SmartUp Foundations – Lecture 3 Part 2 – Roei Aviram

seconds um in parallel I’m a lecturer at azrieli College of Engineering I teach

um industrial engineering few courses actually um I spent about six years

working for ey erston Young is a the leader of supply chain operations not

many know but U actually I is not only a cons sorry Finance financial services

but they also have a huge consulting services in Israel it constitutes about

40% of the business so it’s advisory um and amongst the advisory

Services there there is U what we call supply chain operations ey is recognized as as number

one consultancy worldwide according to Gartner and its magic

water um so I had the privilege of working with u World experts and to

really develop myself in this field in general over the last 16 years I’ve

dedicated myself to Supply Chain management and in

and specializing in Supply Chain management and I did it in several heads

as you can see academic standpoint Consulting standpoint but also enzone standpoint so

basically I was a supply chain director in a few companies um in tea

pharmaceutical we all know tea ANL group uh which is a company from the automotive industry I also had the

privilege of being a factory manager in South Carolina so I I had a short period

of one year relocation it was amazing in my Bon I’m in industrial engineering

with master degree in Supply Chain management and Logistics so as I said I dedicated my entire career to

specializing in Supply Chain management after about six years working

for Anon young and seeing over 100 companies helping them to improve their

performance through supply chain planning I really started to see that

there is a huge problem in the industry the problem was that over 90%

of the industrial companies still use oldfashioned spreadsheets in order

to plan their complex supply chain and we all know what the result is

Right eventually they lose sales because they can predict how much inventory they

should keep at each location and and they carry a lot of inventory holding

cost okay because at the end of the day inventory is an asset it cost money um

it’s it’s not for free holding inventory in your warehouse and if you want a good

cash flow in your company and to be profitable you need to manage your

inventory wisely okay so when I say it’s a problem you need to

understand that for industrial companies we are talking about between tens to

hundreds of millions of dollars per year losing for poor

planning and why because it’s very easy to do it in Excel you just write a a

formula you drag it down and there you go you have a plan but in reality some

products are seasonal some products are more stable some would be linear or

exponential come on we all know that we don’t have a on siiz glove right so it’s

the same with products and predicting the right products and optimizing the

performance is a profession and sometimes you just need a little push

and that’s what we did as a consult as a as cons as Consulting F so what we do today we help companies

to eliminate sales and inventory losses we do that through predictive

planning and we have three services the first is aiid driven planning platform

so we help companies and we equip companies with superpowers we give them

the capabilities to see their planning in different eyes and to optimize their

performance with a click of a button in

addition we are the leading group the leading body in Israel for supply chain

planning courses there aren’t any professional courses in Israel in Supply

Chain management supply chain planning especially not in the death that we have

at intell chain and that’s another part of our business in a few minutes you

will also understand the connection to branding strategy

lastly we still provide Consulting okay so you we use our strengths okay most of

our our team members they came from either the big four okay so the big four

consulting firm um or from U academic or

Academia or so so we help companies also to have the

right methodology in place our software was recog recognized

last year as one of the top 10 companies revolutionizing Supply Chain management

and that was for us a a huge achievement um so it’s it’s very nice

also to see that intelligent draws a global attention I mentioned the team so this

is the Consulting team some of you you can see here today um basically we’re

talking about people with a lot of experience um so we have here om

Goldberg who also came from ey and was uh part of the supply chain operations

team uh we have Dr Gabriel Pinto sits here um Amir zabari who was VP in

several companies and Elan Island xon ma time and a lot of experience in

industrial companies and machine learning so we work with a lot of

companies is in the industry you can see different types different type of

Industries right so we don’t we we didn’t select a specific segment or

domain and we focused on it so we open the umbrella because we see that we can

up to you know so many companies guys this is our where we

stand today but in order to understand our journey we need to take a few step backs

and we’re going to do it from the very beginning so how did everything

start one day I was sitting in my office

working for ey and then I get reached out by one of uh by one of uh relatively

known V’s U um South African V’s called VC Venture Capital

called vat it they said that they have conducted a

foral um due diligence and they were looking for supply and expert because

they want uh they’re looking for to expand their and capabilities and

business in this specific domain the supply chain they see it as a growth engine and they would like to invite me

because they want they were looking for a CEO essentially in the beginning to be honest I thought

it was a joke I didn’t even reply after the second

time I I understood that it’s serious I went I met with them and they were very

impressive and the end of the day I sold them this specific

concept this concept is called sales and operations planning this is the best

practice practice in Supply Chain management and it’s a methodology a business methodology to

combine sales and supply chain Al together in

order to generate consensus okay or and an integrated business planning uh so that

we integrate all the different interest and we have one plan for the

entire company and as you can see there are few steps that you need to take in

order to to establish the monthly planning you have the portfolio planning

so launches new product introductions uh promotions end of life you know some and

maybe we want to discontinue a product and then we have the demand planning so basically we want to

generate for cuts for our entire entire portfolio and then we need also to fill

this produ this demand okay so basically we need to produce we maybe need to ship

we need to store that’s the supply planning part and then we need to

reconcile the gaps between demand and Supply right sometimes we have more

demand and supply and the other way around so we need to reconcile it and mitigate this Gap and then we have the

executive snop meeting where Executives the sea level can take informed

decisions data driven decisions in real

time so that was the concept and the vision was to provide

any industrial small medium business and it’s important because I want you to

focus on the ICP okay our our customer profile back then to provide any

industrial SMB in the world a planning platform that can

consolidate their entire spreadsheets and provide them with sharp insights to

take very clever decisions so it was the bubble period

and everything you said was accepted um and this is that was the time that we uh

founded intelly chain so a little bit background so we found it in Q4

2021 um we closed the deal for $5 million okay with that um South African

venture capital V it um presenting the snop platform so literally for this

presentation I closed the deal for $5 million okay um we were based in the

most expensive office in Tel Aviv as

serona sitting on the 63rd uh

63d floor the most amazing

view from kadera to uh I don’t know maybe AO or something like that it was

amazing but it was expensive and it was part of

the thing back then okay you needed to be attractive it was an the a workers or

the employees H game back then okay so it was very to convince talents to join

you so you need to add a show to put on a show um so everything looked good at the time right you have you have money

you you started to build your thing we had even a free beer so that was amazing

right fast forward we’ve built the initial business model why I’m telling

you this because it’s important that you will see the shifting that we had from

the initial business model to where we are today basically we took the entire

snop process and we broke it down into four

modules each module represents a business process that I

described before and what we had in mind we were very naive but what we had

in mind that we will be able to build it’s like literally build four software

and connect them all together okay so we will be able to build and a

module sell it to a customer make him

delighted and then upsel send him another module and another module in

theory it sounds very good right that was the plan we also had to build

funnels because otherwise you’re not qualified as a startup right so we built

that this is the fun the following funnels that we built so we add a direct

funnel using our internal or personal networking um but also you know call

calls whatever we can in order to have a one-on-one

meetings also we had a no touch funnel that’s like a marketing funnel what we

had in mind back then that was to send to the entire world a

link of our software so so they can use it for free um they would see they would

enjoy it they will see results we will track uh those results we will quantify

them and then we will go again to the D sales funnel look what you what what you

achieved through intelligent wow it’s amazing but also we wanted to be Global

right ahead so we thought that it would be clever to collaborate with um you

know consultancies integrators you name it everyone who has an interest to work

with intelligent that was the business model that we had and we approved it with vit

again everything looked looked good back back then then in

2022 what happened the bubble burst right okay and

not only in Israel in the entire world everybody started to talk about recation

and so on so just as a reminder what happened the market was growing was

growing was growing you know here over here at a rate of 20% more or less and

then everything dropped dramatically at the rate of

40% that made things very very complicated for many big companies and

startups companies you know new early stage companies

but also for vat this South uh African

Venture Capital they went bankrupt and they closed their operations for the

entire companies that they invested in we’re talking about six companies so at

this stage we had to go and what to do what raise money raise money okay the

problem was at that time we had no product

no customers no money we had about four we

had bur it of four to 5 months more or less that was our Runway yeah

exactly and we had also a very limited time very short time to

react now we knew at this stage that we can just go on and and meet V’s right so

before raising money we knew well what we had what we need we needed to do

right we needed to build a as fast as we can an MVP minimum viable product that

was the intelligent demand planning software okay so instead of four module we focused on one module we also knew

that we had to have customers so we knew

that we need to find someone who would be willing to work with us so we reached out a few companies that they were

willing to collaborate we call it the design partners and that’s what we focused on but we

also knew that we had no money and we need to do something

so we need and we needed to generate quick income so we have built the

professional courses you remember that uh that I’m a lecturer in the in the

College of Engineering so I took those lectures I made some adjustments to the

industry and it was amazing that was the start of a magic that we do it till this

very day I’m glad I had a very strong team so in two months time we were able

to build a very lame yet useful

MVP get free the design Partners on board and generate a course that was 90%

ready to be honest okay now we were happy let’s go and start meet V’s so we met VC after VC

after V then what

happened we kept meing more v’s and more v’s and more V and uh I have to be very

tough because every day I got several NOS no no no no no but I just to hear

one yes and I also knew that there’s

something good going on because none of those knows well because we weren’t good

enough or something like that actually in 90% of the cases we went to second

third and fourth meetings sometimes there were some disputes between um

several team members okay and thank you but we knew we had something

special 7 months after okay finally good news came and there was a VP V VC that

was willing to invest in uh $3 million in intelligent we are very happy

yet the business model was very complex we didn’t have a good gut feeling about

it we knew that we do it just because we need the money Luckily

everything turns out for the better and my brother used to work back in the days

with Jonathan and he told me right now that you’re going to get funded go and

meet Jonathan just to get his mindset just to get a good advice so you can

rebuild your company from scratch all over again but with a good good

direction long story short what do you think I did with this

offer we didn’t go for it it and we decided to go with

smartup because we really believe that the right partner is a game changer and

I don’t know if Yan know Knows It But what I personally liked in um meeting

with Jonathan and the team and liby and iive everyone that they believed in what

we did to begin with they wanted us to keep the courses going which was a very

rude W for vises actually when they

heard that we’re going to do some consulting or or courses they they said that okay so it it’s you can’t scale it

up it’s going to be a disaster so if you want to walk with us cancel this Channel

and for us it was very disappointing because we wanted to establish or to build our name talking about

bending through those courses and Jonathan identified it very well and he

told me they are full of crap okay don’t believe them okay it’s all

sorry for my language guys but it’s true this is what we said it’s okay if I’m being honest here okay and that was the

moment I fell in love and that’s it all the rest is history second chapter of our story is

branding okay now that you understand the story you understand the business model that we had we had in place

let’s see what branding did to us so I just just as a reminder that was the the

initial business model and the the funnel one of the first thing that we’ve learned and now I’m going to take you

through a series of principles that we have gained and learned with working

with smart up team one of the um first

insights that we had was on your customers so basically

if we go back to consultancies and integrators then they will do the work for us right it’s easy it’s it’s so easy

that they will try and sell in teley chain well you know what we’ve learn that it it doesn’t work

this way the end of the day every company has its own interest and you

need to own your customers you need to feel your customers you need to

understand your customers in order to build your brand and your product

especially for early stage companies so we ditched this idea out

the window then the second principle was that a brand is personal The Branding um

strategy should Leverage The talents and personality of the founders it needs to

be centered around our strengths the strength of the the CEO and its team uh

and his team and this is why we also ditched out the window the no touch

funnel because we wanted the the direct touch with the market and our

customerss and instead what we did was to go back to the professional courses

which was a huge success okay it was a money but it it was a lot of it was a

nice money but it was also a success because it was a marketing tool think

about it that people are paying you for marketing your capabilities your product

your and so on and so on that was amazing um the third principle is branding first

that’s why we are all here right branding takes time so if you want to

succeed next year you need to start work today okay so we are building our brand

for the US market for the European market even though we focus right now on the Israeli Market but everything we do

what we do we and again what is a brand it’s just a gut feeling so every every person has a different brand

when it thinks of intell chain okay but we need to have an opinion it needs to

have an opinion on us okay so we designed this framework so

outbound so direct sales because we need to bring salaries and we need to be

profitable and we can’t wait a year till we are a big name in the industry we

need to work um professional courses

is one is branding okay think about it that today everybody knows that

intelligent they have a supply chain courses and it’s a huge success like

literally every two months we had we have a huge uh uh course like with 20

companies in the industry um even more okay and branding and

marketing after we’ve built this framework we designed a very

smart funnel sales funnel which looks as FS okay so basically it it

split into three parts um introduction and value assessment proof of value

which is like a pilot and a commercial closing a

deal and one time Yan came to my office it was late it was I don’t know 8 p.m.

he told me Roy I can see you guys all the time you work what were you working on right now and I showed them the

results of this pilot you told me listen it’s like a Consulting work what you’re

doing and that’s the fourth principle that we’ve learned you know with time run to

profitability everything you can do in order to be profitable do

it not clean houses of course everything that supports your business strategy okay and

so the idea idea in the message here that you need to grow from profits and

not from the Investor’s money okay so what we did was genius by the way you

can see what we circled in righted right right here okay so all these pilot all

those preparations all this time that we put as a prel we invested the time and

effort for companies now we rebranded it as value analysis

program okay what do you think it does to come to a company that they need to

pay for a pilot what do you think it it does

what’s the impact of paying for a pilot rather than just getting it for

free commitment once they paid something and this is it’s nothing it’s not lot of

money it’s less than $10,000 okay but once they paid something they’re in the game if we do

it for free they won’t take it so seriously and it helped us because if they w’t go for

it at least we didn’t waste our time okay so we built a five uh step program

the first step was to identify pain so basically if I had a a magic wand uh and

the 100% accuracy in my planning how much money could I save you okay so that’s

the potential then back to reality that’s what we call Value realization so

what the software showed that could be saved so basically if your pain let’s

say is 40% and we can minimize it to

20% how what is the impact of 20 % Improvement okay or 50% this depends how

do you look at it once we know the value we can also draw the goal right so this

is what we call a goal setting session that we have them Define what should be

their kpis and how they should improve themselves so this is a very uh

financial and analytical process they also get to see it not on excels and

nice presentations but on the software of where our hand is on the mouse we

walk them through the process and the numbers but then this that’s the

emotional side okay proof of value on the software so they get one

month for free okay so soal for free

using the software that’s that creates stickiness that’s the program at the end

of the day they will know what is the pain what is the value and what is the ROI one CEO once told me listen you’re

too expensive okay I told them compare to

what and no it’s very expensive and so I told him listen if you will pay let’s say 40K for

our software but I give you back $1 million would that be a fair deal

oh yes of course well if I say it it just blah

blah this prog program shows what is the actual result and that

of course simplify simplify everything okay

so the fifth principle is B B2B aren’t so price

sensitive at the end of the day when they say it’s EXP

expensive everything compared to what if I give you back 10 times more I’m not

that expensive I’m willing to pay whatever it takes if I get in return 10

times more is there something someone here who

disagrees okay so this part of the funnel gets much easier and actually

accelerated after the program most of the companies this is how they

work they just they do everything for free and that was the first change that

the big change that what we did second as I said before we need that the

strengths will be centered around the CEO and its team so let’s talk a little

bit about the professional courses so basically we have the onsite courses and

I can tell you that all the big companies in Israel paid for this

course so NOA Coca-Cola Strauss elbit Moto Chu

Sal everybody needed our help in order to improve their services the online

demand planning you can see a lot of wellknown companies snop so I can go on and on and

on but one of the things that you remember the example of tambur so when we finish a course what

we give our participants certificate this

one is going to be hanging on the wall okay and that’s what I can show you here

this is from visits at customers office that I actually I went and I saw oh my

God it’s on the wall for me it was a huge deal but our logo is always in

front of their eyes and that’s that’s a free marketing

guys especially for companies like Coca-Cola Cola think about it like 50 people were in the course everybody got

one of those let’s talk about branding okay so

the sixth principle is let empirical data be your compass so basically we

work in a in a in a systematic way learn okay build measure Lear okay what

we do is we here in the library or the laboratory story we build something we

we have some assumptions then we go and test it we measure the results we learn

what to do different so all the things you see nothing was like uh you know first

time we adjusted and we adjusted and we adjusted and you can see here some some

ideas of how we what what we do we have a weekly meeting that we measure our

performance you know in terms of Click through rate and engagement um it could

be even what happens through phone and desktop and we also have a mouse flow

that we track what the user sees so we better understand how to do things

thought leaders okay so what we do we generate and we create contents so we

have like a a monthly round table that we walk with we bring along to our

office or if it’s internationally we bring experts we gener we they give a lot of

knowledge we of course we tape everything and then we sit down and we

analyze it we digest it we make some short videos out of it um as you can see

and people just love it okay and the nice the nicest thing about it we don’t need to do much we just just need to ask

the right questions and we create an amazing content uh but branding is about

a year from now two years from now so we started doing it internationally with uh

with with leaders in the industry okay like people who are well known uh they

are like a true uh veteran in this industry um and of course we also have a

lot of things going on with thought leaders okay so if we build the idea to

people that we are the Authority for all the supply chain

stories and for success stories and so on and so on that would be amazing once

we will break into the US market or Europe whatever um another thing we do

we map out the thought leaders okay who might be worthy um and very

interesting uh for people to hear and one of the tip that I I can

give to you if if you look at these people I highlighted I circled in yellow

three of them those people this this is what we call the forers okay so the retired

people they are bored they’re are looking for something to do but you know

the former head of nestle whatever sounds good and again it’s branding so

intelligent and Nestle people don’t understand exactly the connection they make assumption and

for us it’s great this is only what we we don’t want them to investigate further we just want them to make

assumptions the seventh principle is that people love

data okay what’s better than a straight to the point data okay so what we

do we create statistics

surveys with telling in a very nice story pie charts simple ways of

understand the industry and one of the nicest thing that for me was like a huge

achievement is that someone sent me a picture saying for this is a competitor

event okay so it’s a big competitor in Israel they told me listen they are presenting your

statistics okay loc with with our credits

of course public speaking so we have a very nice event in uh in two weeks from

now but we also had a nice event um in uh in in March I think yes um 1,000 uh

1,000 people um from the industry you know leaders supply chain you know

seniors Executives and so on everybody listen to you uh that’s amazing it’s a

huge uh exposure for us um so that’s about branding now I want

to talk about the next step we call it from Brand from Brand to

product so remember the snop the initial concept turns out that

67% of companies fail in their snop implementation

again 67% it means that out of 10 companies roughly seven companies tend

to fail in their snop implementation they pay for it by the way millions of

dollars only the Consulting work could be 1 million 2 million the software

another 1 million 2 million if not more knowledge of course okay so it takes

time and lot of money and they still fail

and this is a very sad statistics but it works very well for us so we have

created a a concept today at a meeting with one of the VPS of supply chain the

industry especially about this concept we call it agile snop okay so what is agile snop why why

do you think it this process tend to fail not because it’s not a good proc it

I’ve seen it with my own eyes that when it’s managed properly it works it works

very well and it gives a huge uh business benefit

but it’s very hard to manage so we’ve decided that we’re going

to help customers we’re going to help companies to manage the process leave

aside the statistics and the complex models and the Machine learning and everything that we have

created just a simple tool to manage this

process think about monday.com what did they really do right the end of the day

it started just as a advanced Excel okay Ms MS project even less than MS

project okay so it was very very poor but it was it looks good it was sexy

people loved it okay and this is what what we’re uh this is what we intend to

do we already started to map out so I’m going to give you a little uh

pip it’s very important because a brand could really change the DNA of the

company okay so we didn’t build a product then we started to think how to

Brand it we let the brand the us how to do

things before we close this session Lan principles

okay because especially when you start you’re in an early stage you need and of

course you want to be profitable right we all want that

so sales First Technology

after our mistake and now failure in the beginning was we put all our focus on

Technology Building the best technology possible that was my vision because I

thought like an engineer like a supply chain professional I didn’t think like CEO

okay and that was one of the game changers while working with the with

smartup because if you want to succeed tomorrow you need to actually today and

it doesn’t mean if you have the best technology but you don’t know how to sell it who are your

audience why should they buy it from you you need to answer those

questions but you need to minimize your expenses this is why we are not we don’t

have like a 40 people in our company and so on what we do we Outsource we bring

only the best the most brilliant people to do what they have to do so we keep the core here at intell

chain and whatever is not a core you know like uix legal issues Financial

issues we we Outsource it to keep our expenses lowest the the possible we

can okay I see it tired and that’s it now we finish this uh presentation with

the results okay that’s the most interesting thing so first of all

I want to talk about our journey of mental shift okay first from ICP that

was only small medium business that was the initial plan we started to see I

know you you you saw those those companies that we are working with suddenly we understand that it was

so stupid of us to think that only small companies will be able or will want to

work with us we see companies

were huge you know Enterprise that want to work with us so today we must to focus on Enterprise and big companies

where they on small medium of course we also have small medium business companies but that’s not our

ICP when you get funded in VC you know what they’re trying to do to push

you spend it okay spend it out as quickly as you can they really didn’t

like me that the fact that it took me time to hire the right people they wanted to push things forward okay

because we wanted to see results forward um and if we work in a lan

approach we don’t want to be the first we want to be the best okay that’s a different

approach PC for free most companies this is what they do guys it’s not an

invention go and and see and you will see that most company the PC is for

you remember what I said PC was rebred as value analysis

program gives us a very nice income and a commitment from the client

side here’s to profitability when we presented to the board how much time for

us it’s going to take for profitability we we said a few good years okay today we’re talking about a

matter of less than a year let’s say okay that’s our plan okay to run to

profitability We tend to think big okay back at the time okay so US market is a

target why Israel is very small Market what is Israel okay

today okay we focus on Israel and once we’re going to be

profitable we’re going to go to the US low price once we we our initial

price was X today is four or 5x okay um

Consulting no no scale it’s not good for the business now we we look at it

Consulting as a scale because you know what we found out in our journey that one of the reasons that companies picked

intelligent was the fact that we don’t give only technology that’s just an enabler we give a

solution we give knowledge methodology and technology so we

work with our clients on a weekly basis and we give them more CPU to think and

take the best decision ever and for them that was a mind a big game

changer technology first we put a lot of focus on our the technology of course we

went to branding first and that was a part that we have when I say no Revenue

that was I don’t know not no much not much okay not zero but not not much and

now we’re talking about hundreds of thousands of dollars in Revenue per year okay um we had just one months that we

that we were profitable almost 40% more

so that’s really change the company and it’s a lot a lot of it as you can see is

branding branding branding last slide and I’m done I

promise you guys okay so the key takeaways that you need to take if I

again grouping all the I’m going to group all the key principles so own your

customers especially at early stage okay you want to speak to them you want to know them

you want to understand what they what do they want a brand is personal build your

brand around your strengths branding first start early as

possible it doesn’t matter if you don’t have a product start don’t

wait run to profitability if you’re not profitable you’re going to end up

closing your company with the with the first disruption and we have a lot of

disruption going on right now right B2B companies are that price sensitive the

first time Jonathan heard our price he told me YX why not 2x why not 3x I

didn’t have a good answer so we tried and you know what it wasn’t a problem

but for me the difference between 1 x to 2x is the entire

funnel let empirical data be your compass okay so what’s not measured is not

managed people love data because to read is is boring give them facts

that’s the most most interesting thing that will help you um in your branding

process and keep it Lan sales First Technology

after thank you thank you very much