The Israeli high-tech company IRP Systems’ decision to adapt the technology it developed of electrical propulsion for the aviation industry to the global car industry, forced it to take a dramatic step — secure the right investors at the right time.
“For me, an investor is never just a financial investor,” explains the CEO Moran Price, rather, a partner in every sense of the word.”
The atmosphere was very exciting at the launch event for the fourth China-Israel Innovation and Investment Summit held a few weeks ago at the Ministry of Foreign Affairs in Jerusalem. Israel’s Prime Minister Benjamin Netanyahu, and the Vice President of China, Wang Qishan, visited five technology and startup booths and were personally impressed by the creativity and daring of the Israeli inventors and developers.
Their first stop was an Israeli high-tech company IRP Systems, where they received an explanation from the company’s CEO Moran Price, 41, on the fast and innovative electrical propulsion systems that the company has developed. IRP Systems even had the opportunity to operate the vehicle that won the world championships in competitive remote control car racing.
What those present were not aware of is that for the last decade IRP Systems has specialized in the development and sales of electrical propulsion systems and high-performance products for the Israeli and global aviation markets; and that the decision to expand to include the world car industry was a dramatic one for the bootstrapped company that was founded in 2007 by Moran’s husband, Paul Price, who is now the CTO.
“About two years ago we understood that the technology that we developed for the aviation world in the field of electrical propulsion also fits like a glove to the e-mobility market which was starting to gain momentum, and that it could accelerate into becoming mass-market”, explained Price, who is an electronic engineer and has an MBA from Kellogg.
“We had the knowledge and the reputation coupled with significant experience gained in the extremely demanding global aviation market. We knew that that was our advantage over many other entrepreneurs, who are mainly advancing technologically, and not concentrating on what happens afterwards.”
How is the seniority and experience that you have gained asserted?
“During the years in the aviation industry, we developed unique IP, we built an organic team that remained with us for the long-run, and we learned a lot about the product management processes throughout the product’s lifespan – from the idea stage to manufacturing, installation, licensing and customer service. We have a product line that is already installed in various aircraft and also in electrical ones. Our systems are also installed in two-wheeled vehicles, such as electrical motorcycles. In addition, we have produced propulsion systems for competitive remote-control vehicles.
We have also been through difficult times. Coping with being a small company trying to grow against larger suppliers and conglomerates is not simple at all. The decision to dive into the global automobile industry did not come easily to us.”
“First, it was a very massive investment in the development of infrastructure, which was beyond our self-funding capabilities. This decision forced us to take a step that we hadn’t taken before — to find investors. More than that, to find the right investors at the right time. We spent a lot of energy seeking the right investors. There were attractive offers on the table, but for one reason or another these didn’t pan out. Finally, Ran Achituv, a close friend that has followed us from the start and Avi Eyal, through Entrée Capital, became our investors.”
As the CEO, was this the most significant financial/business decision you had to make?
“Absolutely. Because for me, an investor is never just a financial investor – rather, it’s a partner in every sense of the word. It was clear to us that we are not taking the classical path of idea- then raising money in order to realize it. We chose a slightly longer and more difficult journey, but we entered the startup world with a lot of maturity and experience, and also many insights that we learned along the way. And yes, through our interaction with Ran, Avi and Entrée Capital, we learnt that when there is synergy, trust in abilities and full support, all of the energy can be utilized for positive action — and the company’s growth is accelerated. There is a snowball effect of successes.”
And how was this practically seen?
“Just as we began our work with our investors, a few good things happened. For example, we started proving the feasibility of the electric vehicle, in cooperation with the Renault, Mitsubishi and Nissan local innovation lab, who made available to us an electric vehicle. At the same time, we were chosen to provide a propulsion system for an innovative electric motorcycle, and we began developing an electric propulsion system for an electric passenger aircraft.
At the China-Israel Innovation and Investment Summit we were chosen by the Israel Innovation Authority to be one of five companies to present to the Vice President of China and his delegation. It could be that some of these things would have happened anyway, but there is no doubt that the support that we receive from Entrée Capital shines in all directions, including to our employees, customers, suppliers, and actually to everyone we collaborate and work with.”
What golden advice tip would you give to young managers at the start of their journeys?
“To dare — and to not be afraid of success. I learned, paradoxically, that people are more afraid of success than of failure. The thought of ‘what will happen if I succeed’ holds no fewer concerns or uncertainty than the thought of ‘what will happen if I fail’. We are here for a limited time, and we need to dare and do things. And when you get over fear — success will come.”
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This article was originally written in Hebrew for the Ma’ariv Newspaper by Dudu Levy Reich and translated by Edie Berg.