Foundations Course – Lecture 8 – Enablers, Innovation and Startup Creation

believe so the lecture is about enablers Innovation and how do you use all of

that in order to do startups so I’m going to starting to look at the

foundations of when you want to do a startup how do you do that okay mainly from the

idea perspective so as usual this is the team you’ve seen them R is also here but she

refuses to give me a picture so you’ll have to look at her live so I’ll

go back again to what what are we trying to do in here I will repeat it every single lecture so that people will

remember why we’re here we’re here not to invest in companies or anything but to teach people the profession of the

building successful companies it is a profession it has a methodology there is

a science to it and it can be taught doesn’t mean that I can take anybody and turn them into a successful entrepreneur

but it means that people who have the potential we can give them the foundations we can give them the

methodology how to do it so what are what is the definition of a successful company we put three

elements to that number one is profitability you have to be

profitable a company that is not profitable is like a kid the parents pay

for everything in this case the investors and very much like when somebody pays your bills there comes a

point in time where they stop paying your bills so profitability means Independence means the ability to do

whatever you think fast growing obviously you can be profitable and

don’t go anywhere but we are showing people how to build a company that is fast growing while being

profitable and the last element is that you don’t need a lot of money to do that

you don’t need $30 million or $50 million or $100 million a few million

are more than enough in order to build a successful company we’re building now workshops

that will go basically take each one of our lectures and turn them into a full course with exercises and homework and

thinking and working on your own company and that will come hopefully soon and at the end of the day it takes

a long time to build a company so The Residency program which is the most

prestigious one that we do with companies um takes a long time companies

go through many many stages and each stage uh puts

different um problems that needs to be solved

so this time I decided to be a little bit more educational so I’ll tell you

what I’m going to tell you then I’ll tell it to you and then I’ll tell you what I told you right so that’s what

every teacher is told to do in the course so I’ll start with that so what we’re going to do is first of all

explain to you what are enablers and what do you do with

them so enablers are a lot of things can be the internet a phone

drones chat GPT all of these Technologies machine translation DNA sequencing crisper anybody here knows

what crisper here you know what crisper is yeah only

you uh SpaceX they have a reusable Rockets face recognition I’ll talk about

it later so I’m just showing you a long list the dot dot dot means that the list is really really long there a lot of

basic ideas and technologies that were developed already they are available you can use them

and Innovation is easy and inexpensive when using such

enablers and basically that you don’t need to develop a

disruptive technology so I don’t have to tell you how many entrepreneurs I see every week

and they have something disruptive I think that they you know think that the word disruptive will make

me immediately uh get to my pocket and give them money so it’s overused it’s

irrelevant disruptive is difficult expensive and nobody understands it so nobody buys it so why even

worry here are new companies and products that effectively used

enablers what I mean by that is that everything was there they didn’t need to

invent anything except a new business model okay no technology no disruptive no

anything just take what is in front of your eyes and put it in a slightly

different combination and you have H integration yes integration no you have

to have some ideas but you can just pick and choose like a Lego and you don’t have to develop anything you just take

the pieces of the Lego you put them together and you get a castle you get something new out of it okay so you take

the iPhone the iPhone has two very important things internet and a GPS and boom you have get Uber Vault ways Pango

you name it right different applications different solutions but the disruptive

technology is in the iPhone not in what you do reusable

Rockets alone mask said I don’t get it you know you fly New York to San

Francisco and you throw the airplane to the water I mean what is this stupid idea you know you you send them rocket

up it comes down you use it again you know we’re not building onetime rockets

and everybody said he’s nuts he’s crazy well he’s not so he build reusable rockets and what does that mean he

brings the price of launching satellites down and so he built a whole new system

called Skylink we’ll talk about it later DNA sequencing started in the 80s with the

human genome cost about $10 billion to do nowadays it cost $1,000 it’s here

it’s available build something around it so where and how you use it so I will

talk kind of interchangeably about two things that we discussed in the last two

presentations one is gross engines and the other is jobs to do okay

so these two ideas that we discussed at length the previous time and the one before that are going to show up again

here many many times because they all play together okay so when you have a job to

do how do you do it when you want to grow how do you do it so all of these enablers should be on the road map for

you to look at and think about them as you build your future so gross engine

you want to do branding marketing product development sales operations many more just think about all the

enablers that can help you do that and obviously you’re here because

you want to build a startup or you already built a startup so you can use all of these enablers in order to do

that okay so bottom line that’s only the introduction until now you don’t need

disruptive technology to build a successful company so what do you need

deep understanding of the jobs to be done if you don’t understand what you’re

trying to solve then chances are you not going to build a whole you know good product or a

good company so you have to better understand what you’re trying to solve doesn’t have to be a whole thing but

something that you solve that people really have an issue with you need to

focus on branding and marketing I keep saying that all the time if nobody heard about you don’t be surprised that nobody

buys from you it’s not because it’s not good they just never heard about you it’s that

simple and people are overburdened with messages with information so you have to

be really really smart how you make people know about you that’s not trivial that’s harder than building the

product so before you go and you start spending money think about that all the

time I on purpose use the word customer delight and not customer satisfaction I think I told you that in one of the

previous lectures when you think about customer customer satisfaction you start ranking

yourself between one and 10 one means they hate me five means they don’t care about me 10 means yeah they like what I

do and that’s very very different than Delight Delight is they are excited

about what you do for them and the example I like to bring is when iPhone

when Apple introduces a new iPhone people stand in line to be the first to

get the new model they spent hours standing in line which make zero sense

it’s emotional it’s not customer satisfaction it’s emotional that’s what

you really want to get to you want people to love you to feel about you not

just to say yeah I was okay yeah yeah smart use of enable us to deliver

the solution of service to fulfill the jobs to be done okay so you understand what needs to be

done now you think about how do I deliver it using all the building blocks

around me in a smart way to do it and it’s the same for building the

company gross engines okay many of them use enablers to scale the operation remember what we talked about grow

engines is where you scale processes so you want to be able to

scale a process without growing in the expense at the same rate so you want to get double the output with a slight

increase in the input okay now we come to some

interesting understanding about enablers so there are actually four different

classes of enablers and chances are many of you will look at me like what are you

talking about so I’ll show you what they mean and kind of open the the screen for you

to start thinking very differently about the world okay and look at everything that

goes around you and say how can I take advantage of work that other people already did so technological is pretty

straightforward right we talked about it infrastructure it’s another big

enabler social norms and big company actions many times

when big companies do something they present opportunities to all the

others now I put them into four categories or four classes but that

doesn’t mean that the same one doesn’t fit many of them okay so usually they

start with technological or big company action but then they start moving they

change the social norms okay great example is social media so technology

but changes completely how we feel about you know should I put my pictures online yes no privacy all kinds of issues show

up because the technology makes it available and so forth okay

so just because I remember that when I talked about jobs to be down I also gave

four different classes so I couldn’t resist it to say I like the know in the Army everything is divided into three I

guess I do everything with four I don’t know so it has nothing to do in here it just

excited me okay let’s start with technological CH GPT CH GPT in my mind

or any of those Technologies I think is a

huge disruptive I use disruptive in this case technology

available I think we are in very very early stage of understanding what it can

do for us but anybody who is not going to use it in some very smart way and I’ll show

that why I said we’ll discuss later I think is missing an

opportunity mRNA messenger RNA real deep

research that suddenly came to the four with the covid-19 vaccine which was

developed in like 6 months okay so here’s an example of a technology that people poed it is just a

technology and because of the opportunity suddenly came to the font

machine translation I guess nobody in here is not using machine machine

translation but I’m not aware of like a product that

is really using it instead of just you know in addition to just when I need to translate from one place to the other

just to explain what I’m saying iPhone GPS Internet and suddenly you deal with

parking okay suddenly you deal with uh taxi camps with this it’s kind of

translation yeah I use it for translation I haven’t yet seen where they use it

differently DNA sequencing again great technology just doing its first steps

into the market SpaceX so I talked about the uh skyling what is skyling

skyling is a essentially covering the whole world with uh internet connection

and obviously that gives you phone and and any other connections um by the way

I don’t know how many of you are aware of it when the war in uh between Ukraine

and Russia started the first thing that the Russians did was to destroy a lot of the

communication uh centers of Ukraine

then the Zar of the world Elon Musk decided to open Skylink to Ukraine

provided that they don’t cross the border for those of you who know

history uh the East Indian company do you familiar with that that’s what started the

uh um British Empire so here’s another example of a

person a company starting to interfere with World

politics do you know another example of where Elon Musk

interf Gaza okay so he allowed Israel to use

skyling in order to communicate in Gaza provided we don’t kill Arabs

um so this is an interesting example about enablers and the power of enablers

when you get to big companies image recognition again very

very interesting example so what is image recognition image recognition is what uh a decade ago uh every year you

know a few dozen people go to PhD because they were able to identify a dog in a picture I was about you’re not

laugh why are you laughing it was a PhD project okay it was difficult to do just to tell a story

I remember when my kids were very very little uh we had a book and the book was

where is the teddy bear it was picture book and the teddy bear was I remember

Brown and you see his hands sticking from somewhere or his nose sticking from somewhere and my brilliant genius kids

were able to show you where the teddy bear is they were I don’t know a year old two years old and me as a computer

scientist I understood the complex of solving it on a computer and I looked at it and I said to myself how on Earth a

year old kid can do that where people get phds for trying to do it and it

doesn’t work so image recognition has come A huge Way Forward anybody with uh Google

photos can do it I use Google photos all the time I run a query and I get the

answer like I don’t remember my company my uh car license plate so I always WR my car and

it shows me my car and everything goes well but the interesting thing is where

you can use it so there’s one area that is almost obvious and that is Medical

Imaging if you think about it what is Medical Imaging you have an x-ray or

even uh something in pathology you know you have a sample in pathology essentially somebody’s looking at it and

based on their experience they say oh this is malignant oh look at this little dot in here I don’t like it or whatever

it is Trivial to train because there are millions of these pictures or or images

with explanations millions of them so it’s

very very tempting to develop such applications and there are many applications like that so is really

company called zebra medical Vision uh was uh created in

2014 raised about $50 million built such an application I

think for pathology right and couldn’t make money they were later

on acquired by another Israeli company called noox in 2021 for a joke and no no is worth a

joke now uh so the whole thing is crashed but why remember they talk about enablers

all the time think that enable you to do things like everything else in life

there’s the ying and the Yang the opposite of enablers are disablers so the disablers are the

people who are going to lose their job right geologist pathologist all the

people who look at the image and say something they’re going to lose their job and they will will lose their

job the reason they will lose their job is because machines are getting much

much better than them much better than them and also once you have one machine

that knows something you just replicate it copy paste and the next machine knows it and copy paste and all the machines

know it whereas if one pathologist or one radiologist knows something he just the only person in the world knows

it and all the fresh grads who want to be pathologist are going to miss a lot

of problems and people will die so clearly the world is going to move to

machines doing all of these analysis but right now they are the ones that have to

say yes or no so they say no how and when it’s going to change I don’t know but I can assure you that 10 20 years

from now you know there is an interesting company isra

SAR called that can check by one you can

check Malia other things and

imag yes this is from this is going to change the world

okay but I’m just showing you that the fact that you have a disruptive technology that really works is not

enough in order to build a company that makes money that’s all what I’m saying here okay remember I’m talking about

enablers and building a company at the same time okay face Rec cognition same

thing they’re getting to be really really good so a young Korean guy don’t

ask me to pronounce his name in New York decided to use enablers he used two

enablers faceal cognition and the other one is social

media so he’s just scanning LinkedIn scanning Facebook scanning everything

that you have public domain pictures of people with their names of obviously so

that when I walk into the story he says hi Jonathan you’re from Zoom info right

so he sells it he claims he sells it only to police

uh forces uh there’s a whole big thing around it uh but here’s an example that

cost him very little money he raised I think two3 million and build the company because he just used enables there are

gazillion pictures with names on it there’s a technology available you put OnePlus one and you have a new

company 3D printers phenomenal technology I’m not aware of any company

or industry that has been changed because of it but things just happen so

I don’t know when it’s going to happen the same goes for drones except for military purposes I’m

not to aware of so all I’m saying is here’s the

stuff and because we only have two hours I didn’t want to spend the whole two hours on that uh the list all goes on

and on and on infrastructure what do I mean by infrastructure so infrastructure is when

the technology becomes pervasive you kind of use it the same way you use

electricity which in the 19 early 1900s late 1800s was know a big disruptive

technology now we take it as it’s there it’s like air okay it came

out of arpanet

and uh it came out of arpanet in 1969

arpanet is the uh um research arm Dara

sorry is the research arm of the AR of the army of the military and what they

wanted to solve was remember this is the height of the Cold

War the had a communication system with hubs and they were afraid that the

Russians will do exactly what they did in Ukraine which is send some missiles and killed the hubs and all

communication will stop so they wanted to build a resilient communication

system that regardless of how many hubs you’re going to kill it will still continue to work anybody that knows

about packet sing understand what I’m talking about anybody that doesn’t know I will give a different lecture we

discussed right 3G the Year

2007 what happened then is that the speed of communication was high enough

to allow internet connection with cellular networks and I put the word iPhone there

because that’s what made the iPhone so popular finally you had internet at your

phone okay IBM PC

that’s both an infrastructure as well as a big company decision or action that

changed the world uh as you can see I’m very very young when I was really young uh there

were big computers and the big one was IBM IBM

several series of computers and each series of computers had their own operating system so if you wanted to

develop a software let’s say an accounting system you develop the accounting system for the IBM 360 if you

wanted to have it on the IBM 370 you had to develop it again because

it was a different operating system and a different set of languages so developing software was an

extremely expensive process because you were married to the

computer today it sounds to you like what what are you talking about well the

the revolution started in 1981 when IBM for some bizarre reason

decided to open the specs for its PC and encourage other companies to

develop IBM PC compatible computers with one exception there was

one little kid who said what why should I open it anybody can guess who this

person was Gates Bill Gates of course so Bill Gates devel it he bought he

bought it yeah but but he for whatever reason I don’t know why he decided that he doesn’t want to give it for free to

everybody and the rest is history okay so you can see the

difference with one decision of IBM which was not a very smart decision and

one decision of Bill Gates what the CH the world has changed but right now we

have only two operating systems to speak of one closed which is the

MacIntosh and the other one is the PC and the same happen now to the new

generation iPhone with iOS and everything else with Android same happens with the browser

you don’t even think about it right but you can open any browser you want can be Edge can be Chrome can be whatever and

they all with the same web pages why because there is a standard and everybody agreed to adhere to the

standard what does does that do it frees up the energy you don’t have to worry

about five different flavors of each piece of software and there are many many tools that you develop the software

once and it goes to the Android and the iPhone you just compile it to the two okay so that’s why I call it

enablers standards why do I write Microsoft Office on Salesforce and QuickBooks as

standard because again the usage of these is so

prevailing so big that there’s a huge market around one application you

develop for Salesforce you’re guaranteed to have a very large

market right if it was PDF you produce the document in PDF you know everybody

can read it okay you work with word processor you

say well it’s Word compatible boom you’re done you don’t have to do anything okay so even though these are

not open systems they still generate such a huge Market that they become a

standard which wasn’t the case 20 years ago or 30 years ago so these are

enablers but not all applications are the same so there is a new layer called zapier make boomi moft that allow you

basically to integrate these systems they have a mechanism that they talk to

the API of this one and the a of this one and in the middle transfer the information okay so you can do all of

that workflows now using zapier or make or boom or whatever you want so again

it’s an enabler um International payment

system 20 years ago if you wanted to get money from the Bahamas or from Iraq or

Jordan or whatever it was difficult nowadays there are companies that essentially would transfer money from

anywhere to anywhere very very easily cloud computing again I remember

when I started Zoom info we had a computer room you know server room why because that was the only way of doing

it now you put your credit card and you are in the business and essentially if you’re a startup you get I don’t know

10,000 or 100,000 whatever that they give you for free right just just start

working open source software again you can use a lot of software for free

available and the last but not least there’s huge amounts of information on the internet huge amounts that you can

use to enhance whatever you do there’s the Freedom of Information Act it’s an American law that basically said any

information that was produced using sh uh taxpayer money belongs to the

taxpayers so you can they publish all the information they

collect when they do any activity that is paid by taxes which is basically

everything so they try to keep the information in unreadable way but if you

persist and you want to understand it you can take a lot of information out of federal

information social norms Zoom meetings

came the corona the covid-19 and everybody was using zoom and it became a

standard a normal thing okay what does that do is basically people don’t want

to see people anymore so let’s say 15 years ago you had salese with territories why territories because if

they live in Chicago they went in the car and visited the customers because they drove to the

customer I don’t know when was the last time that any salesman came to here because I don’t want any salesman to

show up here or anywhere else because when they show up I need to be polite and I need to spend an hour two things I

don’t want to do so when they talk to me on the phone if it’s interesting I say okay let’s do

a zoom meeting and what does it do at the zoom meeting exactly what would he would have done if we were sitting face

to face he would open his computer and show me his screen so why do I need to see him in my

office and give him a cup of tea I don’t so the other way around also works

now think about it people open offices in America and

ask them why on Earth do you open an office in America because I want to sell in America and I said then what are you

going to do in the office in America and the answer is I’ll call

people okay you have to do it for America because in Israel it doesn’t work or and then I organize the zoom

meeting so stay in Israel and what about the time difference well start working at three

that’s all no reason anymore you can take the money from there there’s a tax

calculator nowadays many of you maybe don’t know in America there is a tax at many levels city state and federal and

everybody wants their cut so you have to know what you’re doing but you don’t have to know there is software so you

use that software in your accounting system and you say I have a customer in

Chicago which happened to me you have to pay city tax on software Okay so they

charge you the city tax you of course transfer it to the customer and he pays the the bill he knows what he’s doing so

you don’t really need to be present physically anywhere anymore that’s why I call it social

norms it’s totally that’s the way it works they don’t need to see you they don’t want to see you they want to speak

good English the gig economy okay we all Uber Vault Fiverr upworks task rabbit which

we used in order to take a lot of suitcases down the stairs recently um changed the world literally

changed the world so that means if you want to do something you have all of these help available to you and you can

hire people we we do a lot of that stuff so again that’s why I call it social norms it’s not a technology but it’s

something that now is available to us I still remember when Uber

started people said ah no I’m not going to just step into the car with a

stranger and the am I going to stay in somebody’s

else house are you nuts who’s going to open their house okay so the world is

changing all the time and I call those enaas okay work from

home didn’t exist before Corona now it’s like what you want me to come to the

office more than one day a week you know I live about 20 minutes away

okay change of norms so slack became slack became very very important because

people don’t sit around you so you need to communicate somehow and slack was there and

boom social platforms and social media you know people publish people do things

it’s crazy what’s going on influencers all the things that didn’t exist 20

years ago are now the norm that’s why I call it social norms and people publish pictures and videos

in huge quantity I talked about clear clear view there’s infinite data sets to

do all kinds of things all of it available at your fingertips big company

actions so when big companies do something they many time change the

world in a way that you look at it and you can do the same iTunes so developing

the uh what was it called the the iPod thank

you um it’s nice it’s an MP3 player there were gazillion of them before it

was nicer but still not very important the problem was that an MP3 players

needed music otherwise it’s kind of a piece of hardware and most of that music arrived

from pirated software uh pirated music Napster I’ll talk about Napster later

okay so came apple and Steve Job negotiated with the music producers and

they said 99 Cents regardless of how popular your song is it’s simple it’s easy remember you want to keep things

easy and change the world and that was just the beginning because then said

wait a minute why do I have to pay per piece of music why can’t I just pay

fixed monthly price and get as much as I want similar to the internet think about the

world looking today if you had to pay per hour or per gigabyte you feel it

when you travel right you have your cell phone and you buy 5 gigabyte 10 gigabyte and you square all the time

right so you see the difference when something is fixed price eat as much as

you can it changes the economy it changes how you use it Amazon Marketplace they open their

platform to anybody who wants to sell that allows small people to start

becoming International sellers of whether it’s their own piece of art or whether it is something else that they

buy and sell okay totally Ena Google edwords same

idea one thing one platform that everybody sits on and you can advertise

anything that you can think of so with one platform you reach everybody in the world about every idea it’s an enabler

PC compatible we talked about it net neutrality what is net neutrality I said

before you pay fixed price somebody has to pay the

bill somebody so so the Communication Company somebody has to pay the bills

that half the world is watching Netflix all the time so we want Netflix to pay

much more because Netflix is eating tremendous amount of bandwidth I want

them to pay more but when the internet was created they swore to Net Neutrality

which means all users pay the same price regardless of use so there’s a long

battle going on it’s in Congress in the US about net neutrality whether to start

charging uh companies like Spotify or Netflix and others more for their

communication start Charing foric why int will not pay or

Microsoft I’m just I’m just showing company actions yeah I’m I’m just saying

you can look at it as an an enabler okay remember the the scope in here and saying we should just look at the world

and say this is the way the world behave people put pictures it’s cost money it doesn’t cost money I have this image

recognition what can I do with that’s all what I’m trying to say don’t try to develop something disruptive just don’t

waste your time and money that’s all what I’m saying okay and here’s the last

interesting idea I that’s for you two Factor authentication right remember we

talked about it it suddenly dawned on me that actually we are

creating a too an ID number that is international

each single individual in the world has an ID if you want to know mine it’s

right here 97252

6285 and because I’m married my wife is with 86 at the end and that’s our International unique

ID number the day I lose my phone till I get back something like that I cannot

get to my bank account I cannot do with Google I’m

lost I’m lost two Factor authentication is going

to force everybody in the world to have a unique

ID that’s it and it’s your phone number the full phone number with the area code and

country code just think about it this way and you will come up with great ideas what

to do do with it I don’t know what to do with it but it dawned on me that this is a big company action everybody now wants

two Factor authentication right and it’s it’s spreading just to show you a little bit

about what do I mean by enablers and what they do let’s talk a little bit about uh electric cars so when cars were

invented actually electric cars were very popular why because they were

easier to drive you didn’t need to do this and when you saw the movies right you know you crank it up it’s quieter no

pollution and it’s a perfect for short drives it had a range of about 80 km and

it cost about $1,700 okay and they were tremendously popular so where are

they Ford Model T that’s where they are produced in 1908 cost $600 a

third D Lo longer range trips and better

system because now there were cars so you started building roads you started building roads you go farther away you

go farther away you need a bigger range your bigger range doesn’t go with the battery so you start seeing how enablers

become disablers I really want you to think about all of these as something very

Dynamic it changes it opens opportunities it closes opportunities

but there are many opportunities all the time electric engine started so you

don’t crank anymore right nobody here is cranking their car Crudo was discovered in

Texas and it was inexpensive and 15 million modal T cars were sold in 19

years so the electric cars went out into the clouds in

1935 disappeared for a long period of time now what

happened so look at that from 2010 till today you see this huge growth of

electric price but the question obviously is why what happened in the

world wow new batteries so we looked at the

dates on purpose I’m looking at the dates 2008 55 kilow hours to 450

2020 10 fold but why

why because of uh

this we go back to this so you have laptop computers you need batteries you

have telephones like that has a computer you need batteries so suddenly you had

billions of batteries produced and the technology improved actually s on leftt right but this gave

it a huge huge boost okay so the technology around batteries because there was a huge

demand went up as a side effect we can skip that okay as a side

effect um I’m just shorter on time uh as a side effect you had electric cars

because the batteries are good enough and they’re not yet as good as they could be but the whole world is working

on them so they will become good enough what I’m saying is there are always enablers and disablers and you can use

them to your benefit if you open your eyes and start thinking about what can I

do with what the world has to offer me okay remember we were talking about jobs to be done and gross

engines these are the two elements on which I want you to start looking at all of these and say what can I do with it

so now I wanted to use remember jobs to be done so I wanted to choose something

that I really know very intimately and personally is the story or The Tale of

Six companies I took the headline obviously from the story The Tale of Two

Cities from Charles Dickens um and what I want you to do is

as I will tell you the story I want you to think about what are the lessons that you can gain from these

stories so the stories about Zoom info and competitors and there’s a list of six

competitors in here and the story takes care takes uh about 23 years or 20 odd

years so Zoom info started in the year 2000 because I had the company called

card skan it was profitable it was growing all the good things and the whole world is ask me what are you going

to do about the internet because it was the internet boom and since I am a really really

really brilliant scientist who want to do disruptive things I said wow what can I do with the internet that will change

the world and my idea was that if you look

at the internet at the time okay today it’s very different then the whole game

was how you craw the whole internet the the search engines you craw the whole

internet page by Page when I type in a few words you look at all the pages that

have those words or something similar and you rank them and you want to show me only the pages that have the answer

to what the search engine thought I was asking that was the task all search

engine and there were dozens of them at the time in the late 90s doing okay and

mic and Google the same and I said wow if there is an answer to your

question then maybe the search engine will give it but what if the information is out there

but there isn’t a page that Aggregates that information and the information I was

thinking about is information about companies so if I wanted to get a list of all biotechnology companies in the

Boston area if nobody did the work then there isn’t an answer but the answer is there

I can go website by website figure out if it’s a biotechnology company and is it in Boston and put this information in

a database and now I can answer those questions so the data is out there but

you need a very different engine in order to figure it out and that’s the engine we went to

build at Zoom info Zoom info was a disruptive technology company with all

the glory and pain and I’m going to share with you the pain okay so disruptive technology

remember that we develop a new technology of basically language understanding we

want to read we’re talking about the year 2000 okay we want to read the website figure out what it is not all

websites are companies so we need to figure out if it’s a company we need to figure out what the company is doing we need to figure out their names la blah

blah I won’t go with all the details okay so we did it and the one very good decisions the

decision that we made was okay we need to make money because at that time I understood companies need to be profitable what what kind of information

we want and we picked business information companies and people that was it and we developed it and we tried to

sell it turns out that the data was fairly crummy uh which means it wasn’t

accurate um and we couldn’t find customers but then we found customers the customers were Head

Hunters okay head hunters are people that feel the job of finding EXA ex

cutive candidates for companies remember we’re talking about the year 2000 that means there was no

list there was no Linkin LinkedIn started in 2004 2005 where where you going to find it

you can’t so what job Hunter what uh Head Hunters sold to their customers oh

we are very very into that industry we know everybody in this industry that’s

why you work with us and you pay us $150,000 to find your VP El because we know everybody in reality they knew

nobody so they needed to fill in the promise and they came to us we gave them

those lists and they paid us $1,000 a month for a single seat and it was a

booming business we were growing very very rapidly the year 2004 arrived I packed

my family and we moved to Israel before we moved I said I cannot sit in Israel

there was no Zoom at the time I need somebody here in charge so I hired a

person his name is Gary halwell and he’s going to be the hero of the next slide okay so remember I’m now selling

to Head Hunters I bring Gary hell oops

sorry and he joins us at 2004 the guy is a very interesting guy

he used to work at Thompson Reuters and then he went and was the CEO of a company called inexx I won’t go into the

details of that and before that he was a geologist

at the beers he was prospecting for diamonds in South Africa really smart

very interesting guy and he became connected to your business H really

connected to your business yeah he connected to the business uh he worked at Thompson Roy as in

investex and um we decided when he arrived that we wanted to go to the big Market not the

small Market of Head Hunters we want to go after the big Market which is salese right who needs lists

salese okay so we started selling to salespeople and we discovered was a rude

awakening that the jobs to be done seems to be very very different even though on

the surface and that’s why I’m keep saying that on the surface it seems like all they wanted is a list of people and

companies right so what’s the big difference so the big difference is that

head hunters wanted a needle in a Hy STI their job was to come to their

client and say Here’s a list of 15 people great people wonderful I have

their resume I know exactly where they were because we collected all of these data from the internet so each person

had like a dossier about them and they’re just perfect for what you need

and then they interviewed and whatever salespeople on the other hand wanted the

htic because they had to call 50 people a day a day so they needed lists and

honestly they couldn’t care less about who these people are where they studied what their experience is all they cared

about was their title they’re in the right company and most importantly they wanted their phone number and email

address phone number and email address remember where I came from the

technology no phone numbers no email addresses because they were not on the internet they’re still not on the

internet so we had very few phone numbers and email addresses and there

were jobs to be done wanted emails and phone numbers and that’s where the problem

was so Gary hell who is a smart guy decided to leave Zoom

info and he started another company called net prospects and he didn’t have the bug of

disruptive he had the bug of making money so he came up with a great idea he

said what if I go to people who have very large lists of people companies and

phone numbers and email addresses and I buy it from them so he went mainly to Publishers you

know magazines and so forth and also big companies and he bought the list from them but how did he buy the list from

them he gave them a list from the other guy swap okay you give me yours and I’ll

give you mine mine which is not mine okay I’m telling you he’s a smart cookie

really smart guy I like him a lot even though he was a strong competitor okay

but remember I do disruptive he does business and he had a wrinkle on it

which is wait a minute I get a list how do I know that this is a good list and not a list from 20 years before and the

people are not there anymore the phone numbers are incorrect so he would take 500 records simple randomly send it to a

group in India they would pick up the phone and call or whatever and tell him yeah it’s 90% accurate he would take it

not s it so he had really good data and he grew like

crazy and ra 27 and a half these are all these funny numbers is because I needed

to remember he raised $27.5 million to build a company and he sold it to DNB in

2015 for $125 million I was still sweating and he made a lot of

money no disruptive no anything jobs to be

done okay so I left you in the middle of this drama and let’s continue with the next

next company clo I think so I didn’t touch it I’m

afraid of touching it okay so remember I left you with the

uh understanding that the data that we have is not suitable for the market we

wanted to go after which is the salese so we needed to do something about it uh

der Halo did something really smart and I’m talking about the year

2003 we’re starting to see the problem and uh one day one of my sales

people is very very excited and he says gathan you have to see this I said what

says come come I want to show you something he goes there is an application on his screen and he says

let me show you here I’ll type in Jonathan Stern you see here’s your phone number said okay and um how how do they

do it he says I don’t know but it’s free you can use it it has the phone numbers of a

lot of people I ran a few queries it’s really working well I said yeah but how do they do it he said I don’t really

know I had to download some application and it’s I think it’s sitting on my Outlook and it’s reading everything I

do I’m like and you did that he said why

I said they really spy on you they can see anything you do he says so what do I

care I need to sell and I have a great database so the company is called

plao the person who Bill PLO is a guy called Shawn Parker do the name ring a

bell yeah right so Sean Parker is the one who created Napster which did

basically the same music sharing right peer-to-peer music sharing those of you

who don’t know what peerto peer is I’ll explain to you later and he launched it in 1999 and and he was sued right away

by all the music companies for violating their copyrights and they closed in

2002 so he went on and built Napster at the time then he went to Facebook which

as you saw in the movie became the president of Facebook he likes sharing information I guess and then he went to

Spotify and basically he a billionaire uh plao was sold to Comcast

I can’t understand why in 2008 and was shut down in 2017 I told you that uh net Prospect was

acquired by DNB and was shut down in

2015 so you see that these were successful companies were bought by a big company and was and were shut down

so you can start seeing how the plot becomes thicker and more players and the

Mystery is getting even bigger so I said all right I think that

plexo is right so what we’re going to do is copy we’re going to develop the same

application and sales people seem to be to have no morals and uh you know they

don’t mind sharing everything so great we’ll go after salese and um remember at the time the

popular application for email email management was Outlook and Outlook ran

on a PC so we needed to develop something that runs on a PC that you download and

install download something on your computer and install it and it sits

right on your outlook so I was uh my co-

Executives basically said you are out of your mind you’re are nuts it’s not going to work nobody’s going to use it

nobody’s going to download it it is a disaster in The Happening

why do you want to do that so I hired a guy I was already in Israel as you recall I hired a guy very

very smart guy and we decided that we are going to build the application in a way that is going to be visible and will

give you value what it’s going to do is basically what you have today in Google

that it shows you all the people that you communicate with and collects all the information about them and Builds an

address book for you so that’s what we did we built an address book that built set inside your outlet look and read all

the emails extracted also the signatures in the email and did a really nice

job there’s another company that did that called zne zne if you read it in Hebrew which

is right to left it says inbox so I thought it was a really nice

name so they built the company zne and that’s what they were doing they were basically doing the same thing with a

little bit of other things rais money tried to sell blah blah blah shut down okay so there are a lot of corpses along

the way here uh so we built that product it was a really nice product that I was

telling you was visible and then I had a new VP marketing and he said Over My

Dead Body you’re not going to do it everybody will see it they will sue you privacy smacy we have to hide

it so we scrap that piece of software and we built a new one that was hidden

you download it you never saw it again it just stole your data that’s all what it did stole your data we called it the

swapper because supposedly for doing that you get free

access to zoom not really free you get I don’t know 20 records a month or

something stupid like that but that’s what it is and it never worked really

easily so we forced them to download it I won’t go into the details the amazing thing is that it is still the same way

today okay this very very bad application is still the same way today

and it’s generating most of the data that Zoom info has it works what web there is a web

swapper I’ll get to it in a moment okay along the way there was another company

called jigel as you can see when there’s a job to be done there are a lot of people who are willing to do the job

okay so jigaw was created in

2004 and they have the same idea as net prospects except oneon-one so instead of

going to companies or Publishers that have a big list they went to you and you say if you give me a record I’ll give

you a record so they had these accounting real accounting and you can give records and get records and they

were pretty good at pushing it and they built a very nice company that was growing relatively fast and lo and

behold they were acquired by Salesforce 2010 Salesforce looked at it and said

wait a minute sales people use Salesforce that’s just you know 1 + 1

equal 10 if I also sell them data I can become really stinking rich and they put

a business model business plan to get to a billion dollar in revenues using that

and so he interviewed us they wanted to buy us and jigel we were competing one

against the other and uh so we were sure we’re going to win because we had this disruptive

technology uh jigo had no technology whatsoever so why would they

win because they were growing faster than us and they won so we

stayed without a buyer with pretty bad

system and um jiga was acquired but the problem was that they

didn’t have any technology and they didn’t really understand how you clean data and cleaning data it seems is a very very complex thing so um Salesforce

tried and tried and all kinds of issues and they called the product of the company

data.com and they shut it down in 2020 gone so a lot of this

people are have come done something and gone then in 2007 discover org discover

had a very ingenious idea how to collect data they had room full of people in uh Washington

State who would call on the phone and interview people and they did a pretty good job actually and they accumulated

information on about two million or three million people manually by

phone and they started selling Henry Shak who is the CEO uh is a really

really good salesman he’s also a lawyer and he had a brilliant marketing

idea and His Brilliant marketing idea was you know if you buy from Zoom INF we

are the main competitors zo is still alive and kicking if you buy from Zoom info they give you 20 million records

but you don’t need 19 and a half million them so they just clutter you they just bother you we work really really hard to

choose only the records that you really need that’s why we only have three million records and it cost about four

times more than Zoom info data Andes I’m just talking about marketing

marketing and Truth is not they they have no correlation even okay they don’t sit in the same room anyway he built a

really good company okay discover uh very profitable

um and um he grew a lot by buying competitors so he bought and bought and

both competitors and growing until there was only one big competitor left called

Zoom info and at the time um I was already in

us here for a long time I was traveling back and forth back and forth like an idiot so I decided enough is enough and

so we sold Zoom info to discover org for $800 million in

2019 I was already not in the company it was a few months after I so here’s an example of how solving

the same problem jobs to be done I’ve shown you four different ways of doing it okay four different ways having an

Outlook plug-in having exchanging of lists exchanging of single records or buying

Zoom info four Solutions okay and then and there is a fifth a

sixth company Apollo so they started in

2015 at that time the enablers changed remember we were working with Outlook

Outlook meant I needed to download a piece of software install it on your PC it didn’t work on on

MacIntosh and it was hidden behind they came with a very different

idea which I thought was brilliant they devel veloped a sales automation tool sales

automation is a tool that allows you to send bulk emails to see who opened the

email allow you to create um um list like you can send this email if they

open it you send that email and so forth and so on and uh really nice piece of software that they developed and it sits

right on your Gmail so all you have to do is actually just allow Gmail allow

your uh Gmail to cooperate with that piece of software that’s it really

really simple you click a button and it works and it gives you value immediately

because you can really manage all your sales process through that and it seems almost natural that you share the data

because you use that data all the time right so Apollo became very very

successful when I encountered Apollo I at the time wasn’t at Zoom INF for

anymore I went to zoom info and I said guys you know I think this is this is really really nice solution better than

our swapper you should develop a similar thing I don’t know what happened or not happened but I’m just showing you how

the same jobs to be done got very very different implementations or Solutions

and how when the world changed some companies took advantage of it okay so

when people didn’t care about privacy came plao Sean Parker jigaw and so forth I

said people are willing to swap and Apollo I think came with the best solution which is giving you real value

that makes sense to you and it’s easy to install and so forth so what are the

lessons disruptive technology is hugely overrated I love the technology at Zoom

INF for really did a nice job but it’s overrated there’s a big gap between

technology and generating money at scale so technology is a very very nice toy it

makes you feel great but between that and making money there is virtually no

correlation uh many entrepreneurs start by thinking inventing some disruptive

technology I’m think I’m trying to tell you that this is not the best way to become rich it’s a nice way it’s it’s

really cool but it’s not they should focus on understanding the jobs to be

done and then look around for enablers to get the jobs done easily okay and I think I’ve convinced

you right now that enablers are not necessarily just Technologies oh by the way don’t forget

to start with branding first okay if nobody heard about you tough

luck uh at the end and this is very very

important success comes from happy and loyal customers not from the technology

longterm which is why Zoom info was sold for such a high price and why later on a

year afterwards discover or changed the name to no right away they changed the name to zoom info because nobody knew

about discover or but everybody knew about Zoom info so that’s why the compan is called today Zoom info because we did

a good marketing and then the combined companies went public in 2020 was the

first IPO in the corona season went out at a valuation for about $24 billion $24

billion the valuation has declined I think it’s worth today about10 billion

so not bad for a company with a disruptive technology and a clunky swapper um and it’s a good company it’s

a really good company why because it was focused on

customers both me and Henry that’s what we focus about and customer sales and

customers okay technology is very easy to duplicate I showed you here examples

okay customer satisfaction is very hard to maintain really hard so that should

be what you think about so obsessive focus on customers operations and efficiency and gross energies will take

you much better okay so I wanted to take you through this whole story so you can

see a really big picture of six companies competing on the same jobs to

be done only two succeeded really big by the way Apollo is you know I think worth

about a billion dollar today and they’re growing fast so good companies that

focus on results de there okay similar or different story

Capital IQ was founded in 1998 and it was three Investment Bank

Bankers investment bankers what do they do it’s a nice term for uh like Realtors

but instead of selling real estate they sell company okay so they are the middlemen between uh they try to find

buyers to a company or seller to a company that’s what they do and what they wanted to do is open a

boutique to deal with the low end of the market usually investment bankers take a percentage of the transaction so if the

trans action is a billion dollar 1% is reasonable amount of money the transaction is $10 million

1% not that doesn’t justify the work it’s a lot of work selling a

company it’s a lot of work so they wanted to create a growth engine they wanted to create something that will

allow them to do it faster and better and they identifi that the jobs

to be done the first stage of it is to figure out who might be interested in buying that company so they wanted to

build a database about companies who they are what they do who are the people in them just build a database remember

this is before Zoom INF for 1998 okay and remember this didn’t exist at the

time when I started also did this data didn’t exist so they developed a database of

information about companies which was novelty as I write in here and it was populated manually by lowcost

researchers so they had people in India that would do the research but

and that’s the interesting thing why I bring it up in here so they built a fairly simple mechanism how to find the

information and the mechanism was based on Google Alerts so they fed Google with

the names of I don’t know 100,000 companies they were interested in and anytime Google found any piece of news

about that company it send an alert right so what they did is they have a split

screen on one side they would bring up that page that Google alerted about you

know acquisition new product whatever it is and on the left side they had a

form they tried to figure out what the piece of news was and put the right form

but not necessary because then a person would sit there read the piece of information and fill out the form so

they solved the problem of how to identify new information and they made it easy to copy paste or type whatever

it is pretty much scribes people that sit there and you know get piece of news

after the piece of news it went so well that they bought an Indian company

with hundreds of people that was later on I already knew them I was talking to them uh so they bought a company with I

don’t know 300 400 Indians that that’s what they did they gave them the software and they filled out the information in there okay when I put

something in red that that’s a question I would like to discuss so can you do it today more

efficiently how chpt right so you can compete today with

capital IQ with um I don’t want to embarrass you but even avad can do it now right avad

is a genius in jgpt he shows me how he solves all the problems in the world with jgpt and it works so I can build a

new company called Capital IQ so what happened with capital IQ well they tried to build this

Boutique remember but it turns out nobody was interested in the boutique but everyone they showed them the

database their people that saw it said I want access to that database

okay and so they deeply understood the jobs

to be done because they were selling the database to people who looked exactly like them and they understood the need

of it so it was sold in 2004 to mro Hill as

you can see today’s standard in poor uh it’s still going and it’s going very very well and uh here’s one of those Ena

chpt remember I told you at the beginning want to talk about CH GPT now you see what I wanted to talk about

here’s an example that they basically built a person GPD I show the information and people

copy pasted you can do it today more efficiently now what happened with the people so Neil Goldman founded a company

called relationship science he wanted to build these maps of who knows whom and

he called me and he tried to interest me in working on it with him and I declined

I was too busy and Randy win who was another founder invested in discover or in March

of 2018 and I talked to him several times before before they bought Zoom info

after they bought Zoom info so the world is small and people go around okay so I’ll give you a blueprint

for a startup all of you who don’t want disruptive just want to make money

here’s a blueprint of how you build a startup so you can extract specific

information from free text like web pages contracts receipts emails whatever it is right so all you have to do is use

check GPT and train it a little bit about extracting this

information and what are the jobs to be done so the jobs to be done in a lot of

companies is what I call the back office the back office is where all the

paperwork in one way or another ends up and you need to do something about it

that’s what I call the back office okay and virtually every company has a back

office some of them more sophisticated some of them less

sophisticated and you have to think about scale okay so simple

jobs become more and more complex and valuable as the scale grows CRM like

example okay if you’re are a Salesman and you call three people a day ah you scribble it on a piece of paper you

don’t do beyond that anything when you call a 100 people a day you already need something that will help you remember

who you call what you talked about when 100 sales people call 100 people a day

you need something to handle that because you can’t really manage it manually okay so as the scale of every

activity goes up the need for something to scale it goes up remember

that so there’s a book like anything else called scale

and the universal laws of growth Innovation sustainability and the pace of life in organisms cities economies

blah blah blah blah and gross engines remember are about achieving scale at low

cost well it’s an interesting book it’s a little bit too long could have been

abbreviated but it has some really interesting facts that I never thought

about so heartbeat turns out that heartbe has a

reverse correlation to the size if you have a cat and you touch the cat

heart if you have a baby right as the baby become fat like

me it slows down so elephants have about 30 bits per second per per minute that’s

the heartbeat of an elephant and a cat I think it’s 100 and something

and and a mouse is even faster he even have has a conjecture that says the

heart is designed to uh beat a billion times when it reaches a billion times

you die I don’t know if it’s true or not and but I stopped measuring or counting my heartbeats because it’s too

scary the other thing that he was mentioning in here is how fast people

walk depending on the size of the city turns out size of a city so people

in New York City Walk much faster than the people in Raanana and the people in raana walk much faster than in a kibuts

the bigger the city the more people there are the faster people walk why I have no idea but it’s a very

interesting book and it opens your mind to think that anything that moves up in the scale has some fundamental changes

happening to them and to me all of these are opportunities remember I’m teaching you

kind of how to build a company with five different simple

stamps so the purpose of many business software

applications like a CRM is to Aid the efficiency of scaling

up so what’s the problem why is there a problem why do I

say that the back office is always a problem here’s the problem as I put in here there’s an interface the interface

is between the people who generate the information let’s call it somehow okay

and where you want to put it which in most cases is a database so there is a need to take that information from it’s

call it human structure to something that is a machine structure

always sometimes the information itself is generated by a machine but even then many many times it’s not standard okay

so you get a receipt every single business has a slightly different receipt so you need

to read it in a way okay even though the receipt was generated by a machine so there’s always this problem okay now

what most companies do if you think about it is they have forms right you

want something from a bank you need to fill out a form why because they don’t

handle speech so they want you to fill out a form that’s the oldfashioned way of

dealing with this Gap but not always there are forms and not

people like to do forms so there’s always an opportunity in here in the back office to take whatever is the

input and allow it to happen to be organized okay so when you talk to people about CH

GPT they always think about C GPT in its generative form so that’s called

generative AI which means you take the thing and you ask a questions and it starts giving you whole discussion or it

summarizes something or it does all kinds of generative thing but really it

is far more interesting in its other side which is understanding what you say

we call it prompts but in reality is you tell it what you want and in most cases

it understands you understands you pretty well right and that to me as an

enabler is a h huge huge disruptor because problems very much

like I described before about you know image recognition and finding the dog in the picture these were problems that

were totally not solved until this happened and with that you can do

amazing things but you have to understand the job to be done specifically and I’ll give a few

examples in momentarily okay so what you see in here is here’s a problem here’s a

way to deal with it it’s business to business you have a template kind of to

think about how to build a company so let’s start with a case study

so I’m going to bring you two case studies that I became aware

of so think about a company even Zoom info has I don’t know

10 offices around the world maybe more okay but many many companies have

several offices around the world more than several and many companies have a lot of locations you know Dunkin Donuts

McDonald’s whatever you know they have a lot of locations around the world and I say specifically around the world

okay and each location is usually rented they don’t buy them okay and it’s rented

from a different landlord different contract different laws of the place

different size dates you name it there are a lot of pieces of information that

you want to get out of that agreement and put in a

database but it’s kind of hard so most companies

have a very rudimentary spreadsheet basically okay that they keep I don’t

know four five six pieces of information out of the 30 or 40 that you wanted to

do okay so so there’s a company that said okay this is an interesting

opportunity why don’t we go and talk to these companies take their you know usually

they keep the agreements in a folder or even if it’s in the computer it’s just a PDF

copy um and read that contract or contracts actually and start to extract

information out of it um and here comes the other angle of it so

you can do that that gives you about 30% of the

value the other 70% of the value is if you start enriching the

data and when you start enriching the data you open up a lot of interesting

insights into the original data okay so in this case for example I give just a few examples average rent per square

foot charted over time for that area okay I pay $20 a square foot and it

seems like everybody else you know the rent goes down everybody else is paying

14 I signed the the deal five years ago it was 20 I’m an idiot I should

renegotiate right but unless it shows up to you and

you put a trigger you don’t know that uh updated list of other available

offices in the area you always want to look around and see what else is out there maybe you can swap and get a

better place or maybe you need to grow okay so you want to know always what’s

available number of people in each location so you have 20,000 Square ft and you have three employees like here

right so have big space nobody here that’s because I’m cheap um so you want

to compare the number of people with the space and figure out whether you have less you know limited space and you need

to rent more maybe you have too much space and you maybe need to trim down okay so this is just a few examples to

show that when you start enriching it with data from another place it becomes more valuable let’s go back to the tail

of six companies so one of the assets that Zoom info Zoom info is successful not by

mistakes okay we did a lot of interesting things so as I was thinking about salese

remember moved from recruiters to salespeople gradually it became clear

actually that the information that is really interesting is not about the people it’s about the companies

why because when a business wants to sell to another business they put

criteria that makes the other company a prospect for

example we at Zoom info can sell to any company that that doesn’t have sales

people let’s say they sell b2c they have stores they don’t need Zoom info it’s

useless for them right so why would they have why would I want to talk to them even it’s it’s waste if they have two salese it’s still

a waste I’m not going to waste the time of a Salesman to call them but if they have 500 salespeople now you’re talking

now it’s interesting so we use that remember we have the list of people in the company

with their titles so it was very easy for us to count how many salese each company has and divide the market into

small opportunities no opportunities small opportunities medium big opportunities and start routing the

leads or the companies to the right people hugely valuable and that’s because Zoom info has that if you try to

sell to companies that have many many offices you want to know how many of locations they have so you start seeing

that every company their definition of who is their you know ideal customer product

customer profile is very very different very very different so we started

collecting a lot of data about companies the titles of the people for example how

many Engineers do they have what’s the ratio between the number of Engineers and the number of the salespeople how many lawyers they have you would be

surprised that that’s a very interesting element about a company some companies have a lot of lawyers so you want to

know what they do with them and other companies have very few lawyers most big companies have a lot of

lawyers and if you look at it they are mostly tax lawyers so like all the gas companies in

America have more more tax lawyers each company than the IRS the Internal

Revenue Service which is the Mas okay why because they don’t like paying taxes they rather pay to the lawyers to not

pay taxes okay so so what you see is that the

information about companies was much more interesting and we started enriching our database with hundreds if

not thousands of what we called attributes with some of it which we calculated some of it was taken from

other places but that became a huge asset because it allowed our customers to really be smart about how they

identify their uh ICP okay so that’s what I say when you start

adding more information to this um you will start having a real business so the

value of the data grows significantly when it is in tached with other data so I gave you a

template go to back office figure out what they need you bridge the gap between the

human input and the database you want to build you enrich it and you have a

product okay let’s take another example small business accounting

so this is really interesting too most small businesses have

accounting but why do they have accounting because

this country and many other countries want them to pay taxes in order to pay

taxes they need to hand in financial reports it says how much money they earn

or lost in every year so they have an accountant either in housee or in a

service and they take every receipt and every invoice and all of that stuff and they typeed in in into thing and they

create Financial reports now what happens with these Financial

reports turns out how many of you know how to read Financial

reports liter read them and understand them yeah right so most small business

business owners have no clue what this financial report means and they don’t

use them for day-to-day decisions how do they run their business because they ran it for 10

years okay they have good intuition their father gave them the business or whatever it is and they run without any

Financial reports that’s the reality when I’m talking about small businesses I’m talking about the small grocery

store or a coffee shop you name it you know they have they sell I don’t know a

mill million shekel a year 10 million shekel a year but it’s a small business the owner is the manager is the

everything so we had an enabler the guy came with an enabler and

that is they use Kev so Kev in Israel is the dominant accounting

software and it has an API so you can connect to it through the internet if

they give you permission you know the owner says Okay I want to do it and you can read the

entire uh report there’s also a new law called the

open banking law or bank and essentially it says that each bank has to allow each

customer to access their account through an API so I can connect my own bank

account to my accounting system or to my CRM or whatever it is okay um so that

would come I think the end of this year right

so what this company did was they connected through the apis to kha shevet

and to the banks so they set with the customer and they says can you please put your credentials so that we can

connect to your has Chev and connect to your bank and they um built a report but this time

they tried to build the report uh to be more operational so just

look thought about what we want to show them and they built a very simple report that they can show it to

people um for example sales per employee okay so if the if in the

accounting they said that this employee did that so they can see whatever it for the no no no no no no no it was just

taking the data that was there that was meant to be for tax purposes but there’s

data it’s Unique it’s Rec each line is unique different from one company to the

other depending on how they decided to do it but there’s something in it I’m not I’ll show you in a moment

okay and so they did that they had a very different business model in mind doesn’t matter

but I told them why don’t you mean I don’t know what it means go and show it

to the customers let’s see what they think about it so they went and started showing it to

customers and to everybody’s surprised there was one element that

immediately caught the attention and that was they just looked at the accounts receivable how much money is

still out there that they were not getting paid so obviously we all know

net 30 net 60 and so forth so they had all of these information in the accounting system but they also had all

the information of all the people who didn’t pay and they were out 120 days 300 days whatever it is and they were

shocked they were just totally shocked by the the amount of money that belongs to them and is out there and not in

their bank account and that made them say wait a minute I need to see that

okay and so we created a simple collections application that actually dealt with not

so much collecting bad debt but just making sure that you get paid on

time at Zoom info we collected 99.3% I told you do that in the last

meeting right 99.3% of all invoices were collected which is almost a world record

and how did we do that we did it because the person the famous

Donna just made sure that people who owed us money were aware of it way

before it was due so if it was net30 after two weeks she sent an email and she said here’s the invoice again I want

to make sure that you already have it in your accounting and you’re going to pay it on July 17 blah blah blah a week

later she said you didn’t respond to me is it in your account you just nudged

okay and we got paid why because if you ask and you deserve to get the money and

you ask about it three times and they will pay you because you get it nobody can be angry

at you you know it’s your money you in their Bank you want it that’s all it’s really simple so you don’t have to be

nasty you don’t have to be anything you just have to show that you are efficient and you really want to get paid on the

day you want to get paid so that’s what they’re doing basically okay and know

it’s a small startup it’s just starting but I’m just showing you again this concept of

enablers connecting to Kev so he can build those reports in 10 minutes just

give me your credentials and we’re in right connecting to your bank account so you can see when monies came and went

and so forth and so on and you can connect it and compare it okay so these are

enablers but he didn’t know what to do with them but his customers knew what to do with it so you take these enablers

you build something really really simple and you go and you ask people what’s the job you want to get done and this people

didn’t know it until they looked at the numbers when they looked at the numbers they knew exactly what they wanted I

want that invoice paid now that’s what they wanted okay so you start thinking see

what I mean by enablers I don’t need to tell anything K

is is a joke there’s another big one

QuickBooks I leave it to you okay so I keep saying about oh you

know be creative think about it and so forth so there’s a guy called Jacob

Goldenberg he actually resides not far from here here and he teaches at

IDC and he wrote a book with another person called inside the box right in

everywhere they teach you think outside the box it turns out that outside the

box takes you into you know Bizarre Adventures but most creativity happens

inside the box which means these are the only thing that you can use you should read the book it’s really fun

um and he has a really system to how to be creative you know you put all the things that you have inside the box and

you start adding and subtracting and doing all kinds of things I won’t go into the details but what I’m trying to

say in here is use these enablers as the inside the Box here’s what I’m trying to

do and here’s the world how can I take this plus this mix it somehow and get

interesting results okay so especially in Gross engines

where you know the job to be done you have a good definition of the jobs to be done okay so if you look at it with this

approach of inside the box and I won’t go into it what exactly it is you can reveal a lot of innovation

that really is in uh Plain Sight literally okay sometimes you just

don’t think about it like when you know with the I said about about the collections there’s nothing smart about

it it’s obvious and nobody’s doing it right why I no no because they didn’t

think about it that’s all there’s email you know their email you know exactly when the invoices do you know everything

and you just don’t do it why God knows okay so then you have to

start going to collections and you start chasing them and you waste a lot of money and it’s not a growth engine if

you do it in advance the number of times you have to chase them is very

low that’s what I’m trying to say all along in here is think about the job to

be done think about all the system that are available to you and use

them I’ll go back to the other thing I said about what is the opposite of a growth

engine it’s called people so anywhere you have people in your

organization and you feel like you need to add more people because you are growing that’s where you should

stop scretch your beard that doesn’t exist and say do I really really need to add

another person really really do I need to add another

person or can it be done with the same person with better tools better ideas as

better process and when you start thinking like that every time you

are tempted to hire another person stop

stop first of all hiring people is really hard why are you guys laughing at

Zoom know I know I know I’m just joking

yeah so every time you need to hire a person it’s a lot of work to hire a

person and your chances of hiring the right person for the right job are not very high and at the end of the day even

if you get the right person at the right job life is hard they want to move to

someplace else they got married and they go to Japan whatever it is people are difficult to deal with so anytime you

need feel the need to hire another person stop

think Inside the Box dissect the job to be done and figure out whether you can

do it with a process as the scale of the operation

grows it is a must it’s not just you better think about it okay as I told you

before the only place where I at least had no choice or find no other way was

sales people but sales people if you pay them I don’t

know 15% of the sale or 20% of the sale they still add 80% profit so it’s kind

of interesting but even then the way we build it at Zoom info was very

mechanical so that we build the whole process that B minus salese will succeed

and be productive so we build a whole system around them to be successful even

if they are not Geniuses and not you know outperformers cuz we were thinking about a growth engine how do we can

multiply them and we’re not dependent on their skills

and you can read it

okay so think inside the box is also interesting thing to and it shows it at

all in the book you can read the book how if you take a product you look

at all the ingredients of the product and you start subtracting product

features and many times what you discovered is When You Subtract features you actually get a very interesting

product um that’s not here in this one so I’ll

talk about it and then I will so anybody familiar with a company

called gong other people that’s it okay and

people called chorus familiar here corus yeah

corus so gong came up with the wonderful disruptive idea we’re going

to um record every sales interaction with

customers we’re going to convert it to text we’re going to analyze the text we’re going to find issues either with

the sales process with the salesman and we do a lot of analysis and hard

work and it’s a very expensive system there was this is a Israeli company gongo at least the founders a Israeli

and the competitor in Israel called korus um for those of you who don’t know why they laugh is because corus was

acquired by Zoom info for $550 million um they didn’t ask me and

uh interesting well I became aware of gong many many

years before when one of my salespeople they had a free version for months or whatever it is he used it and he wanted

to show me the impact of that piece of software on his sales

operation so he said I had two salese one of them was tremendously productive

and the other one was less than productive let’s call it this way and I wanted to explain to him

why he was not meeting the criteria so all I did is I used gong to

measure the time the salesperson talks and the time the customer talks that’s

all okay and create a ratio okay and he said

lo and behold I could show this salesman that he was talking 80% of the time and

the customer 20% of the time and the other sucess successful salesman talk 20% of the time and the customers talked

80% of the time that person made 80% more sales than you so you don’t need to

be rocket scientist to know that if you keep the customer just doesn’t listen and goes away if you ask questions and

you wait to the answer and you engage in a real discussion they have a bigger chance of

selling and I said that’s all what you do with gong says yeah why should I do

anything else it’s working and I was thinking to myself how much

money do I need to invest in building a product that just measures the stupid

ratio huh and if I sell it to to companies for let’s say $50 a month per

user or $10 per month per user wouldn’t it be phenomenal way of getting customers instead of trying to sell it

for $10,000 so that’s kind of the thinking inside the box so

sometimes people add more and more features to the product why because this

company wanted that feature and that company wanted this feature so we have now two features let’s put them together right so this company also wanted the

feature now before you know it you have a 100 features that nobody uses and the compan and the product is very complex

because now you need a navigation to get to each of the features and so forth and so on

right do you know if you go to a venture couple group when you try to raise money

have you ever seen the size of the agreements it’s about that

okay and when you ask them why is that so big and he says each and every page

have a reason because sometime somebody was suing us or whatever so now we close

that loophole okay so you have here basically a lot of loopholes you to try

to close but that’s not a way to build a successful product in a successful company so what I’m trying to say again

is think what’s the job to be done and what’s the minimum you can do in order

to do that so creative thinking about mixing

things and taking things out can help you a lot

okay but enables are not just technology they can be something else

completely so we had a company called obster and obster was an international

company it had people around the world really literally there were like 18 people in the company half of them were

one each one in Brazil one in Ukraine I think I don’t remember even one in

Armenia so how do you hire these people okay not all of them wanted to be

uh Consultants they wanted to be hired and they wanted to pay taxes and get all the benefits and how do you do that from

a company in Israel so like always people see where you have a problem other people see opportunity so there’s

a company called deal it’s a Israeli company actually like many provides

Global compliance Services big name including payroll reports and analytics basically you went to deal you paid $500

a month and they hire that employee for you that was it you never saw the employment agreement you know you told

them how much you’re willing to pay and so forth but you paid $500 and you never thought about that employee again except

about his work that’s all you have to start a company in Ukraine or Armenia or

anything so when I was talking about you don’t need to build a company in the US if you find that you need somebody in

the US use deal now it’s 2024 there is a crisis so

companies cannot raise money and it turns out that thousands of companies startups in the US are shutting down so

somebody saw opportunity where others see a disaster so it’s called Simple closure

it’s a startup that helps you close your business turns out that close someone to

shut down yourself they call

Undertakers so these are company Undertakers okay so let’s kind of summarize

everything I wanted to talk today and I told you I was talking about three things right jobs to be

done growth engines and enables three things so what do I do

first start thinking about a great idea or Focus first on talking to

customers and finding what’s the job to be done

so I believe that knowing your jobs to be done

is far more important than how to solve that but how do you know what’s their

job to be done so the biggest asset is of course if you come from that industry like I

told you about Capital IQ they were the customers they know exactly what they wanted okay um people come and they do

something for 10 years and they say there must be a better way to do what I’m doing right these are the best people that understand the jobs to be

done really research so as I said here but if you don’t come

from the customer side you should hire and I put hire because we know how I’m talking about

hiring right you should hire that knowledge before investing developing the product now how

do you hire that knowledge so again I’m trying to give you uh back of the

envelope ideas how to build a new startup not that I encourage you to do

that but I just want to show the process so that you can start thinking about it it doesn’t have to be

complicated so you talk to a potential customers and most of us will talk to

them about what are the problems that you have what are you trying to solve there’s a good chance that it will do

one of two things one he will talk to you about the problem he had yesterday because it’s still fresh in his mind and

it’s actually a small problem but it just happened yesterday and you remember do it

or he doesn’t know what you want from him he’s working he’s happy everything is great you know he has 10 people

filling out forms it’s wonderful I have 10 10 people working for me I go to

promotion I I have 20 people what can be best better than that right so most processes if you talk

about a process I’m yet to find a process that cannot be improved every process from cooking to

cleaning the house to selling every process can be improved

so ask them to explain the process don’t ask them about the problem

so explain to me when you what what do you put into the CRM uh where’s the data

coming from how is it coming to them is it accurate oh somebody has to type it

okay and who is the somebody that has to type it the the more questions you ask the more you’re going to discover the

disaster okay the more you’re going to pull your hair and you say I can’t believe that that’s what they do yes

that’s what they do and they have 20 people doing it and the manager will fight forever to grow

to 25 because that’s his promotion remember that okay so you can

ask from friends and family first you can talk to retired Executives retired

people are my best Target always because they are bored they know what they’re

doing and they look for to somebody to talk to about their business or past workers even they are not retired but

they left the company and you can start talking to them you can use LinkedIn intros there’s

a product called expendi cost few dollars a month and it allows you to

send invitations so you can send about 500 invitations a month before LinkedIn

shuts you down and expendi knows it so it allows you to send about 400 to 500 invitations so you give him a list and

he starts sending invitations yes there’s more every time

there’s a need there are companies who do it and uh in our experience and other

people experience about 30% of the people that you ask for uh become my

friend do it okay so you start if you send 500 a month you’re going to get 100

to 15 people who say yeah sure let’s connect so that’s enough people that you can start asking questions most of them

will not spend the time with you but some will and you can start understanding the business then you might want once you

talk to a few of them and you start identifying that there is a common problem that you see you can say Okay I

want to organize a round table with Executives in the industry to talk about this specific problems and how each one

of you is solving it people like to talk about their issues with peers so you give them the

opportunity the later stage you might consider an Advisory Board and here’s my company my content

again don’t boil the ocean start with a simple product don’t try to solve a lot

of problems okay gong corus why and then we will

end there’s a huge difference between talking to people and having people that pay you

money when people pay you money they consider you to be a partner that’s the reality they start

talking to you when you call them they answer so you remember about branding

first that’s the strongest branding possible even if you sell them a product competing with gong from $10 a month all

it does is measuring times okay and it’s really cheap now you have the VP of sales and

the sales directors talking to you they know you think about their problems

they’re talking to you now it’s easier to grow with them than to come with a product that cost $10,000 and it has

this very complex process that they don’t really understand