Eitan Koter, co-CEO of Wimi, bootstrapped his video-commerce platform for a decade instead of taking VC money. He built 3-4-month product cycles, delayed hiring sales teams until the product was polished, and treated cash flow as the survival metric that mattered most.
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Welcome to another episode of the Whole Human Podcast, an episode where we're going to be talking about growing your company profitably without external investors and comparing that to how you do it with external investors. As always, we're trying to have a very transparent and honest conversation about building companies. And I'm thrilled today to have with me Eitan Koter, who is the co-CEO of Wimi, uh, a major e-commerce player. Uh, Eitan also has a lot of experience doing podcasts on the other side of the mic, so to speak. Um, so we, uh, we're, I'm sure we're going to get into some of that as well. Welcome to the show, Eitan.
Hi, Peter. Thank you so much for inviting me. How are you?
I'm very well, thank you. Hopefully you're the same.
Yes. Yes. Likewise.
So tell me a little bit about what your company does.
Yeah, so Vimi, we've celebrated, uh, 2 months ago, 10 years since founding the company. Uh, we are in the video commerce space and we provide brands with variety of shoppable video and interactive video type of tools and functionalities. So they can enhance their marketing activities. Those videos are being used as part of their influencer marketing campaign, or UGC content creators campaign, or even their own sellers can create videos. Those videos are posted on social media, website, and marketplaces, and, but they're all shoppable. So we are creating this connection between a video and a product page and enabling this shoppable Yeah. Experiences across TikTok, Instagram, Facebook, Amazon, Walmart, Walmart, and also on the customer website itself.
Great. And, and you've been doing video for most of your career, right? You kind of started in traditional media and then you moved online and, and now you're making it interactive.
Yeah. Someone told me, I think it was like in 1999, that Eitan, please be aware that you're not going into the video space and there is no way to go, to go out. So you are doomed. And I couldn't understand what he's, what he's saying. But yeah, I started in video when it used to be called broadcast, right? This is before the iPhone, before IP, before any of those streaming technologies that are so common these days. Um, we always saw the evolution of video from analog to digital and from digital obviously to IP and streaming and the evolution of global CDN and IP traffic. And today video obviously is a major, uh, type of media. Video is, I think more than 85% of the global internet traffic is video. So we see that all over in businesses, in entertainment and education, medical, in so many different type of, uh, industries.
So, and actually you've succeeded where I failed. I started a company called BeamBack TV. Uh, at the early days of the internet where we tried to make TV shows shoppable. So you would be watching an episode of Friends and, you know, Phoebe would be wearing something or there would be a couch or something. And so we tried to get brands to pay us to make that couch shoppable. So if people paused it on, um, on their controller, uh, if they were watching a playback, They could then shop for the couch and get it beamed back to their internet portal where they can then shop it, right? Brilliant idea, we thought. One thing we forgot was the, uh, amount of data you could send back up the pipe, uh, was, was very, very small.
Oh, okay.
So we actually, we could get all the information, but we couldn't send it back out to the internet and make it shoppable. So we failed miserably, but, but we tried. Um, I wanna talk to you about how you've built Wimi because You know, your story I think is a little bit unique in a world where everybody chases, uh, investment. So tell me a little bit about what the focus has been and, and how you've grown, uh, the company over the years.
Yeah, that's a very good question. So initially I started in the video in a company called Scopus Video Networks that we raised a lot of funds for these companies from venture capital. And also we took the company public in 2005, so I actually floated the company on NASDAQ at the age of 30. And also like in 2009, a bigger company acquired Scopus, a company called Harmonic. So we had, uh, we were lucky to have some exit opportunities and I met my, my co-founder, Amnon Sherf, um, around 2009 and Both of us, uh, started to think about what to do next, and we saw that we can, uh, start developing new technologies around video management, video streaming. But in parallel, we saw various opportunities in the market that were quite substantial. So we were able to win some substantial business with those initial functionalities that we've, we've developed. And we grew together with customer demand and developing more and more functionalities that are, we thought that are relevant for other customers as well, but they were immediately being deployed with our design partners or initial customers, customers that we had in, uh, at the get-go. Uh, we knew that we can raise funds, but we also thought that maybe on this round, let's try to bootstrap and It was, uh, uh, a, a decision that we took from, from, from the get-go. Um, it requires a lot of, uh, discipline and probably confidence and some experience by the founders to be able to take such, such a decision and actually risk and deploy some of your personal money also into the company, uh, for supporting cash flows and, you know, times of dips in terms of, uh, flow. flows of income. Uh, but yeah, this is a decision that we took from the get-go and we find a way how to work around it. Uh, it's one thing to do to bootstrap, but I think it's a completely other thing to bootstrap for 10 years with profitability and, and, um, the ability to grow throughout this period. That's another, another important aspect of what we are doing here.
And, and so how have you done it, right? So if, if I'm If I'm listening to this and I'm thinking, okay, I, I really wanna bootstrap my company, what are some of the things that you absolutely must do? And what are some of the things where you in the past may have made some mistakes, even given your vast experience building companies before this one? Sure.
We've made a lot of mistakes, but I think it's important to understand that it takes 2 times the money and 3 times the time to reach some level of, uh, milestone that you, you, you plan. We knew that we are happy to risk a certain amount of money and time, and it requires that initial foundation of making a decision that you, you want to take that challenge and you have a, the right cushion. It can't be that you're risking your entire, um, savings. No, don't do that because most of the chances that it's not going to succeed. But some amount of that, that you feel comfortable of, uh, of using that are, uh, like reserves that you have and you want to execute and you want to monetize that in some kind of an, uh, uh, you know, better way. So you can take your money, put it in some account savings or invest it in a stock exchange or whatever, someone to manage your money or buy real estate. But you can also invest in a tech company. Now today with software, like 10 years ago, it used to be more challenging. Today you can develop products and solutions so fast. Um, like 3 months are, are probably a sweet spot of, uh, from initiation of a, of a, of an R&D development.
Mm-hmm.
In software to reach a, a level of, uh, let's say a beta version that you can deploy with friendly customers. Okay. Like 3 months, it should be the cycle. And 3 months you get, uh, to a point, 3, 4 months you get to a point we can deploy some. initial functionality, not the whole, you know, vision, right? Some initial functionality that you feel is very, very, um, makes a difference. So we need to like focus in, uh, the effort and the product definition is something which is very, very simplified. One, 2 features that makes, makes a difference and actually land and expand from there. So you get amazing feedback. Some of the customers even pay you for these POCs and some of the licensing. And you start iterating and growing from there. So 3, 4 months to product market fit, deployed with customer for another quarter. And from that, you need, you need to start creating initial revenues, which are, which are like substantial. And, uh, I mean, not substantial, but many, maybe recurring, recurring that enables you to grow. And this gives a lot of confidence. And if you reach that level and you need more cash, there are many other resources that will be able to support you. Whether you can create some loans with the bank on some other land, uh, like, um, debt providers that are able to provide you good terms because you already succeeded and you have the confidence to, that you have income to recover that. Uh, and this is, these are the things that we did as well.
So, so, so to, to paraphrase it a little bit, it's gonna take twice the amount of your time or 3 times as long as you think. It's gonna cost twice as much. Um, but you still believe, and then, and then also of course, Do not bet the farm, right? But that also talks to maybe actually scaling your ambition. So another way of looking at this is to say, all right, I'm willing to invest my own money or me and my partner's money, this amount. How far can we get for that amount? What is the scope given these parameters of 2x or 3x? And then to you, as you, the second thing you brought up, which I think is really key, is focus on building something that makes a difference. Yeah. Right? A lot of times when I meet entrepreneurs, they have grand ideas for what their product or service should do at some point, and they start planning and building for that. And my argument is always, well, let's try and build something, anything that makes a difference in the short term, and then we can build on features and things because the second, and you know this better than most, I think the second you add on a new feature or a new functionality, The complexity, it, it's just telling the story, but also the product and service itself, the backend, um, the things that will go wrong multiplies.
Yeah.
So, so, so having that focus and saying, we're gonna build something that makes a difference, we're gonna do it for X, which we can afford to lose, and we're gonna get in market within 3 months. Those are probably pretty good milestones for somebody starting out and wanting to try and bootstrap their business.
Yes. And, and just to add a few, few more things here, and I see this with a lot of, uh, startups that I'm also coaching and mentoring there. It's counterintuitive for the founder to think, uh, very narrow, right? Usually when founders talk about new ideas or new products, it's like a huge story, right? It's very broad and it's really not focused. And the idea is to do more and more and more, like as a first version, like the other way around is the better. Try to zero in, zoom in on whatever. This one or two features that makes a difference. Get that done correctly in a high quality, get this word of mouth in the market, and then grow from there and expand the capabilities of the product. So it's very difficult for a lot of founders to, to figure this, figure out this process. Uh, a very specific market definition, a very specific product definition. Start there and grow, uh, from that period onwards.
And so you obviously have figured this out over the years. Um, can, can you talk to me a little bit about a situation where you had a hard time making that decision, where you had to essentially kill one of your darlings and, and kind of what were the criteria when you guys sat down and saying, there's too much, how do we pick what not to do? How did you actually do that?
So, I mean, there are many good things in bootstrapping, but there is also, I mean, the counter effect is that it's very difficult to invest huge amount into marketing and try to risk because marketing is like putting the dollar before you see the, the, the dollar coming in, right?
Mm-hmm.
So that's always a big issue for bootstrapped companies because we are experiencing kind of a linear growth, which is not like exponential growth, which is usually when you are VC-backed and you experience with, with the SaaS company. So it's a linear growth, it's something different. It's always profitable. Okay. And if you, if you are facing this type of, of environment, then sometime, and it happens to us a lot, there is a, like one mega project opportunity that comes along, right? And you said, okay, this is going to influence our entire roadmap right now. Okay. It's gonna be like an 8-figure opportunity, right? And, and okay, what do we do now? I mean, we, it's definitely going to, like, it's going to be like very, uh, low risk for us to execute. It's probably going to secure the next 3 years in terms of cash flow and, and, and solid income coming in. But we are all distracted from the market that we've identified. Uh, so this will always be, uh, it doesn't have to be a huge opportunity, but can be also like a strategic opportunity. Like, um, you know, one of the large enterprises or tier 1 companies that are, you know, targeting is asking for a lot of customization, a lot of unique things.
Mm-hmm.
There's always a, a problem, you know, for SaaS company to, uh, develop something that works for everyone, but to, to limit the customization and try to find, uh, a way to balance customization versus, uh, off-the-shelf license that fits all. Again, all this, the, the specific market that you're trying to, to, to target. Um, and yeah, I mean, we did, uh, so we, during the last 10 years, we had a lot of these opportunities. We said no to big opportunities. When sometimes we said yes. And obviously we knew what's going to happen, right? We lost that market and we said, okay, we are going to catch another wave in the market that might come up. There are always new waves. You know, when I started in tech, we used to have a product. That product was very good for at least 3 years, 5 years. But now that, you know, any product you develop, that initial version might, might hold for probably 12 to 18 months. That's it. And you need to come out with the next iteration, next functionality, just, uh, Today, I mean, last year with the introduction of the, all the ChatGPT and LLMs and all the AI tools, there are so many, it's so crowded. There are so many companies in every unique sector. So it's becoming, um, um, quite a challenge. But I think what makes the difference is between a company that knows to deliver projects in large scale, let's call it mature. versus innovation, right? So you can always, there's always a new startup that comes, but can this startup withhold volumes and scale, right? Which is kind of, uh, things that are not so related to technology. It's more internal processes.
And about the, and about how the organization runs. I remember when, when you and I spoke about doing this together, uh, we talked about a, a period where you had invested in sales personnel and developing products that ultimately didn't yield the expected results. And maybe that's a, that's a good example to, to bring in now. Yes. To talk about that process. What happened there?
Yeah, so I mean, I shared right now the product side of things. There's also the sales side of things. Sometimes you feel very confident and you have enough reserve to say, okay, let's, let's scale with the, with, with sales. And it's a mistake today. I know that you need to delay recruitment of sales as much as you can, right? And there are a few reasons for that. First one is that you want to, as a SaaS, you know, you want to have a kind of a product-led growth type of strategy, meaning that you need to refine this product to the maximum, get customer feedback, put the marketing hat. Everyone wears the marketing hat, not the sales, the marketing or product management hat. You need to reach a level where this product is like totally polished and everyone's are again, happy sharing that they're using the product to their colleagues, right? And this is the word of mouth sort of evolved and cost of marketing is very, very low. You almost don't need sales for that.
Okay?
You need sales where things are, um, getting complex, complicated, right? And you need those soft skills, human touch or, uh, type of, uh, of engagement where they can surpass the product lacking features or functionalities or really high competitive scenarios. So yeah, I mean, we, we recruited, uh, like a worldwide sales team, which was obviously too early. Some of them succeeded, some of them not. I know, like in, in the previous company, I've managed a team of more than 100 salespeople, right? And I know that 80% of the revenues are coming from 20% of the sales team, right? And it's true. I mean, maybe it's 80/20 or 70/30 when you hire a small team. Let's say 5 or 10 sales managers, you don't know who is going to succeed. It's really very, very difficult to identify. Um, one person can be very successful, but, you know, he or she came from a large enterprise and now they're working for a startup, which is kind of a completely different thing. They don't have all the resources, all the team to support them. They need to do everything on their own. But there are a lot of, uh, complexities in hiring the right, the right talent for a growth startup. It's kind of a different art. Um, so yeah, try to delay the recruitment of sales as much as you can. Focus on the product, uh, manage the product professionally with a product manager that knows to, to interact with the market and with R&D. This is probably going to be the best investment you can.
So, so your, your comments mirror some of the stuff that, that I also keep advocating and, and we both, I don't wanna say we're throwing marketing and sales under the bus, but we are seeing, uh, a lot of companies very quickly wanting to go out in the market and sell something because they want to, of course, capture some revenue and start getting that cash flow. But to your point, the problem is what they're selling is not necessarily fully baked. Customers have a bad experience and it cascades a whole host of issues down in the organization. And the other side of it is the marketing comment you made, right? You know, we're essentially going out to build the market, build a brand before we have something to sell. Which is a very expensive proposition rather than putting something in the hand of a customer that is, let's say, almost perfect. And then privately, to your point, with a product manager, figure out, okay, what do we need to do to make this perfect, but not make it customizable to, to every single large enterprise client, which also happens a lot, right? You, you know, let's say I was selling rubber and Nike goes, I love you. You just need to do all these things. Then you're like, okay.
Right.
But it might actually sidetrack you from, from what you should be doing in order to create your own profitable enterprise.
Yeah. So, uh, I mean, sales team, I started my, my, most of my career was on the sales side and sales has a, you know, very special way to be able to close deals even if the product is not perfectly, you know, totally perfect for the customer or is fully baked. Um, and this distracts the understanding of what's really happening with the product in the market. Um, and this is why I'm saying delay, delay, delay the hiring of the sales team and as much as you can, which is I think, uh, one of the lessons that we've learned during this process.
So it sounds like most of your last, uh, 12, 15 years, maybe even, I don't wanna say close to 20 cuz I don't wanna be insulting, but you did start in Scopus, uh, in, in the early 2000s, I think.
Yeah.
Um, We're, we're, we're both getting up there. It sounds like smooth sailing. It sounds like it's been easy, at least on the, on the business side. You've had some success and I know you're shaking your head now. If, if you're only listening to this, you can't see it. But where I'm going is how have you managed on the personal side, right? You've had a lot of business success, probably some setbacks, but as a, as a person, as a human, how have you managed these ups and downs and, and have you had some challenges along the way?
It's not something, I mean, it's very, very difficult. It's, no one needs to sustain this type of pressures and sleepless nights. It's very, very, I mean, everything looks like too big to handle. And a lot of the, uh, of those, you know, milestones and definitely at the beginning, when I look back on some of the things that we need to sustain and decide and withheld It looks like really ridiculous today because, you know, you gain more experience and you're mature. But on a personal level, it's, uh, you need to have the special character. It's not something that fits everyone. And, um, it's, it's, it's, um, it's a, it's like a risk every day. And when you're risking your own money and, you know, the family is involved, you need to have the right support from all, from all angles. Uh, and, and yeah, I mean, I always, this is what I'm saying. I mean, it's, it's very, very difficult emotionally. Uh, I think, uh, specifically for me, I think I'm lucky because I have the right partner, which is, I think, a major, major part of this journey. Mm-hmm. We have the right responsibility, like in terms of the definition and the demarcation between us, what he's doing and what I'm doing. Which is critical. Very good, uh, supporter, I think, working both sides. Uh, I know that a lot of, I know a lot of bootstrap owners that are doing this on their own, which is also like, um, something that can definitely work. But on a personal level, it's very, very difficult. There are a lot of, uh, sleepless nights. Uh, you need to have the right tenacity and, and like self, uh, confidence that you can So what have you done?
What have you done along the way to cope when, when things were really tough? What did you do?
Look, it's, um, I try to be, uh, helpful here and try to come up with some, you know, best practices and few ideas, but it all relates to the, uh, your ability to be confident in your way. And have like a success mentality. For me, I always like every new idea or every challenge. For me, there is no, no way I'm not going to fight. Um, having the right resilience. Um, I having this, I'm going to conquer the world type of mentality because otherwise you don't have enough energy, uh, to push and to be energetic and very assertive and In terms of the way you negotiate. And you, you are negotiating all, all day long. You're negotiating, negotiating with your R&D team, with your sales team, with banks, with customers. And if you see this as overwhelming and as a challenge, it's not going to work. But if you see this as a, as a learning, as something that you need to learn, experience, and, and, and, and evolve, then definitely it's not, uh, it's not going to work. So it's very, strong focus on mental health, trying to figure out ways that you can balance between, you know, spending hours in front of a screen to do, doing some other things. Uh, I wasn't the best in some of the period and, um, actually has, you know, had an influence on the overall, overall, you know, wellbeing and the way I feel, you know, with myself. But This is something that, um, I always try to, uh, you know, to learn and to evolve. And now that I know that we've been through so many challenges and we were able to overcome them, it gives us, gives us a lot of, uh, confidence in turning to the future. There is some point that you feel that you are strong enough, that you're confident enough that you can be also very, you know, powerful. In, in, in terms of, um, dealing with all the things that you need to do. And it's important to mention here something that is like, there are a lot of things that you need to do, obviously, as a company owner. But the first thing, and definitely for a bootstrap, is taking a look at your cash flow, right?
Mm-hmm.
Like the cash flow is like the number one risk for you to lose everything. And if you, if you focus just on that, Right. And figure out a way to plan ahead at least 6 to 12 months that you know how to, uh, manage cost and income, then the level of stress is going to be reduced by substantial 70, 80%.
Sure.
Right. I used a variety of tools to help me figure out cash flow on a daily basis.
Okay.
And I, I know at any point of time what's going to happen 6 months down the road, 8, 10 months down the road. Which is very, very critical. Now I'm not doing it anymore because I don't have to, but in the early days, of course, it was very, very critical. So I think focus on the cash flow. It's very difficult to prioritize between the tasks because you have so many, so many things to do. So if I need to prioritize, it's like number one, cash flow. That's the major, major, major thing that can—
And I think that's—
Sink everything.
Yeah. So I'm sorry. I mean, that's, that's such an important point. Um, in talking to 2 other guests that are going to come on here, one of them brought up the fact that the one thing that founders and CEOs of startups and scaleups or fast-growing companies need to understand and have a handle on, it's cash flow.
Yeah. Yeah.
And it, and it's, and it's probably the one thing that most of them are like, I can't be bothered because I'm building this fantastic thing or I'm changing this world with that software. And, you know, we've all been there. Again, I think when I started my first company, I didn't think about cash flow. I thought about going out and having fun with customers and selling some stuff, right?
Same.
Um, but then over time you actually learn how important it is. So if we can impart, you know, you've imparted a lot of wisdom today and I appreciate that and I want to thank you for that. But I think the main takeaway from today is focus on cash flow. Do something fast and quick and get it in front of customers and then have a partner along the way. We haven't spoken a lot about your, your co-CEO and your partner in your business.
Yeah.
But that's another thing that I think people listening to this should think about. If you're trying to build a bootstrap company on your own, that is an order of magnitude more difficult than if you have somebody alongside with you, uh, who ideally complements you and who ideally can, can help you grow as well, uh, as an individual.
I just want to add a few more things. Definitely in the tech world today, which is primarily SaaS and software-based, you must have bootstrapped capabilities because you need to get those initial users, customers using your comp— your, your products anyhow before you go out and try to raise some funds, right? So you need to show that you can execute. You can need, need to show that you know how to be agile. In terms of your, uh, thought process and the technology that you are developing to be able to customize quick changes and having that agility in place to bring users into the platform, because that's the only way for you to raise funds from a VC anyhow.
Okay.
Yeah. So that, that's, uh, number one, which I think is, uh, is, is very, very critical, uh, um, you know, in, in any, in any software company these days. So it, and it might take you 6 months, it might take you 1 year, but But it is something that you need to reach on your own. So know that from the get-go.
Yeah. Very good. I wanna thank you very much for being part of this episode, Eitan. It was, uh, enlightening. I'm sure we could talk about a lot of other topics, which we may do in the future. Uh, so thank you for participating.
Thank you, Peter. Wish you all the best with your new, uh, podcast, with your new show. Good luck.
Thank you so much. And to the listeners, this was another episode of the Whole Human Podcast where I, Peter Sorgenfrei, speak with founders and CEOs talking about the things that go well and the things that go less well when we're building companies. Thanks so much for listening. If you have any suggestions for any guests on the show, just let me know and I'll try and get them on.
