Moshe Hogeg’s secret formula for success

The CEO of Mobli’s saga involves hard work, learning from failure and celebrity investors.

By ARIEL SHAPIRA
Mobli founder and CEO Moshe Hogeg (photo credit: SIVAN FARAG)
Mobli founder and CEO Moshe Hogeg
(photo credit: SIVAN FARAG)
Moshe Hogeg, founder and CEO of Mobli, a mobile photo- and video-sharing website, is an extremely dynamic entrepreneur.
He started out with a small investment of a few hundred thousand dollars from a private angel investor and succeeded in raising an impressive $1.6 million in first-round capital.
His investors included such celebrities as Leonardo DiCaprio, Tobey Maguire and Serena Williams. Building on that support, Hogeg managed captivate Kasakh businessman Kenges Rakishev in a second-round investment, bringing in $22m. and then $60m. from one of the world’s wealthiest men, Carlos Slim.
What makes this entrepreneur successful? What drives him? Israeli companies are no longer jumping at the first chance of being bought out, and are making astute long-term strategic decisions. Have start-ups reached a new level of maturity? Today, a plethora of apps and products such as Outbrain and Wix are turning profits at dizzying rates, but there are also companies generating more and more users with little or no revenue, such as Instagram, Snapchat, WhatsApp and Mobli, which are following this strategy: first gather millions of users, provide them with an excellent experience and meet their needs. The money will come in due time.
The beginning Hogeg, 33, grew up in the southern community of Meitar. Now married and a father, he admits he never cared much for school, preferring soccer and the Internet.
His favorite way to spend time was exploring the Net.
He spent many nights and weekends Web surfing as the rates were discounted at those times, carrying out experiments, going into portals and hacking into sites.
Everything was experimental, data security was still in its infancy and it was easy for him to hack into systems.
Hogeg was always trying to reach the extreme.
An autodidact, Hogeg loved learning on his own, creating and doing things his own way – which his teachers wouldn’t let him do at school. He rebelled against the idea of matriculation exams, believing they didn’t represent who he was, blatantly refusing to take the tests.
In the months before starting his IDF service, Hogeg tried his luck at soccer, focusing less on obtaining a good army position. In the end, he developed a love for his service, becoming an officer and serving for seven years.
Mobli In 2007, after Hogeg completed his IDF service, he founded a start-up close to his heart: a website for minor league soccer. He did away with the coach and referees: fans in the stadiums decided what would happen, be it deciding between a penalty kick or a corner kick, or which players would leave the game and which would replace them. With 12,000 users on the site, he learned a tremendous amount from the whole process: which areas of business required his focus, which were unimportant.
But in 2008, many of the investors pulled out due to the economic crisis, and the company folded.
Moving onto Mobli, Hogeg put into practice an important lesson. Yes, it is important to have a significant investment, but the investor can add value that money can’t afford.
Indeed, DiCaprio – the American actor – is actively involved in Mobli on a personal level; leveraging his popularity to bring in additional investors and new users.
The second investment round of $22m. by Rakishev of Kazakhstan and Slim’s $60m. third-round investment led to more products and acquisitions. Today, Mobli boasts 23 million users.
Hogeg’s vision for Mobli for the coming years is to ensure people everywhere in the world are taking pictures – regardless of which app they use. He spends most of his time looking for bright people to help manage the company; he is very proud of his staff, relying on them to help facilitate the company’s expansion. Hogeg’s trust in his staff enables him to pursue other ventures, such as developing strategies for the Mobli Group and Mobli funds.
Hogeg is always looking for the next rising star. He invests money in good ideas, in initiatives that mesh well with his plan – which is to create synergy between Mobli’s private investors and ideas, and form a connection between ideas and customers. Mobli doesn’t wait for people to come to them – they approach individuals who they think will create opportunities for them.
Hogeg’s connection with Rakishev was cemented in 2014 when he invested $67m. in Israeli technology companies, partly through the Mobli fund and the rest directly. Hogeg convinced Rakishev that Israeli technologies are an excellent investment, since the people are so talented and the companies valued at much more reasonable levels than that of Silicon Valley. Following Rakishev’s lead, many other foreigners have recently invested in Israeli companies.
Former prime minister Ehud Olmert has been vital in Mobli’s business development. Olmert is Hogeg’s contact with government offices, and has helped open doors for the company with regard to regulations.
Failures As far as his failures and what he’s learned from them, Hogeg says he learned much from the first start-up, though it was ultimately not a success. He defines something as a success or failure depending on the original goals, maintaining that the only true failure is when you don’t learn anything from a situation.
When Hogeg founded Mobli in 2009, it took him a year to acquire the first round of seed money. He has since discovered much about how he would do things differently, if he could go back in time; he now believes he could acquire the capital much more quickly and efficiently.
Mobli’s video-sharing app was ready before Instagram’s was in 2010, yet they didn’t release it when their competitor was released. At the time they were working on a product similar to Instagram – which proved wildly popular – but opted to wait six months so they could come out with an even better product. This may have been a mistake, according to Hogeg, although he is very satisfied with where Mobli is today.
Hogeg is disappointed that he hasn’t been successful in bringing on board all of the people he wanted to; he regrets he didn’t invest more funds in the Israeli company Store Dot, which makes phone chargers. But he is happy that he has had many more successes than failures over the last few years. (Success can be measured in a number of ways; for investors, obviously by higher return on investment.) The upcoming year is crucial for Mobli; the company needs to leverage its successes and bring in serious revenue. It is going to start charging for advertising and premium products such as pay-per-view, from which advertisers will make 70 percent and Mobli will keep 30%. The goal is not for the company to be acquired: Mobli wants to become highly profitable – and it is in a good position to do just that.
Jason Lyons, founder of the Wall Street Conference, was among the first to invest in Hogeg and co-founder Or Arbel’s super-simple messaging app Yo. Lyons said Hogeg is widely respected in the global business community and that he respects the gradual growth of Hogeg’s companies; he intends to continue such investments and is extremely interested in Israeli entrepreneurs and companies.
The Mobli Group will be put to the test in 2015. Will they be able to bring in revenue from a free app? Will their economic models and market valuations prove true? The fact that Hogeg succeeded in overcoming numerous obstacles along the way, that he successfully weathered the storm when Instagram appeared and that he convinced some of the biggest global investors to join him, are testaments to his incredible abilities.
Hogeg has managed to place himself at the helm of one of the strongest competitors in the global technology field, and for that he deserves serious appreciation.
But he won’t rest on his laurels – and neither will the investors who back him.
He is a very creative person who thinks outside the box, as exemplified in the creation of Yo, which sparked a fierce controversy in its use of only one word (“Yo”) – which has only benefited him. Hogeg may have let Instagram get the upper hand for a while, but the whole saga has invigorated him to fulfill his dreams.
What is Hogeg’s magic formula? A combination of nonstop hard work, hiring the right team players, being daring and a little bit of Israeli chutzpah all mixed together in the body of a talented entrepreneur.
It appears we haven’t heard the last of Moshe Hogeg.
Translated by Hannah Hochner.