Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy where I interview entrepreneurs about how they build their businesses. I am so excited about this story that I’m about to hear. There aren’t a lot of breakout hits, you know, companies that create software and then, boom, it takes off.
Today’s guest says that he’s the co-founder of a company that created two of these. The first was Meerkat. It was a software that allowed people to broadcast on Twitter and this freaking thing just took off. It just . . . people started using it and then broadcasting themselves and others saw that they were broadcasting and jumped in and it just took off.
And then there was an issue which we’ll talk about that forced them to pivot or basically scrap the software, start off from scratch. And they created another thing that took off, something called Houseparty. I remember a friend of mine said, “Andrew, let’s get on Houseparty.” I get on Houseparty. It’s him and a bunch of software entrepreneurs and investors all just on, like, sharing video conversation together. I was in my backyard just talking to these people meeting them for the first time. It’s kind of cool that we were all kind of connected through this one friend. That thing took off. And still, even though both took off, I don’t see them both out there. They’re not setting the world on fire.
I want to know what happened, how they came up with these two brilliant ideas, how the ideas took off, how they decided to pivot, what happened internally, and then why these companies are not as big as you would have thought considering how they came on the scene. And then I also want to find out about today’s guest’s latest company. It’s called Torii. So let me introduce him. His name is Uri Haramati. He is the co-founder of that company. What was it called? Life on Air is the parent company name?
Uri: It is the name of the company.
Andrew: That was the name of the parent company that created the two software apps that we just talked about. He has moved on from there. His latest company is called Torii. It’s SaaS management tool. It solves a problem that anyone who’s got a company with multiple employees or contractors recognizes which is you don’t know what you’re paying for. A lot of the software you’re using, maybe for project management, maybe for database, maybe for this or that, you have to pay by the user but you don’t know who stopped using and who is using.
I’ve actually had a situation where people had been let go from the company and we didn’t recognize that they still had access to some piece of software. Now, not to say that they’re being nefarious and doing something bad but they could have and we didn’t have any access to information about it. Torii is here to solve that. So we’re going to find out about the previous company. We’re going to find out about this company. We’re going to find out why I couldn’t find Uri as the co-founder of the previous company. So many other things thanks to two phenomenal sponsors. The first, if you’re hosting a website, you’ve got to check out HostGator. And the second, if you’re hiring developers or finance people, wait until you hear what happened to me. Got to hire from Toptal. But Uri, good to see you here.
Uri: Hey, good to see you. I’m glad to be here.
Andrew: What was your greatest day at Life on Air, the day where you just felt, like, wow, we’re living the startup dream?
Uri: Oh, there were so many in Life on Air. I think when Meerkat exploded and seeing, you know, organic growth and celebrities and all the knowns starting to use it, that was really surreal. And just so you know, Meerkat was actually the second [pivot 00:03:29] of Life on Air. There were two products before that, right?
Andrew: I know about one before that. It was called Yevvo. But before we get into all that. I read about some of the celebrities. I saw an article about how Julia Louis-Dreyfus used it to promote one of her upcoming seasons of “Veep.” Let me see. Al Roker used it. He’s the meteorologist who’s super famous. He was on it. Jimmy Fallon announced that he would be Meerkating the St. Patrick’s Day parade. We’re talking about this thing that took over South by Southwest, the tech geek fest, right?
Andrew: That’s when you said we made it.
Uri: Yeah. Pretty much.
Andrew: Did you think, “Oh, I am so smart and I was meant to be here”? Did you attach your self-identity to this? Was this a validation of who you thought you were?
Uri: I think it’s part of it and part of, you know, getting [inaudible 00:04:25] that we’d been researching before that and kind of made it, like, we understand what’s working, we know how to do it now.
Andrew: It felt like all these other trials, we were building up to this, we earned the right to be here. Got it.
Uri: Almost, almost, almost, and then boom.
Andrew: Got it. All right. You were saying that this was actually the third iteration. Before we get into the third iteration, I got to tell you I rejected you as a guest on here because I heard here’s the guy who co-founded Houseparty. I said, “No.” It’s just I didn’t know how to say to whoever it was who suggested it, “He’s not really the founder. Ben Rubin is the founder.” And then it’s like an afterthought. I reached out to somebody who knew Ben and I said, “Is this guy really the founder?” And Ben said, “Yeah. Yeah. Absolutely. This is the real thing.” So let me ask you this. Why aren’t you listed on the website in the early days? Why is it that you weren’t anywhere in connection to Houseparty or Meerkat? If I do a Google search going back to 2013, 2014, not until like this recent push with your newest company, Torii, did you come out as the co-founder. What happened?
Uri: Yeah. So I think there are a couple of things. So, at first, it wasn’t really much of an invest for me being out there. So I was leading the product, the R&D team, pretty much the making side [inaudible 00:05:46] and being out there and talk about myself and promote myself was nothing that I cared about. And I joined Ben and Itai. They started Yevvo which was the first iteration. We met back then in accelerator and then pretty much after that I joined them.
Andrew: So they already had this thing that they were starting to cook up. There hadn’t been anything that we now have heard of but they were working together. What’s the accelerator that you met them in?
Uri: It’s called The Junction back then and . . .
Andrew: Where was Junction? I don’t know it.
Uri: That’s in Tel Aviv, Israel. That’s where it started. And there was nothing out there whereas they started developing the two of them and then we released it all together and Ben told me, “Hey, why don’t you join us as a co-founder?”
Andrew: What were you doing at Junction? I’m on the website now. It’s f2vc.com.
Uri: Yeah. Later on it was changed to VC accelerator. Back then it was pretty much kind of pro bono. And I was starting my own startup called Skedook that was an event discovery app. That’s where I met Ben and Itai and got connected and that’s where it led.
Andrew: I see. I was looking on your LinkedIn profile. Skedook is a personal events guide. It was created out of pain we experienced in our daily interaction with events. It learns what you want to do and then the events that interest you and it helps you find those. That was the idea. How far did you get with it and what made you say, “I’m actually going to scrap this and partner up with these two guys, with Itai . . . “?
Uri: Yeah. So I released through the app store, had a couple of thousands of users and then it was Ben’s idea, “Hey, join us and we will do that,” and we had events to live streaming and stuff like that and I said, “All right. Let’s do that.”
Andrew: What do you think they saw in you and what did you see in them?
Uri: I think Ben and I had a real great connection from the days of the accelerator and we are . . . both of us are pretty kind of product people. We see a lot of . . . we see eye and eye and pretty much Ben is more of the crazy one and I’m more of the calm and down to earth person and we kind of balance each other.
Andrew: What do you mean? Give me an example of an argument or a disagreement you had that would help me understand how you think differently and help each other out.
Uri: There were so many. Like, you know, just starting crazy new features tomorrow.
Andrew: Oh, he would want lots of features tomorrow and you would say, “No, let’s pare it down to just this.”
Uri: No. Let’s test it or let’s do something to just validate it or let’s decide first ask why do we want to do that. And that was part of that, right?
Andrew: I see. Okay. I did hear that that was one of the beauties of the apps that you guys created was that they were pared down, didn’t do too much, and one of the reasons why you guys were able to innovate fast is you would take a few weeks to launch a product. I think I heard it was eight weeks to create . . . was it Houseparty eight weeks?
Uri: Yeah. I think Houseparty it was even less than that when we started playing with some product and then we released it to the app store I think it was about one month or two months in total development and released it with, like, unknown name. It wasn’t . . .
Andrew: We’re going to get to that. I’m sorry to slow this down but I love that story, how you did it. That was so amazing. So basically what happened is he says, “What if we do this thing? This chat app that allows everybody to communicate with each other and then also broadcast to the world but also have a quiet space where they could just talk to their friends.” You say, “Hang on a second. That’s too much. Let’s pick the core features.” That’s the way that you guys worked out, right? That’s the two . . .
Uri: It’s more, like, let’s do this thing live that everyone is always on and you switch rapidly between the rooms. I would say, “All right. What is the main thing we want to do and release it? What can we do that is the most important part of it and how can we nail it as fast as we can?” And then we kind of started discussion of, you know, what is that thing.
Andrew: I see how this type of partnership would work out really well. One person who has the big vision, lots of ideas, and the other person who has to say, “Let’s be disciplined and I’m going to force us to pick the one little part that we test and get practical about what we take out to people.” Okay. What’s the first product then that you guys created together?
Uri: So that was Yevvo.
Andrew: Yevvo. This was an app that would let us share live video just with our friends.
Uri: Yeah. It was pretty much like Meerkat, live streaming one to many mobile apps, but a bit heavier and kind of more harder to just use than Meerkat.
Andrew: Because . . . ?
Uri: Because part of it was, you know, how fast it is and how easy it is for you to go live and start broadcasting [inaudible 00:11:04] just one press of a button. There are so many tiny parts around it that make the experience different, you know, [inaudible 00:11:13] video versus [inaudible 00:11:14] video, the Twitter graph that we kind of embedded within Meerkat was easier to build the network in the beginning.
Andrew: And still, I get how connecting to Twitter, which is what you did later on with Meerkat, it gave you access to your users’ social graph and that helped the thing take off. But with Yevvo, I read that you guys had 400,000 users. Yes, there was a problem where most of them were not active. But how’d you get to 400,000 users of this video chat app?
Uri: Yes. We had a lot of iterations on Yevvo as well and we got the spikes, not like Meerkat or Houseparty, but we got spikes that it was blew up in some high schools and then it went viral and it was . . . you know, it was the liquidity to get it grown. So we saw different communities when the live stream was kind of blowing up but in lower or smaller scale and we did a lot of . . . we invested a lot in understanding the users’ data, and you know, what works, what’s not working, community, talking to them.
Andrew: You would call up people who were using it to understand what they were using it for?
Uri: It’s not just that. We were . . . sometimes we were going to the power users and spend a day with them.
Andrew: Just go sit in what? In their high school?
Uri: No. There was . . if a high school [it was 00:12:46], a high school, it’s a little bit weird. But we had back then the guy was community guy called Ryan, later on he would become a product manager and he was just looking at the power users, start talking to them, either on the app or offline, and then he would just go to spend a day with them.
Andrew: Got it. Okay. And what did you guys learn by talking to the first users of Yevvo, the first video broadcasting tool that you guys created?
Uri: Wow. That’s a lot. I think part of it is, you know, the thing . . . and it’s also kind of what brought us later on to just ditch the ideas of one to many broadcasting, right? And you see it again and again that at the beginning it’s crazy and you have this feeling, oh my god, I’m live. You’re feeling like you’re naked and everybody is watching you.
Andrew: You mean for the broadcaster, whoever it is who says, “I’m going to broadcast out to many,” they feel like, “Oh, everyone’s watching me. What am I going to talk about?” Okay. Then . . . ?
Uri: It’s sort of excitement and then there’s a huge decline after three or four broadcasts that you are either, you know, less people are interested in the way and every day you are going to work and then you see that you have less viewers so you’re streaming less. It’s kind of hard and there’s a huge challenge of this synchronization between, you know, you need to be live. I need to be there to watch you. If it doesn’t happen for some reason [inaudible 00:14:26] not as good as you want it to be.
Andrew: If I’m broadcasting live and there aren’t as many people on watching me as there were yesterday, I’d feel like a fool. And I need them there in order to make this thing work versus with YouTube I can create it, post it, they can show up later for it to work. But then can you give me one tip that you used, one thing that you learned that allowed you to get to 400,000 users? I get that part of it is it’s a naturally viral product. If I’m broadcasting, I need a lot of people to watch me so I’m going to start to tell people, “Come watch me.” I get that part that’s inherently viral. What’s one other thing? Even if it’s a small thing that helped you get to 400,000 users of this new app.
Uri: I think part of it is understanding this aha moments of, you know, what makes a user stick. And there are plenty of ways to understand it through the data, right? So, if you see what are the correlation between the users that stayed for a week, two weeks, three months, one month, two months, three. And what happens in the first 24 hours and the first week and pretty much understand it and kind of build a correlation that helps you to understand how you want to get more users to that kind of state.
Andrew: See who’s excited a couple of weeks into it because if we can get more of that experience for more of our people, then we’ll end up with more users.
Uri: Yes. So, first, who’s excited and then it’s why are they excited and then why is their experience different in the first week from other users, what are they doing different. So, for example, one of them was having people to interact with you within the broadcast, right? So, if you had your first two days broadcasting and nobody was interacting with you, nothing. You won’t stay.
Andrew: Even if they’re watching, it’s not enough. I need them to interact somehow. And so you think how do I get more people to interact with our broadcasters because if we do then our broadcasters are going to feel that high, they’re going to want to do more of it, and then we’ve hooked them in and then they start to keep promoting it. Got it. Stuff like that. And so is that why . . . were you guys the first ones or was it someone else to make it really easy to heart a video so that you’re showing that you like what someone’s broadcasting?
Uri: So we started with both hearting and restreaming, like sharing it to other people. But then there was Periscope that started a little bit like Meerkat and then it started with the heart, heart, heart.
Andrew: Where you just tap and you can do a lot of hearts. Got it. You guys had at least one heart to encourage people to keep broadcasting because you show that people like their stuff. What they did was they allowed the viewer to just keep hearting it.
Uri: Yeah. Which is kind of brilliant in terms of when you had the length of contents. You feel it at the same time because, you know, now I’m better, now I’m worse, you feel the people with you, right?
Andrew: So, Uri, one of the things that I admire about you guys is that you were willing to say, “This doesn’t work. We’re going to close it down.” What made you say, “You know what? Yevvo is going to . . . it’s not our thing. We’re going to move on to something else”?
Uri: I think every time it’s a little bit different. So, with Yevvo, we felt, you know, we felt the retention is not there and there’s some kind of hole in the bucket. We see the growth, we see people are having this [vanity 00:17:42] moments when they start using it but then they won’t stay after one month. So we said, all right, something is a bit different. And then we start analyzing the data and we started, oh, we see that it’s not just interaction with people, interaction with people you care about so people you know, not just random people.
Andrew: Okay. And so that made you say, “Okay. Let’s adjust this.” But you closed down the app and started over and this is something you guys kept doing. Why did you do that? Why didn’t you say, “Okay. We get it. We need to find a way to get more people to get their friends on Yevvo and the people they care about on Yevvo, otherwise it’s going to fail”? Why do that instead of creating a whole new app with Meerkat?
Uri: So there was something between Yevvo and Meerkat but it didn’t work out and Meerkat was actually a side project, right? For real. Not just for the . . .
Andrew: But why even have side projects? I thought if you’re all in on a business, you’ve raised money, it’s doing well enough that people are using it, why not fix the leaky holes in the bucket instead of have side distractions?
Uri: Yeah. Because you feel that you try and you try and you try it again and you say, all right. We tried all these things but I think it’s something deeper than just the product itself. There’s something missing. And our assumption back then in the days of Yevvo in Air was this synchronic thing that it’s too hard to do. So we decided let’s start a side product. We’ll call it Meerkat and the idea that were to either stream or schedule a stream. And when you schedule a stream, we’re creating new behavior of asynchronism between the broadcaster and the watcher.
Andrew: That was the thing that people liked about it. It was super simple but it did have those two features. One button to stream, another button to schedule a stream later. And the thing that you added with the schedule a stream for later meant that I could start bringing people into the platform early, let them know, tee up a group of people who might watch me and make it feel better for me when I finally do broadcast.
Andrew: Okay. Let me take a moment to talk about my first sponsor and then we’re going to come back in and find out how long it took you to launch Meerkat, how did you get those users, I think the first week you got 28,000 users is what I read on The Verge. But first I got to tell you about this guy who I interviewed. His name is Syed Balkhi. He created an eight figure business. It’s called WP Beginner. Either figures means what? $10+ million in sales, right? Just by blogging for WordPress creators and then about how to use WordPress better and then what he did was he started adding software. He’s got pop up software. He’s got as a side business a form software that builds in and plugs into WordPress and so on.
He’s doing well for himself. And still, we went out to lunch and he looks down on the ground and he goes, “Oh, a penny.” And the freaking guy picks up . . . he holds up the penny like he just won a prize and he puts it in his pocket. And it fits in so perfectly with what he told me about how I have Netflix account and I think I have one other video account. He doesn’t have any of those. It’s like somebody . . . his gardener or someone said, “I’ve got this video account. I use it.” He goes, “Why don’t you add me to your family?” It’s, like, super cheap and still super successful. And I found the guy fascinating and all his products are well, well done. You could see it. WP Beginner is the website.
So, anyway I went to see who’s hosting his website. Who does he trust to host this multi-million dollar a year business and it’s also inexpensive enough that it’s going to be exciting for a guy who counts pennies. It turns out he uses HostGator, my sponsor. So, if anyone out there is listening and they’ve got an idea for a website, especially if it’s WordPress but frankly anything, go to hostgator.com/mixergy. Not only will you get a really low price on hosting but it’s going to be even cheaper because you used my /mixergy at the end. Yeah. If you go to hostgator.com/mixergy, you will get an even lower price than they charge everyone else.
Uri, look at this. I actually wrote a note to myself before I went to Antarctica, “slow with sponsor.” I’ve got to say the sponsor URLs a lot slower. So let me say it again, hostgator.com/mixergy and get the lowest price possible, great hosting package. And I’ll be honest with you, I use them, Syed uses them, and I don’t think we use the basic cheap plans that they have on hostgator.com/mixergy. Those are really good when you get started.
When you want to scale up, you get millions of people like he has on his website, you want to do much more, they don’t advertise it because they’re trying to accommodate the newer users, but they will absolutely scale with you and they will crush it in terms of prices, even for those high level hosting packages that they have. So basically start with the simple package. Make Syed proud of how inexpensively you’re starting your business and then build up with HostGator. I freaking love them. Syed used them. I use them. Hostgator.com/mixergy. Highly recommend them. So you guys got started. How long did it take for this side project to actually develop into something that you guys officially launched?
Uri: You mean Meerkat?
Andrew: Excuse me, yeah. Meerkat.
Uri: So that was a thing about two months or something more like that that was only Itai, our CPO and our co-founder, was developing it himself. So it was one person, one month, two months.
Andrew: And why is it that you guys can launch so quickly? Is it because you’re using the same basic technology but you’re reskinning it and reintroducing it?
Uri: Yeah. So we have a lot of experience around technology, both for streaming and building, you know, social apps from Yevvo and Meerkat we got a lot of code from that. At the same time, you know, we try to see how can we get as fast as we can to test this schedule or streaming thing at once. So one of the ideas was let’s just have these two buttons that you can either stream or schedule and then you can say, all right, what about building your followers and following and how you create your network? Let’s just connect it to Twitter graph and not care about it and see how it works. That was just in order to reduce, you know, the time and the effort and the product around building the network, right? You can have tons of features around building your own network inside a social network.
Andrew: So what you’re saying is, look, we knew that we needed this network, we knew that the big problem we had before was that people’s friends weren’t connected to the broadcaster so the broadcasters didn’t have a lot of viewers but still you had the discipline to say we’re not going to include it. So you’re saying, yes, part of it is that use the same broadcasting technology that you had before but also that you reduce the features that you launch with and you offloaded a lot of them to Twitter by saying we know that you need your friends. We’re not going to have the friend list. We’re just going to piggyback off of Twitter’s follower list. Am I right or am I just cramming my message into your story?
Uri: Yeah. It’s both that and it’s both saying, you know, we sort of what kind of followers and following and what kind of social graph would fit someone to schedule a stream and that would be Twitter more than Facebook, right? Because Twitter, you have content that you want to share with followers either with friends on Facebook. So we said, all right, let’s have one connection, just Twitter, something very simple and connect it there. Part of it we need it super simple for everyone to understand what it is for, right? This is an app for streaming over Twitter and it was kind of a bit of a side effect.
Andrew: And then so you launched. We talked about how well it worked. By the way, one the reasons why it seems like it worked well was I think it was a TechCrunch post that I saw that said it’s so compelling. They say “on air” and how do you not . . . was it “on air” or . . . “live now.” It was a big uppercase “live now” on someone’s Twitter feed. How do you not just go see what are they doing right now? It’s going to go away when it’s not live anymore. That was a big reason why people were compelled to hit the link and start, right?
Uri: Yeah. That was I think from . . . Yevvo entirely was live whenever. Like, if you missed it, you missed it. In Meerkat, we started only live and then at some point we had a library and stuff like that but it was part of it to really create more moments for you to be with other people because you don’t want to miss it and the [feeling 00:26:04] was great.
Andrew: And so that worked. And then what happened was Twitter started to go on the attack with you. What happened?
Uri: So actually, when we started Meerkat, we didn’t know that Twitter already bought Periscope which was on beta for a few months before that or even a year and then when Meerkat blew up and people started, oh, you know, nobody was talking about Meerkat, Twitter started saying to us, “Hey, Twitter is going to release something like that. They have something they’re working on.” And we said, “All right.” And then they just told us one day and said, “Hey, we’re going to close your graph.”
Andrew: So not only are they competing with you with a native product, which was Periscope, but they also closed access to the thing that you needed them for which is the follower list, right?
Andrew: And basically this is before Twitter became the nice version of . . . the nice alternative to Facebook. This was back when they were still I think trying to figure out who they were and they took the gloves off against you internally. Now you’re smiling as we’re talking about this but that’s not a happy smile.
Andrew: Talk to me about how you felt at the time, you personally and internally as a company, when this happened, crushed your business.
Uri: I think these were mixed feelings. On one hand to say, all right, they can do whatever they want. We will make it without it. We don’t depend on that and we can have solutions. The product works without it. That’s just an addition. On the other hand, you felt, oh, shit, that’s going to slow us tremendously and they’re going to, you know, I don’t know, direct traffic or whatever they want with Periscope. So it was . . . you had mixed feelings because on the one hand, you were on the, you know, we were on the top, like, everything was blowing up and we said, yeah, we can make it, whatever it is. If they stop us or not, we can fight them and then on the other hand you say, yeah, it’s going to be harder.
Andrew: Ultimately, you guys said it’s not going to work out. Was that after, like . . . was there a sad, depressing moment there?
Uri: There is some sad moments there but usually it’s an ongoing process until you decide it, right? So you have those moments before when you say, hey, something is not working here. And we knew that there was a retention problem with Meerkat on week three. Like, I was talking to Ben, like, hey, this is growing up going like crazy, people are . . . we are adding more and more people but you can see that they are not staying for week two and week three. It looks like it’s growing but when you look at the numbers deeper, you understand that it’s not.
And then we just realized it’s not . . . there’s no . . . it’s not right for us to one to many live streaming as a single standalone app when it’s not a behavior you’re going to do on a daily basis, right? When it’s part of your social network, like Facebook or Twitter, it makes more sense. You can go live, like, once a week, once in two weeks, and you have great fun. If you’re on Meerkat and you go live once in two weeks, you’re not going to use it anymore.
So that’s what led us to just say, hey, it’s not going to do . . . it’s not going to work. We need something that is more also . . . some of it it’s more real, right? Something like communicating with your . . . the people you care about, with your friends in real time and not just about, you know, who has the better show from your life. It became something like that.
Andrew: What about this? One of the things that Emmett Shear, the co-founder of Twitch, told me was by being a video broadcasting platform they got a lot of users but they couldn’t help any one of them. Only when they said we’re going to focus on one type of broadcaster, the gamer, could they be the excellent for gamers. Now I know that Justin Kan, the other co-founder of Twitch, said something to you guys about that, too, that we couldn’t figure it out, maybe you guys can, but it doesn’t seem like being a generic broadcaster is enough. It seems like they were right.
Uri: Yeah. He said it pretty early on. I also remember his first streams on Meerkat and you see in [inaudible 00:30:59] today you had many live streaming services, including Facebook and Periscope and other, and only one really, really succeeded and that’s Twitch. And they really focused on one segment and then you can start and build your entire experience around this one segment that totally makes sense. And live streaming is part of their daily life, right? For regular people, you know, we enjoy it. It’s exciting in the first few days, first week, first month or so doing it on a daily basis but then you’re not going to do it anymore.
Andrew: Right. So there was truth to that that this was not really . . . it can’t be generic. You need to have . . . you need to address a group of people, be excellent for them and make sure that that group of people are going to use it over and over is what you’re saying. So it’s not enough that it’s just one specific segment but it’s one that it’s going to be doing this over and over.
Uri: Correct. And I think it might be generic if it’s part of a lot of product or a featuring product [inaudible 00:32:03] it’s more generic and you have . . .
Andrew: I have to say, Uri, I don’t see that Facebook live broadcasting is setting the world on fire. Instagram live is not setting . . . even YouTube, the platform that people go to for video, it’s not a thing there, right?
Uri: Yeah. I think that’s what I said about except Twitch no live . . .
Andrew: Nobody and the only . . . Okay. So I’m getting it. Let me ask you this. You guys decided, “We’re going to do Houseparty.” Part of the reason why you decided Houseparty was you said people don’t want to . . . they don’t have anything to broadcast to a room full of strangers. But maybe if we kind of . . . Tell me if I’m wrong about this. My understanding was you said people do sit around and talk to each other a lot, right? If we had a shared living room with five roommates, three of them might be in the living room and just hang out. Maybe they’ll talk, maybe they’ll just do work on their computers together. We could create that kind of experience. It’s more intimate. It’s more just for friends. It’s not big broadcast. And then you said, you know, we can’t take this brand that’s about broadcast to everybody and say actually it’s going to be broadcast quiet and explain that easily. Why don’t we create a side project, right?
Uri: Yeah. It wasn’t longer . . . it was no longer, like, Houseparty was not a side project anymore. We knew with it we were going all in on that and a huge gamble on [inaudible 00:33:23] very far, they did very far from Meerkat but still was a long process of learning from Yevvo and Meerkat and all the things that we learned along the way. And part of it is also the name Houseparty and what it meant for us over the days of Meerkat.
So, when we looked at live streaming, you have this scale of, on one side, you have kind of the theater or watching live game on TV, right? You have zero influence on the game and you’re just a watcher. And then you have some parts that you as a live audience have more and more influence. We tried with Meerkat to take it more to the other side of let the viewers be more involved, right? So part of it is comment, part of it is [inaudible 00:34:15] then we also introduce features of giving the broadcast to someone of the watchers and stuff like that.
So, if you look on the [network 00:34:26] that we had for live streaming, on one hand, you had this stadium or theater, and on extreme other hand, you had this house party. What happens in house party? You go in and everyone can talk to everyone. Everyone, you know, everyone can see everyone all the time. No one is more important than the rest, right? No one is the broadcaster. And that metaphor is what led us to build Houseparty. And if you look on the early days of the product, that’s what it meant, right? You go in, everyone is there, nobody is the streamer, nobody is the watcher, you are equal to everyone, and the dynamics inside of it are the same as well.
Andrew: Okay. That was the idea that you came up with. The question that I had for you was I read that . . . where is he? You guys had an investor, Josh Elman, who worked to Twitter, this guy, like, worked at a lot of the big companies that we all know, right? He happened to have been at the time he was a Greylock Partners VC. He was a close advisor to you. He believed that you guys transitioned too soon. That you should have stuck with the product, iterated it, instead of saying, “We’re going to go to Houseparty.” Why did you say, “We’re going to go to Houseparty,” instead of saying, “We’ve got something with Meerkat. We’ve got a lot of name recognition, a lot of credibility, big people used it. Let’s just tweak this thing,” instead of starting over? It’s a question I’m not asking, like, critically. It’s a question I wrestle with, too, a lot.
Uri: Yeah. I think part of it is, you know, if it was improvement to Meerkat, that was one thing or changing a little bit for the way you interact with your audience or followers. But Houseparty was completely different. It wasn’t about you interacting with your followers. It was you interacting with your friends and family.
Andrew: No. I get that you have to, if you’re creating a whole new dynamic, I get that it makes sense to create a whole new name. It’s a gutsy move but it makes absolute sense to say, “We’re creating a new product. Let’s give it a new name.” The question I have is why create a new product? Why not say, “You know what? This broadcast one to many makes sense. Why don’t we do what Emmett Shear did which is find a group of people and give this just to them”? But you know what? As I say that, I realize Emmett Shear did the same thing. Emmett Shear took Justin.tv, said, “You know what? We need to tweak this, same features but let’s tweak towards an audience,” and then he called it Twitch.tv. Got it. Okay. So you’re saying . . .
Uri: If you look on these people, so their social graph inside a product and their entire dynamics are totally different for the gamer section than the regular people. The same goes for Meerkat and Houseparty. The experience of the social graph and the people who interact within Meerkat are not the same people we have on your social graph on Houseparty.
Andrew: Okay. I want to understand how you got . . . that clever thing that you did to quietly launch it, I’d love for you to tell that story. I’m busting out of my skin. I want to tell it because it’s so great but I know you’re going to tell it way better than I am. And then I want to know why you decided to leave, and why if you’re leaving, why didn’t you go towards anything similar to what you did before? You went from the same thing over and over and over to suddenly something completely different.
First, I’ll talk about my second sponsor. It’s a company called Toptal. Uri, I’m telling you, if you’re looking to hire developers, they’re known for the best of the best developers. Now I can talk about that forever but instead I’m going to tell you something that happened to me with not their developer part. The part that I don’t usually talk about which is finance side of the operation. I needed to hire somebody to be, like, my outsource CFO, somebody to give me a sense of what I’m doing with my finances to help me catch problems.
At the beginning of this year, I told him I want to run a marathon on every continent. And I was so excited because everybody who I told, mostly everybody, was, like, so excited for me. Yay, Andrew. Great. And I could see he’s not yay Andrewing. Like, even on a personal. So I say, “Jack,” who I hired from Toptal because I wanted to have finance outside perspective. He’s a guy who’d worked for some of the top management consulting firms and has been a leader of companies himself. “Why aren’t you excited,” I say, “Jack?” And I could see he says, “Well, is this, like, a summer break that you’re planning for yourself?” And I said. “No, this is going to operate for the business.” And he goes, “Okay. You’ve got kind of a fuzzy idea of how it’s going to interact with the business. Why don’t we clarify that? Yeah. Marathon on every continent but it seems like you’re also planning a lot of work here.” I said, “Yeah.” He goes, “Let’s really think it through.”
What we came up with was on every continent, not only would I do a marathon but I would do interviews with entrepreneurs which meant I needed to understand who the local entrepreneurs were. So I partnered up with venture capital firms who had inside knowledge of who was really doing something and who was just pretending, right? And I needed to schedule all this and make sure that on every continent I had a place to record, someone to record with, and that I had sponsors who were going to pay for it.
Every once in a while, my wife would say, “This is kind of, like, a burden on us.” I said, “Yeah. It is, time wise it is.” But then she asked how much does it cost, just getting to Antarctica from South America, $27,000 to get my plane, to get a tent there, to get food there, $27,000. I needed to make sure that that whole thing was not going to be, like, I don’t want it to be a loss. I’m very good about I want things to produce a profit. And so it was partially because at the beginning of the year, we sat down, we said, “Let’s just sketch it out.” And he’s a guy who always pulls out Excel spreadsheets to make sure that things make sense. If you . . . Uri, who do you have at your company who’s, like, the financial second guesser for you to make sure that you’re on track? I bet you have somebody.
Uri: That’s [inaudible 00:40:02].
Andrew: Oh, it’s you.
Andrew: Okay. So imagine if you go to Toptal and you say, “Look, I need somebody.” I’m not paying thousands of dollars to work with Jack. I’m paying a few hundred dollars because all I need is a few hours of his time a month and I get all of his background, all of his expertise, all of his connections to come in and help me out, really inexpensive relative to what I’m getting.
Now yes, Toptal is a great place to go for developers. I find that the finance person that I got from them is just life changing, more than pays for himself. And even in the first phone call, Uri, he was so obsessive, he made a spreadsheet of all the things that he was telling me to change to make sure that he justified the money I was going to pay him for months if not years into the future. And it was little things, like, “Andrew, here’s how you should adjust your tax situation this way. Here’s how your wife should decide what health insurance plan to pick for her company because you, Andrew, are on her health insurance and that matters.” This is a lot. This is great. Okay.
All right. Anyone out there who wants to hire great developers, Toptal is great for that. If you want to hire a finance person, especially if you’re trying to put together the spreadsheets or other analytics for your company to help you get more money from investors or plan your future or just be clear that you’re not the only one looking at your finances that have somebody to give you a check, don’t just got to Toptal, go to toptal.com/mixergy. Since I’ve got a note here that says, “Andrew, slow down when sponsor messages,” I’ll say Toptal, that’s top as in top of your head, tal as in talent, if you go to toptal.com/mixergy, you’ll get 80 hours of Toptal developer credit when you pay for your first 80 hours in addition to a no-risk trial period.
Yes, I know I breezed through that but I don’t want anyone to sign up just because of the free time. So I don’t mind breezing through it. I do want to make sure that everyone understands, go to toptal.com/mixergy to get great developers and great finance people to help with your business.
All right. We were talking, Uri, about what was it that you did to launch this thing on the stealth, on the DL.
Uri: Yeah. So we had tons of discussions of, you know, how good is it, would it be something like Meerkat, is it going to be Houseparty, when it’s going to replace. But in the end we decided that we want to release it as soon as we can and we thought that the technology was not ready, was totally different video kind of technology and it wasn’t that stable and the product was super minimal that we need to handle a lot of iteration within Meerkat and we had the Meerkat name and brand back then and we didn’t want to see, you know, Meerkat has failed and now the business is half working, have something that is crashing all the time and it’s not working and then, you know . . .
Andrew: Because you weren’t sure that you wanted to get rid of Meerkat. Is that right?
Uri: No. We were sure. We didn’t invest any day of developing Meerkat maybe beside like crazy bots but we knew that we don’t want to continue with Meerkat.
Andrew: Oh, so what you’re saying is Meerkat had such a good reputation that if you create something else that’s kind of crappy, people are going to say this is crappy already. They don’t give you a chance when you’re a well-known company to screw up and fail and so you had to find a way to crew up and fail which was . . . ?
Uri: Yeah. Which was creating an app on a random name. This wasn’t completely random. It was . . . we looked for someone that we know that can open an Apple developer account and that was the husband of our media growth and his name was Alexander Herzick and we chose him because he was guy a hedge fund guy with minimal social presence so we just created an Apple developer called Alexander Herzick, released Houseparty, and then we [inaudible 00:43:48] and blew up and it stayed almost all along like Alexander Herzick.
Andrew: For a while it was under him. He was the developer of this thing called Houseparty and I think you guys even ended up creating a LinkedIn account for him and a couple of other things for him once you guys launched, right?
Uri: Yeah. So he had his own LinkedIn account but we did create some stuff for him, emails and connections and stuff like that. But he almost didn’t have any social presence for himself so we did create some stuff around it. But that made it super easy for us in some ways. First [inaudible 00:44:29] make mistakes because we pretty much didn’t care and nobody knew us and it also helps us, you know, to build a product and grow it with an organic URL and the organic side of the product, unlike Meerkat that was keep on [inaudible 00:44:43] and grows from external sources of the hype, unlike the product itself, right? When the hyper was so crazy because it was growing and growing and you see, you look from the inside and see it’s not working. With Houseparty, there was also almost no external influences on the growth, right? It was just a product. Nobody knew it. We didn’t publish it anywhere. And you knew that if it works, it works.
Andrew: So what got people to use it? How did you get people to sign up? How did you get them to share it with their friends? How did you get it to grow and become this thing that became so popular?
Uri: So we used different tactics and we tried pretty much everything. So the team in Israel, we iterate on growth and product and product updates and changing it in a way that the numbers would fit and we’d see them growing. On the U.S. side and the team in the U.S., we focused on the growth on the [seating 00:45:43] side which means that we went high school by high school or college by college kind of get like 50 people, 100 people to use it and then to see how this cluster of people . . .
Andrew: How? How did you get the 50 to 100 people at colleges to use it?
Uri: A lot of footwork.
Andrew: You mean you had an individual real person go to colleges and spread the word?
Uri: That’s right. Correct.
Andrew: How did you know who to work with and what was their process for getting people to sign up?
Uri: So two of our team . . . three of our team members in the U.S., they started from high schools they know, go to their cafeteria, tried, you know, hey, why don’t you start using this new app that we’re offering?
Andrew: This was adults who went to the cafeteria?
Andrew: Oh, really? So adults would go into the cafeteria of a local high school . . .
Uri: Not in the high school, in the colleges. In the high schools, they went the high schools as alumni or something like that from the high school they know and then also builds a networking influencers within the high schools so they would prepare the next high school or college you were going to, right? They told us who to connect to and the [org 00:46:49] behind all that and that.
Andrew: Okay. How much money did this cost? Was this a really big investment or insignificant?
Uri: Not that much, you know, if you compare it to maybe acquisition, or you know, we didn’t have almost any advertising background. We didn’t have almost any media buying.
Andrew: How many colleges and high schools would you say that you went to? Dozens? Hundreds?
Uri: I don’t know. Probably dozens.
Andrew: Small number of dozens
Uri: Like, probably around 50 or so I think.
Andrew: And the thing about this app is if I’m using it, I have to tell my friends to go sign up, I have to tell my friends to go into it. And so I’m naturally, if I’m using it, spreading it to other people.
Uri: Correct. And it did have the first initial magic of being live with your friends and the serendipity to see someone you know or a friend of a friend joining you and then kind of go from place to place.
Andrew: I want to find out why it leveled off but one thing that worked really well with it was people were just using it as an ambient tool. It would just sit there, from what I understand with high school kids, in the background. When they want to talk to their friends, they talk to them. When they didn’t, they ignored them. But it was running with their friends watching them and then watching their friends the whole time. How did that happen?
Uri: Yeah. I think these are new and different behaviors that we didn’t expect. It just so happened, right? You see that it’s becoming part of their day, right? And the main thing and the main difference that we want to create Houseparty is when you think of a video group chat or something like that, that it’s also it feels heavy, it feels like you need to call someone, you need to synchronize, like, people are not calling with Facetime today, first I send you an SMS, can we Facetime or something like that. With Houseparty, you just click the button and then boom you’re live with your friends group chatting and you shouldn’t feel the feeling of calling or initiating or something like that.
Andrew: Because once I’m there, they know I’m there and they know that I’m open to having other people in. If they want, they could jump in, and if they don’t, they don’t. Got it. And then everyone of them I think can bring their friends in, too, right? So, if I am live and you’re a friend of mine, you could come in and say, hey, let’s see what Andrew’s up to, let’s just chat in with him. But your friends then know that you’re in my room and if they want to join, I think I’d get like a stranger danger alert that somebody, like a third connection, and I could let them in or not.
Uri: Yeah. You could think of the metaphor of the early days of Houseparty just the same, right? You go there and everyone that is there you can see them and you can bring your friends. Don’t have any random nobody knows, right? And that kind of led us to build a product just like the dynamics of Houseparty.
Andrew: Okay. So you’re saying you didn’t . . . you had a sense that this is partly what people are going to use it for. Less formal than scheduled conversation, less formal than I have something to talk to you about, let’s get on this. More like the living room, a shared living room in a house. That was your vision and the fact that they turned it into an ambient in the background always running type of experience while they’re doing their homework, that was your users taking it to the next level. It wasn’t you intentionally planning it. What happened? Why did the growth level off and why did you guys end up leaving? Why did you personally end up leaving?
Uri: I know. I mean, [inaudible 00:50:13] I left about three years ago, two and half years ago. At some point I decided to move to next thing. There were different reasons around it but it was still kind of growing and it was . . . we had like two million daily active users, right? So, and I don’t know much about, you know, the reasons of what and what happened after growth or didn’t grow. But it was exciting and it was a great, you know, few years but I felt like I want to move to my next thing and it made sense in different ways.
Andrew: But you would have, if it worked, you would have stayed on?
Uri: I don’t know. It worked but there are also other, you know . . . the entire dynamics and growing a company I think it brought us some challenges that we didn’t handle well.
Andrew: Like what? Be open.
Uri: [inaudible 00:51:19] you know, building the Israeli team and the U.S. team and the [conflicts 00:51:22] between the two, and you know, growing the team and growing the product later beneath us founders. That was really hard for us in scaling the team and something that we just didn’t do well, right?
Andrew: Like what? What did you not do well? Don’t hold back.
Uri: I think part of that because both me and Ben are super, you know, product-oriented people, building the product layer beneath us was really hard for us.
Andrew: Because you would argue over what the product should look like?
Uri: Not just that because we, on the one hand, want to give the freedom to the product to take decisions and move fast and move by themselves. On the other hand, we are kind of control freaks and want to do it the way we think it should be. And that’s hard tying on the startups that is very product-oriented to the founders to let go of product. So, for now, for example, in my own startups, I’m building the sales team that I’m kind of handover me as in the salesperson to the sales team, right? That’s another type of growth stage of startups when the founders are building the first, you know, kind of . . .
Andrew: And are you okay with that? You’re saying that you and Ben weren’t willing to cede control of the product to each other. That caused friction and that’s one of the reasons why you left. Am I right?
Uri: Yeah. That’s one of it. And it’s . . .
Andrew: Give me one other one and then I want to close out Houseparty by saying what happened to it.
Uri: Yeah. I think it was hard also, you know, we didn’t build the Israeli/SF communication well enough to have the trust and work fast as we used to be. So it was sometimes was us and them and stuff like that. And we learned a lot from that. I mean, that caused a lot of friction and a lot of arguments and it was hard.
Andrew: Okay. I’ll close it out with Houseparty is still alive and kicking. It’s doing well. I’m looking at it in the app store on iOS, 4.7 rating over 113,000 people have reviewed it. It was acquired by Epic Games which says that it’s going to continue it as it is. It’s one of the rare successes in the social networking space that’s now controlled by Facebook. The other one is one that Josh Elman apparently was an investor in or supportive of. I forget what it is. I don’t exactly know what his connection is. Oh, he sat on the board of Musically which was then became TikTok. And at the same time, it feels to me like it’s a little bit neglected as far as advancement and growth. You could see it even, like, the copyright on the bottom of the site still says 2018 and we’re at the end of 2019 now. So there’s, like, the details are not as developed and loved.
You then moved on to a company that I think this makes a lot more sense. Trying to figure out what high school kids are going to like today and fight off Facebook and then know that if you did finally fight off Facebook, which is really hard, you still could lose the high school kids when they get into college because what they signed up for in high school seems too childish. That seems like a pain in the neck.
What you’re doing now seems like it has more substance, you’re dealing with business people, you get to be ingrained in their business, you know logically what you need to do in order to help them out, like, if you could help them make more money, be more productive, boom, it’s a no-brainer. And by the way, they pay you, right? Houseparty didn’t bring in revenue. So where did the idea come from?
Uri: So it was really part of . . . it did relate to Houseparty. So, when we grew up kind of company grow up, I did have a lot of tools and everybody’s using everything, and you know, we had this younger demographic that’s kind of, you know, going to bring new software into the company and one of them, I love SaaS. I love software. For me using any tool, it’s like unboxing. And so all these challenges about managing that myself and I said there’s something that could be done. I started looking at solutions. There was nothing out there.
Andrew: What do you mean by managing it?
Uri: Managing it. Yeah. That’s a good question because part of it is, you know, the IT perspective, you know, policies, and onboarding, offboarding of employees, spend management.
Andrew: Got it. So where for some people, they hear about new project management software, they go, “I’m tired of it,” new chat software, I’m tired of it. I do see that you personally are interested in it and I do know that software entrepreneurs who I interview are interested in what’s the new software because they know if they can master it, and it’s kind of fun to try to master it, but if they do, they’re going to increase the productivity of their whole company.
By the way, I know that you must have a good PR team because I saw you on every freaking app out there when I was Googling you. Nothing from 2012, nothing from 2013, nothing from 2014, which made me say, is this guy really a thing? And then at some point you were on everything. You have a Dribbble account, you’ve got a Twitter account, you’ve got a crazy software that I’ve never seen account, you’re on every podcast.
The one thing that you do use, Dribbble I think you use you like a couple of things, Product Hunt. You’ve got 137 upvotes on Product Hunt. You’ve got followers on Product Hunt. You’ve got people you’re following on Product Hunt. You’re active on Product Hunt. Product Hunt the place where you find software. So I get how you as an entrepreneur who is curious about software would have a lot of software. So the problem that you had was your team didn’t know the software that you were signing up for or that you didn’t know which of the software that you signed your team up for was actually getting used by them or what? How did you experience this problem of too much software?
Uri: I think it’s both. I think it’s both. It was an indicator for me, like, you know, you see the trends of changing demographics that you have these people that were born into the world of software, people that were born into the world of apps. They are now becoming the majority of the workforce and for then starting to use a new tool, it’s like that, like nothing. And it was my problem of managing everything and taking control over everything while I want to promote people to use the best tools they need, right? I want to be an enabler of software. I don’t want to be blocking people from using and choosing the right tools for them.
And it’s part of the major problems of enterprise today, you know, shadow IT, when you have people started using new tools outside of the IT. So there’s a very bad part of it, right? It’s security risk, it may be PII, like personal information risk. On the other hand, when someone is starting to use a new tool, that’s some positive motivation, right? You want to be more productive.
Andrew: Yeah. You know what? I’m totally with you. One example of that for me is . . . what is it called? Zapier. I like when somebody on the team says, “You know what? I have this problem. I’m not going to go bother anyone else. I’ll figure out how to connect these two pieces of software with Zapier. A form into an email, a chatbot into an email or spreadsheet,” or whatever it is.
The problem is that they’ll all go and create their on Zapier accounts, they don’t recognize that we have a unified Zapier account. If something breaks, none of us have access to their Zapier account and so it’s complete confusion. We don’t know what’s making what work, we don’t know what’s taking data out of here and putting it over there because it’s on someone’s Zapier account. I see that problem.
So you, as somebody who says this is a multifaceted problem where employees don’t know what software exists in the company, where the company doesn’t know what software employees are using, where the company pays for software doesn’t know who’s on it and who stopped using it and they can get a refund, how do you, being who you are, say, “I’m going to come up with this simple first version”? What feature did you say . . . how did you know what features to launch?
Uri: That’s a great question. That’s part of what I bring from consumer to what I’m trying to do in enterprise, right? And the first version, just like Meerkat, it took us two weeks to do that.
Andrew: Two weeks to create the first version of this?
Uri: The first version.
Andrew: And what did it do? We should say it’s Torii.hq, toriihq.com for anyone who wants to check it out.
Uri: The first version was something that we just released to Houseparty, my previous company, and my co-founder previous company which was called Bizzabo, and we started using that, could almost see zero value, but we want to see how it works.
Andrew: You just said, look, I’m creating this one piece of software for two clients, two users, right? What was the name of the other company? What was the name of the other company you introduced it to? You said to Houseparty and then one other one?
Andrew: Oh, Bizzabo. What . . . I knew of them. Why do I know them?
Uri: Bizzabo, they are event organizing, like one-stop shop for event organizing.
Andrew: All right. So then how did you know what features they would need? Did you chat with them first?
Uri: No. We decided, hey, we want them to connect somehow their bank account and then we’re go in and map all their expenses on SaaS.
Andrew: Okay. That makes sense.
Uri: And we did it purely manually. Like, everything was done manually, just add a nice [fishbowl 01:00:13] to see their spend and that was the very first version.
Andrew: You personally doing it sitting down going through their accounts and saying you guys are spending on Twilio, you’re also spending on Twilio, you’re also spending on Twilio, and by the way, Zapier five times two. Is that it?
Uri: No. So we built something that got the data and then we kind of matched it and said, all right, this is Twilio, this is that, this is that. That’s what we did manually and we also created alerts for them manually. We looked at it every day and sent them an alert when something went up or something. And we started building that as we went.
Andrew: And you knew that that was the first feature to create because . . . ?
Uri: Because that’s what it felt that was missing at that time and was kind of the base for what we did back then but we learned a lot from them from the point that we did back then to where we are today.
Andrew: What did you learn from that first version that you created?
Uri: There are so many challenges for companies around SaaS management in general, not just the spend. It’s about automating everything. So, if it’s, let’s say, what we are doing today we are doing mapping, right? So we start with mapping, let’s see what Twilio automatically maps everything you have in the company what is being, how much is being used, how much you pay for it, not just the things you pay for also the free. We can identify, you know, what some companies go on 700 apps that are being used in the company, 700 SaaS tools.
Andrew: How do you know what software we’re using?
Uri: So we have different layers of discovering. One of them can be all the third-parties that you connected to Slack. Let’s say you connected third-party to Slack via mapping from Slack’s API or everything you spend, everything you paid for, we have a browser extension that maps signings to SaaS apps [inaudible 01:02:03] we have different methods.
Andrew: Got it. So you start just putting together a list of all the software that we use, paid for and free, and that’s the first thing that you did for your clients in a simpler way. When you did that, what did they come back to you and say that they needed that you didn’t anticipate? Excuse me.
Uri: It’s really part of what we do and part of how the product works and the product development the last three years. So, when you have all this data and you see, oh, my god, I have 500 apps so the next thing you need, all right, that’s too much information for me. I need that they adjust or I need insights or I need . . . you need to tell me what I action item on, so then we started with insights and then when you see the insights you want to come to me and say, all right, why don’t you automate it for me, right?
Andrew: Meaning what, automate? Automate what part did they ask for?
Uri: That’s a good question. But there are different parts. Like, that’s part of what you discover. All right. What do you need to automate? And then we started with, all right, let’s start automating offboarding of employees. When someone is leaving the company, let’s close all their accounts, and then when someone is joining the company, let’s open their accounts. And we started use, stopped used something, let’s just move this license from somewhere to somewhere or when a new app is being discovered, let’s just, you know, the first person to use it, let’s send them a form to answer some questions that IT will send them anyway. So all these workflows and automations are kind of what created this orchestration and the fact that, you know, there’s something needs to be. There needs to be software to manage all software, right? You can’t add more people to manage more tools when you look at larger companies and enterprise, right?
Andrew: Yeah. You know what? I had a friend who had a very acrimonious split from his co-founder. He had to spend days after they fired one of the co-founders, days sitting down trying to figure out what software does his co-founder have access to. How do we block that? And what do we do to make sure that this is all closed fast? He had this dream that that would be the next company that he started. I thought that . . .
Uri: Now we can do that in one minute in time.
Andrew: I thought Okta did that, too. I know that Okta is one of the integrations you work with but I thought that that’s one of the things that Okta does, it gives employees a list of the software that their company offers and a single sign-in for it.
Uri: Yeah. So Okta is part of it and Okta is one of our integrations. And Okta allows me to connect, like, sign up, single sign-on from one place to all the apps that I configure but then there’s the process of what can be configured and how can it be configured and then some of them are assumptions and some are not assumptions, some of them are on Okta, some of them are not on Okta. We show you the entire stack. So let’s say, for example, the company is using Dropbox, sometimes you can just sign up with new Dropbox account without no one ever knowing that for your company just because you missed it somewhere and then you have a few Dropbox accounts and stuff like that.
Andrew: What’s the prices? I was looking online and one thing that you guys do is you don’t have a sign-up form. You have a get a demo which is something that happens at enterprise. I started to think maybe we need this but there are no prices on your site.
Uri: Yeah. It’s, for me, going enterprise it’s a total, like, 180 degrees from Meerkat and Houseparty, and you know, social streaming consumer. And we tested at some point having sign-up from the website and we are testing all the time many parts and the thing is that it just brought us the wrong people for the wrong reasons because SaaS management is kind of new, not all people know what they came for and there’s still education need to be done, right? It’s a pretty new category. It’s not like I’m saying, hey, you have a CRM. Our CRM is better, right? We are offering you a SaaS management and this is what SaaS management means.
Andrew: Yeah. And people don’t say I need . . . I know we’re running late here. Sorry. We’re going to go. Do you have a couple more minutes?
Uri: Yeah. Yeah.
Andrew: It’s not that people say, “I have problem with SaaS management.” It’s that they have these little tiny issues that they aren’t defining clearly yet.
Andrew: But I was trying to understand then how you guys are presenting it. You haven’t found the one thing that you say. You haven’t found the killer single feature that brings people in and then makes all the other features feel, like, wow, of course, I needed this. I didn’t know it. Right?
Uri: Yes. I think it’s all kind of connected. So, usually, the first thing that would come up for is control and mapping. All right. I’m losing control and I don’t know what’s going on.
Andrew: Control of . . . ?
Uri: Control of the SaaS apps. Some of them . . .
Andrew: I just don’t know what people are using my company.
Uri: I don’t know what people are using or I don’t know what people are paying for or what we are paying for or I don’t know if they’re actually using what we are paying for, stuff like that. And even, you know, external users when you start adding external users, I don’t know who they are and if we removed them and stuff like that. So the mapping and control that’s the most basic part and there’s this huge aha moment there, right? Wow, Torii did this for me and it’s, like, in the first 24 hours, you see everything.
Andrew: But I feel like even that’s not yet articulated in a way that makes people go, “This is it. I know I need this. I found it. This company can do that. Like, I’m looking at . . . I use Ahrefs to get a sense of what top pages are on people’s sites. One of them is it looks like one of the things you guys created was a checklist for employee offboarding, knowing that when somebody wants to let go of someone, they need to know all the things they need to do and maybe they come to you for that and that becomes the entre into Torii. But that’s not a super popular page on your site. It looks like, right? It hasn’t been there.
The one thing that I’m noticing that does work for you is, again, using Ahrefs to get a sense of who’s linking to and what, you personally are the big draw right now, you and your story. So you’re on ReadWrite Web, you’re on The Next Web, entrepreneur.com did an article on you, “Three Ways You Could Avoid Wasting Your Company’s Money on Technology.” So it’s content on other people’s sites a lot of lessons learned from entrepreneurship from you through your speaking to entrepreneurs, and by the way, here’s this one problem I had and it’s solved by this new software I created. And that’s the answer for how Torii is growing right now. Am I right?
Uri: No. It’s something that we started recently about me, but we still, I think what works good for us and in terms of lead generation and in terms of getting customers are being focused on the IT and the people that are really . . . the companies that are really on these places.
Andrew: And how do you reach these people?
Uri: So there are either LinkedIn ads or conferences, or you know, outbounds, and being really focused on this company that [inaudible 01:09:04] like the last 10 years, 15 years, there are more than 300, 500 employees, right? When ITs based and not just getting started.
Andrew: Okay. And so you guys are doing . . . and part of it is you’re speaking at conferences. I think you’re at the Okta conference, right? Part of it is that. Part of it is content around it and people will come to your site and request a demo. But the other part is outbound where you will identify the right people. Am I right about that? And start sending them messages, cue them up with salespeople.
Uri: Yeah. Yeah. It’s not only sales. It’s different growth from consumer and what we’ve done before, like, my previous experience, but it’s ideal and there’s huge, huge difference the acceptance to SaaS management that I’ve seen two years ago than what there is today, like the inbound, the level and amount of inbound because the problem is just getting larger.
Andrew: And how . . . are you basically starting from scratch now because it’s a different product, different customer base, different sales, different everything, or is there something that you took from your previous company that you’re bringing in here that’s helping you do well?
Uri: You mean different products in terms of what?
Andrew: I feel like Torii versus Life on Air are so different that is there anything that you did before that you’re bringing in here except for . . . ?
Uri: Oh, yeah.
Andrew: Yeah. Is there any?
Uri: It’s totally different. It’s totally different experience. I think I’m bringing a lot of stuff from before. First of all, the data-oriented approach that is kind of you can’t live without on consumer and you can’t grow without the consumer. Part of it is the user experience and being very customer focused or user focused, really trying to understand, just like I told you before, you know, hanging around with the streamers and really, you know, dig deep within the customer or users, you know, what are they paying, how are they using it, what are they missing, what could make their life better in creating this problem and that’s actually easier on Torii because you’re actually solving a problem. Before you’re not solving a problem, right? Before it was a vitamin startup, this is a painkiller. So some parts are really easier when you’re solving a problem for . . .
Andrew: Why? How is it easier to find a problem than to find something that’s . . .
Uri: Because it’s easier for them to express it, right? When I’m . . . if I’m asking you, you know, what are your challenges around live streaming today? We don’t care about it maybe. I don’t know. I don’t have problems around live streaming. You know, I don’t care about live streaming. I will do it when I have something interesting to say maybe.
Andrew: It’s hard to ask someone what would get you excited about live streaming or excited about something and have them list it. It’s a lot easier to say what sucks about your life and have them go off. Am I right?
Uri: Yeah. I usually try not to ask about the future. I’m trying to ask about the past or the present just in general product understanding. But it’s easier to ask, you know, what are your pains today around managing your offboarding from SaaS tools? “Oh, that’s crazy. We had this user that left and everybody [inaudible 01:12:27] and we have this subcontractor that was there,” and you know, then they start digging through the next level and we see, all right, do you really need the offboarding something that is not solved, license management, something that is not solved.
Andrew: I really like this business a lot. How are you guys doing now? What kind of revenue are you guys pulling in with Torii?
Uri: Yeah. So we are closing now to, like, the first one million of ARR.
Andrew: Okay. One million in annual recurring revenue. You guys launched I think 2018 was when you officially started even though I thought the site was up a little bit in 2017.
Uri: No. So we started in early ’17. Our first revenues was on early 2018 and the last few months we started building our go-to market team, sales, marketing and it’s been amazing ever since.
Andrew: Did you only raise $1.4 million? Is that it? No, no, no, I see.
Uri: That’s what we raised early on. Earlier this year, we raised $3.5 in addition.
Andrew: Okay. I see now. From who?
Uri: It’s also part of, you know, the fact that you have all this sexy SaaS tools and for solving pretty much any problem that you have and the thing that pretty much left behind that’s, you know, how to manage them and the operational side and that’s also what fascinates me when choosing to build Torii, right? I was in the most sexiest part of startups for most people, right? And I went to the what is perceived as the most boring part, right? Managing tools operations of IT and I think there’s so much interesting parts to do there and that’s what we’re trying to do with Torii.
Andrew: And the reason you understood that this was a problem was you experienced it back in the Houseparty, Meerkat days. You didn’t know what software your people were using and your big issue was what? That people were spending on software or didn’t know what software was there?
Uri: The problem was that I had too many issues with that. I didn’t know how . . .
Andrew: There’s lots of little issues with what software people . . .
Uri: Yeah. Lots of little issues and the general subject of that is, you know, we have all these tools. How can you use, take the most out of them, but stay in control and be efficient, right?
Andrew: I’m concerned with one thing with this interview, that people are going to, first of all, I think they’re going to get a lot out of Meerkat, Houseparty days hearing that story. I think that they’re going to get a lot out of how it’s better to solve a problem than to try to look for a cool thing for high school kids, even though the cool thing for high school kids is what everyone gets excited about. I’m concerned that they’re not going to know how to go find Torii, that they’re not going to connect it, that they’re going to say, “Oh, I know this. It makes sense. What was that thing that I heard on Mixergy?” And then they’re going to go Google around for it. Where’d you come up with the name Torii, T-O-R-I-I?
Uri: Yeah. That’s . . . we want something like a gate for the software for the company, and Torii, that’s a Japanese gate, kind of symbolized gates and it’s nice. Pretty much that.
Andrew: Oh, I see. Torii, spelled T-O-R-I-I, is a traditional Japanese gate most commonly found at the entrance or within a Shinto shrine. It marks the symbolic transition from the mundane to the sacred. And that’s what you want to be. You want to be the transition period from where we were to the sanity that we have right now.
Andrew: Oh, look at this. And now I see your logo, too, makes sense. I’ve seen this freaking this gate a lot.
Uri: Now everything is connected.
Andrew: Now it all makes sense now that I see what the actual gate looks like. I know I’ve seen this a lot in photos and now I see where you guys came up with your logo. All right. That makes sense.
Andrew: Congratulations. It must feel great to do this. It must feel great to have some sanity here. Not a lot of attention. You’re not going to go to a party and people are going to go, “Oh, you’re the guy who created Meerkat. You’re the guy who created Houseparty.” I think TechCrunch is going to stop writing about you. The Verge will never write about you again. But it’s going to be a sane business that you could build that you could really have impact on customers. Am I right?
Uri: Yeah. Yeah. It’s amazing. I think there are huge potential and huge . . . and lot of places we can go and obviously it’s not investing for the mainstream media because that’s the operational part of it, right? It’s the gray part and the thing is that every company needs these parts and I think in the future we see more and more companies in the need for SaaS management and the scope of SaaS management will be larger.
Andrew: I completely agree. And at this point the companies that need you the most are the ones who have the money to pay for you which is great.
Andrew: All right. So it is Torii. I’ve now learned what Torii is. It’s the gate that goes from the mundane to the sacred. You guys can go check them out at toriihq.com. Uri, congratulations.
Uri: Thank you.
Andrew: And let me thank the two sponsors who made this interview happen. The first, if you need a website for anything, go to hostgator.com/mixergy to get the best price. You’re going to make your cheapest friends really proud that the website will be up and you’re not going to pay a lot of money, hostgator.com/mixergy. Second, you’ve heard me talk about how if you need a developer fast, hiring best of the best developers at Toptal, but you now know that I’ve even used them to hire a finance head. Go to Top as in top of your head, tal as in talent, toptal.com/mixergy. And finally, Ahrefs, thanks for being . . . or I guess they call it Ahrefs, thanks for letting me snoop on my guests and on my competitors and understand what their content marketing strategy is and helping me out that way. I think I paid for their account. I think they finally gave me a free account because I’ve been talking about them so much and they’ve become kind of a research partner for me, Uri.
Uri: What do you use there?
Andrew: What I like about Ahrefs, like, if there’s somebody that you want to see, why is everybody talking about them? Who’s talking about them? How do I get that? You could just type in their name and you get to see where they’re getting links, you get to see the value of each one of their pages, stuff like that. I kind of want to just give you my account but just go try it for free. Just put in . . . you know who I would put in if I were you? I would put in Okta. Let me put in okta.com for you. Oh, I typed in . . . I’m going to type that into Ahrefs and now, oh, yeah, they have a lot more juice than you. But let me see what their top pages are. I like doing that to see what, like, the most valuable pages are on someone’s site. It keeps typing in Okra. Okta. I’m using the iPad. I’m kind of an iPad fanatic so it’s a little bit aggressive with their . . .
Uri: Yeah. It’s hard.
Andrew: . . . with their autocorrect. Oh, let me see . . . Okay. So okta.com/workdays is one of their big sites. Single sign-on, you guys did good with that, right? They have a product called single sign-on. You guys have a page about how to use . . . how to implement single sign-on that became a huge for you guys. It was one of the big Google searches I noticed for you. Okay. This is where I start to get a little bit too deep into their world as I start to understand.
All right. Let me do one last thing. I want to see who’s linking to them. I also like to see what are their referring domains. No, no, backlinks, backlinks. I want to see who’s linking back to them. And the reason I’m thinking Okta is they’ve got your customers and they’re in the enterprise space so we can learn from them. Come on backlinks. All right. I’m going to get sucked down a rabbit hole here. It’s . . . I don’t know why this . . . I just got the iPad, this newest one, yesterday and it is super slow. Nothing’s loading, even Google didn’t load a moment ago. But you get it. This is what I do to hunt down what your top pages are, what you’re doing, and understand what’s working for you. All right. Ahrefs. Cool tool. Thanks, Uri. Bye.
Uri: Thank you very much.
Andrew: Bye everyone.