Virtual events and conference platform Bizzabo has been chosen as "Globes" most promising Israeli startup for 2020.
Yet in March when conferences around the world were being cancelled and an entire global industry worth half a trillion dollars annually was suspended, it was hard to believe that Bizaboo, a startup developing technology for conferences, would so swiftly reinvent itself, let alone be chosen as the most promising startup in a survey of Israel's leading high-tech investors, and by such a large distance from the second-placed startup.
Bizzabo, which was founded in 2012 by CEO Eran Ben-Shushan, VP marketing Alon Alroy, Boaz Katz who met in the Interdisciplinary Center (IDC) Herzliya's Zell Entrepreneurship Program has already changed its operations and business model two or three times. In its latest change, the company successfully developed its first product for virtual conferences within two weeks and due to this it is set to end 2020 with 100% revenue growth and income of tens of millions of dollars. The company had never planned to develop such a product. Ben-Shushan said, "I've been in the industry for many years and I'd never been to a virtual conference. It was never a real thing.
The company got lucky (or had the sense). The conferences might have been cancelled but the deals were not. Several years ago, the company decided to adopt an SaaS business model and thus receive a subscription payment from customers. The shift was not easy and required persuading customers that a conference was not a one-off event but an ongoing activity and that they would receive value accordingly.
Ben-Shushan said, "We concentrate all the data produced around conferences and assist enterprises in understanding how their marketing efforts are translated into sales, community management etc. This is called Return on Event (RoE). You want to keep this information even if there are not conferences.
But still at the end of March you decided to fire 20%-25% of employees even though you had cash in your coffers. Maybe such a move is unfair and immoral? You could have waited a little while to see what the situation was.
Look this was one of the difficult dilemmas and one of the toughest moments in my career. Even in retrospect, and not out of stubbornness, I think that with the level of information that we had then, they were employees that were no longer relevant for us. We decided to part company with them in the best way that we could."
"These were people that we had hired in the middle of February for jobs that it would have taken them six months to be productive in, or were involved in long term intitiatives. There is an element of unfairness in keeping on people, as they would say in the army, for decoration."
"We thought it better to put them on unpaid leave and look them in the eye and say that the situation is crap but we think it is better for you to look for other opportunities, because we won't succeed in being a good home for you. In the end it is a dilemma and there is no right or wrong. These are tough decisions. We took it in to bring back these people into the workforce as quickly as possible and that was one of the most amazing things that we did."
Initially Ben-Shushan, Alroy and Katz sought to build a kind of Linked-In for conference. It took them 30 months to realize that this might be 'nice-to-have' for people but they couldn't build a big company on it. Ben Shushan said, "It taught me that you have to define very well who you are selling to, why what you are building is important to a customer and if he will need you like oxygen even in an economic crisis. I also learned that it is very easy to minimize the value of the business model and to think that you can bring many users and that you've cracked it."
They decided to build a platform that would have 10 functions that were until then in the hands of 10 different suppliers - the website, registration, payments system, agenda, mobile app and more. They built a platform that is dynamic and fast and also gathers information about the conferences and provides behind the scenes information. It also makes the conference 'measurable.' "If you invest $2 million in an event. How much does it bring back into your organization and how?"
Customers liked what they got but then came the crisis and all conferences were cancelled. "To some extent the fact that it was an external crisis helped. The sorrow of the many only consoles the stupid. But everyone was in the same situation and that gives you the chance to look at the reality and the opportunities in a broader way than if the problem was internal cwithin the company. On the other hand, it is more challenging because everyone is in chaos and it is difficult to distinguish between the noise and the main things. But for strong companies with high performance capabilities, it provides bigger opportunities."
Last week Bizzabo raised $138 million in a financing round led by Insight Partners and with the participation of Viola Growth, Siemens venture capital arm Next47, and OurCrowd with more than half the money going to existing shareholders. The company declined to say exactly how much but over the years it has probably raised about $120 million for investment. Early investors included OurCrowd, Kaedan Capital and many angels like Gigi Levy-Weiss, AfterDox, Zvi Limon, Eyal Ofer Avigdor Willenz, Danny Tocatly, Eli Alroy, Barak Rabinovich, and Joey Low.
As impressive as Bizzabo's achievements have been, there remains one huge question mark over its future. What will the conferences world look like after the crisis? Has the current situation persuaded people that virtual conferences provide the goods and create business opportunities while saving time and money, or will the focus return to traditional physical conferences?
Ben Shushan said, "I personally think that physical events will return and big time because we are social animals. However, I also think that the coronavirus has created a reality, which will persist and change the way that business events will be seen from now onwards. This is probably the biggest dispersion in the history of our industry and it will open up a new world of opportunities."
"I think that within 18 months there will be more events than ever in the world and there will be a new type of hybrid event. You might fly to a conference in Texas where there will be 1,000 people and in addition 10,000 people will join remotely. All 11,000 people will be part of the journey and experience before, during and after the event but the experience will be different according to your location."
"Alongside this there will be events that are only physical and events that are only virtual. The virtual events will take up the smallest slice of the pie but a significantly bigger slice than in the past because there is now a basket of more significant solutions."
How are you preparing for this?
"With a brain split into two lobes. We have a team working on what's happening today and teams that are like commando units that are trying to imagine how events will work two years from today on a hybrid model. We have think groups and a focus with people from industries completely outside our comfort zone - gaming, dating, social networks. It's somewhat exciting and like building a new company within the existing one."
The idea is to understand how, for example, you date online or how it is that you create the engagement of the children that play Fortnite. You have to invent completely new human behavior for events and that's very exciting. We are very modest and open and are not in love with our own ideas, but we do understand that we have a lot of knowhow both from our customers and our experience of nine years in the market.
Over the past year Bizzabo has hired employees specializing in video and real time events and has been transformed from a company focused on B2B, to one which was more B2C with experiential products. "We offer our customers end products, so that their participants, speakers and sponsors will use them and we need the experience to be more adapted for the user. We started to bring designers and UX people as well as "user behavior" people, in order to understand what to say and not say to users."
"Why do professional conferences even exist? For making connections between companies and people, networking, finding leads, buying knowhow and getting inspiration, and enjoyment. At the moment our working assumption is that these things will continue to exist and that is the reason that these events take place worldwide. Do you need to duplicate the experience of the physical world into the virtual world? That is the key question. I by the way think that no but you do have to invent new experiences and behaviors that are appropriate for the virtual world."
"I'll give you an example. I spoke to somebody very smart in the venture capital industry about avatars in events. He told me, 'What's it all about, I'm in the digital world. It's a waste of time for me.' That says that it is not always right to imitate behavior. In online dating they invented different behavior without avatars."
The conference sector was somewhat under the radar. Covid-19 might arouse competition, even from the tech giants?
"Absolutely. We feel that nine years of hard work has positioned us in a place that today we have assets that mean we are a company with potential - and everything depends on us - to be the most significant and most interesting in this industry."
The rest of "Globes" 2020 most promising startups top ten:
2. Elementor: A software company providing web and development services founded in 2015 by Yoni Luksenberg and Ariel Klikstein. Capital raised: $16 million. Employees: 200.
3. Melio: B2B payments platform founded in 2018 by Matan Bar, Ilan Atias and Ziv Paz. Capital raised: $144 million. Employees 150.
4. Axonius: A cybersecurity asset management company founded in 2017 by Dean Sysman, Ofri Shur and Avidor Bartov. Capital raised: $95 million. Employees: 120.
5. Explorium: A data science platform founded in 2017 by Maor Shlomo, Or Tamir and Omer Har. Capital raised: $51 million. Employees: 100.
6. Nym Health: A big data platform for hospitals founded in 2018 by Amihai Neiderman and Adam Rimon. Capital raised: $23 million. Employees: 36.
7. Own Backup A cloud data protection platform founded in 2015 by Ariel Berkman, Ori Yankelev and Sam Gutmann. Capital raised: $100 million. Employees: 280.
8. Quantum Machines: a communications system between computers and quantum research founded in 2018 by Itamar Sivan, Yonatan Cohen and Nissim Ofek. Capital raised: $23 million. Employees: 40.
9. Snappy: A gifts platform for employees founded in 2015 by Hani Goldstein and Dvir Cohen. Capital raised: $35 million. Employees: 100.
10. Coralogix: A platform that maps software flows, detects production problems, and delivers insights for log analytics, founded in 2014 by Guy Kroupp, Ariel Assaraf, Yoni Farin, and Lior Redlus. Capital raised: $40 million. Employees: 75.
The Startup of the Year rankings are part of the Enterprise Technology Summit held by "Globes" and JP Morgan.
Published by Globes, Israel business news - en.globes.co.il - on December 8, 2020
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