Amazon's aggressive poaching tactics in Israel have start-ups threatening to abandon AWS

  • Shai Wininger, the co-founder of Lemonade, an insurance start-up with $180 million in funding, is criticizing Amazon's aggressive poaching tactics.
  • He's threatening to leave Amazon's AWS cloud service if things don't change.
  • Amazon CTO Werner Vogels responded by saying it could be a sourcing agency issue and promised to look into it.
Amazon.com chief technology officer Werner Vogels
Patricia De Melo Moreira | AFP | Getty Images
Amazon.com chief technology officer Werner Vogels

Amazon's aggressive poaching tactics in Israel have the country's start-up community riled up, causing some companies to explore abandoning Amazon's cloud service in retaliation.

Shai Wininger, the co-founder of Lemonade, an insurance start-up that's raised $180 million, took his frustration to social media, writing multiple posts on LinkedIn and Facebook about Amazon's poaching activity.

"Just learned that Amazon is actively targeting and trying to poach Lemonade Inc. employees," Wininger wrote on LinkedIn. "I wonder if that's their idea of supporting the start-up ecosystem. Reconsidering Amazon AWS."

Wininger later followed up, saying Amazon's poaching of employees from customers, like Lemonade, is a "breach of confidence." He also added the "obscene amount of money" being offered to steal his employees could end up damaging the entire Israeli start-up market.

In a separate Facebook post, Wininger wrote, "Game on! Werner Vogels FYI," tagging Vogels, Amazon's chief technology officer.

Wininger's complaint is the latest evidence of the growing tension between Amazon and emerging tech companies. Last year, Amazon irked some start-ups after releasing a product that looked and worked almost the same as a device made by Nucleus, one of its Alexa Fund portfolio companies. It could also cripple Amazon's effort to expand its presence in Israel, a start-up powerhouse with some of the world's best technical talent.

As Wininger's posts gained traction, Vogels eventually left a comment underneath it, indicating he doesn't support Amazon's poaching from its customers.

"Let me dive into this," Vogels wrote in the comments section of the Facebook post. "It may be a sourcing agency vs Amazon proper. I find that sourcing from our customers would be extremely counter-effective."

Talent war

Amir Konigsberg, CEO of the Tel Aviv-based start-up Twiggle, said the problem isn't necessarily about Amazon stealing start-up employees, but rather the aggressive nature of its poaching.

He pointed out that Amazon has been "systematically" reaching out to groups of employees working on specific projects within start-ups, putting them at risk of losing an entire team at once. Konigsberg, who formerly led Google's expansion in Israel, said Amazon is much more aggressive than other multinational companies, like Google or Facebook.

"Talent war is fine but you have to remain respectful," Konigsberg said, adding Amazon is hurting its relationship with the rest of the Israeli tech community. "It's very important to keep an equilibrium with how you operate. Apple, Google, and FB all have lots of money, but you haven't seen these kinds of complaints happening about them."

The bigger problem for Amazon is that it may be hurting itself.

In the comments section under Wininger's post, a number of Israeli start-up CEOs said they're considering other cloud vendors because of Amazon's actions. That would add to the flood of companies avoiding AWS, a group that includes a number of big-box retailers like Walmart, Target, and Kroger.

"We spend nearly $2,000,000 / year on AWS, yet Amazon recruiters are aggressively trying to poach our developers in TLV," wrote Liad Agmon, CEO of Tel Aviv-based Dynamic Yield. "It's a data point I'm seriously considering as part of our internal debate whether to stick with Amazon or switch to Google cloud."

When reached for comment, Amazon said it doesn't recruit by targeting employees from a specific company or customer.

"We have many open positions around the world and recruit talent based on job-related skills and expertise, not the current employer," Amazon said in a statement.

"While we have employees that leave Amazon for other companies and vice versa, ‎we haven't built the type of customer base we have by specifically targeting our customers' employees for hire – we focus our attention on helping our customers create great businesses on AWS."

Given Amazon's massive share in the cloud space, it's hard to imagine this will have a material impact on AWS. But it's at least opening the doors for competitors to reach out with better offers, as one Google Cloud salesperson did on LinkedIn.

"Google Cloud would love to have you — shoot me a message," the Google representative wrote under Wininger's post.

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