Ben Kaplan 00:00
This is TOP CEO, the show about CEOs making tough decisions featuring CEOs from startups, scale ups and fortune 500 enterprises. TOP CEO is a business school case study, telling the story behind the story, and what you can learn from it from those who have faced the fire. And come out the other side. Welcome to the TOP CEO podcast
Yoav Vilner 00:30
clients at enterprise companies and investors and all that they're not going to care for your new early stage product if you're the only one that thinks it's a good idea. So my investors were telling me like, it's too early for you guys to launch. And I was, I was just I had a, like a gut instinct that I was like, No, we got to do it super fast, we got to build out something huge.
The Detective 00:54
Imagine you're the CEO of Walnut, an innovative startup, disrupting the b2b sales landscape by offering interactive, customizable demos. Your business model revolves around empowering sales teams to craft engaging and adaptive product presentations, without the need for coding skills, all the while enhancing the customer experience. Yet, even as you revolutionize the sales demo environment, you face towering challenges.
Yoav Vilner 01:27
Something kept telling us that this is going to be taken it's going to sell fast. So we took a very dangerous path of believing in that if we had been wrong, you know, we would shut down like everything would be meaningless.
The Detective 01:39
How do you create a new category in the saturated market of sales tools without blending into the background noise?
Yoav Vilner 01:47
It could be a big enough thing to be its own category super fast.
The Detective 01:52
When competition arises, validating your market niche? How do you maintain your first mover advantage?
Yoav Vilner 01:58
You know, I hear a lot of people saying bad stuff about having competition like competition is pretty amazing. Because you would never build a category if it's just the no one would believe you.
The Detective 02:09
And what happens when your explosive float attracts serious funding. You've arrived at a crossroads rapid growth on one hand, and a fresh set of challenges on the other.
Yoav Vilner 02:22
Everyone is in the same boat like you your competition, your friends, your foes, everyone is in the same boat, they have to do it more efficiently. Now you focus more on your existing clients, and you try to innovate your product as much as possible within what you can.
The Detective 02:36
This is the story of Yoav Vilner. And this is The Uncharted.
Ben Kaplan 02:45
you have, you have a unique company in that you had Product Market Fit early on, where there seemed to be a demand, you had 700 people on a waiting list to try your product. But one of the biggest challenges you had is do we try to create a new category, and something that we'll have to explain what it is people will have to get it and they're maybe not buying it now. So they're gonna have to make a new budget line item for this maybe as part of their marketing stack? Or do we try to explain what we do and connect it to something that they're more familiar with something that is not a new category, but there is a budget line item and they they are buying something and maybe you can be like we're better than what you have. So that was the fundamental kind of thought process early on. How did you tackle that challenge?
Yoav Vilner 03:31
Usually startups, when they approach state investors, they would normally always say they're going to build a category because it's kind of, you know, just makes your tam sounds much bigger. And it's gonna, you know, it sounds like a huge company. It's not always true for for every company, there's some type of businesses and landscape where you should probably fit in an existing category, right? Try and find like a product differentiated and are a marketing differentiated and kind of trying and, you know, grow out of something that exists to us, we felt that the perception of our steel, not attractive MVP that we had, the perception was just huge. And it wasn't something that we could ignore. And we felt, it could be a big enough thing to be its own category super fast.
Ben Kaplan 04:14
And we should talk about what this is, which is helping create interactive product demos, that is ating an important part of the sales process. So you do have one sense of like, anyone who's for instance, selling some type of software, they're used to doing demos they know are their sales teams. So that one, they get it right away. But to they weren't necessarily used to thinking about, Oh, I'm gonna go to an external source for software to help me do this. I might just do it however we do it. However, our development team says we're going to create a demo account. So how did you go about them thinking about how are we going to educate why you need to get Walnut and not just do what you're already doing? It's a behavior change, even if probably people can actually understand your product quite easily.
Yoav Vilner 04:59
Right? So the first thing that gave it away, the fact that it shouldn't be a big category was, whenever we describe the pain point to sales leaders, they just stopped us. And they said, right, listen, build it, and we'll pay for it. Right? We don't even like don't even complete the sentence like salespeople don't want to rely on r&d people or product people or design people. And they don't want to showcase a real live product that could break during the call. It's a huge thing. Now let's see if you can solve it. With that response from our target audience, we felt confident to build out something and show them so at that point, we felt comfortable to kind of raise our initial seed and just be allow something because of the the response that we got, which was pretty insane. And my investors were telling me like, it's too early for you guys to launch. And I was I had a, like a gut instinct that I was like, No, we got to do it super fast. We got to build out something huge. We got to be the first to market. And so we launched the product, logistic backup,
Ben Kaplan 05:52
why were they saying it's too soon to launch? Overall? Was it just overall conditions in the world? What point were you like trying to launch and saying, like, hey, people aren't focused on this now? Was it just that, you know, there's a notion in startups of minimum viable product or MVP, sometimes minimum is good, but some of those are like two minimum, they're like, Okay, we're worried because enterprise clients won't see enough value in it. If it's minimal. And we want to go after that target. Why were they saying, Wait,
Yoav Vilner 06:18
I think some people just, like more traditional approach, you know, it's like, yc is all about launch, whatever you have right now and get feedback, right. And so you're talking about
Ben Kaplan 06:26
Y Combinator, and this idea of a Lean Startup, which is you're trying to like, course, correct quickly, as fast as you can to get the right direction. And it's better to fail fast and course correct, than wait and try to get it perfect. So some of the investors just said, No, this is like a big idea. We got to get this right. First, is that what it was, you know,
Yoav Vilner 06:45
it's not just investors, it was like, colleagues, it was some zeros and sea levels we were talking to or VP of sales, they were kind of giving us their two cents about trying to release something a bit more perfect. But there isn't perfectly setup. So we launched that MVP, we had we had a crazy traction,
Ben Kaplan 07:03
what time period was this? When it things crystallize that you're gonna go through this in 2020? And then how long did it take to get to the product launch?
Yoav Vilner 07:11
So it took just a few months, I think that October 2020, is when we finally launched, it took us a few months to kind of, you know, build it out. We didn't expect for you know, the the initial seed we announced ever was 2.5 million. And because this whole story was interesting, it wasn't about how much we raised, it was about a new category that's going to emerge in sales. And fast forward two and a half years later, we can see that it's a huge thing. So the journalists from back then were completely right. So
Ben Kaplan 07:41
after October 2022, take us through the timeline of what happened there. Was it difficult to have 700 people on the waiting list? How long did it take to work through that waiting list? Or did you just turn it on? Or did you need to take people through things? And then after that, at what point did you see the first competitor come in trying to do something similar.
Yoav Vilner 08:00
So about the wait list, we had a very unusual, everything was unusual with how we started. But one thing that was unusual was that our first employee was a VP of sales. From one hand, it was so early on, he was literally helping us with product side, he was helping us to kind of, you know, build something that could fit our target audience from the other hand, he was working through such a long wait list of you know, enterprise companies and bn big shots. And he was trying to figure out who should be the first design partners that we work with who should be the first clients. So he was doing an S, like an SDR, a type of a work and kind of going through all of it.
Ben Kaplan 08:36
I see. So he was doing that he was your first hire, why was he your first hire? Why was that important? You're saying he's Bella, but in some ways doing work. That's not really the duties of his typical role, and also a little bit of work below his paygrade in the sense that, you know, it's very early on. So he just doing whatever needs to be done while so why why did you hire that role early,
Yoav Vilner 08:57
something kept telling us that this is going to be big, and it's going to sell fast. So we took a very dangerous path of believing in that if we had been wrong, you know, we would we would shut down like everything would be meaningless. And we wouldn't raise a series B so fast. Lucky for us, we were right about the perception of the market. And it was just a matter of a few weeks, or a couple of months from him doing that manual work until he actually started building out a team. Was
Ben Kaplan 09:23
it difficult to build out a team? Or what was that as you sort of scaled this up fast and was and how much of that build out was product or engineers and how much of it was, you know, sales and other functions that relate to revenue? Right?
Yoav Vilner 09:36
So what happened after the successful launch was that we got offers to extend our seed round, and we extended it from two three to six. And that helped us kind of bring on all kinds of, you know, functions for product for r&d. So you
Ben Kaplan 09:50
went from two and a half million to 6 million, then you could build out a little bit more of the team and what what timeframe was this
Yoav Vilner 09:56
right after right after the launch?
Ben Kaplan 09:58
So November 2020. I So okay, so you're building that out, you're building out more functions. Okay, what happened after that, after that
Yoav Vilner 10:04
we saw something interesting happen, we saw, like, we obviously worked on improving the product and you know, making it into a whole platform, we started working on our brand, which is one of the strongest differentiators we have. There's very few companies that can do what we do with the brand. Today, we started that work as early as seed. So head of marketing joined us when we were just 10 people, which is also super early on to make such a choice. So there was product there was working on the brand, and kind of onboarding the design partners, eventually, we had really insane conversion rates from design past notes to paying clients
Ben Kaplan 10:38
design partner. So what you mean by that is people who are going to give you feedback in the process and help you do this, and then hopefully, they have a stake in it, and then are going to actually like give you actual currency to keep going is that what you mean by design partners,
Yoav Vilner 10:52
it wasn't just about giving us advice. It was literal, you know, sales leaders on big companies that were using the product, but it was so early on, like, you know, initially you call it design person, because you can't really charge them what you want to charge them, like they're spending time helping you find the market fit within their organization, which is your first time right or second time or third time, because you don't have many of them so early on, after a few months or you know, some time passes, and you just got to see what's the conversion rates from design partners to full scale annual contracts. I think for the biggest companies in our space, if they had, let's say 12 or 15, design partners, usually they would see about 90% of them converted into a full scale client. And this is what happened for us as well.
Ben Kaplan 11:36
And so at what point that when we say within the space, you're getting a lot of sounds like word of mouth traction, or you said sort of going viral. What's an example of that?
Yoav Vilner 11:46
Basically, one of the vision that I had, personally, as a CEO and founder was that I think the prospects are being neglected, like all of the sales platforms and cell companies in the world. They're focusing on the A's and salespeople and their needs. And nobody focuses on the prospect. And they're the one that they get tortured in sales processes, like b2b sales processes suck, meaning
Ben Kaplan 12:08
like it's about optimizing for the organization, selling as opposed to optimizing the experience for the person who's buying very typical thing would be like, you enter your information on a website, and they want to qualify you and you know, see if, as you're worth their time, as they ask you all this stuff, and you just want to get a question answered, but it's more like fitting into their sort of system that they've set up that helps them be efficient and effective, as opposed to giving you a great experience. Is that what you mean by optimizing not for the prospect, right?
Yoav Vilner 12:40
And then I said, we exist and our whole landscape exists, because, you know, we had a vision to make prospects happier throughout the sales process. Why don't we start a movement that I titled we are prospects with a hashtag, and we released a video that was about a nice customer in a closed stores is trying to buy, she spilled some coffee, and she's trying to buy a new shirt. Hi, I'd like to try this shirt face pillow,
13:06
madam, human size, excuse me, how many traffic lights do you see here for a kid at least have your business mail and not your personal one, just as her 1999 pleat that I haven't even turned it on yet.
Yoav Vilner 13:19
We spent the smallest amount of money. We acted in it, and we wrote it. And it was you know, it was just like a few hours thing. And we just published it on LinkedIn. And we said whatever, right? If no one's gonna watch it, we spent like 10k, we woke up and it completely exploded, like there was millions of views. There was like 1000s of shares. And then we had a second episode of that, which was super viral again. And ever since people are constantly messaging us for new episodes with our content, did you
Ben Kaplan 13:49
have a sense of what that meant for the company? Or what it converted to? Or how important that was as a driver of leads for you? How much emanates from that, versus how much are other channels,
Yoav Vilner 14:00
I think have never seen in my life, such levels of engagement with the brand work that we do. We have like, we have like the you know, more traditional marketing channels like everyone, but we're investing a lot of thought into our brand because it's scalable, it's organic traffic. There's network effect. And so there's plenty of leads coming in from the harnessing
The Detective 14:20
the power of design partners, those early users who shaped the product. They've transformed feedback into full scale client contracts. They did to shift the focus from salespeople to the prospect
14:35
of trying the shirt immediately. Please lead I just asked what pain does this shirt solve for you the pain of meeting a shirt.
The Detective 14:45
The wheel prospects campaign, a humorous and unique twist on the sales process sparked a wildfire of engagement. Yet, amid this change, they kept a firm hand on the wheel of traditional marketing And
15:00
what budget do you have? For sure? 9099. Let me just call a shirt engineer for you.
The Detective 15:08
It's a high wire act of balance between the tried and true and the exciting, unknown. But how do they navigate this storm? What were the results of these high stakes strategies? We dive into the eye of the Tempest.
Ben Kaplan 15:27
So take us through the rest of the timeline then. So after you raised a second seed round, larger things are going well, at what point do you get to Series A, and then Series B, what take us through like sort of 2021 and 2022? Yeah,
Yoav Vilner 15:38
so a few months after that, we raised our Series A and three months after that, we raised a series B. So it was all in a pretty tight schedule. What happened was that the inbound leads that we got, just kept growing, the outbound that we did had insane results. We just started onboarding many, many clients, we, from different industries completely, like, we have cyber companies, we have data, you know, we have AI companies, we have a lot of a lot of companies that are not even just like SAS. And so it's a complete cross vertical thing, and from different sizes, as well. So like I said, Fortune five hundreds, and also startups as small as 20 people, these are the people that are using Walnut, and we saw that initial traction early on and felt confident enough to raise a Series A and then B, what were the sizes of those rounds, series A was about 15. And then B was 35.
Ben Kaplan 16:30
Okay, and at what point did you start seeing from the initial challenge was like, do we try to create a category? Or do we try to like make it more related to things people are already buying? He went with more of the category option. So at what point in this timeline, did you start seeing competitors start to emerge?
Yoav Vilner 16:46
I think, first of all, you know, I hear a lot of people saying, but stuff about having competition, like competition is pretty amazing. Because you would never build a category. If it's just you, no one would believe you. It validates
Ben Kaplan 16:56
your category a little bit, right. If you have other players saying that this is a category, this is a thing. Yeah,
Yoav Vilner 17:01
you know, clients at enterprise companies and, and investors and all that they're not going to care for your new early stage product, if you're the only one that thinks it's a good idea. So for us, the competition that came after the successful launch was just helping us to educate the market. You know, I'll always say that every dime they spend on their own marketing helps us educate the market as a whole. There's quite a few players. Now in the interactive demo landscape, it just started, like the first of them came to life, I think, like three or four months after the launch we had. And ever since there were like many more use that
Ben Kaplan 17:35
as a good thing in validating the market bringing some more dollars for education, and feeling like, hey, we had a first mover advantage in this. So if we keep innovating, they're just going to be trailing, and that's fine. We don't have to focus on them too much.
Yoav Vilner 17:49
We never really did, like many of them are obsessive about us completely. Like for me, you know, they're helping us validate this landscape. I don't think they would write about this landscape so much if it was just us. I don't think salespeople would have their own budgets for demos if it was just us. So I do wish that they would keep growing and and you know, do a great job.
Ben Kaplan 18:08
What is the outlook now, in terms of what are the biggest challenges on the horizon? Where do you get when you raise a series B and substantial amount of money? There's financial goals, there's timelines for those goals. There's all of that. What are the biggest challenges now for you to get from Series B to series? C? Yeah, obviously,
Yoav Vilner 18:28
you know, it's a, it's a it's an interesting time. Now, I don't know it's gonna be aired, but we're still at the peak of the downturn. So things are different now for for growth companies. Yeah. Like you said, you know, you have your KPIs, and every company from one hand, everyone is on the same boat. On the other hand, everyone has KPIs that are like 100x more aggressive than what they were like, You have a lot of really ambitious goals you have to get to.
Ben Kaplan 18:53
And that's my question is, sometimes there can be a sense of a risk is growing too fast. In the sense of you bringing a bunch of money, there's high expectations, particularly if we enter a downturn and to meet those expectations is hard. And there's been a little bit of a shift, probably, I'd say, and certainly a lot of either CMOS or CEOs I've interviewed saying that we've gone from this sort of, like, grow at all cost mentality to what is natural bit of a downturn is like, let's profitably grow, let's not just go for market share size, and who cares about if we're making money, but let's focus in so have you felt that shift or pressure and when you have explosive growth, does that set unrealistic expectations? That's a bit of a risk too, because what people you know, you raise money at a valuation that they expect you to hit certain things that are aggressive, but the macroeconomic conditions may be different.
Yoav Vilner 19:42
Yeah, we'll just add to that is that when you were in b2b sales, like you're not the first tool that people would with Cartwright when there's like downsizing and stuff like people need to sell. They know that demos are critical for selling and so they're not really cutting us off. Luckily, thrilled Is downturn, we're still in a good spot. And so you just have to be more efficient like there's so if this is we're looking for, like, let's say, five main KPIs or financial metrics, when they look at growth companies, now they're going to look for 20, or 50 of them or 100. So you just got to be efficient, like, you've got to go smarter than, like you said, not at all costs. It's not that much of an interesting of a story, if you're growing super fast, but you're doing it non efficiently, you're spending too much money. So now everyone is kind of, like I said, everyone is in the same boat like you your competition, your friends, your foes, everyone is in the same boat, they have to do it more efficiently, which is a different mindset. But yeah, we're in a good spot. Luckily, in
Ben Kaplan 20:40
what has been any different changes in how you've approached things, just trying to do it more efficiently, is there something that you've changed, or you've done differently, as a result of that shift in mindset, I would say
Yoav Vilner 20:51
like the usual, you know, thinking more of going up market and, you know, supporting as much expansion as you can, because expansion from existing clients costs less than acquiring new ones. But we have like a marketing machine going onto the track, like 1000s of companies. And, you know, a lot of them, like I said, they come organically from our brand world. But we're definitely also supporting a lot of enterprise companies where you're just naturally more efficient if you support them, because you handle really big accounts that are, you know, they had like a positive ROI. Whereas supporting smaller companies usually, which means you grow, you acquire a lot of new clients, you're doing, it's not necessarily efficiently because you're paying for every lead, they're not delivering, you know, they're not like a high ACV client. So you're not necessarily seeing ROI. And this is like the old mindset of getting a lot of them and it doesn't matter, they will expand if they churn as long as you've got the new revenues. So now it's different now now you focus more on your existing clients, and you try to innovate your product as much as possible within what you can.
The Detective 21:54
They call it Walnut, a sprout that dared to grow amidst the Giants, racing from a second seed round to Series A, and then Series B. They didn't merely survive. They thrived. They knew their target, they knew where to find them reaching out on LinkedIn, Instagram, and even Facebook, proving there is no one way in b2b marketing. Then, competition entered the scene. Yet, this wasn't a setback, but a beacon validation, but they weren't just a lone echo in the void. They had the first mover advantage, turning the competition into tailwinds for their brands journey. In the face of a downturn, Walnut stood resilient, even flourishing, multiplying their income six fold the test of aggressive growth and KPIs didn't dawn on them. Instead, it was an opportunity seized, honing in on expanding existing clients, a savvy and efficient move, solidifying their stand in the market. But as we look towards the horizon, what is the future hold for Walnut?
Ben Kaplan 23:06
What is the vision for three years from now five years from now may seem like an eternity if you're a fast growing company, but where would you like to be? What are the things that you hope and and sort of the vision you project that Walnut could become?
Yoav Vilner 23:18
I think we're especially with the movement that I said and everything, I think we're on a path to be something that's like a gold standard for anything. That's, that's b2b sales. And if you bring the power to the people, then you know, it's a much more interesting field to be playing in. And so luckily, we had a lot of luck around attracting the white audience, like the prospects also as part of our vision. And everything that we do is always what the market wants and needs. So I predict really great things for a woman. And
Ben Kaplan 23:45
finally, what is the biggest challenge that you feel Walnut has and you have personally to realize your full potential, you've had a lot of traction, a lot of market product market fit a lot of growth, there's a lot of customers in your past your present and presumably your future as well. What are the things you're gonna have to get right to realize what you have the potential to be as a company? That's
Yoav Vilner 24:08
a great question. It's always about the people. So I think that if our team continues to be you know, as great as they are, so we're in a good spot. But like I said, all the tech companies are on the same boat now. Like they want to see this downtrend thing kind of, you know, starting to fade out sometime, multiples getting back to normal. And I think that it's in a very extreme spot right now. But besides that, I do think we're in a great spot to kind of develop from him.
The Detective 24:35
The CEO saga of navigating uncharted territories, raising millions defining a new category and battling the storm of competition, all while carrying the weight of a fast growing tech company on his shoulders. From the gripping challenges of early funding and startup survival, to the exhilarating victories in raising series, A and B, then overcoming a global downturn. and achieving explosive growth as we leave you aware of and Walnut at the edge of the future, he shares his vision, a gold standard in b2b sales promising an exciting journey ahead. The battleground is set. The goal is clear. And with Walnut, it's more than just survival. It's about leading the charge. Will yo and his team prevail in this unforgiving business landscape? All the wins of the market via them of course. Only time will tell. For now though, we leave them and their story poised on the Edge of Tomorrow. Ready to face what comes and with that it's case closed
The Detective 25:49
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