MyHeritage, the Israeli Startup helps you to create your online family tree with simple DNA test.
17th, September 2017 - International Startup
It is late at night and Jane, curious to know where her ancestors are from. She is mailing back a DNA sample from a swab from her cheek. Is she using the DNA kit for Ancestry.com, or 23 and me? No, she is using the kit from MyHeritage to learn more about her family tree. Similarly, a growing number of people want to know where their ancestors come from, and they rely on MyHeritage to do this. MyHeritage is an ancestry research startup based in Israel, which is poised to change the way people seek out their ancestors. MyHeritage is a hybrid tech startup because it uses web, mobile, and software products and services which allow users to create family trees, upload and browse through photos, search through a myriad of global records, and learn more about their past through DNA kits.
Gilad Japet, founder of MyHeritage has a long-standing passion for genealogy and the search for it. His saga with genealogy research began when he was 13 when he mapped out his family tree. He obtained a computer science degree from a prestigious Israeli university Technion. This gave him the technical background to create a genealogy searching and mapping platform. However, he needed practical experience before he could make his dream platform a reality. He obtained this experience in Silicon Valley, his exposure to successful companies there gave him strong business acumen which he would need to successfully launch MyHeritage.
He took six months off after getting married to study and analyze his family tree. His efforts were soon frustrated because he found that none of the existing platforms offered the comprehensive ancestor searching tools he wanted, so he built his own platform by writing code for a software program that would identify people's, ancestors based on pictures. Once he designed the program, he created a platform by building a company he called Inbaltech around it.
He founded the company in 2002, right after the dot.com bust, at a time when Israeli investors were loathe to invest in an E-commerce tech startup. Further compounding his problem was the fact that the Internet was still new, and had not introduced the life changing world of social media or blogs.
Japhet believed in his company and vision, and this is what drove him to assemble a group of ten people, and build a new company on a shoestring budget. He realized what the rest of the world had not, which was that people valued their lineage, and would pay to know more about it. He named the company MyHeritage, and offered the software free for download on the Internet. He didn't make any money initially, and even had to mortgage his house to have the funds to sustain his company because investors were still staying away from his company.
His luck turned for the better three years later when he managed to convince angel investors to invest in his company. By then, he had built a website around the company, and the software, so that his company was a real Internet-based software platform. He was able to offer a freemium version of his products and services, which consisted of free basic services, and paid versions and subscriptions for fancy services.
Because the free version of his service was superior to the paid versions of the services the competition offered, people flocked to his website, and downloaded the program in droves.
Japhet was far-sighted because he realized that the demand for his products and services was global - his competitors hadn't figured that out yet, and it cost them dearly because it allowed the company to go global right away. The services and products were initially offered in six languages as early as 2003. The platform was soon available in 16 languages, and this allowed the company to have a global culture right from the beginning.
Users are better able to understand their family trees, know which geographic areas their ancestors are from, and connect with new people by creating and searching through family trees. MyHeritage's website has more than 35 million family trees. Currently more 85 million people use the site which is featured in more than 42 languages.
The company is an expanding startup headquartered in Or Yehuda, Israel, with offices in Tel Aviv, Utah, and California. The company is successful because it was careful with expansion. MyHeritage was funded by angel capital for years. The startup is successful where others are not because it uses facial recognition software to allow people to connect using unique facial features in photos.
MyHeritage has been successful because it acquired other complementary companies. For example, it acquired Pearl Street Software, a creator of family tree software, in 2006. It bought GenCircles, a family tree submission website having over 160 million profiles and 400 million public records in the same year. As a result, MyHeritage was able to allow people to better connect with each other, and understand their family trees.
It wasn't long before MyHeritage began to receive recognition and investment from investors because of its great success. The company had raised $9 million in funding by 2007. MyHeritage continued to be successful through many acquisitions which gave it the ability to provide the programs and services that would allow its users to build and search through family trees and databases, and contact each other. Many of the companies it acquired had millions of users, so this was good marketing for the company.
Its success attracted more attention and funds from angel investors, which gave it the ability to continue to market itself and expand. MyHeritage offers unique programs and services which the competition does not. For example Ancestry.com, one of MyHeritage's major competitors, allows people to look up immediate and distant ancestors through genealogical and historic record websites. Users can also upload documents, and write their own family stories, but it did not use facial recognition to identify photos, it also only operates in 9 countries. It is interesting to note that MyHeritage also allows users to upload documents, and write their own family stories.
So far, MyHeritage has largely grown through acquisitions and investor funds, but that looks likely to change because a growing number of people are attracted by its vast program and product offerings, which are a result of its numerous acquisitions. The company employs between 250 to 500 people. MyHeritage has managed to expand into Europe through its acquisition of GmBH in 2010.
MyHeritage has more users than Ancestry.com does: 80 million vs. 2 million. Currently, both companies are building photo databases to furiously build market share in this competitive industry. Research indicates that the market prospects for genealogy searching are bright because a growing number of people are willing to pay to know their family trees. The market is worth more than $2 billion, and MyHeritage is capturing a growing percent of that market. Also, they are adding customers faster than Ancestry.com because their database is growing at 22% a month.
MyHeritage is growing quickly because it offers users the choice of uploading raw data into its database for free, and MyHeritage will offer matches instantaneously. Also, about 35% of users are loyal customers. MyHeritage has many more customers than Ancestry.com does because MyHeritage's scope is global, whereas Ancestry.com tends to have a following primarily in America.
The long term future of both companies is bright, but MyHeritage may overtake Ancestry.com because its databases are more comprehensive, and because it is cheaper to use.
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Prita Kulkarni is an a new mother with three years experience in research, writing, and analysis. She is passionate about research, and her hobbies include: cooking, writing, reading on interesting articles, philosophizing, and listening to music. When she is not cooking, cleaning, or taking care of her son, she can be found on the computer doing research projects. She can be contacted through Facebook.