Tzakhi (00:00.743)
Hi, Jakub.
Yaakov Karda (00:01.829)
Hi, Tzachin.
Tzakhi (00:03.399)
It's great to have you here. We're at the Meet That Capital startup podcast with Jakov Kalda, a serial entrepreneur and founder and startup mentor. We'll probably talk a bit about your latest exit and about your previous adventures as a founder, but I just want to tell the audience, we've known each other for a few years now. We're good friends. You've been a great...
help from me. I've been taking your advice and a lot of stuff and learning a lot from you and it's great to have you on the podcast.
Yaakov Karda (00:36.006)
Thank you, Tzachy. Thank you for inviting me. My pleasure.
Tzakhi (00:40.807)
Um, yeah, so I'm not really sure where to start, but maybe we should just give first, like a bit of an overview on your, on your entrepreneurial journey. So you started, I think the first company you founded was get where. Started off well. Um, it was quite an original idea. You were, you were doing, um, uh, tailored jeans where people could choose a design and have a design made tailored for them specifically. Um,
sounded like a good idea. You were able to raise money for it and pitch it to investors, build a team, and then it collapsed with a big noisy flop. And then you started over, learned from your mistakes, did it better, built a software company called Chata, which did a chat bot. And we'll talk a bit about what you did better.
and sold it two years ago, I think. Almost three years, wow, time flies. And a great valuation, great multiple and well done and holding most of the equity because you basically bootstrapped it except a little bit of help that you got in the beginning from a few investors, which is an amazing story. And you've also written about both parts of the journey.
Yaakov Karda (01:41.99)
Yeah, almost three years.
Tzakhi (02:06.311)
And I know there's more coming out. So I think you have a lot to tell founders about how to do it right and what not to do along the way.
Yaakov Karda (02:17.094)
Yeah, sure, doing that all the time.
Tzakhi (02:20.199)
Yeah. So can we say, is there one big mistake that you think you've made with Getware that you did not make afterwards with Chata?
Yaakov Karda (02:32.87)
Yeah, I think, you know, the number one mistake was actually to try build something amazing without getting much real feedback from the market. Yeah. We thought that, you know, no one has done it before, so we can revitalize the way people buy clothing and so on. But we never bothered to actually, you know, sit down and write down.
the key business assumptions. And you know, I'm now following the Eric Reese advice from the Lean Startup Framework, where he says that, you know, each business is based on founding assumptions and you have to have them clearly stated and validated. So not only we never, you know, wrote it down what are the assumptions, but we never went to actually consciously validate them because...
If we would have done that, we would have seen early on that the business model doesn't work, but we didn't. And that actually made us spend a lot of investor money, our money, and a lot of our time and effort on something that was pretty much not workable right from the start.
Tzakhi (03:51.431)
Yeah, I think there are two approaches to building startups. And one is maybe Elon Musk and Steve Jobs and the idea of building something really innovative and changing the world or changing the market. There's a famous saying by Ford that if he asked people what they wanted, they would want more horses or faster horses. So he built them cars instead. So he knew better than them.
them what they wanted. He was a step ahead of his customer. And then there's what you just said and the whole idea of validating first and answering a concrete need. So how do you choose between those two or is there a middle way? What do you think?
Yaakov Karda (04:39.27)
Uh, you know, I think that, uh, first of all, it's not wise to aim to be Steve jobs or repeat the success of Steve jobs or Mark Zuckerberg or Elon Musk, uh, or you, you name it. You know, the thing is that these are the exceptions. Yeah. And it's like a survivor bias. And I need to say that there are very few survivors, uh, going in like with success.
uh, doing just the kind of stuff that they imagine not taking feedback from the market. Yeah. So it's not a wise strategy. Second, I believe that, you know, um, four didn't actually quite know how to do customer development because if you do customer development properly, you don't ask people what they want. You learn about their needs and how to fulfill them better. And this is.
surely a very nice strategy because, you know, if you learn about your customers and what their needs are and what solutions, kind of types of solutions can, you know, satisfy their needs, then you are, I would say, on your way to success. Because then you're building something, even if it's innovative and didn't exist before that, yeah, still it should fit into the category of the need, because you do it to invent needs, needs exist.
I think that's it more or less.
Tzakhi (06:11.559)
Okay, can you give an example or maybe if you can, we have the example of Gitware and Chata as two opposite examples of doing it wrong and doing it right. So can you talk a little bit about that?
Yaakov Karda (06:24.902)
Yeah, I think I told you about getware already. And the thing is that it was, you know, not that we didn't ask anyone if they liked it. And we asked a lot and people were telling that they liked it a lot and it's an amazing idea and so on. And, you know, even the investors were convinced because if that would be a dumb idea, yeah, probably we would have difficulties raising, but we didn't.
Uh, so the thing is that, you know, um, there are ideas that look amazing and sound amazing, but they're not sort of, and how to distinguish between the two. It's like, for some ideas, people are willing to put their dollar behind their interest and for others, no. So, you know, basically we released, uh, getware and.
all of the people who were telling us, or most of the people who were telling us that it's a great idea, they never actually ordered a pair of jeans. Because it's one thing to design the pair, a thing that's cool, but another, you know, like, okay, I need jeans, so what do I do now? And we couldn't, you know, compete with a normal store or with a normal jeans brand, because people, when they want to have a pair of jeans...
They just go and get a pair of jeans, you know, as easy as that. And with Chakra, we went actually, yeah, the opposite route, I think. You know, we didn't have to worry about validation of the idea. I want to say here that it was not a classic chat bot. Yeah, it was a live chat product. Software as a service, live chat messenger product.
And by the time we were starting, there were actually like 18 or 19 other established products in the market. So my line of thinking was, you know, like, if there is enough space for 18 competitors doing well, there would be space enough for one more competitor and we could be that competitor, especially, you know, if we improve. Yeah. So.
Yaakov Karda (08:39.622)
If we get where we, you know, really invented the thing, with Chetra, we just took what was existing and we improved taking clues from other types of product. Mostly it was Slack, which was, you know, like very, very, very popular at the time everyone was talking about it.
So Slack for the operator side or for the agent side, yeah. And kind of Facebook Messenger or Telegram Messenger as a chat widget with all the features which were actually already common in Slack and common in Facebook Messenger or Telegram, but just didn't make their way to our niche, to live chat software, to support software. So this is what we did.
Tzakhi (09:39.303)
Yeah, I think the important point you made is that there were not simply other companies, but successful companies. So because sometimes there's a swarm of companies that start or go in the same direction because there's a wave. There's AI now, before there was cannabis and blockchain, and suddenly you see a lot of companies doing the same thing.
Yaakov Karda (09:47.782)
Yeah, successful established companies with a long history.
Tzakhi (10:07.335)
That's not what you're talking about. You're talking about going into a space where there already is someone with a proven, with proven success, and then maybe doing it a little better, a little different.
Yaakov Karda (10:19.334)
Yeah, yeah, yeah, exactly.
Tzakhi (10:22.279)
Yeah, so would that be like a strategy for building a new startup, seeing a software company that is relatively new but successful in the market, is getting a lot of demand, maybe VC backed with a lot of money, and then starting from scratch, but trying to just do it a little better and take a piece of its market.
Yaakov Karda (10:43.974)
Yeah, exactly. I think that's the best way if you are, you know, if you actually want to build a business, because if your primary motivation is to bring your innovative product into the world, it's a different story altogether, but I was not there at this time already. So, you know, you have to understand what you want.
Tzakhi (11:05.479)
Yeah, yeah. I think it was, you know, I wasn't with you at that part of the journey, but I remember reading about it and it was a very, you pretty much had your back against the wall because after Getware failed, you really had one more shot.
Yaakov Karda (11:24.39)
Yeah, it felt like this. It felt like this. So, you know, we were sitting with my co -founders. One of them was co -founder of Gitware and another one was a lead product, UI UX expert at Gitware. So we were sitting on the pay show and thinking like, you know, what can we do? What can we do? Because, you know, we didn't want to just say goodbye and part our ways.
And then we thought of a product that was actually very similar to the product we were using at Getware because we had these custom jeans, so we had a lot of support inquiries and we needed to sometimes hold the hand of a visitor, of a user who was ordering jeans. And we were doing it all through live chat and we saw how useful it is and we saw how bad the products, the existing products are. Yeah.
Tzakhi (12:24.615)
Yeah.
Yaakov Karda (12:24.998)
And then we also saw that we have technology, we have access to technology, which could allow building and messaging software almost out of the box, like really, really fast. We used it for our production management system because we had our own production facility in Mumbai, in India, and we had to communicate the production office with the support office, technology office.
So we used kind of a messaging system over there, which was built on a relatively obscure framework, which is called Meteor JS, which offered that kind of features that you need for messaging. And then it was like one plus one equals two, and these two is chatroom.
Tzakhi (13:14.375)
Interesting, interesting. I think there are also some marketing techniques that did work for you at GetWear and then you took them into in Tchata successfully, am I right?
Yaakov Karda (13:28.422)
You know, I would say it a bit differently. The thing is that with GetWare, many of our customers, they were actually people working in IT in different kinds of technological companies, also e -commerce companies and so on. And our first marketing hack or marketing effort that we did was just to send a newsletter to our former...
Tzakhi (13:40.839)
Mm.
Yaakov Karda (13:55.174)
jeans customers, which sounds totally counterintuitive, you know, like we're jeans and you know, here you have a customer support product, but because those customers that we had, they were like really, really, really loyal. They liked what we build. They wanted to help us. So not only they became the first users, but they, um, they send our advertisement or something like this to others, uh, who are working in IT and, um,
This is how we get the first bunch of our users and paying customers also, of course. And then, you know, if we speak about marketing techniques, I want to single out cold outreach because we were doing a lot of cold outreach on a very large scale. I actually don't know.
any other examples of people doing that, like proper cold outreach with customized newsletters, like drop campaigns and so on. Not newsletters, you know, these are like personal emails. I'm just calling it that way. But on the scales of thousands of websites and that actually...
Tzakhi (15:10.727)
You mean thousands of domains that you were using to send, to send.
Yaakov Karda (15:12.678)
Yeah, yeah, yeah. Thousands of domains. Yeah, yeah. No, I didn't mean thousands of domains to send out mails. I mean, thousands of domains of potential customers. So we reached out thousands of people with cold outreach. Yeah, basically this was the start. And then, you know, we were very much a...
Tzakhi (15:22.055)
Oh, OK. OK. OK.
Yaakov Karda (15:40.134)
product -led growth company. So PLG was like very important and the biggest driver of user acquisition was the get chatra link in the chat widget.
Tzakhi (15:56.103)
Meaning? Can you explain that a bit?
Yaakov Karda (15:58.566)
Yeah, yeah, sure. You know, like you have this chat widget on the website. So a person comes to a website of our customers. He or she uses our chat widget to chat with our customer. And he likes the widget. And in the widget, there is an embedded link which says, get chatra or powered by chatra. So this...
we call them end users. Yeah, so this end user clicks on the link, gets to our website and sees and learns more about our product. And then he subscribes and becomes a customer as well. And the thing is that it worked because some of our customers...
they had very, very popular websites. So that means that out of their visitors or end users, as we call them, there were quite many website owners themselves, or company owners themselves, for whom our offer was also relevant. So this is how it worked.
Tzakhi (17:10.567)
You know, I'm thinking about the beginning of our conversation and the difference between the kind of innovation that you had or you tried to have at Getware and then what you did with Chata. And I think there are two types of innovation. There's kind of like, maybe we can call it celebrated innovation where you're just going out to the world and saying, we're doing something new. And then there is the operational innovation, which...
is really crucial, but it's also very creative, meaning when you're building your company, whatever it is, you're constantly looking for new ideas and smarter ways of doing things. And these aren't necessarily something that you're going to talk about publicly or celebrate, but one marketing hack or one way of using cold email and maybe automating the responses, which I know you did,
Yaakov Karda (18:06.342)
Yeah.
Tzakhi (18:08.391)
saved you a lot of time, brought you in a lot of leads and then a lot of customers and changed the whole trajectory of Getchata. And that was also very innovative, except it wasn't innovative in a way of, you know, of singing it out loud.
Yaakov Karda (18:22.598)
Absolutely, yeah.
Tzakhi (18:26.183)
Yeah, so how to think about that kind of innovation when you're building a startup or where does that come from?
Yaakov Karda (18:32.742)
You know, I think a lot of people are shy above that kind of stuff because as you correctly noticed, it is not celebrated. You know, it sounds boring, too much down to earth. There is no, you don't have this feeling like from zero to one, you know, all these startups, success stories. But I actually think that even those innovative startups, which come up in a way of celebratory innovation, they're still doing a lot of, you know,
under the hood innovation of that kind. And this is actually the difference between those startups that succeed and those startups that fail. Because I'm sure you can think of many startups who had great innovative products, but who didn't invest in operational innovation or wasn't capable of operational innovation and failed because of that. And actually, what came to my mind right now is Tesla.
because Tesla, before Elon Musk took the wheel, that was what they were doing. They had this amazing innovative product, but their way of producing automobiles was totally traditional, totally old, totally dependent on external suppliers. And this got them into depth and almost to the company liquidation. And then Elon Musk came and what he did...
course, he did a lot of stuff, but mostly he said, no, now we need to have this, you know, vertical integration. We need to be doing the things which are not normal in the automotive world. And this actually, you know, made Tesla out of the company, the brink and, you know, like passing memory of some Californian sunshine, you know, and into the.
check your notes that we know it is today.
Tzakhi (20:34.247)
Yeah, and I think for a smaller company, this type of under the hood innovation is a lot about marketing techniques, sometimes storytelling, lead generation, positioning, product development, product marketing.
Yaakov Karda (20:56.902)
Absolutely. You know, I also want to stress that I think that we had the smallest team. We were by the time of acquisition, we were a team of nine people, I believe. And the founders were not working full time at the time already because, you know, we were like very operationally optimized. I think our closest competitor,
Yaakov Karda (21:28.39)
Maybe they had like, it was at least 70 people working there, you know, and others, they had hundreds of people working. So that means that actually we were much more effective as a business unit. And because of that, we generated much better, you know, economic results. And that was also a part of, you know, of innovative thinking because we were a hundred percent remote.
right from the start and to remind you, it was like 2015. And in 2015, you didn't have much examples, you know, of 100 % remote. It was like very, very innovative thing in itself. So we didn't have office, we didn't have office expenses. And if you speak about marketing, you know what we didn't have? We didn't have budgets because we were bootstrapped. So we didn't have budgets. And because we didn't have budgets, we had to...
invest a lot into creative thinking. How can we go around with marketing if we don't have money for the paid ads? You know, and this is where actually the idea of cold outreach, where it came from out of necessity, you know, and I had experience then studying the marketing techniques of one of our partly competitor, partly...
a collaborator because we had an integration with them, who had venture funding, and they were investing a lot into AdWords. And the thing is that when we analyzed their spending, we saw that most of the spending, maybe 80 to 90 % is actually going down the drain. It's going down the irrelevant search inquiries, which were not bringing them anything.
Uh, and the now our niche is pretty easy to understand because you know, uh, if you search Google for live chat, uh, many results would be about, uh, adult industry. And these guys were just buying this adult traffic, which was totally irrelevant to them, you know, not even noticing because they had too much fat, you know, they were not curious.
Tzakhi (23:39.655)
Mm.
Yaakov Karda (23:54.31)
And I believe that this mindset of having too much fat, not being curious and so on, that's actually detrimental to the company health, even if you have venture funding. So.
Tzakhi (24:08.231)
Yeah, I definitely identify with this kind of type of thinking and the need to be lean and nimble and move fast. Yakov, this was excellent and thank you. We're close to the end. I want to ask you, like I ask all my guests to give our listeners five tips for startup founders. Would you do that?
Yaakov Karda (24:33.51)
Sure, so I would start with the general tip. You have to be fair with yourself, honest, absolutely, absolutely clear, not lie to yourself. If you have a gut feeling that something is wrong or something would not work out, you should admit it.
It's the number one quality of entrepreneur, I would say, to be able to be honest with himself or herself. Then again, I spoke about it. I want to repeat that you have to write down and formulate all your business assumptions. And the business assumptions are about the product, about marketing and about the users.
And there is actually a very useful framework, which is called link canvas. Whoever is interested can Google it, which allows to ask the right questions. Yeah. And, and then work with the hypothesis that you formulate to validate them. Third is actually the expansion on the second. It's like.
You have to do customer development and you have to do it very early on and you have to continue doing it all the time because superior knowledge of the customer and superior knowledge of the customer's needs is a key to actually satisfying this customer, making him or her a satisfied customer who would help you to continue staying with your customer and recommend your service to others.
And as we know, you know, like that promoter score is very important. So how do you make people give you a high promoter score is you make them happy by using your product. And how do you make them happy by using your product? You aim to satisfy their needs for using your product as good as you can. Besides that, I think it's better to...
Yaakov Karda (26:56.966)
invest in higher asking, higher demanding, but more experienced and more autonomous employees. Because people who don't need a manager, they will save you a lot of headache and so on. I would say that this is one thing you cannot actually save on.
You don't save on human capital, you don't save on employees. You have to take absolutely best people. And I'm not talking about, you know, stars, people with a name, just very, very, very qualified professionals who don't need constant oversight. It could be able to work on their own.
And for the last tip, you know, I would say, I don't think it's necessary to aim for the stars. Yeah. You should aim for something very concrete and it can be, you know, a moving goal. So first you aim for a first sale in that time, or then you aim for that kind of income in a month and you keep it real. You don't...
aim to become a Tesla killer or Facebook competitor and replace iPhones or whatever. Probably each of the founders has their own internal motivations and their own criterion of success. And I would believe that for most of the people it's not to become Steve Jobs. Maybe it's to have the nice fulfilling job that pays the bills.
and allows a certain lifestyle. And I think it's good enough. So work for that. And if you become a target for luck, yeah, then you become a target for luck and you build something much bigger, but focus on the small. This is it, I think.
Tzakhi (29:04.263)
Awesome, awesome. Jakub, thanks so much. Where should people find you?
Yaakov Karda (29:10.342)
You know, I just started a website which is www .co -founder .cc There is a lot of information about me. I like helping people. So if any of our listeners or readers actually want to get in touch, need help, I would be more than pleased to, you know...
offer suggestions, mentoring, consultancy, whatever, so don't hesitate.
Tzakhi (29:46.823)
Awesome, we'll include the link. Jakub, thanks so much again. This was a very insightful episode. If you're listening, wherever you're listening, subscribe to our channels, whether you're on YouTube or on Spotify, subscribe to hear our next episodes and come to meet .capital and subscribe to our newsletter and you'll get five startup tips every week to your inbox. Thanks again, bye.
Yaakov Karda (30:15.014)
Thank you, Saki. Bye bye.
