B2B Revenue Acceleration
B2B Revenue Acceleration

Episode · 2 years ago

28: State of Affairs: Why VCs Are Calling Israel the ‘Cybernation’ w/ Ofer Schreiber

ABOUT THIS EPISODE

It wouldn’t matter if you listened closely or not. If you’re in cybersecurity, you know about the innovation pouring from Israeli companies. We wanted to know exactly why Israel’s cybersecurity market is so strong, and what we can expect in the future.

On this episode of the B2B Revenue Acceleration podcast, we talked directly with Ofer Schreiber, a partner at YL Ventures.

YLV is a $140 million fund specifically focused on Israeli tech, and specializes in cybersecurity.

You Ere listening to be to B RevenueAcceleration, a podcast dedicated helping software executives stay on thecutting edge of sales and marketing in their industry. Let's get into the show IM welcome to Betobea Riven York,seleration miname is ONA with and I'm yet they with offer shrever from Wyventurs. I want you today, so I'm great thank you for having me that's apleasure. So today we will be talking about the states of Istran Sybo Securitmarket, but before we goingto the detail, an you prease tell us a littlebit more bout yourself, your company, Wyyour venture and your rule within way,O ventor yeah. Absolutely so my name is offe Shiber a'm a partner in wildventures. We are Ventul capital firm with offices in Silipon Valley and Elf,Israel an when invest in Israeli startups, the early stage in cit stageand most sly, mostly in stab security. That has been our almost eclusive focus.For the past few years, we've been working very closely with all of thePODO companies and providing their value and everything they can we'vbuilt a very enormous network of otential customers and partners, andfollown financing, all the strategics and potentiallyacquirers in the Suvar security world in the US and were providing access toIsrael inpnes in early states to that that were currently investing out ofour third fun at a seventy five million dollar fund that we raised in wothousand and Seventeen Wen doing extremely well so far, that's excellentand black weart. So we are also we do a far amount of wolking, the SavorSecurity Company of is Sacosecuritin Market Chste atoboratics and we do seemore and more transone, more growth coming from the save security marketmisriht. So we seer a lot of Israeli playe Israel tart coming into themarket, N and actually Bei quite successful, and I'm sure you followthat growth quite closely walking in...

...that industry and warking Berom Camital,so whaten interestid to underson from your espect Iveten from your pospectiveof being Socu that market and propably speaking to this peope, the ebasis.What makes the Trayli Sano securites market sotron and wath investing in forcompanies such as Wy adventons yeah. So, first of all, I fully agree with whatshe said. Obviously we are the as E ventual capital from this focus onIsraeli investment in Samer security share, the feeling from if you Loka theperson for all seer security is still a very strong market in general, globally,very hort space cunity challenges ar just getting more and more complex andadversaries. You know the hecker getting more and more sophisticated, sosecurity is a big challenge in a big market and Israel in general. As youmay know, we vbeen calling it start up. Nation Israeli is a Hardmad forinnovation and technology in various fields, but now these days we tend tocall it sibernation and the basis of Israel dominance in the thesibersecurity field. Fom My perspective is the idea of the Israeli defense forjust the sheer amount of balented people that coming out of the of theidea, an specifically the intelligence corpse. A lot of people are familiarwith the unit OL eight two hundred the equivalent of the the American ESA andtechnological people that serve their game. Real world experience to the mostpatting age and innovative Simar security landscape. They deal with thehardest, technologi es and doing really amazing stuff. This is, I would saythat this is the best raining in the world to become a Tiber security yesertand it's in a very dite and restful environment. A lot of entrepreneurealIvit is are being done in those places and these people afeter they get out ofthe army. They tend to be coming to produce themselves, they rilder theywant to do something of their own and...

...they create their own startup. Theytake their own very unique, set of skalls in order to develop the rightsolutions that we solve real problems in the saber security on so foro. Ithink that makes pomace sense we seek Gour send. We have pretty have a staotof our clients for teling us the background of the company Orthe. Thereason why the technology came oup in the first place because they werewelcoming to Si durity COSI, WIS protection poses ot the goverloment inIsrael and then the omos tin out to solution as to a PRODEC that can thenbe sord Toar, a company and compaty that w have obviously tess'n sort ofsive or sprite as a goverment as a confre, Mayhav nother t a MEKESA thatmakes a lot of sensin that and I think we a we do see a lot of to start upbeing created on the basis of always trying to innovate or, as you say, thethe beginning of your of your ansertome. You novate in always changing fightingthe next tret, so it's Tet just doing the community, but it's also creatingThi theassolution, finding a new way to fight same Bosreat, which is whichmakes the marken very interesting coming back to an article that youpublish recenty in Ta crunch on outs, strining, Savo, security, industry,Pofominto, somever native one of the stuts that culd my eye was an increaseof seventy six persents in funding for emerging TEC companies or statics. Asthis gross come from more noticeable innovation from your your belief orwhat ar the technogy that perceive the Isaals of funding and N, also, why yeah?So this is the fourth year that we published torrannual report, which iscalled T E state of desiber nation report, were in a very unique positionthat we see, I would say, a hundred percent of Ober security startups thatare being founded in Israel and that forwe thing in Israel. So we get a lotof data and we find SOM very interesting insight and we Polish itevery year in general, Israel and tepeneurs are known to be visionaries.That's not just insid security, but in...

...general and Specifialy. When we talkabout Siver security, I think that Isreland ners Tand to have the abilityto foresee what will be biggest challenges in the Subar security worldin the next few years and once they do that they come. They have the rightskids and the right technological background to come up with the rightechnologies and and when we and when we look at all the you startups that werefounded in Israel in two thousnd and eighteen and we and the ones Thadalready got funded. I would say that there are several trends that you cansee. H First, is that no the world just becoming more and more connected andthe face of innovation in the pace of adoption of neutechology is just beingincreased, so as organizations adopt new technologies only a couple of yearslater, so they starte to realize that they lack security. So, for example,until a couple of years ago, enterprises were migrating slowly andslowly through the cloud, then you saw a new category of sever securitystartups that are dedicated your cloud environment and these years we see itin Ilt. Okay, there are different categories of Iot of connected devicesthat are being introduced to the world. These devices are very vollerble tosival security attack, so we saw this year. Several categories with in Iotgot funder thand we saw a lot of evidy. For example, medical devices we sawseveral companies there and automotive now connected cars and atonois vehicles.So these are. These are the trends that we see more, the tack surface is beingchanged, be there are more and more connected, evices, more and moreopportunities for the bad guys for say to attack, and this is the right placeto come up with innovative solution that are very adequate to these newlandscape, that Mak ofec expense, so pushin kind of bling to that is in innonporrenment. That is always evolving with lots of innovation. Coming the youmentioned cloud mention Irais, fo...

...altesting that are currently appening.Wis, MOW and Moronpe is te ad, the class of moving to the PLAS iobviouslyECOMM thing. But how do you guys keep on Topof, Othis, Tik innovation andmake sure that you, I guess we don't Invest Tony or elates in a specificVarticle, o specific paper solution right, so you know we're sat thatinvestor so invest as early as possibleball Yo know, literally in twoor three entrepreneurs with the popine presentation. That's at the stageat wecome in and Investe and we rely on several things when we make those sifstage investment. First of all, we rely n the strength of the team, the factthat we have very good netwo for here in Israel and we are able to understandwhat is the background of which, nor where he either served in the militaryor work in the past few years, edic of their backround, and when we look atthe fend. When we look at the problem space at they're aiming to solve that'swhere we rely on our network as las I mentioned in the beginning, we havevast network of US based customers, mostly CESOS TS, onfomition securityofficers of say, forfortune, five hundred companies and largest grands inthe world and as part of our dediligence process, we alwaysintroduce tantopreneurs to say between Tento fifteen e customers get theirfheedback and really do a very deep market validation process. And so, evenif there is til no product just in an idea and general direction, we canreach very high level of certainty that the real is deed. There is a bigproblem and indeed the general direaction the dentipoors are goingafter solve, make sense and customers like it and it's about execution andthat's whet Wela. We rely on the on the scades of the team and, of course, weardenat with them and provide them a lot of valuead activities. So all theseintroductions and go to market support in the US we cane of from somem manexquession, which is great because my...

...exquession was about how much ends anyou need to be when you, when your on Investis a with a SIM, know the citstage, because we know that obveouly at the sit tay, you may have a fantasticor fom ponopasbing, oe, fantastic solution to te God o market and bediffeent Persoyo. You actually also Le Question Som, just goin to move ontowhat we smean to as amazing and the question wos Ti equission betweensetting or being acquired those fes keeping the company keeping to ObiginaLega it toin so into sudenrating. We saw lots of company being a quit justjust to mention if Youan and I'm just thiking about his in this frend market.But WEL AV intoe being accoriby to my brother, the nine being acons e check,point Sendu, Iht Pa one to just to mention with you and I believe, thatsfrom not from Prenoyour pespect. There is a constant DINAMA between shop D,midtem, long comics is or building up legacy complant. So SOS, like guess,what I'm saying is a what you doyou build up: A technoogy stoctor to exitthe technogist Nocter, or do you Ril, ae technogis tolbut, in the view thatyou will be very successful and potentially create your innvestent andgo and acquire your competitirvs to take on SOM more market share, sotecusion Regot, for you is what are the signs to I idontify if a comppany isready to be stored, if ye should keep investing in his growth to become moreestablished, a d and more present in the market yeah. So this is. This is aninteresting question and of course it's not it's not related justic Siversecurity threated to any many start up in any field. In general right, I wouldsay that t's even more relevant fival security, because this is a veryacquisitive market. Qu Activity- and we see that largest large vendors, some ofwhich you mentioned, are or a bit struggling to innovate on their own andthey're, very much, relying on on the...

...cutting edge, startup, O small startus,to come up with the next big things: the next next generation solutions andin bed bed these companies within much brother platform. So you kind ofmention it earlier B t. But I would pet catch phase that good companies don'tget Sol. They get acquired right and as an early stage, investors and investorsin general, like don't think that you want to build a company with a state ofmind of a otential exit when you don't build a company to get acquired, butyou always think about. What's the best way to be a the sustainable business, Iwould say that in Siva security, specifically, it's quite hard becauseit's a very crowded space and there are a lot of a lot of Bi companies, a lotof competition and a lot of emptations to to get acquired along the way. Yeah.And you know when you're doing something right as a startup. Usuallyyou grow and you get noticed by the large vendors. Usually it happens whenyou displace a large vendor in ha bigcustomer Yo. Now a customer that stopped that decided not to purchasethe big vendors product and in place and an instead get get the startupproduct. Then you start to step step on their toes and get on their rigder andthat that then they become very interested in the space. And you knowyou reach a point in time when e, when you think whether it's now is the righttime to sell to get acquired or either to raise an addition around of capitaland go away to the next level and D. it's a very hard question. I mean there's, no guarantee, you know you always have to analyze. The market and projectsee see how your Markhow, your specific poket, is going to look like the nextfew years, O just for an example. If, if a large vendor is interested toacquire your startup okay, if you say no, there's a big chance that they willbuy your competitor. So how would that change the lendscape? Maybe then itwould be harder for you to compete, that's something ouit! You consider. Iwill the ledscape looking in a few...

...years, maybe other companies we stepinto your market and get some significant marketshare. So there aredifferent elements that you need to take into considerations when you makethat decision, as mentioned there, it's it's not very easy and it's not a clearcad there. It's not like a yes or no, but at the end of the day, and that'sfor our perspective as investors thing that basicllate them to prenursdecision, it's the found or decision. The founders are the ones who arethey're, the captains of the ship, they're, the heart and soul of thestartup and they're the ones with the vision, and sometimes we may havedisagreement. You know somebody thinks that we need to raisemore capital and go all the way and other guys think that it's time to sell,you need to make a good discussion and be very analytical about it. But theend of the day this is the founders company N and we trie to be supportiveof any every decision. Thoday the day we reach yeah, absolutely WEIT'S G tomake your your life rety exciten, but I do agree with you. I think it's a suberreactive market's almost almost agpressive, sometimes the ware. The waywe see we see big company way after Ta physition and traing to expand the Otfor you and it Begoese by Wayes wher, you've seen tha. We en company sobinglots of companies at once, Withtin temootic in that time. In the way theywould, they would make that position, but buit's interesting at the moment,because we even see non security. The company be invording doing some thatposition. Fo H, when you see your kindof went to Accor reaal security,comady Tosermos, you know its okay whet. You see a Noraco or ou K, W compination,wit, net sea e Ticuraty Pley ae such or even a Microsof, the Qary, an Thosecurity companie straight away. You realize at okay. This is this. Is thisis certainly a sat market at everybody wants wheree everybody wants to wrentto the plane. If you will tat the next petion I ov got from you. Istem is partof the acquisition, so you mentioned,...

...compopnies are being soled and SOM ONSare being acquired. What would you avise to an acquire ro if they were toQeo start? Because I guess the reason why iast me, the push Tis ITE BACrelate batis. We see two times of a position with the acquisition wherealmost traight away the Futtim ofo the STAFP at is leadingthe start up. The seventy is needing Martintins, meaning excect accestral.This is awot like position where the started is actually acting as a starter,carry on doing what they are doing within the larger organization, theretain tat I the peopn growing, and they actually use the resources of thatlarge organization to protential Wut to be the clients IC FIC Rih fih. So I waswondering if you ade an new advice: Fot Your choirer. When these are SA, you goa position O asome one into what's the best way to not only make thatacquisition, but also to get the must of the epiition. That's a veryinteresting question. I think that the most important thing is company cultureyeah. I guess that e. If the startup that acquired it means that they weredoing something right, which means that they had something good going on, andthe last thing big company wants to do is to swallow small start up and crushit, and is something that you know. Sadly, we see we see sometimes e, and Ithink that the Youask, whether a big company, should mbed the stat up intheir in ther organization or either Kepitus as a separate unit, almostafonomous sunitandent under the roof, a lot of different re resources. I wus Iwould. I would say that this is mostly about company culture. If IV, theacquiring company believes that they have, they share the same values andthat they can theyre agile enough in order to work together with this smallunit of proly, very skilled people,...

...then synergy is high and they should swallow it make it one one function. Ithink that if there are a lot of if the gap, you think, for example, youmentioned before that- you see a lot of nonsecurity companies acquired security,startup, so knowin that in that scenario, there's probably a bigdifference between how the large company operates and now the startupoperating how the entrupreneurs would like to move. You know usually antoprenuce white woud like to move fast and be very agile and largecorforations are struggling to do that, yeah. So if, if, if the reality tends more to be likethat, I would advise to keep the start up a a an autonomous function that canenjoy all the resources of the large company like says, sales force and marketing power and soon. But if there is high synergy, if there, if it', it's a big securitycompany that already acquired several startups and there's a lot ofentrepreneurial mentality going on. So I don't see a big concern in that, sojust to conclude it it's all about making sure that Thi, mall and Talatanteam is able to keep doing the good stuff that they've been in the fast fewyears, and you need to enable them to do it in the best way and to enjoy thetinergy and and all the good things that the corporation have that smallset of dont no agree with you. Thank for. I really appreciate your time andinsight today or the different to be that e discuss now. If anyone wants toconnect with you and know more about what will discurs to or find out moreabout, Wyor ventions, what is the best way to connect with me yea, you canreach me out either on my email. My email is off Ofer at wil. Venturescomcan read all about us in a website. I can see ao ll of our folour companiesin our spalogy and ill free to reach up. Okay, that's wonderful one, many thingsonce again of now it was great to have...

...youngish IING. Thank you very much.Itto be inour pleasure. oper adics has redefined the meaning ofrevenue generation for technology companies worldwide, while thetraditional concepts of building and managing inside sales teams in househas existed for many years. Companies are struggling with the lack of focus,agility and scale required in today's fast and complex world of enterprisetechnology sales SEO operatics can help your company accelerate pipeline atoperatics, dot net you've been listening to B, to b revenueacceleration to ensure that you never miss an episode subscribe to the showin your favorite oddcast player. Thank you so much for listening until nexttime.

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