Interview with Oren Kaniel (CEO, Appsflyer) about investments, app ecosystem and corporate culture
Whether it's possible to make several. Shots, maybe. Through. The office a. Flower. Has been growing really fast for, lusty years, do you know exact. Number of employees. Working, today, in the company yeah. 344, something. Like that. How. Many employees do you know personally. I'm, trying, to know everybody, I'm, still, I'm. Still, first. Of all I'm interviewing, all. The, new hires. So. I know everybody, in person. Everybody. Is kind of surprised when I'm saying that I'm interviewing everybody but I I do recommend. For. All all. Enterpreneurs. And CEOs to keep, interviewing. Everybody because. It's, so. Much value, in meeting. Great, people right. Now I just. The. Entire company, to basically. Hire great people so. Even, for me to speak with great people is a good experience, and there's so much value in in speaking, with the, candidates, even before they start to being an employee and they. Appreciate, that so much they. Learn so much I get, to know them so I don't see like unfamiliar. Faces in the office, I. Want, to be a proud approachable. If if. They want to talk about anything, if they want to talk about the strategy, of the company if they want to talk about the product, or a specific, markets, and. Stuff. Like that, how does it feel to manage, such a big company, is it, exciting. Or do. You feel some pressure, sometimes. Some. I don't know responsibility. In, terms of my personal challenges. The. Challenge has changed, is, it more. Difficult for, me today, than, it was three. Years ago no, it's not more difficult for me than it was three years ago or four, years ago I think that these challenges, are different different. Challenges, okay, what's the three. Main differences, so if, let's. Let's let's, go back let's say. Four. Years ago all, right we, had very. Little funding I had. A million. You. Have got good memories so let's say before, well. You. Know four, years ago I said yeah for foreign, something before the seven million round, so we raised. Half. A million okay, two thousand twelve and I. Managed. One. Excel file the. Excel file. The. Bottom, line there was time. To live how much money do we have left. To. Run the company okay. And at, the beginning it was several, months and then we hired people and there was six months five. Months, four. Months to live it means that you have enough money to run the company for four months. So. Much pressure, is. It more pressure. Than. Today. Or. Not, you. Can tell me it's different right because of, it there you say okay if, we're. Not raising more money or, if we are not changing something like, we need to shut down the company in four months how, many months is can, you live now. With your with your last fifty, six million, investment. And. Then, three hundred and forty employees now, it's a different play now it's we, need to decide. Whether. And, how, fast we, want to grow right, so you can control it you. Can control it you have a lot, of clients, they're, paying for the service at the beginning we didn't really have we had clients but we didn't have revenue streams so the cash flow was only one direction from. The company to employees, and vendors and everything else. Speaking. About investments, so, yeah, you've raised 56. Million in. Round. C before, you were raised 20.
In Round B and, 79. In round 8 yeah. Can you say which round, was the most difficult. One the, first one that you didn't mention so the seed brown was and and it's not mentioned in conch base and this is where probably you taking it from, the. Citroen was half a million dollars that was in 2012, and, was. The most difficult it was the most difficult why, because. We. Were two. Guys working. On, some. New, technology, and. We've. Been walking, around and talking with and masters, about, what we're doing it and why. We think it's really. Really important and. They. Didn't get it I mean everybody, said no no, no and I. Can tell you that probably, we've. Been talking with a lot of investors, here in Israel, and Tel Aviv but, by the way I want to get its really interesting questions, so at the beginning it was really difficult because you couldn't you you, don't have any justification. From the market, right and, and. And, investors. Need to trust your story trust, your knowledge, and. They don't have any validation. From, from, the market, and. Anyway. They need to gamble, and. Once. You move, on the. Investors. Have more. Evidence. That what. You're doing, is helping, other, companies. And. Then, Iran. Was easier, the. B round. We. Have bunch of investors, coming to us and in. The last round we have many, many many investors. That wanted to invest in the company and we. Were not in the round it, means that and. They got to know us by, their, portfolio companies usually, investors, invest, in other companies. They. Asked, them about the tools and stuff like that and they get to know the company and the product even. Before we talked with them so there, were really interested in what we're doing even, before we talked with him do, you have plans to to, make apps for profitable, company in the so, first of all it's a it's, a cash it's a cash flow positive. Business. Right now in, terms of profitability. This, is our decision whether, we want to make it profitable. Or not the, vast majority, of the company, is working. On, future, products. Now. If we want to be profitable, and, just cut all this, we. Don't need this right so we can get profitable we, can maybe instead. Of 100 engineer, software engineers we can have 20 just to maintain, whatever, we have and that's, it we're saving a lot of money immediately. We're becoming so, profitable. But. It's it's a short term we're not here for the short term we. Are now very successful. Because. You, know why because. We always, invested, in the product, what, is the future. Five years ten years when. You for, example Amazon, was not, profitable for and you know 20 years this is the culture, of Amazon, that they invest all, their, revenues, in.
New, Business this, is the culture of the company this. Is the culture of Jeff Bezos, and, everything. Is invested. In new businesses, and. We. Have the same belief. Epsilon, has 13. Offices at the moment yes, Israel, US China, Germany. UK, Thailand. Japan. Korea Ukraine, Argentina, and Brazil correct. Yes. It. Was one mistake no. I'm joking. Which. One was the most difficult, to, open. I don't, know you, know it's it's in. The end it's not about the country it's. About individuals. If. You have great. Team. Or great, individual. To. Kick, off and. Lead. An office, it's. Easy how, do you hire. This. Individuals. In different countries, its network, is getting to know people is. Speaking. With people is. Building, that your network, in the end of the day I think in our industry, China is one of the most, challenging markets. And one of the most difficult to, enter but looks. Like caps fire has big, success there mm-hmm, mmm, how did you manage to do this first. Of all. Product. Chinese. Clients. They. Know exactly what, they're looking for. There's. No bullshit, there if, it, works it works if it doesn't work they tell you that it doesn't work and they demanding. I think. It's a positive thing because, it, they push, you to. The limit and, to making, your product, even more robust and. Developing. Things that you didn't, think that needed. They. Know exactly what they're doing and and. We're. Very, very happy to start working with them in very very early stage of the, company how. It started I don't know it's there was a lot of demand coming from China at. The beginning we didn't think that this. This is what's gonna happen but. We've. Been trying to focus on, all. The other regions as, well, and. Then we started to work on to. Work with some. Of the largest Chinese. Companies over there and we saw that they, have an amazing team. Everybody. Knows English. They, know exactly what they're doing great, applications. Get great products, and I. Decided that yeah these, these are the companies that we really want to work with what. About Russian mobile market we love it you. Have. Very. Good team. Working. On Russian market yeah but from. Israel, yes, do you have some plans to open a physical. Over there first, of all we really love, the. Russian market in, general, I think that few. Of our. Most. Important, clients, and even, the first sell. The. First real sell was for, quite big. Russian. Gaming company. So. For us is a history, of the, company. We. Have a very. I, would. Say special. Thought. When we are thinking about the the Russian, market because for, us it really started from the Russian market were, you surprised, that Yandex. At metric has. Quite, success, I mean, just. Offering the free. Product and. Looks. Like a lot of companies. They use. It because it's just because it's free I think. That, if you are using something, that is free you need to be very very very worried, if, you, look at the our service. Or. Any analytic, service, or any service that you give away your, clients. Data, you. Need to be very very worried, you need to ask the right questions, how. I mean. Let's, let's start from the beginning for. Software companies. B2c. Companies, or any, company there, is a, lot. Of assets right cash, they. Have. Furniture. They have computers, and. They. Have data yeah. They're. Clients data. Data. On their clients what they're buying what they like to buy how much they spend, CRM. Data, you. Don't want to give that away to your competitor. Because. They're gonna go one by one and take your clients. If. This, data is gonna, go to your competitor.
They're, Gonna go one by one and take, your clients, if. I know. My. If, I know about my competitors, clients, how much they pay what they're interested in I'm just gonna get a counteroffer, for, them and I'm just gonna steal them away. Think. About gaming, companies. Maybe. One percent is actually paying in our purchases. Would. You imagine giving this one percent of. Your, users, to. Your competitor. So. They're gonna spend with. Someone else because. Someone, is giving you free. Product, a free. Analytics product so. You're telling that if, the tracking. Solution, is free is probably. Given every unit I'm, saying that they need to take a look at very deep look at how. That data is being treated, usually. When it's usually. When. It's free, there. Is a reason why it's. Free and, if it's a premium soft software, there. Is a reason why is if it's premium software because, there is a cost there, is a cost here, to build that right. We're, not building it because I, don't know we have infinite, amount of money and, our. Investors, would like to spend money right, in the end of the it needs to make sense and, you have, two options when you're dealing with data a monetize. On the data it's. A legitimate business this, is how some businesses, work. And. Some. Businesses. Are monetizing, on service. Or software, fees. We. Selected, to be this independent. We, selected, to be unbiased, we. Chosen. To, basically. Protect, your assets protect, your data and make sure that you have. Right and, not giving it away to, someone, else to take over your clients this. Is an invisible. Threat. To. Any company, I. Think. The main buzzwords, of all, the tracking, systems. Including. Apps liar last year was fraud. What's, your estimation, of the fraudulent traffic. Share it's, a it's, a good question but it's a very difficult question to answer. I'll, tell you why, what. We see is, our. Own ecosystem yes. Why our ecosystem, we. Fight fraud in. Basically. Two. Factors, one. Technology. So, we have technology, we have a lot of data we have sixty percent market, share we see a lot, of data we see thirty billion, mobile. App events. Every. Day. We. See, something. Like four billion active devices. Smartphone. About four billion of them this is a huge number. This. Is probably every single smartphone. Out there on, the, planet we have a lot of data and we can analyze and we analyzes, all these data all, the time and. This is how we can detect fraud this, is the one component, of our fraud protection, the. Second one is. Kind. Of a network. Effect we're. Telling our partners. When. It comes down to our clients. Please. Make sure that. You're not sending, fraudulent, traffic, to our clients because a we're going to detect it. We. Will certainly warnings. To make sure that you are actually actively. Trying, to remove fraud because when. Everybody is doing fraud is like, the. Prisoner, dilemma and I had the blog post about the prisoner dilemma and fraud because. In. Order to be competitive in the market you need to do fraud because if you're not doing fraud or you're not you know turning blind Einon fraud, you're, right, numbers are. Not. Competitive, because, someone else maybe is mixing it with fraud and then, the, ROI looks great. And, you, know the competitor, you need to do something about it but if we create an ecosystem that no one is doing fraud and. We create for the first time we actually create, an environment, an ecosystem. That. Everybody. Is incentivized. To. Basically protect our clients and.
You. Believe in this yes, you're in such a good system where we, remove two partners, that we have reasons. To believe that. Not. Only that they didn't do it enough to clean up fraud we believe, that these partners. We. Don't really call them partners their, their main business, was to, make, fraud then we just remove, them from the platform, block their account, and and. That's, it what, do you think about Facebook. And Google attribution, models and they kind of define the attribution, by themselves. Do. You think that it's not. Totally. Transparent, to, the market I think that there is a misinformation. I think that the market is being fed by misinformation, and, there's a lot of misinformation in, the market I think that. Sometimes. When competitors. Do not compete on the value, they compete, then they say things about price and about, this and about losing money and about losing, money on accounts that's all stories. And there, is a new story about the self. Attributed, networks we. Heard one of our. Competitors. Saying, that. They don't have multi-touch, attribution, because. They're not getting all the data from Facebook and Google the self attributing, self, reporting, networks by the way self reporting, networks, but. It's wrong we, and they, are, getting all the, data that they need in. Order to perform in, order to do multi-touch, attribution. We. Have multi-touch, attribution for, the last almost three years you, can define the look-back windows, for. Both impression, and. Click for. All the networks including, the self reporting, networks it's fully configurable, and, our. Clients have that. Option. To configure and, do, anything they want what. Do you think about retargeting, perspective. Yeah. So first of all we are. Big. Believers in retargeting, and, we're engagement, from. A very very early stage. We. Thought that the market will shift from volumes. And installs, into reengagement, and, true engagement. Within the. Apps it, was slower, than we anticipated. Or thought, it's. It's, gonna be but it's thick enough and we. Are very happy and excited about it in. Terms of the, product we invested, heavily in everything. That is related to, retargeting. And we're engagement, for. Example, we. Have one link deep linking which is a critical, component to, perform, retargeting. On mobile you, want to land your client, and a specific landing page whether, or not they have the application, installed that's, one. Which. Is deep linking and then, this. Year we released audience. Segmentation, that you sit can segment your users based. On the first body data and push these segments, to different partners to. The retargeting and we engagement, definitely. We see that happening, I think, that the segmentation.
Product. That we released this year, is super, successful and we have so many clients that working, and using it probably. This is one of the. Products, that we released, that being, adopted super. Fast with our, clients. What. Do you personally focus, on as a CEO, I mean what are your daily, daily, tasks it's, everything it's. Everything I can I. Can. Think, about the product, I can think about the product packaging I can think about the company structure I can think about people, I interview, people I talk with the team I talk with managers. I, can, go in they fund it in certain things or, talk. Or be. Very you know and. And. It. Doesn't, fit out, there I can, think. About specific. Markets and I can think about. So. Many things it's like. Like. Like everything. If. You ask me what. My. Main, concerns, when. I'm doing all that I think. In. The end of the day it's about it's. A for us it's about execution. Execution. Is people so we do care about, our people. Investing. In them and growing in the growing, them culture. I think. That maybe. There is one thing, that guides, me in, in. Building, this company is. How. We. Can make this company a company, that all. The, employees are proud to be. A part of whether. They're currently, employed or, if. They look at the past and. How. Can we make this company. That. They would be very, very proud that. They, took a part of this journey and this. Is a question, that we. Have a lot of answers and, we're, trying to implement the answers but. This is a question that I always ask myself, if, we, want to do something yes or not and, think about it it goes a very long way so, it. Also means, that we need to have a really really good product that people, are proud of right and then. It. Means a lot of other things okay. In the last one, what. Is the main, goal. For EPS, lair for, next year. Southern 18 one, main goal to, continue, to. Win. The market it's. Very simple first of all we need to keep our current, clients, and partners. Happy. With. The platform and with. The service that's one thing we. Want to make sure that everybody is happy or. They you. Know like Jeff besos said they're always gonna make it they want to want. It faster, and cheaper right, yeah. So clients will always want to have, better. Platform, and cheaper. Prices we, understand that and we're trying to do that this, is our target for 2018. We hope that the. Volume. Level, of the word, fraud will, decrease. Because. Fraud, will. Be decreasing and, we. Will hear more about, the. Good stuff, that this industry has to offer like retargeting. And we engagement, and everything that eternity yeah and everything that you can do with it because, fear. Is. Not, good for business and if. We remove, fear, with. Technology, companies. And. Individuals, will think about growth. We. And. We're not thinking about oh I'm being ripped off or something like that and I, hope that 2018. Will be that year Thank, You Orin thank, you much for for. Coming I mean that's possible.