Transcript: Aviv Blumstein (Mr. Japan): Building a Business on Word of Mouth

Opening: the 'Business From the Inside' series

Eyal David: [00:00] Aviv, how's it going? All good, how are you? Great. Let me quickly say a word about the series and then we'll continue. So this is the 'Business From the Inside' series, which is a bit different from what we usually do here. This is already the second episode, and I'll also say that in this series we talk about... we sit, basically together, you and I, and talk about your business, about things people talk about a bit less: how you actually bring in customers, what's happening behind the scenes financially, the mistakes that cost a lot, and a kind of laser-focused look at the business itself, and also how you keep the right mindset. You and I talked about that a bit, so we'll dive in. And before we start, thanks to Startup Nation Central for hosting us in the studio, a truly gorgeous studio. So Aviv, you're the founder of Mr. Japan. Do you want to say in two words what it is? Yes,

What Mr. Japan is, and how it all started with a Facebook post

Aviv Blumstein: [00:53] maybe I'll tell how it started and take it from there. Basically, I wrote a Facebook post about what I'd learned on one of my trips to Japan. I was a product manager in the Tel Aviv high-tech world. The post went completely viral, by accident, and I started getting messages from people: any chance you'd help me, build me a plan? One thing led to another and it turned into a real company. Today "Mr. Japan" is the company that does fully personalized trips, from morning to night, for people mainly in Israel, but also abroad. I'll expand on that a bit later. We help people travel in Japan, discover it and fulfill their dreams there.

Three years of growth and the Japan boom

Eyal David: [01:37] So let's, let's pin this down for a second. How long have you actually been around? When was that post? The post was in May 2023, three years ago. Wow, what impressive growth. Right. Really. So a few things happened that maybe also created some acceleration. Created... how do you say acceleration in Hebrew? Ha'atza. Ha'atza. Ha'atza. That's the one. We talked about this a bit. Wars and everything going on, which also concentrated the Israeli market. They really put Japan in the spotlight. I suddenly found myself in Japan, my daughters wanted to fly to Japan, and basically that traffic was routed to you.

Aviv Blumstein: [02:11] Right, I think it actually started even before COVID. Then COVID came, and Japan was effectively closed for three years. And when it reopened, there was a huge boom. And by the way, not just in Israel. Japan became one of the most popular destinations in the world. When did you travel there? I traveled there in 2019, I think. I hope I'm remembering the years correctly, but I think it started in 2019, and the post was written

Eyal David: [02:50] when I came back from my second trip. Excellent. So you did it a second before COVID. Great, you got lucky. Hold on a minute, a second trip? I'll want to hear about that too, I'll ask about it in a moment. But let's first just focus on what you provide and to whom.

The product: peace of mind, and who the ideal customer is

Aviv Blumstein: [03:06] So we... the product is peace of mind. At the end of the day, planning a trip to Japan is a pretty serious headache. We know how to take you through a process, together with us, that builds your plan and your trip, including the logistics,

Eyal David: [03:24] end to end, very well and very fast. Let's pause for a second, just so we can continue. I don't know if people know, so let's really expand on what this looks like.

Aviv Blumstein: [03:34] Is it mainly families? Who's the ICP, you know? I think if we looked in the system, we'd see that about 50% of our customers are families, and then you have around thirty percent couples, which can range from retirees to people getting married or who just got married and now want to take a fun trip abroad,

Eyal David: [03:58] and groups and solo travelers, which is significant too. The reputation of this trip, at least it used to be, is that it's an expensive trip, right? So basically there's a certain price tag that people... And you told me another interesting thing: we serve people who have already bought a ticket, right? There's a kind of... because that's really true, you need that level of seriousness.

Aviv Blumstein: [04:15] Right. The planning is complex. I mean, unlike a trip to Greece, planning here takes time, and every piece you move is like a piece in a complex puzzle. It affects everything else, all the other days. So we actually require that people who come to us already have the... also seriousness, in the sense of okay, we're now working on this together,

Eyal David: [04:40] but also in terms of future changes, which we try to minimize. So let's also give a bit more background, more context really, on why this service matters. Again, from my own experience, okay? I remember when I flew to Japan, I had a super precise Excel sheet, because even in terms of days, I remember I was limited in how much time I could spend in each place, because accommodation is also a very significant and expensive thing in places like Tokyo, for example. Even finding a hotel where I could actually open my suitcase is a whole production. So I remember being very careful with my time. The second thing... and also in terms of attractions, I remember that... okay, we went to... In Osaka there's the... what's it called? Universal, the Universal park. I had to pin down a day that wasn't a holiday or anything else, when you could go, and based on that I basically pinned down the rest of the things I did on the trip. I don't remember, because for us it was important. So there are all kinds of gardens that really matter, and there are restaurants I want to go to, and everything has a line, right? There are all kinds of constraints you have to work around, so that also affects what you're actually selling.

Aviv Blumstein: [05:44] Right, it reminds me a bit of that riddle where Shula wants to sit next to Yossi, but Yossi doesn't want to sit next to Binyamin, but both of them want to face the buffet. There are so many variables here that putting together one picture that also makes sense for you, as a family for example, with what Japan has to offer at a very specific point in the year, plus prices, weather, events, parks, right? And if there are kids, you need to create enough of those dopamine moments, because Japan is a champion of culture, and when you're a kid that's a bit less interesting to you. So there are tons and tons of things to take into account. It borders on infinite. Add to that a foreign language, a lot of money, and your vacation days, for you and your family,

What the process looks like: from questionnaire to app

Eyal David: [06:30] and it creates a headache that we come in to solve. So what are you actually selling? We're a headache pill. No, really, what does it look like? I'm now coming to plan a trip,

Aviv Blumstein: [06:42] I bought a ticket, I showed commitment, I reached out to you. Yes. What does it look like? So there's a process that takes roughly two weeks, and the first thing is actually buying the flight tickets. Once there are flight tickets, we send a kind of in-depth questionnaire, some personal details about you, some details about the flight. And from there I, or rather I or the team, build an outline plan, something to start working with. Then we hold a meeting, which can be either on Zoom or in person at our offices. In the meeting we do a fine-tuning session. Some things get added, some get cut. The final output is a kind of Excel sheet filled with all the good stuff, that goes into the oven, and at the end out comes an app that sits on everyone's phone, with everything we built inside it: explanations, navigation, bookings. We're with you while building the plan, and if needed at the destination itself. There's a team both in Israel and in Japan. That's basically it. Okay, and how do customers find you today? 95% of our customers today come through word of mouth. It's lots and lots and lots of word of mouth, and five percent is 'I saw the website' or 'I came across it on Instagram,' something like that.

95% of customers come through word of mouth

The first customer sent a credit card

Eyal David: [08:05] So let's, let's break that down for a second. About three years ago, more or less, you had a post, and that post blew up, a Facebook post in one of the Japan groups, you can look it up, and then what actually happened?

Aviv Blumstein: [08:18] I got a message. Shoutout to Itzik. I got a message from him: hi, I saw what you wrote, I'd really love to pay you to plan a trip. And at that point I obviously wasn't doing that, so he even sent me... whether it was him or another guy, they sent me a photo of a credit card. You have to help me. And then I understood the pain here was big. When someone sends a credit card to a person they don't know based on a Facebook post, there's very big pain here. And as a product manager, or really an entrepreneur at heart, I said, wait, let's see if there's something interesting here. So I built a plan in Excel, a plan that, when I look at it today, I'm a bit embarrassed by. And I said, wait, Excel isn't a good experience, I want something a bit more. So at night I started designing something that looked like a PDF with colors and links. And I started getting messages from people like, wow, what a great app. And there was no app, just a PDF with links. And then I said, okay, this is a good point to start trying to build something a bit more scalable. I started with the app, meaning what the customer sees at the end. I went to people here in Israel to get price quotes, and got sky-high quotes, so I decided to build it myself together with a whole team in Ukraine. In hindsight, a decision that saved the company.

Seasonality: sakura, autumn foliage and holidays

Eyal David: [09:56] Well, not the company. Okay, let's move the story forward a bit. So this thing got built, and there's also seasonality in Japan. Let's say it: people don't fly all year round, or do they? Correct me.

Aviv Blumstein: [10:06] People don't fly all year round, but they plan all year round. There are two main points with a really big peak. One is the cherry blossom, sakura, which happens at the end of March and beginning of April, and the second round is around the end of September, or more accurately October to November, when the autumn foliage happens. September is our holiday season here, so there's also a very big peak in that sense. Yes, it really lines up with the Israeli holidays, but the vacations, more precisely,

Eyal David: [10:37] But what did it look like? Because over three years, okay, there was that push from the post, which probably kept pumping organically, or as traffic, probably.

Quitting, and a website built from the group's questions

Aviv Blumstein: [10:47] How did it grow from there? How did it actually move forward? So at the point where I decided, okay, this is what I'm doing, I quit. Oh, up to that point you hadn't quit? No, I hadn't quit. I kept doing it a bit on the side. So actually, I said, okay, there needs to be a website. And to build the content for the website, I went through that same group where I'd written the viral post, and went back through thousands of posts. I started tagging what people talk about, what they ask, what's important for them to know, and then I built the website based on that. I mean, the articles that were written were really based on that group, and little by little Google started showing me, because these are the questions people actually ask. Pretty organically, I started getting customers, drop by drop,

Eyal David: [11:41] one more customer, two more, three more. So if we break it down, during that time you basically started working on marketing.

Aviv Blumstein: [11:48] I didn't try, I didn't try. It all came from a place of, maybe even, people asked me: do you have a website, do you have Instagram? Instagram, by the way, we only opened, I don't know, a month and a half ago, and in hindsight I went with a website, and I really enjoyed building it too. At heart, it says Product Builder, so that's what I really love doing, so I started playing with what I knew how to do. At that point I knew Wix, so I built a website in Wix. There wasn't some strategy where I sat down and said, come on, now I'll build a website and then, no, it was done out of a desire to build something, and probably if you build something that looks good, feels good and gives value,

Eyal David: [12:38] good things happen. Great, so you built it in Wix, because you were going for organic traffic. That was always an issue there, but fine, let's put that aside. So basically I... They've gotten better at it in search results. Yes. Let's understand the timeline for a second, because you really started this, and suddenly October 7th also happened. So were you building the website around October 7th? Is that roughly the period?

October 7, overload, and working on the machine

Aviv Blumstein: [12:56] I don't remember exactly. October 7th came when I already had customers. I had customers, and like I told you a bit earlier, the wars, on one hand it's a terrible, awful thing, and on the other hand, when you're getting customers, your capacity, in terms of the energy you give, you're already in overload, at least at first. One person, and now five customers come, ten customers, you're working 100% of the time giving them value and service. And the hard part early on was squeezing out that extra ten percent at night, when you're already wiped out and it's three in the morning, building some automation or other, or building a product that would help you tomorrow not hit that 100% threshold. Yes, what's called working on the business, basically. Exactly. Working on the machine. And the machine is our ability to take on a lot of people at once,

Eyal David: [14:02] that's the essence of the business. Without it you can't grow. You kept coming back, in our conversations too, to the term 'machine.' Right. What does this machine take in? Take in, as in how do we feed it? Yes. No, let's think about it. It basically takes in your ICP, your ideal customer, at some level of readiness, right? Right. And then it's supposed to spit out on the other side... magic happens, but it spits out satisfied customers with an amazing experience. The customers coming in today... what I actually wanted to ask is, since '23 something else happened. AI tools entered our lives, right? Right. And suddenly that puts you with customers who are more prepared, maybe even thinking: what can Aviv give me, or Mr. Japan give me, that Claude can't? Right? Tell us a bit about that. Yes, so at the beginning there was no AI,

AI: an advantage for the expert, not a replacement

Aviv Blumstein: [14:56] I mean, back in 2023 it existed, but it was in its infancy and didn't work well. And everything we built up until, I'd say, the last year, was built with blood, sweat and tears, without AI, the old way of writing code. And then AI arrived for real, let's say in 2026. These are really advanced tools now, they're good, and we really needed to rely less on our development team in Ukraine, and we did a lot of things ourselves. And today, we talked about this privately too, today AI gives us a very, very big advantage as people who know how to use it, and the bigger the risk for the consumer in general (and a Japan trip is a fairly high-risk trip compared to other trips around the world), the more AI becomes a meaningful tool for the expert or specialist rather than for the end customer. So there are people who build trips to Japan with AI tools today too, but in the end they have to trust themselves to understand the AI's output, and the responsibility is on them. So we're a kind of seal, a stamp of quality in this world of trips to Japan. Whoever wants a perfect trip and wants to make sure they have someone,

Eyal David: [16:27] someone to talk to if something happens, if they need something, that's the slot we sit in. You know, I remember, wearing two hats: I remember when we flew to Italy on parental leave for the first time, when my first daughter was born, my wife told me there's no room for mistakes on this trip. So that's one thing that jumped out at me. And the second thing, I thought about companies I advise that are regulated, for example, and then with AI too there's no room for mistakes. I won't say that's what you do, but that idea of avoiding mistakes, it's a bit negative as a marketing message, supposedly, but that's actually the message, I think. And you also told me that today you're actually competing against apps that people build, the independent traveler, right? Right. How many come to you already more 'baked,' at a higher level of readiness: hey, I already have something I built, let's take it from there? What does that look like?

Aviv Blumstein: [17:20] A lot. A lot. A very high percentage of people say, I already talked to Gemini or ChatGPT,

Eyal David: [17:27] and... but now this is also very interesting: if you already talked to AI, why not take it from there?

Aviv Blumstein: [17:34] Many people come and say, I'm looking at this and I'm not sure if it's good or not, and even if people in Facebook groups tell me it's good or not good, I still have this gut feeling of uncertainty. And whoever wants to resolve that feeling often comes to us. We don't claim to only resolve some feeling or other, but to really give much more value than AI gives. Whether it's, you know, take a right at some street corner, and there sits Toshi, who'll make you the tastiest ramen you've ever eaten. So there's a lot of added value in people who, you know, live and breathe this thing. And whoever wants a generic trip that AI can spit out

Eyal David: [18:18] does that. And whoever wants... I'm with you, I'm just taking it forward. I think, if we define again the ICP, your ideal buyer, your ideal customer, if we already know how to identify them, that they're also at the... how much does a trip to Japan cost today, roughly?

How much a trip to Japan costs

Aviv Blumstein: [18:34] That's the question I'm asked most, and the hardest to answer. Let's say a family of four, two girls, I'll just compare it to what I did. It ranges from 30,000 shekels to 100,000 shekels.

Eyal David: [18:46] Yes, that's very wide. It's very wide. It's probably more toward the middle and up, from what I know, but it's an expensive trip, like we said. So once I frame it as an expensive trip, and I add a kind of insurance policy on top of it, which is about making as few mistakes as possible, I'm already saying I'm targeting a certain segment of the audience that probably doesn't want to make mistakes and will probably pay for that extra. Cool. I basically want, I think, to attract as many people like that as possible. Have you thought about creating a Mr. Japan agent that already has your voice, your knowledge, brings you up to some level of readiness, and funnels you, the customer, in? Yes.

Should Mr. Japan build an agent?

Aviv Blumstein: [19:23] So yes and no. I mean, there's a very fine line in the services world. You don't want to become an agent. An agent can be internal and help us run processes behind the scenes, but externally, no. In the end the person wants Mr. Japan, its knowledge and its team. No, before they're a Mr. Japan customer, I'm saying: I made a plan,

Eyal David: [19:45] now I'm not sure about it, I don't know Mr. Japan, but I could very well come across some agent that's active in the groups. An agent, you know, some GPT or whatever, I throw my plan at it, and it tells me how good it is or where it falls short, okay? Still, I think, still I think there's value here for a new audience. People who appreciate... I keep banging on the table, we were told not to do this, but people like that who know how to appreciate your value, I think it would be really interesting for them to be exposed that way, and then suddenly, oh, there's Mr. Japan, I'll go to them, and I get it,

Aviv Blumstein: [20:16] you see what I'm saying? Very cool. Honestly, it's not even in our backlog, and we have dozens of things in this area. Specifically building an agent that gives some initial feedback and then brings the customer to us, we haven't done that yet,

Without an organic growth engine, you're in trouble

Eyal David: [20:30] and we're in our infancy, really, really in the infancy of the things we want to do. I'm holding on to something you told me in our previous conversation, we had a previous conversation, you told me, I just have it written down, that if you don't have an organic growth engine, you're deep in a rabbit hole, basically in serious trouble.

Aviv Blumstein: [20:46] Want to expand on that a bit? Yes, I think that's my credo, not only in the Japan world but in every possible business. In the end, relying today on a growth engine that's paid advertising is tough. And there are surely people listening who know exactly what I'm talking about. In the end, prices also go up, so the more money you put in, the less value you get from that investment over time. And you must, must, must find some way that's a bit more, let's call it, a backdoor, we said we're speaking Hebrew, so through the back door, to bring in customers, especially in the early period of building the business. You have no resources. I didn't have a single shekel to invest in any of it, in the most sticks-and-stones way, which I also don't know how to translate into Hebrew. Glue and sticks, you know, yes. Everything I could get for free, I took. What would you do now with that approach,

Eyal David: [21:51] if you were building a business now from scratch? Really, I mean, how would you approach it? To this day we don't pay for offices. No, but take me specifically to marketing, okay? Okay, so in marketing too.

Aviv Blumstein: [22:08] The website is still our biggest growth engine, and we don't pay a penny on it either. Even the website itself, like I told you, I have a friend who brought a coupon code.

Eyal David: [22:21] That's great, it saves money, but beyond that, give me marketing tactics or an area of marketing you'd start with, okay?

The best marketing is the product

Aviv Blumstein: [22:30] I'll say that the marketing I believe in most is the product. The reason word of mouth... what is word of mouth, in the end? Is word of mouth a marketing method? Yes, but it's based on a product that's very, very good. So we... I say 'we.' Today it's 'we,' back then it was just me in the dark, in the basement. I put my whole life and every hour of the day into it, to the point of sleeping two hours a night for a very long time, because people also message you on Japan time, so you have to be awake. There was no AI. So I put everything into building the product, on the assumption that if I do it, if I invest,

Eyal David: [23:11] if I give 100% to the product, people will appreciate it. And that's what happened. That really connects to two conversations I had today. Two people I want to bring here, to this series. One of them is significantly ahead of us business-wise. He told me, and it really surprised me, that the thing he measures today is customer experience. Purely customer experience, nothing else matters. And the second guy just told me that marketing is dead, he doesn't know right now, but the authentic thing, which people say is forced today and everyone is trying to do, is what he focuses on most. So that's basically what you did, if you think about it. You gave your all, right? Right. And you were super authentic, and probably, in terms of value, that's clear to me, but also authentic in the post you wrote, right? You put yourself out... I really put myself out there in the most...

What made the post go viral

Aviv Blumstein: [24:10] I mean, there was no agenda there. Zero agenda. Purely sharing my experience. But when I do something, I take it a bit to the extreme. Tell us a bit more about that. So the post, if we send it to you, you'll see it's not just hey, go to this or that restaurant. It's full maps with data I collected over an entire year from all kinds of groups, all the way to a Spotify playlist of the songs I love in Japan, to get a bit into Japanese culture. I'm also... I'm a musician, I really love to play, and it's an inseparable part of me. When I visit a place, I also listen to its music. And I'm also an amateur photographer, so there were some really nice photos there. Put all of that together, and what came out was probably something special that stood out a bit from the usual posts.

Value-based marketing, or just solving a problem?

Eyal David: [25:04] That's my explanation for it. You did value-based marketing, you gave your all, I really get that. Today it's also much easier to do. I didn't do marketing, I have to... Really? So what did you do with that post, if not marketing? You didn't plan it, but that's what you did. Also what you told me about the website, what you said earlier, that you went and scraped the group and brought in the questions that were most... in the end?

Aviv Blumstein: [25:26] Marketing? I was looking to give value. Value-based marketing, that's what I'm saying. So when you say marketing, I take it to places like, you know, sitting down, holding a meeting about how we'll market. It didn't happen like that. Here it really came from a place of looking for how to solve your problem. That's where I live. And when you solve a problem well, good things happen and people come. True, you can say it's also a way to market. Marketing, somehow, when you say marketing, I think of PPC,

Eyal David: [26:00] and all kinds of... No, we stuck to organic, and I think you also put a 'value-based' label on it. When I put... actually, you were the one who said it. But first of all, letting the world know about me. That's what I took from what you said. If I were thinking about where to start a new business now, first I'd tell the world what I do and put out something explosive, like you did, with tons of value, so the spotlight would even land on me, because otherwise I'd get lost in the noise.

Aviv Blumstein: [26:26] This is hard for you, I can see. It's hard for me, I'm trying to understand why. Because there was no intention here, so when you say 'first of all I want the world to know about me,'

Eyal David: [26:37] I wasn't interested in the world knowing about me. I know you're saying that, but I'm thinking: what can we learn from what you did? You took it further, and because we've talked about other businesses, that's what I was trying to get you to imagine,

Aviv Blumstein: [26:46] that's what I took from it. I take something different. Talk to me. What I take is: go with your gut, and if you want to solve some problem, do it the best way you know how. And if you do it well, and really go with your gut, things will roll from there. It's more about the doing, less about what you're doing. It's a fine line that I'm still refining with myself to this day. I get up in the morning and do what I love, and that's why it succeeds. If you break it down, you say, yes, right, you're doing marketing, you're building a product, and so on. True, but it's a matter of passion. And can we recommend to whoever's listening to do things out of passion? I think so.

How to find your passion

Eyal David: [27:36] I think so, so you know, it's... Let's take it a step further, okay? When we talked in the prep call, you told me a bit about passion, right? If you had to point to the compass, or what you could offer to help someone find their passion. Not at a guru level, but you know.

Aviv Blumstein: [27:53] Wow, that's a very good question, and I think for years I did things that felt like they weren't my passion. You know, I was a product manager at a very good place, in life and financially. Great. I reached the peak of... for someone who doesn't code, the very top of the places I could be, and something felt missing. Something feels off in your gut. Anyone who's an entrepreneur feels something like that in their gut, an unpleasant feeling when they're doing something that doesn't feed that need. And it took me a good few years to gain some domain expertise. I told myself a story that I needed some experience. In practice, I needed that same Itzik sending a credit card to grab it with both hands and say, okay, I'm leaving everything and building something now. I think in these matters, it's about looking for some... you know, I'll take it to relationships too. You can be single, and you can be single and available, like the yellow light on top of a taxi, and then good things happen, because you want it, you wake up to some story in your life that's going to take you to interesting places. And I think that's what happened here. I was really hungry for something. I didn't know for what, but I was open to anything that happened. And when you do a lot of things, there's a better chance that things will happen, or that opportunities will come. Let's elaborate on that. Tell us about that whole range of things you suddenly opened up, things you do or always did. How does that work? I think it's a bit of a cliché, but I love it, that luck... Look how lucky you are. You wrote the post, you know, and it rolled from there. I don't see it that way, I see it as... there's a saying that goes: luck is opportunity meeting preparedness, something like that. So I don't think I'm lucky. I simply had the other two things. I'm searching, I'm still searching today. I look around, and that's one of the problems of an entrepreneur, by the way: focus. But here I succeeded, I focused on one thing, and that one thing works very well for us, and we're taking it to the extreme.

Luck = opportunity meeting preparation

Eyal David: [30:15] So let me try to put this into a framework. To find what you love, you cast a lot of fishing lines, but you also waited with those lines, and you probably invested in very good bait, and in the craft, okay, in the doing, while you were doing it, like with that post (maybe you can tell us about other things you did), and then you found something that stuck and that also interests you, that interested you while you were casting the line, and that's how you found the thing. Right. So that's the tip to take from this. What other things, what other lines did you cast?

Aviv Blumstein: [30:47] It's all in hindsight, okay? Lines were cast, if that's how it happened. What lines did I cast? Look, I was in a very good unit in the army, Unit 81, and in Mamram, places where you see and hear about super cool things, and I also sold things as a kid. I mean, if you look at it in hindsight, you can see how this path was built. But it all really feels half accidental to me, with that mindset of what's next? What will fall into my lap, and I'll take it and make something of it. And I really love the world of experiences. Creating some experience you'll go through and simply remember. Memorable experiences. It can be a story, it can be some... I told you about the parking lot thing, which is a podcast in itself, I think. Just doing.

Eyal David: [31:53] You know what else was there, I think? Again, if we dive in for a moment, you also found a market that excites you, both the experience and everything else. But if I judged it with business eyes, I'd say, okay, on one hand I wouldn't do B2C, I wouldn't touch it, certainly not paid, sorry, organic, and certainly wouldn't do it through content and bet on one specific post. You know, with logical, judgmental eyes. On the other hand, you cast a line into a place that, beyond interesting you, is also a super interesting market, with people who, as we said, are a very, very good ideal customer, where if I manage to become the go-to name, that's cool, and it's also a growing market, ultimately, as you mentioned. So without knowing it, or maybe you did aim for it, I don't know.

Aviv Blumstein: [32:37] I've never aimed for anything in my life. There was a problem, I wanted to solve it, I started solving it, without... And it excited you. Without aiming for it, exactly.

Mistakes vs. lessons: the hotel booking that cost ₪45,000

Eyal David: [32:50] And tell us, let's get back to the business a bit. Tell us about some mistake, you know, one that can be learned from, or that you learned from,

Aviv Blumstein: [33:00] that happened in the business. Let me say something a bit cliché, but I really live by it. It's a bit philosophical. I don't think it's a mistake if you learn from it. I mean, a mistake is a mistake when you don't draw lessons from it, and if you do draw lessons from it, then it's a lesson. So the number of lessons you go through as an entrepreneur on a daily basis, in one day, this morning, is infinite. Now, was there something fatal that made you, you know, get up and close the company? Then maybe that's already at the level of a mistake, you could look at it that way. And even then I'm not sure, because maybe you'll open another company and you learned a lot from the previous lesson. So that's my perspective. I don't think there's a mistake we made,

Eyal David: [33:53] or that I made, but there were many lessons along the way. Give us one such lesson that probably came from a mistake,

Aviv Blumstein: [34:00] but is super significant and you took it with you. I'll give you an example. It was about two years ago, I think, we had a very big and important customer, and we really wanted him to be satisfied. He came with very, very deep pockets, and we decided to book him the very best hotels, and when we made the booking, the hotel was accidentally booked for the wrong dates. The point is, we didn't have any system at all for QA and checks. That mistake cost around 45,000 shekels, which early on is a whole world. And I'll share with you what we did with that mistake. First, we built processes so it doesn't happen again. I mean, everything that happens to us, and still happens today, though very rarely by now, you know, the edge of the edge cases. But every time something doesn't work as it should, we think about how to make sure it doesn't happen again. The whole product is built on that. Every message we get today is data for us, and we say, okay, ten people asked X, how do we stop getting this question? So the mistakes build the product. So are they really mistakes if they build the product?

Eyal David: [35:28] In my view, no. Yes, that's a matter of perspective. Again, and probably also, you know, the mistake wasn't big enough, as you say, to mention here. Tell me, if I look for a second at all the... there are mistakes and there's reality, right? Our reality here was that the skies closed several times, for example. How did that affect you? I have to respond to the previous sentence,

Aviv Blumstein: [35:56] that the mistake probably wasn't big enough. I don't think it's a matter of how big it is, unless it's so big that the business closes, or something really happened to your health. Because there was a guy here before me, on a previous episode, who lost 60,000, right? On hiring someone to help him with sales. In my view that's not a mistake either. Because he learned from it, and you also asked him what he learned from it, and he answered... Let me give you an example of a mistake, okay? In my business, for example,

Eyal David: [36:30] at the beginning, and this happens to a lot of freelancers at the beginning, my accountant... I wasn't really on top of the numbers... my accountant made a mistake. I discovered at the end of the year that I owed a lot of money to the tax authority. That's a mistake, okay? Or, for example, if I positioned myself a certain way and could have charged much less money, and found out later in hindsight that I could have charged much less, that's a mistake. Both in terms of pricing and in terms of... you see what I'm saying? I disagree with you. Go ahead. I disagree. I think that when your accountant made some mistake and you didn't have any oversight of it,

Aviv Blumstein: [37:05] it means your energy went somewhere else, and you probably developed something else, and something else good happened in that time. It's a kind of rope: you pull on one end, so there's some price you probably paid, whether in energy or in money, you discovered that accountant made a mistake, and from that point you improved. Now you have either another accountant or some other control process. You learned from it and improved. I really don't see it as... I don't look at it as 'I should have done something differently,' but as how, from this point on, I make sure it doesn't happen again tomorrow. If it happens twice, then in my view it's a problem. Yes, yes, I really believe in that. Okay, let's move on. So I touched on the fact that the skies closed here several times,

Wars as a pit stop for improving the machine

Eyal David: [37:51] so that's not a mistake but reality, okay? Let's put the word mistake aside. How did you cope with it?

Aviv Blumstein: [37:58] So in hindsight, the wars here in Israel gave us breaks like that during the development of the product, which kind of helped us. I don't know if I should say it, but it helped us a bit, because when you're loading customers into the machine and the machine isn't perfect yet, a lot of your energy goes to the customers themselves and not to building the machine itself. So what it enabled was simply stops, nice pauses, where we said, okay, now there are no customers, everything just got canceled, so let's work very fast on the machine, so that when the war ends we'll be a bit more ready. I compare it, even with the team to this day, to a race car that does a lap, and then it stops and everyone jumps on it and improves the wheels and everything possible in the machine, so that on the next lap it'll be faster and stronger.

Payments: the one mistake Aviv admits to

Eyal David: [38:59] What's the most significant improvement that moved the business forward? Wow. I think

Aviv Blumstein: [39:06] payments. That's a complex thing. And payments also in terms of tracking payments, cash flow, who paid, who didn't, sending them some message or other. I think that's a very, very big challenge. And also at the beginning, I, Aviv, fronted your expenses as a customer, I mean, your expenses in Japan. So I paid for your train and I paid for your car, and I'd ask you for the money back afterwards. I mean, on the go.

Eyal David: [39:40] Mistake. A very big mistake. Right, I'm... glad we agree on that, yes. Okay, that's maybe one of the only things I'm willing to call a mistake.

Aviv Blumstein: [39:48] It really wasn't smart, but it let me move fast. So yes, I gained something from it. And then I said, okay, I'll take your credit card and carry out these transactions on your behalf with your card, but there's that verification code you receive, and I need to get a code from you every time. A nightmare, for you and for me. So I decided to take it on myself for a while, until I looked at the cash flow and said, okay, this is horrible. And today we take the money three months before you travel. There's an estimate of roughly how much it's going to cost, and when you come back, the system checks how much you paid us versus what it actually came to, and you even get a small check back.

Eyal David: [40:27] That's fast, fast. You know, interesting, since we talked about agents before we started the conversation, if you had a group that an agent also joins and it knows how to listen, because I understand the codes are the issue, then maybe that would have helped. Let's move on. I wanted to ask, give us a bit of a view of the business, a bird's-eye view, after three years. We understood roughly how much a trip costs, the ballpark. I won't get into how much, into what your average deal size is, but I do want to know what's the biggest cost you have in the business today that people from the outside, probably me, wouldn't even imagine exists.

The big costs: employees, tokens and SaaS

Aviv Blumstein: [41:11] I think the answer, the most significant cost we have in the business today, obviously, is employees. And the second thing is AI. I mean, tokens aren't that cheap today either, and we're working on that too, on how to lower the... to be as efficient as possible in our token usage too. And beyond that, we have lots and lots of SaaS. Tons. We... From the outside it looks like trip planning, a small thing, but there's a very, very large number of software tools we use, at the level of thousands of dollars a month. So for a relatively small company, that's quite a lot. We try to be at the cutting edge of technology, and almost every tool that...

SaaSpocalypse: why it's so hard to replace tools

Eyal David: [42:08] really creates some advantage in these areas too. Let's actually dive into that, because suddenly the... the SaaSpocalypse. Finally I have someone to talk to who isn't, you know, from my usual audience. Let's say, how hard is it for you to rip out these tools now and move on?

Aviv Blumstein: [42:27] Excellent question, because it's very hard. Very, very, very hard, and I think that same... I don't believe the SaaS world is over, and I see it with us. The migration is a nightmare, and we want to do it with quite a few tools, and we say, okay, this is a project, and so this project gets postponed. So... and these companies profit from that postponement. It's very, very hard, especially with things related to information security, things related to payments, lots of integrations that were built up over a very long time, and you say, I'm now going to throw this away to build it from scratch? And the answer is yes, it will happen, just not now. So if someone is looking for a problem, here's a problem probably worth solving.

Eyal David: [43:17] Let's talk a bit about mindset in all of this. What helps you keep such a positive mindset? I can really feel it.

Aviv Blumstein: [43:25] Yes. But if you'll allow me, I want to go back a second, because I'm very glad we went with those SaaS tools, which let us create very significant value with no-code, very, very fast. And I think if someone is listening to us... well, it might be a bit different for them, but there's something really right about starting from something that's already structured, small, creating value, seeing that it works, and only later racking your brain over how to scale it. Let's, let's dwell on that, that's really true.

Eyal David: [43:59] I think in every respect. By the way, that's also what you did, if you think about it. Maybe for product people it makes a lot of sense to get to an MVP as fast as possible, right? That's also what you did with the post. You ignored everything else and focused on the value. It's just that when you're at scale, you have to pay that debt at some point. There's a problem here that I think is super interesting to solve, that lots of businesses are dealing with now. And there's also, I don't know if you're familiar, regulation now in the EU that basically forces SaaS companies... are you familiar with the Data Act? They're basically supposed to let you leave more easily. It's not defined how easily, but there's probably an opportunity to get into that. Okay, but I do want to talk about mindset before we wrap up. Tell us how you stay resilient through all of this. Is resilience the word? Resilience is a good word.

Resilience: 'five minutes from now is a new five minutes'

Aviv Blumstein: [44:58] Every, every entrepreneur needs serious resilience, because otherwise you go crazy. You really go crazy. I think that... there's that saying, tomorrow will be... tomorrow is a new day, or it'll heal before the wedding. There are lots of common sayings like that which, without us noticing, kind of shape our consciousness. And as an entrepreneur who goes through a thousand difficulties a day, you need to build some mindset, at least in my approach, of: five minutes from now is five new minutes. And the more you shorten those intervals, the better off you'll be. That's what builds resilience. I mean, something happened, okay, how do I react to it and get back to routine? And if you could draw some line here, then instead of... you're kind of evening out the peaks. So maybe... it's very important, by the way, to also remember that when the peak is high and you're having some success, to also enjoy the success, and when the peak is low and you feel the world is collapsing, to bring it a bit back toward the middle of the line.

Eyal David: [46:13] If someone did something to him like that... No, let's try to drill into this for a second, okay? Yes. So basically what you're saying is, first, it sounds like you really force yourself to make sure, or to put the emphasis, maybe intensely, but on 5 minutes. You're saying that's the maximum zen you've reached, and you force yourself to make a decision within those 5 minutes?

Aviv Blumstein: [46:36] It's not something done consciously, but first, I also practice mindfulness here and there. I think it's important, not only for people who build things but also for managers, it's important in general. And the idea is that when something a bit less good happens, you zoom out and look at it in a much more measured way, because if you really live that bad thing, then you... it happens so often that you won't survive. So I think I've developed that zoom-out for myself over the years, and today we've created something much more balanced. What occupies you most in that respect?

Today's focus: marketing and number of travelers

Eyal David: [47:22] In general, what occupies you most in the business today?

Aviv Blumstein: [47:26] So up until, I'd say, the first year or two, it really was building the machine. You're building a machine that can take a lot of people on board without you wanting to jump out the window. That was the essence of it. Today it's a bit more about marketing. I mean, okay, the machine is ready, a big bus, so let's bring as many people as possible into an experience we created. So the focus is really shifting. If you look at our roadmap, you'll see it's now more about marketing.

Eyal David: [48:02] So what's the metric that drives you today, then? The biggest metric is the number of travelers. Because it basically indicates... number of travelers, is that number of buyers or number of travelers? It's number of travelers, I mean, buyers, which can also be a group.

Aviv Blumstein: [48:18] That's exactly what I'm asking. So we measure both: number of travelers, and we also measure the cost per trip, so we can know where we stand in terms of... we call it a financial router. One of the opportunities when you build trips, I mean, people trust you not only with the X thousand they pay you to build the plan, but with their whole trip. The trip, we said, is between 30 and 100 thousand shekels, and you become the go-to for how those chips get allocated. And there are lots of opportunities there. And it's very important to remember that those opportunities must not affect the product, I mean, the value. If you start being biased and putting the chips where you can make a profit,

Measuring experience: NPS and 10% repeat customers

Eyal David: [49:06] that's where you lose. So how do you measure the traveler experience? Since we talked about my conversation with the...

Aviv Blumstein: [49:15] At the beginning it was literally phone calls with customers, real interviews with everyone, sometimes an hour and a half long, about everything. And you need to understand what relates to the customer's personality: they didn't enjoy X because their personality is Y, and what can really improve us as a company, as a product, and in our work process back then. Today the measurement happens like this: you get both a WhatsApp and an email saying "Hey, great to have you back home," with a short questionnaire, and we get answers from a very high percentage of people. It's a very in-depth questionnaire. Very, very in-depth. We also measure NPS, meaning how likely you are to recommend us to a friend, and today also retention, which is surprising. How do you say retention? Repeat purchase, I'd say. Okay. So NPS is how likely I am to get a recommendation, and as for repeat business, we said at the beginning, how does repeat business even apply? Who goes to Japan more than once? We have customers who are with us for the sixth and seventh time, which really surprised us. What percentage of customers are in that segment? Around ten percent.

Eyal David: [50:40] That's a lot. Yes. Okay, we'll get into them, they have their own characteristics and that's actually interesting. But how many travelers have gone through you so far? Thousands.

The market: from 37 to 60 million tourists in Japan

Aviv Blumstein: [50:53] And it's a growing market, you're saying. It's growing in Israel too, but if you look abroad in general, you see that as of today 37 million tourists enter Japan, and by 2030 that's supposed to reach around 60 million. 60 million people are going to come to Japan. Why, what's happening in Japan? I think people are discovering it. Whoever's listening and has been to Japan understands, and whoever hasn't may be planning their next trip there. It's a place you fall in love with. It's very, very different, both culturally and even in how it smells. Everything there is different, and much better in many ways than what we know. Not in everything, but in many ways. And then you're... you land on Mars, and Mars is nice. There's tasty food, beautiful scenery, and a culture very different from what's familiar here in the West. There's a magic there that's hard to explain. I always try to with our customers, but you set foot there and you get it.

Eyal David: [51:59] Yes, practically speaking, I think you get there for a fixed period of time, and like we said, there's a constant FOMO that you can't really satisfy, and you also get stuck. At least we got stuck for a week in one big city, and then you really don't manage to get to the different regions of the country, which have different weather or different landscapes. So my sister, for example, went three times in two years,

Aviv Blumstein: [52:28] because they knew a baby was on the way. So maybe there's an interesting marketing message in there. Yes, I'll go further: that really, you're describing a certain level of confusion, or FOMO, and that's one of the things we come to solve. Internally we call it narrowing the range of choice. You have a huge palette at your disposal, and we do that mix and match for the second, third and fifth trip too.

Wrap-up

Eyal David: [52:53] It's a really big palette. Excellent. Aviv, listen, this flew by, and it was really interesting. I think we'll leave your LinkedIn so that if someone wants to reach out to you

Aviv Blumstein: [53:03] and ask questions, they can. Sure, yes. Off we go. Cool, excellent. What a session you put together. Thank you so much for having me.

Eyal David: [53:10] Alright, bye for now. Bye bye.

Aviv Blumstein: [53:15] Wow, I thought of so many things to tell you during the interview.