Neil Patel

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Ronni Zehavi’s path to becoming a prominent tech entrepreneur is a testament to the power of passion, perseverance, and seizing opportunities. Starting his career in human resources, Zehavi took a leap of faith and ventured into the tech industry, ultimately co-founding successful companies and making significant contributions to the field. His latest venture, HiBob, has attracted funding from top-tier investors like General Atlantic, Battery Ventures, Eight Roads, and Bessemer Venture Partners.

In this episode, you will learn:

  • Ronni Zehavi’s transition from being a VP of HR to sales and business development
  • The successful journey of co-founding and exiting a content delivery network (CDN) company called Cotendo
  • The experience of relocating to Silicon Valley and achieving a successful exit through acquisition by Akamai
  • Insights on the importance of market validation, choosing the right investors, and listening to customer feedback throughout the entrepreneurial journey

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About Ronni Zehavi:

Ronni has over 25 years of experience in multinational hi-tech companies. Prior to setting up Hibob, he was an Entrepreneur in Residence at the Silicon Valley-based Bessemer Venture Partners. He’s the strategic advisor and co-founder of Team8 Cyber Security, a powerhouse developing disruptive tech in the cyber security space.

Ronni was also the co-founder and CEO of Cotendo, a content delivery network which, in 2012, just four years after it was founded, was acquired by Akamai in a $300m. Ronni has a BA in History and Educational “Management ‘from Tel Aviv University and a MA in Organisational Sociology from Bar-Ilan University.

He’s currently living in Tel Aviv with his wife and four children.

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Connect with Ronni Zehavi:

Read the Full Transcription of the Interview:

Alejandro Cremades: Alrighty hello everyone and welcome to the dealmaker show. So super excited about the founder that we have today because he’s done it so many times here you know like we’re gonna we’re gonna really enjoy this one. You know the building scaling financing and exiting. Okay, in addition to that the entrepreneur. Like in residence which is a really interesting program and that’s where he’s come up with the rocket ship that he is riding nowadays which we’re going to be diving deep into so without further ado. Let’s welcome our guest today Ronie say have welcome to the show. Thanks.

Ronni Zehavi: Hello Nice to be here. Thank you for inviting me.

Alejandro Cremades: So Ronnie originally from startup nation and how was life growing up in Israel give us a walkthrough memory lane.

Ronni Zehavi: Um, you know Israel is a 1 of the most innovative tech hub on the planet. Maybe second to Silicon Valley um there are so many um, a great. Technology companies that were founded in in in Israel ah and become a you know category leaders in in many ah in many markets you know where Israel is very known for cybersecurity. Ah a for agriculture aek.

Ronni Zehavi: Ah, a chip um a a manufacturing and so many examples. But if you look at Israel in general and um, you know several generations. The first generations were the the the early entrepreneurs in the late eighty s. Of the last century and and the 90 s they were all about bringing up a great technology and then selling the technology to large american corporations such as Microsoft Cisco um Intel.

Ronni Zehavi: Those kinds of of players so it was about building a technology and then selling it without investing too much in go to market the second generation in the beginning of this century. Probably the the first 10 years of um, the year of 2000 um, we saw a change shift. Um there um more entrepreneurs believe that that not only they can come up with an innovative technology. They can come up with innovative goto market and and they become more confident um in themselves that they can build. Ah, great companies that can be potentially can be category leaders ah from from Israel. Obviously if you’re in Israel. You have to think you have to think global from day one because you cannot rely on a very small market in Israel. It’s only less than 10000000 a a population. Um, when you build a business in the us the us market is big enough if you build a business in Germany. It’s big enough market or even in Australia and Israel you have to think global from day one. So I think there are some fundamentals and like basic ingredients. That are built into the um a the israeli ecosystem that um will allow you um a a to build something really interesting with high potential. Um, the history of of Israel. Ah, um, goes back to um a when the.

Ronni Zehavi: The state was founded um in the late 40 s and the last century. Um a Ben goion. Ah first bioone ministerer he made ah a decision when the state was only a few years old to invest in the educational institution university universities. So although Israel was very poor. Um country. Um, that just ah finished ah the independence war he decided to invest in bi um a tech institutions and universities in Israel and I think that was the Dna that was embedded into what we see right now. Obviously the the military and the security industry in Israel were the ultimate incubators for ah for innovation and and tech and tech innovation and more specifically so in many cases you see that the people that ended up becoming entrepreneurs. Went through a journey with ah an engineering a a military engineering background. Um very famous it’s there a 8200 um the the famous engineering unit um in Israel that many entrepreneurs graduated from this. Um. Engineering unit and become um a a tech leaders. Um I’m by the way I’m I’m exceptional I’m I’m not an engineer and I did not serve in this engineering a unit. But in general you know I think the the the.

Ronni Zehavi: The investment in education. Ah the the focus in the army all around technology and innovation and not being afraid to fail in thinking out of the box a teamworking. Um you know you work in small teams and you try to solve big. Problems. Um, you know can be specific ones can be bigger ones I think all these together got Israel to be a very interesting country in terms of innovation. Um, a we call the startup nation. Ah there’s a famous book about um about the tech industry in Israel and I think the beauty ah is that there are many businesses today that aim to think big or dare to think big and their inspiration is to um to build ah companies that can be category leaders. In their in their industry.

Alejandro Cremades: And we see for the people that are listening. You know, no surprise when you know we say that you studied history because you just gave us a masterful class. You know on the whole journey. You know on what the country has gone through now in your case, you started your journey in tech. 9098 and you started there with your first company. So how do you land? you know in in the world of entrepreneurship and especially with starting kotendo.

Ronni Zehavi: Yes, so as mentioned I’m I’m not an engineer but my first job in tech ah in the 9098 was in a a a company named comp touch webbased email company. Ah back in the days. Ah. They were try to be. They tried to build them an alternativeative to web-based email. You know what you got from ah Yahoo and and other companies and my first job was a vphr which I connect the dots today because hib. Is all about um hrte. Ah so I I started it as a vpr in in in in my per in my in my first company. Um I was not the founder but I was um, a Vp and then I realized that I find it more interesting. And more challenging and it was more attractive to me to try to see if I can do well in sales and business development. So the founders of comp touch allowed me to switch my career and basically move from being um, a vphr. Ah, to be a asdr ah at the early days and then develop my skills into sales the business development and then I ended up running the the essays and the business development.

Ronni Zehavi: For comp touch for 5 years It was I was responsible for the international a a a go to market in ah in comp touch. Ah and then in 2007? Um I realized that um. Um I want to try it for myself. Um I was not sure that I can be a Ceo I was not sure that they can be a founder but I had a drive. Um you know something innerentic that um, ah was basically pushing me to try it. Um, and I yeah co-founded kotendo with ah a 2 cofounders both teching engineers and we built kotendo kotendo was um in the cdn but cdn space content delivery network we raise capital from um seoia capital we raise. From benchmark and tenaiya capital um, and the idea was to disrupt the cdn market with ah a next generation technology that we have built. Um, it was basically a technology that allowed allowed us. Ah. To deliver content dynamic content and static content in a very efficient way without the need to deploy so many point of presence and you know, ah and agreements with um endless telecos telcos all around the world to deliver the content. Um.

Ronni Zehavi: And it was a very successful journey I relocated to the us ah, a so a year after the company was founded I moved with my family you know took took um, a risk um and moved my family to the silicon valley and but koten was um. A phenomenal success. The company was acquired by Akamai after three and a half years on the road for an exit of a three hundred million a dollar a and and the day after. I became a in a a a a senior vice president with Akamai and.

Alejandro Cremades: And obviously and obviously with some you know cashche in your pockets. So so give us a walkth through memory lane there on the on the actual process like how did the process of this acquisition come about because first company 300000000 x cities is is pretty significant. So how did that whole process. Happen make us make us an insider in there. So.

Ronni Zehavi: Yeah, so um, we were um in the ah we we we considered Akamai you know back in the days as ah as the enemy. Um, so what can we do? That was the question. To maybe be on par with them. So so to allow customers to evaluate us as as a valid alternative to akaine that was the the original um a a vision that we had um and we knew that we will do well in the execution. Um. And ah we um I think it was in 2010 we signed ah a strategic partnership with at and t ah and basically at and t ah ended. There’s Cdn the in our Cdn solution and basically. Move to? um, they like they they white labeled our Cdn offering and they were start selling. Um our platform to you know, big accounts all over the us and then we did very well also in Europe and in in Japan and in Australia. Ah, so and the business was growing very nicely. Ah and we knew that we are we become a threat to the business. It’s not that we won the deals against them all the time. Ah, but we were able to come in and to reduce.

Ronni Zehavi: Um, you know customers used us to reduce the price of I am I if they ended up not coming with us. Ah, but then down the road we did a very good job. Facebook was a customer of Kotendo when it was ah a tiny a startup with only 100000000 users I’m talking about 2010 ah Twitter was um, a a customer of of Kotendo. Um, in some other ah and some other names and at some point Akamai decided to I mean they they sue us. Um, a with ah three a patent infringements. Um that they claim that um that we are infringing their um their patents. Um and and it was ah a validation that if they sue you. It means that um you are a meaningful player. So I remember um a a phone call I got for my investors at Sequoia basically saying congratulations it will this is probably the the most expensive marketing campaign you will do because of the lawyers. But you are number 2 in the market because they they sue you um and by the way um Akamai you know I’m talking about a fifteen years ago. Um, they the strategy that they they they sue companies and they and then they acquire. Um, it was a.

Ronni Zehavi: It was um, a great move for akaai um, by the way I found um a fantastic team h feed in Boston um, really smart people but but and you get a different perspective about running a startup. Versus you know, joining a large corporation you know selling at billions of dollars um so um, so and then at the end I was running the security business unit for Akamai and ah in 2014.

Alejandro Cremades: No.

Ronni Zehavi: Um I decided it was a little bit less than two years after the acquisition I decided to live and then I I joined the teammate ah the cyber security incubation. Um for um, a again less than 2 years and then I decided that. Security is not something that ah makes me excited and and then I left and joined the Bessemer Bessemer Venture Partners as an entrepreneur in residence and high Bob was born um in the incubator. Ah, within within besemer in beginning of 2015.

Alejandro Cremades: So Talk to us about you know some of the criterias when founding a company because I’m sure that you were really thinking about team technology a market. When you came up with Hibob So talk to us about this and then talk to us about how this was implemented for Hibob to come to life.

Ronni Zehavi: Yeah, so um, in general. Um I I recommend entrepreneurs to think about 3 criterias number 1 is the market and number one in terms of priority. How big is the market you want to go after um. Obviously if you go after ah, a niche market a small market. It may be a a aim a must have but then you lose flexibility because the market is not big enough. You cannot pevot. Ah there is no real flexibility to ah to change. Um, and and and to recalculate your journey if if you if you’re about to hit the world. So the bigger the market is you know that that the higher potential when it comes to Highbob we knew that the the the hs market in general. Um, and the fact that um, many companies on the planet will have to um hire employ pay salary to employees. This is endless opportunity. So from our perspective we tick the box huge market. Um, and then we say okay, let’s go after it. The second element is um, the team. How how great is the team. It starts with the founders. My recommendation. Never do it by yourself. It’s very hard, always try to do it with um, a cofounder or more one cofounders.

Ronni Zehavi: When we founded highb bobb we were 4 cofounders 2 left a the early days and it and it was me and my cofounder and Ceo Israel David um, and the third element is technology. Can you really come up with a. Innovative approach. Um a that. The barrier to entry is is high. Um and then you need to ask yourself all the time when the problem I’m trying to solve is it um a must have a a problem. Ah, that you can solve for businesses or it’s a nice to have you know this scale between and nice to have and a must have is very important and you will learn only when you talk to clients only when you interview prospects about about about the 2 options. Again on 1 on one side if it’s a nice to have solution then you may find challenges down the road if it’s a must. You need it. You need it tomorrow. You want to pay for it and and and most likely you will pay more for a better solution. Then you have a clear path for ah for for success now Hibob ah ticks. Um from my perspective Highbob ticks all the boxes. Huge market. Um, a great um a a technological and product team. Um.

Ronni Zehavi: And then and then um and then the technology um and and we are on the mission to transform how people and in organization operate in the modern world of work. So if I go back to um the way we have analyzed the market in early two. So 2015 ah, bear in mine. It was before covid it was before all the craziness that we see today everywhere. Um, we thought that degeneration transformation. The fact that um knew a type of employees. Will be will dominate the way people work. Um, you know it’s basically the the y generation the z generation their expectations about work is different. You know my father and my generation live to work and my children generation is looking to work. Why they live. That’s the big difference between the approach that we have seen before um you know you walk 9 to 5 you work in in office. You walk full time you work in main cities that was the major themes on on the way.

Alejandro Cremades: Um.

Ronni Zehavi: People were working for decades and and then we thought that the generation transformation will have an impact on those themes and and when we design Bob the platform Bob is the name of the platform hi Bob is the name of the company when we designed Bob we thought that um. We need to come up with something completely different so we looked at the the big um Hris or human capital management systems such as workday or oracle a success factors Adp um a sage in the in in the Uk. They were all designed. Um, before the new generation was even was was even more and and and and and we ah we understood and we thought that will be the reality that the the the experience. The employee experience will be different with this new generation. For example. Um, a contingent workforce um was a phenomenon that has to be taken into account flexible flexible work. Ah remote work even before covid and then and when the pandemic um was really making the huge impact. On on the way people work remember in somewhere in April Twenty Twenty one point, three billion people on the planet were forced to work remotely within two or three weeks did this didn’t happen before um and and then.

Ronni Zehavi: Ah, the the the expectations from from from platforms were um, really ah to try to support this new normal so work remote. Um a a flexible working um a a you know? um. All the things that um were on steroids during the pandemic um were something that we thought um a a we expected that to happen so we were ah the right company with the right technology at the right time. To basically give a fantastic offering and solution and must have again going back to the nice to have and a must have a must to um, a to our customers and our client. Um and then since um um I would say made 2020 ah, the company um started to grow. Ah, ah today we serve um, 35 almost 3500 a customers all around the world. We have um, almost 800 employees we have offices in Sydney australia in tel aviv in amsterdam in berlin in london in lisbon in new york um and we have um, engineering centers in ukraine in romania in croatia. Um, so all in all, a very strong team that basically.

Ronni Zehavi: Allows us to um, aim a to innovate and then and then if you ask me? what was so unique about us so you know obviously there are many players in this industry sweet players I mentioned a few names but also point solution. You can find hundreds of um of um vendors. Focusing only on recruitment or only on learning and development or only on payroll. Um, so what? So what was so unique about um about the value proposition. We brought to the game. Um and and two things to expand it one. We were the first player in this industry. To come up with what we call system of engagement. So for for decades hs were built to be system of record. You’re an employee. Ah, ah, you need to be paid. You need to you need to be tracked on your pto and time in attendance. So many records related to you. Ah, forced by regulations and compliance. So the the industry was bid around system system of record and then automation um around around records system of engagement. This is the innovation we brought to the table was basically saying that employee experience. Is the most important thing so basically from thinking only about organization. It was the organization-centric ah we thought that the shift will be people centric and and engagement means that um it has to be beautiful to the eyes.

Ronni Zehavi: It has to be welcoming. It has to be easy to use. It has to be intuitive. But most importantly, the audience are not only the hr ah department and the finance team. The audience are employees and their line managers and their directors or c-suite. So. A platform that will able to engage with all the people in the organization will win the game um and then obviously before Ai was a big buzz. We implemented cool technology. Um, we started with machine learning and then. Artificial intelligence that um, allows us to um, a to innovate and then the definition of the market that we were um, a focusing on was what we call the three m’s so the first m was mid-size businesses. You know. Ah, companies with a round about 100 employees more or less to a few thousands of employees. Let’s say 12000 employees that the first m the second m was more than businesses you know companies with more than mindset. Um use more than. Technologies you know, um and they use Okcta um, aim for security they use slack for collaboration or teamfo or teams of for collaboration. The title of the head of each other is chief people officer as supposed to manpower managers system.

Ronni Zehavi: Really easy indications to see if a business has a modern mind. Do they care about dni yes and no and the third m was multinational businesses. So the the market that we are focusing on is basically um, a group of um. It’s a huge market. It’s a group of a customers all around the world that the current solution either too big for them. You know or it is too small for them so we discovered um a an underserve market. It was too small for the big ones and it was too big for the for the small ones. These are the 3 Ms. And we focus on this market so today our study that every business on the planet that fits into those three m category should be a custom.

Alejandro Cremades: Now Now in this case, you know you guys have also raised quite a bit of money. How much capital have you guys raised to late.

Ronni Zehavi: Ah, 425000000 since the company was founded.

Alejandro Cremades: So that’s incredible I mean what you guys have been able to build is absolutely remarkable now if I had the opportunity you know because incredible journey. You know that you’ve had as an entrepreneur here Ronnie and you know already you know you’re sick on you know, company and. I mean third company. But but this one obviously you know a really big success already if I was to put you into a time machine and bring you back in time and I was to bring you back in time to that moment that you were thinking about maybe starting something of your own you know back in 9098 and you were able to give that younger self one piece of advice before launching a business. What would that be and why given why you know now.

Ronni Zehavi: Yeah, it’s It’s ah it’s a It’s a great question. Um I Think the recommendation start First of all with um, you know looking into yourself. Do you have the um the the resilience. Ah. That needed. It’s it’s emotional. It’s intellectual resilience to deal with the ups and downs. That’s why I recommended not to do it by yourself and and and co-found the business so you have ah you have a group of people. Um a to help you in the journey the ups and Downs. Um. You know happening every day Sometimes you know you know every hour because you can’t control what’s happening around you. So if you think that you have the the characteristics um and the courage and the resilience that a.

Ronni Zehavi: That will allow you to to go into this journey then then do it by the way if you don’t if you don’t know go and talk to entrepreneurs who did it before and try to learn as much as you can from berickcks from their experience. You know how does it feel to be ah a up. And how does it feel to be at the down you know, talking about the ups and downs and how you manage yourself and how you balance yourself between the ups and the downs. So one goes to you as an individual with with the question and obviously experience um, is is important. So. My recommendation is surround yourself with um with a great um a people that did it before and that can give you a smart advice how to do it. The second thing is um, don’t do it by yourself and then the third one is. Be very focused on answering the questions you have about the business. Obviously as entrepreneur you are bias. You’re in love with your idea you really believe in in in in the problem you try to solve but you need to be very careful. By listening to the feedback you get from ah prospects and customers and and and market experts and industry leaders basically to help you validate if the answers that you are hearing are.

Ronni Zehavi: Basically leading you to the right conclusion about the business. For example, is it a nice to have solution or is it a massive It’s very clear must have solution mean that is a big problem that um, everybody wants to solve it and even though there is an existing problem if you can so. Solve it in a different way. Um less cost effective or ah or um, a or um, you know, easy to use or whatever then they will choose you and they will pay you or even they will pay you more than what they pay for the other if it’s a nice to have then who cares? Um, and you need to be extremely. Ah, a disciplined and open minded to hear those feedback and by the way it’s during the journey. It’s not only at the beginning whenever you move into a new market or you launch a new model you’re going into the basic and and and really listen. To the market feedback so you need to you need to know how to ask great questions. But more importantly to listen to the answers now it start with you as an entrepreneur and then you need to make sure that your um, your management team the organization you know the team leaders they’re all adopting the same Dna when it comes to um, a a to a to a great dialogue between entrepreneur management company and the market if you don’t do it right? You will hit the world. No doubt and then hitting the world cost you money.

Ronni Zehavi: Frustration and you lose because you are not tracking the right opportunity.

Alejandro Cremades: I Love that so runny for the people that are listening that will love to reach out and say hi. What is the best way for them to do so.

Ronni Zehavi: Um, a number one ask yourself? are you ready number? 2 um, go and talk to the people who did it before they will help you come up with the right questions about the business. They will the the right question will challenge your idea. The way you look at the idea and then get people experts that can help you validate the answers. So for example, you think that building and a model is is a killer and you and you’re really solving a big problem. Then you need to verify it by listening to customers by the way 5 is not enough 10 is not enough I’m talking about twenty thirty fifty discussions with customers by the way my recommendation is to record the sessions if you can of course and then listen again to the. Question you have asked. Um and but and also to the answers. Ah, you’ve got then um if it’s up to you choose the right investors. Um I was lucky in my career to have a really fantastic investors. Um, a. Investors ah and entrepreneurs. This is a cato wedding. You cannot divorce. They are with you a till the end till the awfully did the exit and you want to choose first of all great people and you should do your reference checking on.

Ronni Zehavi: In the specific partners talk to other entrepreneurs who worked with this investor before and also who is the rent um and can do they have um, deep pockets can they really support you are they are they you in the market. Yes, and no. Ah so choosing investors is is critical. Um, it’s not an easy one because um, sometimes you cannot choose the investor because you you go with whoever is giving you money but it is something that you need to take into account. And and don’t forget at the end of the day you have only 1 venture to execute and to win an investor has a portfolio. So if it’s not you. It may be um and maybe 2 other businesses that they invested in and for you, it’s it’s only this you live or you die on. On on on on your venture.

Alejandro Cremades: I mean the biggest decision for sure and obviously you know like Ronnie very active on Linkedin and perhaps a other platform. So I guess hey Ronnie I just want to. You know? Thank you on behalf of the listeners. You know also myself for really taking the time to be with us. It has been an honor to have you on the deal maker show. Thank you so much. Rony.

Ronni Zehavi: Thank you, It was pleasure talking to you.

*****

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