How long have you been in this office with this perfect view?
“We moved here about 2 years ago.”
How many people are in the office?
“In total, we are about 110. Appnext is about 70. Worldwide, Appnext has 120 employees. We continue to hire.”
You call your employees “Appnexters”. Who is the ideal “Appnexter”?
“She 🙂 is very creative, ambitious, a team player, agile in many aspects, and one who comes in the morning and knows what he/she wants to do and make sure that whatever he/she does, they do with passion.”
What kind of a person would you never hire?
“Someone who doesn’t care. Someone we feel will not be a part of a DNA of the company, will not contribute, will not feel passionate about what we do. When he comes in the morning and he is not really interested in what he is contributing from day to day and just comes to work. We’re looking for people who are coming to work to develop and contribute rather than just stick there.”
Does it happen that sometimes people start to work with full passion and then after a certain period of time they don’t care anymore?
“It may happen from time to time. But what we do in such cases is we always try to see first, if they understand the role correctly and understand what are their targets and what they’re measured on. And if we see that it doesn’t work or it’s not the right fit, we always try to find a different place for them in the company. We have different cases where people were working in one department and after some time we moved them to a different department – just as a career development phase.”
What’s the average time people work in the company?
“We grew quite fast. Around 70-80 people joined the company in 2017, so the average time is about 1.5-2 years, but we have employees working for 4-5 years and more.”
Appnext has five offices besides the main one in Tel Aviv. It’s Beijing, Seoul, San Francisco, Lviv, Cyprus, correct?
“It’s actually 7 offices: we have an office in Tokyo, Japan as well as another one in Bangalore, India.”
I can understand why Beijing, Seoul and San Francisco, why India and why Japan. Because of the markets mainly. I can understand why Lviv — it’s kind of development center, but why Cyprus?
“Cyprus is very close to us in our hearts and not just geographically speaking. I have opened the first office outside of Israel in Cyprus. That was 14 years ago. We thought of where we were going to place our support center and ad operations center and it was Cyprus. That’s why we started it there. We have a team that works in shifts almost 24 hours a day supporting customers that are using our discovery platform.”
How is the business in China? It’s a tough market, isn’t it?
“China is tough up to the point when you understand the culture. China is an amazing market in terms of the people, in terms of their ambition to develop, expand globally and virtually to conquer the world in that aspect. There are many similarities between Israelis and Chinese in my eyes. Although it’s a tough market, once you do have the right people, you do manage to build the right infrastructure and the right local office there. Then you are set to accomplish great things.”
What kind of infrastructure? Can you give an example?
“It’s all about local communications. I totally see the fact that we manage to hire early in China and the fact that we have succeeded in building the right professional team in China, to be part of the success we achieved in China over the last years. Without the office, without the team that we’ve built, we wouldn’t be able to do that and once you manage to work with the right developers and with the right companies in China, the sky’s the limit.”
How big is your office there?
“Right now we have about ten people in Beijing. We have another employee in Shenzhen”
What about the Russian market? What can you say about it?
“Russian market is one of our strategic markets and it’s definitely one of our top five markets in terms of growth and activity. We see it as a strategic market in terms of what we’ll have in the next couple of years. We’re already working with some of the largest app developers and publishers there. We’re looking at the market from an OEM point of view as part of our Actions product, so one of the markets we’re looking for penetration is Russia. It’s the market that will definitely show its growth in the next couple of years. Both mobile usage device and marketing spend.”
What’s the next location you plan to open an office?
“One option would be Latin America, probably Brazil. Another option is Europe.”
I think that a lot of companies are trying to open international offices and one of their main challenges is to find a General Manager. What is the recipe?
“Find someone who’s in your DNA. Eventually, the office looks like the figure of the general manager, and that’s why he or she needs to be in the figure of the company and the culture.”
Do you hire locally?
Can you remember some bad experiences or some mistakes that you’ve made? Wrong decisions regarding the general managers?
“There were mistakes done but in our case, it’s mostly about choosing the location for the office, not necessarily the person. But for instance, in China, when we started out, we thought that it would make sense to open an office in the financial center, which is Shanghai rather than Beijing. At the beginning we opened the first office in Shanghai and then, a couple of months later, we understood that most of our partners are in Beijing so relatively quickly we’ve made a decision to move it to Beijing.”
With the same team?
“With a similar team. It was just the beginning.”
I didn’t find the information, whether you got funds or not. Can you tell about that?
“Appnext is a self-funded company. When we started back in 2012, we wanted to build an app discovery platform brick by brick. Originally I started my first Internet business about 17 years ago.”
So you’ve got your personal funds and you’ve invested? Was it a big sum?
“Correct. We invested a couple of millions into the company over the years, so it’s all self-funded, bootstrapped, and that’s a part of what gives us a freedom to act as we seem fit.”
A couple of millions is not completely a bootstrap actually. Are you profitable right now?
“We are, but that’s not what we have in mind when we’re looking at the company in terms of growth and strategic activity. We’re looking at growth, at how we drive app discovery, at how many customers or partners are using our technologies rather than measuring the bottom line P&L.”
Are you considering to get some additional funds?
“Not at the moment. We have had many offers on the table over the years. About once a week we get an email saying – «Hey! We’d like to learn more and looking into investing». But the moment we start thinking about it — is the moment we feel that we need significantly higher investment in technologies that we build and then we may start such a round. It’s not on the table right now, but it may in the future.”
Appnext Actions. You started to actively promote it about a year ago, but I haven’t found certain case studies about the implementation. Can you share with us?
“Absolutely. We have a couple of cases — from OEMs that are now shipping devices with the Appnext Actions installed on them via the widget that we created, to cases like DailyHunt, the largest news app in India, which have integrated Appnext Actions, in a way that a user can choose a third-party action when he finishes to read a news article or opens a dedicated actions menu.”
How is it working exactly? I mean, in the news app, what does the user do?
“Appnext Actions is all about integrating services, so Appnext was at the beginning an app discovery platform designed to help users find new apps and to return to apps they already have. Appnext Action is the next step to these services, as an integrated part of the users’ devices or as a part of ‘Super Apps’ that these developers are creating, which means that what you see in DailyHunt, for instance, is that users are able to use services such as ordering food, shopping, booking flights or hotels straight from the app itself. Instead of them just discovering new apps from within DailyHunt they are able to click on a button and order the flight straight from the app itself. The next step is to integrate the same services into devices that you buy out of the box. You buy the device and you have the ability to use certain travel apps instantly without the need to install any apps.”
And what does your platform do?
“We’re enabling all of that. We’re making sure that the user will get the right service at the right time and that it will be available for him.”
And if I am a service provider? Can I develop a small app for your platform?
“Correct. If you’re the service provider and you’re interested in having your service integrated with Appnext Actions, you can do it in a couple of ways. One is to have an instant app, for instance, if you have an instant version of your app, you can be on millions of devices instantly, because we make sure that the users will be able to use your service right away. The second way is to provide an API – we will work with you as the service provider using your APIs and we’ll build a mini app that users will be able to use as if it’s your app itself. So it will be a web interface where every action that they take is connected with an API to your app and basically mimics the app.”
From my point of view, maybe it’s the future, but at least for now, all these things…Facebook is also doing this in the messenger. It’s kind of less convenient than to go to the separate app.
“We do allow users to install the apps and they can do it as well, but the way we see it — eventually, the majority of the apps are used one time. Think about travel — the average user is booking a hotel twice a year. Normally what users are doing right now — they’re installing the app, looking for the right hotel, make a decision within a day to seven days and then they uninstall the app. We provide them the ability to book that hotel instantly from a place that they’re already using, whether it’s already on their device, whether it’s a super app they have added, and they can use it immediately.”
But they don’t install the app because they will use it every week. They install it because of user experience, first place. They could not install it and use the website, mobile web, but they prefer installing the app because the user experience is bigger. Well, you need to give them at least a similar experience.
“I totally agree. This is what we’re working on. We’re trying to make sure that the mini app experience is as good as possible. We’re trying to give the user an extra benefit on top. There is a reason why they will use the super app rather than installing a new app, right? And installing an app that they don’t have. Let’s’ remember that they are using an app that they don’t have right now. In my eyes, eventually all the instant apps should solve that problem, but this is up to the developers, making the progress with Google instant apps API.”
So you think that’s where the industry goes? A lot of Instant apps and Super Apps?
“Absolutely. It’s probably not only me, it’s probably the way Google envisions it as well.”
And you want to compete with messenger? To become such a platform?
“We’d like to be the enabler of these super apps that every single OEM or app in the world would like to become: messaging apps, launchers, news apps, apps that are in certain size — enable them to be the super apps.”
What’s going on with the CPI market, the traditional one? I hear a lot of complains that it’s not growing so fast as it was like two years ago. Advertisers move the budgets directly to Facebook and such platforms. Can you see that as well?
“The user acquisition market in general for apps is in a sort of a turning point right now in my eyes. 2017, specifically the end of 2017 was a turning point. Marketers, app developers, and advertisers became much more educated about how it works and how advertisements are being served and different fraud elements that were found suddenly. The market, in general, is in the situation where there’s a lot of demand. The demand exists. The advertisers are interested in acquiring new users all the time. They have their first budget spent with Facebook and Google and the effective CPIs are increasing over time. There’s no way to decrease them but to increase. The media cost for an existing brand becomes more and more expensive, so they’re looking for new ways to spend the marketing dollars, but because of the market education, they’re looking for specific players and platform that can contribute and can bring them value rather than spending marketing budgets unwisely with fraud concerns. What we see is a lot of bad actors that are losing their business over the last years. And you see the good actors, the ones who have media, the ones who have technologies, the ones who are bringing the value to the advertisers, growing. Still, a lot of challenges coming with it and part of the challenges are wrong attribution methods.”
Give a couple of hints about the attribution problem. What do you mean by that?
“Attribution is a big subject. In general, mobile marketing started and advertisers wanted to pay for the app to install itself rather than the media that they buy because they were able to do that. They were able to track the installs immediately. They had very convenient third-party platforms to help them do that. Immediately everyone wanted to advertise on a CPI basis. What happens then is that many companies, which do not necessarily have their own media, started to take advantage of that. It created a wrong incentive to deliver app installs rather than showing good healthy and valuable media to users.”
It always happens in all CPI.
“Correct, and it happens because of the wrong incentive here. What happens right now in my eyes, that relates to attribution and relates to the way the marketing is currently structured in terms of pricing and companies in the space, Is that the attribution for companies that bring value via media splits between companies like Facebook and Google that are performing self-attribution and manage to find the right method to measure what’s their contribution, to companies that are not performing self-contribution and because of the bad actors they are receiving less attribution. So the media is now valued lower than it should be and that shift in the market creates an unbalanced situation where the real media is priced too low, creates lower value to the publishers, to the developers. This situation is a fertile ground for fraud – by fraudulent actors. Right now there’s an imbalance between attribution and pricing here. It’s something that should be solved.”
Speaking about media, you’ve started as a demand-side platform, focusing mostly on the client’s’ side and advertisers’ side. Now it looks like you’re shifting your attention and focus more on the suppliers’ side and gathering more and more traffic by yourself.
“Let me correct you. We started out as an app discovery platform that provides solutions to developers first. We started as an SSP and then we added the DSP part of the platform by end of 2015. So far, we have close to 45000 apps in Android alone that have integrated our SDK and we’re adding thousands every month.”
Okay, enough with the business. Now about yourself a little bit. First of all, I have one daughter and I’m waiting for another daughter to be born soon and I’m a little bit afraid that it can be hard. You have five children. How is it?
“First of all congrats! It’s great, it’s fun, it’s a small jungle in the house. There’s always the life-work balance that you need to manage, you need to find yourself, find the right time to spend with the kids and be a little bit off the mobile devices and emails from time to time.”
How do you find this balance? How much time do you spend with them?
“Depends if my wife is listening to this interview or not :)”
We’ll make sure she’s not…
“I’m trying to get home every day for the showers when they were smaller and when they go to sleep. And the weekends as well.”
At the end of an interview, we have a blitz quiz. Your favorite Appnext office except the one in Tel Aviv?
“That’s a tricky one. Cyprus.”
Okay. The best conference in the mobile industry.
Which country would you live if not Israel?
“The honest answer — only Israel. Really. The main reason…the answer is not clear, because not everything is great in Israel. But it is home and it feels like home and it feels like this is the place that we call home.”
Three reasons why Israeli companies are the best in the world.
“It’s the people, it’s not the companies really. I guess Israeli and Jewish people, probably by nature, have a very strong survival instinct. Because of the history, because of where we came from and what we’ve been through. We’re trying to do everything as efficient as possible, we’re very ambitious in what we do, we aim very high in many aspects. Most of the entrepreneurs that I know in Israel are ones who always set their targets very very high. It’s always how do we get to be the next Facebook. The ambitions are set very high and even if we get in the middle, it’s great. We are very very tech savvy in a way which makes everything here be much more efficient. We have fewer resources, high ambitions, we are able to be successful.”
One main quality of the entrepreneur?
“Obsession. Be obsessive in what you do. If I need to pick one thing, make sure whatever you do, you make sure you’re passionate about it and obsessive in what you’re doing.”
Funding or bootstrapping?
Facebook or Google?
Apple or Google?
Three entrepreneurs who inspire you most.
“Jeff Bezos, Sergey and Larry from Google and Elon Musk.”
Cool. That was the last one. Thank you so much.
“Thank you. It was a pleasure!”