From 18 Months Flat to 50% Growth: Why Simply Chose Profit Over Growth | Yuval Kaminka on Invested

0:00 A few years ago, the business basically stopped growing. Full disclosure, I thought we should write off the company. >> If Alf or anyone else would have injected a little bit of money to help us out, we wouldn't be around today. We want to build a huge company. We want to go into every home. We want to go public. We want to create something meaningful that is in every home in the world. That's like the type of company that we're building. The grow revenue per employee is just stuck.

0:24 >> Almost a nine-month plan to get to where you needed to get to and it happened in three months all of a sudden. What happened during the war start October 7th unfortunately your nephew was killed >> and I and I your co-founder Rui passed away two years ago. >> Two years ago at age 44 suddenly how did that affect you personally and how did that affect the company? >> And then we're going to go from there to the near-death experience.

0:48 >> Looks like it's a it's a fun episode. Welcome back to another episode of Invested. My guest today is Yuval Kaminka, the founder and CEO of Simply. Welcome, Yuvall. >> Thank you. >> I'm going to start in an uncomfortable place. Can I >> shooting immediately? Okay, let's go. >> Yeah. So you have what I would call at simply two defining experiences including one for full disclosure we're your investor where I thought we should write off the company.

1:26 >> I remember that. >> You remember that? Also a few years ago the business basically stopped growing. And so what I'd like you to do just to start off is to describe in just a few sentences what it is that simply then named Joy Tunes does. What's your business? And then I want you to start really with that first challenging moment we'll call it which is already back I think in 2015 or 16. Is that right? Or 17. When when did that first challenging moment happen? It's it's been a journey.

2:02 >> Start with what the company does in three sentences. >> Okay. So simply builds a companion a creative companion for every single home, every family, every person to make the pursuit of a creative hobby simple and fun. And it means in every in every home in every family there's at least one person that wants to be able to play an instrument, draw, craft, dance, sing, cook, something which is a very human self-expression and it's there are very they are very difficult skills and we're building tools to make it very very easy for you and it's working amazingly well and increasingly well.

2:43 >> Yeah, I know it's difficult because my mother tried to get me to play a musical instrument. She got me a piano teacher. No. A guitar teacher? No. I didn't try drums cuz I'm clumsy. But my brother did. No. Actually, we may be the only family that doesn't answer to any of those creative skills. But I did manage to pound out. >> That's that but that's a point. Like in every in every family you would have you would you want to do that, right? You're looking for a best way. You just described. Okay. I don't want to do it with a teacher. I want I want the skill, right? I want to be able to do that. I want to play piano. I want my kids to play piano. I want to dance. I want to I want my my daughter wants to dance.

3:19 my kids are drawing and want to draw better. And you know, all that applies to every single family. Every single family, anyone can do it. And anyone can do it way better than what they're doing it now. Right. I think that's that would be the point. Not necessarily you become a you know a professional pianist. Maybe maybe you will and maybe you won't. I'm not I'm not I'm not the judge of that. But you can get to a level, every single person can get to a level that you're having fun with a hobby that you're at a skill level that you can can just when you're looking when you can sit down and draw something and have fun with it. Every every single person could do that.

3:56 >> I will say that my nephew Yehuda, he taught himself to play piano using Simply Piano. So the first product was simply piano then at the time called Joy Tunes. You want to just describe what the product? >> So Joy Tunes is almost a different company, right? it was not not just a it wasn't even a not a small pivot. It's like it's like a huge a very separate more educationbased company through teachers and education systems and so on. And then we we shifted to simply which is a huge expansion on many on many levels also not just music.

4:28 >> So expanding from from music to arts, craft and so on all the creative. >> Why don't you describe the piano product? describe the draw product and then we're going to go from there to the near-death experience. >> So, both both products are a beginner to capable getting you from nothing. I don't know how to how to approach this. I don't know what to do. I don't know in the piano I don't know where to put my hands even to a level of capable the basic cable where I can play with two hands and have fun enjoying as well.

4:59 It's not a copy what most what you have the comparables is a copy by reference by copying just what you know YouTube reference or something which is not a tangible skill and but actually by drawing something that you want to draw or like your child wants to draw learning about perspective dimensions reflections shading and so on and the method to do it in a super super super fun way all of them are working amazingly well draw is u at the forefront of growth >> okay We're going to talk about that in a second. Okay. So, go back to 2016 now.

5:32 >> Mhm. >> the company had gotten started in 2012 13. When did we get started? >> That was Joy Tunes. >> Yeah. >> roughly around that time again. >> Yeah, >> I get it. >> And that I think that that the point that you're referring to is a point where the transition that's exactly the transition point. We were we had this board meeting where Ed and from from ALF he we had this conversation about okay Joy Tunes is a company with the most value that I've seen in his words that I've seen to consumers we have to start it's not like we have to monetize and that was a shift to simply piano of not doing through education systems and teachers and so on but doing something which is direct to consumer the shift to simply started and and kind of 2017 is the year that simply started.

6:25 >> You were out of money basically. You were close to out of money >> and we were out of money. we're approaching it was a very Yeah, it was a very wasn't a fun a fun point. It was a very a very defining moment. We created a very aggressive plan that included firing a third of the company and we were small. A third of the company in any size is is very dramatic but was very family community like and was a very dramatic moment with with a very strong plan of how how we not just get amazing growth but also reach break even and beyond kind of kind of own our destiny and and over this fact and at that point was also the write off. If I remember a conversation with Ed and following a board meeting with the plan, Eden said, you know, I just want you to know companies do not survive something like this and we can't bring in more capital inside because we have our fiduciary duty. So just you know truthfully we can't do that but I will support you in any way that I can which as you know and one listening is we know it's not a trivial thing to say because usually you don't your phone you don't get people don't pick up your phone at that at that point and he was I will help you in whatever way they can. To me it was a very depressing moment because Eden but we have an amazing plan like it's gonna it's going to work amaz like why are you writing us off? I'm okay with not ending the capital but this is you were trying to be supportive but actually a downer and we had a plan that was kind of June and we had a plan I remember the dates and everything by the end of the year we will get or the first quarter of the following year we will get to break even remember the financials the numbers everything and we get to that within three months and we give a talk to everyone as part of the onboarding to the company we're now over 200 people and the team and punching way over our weight kind of the AR per team member and all these metrics are kind of over over all the today over all the benchmarks and everything and every single person that joins today has we have an onboarding session about that moment >> to to as something which is a very strong learning in our journey but especially the the freakout was actually not firing people at that point and all that entailed was a few months after when we saw unbelievable growth in terms of velocity like our that that the two principles of the company the cultural principle of the company were born there and we were lucky we were fortunate for that to happen to us that we were that we ran out of money otherwise we wouldn't be around today the things that we learned there if Alf or anyone else would have injected kind of a little bit of money to help us out, we wouldn't be around today. It was a learning that we had to go through.

9:28 >> What were those what are those two cultural cultural principles? >> The two principles that we have are co-building that we all are everyone. It's not leadership and employees. We're all team members that are co-builders. Being a co-founder is this is usually what we what people say co-founder is what they mean. But being a co-founder is you will do anything like this matters to you. This is your baby. You will fight for this. You will have resilience and persistence and you will do whatever it takes and you were there in the beginning at the spark which which matters right it is it is a point that it matters. We're taking that temporal element >> out but the same principle of this is yours. You are a shareholder. You fight for this. This matters for you are impact driven. You will do whatever it takes. No ego. Nothing is too small.

10:16 That is a very strong element. That is the co-building part and the impact velocity is a combination of get done and first principle thinking >> and what turned it around so quickly then right you made the point that it was like a almost a nine-month plan to get to where you needed to get to and it happened in three months all of a sudden. What happened after you fired a third by the way my recollection is it was more than 40% of the workforce but I could be off.

10:41 >> It was it was a third was 25 21 people to 14. >> Okay. again very small was a but a dramatic moment. and the two so the manifestation of the two these two principles because what we did is that okay we took everyone that remained and full transparency of everything. We opened the bank account on the screen everyone this is the amount of money we have. These are the simulations. This is what happens if we succeed. This is what happens if we fail. This is like everything. This is the plan. The pl the plan had this amazing element of focus. There's something so crystallizing of being about a near-death experience in that sense figuratively of course that that just makes it it's like okay these meetings and this conference we're going to go like doesn't freaking matter like this doesn't matter and this doesn't matter.

11:39 And we started the whole the pod system that we we work in squads. It started there basically of these are four things that we have to get right. Our plan consists of four things. Each one had an owner. All of us are shared resources but each one had an owner and this owner was obsessed and all the team were were obsessed about everything about the entire plan and it just worked very very very well. Everyone stayed like we worked around the clock and we had very smart tests and we only did these four things. We didn't know no distractions. A guillotine of focused w worked extra hours. and I think I think we were lucky that I think all four were successful but it's like the plan.

12:25 >> So we even had the Ala's kind of the synonym for it. >> so was moving simply piano. It's the beginning of Simply Piano and the monetization of it. So it was the A the first A was Android just it's a very tactical Android lifetime value we did 6x on lifetime value that year teachers we had a very strong teacher community from from the past and we we gave it for free for teachers it was to how to monetize in a smart way for teachers so they support us and not are not mad with us because we have to to monetize with them and Apple relationships that a sense we're very very with with all the platforms and with Apple specifically but it started then >> how' you make your decision to share the bank account with all the employees that's unusual >> that was easy that was the easiest from all this plan for everything that was the easiest the the we still do it to this day so like the every all hands of the company that we have every month and a half or so there's a a full count of how much capital we have it's a it's just a a form of context that we should all share fair. It's not transparency as a as a principle because there are things that are not that are not that we have you know personal agreements right employment agreements and so on like it's not everything is transparent but it's there needs to be a reason not to share something versus the opposite and in a lot of places not all places but a lot of companies there's okay I need to know form of some way like if you need some context we will give you and we will make it no everything is available everything is open for everyone, every context. I can't guess what context you need and don't need.

14:11 There needs to be a good reason why not to. And sometimes there are good reasons. >> Your employees could freak out from that. They see the cash balance to see how much money you're spending per month. Would your employees freak out? >> if so, you need some sometimes you need to manage expectations. Freakout is not is destructive, right? but if we're in a situation we we haven't been since that time but if but at that let's take that moment it's understanding the situation understanding that yes kind of their outcomes of this >> but now you get a lot of so many ideas and responsibility comes from the team now that they're thinking of it's not someone from finance thinks of of ideas how to cut budgets and starts fighting with everyone else is the team comes outside you know what we could we could you know we could open source this or we could use another service or I don't need to fly out whatever or something like they find we even had on many occasions like we even had to tone it down a little bit like okay you know >> you can drink the expensive coffee >> yeah the the c capital matters but it's okay like this is impactful like you should you know this is a good spend to have >> so take me forward now growth stalls in the business right what year we talking about now the growth kind of stalls out for a bit. So from 2017 from kind of transition to simply >> we had amazing growth amazing growth and then postco co was very very good for us >> we're going to come back to co in a second but yeah >> okay so postco u growth stalled I think what it's not necessarily as very much as a decision there was a point again the part of this first principle and u way of thinking and being very focused on things is that in the crisis that happened after co it was like okay growth is not rewarded by market like the proxy for the predictor for a successful company right now is not growth it's runway >> capital efficiency and runway and so on. So we made okay if that if that's the case we can really invest in improving our capital efficiency, our modeling, our infrastructure like a company a country does in times of crisis like let's work on infrastructure.

16:34 >> Yeah. >> On roads. So we worked a lot on roads for that. >> So this was a purposeful decision to >> a very purposeful decision >> because you believe the stock market basically or investors didn't reward growth enough. >> Exactly. and we turn to profitability profitability very quickly. Yeah. >> >> but it's hard to restart growth from there, isn't it? >> It's again it's Eden again and I'm going to quote him a lot. We're very close and >> we like him. We like you know we all I think we all like to like >> good guy keeper for sure.

17:06 >> Yeah. Listen keeping her around. No, my wife says if I wasn't married to her I'd be married to Eden. which your your partnership with Eden is one of the biggest mysteries of of life for me like just by just how different in the relationship that you >> you two are. >> Oh yeah >> in in the way that you think about the world. >> it's it's amazing. It's like it's I I I you don't know this, but I analyzed this with people that from ALF that joined our team after a lot and with Eden a little bit and so on about this relationship that this beautiful relationship with you built, but we can talk about that.

17:49 >> Yeah, I didn't know that there was a psychoanalyst analysis going on behind my back, but I'm glad to hear that it turned out okay. >> Yeah, there's a lot to say. We can we can talk about it, but it was a it was a purposeful decision. And then Eden had that reigniting growth is going to be very difficult but because what we did at the time was building the roads the infrastructure the modeling the engines we started simply draw at the time and so on. So there is a question of pacing a little bit like moving to both like sometimes like mission takes a little bit of time even just you know cohorts accumulating again right like just like the the dynamics of a subscription business and so on like it it takes a little bit of time >> but the acceleration was actually like we moved from from being flat for kind of a year and a half or so postcoid to 25% growth and then 35 30 something% growth and our 50% goal. It's like >> so I want to talk about co one second.

18:49 So because I think that was also the seeds of of of some strategies. So co hits you know by the way this should know this beautiful office it's very musically and creatively inspired with music instruments and drawing and >> it's just a beautiful space and everyone goes home >> but everybody goes home and they're all looking for creative hobbies. So take us through what happens in CO and particularly some of the decisions business decisions you made during CO that caused the company to really accelerate.

19:20 >> interesting. So there were two kind of two two big things that happened at CO. One was that that the the go home but that we got a very good view of of a passion for people. So it's more of we got this we said it's you get a a crystal ball that tells you the future and gives you an underlying of human need going back to where we started right of like basically everyone wants to play a piano. We only had piano. We had the the beginning of of guitar at the time. So we only enjoyed COVID and and the piano times. and so everyone wants to to play piano basically. Now they have a bit more time which is a question of tools of how accessible and easy and so on. So we got this glimpse of the future and at the same time just marketing was very cheap. So the combination of these two things created a very strong effect.

20:15 We were very cautious even I the analog that I used was it's like I'm going to I'm as a company I want to build a hu we both you know we want to build a huge company. We want to go into every home. We want to go public. We want to create something meaningful that is in every home in the world. That's like the type of company that we're building. So, as a company, it's like I'm going to the gym and I'm always working on my muscles. But someone came in at night and replaced all the weights to be feather feather weight. and that's the parallel to the marketing spend just being like very cheap and and efficient. so working as a company, I can enjoy it. It's like look at me, I'm I'm amazing. It's like but I know that this is not real. Like I'm not actually much better at growth as a company and that one day and we knew that because we were we had amazing data science that went over every quarantine in the world. So we could actually predict everything that's going to happen. so we knew these weights are going to go back. so if I want to work on my body, if I want to the muscles of the company, I need to work extra hard. they need to stack weights on top of each other and I so we didn't squeeze the lemon we didn't so we worked more on usage and retention and content we accelerated working on guitar like we had okay this this thing is happening we need to prepare for when the accelerates which which is why after it was a decision like postcoid the fact that it was a decision to stall growth and move to profitability was that it could be a decision not, you know, this panic move >> of oh no go. No, we were we knew.

21:59 >> Talk to me for a second about your background. By the way, were there any marketing gimmicks during co like give it away for free at all? Did you I think I believe you like you added a family subscription at some point. >> It wasn't a gimmick. It were things that we wanted to test out. we did give some things that we do to this date when there's a big crisis somewhere. so we we like to get to to give it for free. So we started we we had this >> time I think the first quarantine was in I'm >> I'm not mist I think it was in Italy and I think we did we gave it for free there in the beginning before it was the kind of >> So when there's a quarantine in Italy you just say okay simply it's free in Italy.

22:41 >> Yes. >> For how long? >> If I if I recall it was some time ago but if I recall was like a month or two. >> Okay. >> there was free. It's you have the privilege to work on a domain that gives a lot of comfort to people in times of both good and what's less trivial during bad times. So >> it comes with some level of responsibility >> during these times. yes, it was a calculated thing but not a gimmick. If you're interested in finding out ahead of time what's going on in Israeli tech, what the latest trends are, who's breaking not only news, but breaking the trend lines, then you want to subscribe to Olive's newsletter, and you can sign up right in the show notes in the description of the show. Please subscribe to the newsletter.

23:26 >> What is your background like? First of all, do you play an instrument? >> I play now with kind of with our things. I'm not I'm not a musician before. I have a very u the very clear kind of cyber type background did most of my kind of first degree during high school wasn't kind of in the officer in the army in the right units. >> Yeah. >> so the kind of the journey was laid out to me the path was laid out for a for a cyber attack. worked kind of algorithmic research in cyber companies and of B2B enterprise companies and so on but I was always drawn to impact that I wanted to see that I wanted to see in the world u ideally in people's hands but not necessarily so like it's not B toc versus B2B but it's more like this is a change that I want to see and in my humble way kind of small way that I can affect it I want to be part of that so first of all was maybe you know the being the forefront of that was actually academia like science. So I went and did my master's degree in vitzman institute with kind of computational neuroscience basically computer science and neurobiology and was really enjoyed it immensely. I remember remember the pitch I was considering the Hebrew University versus Vitzman and and Vitzman Institute. It's like someone asked well what if we finish all our coursework like you know that's on a scholarship basis basis so like can we just go home and the answer was you you I don't think you understood you come here you're a researcher right it's like if you finished go to you know go read papers and and research something like that struck me it's like I have to be here like this is amazing and I did way over on my kind of courses and in courses I became this teaching assistant like I did a bunch of stuff and I really really really enjoyed it and both my adviserss offered that I continue working and funded me for a while further to continue a PhD with them.

25:28 >> but with a lot of respect for the science I I I felt I needed the application of things. I felt like there's so much that I that I researched here and I was exposed to that I think could be already used to do things out out in the wild. >> So like a neuroscientist and a biologist that's helping people do creative hobbies. Is that the right way to think about this? >> in a know yes, we did I did explore a bunch of stuff. So, I'm not like I was agnostic to >> you wanted to start a company. You didn't care what you did.

25:57 >> No, I wanted to solve a pain. >> And what was the pain? >> And the pain and the pain that we started with that took us in on a route and a lot of different routes, but the pain that we started with was this this pain of of starting an instrument. So, it started with music, the the >> psychological pain. Do you think >> the psychological this all these kind of 90% of kids that are starting out with learning an instrument and don't finish the first year.

26:22 >> Is that a cost pain? A psychological pain. >> It's not a it's not a cost pain. >> It's not a cost pain. >> like you know as a parent you would pay any any price for a kid. Like if if they only continue it's like I'm okay with almost any price for it. It's worth so much. So it's >> it's a motivation. It's a motivation. It's a motivation problem. It's a motivation over these exercises. this like with any skill you'd have this so it's not it's very similar to a lot of education and skills and sports and so in that sense like this beginner to capable challenge is common to a lot of domains and it's a real issue it's a real problem >> a lot of great companies built amazing tools in sports that are exactly kind of implementing solutions for that exact pain of how to get to the capable and how to maintain ain it how to continue with it.

27:15 >> So you mentioned before that during co you released the app or the service free and to encourage usage in in numerous countries that began a trend because also during the war post October 7th here and then the war with Iran you also released it free. You want to talk about that? October 7 that hit us and country hit very very hard and in the beginning we like most in Israel and we did everything that we could think of to help from housing and closing to the fact that making sandwiches here like we ran around trying to find places we can assist as a team and it with the passage of time it became more and more outside we're actually in a domain that is like our day job and we don't need to invent something our day job is super super super helpful for healing processes of people and and we can do that. So we started doing more where we're uniquely positioned. that included opening our apps for free here and it was for a a long time for like a year cost us a lot of money >> to do that. we did this for a for a long duration and then also various different projects and I think the highlight of them was the rehabilitation.

28:40 >> We'll come to that in a second but Israel wasn't the only place you opened the app to right over over the last couple years. >> So so we opened in in several other areas but it was mostly we focused on >> the region >> on the region. Yes, >> we did see spikes in usage in the entire region. >> during the Iran war in particular >> in particular. Yes. In the Iran war like you really could see kind of spike. The whole region is lighting up.

29:06 >> The whole region was lighting up. Yeah. >> There's something that >> like an orchestra in the Middle East >> or drawing in the Middle East. >> Yeah. There's something about this domain that transcends kind of board is very human and transcends like the universal language and a universal parental need and a a personal need and a human need that is transcends all these fights and borders and conflicts and so on is just amazing a light for everyone.

29:31 >> What are some of the comments you got from parents in particular either during COVID or during the war about how their kids experienced the the service? We get very emotional responses. we have a lot of it's it's interesting to be in a company where it's very common during a user interviews that's that people cry >> really from from from joy from from being proud if it's a kid or for themselves of being of achieving something. I'd say even like a measure of okay we think we got it like we have a good product market fit indication when you see these strong very strong reactions to something that we created. and definitely and kind of for people that are enduring something which is more difficult fighting a disease and like this is something and elderly obviously like these are things that fill a void help fight various you know and loneliness and and so on beyond for every for every demographics there's something that is very important for them that they can achieve with this you know if it's a teen it's an X factor right it's a for every for every demographic achieved something which is very emotional, very fundamental.

30:48 >> Is there any specific picture that was drawn that stands out in your head that somehow someone shared as part of a user survey or >> There's so many. I think I think one that that I can relate to was this generational like you'd have a child a father and a grandfather all holding the same drawing that they kind of each one drew a version of their own and they had there was this picture that was shared of the three of them together and was that was kind of okay that was >> this is a beautiful moment.

31:20 >> Do you know where that came from in the world? >> I think this was in the Tel Aviv area. So, during the war started October 7th, unfortunately, your nephew was killed. >> Yes. >> Yanai. >> Yanai. >> Yennai. You want to tell us about Yanai? >> yes. It's so it's a on the more sensitive side. but Yay. so he was he was an search and rescue officer and Zikim at that morning. and he became during his both his life and what what he did before. And and at that these final moments that morning a symbol of of leadership even though he was a kind of a very young leader and learning the ropes of it. But he he challenged a lot of the common wisdom to create his own path of how he thought leadership could be. And it was based a lot on on love on empathy and love. You have to love people. You have to be empath empathetic for towards them. You have to understand them.

32:37 there's this one without again without going too deep into it. this one story >> Mhm. >> the people commanders that he that reported to him. >> Mhm. >> And he gave them an exercise at the beginning of of some course of a leadership training course of some sorts and he gives them an exercise of a of a scenario when you know a soldier or something is behaving in this way or that way and so on. like what what do they what do you do when the the and they were you know the punishment he can't go home he has to do these >> chores and so on like there was this punishment entailed with that and he said okay I'm going to add new information for you and this new information is that it's a it's a lone kind of soldier is kind of family and they have financial challenges and he is he troubled by that like he needs he when he goes back over the weekend he needs to get a job and he needs to kind of help out and his girlfriend dumped him or whatever. It's like, let's I'm going to add more information. Does your answer change? Like, what are you going to do? It's like, okay, obviously obviously our answer changes and we're going to do this or that. We're going to help him assist him and so on. It's like, but how but how, you know, how could we know? It's like your job is to know. If you want to be a leader, your job is to know. You want need to know what's going on with the people that you're leading for you to help them to be the best versions of themselves. And that is that is beautiful and that is so nonchal that that's inspiring. And and he spent his nights talking to his fellow to his soldiers to his to other people in the UN. He spent he he didn't sleep at all. he spent all his nights just talking to people and he had his notes and he kind of he did a lot of house visits and he helped and whatever he can. So that's the type of person and and he became part of what you said you want to talk about later but >> part of the music home that we later open >> and he came for those who don't know is a beach basically area time just north of Gaza that terrorists landed on and began >> shooting up many people and their search and rescue missions there to help the people civilians to get out. But we have something that we don't normally do on this podcast. We have a clip. This is the first of two clips we're going to play.

35:39 But I What is The thing that struck me about this clip about Yanai is the quote at every night or every night you see stars >> and the double entandra which works even better in Hebrew >> than it does in >> only at night do you see the stars.

36:31 >> Yeah. And it says so much. which is also very related to simply right which is that there's all these people around the world with these hidden talents and only when you can kind of get to them in the darkness of their own home on some level right which is hey this this app and service comes where you can discover your own talent do you find do you find stars it's like striking it's almost like a family trait to be able to find these hidden stars around the world >> it's a very strong it became a mantra it's from a a poem that my brother, Yai's father, Yal wrote him before and became a mantra of Yanai.

37:12 and it felt very fitting in the room where it's a of >> in a time of darkness there's there is light you find rays of hope and you find good people. and and there is a lot of of kind of what's in the room in our domain which is a domain domain of light of spreading light of giving hope and giving light not only in darkness it's just light. >> A little birdie whispered to me that he played the piano too.

37:45 >> I played the piano too. >> Did he pick it up from simply >> or was he talented? >> He he was self-taught. >> Yeah, >> he was self-taught. a little bit of simply but mostly selftaught not not lessons and selftaught pianist >> and >> and a very shy one. >> And so you know this this video we just saw showed his coffee cup the memorial coffee cup which he left around the rooms as >> to keep to help him keep awake awake at night >> at night because he didn't sleep at night.

38:18 >> He he he drank a ridiculous amount of coffee. A ridiculous amount of coffee. 20. >> Yes. A ridiculous amount of coffee to be able to keep himself awake to talk to people. >> So I me I mentioned before that we we we explored so many ways in what way we can be helpful and then the connection was made with professor Amiti from from Sheibba Hospital. He's a manager of the rehabilitation hospital at Sheibba Hospital and he had this vision of how music music learning is a fundamental part of a healing process and not not something secondary.

38:58 >> which is very revolutionary. It's like very innovative in the world and we hit it off immediately and it was an amazing very very rapid process. we found generous donations the Greenberg Greenlass family that that that helped with the the construction of a music room, harmony music room and a donation that we brought and >> we being simply >> we being simply yeah for for the spark right of simply of instruments and and devices and subscriptions and musical music music therapists. we connected with the Jerusalem Academy of Music and they came in and brought their students to to help with the ongoing activation of the room. and it's beautiful and kind of in our terminology in our domain there's a product market fit and a very strong one. The the music room is fully fully booked. Departments are fighting over it. they all want kind of it's it became something very crucial as part of the healing processes for all various kind of demographics. There's a community of makers that are building instruments that are helping for those you know with disabilities that need different types of instruments. maybe a world good time to mention that they are looking also like they need donations for musical therapists because they want to expand this program and have more therapy inside the room. You know, my my son-in-law, he talked about this very openly, was wounded in 2014, and he was a musician, played guitar, and he couldn't play guitar after his injury.

40:40 And a bunch of >> guys who were good at hacking things together got together and built him a special implement for his >> his his finger and his hand so that he could squeeze >> the chords on a guitar. And he went back to playing. He ultimately recorded a song with Taki from Fa what's his name? Levy from FA. He recorded the song for Tak Levy from from FA. >> beautiful. >> Yeah. You know about the the basically the road of life. and I see firsthand how music is part of the rehabilitation process through my son-in-law.

41:24 you're very regimented at simply about ROI. I mean, I've never seen a more a company more maniacally focused on ROI and KPIs. Is there is there any ROI or KPI to this music rehab room? yes, I think the ROI is is us, right? Is our own I can the definition of the ROI doesn't have to be a very numerical one. It can be it's more being having a strong per purpose being very deliberate about things about how does success look like >> and being very focused like if this if we're going to do this we need to do it right.

42:06 >> and this this required a lot of resources and bandwidth to to do it right. But it was very important for us to know that there's product market fit. Like if this was another room that is half empty and devices that are broken. It's like no no we have to make sure that there's a kind of enough that there's maintenance and that there's support and that continues and and so like that's the only way to do this.

42:28 It's not >> who built the room. >> the construction came from this donation that I mentioned that's like kind of from from the from the hospital side the friends of Sheba. >> Yeah. And >> u and and everything inside it and the therapy the ongoing therapy came from us. >> Came from you. Yes. And did you help build the inside of the room? We no the design of it came from >> the design came from Yes.

42:54 >> Yeah. I thought I had heard something like that from >> Yeah. Yeah. We we designed the room with with the hospital. >> Let's see the clip. You know, rehab basically depends on the motivation of the rehab individual. Leat was an example of someone whom we couldn't we could hardly penetrate her very depressive mood and depressive attitude and lack of motivation.

43:40 She was very much within herself at bed, hardly going out, hardly cooperating with physotherapy, occupational therapy and other means of rehab that we offered her. And her li and her eyes literally lit when she was offered to come to the room. for you made the The rest is history because she's done a huge mileage via music therapy that she's not oxidized anymore.

45:15 So when you see that story, the music room brought her back to speaking. How does it make you feel? >> obviously speechless. it's like I I'm very proud and happy that that this is my I'm part of this that I had some stake in this that we had some stake as a simply as a team as a have everyone involved in this. It's beautiful. I heard that somebody described seeing amputees sitting down at a drum set and asking wait, can I record my songs here? What'd you feel the first time you watch someone like use the room and say, hey, an ampute is going to record his songs here, play the drums or record his songs.

46:13 >> So maybe the silly answer would be going to the to being deliberate. I'm I want to see day seven retention. It's like I want to see not the first enthusiasm. I want that I want that result. I want the end result of the >> of Leadat speaking >> of Lead speaking. I want to see that that patient continuing time and again and not not coming because the first the first impression is is is important and it's great and it's like you come and you jam a little bit and so on but will this person comes the day after?

46:50 It's like when I was there recently immediately like my instinct was to go around and check that everything is working and to see and I found this amplifier that wasn't kind of okay we need to replace that and like did they clear the room for me to be here or was it empty and so on like I want this this is not this kind of poster thing we want this to work and and it looks to be working so we're starting to replicate like we want to do more of.

47:22 >> Where are you going to replicate? That's what I was gonna ask you. There other countries, other cities. So the immediate the immediate thing that we did which is a slightly different use case of this was we launched it several weeks ago was with Tel Aviv Museum on the drawing side of adding adding this element inside the museum for families and and kids and kind of delegations and art therapy and everything to be able to interact with the art of the of the museum and draw pieces of art from the museum >> there. And it just it started recently and there too amazing product market fit like how do you define like product market fit despite the fact that there are a lot of things that are broken and kind of the projector isn't necessarily like that is screening the drawings and so like not necessarily tight with everything and still we have tens of thousands of drawings made and this is like in a in a a few weeks with 15 to 20 stations there in the museum. Yeah, like we have tens of thousands of drawings made.

48:26 >> Take the art from the museum and then you kind of >> and then it's like it gives an instruction with with simply draw. It gives an instruction a tailored instruction for how to do to make this drawing and you know in a sessions that's fitting for for the kind of capacity in a museum and so on like 20 minutes of drawing of some art element from the museum and then it you broadcast that like you put this on the projector and it shows it on the on the wall. and you have this this moving gallery of drawings that the kids are now part of the of the musician of the gallery, right? And again full all the time to the point that they have to force people out after closing hours.

49:09 They kind of they close the light on on kids. Now we want to look expansion both locally kind of do more of this and then or in parallel start doing in other countries US obviously and and in different in other for in more use cases as well. So, so we have kind of museums, we have hospitals. We didn't do children hospitals. I think it's it applies very strongly there. someone recently brought up prisons. That's kind of rehabilitation of that is interesting for us as well. I think we there's a lot we can do.

49:47 >> This wasn't your only interaction unfortunately with loss during this time. Your co-founder Roi, >> it's it looks like it's a it's a fun episode. >> No, it's I think an important episode. I know it because there's this unique combination of retreat and company that brings such joy. I mentioned my nephew learned to play the piano with this. My kids have all used simply by the way. They're more musical than their father because they got it from their mother.

50:10 And I have run into thousands of people probably at this point who have taken on a creative hobby through simply and it really incredibly brings such joy and I think the striking thing about this company as we mentioned the challenge of laying off a third of the company the growth stalled at least from our perspective you say it was it was the infrastructure either way it doesn't matter restarting that growth is stunning and this is such a scientific company you you really created this pod structure that so many companies have have emulated which I want to come back to at the end. and you're totally KPI driven company and you've just overcome an incredible amount of things and wealth accelerating. You're bringing more joy to the world through this. And so as I said your co-founder Roui passed away >> two years ago.

50:59 >> Two years ago now at age 44 suddenly suddenly understood Disney. Yeah. And within I think five or six months of your of your of your nephew and Roui I think was with you in in the army unit. He was your commander in the army unit before starting the company. >> How did that affect you personally and how did that affect the company? So so the effect was obviously meaningful boy besides being one of the most brilliant people I've ever had the privilege of working with and I worked with with a lot of very very very smart people. he was my best friend. we had a lot of past between us traveling in different places in the world and our partners just the two of us and with our partners and he was my best my best friend and the impact of it is obviously it impact okay so so you know it impacted the company obviously he was a beacon for a lot of people and he held a lot stuff and he was very a lot of people depended on him including myself.

52:22 and so kind of over the past two years almost three years a lot of people have been asking me where do I find kind of the strength of everything that happened with this very very difficult time on a personal level. do I find the strength to continue with, you know, with the startup grind and with all the with board meetings and investors and and all that and my response is that it's it's sort of the the other way around like working in something like what we do and with the people that we do this with is is what gives me strength to deal with everything that is happening. You once I don't know if you remember this even but you once asked me years ago how do I deal how do I cope with the loneliness now the being the loneliness at the top and I remember I don't know if you again if you remember the response I kind of I pondered upon this and then I said well you know I feel the full spectrum of emotions of that that you have like good and bad often on a daily basis but not loneliness One of the principles of that co-building which which is implemented we we bring people in. We we we expect this from them and we grow them into we we are partners. I have a lot of partners. I lost a co-founder as a company. We lost a co-founder but we have a lot of co-builders. So we overcame or we grew we we we didn't grow stronger because of this but we we did grow stronger kind of the weird thing is that business has been amazing in the past two two three years >> your growth and your revenue per employee is just stunning >> and and everything is so on so it's so this is because of this very very very strong partnership and the way that we work that allowed us so the loss is much more on the personal level and I have I have Woi with me. I ask him questions. He disagrees with some of my decisions. I know which. I have an argument and unfortunately for for him I have I have an advantage and I win.

54:36 but but not not always. Sometimes not sometimes he wins the arguments and it's a I do feel a gaping hole of of regret. forget is the right word, but of of of of the miss of him not being around. He would be so proud of of what we're doing and the results that we're achieving and he would have an amazing freaking fun time.

55:10 Like he would he would be he would celebrate in all the things that we're doing with AI and beyond and everything that would he would have so much fun. Before I get to the wrap-up, I want you to talk through the pod structure because you've also really innovated on this many years ago and the company's grown a lot since then both in revenue a number of employees given explosively. It's transformed itself through AI pretty meaningfully over the last couple bunch of months to a year. But the pod structure persists. You've built what I think is an incredibly scalable replicable almost maniacal model.

55:48 >> so it's it's a it's first principle meets meets organizational structure. It's the same thing. It's okay how what is it that we want to achieve and how what's the bay best way to achieve it. And when you have so we start with an OKR we start with an objective. Okay, we want a certain effort to happen and then we go into okay what's a team what's an exciting team to achieve that who needs to sit it's a very practical question like who needs to sit next to whom in this in the open space >> for for the most amazing results >> and that's that's basically a pod so you want it to be it's a minmax question like you want it to be the smallest amount of of people to be able to run fast because the more people it's like more opinions and more processes and more it's like it's like it became you can't have a brainstorm with with 10 12 people definitely not more than that frank it needs a but these people as a small team will have an unbelievable amount of context on the on the problem on the challenge and the business challenge that we have and they will do whatever it take it takes to achieve that that thing and creates often doesn't have to be but it often creates a multi-disiplinary team and so on and the way it you're right that it's very scalable to the point of let's say so I just need to break down these OKRs I need to break down the the achievements the business achievements that they want to achieve and it could be and it could be all the developers are sitting together like I could say oh you know what they want an infrastructure software element infrastructure that's like that's what my plan for the next six month in some area it's like okay so we need five developers working together and doing just that u so just just being deliberate about not okay all developers are sitting together in other departmental all marketing all and and that optimizes on communication between them and on training on the job training and and so on it optimizes on that which is okay but if we're optimizing on something else we we would want a different structure for that.

57:54 The disadvantage which is why this time in is also exciting is that it's it's unbelievably bad with on boarding. It's like training someone to this train of thought to or you going into being a kind of having only two developers in a team with and you're immediately thrown into kind of I need to work I need to understand the customers as a developer. I need to understand the customers and the marketing and working with the marketing person and the product and the designer and everything. It's like an overload. So it's very hard for on boarding. It's very hard for hiring. it means that we hire problem solvers more than disciplinary professionals but problem solvers and as you can imagine where I'm going with this. It's amazing with AI like the the fact that first of all I can hire less. So it's like I need to onboard less people. So hiring obviously but a lot a lot of positions but her less every person could do more and the sheer fact that we always hired for problem solvers and not necessarily a lot of experience in Java right but like someone that is I I will solve this whatever in whatever way possible is very fitting for for the revolution that's happening.

59:08 >> So I want to wrap with the following. So we we talked about your nephew and we talked about my partner Eden. Eden has a rule that you never invest in brothers and families and it's a recipe for disaster. It comes off here all the time because for some reason there are a lot of brother founding teams in this country. Turns out that as simply your brother Yagal is I think the head of music >> music and he he he's leading now a kickass music AI research team.

59:41 >> Your mother who I believe is a psychologist. Is that right? It was the head of the Israeli HR Association. >> No, not HR. HR pure >> Israeli HR association. Dr. Schlomit Kaminka was your chief consultant on performance reviews or a consultant on performance reviews at some point. we I think not formally we we had we had help from if that's a point we had one of my brothers another brother there was a time where another brother was actually conducted research he had a he has a PhD in education and he conducted formal research for us on the impact of what we're doing so it was kind of a controlled study with unbelievable results right but that like yes he was part of the company for a little Are there any complexities in this?

60:31 >> Of course. and I would say so you know we spoke about Oi as my best friend regardless of simply so I started with my brother and and my best friend the company. it has to so this would not be like if as tips go this is not you know okay you should start your company with family and friends. I know exactly they know my capabilities. I know their their capabilities and we have this fundamental strong trust between us.

61:05 which means that we did in the beginning we we spoke a lot we had unbelievable communication like everything is open you don't leave though we had these rules like you don't leave anything behind like everything is open feedback anything everything is open and expectation setting that we all knew that we are here for the company meaning there will be a point or there might be a point where we can't grow to be what what the company needs us to be kept saying that for as the CEO that this is not this ego trip, right? Like I'm I'm on this path. Every person that joined the company breaks my, you know, my record for how many people I led.

61:44 I didn't know if I'll enjoy being a leader of 100 people. and if I'll be good at it. and I have the same question now on on 500 people. if I'll enjoy it and if I'll be good at it. And if I if I don't I need to trust people that tell me that we need as a company to need someone else to lead and in the same so the same type of expectation we had between us and we separate hats. So on Shabbat's dinner we don't talk about work >> and you managed to manage to keep to that zero talk about working >> 10%.

62:16 >> And if there's disagreement who makes the ultimate decision >> so it's based on on on on our ownership in the company. >> Got it. It's a it's a context. There is a there there isn't a formal like a hierarchy in terms of who is valued more. It's it's a there's a a hierarchy of context of ownership and context. Right. Yal is an owner of his domain. I do not make decisions in his domain. >> Last question. This is you're still on the journey. as simply and >> some would say in the beginning >> some would say in the beginning and obviously the last two and a half years have been a journey if you were giving one piece of advice either to yourself or to other people out there what would it be?

63:07 >> it's always the the advice that always comes up often is that I hear all the time and I would give myself in a heartbeat is velocity. It's always about kind of velocity faster. >> That's the startup advice. >> That's the startup advice. >> Advice you'd give for the last >> two and a half years or 12 years, however you choose to think about it. >> Work on things that matter. and and it's actionable. It's not just this so there's no double bottom line. I don't believe that.

63:42 and it's not like we're, you know, we're growing like crazy and we have this huge companion in every household and we're the future of how this world is going to look like in the world of AI, you know, with people that have more time and more need for this and and we we're strong believers. We see that AI is elevating humanity and elevating creativity for people and we're part of this trend that is happening in the world that is going to be that is evolving right this is something that is very strong and what amazing financial outcomes for you guys freaking amazing outcome financial outcomes but to have the strength to do that over time with things that can that happen for us it's like you know no one predicts that in that startup journey of what happened to us. But the things there there is so much grind like in the regular path. There's so much and you need to have so much strength, so much resilience. It needs to be or it's much helpful if you do it on something that you believe needs to happen in the world that gives you so much strength and with people that can share the load with you.

64:51 >> Do you worry about competition like Dualingo thinks about giving away music for free? It's not that I'm wary of it that we're we're aware of. We look at competition all the time and there are obviously it's a it's a very exciting domain. So there obviously a lot of interesting competitors out there. we learn from them. they we know they learn a lot from us. we learn from them and we and we we we just we're better like we we need to make sure regardless it helps us having a compet having a competitor helps us define how you're going to be better if you're lacking that you need to disrupt yourself all the time and how can I be better with a competitor just it just makes it easier so it's very helpful >> you thanks for joining us on invested I appreciate it if you enjoyed this episode of invested and found it meaningful because I think this was an extraordinarily meaningful episode of Invested. Please rate us five stars on Spotify and Apple Podcast. Subscribe to the YouTube channel. Don't forget to subscribe to the newsletter. And if you're looking to follow Kamiko, you can find him on both LinkedIn and X at Yu V A L K A M I N Ka. That's both on X and LinkedIn. Thank you. Take care.