Transcript: Building Cash Cows: Danny Avitz on Lean, Profitable SaaS the Indie-Hacker Way

Eyal David: [00:09] Hi Danny, what's up? — Eyal, how's it going? Excellent. It's no accident you're here, but it's great that you came. Great that you had me over. We won't get into the fact that you came here during the holidays — kids and wife aside. Yeah, the kids are here, drinking secret raspberry juice, playing Roblox, all that good stuff. So, we're here to really talk about building products. You and I talked about this — we'll introduce you in a second and say everything — but you and I actually talked about how, how it's becoming easy, everyone sits down with a vibe-coding tool, Base44 and so on, and how suddenly, the 'why' and what you build, and how you market it — this has become the thing, so here you are. So Danny, how do I even introduce you? — Good question. So I'm Danny, 41, married plus two — the most important thing. I always start with that because it's what defines me, I think, it's the foundation. I was an active entrepreneur for 11 years, founded three companies. The first two were bootstrapped, the third was VC-backed. The first was sold, the second generated revenue, but in the end we discovered it was unprofitable — so in bootstrap you don't chase product-market fit, instead you say, okay, we're folding. We folded at that point — you don't always fold, but at that stage we decided to — and the third company was VC-backed, which recently had some kind of mini-acquisition, even though I left it five years ago. Today I basically have two hats: with one hat I work with companies as a fractional CMO — I really enjoy it — and with the second hat I'm a fairly active angel investor. I think I've invested in close to thirty companies over the last four years, and there's also cross-pollination we can talk about, between the work with the companies and the investing — sometimes there's overlap, sometimes it helps the companies, sometimes it helps the deal flow, and I really try to answer along the way. So that's it, that's really how we met — maybe we should say a word about it, through Qodo? Yeah, Qodo is a wonderful company founded by Itamar Friedman and Dedy. Qodo basically provides a code-review platform for developers, today people write tons and tons of code, and they want the code to behave properly — it's really... and it's a field that's exploding. So, how do you market something like that? Just, let's shoot it from the very top. Excellent question. It depends when you ask, because what worked isn't necessarily what works now, right? So you have to be — I know a lot of people use the word today, to be authentic — but you really have to be authentic, you have to give value, and a no-bullshit approach. Meaning, you can't come and write all kinds of buzzwords. Developers — the more technical you are, the more you want to see. You want a sales call less; you first want to get some initial value, and then you say, okay, this is interesting. When we started, the main tools were, I don't know, GitHub Copilot — you're still starting out, and so on — and slowly they accumulated, more and more tools arrived. And then Cursor, and then Windsurf, which had a similar name, right? They were called Codeium and Codium. There are tons and tons of tools today, so inevitably what worked back then didn't necessarily work today, for a few reasons. One, the target audience's excitement threshold — insanely so. What excited them and got them very enthusiastic three years ago, versus today, it's like, okay, meh. And second, there's a lot more competition, so you have to reinvent yourself every time, you have to run fast — it's the fastest-running field I've ever seen. And I see tons of entrepreneurs reaching out to me there in the world of vibe coding, whether it's security-app coding, or now let's do app coding, but vibe coding — but in the enterprise-grade world, but like a SaaS product, no matter the angle, I always say it's amazing, and if you succeed... If you have a decent-and-above story, then you'll gain traction and a crazy roller coaster, but you're a bit masochistic, more than the regular entrepreneur. But it's a fascinating field. Okay, so we understand where we're speaking from, we also felt the vibe and the pace — excellent, it'll stay with us — so let's really get back to the question. You and I started talking about this in the conversation beforehand, and the first question you asked me — we're basically simulating here a case of people founding a company, founding a business, founding some product, actually walking it through. I sit in front of Base44 and try to start thinking about where to begin, and you asked me whether it's even investable, or whether you're now going to create some cash machine here. That was the first question you asked me, right? Right, because I think it affects not only the mindset and the technological complexity of the product and the go-to-market and the business potential and so on — it's a question... It's THE question, by the way — the answer can change along the way, and many times it does, but that's the question, for a few reasons. First, my validation — and I'll touch on this in a second — of course, everything I say here is Danny's truth, right? It's not written... it's not... it's not mandatory. But it's based on 15 years of experience, plus I really see hundreds of entrepreneurs a year. I think that if we're going in the direction of a Cash Cow, which is an amazing direction that I really really love, and it's a movement that's been growing for years — all the indie hackers and solopreneurs and as few FTEs as possible — Full Time Employees — examples like Adam Robinson and Pieter Levels and so on, so what do we get here? First, I'm not defensible by definition, meaning, right now I'm not looking for some VC, I'm not looking for some story, some vision — I want to just get shit done and create some traction. So I start with something relatively niche where I want to just see that I have some grip. So in my approach, instead of going and doing validation now with someone professional — you know, in cyber you go to the CISO, if it's here you go to the... — instead of doing that, I just put up some landing page or reach out to all kinds of subreddits in all kinds of places, and I just want to see for a moment whether people are even interested, whether they even enter the landing page, whether they even do a submission. Here too there's a fork: do I have some conviction, where I know what I'm going to build and I've decided and I start building it, or am I going to interview them, or do I find something here, some very very delicate MVP, or maybe it'll even be a Calendly along the way — that's one thing. And I'm also not telling a story here of a one-billion-dollar company, that's not interesting. I have a lot of friends, quite a few, who make medium-plus solutions, and it's not — I'm not saying this as criticism, they say it about themselves, I'm not looking to ask them why — and they generate great traction, revenue of $10,000 a month, and it's totally possible, because you don't have to be the one who's up there in the Gartner top-right, like there's room for everyone, the market is big. The other side: if you're going now, if you say, okay, I'm going to found something and create something big, you go after VCs — I mean, VCs because of their model, which you could dedicate a lot of episodes to — I'm not a traditional VC guy, but there are the models, right, of the whole thing. We have another episode exactly on this, so you're basically talking about... So okay, so a VC always asks you — wait, how do you see yourself becoming the next unicorn, because that's the thesis, that's basically the model. Here too a question remains: what will the future of the VC be, that's another 10 years and so on. And then you tell about mission and vision and team and why-now and traction and how here, and I have conviction that the category is such and such — which is totally fine, and the building is also different, when you... That's it — if I summarize it for a second, there's the matter of speed versus quality, like you said, and there's also the matter of how locked-in I am on my ICP in this case, right, I have to be very precise, because the ROI is also very precise when I do a Cash Cow, right? — Yes. — which is related to speed. Tell me, marketing-wise too, I allow myself a lot more things, right? I calculate a lot more things. First of all you can see, you don't have a board and all that. When you run marketing experiments, usually the board isn't involved in that, right? It's you, it's the entrepreneur, and usually the entrepreneur and the partner, maybe the entrepreneur and the CMO, the VP Marketing, who decide on all kinds of decisions and experiments — but there really is a lot more mental flexibility. And also you, I think you're less obligated — and if I didn't take money from anyone, my ICP, which is Ideal Customer Profile, right? My ICP could be today, I don't know, DevOps, and tomorrow it could be, I don't know, an accountant, right? Like, because it's me, Danny — me, and I decide each morning what I'll do — but if I've got investors I've harnessed behind me, then I have more responsibility here... — Accountability... — So now, if you were to approach this, again, in the situation that exists today, by the way, before we started this I did a deep study with GPT, I asked it if I were now founding a business, a Cash Cow, how it would look — it really started to direct me to the level of verticals, it told me in a generalist way, avoid that, so we're now going to some niche, like you said. Let's go. — How would you approach it? Hello, excellent. I'm speaking as Danny. What interests me is... first I go... I chase after things that interest me and that I have a personal passion for. So say... sports, say, I like doing sports, but I don't like watching sports, so I wouldn't enter that vertical, because it doesn't interest me. Gaming — less my content world. You know what, let me help you for a second. The second question you asked me was B2B or B2C, and then I asked you, sorry, and then you told me right away B2B, that's my direction. — Right. — So that also filters out all kinds of areas... Right, so first you clean out — first you clean out — what interests me mainly is B2B, it's B2B SaaS, and then there are all kinds of... and my agenda today is to take all kinds of more traditional industries, and do to them... there are fund models that do roll-ups, all these things — basically take something more traditional and inject that spark of AI and automation, work-plus, and agentic-work-plus, and like let's play with it a bit. Now, I'll open a parenthesis for a second — everyone loves to say, wait, we're, we're disruptive. So people really do love to look at themselves, love to work with a disruptive solution, but you have to remember that nobody likes to be disrupted. Meaning, don't come now and change the whole balance of power of some organization, whether it's large, medium, or smaller, but rather come and be some kind of enabler that enables better, faster. Like you say, it's not moving the cheese. The moment we've really decided on the thing we're doing now — a Cash Cow, we want to sell — or we don't move the cheese, we want to enter softly, right? — Exactly, yes. And then also, one, you don't always take yourself as seriously, meaning, you say, okay, this is what I'm doing, and let's run with it, and maximizing, I do fine-tuning and all that, it's totally fine. And if it works, then you can either double down, or try to replicate it vertically, right? And you can do tons of things, but first of all, look for a moment for the spark of something that works, see that you're generating some value. Now, you don't have to come — in my view you don't have to come and say, okay, so I sell a seat for $800 a month, with a one-year commitment, and then my ACV will be $20K, you can also do it more nimbly. — It's low-scripted, as fast as possible. — Yes, you can also do it fast — I'm really asking, there's a guy, Alex Wist, who I had a few conversations with once, was a developer from Eastern Europe, who said, the moment I reach some MRR threshold, I quit my job as a developer, he founded, according to his product, some 20 ventures, and the most successful one reached around $50K MRR, it's cyberleads.com, and by and large — by and large, and I talked, I dug in — what I'm going to tell you is what it was, what he does. If you're a B2B agency selling development, design, content services, whatever it is, you're basically looking for companies that just raised and are growing, and are in the in-between stage, where they don't have someone in-house, but they do need this solution. He would simply go, export to a CSV, add a few more parameters, including contact, which today you can do with a tool in half a second, and — by his own reporting — that reached $50K MRR, while he does it from all kinds of different places around the world, part of the time — it's just a mesh, you don't have to... I really appreciate the approach and the — from two angles — I might have even done it a bit better, I had a few thoughts I shared with him, but it's just a mesh, you don't have to have some team of elite-unit alumni to build something with some technological moat — you can also create... especially today, right? — Especially today. A moment before we continue — click the link to the Product Builder WhatsApp group in the episode description and join the community. There you can continue the discussion, ask questions, and be among the first to get notifications about new Tachles episodes. We're waiting for you there. And now, back to the episode. So I'm really trying to get to the tachles of what you said. So first you'd choose something you love, you'd choose something more traditional, you called it? Basically, where you can add value there with technology without moving the cheese too much — how do you approach choosing these areas now? And maybe, you know what, we started to build a criterion here, maybe let's continue for a second. Okay, so I can tell you that one of the times I thought about founding something — I first develop on myself, after my last company, I thought I'd found something, I did tons of ideations, tons of very good entrepreneurs, and eventually I decided I wouldn't found it, for all kinds of reasons. One of the reasons, actually, being someone who also does early-stage investments and also works very closely with the entrepreneurs, at the level of... I have companies I work with where the founders talk to me two, three times a day at the start, because I really enjoy the building. I've realized about myself that I'm good from 0.1, and from 1.0 on it interests me less. Once I enter larger organizations and a bit of a layer and a bit of organizational politics, then personally that interests me less, I had tons of years of self-flagellation, or self-something, of why I don't go to like some corporate and do bigger things. And I realized that I love to build. So back to your question, when I thought about building things from scratch — and by the way, as we speak I am building some small thing that I'm quite fond of, plus-plus, for myself — I would really reach out to people, whether it's people I know, and what's more interesting is sometimes the people I don't know, because then they're not biased and they don't say, okay, wait, Danny's nice, or Danny's a friend, or things like that. The main path is with LinkedIn, there are tons of automation tools, or you can do it delicately, and I would simply reach out, and apropos what I said, I really talked to several gray-suited bankers, that's how I saw there a bit — hipsters working at American banks, and I tried to offer them a few solutions at the time. There was no breakthrough, okay? And it's excellent that there was no breakthrough, like what's called fail-fast, instead of going on and saying, okay, this is my mission, and this is where I'm going to waste my time and my money or other investors', or I don't know. One thing about me is that at runtime all kinds of silly ideas sometimes come to me, and I had some idea, and I tried to validate it, and I didn't succeed now, I didn't succeed — not like I succeeded in getting the people to come talk to me. On the contrary, I brought tons of people to talk to me, and they all told me, listen, yes, but. And there were too many 'yes-but's and too few real 'yes'es, and in the end it came to... You didn't strike oil. — Right. So okay, I think in terms of the criterion we pretty much understand it. You started, say you now found a few directions, usually do you run on one, do you run on several, do you just build them a landing page — what does your strategy look like? There was a period I tried to run on several in parallel. I understood, yes, I'm very much a multitasker and very fast, I know how to build very fast. I understood that... since I don't do this full-time and I...

Dani Avitz: [15:27] I have tons of other occupations during the day, so I understood that if you grasp for too much, you grasp nothing, and I decided to focus each time on one thing. And there too, like, not by force — there were times I really forced myself to think about directions, or really to research and dig, and I'd be on all these sites that sell second-hand SaaS's, and then I'd get inspiration, I'd say, okay, they reached, say, $18K MRR, and this is what they do, and I go in, and I see both the product and what they do in terms of go-to-market, and I'd probably do it a bit differently, hopefully better, okay? And so on and so forth. And then I realized that this had already reached a place of almost wanting to please myself, like, coming to find dry criteria and saying, okay, this is traded, I don't know if it's by ARR, by certain multiples, and here's the journey it went through — and then I decided that when it comes it'll come, I'm in no rush, meanwhile I really enjoy being exposed to tons of...

Eyal David: [16:25] How would you do it? Would you reverse-engineer the companies you find? Basically see what... — I'd look at and analyze them, I have to admit I never did reverse engineering,

Dani Avitz: [16:32] and it came to me, let's do this too. There was an Israeli entrepreneur whose work I really loved, but I felt it wouldn't be ethical to try to replicate what he does, so I didn't. And today I say, if it comes it comes, because I have passion and desire, but I also have passion and desire for a million-and-one other things I do,

Eyal David: [16:55] so it's not a top priority right now. — Yeah. Okay, let's really dive into an example anyway. Now, if you were to approach such a thing, which channel would you choose,

Dani Avitz: [17:03] would you basically start marketing this validation? That's a question... it's like, like a house. Where... right, it's a very very general question. By and large I'd do a lot of experiments, not trying to perfect them at the start of the road because you never can... if they succeed, we can double down, but I'll give concrete examples — you can always double down and optimize. There are a few channels I like and that usually work for me. The first stage is, like I said earlier, and if it wasn't clear, LinkedIn outreach. There's almost no company I'm involved in — and I'm involved in one way or another at this point in time in forty companies — that LinkedIn outreach didn't work for. — Wait a sec, how do you do it well? How do you... I'll say, I'm getting bombarded by all these automatic messages, so that's me too, it never worked for me. How do you do it well? So I'll tell you, first of all, once you could — like everything, the excitement threshold rose, and I used to do the automation. First of all, it's against LinkedIn's policy, I don't recommend it, okay? And everyone should do what seems right to them. But like you said half a minute ago, and rightly so, we all get messages that in the best case 60% of them are generated, and in the worst case more. I started this back when there weren't tools of this kind — I'm not advertising here, but we have a tool of this kind from forty-nine dollars a month up to four hundred dollars a month, and each with its use-cases and prices accordingly. I think that more than 10 years ago I had an Eastern European scraper developer and we'd do it with Excels — that brought us a deal at my last company with a Fortune 500 company, a deal of $360K in the first annual contract. And the thing... also the rules were different. Once you could send 80-100 invitations a day. Today that's more or less the number per week, so the numbers are different too. By and large... I'm getting into technical details here, so I'll do this very briefly. Sales Navigator is a LinkedIn tool with very precise filtering capabilities. When you have a thought of the ICP you want to chase after, you send short messages. Usually there are three factors that affect this. One, it's your profile, meaning, usually they respond less, they engage less with people who are recruiters or salespeople, more with CEOs, with entrepreneurs — if it's cyber or things like that, if you happen to be a CISO, or if you're reaching out to technologists, so it's who you're reaching out from, who you're reaching out to, because that's your target audience, and, like, how you reach out. How you reach out also splits into two: there's the invitation, which I keep simple, keep it simple, the 'first name here, love to connect' — I've already sent, I don't want to say hundreds, so I'll say tens of thousands of invitations, that worked best for me. And then, the follow-up message, which is basically where the craftsmanship comes in — that it be too short to not be boring, but not short enough that they wouldn't understand — trying to minimize in advance all the anomalies and all those looking for work, all those who just want to talk to an entrepreneur, all those who are bored at work, those who want to learn, and there are all kinds of them, and it happens, and it's fine, it's part of the game. On average this, when you do it right, brings me — brings my portfolio companies, on average, between three and five meetings, on the face of it the person looks qualified. I'm not saying he comes to pay — from his profile — I'm not saying he comes to pay. Could be he's qualified and then he actually was looking for work. Could be he's qualified and he just wants to do some CPR, so like he's learning, but the person is interesting, you'd... he wants to learn and advance. So that's one method, it's not scalable unfortunately, there are ways to break the scalability, this way and that, but it works. It works, and everyone who argued with me as a friend and like if you do it together, in the end it works more, works less, it works. So that's the first stage. The second stage, and now, here I get into, and it's almost industry-agnostic, okay? Setting aside the B2C side, where in B2C I'd behave differently — and additional ways, you know, it can be starting from all kinds of small campaigns that I try hard not to do, and it's definitely not search at the start of the road, through Reddit and other social. There are places where it's more right to do — I really map, manually, keynote speakers and all kinds of people who are like, we see they're high-profile, that they're at all kinds of relevant conferences, and I try to leverage them. It very much depends on what I'm trying to focus on, I can tell you that right now in my world, of the product I'm building, it's basically around, like, say, leveraging AI to identify trends in social, and ride them fairly fast, and the way I actually do this — so first I started, I started from friends and family, eight guys more friends less family, eight friends, and people I know from the target, who all told me, this is interesting, I'd like to buy this, okay. What do they get in the first stage? So in the first stage I showed them a dynamic demo, okay? And they said, how much will it cost? I told them $549 a month per seat, they told me, I want it — companies we all know, okay? And I said, cool, but that's not what... they'll almost say, like, I know my relationship with them, they'll say yes to lots of things, because what's the problem? So I actually want someone who doesn't know me. So the first thing was to reach out basically with this method on LinkedIn, and it worked. I have another seven or six of these that are basically running, you know, out of the six-seven, by the time I get to them, two won't answer, one will say, but fine, I wanted to check for a moment whether there's even, whether it's interesting. I did a few... I activated a few people I know on Reddit, and got a few more from there. I want to do some paid campaigns on Reddit, I decided to try anyway, and on Twitter, right? Like, these worlds. I don't do email campaigns, I don't do search campaigns, I don't do these things, right? I mapped — there's an option to map on LinkedIn all kinds of webinars that people participated in, so I searched for webinars in the same content world, and then, like, I reach out to them — there are also all kinds of ways to reach them, a more scalable way, it's by email, which I said I don't do, but it's not a kind of cold, because I say, hi Eyal, I saw you participated in this webinar two days ago, listen, this is what I'm going to build, right? And all these things, in the end, from my goal, it's — I set very clear rules for myself, I want, and I deviated from the timelines because of the holidays. That's it, my next question is the timelines, okay? So the timelines are very fast, because my time is my main resource, and I try very hard to prioritize, like, I'm in a year like this, where I have a bit of work-life balance and well-being and a bit more hobbies, because I had very intense years, so I set for myself that I want to have 100 people on a waiting list by the end of the month. I have to admit this was supposed to be by the end of September, but because of the holidays I gave myself leeway until the end of October, and now, you know, I'm flexible, if it's 80 or 60, but it'll light me up, so like, we'll give it another chance. And if it's like three — three won't be, but say if there are only 20, after I made an effort — and I haven't yet made an effort — and after I make an effort, then I need to go back to the drawing board.

Eyal David: [24:27] Okay, so I'll ask a few questions, one sec, it's good you gave an example, that's great. So at this stage, basically, how much time did you say, fail-fast, right? How much time do you actually give this whole thing? If you now failed to get past September, would you basically lock the thing and move to the next one?

Dani Avitz: [24:42] Could be yes, it depends on a few factors. One, what my alternatives are. Two, how much I believe in this idea. And three, it's probably the weighting of the two. Because in the end it's a matter of choices. By the way, I have ideas I put in the attic, yeah, in the basements, and, like, in some drawer, and sometimes I go back to them, and sometimes I say, wow, how lucky I didn't do it, or what a bummer I didn't do it, or all my assumptions and first heuristics were correct one by one, but still, how lucky I didn't get in, because I see that it's already becoming a field where you have to be, like, VC-backed and be all in on this thing. So there are tons of elements here.

Eyal David: [25:20] Okay, more questions. Now, basically I started sending the messages, and I also understood the bombarding-everything, like together basically, in order to reach the September goal, you did it all combined, and basically what's the promise you give them in all these messages? I tell them, listen, this is my background, this is what I did.

Dani Avitz: [25:35] There's a pain I experienced myself... maybe across the board, okay? And this pain is... Could be it's your pain. If it's your pain, this is what I'm going to do, this is the vision, this is my thinking. I'm not going to do 10x on what you're doing now, but I'm going to save you time, and you'll see very empirically that I improve a bit, and I'm building something. Do you want to be part of my building process for a moment — I want to show you the demo, and I'm going to release it to x companies. When I generate a critical enough mass of these companies, then I'll already generate some FOMO, I assume I'll already have mini success stories, I'll have logos, I'll have testimonials, I'll have case studies, and those I'll be able to start leveraging, right? But at the start, so you have on one hand the fake-it-till-you-make-it, that I'm in the world of... If I were VC-backed, then you know, most companies that, like... one of the challenges of companies, of startups that come to big companies — look, nobody ever got fired for buying IBM, right? Like, you want to look a bit bigger than you actually are, and you have to protect yourself in a different way — the self-way — which is the most important thing, and morally, you know, easy, and on the legal level, you don't want to, like... right, you don't want to scatter promises there, but you do — suddenly you have logos, so you have logos of investors, and you have maybe logos of companies that are, like... you know, design partners, right, but nobody's, like, 'trusted by.' So you start to build trust. You start... like, it's a kind of social proof, right? So, like, I think you're very much at the solopreneur stage, so your promises are more modest, and also there's no board now, and listen, if it succeeds, then reach out to procurement and legal, like, it's very... bring the payment, your mesh, or your Stripe, and, like, let's close the deal, or as a start, the first two-three months free, you know how here it's too many constraints, and then if you start generating this initial traction, it creates a fairly fast flywheel.

Eyal David: [27:39] Let's come back — we're still staying in the planning stage, because like you said, you still haven't written a single line of code. Nothing. Let's go back for a second to your Excel, you built a business plan, again, the whole business seems to make sense, and do you already think at this stage about the marketing play

Dani Avitz: [27:53] you'll have, or how much money you'll need to invest, or how does it seem? I think, if I knew for instance that this would be a paid-media game, of acquisition, a game of CAC, LTV and that — less my world. It's less my world, now let's do like this and see what, you know, and where the return is and... like, there are industries where it's amazing and there are companies that'll come and tell you, but that's the beauty, it's all the beauty, you can, like, generate scale in this thing, right? And if it succeeds, you don't raise money, you raise debt, and you... forget it, no, me personally, that doesn't interest me. I'm more... I like... if I look at it in two ways, there's PLG, right? Like product-led growth, and today it's also PLS, product-led sales, and there's also the other side of the equation, there's ABM, account-based marketing. Now ostensibly these were two very contradictory things, but that's not true, because we see more and more companies... I'm talking now about startups, doing, like, PLG, but the PLG is actually the engine, right? That brings the deals, like, of the top-down, because in the end you reach a decision-maker... C-level. And he in a hallway conversation says, hey, did you see this company? He says, oh yeah, like we did self-onboarding to their product, looks cool. Now, when you do this alone as some indie hacker, then many times you can't seep from PLG to ABM, because you need... because you're not enterprise-grade, like you're... it's significant to be enterprise-grade, right? You don't even have — you're not GDPR, and you're not SOC 2, you're not a million-and-one things, but on the other hand, it does sometimes make you seep from pure PLG to services. It's, like, many times I see this as a mini-enterprise of the solopreneur world, right? Like you sell a product at... I don't know, $30 a month, $50 a month, $99 a month, and suddenly you have some proposal of, listen, we need such-and-such customization, and then you become, listen, you suddenly become some mini service provider, right? You can come to them — there are also those who succeed or work on themselves who say, okay, I'll do this for him and then I'll create some cookie-cutter and I'll sell it to all his friends. We'll put a link, we have an episode with Yanir who did exactly that and tomorrow like this — or not tomorrow — he built a huge company. Interesting, we're still in the planning stage,

Eyal David: [30:01] it still really intrigues me, so let's move to the Excel that we saw makes sense — do you do some market research? What does it look like? Even before you reached out to anyone, right?

Dani Avitz: [30:09] Yes, look, I started from the fact that I usually approach pains I experienced personally, and when we experience them personally and we adopt a proactive approach, then we don't say, oh, I'm a victim, I'm in pain, I look to see if this pain affects others too, and I look to see what solutions they use. Like, I don't want to run and invent a category all the time just to invent a category. I just want to show what exists. So many times, like, I already know the competitive landscape, I already know who exists, I already know the B, the... maybe not enough, so I, like, do some more double-down and go in and dig and ask friends, but that's the start, yeah, I must, must, must understand, like, where I stand. Now, with everything happening today, I also know that what doesn't exist today could be ready in another two-three days, and that's fine. One of the challenges of this fast building is basically a moat, right? I, like, you know, once when... Once I talked to someone who asked me what a moat is, so I looked in Google, saw a ditch. I don't call it a ditch, I say something that's defensibility, like, if I open something today, and you can open it tomorrow, and then, like, they ask, okay, so what's the difference between Eyal and Danny? So no, the difference that exists — I didn't position myself properly, or I don't have some barrier here. Once there were more significant technological barriers, once, today the barriers are shrinking, there are tons of companies building their... sorry, their IP and things like that, but in terms of what you and I are talking about, at the heart of it, of let's do something, we're not on Olympus, we're way down at the bottom, so you can... so yes, you can generate defensibility, some moat — the moat could be that I was first and positioned myself as one who's, like... here are all the companies that work with him. The moat could be at the level of the features I decided to do, or there's this model of open startup, right, or all the work-in-progress, where I share each time what I'm doing, and then, like, you can come and there's some discussion. The moat could be that I use the huge data I created and cook it and use it to give some better output. There are lots of moats. That's it — if we go for a second, let's talk about industries and niches, because now I also took this. Could be that really the very fact that I understand the niche well enough, I don't know, because I do... I help a dentist in Portugal — we just talked about a dentist earlier. But I understand their regulation very well. That could be a moat, for that matter.

Eyal David: [32:32] Right, right. So now basically during the choice of industry, beyond it being a pain and relevant to me, I understand it, you look for a moat — at what stage do you do this, or do you set out and say, well, this interests me... You know, I'm a big believer in the approach that says,

Dani Avitz: [32:48] let's start simple many times, because we can always complicate it later, make it a bit harder. Now, there are times when you again, if you go to a company that's VC-backed, then there's the CTO and they're already thinking about the complex architecture and what will be here and which... how we'll register patents and about IP — but if you're a builder, you're not there, you're let's set out and let's see, right? So, like, if I think I'll have some glass ceiling that won't... I don't know, that it's not scalable, it's not even mini-scalable because of technical constraints, say for instance, in order to provide your solution, you depend on some third-party platform, some private server, that has all kinds of limitations. And then everyone has to ask, do I do proxies and scraping, right, and then build some methodology like that, or maybe I talk to them and create a partnership, or maybe I entirely... everyone — or better, everyone with their own approach. Yeah, I also didn't just say a dentist in Portugal for no reason, geo also becomes a kind of moat you can relate to. Right. Which is a very interesting field, we already talked about...

Eyal David: [33:51] Let's not open that up further now. So let's touch on it for a minute — SEO, Search Engine Optimization... what do you really think about SEO today, in our times?

Dani Avitz: [33:59] I don't think it's dead... first of all, I'm not an SEO expert. I don't think it's dead, I think it's changing, like all of us, everything. Danny of today isn't Danny of ten years ago, and I hope Danny of another ten years will be a better version of Danny today, right, we change. So after we've dispensed with this philosophical paraphrase, SEO changed, and we see it everywhere. Starting from Google, like, from Google AI, right, which, like, changes things. And by the way, I see it in tons of companies where basically the number of visits dropped. The organic dropped. The organic, but when you look in Google Search Console, like, the impressions rose, and then you start doing analysis on the CTRs and so on, but what I'm coming to say is that it's not necessarily that the brand dropped — they just saw it in one of the LLMs, in Perplexity, in Claude, in Gemini, in ChatGPT and so on, that's one.

Eyal David: [34:54] So SEO, there's the Google AI, but there's also what you started, what you mentioned, the GEO and the AEO, which is Generative Engine Optimization and Answer Engine Optimization.

Dani Avitz: [35:05] Here's an excellent example, say, of riding a trend. I personally alone know four amazing Israeli teams building tools like this of GEO, that basically know how to do monitoring for you and, like, visibility, of where your brand is in these engines, and then recommendations of what content to produce so that maybe you'll be seen and so on. Amazing, everyone wants to see this now. Slowly we also saw that all the big ones of SEM, SEMrush, Ahrefs, and all those started to invent this thing, but that's a classic example of strong friends who built, they identified this thing — I don't call it hype, because it's real. Or real hype, okay, like, this thing is happening, it's a real problem, it's happening. They identified it, started, and each and every one of them, of the four I know, and if I know four, think how many there are, generated revenue, very... what I'm saying, significant revenue, it's six figures ARR only, eight months, six months, seven months. So here's an excellent example of some pain they experienced, whether as SEO people or as data people who worked at all kinds of companies doing analytics, and ran with it. So if now I burst,

Eyal David: [36:15] we'll also talk maybe really about the niche you invested in, of the headphones, if we have time, but let's talk about the two niches for a second, okay? Which niches or verticals are there today, you think, that are very interesting in light of the current period?

Dani Avitz: [36:28] You made a lot of marketing moves, I noticed exactly as you gave. Yeah, so I'll give you a thought from this last weekend, okay? For a year and something I've been drumming this into anyone who wants to listen, that I think that basically, there are already now all kinds of studies in the US showing that basically there's a growth trend of everyone who's... not... I call it non-technical professions. Plumbers, electricians, welders, carpenters — you see it, like, in the numbers, right? And it's already entered the... McKinsey reports and... it's not just statements. And then you say, okay, I take this, that's one. Now, everyone wants their son to be a big engineer, go, but nobody wants him going around with a sewer line, which by the way is great money. Yeah, as one who's already opened a few... who's had a few sewer backups in my life. So nobody wants it, so you say, okay, first of all, everyone wants it and it's not happening, and on the other hand, there's a scarcity of someone going to work in this. Now suddenly there was an idea by Jensen, Nvidia's CEO, who says that we, toward 2030, are going to open tons and tons of data centers — I don't remember the amounts, but they're staggering amounts, and he says that... I don't remember numbers, it was... how many workers you need for each such data center, but it's insane numbers. But a great sewer line — I understand how to do it. I went to electricians, and I went to whoever builds... so, like, it's something that's the least builder thing we talked about, but, like, up to such a level, I don't know, maybe building systems for people like this, or maybe founding teams like this, like, these are really things I look at, and I fantasize about them, because I won't do it, because I have no connection at all, but I really look, and this last weekend I read maybe some four, five articles about this, and it's on my to-do to keep digging into it, because it's interesting, because I know there's a lot of activity and a lot of business there. So, like, I want at the very least to understand it a bit before it happens. Tell me, what does your research really look like,

Eyal David: [38:26] it really intrigues me, how do you now delve into the topic? I, because I'm ADHD by definition,

Dani Avitz: [38:34] every research of mine starts with some fifty open tabs, and I start... the methodology isn't that structured. Yeah, like, I generate for myself some... either an Excel, or a spreadsheet, or some... Google Doc, or probably a combination of both. Despite what I said, I don't see myself as a macro person, I don't know how to forecast... I don't know, I look at specific points, so I look to see what people better and smarter than me forecast, against all kinds of signs I see now, and to see if I can connect between them, and if I can somehow integrate there and be a small cog in this thing. That's the builder's view. Again, if it were the Danny who looks at the VC-backed,

Eyal David: [39:13] how I now open a category — but in the conversation right now we're not there, right? How do you do it? Because it sounds to me like...

Dani Avitz: [39:21] a simple methodology you developed over time, say, now with all the AI tools. So of course there's reference here to AI tools and deep research, right, and all these things, and I do them too. But I also go into Googles, and I go into... Reddit. Again, it very much depends on industry. But I do, like, really go in and read a lot of Hacker News, and I look at places like Indie Hackers, to, like, see what they're talking about, and I look to see people's pains, and I talk, like, I know...

Eyal David: [39:49] And you also draw the conclusions for yourself, I notice, you don't let it make it easy for you. It helps me cook up insights and, like, do migrations of the information,

Dani Avitz: [40:01] but the decision-making I keep for myself, and I consult with quite a few friends, so meaning, I know quite a few people, so I'll always have someone who's also an industry expert, like, in this content world, and if I don't have him on hand, then I... a phone call and, like, we'll introduce each other, and also maybe it's someone who did investments or is looking at doing investments in this field... I always bring you the counter to reality. I must, must, must have this conviction. Okay, so let's close the parenthesis.

Eyal David: [40:31] I'll give you a few areas. We said not B2C, so I'm skipping, but let's say for a second B2C and then we'll return. There's, for example, a blitz on parenting and raising children, these are things that are resilient to AI, it'll stay — couplehood, improving relationships. There are tons of examples here of lots of things that are humanized. I really liked, if we look, say, at B2B, there's the company Lavorel, I think, that entered on the matter of super-connector. It's a very human thing that'll stay, I liked it a lot. So we talked here really about a lot of professions, like you described, basically field workers, technical professions. So like you said about electricians and that, veteran generation, third generation, immigrants — that's also something happening now a lot. There was the wave of fintech for immigrants to transfer money easily from place to place. Right, and maybe now just, I don't know, I haven't dug into it, but here we go on a B2B idea, maybe it could be how do I basically manage the relocation of my employees, that's happening more, I don't know, in short, there are tons of ideas, I flooded you here. Let's come back... it was at my place, again. Let's come back just to the point of the B2C,

Dani Avitz: [41:33] the company you wanted to mention. Ah, so I said, you know, I look, there are always rules, but there are also exceptions, so I always look at B2B SaaS also in terms of, both in companies I work with and in things I think of building myself and in companies I invest in. And here, the opportunity arose, a good friend, Yoav Markovich, who basically built a headphones brand for rockers called Hooeys. In a year — now this is B2C, and it's hardware, and it's expensive headphones, and all the big no-no's, like, by and large, and here, last year, which was I think his first, and second, sales year, he already crossed $12 million in annual sales, this year already significantly above, and here, and how great that I, like, deviated from the rule for a moment and entered as a tiny investor, yeah. What interested you in this field? First of all, Yoav. Which also comes back — the person. The most important thing, people, people, the most important. In this specific case, I know this venture from the start of the road, we had tons of conversations still... he did, for instance, amazing validation with the landing page, and he really talks about it, and he tells about it openly that he basically sold, like, on paper, a whole lot — I don't remember the numbers, but a whole lot — before he even thought of producing headphones, and this is producing headphones, it's not now doing vibe coding or using some gen-AI like this to make some alpha version. It's significant, it's a production line, and they already work over time, and, like, so here it's beautiful, and, like, amazing.

Eyal David: [43:05] He's a cannon. Tell me, and there you didn't get into marketing at all, I understand, right? No. B2C.

Dani Avitz: [43:11] No, and there it's a game — first of all they do, they know how to work, and another point I'll open a parenthesis for a moment, or a pin, like you say, in a second I'll get to it, that they're already at the stage where they're already not zero-to-one, right? Yeah, like, I also have, I know how to give value, I think, especially to that, but zero-to-one is the most interesting, because there's nothing, there's nothing, so meaning, you just build, not only you, you don't just start building the first floor, you build the foundations. It's the most fun, and in their case, it's like we talked about earlier, it's also a lot of an acquisition game, like, paid, right?

Eyal David: [43:46] And partnership, things like that, so, like, I'm not an acquisition guy. Amazing that you identified it. Tell me, I'm now jumping for a second to another practical thing — it was a very practical episode, until now — listen, there's hi, there's what, less, the world changes — which capabilities do you most recommend sharpening basically in the current period? One, so, I'll actually start cautiously... no, I'll just say, who's the audience, like, always, mainly people from high-tech, right?

Dani Avitz: [44:10] who want to build something now in the environment of this episode? So even though there are vibe-coding tools there, and even though there are... I think that today... I regret that I don't know how to code, even though I did the... I'm technical like this and all that, but, like, I don't know how to code, and on my to-do I have, like, I want to start learning Python for a moment at a basic level, not to be good, but so that we can work with, say, Claude Code properly, right? Because it'll give you a lot more customization and a lot more options, than amazing vibe-coding tools. So for me, I feel this is missing for me, and therefore... and why is it missing for me? Because if I now go to build something, the side that'll complete me is the technological side. Whether I recruit someone or whether I team up with someone as a partner, and it'll always be an equal partner, in my approach it's always, like, equal partners, equal co-founders, so there it's missing for me. So that's first of all, which is, like, an antithesis, because, like, today, why write, why do you need to learn to code? Because there's already... I think you do need to, not... maybe not at the depth level of a few years ago, but yes, you need to. I think that once, you know, today they talk a lot about product, about being the geeky one, you have to be very creative mentally too, I think that in the end, in the end, in the end, one of the things that's true for now, pre-AGI, that they can't take from us, is creativity. We'll talk after AGI, right? But... and now I see a lot that, like, the difference between... like, between success and failure, you know what? Between big success and medium success, it's many times rooted in thinking outside the box, which is something I... like, it's my enjoyment, like, to try to think outside the box and find something, and then to do very very fast execution of it. And if it succeeds, to double down on it, and if it doesn't succeed, then before you kill it, to think, wait, maybe I was wrong, maybe we'll do this, this, this, and in the end, like, to move fast and do lots of actions, and then, like, you tune. So I think that first of all... the ability and understanding that you have to run fast. To run fast and not... you know, there were phrases, right, that if you're not embarrassed by your MVP, it's not an MVP, and all kinds of things like that, right? So okay, let's set that aside for a moment — it's to work fast and roll and iterate, and today a product within two-three days can support more... you know, more integrations and more features and more languages and more I-don't-know-what, and simply not to rest on your laurels, which is a dangerous statement, but, like, I'll set it aside for a moment, roll it on to the developer of the next generation, it's simply to be very very very dynamic and run and not fall in love with your own ideas. It's something that I... I did, I sinned in it a lot, and if there's something I always, like, try to aim for, it's not to fall in love with our own ideas — sometimes we think we have an excellent idea, and suddenly not, and then we give ourselves all kinds of excuses, no, because he's not my ICP, this needs a different ICP, and sometimes the change is small, sometimes the change is huge, and in both places it's a bit of moving the cheese, right? It's whether you move it here or whether you move it from a shelf, or whether you find it in the fridge, but sometimes that's what you have to do. So keep it simple, that's basically what I mainly take from it, I'm a keep-it-simple guy. In most cases — there are times you can't, you know, if you're now building, using these, I have an amazing company I invested in, in the world of bioinformatics, right? You can't be there, you can't keep it simple there. Okay, algorithms and pharma companies and that, it starts complicated and gets more complicated from there.

Eyal David: [47:43] Danny, I think, first of all, it was a very interesting episode — that's it, it's already over? As you see, I'll say something like this, I think we will invite you for another episode, I'd really love to talk about investing in our time, especially early early investing, we can also talk about the future of VC, I think we'll also accumulate more episodes around this by then, so we'll also have interesting topics to talk about, and also if the community asks more questions, then we'll have more meat for another episode. It was an excellent episode from my perspective, what do you wish for yourself in another year, Danny? First of all, it's critical these days that all the hostages return,

Dani Avitz: [48:18] right, and that the war ends, and that we know better days. That's above all the most important. And I should have opened with that. I wish for all of us that we continue, that everyone will want to step out of, like, our comfort zone, basically the fact that people look — and this wasn't the case ten years ago — that someone working somewhere in their after-hours looks at some tool, and says, maybe I'll do something, or what is it, and it doesn't have to be technical. There are guys who suddenly look and do real-estate projects, and there are guys who do... It seems to me, stepping out of the comfort zone. I... I'll give a personal note of mine for a moment. At age 40 I decided to step out of the comfort zone, and I did a few things, and one of them is I did a skipper's course with my wife, and this thing fills me in a way I can't even overstate how much it fills me, and of course my hobbies, so I take with my friends — you're invited, we can do it a couple of times on a sail already — so with friends, and it brings different conversations,

Eyal David: [49:18] and to be in motion all the time, I think. So I wish for you to continue exactly like this, and all the things you said, I share them, and it was really fun, Danny, and we'll also put a link to your LinkedIn, so people can get in touch with you. Let's go, whoever wants to is welcome.

Dani Avitz: [49:34] Wonderful, let's go, bye. Good time.

Eyal David: [49:38] Hi friends, thanks for listening. If you found this podcast valuable, you can subscribe to follow us, of course to additional episodes on Spotify, Apple Podcasts or any other app, and of course if you didn't find us on some app, I'd be glad if you'd write to us. We'd love five stars on every platform and for you to follow us, so that more listeners can be exposed to us and find the podcast. You can also find the previous episodes on any app or on the YouTube channel, we have links in the description. Until next time, let's go, be efficient and bye bye.