Eyal Lifshitz is the co-founder and CEO of BlueVine which provides small and medium-sized businesses with access to fast and simple financial products through an advanced, online platform. The company has raised $140 million in equity capital and over $400 million in debt financing. Its investors include the likes of M12 (Microsoft), Citi Ventures, Menlo Ventures, and Lightspeed Venture Partners – to name a few. Before BlueVine, Eyal was a principal at Greylock Partners’ where he invested over $100 million in capital in start-up companies.
In this episode you will learn:
- The ideal number of cofounders to have
- Growing yourself as a leader when scaling your company
- The #1 thing to do when starting a business
- The value of patience as an entrepreneur
About Eyal Lifshitz:
Eyal Lifshitz is the founder and CEO of BlueVine in Redwood City, Calif., that gives small businesses advances on their outstanding invoices.
As a third generation small-business entrepreneur, he is passionate about helping small businesses grow and prosper.
Before BlueVine, Eyal was a principal at Greylock IL, Greylock Partners’ dedicated fund for Israel and Europe.
At Greylock, Eyal was involved in investing over $100 million in capital in start-up companies.
Earlier in his career, he was a consultant at McKinsey & Company and an engineer at Texas Instruments.
Eyal currently lives in Palo Alto, California with his wife and two kids. He holds an MBA with high honors from the University of Chicago, where he was a Carlton Fellow.
Connect with Eyal Lifshitz:
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FULL TRANSCRIPTION OF THE INTERVIEW:
Alejandro: Alrighty. Hello everyone and welcome to the DealMakers show. Today, I’m very excited about the guest that we have because he is someone that has been on both sides of the table as an investor and now as an entrepreneur. Without further ado, I’d like to welcome our guest today. Eyal Lifshitz, welcome to the show.
Eyal Lifshitz: Thank you. Great to be here.
Alejandro: Originally born in the U.S. in New York City, but you end up in the army in Israel. How did this happen, and how was life growing up for you?
Eyal Lifshitz: My parents are Israeli. They met in the U.S., and I was born, as you said in New York. Then they had a bit of back-and-forth from the U.S. to Israel. I did go to elementary school and middle school in the beginning of that in the U.S. We lived in New Jersey this time. Then my parents got divorced, and we moved back to Israel when I was about 13. In Israel, military service is compulsory, so I joined the military like most of my high school peers. I elected to go to a combat unit, which certainly shapes your personality.
Alejandro: What did you learn from being in the army?
Eyal Lifshitz: That you can endure a lot more than you think.
Alejandro: You were there for over three years. That’s a significant amount of time.
Eyal Lifshitz: The military in Israel is interesting. You go in as a teenager. You’re 18 years old. You’re hanging out with your friends a moment before, and then you join the military, and the military is very different. There is no “I don’t want to do this.” There are orders. You’ll go to jail if you don’t follow orders. It certainly toughens you up, and it gives you a lot of perspective around what you can and can’t do. It certainly toughens you up mentally as well as physically. It really teaches you about teamwork. The saying, “We’re all under the gurney holding it up.” It’s really true in the military. It certainly is one that is good lessons in the beginning of your adult life that you carry with you, certainly as an Israeli. I think in other places as well.
Alejandro: How did you develop the love for engineering and solving big problems?
Eyal Lifshitz: Engineering to me, I’m not going to claim it was a very deep-rooted love for technology that brought me there. To be honest, I bought my first computer when I was 21. So, I’m certainly not one of those that’s geeks as children and learn to code. My co-founder learned to code when he was 13. That certainly wasn’t me. I used to go to the beach. I surfed when I was a teenager. So, to me, it came out more through curiosity. I completed my military service around the year 2000. Back then, technology was bussing. It was the dot com era, and everybody was going and studying engineering and computer science. I really had no idea what it would be. Like, “I guess there’s so much noise around it. I guess there’s something to it. Let’s give it a shot.” So, a little bit more random.
Alejandro: Your father and your grandfather were both businessmen. They developed their own businesses. How was it for you growing up and seeing your dad and also your grandfather really building businesses and really scaling. What was that for you?
Eyal Lifshitz: Both of them were small business owners. Although small business owners don’t usually refer to their businesses as small businesses. They just refer to it as my business.
Eyal Lifshitz: My grandfather owned a lighting/electricity store for about 40 years. Then my dad had a physical therapy clinic in the Upper East Side of New York for three decades. To me, I wasn’t at the time where my grandfather was running his business. He had already sold it by then. He was already retired. But I did grow up with my dad running his business, and I remember spending my time in his business. It was kind of funny. I remember him as being the boss. He had a small company, small business with five or six employees, but he was king of his domain. I saw the attractiveness of it. He was running it, and I think he enjoyed that freedom to really be the owner and driving that, but at the same time, it came with a lot of stress. I saw times where he was more stressed because either there were issues with employees or there were issues with cash flow. I saw it from nearby, closeup as a child. As a child, you don’t always understand or are able to understand what you see, but over time, as I grew up, I got more of a sense of what was really going on. Yeah. It gave me a real appreciation for the rewards, but also the challenges of running a small business.
Alejandro: Would you say there was probably a time growing up where you were exposed to all this business environment where you probably tell yourself, “One day, I will have my own business?”
Eyal Lifshitz: It’s interesting. I never thought I would. There are some folks that have from the moment they’re born or very early on in their career they know they want to be an entrepreneur. It wasn’t the case for me. I’ve seen it up close. Maybe because I’ve seen the challenges with it. It wasn’t something that I was automatically drawn to. It wasn’t like I graduated from college, and I thought to myself, “Oh, the first thing I want to do is become an entrepreneur.” Actually, if you look at my career, I followed a pretty safe path. I went to a good university. I studied engineering. Then I went to work for a large company. Then I went to a good graduate school, a good university. Then I went to work for a well-known consulting firm. Then I went to work for a venture firm. So, up until I started BlueVine, I’ve actually not taken that much risk. With entrepreneurship or with starting a business, there’s just a lot of risk. I’ve actually taken a pretty safe path until that point. But something in me – I started getting the itch for that entrepreneurship bug, and that happened before I started BlueVine. But it wasn’t something that was with me throughout my life.
Alejandro: Talking about that safe path, it’s really interesting because most of the founders that I interview that are really successful, they have very clear paths that really form the way of thinking about resolving problems or about tackling certain situations. Most of these people either come from investment banking, consulting, VC. In this case, you actually have two of those paths. So, I guess, that makes you a Swiss Army Knife. Going into this past experience, and I want to just hone in here. You worked at McKinsey, and then you worked at Greylock. Let’s talk about McKinsey. What did you learn from your time being at McKinsey?
Eyal Lifshitz: McKinsey is really a great firm to work at. Certainly, after business school. It’s a little bit like an extension of business school. You deal with a whole set of different business issues, and you work on solving them. You consult for typically large companies, and you help them think through various strategic, operational issues. The firm is great. There are really smart people working there that you get to work with side-by-side. You tackle typically very important issues. When companies hire McKinsey to help them think through things, those are usually things that are at the top of the list. Things that are on the mind of the CEO or senior executives. You get to really problem-solve around these things and come up with solutions. By working with many types of companies and potentially industries, you get to experience many of them. You see many types of these problems that potentially in companies, they don’t happen every day. They come once in a while, but you working in this capacity, you work with company after company, so the majority of your work is thinking about really high-level. super important, super strategic things. So, it’s a great opportunity to generally hone your problem-solving and broader business skills.
Alejandro: Got it. One of the things that’s a tough part in the venture world is getting into VC, especially if you’re an outsider; you’re not a founder that has gone through the full cycle or perhaps you know someone. So, you literally went from McKinsey. You made the jump to Greylock, one of the most respected VC firms. For the folks that are listening, people like Reid Hoffman, involved in the firm. You actually invested, I believe, over 100 million with the firm. You were part of the investment team. But first and foremost, how did you get your foot in the door?
Eyal Lifshitz: I joined the Israeli UK office of Greylock. Since then, they’ve spun out. But at the time, they had a full capital for that part of the world. They were looking for an associate/principal. I think I fit the description of what they were looking for. They were looking for somebody with a strong technical background and a business education, and potentially consulting experience. So, I did fit the mold of what they were looking for. That didn’t mean there wasn’t a lot of competition for that role. I’ve heard there were about 100 or more candidates that were interviewing for the one role. So, it certainly was a coveted position. Why did I get it? Who knows? I think maybe I had good chemistry with them. I probably performed okay in the interviews. I don’t know if it’s 100% objective. Part of it is, it is just the level of chemistry that I had in the interviews, and they gave me an offer. It was a great opportunity, and I jumped on it.
Alejandro: Really cool. What kind of stuff were you doing there? Were you like mainly sourcing and helping the investment team in deciding on which companies to invest in? Or what kind of work were you doing?
Eyal Lifshitz: I was the only non-partner investment professional at the time until slightly a bit later when we hired an analyst that reported to me. I did a whole bunch of things because the partnership invested across multiple industries, across multiple geographies, both across continents all and Europe, in the UK, and in Israel. So, I had the opportunity to see a lot of potential investments in different industries, in different stages, and it was just great. It’s looking from the outside in and engaging with really, really smart entrepreneurs that are doing very exciting things. I don’t remember the number of investments that I was part of, but pretty much every investment at the time. It was a really good period because it was 2010 to ’13, just coming out of the Recession. The firm had just raised a new fund, so there was a lot of capital to deploy, certainly more than 20 investments when I was there at the time in several follow-ons. So, a really good time, and I learned a lot. The folks that I was working with were just amazing, and I learned a ton from them.
Alejandro: Then talking about the investments and the process, especially for the folks that are listening, and many of the folks listening probably are either in the process of fundraising or thinking about fundraising. When a firm like Greylock decides to finally place a bid in a company, and they say, “We’re going to put this amount of money in this business,” what is the process that happens all the way from the moment that the partners decide to invest in that specific domain, what does the process look like?
Eyal Lifshitz: There’s a long process leading up to it. Long is relative, but when they actually decide to invest in a company, the entrepreneurs first need to decide if they’re taking that offer. It’s not that every offer that the firm wants to give an entrepreneur, the entrepreneur will take it. Increasingly today, it is a competitive market. There is a lot of competition for good investments. Good companies get multiple offers from investors. So, part of it is to negotiate the offer, and if it is a company that use an investor they really want to invest in, you need to convince them to take your offer. So, there’s kind of that dance that goes on. That part is kind of the terms sheet stage. The VC provides a term sheet to the entrepreneur. Then there’s negotiation on it. After the offer is accepted, meaning both the firm and the entrepreneur sign the term sheet, then I’d say it’s more technical. Usually, there’s legal due diligence, which is more confirmatory. At that point, the VC typically does not do any more diligence. They do all their business diligence up front, so when they offer a term sheet, they want to invest. This is more getting it firmed up from a legal perspective afterwards. There’s usually another couple of weeks of legal diligence. Then when that’s done, the money goes through, which is nice. Yeah, that’s the process. I’m happy to get into anything specific.
Alejandro: Yes, now that you’re looking at it from the founder’s perspective and especially when we have these founders listening, you have three years as an insider as a VC. Now that you’re a founder, you know the don’ts and the do’s when you’re raising capital. For the people that are listening, what are the top three tips that you would give them on fundraising?
Eyal Lifshitz: 1) Prepare. Fundraising requires upfront preparation. You want to come at it with your best foot forward. That means putting together the story that best reflects your company, whether it’s presentation, or pitch, or whatever other material. It changes from round to round, meaning when you’re an earlier stage company, the things you need to prepare are different than you need to prepare in your later stage. However, in either case, being prepared when you come into this is a good idea.
2) Leaving enough time. You don’t want to fundraise with your back against the wall. Entrepreneurs in fast-growing companies typically burn cash. That’s why they need to raise capital, but you don’t want to be in a position where you’re really close to the end such that you’re frantic. You want to give yourself enough time, and particularly, you want more time the more later stage it is, but a good rule of thumb is at least around six months.
3) There’s a little bit of a dating game in finding an investor. The fact that you have a really great company doesn’t mean it’s going to be right for every investor. There’s going to be a matter of also fit. What the thesis of the investor is what industries are looking for and what stage they’re looking for. So, there needs to be a fit. I would encourage entrepreneurs when they go to fundraising to seek the investors and to focus on the ones that are relevant for them. There are more nuances there like, are they really going to invest in a company in this space and other things. It could be a very tedious process if you go super wide as an entrepreneur and meet every single investor out there because the work of investors is to meet entrepreneurs. Generally, their threshold for meeting interesting entrepreneurs is quite low. But you as an entrepreneur, yes, as a CEO, definitely one of your rules is to raise capital, but you also have another job which is running the company, and fundraising is distracting. So, you want to make the process as efficient as you can, and part of that is being selective and thoughtful about the investors you want to meet.
Alejandro: Got it. Very, very powerful there, Eyal. The last question here to close the loop on Greylock, and now we can talk about your journey as a founder is, you were eluding to great companies before, the fact that great companies would receive multiple offers. What does a great company look like?
Eyal Lifshitz: They’re very subjective; no response there; great companies in the eyes of the investor. Investors have their perception of what is a great company. I can give you the more generic bullet points here. Especially when we’re talking about venture investors, they’re looking for growth. So, companies that are growing are more exciting. Then it’s a matter of, certainly in later stages unit economics is the primary unit of economics here. Does it work, or it doesn’t work? When you’re acquiring a customer, are you actually generating more or less profit than you’re actually spending to acquire them, and in what new multiples. Those are the things that people look at. Then after that, it becomes things like the industry, what is the upside here, the market. The market is always in play because people look at it as an indication of how big the outcome could be, but it could be a little bit deceiving because in some cases, markets are formed. The investors that invested in Airbnb; at that time, there was no market. They’re defining a market. The ultimate size of the market is important, but that is something that could be a little bit deceiving because sometimes the company’s actually defining their own market, and over time, it will actually be very large. Then, again, there are other things which are more subjective. Investors have different theses around business models and what is interesting and what is not interesting. Obviously, the team is important. Investors are investing in a company, but they are really investing in the leadership that is leading the company, and first and foremost, in the entrepreneurs. That becomes more important in the early stages of the company. It’s always important, but in the beginning, especially in the seed stage or the early stages, everything is being built. So, the investor is making an explicit bet here that the entrepreneurs, the founders will be able to figure it out even if there are going to be bumps in the road, and they’ll be able to execute on that vision. It’s very important that they’re making that type of bet, so they want to make sure they truly believe in that founder’s leadership of that company.
Alejandro: So, when you’re thinking about teams here, Eyal and founders is there like a common trait that these founders ultimately go out and build something really meaningful. Is there like a common trait that they have?
Eyal Lifshitz: I can’t speak for all investors. I can tell you some things that I’ve seen, and I’ve heard. Generally, investors like to invest in teams that are – in a category. I mean, they’re strong. What does strong mean? A couple of attributes that I think most investors look at is, are they charismatic? Are they good salespeople? Part of that reason is, especially the CEO, you’re always selling. You’re selling to investors. You’re selling to employees. You’re selling to your partners. You’re selling to your customers. So, your ability to communicate and get other people excited about what you’re doing about your vision is really important. That is something that an investor looks at. Are you able to really convince others that what you’re doing matters? That is something that they look at. Obviously, they look at just general intelligence. I’d say another thing is like tenacity and perseverance. It’s not an easy journey. I think from investors that I’ve worked with they really look at the personality of the founders. Are these going to be ones that are able to tough it out and make the tough decisions when they need to? Making easy decisions are easy. Making hard decisions – I know this is kind of [laughter] – but making hard decisions is hard. They want to see that this is an entrepreneur that’s able to make the hard, right decisions when they need to.
Alejandro: I hear you. The hard decisions are definitely hard, Eyal. Let’s talk about your entrepreneurial journey. How did you come up with the idea of BlueVine? How did this come across your head, and why did you decide to leave the safe, comfortable path that you were on to really complicate your life like this?
Eyal Lifshitz: It’s been the best decision of my life, by the way, so far. So, just kind of get that out. Working in Venture, one of the areas that we were interested in when I was at Greylock, Israel, was financial services. Specifically, we were looking quite a bit at financing companies. The general theme of financing as a service, becoming an online one was certainly happening and one that I believed in. The reason is, whether you’re a small business or consumer, consuming or requesting financing online is a better experience than needing to go to a physical location and fill out a mound of paperwork, and waiting three weeks rather than sitting in front of a computer, clicking a few buttons, and getting an instant response. Put aside whether the business model is a sad one or not, but just from the customer experience, it just makes a whole lot of sense. Innovation around customer acquisition and data science and capital markets have made that business model become a viable one. We saw many companies starting during that time, whether it was LendingClub or others that were delivering this type of service either to consumers or small businesses. My idea was: let’s see if there are forms of financing that are in demand but have not yet made that transition. They’re only available as offline services. Can we find something like that and make it an online service? At the time, I learned about invoice factoring, which is a form of commercial financing, a form of business financing. I learned that this is a service that makes small businesses use and has a lot of value to them. But the experience, itself, is very clunky, very offline, and paper-based. I thought to myself, let’s take a page of what others have done, generally, in other areas within financing, and let’s apply it here. Let’s see how we make factoring an online product. That was the initial thesis looking for the outside in. It has substantially evolved as we learned our customers and we understand what the real pain points in the market. But at the time, looking from the outside in as an investor analytically that got me excited. There’s an opportunity here to take this form of financing which has inherent demand. It serves a real purpose, but it’s done in a very archaic way. Let’s modernize it. Let’s take a page from how others have been looking at this market, but doing it in a different area. That was the initial idea, and that’s where we started.
Alejandro: Then, what was the evaluation? Before that, how did you meet the founding team?
Eyal Lifshitz: The founding team, I met through introductions. The benefit of working in Venture is you’re pretty well connected. Then you also have good ears to the market to know where people are considered strong. I benefited from that. I got introduced to my co-founder and CTO, Nir, through a mutual friend. He was, at that time, the CTO in another company. He was about to leave, and basically, like a blind date, we met. We talked, and there was a click. We had a third founder who was part of the team in the beginning, but then over time, we parted ways. Sometimes, the initial team doesn’t work out for the long-term, but we started out as three in the beginning.
Alejandro: Just out of curiosity and for the people that are listening and perhaps thinking about starting something, any tips for how people should be structuring during the dating phase like thing, so that if there’s a falloff, like damage control that can be done?
Eyal Lifshitz: I think every case is different. What I would say, and I don’t know if I’m exactly answering your question. Choosing your founders is incredibly important. It’s a little bit like getting married. You’re going on this really intense journey together, and it’s a bumpy one, and you want to make sure you’re going about it with people that you trust and people that compliment your strength and weaknesses. So, you have the overall right team to start out with. It’s hard because marriages end up in divorce, too, because you don’t always know. So, there’s not always a long-term fit. Part of it is because sometimes the role and the company changes over time, not because it wasn’t a good fit, to begin with. But I think you want to spend the extra time, in the beginning, to make sure that your co-founders are ones that you really think are the right ones for you for the long-term. Part of it is trying to assess early your differences in personalities, working styles, philosophies. Again, very analogous to marriage. If there’s stuff that is not working in the dating period, it’s probably going to be way harder later, so you want to make sure that you’re tuned into what makes you same, what makes you different. You’re different people, and that’s important. You’re bringing in different things to the table, but you want to make sure that this is somebody that is compatible to you. I would say that my recommendation is to start out with no more than two or three founders. I’ve seen teams that come in, and they’re four or five founders. I’d advise against that. In terms of your ownership of the company, you’re splitting it with more people. Founders have different positions in the company as opposed to my executive team, my leadership team that is a very strong and senior team. My co-founder has a special status. Even though I’m the CEO, he’s my partner. It becomes more challenging when the company’s growing. In the beginning, you’re like, “Yeah, okay. I’ll have another three or four founders.” When the company’s large, it becomes challenging to make that dynamic work, especially because as you grow, the founder CEO remains his position, but one of the things that happens as you grow as a company, you may need different people to fill the roles that your earlier co-founders – especially if you have people on the business sides of it, are filling. Many times, it’s an obstacle later on. I think the natural part as a CEO and a CTO, especially in technology companies, maybe a third one if it really makes sense and they’re bringing something to the table that is very rare and is very defined, but otherwise, I’d probably limit it to two.
Alejandro: Yeah. I’m right there with you. I think otherwise, there are just too many egos to manage, and it’s just all over the place. Eyal, let me ask you this. What were the early days like of BlueVine?
Eyal Lifshitz: I’m trying to find the right way to describe it.
Alejandro: A lot of chaos, I’m sure.
Eyal Lifshitz: Yes. Chaos is the right word. I think you’re in a point where you’re trying to create something from, at the time, literally nothing. I’d say everybody is jack-of-all-hands, all trades at the time. Everybody’s doing everything. You are kind of scrambling to put something together and find initial product/market fit. It is a very exciting part of the journey. It is one where you’re like, “Oh, it’s happening! We’re actually doing this.” It’s incredibly exciting when you launch your product, and you actually have customers use it. I created something that is actually valuable to people. It’s an incredible rush. In the beginning, it’s very frantic. The thing is, when you’re so small in the beginning, nobody pays attention to you. So, you’re scrambling to get people to even have a conversation with you. In the beginning, when we started, we needed to find a bank that was willing to work with us; even open an account for us. Today, that’s really trivial. If I want to go to a bank, and I want to start working with them, I’ll have like ten banks who want to work with me today. But at the time, it was like a bank that is willing to work with this company that just formed and allow us to do what we’re looking to do even that was not trivial. Exciting and chaotic is probably the right way to describe it.
Alejandro: I hear you. Talking about product/market fit. What ended up being the business model of BlueVine, and what did product/market fit look like?
Eyal Lifshitz: It considerably evolved. I would say that our product/market fit in the beginning was a limited one. But it was enough to resonate with some segments in the market. We introduced our first version, Online Factoring in beta form in March 2014. Then more [34:30] in June ’14. We were hitting on a need in the market that later as we refined our standing over the need, we changed our product. But in the beginning, we saw that there was need for revolving credit with small businesses that factoring could solve that need, and they weren’t getting access to that type of financing in a good way elsewhere. Or, they were looking for factoring, but the proposition that we were offering, which is more on demand, more seamless, and online, it really spoke to them. So, we’re capturing a couple of types of demands there, but overall, I found it fascinating that as a no-name company, people were still – the demand was great enough so that people were willing to work with us. We did get customers. Over the first six months, several hundred customers. So, we’re doing something right.
Alejandro: Got it. What were some of the early hires? I’m sure that perhaps there was someone to provide some guidance with the regulatory landscape because when you’re doing this kind of stuff, regulation is a beast.
Eyal Lifshitz: We worked mostly with external counsel, so again, as a startup, you are very lean in terms of your headcount, and you leverage resources when you can. For regulatory, at the time before we raised the next round, we were really relying more on external counsel. So, we didn’t have that in-house. Later on, we hired a phenomenal general counsel and Chief Compliance Officer, Sharon, that is now running a team here. But, at the time, she joined slightly later on. In the beginning, we hired more generalists. Folks that had the ability to do multiple things, which means we hired three or four folks in the U.S. They were doing marketing, and business, and customer support, and collections, and all of it. We weren’t in a point, especially when you’re in that phase of a company where you’re able to afford high specialization. This was like all-hands-on-deck. You do everything. That was the type of recruiting we were doing mostly in the beginning, the people that had a somewhat of range and were excited to join a startup where they would be able to wear many hats.
Alejandro: For something like this, it’s capital-intensive to scale a company of this nature. How much capital have you guys raised to date?
Eyal Lifshitz: To date, we’ve raised 140 million dollars in equity capital, and over 400 million dollars of debt financing. So, together, 500+.
Alejandro: Got it. I saw, obviously, as you were saying, once you are in the venture world, you’re connected with other VCs and so forth. You guys raised the Series A fairly quickly compared to when you had founded the business. What was the jump from financing milestone to financing milestone for you guys?
Eyal Lifshitz: We had several rounds. We’ve had 5 1/2. Each time, it was different. The first time that we raised capital, as you said, I basically raised it from Greylock Partners, Israel, which they’re called 83North, and from Lightspeed Venture Partners. There, it was not much more than a power point and a team. We’re going about doing and disrupting this market. They believe that there’s an opportunity, and they really made a bet on me and my co-founders. The next round that we’ve raised was actually pre-empted by our existing investor where the proof that we’ve shown is, we’ve had a couple hundred customers, and we were financing a couple hundred thousand dollars per month. We showed there is product/market fit. We showed that we were able to build here an initial business and that we’re scaling it. The next round, which was led by Menlo Ventures, we were already financing something like 8 or 9 million dollars a month. So, we’ve taken a big jump from the previous one. We started showing scale, and we started showing unit economics. The next round, we started having multi-products. That has come about from our understanding that small businesses, the way they do financing is actually quite more general than what we thought. We came out with factoring, but small businesses have diverse needs, and their needs change over time. So, our strategies become more of a multi-product strategy or cross-financing. Then eventually, even not just financing around financial services. That was the thesis that we continued afterwards and have begun scaling that, which has led to investors making their bets on us and these sequent rounds.
Alejandro: Got it. How big is BlueVine today?
Eyal Lifshitz: Today, we are 280 people. We’ve crossed 2 billion dollars of financing to small businesses. We’ve come quite a long way.
Alejandro: Is it true when they say that when your business is scaling at 2x or 3x or whatever, that is a year, you need to scale yourself from maturing and transforming yourself into a better leader at the same rate? How was that for you?
Eyal Lifshitz: Hard.
Alejandro: So, how did you do it?
Eyal Lifshitz: I try to listen and get feedback. I think I’m generally aware of where I’m strong and where I need to develop. I continuously work on developing myself. I think first of all you need to be aware before you can actually do it. Part of it is, throughout the journey, certainly my role has changed. In the beginning, it was like I was doing everything. For example, our backend system, we were using Salesforce. I was the one that configured all of that, including coding. In the beginning, it was really rolling up the sleeves and doing everything. Then, later on, my role became more of like making sure that I’m hiring a strong team around me that really are more of experts in their respective functions, and giving them the room to operate and empowering them. Then as a company grows, this is about making sure that the overall company is aligned and centered around the mission and vision of the company, making sure that you’re maintaining the culture that you started out with as the company scales, and you actually don’t know everybody by name. So, there’s a lot of evolution in terms of what makes a good CEO at every stage, or what you need to be doing as an entrepreneur. It’s not always easy. I love product. I’m really drawn to product, and I’m super-passionate about it. I wrote half of the specs in the beginning. I still contribute. I remember there was a moment where there was a product manager that was doing something, and I came back, and I offered my own suggestion. I didn’t ask her. I literally went in, and I provided like, “This is how it should be done.” She was very upset with me, which is rightfully so because if you’re hiring great people, you need to let them do their work. She came to me and told me like, “Step back” in so many words. Like, “Let me do my work. If you have opinions, later provide me the feedback, but don’t do the work for me.” That was like a moment of reflection for me is I’m probably not doing the role that I need to be doing at this stage of the company. There were other moments like that. Again, it’s not that I’m perfect. I make a lot of mistakes. I think about those things, and I think that’s the first thing you need to do if you want to get better.
Alejandro: Got it. So, now that we’re talking about listening and learning, there’s one question that I typically ask the guests that we have on the show, and that is based on all of the different things that you know now; being on both sides of the table. You’ve now been with BlueVine for quite a while as well. If you had the chance to sit down and have a chat with your younger self, and give yourself one piece, Eyal, of business advice before you were to launch a business or let’s say before you launched BlueVine, what would that piece of advice be and why would you give that advice to yourself?
Eyal Lifshitz: Business or personal?
Alejandro: Let’s say business, and then maybe we can give a personal one too. Why not, as a bonus.
Eyal Lifshitz: This is tough, like one sentence for business advice. Listen to your customers. I know it’s very clique, but that is the #1 thing. Everything that we’ve done at BlueVine, and how we expand our vision, and the product that we’re looking to deliver, a lot of it has come from our understanding of our customers. What they’re saying. Not just what they’re saying, but also what they’re doing. So, I mean, listen to your customer in a broader sense. Try to understand them. Read between the lines. If you focus on your company and your business around your customer needs, and you’re really building amazing products for them, that is a really strong recipe for building a successful company. I can’t stress that enough, primarily coming from the VC world. VC, you’re looking at things very much from the outside, in. You’re very analytical about it and mathematical about it. As a founder, you really need to grow that muscle of really understanding and listening to your customers.
Alejandro: Very, very powerful. Listening, it sounds so simple, but also, it’s so hard when you’re in it. So, I really love that you’re saying that. On the personal side, Eyal, the bonus one. What would you say to your younger self?
Eyal Lifshitz: One word: breathe.
Alejandro: I hear you.
Eyal Lifshitz: This is a marathon. It is a bumpy journey. It is a hard one. Even in the most successful companies, it’s never a linear, smooth path there, and it can get very hard and very dark. So, just breathe. I try to exercise that advice. Get perspective and understand that you need – this is a long road, and you need to have patience. There’s always another day.
Alejandro: Absolutely. Eyal, for the folks that are listening, what is the best way to reach out and say hi?
Eyal Lifshitz: My email is firstname.lastname@example.org. I have a LinkedIn, and I have a Facebook. That’s me, personally. The company website is bluevine.com. Small business owners, our mission is to empower them and make them successful. We are here 100% focused on that mission.
Alejandro: Amazing. Eyal, thank you so much for being on the Dealmakers show today.
Eyal Lifshitz: Thank you so much.
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