A tale of two cities: how a Lebanese startup moved to San Francisco
Elie Khoury knew he wanted to be in California ever since he was a child tinkering with computers in Byblos.
“I didn’t have a clear idea of where I wanted to go. Entrepreneurship wasn’t even a term I heard at the time,” said the San Francisco-based Lebanese entrepreneur at Pepe Abed, one of his favorite restaurants in his hometown.
It was a long and hard-fought journey from Lebanon to get his company Woopra on the map of arguably the world’s most competitive tech market.
Launching in Lebanon
Khoury graduated with his classmate Jad Younan in 2007 from the Lebanese American University. Their senior year project was a real-time analytics model which would be the foundation for the startup they’d set up the following year, named for its catchy and unique sound.
Woopra allows bloggers, websites and online companies to engage with their customers by tracking their behavior while they’re navigating the company’s site. The analytics provides businesses with information to improve their online presence and customize their offerings to retain and engage more customers.
The two partners gradually developed their business with a growing list of global clients, including AT&T and Volkswagen, and not long after their launch in 2007 opened an office in Texas to handle the site’s heavy traffic with Lebanon’s slow and unreliable connection. It was their foothold in the US, their dream destination.
“We spent four years in Lebanon trying to make it work. We realized our customer base was over there. [Like] if you’re a good soccer player you want to move to Real Madrid, it was a no-brainer. Silicon Valley was the right place to be,” Khoury said. “I love my country. But Woopra has a better chance of competing if it’s in the major league.”
They moved to San Francisco in 2012 and started seeing results within about six months. Growth was in revenue rather than customers, as deal sizes increased by 40 times within two years of their arrival.
“Of course that had to do with other factors as well including pricing readjustment, but being in San Francisco allowed us to close $100,000-plus accounts which was nearly impossible in the past,” said Khoury.
Making the move
The challenges of setting up shop and building a team in that city included competing with the Facebooks and the Googles for the best people, affording attractive salaries and higher rents, and retaining good talent (most engineers in the Bay Area switch companies after about a year and a half).
“The nature of competitiveness in San Francisco makes it a challenge but also it's a good thing,” said Khoury.
Being located in the world’s high-tech hub meant he got access to some of the smartest people in the industry, and the visibility needed to attract high-end clients. Their first office was in a windowless basement, where they tried to create a fun environment by bringing in a ping pong table.
Woopra cofounder Jad Younan has no regrets about the move but is realistic of what it meant: longer working hours, tighter legal regulations and less time for socializing.
“It’s easier to do our job here,” Younan said from San Francisco. “I do work longer hours, but it’s not unpleasant. The culture here is about doing something productive and enjoying what you’re doing.”
Survival of the fittest
San Jose-based Lebanese investor Elie Habib met Khoury in 2009 when he was still based in Lebanon and became an informal adviser, counseling him through the company’s ups and downs.
One of those downs was when Khoury nearly lost ownership of the company to an investor from Texas who, along with his friends, bought a majority stake in the company for a relatively small price at a time when Woopra was strapped for cash.
Khoury and his team understood what was happening in time to save the company, but not before they agreed to buy out the investor for several times what he’d put in. The reason Khoury was able to keep his business was because the intellectual property, the coding of Woopra, was in Lebanon, which the investor couldn't touch.
Khoury earned Habib’s respect for tenacity and his ability to take hits as the company grew out of Lebanon into new territory with few resources.
“From the get-go, it was beyond Lebanon. This is a solution that from day one had a very big international appeal,” said Habib.
“Before he moved to California, he already had a US presence. He had 100,000 users using his solutions. The analytics space was very nascent. His timing was really fantastic - way before big data, before the cloud. He was really at the forefront of that industry. Immediately he was being pulled in the international direction.”
San Francisco: tough but worth it
As a B2B company, Khoury said having an address in San Francisco made a major difference in attracting big clients.
As he was making plans to move between 2008 and 2012, he considered other tech hubs like Boston and London. He said they were good, but not the absolute center of the industry, which was where he wanted to be.
While Khoury never expected the journey to be easy, he also didn’t anticipate the extent of how difficult it would be – and looking back on it he doesn’t think that was necessarily a bad thing.
“My ignorance pushed me to keep going,” he said. “If I’d known how complex things could get, I might not have done it. Not knowing how challenging things can be can be a blessing. I always tell people: don’t over-research. If you just start, by the time you identify your first challenge, you’re already doing it.”
Still, he doesn’t regret the decision.
He loves working footsteps away from some of the world’s biggest tech firms, such as Salesforce and Lyft, and being able to ride his bicycle to work from the old Italian neighborhood of North Beach to the former industrial area South of Market.
“I got out of my comfort zone. It’s like the opposite culture of Lebanon. I loved the openness of the city. I also loved how simple people’s lives were – in one of the wealthiest cities in the world,” he said. “I was very impressed with how modest some famous people were. They were very caring and kind and they introduced me to the right people. It was like a chain. Suddenly you have an amazing network of smart people.”
But the Lebanon the two partners left four years ago isn’t the same Lebanon Khoury returned to on his most recent visit, a time spent camping in the mountains and offline.
And many of the features he loves about Silicon Valley can now be seen in his home country, albeit in much earlier stages.
“Lebanon today is very different to Lebanon five years ago,” said Khoury, referring to the country’s growing tech ecosystem.
He still sees talented engineers either going abroad abroad for work or settling for jobs outside their field if they want to stay in Lebanon.
Khoury took the first option, saying that the only way he was able to work in a high technology field in his home country at the time was to start his own company. It wasn’t a bad thing for him, but a challenge for a country that has long struggled with a steady brain drain of highly skilled workers.
“I would have considered working in a high tech firm. [But] the only way for me to get into high tech was to build own company,” he said.
Looking back, he’s glad all the obstacles he faced in the beginning pushed him to the other side of the world.
“It was definitely exciting to be a big fish in a small tank, but it’s more exciting to be a small fish in an ocean,” he said.
“I’ve always said to entrepreneurs, go wherever you see fit. Don’t force yourself to stay here to be patriotic. You’re not helping your country by staying. You can come back later. You don’t want to jeopardize your future to give to country. We don’t have the major league here. Love your country, give back, but don’t feel forced to stay.”