Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m looking over here, guys, because I was looking for the beads that I usually have on my wrist. It felt a little weird not to have it on. My name is Andrew Warner. I’m the founder of Mixergy, where I interview entrepreneurs about how they built their businesses, and I talk very fast because I was a New Yorker for most of my life.
But now I’m living in San Francisco, where if you walk around, you see Levi’s kind of plastered all over the city. I didn’t really fully understand, until I got here, how much of San Francisco is a part of Levi’s heritage. It turns out that Levi’s, the maker, the guy who created the first jeans is a guy who created jeans back in the early mining days, the Gold Rush here in San Francisco, which began in the 1870s. The reason I bring this up is because a lot of the people who were mining for gold ended up actually mostly, right, they ended with nothing, and God knows they don’t have much of a heritage today, but Levi’s still does. The company that enabled those people to try to get rich and in many cases to get rich, the company that enabled the city in many ways to become the draw, the magnet that it was in the 1800s is still around.
And the reason I say that is because I feel like today’s guest, Gil, is a guy who’s kind of doing the same thing. You won’t recognize his company name. Maybe some of you will, to be honest, because you guys are developers, and you might be using StartApp, his company name. But you will recognize many of the companies, many of the apps that use his software to get more insight on their users, to monetize their software, and to make their stuff better on a regular basis. He is one of these companies that, like Levis’, enables other companies to shine and grow and hopefully, just like Levi’s, he’ll be able to survive for as long as Levi’s did and have the kind of impact that they did, maybe even more.
All right. His name is Gil Dudkiewicz. He is the founder of StartApp. StartApp builds solutions for app developers to help them monetize their apps better. To put a little more flesh on that, and obviously we have an hour to talk about this, so we’ll do much more than this. But to put more flesh on that, he gives them data on who’s using their apps, and he creates tools for them to monetize. That means largely through ads within their apps, but in other ways too. And because really he is a forward-thinking guy, he’s also going to be enabling apps to add blockchain technology to their apps. I don’t even know what that means fully, but we’ll talk about that in this interview thanks to two great companies. The first will help you to do smart email marketing. It’s called ActiveCampaign. And the second will help you hire your next phenomenal developer. It’s called Toptal.
Gil: Thanks. I’m not sure if I have anything to say after this introduction, because you basically said everything we should. You [inaudible 00:02:37]
Andrew: Yeah, it took us like 13 minutes for me to fully ask all my questions about the company, but that helped me do the intro. Hey, before we get into things, revenue, why aren’t you going to tell me what your revenue is?
Gil: We’re a private company. We never brag about revenues. We never brag about the amount of people we have. We brag about the customers that we have. [inaudible 00:02:56]
Andrew: Are you profitable?
Gil: Yeah, we do.
Andrew: You’re profitable. Do you have outside funding?
Gil: Yes, we raised $5.5 million more than six years ago.
Gil: From two VCs. One of them I was EIR at the fund, so they put money in the presentation. And another one we raised a year later. We already had revenue then. And we built the company differently. We never brag about how much money we raise.
Andrew: And still, by the way, I’m sorry to interrupt you, but right over your shoulder, this leads into what you’re going to say, there are logos of lots of apps that we recognize. Can you just say some of the ones that are over your shoulder for people who are listening?
Gil: Yeah, we have from GSN to [inaudible 00:03:36] to Candy Crush to [inaudible 00:03:41].
Andrew: Angry Birds.
Gil: Angry Birds. We have many, many different apps that we work with from the big, from what I love from the mom-and-pop shops to the Amazon and Google and Facebook and Baidu.
Andrew: Amazon, Google, and Facebook use your software in their apps?
Gil: So some of them are using us as advertisers. Some of them are using us to monetize, and some of them are using us to get data. Okay?
Gil: So we work, just to give you a sense, I can’t talk about the revenue. I don’t really like to talk about the revenue. It’s a private company. As the CEO and founder, I’m actually . . .
Andrew: Can we say over $7 million in revenue? We can say that, right?
Gil: Over what?
Andrew: Seven million?
Gil: Yeah, that was that like many, many years ago.
Andrew: Okay. All right. That gives me a sense of it, but you were going to say how many apps and app developers are signed up for your SDK.
Gil: So what I can easily say that we have more than 400,000 different applications that have integrated with us. We have about 10,000 new applications coming every month to our website, download the SDK and [inaudible 00:04:48]. The SDK, which is essentially the software development kit that goes, the piece of software that goes inside the application has been downloaded 12 to 20 billion times, by now 19 point something billion, which is the largest SDK distribution in the world after Google and Facebook, according to [inaudible 00:05:10] marketing research.
Andrew: Okay. So even if we’re not aware of your company name, we’re using software that uses your company. You know what, before we get into how you came up with this and how you built it up, I want to ask you kind of a painful story about a previous company that you had. You were working with a partner. You wanted a cofounder. Why did you want a cofounder there? Because this ended up in a sad situation. But why did you even want a cofounder then?
Gil: So there are a couple of reasons for it. One [inaudible 00:05:39] it’s really a roller coaster. Anyone can put a shiny, nice face and say, “Hey, that’s an easy thing, and everything is nice and easy, and you can just build a company and enjoy and make money and everyone is happy.” That’s a good story, but it’s so far from reality for many, you know, for any founder that you talk to. So I wanted someone I can share some of the ups and downs of what’s going on. And secondly there’s statistically, and I’m an analytical guy. Engineering in my background as well. Statistically companies with two founders are more successful than one. Okay?
Andrew: Okay. What was the business that you founded?
Gil: So it was a TV search engine and a recommendation engine, kind of TiVo, if you remember, but without actually the device. It was an extremely cool idea. We had patents on it. The product was awesome, but I think it was ahead of the time.
Andrew: It’s called MeeVee. I remember it actually. It was big at the time.
Gil: Yeah. You still see the sign if you go on the 101 South in Burlingame. You can still see the sign on one of the buildings. It’s still there.
Andrew: Why has it not been removed yet? I see it here in a photo on Amazon.
Gil: I think it’s just too expensive to take it down. So whatever the reason, it’s not . . .
Andrew: It’s still there. I looked on Google maps. I still see it, yeah, there in Burlingame. All right, and so you found a cofounder. He was an older guy who had more experience. Talk about what happened.
Gil: He was the older guy. He was the industry expert. He was, you know, without naming names, he was a professor in a university, teaching this subject matter. He knows it very well. I was a Berkeley grad. I did my MBA task, and I was extremely proud that 99 in the Silicon Valley can raise money just by saying that they want to open something. That was my impression. The reality wasn’t as easy. But I told him that, “I’ll quit my job if you’re concerned that you won’t find a job. I’ll quit my job. We’ll raise $500,000 and then you join full-time.” So I was able to raise $500,000. Then he was concerned that that may not be enough for him, because at this stage, [inaudible 00:07:51] wanted money, then he may not find a job easily.
Andrew: To give people a sense of the time, this is the year 2000, back when just around the time when people were raising millions and millions of dollars on nothing more than a napkin idea.
Gil: Yeah. [inaudible 00:08:07].
Andrew: So you raised only half a million dollars. He saw that you raised the money, and he did what?
Gil: He said that it’s not enough for him to feel confidence about it, and he wanted to make sure that he’s more secure, etc. I said, you know, “That’s a different game. It is a startup. I was fine with you working full-time and I’m taking the risk raising money, but [inaudible 00:08:26] together in the same boat and [inaudible 00:08:29].” He was too concerned. You know, there is a saying, there’s a phrase that says man plans whatever and God laughs above. Eventually he was let go from the company that he was working on and couldn’t find a job for many, many years, and I was there for like six years until the company was essentially sold.
Andrew: Wowee. But at the time, you were alone. This person, who you admired, who you were counting on as a partner, who you needed, disappeared the day that the money hit the bank, and you had to figure it out on your own. Was it okay to run the business by yourself in the end?
Gil: Well, in the end, yes, but it’s more complicated than this, because I raised money on the names of both of us. I go to an investor and say, “Hey, you know, we are opening the company. Do you want to put money in it?” Integrity for me is crucial on anything I do, and that’s not a promise I give to the investors. I promised them that there are two of us. So I had to go back to them, not technically, but with my integrity and the way that I look on things, I had to go back to them and say, “Hey, I’m by my own. Are you okay with me going and continuing with it, because you put your money? We can return it if you don’t feel comfortable.” And I think that made them feel very comfortable with, you know, the approach of transparency and the approach of being honest and the integrity. They started to say, “You know what? We invest with the idea. We invest with the spirit. We invest in the people. Keep going with it.”
Andrew: All right. Later on I want to find out, later in the interview, how you found the team for StartApp. But I’ve got to ask you, the next thing that you did after that was a company called SweetIM. Wasn’t SweetIM . . . it was something that you install, like a browser bar or an executable, that essentially was pumping out ads, right?
Gil: Not really. It was essentially an add-on to the messenger and an add-on to the browser that enabled you to send different animation and different smilies, like we were the first generation of the smiley, like at the time that smiley was two dots and like you know a sign. We actually did a very nice one, winks and different times of flash animations. We did an add-on for the messenger and an add-on for the browser, but it never sent advertisements or anything without permission of anyone.
Andrew: It feels like a lot of people at the time didn’t know that they were giving permission for that. You guys would even redirect them to your own search engine, which used Google, and then allowed you to make money every time people clicked on one of the Google ads. It was what some people would call adware or malware.
Gil: I think you’re right in a way, okay, and what I mean right in a way, it’s not what we did, but the industry went to this direction, and that’s part of the reason that I said enough is enough. For me, that’s not really what makes me excited in life.
Andrew: And so what did you do about that company? How did things end up at that company?
Gil: The company sold afterwards for a very nice return, and it also raised very little amount of money, less than $1 million and sold for like probably close to $50 million.
Andrew: Wowee. And you were not the founder, but you were the CEO. You had a substantial stake in the business.
Gil: I was the fifth employee. Also there were two founders, which were great guys, but didn’t really get along working together and kind of wanted adult supervision. Whatever can go to 30+ years old is adult supervision, but you know that was the case. It was five people, pre-revenue, and when I left, it was like 40% EBITDA and a fairly profitable business.
Andrew: What did you bring that . . . what did your maturity allow you to bring into the business?
Gil: I think focus. I think a lot of what . . . if I’m looking and I’m not . . . I shouldn’t talk necessarily about what I think I do well or not, but I think what I really try to do is build good teams around me that knows the business and can work well together and are the right people for the right job in a way and can integrate together, etc., and bring the focus and enable them to work. I’m probably not the best person in anything that we do. I’m pretty sure that you’ll find, for any specific task or any specific job or any specific whatever we do, someone that does it much better than I do. But [inaudible 00:12:54] it worked together and give it the direction to what you want to do, that’s something that I think I do okay.
Andrew: Can you give me an example, something specific? I want to understand, because I feel like I should, at this point in my career, have that kind of maturity. But I don’t even know that I’m identifying what that maturity means. What’s one thing that you were able to do that gives me an understanding of how you can organize a company better because you were 30 and because you had that previous experience?
Gil: So first, not necessarily look for what everyone thinks are the best people in the world. I gave up on many good coders in a way and business people and sales and whatever that may be the best at what they do, but they’re not the best for the organization and not the best for working together. My view on it is if I’m stuck with any of them on a flight to New York or a flight to wherever, can I still have a good communication with them? Can I have the rapport and respect and appreciate the person that I’m talking to? Can I trust them? A lot of it is [kosher 00:13:57] for me, and without it, I don’t think you can really build a decent organization or a decent company.
Andrew: Yeah. You know what? I remember I had a friend of mine who was running, at the time, a publicly traded company. He needed a great CFO, and so he hired someone who was a great CFO. The problem was he was like 27 or so, and the CFO was 40, and the fact that he was talking to a 40-year-old as a boss intimidated him. He told me over drinks one time really intimidated him, and in the end that little bit of discomfort meant that he couldn’t stay on top of what the CFO did. They had this huge falling out, and the company suffered for it. You could see the seeds of that. That’s what you’re talking about.
Gil: Yeah, that’s frankly how, because, you know, being the founder of a company you definitely manage people that are way older than you are and essentially saying that you don’t really care about the age, you know, it’s not only age, age, whatever diversity that you may want to [inaudible 00:14:53], it’s easier said than done. But I think at least in the Silicon Valley, when I started, there was a lot of respect for fathers. So people are willing to work with fathers [inaudible 00:15:06]. Like some of them love the idea of being in the young companies, but not necessarily willing to take the risk of opening something of their own or don’t have the idea or don’t many different things that can [inaudible 00:15:18] them for not opening the company.
Andrew: Okay. I kind of get, not that much, but I kind of get a little bit of how you operate. Let’s fast-forward 2010. 2010 you said to our producer, “I look around this world and I see things are changing. It feels very much like the year 2000, where in the year 2000 the internet was just taking off and huge opportunities were available everywhere. 2010 mobile was just taking off. I see huge opportunities everywhere.” A lot of us saw it by then, right?
Gil: Not really.
Andrew: Really? Tell me.
Gil: Many people looked into it, and I don’t they understood it. Many people looked into the iPhone and said, “That’s the biggest pain.” I looked at it and said the iPhone will be much bigger, because that will be the same as Apple and Microsoft in a way. Whether you’re a closed environment or you’re an open environment, one of them can make more money, but in terms of the impact on the economy of the world, usually the open economy are actually doing much better. So many people saw it, not to the same scale. I think that was the only case almost that I remember that reality did much better than all the projections of all the companies like Forrester and [inaudible 00:16:31] that predict the future, that was the only case that reality was much better and much faster than any forecast.
Andrew: Okay, I get that. The thing that I don’t understand is if you see that view, how do you pick from all of the different things that you could do? You could become an ad agency. You could create your own apps. Remember there were people who created nothing but smile apps, right? You would hold up your phone in front of your face, and it would look like you smiled, or maybe it would make you look like you had lion teeth or something. There were lots of different people who saw a potential, maybe not as big as you did, but went in different directions. How do you pick from all the options? What’s your process?
Gil: So for me the process, first it was a process. I looked at many different ideas. I was EIR at the time at a VC fund, and I was looking into going and managing the company that they wanted to invest in or just opening a company of my own. And frankly, I had many different ideas, and I made the decision that I wanted my own company and not being the CEO of another one. We can talk about it, if you want, in a second. But I went through different ideas, and essentially the example that you put in the beginning is exactly what [sells me 00:17:4]. I wanted to be the Levi’s of the Gold Rush, versus try to dig for gold, because I don’t really know what the appetite of the consumer will be for a specific app. You remember Flappy Bird?
Andrew: Yeah, it hit big and then disappeared.
Gil: Can anyone predict that when an application . . . I should not say anything because all of them are my customers in a way, but can anyone predict that this would be such a phenomenon in no time? [inaudible 00:18:07]
Andrew: I would even suggest the company, whose logo I see over your shoulder, that’s the Angry Birds. They were huge. Their stock price went from what, 12 bucks to or €12 I should say to now 4.75. It’s hard to keep that kind of hype. So that’s what you saw.
Gil: Yeah. I want . . .
Andrew: You said, “I don’t want to be one of these guys who could potentially be the next Flappy Bird.” All right. So you said, “I want to be built-in,” and then within that, and I understand why you narrowed there. How did you narrow even further?
Gil: So I realized being in 2000, in Silicon Valley, that it’s fairly resembling the hype of the internet, that anyone is looking into iPhones, and there was a big hype, and there was a lot of users who actually continue to use more and more websites. But I think there was a big difference. There were two differences in my view. One of them is that that’s moving way faster than the internet, and I think that the option of the mobile phone, what we call mobile phone today, that option was way faster than anyone expected.
But secondly it was clear that you can monetize them. For me, moving from a TV to PC to mobile, essentially there are differences, but in all of them it’s a computer. It’s a smarter computer. It’s a computer with [inaudible 00:19:34] of communication. It’s a bigger screen with less CPU if it’s a TV. But all of them essentially are computers that you consume content out of them. You can talk about leaning forward, leaning backwards if it’s a TV’s experience versus a PC, and mobile is way more personal than any of them because on your PC at the time there were a few people using it. On your mobile, it’s only you. All your kids, they take your phone and you know you have no choice with it. I realized you can do much more with it and you can adapt different tools from the internet.
Andrew: Let me hit you in a moment with a blast from the past that maybe will help me understand how you made a decision. But first I want to do a quick read from my sponsor, because I got an email from a guy named Ben Hodgins, who said, “Hey, Andrew, I miss the intro and outro jingles.” I used to have music at the beginning and the end of the episodes. I get it. We should bring that back. Then he says, “I greatly appreciate the shorter ad reads. Five minutes on a Toptal ad? That’s way too much. I fast-forward every time, every single time. Thirty seconds, I can listen to that.” So guys, here it is for Ben and everyone else feels that way.
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How’s that, Ben? Faster, right? All right. Here’s the blast from the past. I love that the audience sends me feedback like that.
I’m looking at one of the first versions of your website. Oh no, I just lost it. It was just up on my screen here. There it is. Okay, I saved it. I pinned it, and so it was on the left side of my Chrome browser.
It says, “Get paid for your Android app downloads. Introducing search-based monetization to the mobile world. Get paid for every app download $50 for 1,000 U.S. downloads.” What is this?
Gil: So I think that was one of the most brilliant marketing campaigns we did, and I think there are many companies competing with how to take the attention of app developers, and most of the app developers are concerned because they don’t really know you. Like will they really get anything from you? If you do the advertising for them, how much do they get? Do they get 10%? Do they get 90%? Fifty percent of what?
We said, “You know what? We talked to the app developers. We realize that’s a big concern. We made the numbers. We are good at numbers. We are a data company. We understand how much we make on average per users from different locations, different types of apps, etc., all of the analytics that we do.” Then we said, “You know what? We will give you a flat amount of money upfront for whatever we get from you, guaranteed.”
Andrew: You’re not inspecting how many times a user who downloads the app is engaging with it. No. You just said, “Get people to download it. We’ll pay you every time someone downloads and uses your app. Just run our ads.”
Gil: Yes. Then we did an average of [inaudible 00:22:30] from different places in the U.S., international, etc. If we saw that something is totally different, then we can communicate with the big app developer. But other than this flat-out, that’s the deal. It’s simple, easy to understand. It works brilliantly. We were the first one to do it, and it works brilliantly. It gave us users, app developers in an amount that we freaked out with how fast it actually grew. I think . . .
Andrew: Fair to say that of all of the different things that you could have used to become, to use the Levi’s analogy, of all the different things that you could have done, you picked advertising because that’s where you had a background. That’s where you had some experience.
Gil: I think that that was what we believed was big. In my view, you want to play with the big industry. The advertising industry seems to me to be industry that will go more than $100 billion. If there is $100 billion of revenue, you should be able to do something. If the industry is small, no matter how good you are, you can’t really do something which is big. We wanted . . .
Andrew: What about the thing that scares everyone, which is that Google, at the time, was huge? Today, obviously, Facebook. What about that?
Gil: Oh yeah, it’s a big concern. It’s a big issue. It’s a big concern. There are big competition in the world because they’re your partners and your competitors at the same time. It’s a big thing, but I think what started this is if you’re focused, then you can move faster than these companies. And that’s your advantage. We are not smarter than anyone. I do think that we are smart people, etc. I’m proud of the team. I’m proud of everything we do. But there are many smart people in many other companies. Definitely in Google and Facebook, there are great people. But the speed that you can move, the speed that you can adapt to the industry as a startup, they can’t compete with it.
Andrew: What’s this app, that I saw on the first TechCrunch article about you guys, that had search on an Android phone? That was an app that you guys created?
Gil: We created in search as well. I forgot the name of it, but we created the search application that you can search everything you want, not only on the website, but you can search your contacts, emails, etc. So sometimes you’re looking for someone and you’re looking for someone from contacts, you’re looking for someone from your emails, etc. Today it’s a [standard 00:24:49] on the devices, but really nobody did it yet.
Andrew: So when an Android developer got someone to install their software, they were also getting them to install your search button.
Gil: Sometimes yes, sometimes no. But yeah, in most cases, we preferred them to do it.
Andrew: You wanted them to automatically install it, and that’s why you could afford to pay per download, because you were getting a certain number of downloads of your app.
Andrew: That’s why you were also going after Android because you knew you could do it there.
Gil: Yeah. But also we went to Android because it’s bigger and easier than iPhone. It’s not bigger in terms of revenue for the device manufacturers. Obviously, Apple is making a huge amount of money. But if you look on the economy around it, that’s a different story.
Andrew: That’s also where see a similarity with SweetIM, that the search gets put in with the thing that people want, and then search is an easily monetizable product because Google, who in some ways would be your competitor, in other ways becomes your friend because you get a percentage of every click on those ads. Right?
Gil: Yeah. But that doesn’t go to market. By the way, that’s not anything that we do today. That’s not anything that we continued after a couple of years. That was a way for us not to raise too much money, then solve the chicken and egg, and a way of getting both publishers and advertisers.
Andrew: Okay. All right. We were talking about a cofounder. In this business, you said, “I’m going to learn from my past experience.” How did you find the first person who you brought on, the person who would become your partner?
Gil: I was searching a lot, and I was looking for someone that is both technical, has mobile experience, and I can trust. And it wasn’t an easy thing, because you’re really looking for a partner that you kind of get married with in a way. I’m thinking so much that you have to find somebody that you can . . . not someone that is exactly like you, because that doesn’t really do anything to have twice of me. Once of me is more than enough. So two, it’s not really what you’re looking for. But someone that can complement what you do, someone that you can trust, someone that can help you when needed, that can be an advice for whatever you need. It’s not an easy thing to look for. I talked to many different people, and I found him and, you know, was able to convince him to join me.
Andrew: This is Ran Avidan. He is the cofounder and CTO. To this day, he’s still there. I saw him on the earlier version of your site all the way up to today. I was looking at his background to try to understand what about him made you feel like he was complementing you. The thing that I see he was a Director of Products at NewACT. He did Followapp, a program manager for five years. What was it that he did that made you say, “This is my guy”?
Gil: So when we sold NewACT to Amdocs, he was both the VP of Engineering and the VP of Product. So he knew both engineering and product. I wanted someone who is open-minded and looked for things in a broader scale and not necessarily look for a very specific, narrow solutions and someone that loves to investigate and loves to think big about stuff. There was, you know, we communicate very well together. I don’t think . . . and you can talk to people internally. I don’t think we are alike. I think we are very different in many ways. We share the same values., But other than this, we think about different things very differently.
Andrew: Okay. You told our producer, “Once we discovered this, we went out and we created an MVP superfast.” What did it have, and what did it not have?
Gil: So I can’t even, like the example, the specific example I give you won’t necessarily say anything. I can tell you that we founded the company in December of 2010. In May 2011, we already had half a million users. The speed . . .
Andrew: And the hook was not so much even the product, but also the marketing.
Andrew: That you were always good at doing both.
Gil: I think that you have to have both. You can’t . . . it’s like one [hand clapping 00:29:05] if you do only one of them.
Gil: You have to do both at the same time. You know, I remember we put a budget of $10,000 to recruit some beta testers and to get into I think 5,000 users with the $10,000 that we had. We barely could support it because the speed, and that’s because we’re a platform that supports others. The speed that we got half a million users was like less than three months since we launched the initial product.
Andrew: Yeah, that’s another thing that I saw on my notes that I highlighted to bring up to you. You told our producer, “We had a budget of $25,000 to get our first 10,000 users. We didn’t even need the $25,000. We had about half a million users superfast.” What did you do?
Gil: We recruited app developers, and most of it is from our network and friends and friends of friends that trusted us, and we launched a dozen apps, and then we got half a million users in like no time, no time. And you can’t tell which one of them will be successful. I can tell you there were many of them that looks exactly the same, and one of them did 10 times better than the others.
Andrew: It was just working the phones and saying, “I need you to try to put this in your app.”
Gil: Yeah. They were looking for solutions as well. They were developing apps, many different types, and they’re getting users, they’re getting downloads, and they don’t see any money. You know, they need to support their families as well.
Andrew: All right. Here’s the other thing that I see going back in time. You guys used to be . . . What is this? You used to have a ticker at the top of your website with all the . . . It was titled “Exciting Events.” There’s Droidcon Berlin. There is Nexgen Android. There is AnDevCon 3, Apps World UK, Israel Mobile Summit. This is part of what you guys did. You would go to all of these events.
Andrew: And it says silver, bronze. You’re sponsoring them? Is that what it is?
Gil: Some of them we sponsored, some we did not. There are some that we go to meetups and just talk and work the floor. Some of them we’re representing. Some of them we were speaking. Last year, we did more than 150 events [inaudible 00:31:07].
Andrew: A hundred and fifty events?
Gil: Yes, 150 events. So some of them can be as big as Mobile World Congress, that last year we did a party. We did a party in Casa Batlló, which is Gaudí ‘s house in [inaudible 00:31:24].
Andrew: Whose house?
Andrew: I don’t know, but that’s okay.
Gil: He’s the number one . . . he’s the one that did the Sagrada Familia.
Gil: He’s the biggest architect and the most admired one in Barcelona.
Andrew: Yeah, I know there are people in my audience going, “Andrew is such a rube. He doesn’t even know it.” I am a bit of a philistine. I accept it. But this is even going all the way back to the beginning. Part of the way that you grew was you went out to these conferences. You told our producer, “I went about at least 100.” What was your plan back then? Was it you personally by the way, Gil, going to these conferences?
Gil: So all of us did. I think there are better people than I am in terms of mingling around and work the floor. But all of us did.
Andrew: You just go in there, and then what would you do it these conferences? You weren’t buying booths necessarily.
Gil: Well, fairly fast we actually had a booth in some of them. We usually had a booth in the biggest one, and then the rest of them we worked the floor, speaking in different panels. But we worked the floor. We set meetings in advance. All of us do it, and by the way, all of us, all of the technical team in the beginning and we should go back and do it and develop apps as well as part of the practice. In order to understand the difficulties and the obstacles and what our developers feel, every new programmer as they came to the company, regardless if he was [inaudible 00:32:42] developer or an Android developer or what have you, the goal was the first few days develop an app. Pick whatever you want, just build an application that you understand what they’re actually [inaudible 00:32:54].
Andrew: What’s something that they learned by developing an app that they didn’t know? Do you have an example?
Gil: First, the [affinity to it 00:32:58]. They can’t [inaudible 00:33:00] they are developers, because they’re building the apps, so they start to understand the world much better. They understand the obstacles that they have. They understand the concerns that they have. They understand the issues. They understand what does it mean [inaudible 00:33:12] users, because if you build an app, you are starting to look at the analytics and understand that people actually use the application, how much they use it, etc. But it’s both . . .
Andrew: How are we doing on time, by the way? I want to go little bit longer. Do you have another 25 minutes? Or do you have another meeting?
Gil: We should be able to do another 20 minutes.
Andrew: Okay. We’ll keep pushing here. When you were going back in, you said, “We always would establish meetings.” Tell me more about some of the things that you would do. You would call ahead and you try to set up meetings for yourselves. You try to speak on as many panels as possible. What else did you do? I get the feeling that you think differently about business than most people do. What other hustling things did you do that helped in the early days?
Gil: We do many different campaigns. We communicate with the app developers. Today we have a list, for example, of many hundreds of thousands of app developers that we communicate with them on a regular basis. We send them newsletters. We respond to their tickets, which is also extremely important. We get today I think like 10,000 tickets a month or whatever, like an insane amount of customer support. We answer every single one of them. So we communicate with them. We also communicate with them before we start developing anything to learn if that’s important. But it’s also a community, and that’s what you need to understand. It is a community of app developers. They talk to each other. If you do something good, they’ll talk. If you do something bad, they’ll talk as well.
Andrew: What else did you do that stood out in the early days, back when you were in just hustling mode, trying to get as many developers as possible for under the $25,000 that you had?
Gil: We’ve been in many forums. We learned the forums. We’ve been polite, although we’re not aggressive of, you know, talking continuously what we do. We just try to contribute so people will listen to what we do, and we try to be innovative on the marketing. We try to be innovative on anything we do, so that’s including the marketing side as well.
Andrew: You also went after advertisers back then.
Andrew: Your site, from the beginning, had a site for developers, a site for advertisers. How did you get advertisers?
Gil: Some of them were very easy because some of them are willing to test whatever you do, and you just need to actually do well on the results. And some of them were extremely hard. And by definition, we are a technology company more than we are a sales and marketing organization. The company was built initially in Israel. There is a lot of technologies in the company. Much less a sales organization. So building the sales organization, I think only now we are starting to have a really mature sales organization. We hired someone from Google to manage and from [inaudible 00:35:56] to manage all the sales in the U.S. We hired someone from CNN and AOL to manage all of India. So only now we think the sales has become more mature. But it’s always the creativity and just be passionate about what we do.
Andrew: All right. So the first version was what I described earlier. It had the search button. It had the search within apps and then the advertising. What was the next thing that you built for developers?
Gil: So the first one was the search, then the advertising part. Then about three years ago there were many derivatives of it, but if I’m looking at the big stones, the next one was the data platform that we developed about three years ago. We realized that we have a huge amount of data from [inaudible 00:36:43], and we continuously contribute to the app developers. We realized that Facebook and others are saying that they have a lot of data on their users and probably the most amount of data on the users. But that’s not really the case. Well, if this is the case that they have more than others, but they don’t really have everything. I’m not sure [Android 00:37:05] you have, you know, Facebook and LinkedIn. But if you have both, I’m pretty sure that it has found two different [titles 00:37:12] in both of them.
Andrew: Have two different what on both?
Gil: Two different titles, two different people.
Andrew: Oh, yeah, it’s the same person but with two different experiences on there.
Gil: Yeah. It’s like, you know, if you look online on one of them, I only go to games and I only eat and I only party and have fun [inaudible 00:37:28]. And on the other one, I only work. So there are two different, separate people. Reality is you’re one person. You do all of them. We realized that there are thousands of different small and midsize applications of communication, dating communication, messaging, social network, etc. that have a lot of information about the users, which is much more accurate, because if you’re in a niche type of category, your information there is way more accurate. If you’re aggregating this data together, we can build the biggest dataset on users possible.
Andrew: By connecting the Andrew that’s on LinkedIn, for example, and the one that’s on Facebook. I might be acting differently, but it’s the same person. If you can connect me, a third app would then have a much better understanding of who I am.
Andrew: With the expectation that it would help with advertisers or the app makers to know their audience?
Andrew: How did you know that this was even necessary? What was your process for knowing what to build next?
Gil: So that was, you know, some of the product you get by gut feeling. Some of the product you get by totally analyzing the market. That’s my partner actually came with the idea, and it took him a very long time to convince me, because I knew the amount of effort that we have to put into it. But essentially, we realized that’s why Facebook is doing great on advertising, why Google is doing great, because they come with a great story to advertisers and say, “Hey, guys, we know the users better than anyone else. We have as many users as you want. So give us the budget to give you the best users and as much as you want.” That’s a very strong statement, and we realize that the way for us to compete is coming with a bigger, better dataset and also that we have actually [inaudible 00:39:22] we have more users than Facebook. We’re about the same amount users as Facebook in different locations. By doing this, we can actually come with a story that is equivalent or better than the story that Facebook comes with. The reason that they hesitate a lot is that they knew how much effort it will take.
Andrew: You knew that this made sense for advertisers, that you could get a better return for advertisers if you have a better understanding, but it still was going to take a long time to build it. And so now I think I see it. The analytics was an extension of the ad business that you were already providing.
Andrew: And then it became more about the app maker, or it also became about the app maker getting an understanding of their audience, kind of like Google Analytics for the web.
Gil: It’s an ecosystem. You can’t look only at the advertisers or publishers only. Eventually it’s an ecosystem. It’s an ecosystem with app developers. It’s an ecosystem with advertisers. It’s an ecosystem with platform providers, like the Oracles and Adobes of the world and everyone that support with their marketing clouds. There are many companies and entities around this ecosystem, which is huge. So this doesn’t support only advertisers or publishers. It supports all of them.
Andrew: Okay. All right. I’m going to do a second sponsorship message. Then I’m going to come back in and asked about this big milestone that you told our producer, that happened “sooner than I expected.”
But the advertiser, in keeping with the superfast ad read that Ben Hodges asked for, it’s a company called ActiveCampaign. If you’re looking to do kind of actually what we’re talking about here with Gil, be smarter about the way that you message your audience so that you can reach the right people and frankly, if you’re selling, sell more, ActiveCampaign will help you. I’m not going to tell you how. In fact, I’m going to suggest that you learn how you can get more sales by using smart marketing automation by just going and checking out a couple of GIFs. Go to ActiveCampaign.com/Mixergy. Hit the features section, and those GIFs will show you a few really fast ways that you can increase your sales using smart email marketing automation. When you go to ActiveCampaign.com/Mixergy, you’re also going to get a free trial, the second month free if you decide to sign up, two free one-on-one sessions and migration. So if you’re using a crap email provider, they’ll migrate you for free. ActiveCampaign.com/Mixergy.
Let’s see if this gets more sales if I zip through my ads. What do you think? Faster ads maybe help?
Gil: I think it’s good advertisement. We should start to promote with you as well.
Andrew: That’s fantastic. Do you actually even need to buy ads anymore? Or do you feel like you guys have saturated the market?
Gil: You know, does [inaudible 00:41:56] buy ads?
Gil: I think you need to continue to support your marketing. Can we live and no input on revenue if we do zero marketing for the next three months? Yeah, it won’t make an impact. But if the goal is to continue growing, then you need to do the marketing.
Andrew: What you do right now? I’m trying to understand your marketing right now by using SimilarWeb, another Israeli company that’s good with data. I’m looking at it. I don’t think I have the full picture. What are you guys using to . . . What’s your marketing today?
Gil: So it’s totally different. By the way, I like them a lot. I met Or, the CEO on Sunday, this Sunday. It’s a great company. So I always appreciate [inaudible 00:42:35].
Andrew: Great freaking product too. I mean, people talk about using Alexa to understand how much traffic someone has to their website. Alexa has been neglected for years. SimilarWeb has super insights, like I can see you guys get one of the top links to your site is, no outgoing, it’s GitHub, one of the top links from your site. PayPal for some reason is another outgoing site. I love getting this deep, deep data on your site. Top search terms app, startapp. Anyway, I don’t want to get into a commercial for SimilarWeb. Tell me what you guys are doing, because I don’t see it yet.
Gil: That’s fine. I’ll get the money from them. You can do the advertisement and Ill go and talk to Or again.
Andrew: They’re fantastic. So what are you guys doing? What kind of advertising are you doing now? What kind of marketing are you doing now? Is it all events?
Gil: It’s not really the advertisement is just buying add. It’s really doing the right work. We are talking, for example, today one of our partners, one of our VP Sales is leading a panel in an event. I was here in like three different conferences this week talking to other CEOs and talking to other people in the industry. We are continuously doing the legwork of talking in panels, sponsoring different events. It’s not buying media as much. It’s really like the legwork and making [events ourself 00:43:57] and participating in many panels and speaking events and going to conferences and making sure that people know about you.
Andrew: Yeah, in the early days, you guys were doing some content marketing. Like I saw the early blog posts where here’s a really good cord for charging your iPhone if you’re late. Here’s why think that Samsung and Apple are interesting competitors and why Apple is going to make Samsung and Android better. It was that kind of thing.
Gil: Yeah. We do this a lot as well. We have a blog that we are writing in the blog, and I think we do a great job over there. So we get part of supporting and give them more information so if they’re looking for information, they can come to us. We do a lot of this, and we do a lot of trial and error. We never really know what will work, so we continue to work and continue to try new things as well.
Andrew: Okay. The big milestone that I mentioned earlier was you guys hit profitability. What did you do to hit profitability within three years?
Gil: So I think there are a few ways of operating companies, and our modus of operation is that we believe that companies eventually should be profitable and [inaudible 00:45:11] economy that you need to meet revenue and you need make revenue as well. You need to have profit as well, because otherwise it’s not sustainable. If you take money from VCs and just spend it in order to work, that doesn’t really build a company which is sustainable. We didn’t raise much money, and in many ways it’s made it harder, because the company never has too much capital in a way, on [one hand 00:45:36]. On the other hand, [it’s obviously 00:45:38] to solve things the right way. When you have too much money, sometimes you try to solve things by hiring more people, and that doesn’t solve the problems usually. It’s usually just [inaudible 00:45:49] . . .
Andrew: You’re saying you guys hit profitability because you force yourselves to be lean and to look for profits wherever, look for revenue wherever you could. But what did you do to get to that revenue? What did you do to stay that lean?
Gil: First, you focus on it. You make sure that one of your KPIs for me and for the finance team is: What is the revenue per employee? That’s a measurement is certainly legitimate. Measure your EBITDA. Measure how much money you make from different campaigns.
Andrew: And then do individual people on your team also have like metrics that connect back to revenue, or did they at the time?
Gil: Of course.
Andrew: They did?
Gil: Of course.
Andrew: What about an engineer? What do you give a developer that allows them to see that the work they’re doing increases revenue?
Gil: So it is harder, but you build it as a team. So you don’t talk with them. We talk about us as a team. We try to sit together for example at a table and we know what each other is doing. So if you look at our company, only the finance team are sitting in one office. All the rest of us totally open space from day one. All the offices that we have all around the world, open space, and we also shuffle the seating every few months. So I think, we went move back to Israel about a year and a half ago, I probably sit in like five or six different places already, and that enables you to know what’s going on, that’s enabling everyone to feel important the same way. They know what’s going on. They are connected. You do not measure engineers on the revenue that they bring this month, because that’s not directly necessarily the way that they contribute. But we measure with and we measure it as a team. And if we as a company are successful, we celebrate big time. If we are not, we are celebrating less.
Andrew: Yeah, you know what? I’ve seen that done in bigger companies. My wife works in tech here in San Francisco, and all these companies have bonuses. And I asked, “What are these bonuses attached to?” And it’s company metrics and individual metrics, but she has no impact on company metrics. Like when she worked at Yahoo, she wasn’t driving traffic at Yahoo. She wasn’t driving sales.
Gil: But that’s [inaudible 00:47:57]. We are a technology and product company. I would say that a significant part of our revenue and progress is based on the sales team. Are they able to sell? But if the marketing team doesn’t really provide the sales [inaudible 00:48:16] for them in the best possible way and the right [inaudible 00:48:19], they are not able to sell as well. If they are not going to many different conferences beforehand and the brand, the advertisers or the publishers or whoever, they can’t really sell as well. And if the product sucks, they can’t really sell well, or they can sell, but it doesn’t last. If the engineering team doesn’t really build good products that are sustainable and scalable, then it doesn’t last either. Innovation most likely comes from product and from engineering. [inaudible 00:48:49]
Andrew: Does it become kind of like karma, where they know that the work that they do is good and it’s somehow going to come back to them, but they just trust without knowing specifically how it’s going to come back to them in a bonus?
Gil: So yes, there is a difference between also bonuses and commissions as well, and that’s a different discussion about how to manage things specifically. So yeah, you manage engineering more on bonuses than commissions, but they all know the company [inaudible 00:49:17]. They all know, you know, it’s full transparency. They know the [inaudible 00:49:20]. They know if something is good or something is bad. They know if something crashes or not crashes. They are fully aware of it and fully part of it.
Andrew: I feel like someone on our team, just like I go back in time and find old articles about my guests and go back in time and find old websites, someone on my team should call other people at the company and pump them for knowledge, like say, “Hey, by the way, how are you guys doing on revenue? What’s working for you guys?” We need that kind of a researcher. That’s something for the future.
All right let me close out with this, speaking of the future. Blockchain, before the interview started, you said, “Andrew, if you run this a little bit later than you record it, I can talk about how we’re going to add blockchain.” And I said, “What you mean?” How are you adding blockchain?
Gil: So I think we are sitting here today the same as we started the company in 2010, or the same as the internet kind of started in 2000. It started earlier. Everyone talks about blockchain. Everyone understands that there is a big phenomenon, even better than before there was talk of money . . .
Andrew: Like there’s a sense the world is going to change because of this technology, but how we don’t know. When it will happen, we don’t know. Kind of like we all thought the internet was going to change the world, but weren’t sure what was going to work.
Gil: Yeah. So I’ll make it more specific. I think blockchain will do to databases and ledgers whatever the internet did to communications. Databases and ledgers have a lot of money involved into it and a lot of different things that we are doing. That’s essentially what you have in anything you do is the communication part, the databases and the computing part in any technology kind of. And blockchain is going to change a significant part of it. What we are building is all the blockchain solutions for our developers so they can continue to focus on whatever they know best, which is the [inaudible 00:51:11].
Andrew: And you guys will do the blockchain. What I’m wondering is the only example I could come up with, that kind of made sense, was I imagine a lot of the apps over your shoulder have some kind of virtual currency in that world, a point system that looks like coins, and I could buy more coins and get more access to the game if I buy coins from them versus earning those coins in the game and trying to build up. So I can imagine that the blockchain would allow me to have or allow them to add a virtual currency that people who get points will make more of that virtual currency and use some of the virtual currency out in the real world to buy things like T-shirts. You said earlier, before we started, yeah, that’s one way. But what else is there beyond that?
Gil: So first, it’s not to you and I to actually even imagine what app developers will do. We work with four editors on different tasks. Believe me, they are motivated definitely for me. So they come with many different things. But you work, for example, with the NBA. We have an exclusive deal on something with the NBA
Andrew: The National Basketball Association.
Gil: Yeah, we all the basketball teams in the U.S. They would love to have the one token. Can they do it? Do they know how to go and do anything with the technical side? Personally, I give them a lot of respect on how they run a [inaudible 00:52:27].
Andrew: What would they do with it?
Gil: Rewards. You know, in San Francisco, it’s a bit different than New York. If you go to a Knicks game and you see when you go to the game and see that half the audience has come and gone in the second quarter, that would piss you off. You can reward them with tokens, whoever comes first. Whoever come in the first quarter. Whoever leaves only when the game ends. When you want [inaudible 00:52:49].
Andrew: And this coin, it works just for them, and they could give it out and they could create their own ecosystem with the coin. Would they also be selling the coins as a way of bringing in money?
Gil: No. Well, they can do whatever they want, but our preference will be that they have their own name, but it will be transferable to anything else.
Andrew: So if I have a coin that I create using your blockchain technology and Rovio has one, it might be interchangeable.
Gil: Yeah. If you’re the Warriors versus the Knicks, you can actually transfer the coins in between.
Andrew: Oh, within the NBA, the coins will be transferable.
Andrew: But within another apps, would they be transferable?
Gil: With others as well. That’s the goal.
Andrew: So you just imagine having a virtual coin that all your app makers can give out to their people and use as currency. That’s what you’re imagining.
Andrew: And then would you like maybe let me, if I’m not using any of your apps, would you let me buy the coins?
Andrew: So there would be an ICO then?
Gil: It will be an ICO as well.
Andrew: And then you’re going to use that ICO money to do what?
Gil: We’ll raise money before the ICO. Raising the money is not the hard part. That mostly will be done in private. So the ICO will actually be in order to enable the app developers to participate within it.
Andrew: So they would be able to buy it you mean?
Gil: Yes, because [inaudible 00:54:09].
Andrew: The app makers would buy the early coins so that they could then give it to their people?
Andrew: Oh, so you’re creating a currency and then giving it to them, allowing them to participate. Do they get, when you make more of these coins, do they get the new coins too, in proportion to the ones that they buy?
Gil: The way that this industry works, at least what we do, the number of coins is set. So essentially we don’t create any more coins. We create a certain amount of coins. You sell some of it in the beginning. You have something in reserve. You can give some of it to the community, but the number is totally set in order to diminish inflation in a way.
Andrew: Okay. So how does this work? I understand how an ICO would work. You create your virtual currency. You allow someone like me, who believes that it’s going to be worth more money in the future, to buy it when you first create it. That’s an ICO. What’s the money, the investment . . . Sorry interrupt me, tell me where I’m wrong.
Gil: Yeah. Well, there are a few things and few types of it. Essentially, yes, most likely it will go up or there is a chance that it will go up. That’s not the reason we do it. What you describe is, hey, let’s make an investment in an ICO in order for the money go up or in order for the token value to go up.
Gil: What we do or what we aim to do is the utility tokens that will enable the users and enable app developers to use it. When it goes up, it will do a good service and everyone will use it. Most likely the price will go up. But the goal is not, hey, let’s make an investment for it to go up.
Andrew: Okay. But you will do an ICO, and that’s how an ICO works. My imagination is that you’re going to sell it outside the U.S. to avoid the regulations that exist here, especially since you’re international, you can do it. Right?
Gil: So there is a technicality of how to do it and what you can do in the U.S. today and what you cannot do in the U.S. We’ll obviously follow all of the regulations, but we will be [inaudible 00:56:05] investor, we will be in the U.S. [inaudible 00;56:07]. We talk about regulations later on.
Andrew: Okay. And the part that I didn’t understand was you said, before all of this, there will also be an investment. Who’s going to be making the investment and investment in what?
Gil: So most of the better ICOs are done in a private sale before the public ICO.
Andrew: Oh, okay. I thought you were going to raise money for StartApp and then . . . no, you’re just saying before we officially do the bigger ICO, we’re going to do some private placement where people are going to buy the coins before we make them available to the general public. Is that right? Yes, I see.
Okay, and that’s the blockchain technology that you’re going to start off with. But at some point in the future will you allow the app makers to have their own coins, or are you going to start to . . . You are?
Gil: Yeah, absolutely.
Andrew: Okay. You’re just saying first of all this is an interesting coin. That makes sense. And then you’re also saying — tell me if I’m wrong here — you want to just keep creating the tools and let the app makers do whatever they want with it, just like the pencil maker doesn’t know what I’m going to draw with a pencil or frankly take notes, they don’t care. They just want to make a good pencil. You want to do the same thing, and if blockchain is a new piece of technology that app makers might want, you want to build it.
Andrew: All right. I feel like the big takeaway here is the way that you build tools, the way that you market, right, by going out to conferences. We all think about online marketing, Facebook ads, etc., and frankly you’re in the space of selling ads and still you went out, when you were starting out and even to this day, doing events, meeting people, talking to them. That’s one of the big takeaways. The other one is find tools to support whatever the new technology is. So I see virtual reality is starting to get big and cryptocurrency, etc. Be the person who makes the tools to enable that type of software to work. That’s another thing I’m getting from you.
And there’s another one that I don’t know how to put in words. That is the sense of the way that you got app makers, the way that you monetized in the beginning, that is a uniquely clever thing. I don’t know exactly how to express that. I don’t know how to sum that up. The way that you came up with that idea of paying them, the way that frankly you said, “You know what, everyone is saying I’m going to make money within the app. I’m going to also have these app makers install my search app on their phone.” That’s a nice way to generate some revenue too. There’s a cleverness there.
Gil: So I appreciate what you say. I think it’s always innovate, always try to think outside the box, which I think that’s always important. And continue to try, and if you’re failing a couple of things, that’s fine. [inaudible 00:58:38] go to and just keep innovating and keep trying.
Andrew: Yeah, but there’s something . . . so SimilarWeb, I’ve gotten to know a little bit about them. I said, “How did SimilarWeb get all of their data in the beginning?” Well, there are all these plug-ins for Chrome that don’t have any money that’s coming in. SimilarWeb said, “Tell you what. Give us some of this data. We’re going to use the data to understand what people are using.” Versus Alexa, in the early days, they wanted data, they would force people to install or incentivize people to install the Alexa search bar. No one is installing the SimilarWeb search bars. So they partnered up with the Chrome plug-in makers. That kind of cleverness is unique. I just don’t know how to sum that up in a clever way, but I love hearing those stories.
All right, I’ve exceeded our time together. I appreciate you coming on here. I think we’ve kind of touched on enough of the story here that people can get a sense of what’s there. Anyone who wants to go check out your website should go check out StartApp.com. If you go to any conference and you see someone from StartApp, or if you see Gil anywhere, go and say hi to him. Tell him that you saw him here on Mixergy.
And finally, I want to thank my two sponsors, Totpal.com/Mixergy and ActiveCampaign.com/Mixergy.
Who is over your shoulder? Is that an assistant who saying, “Come on, Gil, we’ve got to go”?
Gil: No, but I have to.
Andrew: All right. I will let you go. Thanks. Bye.
Gil: Thanks. Bye.
Andrew: Bye everyone.