[00:00:27] Jay: Hi, everyone. Welcome to the First Customer Podcast. My name is Jay Aigner. Today, I am lucky enough to be joined by Ron Gidron. He's the founder and CEO of X Type. he's over in Israel. so Ron, hello, buddy. How are you?
[00:00:40] Ron: Hey, Jay. Thanks. Thanks for having me. I'm doing great. How are you?
[00:00:43] Jay: I'm doing fantastic. It's, Wednesday, I think. I don't know. They all blend together.
Um, so tell me where did you grow up and did that have an impact on you being an entrepreneur later in life?
[00:00:55] Ron: Yeah. It's an interesting story. I grew up on a farm. I, I had no plans of becoming, you know, I didn't even know anything about computers. I grew up on a kibbutz, which is a unique way of life, in Israel. And,you could say it was an accident. I,
I went to university and took some math classes. It was, the early nineties and, you know, the high tech boom in Israel started and this company made me a job offer and I got a job. This company was called Mercury Interactive and here we are almost 30 years later. You know, I never drove a tractor since.
[00:01:28] Jay: It's so funny you say that. I have had a couple people on the show. Who were on a farm growing up and I talked to a couple of them and you never really think about how like farmers don't, I think, get their due for being entrepreneurs. Like, it's such an entrepreneurial like thing to, like, grow your own food, figure out how to sell it, figure out how to price it, figure out how to deal with, you know, supply and demand and all these different things.
And I don't think that, you know, just in the general. Thought of what a farmer is. You're just like, Oh, it's just some guy who like plants and stuff and whatever. it's a business owner. It's a whole thing. Like it's not surprising to hear that.
[00:02:03] Ron: Actually, I really appreciate that perspective. And you are absolutely 100 percent right. You're the first person I've heard say that and I go, Oh yeah, he's right. Actually, it is. And also, you know, farmers are, and they do it every year, right? So we're also used to, like, and there's a lot of elements that you don't trust, that you can't control, like, you know, the weather and lots of stuff,
Right.
And market prices and stuff, so. Never thought about it that way, but you're absolutely right. Maybe there's something to it.
[00:02:33] Jay: Maybe so maybe we need to, you know, I'll, start interviewing farmers exclusively. And then we'll start a
farmer's farmer's podcast now.
[00:02:42] Ron: I haven't farmed anything in many years.
[00:02:44] Jay: All right. Well, yeah, I don't know how popular farmers pot. I'm sure there's probably multiple farmer podcasts out there. so tell me, what was the first business you actually started?
[00:02:53] Ron: so I actually had, so I've been in high tech and enterprise it for almost 30 years now. I told you about the first job I got at Mercury. I spent 10 years there and then I spent another 10 years in and different monitoring software. And I got into the DevOps space roughly 10, 12 years ago. And, somewhere along the way, I actually had my first go at a, software startup, we're trying to build a monitoring,solution.
It ended very badly for me, had a massive fight with, you know, one of the co founders and there were three of us, it was a terrible. Terrible experience. and go anywhere. We wasted a year. and then the next company I started is X type.
[00:03:33] Jay: Okay. What,what was the biggest lesson you took from the first go at it into the second one?
[00:03:41] Ron: there's so many, probably the biggest one has to do with, you know, who's your partner as well. I understand that this is not a lightheaded decision to make.
Right?
my other, insight is you should listen to your wife.
[00:03:57] Jay: I would I would recommend that.
[00:04:00] Ron: I'm not
kidding because back then she was like, are you sure you know about this guy?
This is so long ago. I'm not going to put anyone's name on here. But and I said, yeah, you know, there's a few clinks, but I can get along. She's like, you sure?yeah, she was right. And,
[00:04:15] Jay: Yes, that's good advice.always listen to your wife. what, it's such an interesting topic and I could probably talk about it for hours, but it's how would somebody who hasn't had that experience of You know, less than ideal partnership with the founder. would they make a better decision about that when they start a company with another person?
Right. Like, what are some of the things they can look for to kind of stay out of trouble
[00:04:47] Ron: Well, I mean, that's going to be a hard question for me to answer, but I can tell you about my experience and what I've learned. So a couple of things. 1, it took me a long time to get back into it. Right. This was a painful experience, and it took, you know, I don't know if it was seven or eight. I could work out the math.
You know, close to 10 years before I before, before I took another shot at it. So there's a lot of experience that came along in the way. you know, I can blame my partners, you know, all I want, but the reality is it's also on me. Right. So, so there's the question of, are you ready? Right. Are you so I would.
Right. I would probably think that's the most important thing. Like, you know, are you, do, you know, what you're doing and are you know, are you confident? And the answer is obviously never, you never really know what you're doing, buthopefully you understand what I'm saying. If
[00:05:40] Jay: now? Yeah, no, it makes
[00:05:42] Ron: Level of maturity, I highly recommend, right? Get comfortable with yourself because it's going to be rocky.
[00:05:47] Jay: Yeah, that's I think that's great advice. yeah, I think the older I get, I mean, I have a bunch of kids and I'm married and I have, you know, a couple of businesses. And I think, the most important thing is exactly what you said. Like, any of those things. Even if your partner sucks, then that means picked the wrong partner to work with.
Right? Like it all goes back to yourself. Like,
and that's how I lead our business is like, it's nobody else's fault ever. Like it's something I either hired the wrong person. I trained them incorrectly. We don't have the things documented, right? We got the processes aren't there. Like whatever it is, it's something that I did not do properly.
Like I brought these, you know, these things in. So I totally think that's a great. Piece of advice.
[00:06:33] Ron: I,
[00:06:33] Jay: yeah, go
ahead.
[00:06:34] Ron: yeah, I'll pitch in a little thing. my dad's passed like three years ago. My dad taught me a lot of stuff and he had all these sayings and I remember he told me this when I was pretty young and it only clicked much later and he, my dad was a factory manager and stuff.
and he said, You know, you can delegate authority, and it's a very good thing to do, right? You can empower people, like truly empower them. Don't, you know, let them do, let them excel. Let them do the things they know how to do best. But you've got to remember this responsibility doesn't trickle downhill.
So, and it's a tricky thing, right? You can delegate authority, but you can't say I'm not responsible because as long as you're as long as you are sitting at the top of an organization or even a department, whatever. Responsibility stays at the top. It doesn't roll down. So that's
[00:07:27] Jay: That's a great, I love that. I love that. the framing of that is great. And like, again, I think it's, I think I've learned more than that. I should have paid more attention to that in my personal life as the years have gone on. Like everything is, goes back to you as a person. It doesn't matter if it's business or whatever.
So, tell me about X Type. What is X Type? Where did it come from? And kind of who was your first customer to get it started?
[00:07:50] Ron: Yeah, so xType is a platform engineering solution for, for ServiceNow customers. Maybe a word on ServiceNow. ServiceNow is an enterprise IT platform. It's a development platform. It's used by, you 8, 000 Enterprises worldwide. It is a wildly successful company publicly traded on the NASDAQ, led by a legendary CEO called Bill McDermott, who ran SAP before that.
And, it is becoming the de facto. platform for, businesses to do digital transformation. So you can think of it kind of like the sales force of the I. T. world. And it's, you know, it's that kind of a company. So it's an ecosystem. There's obviously a technology base to it, but there's also a lot of people like, you know, hundreds of thousands of people around the world in enterprises building and operating the ServiceNow platform.
And what xType does is we allow some very large organizations. manage and develop, ServiceNow applications at any scale. in order to do that, we solve a bunch of technical problems that have to do with the very wide premise of DevOps, but we do it in a very specific way to the ServiceNow Ecosystem.
[00:09:05] Jay: So who is your, Well, let's start with this. Who was your first customer? Who'd you get in the door? who'd you get to buy in and how'd you do that?
[00:09:12] Ron: Right. Okay. So when we just started, and this is before we raise any money at all, and we were just mocking about, we did a lot of talking to a lot of people we interviewed and asked, and we knew there was a problem. So we had experience with the problem set, but not from not inside of an ecosystem behind them.
We had a hunch that. there's a, there's room types of things that we know how to do in those ecosystems. We knew we had to learn a new language, get familiar. So we had a lot of conversations. our first 2 customers were, Playtica, which is a gaming company. they're a huge gaming company, but actually not such a huge ServiceNow customer and a division of hp.
both in Israel, not my cousins, not my another friends, so cold calling, et cetera. and those were, those two were. Partly design partnership, et cetera. So I mean, it's now okay to reveal this. So the first deal was a 6, 000 deal. You know, I paid the AWS bill for a couple of months.
[00:10:08] Jay: Right.
[00:10:09] Ron: the 2nd, 1, the 2nd, 1 was a little bit more than that.
Probably about triple that a little more than that. and those 2 customers really helped us shape the product and the MVP that we ended up building and also, Understand the ecosystem and our 1st pure customer with X type that is today with Zurich insurance.and they are a public reference.
If you go to our website, you know, you can hear a lot of what they're doing with the platform. And we're, you know, I mean, thousands of deployments, thousands of releases. They're getting amazing results and, you know, they're a great partner.
[00:10:49] Jay: so you mentioned the cold calling piece and you glossed over it a little bit, to get those first couple of customers. Tell me a little bit more about it. I mean, did we literally, you know, did you find that, you know, a list of companies you thought would be a fit and you kind of just started going after them via cold call, like how did you actually get in touch with these people and convince them to pay you 6, 000 and then 18, 000,
[00:11:12] Ron: Yeah, so, take a step back. So, the step back is this. And, you know, we verified the problem first. Meaning we wanted to get very high conviction that the problem that we think exists in the ServiceNow ecosystem actually exists.
[00:11:33] Jay: right?
[00:11:34] Ron: And so when we first started, I actually had a template for this. I would, you know, called InMail is more correct, right, on LinkedIn, right.
I would send an email to someone who I thought, you know, would be a team leader, software developer or something like that, and say, Hey, my name's Ron, da. I'm not in sales. Like, I just want to, you know, I literally would say it. I'm not trying to sell you anything. I just wanna get some feedback on this.
We're thinking about that and just, and the first calls. they weren't they weren't sales calls. They were just, you know, conversations about this platform. We were learning more than anything.
And we were also creating, you know, some rapport andwhat turned out to work is that our hunch was right.
The problem was real. So then people would come back to us and say, Hey, you know, you've done something like this. Or, you know, have you if you acted on this and we would say, yes, and. And it kind of rolled like that. And so the 1st, so those 1st, 2 customers didn't actually start as paying customers. I said, Hey, guys, you know, we'll let you use a product for free.
Like, right. And then once they've used it for a month or 2, I went back and I said, Hey, you know, can you at least cover my cost for this? Right.and, you know, and they said, yes, we do very different deals today. Like, all of our deals today are 6 figure, you know, yearly billing in advance.
Okay. Bye. Large enterprise deals.
but, yeah, that was the start.
[00:13:06] Jay: there's a huge leap, obviously between 6, 000 and six, six figure. Um,what has changed about the acquisition of those customers and talking about, time to close, right? Like what is the lead time and the contracts and all the stuff for a six figure deal, I would assume are much, much longer, you know, than a 6, 000 deal, tell me about how that's evolved as you guys have built the platform.
[00:13:35] Ron: Yeah. So it's actually very counterintuitive. I don't think it matters at all if you're going to sell to an enterprise, it's going to take you, you know, months and whether it's 3 to 9 or 6 to 12, depending on how large it is, you're going to spend as much time. And the reason for that is, and I'm just going to ignore the fact that you need to solve a real problem and your product is going to be real and all that, but just talk sales process.
A lot of people don't understand this. Selling to an enterprise is not selling to a person in the sense that you're selling to a group.and so selling to a group is essentially you're trying to get consensus amongst a group of people that have that all are all responsible for service now in our case, but they have different, responsibilities and different objectives and architect.
Things, you know, wants to see different things to say a platform owner who's looking more of a business and you're head of development is looking at other parameters. So,so the sales cycle to an enterprise actually will take you months, regardless of how long you do it. The leap, though, that you mentioned, I want to touch on the leap didn't just happen.
I mean, early on, we were essentially trading, you know, our product, you know, Or as close to free as we could, we weren't trying to make a lot of money. We were trying to learn the problem and build. So our target was always what we're doing today early on. It was, I mean, it's just gold. Like, how are you going to go build.
For an enterprise system when you don't have access to one,
[00:15:18] Jay: How did that so when, what was the moment? Was there a moment that you said we've learned enough? It's time to turn the gear and like, kind of be more serious or was it just a gradual process over the months and years where you guys kind of just put it all together?
[00:15:33] Ron: yeah, the latter. I mean, this just doesn't stop, right? you're always crazy and you're always trying to sell and right. So you just keep pushing and pushing and every and, you know, stuff gets done along the way. So the product gets a little better. And now, you know, and maybe the customer is now a little bit more ready and they also remember you also, you know, you gotta.
Yeah. Remember that these are large organizations and, you know, you and your buddy in a truck is, you know, is not something that they could easily do business with. So now you've got to set up a company, you've got to, you know, arrange everything so that you just so that you could do business with them.
So all of that messy stuff happens along the way and in parallel. Um,and I guess the reason it eventually works. Is because you chose a real problem so that, and I actually just said that a couple of days ago on a different show. That is the key. That is the most important thing work, work on a real problem.
[00:16:32] Jay: right. No, I mean, yeah, it has become a more popular.bit of advice, I think in the past. Yeah. A couple of years, like you hear a lot of people will and it's because it's true, right? Like a lot of people spend a lot of money and time trying to work on something before they really know That somebody's gonna pay him for it that it's like you said It's a real problem that people are like paint.
It's a pain point It has to hurt bad for people to want to pay you six figures to come in and solve this as a small business, you know, that's kind of grown. How do you handle marketing versus sales like for us, you know spending a bunch of money on inbound? And we do quality assurance as a service, and we kind of have a specific target and market.
So we kind of, it feels like outbound is the right way to go as we grow the brand and build things. Do you think there's any benefit in doing a bunch of inbound marketing stuff, or are you guys still focused on doing outbound? what's your mix and what's your thoughts on that?
[00:17:27] Ron: Yeah. Thank you for bringing that up. And I need to shout out to Ralph. Passion is my CMO and a great friend that we've worked together for years. So I'm going to say a couple of things on this. 1 is. We don't have a marketing funnel and a sales funnel. We have one funnel and it all. And actually, you know, we don't, because of the type of business we're in, we, you know, if you go to our website, you can download the eBooks and, you know, watch webinars and demos, et cetera.
So we, we do all of that inbound and like lead gen thing. we don't count leads at all. We actually, we count our deals in the pipeline. So we have a very well defined. Process that includes, you know, it's very front loaded. So we'll verify that, you know, budget. Authority need timelines sort of like early on.
We'll verify. Hey, is the person we just met, can they, do they can they bring us the money. Or at least introduce us to the people that are there. We don't. we will qualify out very quickly. If we don't find the business tail end for anything we do. And this is not because we don't trust our product or we are, you know, or we're scared about the technology.
It's because that we are, worried about wasting time. Time's the biggest enemy for everything. So, the type of business we do basically necessitates this right
now that we're more established, right? We know the problem. We have a good solution. we know how to do the business value assessments. We understand ROI and all that stuff.
So, not to answer your question. We do mostly inbound,because the service now ecosystem that we're in, it's literally,we also, you know, I mean, we. We spend more on events than we do on like in a traditional business, because again, we live inside of an ecosystem and we need that face to face with people and events are just great.
So, shout out to ServiceNow, they put up a good event program. We try to sponsor and join them as we can. I know it's a little bit unusual, but it's, that's what works for us.
[00:19:38] Jay: Yeah, it's interesting. It's definitely interesting to build a business inside of another company's ecosystem. Right. I mean, it's like, it's probably great for a bunch of reasons. It could potentially be terrifying for other reasons if, you know, because you're kind of hitching your wagon to their star essentially.
And if that, you know, kind of goes up and down, but I mean, for something as big as, you know, ServiceNow, which I've heard about for a few years, You know, I think that's safe, right? It's like building a sales floor. It's like a, putting a layer on top of Salesforce or whatever. Like it's got its pros and cons,
[00:20:08] Ron: I've said, and by the way, that's an investor issue, like when you start, like, you know, a few years back, andthat was one of the biggest objections I got is like, Hey, you know, you're solving a problem that's not yours to solve. And then I got it. I got a great answer for it. And maybe I'll do a short answer here.
I worked at Mercury Interactive. We did testing tools for Microsoft. Mercury IPO and was a huge success back in the 90s. And every year there was this huge scare. Microsoft is going to release a test tool. And, you know, we're going to run out of business. and they never did. And actually they did. They released this thing called Microsoft Visual Test.
Like we're talking like ages and ages ago. That was after Mercury had already IPO, right? and was an incredible company. And then I worked in the monitoring space and we did monitors for the Oracle database. I worked for a company called Precise. It was a 650 million exit, not for myself, but for the company.
And it was exactly the same. Like, who are you to solve this problem for them? And the answer, the reason I was not afraid of this is because I know this for a fact is that those companies are focused on their own growth and that is on the business end of what they do. All right, service now is a digital transformation behemoths.
They will do a lot more digital transformation add ons to their platform, you know, get into financial services, get into ERP. I'm not sure what's on the roadmap, but they keep growing there for them to solve an internal issue is not. You know, an immediate thing. It's also and there's another little nuance here.
I'm sorry for the long answer is that as surprising as it may sound, they don't necessarily have the best people to sell this kind of solution. Because again, remember, they're selling to their customers, the business and the value of that. And they don't always understand how to sell a technical solution for a technical.
They might not like hearing it, but it's true.
[00:22:15] Jay: No, that makes sense. That makes a lot of sense. so much good stuff in there. All right. I have one more question for you. Uh, non business related. I'd love to say that cause people go, well, what, what's coming? if you could do anything on earth. And he knew you couldn't fail. What would it be?
[00:22:35] Ron: I'm Israeli. It would be peace. I get rid of all weapons, rid of all bad thoughts, and I, you know, world peace is my answer if
[00:22:45] Jay: Well, you can't, you can't fail. So I think that's a beautiful answer. I had some people say things close, but I mean, nobody living in Israel, that's kind of in the thick of it. So, you know,I do appreciate your time being on today. I hope you and, you know, your family and loved ones, everybody's doing well over there, Ron, if people want to reach out to you directly, if they want to learn more about X type, how do they do that?
[00:23:06] Ron: Sure, you drop me an email. It's very simple. It's ron at xtype. io, right? if I don't answer immediately, I, you know, I will still answer, or you can find me on LinkedIn as well. Okay, thank you so much.
[00:23:16] Jay: Dude, It's been great.
talking to you. Great meeting you, enjoy the rest of your week and we'll catch up again soon. All right.
[00:23:21] Ron: Thank you very much.
[00:23:22] Jay: Thanks, Ron.