What happens when you realize your original idea won’t work?
This is the story of a founder who almost ran out of money pursuing a stalled business idea and what happened when he changed his mind at the last minute.
Noam Schwartz is the co-founder of TapDog which aggregated data on companies, like how much traffic their web sites got & what was said about them in the news.
It was bought by SimilarWeb, where he’s working right now.
Noam Schwartz, TapDog
Noam Schwartz is the CEO and co-founder of TapDog which was bought by SimilarWeb. It is a competitive intelligence platform that delivers actionable insights for organizations.
Andrew: Hey there, freedom fighters. My name is Andrew Warner. I am the founder of Mixergy.com home of the ambitious upstart. This is the story of a founder who almost ran out of money and then realized that he had to change his idea at the last minute. What would you do in a situation like that? Would you change your idea, or would you just say, “Hey, you know what? It’s over.”? We’re going to find out what happened to him. His name is Noam Schwartz. He is the co-founder of TapDog, which aggregated data on companies like how much traffic their websites got, and what was said about them in the news. Noam’s company was bought by Similar Web where he is working right now.
This interview is sponsored by the page I created, frankly. Here’s the deal. I used to struggle with getting people to give me their email addresses. I tried all of the things that you’ve seen like pop ups, but they didn’t feel quite right. I used to try the box on the right side of the page asking people for their email addresses. I didn’t really collect many email addresses that way, and then I discovered a page that just killed it for me. We’re talking about tons of email addresses at minimum when I first put it up there of 100 email addresses a day when I was getting hardly any from one page. We just kept tweaking that page until it got better and better.
Now I want to make that page available to you. Write this down. If you need to collect email addresses I want to give you my page. Here’s where you get it. It’s at AndrewsLeadPages.com, wait, no AndrewsWelcomeGate.com, excuse me AndrewsWelcomeGate.com. You’re going to get my page, the one that increases conversions, and it will be powered by lead pages, the site that’s known for increasing conversions. Here it is again, AndrewsWelcomeGate.com. Noam, welcome.
Noam: Hello, thanks for having me.
Andrew: Good to have you on here. The original business idea was called what?
Andrew: Multa.com I’m looking at the page right now from Internet archive. If you had to describe it in a phrase, how would you describe what it did?
Noam: It started as an idea quite simple. YouTube meets KickStarter. It was basically a web platform that let people challenge their friends to do everything to do whatever they want.
Andrew: Give me an example of a challenge.
Noam: We had people in the University of Florida daring their friends to go into the river crawling with alligators, we have had people kissing a random stranger, and we had people participating in a 10K just for charity.
Andrew: The idea is if you pay me fifty bucks, you the Internet community pay me fifty bucks I’ll kiss a random stranger and put the video online?
Noam: Yeah, that was the basic idea.
Andrew: So that’s what in it for me, I get a little bit of money. What’s in it for them is they get to dare me and see me do things?
Noam: Yeah, we had amazing content being uploaded to that website.
Andrew: Where did the idea come from?
Noam: Basically it was back in 2010, I think, and me and my co-founder, my partner, my business partner, Antinawa Alunkawat, we sat in the living room and we thought that we have to build something for ourselves and for our friends just to have fun and to play with code. We hacked something quick, and that was Multa.
Andrew: How long did it take you to hack this thing I’m looking at right now?
Noam: It’s still online. It’s still online. People are still using it. When we launched it we got another co-founder Asitio who wrote on it for about four to five months we raised some money from a local investors here in Tel Aviv.
Andrew: How much money did you raise?
Andrew: $150,000, what did they see in the idea that made them say, “This has legs. It’s going places.”?
Noam: Well, the first investor said that it made him laugh, and that was a good signal for him. He invested us, he invested in the team, he invested in the idea. The idea was much, much more than just daring people for money. The idea was how to create original content with people who we like and the people who we connect with while creating a new kind of engagement. [??]
Andrew: Crowd sourcing for video. If I create this interview I don’t know if anyone even cares about it, but if I first ask people to pay for it and then create it based on whether or not I got paid, then I know I have a built in audience and I have built in revenue source. So you started out with daring people to do things, but your vision was all content creation, all video creation.
Noam: Exactly, exactly.
Andrew: I see. How did you meet the investor who put up the money?
Noam: In the first round we had four investors, and I knew nothing about VCs, about money, about how to raise funds, even about how to approach investors. So, when my [??] was I was going through the Internet searching for angels, as well. Got a list and started contacting them, one by one. And I started with the most known one. And I actually Facebook message him saying, ”Hey, my name is Norm that’s my deck.” I sent I think a deck of like 40 pages, something ridiculous that I would never send today.
Andrew: Why not, what’s wrong with 30. Why not, what’s wrong with this 30 deck, this 30 page deck.
Noam: It was way too long. I wouldn’t read it today.
Noam: But, anyway I was very inexperienced. And he amazingly sent me, hey that’s amazing let’s meet up. And we did after a couple of days. And after two meetings he said, great I’m in.
Andrew: So Facebook Messenger is your thing. I never check Facebook Messenger. I happened to check it one day and you sent me a message say, ”Hey I’m a big fan. I’m in San Francisco. I should tell you about my story.” I don’t even think you said, I’ll tell you what my story is. I got curious. And then we meet up here in person. So does that work for you using Facebook Messenger as a way of talking to people? As a way of talking to strangers and getting a reaction?
Noam: Well that’s funny because if you think about how we got to meet up. You started SOG along 2008, 2009. So there’s like an entire new generation of entrepreneurs that you [??], that knows [??] from the beginning.
Andrew: I know that’s so great.
Noam: And you were there before them. Think about it. I learn so much from the interviews, from other people, from you. Actually, messaging you was something they use to be noticed, to get noticed. So I guess that was it. But I’m not really using Facebook Messenger to much today. I’m not using it all.
Andrew: Okay. I thought maybe you found a new opening into people’s worlds and if you’ve got investors to response that way. I thought maybe you got business partners and I thought maybe I was onto something with it. So okay and I’m going to come back and see what you learned from Xerde because I’m always curious about what people who don’t just listen but do something with that, these interviews.
I’m curious about how you treat the interviews maybe differently from the average person. So we’ll get back to that in a moment. But now you raised this money, it’s time for you to go and launch something, right. Or no you launched something before. How did the money change what you were building?
Noam: The way the money change it, first of all we took some money, I took some salaries we were working on our savings for a long time. We were able to get an office, and to hire another developer. And were able to actually get out of the office to go meet the users, do a proper launce with some testing in the … on the field.
So [??] and then [??] was more talented into college kids. To mold our young population. So we got introduced to some college kids, some fraternity kids in all kinds of universities. We chose University of Florida because it was … it still is a great party school.
Went on a plane, got like, a big suite in the middle of the campus and stuff inviting people over to meet us, talk with us, to play with the app. Tell us what they think. And it was a huge success. We really took over the campus, I think 50% of the population of the campus based on who are leaders actually used the app in the ten days that we were there. And the money gave us the opportunity to do that.
Andrew: To fly out there, to rent a hotel, to spend time basically living with your customer. So you know, it occurred to me that when I do interviews with entrepreneurs who do customer development. They all say that doing what you’re just talking about helped them come up with the perfect product. And it seems to me having done these interviews that if you ask your customer and get feedback then boom, you’re going to have a success 100%. And anyone who doesn’t do that is bound to fail.
But here you are a guy who did do it and still were misled were ending up and going with the wrong business. So what was it about the feedback you were getting that misled you? How do we… What do we learn from this?
Noam: I don’t think that the feedback misled me, I think that the feedback was valuable, and helped us basically survive with the idea and manage to get some kind of positive outcome out of it. Because Multa in the beginning was a dating machine. [??] your friend, do anything, something more jackass [??]. And when we came to the campus, and not only to the University of Florida [??], also, like, different places, we realized that people like to talk, they like to watch and to see the content, they like to enjoy that content. But they don’t.. but they are very sensitive to creating such content. People don’t like to be perceived as ridiculous. But if you add some kind of a social do good layer, on top of that content, so everything is cool. So, basically…
Andrew: So, I may not be ridiculous to make 50 bucks, but I’ll be ridiculous to make 50 bucks for a charity. That’s the big insight.
Noam: …Yes. And then things got interesting. And that’s what we got from the universities. So, all of a sudden, then the average sum of the challenge, that’s the way we change the [??] to a challenge.
Andrew: I see the first version of the site says Multa, there’s a guy with horns, like, devil horns on his head, I’m guessing. Dear friend show everyone. If I look at it today, it just says make challenges happen.
Noam: Exactly. So, all of a sudden the average amount of money that was raised was changed from about 25 to 50 to 500 to 750. Charities from all over the world started using us as kind of… some used this as a white label to organize events, to organize big things. There’s something called L-A-G in the U.K. has been down there for years, in big campuses all over the country. And we got to, like, 7 or 8 schools. We sponsored 10Ks, we almost did something with the Color One [SP]. You probably know them. We’re doing some places in San Francisco, and San Jose’.
Andrew: And who are they?
Noam: Color One. [SP]
Andrew: Oh, I don’t know them. Okay.
Noam: It’s a cool initiative when you are doing the 5K or 10K and people are firing color balls all over you.
Andrew: Oh, interesting they just throw color balls on me as I run. I would do that.
Noam: Yes, I know I participated in it in last June in San Francisco. It was amazing. Think about [??], but for a good cause. And with a lot of colors being thrown at you. So, it’s cool.
Andrew: So, how did being there help turn you on to charity? I want to understand what they told you that made you realize that charities are the way to go.
Noam: It was basically thousands of yes, no questions. What would make you participate in something like that, what would make you feel comfortable doing that, what would make you excited about a concept? And I have hours and hours of footage. I took a video of everything. All things that have been tested, all the interviews, all the conversations. I wanted to share with my cofounders. I wanted to share with people I trust, I wanted to get as many opinions as possible. And, but basically when we were there was an event called Dance Marathon.
Andrew: A Dance Marathon. Okay.
Noam: Yes. So, people had to dance 24 hours straight. Something that is very not real in Israel, but apparently it was highly popular there. And being there in that environment, and seeing that people are actually doing what I wish them doing in my application, was that Aha moment. Okay. Maybe we need to, instead of being funny, and [??], we need to be inspiring, we need to inspire people.
Andrew: I see. Yes. The happiest moments where you walk around and see someone doing what you would like to do. And you can’t be doing for someone else what you would like them to do for your platform, and you can’t understand why. And I see you spent some time and you figured it out. It was the charity component and so you’re on to something now. You come back to the U.S. and still, somewhere around March, April, 2013, you said to your wife, life sucks this has to change. Why did you say that to her? What made you say it?
Noam: There was a year before that. We went to the University of Florida in 2012 and things were very, very good since then actually. We got a lot of YouTube artists working with us and creating content. We got a lot of love from the press. We got selected as one of Israel’s top twenty start-ups in Business Insider and all kinds of very respectable publications. But, our big mistake was way before we even launched. We chose to go web. Not to go mobile first but web first.
Andrew: I see.
Noam: And that was the time there was the first appearance of SocialCam and Videe and later, what’s the name of the other Twitter Bot, the video app?
Andrew: Viddler, no Vine.
Noam: Yes, Vine. So basically, all of the content we hoped people would consume through our web interface or through the mobile web app or through the app that we would develop later wasn’t enough. The content didn’t match the platform and that was the fundamental mistake. We couldn’t be that. It was just not what we could do. And then we developed an app. It wasn’t good enough. We didn’t have any money to spend on marketing.
Andrew: Because if people wanted to upload a video that they did they would have to shoot it on their mobile phone and then come back to their desks, connect their mobile phone to their computers and then upload it that way.
Noam: We eventually created an up loader for proof but it was way too complicated. It was dumb. It was a big mistake. Around the end of 2012, beginning of 2013, we started exploring all kinds of new business models. Partnering with charities. We had some experience in that from the beginning. Working with brands. We made some money, nothing serious we broke even. But, it wasn’t interesting, and I felt and I said to my wife that things are stuck. Things have got to change because I felt that we were not going anywhere.
We were a great team. We trusted each other, we loved each other, but something had to change. Two days later we met an accelerator, the representers of an accelerator in Silicon Valley called Upwest Labs, amazing people and amazing accelerator. They knew us. We met with them a couple of times. We knew them for about a year. They were following us eventually. After a couple of interviews they decided to invite us over to come to Silicon Valley, get an office in Paolo Alto, live in a huge house in ?? with twenty other entrepreneurs, and see where it goes. I took my team. We were five guys. Back then we were twelve in the peak or eleven and we were down to five. We went to Silicon Valley and started working.
Andrew: Wow! You got to eleven people on the team. Okay, and then you went with five people and you said we’re slimming down, go to five people to Upwest Labs in Silicon Valley and how does the product change now that you have got this new house, this new environment, to build it in?
Noam: We closed it after two weeks.
Andrew: Really? That was two weeks after you got there. What made you say at that point that it’s time to close?
Noam: We met with amazing people from the community, with CO’s that I admire, with ?? leaders from the valley, people whose opinions were so important to me but also their logic and understanding of the environment, of the economy, of what can work and what cant in ways that weren’t obvious to me back then but they are obvious to me today completely changed us. We walked like zombies after getting the feedback and advice, but we knew that, “Okay, we are here. We have a team. We have some money because we made some money. What now?” We’ve got to think about . . .
Andrew: Before you think about what now and tell me how you got to this idea that really did end up working and was sold to Similar Web, can you give me an example of the kind of feedback, of something that was said to you that made you realize that you had to make this drastic move because that’s a pretty big move to make in such a short period of time. Do you have an example of something that was said to you?
Noam: I’m trying to remember. We all felt that something was not working.
Andrew: OK, even going onto to accelerator.
Noam: We kind of were very . . . we didn’t have a lot of faith in the existing business model, we thought that we would be able to change it to something that would be more [??], but when we faced reality I remember there was a P.R. lady, an amazing woman and person, her name is Julia French you may know her, she looked at us and told us, “Oh my God. You’ve got to change your idea.”
Andrew: She just came right out and said it like that?
Noam: Yeah, she said, “Okay, you’re going to be my charity.”, and she was a mentor in the program. Then I felt like if someone is calling my company a charity case, what’s going on in here? I’m not used to this. That’s just not very professional feedback that we got, but a very strong one. We got a lot of stuff that showed us how our predictions were wrong, how we were calculating the total available market wrong, why we were into regulation hell, and all kinds of stuff.
Andrew: Regulation hell about raising money and giving it to people?
Noam: Yeah, about how to take a cut of the money give some to the vendor or some for us; how to give specific receipts for tax returns; a lot of things. Then we started thinking about something else. Both me and [??], my partner, were intelligence officers, and our main job was basically looking for data in every possible way and source you can think of, aggregating it, finding patterns, understanding what it means, drawing conclusions, and telling the people above us what to do. What does it all mean?
We thought, “We built a startup that apparently wasn’t really suitable for our personality, and we had a lot of mistakes during the entire journey. Let’s start over. Let’s take something that is really embedded in our personality that we can connect to based on our background and our real life experience and something that we can really see how it’s getting big. Who are the clients? How much money do they have? Who would pay for such a product? How much? [??] like the classic [??] creation.” We spent three days in a row not sleeping, not doing anything, just eating, writing, and typing, and we came up with a new Multa, a new concept.
Andrew: Eating, writing, and typing meaning just brainstorming on paper, “How could we use our ability to gather information and make sense of it in the business world?”. You were just brainstorming and thinking it through until you came up with the model.
Noam: Yeah. It’s not true that it was for us. It came from the entire team. The entire team felt that something was off, and the entire team knew that we were coming from the right background. We started talking about it, and everyone sent a few sentences to the air, and once we got it, it was amazing. It was, like, not an Ah Ha moment, but we all had the same vision and it was brainstorming. Well, basically we all went to the same direction. We all knew exactly how the first mock-up should look like. And then we had an amazing, amazing, amazing, adventure, that is still going on today.
Andrew: The original idea that started off this whole adventure was getting what kind of data and putting it together how?
Noam: So, basically we thought that, let’s say you’re tracking a company. Okay. And you, for example, are tracking a lot of companies. I guess on a day to day basis. So if you want to know what’s going on, you want to understand what they are doing, so you need to collect information from many sources. Some of them are digital, some of them are offline. Some of them are accessible to you. Some of them are accessible by APIs, or by callers or by whatever digital means. You need to aggregate it, and you need to make it pretty, you need to visualize it in a way that will make sense to you, it will make sense to your team, make sense to your superior, even.
And then you need to do it again, and again, and again. If you really want to find the patterns, if you really want to make sense in the letter. So, if you have 2 sources, that’s nothing, that’s a couple of minutes, every day. But if you have 50 sources, or 500 sources, that’s tricky. And if you’re following 20, companies, 50 companies, depending on which industry you are, that’s impossible. That’s an entire team. Which needs to do an entire team of competitive intelligence Analysts.
So we decided to build software that will do that for you. We’ll connect to all of those sources, if they’re paid or free, or it’s hard to get to them, or it’s easy to get to them. We’ll collect them and we’ll put them in the same place. We’ll visualize the data for you, we’ll find the pattern, we’ll alert you about changes in the data itself.
And basically, we give you an estimation of what’s going on. So when output can be this company that you’re following after is opening a new office in Japan and a different company just hired a new VP [??], and this [??] VP, which means that they are going to change your team. And this company is going out of business and a different company is now pivoting to a different business model.
Andrew: Got you. And data will show me that only if it’s organized properly. I see, and that’s the idea. I keep thinking of it from my own personal use, you know. And you’re showing me the bigger use of it, for bigger companies. For my own use, it takes me forever to check out all these different sites to get to know a guest, you know. I do have to look at Archive.org, I do look at Similar Web. Thank you so much for giving me Similar Web Pro. I love it. I used Similar Web before you and I ever met. It was one of my secret weapons.
And then you showed me what the Pro is like. So that tells me where people are getting traffic, where that traffic is going, etc. Those are just 2 sites that I go to. I know that there are other sites that I should be looking at, more new sites and so on. It just takes forever to put it all together and I have researchers who help me do it. But I can see that there’s a much bigger need than that. Much bigger need than, how do I keep Andrew from checking out 10 sites. For other people it’s just tell me when my competitor is opening up an office in a different country and when they are hiring certain kinds of people so that I know what move their making.
Andrew: And for that people would pay.
Noam: Yes. They would, they did.
Andrew: OK. But then you get all that data. You weren’t going to put it together yourself right?
Noam: So, that’s funny that you’re bringing this up because one of the [??] you want to avoid is wasting money, wasting time, wasting energy. So, when we first started, we got the idea, we did the mock-up, we tested it, among ourselves, among friends. I spent hours, and hours, and hours, talking with people from the industry. I used to be also a data analyst myself. So I had other friends that [??] involved in the industry today. And we knew that building something like that, like, scrapers and coilers and things that require a lot of computing power will take a lot of time. So we started with something very simple. My partner and I would build, we wrote the book. We wrote the presentation of 300 or 400 pages that describes…
Andrew: What was the book about?
Noam: It wasn’t really a book. It was more like a huge presentation. A huge power point file that was a step-by-step how you create a report.
Andrew: How to create an intelligence report on a competitor or on any company.
Noam: Yeah, it was very basic in the beginning. It was how to create a report on a company that the main presence was in the web. For example, Marqueto or sales force if you’d like. Hubspot, Case Metrics. Those kind of companies. It was a guide book. Go to this source on a cruddy domain. Get the results. Understand what it means. Sort them in a specific order. Put them in Excel. It was 300 to 400 pages. It was simple with about 45 different sources. And it was basically a manual for people on ODesk and eLance. It was before the merge. We hired 10 people.
Andrew: Oh, I see. It wasn’t so much for the public. I misunderstood it when I heard about it. It was meant for freelancers. You were giving them a how to guide to do what?
Noam: To build our first data base. Instead of building callers and scrapers, we hired people for five to ten bucks an hour. And we asked them to follow those instructions and fill out those Excel sheets.
Andrew: I see.
Noam: Those Excel sheets then were converted into an [??] data base. They were pushed into the mock up we built. We took the mock up and we did some hacking and then we became HTML. And all of a sudden we had an amazing software. It looked like an amazing software. With a data base that we can show our potential clients and give them a live example of what they can get. So we matched the companies if we gave to the eLancers based on the demos that were planned to the same day.
Andrew: So then when you were doing a demo, you could sit down with them and say, “Look at how great our software is. Look at all the information we get on companies that I now you care about.” They see all that data and they think, “Boy, your software is amazing.” What they don’t realize is hours before an eLancer, ODesk freelancer just put the data together manually for a few bucks an hour. But it gave them a sense about what your software could do.
Noam: Exactly. Exactly.
Andrew: I see. And so when you say that figuring out the product is more important than building the product, this is what you mean.
Noam: Yeah. If you don’t have the product and also not wasting time for anyone because we were still on the money from investors and…
Andrew: And you were starting to want out as I understand.
Noam: Yeah. We were starting to want out. We were able to build on fumes. We didn’t take any salaries. We were able to survive because we were living in the accelerated house. And walking from the office. And all of the employees were stuck with me in San Francisco. So they didn’t have anywhere to go to. So then we understood that this was going somewhere, that we were on to something. And that was amazing.
I would not forget this experience never in my life. Walking into an office and after five minutes getting people surrounding asking for more. What can they do with your platform? Can they try it out themselves? How fast they can get a seat. It was amazing. It was like, “Yes! We’re onto something.” And that gave so much energy and so much joy. The entire thing felt like, “Okay, let’s level up. We got it.” And we were working our ass off.
Andrew: What do you think it cost you to put together this data that you used to kind of fake your way through your first MVP? Are we talking about two thousand bucks? I’m trying to compare the cost of doing it manually to what it would have cost you to actually code the whole thing up.
Noam: In dollars it was less than 1,000.
Andrew: Less than a thousand bucks to do this stuff and amazed all your clients and made them say, “How do I get a seat? How do I buy it?”
Noam: Yeah, but we had a form [??] developer and a designer and a back end developer. So excluding labor less than 1,000.
Andrew: I see. So the data was less than a thousand, but you still had to have someone make the page, make the site look good, and pull out the data that you hired the free lancers to put together for you.
Noam: Yes, so the design and the formula that we’re talking about much was the guys were amazing. You can see Similarweb.com now and its contents, so the same people that built the app.
Andrew: Oh well. Similarweb was done by your guys.
Andrew: By the way, why can I not see TapDog? Why are you using a robot txt file to keep me from seeing it?
Noam: We removed it because some of the I.P.s is going to be [??] in a similar but not still a . . .
Andrew: You don’t want your competitors to have information about what you are doing.
Noam: Yeah, exactly. Exactly. And also there’s some very cool companies that are doing similar things, and they have made amazing progress. We need to give them appreciation for that. So there’s not a lot of reason to keep the inside of the [??] but the outside is, therefore, forever like a museum.
Andrew: Okay. So now you have all this data. You know people are ready to buy it.
Andrew: Isn’t it tough for you to tell your team, “You know what, guys? Look at this.” Or at that point does it get easier because they saw how excited people got about buying?”
Noam: No, at that point we were all going as far as possible to TapDog, and nobody stayed in [??]. We actually took a couple of months of building TapDog and kind of neglecting Multa. One of our investors got us a deal for Multa, a partnership with a big production company. The day we sell Mukta is a white label for other TV shows.
Noam: We created an engagement mechanism.
Noam: So it was very interesting. So Multa is actually still active but not as Multa but the code of Multa is implemented in all kinds of places all over the world.
Noam: So the soul of the code is still living.
Noam: Yeah, it was a good outcome all in all. But TapDog was the main thing.
Andrew: Okay. Actually before I go on to TapDog, I want to do a quick plug again. If you are out there and you need to collect more email addresses from people who come to your site, why do you need to do it? Of course, you know, you just don’t want to hit on your site, you want a relationship with the person who comes to your site. And the only way to build a relationship is to collect leads, to collect their email address, to collect a way for you to contact them on an ongoing basis.
But how do you collect those email addresses? Well, you need a page that converts. You need a page that encourages people to give their email address. You need a page that is so well done that people will naturally feel comfortable put their email address into it. I have one that works, and I’d like to share it with you.
Only this month, and I probably will pull it down next month. If you want it now, you can grab it for as long as you want. Anyone out there after I pull it down will not be able to get it. Here is the page. This time I’m going to get the URL right. It is AndrewsWelcomeGate.com. It will only cost a buck. You will be running on the LeadPages platform. So you know that it will run well, that it can handle your traffic, that it will be built to convert.
And, of course, if you’re not happy with that one, there’s tons of other pages on LeadPages that once you sign up you can access to. Let’s start with mine. At least, check it out. It’s available here, AndrewsWelcomeGate.com, AndrewsWelcomeGate.com. Did you just write that down?
Andrew: Yeah, you know what I just noticed? Every single guest that I’ve told about this except for the founder of 1-800-Got-Junk wrote it down, and I think the founder of 1-800-Got-Junk did not write it down because before I did the promo I said, “Will you give me feedback?” And so he was paying attention to give me feedback.
Noam: I see.
Andrew: It is a very well converting page. All right.
Noam: I will try down. I’m now starting to make a new product. So
Andrew: [laughs] What kind of product?
Noam: We’ll [??] an API. So everything in the [??] is about conversion. So it’s not about how many people you’re going to get. It’s about the quality of those people. And to get high quality leads is very expensive. So conversion rates of 0.5 or 0.0.5 is not an option. You need to get to 5, 10.
Noam: So conversion is everything here.
Andrew: For me too.
Noam: I’m going to try.
Andrew: That page got us over a 20% conversion rate.
Noam: Seriously? Wow.
Andrew: From strangers. And frankly I’ve used other lead page pages for different things and I’ve gotten over 50 percent conversion rate on some of them. And the weird thing is lead pages will say that if you have a page with a request for an email address and a name on it, you’ll get okay conversion. You’ll get even better conversions if the page has a button that people click on and then they’re asked for their name and address.
Andrew: You know, sometimes it’s counter intuitive. Sometimes first putting the button and then asking for an email address is better than just asking for the email address. Anyway, I’m really a big user of lead pages. I’ve been a customer of theirs almost from the beginning.
Andrew: And I’m happy that they’re sponsoring Mixergy now and powering Andrewswelcomgate.com. All right. You have to now code up everything that you promised these customers. You have to get data for all that. Let’s start with how you get the data because it seems to be like coding it up is easier. How do you get all that data?
Noam: We started with a lot of public API’s that we knew. We built some scrapers. That took a lot of time because that was mining the project. That was a big thing in the company.
Andrew: What did you scrape?
Noam: A lot of pages. You know scraping is a gray area.
Andrew: Yeah. Give me an example. We can talk about it here.
Noam: It’s so secretive. We started by scraping to see if all kinds of pages like LinkedIn for example, to see if we can do it. But we knew it was not scalable because it’s totally against [??].
Andrew: LinkedIn would have shut you down.
Noam: Eventually we had some kind of an agreement that made it all okay. A lot of Googling, crunch base, all kinds of different sources that research companies are gathering from all over the internet. And some of them are online and some of them are not. We had agreements that people are uploading to an FTP service every hour. And then we’re downloading it and updating our data base. It was for me [??] heaven basically. To close deals every day. Every day. That was my goal. I need to close another data source every day.
Andrew: Everyday another data source. And you don’t necessarily have to pay for them. Crunch Base you don’t have to pay for do you?
Noam: No, of course not. You know, some of the data sources were so, it’s funny to even call it a data source. Think about you want to get to this creation of the company. How are you going to get to the creation of the company? Especially if the company name is not identical to the company URL.
Andrew: So how do you get that?
Noam: So we had a lot of tricks. To validate the first couple of links in Google with the first couple of links in different search engines and to give them score based on the results and based on the SEO…
Andrew: What’s a data source you are especially proud of having closed?
Noam: Having closed? Similar Web.
Andrew: Similar Web. Because their data was so good. But you didn’t have money. How did you pay them for their data?
Noam: We had a great deal. A great deal. We basically got, I think we haggled down to like 20 percent of the first cost. This will never happen again in Similar. But that was just the beginning. They had just launched.
Andrew: Similar Web was just not known. I’m now starting to see people get to know them and talk about them. But when I first discovered them it was I was frustrated with Alexa data. Compete.com data stunk. It’s the worst. I can compare it to my own. I shouldn’t say anything is the worst, but I’m going to say it. Compete stunk. Alexa was, what are you going to say? Do you disagree with me? If you do, you know it better than I do.
Noam: I’m not saying anything.
Andrew: I was unhappy with Compete Data. Let me say that. It didn’t show me what was going on with my interviewees. And when I compared it to me own internal data, I could see that it was off.
Andrew: So I started doing some searches to see if there was someone similar to that. To Alexa, similar to Compete. And I found an old Mashable post about Similar Web and I went there. And then, boom. Just the free version was able to tell me how much traffic a site got. Where the traffic was coming from. Where the traffic was going. I think I was, at the time, able to see some of the ads. I said ‘beautiful, great’.
Noam: Still, the proprial[SP] pages, to do a conversion analysis on the spot, yeah it’s an amazing product. We were fascinated by the API. And it’s…
Andrew: And so you made a deal with them and suddenly you had all that data to give to your customers.
Noam: It was like magic for people, I admit that I was so surprised, because it was so.. I’m proud of the deal, but I’m an analytics guy. I knew completely about Alexa, about Sela and OHLC, also or other sources of data. when people realize that they can see other peoples traffic, other sites traffic. They were “What is going on? How do you manage to do it?” That was one of the best selling points actually, to create such a pulse[SP] with this data.
Actually, our biggest clients were also companies that were multi-industry digital, we didn’t have clients from the pharmaceutical industry, or the agriculture industry or heavy machinery. We had digital vendors, web based companies that wanted to find out what was going on with their competitors.
Noam: So yeah, it’s definitely similar work. As well as to start the medium off the gate level story.
Andrew: Okay. So now you get it, it’s time to get customers right? Otherwise the data’s just sitting there. How did you get customers?
Noam: We had an amazing relationship with a lot of places in that world from the Accelerator. One of the best things about AQuA’s[SP] labs and I guess about Accelerator’s in general. You know what, Accelerator is in Silicon Valley. It took me about two years to get familiarized with the industry in Tel Aviv. With entrepreneurs, with investors, so that people would know who… for me to understand what you can do and what you can’t. I know people believe what you can’t do and what you can…
I got my money by sending a Facebook message, and this something that most people would never do because it’s very awkward. But still, there are some rules of conduct, things that are acceptable and things that are not. When you are moving to a different industry, to a different culture from that of Silicon Valley, if you’re coming by yourself it will take you a long time to create a network. When we went to Uppers labs[SP], we had a network, the network was there. We got meetings in Cisco and Mercedo[SP], in Linkedin and Facebook, in Google…
Andrew: I’m looking just at Julia’s profile here on Linkedin, and looking at her customer base. She runs…
Noam: She’s amazing.
Andrew: … CoveredCo. She has, as clients, where is that, WhatsApp, a Techcrunch Europe writer’s bragging about how much he likes her, I saw Dropbox, I see a bunch of, I’m trying to find the names that people would recognize in the audience, but there’s a ton of them.
Andrew: And so she must have a ton of good relationships alone. So I see, by being a part of the Accelerator, all the sudden, all doors open up, it seems.
Noam: Yeah, I can say for certain that they were responsible for about 95% of the clients that we got, because they got us certified. This is a company from Dell House, so it’s okay. They told some friends, then it was, then they got us but this company owes everything to Upperslabs.
Andrew: No, how much did you do in revenue before you sold?
Noam: Not much. Tens of thousands.
Andrew: Tens of thousands a month, or total?
Noam: Month? No, in total.
Andrew: Tens of thousands total. If you were on to something, how did you end up selling to Similarweb as opposed to continuing to grow?
Noam: Because we… that was a long time ago and we’ve told that story several times. So basically, it was a decision that… in this world there’s a lot of companies that are doing similar things, and they are competing against each other and it’s basically… those are all factors, but it’s going the same way. When we first met Similar, we noticed that our team had a very, very similar vision. We saw ourselves as the company that is going to create the competitive intelligence engine behind the web. We started with insights, we started with alerts by getting a lot of data sources for more on the world [??], but we knew that eventually we have to develop those sources in order to be independent. Because some of companies that based all of their user base on Facebook connect, it’s dangerous, because they can shut you off in no time. It happened before and it will happen again.
Andrew: Yes, I mean, I met people like that.
Noam: And we were basing our data on other insights and other people’s data. So when I looked several years into the future I saw that OK, I need to create an entire department of data scientists, I need to create a big data infrastructure, I need to create those sources at least the inventory, the essential sources to be able to build upon them.
Noam: but I have the insights, and Similar[SP] went to the same direction but they already had that. They were about 50 people back then, it was just before a big round they did with Naspers, and when I met their CEO accidentally in an event in Google campus in Tel Aviv, and we met the day after that, and I met the VP codart [??] and the VP R & D ED? And we were just completing each other’s sentences.
Then we were in a dilemma, are we going to fight our way to the top and create everything and raise a lot of money and demote [??] ourselves to death basically. Because we didn’t have a lot of grounds to base a good valuation that will not dilute us, and do everything that they have already done. Feels[??] all join hands and fight for the same cards, to be like a huge Multi-billion dollar company in Israel.
Andrew: How much did you sell for?
Noam: I can’t really reveal that.
Andrew: Did you become a millionaire because of it?
Andrew: Even with your shares in the business, even with equity?
Noam: Yes. If there would be a good outcome to Similar? eventually in IPO or a huge sell, I would be very happy, both for my team and everyone involved. But I still need to work. Andrew: So are you freaking hungry because you hit on something and you thought Aha I can do this, that now you’re saying to yourself I can’t wait to have a shot at it again, another opportunity to build something like TapDog?
Noam: So it’s there, it’s always there, it will never go away. It’s not a joke when people say you have the bug. But what we’re doing right now is so exciting, because this company is going like crazy. We are now 100 people, and we’re having adventures here that I couldn’t believe there is something like that going on in Tel Aviv, regarding the business opportunities and clients that we’re doing and co-projects and innovative technology. This is amazing. So this is also something that is a once in a lifetime opportunity to be in a company like that, so that’s one thing.
Andrew: I see.
Noam: And I’m here with my second family, my team. This is amazing, my best friends in the world, my buddies[??] , walking with me in this crazy adventure.
Andrew: one thing you told a researcher here at Mixergy here is the nice part of having done this is that now you have the credibility to do whatever you want next. If you decide to in a year, in 5 years, to go and do something else, what do you think the reaction would be?
Noam: what do you mean the reaction?
Andrew: you think, from investors, from potential customers and partners.
Andrew: Doors start opening up? You now have the work that you got from being a part of the accelerator?
Andrew: …that you get to meet when you come out here to represent SimilarWeb. I won’t reveal who, but when you were in town you were telling me who you met with, and you’re good at that.
Andrew: By the way…
Andrew: …if anyone ever has an opportunity to sit down with Noam, if you’re out there listening to me, find a way to sit with him in private and talk about data intelligence, where data is collected, how data is collected, how it’s used. I think it’s beyond the scope of this interview, but it’s fascinating stuff that you can only get into when you have private conversations. Noam, now you’re on the inside for so long that I think you have a unique ability to share where data comes from, how SimilarWeb and other companies put data together, where we as entrepreneurs can get data and what we can do with it.
Andrew: Let me do a quick plug here, and then I want to ask one final question that has nothing to do with your business before we end.
Andrew: Here it is. You heard Noam say that he’s been a Mixergy fan since he started out. If you’re just new to this, maybe new meaning the last year or so you’ve come in and you want to catch up by listening to all the older interviews, over a thousand interviews you could listen to while you go for a run, while you’re at the gym, while you’re just waking up or walking around the house, while you’re commuting into work, whatever, all those interviews are available to you at Mixergy Premium.
When you’re a Mixergy Premium member you get access to the thousand-plus interviews of so many entrepreneurs that I’ve interviewed here today have said that they listened to, that they grew up on. This is the stuff.
If you want to listen to Drew Houston of Dropbox in the early days talk about how he built his business. Y Combinator’s founder Paul Graham back when he was in Y Combinator full time talking about how he built that up. Alexis Ohanian talking about how he built up Reddit back in the early days before everyone was on Reddit – back when Reddit was a second player to digg.com. You can see his thought process. You can see how he built it up in that old interview.
So many of those interviews with people who have gone on to greatness are in there in the Mixergy archive, and if you want to listen to them just be a member of Mixergy Premium. Here’s the URL. Go to mixergypremium.com. Sign up. I guarantee you’ll love it. Thousands of other people have loved it, and I know that you will love it and benefit from it. mixergypremium.com.
Noam, here’s the final question. It has nothing to do with this business, but I think it says something about you and I think a lot of people in the audience are going to identify with it. When you were a kid you sold string.
Andrew: Yeah. Wasn’t it string? Here we go.
Noam: Oh, strings, yes, bracelets.
Andrew: Yeah, tell me about that.
Noam: Wow. I told that?
Andrew: No. You tell us now. We haven’t gotten into that. How did you sell string as a kid?
Noam: It was second grade.
Noam: It was second grade I think I sold that. I went to a religious school. It was strange now when I’m remembering back. I think I saw that on someone, on a neighbor. It was so cool. It was like a small [??] made of strings, and I thought okay, why not make something like that and sell them to my classmates.
I got a partner. He was actually the money guy. I was the creative guy. He eventually became the manager of my band in high school. It was a vital partnership. Yeah, we just started doing that. We sold them for the equivalent of a buck today, something like that.
Noam: It took us about 30 minutes to create one, and we spent all of the classes creating bracelets and all of the time between the classes selling them. I think we spent most of the money on lunch and restaurants. That was very strange for a seven year old kid to go and get a table in a restaurant. But, that was the beginning. That was the beginning of this journey. Wow, I forgot about that.
Andrew: Yeah, it’s kind of cool. I see often entrepreneurs who had these little businesses even before they understood that what they were creating is a business. It’s just a creative outlet, and one of the exciting things about what we do today is that we get to keep living that creativity, that creative flow that we had when we were kids.
Andrew: All right. Congratulations on your success.
Noam: Thank you.
Andrew: I would like to send people over someplace to find out more about you. I think there are two places where they can go and connect with you. The first is your blog, but I don’t even know if you update it much.
Noam: Not much, but sometimes.
Andrew: It’s noamschwartz.tumblr.com. Sorry?
Noam: Not much, but from time to time when I have something important to say or interesting.
Andrew: I think a better place for people to connect with you is probably… Oh, no, not even Twitter. You haven’t tweeted in months.
Noam: No, [??] Facebook.
Noam: That’s the place, yeah.
Andrew: And you’ll let people add you on Facebook even if you don’t know them?
Noam: Yeah, it’s okay if it’s not a personal forum for a long time. We don’t like stuff about your feelings or about your issues, at least in my circle. It’s a professional group.
Andrew: I see a lot of Noam Schwartzes in here. I’m trying to add you on Facebook. We probably are added…
Andrew: …for some reason I don’t see you. It’s NoamSP, right?
Noam: Yeah, just like facebook.com/noamsp.
Andrew: Yeah, facebook.com/noamsp. Noam, congratulations on your success. Thank you so much for having listened to Mixergy over the years and now coming back and completing the circle of Mixergy by doing an interview and teaching other people. It’s been great to see you here.
Noam: This is amazing. [??] building your website…
Andrew: Our connection is starting to go down as we’re talking.
Noam: Okay. No, I’m saying my wife is starting to be [??]…
Andrew: Oh, she’s starting to become an entrepreneur and listening to Mixergy. Right on. Good.
Noam: Thank you.
Andrew: And I got to meet her when you guys were in town. We happened to be at the Apple Store at the same time. I’m hoping to get to see her again. Congratulations to you.
Thank you all for being a part of Mixergy. Thank you, Skype, for having survived for just an hour before starting to go down. That Skype is so unreliable sometimes, but I’m proud to get to use it. All right, everyone, bye.
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