Joseph J. Sherman
Business Development Representative - B2B SaaS

Business Talk with Itai Sadan: Strategic Change at Duda

Itai Sadan shares lessons from Duda’s strategic change and business insights for Israeli startups. (Courtesy, Duda)

Itai Sadan is the Co-Founder & CEO at Duda.  Itai was born and raised in Tel Aviv, studied Computer Science at the Ben-Gurion University of the Negev.  He worked in Israel’s high-tech sector before moving to Silicon Valley.

Together with co-founder Amir Glatt, Itai established Duda as a successful company that is on its way to becoming a unicorn.  Based in California with Research and Development in Israel, Duda is a web design platform for web design agencies that work with small businesses.  It has 18K web designers and agencies and hosts over 1 million active websites.  

But, before it had a focus on serving agencies and SaaS platforms, the company was known as DudaMobile, a platform that offered a do-it-yourself mobile website solution for Small- and medium-sized businesses. The solution made it easy for small businesses to build a mobile-friendly website and enabled them to convert desktop websites into mobile-optimized sites.  

How successful was Duda Mobile?  

Duda Mobile was very successful in its early years, it grew in a 2-3 year period to a few millions of dollars of revenue and many millions of mobile sites built on it. 

Whom were you partnering with?  

We sold directly to SMBs and Web Professionals and partnered with large Enterprises who sold into SMBs like Google, GoDaddy, Yahoo, OpenTable etc.

Itai Sadan (Courtesy, Duda)

Were you attracting investors?

Yes, we raised a Seed, A and B round on the heels of DudaMobile’s success.

Where did you get the idea that you needed to change the company’s direction?

We followed the industry and had a sense that with the proliferation of devices and screens, SMBs would not want to build a website for every type of screen (desktop, tablet, mobile), they wanted to build it once and that it would run everywhere. In addition, roughly at the same time the responsive web design framework started getting traction and it became clear to us that this was the future.

Was it a momentary epiphany, or was it a process?

It was a process and as I mentioned, we were following the rising trend of responsive web design. We believed it was the right way to go and that we had to be part of that trend. We also didn’t see any other website builder that adhered to the trend and were hoping to launch the first responsive website builder. Unfortunately, it took us quite a while to build it and by the time we launched we were not the first to market.

At the time, did you think it would be a completely new direction for the company or only building an additional business or division of the company?

We thought it would be an additional product to offer to our customers. For a long time we were offering the mobile site builder for folks who already had a desktop site and just wanted to make it mobile-friendly and the responsive website builder for those who want to build a brand new website that is designed to work on all screens from the get go.

How did you make the transition?

It was initially taken by surprise at the company that we would consider building a responsive website builder as the company had its roots as a mobile-only company. We were a leader in the mobile web space, we were unique and differentiated. There were questions if we should expand to do other things strictly in the mobile space, for example get into mobile advertising.

But Amir and I were determined that there is an opportunity in the responsive web design space and we felt it was too risky to stay solely focused on the mobile web. We were also very excited about owning the full web presence experience of our customers and thought we could build a great product. We eventually managed to get everyone on board with the new vision. 

How long did the transition take?

The transition took much longer than we expected, I believe we pitched the idea of building a responsive website builder to the executive management team for the first time at the end of 2012. It took us until early 2014 to build and launch the product, we called it DudaOne at the time. What further surprised us in the process is how fast DudaMobile declined once the deceleration started in 2013. I’m glad that we started building DudaOne when we did as otherwise we would have been in a much bigger problem. 

What was the transition like?

The transition was not easy, as I mentioned DudaMobile started declining in terms of revenue pretty quickly and it took time for DudaOne to gain traction. Now when you have DudaMobile that is making millions of dollars a year declining and DudaOne as a new product that was gaining nice traction but in the early days at relatively small numbers it’s rough. It’s like taking money out of one pocket and putting it in the other pocket. 

There were about two years that the topline revenue of the company didn’t grow substantially. Also In order to reduce burn, we had to let some folks go at the time which was difficult. There was also constant debate of how much real-estate would you give a new product on our homepage when it is still generating relatively low revenue versus the incumbent product that was paying the bills. I think by the second year it became clear to all that DudaOne was the future, it was growing rapidly and we were getting to the point where 50% of the revenues were coming from it. 

These two years were not easy and it is mostly due to the belief of our team and our investors that we were able to make it. In many ways it was as if we pressed the restart button and started a new company around a new product, the old product was really what kept us alive and helped finance our resurrection as a different company.

The list of bankrupt companies includes many firms praised for their success only a short time ago.  Why do you think so many successful companies fail to change?  

When you see how hard it is to make the change in a small company, you understand it is 100 times harder in a bigger company that moves slower where people and interests are not aligned. The first thing is to spot the change in market dynamics when it is about to occur which is difficult by itself, the second thing is to be able to adapt quickly enough which is even harder. 

I’m sure that in all the big companies that were leaders at one time like Nokia, Kodak and others there were very smart people who identified changes in market dynamics that would impact their company, but steering a huge ship in a different direction is a very difficult endeavor.

From the customer’s perspective, change can often look relatively easy.  For example, Blockbuster ceased operations, and Netflix transformed itself.  Retail stores of every type filed for bankruptcy as Amazon grew.  How do you manage the change for the customer?  Or do you?

I’m not sure you need to, the customer will buy products from where they get more value. Customers are fluid, it’s really the companies who need to be on the guard to make sure they are the ones providing the best solution. The reality is that very few companies live to re-invent themselves over many decades, this is why you see Google and others investing in these moonshot projects hoping they will be the ones disrupting themselves. 

Companies disrupting themselves is an interesting concept.  Is Duda in the process of disrupting itself?  What does the future of Duda look like?

I feel we are constantly “disrupting” ourselves to ensure we continue to maintain product-market fit. Not every disruption is a complete pivot like we did when we moved from DudaMobile to Duda when we both invented a new product and narrowed our Ideal Customer Profile (ICP) to focus on web professionals and digital agencies. There are also mini disruptions, like finding a new type of ICP to go after, examples could be companies that are expanding down-market from large enterprise to SMB or going into a new industry vertical.

Two years ago we identified a new type of ICP which we felt our product is relevant to, this was a SaaS platform that sells into SMBs usually focused on a specific industry vertical (e.g. real-estate, travel etc.). We noticed that many of these SaaS platforms were primarily providing back-office tools to their vertical (e.g. CRM, ERP) and many of them wanted to embed a site builder into their platform in order to offer websites to their customers.

This was a perfect match with what Duda has to offer as an API-based website builder that can be white-labled. Since then we have acquired many customers that fall into the SaaS segment like TripAdvisor’s Bokun, Thryv and Appfolio. This is just one example, we are not resting on our laurels, we continue to search for more markets, more customer types that could open an even larger TAM for our business and allow us to grow.

About the Author
Joseph has extensive experience in business development, sales, and marketing with tech start-ups and scale-ups. Joseph holds a Masters of Business Administration (MBA) from the KEDGE Business School in France, and a bachelor’s degree from the University of California, San Diego. In addition, he has studied at the Tecnológico de Monterrey (ITESM) in Mexico and received a fellowship from the University of California, Berkeley.
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