Jeff Amerine:
Hey everybody. This is Jeff Amerine and I’m here for another episode of the Innovation Junkies Podcast. Today we’re going to have a very special guest. We’ve got Gabby Czertok, who’s based in Tel Aviv, with us. He is the founder and CEO of The Builders. Gabby’s a serial entrepreneur, is an innovation and technology enthusiast. He’s done a number of amazing things in his career, CEO of emerging companies. He’s got a background, a legal background from Tel Aviv University what we’re going to talk about today is his experience in growing The Builders, which is an innovation facilitation company that finds and curates some of the most amazing technology ventures out of Israel and connects them with large enterprises, the fortune 500s to really help them with competitive advantage and to do things that they clearly might not be able to do themselves with their own technology team. So Gabby, welcome.
Gabby Czertok:
Thank you, thank you, really excited to be here. I’ve heard so much about the podcast I wanted to, I always dreamt of a day you’ll invite me, so I’m happy we made it finally.
Jeff Amerine:
Yeah, well, we’re glad to have you on. So give us a little bit more of the origin story. I mean, I gave that summary, but I think there’s a lot more depth and meat to that story. So tell us a little bit more.
Gabby Czertok:
So The Builders, I can tell you my origin story. I think I was 13 when I started my first business and I was doing gardening and I was selling toys and doing all kinds of stuff as an entrepreneur. I think by age 17 I was importing TV equipment and all kinds of stuff. So I think it’s in my guts and my DNA to be in this entrepreneurial world from a very early age. But The Builders we started, it’s almost 10 years. It’s going to be in June, it’s going to be 10 years to helping large corporations figure out what technology needs they have, what problems they have, and how can you solve those problems using startups, technology, mature technology in a faster way. Basically, one of my favorite quotes is one of the leaders we worked with, and she said, I was expecting my teams to show me, here’s my strategy and here are the startups I’m working with.
But instead they showed me here’s my strategy and here’s I’m getting there faster using the startups. And that’s essentially our goal to help the corporate to work with, to get there faster. With things and technologies that they may have not been able to get access to, they may have not been able to know exists. Or in some cases the sockets don’t fit because the corporate’s built for having 11 lawyers on their side, 11 lawyers on the other side, and making sure that all the lawyers get in to maximum protection for each organization and when you work with the startup you’re going to reduce a little bit your protection and increase the risk but you’re going to increase the reward also and the corporates you work with understand that and I think that’s the understanding and create a path they don’t say okay let’s give up our structure and process because we don’t want any more protection but they say for this specific path let’s find a way where we know it’s important enough the problem we’re solving is important enough the
The leadership understands why we’re doing in this path. There is a curation, there’s a protected way to protect or never protect, reduce risk in other ways. But we understand that we can have nine types of insurance requesting nine types of insurance from a startup because just getting that insurance will cost them $50 ,000 a year and this contract, it may be even smaller, a pilot may be even smaller. Or we can’t ask them to have very complex and rigid security mechanism internally. If we don’t give them data, we don’t give them certain types of access to risk. So what we do in this process is help the corporates understand the challenges, help them figure out what internal processes can be done differently for working with startups, then help them find the paths where it’s a big enough impact and it’s meaningful needed to try and solve what technology, sometimes technology can’t solve it. And we’ve had corporate come, come to people inside corporations, come to us and say, this is my problem. This isn’t, we need to change the way IT is presenting sales data to you. This is not a startup problem. This is, you should talk internally because that’s the way to solve it. You’re not, you can find the solution, but it’s not the right thing for organizations. So you have to find the right problem, the right need that actually can be solved by technology. And then we help find the technologies through a network, and we try to break down every part of this process and rebuild it in a unique way. So the way we find startups who work with companies like Paramount and Merck and very large corporations and everyone wants to work with them. And every startup will want to work with them and just kind of go out to the main square in Bentonville and then say, hey, I have these corporates who want to work and every startup will be piling up to work with them. So the way we do it, we work very much under the radar.
We have about 100 people who have a secret key and they refer startups to us based on the needs. So they’ll get access to the needs of the large corporations and they’ll be able to refer relevant startups based on those needs. And then the corporation, I’ll give an example from one of the programs we completed a few months ago, we had 29 startups referred to answer five business needs. The corporation had 400 reviews. We also built our own platform because one of the other things we found is the engagement journey is a challenge also. How do you engage the people inside the 20, 30 people who have to look at the startups and engage them in a fun way and an interesting way where they can learn from it? So we built this platform that allows them to have a fun engaging process. And we have 400 reviews for these 29 startups. They selected 12 -day one meet and they had kind of in-depth. They selected two -day one of test, 90-day pilots. Two of them down within 90 days and it’s good and bad because it’s a very quick yes or no. And I think for a startup that’s an amazing value to get a quick, also a quick no is an amazing value and not to get dragged along. And this year, so last year in the same program, two out of two didn’t move forward and this year two out of two turned into multi-year agreements and have been deployed in certainization. And the value of having everyone’s eye on the ball for these 90 days, testing, seeing what works, what doesn’t work, what’s stuck. Okay, well, we have a problem with something, let’s get the person who can solve that something quickly so we don’t now wait for next meeting in three weeks until we figure out why even we had this problem. No one remembers where we started even, and you have to go around. So a lot of it is focus, speed, curation, and very curated methodology to help both sides work on what matters and not get distracted by the problems that don’t matter.
Jeff Amerine:
And when you think about, sometimes we think about innovation, we like to categorize it as there’s incremental innovation, which can still be super valuable. There can be breakthroughs that really can be that sort of 10X leap. And sometimes there’s stuff that’s completely disruptive, disruptive innovation. If you think about that spectrum of possibilities, where do most of the opportunities that you work on fall. Where is it in that spectrum of possibilities?
Gabby Czertok:
So I mentioned we’ve been doing this for 10 years. We have 99 startups go through a platform, 233 pilots and 64 license agreements signed between the corporates and startups. And it’s a mix because the largest focus, we don’t use the word innovation almost, we use the word commercialization because the larger focus is on commercial solutions that can bring value to the corporate they work. They’ve been tested, maybe they’re working for a year. They’ve been tested with some smaller corporations, but it’s a working solution. They can bring value immediately. And in many cases, because we don’t work in specific verticals, so we won’t say we do AI startups or data startups, we look at the business problem. So it could be a warehouse management cameras to improve picking accuracy inside the warehouse. And if we look at the problem, the problem can be big enough to be, if you solve this in a smart way, it can be a disruptive value, but doesn’t have to be disruptive technology. You have computer vision you have it can have to be a really good technology it has to be fast best, etc. but doesn’t have to be something quantum that has never been seen before because in the corporations They don’t really care. This is like breakthrough technology care of his breakthrough business value And if you’re able to impact the business in a meaningful way, that’s how I’ll don’t measure it. And that’s how we’ll measure it also so, we don’t we don’t look so much at, we’ve done the path, by the way, everything. We’ve shied away from 10 years. Let’s look at something we’ll bring about in 10 years because the corporations change, the people change rarely. If the person who has a problem 10 years later is still in the same role, it’s a surprise usually inside organizations. And then every three, four years, someone who comes says, wait, I have different 10-year goals. But we do use the 10-year and five-year horizons to set a path and set a course on success. So we’re looking at this company that we can use in one year, two years, and what would look like, what impact would it be if this is successful five years later inside the organization.
Jeff Amerine:
How much time do you spend through the program on bridging the sort of cultural differences and making sure that the Israeli ventures understand what the culture of the enterprise is like and how they buy and talk a little bit about that process of making sure that there’s good alignment and preparedness on the part of the venture with how they do what they do.
Gabby Czertok:
So it’s a very good point because there’s interesting research that in many cases the startups can’t sell to a corporate or corporates don’t buy because the startup is not selling in the way the corporate wants to buy it. And that in many cases the startup doesn’t understand the way the corporate talks about themselves. How do you even describe a business unit? How do you describe your internal goal is how do you talk about customers versus shoppers? How do you talk to viewers? Even understanding the different nuances of terminology can change the way you’re communicating inside the organization and how you’re talking to our organization. In many cases, stirrups don’t understand hierarchy of the corporates and they don’t understand what are the problems you’re solving for this person. So you’re saying, I want to solve a problem for this organization. I am in many cases we know these organizations as consumers and we know them as big brands. You think you know what their problems are because hey, I’ve watched a movie on streaming on Paranormal Plus. I know what their problems are. Or I’ve watched their movies. Probably their problems are very much studio related and they really want to improve only their cameras. But some of you understand this organization there with huge IT organization and a lot of value in totally different topics. So sometimes the startups don’t understand or don’t understand or think about what is a problem specific person I’m talking to. One of our partners is a very smart guy who said once he told the startups, I don’t care about your pitch. I said, what do you mean? Like we came here to talk to you and said, I care about my pitch. If you can hear my pitch and repeat it to me where my future is impossible without you, that’s what I want to know. And if you can, then I don’t care. So, the stars in many cases the first thing they’ll do is come in and they’ll pitch. And you lose so much value, you know this more than me, you lose so much value.
Jeff Amerine:
Sure. No, that’s really good. And by the same token, you know, and it’s, you called your, one of your original programs, even though the company name is Builders, you called it the Bridge. And when I think about a bridge, I think about the fact that there’s also got to be coaching at times on the enterprise side to get them to engage adequately, to get them to just not squash the life out of the startup as well, because it’s easy for the big elephants to step all over something that could have been really good just based on their own girth and their own size. Talk a little bit about that size. I know you’ve got the Beam platform that helps with the engagement, but talk about kind of how you get the enterprise really ready to take best advantage of the innovation or the business solution coming from the new venture.
Gabby Czertok:
So it’s interesting, it’s almost like there’s an enterprise-ready startup, but it should also be a startup-ready enterprise. Because I mentioned before a little bit about the processes. So you have the team at procurement who gets it. And they’ve worked with startups in the past and they understand why it’s different this time. They understand who’s interested in side organization and how do you make sure they’re a part of the process all the time. You don’t call them at the end of the game and say, hey, get an MSA out of this. But they know they get involved as early as possible illegal compliance, very important players, but if you’re able to bring them in early, you get much, much more value from the interaction, you get much more chances to succeed. In some cases, it depends on the partner and the program, some programs we do, we have the procurement legal and security come in, I need to start up and talk them through and say, hey, you usually don’t hear this. If you succeed, let’s talk for an hour, we’ll tell you here the 10 most important things you need to know, we’ve had a startup who had a $700,000 contract with a Fortune 50 company, one of our partners, and they just send it to the lawyer, the CEO sends the lawyer, and the lawyer red lines half of it. And an MSA with a large organization, which if you get small things changed, then it’s a miracle. And you forward it to the business person. I think you made them, like, you can’t not have insurance you cannot have liability. This is not something and the start-up is lawyers The legal should figure it out like I don’t care and they send it back and legal rent line again and after two iterations like that the corporate said I think this startup is not ready to work with us because if this is how they approach business with us they’re never going to succeed in in the process and having the corporate being able to say that is also valuable. I think for us, one of the lessons we learned is setting expectations very early in the process for everyone. So if we get the corporate to talk to the startup and share what’s happening, but also the internal people, we build a set of workshops which helps the people inside the organizations to think about, get into a CEO mindset, a startup CEO, and think about when you have different constraints. So very interesting, we had a leadership team do one of our workshops and part of the workshop you get into roles of different players in the startup and interesting to see the finance person taking the marketing role. And suddenly they’re allowed to talk about marketing. I mean, the organization, they’re 20 years, they’ve never been allowed to talk about marketing. So you’re in finance, you have to keep in your finances and vice versa. And suddenly they get to see this from different perspective and get to try things in different perspective.
When they meet the startup, they’re in a different place in their mind because they understand. They understand the constraints, they understand the size. So some of it is the methodology and structure and making sure everyone’s focused. Everyone knows what’s the first step, what’s the next step, what’s the timeline. When do you need to make a decision? Who’s looking at this? What’s the impact on sanitization? Second thing is really preparing the individuals and letting people get experience and access to startups.
We have another workshop which we call First Pitching and Entrepreneurs Guide the Corporate People in Telling the Story and Pitching Internally. And once you go on stage, and we’ve had someone who’s, I think it’s 25 years of experience in sales and centralization, amazing guy, and the startup just ripped him apart and told him, hey, this is terrible. I don’t understand all this terminology we’re using. I’ve never heard it. I don’t even know what these words mean. And the person at the corporate side, you’re right.
You’re right. There’s so many things no one would tell me inside organization. Everyone’s always really nice about it, but you’re right. I learned so much from this. So just creating those informal interactions where the corporate gets to shaking hands and hands are a little bit shaky when you go on stage to pitch, it’s also part of the individual setting the mindset of the people internally. And sometimes it’s transparency and that’s, I think maybe…
We were like a trusted VPN on both sides and I think that’s a lot of our value and I’ve had people in the corporate sales and I don’t trust the startup. They lied to me once, they messed up. Don’t want to work with them again. Don’t want to talk to them and I’m not going to answer any emails from them ever again. That’s my approach. That’s the way I’m going to deal with them from now on. And telling this and this and this, then start saying that we exaggerate it. We’re going to have at some point whatever it is.
Being able to be there and tell both sides, here’s what’s happening, here’s why it happened, here’s what can be done or can’t be done to repair the relationship or to do things differently is in many cases a deal savers. And we’ve had one of our corporate partners said, I don’t want to work with that. So, okay, why? I had a business model. I don’t like the business model. It doesn’t make sense for me. And so they say, okay, if they change the business model, would you be open to talking? Of course, but like why would they change it for me? Like, would Microsoft change the business model to work with me? This doesn’t make sense, they’re a vendor. And understanding that you’re a third or fourth or fifth customer for this, for short, this size, first customer to sign, it helps bringing them back to the table and saying, hey, this is the problem. And the start may say, I don’t want to change my business model, never. But they may say, for this, I feel like I might. So having that conversation brings a lot of value.
Jeff Amerine:
That’s really good. I want to take a little bit of a step back. I’ve had connections to Israel through family members for a long time. I read the book probably more than 10 years ago called Startup Nation, which kind of reignited my interest in the area. I mean, this is a relatively small country in terms of population, less than 10 million. Lots and lots and lots of publicly traded companies have come out of there. In fact, at one point it was estimated on NASDAQ there were more publicly traded Israeli companies than EU, China, and India combined. That may have changed, but still it’s impressive on a per capita basis how much happens. Give a little bit of that from, and I think about our audience of corporate innovators of why they should think about Israel as an innovation partner in general. And for those that don’t know, and there may be some that don’t, a lot probably do, but give a little bit of your perspective on that because you’ve been in the middle of it.
Gabby Czertok:
So you mentioned Israel, we like to say that together with China we’re 1.4 billion people, but we only contribute 10 million people to that equation. I think it’s US and the NASDAQ number one, China number two, and Israel number three in the amount of companies in NASDAQ. So we’re doing pretty well. From that perspective, famous technologies came out. The firewall was invented in Israel, Waze was invented in Israel, cherry tomatoes, fun fact that not everyone knows, but also Israeli technology. So there’s a lot of technology here inside our phones, computers, Pentium, the Intel Pentium chip was invented in Israel and many, many chips afterwards. So a lot of technology from a very small country, very, I am looking at the map behind you, kind of very far away and the map behind you, but everything in Israel is geared to international. So all the startups, if you go to meet a friend startup, they most likely have sold in France and maybe they’re selling in Germany. And they have an amazing business because they have tens of millions of people on that, in those two geographies. And Israeli companies most likely they’re selling in the US and then in Europe. If they end up selling in Israel at some point it may happen, but they’re global from day one. So it helps in the way they do business, it helps in the way they approach business, it helps in the way they approach building their whole tech stack and building their whole regulation. Everything that’s done is done to be ready to go global on day one. And the very high amount of stars per capita, I think it’s every 1 ,300 people who’s a startup, that statistic changes all the time. So a lot of entrepreneurs, a lot of tech density. So if I want the best product, he’s probably maybe half an hour dry from me.
And if I want the best CFOs, she’s most likely an hour away from me max. So, and everyone knows everyone to that extent. So it’s a very, very quickly high credibility evaluation. So if I want the best people and I want to find out about them, everything from their kindergarten, what they did in kindergarten through their other services, et cetera.
It’s pretty easy and that brings I think to higher chance of success when there’s higher levels of trust. I’ll say one more word about that is that I think Israeli startups, Israeli entrepreneurs have been able to play in very different verticals and very different spaces also. So it used to be semiconductor and now a lemonade insurance company, a lot of BTC technologies also.
And you’ll see Israeli technology in pretty much every vertical or every industry.
Jeff Amerine:
You know, the, the authors of the book, Startup Nation said, said that there were some cultural elements that were extremely helpful as well. And that the Talmudic training, the sort of, conversation and debate was, was kind of part of the society. They also, he made the point that the IDF is a very flat structure and there’s compulsory service and that, and it was challenges were welcome. And that that sort of, that, that sort of mindset, where you have a flat organization and where there was open dialogue makes this sort of fuel and kind of fabric that makes a good startup successful because you get really talented people together. They focus on the goal, but they’re happy to debate things along the way and it makes it stronger. It’s not extremely hierarchical. What are your thoughts about that?
Gabby Czertok:
So I think it’s a lot of, there’s a lot of cultural elements for sure and being able to challenge everything and the CEO and the intern have, I would say they have the same rights, but they have the, and a lot of companies, the intern will have a, it’s okay if they don’t go up to the CEO and say something that’s wrong in the company in his or her opinion. And it’s not unheard of. And you see meetings where there’s 15 people and everyone, you don’t know who’s, it’s not like there’s one person who’s saying his opinion and then everyone’s following and everyone has an opinion, it’s okay that they share their opinion and it’s fine to communicate it. So it’s expected almost. So I think that’s one thing. I mentioned that the talent density is another thing. I think the fact that also the entrepreneurs here are very open to learning all the time.
Every opportunity is a learning opportunity, increases chance of success, but it’s part of our culture being curious and being open to learning all the time from everyone, any opportunity, because that’s where you see high value. And there’s always, for every interaction, whenever you can learn, wherever you can improve, how can I be better? And almost like self -beating ourselves with them, what can I do better, what can I do better, is very helpful for building a startup and for bringing an entrepreneur.
And then the hours, it’s interesting because we talked about this before about the time difference, etc. I’d say typical Israeli entrepreneur before midnight. So pretty much 3pm to midnight is for calls and you’re connected to the first hours, the East Coast and then you go to the West Coast. So it’s a very, very common interaction here that people are from that perspective always on.
Jeff Amerine:
Yeah. And that’s great. I mean, I think it’s a compelling story and it’s something that if those that have the innovation task, the commercialization task in large enterprise, aren’t familiar with the opportunities there, they should certainly take a close look at it. And that’s kind of a good segue to this next topic, kind of the final thing that I want to really go into in a bit of depth. As a midsize or even a large company that’s trying to create a more impactful set of connections to take advantage of startups, international or otherwise. What’s some advice to them in terms of how they get ready? How should that enterprise get ready? Just like you said, to be a good innovator. I mean, all of these, if you look at kind of the half-life of publicly traded companies, it’s as short now as it ever has been because they’re getting out-innovated. New products and services are coming on more quickly than what they can do because of their own size.
So how can they get ready for what comes next? The large enterprise or mid-sized enterprise that maybe hasn’t had a long history of being particularly innovative or quick to market.
Gabby Czertok:
So I’d say it’s kind of the flip side. It’s going back to be curious. And if you’re curious about what’s out there and how things are looking, I gave a workshop in Japan a few weeks ago and some entrepreneurs told me that the Japanese corporates are slow and they’re not really open and they’re not ready to explore. But the American corporates, they’re amazing and they’re always ready to explore and they’re always open. And it’s interesting that every corporate we talk to, they say, listen, we’re not as fast as the other companies, we’re slow and we’re complicated. Everyone looks at it and it’s almost like a distorted lens that you think, it’s really hard to perceive where you really are on the innovation curve. And we moved to the term commercialization because that’s where we focus on. I think there’s in the journey of innovation, there’s an exploration and moon shots and the beginning where you want to really conquer the world and figure out what’s even out there and help us imagine the future. And we come a little bit later stage of let’s get focused business value. So I would say one thing is understanding who are the stakeholders, the manner and set around station for this kind of process and what are their problems. And if you’re not solving something that is someone’s plan, someone’s bonuses are connected to it, someone’s OKRs, then answers of why are you solving it and why is it not on their OKRs.
And if it is, make sure that person’s involved from a very early stage. And bringing the right people in the right stage with the right problems is a very big part of this journey. And touching the people, making sure that there are some people who are going to move you forward in the process, and some of the corporations that are going to hold you in place, some people are going to pull you back. So making sure that you have the right internal stakeholder management, internal stakeholder air cover, but also making sure that you’re able to bring value to everyone interacting in the process is super, super important in this type of engagement. Then the second thing is figuring out what processes do you have internally, which will make you unsuccessful if you try to do this. So…Some of you will find out that the first startup is going to get a 64-page MSA requiring nine types of insurance and I think they’re going to say, hey, we don’t have any of these things. Do you really need all these things or the 40-page InfoSec questionnaire you’re going to get? And then you’re going to find out that the startups will say, listen, we had a startup once who said, listen, I don’t think I’m one of these corporates. So why? I said, I don’t have cameras in my office. I don’t have a safe. They’re asking you all these questions. I should have a camera. I should have a safe. I should have a lock. I should have a security guard.
I don’t have any of these things, what should I do? I’m saying no, no, no, no, I can’t even submit this, it’s terrible. And so the corporate being able to understand what processes internally are gonna be challenging in this process and then what can you give up and what you can’t give up. I have to have indemnity, I have to have…
My procurement process has to be involved. I want to maybe get a specific person more involved because they’re more geared towards startups, but I want to keep it this way. I don’t want to do this. I do want to do that. And I think the most important thing is flexibility. Listen, here’s what we think we’re going to do in this process. We’re going to need to evaluate ourselves all the time. We need to get honest feedback from everyone involved in the process and make sure that the people we’re interacting with are honest and transparent all the time because that’s how we’ll improve, iterate about it. People who come with a here’s our plan, here’s a three -year plan for innovation, I just think it’s so hard to be able to predict the internal process and the changes and every plan has to have a methodology, a basis, a good structure and then what are we going to change, how are we going to learn, very very strong introspection and what went well, what didn’t go well, and making sure that people who are in this closed circle are able to share their opinions openly and talk about it. I think that those are kind of key things for success. And the last thing, I’m a little bit biased, but partnerships are super important in this process also. You’re going to work with external vendors, external suppliers, external partners, or startups. What can increase your chance of success? What can reduce risk, and who do you need in the room when you’re talking to them, when you’re interacting with them? How do you make sure this type of partnership works? I see in many cases, corporations hire someone who was an entrepreneur or was in the startup. I think that brings a lot of value. Working with third parties who have experiences, who have done this before. For us, it’s interesting because sometimes our partners say, your process seems impossible, but I’ve seen 10 other Fortune 500s doing it. So I don’t even know if I believe and then tell other people, listen, if this can be, Paramount can do it, then we can do it. If Merce can do it, we can do it. Because one of the first reasons people say, no, we’re too big, we’re too slow for this. Wait a second. But if they did it, then maybe it’s possible. Maybe there’s something here that’s possible. So even just the kind of belief, the kind of art of possible is something that gives power to people inside the organization to try things.
Jeff Amerine:
Now that’s fantastic. So we’ve been on this morning with, Gabby Czertok, the founder and CEO of The Builders. He’s given us some great insights around, corporate innovation and commercialization and how these bridges can be built. Actually, the program was called the bridge between really great, highly curated, high tech ventures that have specific solutions that might be relevant. And enterprises that are trying to figure out a way to kind of jump the shark and go faster to get interesting stuff into the market more quickly than they might otherwise. I really appreciate you being on Gabby. This has been super insightful. I know it’ll be great for our audience. And one final thing, where can our listeners find out more about yourself and also The Builders?
Gabby Czertok:
So thebuilders.co and LinkedIn is probably the best place to go. I think I got LinkedIn slash Gabby. I got one of the first ones. So, but I think I don’t know if we can post the links, but inviting people to thebuilders.co to reach out and or gabbyc@thebuilders.co. Happy if anyone has questions, curious about the process, trying to figure out things, happy to help out and kind of be a sounding board and really thank you very much for having me. I really appreciate it.
Jeff Amerine:
Yeah, thanks for coming on. It was great.