[00:00:00] Omer:
Rami, welcome to the show.
[00:00:01] Rami:
Thanks. Thanks for having me. It's a pleasure being here.
[00:00:04] Omer:
Do you have a favorite quote, something that inspires or motivates you that you can share? Share with us?
[00:00:09] Rami:
I'm not a quote person, but I find myself using the A Seinfeld quote when I'm trying to describe processes. And the quotes goes something like, you cannot knock a Koch vending machine down in one take.
You have to rock it back and forth. And for me, it's always a reminder of there are things that. Has an internal clock and you cannot rush them. So it's always a good grounding for me. So I'm using that a lot. So this is, yeah, that's a quote. I'm a favorite one.
[00:00:39] Omer:
Love it. There's a lot of wisdom in Seinfeld, isn't there?
[00:00:43] Rami:
Yes.
[00:00:44] Omer:
So tell us about Salto. What does the product do? Who's it for and what's the main problem you're hoping to solve?
[00:00:50] Rami:
Software is a configuration platform for SaaS application. When you look at the kind of modern enterprise and enterprise to, to be honest they manage the business of the day-to-day using cloud application, the likes of Salesforce, JIRA, NetSuite, Okta.
Everything is SaaS. And the SaaS is a no-code platform. And what you what these companies are doing on a daily basis and making changes to these application to fit the business. Take an example of Salesforce. What you'll do, again, you'll have a group of people that are changing the configuration of Salesforce to fit what the business does, and that's a daily thing.
They develop solutions around it. And the way these changes are being handled today, it's manual, it's error prong. Basically, you go to the UI of Salesforce and you click and click and click. At some point you'll get a solution. In most cases you'll do it in production and all these things create some kind of a continuous process of misconfigurations happening with this application.
And it's really hard to ma to manage some such and structure process. What we do is we know how to connect to these application, extract the configuration, and basically offer you a DevOps like process for this application. Think about, let's take another application. It takes, let's take Okta, your data configuration in pre production environment.
We'll extract that configuration, show you what you did, and offer you a way to actually automatically move it to production while analyzing the changes that you made if they are within a standard. If you're not making a mistake, if you're taking all the changes. And getting you to production in the same way while backing up your configuration allowing you to restore to a known place, et cetera.
So essentially we are the configuration platform, everything cloud application.
[00:02:41] Omer:
Great. Okay, so we're gonna talk more about that and where the idea came from and some of the early days in getting started. Before we do that, let's talk a little bit about your background. This isn't your first startup.
You have already worked and had three successful exits. I think you sold first company, I think Cisco and Red Hat and Oracle. So just tell us about that. What were some of the other startups that, that you've already built in?
[00:03:10] Rami:
Yeah it's a different, so it's different area in each applic, in each startup.
So I started, my career in the first startup was around networking. We build a fiber optic switch. That was the infrastructure back then. Very physical infrastructure, very real one spent. I was acquired by Cisco, as you said, very fast. It was a good success story. We didn't, after we developed the product within a quarter, we basically covered all costs of the startup.
So we very fast acquired by Cisco. I spent a few years in Cisco doing high end routing, and then I left to do we started a company called Kuber Net. If, open source virtualization, the it's called KVM. This is basically the engine that runs Amazon Cloud, Google Cloud. Oracle Cloud, whatever cloud you want to think about, we developed that yeah.
And it was introduced into the Linux current very fast. And we were acquired again by, by red Hat. I spent two years at Red Hat pushing this in, make sure the product is viable. Left to start another company called Revelo. In Novello, we went a layer above and we did cloud virtualization.
Essentially, we allowed enterprises that are trying to move to the cloud to rent capacity on the cloud without changing the application. That went really well. It was acquired by Oracle, spent two years in Oracle and left to start Salto. So that's basically the background.
[00:04:32] Omer:
And now already you, you have some.
Some great traction with Salto. Can you give us a sense of the size of the business and where you are today?
[00:04:39] Rami:
So what is interesting in Salter compared to the other startups? Usually in the startup, it's a bit cynical, but it's true. You go to a prospective customer, you have to explain that he has a pain.
Once he's convinced that he has a pain, you have to explain to him. Yeah, and I'm, the solution for that in Alto is a little different. The pain is there. People know that they're mismanaging the configuration in these applications. It's something that I'm, whenever I go to talk to a customer.
Yeah, of course. And I have to convince them that I'm the right solution. So far we've been like hundreds of customers, enterprise customers, fortune 100 and large startups from, there's no one vertical. We're the kind of eight figures in ARR and going really nice.
[00:05:23] Omer:
And you've raised just shy of, I think you were telling me 70 million so far.
[00:05:28] Rami:
Yeah. Shy. A little shy of 70. Yep. Yep. From Bessemer, Lightspeed Excel and Salesforce ventures.
[00:05:33] Omer:
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Gearheart's Leadership team even works directly with founders offering deep insight into startup success. Book your free one hour strategy session with their leadership team before the end of May at gearhart io. That's Gearheart.io. So let's talk about where the idea came from. As you were saying this is customers have this pain, but they're not.
They're not, or at that time, certainly haven't been looking for activity, looking for a solution. So it's a new category. So you have you pushing this rock uphill that not only you have to tell them about the pain, but you also have to convince them that they actually need a solution and all of this stuff.
Where did the idea come from and then how did you get started this time with your fourth startup?
[00:06:50] Rami:
So it says an interesting origin story. So previous company, Ravello, the one I talked about before, it was a SaaS product that was connected to Salesforce and Marketo for Salesforce.
In SaaS product, when you develop the product, you have a very. Well-defined process in which you take changes from the idea all the way to production while understanding it, you make mistakes and everything. We were very efficient in that, but when we had to do the sort of the similar changes to Salesforce because it was connected to the product, one of the things, realiz, it doesn't work.
We are not able to do it. We couldn't figure out why it was clunky. It was hard. It was annoying, created a lot of friction inside the organization and for me it was, I thought that back then we're not professional. We're small company don't know how to work this large platform.
We have to learn it at some point. It was something, it was a scar, but I said, yeah, at some point we'll get there. Then we acquired and after spending some time at Oracle, I left and started looking at that problem, trying to understand, curiosity, and then I figured out, no, it's a structured problem because all of these platforms, these new platform are.
Created as a no-code platform because of all the benefits of no-code. No-code is great. You don't have structure. If you don't have structure, you have no way of creating that process because we keep talking about, the difference between code and no-code. One of the biggest differences is code give you structure.
You understand the relationship between the component you, because it's text, you can understand who's doing what. A conflict is not a crisis. Two people are writing on the same line of code. Yeah. You can merge conflict in, in Git and you can do all of those things. As a second nature. When you look at how the similar changes are done in in these SaaS application, these cloud platforms.
Everything is a crisis because you don't have that structure because. It's a so a point and click marathon to get all the changes in, and then you have to replicate it in another environment. It's a nightmare. So what I figured out is that is an industry problem. It's not our problem. So if that's an industry problem, that's an interesting problem to solve.
So this is one how, this is where we start South. South sto put our own money in to begin with to make sure that we can develop a technology, started developing the technology. And then brought the VCs in.
[00:09:19] Omer:
How did you go about validating the idea? Did you just spend time, like having lots of conversations?
Did you build some prototype and start getting some feedback?
[00:09:29] Rami:
As always, you start by talking to people. Start by talking to prospective customers, CIO, trying to figure out if you're in the right direction. Adjust and repeat. And we knew that we have to develop the solar.
What you call the prototype of the technology in parallel. So we did all of that in parallel while feeding it. So it was a, it's a process of, about three to six months of coming up with a prototype that is fed by by feedback that you get from prospective customers. So this is how we created the first one.
And you always miss, it's it's nothing new. You always miss, you always come up with. Things that are not working well? Yeah I can share a story, thought about it a little bit before that, I went to to pitch for a company, the Alto story, and when I done pitching the story, the lady there told, basically told me, that's amazing.
Can I hug you? Yeah, amazing. Cannot hug me, but it's amazing. You get a lot of buzz from someone like that coming back, giving, sharing the feedback. Everybody's happy. Six months later. Six months later, when I came with the product, it was like. No, this is not what I'm looking for. And a lesson from that is, it is a very basic lesson when you pitch something in a, in an early stage that the customer or the prospective customer takes an artistic freedom, understanding what you're saying, because you're not very specific.
That's the nature of thing, because you don't have an enough details. So you build something you pitch something, they hear something else when you come in later on. Things can go wrong. Lesson for me from that iteration is you need to have multiple kind of feedbacks.
And as you go along, as you develop more, give more details, make sure that you are on the right path. And it's not an easy thing. It's really hard to do. You have to be really disciplined. I don't think I'm doing it well even today.
[00:11:25] Omer:
So I'm curious, when you had that first conversation and this person wanted to hug you, what did you show them?
Was it just some slide decks? Was it some work in code?
[00:11:33] Rami:
It cannot show code. These are not technical people, so it's a slide deck mockups or whatever you have from the UI. These are the things this is what we intend to do and these are the things you can show. And by the way, because of the limitation of you know how long it takes you to develop something. Even when we had something that very specific, the first feedback we got at that was real feedback, kind of something you can use was go away because it was not good enough. That was a good feedback. Go away is a great feedback because okay, why?
You can understand why they're pushing back on you. You take the extra step of trying to understand, then you go back and it's really fast to fix. So that is a good feedback. The positive feedback, it goes the direction I talked about before, it can be really confusing.
[00:12:27] Omer:
W hat do you think the disconnect was wa was it like just one specific customer who use this kind of creative freedom to fill in the gaps on what you hadn't described or do you feel like you hadn't really. Nailed the problem, like clearly enough or the solution, like what was the big lesson you learned from that specifically about Salto?
[00:12:50] Rami:
Yeah. The lesson for me is trying to be specific, but all it's inherently problematic because you don't have the specific of the solution yet.
So what you're trying to do is pitch something and get a feedback. So you talk about something it's. It's not, it's hard for you to be really specific early on, and if you're not specific it can take a tangent. They can go in a different direction. Sometimes it's good because maybe they give you a good idea about what they want, but in a lot of cases it's really hard to fully understand what they want if you're not specific.
So it's about being specific, about showing a product as early as you can. And then you start to get the interesting feedback. But, I believe in. Interacting with prospective customers earlier as you can, even if it's just talking about the problem that you're solving, because only then you can get great ideas and how I didn't think about this one, but the risk is what I said before.
You get a two positive feedback on something that is, it's not even close.
[00:13:51] Omer:
In terms of getting to the first 10 customers. You already touched on this a little bit, that you're it's a new category. You have to put in even more effort into convincing them that they need something before you can even get to selling it.
How much of a struggle was that with the first 10 customers? Because at that point, not only have you've got this new category you're trying to convince customers. But there's a whole bunch of stuff that you still haven't figured out and you are figuring out, in terms of the positioning, how to articulate this, all of that.
So how much of a struggle was it getting to those first 10 customers?
[00:14:27] Rami:
Not a lot, as I said before, Salto is, it's a, it's special case where the pain is there. So all you have to do is find the classic early adapters people who are aligned with the vision. It was fairly easy to do here. So you do the one-offs and it's the first 10 customers.
It's never easy. But it's easier. And I don't remember it. It's not a struggle. That's the thing. It's we got early adopters from our contacts from VC contacts. People get excited by the idea of alto because you. One of the things we realized when we started building the idea of alto you creating tools that make people professional, because people who deal with that area of the, it feel like they're being given a task very complex task, but they don't have the right tools to solve it.
You coming in and giving them the tool, they get excited. They may tell you that, Hey, I'm not sure if I'm technical enough to to handle something like that. Then you have to adjust, but the excitement is there. So getting the first 10 was not a struggle, not a problem.
[00:15:35] Omer:
Would it be fair to say that when you were having these conversations.
And you kinda articulate the problem. They all agreed 'cause they were experiencing those problems. And then you talk about how to solve it and how Salto solves it and they get excited and that part was easy, but the bigger problem was that most of these prospective customers weren't out there looking for a solution.
[00:15:59] Rami:
Yeah. One of the things that, so thi this is the main problem of what people are calling, creating category. It's essentially a buying pattern. So if you are trying to fit yourself in an existing budget or existing category that already it exists, you go to sell something. And, the buyer persona looks sideways and they see lots of peers doing the similar thing.
They're just trying to figure out which product. Then it's a feature by feature. If you're creating something new, a new category, and you're going try to, trying to sell it, the first thing that people will do, look sideways. None of my peers is doing that. Why should I be doing that? And the, the default behavior is, okay, I'll wait.
I'll do nothing for now. I understand the pain. It's painful, but I lived with that for the past five years. Why should I change right now? So get that this kind of stone up the wheel. You have to create a base of customer that you can reference, Hey, this one is doing it. That one, that's the hardest thing in creating a new category.
So yes, we did experience that
[00:17:03] Omer:
often.
What a lot of founders look to at this stage is, kind of design partners and working with specific. Companies to build the product. And it's interesting 'cause you were telling me you are almost religious about not doing that and staying away from that based on some hard lessons you've learned from your previous startups.
Can you share one of the stories
[00:17:25] Rami:
Actually, I have a interesting story we didn't talk about. So what's, let's talk about the danger of having what we call a design partner. Design partner can be really opinionated. And take you in a route that is the dead end. And again, when you're early on in a startup, you're looking for that feedback.
You are this is the things that you're looking for. So for me, I tried to avoid design design partnership. I, we had, I think it was the previous company, no, two companies ago. We had a design partner, a big bank, one of the biggest, who was willing to pay us half a million dollar to actually work with them on the subset of the product that we had.
And we analyzed it and we realized that. This will get us nowhere. And the hardest thing, we didn't have revenues back then was initial, was technology. The hardest thing you had to do is tell 'em, no, we're not gonna take the half a million dollar because we'll end up nowhere. On the flip side of that previous company, Nello our first customer, it's not a design partner.
Our first customer was, he was willing to pay us a million dollar a year. Or actually for what we developed back then. Yeah. It was amazing for a kind of the best validation you can have that we gone conquer the world with that. We try to duplicate that. The use case, the persona, the ICP, that's what you do.
That's what you read in books. Take a success duplicated for a year. We couldn't do it. We could not duplicate that. It took us here to realize that was a unicorn. It's not gonna repeat itself. You need to give up on this one. And we overfitted our go-to market a little bit of the product on this one.
So I'm really suspic suspicious on the process of design partnership. I'm trying to have as many as I can. I'm trying to make sure that they have skin in the game. So meaning they have to pay for something. I'm trying to have a few, so I don't over fit. That's the main lesson I learned from those two.
[00:19:29] Omer:
Let's talk about growth and I guess going from the first 10 customers to first million and beyond, w. What did you do? Was there a specific growth channel that worked well for you or was it a whole bunch of things that you were just doing along the way and some, it was, it messier than we imagine when we looked back and talk about the story
[00:19:52] Rami:
is a mess.
You can think. It's always trying to understand the pattern. It's really hard. So you try everything in the beginning, like everybody else. You try. What kind of an emerged? After a while of trying to figure out the data is the best channel that we have is events. And even that is really messy because it's a specific event.
So previous companies, events never worked. You go, you spend a lot of money in a booth, you get a lot of noise, you get thousands of scans. You are happy. You're coming in. You created work for marketing and SDRs and everybody for a few months, and you get, I wouldn't say zero, but close to zero here. We built it a little different here in Alto based on that.
I, in the beginning, I didn't wanna do events even, I said, no, we're not gonna do events. Yeah. And. It is marketing. People push you to do events. I, alright, let's do events. So I can tell you that the way we look at it, the big events don't work for us. Big events are noisy. Big events are Dreamforce reinvent.
They don't work for us. You have to be there for brand or anything else. But it doesn't work because people are coming to have good time to get swag. And it's really get them to work in a sort of professional trying to find a solutions way. Whereas if you take medium-sized events, again, at least for us in Salto, smaller events, it's not that flashy, but people are coming to work and we've created some sort of a very structured way of.
Filtering people in. We have two layers. The first layer is trying to figure out if it's the right persona within the right HTP only. Then they get to the next layer where they get the swag and everything that they're looking for. But then you al you, you already talking about something very specific and trying to get them into the sort of the first meaning of starting to sell to them.
These are working laly for us, most of our leads are NQL coming from these,
[00:21:57] Omer:
how do you do that filtering? So how do you're dealing with these people coming through is it just a matter of qualifying questions you're asking people when they turn up?
[00:22:05] Rami:
Yeah. It's a trick because you have, you don't have a lot of attention from, so it's a combination of asking the right question and pulling them in with that question.
So for each event. As part of the preparation is, okay, what are the qualifying questions? How do we represent that? Who's gonna sit? How do you, who's gonna be the frontline? Who's gonna be it, the backend? So it's a very detailed preparation of, for each event, I. We become like a little bit of a machine for that.
But for every new event you have to reinvent it, try to understand, read the data after that, was it a good event or not? And if it wasn't good event, are you gonna do it next year or not? So it's a process that we created in internally. Yeah.
[00:22:47] Omer:
Got it. Okay, great. So you have that first filter and then the sec, once people pass that's where you are you're having deeper conversations with people and then.
What's, what is the general strategy as if, as the event follow up that you, is this something that you're doing now with Salter that you feel works and we should have done it before?
[00:23:12] Rami:
Yeah, actually when we started within, didn't do that. So the structure of how they're gonna follow up is really important because it's when the leads coming in, if you can have hot leads.
But they can fall. And we had a few examples of that hot leads coming in. Everybody excited. You share everything on Slack, people are celebrating and then basically you forget to do anything about it because you thought that this one is doing that. So what's the process of taking the leads in and if possible, automatically follow up, following up on them to make sure that they are.
Part of the process and I insisted after missing few events and spending the money not getting anything out of it, I insisted of that being automatically to begin with. Even if someone is trying to, if somebody is trying to reach out to them, we should have something automatic because that way things don't fall through the cracks and you miss on those because even if you get something automatic, you'll get a response from someone who was a hot lead.
You respond. So you make sure that you have a process in place regardless of attention or crisis within the company that will get you the lead to the right place. Once you have that, you can start, ad-libbing on that making, an SDR once say, Hey, I want to take these two because I feel like I can, make them work.
Go ahead. As long as you have the, of automating the whole process, you can ad-lib. If you don't have that, you basically just ad-libbing. And that created a, as I told you, a few missed events.
[00:24:40] Omer:
Let's talk about content marketing. That's also one of the. The growth channels that's worked well for you.
Just tell me a little bit about what are the kinds of things that you do as part of your content marketing strategy and what, maybe what was some of the challenges that you've faced in, in, in, implementing something that, that, that's working.
[00:25:03] Rami:
So we're doing a lot of creative things in content marketing.
But I'll start with the challenge. The biggest challenge in content marketing, the two challenges. One is how do you create a cadence? Because it's really easy to create the first, the second one, and then if you don't have anything, going on for a few months, it feels like it's dead and it's worse than not having an, the second one.
Is measuring the effect of that because you can invest a lot in content marketing and you tend to invest a lot in content marketing, but it's really hard to fully understand the effect of that. How do you measure that? Because today in today's marketing, everything is a few touches you could have the content market to the content that you have affect someone to get into your booth in the event this is how you got it, and you measure it on there and you don't understand that the fact that they're there is because of content.
So it's really hard to measure. And when it's hard to measure there's a tendency to when I do need to do the next investment, should I do the investment, should I not? And you end up, yeah, I need to do the investment. So maybe should do half of it. So you not going all in. So it's about discipline.
It's about, knowing or knowing that you have to do it. We did a few interesting things. So one of the things we did, because it's as we said new category, we created what we call alto Leap al lip. It's basically a university of properly managing a configuration for each of the applications. You can go in and consume content, video lessons that are not so specific. Even I can, how do you properly do that? And that in NetSuite or in Salesforce or in Okta. So just to get our brand out there. It's time consuming, but it's, it. I can tell you that it creates a brand around what you do that feels like it's working.
For that, we were able to measure some of it and it worked nice. So that's one thing. One of the things that most companies are doing, and we are doing the same thing. Salary surveys always work because people are interested in that and they'll open, they'll download, you'll get the lead. So doing that, and on top of that, because we're selling sort of an engineering product.
We are doing a lot of technical writing or technical visionary writing kind of thing. This is the way you should do it. This is the right process. Look here, look there. So we're spending a lot of time on that as well. So yeah, we're investing a lot in that. We probably need to invest more, as I said before, but that's a significant channel for it.
[00:27:37] Omer:
Yeah I think this thing about content investment is always a tough thing. The this example that you gave where. You could have invest, whatever you invested in your content marketing. Over the last year could have led to somebody reading something and then turning up to an event. But then when you come to the event, it's the event that gets the attribution for that lead.
And then you're like why do we need to invest in content? I. Let's do more on the, let's move that money. And then you suddenly find maybe things aren't working as, as well.
[00:28:08] Rami:
You always have that discussion with your v, your VP marketing or your CMO is yeah, it's multiple touches. We don't know.
And as a CEO you always get pissed from that. Yeah. You always get pissed because you wanna see you wanna see your dollars working because you have to invest. Yeah. It's, yeah, it's a problem.
[00:28:27] Omer:
Okay. The other thing that you do is, I look at Salta and it feels like an enterprisey product, although it's not really right?
'cause you have customers, a different size of co companies. But I was surprised to see that there was a free tier as well on, on the product. Can you just explain some, the thinking behind that and why you decided to do that?
[00:28:44] Rami:
Yeah. So that's it's an interesting use case.
One of the things we are doing is a platform. It's called impact analysis. Basically it's read only you for configuration. We analyze the configuration for you and tell you a lot of interesting things about them before you go ahead and make changes. In the beginning we thought we're gonna sell that sell it as a feature.
We realized that it's not a feature that it's easy to sell. There is an industry around doing impact analysis or some few vendors, but it's hard to sell that. And we have the unfair advantage that we can also do, not just read, but read and write. So say, you know what? As a way to make an impact to splash in the market, you're gonna give it away for free.
All the impact analysis is away for free and we'll get people in. It worked. We got a lot of people going in the plan of few thousands of companies going on the platform using it on a daily basis. A lot of active users, and it's a. Source of leads for us. The problem with that, if you don't carve out your user or your use case in the right way, and I'll give them the STO examples, people coming to STO to do read only and not necessarily they want to do the read write, which we charge for.
So you end up with sometimes wrong leads or it's not yielding or segment of your users on the free tier is not working at all. But at the end of the day, as we said before on content, it's hard to do the full attribution because they get to experience the brand and the product and everything. And at some point they'll get to the right conclusion and start using us.
So we're not, we're still maintaining the free, it's hard. It costs money and you get a lot of sales people whining about it because they feel it cannibalizes the ability to sell more. But I think it's worth it. But it's, I can tell you that it's always a discussion. Should we continue, should we not?
Because you pay for it. You have to maintain, you have to give support for people using it. So it's always a discussion also.
[00:30:46] Omer:
Are there any challenges when you've got people coming on the free. Plan in, in terms of on onboard, is there like a steep learning curve they have to go through in terms of setup, configuration, onboarding and that sort of thing?
[00:30:59] Rami:
There is some of it, but because it's read only, it's fairly easy. We invested, that's part of the investment, talked before and trying to make a disease possible. It's, I wouldn't say like it's completely trivial, but it's easy to get on board. We're not investing in onboarding them. We have a knowledge base that they can use to help themselves, but it's not a big deal, but it, we went through investing in that area to make it easier for them to get on, on, on the platform.
[00:31:27] Omer:
Let's talk about one of the channels that's been tougher to get working outbound. What's been the biggest challenge there?
[00:31:36] Rami:
Out, it's it's a little bit of, for us at least for all the company I've been involved is it's a little bit of black art because basically you're trying to think about the process.
You have a list of names. People are not necessarily in the market for your product. You're going and try to get them excited over a product. The yield is low. The friction within the organization, people who need to get up on the phone or email or whatever means you're doing get a kind of a stream of nos on a daily basis.
It takes a toll. People hate doing that. It's hard to get people proud about the achievements because, an outbound can take a while for you to get in. But it's something you have to do. It's eat well and exercise kind of thing. It's something that, it's one of the sources that you have to go after.
So we invested in Alta actually in trying to do it better, trying to create a process in which people understand that they would, they will get nos it's okay to get nos. It's part of the, the. The overall outbound thing. This is how a know looks like, and this is how, what you should expect, this is how to get better at that.
And we brought someone in external we've trained our salespeople and SDRs on that. We try to create some kind of, sense of accomplishment of getting those kind of celebrate any accomplishment outbound. But it's still, it's a tough one. Think about the process of getting. Daily go, no, go away.
I don't wanna talk to you anymore on a daily basis. It's hard. But it's some, it yields if you do it as a process, at some point it's starting to yield as long, as the brand become more recognizable. People starting to react to your outbound, but you have to keep the thing going and you have to remind people, yeah, we are, this is why we're doing it.
This is how it feels like it, it's a grind.
[00:33:31] Omer:
Yeah. And do you think it's getting harder now with, 2025 AI noise? Agents, all of this stuff?
[00:33:38] Rami:
In general, every, everything is harder with agents. You're right. Everybody has a budget to spend on AI. So the way you have to tell the story about something about ai I think that, yeah, it's, everybody deals with that we deal with that as well.
But I think. Outbound in general is harder than 25 because people are having a better way of blocking you because of. Rules because it's easier to get an AI to read your emails. It's easier to get the, the outbound motion so you get creative. LinkedIn is a amazing platform to do outbound on, so if you do it in a creative way. And if you have the right way of doing that, you can actually use that. So you make the outbound a little more interesting to your target audience, a little more engaging to your target, but it's still essentially end of the day, it's an outbound notion. You going through a list of names and trying to figure out how to get to them.
[00:34:36] Omer:
We talked quite a bit earlier about the new category and some of the challenges around that, and one of the ways that you were telling me earlier how you try to overcome that was targeting the discretionary budget that your perspective customers had. Can you just explain what you meant by that and what exactly you were trying to do?
[00:34:58] Rami:
Yeah. As I told you before, it's, it was really easy. It's still easy to get people excited about it. The problem in coming with a new category is that there's no. Line item in the budget dedicated for you. So where do you get the budget from? If you can get people excited, they'll use the discretionary budget.
So early on it was easy to get people excited and, talk about discretionary budget. So we built our land pricing and motion, iCP and everything. Our go to market was around that. We get to someone, get him excited, get, price it correctly so they can use the discretionary budget.
And we actually very specific, we want to have a manager or a director be able to approve it so it's fast and it can take a take from that and get into the organization because later on, the way that our product works is you have a lot of way to expand, not just grow more users, but add more applications to it, which is really easy to do.
What happened was 23, middle of 23, when the market started to take a, a dive, the first thing that disappeared with discretionary budgets, along with the, from the organizations, a lot of layoffs and cuts. So what do you do then? So what we realize it's, yeah it's gonna be a struggle to get deal. When I say struggle, it's gonna be longer. You have to go through more processes, show your value, ROI calculation. So if I know that the process is gonna be longer, it's not no longer like a one or two months of of sales cycle we should charge more because the volume is gonna drop. So what we did is we changed our pricing in a way that allow us to charge more.
But we basically turn into usage based pricing, which allow you to tailor it to, the customer have a feel of they can start small if they want to, but when they start using it, get to a higher price very fast. So we changed that. We basically drove our landing a SP, we managed to get it to X in a very short period.
We adjusted the ICP. Meaning, okay, let's go to larger companies. Let's you know it's gonna take longer, so let's spend the time in doing kind of a larger prospect because it's okay. Now we changed the products a little bit, so we had to make a lot of changes and it's not something like this.
The problem with that is. It's not light bulb coming in and say, Hey, the market is going down, no longer discretionary. It takes you a while to fully understand what's going on. Deals that were hot and you're sure you're gonna get them fast, and the expansion was already there.
All of a sudden they're no longer there a customer that was happy. You talked about huge expansion with a, fortune 100 customer. Few months later, early the kind of the churning, because they don't have budgets anymore. So it takes a while to fully figure it out. It takes a while to fully understand how to, what are the steps that you can take?
What is in, within your arsenal? So that's that's it's a shift. I don't have a lesson learned from that other than, think hard. Don't work in a kind of down economy. That's the only thing I can think about.
[00:38:22] Omer:
How did you eventually figure that out? Or what gave you the clarity in terms of, okay, this is what we think is going on and therefore we need to make these changes?
[00:38:31] Rami:
It's, it wasn't one take kind of thing. We always do. We are, the culture in the company is engineering company, engineering culture. We we overanalyze everything. So we had a lot of sessions trying to understand what is the framework, why is it not working? Are we not pitching it correctly? Are we not?
So at some point when it was obvious that the economy is going south okay, let's put that in the equation. Let's see what it yields and let's put this in the equation. Then you start seeing people being laid off. Okay. And budgeting being cut. So the ah, we don't have discretionary budget, that's a problem.
From there on, you start pushing in the right direction by text, fully understand that, because it's never obvious. In hindsight, it was of course that what happened while you are in it, it's really hard to understand what you're seeing.
[00:39:23] Omer:
Yeah. I think it's interesting that despite you having gone through three startups, three successful exits, there's still a lot of, I guess basic or fundamental kind of challenges that you've hit and had to figure out and overcome. Which shows that, you're human just like the rest of us. But at the other hand, it's almost it's al almost like somebody who's doing it for the first time.
It's oh my God. It's this is what I have to deal with. It's, it doesn't get any easier.
[00:39:49] Rami:
No, it's not. It, and it changes because I'm not in the same market. As I told you, each company is a different market. The only thing that I get from experience is the sense of, okay, I've seen worse.
I can live with that. I can find a way around that. That's the main thing. So you always kind, okay. I think I can solve that problem. I need some time. So that's the only thing you get from experience.
[00:40:13] Omer:
Alright let's wrap up. We're gonna go into the lightning round. I've got seven quick fire questions for you.
Let's see. What's one of the best pieces of business advice you've received?
[00:40:22] Rami:
Early on, we had someone really seasoned working with us and I'm an engineer by education, so I love engineering problems. He told me sentence that goes I would replace, or any business problem with 10 engineering problem if I can.
That kind of stuck with me because for me, an engineering problem was, wow, this is hard. We need to solve that. But for me, no, it's not an issue. Solve the engineering issues. I don't wanna have any business problems that stuck with me for a long time. I still use that.
[00:40:51] Omer:
What book would you recommend to our audience and why?
[00:40:54] Rami:
The classic one. I explain why the Innovator's dilemma. It's an old one. It's a good one. As I said, I'm over analyzing for me reading this book other than it's amazing. But it lays the blueprints of why startups make sense. For me, it was like, haha, this is why startups can work. This is why I should be there, because the whole framework that is lays there.
So that was amazing for me.
[00:41:23] Omer:
What's one attribute or characteristic in your mind of a successful founder?
[00:41:27] Rami:
Make decision fast. The biggest thing I see I'm helping entrepreneurs as well. I'm a major investor in that people are afraid to make mistakes. And if you're not making just in time decisions, the organization floats on a default and you'll get the wrong results.
Take the decision. And if you are wrong, admit that you're wrong and fix it, but make sure that you have the right decision in time, because I think that's the toughest thing.
[00:41:53] Omer:
That's great advice. What's your favorite personal productivity tool or habit?
[00:41:57] Rami:
Yeah. If you're not, if I'm not saying Chat GPT these days, it's it came like a moot question.
It's everything. Yeah. I'm doing everything with it yeah.
[00:42:06] Omer:
What's a new or crazy business idea you'd love to pursue if you had the time?
[00:42:10] Rami:
I'll have one. I thought about this question. I'm working with entrepreneurs. If I have an idea I'll push it through someone. I did it a few times, I.
Kind of be part of the ideation of other entrepreneurs and try to push my ideas. So I don't have one that is itching right now.
[00:42:25] Omer:
We'll see if in a few years time what's going on like that. What's an interesting or fun fact about you that most people don't know?
[00:42:33] Rami:
Yeah, I thought about that. That's a tough one.
I call it, I'm logically superstitious. Because the be super prestigious is, again, I'm logical, the be super prestigious, trying to find pattern and a way to influence the chaos in your life and startup. It's ca it's chaotic, but what I'm telling myself is trying to justify it by saying, yeah, the fact that I'm deciding to, walk with my right foot in when I walk in the door, it gives me more confidence.
This is why I can do better things. I'm trying to balance the two, but yeah, I'm super stupid.
[00:43:03] Omer:
Love that. And finally, what's one of your most important passions outside of your work?
[00:43:07] Rami:
I insist of having hobbies. I'm obsessive about my hobbies and I'm spending a lot of time, my off time on those, and I'm changing every six months because I, it needs to be fresh for me.
My last one was motorcycles and track riding. I'm switching back to playing guitars these days because I feel like I didn't play my guitar for too long. So every six months I'll switch and be obsessive about something else because it's get everything flowing and I need something outside of work.
[00:43:34] Omer:
Do you think it also dedicating the time for that also helps you with the business?
[00:43:38] Rami:
Yeah. It gives you perspective because you, otherwise it's day and night. Just thinking about that you getting a loop, you getting in a solar echo chamber. The fact that you're obsessive about something else give you a lot of perspective.
[00:43:51] Omer:
Love it. Rami, thank you so much for joining me it's been a pleasure. And if people wanna check out sto they can go to it's sto.io and if folks wanna get in touch with you, what's the best way for them to do that?
[00:44:05] Rami:
LinkedIn. Rami Tamir can find me.
[00:44:08] Omer:
Thank you my friend. It's been a pleasure and I wish you and the team the best of success.
[00:44:12] Rami:
Thank you. Thanks for having me.
[00:44:13] Omer:
My pleasure.
[00:44:14] Rami:
Cheers.
