In September 2018, Insight invested in Sisense, a leading business analytics software company. Teddie Wardi, Principal at Insight Venture Partners, talks with Amir Orad, CEO of Sisense, about his entrepreneurial background and how Sisense will utilize Insight's recent investment to continue global growth.
Teddie: Amir, in 2015 you became CEO and you’ve grown Sisense to be one of the leading players in the Business Intelligence (BI) and Analytics market. How did you get your start in software? Did you always want to be a tech entrepreneur and CEO?
Amir: Not really. I was a geek in high school and became a computer hacker. Through that experience, I co-founded of a startup in 2000. I learned that being a technologist and a business leader is a great combination. This allowed me to lead a second company as CEO, and then a third company, which is Sisense.
Teddie: How did you end up in the business analytics and BI space? What is inefficient about current solutions and what does Sisense bring to the table?
Amir: All of my prior companies had analytics at their core – one of them used analytics for cyber security, the other to fight financial fraud and crime. Sisense is propagating analytics across dozens of industries and a nearly infinite number of use-cases. The reason I joined Sisense is that there’s no good solution for complex data sets. Since enterprise data sets are growing in number with more data sources in the cloud or internal applications, complexity is increasing. Without a solution like Sisense, companies need PhDs and strong technical folks to deliver analytics to internal decision makers and to customers. And that's broken. In 2018, companies should not spend months or years building analytics to analyze complex data sets. Sisense has built the technology to solve this problem. I saw this need, I met with customers, I fell in love with the company, and here we are.
Teddie: What are the key factors that you attribute to your success in scaling Sisense?
Amir: We give non-data science experts the ability to handle large, complex data sets. To build a company focused on ease-of-use, usability, simplifying processes (using advanced AI and machine learning technology) is a challenging balancing act. Many companies have simple stuff, done well, many companies have complex stuff done in a complex way. Sisense combines the two in a way that is powerful and innovative.
We are highly focused on our customer's success. From day one this has been a differentiator and it's due to our technology, culture and way of doing things. We always hear the same thing from customers: they tell us that not only is our technology better, but our level of service and support is unmatched. That makes a difference.
Teddie: As a serial entrepreneur, how do you manage founder transition coming into a company like Sisense as a professional CEO?
Amir: It helps that I have been a founder in the past. I know how to get my hands dirty and have experienced the pain that comes with building a company. As we all know, building a startup is incredibly difficult. At the same time, it's amazing. Since I have been in their shoes, founders can understand that I'm not coming from some ivory tower.
Secondly, every founder is a rockstar and every founder has amazing skill sets. The goal of a CEO is to match skillsets to what the company needs at different phases of the company's growth. When you do this and you evolve together, good things happen across the board.
Teddie: While scaling the business, what do you wish you had done sooner?
Amir: In hindsight, I wish I had put more feet on the street on the sales side, earlier. When you run a business, there is a balancing act between being in love with your product and rushing to market, versus taking your time and doing it the right way. It's about balancing expenses and revenue and where you put your energy. Looking back, since we had such a strong product market fit, we could have increased our field sales presence early on.
Teddie: Talking about putting feet on the street, you recently announced a new European headquarters in London. Why now? Were there any challenges that you had to overcome?
Amir: It's an interesting story and it fits the way we like to spend money. We believe in achieving high growth, but also being efficient and smart. We already have a large presence in Europe and a hundred customers in the UK, including companies like Rolls-Royce and SDL. We waited for this critical mass before we invested in an actual office in London.
Brexit was a consideration, whether to build a team in London or somewhere else in Europe. We decided that the UK is still the right place in terms of talent, especially with enterprise sales. In terms of flights, language, culture, accessibility, experienced people – London is the right location. Brexit makes it a bit less fun when it comes to tax treaties and other trade issues, but it has much less impact on a software company with a global presence.
Teddie: Let's switch gears to discuss fundraising. Why did you decide to raise money now?
Amir: The number one rule is to raise money before you need it. We decided to raise money now because we don't urgently need it, although one day we will. The business is growing quickly, and we can accelerate the pace by investing more in our product and go-to-market resources. This goes hand-in-hand with an investment. These are the reasons that we raised now, but we took our time to find the right partner. We did not accept money from the first investor who would say “yes.”
Teddie: You've raised a few rounds before this one. What factors do you look for when evaluating a partner for investment?
Amir: We have an amazing set of investors and VCs and this makes a difference. We have a rule internally – the “no-a-hole” policy. We only want to bring in people that are human beings that can add value. We also wanted investors who could move fast versus drag us through the mud in endless processes. Beyond this it was important to have clean terms. By that, I mean a simple term sheet and a simple cap table, without all sorts of weird structures added into it. Over time, it is the alignment between the investors, employees and leadership team that's critical when you’re moving fast.
Teddie: How did Insight fare on these factors?
Amir: We had multiple term sheets so we had a choice of who to work with. We selected Insight because of what I mentioned: the caliber of people, a down-to-earth attitude, the ability to move quickly. Insight asks direct questions, receives direct answers, and gives direct feedback. We ran a lot of different background references with other companies and other investors who have worked with Insight. There was a consistent theme about the quality of the company and their down-to-earth nature.
The fact that Insight also has a large portfolio of companies that are similar to us — meaning later-stage and pre-IPO companies — was helpful in terms of benchmarking and having similar experiences.
The New York presence was a major bonus as well—not a requirement, but a major bonus. We're east coast, New York headquartered. We have offices worldwide, but having someone who is in the same time zone and shares a NYC-mindset was a major plus.
Teddie: It's nice for Insight that Sisense is six blocks down the street. It's not as common as you would think because we invest all over the US and Europe. Let's talk a little about the future. What are your plans for using this investment?
Amir: There are two trajectories that we're accelerating — product and sales.
On the product side, we already have an amazing product. We have over a thousand customers from GE and Phillips, to Nasdaq and SkullCandy, and many SMB's along the way. As an aside, some of our customers are Insight portfolio companies. The way that we'll accelerate product value is by investing in AI, machine learning, and cloud deployments. Our new round will improve the ease and speed of getting value from analytics. That’s an area where we're already ahead and we want to continue to stay ahead of the market.
On the sales side, we’re focusing on global growth and accelerating growth. We are building an office in Tokyo and London because we already have customers in both countries. We’re continuing to grow our footprint across the US.
Product and sales are our two areas of focus and, in a way, that's all you really do in a startup; you build stuff and you sell stuff. And that's the same for Sisense.
Teddie: BI is a market that has been around for a long time. What are the most important trends that will help Sisense grow in the next three to five years?
Amir: The BI market is confusing to buyers because it’s saturated. Every company is using some solution. We're in a new generation of analytic technologies. The growth in data size and data sources, is mind blowing. Everyone has more data and more data sources. And at the same time everyone wants business users to be able to get more value from data without going through painful, long, tedious processes. That's a fundamental change. Add to this the fact that to be more competitive, every ISV is embedding analytics as part of their product and service, and further add the explosion in Cloud — both data sources and deployments and AI that can take the data to the next level of insights — and you get the perfect storm of company need.
However, most of this market is still serviced by twenty-year-old solutions, like MicroStrategy, Oracle, Cognos from IBM, and Business Objects from SAP – which is now reaching the end of its useful like – and you realize there’s been a major change in user needs without the major change in the vendors. Most of the solutions out there are outdated and unable to evolve fast enough. This is a perfect market for a company like Sisense – and a large market with the opportunity to add real value to customers. That's why we are seeing explosive growth. And that’s why I think it’s only the beginning of the revolution in this market.
Teddie: So, most of companies need to have analytics as some part of their business, and of course at Insight we're seeing a trend that almost every business is becoming a software business. Do you see most ISV’s shipping product with some level of embedded analytics?
Amir: Yes, and not only software companies. Everything around us is computerized. Let's say you buy prescription glasses online. They can tell you that you need to change lenses with some analytics measuring your eyesight.
Everything is going to have embedded analytics or it will be out of business. Just like every business is either using the internet, or already dead.
I believe that every business is going to bundle the product with insights around usage of the product. That makes the users better at getting value, and driving business value, and makes the company more competitive. We're at the forefront of that revolution, and I would say to every entrepreneur CEO listening to this podcast: If you have a product or service, and clients ranging from consumer to business, and you're not making your offering smarter with analytics, you'll fall behind, and you'll end up losing your market.
Teddie: Well, let's talk about any advice for the listeners and any aspiring entrepreneurs out there. You raised a few rounds with Sisense, and you have a lot of experience in fundraising from your previous ventures. Any lessons learned from the process or any advice you'd like to give to people?
Amir: Building a company is difficult. You always think the grass is greener but you always find out everyone goes through the same challenges and difficulties, despite how it looks in the press. So number one, you're in good company. You need money to grow the company. Some people have bootstrapped, and I applaud them. It's amazing. But most companies need finance — extended finance to accelerate growth or even start growth. And I've seen companies die by picking the wrong investor. Literally. I've been involved in a company that took money from the wrong investor early on and imploded at the end, so picking the right partner to give you money is really important. It's a wedding and you better know who you're getting married to. But at the same time, you need cash, so you need to balance the speed of raising money with the value of the entity you're taking money from. That’s my advice. After that, it's all about focus, execution and adoption along the way because no plan survives the market for long. All plans end up changing faster than we expect.
Teddie: That's certainly helpful advice. Amir, it's been great to have you with us today and really appreciate taking us through your story. At Insight we're really excited to be working with you and being a small part of what the Sisense journey's going to be going forward. I think the market that you're describing is going to be a very exciting place to be for the next three to five years. So thank you.
Amir: Thank you. And I fully agree and I'm excited to be here.