From funding to exit – pivots, flexible engineering, and B2C marketing with Idan Yalovich from Zest

Product Stories
From funding to exit - pivots, flexible engineering, and B2C marketing with Idan Yalovich from Zest
/

Summary

In this episode of Podcast Stories, Victor Purolnik talks to Idan Yalovich, co-founder of Zest.is, an information enablement tool. Idan shares lessons learned and strategies used to take his company from funding to exit and pivoting from flexible engineering and B2C marketing.

Episode Highlights/Topics: 

  • What is Zest? Search engine tool to find info all in one place to do your job faster
  • Idea of Zest: Empowers users to use keyboards and shortcuts without context switch
  • Product vs. Programming: Where Idan started and shifted to learning how internet works
  • Content: People find value in getting information and articles relevant to their profession
  • Problem: Who is writing/changing work-related info/data and distilling/classifying it?  
  • Content Overload: People suffer from the fact that information is everywhere
  • Target Audience: Meet and network to listen/talk about how people work, use content
  • Engineering: Product skill to understand the boundaries of your imagination
  • Framework/Foundation: Hire remote help to manage related tasks and achieve goals
  • Marketeer: Idan’s go-to-market strategy to market company faster and efficiently
  • B2B to B2C: Business sells to another business and at the end, you face a customer
  • Bottom-up Method: Sell product to individuals and different personas for user experience  

Resources/Links:

Idan Yalovich on LinkedIn

Zest.is

WalkMe

Confluence

SharePoint

OneDrive

Slack

WeWork

Medium

Trustshoring

Read the transcript:

Victor: [00:14] Welcome back, everyone. Today’s guest is Idan Yalovich, Co-Founder of zest.is. I met him and his Co-Founder, Yam, four years ago on the rooftop of WeWork HaZerem in Tel Aviv, when Zest was in its early stages. And fast forward to today, just a few years later, he sold the business and has many, many learnings to share and the strategies he used for funding, pivoting, engineering, marketing, and getting acquired. So this is going to be really interesting. Idan, welcome to the show

Idan: [00:48] Thank you. Thank you for having me, Victor. Glad to be here

?Victor: [00:52] Let’s give everybody a quick little background and introduction. Who are you? And most importantly, what is Zest

Idan: [00:59] Zest is a tool that enables search engine across cloud services. So from the work, knowledge worker perspective, you can, with Zest, search just in one place and get any information that you need to do your job faster

So instead of going to Confluence, let’s say, SharePoint and OneDrive, you just need to hit Zest. Zest idea was started with the idea of empowering the users to use keyboards, to use shortcuts, so you can get any information you want quickly in your—actually, without any context switch. And I founded Zest with the Yam, as you introduced, a few years ago. Yam was the marketing part and I was the tech part

My background mainly is programming and development and frontend design, all these kinds of tools. Zest actually is my second company, I started the first company, which was a software development studio at the age of 24. And then since then, we grew, I met a lot of people, learned how to run a business and here I am, almost eight years after, two companies, one exit. This, I think, is fine as for now

Victor: [02:21] Absolutely. Just got to keep going like that and it’s going to be very fun. But that’s very, very cool. Did you start as a developer with like, developer ?background? How did you get into product more of, like, more of the design, more of the strategic planning, user research, kind of sphere out of just programming

Idan: [02:43] Actually, it started before I even build the first website. I felt that I need to better understand how the internet works. So if I want to understand how the internet works, I need to go and learn how it works, what are the components and what’s in it for the people that uses the website. And this is how I started; I learned HTML, CSS, JavaScript, and then I gained them as tools to achieve a bigger goal of building the product that people will use. Everything was from the prism of building products

Actually, it started with the– with frontend tech stack, HTML, CSS, JavaScript, and then the components and all the frontend kind of technologies. And fast it moved to the backend technologies, because when you build a website, and you want to store and you want to save, and you want to integrate with third parties, whatever, you need to have a backend, a strong backend

And from that point, I started to develop and learn how to create, from the programmers and the engineers perspective, how to create useful products

Actually, I think one of the, one of my mentors told me once, ”A good developer is a lazy one, you don’t want to do things twice.” And I think I strongly adopted and I took it to the product world. And I realized that if you do something again and again and again, so this is a reflection of pain, of a problem that maybe you can fix with technology. So actually, this is why I learned the technology

Victor: [04:23] That makes a lot of sense. That’s a very good insight. Now let’s speak about pivoting because I know you guys have pivoted once with Zest, how did you start? I know it has been and it is still about the cross-platform search. But who was a targeted at initially? What did it look like? And when did you realize that you need to do something else

Idan: [04:47] If we want to talk about the pivot, so we need to describe a bit the Zest background. Zest started with, we were three cofounders—we didn’t call it cofounders, we called it friends, and we actually went to a shelter and then build a thing, something that we thought, as I said earlier, that will help people to get information in much easier way

So we build a new tab extension that actually brings in information, so each time actually you open a new tab, you get a fresh content that’s relevant to your profession. We did it and then we sent it to friends, and then the friends said, “Oh, this is, sorry, you waste your time, we need to do it—do something else with your life

And we iterate a few times and then we realized that actually, people found value in the fact that they get information and articles, it was content, mainly public content from publishers, before the days of Medium, the information was scattered everywhere

And what we did actually is we distilled the information, like filter the click bytes and SEO aggressively, articles and put the, what we found as value or Zestworthy content, and put it in one place. Then we added a layer, then we enabled people to submit content and then it grew so fast that it, one day, [Inaudible 06:21] and Product, and I think, made an article that named Zest as the one of the promising tools for 2017 or 2018, I don’t remember

And from that point, you know, when you get that exposure, so the spike or the global user go up so fast, and everyone mainly, not everyone, but a lot of people in the US and new ones, and they started to use it. And as I said at the beginning, we were just three friends that did something

And from that point, we actually realized that we have something and maybe we can turn it into a company. So we decided to raise money, establish—incorporate the company, raise money, build the business model, and then tried to grow the company, but the whole idea was, I think, the seed of the idea wasn’t integrated with business model and with company pillars that you need if you want to build a company

So it was a cool idea, a cool tool, but any business model iteration that we tried to do face the reality that said no. So actually, at some point, after a few iterations, we realized that maybe we need to leave that idea and we need to think on a different aspect of the product

I flew to the US and tried to learn more about how the information goes there. And at some point, I realized that the main, the huge pain that people and knowledge workers mainly, any people that walk with changing information actually, they suffer as the internal information, like his work-related information and data, and not professional content that grew his talent are gone

So at that point, I thought that, “Okay, we have something, we have technology that know how to distill content and how to classify the content cluster and send it to the right audience, so maybe we can take it and implement it within companies

  At that point, it was the beginning of 2020 and we started a pilot with a few beautiful companies in the US and Israel. And I realized that this is it, people suffer from the fact that the information is everywhere. And when they need a document, they go to Google Drive, and then to Confluence and then they search it on Slack. And sometimes they’re not even aware that someone else from the company did something similar or have some insights in somewhere.  So I realized that, “Okay, this is what we need to do.” And it took some time to convince everyone but at that point its, okay, it was it, and then we decided to pivot

The pivot is not an easy move, especially when you have strong brand and a wellness, and people recognize you as marketing tool that help like a publisher, like a magazine. And now you need to pivot and you need to put the technology first, and you need to say, “Listen, I’m doing something else. The phase of the marketing magazine was beautiful, but now we are doing something else.” And this was a hard point of branding and maybe rebranding or marketing the company again.

Victor: [09:49] Yes, because it seems it’s like a very different target audience, at least it seems initially. Did you think about just rebranding it? Because it did keep the name, the domain, the—not sure of the logo, I don’t remember. But essentially, like, if you went to Zest probably one day and then a week later, it would be like a different company almost, is that correct

Idan: [10:13] Correct. It was a hard pivot, just one day

Victor: [10:18] Nice. Well, congratulations. It turned out very well. I think it really needs the courage and honesty to tell yourself that, and then go to different directions. When you flew to the US, how did that look like? Did you meet up with startups or with companies, enterprise to try to speak to the target audience, or more like, understand even how people work, how people use content

Idan: [10:44] Actually, at first I learned—I flew there with my entrepreneur hat. And I flew there to try and meet people and meet tech-savvy people and workers in enterprises and companies. I think I was alone. I didn’t know anyone. And I just started with someone, send an email, and, “I saw that you are in New York, let’s grab a coffee.…” And then it started. And then I met a few people

I have one good story, but we can talk about it later if you want. How I started my networking in New York, it was in a river in Israel when I had a coffee with a random dude, and he told me, “Yes, I’m flying to New York.” “Yes.” “And what are you doing?” “I’m doing—I’m helping Israeli startups to land in New York.” “Oh, this is beautiful. I’m flying to New York as well on Wednesday.” “Oh, we have the same flight. Oh, let’s fly together.” This is how I started

And actually, yes, I met companies like anyone who agreed to meet me, let’s be honest. And the story wasn’t so clear, so some of the people didn’t understand what I wanted from them. Some of them thought that they want to raise money from them. And others point me to the right direction. Some of them had beautiful insights

But I think the way of the people think there, was the thing that convinced me to feel, to see them, to listen to them. And when you ask someone about information, this is the country that suffer the most of content overload, information overload. So when you see and when you just sit with someone, and you see his iPhone and what they do, and how they work and how many apps the people use, I realized that this is the field that I need to play in, I guess

Victor: [12:46] That’s super, super insightful because everybody keeps saying about, “Do things that don’t scale.” And that usually means for people, “Okay, I’m actually going to respond to an email or pick up the phone call because I thought, really, it would just be a chatbot, and that would be enough. But okay, we do things that don’t scale, so I’ll hop on that call with a user

But no, it actually goes way, way, way beyond. And it is a recurring pattern actually, across the show, I believe, doing things that don’t scale is part of the research. Yes, of course, you’re not meeting with every client, you’re not doing that as a sales strategy, but you’re definitely doing that, to get to know your audience and to build these initial connections, right? That can be very powerful over time. So this is very, very insightful

Idan: [13:41] I think, when you do user research or market research, you need to find the people that have enough experience to explain what is going on in their teams, for example, or its pods of people everywhere

So if you can find someone that have the point of view, that will help you understand like a group of people, group of users that you want to research, instead of asking each user, then I think you have like an ability to do a few interviews, and I didn’t call it interviews, I called it just a meeting to listen, to talk. Because interview may be too serious for that point, it was for me

Victor: [14:25] This is exactly right, being more informal, reveals more of the truth behind something, I would agree

Let’s move on to engineering because you are after all, the CTO head engineer of Zest and also product person. So were you the main developer of the early product in moving forward

Idan: [14:49] Yes. The entire time of the company I was the tech lead of the company. I think it’s a powerful skill as product because you understand what are the boundaries of your imagination and you understand that there are no boundaries. So you can think of something, on something and then to do it, to create it. So I think an engineering skill, in some level, it’s important to any products, human

Victor: [15:21] That’s true, because you are getting this instant feedback loop of what’s possible, what’s easier, what’s better, what’s quicker to implement or what’s just—what’s going to take a very long time versus—

Idan: [15:36] Well, the low-hanging fruit

Victor: [15:38] Yes, exactly. Exactly. Like, I understand that the problem and now what’s the quickest way we can actually do this? With another technical person is always takes a few cycles of calibration, of getting people on the same level, right, of understanding and bouncing back and forth, whereas you can do that instantly. That is, I don’t want to say the only, but the biggest benefit of a technical founder, not even being able to save money or do things on your own, but really this instant feedback loop on an iteration in your head, I think that’s a—you’re saying that right. But you were not the only developer the entire time, when did you decide you need help, you need more people

Idan: [16:22] It took me a while, but at some point, I realized that I need some help because more and more managing related tasks assigned to me, so I needed more help with the engineering and the development. And this is where, actually, I think I hired the first engineer a few month before I met you. And I think you were the one that actually opened the option to hire more engineers and came up with the idea that I can do it remote, because it was I think, four years ago and the remote work wasn’t developed as today. So you introduced me to my team that actually came with me the entire time. Even until today, even they’re now part of the buyer, the company that acquired WalkMe

Victor: [17:24] That’s a long time. That’s excellent. Well, very happy to hear that. What’s the setup over the years? Who was part of your team? Or is it? How big—what kind of a setup was it? How many engineers? How did you end up working over at the time

Idan: [17:40] The engineering team was, overall, I think, five people, including me. Mainly what I like to do is to find the most accurate person that understands me and can do his job, like achieving it. Like, okay, we set up a goal, it’s clear, let’s do research, do whatever you need to achieve that goal

And when you find people like that, and I think the team with your help, and Gohil’s help, I think we found the people that can help us to build a small team that deliver. We build—for example, we build from scratch an app, mobile app, based on React Native for both of the platform; Android and iOS in three months. The functionality there was full and the same of what we had on the web. So it was super fast from the day we started to the day we launched it, it took us three months and we’re team of three people. So if you find the right person to work with, I think it can move fast. And I trust them to learn more, more and more content

Victor: [19:06] One thing that I’m super curious about is that how did you manage your remote team? Like you said for yourself it was also the first time remotely. Any lessons learned here? I see you’re less of the guy who would document everything and then just assign tiny tasks to everybody, but more like give bigger meaningful chunks out to a responsible person. How did your framework look like here? What would you tell others who work remotely or start working remotely

Idan: [19:37] I’m not sure what to tell other people that start to work remotely. But I think that my method was tracks like I have one track for myself that I understand what I need to do and what are the tasks. And what I need to do actually with new hires is to bring them on to my track so we can move forward. And I’m doing the first few steps and they follow me and understand what I’m doing because they, where we heading to because we are on the same track

And what I do usually at the beginning is, first I’m starting with create tasks, the goal of the task is very, very clear, what we need to achieve at the end, and how will it look like, this is very clear, because these are the foundations

And then from that point at the beginning, I break it to sub-tasks for the engineer. So the new hire can understand the way of work, how do I work? And how do I create, like, a task that can lead me to achieve what I want? So I’m doing it for the first few times. And from that point, I can just tell them the title of the task because they know and they aware of the bigger picture, and they can move on and create it to themselves or to other employees that they now manage

Maybe have another analogy is to, I’m trying to put the food in small bowls. So at the beginning, the people don’t see and don’t need to see the entire picture, they see something vague, but they don’t need to see how everyone works and what everyone now are doing. They just have their own bowl and by the time the bowl is growing, and now they can manage and handle a table because at the beginning, they can’t handle a table of food—the food is analogy to code and components. They can’t handle a table full of food if especially they work in a different timezone. So then they need to have a focus, they need to understand where they started and where they end. And by the time it grow and grow and grow

And actually today, I can say to one of my team members, that I just need to have a storage service and he will get it right away what needs to be done. And even after a few hours, he will come up with an idea, “Listen, we can have it in a—we can add a batch mode to the requests,” and like even to grow the product and actually from an engineer, they think as a product, very technical-oriented product, but think as a product and not just an engineer that’s coding. And I think this is the method of tracking the goals

Victor: [22:35] I love it because it is about context, right

Idan: [22:38] Yes

Victor: [22:38] It’s about getting the context across slowly not to overwhelm initially. But once you’ve built up this mutual context with everybody, that’s when they start understanding on their own. And one thing that I always keep telling our clients is, if you start working with a remote team or anything like that, after—you should definitely visit to build that context, it works so much better if you visit in person, like even once. Did you do that? Or did you see any benefits of that

Idan: [23:07]  Definitely, yes

Victor: [23:09] Awesome, very good. Now, one of the last things we wanted to speak about is actually marketing. That’s the amazing thing. You are really an all-rounder when it comes to product in product businesses. And we wanted to chat about a very interesting marketing strategy that you have also implemented. And the low-hanging fruit people always say is a B2B SaaS, selling directly to big companies, can’t even do your sales-led approach and get people in. But what a lot of other companies are doing is something slightly different, including Slack. Give us a quick overview of how you see that works

Idan: [23:49] From my perspective, marketing wasn’t just how to market the company, but what is the go-to market strategy. And I think the go-to market strategy is a bit different than just the marketing. The marketing is a subject within the strategy because aside the marketing, you have sales, you have product-led growth, you have a few things that actually if you put them together, you have your go-to market strategy

With the marketing field, I had the best partner in the world, I think, Yam. He taught me so many things about marketing. And I think from my personal experience, I became a multitude after working with Yam, and I think again, with the tools, the skill set of the tech tools that I had, plus the marketing hat that I started well, I knew how to market the company in an efficient way. So when I had trouble to find people, I built a few scripts that can help me do things automatically and to market the company faster

The way we decided on the go-to market, at the beginning we didn’t have a go-to market strategy. I think after we pivoted, and after I came back from the US and I realized that, “Okay, we need to set a clear go-to market strategy,” I started to think about it and to implement it. And I think, the most powerful tool, or before that, any B2B tool actually ends with a B2C company. And when you think about it, any B2B business sell to another business, sell to another business, but the end of this chain, you will face a customer, an end user, and one company that sells to so many people

We can take it to the tech world. So we have  Amazon, let’s say, and we have Facebook or Google or the giants like even Apple, and they sell to customers, and they lead an industry of B2B businesses that sells to each other, to sell by the end of the chain to the B2C company. This is my believe, my idea

Another huge thing that I saw is companies such as Slack, Meevo or whatever, companies that go from the bottom, they have a sticky product, they have a clear pain point solution. And what they offer, they offer the end user an experience that is unreplaceable once you start using it. And from that point, if the end user starts to use it, actually, they split the user persona and the buyer persona; the user persona is the end user, the employee of the company; and the buyer persona is someone from the company that needs to sign the cheque

So they target, and they build the product for the end user, the end user start to use it, the employees starting to use it. And then at some point, it’s too wide within the company that the salesperson can go the company and to the buyer persona, and now do the script, tell the script and actually sell the product because, hey, your company is already using it

So now you need an SSL, okay, and you need an enterprise license, this is the method of maybe bottom up. And I thought that when you go to enterprises and you have a cost platform search engine, costs services search engine, so you have the data is under securities restrictions. So the Cisco decide if you can open, let’s say, Confluence to a search engine. Or if you can install an app on Google that get any scopes of the Google Drive. So actually, you need to sell it to the buyer persona, that’s the CIO, the people there, but the experience that you want to have is for the end users. And this is why I adopt and I wanted to build a product that differentiate the other insights engines or search engines, it depends how deep your technology go. And I wanted to have a product that the user experience is unique in this field. And it takes practices from B2C products that you can find, implement them in a search engine or in search engine tool, and then try to go from the bottom, try to sell it to individuals and talk to the individuals

  And all my marketing plan was to individuals, when the sales and the business development was pointing to my buyer persona and the buyer persona, they were people from the CTO office or the CIO office, or sometimes even HR. This was our strategy and it worked really well because then at some point put us in a field of giants and our product was beautiful, was very smooth, very sleek, and you can started working with it. Actually, young people and young workers started, preferred our product than other products that are so old and the user experience is so, belong to the past

Victor: [29:40] Oh yes, 100%. When you build rapport with them and when they loved you, well, the team lead had no other choice than sign you on. I think this is a great strategy, it’s wonderful. Now, we mentioned of course that you got acquired recently, did you get funded in the beginning as well

Idan: [29:59] Yes. We raised the few hundreds of thousands of dollars in 2018

Victor: [30:07] So that’s after you already had a prototype, you already had same users, you already had some things, this was not totally precede or we only have an idea. So it’s more about actually having something already and then accelerating a bit, is that right

Idan: [30:27] Yeah, yeah, something like that. We had something but we didn’t have a company, we didn’t have a business. So we had something

Victor: [30:35] Got it. Got it. Okay, that makes sense. Do you think that founders underestimate the stress set and work of both funding and getting acquired in the end before they do it

Idan: [30:48] What do you mean by underestimating

Victor: [30:50] If you listen to podcasts or read blog articles or if you’ve had no first-hand experience with that, it might seem like it’s a walk in the park and it just naturally happens. Is that how you experienced it

Idan: [31:07] No, it wasn’t a walk in the park. It wasn’t. It was hard, very, very hard. I think to position the company in a way that now you sell a different product, the pivot was a super hard thing to do. Because it’s not just that you change the brand, you change the messaging, and that’s it, you’re ready to go. You need to, like, when you have a board of directors and they need to believe you again, they need to believe that you can take the company again, “Okay, you did something, it wasn’t successful and now we want to have to go to another venture, why? Look at the bank account, look at the burn rate, and explain why, how are you going to do it

And sometimes, as a founder, I didn’t have a clear idea why I want to go that road, but I had the guts feeling of, this is the right path and this is where we need to go. So I think it’s hard, not just to build the product, the build the product, okay, it’s one thing, then to sell the product, it’s another thing, then to market the product, it’s another thing

But having that wind behind you that pushes you and to get it, this is was—I think the hardest part because you are so alone when you decide. And if you will success with your decision, people with, will say that, “Okay, we did it. We, did it.” But if you want success and it will go down, people will say, “What is people?” Your team members, your board of directors will say, “Oh, I told you.” So I think when you make that kind of decision, you’re so alone, and this is the hardest part. It’s not a walk in the park, not at all

Victor: [33:02] Well, even more congratulations, because I know how hard that must have been for you. And it’s amazing how well that worked out for you, so props to that. What’s next for you

Idan: [33:17] So as part of the acquisition, I joined WalkMe. WalkMe is a wonderful company. What we do there is actually—WalkMe saw something that we can say, with all the modesty, I saw as well. And they decided to double down on that solution, to add it to their portfolio, product portfolio. And by acquiring Zest, they purchased the technology actually and they put me to lead this effort of building that product within WalkMe, so this is what I’m doing now. And I won’t leave it until I will achieve it because it’s part of my entrepreneurship journey. I feel that this is what I started. Maybe we can say that this is the real rebranding that we made to Zest because Zest was for the marketing, the new tab, and now actually we branded—we rebranded the product, we rebranded the solution under the beautiful company as WalkMe. So this is what I’m going to do, I’m doing lots of things because you can’t sit and lay back, this is not the time for me yet

Victor: [34:29] That’s great. So where can people find out more about you, about Zest, about WalkMe? And how can they connect with you

Idan: [34:37] So people can first off go to zest.is, the website is still on. Walkme.com, go there and see the product, the relevant product that I’m talking on from the WalkMe portfolio is the Workstation, Walkme Walkstation, like redefining the employee experience, how employees experience the day to day job. As for me, you can just connect with me over LinkedIn, I’ll be happy to chat with everyone, I think

Victor: [35:06] Wonderful. Thanks, Idan, it was super, super insightful. Thanks for getting on the show and looking forward to speak soon

Idan: [35:16] Thank you for having me, Victor, and have a wonderful day

Listen to other episodes!

Subscribe to the podcast newsletter

Subscribe to the podcast newsletter