Thursday, June 24, 2021

“Growth and scaling are the hardest things to get right” - Chainalysis’ Michael Gronager

Earlier this year, Chainalysis announced its $100 million funding round, valuing the company at more than $2 billion and marking the fact that cryptocurrency is now mainstream. Since its Series C in November 2020, Chainalysis has increased ARR by more than 100% year-over-year, doubled its client base and now supports more than 100 digital assets across 10 native blockchains (around 90% of cryptocurrency economic activity). It’s been quite a journey getting here and there’s still a way to go as cryptocurrencies integrate with our global financial system.

I sat down (virtually) with Chainalysis co-founder and CEO Michael Gronager to discuss his learnings from almost seven years at the helm of a high-growth company. He shared his tips for building a global business, hiring, what he’d do differently and more…

The Chainalysis journey

PB: Let’s go back to the start. What was your career prior to founding first Kraken and then Chainalysis? What attracted you to entrepreneurship?

Before Kraken, I was planning and running public research infrastructure projects across Europe. Essentially, I was just doing politics and talking to research councils to get funding. I got to a point where I thought the purpose of the education and research systems we were creating was for people to build companies and that those who could do, should. After a conversation with a colleague, I decided to build something myself. I started coding iPhone apps and got one off the ground for a US company. This gave me some financial freedom, so I quit my job and was soon bitten by the crypto bug. 

I started reading about Bitcoin when the price went crazy high - growing from $1 to $32! - and then crashed to $15 in 2011. I saw Bitcoin as a new paradigm in computing, creating digital scarcity where something digital couldn't be copied and you could only transfer its value or symbolic value. I looked for places to meet other people who thought Bitcoin was cool and found the first ever conference in New York. I met [Kraken co-founder] Jesse Powell here.

How did Kraken come about?

I’d been experimenting with distributed payments online and couldn't figure out whether to create a business around this or not when Jesse contacted me about a crypto exchange he was building. It sounded fun, so I went to San Francisco to join the team and Kraken launched in summer 2013. It was perfect timing - Bitcoin that year went from $10 to $1,000.

How did you get from there to Chainalysis?

Mt Gox, the biggest crypto exchange, went bankrupt in early 2014, losing about half a billion dollars following a hack. This caused a big downward spiral of everything crypto. It was associated with criminal activity, hacks, online drug sales, terrorism and more. No one wanted to talk about crypto, so running an exchange was tough. Talking to banks and regulators in Asia, Europe and the US, I kept hearing the same issues: they couldn't monitor transactions, no one understood the return of funds, and - most concerning - crime couldn’t be investigated. I thought about this, read the original Satoshi article and others on how it was possible to trace, execute and build a data layer crypto. I then decided to try and solve the obvious problem of understanding the flow of funds in the most transparent financial ecosystem ever created.

I left Kraken and created the Chainalysis prototype on my flight back to Europe. I had a lot of Bitcoin code and software so the proof of concept was basically 50 lines of code. I could build out clusters of transactions, enabling you to see different services and create the early map of crypto. It was then a case of finalising it, bringing Jonathan and Jan on board, selling it, and here we are!

Learnings for the next generation of entrepreneurs

Many European founders wonder where to start their company - move to the US or stay in Europe. Why did you decide on New York and then build Chainalysis’ organisation between there and Copenhagen? 

In the best of all worlds, we’d have probably moved to San Francisco. There’s great talent, a lot of investment and programmes like Y Combinator. You can get capital and be up and running in the blink of an eye. But, when setting up, we wanted to maintain a European connection for developer resourcing and build some of the team out there. I also had family in Europe. Having a nine hour time difference between Copenhagen and San Francisco didn’t make sense. Proximity to Washington DC was going to be key for US government customers and the heart of finance was in New York so it made sense to set up shop there. There are two key reasons we didn’t just stay in Europe: there’s a sales momentum and energy in the US that we wanted to tap into to win the global market, and building trust with US government agencies would have been harder if we were seen as a European company. We had to be US-based.

How did you initially think about going global from a sales perspective? With the crypto ecosystem, you’ve got a big buyer in US government agencies, Chainalysis’ European roots, the UK’s GCHQ, and a lot of crypto activity in Asia. It's challenging for a young company to deal with three continents and time zones for sales. How did you do it?

We ran a lot of our sales calls over Skype, sitting in various places doing early or late calls every day with exchanges or law enforcement agencies worldwide. It worked pretty well. We were quite successful selling the product to both government agencies and exchanges purely online. But growing these accounts later typically required travel. Once the customer had bought the product, we had to get on a plane to drive adoption and upsells. I’d be jumping all over the world for these meetings. It was a lot of travel. One of the things I’ve enjoyed with the pandemic is not always sitting on a plane!

Now you’ve had five or six years of global expansion, is there anything you’d do differently?

I think that setting up and building a team in one office with a strong focus on product and design and so on would have been a slight advantage over hiring people via the internet all over the world, so I’d probably do that now.

I’d maybe even have moved to the West Coast at the beginning. When you’re trying to attract commercial talent at higher levels, it still has an advantage. It’s probably 10 times the talent pool of the East Coast and another 10 times that of Europe. This isn’t the case when hiring engineers - the quality across Europe is better than most of the US, in my opinion. But for leaders in sales and marketing, there’s a lot of high growth company history on the West Coast to draw talent from. 

Let’s dig into this. Hiring execs is one of the most important things for high growth companies. How do you view the composition of your team and proportion of people who’ve done the job before versus those growing into roles?

I think it was Eric Vishria who said he’d split it so 75% of the team have done the job before and 25% are growing into roles. I think that's right, but the key question is: “what does it mean to have done the job before?”. There are probably only a couple of COOs who’ve successfully built a company from $5m to $5bn revenue over 10 years and they likely don’t need or want to work anymore. I’m looking for people who’ve experienced high growth. There are tons of companies that have built hundreds of millions of revenue over 20 to 30 years, companies growing at 20-30% year-over-year. These companies grow at a pace most people can handle. They don't experience the same issues as high growth companies and it’s the high growth experience I’m interested in.

It’s important to me that they've been part of the ride overall and seen a company fall apart constantly and need fixing. You're basically driving a car too fast. But high speed racing cars are meant to fall apart. They regularly need new engines and tires and that’s what happens to a company when it grows at 80-100% year-over-year: you need to have the mindset that Band-Aids are your best friend and the company needs duct tape all over. Getting the company into this mode of constantly fixing and changing every component is the hard part. I'm looking for two thirds to three quarters of the team to have experienced that.

I like the racing car analogy - it brings me nicely to the role of company culture and values in keeping things together. What values have you created for Chainalysis?

Early on, we got a lot of cultural input from Techstars. We inherited their value “Give first”, a way of interacting with others so everyone wins. The other value to highlight is “radical gradualism”, which means aiming big but understanding there are many subtle, smaller steps that need to be applied along the way. This is very relevant to the early crypto days where everyone would say, “we’re taking over the world this year, governments are gone, everything’s done and this is happening now”. But this isn’t how change happens. Even the internet took 20 years and that’s fast for global change. Understanding all the steps and winning over stakeholders in the right order is the important part. Radical gradualism can be applied to problem-solving all over the company. Have the mindset of getting to the moon, but recognise there are many steps to building the rocket and getting it into orbit and beyond.

Chainalysis has developed a very mission-driven attitude from working closely with law enforcement. Many things we’re doing are seriously important - people's lives are at stake - and they’ve become a core part of our company culture. More important than value creation, it’s the bigger goal of creating a better world.

This is an important point. Chainalysis has been involved in some high profile cases. What accomplishments are you most proud of?

One that stands out for me is our involvement in the shutdown of the largest ever child pornography site in October 2019. There were more than 300 arrests across 38 countries and at least 23 minors were identified and rescued from abusers as a result of this investigation. I felt that if this was the only thing I ever accomplished it would be good enough for me.

Last year also saw the largest seizure of cryptocurrency - more than $1 billion - in the Department of Justice’s history. We’ve got a lot of “biggest, fastest, most important” cases on our resume and they're all cases to be proud of.

Looking back to when you started Chainalysis, what do you wish you’d known then that you can share with the next generation of founders?

I wish I’d properly understood the nature of fast growth and getting it right from the beginning. Growth and scaling are the hardest things to get right. We all get excited when we see growth for the first time. But it’s important to understand that getting to the point where you have a product, some customers and a million or two in revenue is just the start. Many companies get there, but never figure out how to scale beyond this. Maybe there’s no product-market fit, for example. Or maybe they do scale, but headaches start because they do it too quickly. It’s tempting to grow fast, but it’s hard to reach a stable growth curve. Growing by more than 100% is tough - it’s a muscle that needs to be built over time.

Building a business is always tough especially when growing as fast as Chainalysis. Are there any tips or life hacks you’d share with other entrepreneurs?

Developing routines helps in various ways. I try to exercise every morning, getting up and running so I know it’s done ahead of a day packed with meetings. I try to find joy in the small things. Ensure you have some of that during the day - whether it’s your morning run or cooking, for example. I like to cook as you can mentally get into another zone.

Try to also take one day off a week. I can’t take two days off, but I try to have Saturday as a reset day. Get your mind in another place and don’t think about work for several hours. It’s important for mental health as the other days will be 100% occupied with work.

What’s been the hardest thing about building Chainalysis that you didn’t anticipate?

Probably the fact you become another person on this journey. And you want to, but there's stuff you sacrifice. Not spending much time with my kids is tough. But when you're building something and you get into this mindset, it’s like you’ve swallowed a pill. Change just happens. Some of the life changes are tough, but you get to experience things that very few people do. I'm deeply grateful for that and hope I can share some of this with my kids at some point - this is a journey I can bring them on in various ways too.

Nicolas Brusson discusses BlaBlaCar’s journey from French success story to global winner

“It was all about being practical and preserving culture” 

- BlaBlaCar's Nicolas Brusson

Last month, BlaBlaCar announced its $115 million funding round to support its growth strategy and continue its mission of becoming the go-to marketplace for shared travel. Since its founding in 2006, BlaBlaCar’s story has had many chapters. After rapid international expansion across several continents, as the founding team brought Silicon Valley’s global ambition into Europe, and the extension of its offering to buses and multimodal transportation, BlaBlaCar is preparing for the travel rebound expected as the world reopens. Throughout the pandemic, the company’s community-based model showed strong resilience while the importance of its culture and values shone through. Today, more than 90 million BlaBlaCar community members travel by carpool of long-distance buses across 22 markets. 

Co-founder and CEO Nicolas Brusson spoke to me about BlaBlaCar’s early ambitions to be a European rather than local country winner and its progression to global player. From the company’s approach to international expansion and encouraging entrepreneurship within the team to the importance of avoiding technical debt and setting aside time to “think, read, absorb, and rethink”, read on to find out more…

Let’s start at the beginning. How did you end up heading to Silicon Valley from France to join a startup?

It was entirely by accident to be honest! The original plan was to finish my master’s degree, do a PhD at Berkeley, and become a scientist. But the Valley in 1999 was a new world of startups, venture capital, and stock options. It was like a foreign language to me - I’d never heard of any of this before. I never went ahead with the PhD – I joined a startup instead, as it felt like the right thing to do. And that was the start of an interesting journey. 

1999/2000 was the startup heyday, and I was in the hot space of telecoms – it all looked promising. But then came 9/11 and the severe downturn in the Valley in 2002. We filed Chapter 11, and had to restructure and rebuild the company, which we sold in 2006. This – very non-linear – startup journey was how I initially educated myself on entrepreneurship and raising money, before going through a phrase of expansion, retraction, and M&A. 

You then came back to Europe and joined a venture firm before co-founding BlaBlaCar. How did you go from VC to founder?

After seven years at a startup in the Valley, I knew I wanted to be part of the ecosystem. I liked the “change things, move fast, take risks” environment. But it was practically non-existent in Europe at the time. So, after taking my MBA at INSEAD, I started working as a VC in London, focusing on European tech.

But then I met Fred and, not long after, Francis. Fred had started a website called Comuto, with the simple premise of connecting drivers travelling from A to B with passengers looking for a ride. Back in 2006, that was a very weird concept. There were no social networks, let alone sharing economy then, so it took a while to take off. Until the first seed round in 2010 we were building the company with no funding. 

BlaBlaCar started in France and became a local phenomenon. It took time to build the community, but in 2010/11 things started to explode. What drove you to make the leap from French to European to a global player?

In Silicon Valley, the ambition is always global. Very few startups say they’re building products for California or the US. They’re building them for the world. I wanted to bring that level of ambition to Europe. The first generation of internet entrepreneurs did well, but they were “single country winners” – they were always “the French or German e-commerce company”, for example.

The ambition for BlaBlaCar was to be a European leader rather than just a French winner. It was in our founding team’s DNA. We’d spent a lot of time in the US and wanted to build an international team. We also felt thinking locally was the biggest hurdle for European startups back then - it’s changing now. With competitors in the US often 10 times bigger, they’d become an acquisition target. This became the ambition for many companies in Europe – to build something local and sell it to the category leader. 

We wanted to be that category leader. But, for that to happen, we had to be at least a European winner. We had a good product that worked well in France, so we expanded it across Europe between 2011 and 2014, before moving to a more global scale, launching in Russia, Mexico, and India. Today, we’re a global leader in the carpooling category, but back then that was a pretty new thing in the consumer internet space. The few companies in Europe that we turned to for advice were from Sweden or Israel - only a handful had become a global consumer internet leader.

BlaBlaCar’s global expansion and the different strategies you’ve adopted have been interesting. In several countries, you went through small acquisitions, in others it was larger acquisitions, and in others you started from scratch. What would you advise entrepreneurs expanding globally? When would you go for an acquisition versus an organic launch?

It was all about being practical and preserving culture. We used different playbooks to scale, either hiring someone local, sending someone from HQ to set up a country, or acqui-hiring. This wasn’t buying a business in the traditional sense; we were acquiring teams of entrepreneurs who could build BlaBlaCar locally and have a lot of local autonomy. These teams of two to five people were culturally aligned with us, had the same values and were solving the same problem. Clarity on what we’d give up in autonomy and what we’d retain centrally meant the brand remained consistent. As we expanded, BlaBlaCar never had different names in different locations. 

It isn’t common when acquiring a company to use your brand and give them autonomy on the way it’s marketed and how the team is built. One of the challenges we faced was convincing entrepreneurs to give up their brand and product to be part of a global company. We learned the importance of being clear on our expectations of the local team, as well as the central. 

It’s important to be clear on your own brand, product, and tech platform, too. In your first M&A, it’s easy to believe you can manage two brands and two platforms. But after five or six M&As, you’re in 22 countries, and you have multiple brands, and different products and platforms. It becomes too complicated. Having a single brand and product helped us scale faster. 

Culture is also important.

It’s critical to ensure you have a unified culture, with the same codes of conduct and behavioural principles across different countries. 

You mentioned the importance of having a single platform to scale, but you also need a platform that’s flexible enough to adapt the product to the specificities of different geographies. In 2013-15, BlaBlaCar went through a full replatforming to enable the platform to tackle all these different countries. What did you learn going through this process? What advice would you give entrepreneurs on how to think about the architecture and structure of their products?

A platform will become more complex as it grows over time and will need to be re-engineered. It’s a mistake to think that four or five platforms with different names in different countries will save you from the fact that, after six or seven years, you’ll need to change those platforms and reinvest in tech. Having a single brand, tech team, and platform is much more scalable than multiplying the number of platforms. 

We shifted from being a monolith, in terms of code, to a service-oriented architecture. Doing that as you grow, particularly after being global with lots of specifications for different countries, is painful. You’re constantly wondering whether to continue building new features on the old platform, or slow down and spend more time reinvesting in the platform itself by creating it anew and then building features. But there’s no perfect answer. You need to find a trade-off between investing in your product and features, and continuing to invest in the old platform while migrating to a new one.

We made those hard choices in the last couple of years. We could have launched some features earlier but decided to pause and reinvest in the platform. There’s always a trade-off. Just be careful not to be too short-minded, otherwise you’ll pile up technical debt and soon find out that it takes years of replatforming to move on.

Shifting gears. Let’s talk about BlaBlaCar’s culture and values. I remember when BlaBlaCar launched in Germany. It was a very quick decision. The company managed to make it happen in just a few weeks. This was down to the culture and values you’d put in place. Could you elaborate on the key tenets of these, and how important they were for success?

Culture and values are critical for any company at any stage – and they’re tested in hard times.

Whether you need to make a quick decision, or you’re in a crisis like COVID, you’ll see how resilient your culture is.

We invested in culture early and wanted meaningful values. Firstly, you need a strong sense of purpose and be clear on the problem you’re fixing and why. Internally, we also worked a lot on our general principles around the way we work for our  employees, crowdsourcing them at a company offsite in 2013. We realised that a company’s internal culture - its sense of purpose and behaviours- is very much carried by its founders. However, that culture won’t scale beyond 50 or 60 people so, as you grow, it needs to be formalised. 

It’s important that any internal principles are embodied within actions and processes. We say “Dream. Decide. Deliver.” at BlaBlaCar, for example. While this could just be written on the wall, the agenda of every meeting is tagged either dream (brainstorm) decide (make a decision based on previous dream sessions, but no more room for dreaming), or deliver (provide a progress update on execution)”. This makes meetings efficient, and ensures the principles are relevant. 

We test our principles over time asking people if they’re being applied and how they’re embodied. If they’re not, we either work at fixing them, or drop them and evolve.

BlaBlaCar’s story has many chapters. There was rapid international expansion. The rationalisation of some of the countries which weren’t working. The launch of buses, railroad, multimodal, and then COVID happened. How do you think about resiliency as a CEO, a part of a company’s culture? Did you adapt the values?

Uncertain times test the resilience of your company and culture. COVID has put a lot of stress on the company over the last year. We’ve been tracking employee morale, before and during the crisis, using NPS as a key company metric. We’re proud to say that it hasn’t gone down - we’ve seen consistent employee happiness, even during these uncertain times. We were very proactive though. We over communicated and were very dedicated to keeping the team together and living by our principles throughout. We also stuck to our tech and product roadmap and in fact, there was lots of innovation over the last year, and we were able to ship more product features as we’re investing more in the tech platform. We also held an internal hackathon dedicated to supporting the fight against COVID-19, just at the height of the crisis, and ended up launching BlaBlaHelp as a result, a community app enabling people to support each other with grocery shopping during COVID-19.

Being able to keep the team together, keep your key talent, keep delivering, and keep morale up is the acid test of your culture and values. Every company faces challenges and  bumps in the road, and if people jump ship, the culture may have been written on the wall, but it probably wasn’t embedded in the team. 

Let’s talk a bit about your leadership style and broader views on entrepreneurship. How would you describe your personal leadership style?

Transparency is the main word I’d use - we’ve always tried to push this at the company. Whenever we give a CEO talk, we share lots of numbers and financials. It’s all transparent and open. Trust matters, too. BlaBlaCar was built on trust between members sharing their cars. The fundamental belief is that you give people as much information and context as possible, and assume it’ll result in brighter and better decision making. 

We encourage people to be entrepreneurs internally and talk a lot about the BlaBlaCar mafia that have gone off to set up their own companies. We say BlaBlaCar is a place where you learn and, when you stop learning, you go elsewhere. People can learn for a few years and leave. Sometimes they never leave, they just keep learning. Our culture of entrepreneurship, and accepting that, at some point, people leave and do something else creates a great deal of autonomy and transparency, and a healthy dynamic internally. 

I think the quality of your staff shows in the quality of your alumni network. There’s no stronger signal for attracting new talent than if people do great things after spending time at BlaBlaCar. Today, more than 30 people have left to start a company, with more than €60 million raised. 

What do you wish you’d known back in 2012 when you got the first $10 million investment from Accel? What advice would you give to entrepreneurs starting their journey?

Pick your co-founders and investors carefully. People don’t realise the intensity and length of the entrepreneurial journey.

Successful companies aren’t built overnight - you’re going to spend a lot of time with your co-founders. The same is true of investors. Accel came onboard in 2011, so it’s not just a year or two. You’re looking at five years plus on average.

I’m always a little sceptical when I see those incubators where people meet and – bang! – they start a company. It’s like going speed dating and getting married right away. Likewise with super-fast fundraising - you end up with two new board members you only met the month before. At BlaBlaCar, we typically spent a lot of time and knew everyone for years before they joined the board. 

I’d advise every entrepreneur to invest in those relationships. Don’t see fundraising as just raising cash and getting the best financial terms. Make sure there’s a fit. You’ll be spending a lot of time building your company’s strategy with your co-founders, investors and, more specifically, your board members. 

What life hacks or habits that you’ve developed over the years to cope with the stress of building the company can you share with other entrepreneurs?

I live in Brussels and the office is in Paris, so I travel a lot. I segment my weeks to try and spend at least three or four days a week in the office (pre-COVID) concentrating on the team. I do very few external meetings and avoid emails. 

I always save a day a week at home, with very few meetings, to go through data, and take time to think, read, absorb, and rethink. We all need quiet time, so you need to segment your week and not run like crazy all the time. Otherwise, you won’t have quality time to write or think. Spend less time on tactics, and more time thinking strategically. 

Gloat: the marketplace unlocking workforce potential for Fortune 500 companies

Fun fact: it seems that I end up investing in a cloud HR company every seven years. The first one in 2007 was Cornerstone OnDemand, the second one was Peopledoc in 2014 and the third one is Gloat in 2021. What all of these companies have in common is the ambition to create a category in the HR space: Cornerstone OnDemand pioneered talent management in the cloud, Peopledoc focused on HR Service delivery in the cloud and Gloat is launching a totally new but very high potential platform - an internal talent marketplace that unlocks the workforce potential of large companies. 

As companies are in the midst of adapting their teams to be more flexible and take advantage of remote working, new tools are needed to optimise productivity and ensure equality of opportunities. Gloat has pioneered the Talent Marketplace to solve that, and it’s now becoming a strategic tool for global enterprises. Some of the world’s largest, most forward-looking companies are already benefiting from the workforce agility enabled by Gloat’s AI-powered platform. As the company today announces its $57m Series C round led by Accel, I sat down with Gloat’s co-founder and CEO Ben Reuveni to discuss what inspired him to set off on this entrepreneurial journey, how he has seen approaches to talent change in light of COVID-19 and much more…

Please tell us a bit about founding Gloat, and what inspired you to start the company?

I was in Israel’s intelligence unit, surrounded by computer gurus, algorithmic experts, and mathematicians. One day, my boss asked me to spend 10 percent of my time sharpening the algorithm used by the unit to find talent. 

It changed my life. This idea of helping people navigate their career and find their true place was what initially planted the seed. And spending 10 percent of my time doing something I loved was exciting and meant I was much happier and more creative in my day-to-day work. 

After that, I joined a startup in the storage space, which was acquired by IBM. For the first time in my life, I saw what it was like to be a small employee in a large company – there was no transparency, no visibility, and no agility. It took me ages to initiate anything new. After five years, I decided to see what the next step in my career would be. I had two options – explore outside of IBM, or explore internally. 

For some reason, I thought it’d be easier to explore outside of the company, so it was a bit odd when I told the HR department I wanted to find something new inside IBM. They were nervous – they thought I wasn’t happy or satisfied – the whole process was really unstructured. 

It was about this time I met my co-founder, Amichai, at IBM. And that made the decision for me. We left IBM and started Gloat with the idea that, by using data and algorithms, we could help people navigate their careers. We created an external talent marketplace where we helped people move between companies, showing them how they could develop their career and move to the next opportunity.

And after this initial idea, you pivoted? Tell us about that.

Right. Almost four years ago, we saw that -  about 50 percent of the time - the algorithm showed that the next step for candidates on our platform could be within their current company. This was a lightbulb moment. It inspired us to create the first internal talent marketplace, where we could show these employees that they could find their next career step within their company, and help them navigate their career internally. 

Imagine a product where you onboard employees at one end and hiring managers at the other. You let them find each other by using AI and algorithms. We’re controlling every aspect of an employee’s career – whether it’s a part-time project, full-time job, or shadow learning opportunity – we’re trying to show them how they can develop within that company. It was a win-win situation. The company focuses on the employee, and the employee focuses on their career. Everyone’s happy. 

Can you tell us a bit more about how it works? Where do you get the data on the employee to understand their skills? How do you get the data on job postings, potential projects, or mentorship requests?

We learned early on that data is key to our success. But in my first meetings with large companies, I was shocked to find that the executives I met – CEOs and CFOs, for example – had almost no data on their employees. But with our internal marketplace, the first thing that provides value to the employees is the onboarding process – they’re providing rich profiles about their skills, experiences, and projects. After they give us these data points, we can show them all the relevant opportunities that exist within the company. 

We also learned that, to create a successful live marketplace, we had to understand we weren’t alone in that particular ecosystem. We needed to be integrated with a company’s common platform in order to create a seamless experience for employees and managers. We had to be able to pull information on job openings and career opportunities from all of a company’s data silos in order to create an engaging experience that could be deployed in large companies. 

It’s striking that, from the very early days of the internal marketplace, you managed to sign seven figure-deals with very large enterprises from around the world. How did you start building these relationships as a small company in Israel? How do you build that trust and then deploy your solution across their entire employee base?

Large organisations are often misunderstood as being late adopters of new technologies. But I think it’s the complete opposite. We learned that big organisations have big challenges, and they’re looking for partners to help solve them. 

The Unilever team, for example, knew they had a challenge. They knew they wanted to break the silos within their talent organisation, and were looking for the right startup to help them do that. Gloat was that startup. We began by establishing a trusted relationship where, rather than a vendor, they saw us as a true partner – we’d learn from them, they’d learn from us. And this mutual relationship led to a successful deployment.

Everyone knows everyone in the large enterprise ecosystem so, after we won our first big client, it was easier to win the second, third, and fourth. Everyone was speaking about the impact and success of our solution. I’m proud that we put so much effort in at the beginning. It was so rewarding in the end. 

This was pre-pandemic. COVID really shifted the way people think about work. How did this impact the way people thought about internal talent marketplaces? 

I think everyone’s asking that question right now. But the fact is, the world has changed, and it’s not going to be the same as it was pre-COVID.  

The impact on Gloat has been interesting. Before COVID, we were telling enterprises how important it was to focus on their internal talent. Then, during the pandemic, companies realised they couldn’t rely as heavily on external resources any more. They needed to focus more on their most valuable assets – the talent within the company. Our clients were asking if we could scale to their entire company within two weeks. So many companies have had to adapt their business models during and post-COVID. They needed to be more agile, and were using our product to reallocate talent from under-utilised to over-utilised departments within their business. 

We’re excited about our future. Companies have realised the importance of focusing internally, and we’re seeing that in our pipeline. Rather than a nice-to-have, we’re now essential. 

Gloat has grown and hired very fast in the last 18 months. Any tips for other founders going through hyper-growth on how to find and retain the right person, and make sure they’re a cultural fit?

Our entire philosophy is that people are everything. And not just when it comes to creating a product. It’s part of our core culture – from the interview process to the effort we put into understanding if there’s a cultural fit. 

Everyone’s working remotely right now, so we’re focusing on connecting people together and creating one team. I do bi-weekly Zoom meetings, for example, where everyone can join and ask questions and give feedback. We’ve also deployed our product within Gloat, creating an internal marketplace that’s helped get people working together on the same project – remotely. In fact, our first live conference was created by a project team put together within our internal marketplace. 

To other founders, I’d say it’s time to show you employees they can develop their career within the company – even if they’re working from home. It’s also important for founders to take advice from other CEOs. I like to surround myself with a bunch of successful CEOs and get their advice and perspective on different things.

Being an entrepreneur is hard. How do you cope with the pressure? Any tips on how you organise your time and balance the company, your personal life, and just making everything work?

My secret is my wife. She’s the total opposite of me, and she’s really helped me focus on getting some family time. That’s something I’m always struggling with – especially post-COVID, because we’re all working all the time. But family time’s important to me – the family makes me happy and excited, so I know I’m working for an even greater purpose.