Who Is Shai Agassi?
Shai Agassi is an Israeli entrepreneur who founded Better Place, a company that developed and sold battery-charging and battery-switching services for electric cars. He resigned as CEO of Better Place in October 2012 and Better Place filed for bankruptcy in May 2013. Prior to that, he was president of the products and technology group at Systems, Applications & Products in Data Processing (SAP SE) until he resigned in 2007. In 2009, Time Magazine included Agassi in its list of the 100 most influential people of the year.
- Shai Agassi is an entrepreneur who is best known for founding the company Better Place, an Israel-based startup with an intended goal of producing mass-market electric vehicles.
- In the 1990s and 2000s, Agassi was a rising star in the technology and entrepreneur world, and in 2009, Time Magazine included Agassi in its list of the 100 most influential people of the year.
- Better Place raised approximately $900 million from 2009 to 2011, but produced less than 2,000 vehicles.
- Agassi resigned as the Chief Executive Officer (CEO) of Better Place in 2012 and the company filed for bankruptcy in 2013.
Understanding Shai Agassi
Shai Agassi was born on April 19, 1968, in Ramat Gan, Israel. His father, Reuven Agassi, was a colonel in the Israel Defense Forces and an engineer. Agassi enrolled at the prestigious Technion-Israel Institute of Technology at age 15 and graduated in 1990 with a bachelor's degree in computer science.
With his father, he co-founded Quicksoft Ltd., TopManage, and Quicksoft Media. He also founded TopTier Software (originally Quicksoft Development) in 1992 and served as chairman of the board, chief technology officer (CTO) and eventually chief executive officer (CEO). SAP SE acquired TopTier Software in 2001 for $400 million.
After SAP SE's acquisition, Agassi took the job of head of global product development, succeeding SAP SE's founder Hasso Plattner in the role. While at SAP SE, Agassi developed the idea of a green transportation revolution. After Agassi met Andre Zarur, CEO of the biotech company BioProcessors, the two authored a whitepaper titled, "Transforming Global Transportation" in 2006.
In December 2006, Agassi gave a talk at the Brookings Institution, a Washington D.C.-based Think Tank. It has been reported that this talk included former President Bill Clinton and former Israeli Prime Minister Shimon Peres. This event ended up opening doors for Agassi to pitch his plan for a green revolution in transportation. After being passed over for the promotion to CEO of SAP SE in 2007, he quit the company to found Better Place.
Agassi's connections afforded him access to very wealthy investors who were integral to early, large funding rounds for Better Place. In total, Crunchbase has estimated that Better Place raised $925 million to start a business selling electric cars in Israel.
From the beginning, Agassi had unrealistic expectations for what the company could do in the market with the money it had. Agassi used his excellent connections to strike a deal with the CEO of Nissan-Renault, Carlos Ghosn, to build Better Place's automobiles. Ghosn reportedly suggested they start by building 50,000 vehicles, which would represent half of the Israeli car market. Agassi inflated this number to 100,000 when he went public to discuss his plans for the company.
Agassi wanted his cars to be cheaper than gas-powered alternatives, which at the time was not feasible. In subsequent funding rounds, production costs were downplayed and Agassi's narrative of transformational technology was used to justify wildly unrealistic claims.
At the same time, Better Place made several bad management decisions. For example, none of the founding employees had experience in the automobile industry. Rather than focusing on creating a concept and then building it with the help of product managers who could guarantee a reliable and affordable product, Agassi began hiring marketing employees around the world who were tasked with lobbying national governments outside of Isreal for favorable tax breaks.
At the time, it seemed as though Agassi could do no wrong. Even Thomas Friedman, the American political commentator, author, and recipient of three Pulitzer Prizes, writing in the New York Times in 2008, suggested that the U.S. government would do better to fund Agassi's startup than save Detroit from the financial crisis that nearly destroyed the infrastructure of the city.
However, in the summer of 2009, Agassi's vision and optimism appeared to begin unraveling. He relocated from California to Israel without telling his colleagues beforehand, and his relationship with his wife came to an end. His new girlfriend started attending executive meetings with him, and he lost a key employee Eliza Peleg (who was reportedly a necessary counterpoint to Agassi's untoward optimism).
The company's costs ballooned as Agassi insisted that Better Place invest in building everything from charging stations to navigation technology. At a time when the company should have been scaling back its costs and considering outsourcing, it was actually losing vast quantities of funds every day. it has been speculated that the amount of money the company was losing each day on operating expenses like sales, R&D, salaries, and payments to suppliers exceeded $500,000.
Eventually, it because clear to the company's investors that Better Place's costs were out of control and that the company did not have a viable path to profitability. In late 2012, Agassi resigned as CEO. In total, the company sold less than 1,500 vehicles of its projected 100,000, mostly to employees and through corporate leases.
Since his departure from Better Place, Agassi has kept a low profile. Agassi's LinkedIn shows that he was the CEO of a company called Newrgy from 2014 to 2015.