By Daniel Sablosky*
I recently had the pleasure of sitting down with Avital Grushcovski, the V.P. of products, co-founder, and resident “Swiss Army Knife” for Source Defense. Source Defense is a cyber security startup focused on attacks orchestrated through third party scripts, and this is an exciting time for them; the company has just been selected from a pool of over one thousand competitors as one of the top ten for the SAAS awards for new products. I got to know a little about the startup’s meteoric rise, but what truly intrigued me was his uncompromising and unique opinions on how startups should go about conducting their business and the issues he had to deal with when pitching a technology which was, quite literally, the first of its kind in the world.
Working on the product
First, a little background on Avital and his team. Hadar Blutrich and Avital worked together at an AdTech company. After leaving the company they went their own ways professionally until Hadar had an idea. A constant problem they had been dealing with while working as third-party vendors was cybersecurity. He felt he had the solution which none of the major players in the field had even considered. Hadar wanted to build a software that served as an intermediary between these third party systems and the webpages they interact with, only sharing relevant information and mitigating the risk of third party cyber-attacks entirely. It only took one phone call to sell Avital on the idea and they began building a plan.
Source Defense creates a barrier between third party content providers (such as analytics, social media, advertising and more) and companies using these products. They create a reflection of webpages which third parties interact with that only shares necessary information with the outside companies. With a simple UI, Source Defense users can decide what information these vendors need access to, based on the functionality needed to perform their services. By restricting information such as username and password boxes in the webpage the vendors interact with, it eliminates the danger of these outside sources being hacked and losing information.
In the early days of the company it wasn’t uncommon to see the founding members pulling 18+ hour days. These long hours were a grueling affair, and the inevitable outcome of trying to create something from nothing. Avital knew what he was in for though, and recommends that anyone interested in startups ensure they like the work first: “Don’t start with an idea, work at a startup first. The idea is just the beginning, working at a startup and having this uncertainty is not for everyone; be sure you can handle it before you go for it.”
Selling the product idea
The next step was the hardest for the Company. They were selling a solution built on tech that had never even been considered before. Now while this might seem like a problem many startups face, most deal with improvements to existing tech and practice, whereas Source Defense needed to describe the basic concept, which created a major obstacle in the pitch room. As Avital put it: “Most investors looked at it as a matter of, either the solution doesn’t work, or there is no market for it. They had a very hard time accepting that this approach was so unique, no one had actually been able to approximate it before.” You know all those buzzwords that companies love to throw out during pitch meetings? The ones that really get investors salivating, “one billion dollar market,” “Like Uber but for ___.” Well Source Defense team had to take a slightly different approach, one more based around: “yes this is possible and we have done it” rather than: “we’re building a better version of this million dollar idea.”
The team’s pitch meetings followed a sort of format: “When we would have meetings with investors or potential clients, the tech guys would love the idea and jump on it. Talking to the financial men we were constantly held up by our inability to outline an existing market for the product, because the product had never existed in any form before.”
The big break came with Jerusalem Venture Partners taking a rider on the young company with the brand new solution. JVP was the perfect fit for the team as they had access to a deep stable of mentors with experience pitching to big name investors to draw on. Avital attributes his success in selling a product nobody could understand to practice, practice, and more practice: “I would do my pitch obsessively, for JVP mentors, team members, companies. It’s gotten to the point that no matter the circumstances I can always deliver that pitch perfectly.”
Once he had cracked the code of how to get companies on board, and locked down commitments from those early adopters, his phone wouldn’t stop ringing: “Right now we are skyrocketing! Actually we’re trying to slow down the influx of clients so we can deal with the ones we have!”
18 months on
Source Defense is involved in four major fields: financial, insurance, eCommerce, and content publishers. Each of these groups of clienteles have different pain points but all rely heavily on trust and protecting their customers. The addition of new European legislation – GDPR (general data protection regulations) – has really boosted the need for Source Defense. These regulations followed by some powerful penalties serve only to drive up the demand for the company’s products, as it is much more cost effective to simply protect the data in the first place.
Source defense has evolved as all startups do, completely rebuilding their tech a year in with advancements that didn’t exist at the inception of the company and bringing on 10 additional members to handle the increased workload; but the core idea and core team have remained the same from the outset, and their drive has them poised to be a worldwide powerhouse.
Currently, the company is focused on a number of implementations and is already active in the EU, US, Canada, and Israel.
As always with the Tech7 blog we asked Avital if he had any advice for young entrepreneurs starting out. As a person with a very successful company who has worked in the industry for a long time, he had great insights to share: “When you start out, you will meet a lot of people trying to get a piece of your company. They will offer advice and interest for a percentage of the company. Make sure you know what you’re getting, make sure there is an obligation to provide results. It’s ok to pay with equity based on agreed upon KPI’s, but don’t give away your equity for just an intro.” Avital thinks these guaranteed results are central to the success of early stage startups looking to maximize time and opportunities: “Time is the most precious resource you have.” In pursuit of making the most out of these opportunities: “go to any event at the beginning, make your mistakes early! But after two or three of those practice events, go to events with purpose, talk to event organizers, they will help set up meetings for you.” Once you have your game plan worked out be more selective: “Don’t jump on any event, make sure you know who will be there and that they’ll be in a position to make a move on you.”
“One of the important things we did was to join groups and communities that helped us propel upwards. These groups and communities are crucial and come to play whenever you need a sharing of information, recruiting and even just looking for the right service provider and are huge time savers. We are members of several of these groups and communities; some are there for consults and opinions and some, like Tech7, takes the next step and creates a unique ecosystem with general events for their members and at times, important connections on the local and global market.”
* Daniel Sablosky is a student at Virginia Tech University studying Industrial and Systems Engineering. He was in Israel for the summer through Onward Israel and worked with Tech7 & CDI Negev.