Transcript: Not Every Business Needs to Be the Next Startup | Tal Niego Yassur (ehouse)

Opening and getting to know Tal

Eyal David: [00:00] What's up? All good. It feels like we've already had this conversation several times. Totally. And how much is it, hi Tal. So we're at Startup Nation Central, and thank you for hosting. Tell me, it's really fun. We came through the Sif, we talked about it. Totally, it's so stunning here. Totally. So, tell me, before we get to talk about ehouse and everything, all the things we thought about,

Tal Niego Yassur: [00:23] tell me about yourself in a few words. So I'm 42, about to turn 43. I have two stunning kids, Leni who's nine and a half and Dandon who's seven, he just celebrated, I live in Ramat HaSharon, two gorgeous golden retrievers, a good relationship and this kind of stunning second chapter that fills my heart anew every day. And I try to start my mornings in the fields, as you already know. And I always start with that, because once, a year ago, I would start the other way around. I'd tell you what I studied, what I did, what this, what that, something like that. The last two years taught me where you start and what the priorities are. So that's my foundation today. Because what else changed in these two years? I think that once your foundation, your home, you devote your energy in all the right places, not just at work, not just in your career, not just in that, everything gets much better, including work, including the company, including the business. I think what we all learned in these two years is that you know, in the end there are lots of important things, but then in one moment you get a moment of clarity about what's important and what isn't. All this imaginary pressure we live in, emails, matters and so on, real pressure, like very stressful, banks, stressful. But in the end, you aim as best you can, you need to enjoy what you love, do the best you can, put your energy into it.

Eyal David: [01:54] Okay, we need to dive into that more deeply, but really, when did you start your entrepreneurial path, what did it look like? The truth is I was born, so really, I absorbed it at home, from my grandmother,

Self-employed since 22: tennis, interior design and the grandmother who built a textile empire

Tal Niego Yassur: [02:08] and then from my father, and I've been self-employed forever, I started at 22, I set up my first licensed business. Before that I was a competitive tennis player, an outstanding one, so that was what I did until the army, including in the army. And right after my bachelor's degree I set out on an independent path, I studied a bachelor's in interior design, then a bachelor's in business administration, specializing in entrepreneurship and innovation. But my first entrepreneurial business, at 22, an interior designer, I was very, very good at marketing and business and so on. Half a year after I opened the office, a 22-year-old girl, I already had 11 projects, I hired people but I was only starting to learn the secrets of the profession, like what you actually do. That taught me a lot, a lot. So I really, and since then I rolled into startups I founded and companies, partly operations, an e-commerce brand, ehouse, better to talk about that. But along the way I was an employee for half a year, there were bets in the company on how long I'd last, or my boss would last. It won't last long, but I really love building things. So fill in a few gaps before that. What did your grandmother do? My grandmother, of blessed memory, passed away last year, she was the closest to me, and I learned a lot from her and everything. She founded a business sewing bras. You have to understand, her parents, say, they weren't, she as a girl in Jerusalem, and so on, they didn't send her to study, she really, really wanted to study, and they told her, in middle school, and back then women didn't study, they told her, you're not studying, you're going to work, they sent her to a seamstress so she'd learn to sew bras, and she came home as a girl, just in eighth grade, like, not eighth grade, what is it, 13-14, and said, why should we sew for her? I'll teach you what she taught me, and we'll set up a business sewing bras. A girl taught her whole family, her father, her mother, her sisters, one was a sewer, one was a cutter, one was a distributor, one was a seller. Over time it grew and grew and grew, and became a huge textile business, that my father and the brothers' brother joined the company, took the company public, but it's really the entrepreneurial mindset of doing things with your hands, and taking risks, and building, really building, you know, in south Tel Aviv, stores, textiles. It's really hands-on, that's what I'm hearing, and then it also connected for me to tennis, that's also hands-on. Totally. So how did you get to tennis, and what did you learn there? What did you take from there after a career like that? Wow, I think there are always lots of parallels between tennis and entrepreneurship, to life in general, but certainly to entrepreneurship. You know, tennis is the sport, in my eyes and in the eyes of many, one of the hardest there is, physically too, and it's getting more physical every year, as the levels there rise, but also mentally, and also you're alone on the court. That is, you're responsible for failures and successes while the whole world is watching, and all the... and that's something very connected to entrepreneurship in a certain way, or to responsibility, or to being a company CEO, or being alone at the top. But more than that, the strongest lesson learned, the strongest lesson learned, is, there's something in tennis, that it's a point, and another point, and another point, and a set, and a tournament, you never rest. And it demands a kind of mindset from you, that if you lost a point, go to the next point. You won a tournament, be happy for a moment, the next morning you start a new tournament, that's how it is in entrepreneurship too. Statistically most players lose many more points than they win. That's the statistic, that's how it works, which is identical in entrepreneurship too, and you have to recover from it, and if you lost points it doesn't mean you'll lose in the ranking. And I think, most importantly, and to this day I use this, in tennis there are days you come to practice and you don't hit. It's not a good day. You can't walk off the court and go home. That's not how it works. Those are days you return balls, and this returning balls, it happens also when you get up in the morning, you don't feel like it. It's not exactly the day. You can skip going to the beach, or fold the day, which is also fine. And there are lots of days when I tell myself, but these are days of returning balls. You play calmly. You answer emails, you move things forward, you're not on that kind of day. These are things that accompany me to this day, and more, you know, lots of things. It's like a very, very strong mindset here, I really see the parallels. And would you say that...

Eyal David: [06:45] What's the thing you feel most, again, look at what you've done so far, really, what's the thing you took with you most, out of all the things you just listed? In tennis specifically or in general? Yes, yes, yes. You must not grow, I also remember that as a startup person. Like, there are situations where you... totally, it's a roller coaster. You, you have a very big win, and then a few lows, a few customers who left, a few this, and then that's part of it, it's these cycles. It's kind of, in the end, as long as the general direction is moving forward, and that's the way, like, that's the thing. Like, you can't only succeed, you can't, and you don't get worked up by the lows and the failures and so on, so I think,

Passion and resilience: what Tal loves about entrepreneurship

Tal Niego Yassur: [07:34] now together with you, that one of the things that parallels my entrepreneurial path and also tennis, and maybe I probably learned it from tennis, I got into tennis because I really loved it. I started at a late age, 13, I pushed myself there, and my parents were really not the pushing kind, on the contrary, leave it, why do you need to be in the sun and so on, it's really, when you love something a lot, when you enjoy it, when you enjoy the game, when you enjoy building, when you have the passion, then your survival and your ability to contain things is much stronger, the resilience is stronger. So what do you love about entrepreneurship, then? What's that thing that... wow. No, I'm crazy about entrepreneurship. Like, there's something about entrepreneurship in my eyes that is the source of life, optimism. You build worlds, you build worlds out of things that don't succeed, you build worlds out of experiences of, you know, entrepreneurs usually, out of failures, out of problems they run into, they build a world out of it. Something about building a world, building a product, it's exciting, it activates the mind, it's almost like, it's between Lego, I also build lots of Lego, I build Lego, and sudoku, and this ability, by the way, and it has a very big parallel to planning, architecture, very much, it's like, you move, move, move, move, until something connects, and then another iteration and another iteration. Look, it's something very exciting and very satisfying. Mostly I love the journey, I have to say. It's not something that has a start point and an end point. A company, a business, it's something that's always changing, always requiring new things, new capabilities.

Why you shouldn't go into entrepreneurship for the money, and what ehouse is

Eyal David: [09:17] How much meaning does money have in the story? Define it. Exactly, I heard Adam Neumann, I don't remember, with Eran Gefen, so he gave some gem there around vision. Basically, do something you're passionate about, basically do something that has big impact, that you know how to identify, and don't worry about the money. How much meaning does money basically have?

Tal Niego Yassur: [09:41] I don't think there's, I mean, if you go into it because of the money, don't do it. Really, by the way. Really, really. I, every venture, company, business, something I did, it was never for the money. And at the same time I'll say, I'm a material person for whom quality of life is important, I love going on vacations, I love living in Ramat HaSharon, which costs money, and that's fine, but you don't, there are better ways to make the money. In general I think this life is too short to do things only for the money, so if there is, cool and great, and if there isn't, first of all do what you love. I know there are entrepreneurs who found companies of one kind or another mainly for the economic sense, and that's possible in certain fields. But I will say from what I experience, and I have very close conversations with my friends, it just makes it so much harder, and frustrating, and unfulfilling, and you know, two things will happen, I think. Either you'll choose something, and I've done this too, you'll maybe find yourself doing something you love less because of the thing, or you'll put too much logic into the thing to justify it, and in the end maybe you won't do it the way you wanted. Totally, it also kind of doesn't give you that it's a driver, you're only thinking about the turnaround, about the money, about this, it's not, it just really makes it harder. If you don't enjoy the journey in entrepreneurship, find something else, because it really, you'll just be miserable, and it's hard anyway. Or miserable. So tell me a bit about ehouse. So we founded ehouse almost six years ago, and basically we're building a home for e-commerce entrepreneurs, or I say small businesses that have physical goods and sell online. And we basically built a platform that has two sides. It has one side that's basically real-estate and logistics with services, in the really physical world, I'll expand on that in a moment. And the other side of it is basically technology with software we developed and are still developing. And on the physical infrastructure side we built, that's basically warehouses. In Israel today we have a warehouse in Tel Aviv, in Rishon, in Haifa. In the past we also operated in Berlin and London, and I hope we'll go back there very soon. And we basically rent people small to large storage units, that they can rent according to their needs every month. It's basically a renewing subscription, a monthly renewing subscription, letting them grow precisely as needed. It starts from a locker of a meter by a meter by a meter up to warehouses of 300-400 square meters, where you can take for yourself a managed independent warehouse, and you can look at it really like data storage. That is, businesses that have physical inventory have seasonality. Almost always, Black Friday and so on, a summer business selling flip-flops, tea that sells in winter and so on, war, no war. The ability to shrink and expand according to your inventory is critical, it makes you much, much more efficient. So that's really, that's the physical side of the thing. On top of that, in these warehouses, it's basically a place where you can store the goods, you can come work from there, operate your company, your business yourself, or we, our team, offers picking, packing and shipping services. We do it all hybrid. The first in the world, I believe, to do it hybrid. That means you can always do it yourself, store and come and do it yourself. Always do it with us, store and our team will do it for you. We do everything in between. That is, you want to do it Sunday and Thursday and have us do it the rest of the week, great. You flew abroad, we'll do it for you. You went to reserve duty, there's a busy period and so on, you went on maternity leave, you went on maternity leave and so on, we'll support you. Beyond that, and we basically sell packaging products, branded and unbranded, all the shipments go out through us, and that means we unlock a small or medium business, and basically allow it to ship with any shipping company it wants, no matter its volume, whether you ship one unit a month or 5,000 a month, you can switch between companies, we know how to recommend which company will be better for a fragile shipment in Dimona versus... In short, you called it a home,

Eyal David: [14:06] but basically you do everything that I as a business owner don't want to do, that's what went through my head when you started listing it, right? Exactly that, it comes and says, deal with, you founded a brand because you love padel,

Tal Niego Yassur: [14:18] and you're passionate about it, and you know how to market and create content and deal with developing the product, leave us basically all the grunt work behind the scenes, and we'll support you, and that way you'll basically be able to grow and scale, you'll be able to devote your time to things. And it's even flexible, because hey, if you feel like it,

Eyal David: [14:34] come basically take it, basically take it, and when you don't feel like it, then... totally. Surely with seasonality when businesses go down, maybe you see them coming in more, because they want to cut expenses. We see them mainly at the beginning, the beauty is that we, a lot of times we,

Tal Niego Yassur: [14:51] businesses approach us, we approach them, and they say, no, no, we're too small, and no, you're not too small, you can come, take a shelf, take a locker, do it yourself at first, and then you really see it, it removes some of the fear, of the worries. And the second thing is that the businesses, the micro-brands we serve, these are small to medium businesses, a lot of times still, even if they don't want to do it themselves, they'll want to start by doing it themselves, they'll want to talk to the pickers, they'll want to come in and do some of the things themselves.

Eyal David: [15:23] The quality assurance, handling returns, and then they'll want us to handle the returns, like... that's really interesting, you know, because I thought about the path you took, that you mentioned your grandmother, yes? That she basically probably went through every, or someone in your family, went through every position in the factory, right? Or in the business, right? Totally. So here you basically give the option to go through every position, but not, right? So how are the businesses you see being built today basically, is it better basically that I focus on the meaningful thing in the business and not on all the trenches, let's call it?

Focus on what you're good at — and own the numbers and marketing

Tal Niego Yassur: [15:59] Absolutely, once you focus on what you're good at, on what you, where you have more contribution, then the business grows and expands. Like anything, by the way, you know, in the end as entrepreneurs and solopreneurs and so on, you're required to do almost everything, customer service and so on, but you can't. So if you focus things on what's easier for you,

Eyal David: [16:21] and outsource the rest, then the growth will necessarily be better. But is there a certain area where you say, wow, entrepreneurs kind of put it aside and it's actually worth focusing on? Just, I'll say. It was very easy for me with the whole tax thing in my business, always, to put it aside and not deal with it. But actually when I understood it from the inside,

Tal Niego Yassur: [16:39] like, it had a lot of meaning for my business. A lot. So by the way, yes, on finances, the more that as business owners you master the numbers, okay, you have an accountant, and sometimes there's a comptroller like that, and sometimes your partner does it, but you, anyone who's inside the company and is a leader, or a business owner and manager, they have to understand the numbers all the way for a second, but really at a resolution, and in e-commerce it's critical, because you have lots of moving parts. It's not SaaS, it's not that easy. How much the carton costs, how much the shipping costs, and how much the returns cost, and lots of added cost you don't always calculate, and then you see lots of businesses moving money from pocket to pocket, but not really making money. You have to master the numbers. The second thing is marketing. Lots of businesses outsource to campaigners. I'm talking about paid, let's just talk about it. Yes. Paid. By the way, paid, and I'll also say content creation, also content production. With paid you can outsource, but in the end you, as a business owner, you know it best, you have to understand what it means. You have to understand what LTV is, and what each number means, what your costs are, what, how it looks. You don't have to do it by hand, but when you're running the conversation with your campaigner in the end, it makes it much better. But also in content production, I noticed, even at ehouse, there are people who are amazing at creating content, but you have to fine-tune it and explain to that person who comes to create the content who your customers are, what they want to hear, what the tone of voice is, what... that's super critical. So I think those are two areas that a lot, sometimes people are a bit overlooking, meaning they do a kind of fire-and-forget and think that...

Eyal David: [18:27] Maybe we'll explain why it's critical, because maybe it's very clear to us, but let's say for a second, because first of all it's the fuel for the business, so like you can't neglect it and basically also put into content creation, in the end what difference does it make, right? In the end it drives traffic. And if it's not a bomb, then how hard is it today to stand out above the noise, right? So like if it's not excellent, then how will you take it forward and how will you reinvent yourself when you need to. The second thing is that you also don't want to be in your vendor's hands, right? Like if you decide to switch, then you need to understand, what basically is the thing, and replace it like a puzzle piece, like I said, hands-on, right? Totally. So okay, in light of all this we'll soon talk about business owners' challenges, really interesting, but what's the thing that occupies you most today?

The shift to profitability and scaling the technology

Tal Niego Yassur: [19:14] The thing that occupies me most today is how we changed our growth model in the company, and today we rely on profitability. We started as a bootstrapped company, we raised eight and a half million dollars from VCs, and today we rely, our growth rests on the company's profitability. That's a completely different game, it changes lots and lots and lots of things, decision-making and so on, so one is bringing the company to a place where it's both profitable and stable and organized, and profitability of the kind that also enables growth. I'm not a very big believer in companies that are profitable, but I love companies that are growing and big, forget big, yes, but that have some kind of model that's solid and also lets the company make product progress, development, global and so on. That's one, it occupies me a lot, and the second thing that occupies me most is related to the second side of our platform, technology. We're very busy, I'll expand on it in a moment, we're very busy today with how the company keeps expanding without depending on its real estate, its physical infrastructure. How do you bring more and more customers, more businesses into the platform, without the physical dependence on spaces, on real-estate spaces? That was always the challenge of ehouse, we're very happy about the real-estate part, it creates lots of added value and competitive advantage and lots of things for us, but it's a puzzle to crack. The other side of the platform is software we developed, that we set out to develop only after we understood at all that it needed to be developed. Basically because our company operates in a way that's a bit different, it serves micro-brands and not big brands, all the needs of those business owners are completely different from a brand that sells 5,000 products, from how they manage inventory, and how they do post-purchase, and how they do order management, and how they pick a thousand and one things. And that required us to develop software dedicated to those small business owners, which nobody serves today, because they're kind of not big enough. On the other side, we as a company, and the operation and the operations are very different from a regular 3PL, from a regular warehouse, because we pick from lots and lots and lots of small warehouses, it's not one big warehouse with shelves, imagine lots of pickers running around, so that required us basically to develop a whole system that's designed for us, for our members, and we're at a stage where we want to understand for a moment how we use this software, it's excellent, and it serves all our members, and also our sites, and how you take this thing and scale it, how you also let a person sitting in a warehouse in his home in Dimona, or in Miami, or whatever, use the same technology we developed, and manage his inventory with it, and connect with it to the shipping companies, and do the post-purchase, and the returns and so on, without physically sitting with us in the property.

Eyal David: [22:16] Okay, let's put things in order for a minute. First of all, when you talked about that, I remember that Marriott, exactly the hotels, they don't buy the properties after all. Right, they work through franchising. Yes, which is probably a much more successful model, I can understand why it occupies you, and the second arm, of taking the technology and basically distributing it at scale, is also very clear to me,

Tal Niego Yassur: [22:41] there's enough value in it. You're asking. Yes. That's a good question, I think there was always a question about this, we always believed yes, and today we believe even more that yes. The reason is that today we see many more entrepreneurs and businesses who don't necessarily set up their stores on Shopify, or on Wix, or on WooCommerce. Every day we run into more and more people building the platform, their store, on Lovable, on Base44, Claude Code and so on. Setting up the store is the easier part. Now, when you did it, say, on Shopify, the whole back end, you already got it with Shopify, and still things were missing. That is, still, even though you built it on Shopify, our system had advantages. We help you manage it multi-shop, you can work on Shopify and at weekend fairs and in physical sales. There are a thousand and one advantages there. But all the more so, when you build your store yourself, the storefront, the whole back end is super complicated. Now, it's not that you can't build the order management system yourself. And this week I had an interview with someone who did that. Technically you can, and it's easy today to build, the business logic involved in this thing, and it's such a complex product, with APIs and calls to the shipping companies, and order management, and what did arrive and what didn't arrive, and dashboards and so on, and it needs to interface with the inventory app and so on. That's the complexity, and that's where we have a huge advantage, and when I look ahead, as more and more and more of these start to appear, they'll need platforms like ours that will give them the back-end support. So does it have value? Absolutely. And today, much more than ever.

Eyal David: [24:26] That's interesting, because just a second before that, we talked about it, you mentioned those places in Europe, that you no longer operate in, you said, wow, I want to go back there. Yes. So it's like a play that goes together basically. Yes. Because you do want to open more physical places, because it has meaning, and it also has, we talked about a moat in our conversations, right? Right. So basically the thinking is also to gather these people, also so that in the end you can convert some of them basically to physical. So that's a great engine, right? Exactly that. Once you basically do onboarding

The franchise model and lessons from Berlin and London

Tal Niego Yassur: [24:56] of yours to your software, you basically start to see where it's worth setting up locations, where there's a cluster of small businesses that need you to set up, and then you can open a small hub there at first, just for collecting shipments, and then grow and expand. That's what we did in London, by the way, we didn't set up a whole building like we did in Berlin, but a smaller store of 300 square meters, that served a building of warehouses, where the warehouses weren't ours. ehouse is a company whose vision was always to grow on a franchise model, speaking of Marriott. We had a pretty big understanding that we'd seen better and bigger than us, like WeWork and so on, and what capex is, and what investing in real estate is, and we didn't want to be there. And then we said, wait, but we have lots of business logic and know-how and technology we developed, and the idea was basically, and still is, by the way, to sell the software to a local franchisee who will basically operate the warehouse himself with all the... with the ehouse brand and the ehouse technology. And I'll say that with great caution, yes, it's something that was in the works in Europe with a franchisee, and we decided to wait with it for a moment until the company in Israel stabilizes, but it's definitely on our roadmap, for the very, very near future. Lesson learned from Berlin and London, where we operated ourselves, and it was super hard. Like, we underestimated, I mean, we thought that an e-commerce entrepreneur in Israel is the same e-commerce entrepreneur in Berlin and the same e-commerce entrepreneur in London, and his needs are the same needs,

Eyal David: [26:34] they really are the same needs, but the whole market around is different, and the mentality is different, and in the end you need to be truly local. That's it, it kind of takes you to the advice you gave earlier, that like focus on what you're good at, so like as a start, when you enter a market, focus on what you're good at, and then really start building the more local part, right? Totally. Like you're saying that I really need to understand the market.

Tal Niego Yassur: [26:58] So I think it's two agendas, either you grow from market to market slowly and you establish yourself in a market and develop and solve it and so on, and then we'll move on to the next market. Like you see most companies doing, and rightly so, because it requires resources. You don't see many companies starting in the United States and within a second also jumping to Europe, and that doesn't happen much.

Eyal David: [27:21] Certainly if you have something physical,

The global vision: turning a local business into a global one

Tal Niego Yassur: [27:24] it's just that in ehouse's situation it's a few things: one, there are lots of small e-commerce entrepreneurs and they're scattered, and then you need to open quite a few hubs to serve them, it's like antennas. Because in the end we serve small businesses that don't ship much, and you want as many of those as possible. So it requires you, it's not setting up one place and... that's one. Two, we deal with micro-brands that are local, and our vision is basically to turn local business into global business, and basically weave some network that works together. What does that mean? It means that businesses from Israel will be able to export a pallet of twenty Israeli businesses, and the guys in the warehouse know twenty Israeli businesses and so on, and together this pallet will reach ehouse in Berlin, and there you'll be able to sell it, and from Berlin it can also reach London, and how you connect England with the EU with the United States and so on, which are different markets and so on, so that's the idea. Now, we thought we'd be able to do it ourselves. I mean, we knew in advance it would be very, very hard, but you know, you start and you hit walls and you need to. It's very, very hard. I mean, you need someone local, for whom it's also theirs, who isn't just a partner, but an owner, in order to... no, that's a really interesting vision, I didn't know it. Yes. Also because I thought, well, probably in Israel it's less interesting to take it outward. But you're thinking about it, it's not just loading a container, it's also the matter of marketing and marketing together basically as one product, or one brand, the thing. Totally, not even just the container, you know one of the hard things about moving from place to place is releasing it from customs, and you need an entity that buys the goods and releases it. That's operationally not simple, and it's not just shipping in a container. That's one of the things we believe we can solve, and like everything we did at ehouse, there's something about working together with a community and using your buying power, it helps the whole community and every single member lower their prices, work in a more efficient way. So we do that in everything related to shipping and cartons and storage space. In the end, you seat lots of people with an identical need in the same place, and we think it can also be done at global scale. Surely AI helps a lot there, right? Probably? AI helps a lot there, up to a certain front, I mean, AI is great for us, again, because we have lots of moving parts, lots, like both in the physical world and the software, and lots of data moving from place to place, lots of businesses. It's amazing how much it improves so many things in the company, and there are places it doesn't improve, and the wisdom is basically to understand for a moment where you can use it and where not. I have to say again, that you know, when we started, there were big periods when they said, we're staying away from companies that have assets, hardware, real estate, operations, services, it was like a big no-no, and today everyone agrees that on the contrary, precisely when you have a company that has technology and has AI, but also has a component that's operational, physical, then that gives you a very, very clear advantage, and you can't be replaced.

Eyal David: [30:42] I notice something, a bit like what you said about interior design, this matter of precision, precision, precision, precision, I keep hearing it come back. Like, you talked about AI, where to use it and where not, obviously that occupies everyone, but, by the way, it's probably also one of the things that occupies you a lot, maybe you'll expand on it later. And when you come to be precise, and you talked earlier about small businesses, that nobody serves them, or doesn't serve them enough, there's almost no infrastructure for them, because you see more than in the past basically small e-commerce businesses popping up?

Why layoffs and AI are creating more small businesses

Tal Niego Yassur: [31:15] Yes, absolutely. It's already, you know, it's a phenomenon of a few years, as we see. Before COVID, yes. Before COVID, and then certainly during COVID. You saw it too, by the way, also in 2008, in many, in many crises, 2008-2018, like, many economic crises there are, but today, with everything happening in AI and the waves of laid-off people there are and so on, you see many more people who either need to go independent and go back to what's called, what I call economics, the ABC of economics, buy for one shekel, sell for four, like, that's one, and I think also today people understand they want to deal with things close to their heart. You see it in businesses too, we see it in people around October 7th, who started setting up businesses that commemorate the memory of the story, of people they know, of people who are loved. I mean, people want to deal with something that fulfills them in the end. So it's two currents happening now, or three, it's, you know what, it's basically two cases. It's a wave of people who are laid off, whom AI will or won't replace, or will do enablement, like, it's just much easier today. It's much easier today to set up a business, and to be a much more efficient person with a fleet of agents or systems you build for yourself. And also the matter is that people in the end want to deal with something they love, and this lie of going to work at some giant company, and there's the safe income and so on, for quite a few years already people have understood it's not like that, but now we really understand that you no longer have ten-year careers at the same company.

Eyal David: [33:03] You need to take care of yourself. That's it, I heard, I talked with a friend this week, and she told me something very, that it's even very dangerous to sit as an employee and not start taking care of your additional income.

Tal Niego Yassur: [33:16] Very, very. I believe that I always had it, and I saw how it moved me forward. The more you build yourself a portfolio of income and small businesses that's diverse, that's the safest thing in my eyes you can do for yourself, certainly in a world that's changing so fast. I saw it in the COVID crisis, when I had just founded another company, but I had two more small businesses running, and I could make the shift. I couldn't during COVID, it was pretty clear to me that I couldn't keep building the startup I was building, not to run to the world that was more or less closed, but I had the e-commerce business, so that's what saved me and my household's livelihood. And you see it time after time after time after time after time after time. Once you have a relatively broad infrastructure of occupations, consulting services, selling goods,

Eyal David: [34:08] you name it, then you'll land on your feet more that way. So that's it, I really wanted to ask you earlier, which e-commerce business, you had a few I assume, but which e-commerce business you had was successful? The truth is I didn't have a few, actually, e-commerce is a walk.

Tipiz: the side business that became ehouse's engine

Tal Niego Yassur: [34:21] That what you did, and how did it succeed? Yes, a business called Tipiz, that sells wall stickers for home decor. It's something that started as a side business, when we designed the room of our eldest daughter, Leni, and we got stuck on a product we really, really loved, and we took the franchise for this product in Israel, it was an American company, but it was out of a passion for building, really, like I just wanted to build something, the speed captivated me, back then I was working on a company called EasyBuild, in the renovation world, and a startup, and fundraising, technology, etc. etc., a whole complexity, and then you set up an e-commerce business, very easy, like the start of it is very easy, you import goods, you this, you set up a store on Shopify in two days, you start selling, it really turned me on. But afterwards, you understand that doing the scale is harder, and all the day-to-day operations are hard. What happened, it was something small we ran from our home storage, and in COVID everyone was stuck at home, and it just grew at a dizzying pace, and we needed to find solutions for bigger storage, for shipments, back then we did the shipments ourselves, yes, like,

Eyal David: [35:32] driving it around at night.

Tal Niego Yassur: [35:36] Couriers, we started working with a shipping company, so they come to your home, but they come like once every three days, once like this, really hard, rates, matters. And we understood we wouldn't be able to grow fast enough if we didn't find better solutions, and that was basically the beginning of ehouse. I mean, the beginning of ehouse was meant to serve Tipiz, from the understanding that there are surely a few more small businesses like Tipiz that need the same, that have the same need, and if we put them all in the same warehouse, we'll be able to grow as a community. And Elad and I, Elad is my former partner who's no longer part of the company today, but a very big part of the company today, even when he isn't there. When we started ehouse, we started it as a solution, I mean, within two months of when the idea was born, there were already the first paying customers, we ran forward very fast. That's given, basically. No, actually not. No, no. Like, Tipiz, yes. But customers came into ehouse even before we finished the first site, which was still a construction site. Were those basically people from your network, from e-commerce, or did you just find them online? We found them online. Like, we published it, and among friends, and it was, it was also the COVID period, everyone needed a solution. But we started it for, because we thought it would be a good solution, we invested the money ourselves and set out. It wasn't from a place where we were looking to found the biggest company, or raise money, or we did some kind of, we talked with lots of people from the industry, and there were reactions this way and that. It'll work, it won't work, it's been tried before, all kinds of things like that. They won't want to sit together because they'll copy each other, all kinds of things like that. And we said, okay, so instead of starting from a building, we'll start small. A small unit, and we'll grow from there, and that's the best thing we did. And then we started small, we filled the first unit within a month, took another unit, it also filled up, and the technology only started to develop later. I mean, we started developing technology, at first we built everything with masking tape, Excel sheets, off-the-shelf products, somehow this thing held up. When we passed a million dollars in revenue after a year, it no longer held up, and then we had to develop technology.

Eyal David: [37:52] But that was amazing, you build in iterations. I caught something here, yes, we'll continue, we talked about precision, precision, I caught something here, like in my head, when you talked about stickers, I said, okay, if she needs, like, if she has a space problem and so on, then she sold lots and lots of stickers. Also stickers are an amazing business, like both in terms of shipping, and in terms of storage, so no, so if she had a problem. That's it, take me there for a second, what does it look like in terms of numbers, how far did you get there, what does a market like that look like? Look, it stayed a small business,

"Real business": the segment nobody bothers to serve

Tal Niego Yassur: [38:19] it's not, what happened is that basically it grew in COVID and at the same time ehouse also started. So at a relatively early stage I left the business. Neta continued to operate the business and she basically ran it and led it forward. Relatively early on I could no longer hold both ehouse and be involved in Tipiz, and Neta did an amazing job there. And it always stayed a small business in not-big numbers. I think out of a perception, and out of a perception we see a lot in the businesses at ehouse, that it was very hard for me to accept at first, I didn't understand it, from my point of view, wait, how does it work? Let's make something huge, let's make some company. And I learned that most business owners and most brand owners don't necessarily want to be the next Mix & Styles. They don't, sometimes you open a boutique bookstore, you want to stay a bookstore, you don't want to be Steimatzky. And the reason for that is that these are people who rise out of a passion for something, that we opened our store because we loved the product, the engagement and the day-to-day. Once you grow and become a company, a big brand of ten employees, 20 employees, you no longer necessarily deal with what you love, you're required to deal a lot with financing, a lot with marketing, a lot with managing from above, taking risks, pressures and so on, and I discovered that most people don't want that. And that required me to get on a plane and interview dozens of people in London and Berlin who are our customers, and understand for a moment, is what I see in Israel happening there too, why don't you want to grow? And people sat across from me and told me, because we love dealing with developing the product, we love dealing with the day-to-day, we don't want ten employees, it's not fun for us, it's not good for us. So to your question, about Tipiz and what scale and so on, one, I really don't remember, because it was COVID and I don't want to just throw out things, because really, really Neta did all the development work there and amazing work, I don't want to mislead or take credit for it. But I will say that this is the segment of customers we serve, I call it real businesses, real business. It's a kind of segment that in my eyes is overlooked, it's this kind of segment of people who sell, who become a real business when they sell 200-300 a month, which isn't a lot, but that's roughly the stage where you're already a business and viable, that can at least pull your own salary, and until you reach, say, 3,000 shipments a month, okay? It's small, in US terms it's tiny, but there are so many of them, lots of them, and precisely they don't have the solutions. Because most companies don't get up in the morning to serve them, they're not interesting enough to anyone, if you're SaaS, you can't serve a company like that, it doesn't have, happily. We found the right business model that lets us build products for them, and also lets us be a company that's solid at the level of its unit economics. It's a segment that's amazing, for this segment I get up in the morning and this is the segment I want to build a whole ecosystem for in the end, like from a school for real businesses to podcasts for real businesses, it's a segment I really believe in. I don't, today, I don't believe that every business will necessarily be, you know, the next exploding brand, no, not necessarily, it doesn't need to be. So okay, I used it as a segue, if you noticed, with Tipiz,

Eyal David: [41:59] because I wanted, first of all something interesting you said, it kind of touches on what you said, we talked at the beginning of the conversation about basically taking local businesses and turning them global. Interesting to know whether they also want that, in light of what... and then there's a matter of mindset in general, and choosing the right ones is a challenge. Right. And the second thing is, you basically went, you did basically go a bit like grandma basically through the different departments in the company, right? Totally. So tell me a bit what... Grandma Rachel, by the way, I don't think I mentioned his conversation. Right, you asked about it. Yes, yes. So which, which, I won't go to challenges, what kind of businesses do you see, in which fields, that are more successful and less successful, first of all?

Tal Niego Yassur: [42:47] I think it really depends on the period and the seasonality. That's the truth, certainly in Israel. I can refer to businesses in Berlin and London, but certainly in Israel, war, so you'll see the businesses of food and things related to the home and so on, and then the holiday thing and so on, it really, really depends. I will say there are very big trends now of matcha, exploding. Because there's a shortage, right? And I know, I was in Japan, so... I don't know if it's from a shortage or not, I just see more and more and more brands arriving, books, lots of books, lots of people doing self-publishing. Physical books? Physical books, really physical books. We have quite a few physical books, people doing it with private publishers, storing with us, distributing through us, cosmetics. So I think these are the things, say, the new ones I see, with, again, an emphasis on matcha.

Eyal David: [43:43] Books? Books don't make sense in terms of weight, and also like in light of the situation now,

Why physical still wins in the AI era

Tal Niego Yassur: [43:50] that fine, it's really easy to publish a book cheaper and cheaper, but people read books. People read books, just this weekend I read an article about Book Clubs, and it's become really common, and really, yes, people, it's very trendy today, it turns out. I don't think people, because of this trend, it was book week, not like that, I'm also a book person, yes, so I'm biased, but people still read books physically, people still enjoy the physicality of the thing. By the way, people still love physical products, we're in a world of AI, we're in a world of this, I deal with it, I see the physicality with my own eyes. Yes, today there's still a completely physical world,

Eyal David: [44:27] we still because people enjoy holding something, grabbing something, getting a gift that's physical. I think, physical, no doubt, like it's, I think, regardless of AI. But I think that... well, also about matcha it's pretty clear, actually, it's surprising, maybe simultaneously, but actually around the physical, it's also easier for us today to go to those places, right? If we talked for a second about the changing world of work, and it's easier for me to go to that kind of business. Because I'll feel I have some kind of moat that I'm basically building. Right, something that's tangible, it's something that's not in the clouds, it's not in the air, it's tangible. Robots all the time, yes. Yes, including robots, including...

Tal Niego Yassur: [45:12] Yes, I feel more and more people are going to these worlds today. I can tell you that I, as an entrepreneur, and I also saw it in my team, including the development team, part of the magic for me, and that there's something tangible, physical, that you see with your eyes, it creates something more real, that it's easier for you to move forward, that you see what you're doing, and you see your customer, and how he uses it, and what he does, and it's a physical thing, and it moves from here to there, there's a certain magic to it, certainly in today's worlds.

Eyal David: [45:44] And what in your eyes are the challenges of those business owners? Let's go actually with the people you mentioned, that you love, the smaller ones, we love all of them, but actually these, what are their significant challenges? Look, first of all it depends on the stage they're at. Come on, let's go like with your store, that's a good example, I think. I think the beginning,

The real challenges of small business owners: infrastructure and marketing

Tal Niego Yassur: [46:05] the beginning, the beginning is related to the company's infrastructure at the operational level, actually. We said, a member in Berlin, I came into ehouse, I had a list of ten things I needed to do, and I crossed out everything the day I came into ehouse. Really, not an ad, that's what he said. Because you start the business, building the online store, that's really, really, really the easy part. Even before AI and before, it's really, it's not that complex. The hard part is finding the shipping companies you work with, and where you store, and the packaging materials you produce, and who will sell to you at a small scale, and how you design the packaging, and how you manage the inventory, and payment processing, etc. etc. That's the beginning, that's at the level of the business infrastructure, the operation,

Eyal David: [46:42] that's one of the challenges, you see people who get stuck there for a long, long time. Yes, because people will come and say, hey, I can go into Claude, or any LLM I like, and I'll start getting answers, right? So why isn't that? Because you'll get answers, and you won't necessarily find the other side that will cooperate with you.

Tal Niego Yassur: [46:56] Because in the end it's a world of people. It's a world of people, and it's a world where you need to talk with them, and it's a world of price quotes, and all the more so in Israel, okay? Abroad, in Europe, you'll see it's more like this, ship through FedEx or DHL and so on, but there too it's very expensive, it's very hard, you need the technology to support it, so there's this complexity, but rich, okay? That's solved. I think the next stage, obviously, is marketing, up to a certain scale. I mean, what we see a lot is that for the initial scale, you manage with marketing. Whether you do it yourself with an agency, you create content, word of mouth, whatever, but then it reaches some barrier, and making the next leap is the difficulty. And the biggest, biggest barrier in my eyes, and it's related to this, is the company's infrastructure at the level of how entrepreneurs look at it. I mean, I see a very big difference between businesses that on day one knew marketing was going to cost them like this, and didn't rely on marketing now being word of mouth and such, but took into account that they'd need to pay quite a lot for marketing, and prepared for it in terms of financing and in terms of mindset, which is no less important, and priced the product accordingly. And you really see the difference, you see the difference between brands that started and were doing great and got stuck, and suddenly the way they priced the product doesn't cover their costs, whether it's operating costs, customer service costs or marketing costs. And the way they prepared for it in terms of financing, funding, whether it's at home, banks, an investor like that, it's not a world of investors usually, so like, they just didn't prepare for it, and mainly, mainly, mainly the mindset. You see, I talk with lots of people who already know they invest one shekel and four come out in the end, so invest a thousand, four thousand will come out, but there isn't. So fine, so take a loan, it'll pay for itself in ROI, that's not the mindset, and there, I think that's where a lot of the businesses are stuck, and it's a problem you need to start from the outset. I mean, the way you start this business, you need to think about these things. And when you think about this school you mentioned, how are you going to approach this thing? This thing, again, in the context of what you just pointed to. So I think that again, setting up businesses today consists of several fronts, there's the world of knowledge, of know-how, which exists today on YouTube and this and that. I don't think, by the way, that it exists in academia. I think academies today are working very, very hard on how, what their role is today in force, I mean, they have an important role in how to think and so on, but there's the world of know-how, which I think needs to be made accessible in a better and more up-to-date way, and centralized, because there's so much knowledge and so on. But that's one, knowledge not of how you build, again, a monster, how you build a business you live from, and maybe support a few more people from. That's one. Two, it's the matter of mindset, it's the psychological matter in the thing. How you as a person live from a place of initial investment, of seasonality, of preparing for a place where you lost a bit of money, or this month, from an employee who's used to earning a certain fixed paycheck all the time, suddenly there's a chance that in one season you make 100 thousand dollars, and a quarter after that you don't make money at all, how do you not panic about it, how do you do boards with yourself, or not with yourself, how do you prepare an annual plan, huh? All that mindset. Financing, pricing, connecting to other people, because one of the things we discovered that helps the survival of those business owners is this togetherness. It's understanding that more people are dealing with what you're dealing with, that it's part of the thing. You're stuck at home alone with yourself, you don't know that this is how this world works, and nobody talks about it. For me a school of business administration for real businesses is one that will basically cover all these things, because you know, and then the clearer things of marketing in the new era, how you bring AI into the business, how you, how you approach it.

Eyal David: [51:04] And then when I think about this school, then the more it, if we said it's all people, I don't imagine a school like that being taught by AI. No,

Tal Niego Yassur: [51:14] it's not taught by AI. It's not content that some of the content can, AI can support it, but from my perspective, the reason we founded ehouse the way we founded it, as a physical and technological platform, which is super, super hard, and lots of people raised an eyebrow at it, and like really, a company that's different in the landscape, and it has the complexity and it has a thousand and one advantages, but in the end we deal with a world where people sell physical goods online. I mean, from the outset it's a world where you have a side that's online and technological and a side that's physical, and from that same place, you know, in the end it's commerce and trade, there's a person buying on the other side, you can't do these things with AI, you can't do them only with AI, it's a mix of everything.

Eyal David: [52:03] Yes, no, also the matter that again, I want to be part of a group, I want to be part of a community, so I don't want to sit at home now, most likely I won't sit and learn like in front of a computer or in front of a device. No. Interesting, some hypothesis, you don't realize how long we've been talking, it feels like a casino here, because there's no clock anywhere, but it was like... I see our conversations, right? And when you take for a second where it'll go, like, what are your hypotheses? This, let's call it the world of small businesses, e-commerce, like that. Wow, it's really exciting to talk about it today,

A school for real businesses and the future of the segment

Tal Niego Yassur: [52:38] in this era, because I think this is the most exciting period for small businesses, for solopreneurs and micro-brands, and it was always there, always, always it was there, and now in my eyes it's going to explode. One, because it's easier, the same reasons we talked about, it's much easier to build it today, much easier to operate it today. Again, when I say easy, it's not that it's easy, it's not easy at all, but it's much more possible to do these things, it's much cheaper, it's much more within reach, let's call it that. And the second reason, it's because many more people are going to be pushed out of their workplace. So I think that in the coming years we'll see many, many, many more people setting up small businesses, whether physical or not, but in my eyes there will be much more impact actually for physical things and we'll see more service providers who also sell physical goods, we see it today too, a fitness coach who sells mats, a lactation consultant who sells baby carriers, people who create content and sell their own brands that are developed, we see it already today, we'll see it at much larger scales. And my vision about it is that I really think that in the end a whole ecosystem will develop around this segment, from a banking system that will serve this segment to systems and software and physical infrastructure and communities, you name it, but a segment where it's really going to be a world.

Eyal David: [54:16] And on the more pessimistic side, like if you look for a second where it is, forget it, not pessimistic, if we now actually want to push forward and go set up a business, okay? Yes. What's the place you'd focus on most before everything?

Tal Niego Yassur: [54:28] The world of marketing, how are you going to reach customers, who's going to buy it? This fear of whether there'll be someone on the other side who buys the thing? Because what will happen to the economy, and will there be laid-off people who can afford it or can't afford it, and there'll be a lot of noise, and there'll be lots of these, so everything you set up will be. So you first of all have to know, beyond everything we talked about, how you, to whom you're going to market it, and how you're going to reach people. I'm sure lots of solutions will come up, like when Facebook came into the world, suddenly it allowed every person to advertise themselves, their services. I think they haven't been born yet. Obviously there's everything related to AI search and so on, obviously. I think that really, really, we haven't yet seen the new marketing platforms, we haven't yet seen the tools that will help people market themselves.

Eyal David: [55:21] I don't know, I really... So I'll suggest a way of thinking, okay? That I thought of. First of all, if there'll be agentic buying, well, let's put marketing aside, wait, that's too complicated, but you can do what you did, I think it's basically identifying that there's a market here, there's a problem here, and then going, if you're talking about marketing, then going and creating that channel, maybe starting from there already a few years ahead, make a podcast, make whatever, that's probably the area. The second thing is that if there's, I have a thought about some area that's about to explode, and there'll be lots and lots of businesses there, then it's actually really the service aspect, so like there's oil. Say we talked about, I don't know, say now lots of businesses will come up around home baking, and they have some need, they have some need that I as a service can answer, so maybe I won't be bummed that I can't go and open my own home-baking business, I'll go make a business that supports home baking. Totally, totally. And then there you can start working on marketing, and basically a channel... I think that's pretty much maybe a bit similar to my story, because at the end of the day we founded,

Tal Niego Yassur: [56:27] not, Elad and I, we could have founded a branded e-commerce company and joined the trend of it, and we basically built infrastructure that would serve that trend that developed or that segment that grew. Exactly, exactly, exactly that's where I understood. Right, right. Stunning.

Eyal David: [56:46] Listen, I had so much fun. Me too, a lot. You finished me, come back here again. If you, if you, do you have some bet on this future. When it'll happen. Not when it'll happen, that's not right to say, but we just didn't talk at all, it felt to me, we talked about laid-off people, we talked about grandmothers, I don't know, but like, older people, but we didn't talk about juniors and younger people, which in my opinion is also a significant boost that will happen in this world? Totally. What's like your bet about this segment? Specifically people who are now finishing their studies. Yes, yes, yes, yes. It's a segment, it's... because we said, business administration, I don't know what they study today. They don't.

The juniors who will go independent because they have no choice

Tal Niego Yassur: [57:25] They study. But it's hard, everyone who studies today, look, it starts from people finishing a bachelor's in architecture and lawyers and accountants and in the free white-collar professions, where already today, like it's hard, it was already hard before to find work, but now all the more so, you already need fewer draftsmen and fewer lawyers and so on, so it's hard. All the way to the development world, the engineers, finding work today as a junior is super, super hard. So I predict that this segment of people who just finished their studies will go independent, because they'll have no choice, and again, whether it's hard, because what will you consult on when you just finished, right? So probably not as a consultant and not, but as pure commerce, like they did hundreds of years ago, buying and selling, there's no choice. As for when it'll happen, I think it's already happening. I think the pace at which it's happening is much faster than I even imagined. I see that from day to day it's moving much faster. I mean, I see the number of businesses arriving, I see the number of laid-off people, I see the difficulty in finding work and what it does, the impact. Let's see where it goes, let's see if there'll be someone on the other side or there'll be a supporting economy. I believe so, I mean I believe there will be the economy to support it. Well, no, so we also found a great reason, for you to come back and update us, stunning, how fun. Really, really fun. Thank you very much. Thank you very much. How do people get in touch with you, if they want, do they do LinkedIn? You can do LinkedIn, emails, I'm slow to respond, but you can do emails, my email is Tal, tal@joinehouse.com. So it's also indexed basically, in operations and everything. Exactly, exactly, I think that's the simplest way. And what kind of businesses is most relevant basically, at what stage and how to get here? Every stage, from the stage where you have an idea and you're going with an idea and want to come sit with us in the open space and that way start working on it, all the way to very, very large businesses that rent in the thousands, we're there.

Eyal David: [59:32] Excellent. Let's go, so now we'll really say thank you, and it was fun. Thank you very much. Let's go, bye for now. Bye bye.