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Most entrepreneurs don’t get that. They start a company. They spend most of the decade of their life and then when they get to the end, they’re like, Oh, I wonder how exits going to happen. So I wanted to make sure that we had something where we had numerous numerous potential acquirers where we were an immediate visceral fit with an existing large business unit they have a lot of pressure for and that they talk about quarterly earnings calls, and where they’re viciously competitive with each other.
Jay Clouse 0:26
The startup investment landscape is changing. and world class companies are being built outside of Silicon Valley. We find them, talk with them and discuss the upside of investing in them.
Jay Clouse 0:38
Welcome to upside.
Eric Hornung 0:53
Hello, hello, hello and welcome to the upside podcast, the first podcast finding upside outside of Silicon Valley. I’m Eric Hornung, and I’m accompanied by my co host, Mr. Ugly tuna saloona himself, Jay Clouse, Jay, how’s it going? We’re back baby.
Jay Clouse 1:11
No, we’re bringing the saga of ugly tuna into the pod now,
Eric Hornung 1:15
Oh,you’re going to have to give them you’re gonna have to fill the listeners in on what is perhaps the greatest rivalry north of High Street.
Jay Clouse 1:22
All right, I’m gonna take a deep breath before I dive into this because I get a little heated, ugly tuna saloona is a bar on Ohio State’s campus in an area called the South Campus gateway. It’s an area that historically has been where restaurants go to die. This restaurant in particular, attracts a lot of Ohio State students. And I think it’s the worst bar on the planet. Good news is about a year ago, it shut down, which should have happened something like 15 or 20 years ago, because there was literally a man who went to ugly tuna saloon and then cease to exist. That case is still open. They have no idea what happened to him. And they just kept operating. Mostly I hate it though, because they have their music too loud.
Eric Hornung 2:04
Well, there is no one that has ever said you’re not petty.
Jay Clouse 2:10
So I, in my college years really took to Twitter to sort of antagonize maybe terrorize a bit, Tuna Saloona , trolling them at every corner that I could, until they blocked me. And then they shut down. And we all rejoiced and now, news comes out that they’re opening a new location.
Eric Hornung 2:29
They’re like the Hydra of Ohio State bars, just chop off one head, they block you and they come back.
Jay Clouse 2:35
They just won’t die.
Eric Hornung 2:37
They won’t. And I don’t think that Twitter is going to be as powerful as you might need to cut off the second head of ugly tuna saloona, do you think that there may be some other productivity type apps that you could use?
Jay Clouse 2:52
This is a stretch.
Eric Hornung 2:53
Maybe we’re stretching, man. We’re stretching all the way out?
Jay Clouse 2:57
Maybe we could use Gmail or a tool that interfaces with Gmail and weaponized Gmail.
Eric Hornung 3:04
Wow, man. I wonder if we had someone coming on the podcast today that would make this segway work.
Jay Clouse 3:11
Well, I hope so. Today we’re talking with Eric Shashoua, founder and CEO of Zive, which makes Kiwi for Gmail. Kiwi for Gmail turns native Gmail into a full desktop application, dramatically upgrading the entire user experience and adding features like default email client, multiple accounts, multiple windows, and more. Eric, I’ll be honest, when we scheduled this interview, I was thinking, is this a company? Is this a product that seems like it’s just kind of like a Chrome extension maybe. And then I started doing research on this company, I installed the Kiwi for Gmail app. And I am bullish that this is going to change the way that I email.
Eric Hornung 3:48
Wow. So we have a little user feedback here. Little hot take, before we jump into the interview, what what was so captivating about it?
Jay Clouse 3:55
There’s something about for a Mac user, there’s something about taking a tab in your browser that you have open all the time, and making it a window, it happened when Trello I realized had an app, it happened when I downloaded the slack app, just having the app makes a little bit easier. But I’ll tell you what I think is really powerful here, I have my Gmail tabs open all the time. In case I want to go action something quickly because it takes a little bit to load Gmail, I have two G suite accounts. And now with this, I can still enjoy that benefit, but have it somewhere not distract me when I’m just in Chrome doing other things in Chrome that I need to do. I spend way too much time in Gmail. And it’s mostly because I have those tabs open all the time. And now I have easy access without the immediate distraction.
Eric Hornung 4:44
Did you ever use Google inbox? Apparently that’s getting shut down. And it’s a big deal for a lot of people. I never used it. I don’t I don’t know the difference between inbox and Gmail.
Jay Clouse 4:53
I never switched over, I have a high switching costs for all things related to Gmail and G suite and slow to adopt. So never jumped into it. I know a lot of people liked it. I never really had a problem with my workflow in Gmail. So I just never switched.
Eric Hornung 5:07
And one more question about the email lifestyle. Is this a competitor with like superhuman? So I hear a lot about them.
Jay Clouse 5:14
I don’t think so. Because this to me, to my understanding is a fully desktop application and superhuman is going to be predominantly used mobily, or at least as a replacement for Gmail. And this is not a replacement for Gmail. This is kind of a repackaging and reframing of Gmail, so you can use it better. In fact, I’m pretty sure on their website, I saw that they are official Gmail partners, which is something I had in my mind, which was, I wonder how Gmail feels about this. But it seems like Gmail, maybe pro Kiwi for Gmail because it keeps people in Gmail. So well, we’ll have to ask about that. Any other good facts on Kiwi for Gmail or Zive, which is their parent company? Just a little bit more background? They were founded in 2013. Based in New York City, the Big Apple, Kiwi and the Big Apple, some fruit Inception there, and they’ve raised about $2.2 million today. Do you think an apple mixed with a kiwi would taste good? Like if you bred them together?
Eric Hornung 6:12
It’s kind of like outside Apple inside Kiwi or outside Kiwi inside apple?
Jay Clouse 6:17
I think you got to do Apple on the outside to get through the hard edge. Otherwise, it’s going to surprise you and you bite into the kiwi.
Eric Hornung 6:24
Okay, I get down with that. Not a big Kiwi guy in general. But I like the name of it.
Jay Clouse 6:28
Yeah. Alright guys, we’ll jump into this interview here. If you have thoughts as we go through. You can tweet at us @upsideFM or email us hello@upside.FM. Let’s bring in Meredith Sugar a partner at Taft Stettinius and Hollister to teach us about preparing for an exit. Taft is a full service law firm known for assisting entrepreneurs across the Heartland. And as a reminder, the following remarks by Taft attorneys are for informational purposes only and are not legal advice. This information is not intended to create in receipt of it does not constitute an attorney client relationship. No person or organization should act upon this information without first seeking professional counsel. Speaking of professional counsel. Meredith, welcome. Thanks for joining. How’s your day going?
Meredith Sugar 7:09
Good. I’m great. Thank you.
Eric Hornung 7:11
Love to hear that. So we got a quick question for you. Both prior to and after exiting a business, what sorts of steps might be taken to fully utilize the state and gift tax exemptions.
Meredith Sugar 7:24
The federal estate tax exemption is set very high right now it’s $11.4 million per person, however, that to come back down to 5.4 million in 2026. And Congress very likely could act lower before then the estate tax is unified with the gift tax. So for example, if someone gets $5 million today and uses this much exemptions, and they would have 6.4 remaining if they pass away next year. Everything non exempt though, is taxed at 40%. So for that reason, clients may want to get now while the exemption is high. And in doing so not only is that asset out of their state permanently, but so we’ll all the appreciation on it either follows later. They’re also creative ways to get take advantage of low interest rates and minority discount, while still allowing one to have just in case funds for a spouse. And addition to larger gifts like this. A person can also get up to $15,000 per year per person and pay no tax.
Jay Clouse 8:21
I love any advice that’s helping me keep more of my money in my pocket. Meredith, if people want to learn more about Taft or yourself, where should they go?
Meredith Sugar 8:30
Our law firms website is taftlaw.com and I can be found there.
Jay Clouse 8:41
Eric, welcome to the show.
Eric Shashoua 8:42
Hello, how’s it going guys?
Eric Hornung 8:44
It’s going really well. It’s a beautiful morning here in Ohio, which is where we are not where you are. We’re recording this remotely. But we like to start upside with a background on the founder. So can you tell us about the history of Eric?
Eric Shashoua 9:00
Sure. So I grew up in Atlanta, Georgia, I went to college in the northeast, Brown University, I studied computer science and undergrad. So my focus was specifically I wanted to study computer science so that I could then run startups later tech startups. So advice that I’ve been given by someone who’d been successful in starting a company himself was that a lot of business guys in tech don’t really understand technology. And that really limits them in terms of what they can do. So I studied computer science. And then I started my first company in my my senior year at the school,
Jay Clouse 9:31
You mentioned that you wanted to study computer science, so you can run tech startups later. Where did you discover that interest in the first place?
Eric Shashoua 9:39
It was so right after right after high school, I took a gap year. And I really wanted to the whole .com thing was happening. So I graduated in 99′, the whole .com was happening. So I I begged and pleaded to this this one company that I knew that my uncle had some connection to to let me go in and just have an unpaid internship there. So I I got in. And then I started talking to the guys who were running the running the company there and found out several of them and taken that route they did had a technical background, and they use that to run companies or marketing and things like that. So that’s what I thought, Okay, this really makes sense.
Eric Hornung 10:16
So you say you took a gap year that’s between high school and college? That’s right. Yeah. That’s a pretty unconventional thing in the United States. What was that decision? Like? How did your parents think about it? And how did your classmates like view that idea?
Eric Shashoua 10:29
I graduated from high school year early, so I felt a little unprepared to go to college right away. So that was my parents were okay with it. And it is I think it’s become more common in the US now. But yeah, back then. It wasn’t half my family’s European. So my, my father is British and I grew up there a little bit, too. You wouldn’t know it to hear me talk. But
Jay Clouse 10:50
Yeah, flat, flat American dialect that I am used to.
Eric Shashoua 10:53
Jay Clouse 10:55
So what was the the company that you did the unpaid internship for?
Eric Shashoua 10:59
That was a company that was it was a. com, of course. And it was basically, you know how indeed.com and monster.com or like a horizontal staffing. So they they were that just for healthcare. So they were called miracleworkers.com. They had really cool kind of cute marketing campaigns to target nurses by sending out cookies and things like that in the mail. But that was what the company was so.
Jay Clouse 11:20
Which seems like might be illegal.
Eric Shashoua 11:25
Jay Clouse 11:25
That might have been before the sunshine act.
Eric Shashoua 11:28
Eric Shashoua 11:30
But I remember sitting in the back, and we were like putting cookies in these in these boxes that were shipped out, it worked really well had a sort of cute factor to it that got a lot of goodwill towards the company.
Jay Clouse 11:39
Super high tech.
Eric Shashoua 11:41
Jay Clouse 11:42
What types of things did you learn from that .com experience in, you know, the late 90s, early 2000s.
Eric Shashoua 11:48
Honestly, I think that what I learned most from that happened after my first company, where I was able to sort of put together what it was like to have a venture backed company and raise VC funding, and how that can move towards exit, and then combine that with what I saw in the 90s, the late 90s. So what I what I really realized, I went through my first company, and it took us 5 million to to just bring a product to market because it was a consumer electronic. And we raised VC funding, we tried to we had an opportunity to exit the VCs block that they would have gotten a three to four xROI within a couple of years. And that was that was probably one of the biggest learning experiences for me, because I realized that VCs, they’re not the bad guys that everyone thinks they are, most of the time, some of them are, but they have their own financial model. And their model is that they have to put in 15 to $20 million to work in a company, there’s always more than one of them, and they have to have a 15 to 20 x return. So they’ll wind up. Basically, if you raise VC, you have to exit and half a billion or a billion or more. And there are very few exits that happened like that. So that was one thing I was like, okay, that really kind of forces a lot of startups to raise venture capital and shoot for the moon, which is not when they could have much more successful exits, they targeted 200 million or something. And the second thing that really stood out to me was that these VCs, I saw them go through, we had very well connected people in the company. So I was able to meet lots of these guys. And you know, like a ballroom that happened once a once a year where you sit and you talk with 300 VCs across the US. And what I kept on seeing was that there were these, these hype, things that would happen, and no one would see them at the time. So in 2005, 2006, there was green tech, okay, everyone was was about Wow, there’s going to be something that’s going to come up, that’s going to replace nuclear power. And on its own each individual company you would talk to, like, it sounds brilliant. But when you sit in a room of 300 people, 300 different VCs, and each one of them has four or five of these companies, each of which is is supposed to replace nuclear power or fossil fuels. It looks stupid. So like you can’t, because not everyone can do can do that. The same thing happened a couple years later, with 3d TVs, I don’t know if you guys remember, CES, around 2009. Everything was 3d TV, they were gonna they were going to come. And if you actually tried them, you had to have these glasses on, like you couldn’t tilt your head. And it was it was terrible. So but everyone went ape over that. And then there was 3d printing, which all these things. So I’ve I’ve done really well investing in public markets, because I’ve invested against these trends, usually. But it’s incredible. So 3d printing everyone, if you’re out pitching, everyone was investing in that no one could get enough of it. And if you went and looked at what these 3d printers could do, they could print like cheap plastic tchotchkes. And like, bad quality, cheap plastic tchotchkes. And like, that’s, that didn’t make any sense. It also didn’t make sense that people were going to be, you know, modeling 3d things in their computer in a mainstream way, or the average guy like us to do it. So more recently, it’s I know, you guys will probably think I’m nuts for saying this. But it’s blockchains cryptocurrencies. If you go if you go to investment conferences right now, or Angel groups and things more, so it’s it’s slow down the last six months, but for about two years, everything was cryptocurrency in and everyone was going to get super rich, and everyone wanted to put all their money into it. So one of the things that happens, and this is gave me a sense of the whole .com thing, people sort of getting crazy over something like VR, which is another one. The technology, which like the whole .com idea that people will buy things online. Yes, they probably will in the future, but it’s not going to happen in the next 24 months, the world isn’t going to suddenly change. So you have all these VCs who are putting money in VR, and the amount of investment flooding into that space. And all these startups, they can only really get a return of realistically, 30 or 40% of all gamers everywhere are using VR headsets. And that’s the only way they’re gaming, like next year. So that’s what you keep on seeing. And that’s what I learned from the.com thing, but it took me going through my first company to get
Eric Hornung 15:59
there reminds me me of the Gartner hype cycle. You ever seen that graph?
Eric Shashoua 16:04
Yeah, they’re good at that. It’s a shame that they don’t really seem to listen to their own stuff. And, you know,
Eric Hornung 16:12
There’s some wild stuff coming up on it. I feel like on that, like up tick, like magic dust or whatever. That seems to be the one that’s like, five years out from the top of the hype cycle.
Jay Clouse 16:22
Yeah, so you had this exit for the company, you’re running at the time blocked, what was the ultimate outcome of that company? What happens after the exit is blocked.
Eric Shashoua 16:30
So I left I can’t say, I have to be careful what I can say and when I can’t say but basically, what’s public is no, I helped the company raise another 7 million. So left the company with 14 million raised, I started to become beet red, jealous of software startups because you could spend a couple hundred thousand dollars and you could get to, to market instead of 5 million. So I left to do that brought in a CEO who we all liked and thought could could do well, the VCs wind up true to that model they wanted to putting another the total in the company in the end was 32 million, the company hadn’t really grown too much beyond where it was when I left. So ultimately, the amount that had been invested was more than that, that offer amount that we’d had. And so the company didn’t exit. And ultimately, that company that had made that offer that would have acquired us four years earlier, wound up acquiring what was left of the company. And now if you go and look at so the company was called Zeo ZEO. If you go and look for Zeo personal sleep coach and things online, and you’ll find that there’s there’s a really surprisingly robust aftermarket for these things is there about nine different guides for we had a headband, you’d slip on and slip off, it would wear out. So it was a replaceable, there are nine different guides out there where people are, they’ll take you through details of how to rebuild that. And there are another several guides out there on how to in the circuit board that would sit on the the module on the forehead, there’s a capacitor that burns out, after a few years, all these guides on how to open it up, take it out and replace that capacitor and where to source it from in China, so forth so that you can keep using Vizio. So it’s exciting to see the company itself. I think that we could have had a really nice exit. That was a smaller exit. I think that the one of the things about that company, though, is that we had a wearable before wearable was a word. So it was for sleep. Now we have you know, our Apple watches and we want to we’re like oh, how am I sleeping at night? So there’s it’s it’s interesting, I think market timing and things.
Eric Hornung 18:31
One more question on this this companies Zeo. You mentioned VCs blocked it? We haven’t really had a conversation on the podcast about what that actually looks like? Do they own the board? How are they able to block exit.
Eric Shashoua 18:46
So one of the terms when when a VC invests almost always is there’s restricted provisions, they’re called in the in the terms and what that means, essentially, is that if some really big change of control event happens, which is acquisition or, or other major, major decisions of the company, you have to have their approval, so they can stop something like that from happening. And sometimes what that means is that it’ll get to that point and then and then they’ll say no more often what that means is the their expectations around that. And so if there is something which is coming along which they would not want that to happen, then it sort of gets stopped even earlier at the board level, where it’s like, No, you know, we don’t want to pursue this now. Yes, the company could exit there. But what’s the point we just invested in, you know, our fund only looks for these kinds of returns, so wouldn’t even move the needle, and we’re your investors. So you know, you guys are? And we’re a team now. Right? It’s, it’s marrying yourself to a different model. Most startup entrepreneurs, if they if they have the chance of an exit, which will make them multimillionaires, they’ll they’ll take it to a VC, a lot of those exit exits won’t work.
Jay Clouse 19:54
So now moving forward past Zeo, you’re running a software company now.
Eric Shashoua 19:59
Jay Clouse 20:00
How do you describe so Kiwi for Gmail is what we’re talking about today. But it’s under Zive? Can you help me understand the difference?
Eric Shashoua 20:08
Yeah, so Zive is the same as a company, Kiwi for Gmail is the product and Kiwi for G Suite is the the enterprise version of that. So that’s what that’s what it is. company name is sort of small recessed in the background. And it’s fine if no one knows what it is.
Jay Clouse 20:22
And so you were beet red jealous of software startups and their ability to get a product market quickly. You started Zive and Kiwi for Gmail, is the first product, tell me about how you decided like, why Kiwi for Gmail.
Eric Shashoua 20:38
So the there were a few things. The reason why I was so jealous, which I think is really important for other people to know is that if you build a product, people think they’ll start a company. And they’ll be like, Oh, I have a great idea for this great product, let’s go build it and build a great business. There are different kinds of products, if you build a hardware products that has any kind of circuitry in it or anything that needs to be manufactured, you’re going to have to pay a lot of money to pour molds and things in a factory in China, you’re going to have to find that you’re going to have to spend a lot for the initial run, it’ll cost you low multi-millions, just to be able to bring that product to market, which effectively if you really think about it is testing hypothesis. So it costs you $5 million. To bring something to market to test hypothesis with software, you can build a prototype of something with 50,000 bucks, and you can start testing it out. And then it’ll cost you another few hundred thousand dollars to bring it to market if you want to do it really well. So it’s it’s totally different. The other thing that I that I liked about software was that Steve Jobs said this in the late 90s. This was on his hiatus from Apple. But there was this interview, where they said, and no one this is like a hidden interview somewhere. But he said, if you look at hardware, the biggest difference between the best CD player and the worst CD player, mid 90s, best CD player and the worst CD player is like 20 X. If you look at software, the biggest difference between the best software and the worst software is like 1000 x. And most of the really good software is very, very small and few and far between. It’s it’s kind of like a mountain of crap. So I started to realize that and I started to develop a real fondness for the consumer and you know, consumerizing things. And I think that most enterprise software is the most boring, ugly, awful stuff out there. And I thought well, Can people make this a lot more friendly? So that was that was where the whole software thing came from.
Jay Clouse 22:30
And how did you land on this Gmail opportunity. Specifically?
Eric Shashoua 22:34
I wanted to make sure that I had a company that had a few a few things with it. One was a product that could be explained very, very simply, in a short sentence like Gmail on the Mac or Gmail on your PC, people can get 70 or 80% of the idea from that, a single picture. And something that could be kind of a bit cute. So queued email is one of the most stressful things people deal with throughout the day. Editing presentations and things like that, too. So our whole strategy is kind of be a little bit cutesy, because a kiwi is like a small flightless bird or a small, you know, non threatening little fruit, depending on who you are. And so that it’s it’s kind of harmless. So similar to what Dropbox did, if you look at their their illustrations and things, it’s similar to what we took pointers from them there, they have basically something which is you can have a server that your computer can connect to to store your files. If you presented it that way to people, then 99% of the market would be alienated right away. Instead, they they have like all these childlike drawings that are like what a five year old, you know, you stick up on your fridge to illustrate what the thing is. So that’s, that’s where we we wanted to kind of pick the brand. That was the second thing. The third thing was I wanted to have something that could really appeal massively and have ongoing relevance. So email is something which isn’t going away, there are a huge number of applications that are launched all the time. And they might be a really good application for like filing your receipts or some totally new way to mark your habits or something, they might be really great ideas, but there’s no reason for the for that to stay in the sort of public consciousness or for people to keep writing about it. So you’ll have your one week where people know that you exist, and then you’ll never be able to get anyone to pay attention to you again, email, there are about six or seven good email apps out there. So with email, everyone’s always, always have a problem. So that’s where we picked that. And we wanted to pick something that was huge, which was the fourth thing, which was Gmail. So we went after that they had a billion users when they started as 1.5 billion now. So those were, those were kind of the main things that went into the company.
Eric Hornung 24:51
So product that can be explained simply, a bit cute, massive appeal, and a huge user base, when you are evaluating potential ideas. Were there other ideas that kind of fit those four pillars, or was this kind of how you got triangulate it in and it’s like, this is what it has to be.
Eric Shashoua 25:09
Nothing else fit those four things. So this is what this was the first idea that seemed to really stick. And we tested it with a kickstarter. So a lot of people think of as a kickstarter, I think these are people who haven’t really been around the block before. And they don’t know how to start a company. They think of kickstarter as a way to actually start their company. It’s not, it’s a great pre marketing tool, and testing tool. So we we spent about 20,000 bucks put together a really clunky, non not really that functional alpha of the product, did a really nice video of it and put it on there. And then we saw whether people responded to the concept. We were the number one tech Kickstarter by popularity in what was that 2014. We did it to the very end of 2014. So we we started with those four criteria found something that fit then we did a Kickstarter found that actually people like this, and then we committed, go and raise funding and build it.
Eric Hornung 26:01
Do you find that people? I feel I find that Kickstarter generally leans more hardware? Do you find that there’s a movement towards software? Or were you an anomaly on Kickstarter?
Eric Shashoua 26:13
It is very hardware focused. And it still is it was then and it is now. So there is some software stuff that’s there, there was company called mail pilot that did something there, there was another company that made I don’t remember what they’re called, but they were like a security focused email client that, you know, people who wear tinfoil hats really like for some reason. So there were some things like that, that we went off.
Eric Hornung 26:35
Would you recommend that one of these companies that prototypes a software for 50k, like you said before goes and actually test that hypothesis on Kickstarter?
Eric Shashoua 26:47
All of them? Yes.
Jay Clouse 26:48
And how would you recommend they do that? What are the steps to doing a successful pre marketing or pilot Kickstarter?
Eric Shashoua 26:55
I’ve written about this quite a lot. I think the main thing is most simply are that that people miss are that you can’t start a Kickstarter and then launch it the next month, it takes about three to four months of planning, you will have to invest some money in like getting the Kickstarter going marketing it a little bit. And a really, really big thing is you have to have a campaign campaign going with bloggers and press where the ideal thing is that you three or four months beforehand, you go through and you look for all the other Kickstarter is that are remotely similar to you, then you look for all the people who wrote about them, you put together a massive spreadsheet with maybe 300 people on it, then you go out to every single one of them. And you’ll wind up with maybe 20 or 30 people who think it’s cool. And they’ll they’ll write about it when it starts. So those are the main things that people completely miss. And I think that that’s probably 30% of the reason why some Kickstarter is fail.
Jay Clouse 27:49
So Kickstarter goes off. And people seem to like it. You say, okay, we’re going to build this thing. Now. You said that you committed to fundraising, do you fundraise immediately after that Kickstarter?
Eric Shashoua 27:57
Yes. So I went out to, i’ve done this before. So I knew how to raise funding from angel investors. So I went out and raised from a couple of the angel groups that that I’d known before and so raised a quarter million and then we we build the product and took it to market.
Jay Clouse 28:14
And what was the pitch at that time? Was it? Well, I know what the pitch was, but were you pegging the Kickstarter and saying, Look, how many people cared about this was that like a core part of your fundraise?
Eric Shashoua 28:23
That was part of it. Anytime when you’re at the the early stage in a fundraise, you’re selling a concept. So that’s one of the hardest things about a seed investment round that you have like a picture to show people and you’re asking them to invest in that. So it takes more work than what they were investing in, I think was the hardly it was us I think they had we had a an experienced team, they’re always angels are always investing in the people to partly it was and partly was the idea. So we got a lot of people who who invested who would be like, Oh, I don’t really get this. They show it to their kids. And their kids would be like, Oh, my gosh, I want this. And they say okay, so I came back and I invested because they were super excited about it.
Eric Hornung 29:02
How come you decided to go Angel groups instead of like individual angels?
Eric Shashoua 29:07
It’s just a more efficient way of finding individual angels.
Eric Hornung 29:10
We’ve heard that Angel groups take a little longer to close through due diligence process. Do you find that’s the case?
Eric Shashoua 29:17
Yes. There are two different kinds of angel groups there. A lot of them, the typical ones, they’ll take a long time to go through and close. And I find that really sort of frustrating. Then there’s there a couple out there carrots, who is the largest Angel group in the world, it’s kind of franchise do Have you heard of them? Yeah. So it’s them, you have to pay up front to go and present. So a lot of people are like, Oh my gosh, that’s so weird. I don’t like that. You can get in very quickly there. And you can present and they have real investors, and they they really invest. So I’d already raised a couple million through carrots who before I knew the drill. And so I I went out there and within a month, I went out there presenting and then right after those meetings, you have all these investors who are coming to your due diligence.
Jay Clouse 30:00
Talk to me about the the Kiwi model now. The products out I installed it last night, I was playing around with it last night, I downloaded it for free. So how does Kiwi work for for you guys as a business,
Eric Shashoua 30:13
There are two pieces to it. So there’s the consumer side, and there’s the enterprise side. So we sell and we’ve expanded Kiwi to to integrate things like Google Docs, Sheets, slides and Google Drive. So the as a business, we sell it to people on the Mac, and we sell it to people on on PC. And it’s it’s not that expensive, it’s $10 or $10 a year. And we we honestly don’t make a ton of revenue out of that. So but it is something which gets the word out. And it makes people very aware of what the product is, and so forth. And there’s the enterprise side where there are companies that have moved over to G suite. And a lot of them want something that’s just sort of on the desktop outside the browser, and they like a lot of the features that we bring. So part of that also is the use case in a company is that people are they they’re generally on one or two 24′, 27′ inch monitors. So they they want to be able to multitask. So having something outside the browser helps them.
Jay Clouse 31:08
And so do the enterprise clients. So they have a different fee than the consumer does?
Eric Shashoua 31:12
They do so with them, we charge them actually $5 per user per month. And they have more features that work with G suite and things.
Jay Clouse 31:19
That’s going to ask what what are the differences there? Because I came in and I, you know, I have a G suite account for my business, but it’s just me. So at first I tried to do the enterprise side of things, then I realized, Oh, wait, I can actually just use the consumer app. So what are the what are the differences.
Eric Shashoua 31:35
So Google keeps on coming up with more and more functionality that’s focused just on enterprise, like they have Google meet, as opposed to Google Hangouts, or video chat, they have a new enterprise chat product, they have something called Cloud search, which lets you search through all of G suite. So those things will only work in the enterprise version. And we’re adding features like that more and more often. The other thing is also that enterprise, it takes a lot more support and things. So with them, we will only support a company on the consumer side up to five people in that company. Once it gets past five people, then they have to use the enterprise application or they can’t use those accounts.
Eric Hornung 32:13
What does this partnership with Google look like? You mentioned they have some features, but it seems like you’re heavily reliant on what they’re doing. So are you competing with Google? You partnered with Google? How does that all work? How does that relationship work?
Eric Shashoua 32:27
So we do have a relationship with Google, they like us quite a lot. I can’t say anything more than that. And even that might be too much. But so we facilitate a lot of what they do. If you look at a web browser, a web browser is it’s built to as a really generic tool, every every browser page that you open up, every tab has to literally be able to show you any single page in the in the world on the web, you can’t build something which is a focused application out of that. And as these applications that our content creation applications have grown from, like the sort of cute awkward things they were in 2005 and 2006, like Salesforce, it was like your light CRM when it came out. So as those have grown and complexity, it makes less and less sense for them to be sort of in a generic environment, as opposed to having a focused application built for G suite. So that’s what we’ve done. And you really can’t do that in the browser and an easy way. So that’s how this this complements what Google is doing right now. We basically amplified this on the desktop, like you would on your phone.
Jay Clouse 33:38
Google has a mobile app, I have a Gmail on my phone, why didn’t they do a desktop app natively for Mac too?
Eric Shashoua 33:45
This is one of the I think one of the big things about big company philosophy and how they, they sort of get stuck in some of the ways they they think almost any software acquisition is something that the company wasn’t thinking about or wasn’t wasn’t in their strategy until someone showed that it worked and then they wind up acquiring. So Google strategy, I’m going to talk just about the things that that we’ve speculated from the outside and things, not what they’ve told us. So their strategy seems to be if you look at the Chrome browser, it started as something which was like your your light, fast browser, use this instead of Firefox and Internet Explorer. So a lot of people have noticed that it’s become slow and heavy over the more recently, if you look at the code that is underneath Chrome, you’ll find that almost all of the Chrome OS operating system code is there. So what’s happened with Chrome is now you’re not running a web browser, you’re running an operating system, in a window on your operating system of Mac OS or Windows. So it’s become, that’s what they’ve kind of tried to do, where they turn that into an operating system within an operating system. And I think that their approach is basically, if people can start to realize, wait a minute, I’m doing every all my work in this web browser. Heck, I don’t need I don’t need a Windows computer, I can can just get a computer that only runs the Chrome web browser. So I think three or four years ago, I thought that was amusing. Now with them having taken over the K through 12 market with 60% of that market being Chromebooks now, and they’ve done that within three years. Microsoft scared of that Apple, you know, they never really had much of a chance. But it’s starting to not seem so nuts. It’s still an entire computer just running the web browser without any any frills. I think, again, this it applies there very well.
Jay Clouse 35:31
What type of existential threat have you felt? Do you feel being in application version of a browser tab? You know, like, maybe right now, Google is is telling you guys, like, don’t worry about it. But if like tomorrow, for some reason that changed, what type of threat do you guys feel ?
Eric Shashoua 35:52
Very little. There are a lot of companies out there that have made things integrate with Gmail, or with G suite in different ways. There’s a whole large marketplace, I think there are hundreds of at least a couple hundred good applications that have, you know, real traction. So any of these large tech companies, they have a strategy of trying to foster an ecosystem of third party applications around them that will add functionality and integrate them, someone does something which is interesting or good or helps them a lot. Oftentimes, they’ll acquire them or they’ll partner with them. So I I’m not too concerned about that with this. The other thing, and I’ll just be generally for a second, it’s ideal as a startup for you to try and pair yourself with a business that is at the point of scaling. And that’s actually and that’s a large enough business, that it’s something that these companies talk about on their quarterly earnings calls. So what that means is something like G suite, Google has spun a big growth story around this or GCP, Google’s version of Microsoft Azure, and Amazon AWS, cloud computing, they’ve spun a big growth story around this and public markets, they released earnings on TCP once the first quarter of 2017, I got a lot of Blackboard, and they haven’t released earnings since. Internally, there’s been huge pressure to make that grow faster. Because Microsoft, even Microsoft for started the same time as Google trying to catch up with Amazon is maybe five or six times the size that they are based on the numbers they released in 2017. So ideally, you pair yourself with the businesses at the point of scaling, where there’s huge pressure from public markets from top down, because then when something comes along, that helps, then they can sit there and say, oh, should I spend a year and a half building this myself? It’s helping my clients right now. And it’s helping my resellers sell and it’s helping everyone, you know, succeed? Maybe I should just buy it instead of integrated within a few months.
Eric Hornung 37:40
You mentioned well, I think we’re heading down a path here. And I’m curious to hear your take on it. But what is the exit strategy for Kiwi is it exclusively to Google or standing alone as like, independent partner, or can even go elsewhere. In terms of acquisition?
Eric Shashoua 38:02
I can say this. So the strategy behind the company has never been Google, it’s always been that we can, we can build things like Kiwi or other things that are out there. So the strategy has been build this one application, and then build others that are like this for other things. My whole approach with the company is something that I think most startups don’t do. And I find that depressing. Honestly, when I go and see startups present, most startup entrepreneurs, they think that if you build a really great business, then exit will happen. And anyone who’s been around the block knows it doesn’t happen that way. You have two companies are sold, they’re not bought. So most startups, they’ll build something you have to be passionate about your product will get to a place where at the end of seven or eight years, they’ll have maybe three to five companies that could acquire them. They’re often an add on business, they’re not something which, which applies to an existing business. And they’ll fit them in different ways. So there isn’t this obvious fit with what they’re currently doing that they have internal pressure around. And then they don’t compete necessarily, too directly with each other. So there’s no urgency to acquire. So you have three to five people that you’re not like a super immediate fit with, you don’t solve the key problem for them. And they there’s no urgency. If you don’t get that initial one bid, then you can’t hire a bank and go through the whole 30 to 60 day short auction bidding process and all that, which is how you get to these large exits. So most entrepreneurs don’t get that they start a company, they spend most of the decade of their life. And then when they get to the end, they’re like oh, I wonder how exits going to happen. So I wanted to make sure that we had something where we had numerous numerous potential acquirers where we were an immediate visceral fit within existing large business unit, they have a lot of pressure for and that they talked about on quarterly earnings calls, and where they’re viciously competitive with each other. So they’re, the CEOs of some of these large companies are screaming at each other through through media every few months. I think that’s how you set up a company for exit. And my philosophy is no VC, no VC, not because they’re bad guys again, but because you’re marrying yourself to their financial model. And that that’s the model which is going to take over, it’s not an equal marriage, we targeted an exit, which is a non unicorn sub $300 million exit. If you look at this space, which again, most people don’t do before they start a company, there are 360 exits in this space a year, about 20 of them are exits that are above 500 million, and only about 10 of those are m&a and the other 10 are IPOs. And not often the spectacular headline generating IPOs, but just IPOs all the rest are under 300 million. With a lot of startups, you need to raise 50 to 80 million in order to either buy awareness or pay for infrastructure. So we started a company that didn’t require either of those things. And so that’s it. The numerous acquires acquire strategic goals is a fit acquires that are antagonistic and some $300 million exit hashtag no VC.
Jay Clouse 41:01
When you when you say that there are 360 exits in this space, do you mean the like technology space generally, like annually, there are 360 technology exits,
Eric Shashoua 41:10
The tech productivity, soccer space,
Eric Hornung 41:12
Who are you guys competing with like, Who are your competitors?
Eric Shashoua 41:15
Generally, the competitor is break down into couple different categories. There’s no one doing exactly what we’re doing, which is focused just on a focused application built around one thing, the closest competitors would be companies that are trying to make kind of a second web browser that will allow you to have all of your work applications in one application. And I think what they’re doing is really cool. So station is one of these, I think their website is station.io. They’re like, Hey, you know, all these things that you’re doing slack and so forth. Rather than swirling around in the chaos of tabs in your browser, just have a dedicated application to it, you can go through all these and you can pull it up, and they made a nice product. So in the sense that you can put Gmail in that and sort have a non tailored experience to Gmail that can sit in the same window as everything else. That’s I think the closest thing that that could be a competitor to us. The rest are there are other applications that are built for G Suite or built for Gmail, and you can find them if you look for them. But this is remember the whole mountain thing where pile of crap. So most software that’s out there is generated. It’s it’s done by someone who’s like an engineer or couple engineers who get together and they they build something they have no idea how consumers think, what people want, how to make a product attractive, you know, they wind up as the flotsam of the software industry.
Jay Clouse 42:39
So I saw on maybes your crunchbase said Kiwi targets at the 800 million users slice of Gmail users average age 31 primarily use email and desktop. Is that too, if I’m extrapolating out? Does that mean that your market potential here if you’re doing $10, a year for these users is about $8 billion on the on the kiwi for Gmail side?
Eric Shashoua 43:00
Yeah, if you if you multiply that up. The business side is really what? What would drive things more? So $5 user per month, so forth?
Jay Clouse 43:10
Well, how does distribution work? How do you how do people find Kiwi for Gmail and say, Oh, I gotta switch over to that, because when I heard about it, I started using it. So how do you get more people to hear about it right now,
Eric Shashoua 43:20
A lot of it is pressing word of mouth, we don’t market heavily, it has very high reference value. So your net promoter score, where, you know, your question is, how likely are you to recommend this to a friend that’s very high with you. So those are some of the main ways the Kickstarter that we did is how we tested that. Because it Kickstarter, people are mostly finding out there’s there’s press which, which serves as a kernel to spark things. And then you have to back that up with word of mouth. And if you have both of those things together, then you have something which can be successful.
Eric Hornung 43:53
How big is your team?
Eric Shashoua 43:54
We have about 15 people working for the company.
Eric Hornung 43:58
You guys all in New York?
Eric Shashoua 43:59
No, actually, we’re we’re spread out a little bit. I’ll say this, I have a philosophy of not hiring people in New York or the Bay Area, which is completely counter to what everyone else thinks. The reason why is that unless you’re hiring someone with you have to have people who have like a super FinTech, like financial background, or you’re trying to build sort of like a machine learning thing to become like an intelligent human like robot, you don’t need those. If you don’t need those skill sets, then any developer you hire in those places, you’re going to have to subsidize their, their salary with another 80,000 of basically, you know, property and living expense to pay the rent. So most of our developers have actually been in the Midwest.
Eric Hornung 44:41
Where’s your favorite cities? dire from?
Eric Shashoua 44:43
I would say, Cincinnati, St. Louis is a is a nice emerging market, Nashville. There’s Austin. But Austin is starting to become more expensive, because after so many years, now, it’s a place that people are going to too much.
Eric Hornung 44:56
Why are you headquartered in New York,
Eric Shashoua 44:59
it’s a very good place to be for the reasons that companies normally are in New York or in the Bay Area. A lot of the people that you want to meet who could be partners who could be clients press, you know, most of them tend to be in one of those two places. So for me personally, A., it’s, it’s better to be close here B. it means that I have to travel about 30% less. And the third thing is that one nice thing about the Northeast that California doesn’t have is the urban corridor where you can hop on a train, and you can be in DC and back in time for at least to sleep in your bed.
Jay Clouse 45:28
One last question for me, Eric, you mentioned that, you know, the view of the company is to make more self contained products like this. Are you guys actively develop developing new products right now? Or are you focused solely on Kiwi?
Eric Shashoua 45:42
Were actively developing other things. I can’t say more than that. So we want to keep it under wraps. But we’re very excited about that building on the success that we’ve had with Kiwi for G suite. You know, we’re also coming up with some really exciting features for Kiwi for G suite, you probably saw the focus filtered inbox these things on left side.
Jay Clouse 45:59
Yep, that was one of the most exciting aspects for me, like right now, I consider myself a gmail power user, okay, I use the tabs, right, I use the primary updates, social promotions, whatever the filter of this is, all the unread in your primary tab is going to change my world.
Eric Shashoua 46:19
Thank you, that’s great. Our thinking there was was that most people don’t get to Inbox Zero. That’s sort of like the the 2% body fat sort of, you know, I jog every day and make my own weird milkshakes and things, people. So most people have in boxes that are like 100, a few hundred unread and it’s just a mess. So for those people, the idea we think is let people be sloppy, don’t force them to have to prune and garden their inbox. So with that, you can say show me email this coming today or the past two days that’s that’s unread. And that uses Google’s AI for important flags, which so far has been kind of a curiosity that’s useless to people. And you can wind up with an email list that’s that’s like 10 emails long and you can working on that you can have an empty email box or almost empty. So
Eric Hornung 47:04
I am so so much on the Inbox Zero bandwagon. I’m gonna have to get my girlfriend on this because she has, like 46,000 unread emails, and it like drives. And she has the notification that says how many you have on your phone. And it like drives me crazy. Like it’s, it gives me sweaty anxiety. That’s really gross.
Eric Shashoua 47:22
Eric Hornung 47:23
Yeah. Thanks. Thanks.
Jay Clouse 47:25
Actually, one more question. I lied. Has there been any user behavior of how people use Gmail that you guys have discovered? That’s been surprising to you?
Eric Shashoua 47:34
Yes, I think there been, there been a few things. I think one of the things that that surprised us early on that we learned fairly quickly, and we built the application around a specialized was that the smaller the screen people have, the more they want to work in tabs. And it makes sense, right? Because if you have, you know, on your phone, you have very small screen, you can’t like split screen and do different things. You have a 13 inch screen, then you also can’t really put too much on there. So that was interesting to us. Also, the degree to which people don’t use Google Drive was a was a surprise.
Jay Clouse 48:07
Great. Well, Eric, thanks so much for coming on the show. If people want to learn more about you or Kiwi for Gmail, where should they go?
Eric Shashoua 48:14
kiwiforgmail.com or hit me up on Twitter @eshashoua e s h a s h o u a. So easy to spell, right?
Jay Clouse 48:23
Jay Clouse 48:27
All right, Eric, we just spoke with Eric Eric Shashoua of Zive, specifically spoke a lot about Kiwi for Gmail, but got a lot of insight into how he thinks different mindset than a lot of the founders that we talked to, which I found to be refreshing,
Eric Hornung 48:43
Holy, moly, Jay. That’s a phrase I haven’t used in a while. This guy put some real thought into how he structured his business. And I think that in a world of Lean Startup type companies, where you have some he goes, Okay, I have this general idea, let’s go see if it’s a real thing. This is a completely different mindset. This is a, I’m going to think about all the avenues I’m going to think about this hashtag no VC movement that he’s kind of talking about. I’m going to think about the incentives the disincentives, the potential acquisitions, it was a whole different level of intentionality, before the business was even launched, or it felt like that, that I think we’re used to, when we talk to founders,
Jay Clouse 49:28
most of the time, you get founders that are one of two flavors, one being that they are so close to and obsessed with the problem that they have to solve that problem. The other being that they are so obsessed with an idea that they have that they’re going to make that idea real, and they’re going to try to figure out why it should exist. And Eric was neither of those.
Eric Hornung 49:48
Different. He was like, you know, when you go to McDonald’s, and they have vanilla and chocolate and swirl, he wasn’t vanilla or chocolate and he wasn’t swirl either. It was very unique. He was like ordering strawberry off the secret menu.
Jay Clouse 50:00
He was like, I know, there’s opportunity around me and I’m going to, you know, I have like that gift of Russell Crowe and A Beautiful Mind spinning around in my head like. That’s how I see Eric at some whiteboard, like figuring out what is the perfect business to start with and product to start with that accomplishes the goals of his four pillars, pillars. Eric,
Eric Hornung 50:20
I love pillars. I have never seen a beautiful mind. So I don’t know the visual, but I hope the listeners get it.
Jay Clouse 50:26
It’s very good. It’s also similar to you know, Matt Damon in Good Will Hunting on the chalkboard.
Eric Hornung 50:32
So you’re saying Eric’s a genius?
Jay Clouse 50:34
I’m saying that he approached this opportunity almost mathematically. Yeah, I would agree with that.
Eric Hornung 50:41
So I think that answers one of our questions about the founder, and just our general takes on the founder. But how committed Do you feel this founder is? We talked a lot about acquisition for an interview where we didn’t really prompt the question of acquisition did that rub you one way or the other?
Jay Clouse 50:57
It rubbed me as unique. It’s interesting to do this debrief where we normally take the lens of a early stage venture investor, and Eric standpoint was not really looking for investment did that path did VC did not like VC, I’m going to contrive this business in such a way that VC is not a necessity, nor a hindrance. At the same time he is approaching this, I think from a lot of directions that a an investor would want to your point about acquisition thinking about an exit in the beginning, beginning with the end in mind something that, as he noted, a lot of founders don’t do. So as an investor, you’re interested in that. However, he also said, you know, he’s targeting a sub $300 million exit, which will cut out a lot of potential investors if they had the opportunity to invest in this and if he was looking for it. But again, Eric was not looking for that.
Eric Hornung 51:51
I absolutely love the stats, he pulled out about the 300 plus companies that are acquired or IPO in a year, only 20 of those are over 500 million. But that’s what every VC is setting up their models on is hitting one of those 20. And those other ones that don’t make it. I mean, they’re adding value to a fund without a doubt. But it’s not what a VC is going for.
Jay Clouse 52:16
I’ll tell you one shadow, I did have I was a little iffy on the pricing model, and the distribution.
Eric Hornung 52:22
Tell me more?
Jay Clouse 52:23
Well, consumer $10 license per year, enterprise $5 per user per month, the consumer app right now. And as far back at least as a YouTube video, I found talking through how to use Kiwi for Gmail had the consumer app for free, I downloaded it for free enterprise app did not seem like I could just easily download and do everything off the shelf, it seemed like I needed to interface with his team to get on boarded. So I don’t necessarily I mean, it seems to me that the revenue model is predominantly enterprise users. I didn’t know how big that market is. Five dollars per user per month is pretty significant. I’m guessing, you know, you have a company that if they have 100 employees, they’re all using the same G suite account. So that could be hundreds of dollars, thousands of dollars per company per month. So it’s probably significant. I just don’t know how big that is. You know, in the research, we saw that he’s targeting the 800 million users slice of Gmail users that are average age 31. And primarily use email and desktop, I didn’t know if that was enterprise included. A lot of users using G suite or Google apps that have a domain specific email account like I do with unrealcollective.com, or JayClouse.com. I could use the consumer app, I didn’t need the enterprise app. So I don’t know how big that segment actually is.
Eric Hornung 53:46
It was great. Those so fast. Two plugs, you just bam, bam, pop those right in there. Yeah, man, this is like way more your world than it is mine. I feel like this product is not really made for me. I am going to try it out. I haven’t downloaded it yet. But I will try it out. Because they’re in the hotfolio now. And I’ll probably get addicted to it. But I guess I’m not the email power user that you are. Nor do I know much about, like I picked Yahoo in 2001. And I stuck with that for until I got to Ohio State. And now I’m Gmail and I’ll probably stay with Gmail for I mean, unless Gmail like really starts turning down. But do you see any trends? As someone who’s more involved in this space? Is Gmail rising? Is Gmail falling, is he buying a winning horse or a losing horse here, like what’s happening in the email wars, they’ve kind of died off,
Jay Clouse 54:45
I do believe that Gmail is continuing to rise. With the exception of Outlook, you know, a lot of enterprise users will be using Outlook because they’re on a Microsoft System, Yahoo, much less of a factor, Hotmail much less of a factor, AOL, much less of a factor superhumans coming up. And that’s worth mentioning. There’s something called front app that’s coming up, that’s worth mentioning. But I did just see recently a verge article I want to say that was mentioning for Gmail’s 10 year anniversary, they’re rolling out a couple of features that were major Gmail add on, like their businesses built as Gmail add ons that could just be wiped out by that, that shift. And so you know, if you’re looking at this opportunity with kiwi, we asked Eric, you know, could could Gmail just make your product obsolete, essentially, by making their own desktop versions, and he wasn’t super concerned about it. Google is a clear potential acquirer here. But I do think as an investor, you have to look at the risk and say, they could make a desktop app. And that might take care of Kiwi as a product. Zive, the company could continue on if they have more products by then. But there is some level of risk there.
Eric Hornung 55:55
There’s a level of risk, I think that investors tend to inflate the risk of super large companies moving into less than $1 billion a year businesses because you have to think about from Google’s perspective, they’re saying, Okay, how can I build something that’s going to make me a billion dollars a year or more? And is a desktop app that’s going to be valued at less than $300 million? Really going to be that for them? I don’t really think so. I think the risk is probably a little over inflated thinking about Google is a competitor now, yeah. Could they spin up a desktop app in a couple weeks with the amount of engineering talent they have? Yes. But is that going to get through the layers of bureaucracy to get approved to waste all of those engineers time and talents on a desktop app for Gmail, when they could be using it on something that is a clear path to a billion dollars? I just don’t see that a manager would make that call.
Jay Clouse 56:53
I think I just talked myself out of my other shadow that I mentioned, which was distribution. At first, I was thinking, how is he getting the word out about this thing? to consumers? It’s a pretty crowded space. I didn’t know anything about it until I came across it. I don’t know how people are learning about it. He mentioned word of mouth that has a pretty high referral rate. But then I got to thinking if the if the play here is enterprise, and you’re selling to an enterprise, they’re going to issue machines with that app already installed. And so it’s less of an issue in that strategy.
Eric Hornung 57:23
Like backing out of the shadows just looking down and seeing a turtle.
Jay Clouse 57:28
Man, that is a call back.
Eric Hornung 57:31
Yeah. Well, that’s where we got the word shadow from, you know,
Jay Clouse 57:33
That is right. So one more thing I want to touch on Super briefly here. Eric, you mentioned they’re a team of 15. They don’t hire in New York, or the Bay Area. In fact, he mentioned that his favorite cities to hire talent, Cincinnati, St. Louis, Nashville, Austin, with the caveat that Austin is getting more expensive cities that we’re getting pretty familiar with here on the pod. And I thought that was worth just calling out and saying we see you.
Eric Hornung 57:57
I don’t think it’s going to be the last founder we talked to who has a coastal presence, whether or not they’re headquartered there or not, that is examining this distributed team mentality, where they’re leveraging the talent that is emerging in the Midwest, in the southeast, in the Rocky Mountains in the southwest in Texas, and just working with this distributed team mentality, and then having the access as a founder to the contacts they need and the capital that they need.
Jay Clouse 58:32
So Eric, what are you looking for from Zive 6 to 18 months from now?
Eric Hornung 58:36
There were hints later in the conversation of new product development? Where are they going next, I guess would be my biggest question. I know that there are a lot of questions around adoption for Kiwi for Gmail, but it seems like the team of 15 and no need to fundraise in the near future, they probably are doing okay enough. And what you want to see going forward is, is the next product as successful, or as the next product strategically beneficial to Kiwi for Gmail. I also would like to see in future interviews, my fellow New Zealanders, I’m not from New Zealand, but we have a couple of listeners on the show. So I feel feel your guys pain that when he defined a kiwi, he said it was a cute little fruit, or a cute flightless bird. But he didn’t mention that it could be a person from Down Under.
Jay Clouse 59:30
Hmm. All right, that is a stretch. I’ll let it go. Is it spelled the same way as a k i w i?
Eric Hornung 59:36
I don’t know. No idea.
Jay Clouse 59:37
It might just be like k e w e e. I don’t know. Look it up while I’m giving my 6 to 18 month Look out, don’t even need to listen to me. In the next six to 18 months. I’m looking at a couple things. One I totally agree on in terms of new product development. What does that look like? What is their plan? I’m also looking to see I would love to see some retention numbers with people who download Kiwi for Gmail was actually looked like we didn’t ask about retention. And third, something that Eric brought up that I really enjoyed as a perspective was how closely he paid attention to the priorities of his potential acquirers. And what they’re getting pressure, what they brought up on their investor calls, and what types of things they’re getting pressure on. So I mean, I’m not going to do this. But if I was paying close attention, I’ll be looking at things like the Google investor calls and seeing what they’re talking about as it relates to Gmail.
Eric Hornung 1:00:27
kiwi, spelled k i, w. I is a nickname used internationally for people from New Zealand as well as being a relatively common self reference.
Jay Clouse 1:00:38
All right, I’ll give it to you. Got it.
Eric Hornung 1:00:40
It’s a mild stretch. It’s a I’m not touching my toes, but I’m definitely around the ankle region.
Jay Clouse 1:00:46
Points. Alright guys, well, we’d love to hear from you what other definitions of Kiwi that we’re missing. We love to hear your thoughts on this episode. And if you’re a Mac user, we’d love for you to download Kiwi for Gmail and let us know what you think of it. You can tweet at us @upsideFM or email us Hello@upside.FM. We’ll talk to you next week.
Interview begins: 08:39
Debrief begins: 48:25
Eric Shashoua is the founder and CEO of Zive, makers of the app, Kiwi for Gmail.
Kiwi for Gmail turns native Gmail into a full desktop application, dramatically upgrading the entire user experience, & adding features like default email client, multiple accounts, multiple windows, etc.
- Ad: How to fully utilize the state and gift tax? (07:24)
- How CEO Eric Shashoua learned from VC’s about backing a company. (11:48)
- Starting on Zive’s product: Kiwi for Gmail. (20:38)
- Recommendations for Kickstarters pre-marketing a business (26:55)
- How Kiwi can make money (30:13)
- Kiwi for Gmail’s marketing strategy (43:20)
Zive was founded in 2013 and based in New York City, New York.
Learn more about Kiwi for Gmail: https://www.kiwiforgmail.com/
This episode is sponsored by Taft, Stettinius & Hollister, a full-service law firm known for assisting entrepreneurs across the Heartland.