Karen Walker Interviewing Ronen Samuel

Yeah, it's always great to be here. So this industry is a very, very old industry. It didn't change for ages. It's about time to change. Actually, the supply chain of this industry is very old and it's broken. The way this industry is working is trying to focus what the consumer people would like to wear 18 months in advance. Why 18 months? Because you need to design the product, you need to produce it. Usually you produce it in China or Bangladesh, shipping it thousands of kilometers into the U.S. well in advance, marketing the products, and then hoping that the consumer will love the products and will wear it. To do that, you're actually producing large quantities in China and trying to sell them. What this industry is creating is actually a huge waste. This industry, the textile industry and fashion industry, is the second most polluted industry in the world. The first most polluted industry is oil, second is textile. Why is that? From two main reasons. One is producing overcapacity, overproduction, and about 30 percent has never been sold. The second reason is that the way things are being produced and the way that the material is being dyed with ink is really consuming, for one end, lots of water, and in another hand, polluting also the earth and water. Just to produce one t-shirt, like the t-shirt I'm wearing, is more than 2,000 liters of water being consumed. And think about the amount of materials that are being thrown away. 30 percent is not sustainable. So this industry has to move to a much more sustainable way of production, and this is a massive change that needs to happen. But another thing happened in this industry, and actually, which is impacting dramatically the industry. In the past, you know, there were a few brands that were controlling the consumer. They were telling you what you're going to wear next season is going to be orange or going to be blue, and this is what you are going to wear. Today, in the digital world, the equation of supply and demand and how you influence the consumer is absolutely the opposite. This generation, really everyone wants to show themselves. Everyone wants to be unique, and they would like to wear things that they like, not the brand telling them what to wear. And the digital world also influenced the way that the brands are marketing themselves. Today, more than 30 percent of the products you are buying is for the internet, for e-commerce, for marketplaces. The focus is that by 2025, it's going to be 50 or 60 percent of the things.

The computer to choose any design for Michael Jordan from the last 25 years. Think about Netflix. The creativity is of the order from individual assets to the physical place. Absolutely, like Amazon will use connecting you to creators. But actually, this is just the beginning of the revolution of the box market because once they're unleashed, because then anybody... a banana on top of the design, hundreds of choices of different bananas. You choose it, you decide the size, you decide the color, and they ship it and they produce it in a day.

So the first session is actually the most unsustainable way of watching that session. What we're doing is exactly designing what the consumer needs when they need. Fast fashion is about creating large quantities in very, very short time and changing the scene moves many, many years very, very shortly, but it's created a lot of waste. Yes, it has to change the supply chain by moving the production closer to the consumer, so moving into Europe or to the U.S. in order to be able to replace the products on the shelf every week or the second week. But it created a lot of waste. It is creating a lot of waste and it's not sustainable. The only sustainable way is really producing only what a human needs when they need it.

Oh wow. So look, interesting. The world is going more and more digital. You know, we are spending, our children spending most of their time already in the video. We are spending 90 percent of our time in Zoom meetings and Facebook and Instagram and all those things. It is just getting crazy. And now with... it's all about getting a more real experience. And in these matters, actually, you will... it sounds very strange that the people in the future will spend more money, budget on buying clothes in the virtual world versus in the physical. You know, today people are buying, you know, paying for likes because their perception outside is the perception of death. In the digital world, if people are following you in the digital world, you are also successful in the real world, and this is kind of the new life that you are going after. And people will start dressing their avatars. And if you're going to show, you would like something one thing, and if you're going to do a game, you will address other things, and you would like to address it with unique stuff. And unique stuff, you will buy addresses from different designers. And actually, in order to show that it's unique, you are obviously going to have to pay a lot. And NFT is going to kind of make it unique. So if you bought a product that behind it is NFTs, everybody will know that it's yours, that you paid, that you need, that you invested in. What Kornit is looking into is, first of all, how can we play in the virtual world? And we understood that actually we cannot play against it, we have to join. And people will have their life individual and they have the life in the physical. And what Kornit can do the best is connecting the visual and physical. So if you are investing now in buying a shirt in the digital world in your avatar, what we will enable you is also to take this shirt and produce it in the physical world, so you will have it also really the part physically. And vice versa, if you bought something in the physical world, you already and spend money on it, you will be able to transform it into the digital file and you will be able to use it in your digital avatar in the metaverse. So this is where we are going. We're also looking at NFTs and we are building technology that connecting the digital NFTs also to the physical energy. So if you bought a very unique product and you pay a lot in the digital, you will be able to produce one-off also in the physical world, and you will be able to recognize that this order is unique and there will be connection between the physical energy to the digital.

Yeah, so it's still not a large organization. We are close to 1,000 people, employees, all over the world. We are based, the headquarters in Israel, but we are a global company and our biggest market is in North America. About 60 percent of our business is coming from North America, but we are based also in Europe and in Asia. And the multicultural, you know, the culture is evolving because when you are a startup and when you are going managing 1,000 people and a relative fast-growing company, you have to adopt a bit different culture. But we always try to maintain some basic DNA for the company. So for us, we call it with the slogan 'Bonding Matters.' And bonding matter is a matter of connecting between us as the employees of Kornit, between us to our customers, bonding also is between the inks that we are printing on garments to the garment itself, to our suppliers. So I can tell you that bonding matter was actually a big challenge in the last two and a half years with COVID. People work from home, people had lots of issues with kids going to school or not to school. Every day we wake up to new pandemics all around us, a lot of uncertainty. As for us, we tried very hard in the last two and a half years to even go one step further and strengthening the bonding matter, not only through Zooming things and connecting to our employees and really encouraging them to come to the office, of course with all the protection needed. But there's nothing like meeting people in the corridors, sitting face to face. The virtual is important, but without sitting together and feeling each other, we are losing a lot of the passion. Kornit is a lot of our passion. You will see many of our people here with bright eyes. We care about our customers, and many companies are telling it, but this is in our DNA. And we care about the company and about our product. We believe that what we are doing is much bigger than just the products that we're selling. It's really about changing the industry and changing the world to a better world, a much cleaner world, which is more sustainable.

Yeah, you know, it is a tough question because there are many, many moments that you can define as a success. And you're going as a person, you're learning every day, you're growing the teams, you're reaching new heights in terms of business with us. But for me, in the end, you know, it's more about the personality. It's more about seeing that you're doing the right thing. I'll give you an example that happened to me. Actually, three months back, my daughter just ended her, finished her graduated from the army service. You know, in Israel, every person to go to the army, even girls are doing two-year service. And usually after that, they are going to university. My daughter decided to travel around the world, and it's quite common in Israel. And usually this age, they love to travel by themselves with friends. So my daughter as well, with friends, she's traveling with friends. And I think that one thing I'm very proud, she actually called me and told me, 'Dad, why don't you join me for one week in Argentina?' She's traveling in South America. For me, it's actually one of the biggest accomplishments that I can say as a human. In the end, to see that your daughter, really in the most exciting place and with friends, she wants you to join her, you know, her old father. This is an achievement for me beyond any business achievement that I can share.

Thank you very much. Pleasure. Thank you.