This is part three in a three-part series on business development with Chaim Ellenbogen. In the first part, we discussed the trend of Israeli companies to scale up, Chaim’s experiences building Checkomatic, and advice for Israeli founders. In the second part, we discussed creating a new specialty division based on an existing business.
In the next part of the series, we will discuss how Chaim scaled his start-up with a third division. Chaim will also share insights for Israeli entrepreneurs and start-ups that do not fit the high-tech model.
How did you decide to start yet another business division?
I was thinking about a story by Steve Jobs where he describes figuring out what the customer wants before they ask for it. Jobs quoted Henry Ford’s approach, where if someone asked customers what they wanted, they would have asked for a faster horse. Few people would have thought of asking for a car. Jobs said, “People don’t know what they want until you show it to them….”
How did Jobs’ message impact you?
I realized that I might be missing something big by asking people what they want. I asked my clients what they wanted. They said, “We want checks the next day.” and I delivered. It was a great business. But was there something even bigger I was missing?
This time I started thinking of what nobody asked me for. I told everyone on my staff to think of ideas. There are no bad ideas. We won’t use the vast majority of them, but that’s ok. At first, we will think of things that sound silly, impossible, or just different from how we have been doing business.
What happened next?
Once we started feeling “free” to think out of the box, I brought us back to basics by asking what products or services might be relevant to our clients. It’s once a thing to dream of creating a new computer like Apple, but we were not a technology company. We build a great business around printing checks and another business by getting them to people the next day.
So went back to my team and asked what we can customize and get to clients the next day? We started looking around our own office. First, what products are customizable?
What did you come up with?
We came up with ideas like trade fair pens, gift sets, door signs with people’s names on them. Those are all customizable, but they are not something companies order regularly, like checks. I did not want to start a seasonal or occasional use business.
One day while opening my mail, I received proposals from three potential suppliers. One supplier’s proposal was stuffed in a regular company envelope, which was too small for the number of papers in the proposal. But, it has the company’s name printed professionally on it. The second proposal came in the right-sized envelope, but the company name was handwritten. The third proposal came in a massive security envelope with the company name printed on it.
Before reading the proposals, all I could think was that these guys need to get better envelopes. Then I called a team meeting.
What happened at the team meeting?
I asked my team what they thought about the proposals. Everyone commented on the envelopes. It’s the equivalent of making a first impression. That was the beginning of BusinessEnvelopes.com. We saw with our own eyes that envelopes say a lot about a business.
What do envelopes say?
Confidential documents should be sent in safe and secure envelopes. Marketing documents should have color, so they stand out.
These things may sound obvious, but once you start to look out for them, it’s clear that many companies don’t connect the dots. Do you know how many credit cards or sensitive financial documents are sent using regular envelopes because someone wanted to save a few pennies? They may have saved a few pennies, but they lost many customers who feel their information is at risk. And the ones that do make sure to use the appropriate envelope gains the trust.
You build a successful company with several divisions outside of the high-tech start-up model. What advice can you share for potential entrepreneurs who are thinking of launching their start-ups?
Not all start-ups have to be technology-based. Technology is a toll, and tech start-ups are great. But, there are many possibilities.
Also, don’t be afraid to learn from high-tech founders. I love reading about Steve Jobs and thinking about how I could apply him to my business. Mobileye, Waze, and Wix are exciting companies. Study them, but don’t try to become them. Build the company that you are uniquely suited to build.
Unicorns are great, but not every company will reach a $1 billion valuation. Remember, the term was coined to reflect rarity. It’s essential to go for the stars, but don’t feel discouraged if you don’t reach the top echelon of corporate valuations. You can be personally fulfilled and wealthy by building a successful business even if it is not at the apex of valuations.
Is there any final advice that you would like to share?
Integrate your values with your business. I care about security, and it is reflected in my envelopes. What do you care about? How can you show it in your business? Don’t be afraid to spend a little more or charge a little more if it means purchasing supplies that align with your values.
Suppose you have a coffee shop in Tel Aviv where people care that the farmers growing the coffee earn a living wage and have quality health care? It might just cost a few more agorot per latte or espresso to reach those goals.
Suppose you are an accountant in Jerusalem, and you care about inspiring high-school students from underserved communities to matriculate to college. Consider spending an afternoon a month speaking at high schools or become a mentor to an aspiring accountant.