Moving a Technology Company from Israel to America: Perfecto Mobile CEO Eran Yaniv (Part 4)

Sramana: Given that you were facing a tricky market with uncertain revenues, how were you able to finance the cash requirements to keep your human capital?

Eran Yaniv: We did not have enough revenue coming in to keep the status quo. When you make the right decisions financially and organizationally, then your VCs will appreciate that. They will support you through the long haul. That is exactly what happened.

In addition, we gained some new funding from the Israeli Chief Scientist. That, combined with our VC funding, helped us survive that period. We could not have done that if our investors did not believe in us. Our investors believed in us and the moves we were making.

Sramana: You seem to have very savvy investors.

Eran Yaniv: Carmel Ventures is a very strong investor and has stood by the company. They have provided a lot of added value. In the early days when we were going after the mobile operators, they were a very good bet for us.

Sramana: That is very good to hear. Investors are very good at pulling the plug when markets get rough.

Eran Yaniv: Israeli investors have the characteristic of standing by the companies they invest in.

Sramana: In 2008 and 2009 you managed to weather the storm. What happened when the market turned to your favor?

Eran Yaniv: There is the delusion that mobile applications are very easy to produce. Companies think they can be created without much effort and deployed to the marketplace without quality assurance and testing. That typically happens with the first version, but when the second and third versions roll out that attitude changes.

It took us a bit of time to understand which applications would generate revenue for us. At that time everybody was looking at top games that everyone used, but they only paid a dollar for those applications. It dawned on us that the real applications that matter to us are ones provided free by enterprises as a means of driving business. Once we realized that in mid-2010, we started to make a shift towards the enterprise.

By the end of 2010, we understood everything that had to be done. The market was correcting and we had a game plan. We moved our headquarters to Boston and we hired a VP of sales. Once we understood what the market segment shift was, it was amazing to see what happened to the company.

Sramana: What kinds of corporations had the maximum adoption of mobile application development, and which ones were in your sweet spot?

Eran Yaniv: The financial segments are at the top of that list. Just for the sake of the brand they need their applications to perform as advertised. They are utilizing mobile media in a prominent manner. We are seeing retail, media and entertainment, and travel coming in as well. The financial segment is definitely the leader with the highest quality requirements.

Sramana: What is the scale of the deals you do with them?

Eran Yaniv: Today we provide two types of offerings. We provide a public cloud with a variety of handsets, maintained by us, that can be accessed by anybody through our website. We offer a free trial and if people like what they see, then they can buy a subscription. This attracts ISVs and small companies. The bill sizes are hundreds of dollars a month or a few thousand per year at most. This model is most suitable for ad-hoc testing.

The other offering is a private cloud dedicated to a particular client. It can be populated with any handset the organization wants. This is very well suited to organizations that would like to employ disciplines of automation around the quality processes. This is very well suited to organizations that are keen on security measures and privacy. An example of this would be an organization with 24 slots in the cloud, populated with 24 devices for their consumers with automation capabilities and reporting into their backbone systems. This can range in the hundreds of thousands of dollars or even into the millions of dollars on a recurring basis.

This segment is part 4 in the series : Moving a Technology Company from Israel to America: Perfecto Mobile CEO Eran Yaniv
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