Israelnewsletter.com had the opportunity to sit down with serial entrepreneur Yaron Galai, Co-Founder and CEO of Outbrain, who sold his last startup to AOL, to talk about his newest venture.
Can you tell us a bit about your background? Yaron Galai, Co-Founder, Outbrain: I’ve been an entrepreneur since I can remember myself working… Actually realized recently that I have never in my life sent my resume applying for a job. I am now working on my 4th company called Outbrain. My first company, in which I was more or less the only employee…, was called NetWorks. It was one of the first web design shops in Israel. I started doing that around 1995 or 96 when the first Netscape browsers just came out. I ended up developing about 30 or 40 websites for companies in Israel. Doing this alone, I had to figure out all aspects of launching a website – HTML, hosting, design, SEO, etc. In retrospect I guess that was slightly insane, but it did give me some decent insight into the whole internet thing, as well as into running a business. I ran NetWorks for about 3 years, and all while studying product design at the Holon Institute of TEchnology (www.hit.ac.il), so it was pretty much all done on a moonlighting/weekend basis. This might have been part of the reason that I had failed to graduate and have never received an academic degree…http://www.outbrain.com/get/
After NetWorks I co-founded another company called Ad4ever which was a rich media ad serving platform. That company was later sold to Atlas, which was later acquired by Microsoft, but that sale happened way after I left the company so I can claim 0 credit for that happening.
I left Ad4ever because I had this idea for serving people on the web with interesting and contextually relevant links. I joined forces with my co-founder – Oded Itzhak – and we merged both of our ideas to one company which we called Quigo. After a couple of years of iterations, our product evolved into a contextual ad network. We ended up serving contextually relevant text ads on top-tier publishers, such as ESPN, ABC, FOX News, etc. That business grew quite nicely and we eventually sold it in 2007 to AOL.
Tell us about Outbrain. YG: Outbrain’s goal is very simple – To serve readers of blogs and news sites with interesting and relevant links to other stories. I love reading blogs, magazines and newspapers, but I always feel overwhelmed with the amount of content that’s available. Blogs specifically create this massive flooding of content that’s impossible to sift through today. With Outbrain we wanted to help readers to easily find great articles or blog posts in an easy, quick and automated way. We offer bloggers and publishers a free service that they can place under each story they publish. Our system then automatically places highly interesting and contextually relevant links to other stories on each of those pages. For the blogger/publisher, this service provides a great user experience, it generates more traffic for them, and it gives some feedback on the content they produce. Again – the service is completely free, and can be installed in less than 2 minute on all major blogging platforms such as Blogger, TypePad, WordPress, etc:
We believe that good recommended links have to be personalized for each individual reader, and so over time, as our algorithm learns of the reader’s reading taste, our recommendations become increasingly personalized.
Have companies using Outbrain, seen an increase in traffic? YG: Yes – all bloggers/publishers who install Outbrain see an increase in traffic. And as our service is completely free to the blogger, that increased traffic can be fully monetized by them with ads.
But that’s not the only way we let bloggers/publishers make money. We’ve also recently introduced an advertising program which we call Sponsored, But Good™. The idea here is to apply our same principals of serving interesting stories to our advertising. Advertisers pay us to drive traffic to interesting stories, reviews and blog posts written about their company. We put a lot of emphasis on ensuring that the stories submitted by advertisers are both authentic and interesting. We then share the revenue generated with the bigger bloggers/publishers, and let the smaller ones donate some of the revenues to a charity of their choice. More information about our Sponsored, But Good™ program is available here: http://blog.outbrain.com/2009/02/sponsored-but-good.html
So when a blogger installs our service, they don’t only improve their site and user experience, but can also make money in two ways – increased traffic that they can monetize via ads, and revenues from our sponsored link service.
What are the risks to your business? Is there any competition? YG: Yes – there are quite a few companies that provide related link functionality to publishers and bloggers. Some charge money for the service, some offer contextual links without personalization, etc. We like keeping an eye open on competition, but don’t pay too much attention to it as we found it is much more important to listen to our customers (bloggers specifically). We’re pretty obsessive about supporting our bloggers and helping them be successful using the Outbrain service.
As far as risks go – I think our biggest risk is of losing focus on what we do best – serving readers with highly interesting, relevant links to other stories. As a startup it is very easy to get tempted with “opportunities” and spend lots of resources on things that seem important for the company for a moment, but don’t really matter to the customer. That is the silent killer of most startups. We put a lot of effort to remind everyone on our team that we have to focus on providing our bloggers a great widget and terrific customer support, and provide the readers with great links. Losing that focus is likely our #1 risk.
Benzi Ronen is currently on a quest for his next start-up. He and his partner Yossi Pik recently launched Buddy Runner (www.buddyrunner.com ), a personal virtual fitness trainer for your mobile phone. Israel Newsletter recently had the opportunity to sit with Benzi to learn about his newest venture.
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Most recently Benzi was Vice President of Product Management and User Experience at SAP. Prior to SAP, he co-founded and was CEO of Octago Inc. based in San Francisco. He was a product manager at both Microsoft (Redmond) and Netscape (Mountain View) and completed an MBA at the University of Michigan and a BA in Sociology and Anthropology at Tel-Aviv University. He met his business partner, Yossi Pik, at SAP where they had a chance to work together and realize that their skills and passions were complementary. Yossi was VP of Research and Development where he led a team of 70 people. You can read more about Benzi’s “Journey of an Entrepreneur” via his blog at http://benzironen.wordpress.com
Give us the elevator pitch about BuddyRunner Benzi Ronen, co-founder, Buddy Runner: Buddy Runner provides the capabilities of an expensive GPS enabled personal trainer on your Android phone. Buddy Runner allows you to monitor each run by recording your distance, pace, time, elevation, and route. A personal dashboard is created for viewing, analyzing and sharing your progress. With over 10,000 downloads during the first 4 weeks of our launch as well as being one of the highest ranked applications within the Android Market, we are much better positioned to place our next big bet.
Our premise for Buddy Runner is that smart phones will become our personal assistants for different aspects of our lives. Examples include; help with administration, managing our social lives, shopping assistance, and the area we are focused on which is a person trainer to get you fit and live a healthier life.
The convergence between a cellphone in everyone’s pocket , computing power on small devices, and mobile high speed Internet access created the perfect storm for the next technological gold rush. Smart phones are in their infancy but became top of mind when Apple released the iPhone. Why was this a significant transitional event and what makes a smart phone different from the phones we have seen to date?
Smart phones provide a technology platform that enable developers to easily develop applications and make use of the different functionality of the phone.
Smart Phone providers succeeded in circumventing the telecommunication companies that had a lock on what could run on the phone by delivering a market place where developers could freely upload their applications and consumers could easily download them. In addition, there is a payment scheme on the store which provides incentives for developers to let their imaginations lose.
iPhone’s slick user experience and savvy marketing quickly turned a geeky concept into a must have consumer electronics device for everyone.
Given the openness of Google Android, is there a technical barrier to entry? How will you differentiate? BR: Yossi and I selected the Google Android platform as our beachhead before broadening to other smart phone platforms. Our rationale was driven by Google’s open platform approach which provided us with the ability to rapidly build, experiment, and iterate our technology development. This approach worked well since today we are able to leverage most of our technology investment (server side) as we traverse to additional smart phone devices.
The tsunami of smart phone applications (already over 25,000 for the iPhone) make it difficult to gain market attention. Most of the applications being offered involve relatively little development (less than 30 days of development), don’t have any technological patents and have a short shelf life since their cache wears off quickly. As a result, the application demand behaves similar to movie box office hits. There is a short window of opportunity to materialize a big hit and the general public’s attention quickly moves on to the next new thing.
With Buddy Runner we have focused on a lifestyle category. We don’t expect to appeal to the masses but are rather focused on gaining the attention of a homogeneous segment of users that run at least once a week outdoors, are interested in tracking their results, and are willing to run with their cellphone which they often also use as their music player. This group becomes a diehard segment since the application becomes more meaningful as it contains more of your personal workout data.
What is the next step for BuddyRunner? Risks? BR: Since we are bootstrapping the company, we need to quickly determine the best way to monetize our success without challenging our popularity among users. We are constantly debating our long term vision with the need to generate revenue in the short term.
The fitness category has a many large gorillas which have a big interest in securing their positions. Nike and Apple released a joint offering (Nike Plus) which includes a pedometer within the shoe that communicates with the iPod. Garmin, Polar, Suunto each have their version of high end fitness watches. Each company is trying to leverage their strength (brand, market traction, technology) in order to become the leader in this category.
It is clear to us that we will not be able to become a significant contender by playing by the same rules. Our product roadmap depends on utilizing the unique benefits of a smart phone and incorporating them into your workout in a way that none of our competitors are capable of doing. In addition, we need to ensure we differentiate ourselves among other fitness application running on smart phones so that we can justify charging a fee that will provide us the gas to bootstrap our way to the future.
Even though the Israeli real estate market has barely taken a hit in the current economic slowdown, Israeli consumer confidence has. That must be a reason to explain why fewer and fewer Israeli’s are looking to make real estate purchases.
According to Globes: “The economic uncertainty has caused Israelis to defer dreams of buying a first apartment or moving to a new one. In April, 6.6% of Israelis said that they planned to buy a new or second-hand apartment in the next six months, compared with 7% of Israelis in March, according to the Consumer Confidence Index, compiled by Globes Research and Kesselman and Kesselman - PricewaterhouseCoopers Israel. This is the lowest level since January 2009, and before that - in January 2006.
The low level of planned home purchases in April is unexpected, since the Consumer Confidence Index jumped in April to 76.1 points, its level before the collapse of Lehman Brothers in September 2008.”
Let’s see if this lower demand will translate into lower home prices.
Pope Benedict XVI is visiting the Holy Land for a week long tour, the first since Pope John Paul II came in 2000 and only the third visit in recent papal history.
Bringing and escorting the Pope around Israel is not a simple matter. In fact, much of Jerusalem is coming close to shutting down this week to make way for an enormous security detail. Dubbed “Operation White Cloak”, His Holiness will have over 80,000 security personnel in his retinue, including over 60,000 policemen.
Hashmira’s command and control center will provide remote monitoring solutions of the sites being visited by the Pope to Israel’s police and security forces.
The system that Hashmira has set up is estimated to have cost millions of shekels and will link to the Pope entire itinerary while he’s in Israel, including Jerusalem’s Old City, Yad Vashem, Hadassah Medical Center in Ein Kerem, the Notre Dame Hospice in Jerusalem, the residence of the Vatican Ambassador to Israel, and the Church of the Annunciation in Nazareth.
Bringing and escorting the Pope around Israel is not a simple matter. In fact, much of Jerusalem is coming close to shutting down this week to make way for an enormous security detail. Dubbed “Operation White Cloak”, His Holiness will have