How Israel became a leader in product-led growth and sales ops start-ups
At a time when enterprises worldwide have been embroiled in the complexities of digital transformations, Israel has emerged as a global leader in sales ops tech solutions.
Israel has a long-standing reputation for being a hub of tech innovation. The country has one of the highest start-up per capita rates in the world with a bustling tech ecosystem. Over the years, countless Israeli-founded tech companies have gone on to achieve commercial success, but their growth has historically been limited by their location, and consequently, they have routinely found themselves subject to acquisitions and mergers by larger organizations from North America. In most cases, this meant that non-technological staff members would have to find alternative employment. The past decade has brought about a noticeable shift, however.
An Era of Sustainable Growth
Now, the Israeli tech ecosystem is thriving like never before. The last decade has seen a slew of start-ups erupt onto the scene; companies like Wix, Monday, AppsFlyer, Taboola, and Outbrain, to name just a few. Where these start-ups differ from those that came before is that they have proven to be both scalable and sustainable, and have even begun making major acquisitions of their own. In June of 2021, Wix added drop-shipping platform Modalyst to its portfolio, while Taboola acquired Connexity, an e-commerce marketing networking for $800M. More recently, Israeli CRM company Optimove purchased Graphyte, a UK-based enterprise.
Nimrod Cohen, Managing Partner at TAU Ventures, gave his thoughts on the matter: “Companies such as WIX or Monday emerged here, reflecting that Israel knows how to establish large companies whose growth is based on the PLG model. This allows more knowledge to circulate here in the ecosystem and we see younger companies like Swimm that successfully apply the model. This is very important knowledge for Israeli ventures since we have seen that companies that made the biggest and fastest leaps in the world in the last two years were based on it. However, you have to be careful because it is based on a lot of investment on the part of the company in adapting the product and marketing to the model, and this is a step that takes a lot of time and money, so you have to monitor that it is done correctly.”
For a company with an Israeli HQ, achieving the requisite growth to reach an IPO necessitates having a strong sales and marketing team based here in Israel. However, that means we have an ocean to cross and a language barrier to overcome, so how do we solve that? The answer lies in automation and tech.
There is a growing contingent of Israeli-based companies who are devising software solutions that bridge geographical and language barriers for start-ups, and this is enabling Israel’s wider tech ecosystem to flourish in ways never seen before.
Here are a few companies that are fueling Israel’s next big tech giants:
Founded by Eyal Elbahary and Alon Lubin, DealHub offers a revenue amplification platform that enables companies to consolidate all of their sales ops applications into a unified AI-driven solution. It integrates fully with major CRM systems and provides full CPQ implementation to enable sales teams to quickly configure products and send accurate quotes to prospects. DealHub provides a streamlined solution for sales professionals dealing with complex, high-volume product orders. “We are experiencing a fourth consecutive year of 250% YoY growth,” Elbahary said, speaking on the success of DealHub. “The CPQ market is full of untapped potential, as is our one-of-a-kind offering.”
Established by Dan Adika, Rafael Sweary, Eyal Cohen, and Yuval Shalom Ozanna and is headquartered in Tel Aviv, WalkMe provides an impressive Digital Adoption Platform designed to help companies take advantage of the opportunities presented by digital transformations by measuring their impact and providing actionable insights. At a time when remote working and digital sales are fast becoming the norm, the company is poised to expand further. “We expect to accelerate our revenue growth in 2022 driven by our strong technology position,” said Dan Adika, WalkMe CEO, in a recent interview.
Gong was founded in 2015 by Amit Bendov and Eilon Reshef, and the company has quickly taken off. The company’s Revenue Intelligence PlatformTM collects key information on a company’s customer interactions, empowering employees to make data-driven decisions about how to proceed with sales cycles. Speaking on INC, Bendov talked about the edge Gong can give users, referring to the service as “unlocked reality”. “Without Gong, companies don’t really know what’s happening with their customer-facing people,” Bendov said. “Gong automatically captures customer conversations, using natural language understanding to understand what’s going on and helps companies with insights so that they can improve customer service, sales and create a better employee experience and customer experience.”
Established in 2014 by Chemi Katz and Ohad Greenshpan, Namogoo is a Digital Journey Continuity Platform that aims to tailor each customer experience to the individual. The platform uses intent-based promotions, customer hijacking prevention, and the first-ever Customer Journey OS to ensure a smooth experience that increases conversion rates on digital sales channels. Speaking on the value of Namogoo, Katz said: “Customer Journey OS standardizes and aligns a wide array of tools, helping eCommerce companies speak in one voice to their customers and avoid misaligned segments, messages, and actions.”
Walnut offers an impressive demo-creation software that allows companies to create and customize interactive product demonstrations and insight-providing data relating to their usage. The company was founded in 2020 and achieved immediate success. I also asked Yoav Vilner, CEO of Walnut.io, about his experience as a leader in product-led growth here in Israel. “As the first mover of the interactive demo space, which just recently Gartner praised in a new report, Walnut happened to be one of the reasons for the giant leap in PLG the past 2 years. By using and embedding the Walnut demos across their assets, hundreds of companies including Fortune 500 companies are closing the gap between the buyer and their product in a PLG motion.”
What Israel’s Start-Up Experts have to Say
There seems to be a clear connection between product-led growth and the nature of Israeli tech start-ups. I asked Rami Gazit, Head of The Galilee Accelerator where I am a mentor, to give his perspective. “The Smart Industry space is crowded with the ‘big tech’ names, serving corporations with heavy so-called ‘all-inclusive’ suites, like ERP and CRM systems,” said Gazit. “But actually, there are many holes there – industrial companies are having so many unsatisfied users that look for solutions to address their needs and can’t find them in these suites.
On the other hand, start-ups can’t just easily sell to the C-level executives, that don’t feel the pain and the potential gains and can’t understand what’s missing in the ERP suites after spending so much on them. That’s why PLG can be the way to go – you start bottom up, first get users to use your product with just some functionality then go up.
The challenge of course is finding the enthusiastic early adopters and the initial functionality that can be implemented without too many dependencies on other systems and IT, while providing real value from inception and promising a lot of additional potential benefits for the extended version. It’s tricky but doable in a lot of cases, including in the Smart industry domain. “
On the power of product-led growth coming from Israel, Ayal Itzkovitz, Managing Partner at Pitango First, said: “B2B enterprise sales used to be the province of those in the ‘C-Level clique’ of large enterprises. It was difficult to break in by Israeli companies and execs.
With the shift to bottom-up grassroots adoption models, sales is becoming a programmatic data challenge, and this is where US companies are losing their birthright advantage and where Israel’s strengths in building data science and analytics growth machines can make all the difference.
PLG is thus a play into the strength of Israeli companies not only producing more category leaders (targeting the US and global markets) but also doing so while operating from Israel.”
So, there is obvious potential for more Israeli businesses to expand and potentially even join a growing list of Israeli companies that have achieved unicorn status. By leveraging this current recession, the Israeli ecosystem can grow a more sustainable marketing and sales operation knowledge hub that will fuel the next big wave of Israeli start-ups and tech giants.