Latest / Unstuck Pod / Building BI as a Service (Elad Levy and Jamie Schneiderman)
Transcript
- Jamie: welcome. Thanks joining the Unstuck Pod. Do me a favour for people who know you, don't know the business. Can you share some more, some background about yourself and the company, what doing? Elad: Hi Jamie, thank you so much for having me today a years entrepreneur and CTO With couple of exits a couple of failure and dive is currently my fifth company I've been in B2C most of my life. that's my first Shot in the the B2B world and the SAS tools I bootstrap the company and managed to get it into profit Luckily with the AI our team very lean and efficient because it makes our life easier And we are scaling slowly Unlike B2C, is more grinding I don't know I miss b2c very much to be honest but and I do a little bit of a fractional cto work and consulting as well to keep myself busy because I said the sale cycles in b2b take months sometimes and that's really slow for someone that came from b2c Jamie: Ha Yeah, I've seen two and a half year sales cycles. ⁓ Elad: Yeah, my last company was a game publisher, a game studio, and we reached the 1B valuation. this is a very different experience for me. so far it's been fun. It's just a little bit of... It's different, but it's an interesting experience. Jamie: Yeah. Okay, tell me what caused you to start it? what was the here you are, come from B to C, you've been doing things a certain way, and now you shift, why? ⁓ What caused you to shift? Elad: my last company I was one of the co-founders and cto we had a huge exit. We reached the 1b valuation when I left We were making 300 million in annual gross 120 million in ibita insane numbers and not that of a bigger team, we were by a bigger company and then it became a corp and I don't play nicely in corps because I just lean companies and small teams moving fast it's just a personal preference and I decided quit And then I reflected a little bit on why this company worked because every entrepreneur, know, you have your success and you have your failures and when you success you're starting to think maybe there was a magical formula or whatever, but it's it's bullshit. ⁓ I had at that our magic sauce Secret Sauce, our advantage in the industry was that we were very data driven, really obsessed about data. And top of that, we developed lot of LiveOps. It's called LiveOps in the industry. In other industries, it's a CRM work. We were really obsessed on CRM work. And... I've learned over the years the ⁓ work that these tools that you develop which takes data and not only give you insight but make it actionable insight that's what makes the winners from the losers that's why what really makes ⁓ grow a whole new level of service and monetization decided to take all that knowledge and a company out of it I'm very hands-on I let go of hands-on part of the technical I still write code and DevOps and configure servers and I started Me and just one more guy. Small office, very lean, very simple. We started, writing a lot of CRM and marketing automation tools. But When we started pitching them, we realized that the underlying data was just garbage. People don't understand data. They do not know how to collect data. They do not know how to process it and gain insight from that data. and They just connect a lot of tools, and those tools basically generate it's a garbage in, garbage out. basically, know, and then show those KPIs to their and it's a really mess. I said there is a bigger problem here. You cannot do marketing automation on data that is garbage. Let's fix the data first. and Jamie: Yep. Elad: Somehow we started doing data as well. Over years we they the industry started calling us a BI as a service company Because we realized that small to mid-sized businesses don't have the time to build in-house data teams It's very expensive. There are a lot of tools. It's very confusing Every year there is a conference of some new tool and push it crazy and that's the new thing And when you go to the conference and you mention something of the past people will tell you dude This is you're stuck in the old paradigm. Everything is changed it's really confusing mainly for founders CEOs and product managers and marketing people because They just want to wake up in the morning and see a freaking report on ROI and was in performance of their product But they struggle with building in-house teams and it's a nightmare. I decided to build And they say a bi is a service we deploy an engineer and a data analyst and a swat team of data experts for every company And we become an extension of that company that they can focus on building products and building services And not building expensive data teams Big companies obviously they have gazillion people and infinite resources they can afford the luxury but small to mid-size they install Google Analytics which gives you squat you you do not you cannot really get insight from yeah Jamie: sorry ⁓ to interrupt but I'm with you. You're talking about in what industry? ⁓ Elad: because of my background we started with games and mainly mobile B2C, but then we started spreading into education Automotive prop tech we have really The problem repeats itself in industry and it's the same story. There's a CEO and my first question is Jamie: Mm-hmm. Elad: How much did you make yesterday? And he's I don't know. Okay. How of your clients have a reconversion? are rebuying the product. I don't know. And they cannot answer simple KPI questions that are crucial for the business growth. this is where we step in and we bring all our, tools and knowledge and we do a kickoff call with the management. We try to understand what they want. The North Star metrics, the business questions, the product questions, and then we take it from there. It's a an iterative process. I tried building a 100 % SAS. It doesn't work because they don't know how to use it. They just use it like any other tool. And if you do 100 % service, it also doesn't work because you just leave them a paper with an audit and they don't know what to do with that audit. we found out that we must bundle the factor with the technology factor. And that is what working for us. Jamie: you've had success. you've had some success doing this. I want to understand how'd you get, what got you to where you're at, at least now. what's worked for you up until this point? In terms of drive, you talked about being cashflow positive, Growing, you've grown a business cashflow positive. what got here? Elad: Yeah. we bootstrapped I bootstrapped the company VCs not like when you say there's a human factor involved they're not no and Then if it's a company that will grow 10x No, they want the 100x a X the next Facebook's and next Twitter they live in La La Land, it's not I mean, yes once in a gazillion companies you will hit one of those things but VCs really do not like this type of businesses. I bootstrapped the good old-fashioned way, know finance the development in the beginning and Started hit, going to conferences. I still go to conferences and speaking with people and somehow you get a few clients here and few clients there from the games industry will end the through a We landed hard hard rock the hardware groups will a partnership which is a huge client for us and I think that the thing that works Jamie: Okay. Elad: worked for us was keeping lean we didn't lose our heads and started renting expensive offices and hiring a ton of people plus AI we downsized from we were around i think 20 people and then Jamie: Yeah. Elad: AI we downsize to we're now less we're not even 10 people now and then another problem you have the CTO and the CEO in the same role. ⁓ I ⁓ I I refactoring I woke up one day and I saw that our AWS bill is expensive and I Decided I said I'm not paying the same hard drive over and over let's de cloud the whole thing Jamie: Yeah. ⁓ Yeah. Elad: and we cut it from $20,000 a month to 800. And I did the same thing in Platica and the company that acquired us. We managed to lower the cloud bill from AWS from $2.3 million annual to 100,000 annual. Jamie: Wow. Wow, that's pretty good. Elad: You're wasting Every time I did it, we managed to cut over 90, even 95 percent, of infrastructure cost, because it makes no sense. and In some cases, I mentioned that I do fractional CTO work. I had declined that The company hired to develop their software. They they built a software as if he's going to have millions of users. and then I'm connecting to their servers, and I see that they have a peak of 20 people Jamie: Yeah. Elad: per second. and I started laughing. I said, dude, that iPhone 7 can manage this traffic. we cut all the fat, we them. They were around I think Six thousand dollars a month we lowered them To a month and it's really really a lot money that you burn and throw down the drain and if you this money and keep it lean and just invest in smart marketing B2B marketing is expensive actually we do a little bit of podcasts and PR and some posts And you lend another client and another client and we managed float and always keep the company lean which got us into a cashflow positive quick Which is really amazing Jamie: let's talk about the challenge for you of going to the next level, you've ⁓ done a lot of great things around getting to this level. it's fantastic. Now let's talk a little bit about the challenge of the next level, What's holding you back or what's been holding you back over the last little bit to get there? Elad: Yeah. Well, my session with Jamie about how do I'm going to unstuck my business, but basically B2B is slow and Jamie: You Elad: You have to create a pipeline of deal flow that is insane. you have to hire a small army of SDRs and account executives and build this whole pipeline for sales that is just expensive a small company that bootstrap. And now I started investigating other that out of the blue with different private sectors and government it's exciting year I'm really expecting that we're gonna make huge the level up and games you level it's same thing we need to up And also we over the years specifically in games and I think that this is to every industry to be honest Every industry every product have a pattern that the founders the are looking at the same KPIs if you have a dating app, they look at the same KPIs. If you have a specific game, it's the same KPIs. we created a SaaS, a lite version of our product. And now we creating a free premium enterprise. Jamie: Okay. Elad: the BI a service that we are doing for a very low price. We are going to categorize it enterprise and we're going to create a SaaS that is more easy to ramp for small businesses and showing basic APIs. Sometimes these basic API's are really really valuable, something as simple as install retention Engagement session length. These are the basic stuff that are relevant to a ton of products, it's really Jamie: No, I for sure. mean, I think they can move the needle completely move the needle. Elad: Of course, course, of course Anyone that developing products the end of the they want to get more Looking at that product. the more time they spend inside your app or your product The more opportunity you have to engage with them monetize them ⁓ Jamie: Yo. Okay. Elad: That Insight valuable, if you and I think that development should be this way I worked as a Even though I'm a 20-year city where I was I also took in a VP product role for about a year and a half I've experienced that side as well And if you orient ⁓ you focus your team around a specific api I don't know session length or attention Magic happens because every every all the other stuff just starts accommodating on its own Revenue will follow you if you on one of those funnels And you polish them then the money will follow it always does Jamie: I I get the revenue will follow if you focus on one of those funnels. the question for you is Which Which funnel Which funnel are you following? Elad: In products, mobile, I love starting with the crash rates. That's my favorite. Because when something crashes, you sick of it and uninstall. That's your first reflex. mean... Spotify works amazing, but if it starts crashing every time I put a song I will try finding an alternative. Users are impatient. don't have time for stuff that doesn't work. They want everything to be perfect and it's really the absurd. thing is that it's really easy you have a gazillion companies and SDKs And will show you the even Google gives it for free. and Polishing, just fixing bugs, because products just need to work. That's It's as simple as that, if they work, that's that's a great start. And love starting. I love the basics. I am strong believer that if foundation is strong, then it's easier to build on top of that. know, crash rates, loading funnels, sometimes, Jamie: you Elad: You load the loading is super slow because of some Something in the back end or there's some assets that you're heavy assets that you're downloading If it's a workout application you're downloading a huge video And it's slow then People are impatient, they want even if it's not possible. Technically they want everything to work fast They are just impatient Jamie: Yes. Elad: basics then retention then the FETU is the first time user experience that's the onboarding which is also crucial because need to you need to feed the user with a spoon do this click here do that hooray and these are basic really basic things you will be surprised that many developers ignore that They just, jump into water and launch ⁓ stuff hope for the best. Jamie: I like the added, by the way, that you would ever need to come and work for me, but the attitude is great. Cause I love that. I'm not technical. I've been around, B2B SaaS for, forever, but I not personally technical. I love that attitude. it all has to work. it has to work and has to work well and easily and no problems. And anyway, I love it. It's fantastic. Elad: had several projects in my life. I did a couple of ⁓ turnover for companies projects and I've ⁓ one that the polish took twice than the development time and It sense, it makes sense because If you look at the best products and the best services and the best apps in the world The polish, the finish level is just amazing, If a phone, it just works every time. Zero problems. And it's, for me, it's happiness, as a user that other product, I'm super happy when I touch something and it just works flawless, Jamie: if one, piece of advice you want to give to the You're a multi-time What's the one piece of advice that you would give them? Elad: Well, First of all, keep trying. because I don't think that I've met this guy years ago when I was a kid, and I asked him what he thinks about successful people. He was a very successful guy, and he said successful people just keep trying over and over over, and over because failing is normal. I the attitude of failing fast, because the faster you fail, the more the faster you can either pivot or throw away the idea and make another one. and You have to try and try, and try and get up back on your feet and try again. and try again and the the That's one of my biggest and most important advice and for those of you who are out there building services or products. data is to you insight about crash rates and loading funnels and all the cool and nifty stuff but sometimes you just need to listen to your user so make it easy for them to complain Make a huge button of contact us complain here. Why what don't you like? those reviews ⁓ you get ton of feedback from people And it helps you make build better services and products. So listening That feedback loop is what builds better better products better companies guy and industry so i'm still involved Jamie: Okay, so please tell everyone where they can find you follow what you're doing. Elad: obviously is my the best way to reach my is elad at I another email for the games specific. It's eladdedive.games the website obviously dive.games or divedata.co and I'm super available on LinkedIn. I'm taking meetings with people. If you are in the East Coast, New Jersey, New York, I would love meeting in person because the whole zoom things is it was nice in covid but i really miss meeting people in person and having coffee and it's nice bonding is crucial bonding before business Jamie: business. I love that. That's great. ⁓ so listen, Elan, thank you very much for your time. I appreciate it. we'll make sure we add those links, in to the description after. ⁓ thank you, everyone for watching, listening and, have a great rest of your day. Elad: ⁓ Of course. Thank you