Tzakhi (00:00)
I'm Max.
Max Simonovsky (Soapy) (00:01)
Hey, it's Sachi.
Tzakhi (00:03)
It's really great to have you. We're at meet .capital startup podcast with Max Simonovsky, a great friend and an excellent founder, founder of SOPE and CEO of SOPE. I've known you right from, I think the inception of SOPE and seen a lot of what you've done over these years from 2018. And you've done an incredible job.
Max Simonovsky (Soapy) (00:30)
Mm -hmm.
Tzakhi (00:33)
And I was so happy to hear that you, when you told me that you're now looking to kind of share some of your knowledge and experience. So welcome.
Max Simonovsky (Soapy) (00:45)
Saki, it's great to see you. It's been a while, right? Since 2018, it's been a while. I'm happy to be here and share some of the experience and the knowledge that I gather, captured and harnessed along the way. I think it's about time for me to give back and I'm happy to do it.
Tzakhi (00:51)
Yeah.
Yeah, and I got to tell you that one of the things that I'm proud of is that I identified you and Sopie very early on as something that's going to be brilliant and super interesting. And I think so far, I think it was 100 % right. So let's get into it. Can you tell us first, maybe just give us a bit of a background around Sopie? Because one thing I should tell our...
our audiences that SOPA is truly kind of a startup in the most pristine sense of the word. We're trying to do something completely innovative and new. And there are not a lot of startups that are actually going and doing that kind of hard thing. So can you tell us a bit about that?
Max Simonovsky (Soapy) (01:55)
sure. so I think, well, so he has changed its, I would say probably face in some way several times along those years, but, we were very honest in to our core, vision and the core vision always was user centric infection prevention technology that can help mitigate.
risks related to infections when you're not washing your hands properly. And, and when I, when I'm talking about that, I'm kind of remembering right now how we started. And when we started, it was all about education of kids, developing countries, emerging and burgeoning markets, places where hand hygiene is so important that, it's probably one of the biggest agendas of
the World Bank, the World Health Organization, CDC, government levels. I'm speaking about high government levels. And that's where we started. We decided that we want to develop something that will make hand hygiene more accessible. And when I'm saying hand hygiene, I'm speaking about an actual washing hands with water and soap in the best probably way you can. And the biggest hurdle back then was
we can't really do it because we don't have water in those places. The water is not good. Soap is not available, right? so that's how we started the, the interesting thing that the longer the way we changed, and develop our technology and we are still working in developing countries. We still have clients in India and Taiwan and, and, and, sub -Sahara Africa, but we also evolved our technology into a way. And if you look at our website right now, what you will see is a.
high -end medical, almost medical device technology that is capable of providing solutions to healthcare facilities, align with regulation standards and make sure that the medical team is capable of washing hands in the most friendliest way for them. So very still user -centric approach with a high -end front.
21st century technology incorporated into it.
Tzakhi (04:27)
Yeah, I think you took on yourself one of the hardest missions in so many ways. So it's, first of all, it's innovation, hardware. Then in the beginning, you were also in developing markets. Then you come, you also have regulatory hurdles. So really a lot of things that you were, a lot of, a lot of,
Just a lot of things you had to handle and overcome along the way.
Max Simonovsky (Soapy) (05:01)
It's true. I think if I look backwards and summarize all of the challenges we solved along the way, and if I can write that on a few papers and send it back to myself back in time, I'm not sure if back then I would take this mission, to be honest. So I was probably lucky not to understand how
how difficult this is going to be and how many things need to be solved. And I'm saying I was lucky because if I knew I would not do it. And now, because I had no idea to the same level that I have right now, that it's going to be pretty challenging, I took the chance and said, in a very Israeli way, I can do it and I will do it and I'll find a way to do it. And then...
The nice thing is that you solve those challenges one after another on your journey. So they are not hitting your face altogether. And as a result, we are where we are right now. We have a product that is in the market in many countries around the globe. People use it, people like it. So you're right. And thank you for reminding me that.
Tzakhi (06:24)
Yeah, and I also think, I think what drove you and maybe kept you going is you have a vision and a mission. And I think SOPE has definitely helped a lot of people, perhaps even saved lives by improving hygiene in places where it's truly needed, both in developing markets and in the Western world, in various facilities where that's needed.
Max Simonovsky (Soapy) (06:51)
I think we did. I can definitely say that we have an actual reports from our clients that they're saying that their hand hygiene practices, culture compliance improved dramatically after they implemented and introduced SOPE into their facilities. And this is true for the projects we had in India, the projects we had and have in Taiwan.
the projects that we have in Israel, in Italy, in the United States, both in healthcare facilities and non -healthcare facilities, we do have reports that we prevent the spread of infections. And most likely that means we save definitely challenges, prevent challenges, probably saving someone's some life as well.
Tzakhi (07:45)
Okay, let's talk a bit about raising capital for SOPI with all these challenges along the way with, you know, different iterations that you made, pivots that you made in terms of market section that you were addressing. How did it start?
Max Simonovsky (Soapy) (08:04)
Well, I'll start with raising capital is not easy. It's not even about it's trendy now or not trendy now. For something like definitely for something like SOPI, because you have a technology that need to be developed from scratch. It is not as sexy as you think it is when you just think about it. When you drill down, you understand how many things that we have inside and then it becomes more sexier to investors. It's a hardware device.
It's an IOT device and it's a big software component incorporated into that. So it was, it was not easy. And I think the main reason why we, we were capable to, to raise money started with finding the investors that resonated with the vision. Those who realized it is a challenge, even though we know about the challenge for many years, if the challenge is not solved.
are actually our first investor already invested in companies that try to solve similar challenges. So he had a pretty good understanding of the market and the market potential. that was the first investor that we secured. still our investor now supporting us. he, he has a venture capital as well. He understand the idea immediately. He realized that.
This is a very unique approach when you put this, the user in the center and not just the end client who is going to pay for it. He trusted me. He trusted my partner and he gave us a chance to really go out. I can tell you that we probably met somewhere around a hundred investors by then. And we screened investors, not in the smart way. So we pretty much approached everyone.
because we had no, not enough experience. And at some point we realized that we are doing something wrong. We need to look for people who understand what you're talking about and that are not afraid of taking a chance on complicated technology. the moment we did that two weeks after that, we found we, we got our, our first investor. As soon as we got him, we were capable to build coalition with other investors who already we talked with.
and expressed enough interest to pursue the idea. They just wanted to have someone who is understanding the market to say, yes, there is a good opportunity here. I hope that makes sense. I will probably add to that that because we raised money several times, every time you raise money, you raise money for something different. And we had in SOPE kind of a
two core approaches. One is you're raising a budget to operate. That was a mindset for the founding team. We need a budget to operate and not just we need money. And when I'm saying we need a budget to operate, that means what is the next big, several risks that we need to mitigate using budget? So that means, do we need patents? Okay, let's figure out how we do that, how much money we need. Do we need?
POCs, let's figure out what that means in operation, human resources and investment of budget that we need to put in in the next year or 18 months. Those are risk mitigation factors. And when you raise money like that, you also show responsibility for what you ask from the investors. So you're trying to mitigate their risks.
using their capital to get a good return on investment for them, for you, and for the previous investors. I hope that makes sense.
Tzakhi (12:05)
Yeah, so you are always looking at the next steps and thinking of what's going to come next and had a very, very well thought plan for what the capital that you're going to that you're raising is going to be used for and how it's going to basically de -risk and improve their investment.
Max Simonovsky (Soapy) (12:23)
Absolutely. Absolutely. Probably I'll highlight even, even maybe I'll drill that a bit, a bit more. For example, if you, if you do the journey that we did means you have an idea, you need to develop a product that is multi -layer complicated technology that has a variety of technologies that need to be assembled into one thing. That means that until you have it, you can't really do cells. You can, you can, you can see if there is an interest.
for the theoretical solution that you might have in two, three, four years, but you can't really do sales. You can maybe find fuel, letter of intents, just, and this is more market exploration and opportunity exploration than an actual sales process. Sales process is a way different thing. And that means that when you raise money at that phase,
You can't run after sales, even though investors are asking for that, but you can't because your first core thing you need to do is to mitigate the risk that is in front of you. And if you're not going to solve that risk, if you're not going to take it off the table, you will never get to the sales process. So if your risk right now is to prove this technology is reliable and can work and you can actually develop it,
into a minimal product that the potential client will say, yes, I want to try it. There is no sense to do sales. Sales is a different process. It's a pipeline. It's a marketing, it's managing leads. There is so many books about what sales are. It's very hard to do sales and developing a product at the same time.
Tzakhi (14:12)
I think it's worth clarifying what kind of product because for some products, you can do sales even before you, for a lot of products, you can do sales even before you have a product because if you know that you can deliver or you can deliver something which is good enough, sometimes there are products that are technological, but you can deliver them with human labor and then you can start selling them just to see how the market responds to your product before you even build it out. But in the case of Sopi or
other companies that have a very kind of R &D heavy product, what you're saying is it doesn't make sense to start doing any sales before you have not simply an MVP, but something which is really, really valuable.
Max Simonovsky (Soapy) (15:00)
While you were saying that, I was thinking of an example how to explain it. I think that you have products that are services. And when I'm saying services, that means that you can theoretically do the same thing without any technology by having a fleet of human beings. Right. And then you're trying to develop a technology that can minimize that human fleet of people, of human beings into a process that can be done by.
and AI it's a trendy word right now. So everyone will understand that. Right. and those kinds of products mean you can actually sell them before you're, you have the product because it's more of a service, less of a product, even though we need to call it a product because that's what we sell, but we actually selling services, smart services, not just people. there is a very fun history example, until, until I would say.
The beginning of 19th, the 20th century, there was a job in New York for women. She had a fleet of workers. She was, she was selling time. She went, she, every morning she woke up with her teammates, went to a specific location where was a very accurate clock inside the city. And then she was running around through the city, adjusting the clocks, the main clocks, the main watches around the city. She was selling her services and she was selling time after.
After all of those watches were adjusted and connected, she's not needed anymore. Right? So this is, this is an example of you selling a technology that's all the service and then that technology becomes service. The products that I'm referring to and Sope is an example of that. A more heavy in terms of it's not just the service. It's more than that. So medical device is a great example of that. For medical products or pharmaceutical devices, a greater example of that life science technologies are a great example of that.
Heavy IOT B2B devices is a great example of that. It means that product when you're trying to sell it in most of the cases, you'll have regulation requiring to certify that product on quality and safety. Then the client will tell you, I want to see it. I need to see, I need to touch the product. I actually need to have that product in front of me running for a period of time. Those products.
is very hard to actually sell. You can find interest, you can find companies and people that will say, we want to be the first users. We want to commit to be the first users, but those are not sales. This is more business development and opportunity exploration, just two different things. Sales is a, we found the process. What is the sell cycle? We,
We optimize that, improve that, and now we copy and repeat, copy and repeat, copy and repeat. We are not doing exploration anymore. We are not, it's just copying and repeating the process. Those are the people within the organization need to reach out. This is how I do it. This is what I promised them within three weeks. They will reply me with several questions. This is what I answer them. So you have all of those answers and replies already prepared and you just leading them through the funnel to a point where you finally know if they're going to buy it.
or not. So it's a very mechanical process. It's not an exploration. That's the phase when the startup is starting the scale up. So it's post A, B round as an example, are usually within that phase when you just copy and repeat yourselves processes.
Tzakhi (18:41)
Is there a way to kind of a middle way of just to get your investors feeling happy and safe about their investment, not trying to do sales, but maybe gathering a few LOIs, for instance.
Max Simonovsky (Soapy) (18:55)
Yes, and I would say even not just LOIs you can show revenue, but you're usually if you it's it's a revenue Indication this is not scale up in sales. That's not launching the product said revenue indication, which means I'm doing the the basic version of whatever I have the basic promise the basic technology that I can we did it as well by the way we and Sophie we did exactly that Then we went to a few few clients
We have not launched a product back then. We just went to a few potential clients that we identify as people who has interest in having the final product in the future. And we told them, look, we want to have a partnership together. We want to offer you a pilot of a technology to redevelop. You're going to be the first people who will benefit from it. We will charge you way less than we are going to charge for that final product in the future. You'll get two benefits. One.
You'll be the first to have the product. Second, you will be part of the team that is actually innovating that product into becoming the best thing you can have as the end user. So they are highly invested in pursuing that process with us. Not everyone agree, but those who agree means that if they try the product and they don't like it, they will tell us immediately.
They will be hard with us. They will tell us, Max, this is not working. The water is not good. the quality of hand hygiene that we get at the end of the process is not a good, our hands are not clean, et cetera. So, and we had those partners, we had them in India, we had them in Israel, we have, we had them in Italy. We had them in the United States. We were looking for those clients always because the client, the first clients who complain are actually your best friends and your best clients.
for getting your innovation to where it should get. So going back to your question, usually those partners, and I'm calling them partners more than clients because they are more partners. When they pay for a product that is not yet finished, it's probably the best indication that the market is there.
Because if someone is willing to pay for a product that you tell them upfront, this is not the final product. This is just one of the phases and you will get the final product, but they will willing to pay for this, which is maybe 40 % of the final thing, maybe 50 % of the final thing that's generate the revenue and an indication that the market is really there.
So it can be more than just LOI, it can be an actual revenue.
Tzakhi (21:47)
And you use that to convince investors to invest in Tysopi.
Max Simonovsky (Soapy) (21:53)
Yes, we gathered LOIs and then we gathered commitment for investments and we actually sold our first POC back in 2019. So if you think about it, we started the company in 2018. I don't know if you can hear me because my headphones are something is happening to them. Can you hear me? Okay. Okay. So what I was saying is that.
Tzakhi (22:16)
I can hear you just as I did before.
Max Simonovsky (Soapy) (22:23)
We started the company in 2018. We had, you can even look, look, there is a video on that, on that product in the market, on YouTube. We had a product that is so far from where we are right now. We actually sold that product for, and we, and we send that to the client and we did a proof of concept and piloted the product. And the fact that we were capable of.
selling that, making a pilot, getting a report from the client, and then a letter that is saying, if you can improve those things, we are interested in buying more. All of those in that information, when we presented that to investors, they said, that makes sense. Okay. That's not you promising me something that's a potential client saying, I'm interested in this.
and I'm willing to pay and I already paid something. So there is a real indication that there is a potential market there.
Tzakhi (23:30)
Yeah, awesome. And I think now investors are asking for that even earlier, or even like the first investors are starting to ask for this kind of proof. And it was amazing that you were able to do that even with such a difficult product to bring to market as you had back then and as you have now. Max, thanks a lot. This was awesome. But before we go, I do want your five tips for startup founders. Can we have them?
Max Simonovsky (Soapy) (23:59)
So I think the first advice that I have is something that leads me through my life and that's being honest with yourself. It's very important for us as founders and CEOs to be honest. You don't always have someone to speak with. So you need to be honest with yourself on everything that you do and all what you're trying to achieve as a founder. That also means you need to be honest with your investors, with your clients, and with your teammates. And that's...
Not your employees. They are all your teammates. They're all your colleagues so If you are not doing that It will become challenging along the road more and more Second and this is definitely connected to that of being honest with yourself if you're not ready to do sales For whatever the reason is the product is not there yet. You don't know how to do cells
You don't understand the process. You don't have the people. You don't know how to manage sales cycle. Don't do it. Try to understand what that means. You can do business development. You can do exploration. You can do market research. That's not sales. That's something else. Okay. Sales is a process. You need to learn it. If you don't know what it means, you need to go and learn or bring someone in. Connected to that. If you're not ready to fundraise, don't fundraise.
If you don't know how to do it, don't do it. Don't waste your time. Learn, understand who are the right investors, what they expect from you. Make sure you have that story aligned and aligned between your honesty and your expectations and your needs to what the investors are interested in investing in. Some investors will never invest when you ask a million because they don't know how to invest less than 10.
And some investors will never invest a million because they don't know how to invest more than a hundred thousand. So you need to understand all of those small nuances and not waste your or their time. So be more efficient. Something that probably everyone's saying, team is very important. Your team, your colleagues will make you successful or will fail you. If you are not...
If you are not finding the right people who will back you up properly and who can help you mitigate those risks that we discussed before, those risks will kill your idea, will kill the startup. You will waste time, you will waste money, you will not achieve. So your team should help you mitigate the risk for which you're raising money. It's very important. When you pay peanuts, you get monkeys. Choose the right team member, pay them.
enough so they can help you mitigate the risk that you need to solve. Probably the last thing that is important for founders and especially CEOs,
Be respectful to your successes. And when I'm saying respectful, that means that it's not just acknowledge and understand that you have successes and you need to stop and enjoy them. You need to be respectful to those successes because not everyone can do that. And if you did, that means something. And you need to not to brag about them, be humble, but also know that if you launch the product,
If you develop something that no one did before, if you fundraise money, if you secure the first order, if you secure the first pilot, all of that means that whatever you're doing has a chance to be very successful. There are many more things to do, but there is a chance for you to be successful. So be respectful to those small successes. They usually build a big one.
Tzakhi (28:02)
Awesome, yeah, and I think these are great pieces of advice. Max, thanks so much for this. Who should reach out to you and where should people connect with you?
Max Simonovsky (Soapy) (28:16)
Find me on LinkedIn. It's pretty much my name. That's the easiest way to reach out to me. You can share my email as well. That's also an easy way. I think I'm in a point in my life right now where I want to share my knowledge and experience and give back because I received a lot of support from people who did things before I started SOP. And I feel that I want to give it back.
to the community and to entrepreneurs and share whatever I can. So whoever is starting a journey, whoever is interested in not being alone along that way and getting some, you know, some advice, I'm not probably the best advisor you can find in the market, but I can definitely share my experience. I'll be happy to give you that. I think that's it.
Tzakhi (29:14)
Awesome. We'll include your LinkedIn in the notes. Just a word, if whoever's made it so far, if you haven't already, subscribe wherever you are, Spotify, YouTube. And if you haven't done it, come to our website, Meet .Capitol and subscribe to our newsletter and you get five startup tips to your email every week. Max, this was great. Thank you. Speak soon.
Max Simonovsky (Soapy) (29:39)
Thank you. Pleasure.
