Risk evasiveness -an anecdote

Tel Aviv based start up TVS purchased a US based competitor USC in the field of IT marketing services for bloggers. TVS is fast innovative, sloppy, undisciplined and years “ahead of the curve”. Their product line is super sophisticated, yet not fully stable.

USC was solid, stable, close to the customer and moderately innovative. Slowly they were losing market share, but highly profitable when TVS purchased them.

TVS initially fired most USC US-based developers and retained their sales force. The US based sales force was reticent about pushing “half cooked crappy products” into “our sophisticated customer base. “If we sell TVS products as they presently function, we will be sued.” Slowly but surely, TVS replaced the entire US based sales force with ex-pat Israelis, who were more willing to take risks. And take risks they did, losing two thirds of the US based clientele in a year!

In Taiwan and China based clients of USC however, TVS quadrupled their sales, without “ex-pating” one Israeli, The Taiwanese and Chinese offices complained that the Israelis were still a bit risk evasive, albeit less than their former American masters. One Taiwanese salesperson said, “as long as we can maintain customer relationships as we seriously commit to increase product performance, we can help the clients drive innovation with our cutting edge products.”


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