A few years ago, the business basically stopped growing. Full disclosure, I thought we should write off the company.
If Aleph 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 growth revenue per employee is just stuck.
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 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.
Looks like 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, Yuval.
I'm going to start in an uncomfortable place. Can I start shooting immediately?
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.
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 JoyTunes, 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 did that first challenging moment happen?
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 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 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.
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 because 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 — but that's the point. Like in every family you would have — you would 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 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. My daughter wants to dance. 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 would be the point. Not necessarily you become a professional pianist.
Maybe you will and maybe you won't. 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 — just when you're looking, when you can sit down and draw something and have fun with it. Every single person could do that.
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 JoyTunes. You want to just describe what the product —
So JoyTunes is almost a different company, right? It wasn't even a small pivot. It's like a huge, a very separate, more education-based company through teachers and education systems and so on. And then we shifted to Simply, which is a huge expansion on many levels, also not just music.
So expanding 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 products are beginner to capable — getting you from nothing: I don't know 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 capable where I can play with two hands and have fun, enjoying as well. It's not a copy. What most — what you have the comparables is a copy by reference, by copying just what you know, a YouTube reference or something, which is not a tangible skill. 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 at the forefront of growth.
Okay. We're going to talk about that in a second. Okay. So, go back to 2016 now.
The company had gotten started in 2012, '13. When did we get started?
Roughly around that time again.
I get it.
And I think the point that you're referring to is a point where the transition — that's exactly the transition point. We had this board meeting where Edo and from Aleph, we had this conversation about, okay, JoyTunes 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 kind of 2017 is the year that Simply started.
You were out of money, basically. You were close to out of money.
And we were out of money. We were approaching — it was a very — yeah, it was a very — wasn't a fun point. It was 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 very dramatic, but it was very family, community-like, and was a very dramatic moment with a very strong plan of how we not just get amazing growth but also reach break-even and beyond, kind of own our destiny. And at that point was also the write-off. If I remember a conversation with Edo and following a board meeting with the plan, Edo 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 anyone 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 point. And he was, I will help you in whatever way I can. To me it was a very depressing moment because, Edo, but we have an amazing plan. Like it's going to work amazing. Like why are you writing us off? I'm okay with not bringing in 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 all the benchmarks and everything. And every single person that joins today has — we have an onboarding session about that moment.
As something which is a very strong learning in our journey, but especially 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 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 ran out of money. Otherwise we wouldn't be around today. The things that we learned there — if Aleph 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.
What were those — what are those two 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 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 matters, right? 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. You are impact-driven. You will do whatever it takes. No ego. Nothing is too small. 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 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.
It was a third. It was 25 — 21 people to 14.
Again, very small, but a dramatic moment. And the two — so the manifestation of 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 plan had this amazing element of focus. There's something so crystallizing about a near-death experience in that sense, figuratively of course, that just makes it — it's like, okay, these meetings and this conference we're going to go to, like, doesn't freaking matter. Like this doesn't matter and this doesn't matter. And we started the whole pod system that 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 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 focus worked extra hours. And I think we were lucky that I think all four were successful, but it's like the plan.
So we even had the — Aleph's kind of the synonym for it. So it was moving Simply Piano. It's the beginning of Simply Piano and the monetization of it. So it was 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 the past, and we gave it for free for teachers. It was how to monetize in a smart way for teachers so they support us and are not mad with us because we have to monetize with them. And Apple relationships — in that sense we're very, very with all the platforms and with Apple specifically, but it started then.
How'd 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. We still do it to this day. So like every all-hands of the company that we have every month and a half or so, there's a full count of how much capital we have. It's just a form of context that we should all share. Fair. It's not transparency as a principle because there are things that are not — that we have, you know, personal agreements, right, employment agreements and so on. Like it's not everything is transparent, but 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 this '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. 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, they see how much money you're spending per month. Would your employees freak out?
If so, sometimes you need to manage expectations. Freakout is destructive, right? But if we're in a situation — we haven't been since that time, but at that — let's take that moment — it's understanding the situation, understanding that yes, kind of there are outcomes of this. But now you get so many ideas and responsibility comes from the team now that they're thinking of — it's not someone from finance thinks of ideas how to cut budgets and starts fighting with everyone else. It's the team comes out and says, you know what, we could open source this, or we could use another service, or I don't need to fly out, whatever, or something like that. 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 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 are 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 post-COVID was very, very good for us.
We're going to come back to COVID in a second, but yeah.
Okay, so post-COVID, growth stalled. I think it's not necessarily as very much as a decision. There was a point again, the part of this first-principle way of thinking and being very focused on things is that in the crisis that happened after COVID, it was like, okay, growth is not rewarded by the 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's the case, we can really invest in improving our capital efficiency, our modeling, our infrastructure, like a country does in times of crisis. Like let's work on infrastructure, 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 turned to profitability very quickly. Yeah.
Um.
But it's hard to restart growth from there, isn't it?
It's again — it's Edo 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.
