He Sold A Company To WeWork And Now Helps Companies Harvest Retail Consumer Behavior Data

Shahar Alster’s career is a testament to the power of resilience, innovation, and strategic thinking in the tech industry. As a multiple-time founder, Shahar has navigated the complex landscape of startups, scaled businesses, and led successful exits.

Shahar’s journey, from his early days in Israel to his transformative experiences in Silicon Valley, offers invaluable insights for aspiring entrepreneurs.

He has also been brought in as an external CEO, raised funding, and has successfully navigated an acquisition. Here’s a detailed exploration of his experiences and lessons learned.

Listen to the full podcast episode and review the transcript here.

A Journey Rooted in Israel’s Startup Culture

Shahar Alster was born in Israel, a country renowned for its vibrant startup culture. After serving three mandatory years in the military, he spent 15 years in Israel’s tech industry.

The discipline and resilience Shahar gained during his military service in Israel played a crucial role in shaping his entrepreneurial mindset.

He learned that whether you serve in combat or infantry units, there are no limits to what can be achieved, a lesson he applied in both, his personal and professional life.

The military taught Shahar that people are much stronger than they think and that our limits are much beyond our minds and capabilities.

This mindset was instrumental in his ability to navigate crises and lead teams effectively, whether in the tech industry or during the challenging phases of his startups. After leaving the military, Shahar went on to study economics and marketing and then, joined the tech industry.

From Military Discipline to Business Acumen

As Shahar recalls, when he started his career in 1999, the tech industry was new to the world. Back, then, the challenge was to connect everyone to the Internet, unlike present times, when we don’t even think about having a connection or network.

At the time, the challenge was how to connect more people in every place in the world through the thing called the Internet. Although Shahar did his MBA In marketing, he was really curious about the Internet, connectivity, and Wi-Fi.

For the next 15 years, he worked in the tech industry more on a local level. He was running a technical company and eventually moved to Silicon Valley to further his career. Shahar’s early experiences in Israel’s startup ecosystem laid a strong foundation for his future endeavors.

His move to Silicon Valley, a hub of innovation and opportunity, was driven by the desire to work on larger scales and with more significant impact. As Shahar explains, around 20 years ago, Silicon Valley was a different place, and it came as a culture shock.

Although Israel is called a startup country, it is a small nation with just 10 million people, which is why it has limitations in technology and innovation. Being a small country, it is a small market, which is why, to work in big companies, one would have to run with the big boys.

Silicon Valley: The Epicenter of Innovation

Moving to Silicon Valley marked a significant turning point in Shahar’s career. He considers it the best place in the world for innovation and entrepreneurs to extend their skills and build companies.

When invited by a friend, Shahar packed his bags and moved to Sunnyville, Silicon Valley, with his wife and three-year-old son.

Here, he co-founded and led two companies, both of which achieved successful exits. His first company, ChooChee, was acquired by Deutsche Telecom, while the second, SpaceIQ, was acquired by WeWork. Shahar experienced the full cycle of a company from the start to the finish line.

Shahar recalls how the company started out with 4-5 people and Shahar himself acting as the VP of technology. He then moved on to take additional roles in the company, and two years later, they had a team of 55 workers and lots of customers.

After the acquisition by Deutsche Telecom, Shahar stayed on for another year. He ran it through the entire cycle of presentation, to a small team, to a funding team, to a full scale to M&A, to one year with another company. It gave Shahar the whole spectrum of experience within four years.

Deutsche Telecom expressed their interest in continuing working with Shahar and his team by starting another company. That’s when they came up with the concept of SpaceIQ.

The Importance of Research and Validation – SpaceIQ

Shahar’s approach to building startups is rooted in deep market understanding and validation.

Since Shahar and his team had a B2B background, they were confident they could help small and big enterprise companies to do what they’re doing better from network management to security to any other problem.

With SpaceIQ, Shahar and his team identified a massive, underserved market in workplace management, particularly real estate management and facility management. They conducted extensive interviews with potential customers to understand their pain points and validate their ideas.

The key problem they identified was that the industry had not been digitized. It was still running with paper, pencil, and maybe spreadsheets. Shahar and his team found a few companies attempting to resolve the problem but with old-school ideas.

Before building a deck and presentation, they started interviewing customers, including over 40 facility managers and real estate managers from companies in and outside of Silicon Valley. They asked questions about the activities they did, their procedures, and the problems they faced.

Two months later, Shahar and his team returned with mock-ups and presented their solution. They had the market size, appropriate timing, zero competition, and potential customers. They also had a product that was versatile and could evolve with the changing needs of the customers.

This rigorous validation process ensured they built a product that truly addressed market needs, which was key to their rapid growth and eventual acquisition.

The Power of Validation and the MVP Approach

For Shahar, validating an idea before fully committing resources is crucial. He emphasizes that an MVP (Minimum Viable Product) should solve a core problem effectively, even if it’s not perfect in appearance.

This approach helped SpaceIQ attract customers early on, providing proof of concept and driving further investment. His mantra: If you’re not embarrassed by your MVP, you’ve likely spent too much time on it.

Shahar’s strategy was to pick out five or six problems that really hurt people and work on them. They first identified move management as the problem and designed a way to solve the problem.

Once people started using it, Shahar added layers of UX and UI, which ensured he always had customers.

Raising Funding and Scaling SpaceIQ

Shahar remembers how getting funding for the company was very challenging. Getting the initial $2M in seed funding involved pitching to many VCs, and convincing them of their concept was tough. After 25 to 30 meetings, Vertex Ventures decided to back them.

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Building the company was a streamlined process because Shahar was working with a team he knew, and they eliminated the team and culture-building processes. This factor helped them to quickly scale the company.

Within two and a half years, they had a long list of customers, including big companies that had previously worked with their competitors. SpaceIQ was working with companies like Tesla, Nasdaq, Facebook, and Splunk Technology.

In Shahar’s opinion, the reason for the success was that they entered the industry with a fresh perspective. Their approach was very different from the competition which allowed them to make their mark in the market.

They also went on to raise a series B $20M round, but since they were short of $2M, Shahar contacted the CEO of WeWork with an offer to invest in SpaceIQ and become a strategic partner. Instead, the CEO made Shahar an offer to purchase the company, which he accepted.

Strategic Exits and Acquisitions

Shahar’s strategic thinking extends to knowing when to exit. When WeWork expressed interest in SpaceIQ, it was not just about the financials but about how the acquisition could amplify its mission.

WeWork was keenly interested in the company’s capability to connect to every data source in every company and take all this data to run the technology, which was the secret sauce. It could help a big organization.

Post-acquisition, SpaceIQ operated independently within WeWork, allowing it to leverage greater resources while maintaining its innovative edge. However, the eventual sale of SpaceIQ due to WeWork’s strategic shifts underscores the dynamic nature of tech entrepreneurship.

As Shahar explains, they sold SpaceIQ once again as part of WeWork to a competitor. This time, they integrated the team as well, which left him open to exploring new opportunities.

Returning to Israel and New Ventures

After years in Silicon Valley, Shahar returned to Israel, where he continued to leverage his experience. He joined Yotpo as a General Manager before moving on to lead Ourcart as CEO.

As Shahar explains, Ourcart specializes in understanding consumer behavior in the retail space and other resource companies.

This move highlights Shahar’s adaptability and continuous drive to take on new challenges, even after multiple successful ventures. He recognizes the fact that his entire network was back in the US.

To open a startup in Israel’s business landscape and to build a team of good engineers wasn’t easy.

However, Adam Fisher, a board member of Yotpo offered him the opportunity to work in the company. He could be the General Manager and build something new but under an umbrella and without the pressure of a board.

Shahar’s rationale was that he could focus only on the execution without worrying about aspects like fundraising and board interactions. Unfortunately, within a year, the company decided to close the product.

Joining Ourcart as CEO

After that, Shahar was approached by headhunters with the opportunity to be the CEO of Ourcart. This was an entirely new experience for Shahar since he had always been an entrepreneur, building a company from scratch, dealing with the execution, raising money, and then going through the M&A process.

Shahar took his time doing due diligence and researching and validating the market before accepting the offer. As explained above, the company specializes in understanding consumer behavior, but with new technology that is complete with AI capabilities,

The business model is to scan physical receipts of purchases customers make at grocery stores and upload the receipts using a program. Scanning these receipts gives them an overview of customer behavior in locations like the US, Europe, and Asia.

The data is then analyzed and used as market research by big brands that can develop insights into what shoppers are doing. They can identify the reasons why customers buy merchandise, groceries, and other products or why they don’t buy them.

Shahar talks about understanding the company’s major assets when he first joined. He identified its strengths and weaknesses and adjusted the structure to align with the opportunities that are now available in the market.

For instance, the new CTO specializes in AI and can understand and implement current technologies. Using the CPQ industry that is now available is essential to keep the company running and competitive. And, this resulted in making some hard decisions about replacing the team.

Shahar also talks about making adjustments in the company’s roadmap to become a better technology provider and help customers gain more value from its products. Without using Ourcart accounts, companies can’t really do their jobs, in Shahar’s opinion.

Ourcart’s product is similar to spreadsheets for accountants and Jira for engineers. To be successful as a marketing manager in any major brand, they need to have Ourcart accounts.

These accounts help understand the customer journey and behavior and other markets and opportunities in real time without spending millions of dollars.

In Conclusion

Shahar’s journey emphasizes the importance of staying dynamic and open to new opportunities in the ever-evolving tech landscape. His story is one of relentless pursuit of innovation, strategic growth, and the ability to navigate the highs and lows of entrepreneurship.

Shahar’s experiences offer a blueprint for aspiring entrepreneurs aiming to make a significant impact in the tech world. He advises them to always believe in themselves and their abilities. He also tells them to be patient and that entrepreneurship is a marathon, not a sprint.

Most importantly, it’s crucial to surround yourself with people you enjoy working with and savor every moment of the journey to building companies, regardless of the outcomes.

Listen to the full podcast episode to know more, including:

• Discipline and resilience learned in the military can significantly enhance entrepreneurial success.
• Moving to innovation hubs like Silicon Valley can provide unparalleled opportunities and exposure.
• Thorough market validation and solving real problems are crucial for startup success.
• An MVP should solve a core problem effectively, even if it’s not perfect in appearance.
• Strategic exits can amplify a startup’s mission and leverage greater resources.
• Continuous adaptation and openness to new challenges are essential in the dynamic tech industry.
• Building a strong, cohesive team from previous ventures can accelerate new startup growth.

 

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