Andrew: Hey, everyone, my name is Andrew Warner. I’m the founder of Mixergy, where I interview entrepreneurs about how they built their businesses. One of the patterns that I’ve noticed over the years is entrepreneurs who build measurably dependably successful companies, identify a pain, a real problem in the world and then they understand it and start to address it and solve it, and as a result, they end up building a successful company and that’s what’s happening in today’s interview and you’re going to find out about it.
My hesitation for you about this interview is once you find out what today’s guest does, you’re kind of going to feel a little bit like my mom did the first time I took her to an Apple Store. We’re in New York, in Manhattan. I take her into an Apple Store. I say, “I know you want a camera, but I’m going to get you an iPhone.” She said, “No, I just want a camera. I’m happy with my phone.” I said, “Mom, you want an iPhone. It’s got a camera in it and all this other stuff, just get that.” She said, “No, I’m not a smartphone person.” I said, “Fine, I didn’t get it.” You know what I’m talking about, Guy.
A few months later, I actually just bought her . . . actually, I bought my dad an iPhone and I shipped it over. She looked at it and it just opened her eyes. This person who thought that she was not a smartphone person suddenly saw, “Hey, it’s easier to take pictures on this and actually, it’s more fun to share them. I don’t have to upload it into my computer. Why do I need a digital camera from Canon? An iPhone is better.”
So the reason I’m telling you this is sometimes the things we’re a little scared of, like my mom was scared of a smartphone, are the things that need to be presented to us and open our eyes. So here is what today’s guest does. His name is Guy Greenberg. He is the cofounder of a company called Cooladata. Here’s the part that’s going to scare you, but I promise you, as we go through this, you’re going to understand how he built it, and whatever he used to build his business, you’re going to be able to apply to your business.
Cooladata is a big data behavioral analytics platform. All right. We’re going to find out how he got here and how he did it and how he’s building it up. We probably won’t find out his revenue, but I promise to ask him because my producer said that he warned him that’s what I’m going to be asking.
All right. This whole thing is sponsored by two great companies. The first is a company that helps me close more sales, get more business and I urge you to try it. It’s called Pipedrive. And the second is a company that I’ve hired a developer from, a designer from and now somebody to help me with my finances, such a great company. It’s called Toptal, top as in top of your head, tal as an in talent. I’ll tell you more about those sponsors later.
First, Guy, welcome.
Guy: Hi. How are you?
Andrew: I saw you smile as I did that intro. What was it about that intro that resonated with you?
Guy: Taking your mother to buy the iPhone. Actually, I’m the iPhone guy for my mother. Every day I get a phone call, “Fix this, fix this,” as if I’m the expert.
Andrew: You relate. We all have stuff we’re afraid of. For me, I had a bunch of Mixergy interviewees to my house and I said, “I’m going to cook something for them, but I don’t know how to cook.” I called my dad. Every step of the way, I had him on the phone. I said, “How do I do this?” I had to boil tomatoes and peel them. I don’t know how to do it. So we all have things that we’re afraid of, but we’ve got to learn them.
Let’s just go back a little bit before we talk about Cooladata. You were working at a different business, and you had a pain with KPI implementations. This is at a previous company that you were with, Gilon. What’s KPI implementations and what’s the problem that you had?
Guy: Well, it’s not that I had a problem, but basically KPIs gave me only a snapshot of the business, of what’s the current situation right now. It’s kind of how many sales, what are my sales, sales distributed by geography. This kind of thing, I would say traditional [inaudible 00:03:48] and BI has been there for almost 40 years and hasn’t changed much. I started to think about a different way of analyzing or more revolutionary way of analyzing data, which is based on time series. This is the behavioral analytics we always . . .
Andrew: Let me pause you for a second. KPI, key performance indicators, every business has to do this, right? We internally have a spreadsheet, and I know that’s going to turn some people off, where people on the team have to go and get the data that we need — how many people join the mailing list, how many of them bought, that kind of thing. That’s what you’re saying that every business had to do. You had to do it. What was the issue with doing it?
Guy: Businesses still have to do it. It’s something that’s fundamental for every business. However, it only gives you a certain picture of what’s going on. Today, especially in the online world, it’s much more dynamic. Things are changing all the time, and you have to see things not as a snapshot, but as a kind of dynamic way. For example, what causes people to renew an account? What causes people to abandon their cart when shopping? These are things that you cannot get just from a snapshot. You have to understand the series of actions over time.
This is behavioral analytics. This is a fundamental difference between KPI-based BI, which is basically a pivot table or a show me sales by country, etc., compared to behavioral analytics that, for example, show me the series of actions that lead to checkout in an online story. So this is a different way of analyzing data. Behind it, you have to have a very sophisticated way of analyzing the granular actions themselves. This is something that traditional BI lacks.
Andrew: BI, by the way, business intelligence.
Guy: Yeah, business intelligence. So I’m not saying BI is going anywhere. It’s here to stay, of course, but I think the new era of online big data, event-based data, things that are happening very dynamically is bringing also a different way of analyzing data, which is a behavioral analysis. It’s kind of a time series analysis. This is the main difference.
Andrew: It’s good for me to hear that even a company your size, you had 300 employees back when . . . am I pronouncing the company name right, Gilon?
Andrew: Even when you were running Gilon, you had 300 employees. You even had a hard time getting that data. Sometimes I feel like what is wrong with me, what is wrong with my team that we can’t get the kind of data that you just mentioned. You’re saying what you told our producer was it would take you six months to a year to implement it. It would take you 5 to 25 people on your team to try to get this data together. This was a frustration you had at the business before you sold it. Am I correct in understanding that?
Guy: Yes, exactly. What happens is that you come to an organization, you have to map all the data sources. You have to decide which one to choose. You have to clean the data and connect it, transformation, load the data, analyze it. This whole process is very tedious. It has a high rate of failure and takes a long time. Another problem with it, in a dynamic world that changes every day, once you finish this, after six months, it’s already outdated. Today, the time to market is critical. So you want to have something within days or even hours so that you can adjust your analytics to your business dynamics. This is something you couldn’t do in the traditional way of doing it.
Guy: This is what brought me to found Cooladata, to do these things within days instead of within months.
Andrew: So you know what? I went back and I found an old Gigaom article about you from 2013, and they said that you and your cofounder, Tomer Ben Moshe, you guys were running a consulting business after you sold your company. What I’m wondering is a guy sells his company. Why start a consulting business? It feels to me like this was part of a bigger strategy that I need to understand. Tell me about that.
Guy: Well, I wouldn’t say it was consulting. I would say it’s a combination of an angel and consultancy. I was more of an advisor. I did some angel investment in a few companies, actually, around big data and that area.
Andrew: I see.
Guy: Part of my added value is bringing my knowledge in BI and big data. This was part of the investment, part of the whole package.
Andrew: I see. And as you were giving them advice, as you were looking inside at their business, you started — again, this is according to this Gigaom article that I read — you started to see, “A tremendous hunger for what you call unified behavioral analytics,” this understanding of unifying not just the data you have from the with, but what about the stuff that happens in CRM? What about the stuff that happens offline? Am I understanding that right?
Guy: Yes, exactly. Imagine I have a customer, a foreign exchange customer. So you would probably register in the website and want to do a stock trade. However, you would get a phone call from the context center to a person who will connect you by a phone and put the data in his CRM system. So we already see two touchpoints. One is the web touchpoint and the other is the CRM. Then he would probably start trading. That was an online trading system. He would also have to follow up with him by email and his web interaction. In order to get this full journey, you have to have a system that supports this.
The benefits, the business benefits of this thing is you have a much better experience. You manage to bring up his revenue to retain him, to have a more satisfied customer. This is something only Cooladata can do. I think this is one of our main strengths.
Andrew: I see. That happens to us too. If I talk to a customer at an event, for example, I put it into my personal CRM. If somebody buys from us, it goes into our business ecommerce CRM. If they then talk to our customer service, it goes into our email system. There’s no unified place where we can see, “Hey, this is a person who talked to Andrew and someone who bought from us and now he has a customer service issue and how did he go from one to the other to the other so we can find more people like him and give them a similar journey and that’s what you’re talking about.
Guy: Exactly. The web analytics tools that you have today, they’re very good to analyze what you’re doing on the website or mobile app. When it comes to what’s going on in other sources, like the CRM or the call center or the trading or other system, they fall back. Then that requires to start building a very expensive and tedious data warehouse, and this is something you’d like to avoid and this is where Cooladata comes in.
Andrew: I’ve got to tell you, I’m looking over your shoulder as we’re talking. What is that framed — I don’t know what it is, the framed photo behind you?
Guy: Well, this is a photo from my army service. I served in the rescue unit, the Air Force Rescue Unit. This is me actually going down the helicopter.
Andrew: That was you in there. That’s so tiny on my screen, I can’t tell. I heard there was a situation in one of the rescues where I guess it was a kid who went into an underwater cave? What happened there?
Andrew: I think this gives me a sense of your personality and how you learned to make decisions. What happened there? Do you mind talking about it?
Guy: Yeah. It was many years ago, actually. It was a school trip. About a 16 or 17-year old kid was told this cave is a cave you dive into and get into an air bubble. But he wasn’t advised to do that. So he decided to go in. Apparently, this year, there was lots of rain and there wasn’t any bubble, so he practically drowned. We came with our diving equipment and immediately we have to make a decision whether to do a whole process of securing yourself, which would take several hours, or just jump in and try and rescue him.
The decision was go and try and rescue him. Unfortunately, it was too late. It was already half an hour in and he died. I was actually told that I took an unnecessary risk. However, this is the kind of decision you have to make in seconds. It’s probably not the optimal decision. However, in the startup industry, you have to make fast decisions as opposed to optimal. Sometimes you’re wrong. That’s what happens. Under pressure, you have to make all the time decisions. This is one of the lessons I learned from that.
Andrew: I’m surprised you took a positive lesson from that. It almost feels like because the kid died — now that I’m dad, just saying that is so painful for me — because of what happened, you might take away from that it’s not worth taking a risk, it’s not worth going after because even if make my best effort attempt and risk my own life, things may not work out. Why didn’t you take that negative away from that?
Guy: Well, as I told you, it’s very easy to say afterwards what was the right decision. I would say a no-brainer. But the thing is, you have to take the decision in the right time. If you think you had a chance to save the kid, it was the right decision. Unfortunately, it didn’t work, but at the time, if I thought it’s good enough to take a chance and have a chance of saving him instead of waiting a few hours and do all the necessary secure things, I would say it was, at the time, the right decision, the same as in business.
You do the business decision at the right time. You have to decide to shut down a feature, to turn down a customer, to turn down an investment, to take an investment in bad terms. These are things you have to decide. Only later on, you’ll know if you’re right or wrong. The thing is, you don’t have much time to have all the considerations. It’s good in an optimal world, but the world is very dynamic and under pressure and you have to decide quickly.
Andrew: My brother for a while there was a professional, full-time poker player, and I remember going in and watching him and hearing the conversations after some of his poker matches. He and his poker friends would have to remind themselves, “Hey, you got beat on this one hand, but you made the right decision based on the numbers, based on the odds of winning, based on the hands that you had.” They had to just keep reinforcing, “Don’t take away from this that because you lost, your move was wrong.” Inevitably, if you keep doing the same move in the same situation, you’re going to do well. I think that’s important to take away from business too. So many times when something doesn’t work out, we think the whole chain of events leading to it and every decision-making point up to that point was a failure just because it didn’t work out and that’s the right way to approach it.
Guy: I acquired a few companies in my career and some are good decisions and some are bad. But eventually, if you do your due diligence, in the end, it’s your gut feeling and that’s the way to decide. Deciding on the pressure according to the best knowledge you have in your gut feeling is probably what you have to do when you’re in a startup.
Andrew: Okay. After your military career, you ended up being the CEO of Gilon Business Insights. That’s the company that we talked about earlier. You were there. As I understand it —I’m looking at the Crunchbase entry on that business — there were lots of different things that you did, but at the heart of it, you were in charge of managing people’s data and making sense of it for them. Am I right?
Andrew: Through software and services. You guys then sold it, Crunchbase says, for $19.9 million. Is Crunchbase right? Is that public?
Andrew: Did you make out well from that sale? Did you end up with at least $1 million from that sale?
Guy: I’m okay.
Andrew: You’re okay. You won’t even say that.
Guy: I’m okay.
Andrew: All right. Is it weird that I’m asking a lot of personal questions?
Guy: No. That’s fine.
Andrew: All right. You left that company because?
Guy: Basically, you have three years’ look and then you decide if you stay. I’m not a corporate guy. Working in a 7,000-employee company is not for me. I knew it from the start. I think most entrepreneurs find it hard working in corporate. That was a good decision I made from there.
Andrew: Okay. All right. That brings us to this business and how you started. Let me take a moment to talk about my sponsor, then we’re going to go back in and talk about the first move you made, which was kind of surprising, but I think it’s one that a lot of entrepreneurs end up taking, then one little thing. Actually, it was one big thing changed everything for you in raising money.
But first, I’ve got to tell everyone about a company called Pipedrive. Guy, my guess is you don’t know Pipedrive. Am I right?
Andrew: I’m going to be open with you. Salesforce is an investor in your business, am I right?
Andrew: Yes, because Salesforce wants you to help their customers make sense of all the data in Salesforce and connect it to what’s happening your customers’ websites and so on. Here’s the thing. For many people, Salesforce is terrific. For some companies, it’s just not. It’s overkill.
For businesses like mine, when I want to just close sales, what I do is I just fire up Pipedrive. I create a new pipeline. Pipelines are steps of each sales process that I have, like what’s the first thing what we do, what’s the second thing and so on. Then I start to work the system. In fact, it’s helped us organize our sales, close more sales and get insights into our sales. Let me focus on the last part because you’re a data person and I think this is an issue that I a lot of people have.
A couple of years ago, I was talking to one of my listeners and he said, “No one likes me. It’s so hard when you’re starting a business. No one wants to talk to you. Andrew, you don’t understand. Anytime you try to sell something, of course people are going to buy from you because they know you, they trust you, they have a bigger customer base and so you’re going to get yes’s where I get no.”
I said, “You’ve been making these offers where people are turning you down?” He goes, “Yeah, they’re not even responding. They’re not even listening to me.” I said, “Hey, we’re using Skype. Go up to the conversation menu in Skype, hit the screen share and I want you to do something for me. So he did it.
I said, “Here’s what I want you to do. Go into Gmail, type into the search box is:sent.” He did that. I said, “Now, show me all the emails that you sent to your prospects trying to sell.” And he showed me two. He sent out two messages, and he thought he was a failure because those two people didn’t respond. What a mistake. But it’s the delusion that a lot of salespeople have. They think they made more sales calls, sent more sales emails than they actually did.
Since then, I started telling everyone go sign up for Pipedrive, organize your process how you think you’re going to sell and if you’re telling me that people aren’t buying, I want to see the stats section on Pipedrive. The beautiful thing about Pipedrive is it shows you how many people did you actually send sales emails to, how many of those didn’t respond?
So, if someone sales, “I can’t get anyone to buy and I look at their stats in Pipedrive, I can see they only sent out two or they sent out 20 or I can see where they’re dropping the ball. My friend, Noah Kagan, says that he gets 50% of his responses the second time he pings someone. He’s well known, a successful entrepreneur. He still gets 50% responses the second time he sends a ping saying, “Did you get my first message?” Most people don’t do that.
Pipedrive will help you do that and so much more by organizing your sales process and holding you accountable. I want you to go check them out at this special URL if you’re listening to me because they are long-time Mixergy fans. I’ve sent so many customers their way that they keep buying ads from us and they’re giving us in return for that 14 days free and 14 days you will be able to organize your sales and make real sales if you use this software.
So go to Pipedrive.com/Mixergy. You’ll get 14 days free, 25% off for three months after that. And really, more than that, an organized way of selling, get yourself some sanity, increase your sales, but also, do it in an organized, sane way. You’ll be glad you did. Go check them out, Pipedrive.com/Mixergy.
Guy, what do you think of that as like a sales pitch? I always try to get a report card from [inaudible 00:21:30].
Guy: I would like to hire you. You’re a great sales guy.
Andrew: You know what? Thank you. As a kid, I used to admire the infomercial salespeople who could sell, sell, sell. I used to wish that I was at an age where I could go on the Coney Island Boardwalk and I could watch those people who could sell to strangers because I could learn from them. There was an episode of “Curb Your Enthusiasm” where Larry David said, “I want to sell cars.” I think most people who watched it couldn’t identify with it. I could. I always dreamed that I could sell cars for just like six months, let me learn it. So doing these ads helped me do that. You’re smiling. Do you identify with any of that?
Guy: Actually, I’m not the greatest sales guy, so not really. I like to sell out of a professional kind of view, which I understand the business. I understand the product. I understand the technology, not because I’m a great talker or talker or that kind of stuff. But I really admire the guys who can sell anything.
Andrew: Me too. My sense is that your CEO, Dan, is more of the salesperson. Am I right?
Andrew: We probably had you on instead of Dan — Dan would be able to talk, he’d be able to sell us on this business, but we had you on because you’re the founder and that’s our focus on Mixergy, am I right?
Guy: Yeah. You probably wanted to see the founder, but definitely he would sell better than me.
Andrew: The first step that you took was you sold the company, I understand the problem because I’ve been doing some angel investing. I see where the next business needs to be. Why didn’t you start it? Why did you go with Tomer Ben Moshe? Why did you contact him and say, “Hey, let’s do this together?”
Guy: So we knew each other from the past. We did a lot of activities tighter when I was at Gilon and Tomer as at Microsoft. We worked with Microsoft’s [inaudible 00:23:25] services had just launched. We did a great job in penetrating the market. I think we had a good experience of working as a team and with BI technology. So we were very excited when the big data on the cloud came in and all the new technology and how to utilize it, as I mentioned, not only for scale, which, of course, goes without saying, but to analyze things in a more exciting way with the behavioral analysis and we did it in a few days instead of a few months.
I think all of this together is very exciting and it’s a game-changer thinking of the world. I built the data warehouse for the largest bank in Israel, Bank Leumi. It took us two years and it was a team of 40 people. It was 3 terabytes. That was huge back then. Today, my smallest customers have much more than 10 terabytes.
Andrew: Yeah. I get more than that just from Google Drive.
Guy: Yeah. That price is a fraction of less than a [inaudible 00:24:52] of what it costs then, the price per terabyte. It was a game changer. What happens there, we had to consider each transaction whether it’s worth analyzing, because the cost was so high and today, just putting everything and the smallest company with two, three people, ecommerce site, gaming company, they can afford things they can only imagine 15 years ago. So, that’s for me very exciting, and that’s what makes the new businesses what we call insight-driven. They make their decisions on their data on an hourly basis.
Before, the CEO of a bank or any other enterprise organization used to get a printed report he hardly looked at. Today, the new CEO is the type that drills into the data, analyzes it, knows exactly what data science is, knows predictive modeling types. This is a different era, a different generation. For a data guy who’s been in this for 25 years, I think it’s very exciting.
Andrew: So the first step you took, you told our producer, was raising money. I wonder if there was a step before that that you just happened not to bring up with the producer. Did you talk with potential customers before? Did you say, “Look, I have this experience in data. I think there’s a big opportunity in doing much more because of the cloud. If I do this, would you be my customer?” Did you look at potential customers? Did you talk to them before launching?
Guy: Yes, of course. As I mentioned, when I was an angel and I did some consultancy because I was considered an expert in the area. So companies came to me and said, “Look, I have this problem. I’m smart electricity company who measures electricity consumption in building and I collect lots of data I don’t know what to do with.” So how can I monetize it? I would give them advice. You have to do this and this. You have to build this whole system. This is the outcome you bring.
In the end, your main asset for your data, not your census. So I would give these companies this advice, sometimes for free, even. I realized that even the advice I gave them would still take them quite a long time to build this and it would be expensive and they don’t necessarily have . . .
Andrew: Sorry, you were saying they don’t necessarily have what? It was taking a long time and they don’t necessarily have what?
Guy: The right resources.
Andrew: The resources to do it. Okay. So were you also saying to them, “If I build this, will you buy?” Were you trying to get commitments for purchase also?
Guy: Yeah. Actually, many of them told me, “Can you build this for me?” I’d say, “Not now, but if you wait a year until the platform is ready, then I will probably [inaudible 00:28:13].” But Cooladata is not something that took six months to build. It took about two years to build. It was very complicated. Lots of IT, lots of technology. It wasn’t something I could promise them and then deliver after three months, but it gave me the right idea that we can do it and we should do it and that would bring good value.
Andrew: Then you went to raise money. It wasn’t hard. It was actually easy because. . .?
Guy: We had the track record. We had an exit. I personally had two exits before. We’re experts in the domain. So I think when you have a proven track record and you know what you’re talking about because you’re an expert in your domain, so it makes things easier. It doesn’t go without saying, but it’s based a lot on that theory and of course your personal relationship with investors that you have from previous encounters.
Andrew: How did you connect with the investors?
Guy: Well, I know them. One of them was invested in a previous company, two previous companies and the other we did some co-investment as an angel and a consultancy. We developed those relationships. When you come to raise money, of course, it makes things easier.
Andrew: And you had those . . .
Guy: You get a certain amount that’s a [inaudible 00:28:54], but if you prove to deliver certain KPIs, then you get the extra round A.
Andrew: Okay. Then once you raised the money, it was time to build the product. How did you know at that point what goes into your first version considering all the different data, all the different ways you could analyze it?
Guy: So I think you had to have two things in the first MVP. One is the loading semi-structured data in real time, which at the time, it wasn’t easy or even today, it’s not an easy task. So you can get events streaming from tens of thousands of device at the same time, then you have to handle this amount. So I would call this part the back end part, loading the data and reaching it.
The other part was to show a different way of analyzing the data that was not the usual, traditional way of analyzing and what I talked about, the behavior analytics. So, proving these two things in the platform was our first go. It wasn’t easy, a lot of problems. The technology was very new at the time. Building it better is probably not the best idea, but in the end, it proved out that we bet on the right technology and it worked.
Andrew: It worked. Still, you had to educate the market. You still had to say this is the way you guys are used to dealing with key performance indicators with metrics of success, but here’s this new thing we have. Talk about that. What was the difference in how they saw the world and how you wanted them to see the world?
Guy: Yeah. They used to see this dashboard showing them engaged with the sales and top ten customers, top ten products and then they were actually quite happy with that. So, coming to them and saying, “Look, you’re missing something by not analyzing in this different way, it was something you had to educate. So to teach them, today it’s probably more common follow analysis, cohort analysis, path analysis, these are things that today you see quite a lot and it’s much easier, but at the time, at the beginning, it wasn’t so trivial to educate, understanding what was a retention heat map is not something that comes intuitively.
You have to explain what you see here on the screen, why is it important, why a behavioral segment in the online world is much better than a demographic segment because practically, many of the people put in fake data about their demographics, like their gender or their age, whereas when I’m talking about behavior, I don’t really need to know the demographic data because I base all the segments in my analysis on the behavior and that is much more accurate and gives a much better picture.
So, when you explain it, it makes sense and people understand. It’s not really easy to articulate it in two sentences. You have to actually sit with a person, show them, explain your mistakes and webinars, meetups, lots of content writing. This is something unfortunately you have to deal with when you educate the market. I think if you see the trends, you hear much more the term behavior analytics nowadays and cohort and follow and path are probably things that I would say are almost commodity. So it did happen eventually and they were happy.
As we went on, we saw it’s not enough. Behavior alone is not enough. You have to connect it with more enterprise data in order to really get the real value out of it. As I mentioned, the story about connecting the CRM, trending, ecommerce, and the online data together gives you a much better picture and a much more clever way of analyzing.
Just to give you an example, everyone knows what the customer lifetime value is. That’s a very common thing. However, if you calculate the customer lifetime value only according to the activity on the website, on the ecommerce site, you would know you actually return the product to the store and practically the revenue is much lower.
Actually, they spent a lot of time from the support and he’s not a good customer as I thought he is. He’s a much lower value customer. This is something you can only get the full picture when you merge the online and offline data together. I think this is what we realized as opposed to the beginning when you looked only at the behavior when we realized you have to have the unified and the connection of the online and the offline.
Andrew: This was you or your company having to go out and convince businesses that this is important, that this made sense, and explain to them what the insight would be and how they could use it. Am I right?
Guy: Right. So different types of businesses, you see the early adopters are actually the online businesses, the ecommerce, the gaming, they live data, they live behavioral. That’s what they do all day, actually, in their main business. So it’s not so hard to convince those, I would say, low hanging fruit. However, going into a large organization, which is brick and mortar, and now moving into online is a big more difficult. It takes more time to realize things and they’re more conservative in how they think. So, yes, we did it the right way, went to the low-hanging fruit for the fast-adopting businesses and then moving up the stream.
Andrew: If you heard me typing, it’s me writing a couple of questions. I want to come back in a moment and ask you some questions that just seem obvious to me and I can’t figure out the answer to. As you were talking, I wrote them down. Let me take a moment and tell you about a company called Toptal. Guy, do you know about Toptal?
Andrew: They’re phenomenal. This is the company that has the best developers in their network. If you need to hire a developer, you go to them. They match a perfect person with you. If you like them, you get to go right away and they’re part of your team.
But here’s what I did with them recently. They added a finance department. A lot of the stuff that you’re talking about, even if I had the data, I don’t know if I can analyze it enough. I don’t have the background in it in doing cohort analysis, for example, and understanding where our best customers are. Even if you give it to me, I need someone to help analyze it. For a long time, I thought because I don’t know how to do it, we’ll just grow it at some point and find a solution for it, but it’s not me, it’s not now.
And then I had lunch with—actually, drinks, let’s be honest, it was scotch—with my sponsor, Toptal. They keep wanting me to talk about their finance department, but I don’t want to talk about because when they tell me to talk about it, they say, “You have people in your audience who are raising money. They need spreadsheets. Our guys can do their spreadsheets.” I say, “No, I don’t know if that’s the right audience for us to target, people who are trying to raise money and tell them Toptal is going to help them do it.”
I said, “You know what? I have this issue. I’m trying to figure out where my money is going, what’s making us the most money, what’s the most valuable part of our business? What am I missing in the way we’re structuring our company? Would your finance people be able to help with that?” They said, “Yeah, we can do that.”
So I was introduced to a matcher. I talked to the matcher and said, “Here’s what I’m looking for. I explained it.” He went away and came back with a job description and said, “I think this is what you’re after, not the way you explained it, but I understand what you’re looking for. Does this make sense?” I said, “Yeah, that’s the job.” He goes, “Great. Give me a couple of days and I’ll find some great people for you.” And he did. He found three terrific candidates. I talked to all three. I did a screen share with them. I showed them my finances. I got some insights from them. Then there was one guy who’s so good. His name was Jack. I said, “Boom, Jack’s my guy.” I messaged the people at Toptal and I said, “Set me up with Jack.”
Jack’s been a tremendous help. He looks at—he loves data. He loves data so much that he looked at all the credit charges that we’ve had over the last year and he found opportunities for us to cut our cost with credit card processing. I didn’t even know that credit card processing was a big cost because if I look at my income statement, all I see is little tiny expenses. I didn’t realize we should batch them and understand it. I didn’t realize where we could save money with it. I didn’t understand where we could cut costs on some software. That’s he did. That’s what he helped me with.
If you’re out there and you need help with any part of the finance of your business, you shouldn’t have to deal with it alone, hire someone from Toptal. They’re not very expensive. I’ll be honest with you guys. I’m paying about $250 for Jack. This is a guy who came from McKinsey background, ran a couple of companies for the Carlyle Group, phenomenal guy. So it’s definitely worth it for me. I don’t need him for that many hours a month.
But you’ll get that kind of person, someone who can go through cohort analysis, spreadsheet creation for you, help you understand where your money is going, how you should be structuring your business, help you ask the kind of questions that you didn’t even need to be aware of. For me, I didn’t know whether we should be rethinking whether we are an LLC or not. I didn’t know the tax plan that Donald Trump put forward a few weeks ago could actually impact by business and what I should do to take advantage. I didn’t even think of that. But he did.
All right. Go check them out. I have a special URL. When you go to this URL. They’re going to give you something they’re not giving anyone else. The URL is going to give you 80 hours of Toptal developer credit when you pay for your first 80 hours in addition to a no risk trial period of up to two weeks. Trial period is phenomenal. Go check them out at Toptal.com/Mixergy. That’s top as in top of your head, tal as in talent, Toptal.com/Mixergy.
All right, Guy. That one went a little bit long. I get very passionate about Toptal. Even if you and I were to have dinner together, this is what I would talk to you about. It helps because you know what? You’re running in circles where you’ve got investors now who look over your numbers and give you feedback—who gives you the best feedback? Who’s the person who helps guide you, Guy? I don’t have that. I do now with Jack.
Guy: Yeah. So, of course, I try to speak to several people. The best feedback I get is people who are CEOs of startups like me, we struggle with the same problems. We have the same pains, same frustrations. It’s the only guy that really understands you and I have a few friends. Like me, we pass difficult times. We have successes, we have failures. I think these are the best people, the CEOs or the startups.
Andrew: How do you find those people that you can sit together and talk about your failures, show your numbers to. How do you find these people?
Guy: Well, doing business, you do business with many people. Some of them, you get to have really close relationships and you stay friends even out of business. These are the best people, the best advice I get from these people is because they really understand me and my point of view because they do the same time.
Andrew: It’s not a formal organization or formal search structure for you. It’s just anytime I come across an entrepreneur that I dig, I spent some time with him, we become friends and through the friendship, I don’t just ask him about life in general, but you’re saying I also show him my finances, talk to him about my business challenges and get feedback, am I right?
Guy: Exactly. Everyone is always short of cash. Everyone is not trying to raise money. Everyone has a problem hiring employees. Everyone has a problem finding the product market fit. They’re all in the same area. Speaking to those people is the best advice you can get.
Andrew: So, when you were talking about getting customers, I flashed to something that we said earlier in the conversation, which was when you talk to the companies you invested in, they said, “Yeah, we have this problem. We don’t know how to analyze this data.” He said, “If I solve it, would you be customers?” I’m wondering a few things about that. Number one, were they eventually customers of yours? Did they a couple years later when you came to them and said it’s done, were they in a position where they wanted to sign up?
Guy: Well, some of them did. Some of them already built their own system. So, they said it took me a year and I invested half a million dollars, but I already did it. It’s sunk cost. I’m not going to go into anything again. Some of them did. No one waits for you. Eventually, when you came with something good and they’re not happy with what they have, then we will be happy to change it.
Andrew: Do you remember your first customer?
Andrew: Who was it? Can you tell me about them?
Guy: Well, first of all, I want to say that the first customers are kind of our design partners. They eat a lot of shit. They get all the bugs and all the beta releases and everything. These customers help you build the company. They don’t necessarily stay your customers because they took a long time. but we have some customers that have been with us for about four years. Yeah. They still remember the hard times we went through, but they’re happy now.
Andrew: Why would someone be a customer of a new business knowing they’re going to be the ones who have to eat all the bugs?
Guy: It depends. If you can bring them value, they sometimes overcome the bugs and they are willing do it. Of course, they pay less or they don’t pay at all. So they have some benefits. They also can ask for features that are relevant for them and probably get what they want because they’re your design partners.
So, if you’re willing and if the bugs and all the problems are not so terrible, you have some benefits of being the first time because you get a more customized system and you get some consultancy and best practices from my knowledge. So I’d probably say there’s problems in that, but it depends a lot on the type of guy you’re working with. If he’s an early adopter, he understands the situation.
Andrew: I get that. Is it also that they have the pain point that’s so big that they’re willing to deal with an imperfect product?
Guy: Yeah. Basically, just dealing and loading huge amounts of data to generate is a big challenge. We’re not talking about even sophisticated behavior analysis. This is something that trying to do on your own is quite a big risk and it’s quite expensive. So, if you have someone who you know is a domain expert in that area and you have a lot of benefits doing something, even if it’s kind of an intermediate solution, in our days, time to market is worth a lot of money and worth a lot of pain. So, yes, it’s worth it.
Andrew: One of your big customers, and you’ve got a bunch of big customers on your website, I saw them. Coca-Cola is the one that keeps standing out for me. But another one makes total sense, Target. They have an online presence and an offline presence. I could be shopping for their stuff online and then going into the store or vice versa. I’m wondering if you can tell us the issue that you had with Target when they signed up as customers?
Guy: So I don’t like to refer to customers without their approval. Basically, you have some case studies you can talk about. I’m willing to talk about customers that have quotes on the website.
Andrew: I see. I’ve got a story about them here.
Guy: I don’t want to talk about customers who don’t approve it. Basically, let’s take an example of like Webcollage, which is a company that supplies data to many Fortune 1000 companies in the U.S. about their content, the usage of the content. They manage the content, the digital content for their brands and huge companies. They want to supply those brands with data on the usage of the content. This is something they use Cooladata. Many Fortune 1000 companies use Cooladata. They do it with our platform. So this is an example of a very good use case of how you can leverage your product and give an extra service insights on top of your basic platform.
Andrew: Let’s talk about a challenge. How about one customer here, I won’t mention their name, but I see them in my notes from your conversation with our producer—they left you. Part of the reason they left was you didn’t realize they were having so many issues. The other thing was that they thought that you guys weren’t ready for them. How do you deal with that?
You’re still figuring it out, just like you said, everyone has product market fit issues, everyone’s trying to figure out their product. I’m seeing that like your whole demeanor changes when I’m talking about these issues. Am I right? Am I picking up on the right vibes here? This is not a happy thing for you to talk about. It’s still painful. I’m almost remembering how you were talking about the rescue operation you were on earlier when I talk about these challenges.
Guy: Yeah. It is painful. You take it personally when you’re an entrepreneur. Every customer that leaves, you take it personally. In the end, the customer is always right. If he has his reasons, he has his reasons. The only thing you can do is try and learn from it for the next time. I think one of the things I realized over the years that customers will shout at you and scream at you and give you the worst phone calls are the best customers because they help you improve and help you react.
The customers, the dangerous ones are the ones that don’t say anything. You think they’re happy and they’re actually not happy and you only realize it when it’s too late. You have tools to measure that and today, we use a lot of tools to measure the usage of our own customers, the behavior. We call it Coola on Coola. We just measure and by understanding the way customers use the platform, which features they use, how many times you use it, what kinds of things they like, what kinds of things they don’t, just by analyzing this data, we can predict the customer is unhappy before he actually knows that.
So these are things that help us improve. However, I can’t say we can avoid things that happen. There’s always external sources — companies get board, companies go out of business. The only thing we would like to minimize to zero and we did a very good job is the voluntary churn, people who actually aren’t happy with the platform and want to leave you, and this is something we really do our best, by both analyzing the data, staying in contact and trying to improve ourselves all the time.
Andrew: All right. The final question I have is about revenue. I know you told our producer, “I’m not telling revenue. We’re not ready. We’re not at a point where we want to talk about it.” Can I get a sense of just the size of where you guys are right now? Are we talking about a business doing over $1 million in sales, over $5 million? Is it just getting started?
Guy: So, as I mentioned, we’re not going to talk about revenue. However, we have over 60 customers. We’re growing fast. We just doubled our revenue for last year. I think the company is on a very good track and getting very good traction. Also, we’re going up the value chain. Our proper customers also have gone up 50%. So, basically, this is what I can give you. Otherwise, we’re a private company and we don’t disclose this.
Andrew: What is a typical cost? I actually did a search on your site to see price. Usually, I get like through Google search, I get some back page that lists the pricing. With you, I get a page that says, “Talk to our team and get your pricing. Fill out this form.” Roughly what are we talking about here? If somebody wanted to hire you, if a major Fortune 500 company wanted to hire you, what are we talking about?
Guy: So the pricing starts around $2,000 a month based on search and volume and goes up to tens of thousands, depends on the size and the complexity. The main driver is the volume of the data, the number of events.
Andrew: All right. So, if the cheapest price is $12,000 a month for 12 months of a year, 60 customers —
Guy: No, cheapest price is $2,000 a month.
Andrew: Yeah. That means at least $1.4 million, $1.5 million roughly and that is the smallest amount that somebody can pay for the service. That gives me a sense of where you guys are, a very low sense, frankly. I know it’s got to be much more than that. It gives me a base, a floor. All right. Thanks so much for doing this interview. Congratulations on having built it. How do you feel it went? You know that I like to evaluate —every time I do an ad, I like to evaluate it. How was that? How do you feel this interview went for you?
Guy: How’d I feel what?
Andrew: How’d this interview go for you? Evaluate the interview from your point of view. How do you feel it went?
Guy: So I really enjoyed it. I think the conversation was very intuitive and I didn’t have to think — I think you give a very good feeling. Well done. Personally, it felt well. I liked it.
Andrew: Good. All right. Thanks so much for doing this interview. I appreciate you being on here. For anyone who wants to check out Guy’s website, the URL is Cooladata.com, like the word Cool with an—where’d you guys come up with the name Coola?
Guy: Well, in Hebrew, Coola means it’s just data. It’s not a big deal. It’s only data. That’s what Coola means.
Andrew: Really? People say it’s only data, it’s not a big deal so often that they need a single word for it?
Guy: It’s coola data. It’s just data. It’s not a big deal.
Andrew: I see. All right, coola. Coola.com. And of course, my two sponsors are the company that helps me sell that will help you sell more. Frankly, use it individually or bring it in with your team. You’re going to love it. It’s called Pipedrive, Pipedrive.com/Mixergy. And the company that I can’t stop talking about. If you invite me to dinner, there’s a good chance that if you say the name Toptal, I will keep raving about them. They’re called Top as in top of your head, tal as in talent, Toptal.com/Mixergy. I’m grateful to both of them for sponsoring and to you, Guy, for being on here. Thanks. Bye, everyone.