Ofer Israeli, CEO of Illusive, building a team based on excellence
This week I sat down with Ofer Israeli, founder and CEO of Illusive. Illusive prides itself on leveraging the best Israeli talent and hiring graduates of the IDF's signal intelligence unit 8200. Prior to founding Illusive in 2014, Ofer worked at Check Point one of Israel's first globally successful cybersecurity companies.
I asked him when he knew he was going to become an entrepreneur.
"That's a good question. It started back in high school. A friend and I got into programming, and we said, "Let's get a job doing this thing." We advertised ourselves as an outsource coding company. With the wisdom of 16 year olds, we chose a name for the company without checking whether a company already existed with the same name. We learned the hard way when we got a cease-and-desist fax from one of the leading law firms in Israel.
But, that aside, we found out that if you just go for it, pretty big things can happen. We started with small projects and went all the way up to redesigning and recoding a hospital management system. If you think too hard about it, it's kind of scary that they let a pair of teenagers do this kind of thing, but we did it and it was successful.
I think that planted the seed for both of us that we were going to start something. My friend founded Sisense, which is a successful data analytics company, and later I started Illusive."
It's a story that reflects my own first experiments with entrepreneurship during my school years. The seed that gets planted with the first experience may take some time to reach fruition, but it's there all along even before you make the leap to founding a company.
Knowing that Ofer began his career at Check Point, I wondered what the triggering moment was that made him strike out with his own project.
"I had been at Check Point for a number of years. I didn't have an idea yet and I didn't have partners either, but somehow, I felt that was the right time to leave. I wanted to give myself time to figure out who I want to work with and discover what ideas came to mind. I got connected to two gentleman Nadav Zafrir and Israel Grimberg who founded Team8 as a mix of incubator, accelerator and VC firm. The idea was to choose big problems from the security world and build big companies to solve them.
We started talking and for the first nine months we worked together building Team8 and Illusive.It was an interesting time because we were founding both the company and the fund that would fund the company.
The main advantage that we had then was that we were able to focus on the hackers' perspective. We started with the premise that whatever we're doing in the security world, it's not good enough. The reality is that the hackers are winning and that's an unsustainable situation. Cybersecurity at that point was all about modeling responses to attacks similar to ones we've already seen and reacting to things that have already happened. By definition, it was about playing catch up.
We wanted to flip the scenario and make the attacker react to us instead of us reacting to them. That was the philosophy and we started to look for practical ways to make it happen."
It's such a smart way to build your business. You take a problem, strip it down to first principles and then rebuild. I pushed Ofer to describe how he and his team were able to validate their idea. How did they get it from their whiteboard into another company's boardroom?
"We started talking with clients in Israel to get an initial sense of whether we were moving in the right direction and then we went on our first road trip to the US to get an initial sense of whether we had something. We ended up landing 11 customers from that first trip, but it wasn't all smooth sailing.
Our first meeting was a huge success. We met with a well-known bank, and they couldn't have been more excited. We left that meeting feeling validated, thinking that this was going to be easy!
Then, two hours later we had another meeting with another bank, and they told us clearly that there was no way they would ever deploy our solution on their network and that we needed to go back to the drawing board! It was very humbling."
Elation and deflation in the space of an afternoon! One of the things companies often struggle with, especially companies from outside the US, is how to build that network of contacts and land meetings with big name potential customers. I had to ask Ofer how his young company managed to get in front of big banks and insurance companies on their first road trip.
"It's a lot of hard work hitting up whoever you know to make connections for you. I would say there were two significant factors for us at the time. Firstly, we were already in talks with a couple of big investors, and they certainly facilitated some of those connections. The second was Nadav's former role as head of the 8200 unit in the IDF. Being the head of Israel signal intelligence was a big draw that had people asking, "What do these guys know that I don't?"
One of the biggest challenges right now for any startup is recruitment. There seems to be more startups looking to fill key roles than high-caliber people with the right talents and experience. I asked Ofer how Illusive went about filling those roles which are so important in the early stages of a startup.
"We all tapped into our networks in a very targeted way to bring in the best talent we could. Between people we knew from Check Point through to the military we set a very high bar. The thesis was that if we can hire superstars as the first 10 employees, then that becomes the basis of how the rest of the company is built. Really strong people want to work with strong people, so they bring in their friends and at some point, you achieve a critical mass of excellence."
It's a simple enough proposition, but it's still tough to execute. Switching gears a little I wanted to hear about Ofer's experiences having moved to New York. I see a lot of companies that are founded all over the world, looking to the US as a source of funding, customers and even credibility. I asked Ofer why he made the move as CEO while most of Illusive's development is still based in Israel.
"I think there's a glass ceiling if you're not based in the market that you're selling into. I felt the need to be present to understand our customers and their pain points. I spent many hours when I was still living in Israel, hopping on calls with people in the US, managing all the different time zones, but it's not the same. Also, as CEO I find I get drawn into what's around me. If I'm in Israel with the development side, then I'm drawn in naturally to development. At some phases of the company, that's the right place to be, but at other times you really want to be drawn toward the market and the customers.
Why did I choose New York? We work a lot with the banking world and the insurance world, and many of those clients are here. From a time-zone and distance-to-Israel perspective, it's easier to be on the East Coast. But also, it's just a fun place to be. If you're going to move, why not pick a city that is also exciting and fun to live in?"
It's refreshing to hear a CEO talk about fun and Ofer is an excellent ambassador for the startup life. Before we finished our conversation, he told me about the message he would love to send to people choosing whether to work for a startup or a big company.
"I get that startups aren't for everyone and big companies aren't for everyone. But I would love for people to understand the impact you can have in a startup and just how rewarding that can be. When you work for a big company, it can be hard to move the needle even when you have a really great idea. I think the opportunities available when you go to work at a startup are very exciting. That's the culture we've established at Illusive and that's the thing that I like to show candidates as we continue to build out the company."
I love to hear CEOs getting to grips with the culture of the companies they lead, as much as with the technical and business aspects of their business. Ofer Israeli is a thoughtful leader making smart decisions about his company and the way he runs it. I expect we'll be hearing a lot more from Illusive in the years ahead.