Tsiki Naftaly is a serial entrepreneur and veteran of the IoT (Internet of Things) space. Seven years after he successfully founded Israel’s largest mobile services house Zemingo, Tsiki teamed up with his colleague, Israeli Air Force veteran Zvi Frank, in 2016 to launch Copilot, an automated customer experience (CX) management platform for consumer electronics. Building on his deep experience developing and designing for connected devices, Tsiki helms Copilot’s business, which is aimed at helping smart and connected device brands to drive better customer engagement and more value from their end-users. In his role, Tsiki oversees all of the company’s business development, sales, and marketing efforts.
Before launching Copilot, Tsiki was also instrumental in the co-founding of Boatbook, a leading app for yacht owners, and 42 Game Changer, a revolutionary engagement platform for trade shows. He is also a mentor and board member of various startups.
In an exclusive interview with AsiaTechDaily, Tsiki Naftaly says:
“In aviation – and specifically takeoff, there are two things that you don’t need to worry about – the runway behind you and the altitude above you. The same is true in launching your startup. Dwelling on the past and ways you have failed is stupid. It’s also stupid to worry about what the big guys (e.g., Google) are doing that may compete with you later.”
Read on to know more about the successful journey of Tsiki Naftaly and Copilot.
Please tell me about your background, and what are you working on currently?
Tsiki Naftaly: In 2009, I co-founded Zemingo, a mobile design and development company for IoT businesses. It became Israel’s leading firm in the mobile space. It was there we noticed that many brands in the IoT space were missing a valuable opportunity to leverage user data from their connected products to create more valuable relationships with their customers. That’s where the idea for Copilot came from, named because the Co-CEO and I are both pilots (him former military and me, commercial).
We determined that, like a captain piloting a plane, when you are launching a connected product, you need to keep your focus on what’s going to keep that product flying – manufacturing, distribution, etc. We see ourselves and the Copilots in that we can help with navigation and communication. We’ve had a significant influx of customers since CES earlier this month; we’re currently focused on making sure those customers realize the full benefit of Copilot’s automated customer experience.
What motivated you to get started with your company?
Tsiki Naftaly: As I mentioned, many consumer electronics companies are rightly focused on building, manufacturing, and selling units. Many small and mid-sized companies do not have the resources to do what we do and are therefore leaving valuable opportunities on the table. Copilot’s automated customer experience platform is created specifically for consumer electronics companies. We give consumer electronics companies a way to understand and automatically communicate with their customers based on user behavior.
By gathering, analyzing, and segmenting user data, we can offer brands incredible insight on how/if their customers are using their products. Then we offer those brands a way to engage their end-users automatically to improve customer satisfaction and increase revenue and Lifetime Value. Our platform helps brands speed onboarding, reduce product returns, improve online ratings, and increase revenue through sales of consumables, accessories, subscriptions, and product upgrades.
How have you attracted users and grown your company from the start?
Tsiki Naftaly: We’ve watched an evolution happen over the last year. Initially, we were relying on previous business relationships from our work with Zemingo and word of mouth in addition to a lot of research and cold calling to companies we thought would be a great fit. Many consumer electronics companies weren’t aware that they even needed a solution like Copilot. But in time, companies have started to understand that the beauty of having a connected product isn’t just a matter of addressing a trend – there’s real value in having the ability to understand and communicate directly with the end-user. Still, there’s the resource question, so our conversations have moved from why and whether they need a solution like Copilot at all, to how quickly they can get set up with our automated solutions, which saves them time and money.
In recent months, we’ve discovered that the market has arrived. Nearly every consumer electronics company we speak to either has, or is working on a smart version of their product, and addressing the customer experience has become more obvious. We’re really looking to capitalize on that great momentum.
What’s your business model, and how have you grown your revenue? What strategy worked best?
Tsiki Naftaly: We offer a tiered subscription model. Our customers pay by the number of connected devices they have in the market and only pay for those that are connected so that we can work with that user data. We offer a free tier so our customers can see the value of Copilot as they grow. We believe so strongly in the positive ROI we deliver that there’s no risk on anyone’s part.
We save brands hundreds of thousands of dollars by offering an automated solution that doesn’t require them to hire engineers or marketing specialists to build or operate.
How much money (funding) have you raised in total so far? When was the recent funding round?
Tsiki Naftaly: We raised $5M in 2019, led by Jerusalem Venture Partners (JVP).
How do you decide when to go out for fund-raising? What were the internal decision processes in determining when to begin fund-raising, and what were the logistics for this?
Tsiki Naftaly: We bootstrapped the development of the product using internal resources until the product was mature enough with a growing rate of real paying customers. Our goal was to attract investors without giving up too much equity.
How many investors have you met so far, and which among them have invested in your past funding rounds? And how long does it take on average to finalize each funding round?
Tsiki Naftaly: We’ve met with about a dozen investors. We’ve done only one funding round so far, and it took us about four months.
How did you meet these investors, and which channels worked best for you?
Tsiki Naftaly: We met those investors through personal relationships and previous acquaintances.
What are the biggest challenges you’ve faced and obstacles in the process of fund-raising? If you had to start over, what would you do differently? (Your insight or advice on this would be very helpful for startups)
Tsiki Naftaly: The biggest challenge in raising funds is an all-consuming process – with lawyers, technical audits, etc., and a good CEO needs to be able to keep focus on the investor while also overseeing the business and satisfying the customers. We are lucky that we have joint CEOs, so my Co-CEO Zvi Frank was able to focus on the funding process and due diligence, while I could maintain the focus on the business. For startups who don’t have dual resources, I would suggest using an external professional to assume the responsibility and help navigate both of these priorities.
What are the most common mistakes founders make when they start a company? (or What should all first-time startup founders know before they start their business?)
Tsiki Naftaly: One of the common mistakes that tech companies make is that they try to achieve perfection before they meet the market. You need to get the product out and meet your market, and then iterate once you get their valuable feedback.
We’re proud of the product we’ve built because we took the time to listen to our customers and iterate based on their real feedback. The current version of the product is representative of that.
What do most startups get wrong about marketing?
Tsiki Naftaly: Some companies can’t sell their product. They say they will work distributors and resellers. If a company can’t market and sell their own product, they are likely to be unpleasantly surprised by their results.
What’s the best advice you’ve ever received? And what advice do you have for someone who is interested in doing similar things like yours or in a similar direction?
Tsiki Naftaly: In aviation – and specifically takeoff, there are two things that you don’t need to worry about – the runway behind you and the altitude above you. The same is true in launching your startup. Dwelling on the past and ways you have failed is stupid. It’s also stupid to worry about what the big guys (e.g., Google) are doing that may compete with you later.
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