Gil Eyal: How Being a People Person Made Me Successful

0:00Welcome to the Exit Paradox podcast, where we discuss how to build a fulfilling and meaningful life after selling a business. I'm Anastasia Koroleva, an exited founder who spent the last 13 years researching and collecting stories about life after a successful business sale. I literally sold and the next day didn't work for the company. So it was a very sharp separation. Gil Eyal. Four years ago, he sold Hyper, a software business which revolutionized the way big agencies and brands run influencer marketing. Today, Gil invests in consumer startups that can benefit from having a celebrity on their cap table.

0:38In this episode, we discuss overcoming a post-exit identity crisis, building a personal brand, and dealing with celebrities. Once you start investing, it's very hard to mentor without investing because everybody goes, wait, Gil's involved and he didn't invest? What's wrong with your company? A lot of people who want to be angel investors end up doing one or two investments. It's a portfolio game. Like you have to do a lot of them to succeed. I see about 300 to 400 companies a year to invest in three to four. Why would anybody pay for influencers when you can just buy an ad? If you gave me cream that I could put on my head, grow a full head of hair, no chance you would believe me that works, right?

1:17Unless you saw The Rock using it for six weeks and growing hair every day when you post.

1:28Hello Gil, very happy to see you here today. Thank you for joining me. Hi, Nastasja, thanks for having me. So, four years ago, you sold a software company, which built software for influencer marketing firms. And that company took you seven years to build, and it made quite a lot of noise in the industry. Also, as part of that process, you personally built a celebrity name for yourself. You got all possible awards. You were called the new king of influencer marketing. And you hang out with the likes of Leonardo DiCaprio and Serena Williams. So my question is, when you sold that company, how did you feel in terms of your identity that you were no longer part of Hyper?

2:16are? You know, it was really hard because you genuinely become one with that company that you build. Like people know you as the person who runs that company. And depending on the type of exit you have, it's not always, you know, it wasn't a billion dollar sale where, okay, now I'm going to become Mark Cuban and life changed. Of course, for the first time in my life, I had some extra money in my bank account. I wasn't worried about paying bills the next month, but I was still going to be working and there's a real identity crisis around it like oh it's almost like giving away your firstborn obviously not the same but this is the company that I built for seven years it's all I did it's the only thing I did other than take care of my family and it's a it's a real crisis it was it took me probably two years to bounce back what did you do to bounce back what was helpful and what maybe was not very helpful that you tried?

3:16I am wired to do work, so I wasn't ready to go relax right away. So I immediately wanted to bounce back, find out what the next thing I'm doing is. But I got unlucky. I sold Hyper in February of 2020. A month later, we were all home with COVID. There was no hiring. Nobody was doing anything. When you sell a company, you do get a lot of offers. But the quality of the offers that you receive are part of what the market's looking like. If people aren't raising capital, if people are firing people, then you get different types of offers. So I found myself doing a lot of consulting work, recognizing that a lot of other founders are going through the same identity challenges that I was going through and dealing with the same pain that I was dealing with.

4:02And that led me to start my own investment arm called Stardust, which is initially was supposed to be with other partners. Now it's just my brother and I. But it allows me to be a mentor and help other people. And that's where I was able to kind of bounce back. Suddenly I found new purpose. I wasn't building a company. I didn't have all the stress and the pain that comes with building a company. But I got to be around really talented, better founders than I was, honestly, that could build bigger and better companies that have eventually become more successful than I was. But it allowed me to just find new purpose after you kind of are left with the carpet being pulled under your legs.

4:45So did it help you with your identity crisis? Because now you could say, I have this venture capital firm, right? So it probably felt good to say that. Yeah, but my identity crisis wasn't about a title. It was more about purpose. Like, what should I be doing? You know, I was at the time was 42 years old. You're supposed to have a midlife crisis around that time anyways. And, you know, where do you go? What do I do? I used to wake up at 7 a.m., you know, put the kids to school and run to the office and then be there till midnight and come back. And suddenly I have all this free time. Nothing's really that important.

5:23Like you can only play so many video games. so you wake up you you still take the kids to school and suddenly it's 8 30 in the morning and I have nothing to do so for me it was about surrounding sorry it was about surrounding myself with interesting people it was about waking up and jumping out of bed knowing that there's a reason for me to come it wasn't really about okay am I still going to win all these awards and am I still going to be considered you kind of feel like the market keeps moving on without you and new and smarter and more developed ideas come from other founders. And you can either choose to continue to compete with them and try to build something or do what I do, which is, hey, let me find people who can do better and help them do it.

6:07So you basically jump back into the activity to feel needed, to feel this purpose, as you said, again. Yeah, I needed a drive. I needed a reason to get excited about the day.

6:24And, you know, when you have a company, it's too much of it. There's never an end in sight. You can work all day long. You're not going to get close to what you need. So it allows you to find a better balance. But I needed to be close to founders. I needed to be close to innovation. So you got that rhythm and you ran back away from it, back to work. Yeah, but a much more, you know, a much more controlled environment. I don't work. Usually, I'll, you know, I'll still answer emails and stuff like that in the afternoon, but I spend a lot more time with my kids now. I'm not tied down to the desk until midnight.

7:04If there's obviously if a founder needs me, then we're there. It doesn't matter what time, doesn't matter if it's a weekend. But you have a lot more control, a lot more free time and a much healthier balance. So how much you work per day and per week, you think? So I do, I work about, I'd say 10 hours a day now. A lot of it has to do with my investors own a really big real estate company. And they asked me to come in and help them with some of the work there. So a lot of my time is spent there. I'd say about 75 % of it. And then I do meet with founders at least five to 10 times a week, either new founders or founders that we've invested in.

7:41And the way that we do it is because of our experience with celebrities and influencers is that we come on, invest, and then for the first three to six months, we work side by side with them to get as much exposure and more importantly, credibility through celebrity and influencer partnerships. And then we kind of take a step back. So I always have one or two companies that I'm working with aggressively. And then obviously if they pop up and say, hey, we need your help. We're in trouble. Something happened. I just had a bad day. I need someone to talk to. then sometimes that will last till midnight, but I don't really see it as work.

8:13It's my hobby. 10 hours a day. Lucky you. Pretty much. So it sounds like you are leveraging that amazing network that you've built with Hyper now in your new venture. Can you tell me a little bit more about how you choose those companies you invest in and help? Yeah. When I was a founder, I used to think that investors are jerks. You would get either a maybe or a no, but never really a good explanation of why. And then when you start investing, you really have to think about what you're doing and who you're going to invest in. And I realized I'm not going to compete with Andreessen Horowitz for the best deals.

8:57They're not going to come to me. But there are spaces where I can be a mini version of that, right? Where the value that I can bring would be enough for the best companies to want to work with me and the best founders. And where that really came to play is companies that have an amazing product, so amazing that you probably wouldn't believe would work because it's too good to be true. and it sells to a consumer that could be convinced and influenced by the types of people that I've worked with before, which are either influencers or celebrities where it makes sense. And so what we look for ideally is a consumer company, often CPG, but also consumer tech, where if I told you, hey, I have this product, you'd be skeptical.

9:46That's the beginning, right? Because some of the example I always give is if you gave me cream that I could put on my head, grow a full head of hair, no chance you would believe me that works, right? Unless you saw The Rock using it for six weeks and growing hair every day when you post it. So we're looking, you know, that's the ideal company. If you're out there, call me. We're going to do big things together. But we look for companies where, sorry, we look for companies where that's the story, right? Where that's being able to do. And then we say, okay, let me see if I can pitch the company back a plan and say, hey, if you bring me on board, here's what I'd want to do.

10:23I'd want to bring this celebrity, and then I'd want to go to this retailer. And that would require you to offer the celebrity compensation because we won't do it for free. Are you willing to do this path? And if they do, and we love the product, and more importantly, we love the founder, we have to love the founder, then we think about it as a viable investment. The result is that there are plenty of amazing companies that we pass on that just because we don't have the right value for them. The great example of that is a company called Deal, D-E-L. We were one of the first. I've known the founder for many, many years.

10:59He's offered me an opportunity to invest. And I said, look, I don't know this space. Obviously worth$12 billion now or something like that. Would have been nice had we invested, but I can't look at it that way. I have to focus as an investor. What we do try to do is be very direct with the founders and tell them the truth. Why didn't we invest? If it's really because it's just not a good fit for us, or do we think there's some flaw in the pitch? You know, maybe the market's not big enough. Maybe there's better competition that we've seen out there, things like that. Fascinating. So let's go back to you personally.

11:35Your motivation to work, and as you said, you work 10 hours a day and you're happy to do that. how how did your motivation change from the time when you just started at hyper and today what's driving you so you know I started hyper I was really no one you know no one knew me I had a pretty good education I didn't come from a lot of money but very loving and warm family and supportive family and you know my brother was a successful uh private equity and you know manager and my younger brother worked for, you know, big tech, Intel and then Apple. So, you know, a lot of disappointment to fail or not fail.

12:20And not a person who generally loves stress. But when I was working, before that, I got exposed to some celebrity work and I realized the impact that the then nascent influencer marketing space would have on digital marketing. So I felt like I really needed to do something in that space and thought that maybe I could make a lot of money. But I knew that it would take a long time for me to make a lot of money. What really drove me was to build my own reputation. That's my recommendation to every single person, whether you're a founder or not, is think about yourself as a brand, your personal brand.

12:54And how do you get to the point where people think of you as the authority figure about something? And it doesn't matter if you're starting a company or if you're just working at a big organization. If you want to be promoted, if you want to get bonuses, then you need to be the recognized expert about something. You want to be the person that we can't deal without. So I was very driven to try to build myself into that person. And I thought I had an opportunity because it combined a few things. One, it was an up-and-coming market where the old guard wasn't really excited about people who were doing digital marketing.

13:31really dismissed it at the time. They thought, why would anybody pay for influencers when you can just buy an ad? And I've heard that sentence so many times back in the day. So I felt like there was a big opportunity for a market that was going to be really, really big. The current active players are dismissing. So I could carve myself out a spot in it. And I also, you know, interesting people and the type of people would be attracted to this industry or the type of people that I want to work with. So I got into the space and started, you know, iterating because it probably took me five or six versions of the product before anyone was willing to pay for it.

14:17But what I found was that once I found a product that people were excited about, they were really excited about it. and so it became fun the first few years are just fun I felt like I was on this project that was kind of had the legs of its own legs people were excited to meet me you know I'd always been trying to get meetings suddenly people were asking to meet me I was being asked to speak so once it once I got some confirmation that wait I might be on to something it was very fun for many years until the later years which we'll talk about which became much much harder but the first two years were literally the best job anyone can ask for with you know the greatest people and in a space that was just tons of fun to work in.

15:05Are you happy you sold or do you ever regret? I wish I'd sold a year or two before we talk about a little bit but the market had shifted on us we recognized the market shifts pretty early because we were a data-driven company but not all of our investors agreed to sell we did have some offers that were higher so I wish we had taken them. You know, sometimes you get, you need luck. So we got lucky that we sold before COVID because we probably wouldn't have even sold maybe a few months later. But had we sold a year or two earlier, I think we'd all done a lot better. But, you know, hindsight is 20-20.

15:43Am I happy I sold? Yes, 100%. I think by that point I was fed up. The market had changed. We clearly recognized that the market was going to become a lot more difficult. Social networks who had previously dismissed this market couldn't really care about who's doing it, recognized that this was taking a chunk out of their revenue stream and started implementing different algorithms and doing everything they could to make our lives miserable, to make it harder for people to work. An example is a big social network. We won't say the name, but I'm sure people will guess. Called me up and said, hey, we suspect that you're doing something improper.

16:20So just know that we're considering suing you. And I said, what do you think I'm doing? They said, well, we can't really tell you. And I said, well, are you going to write me a letter? No, just know this. Now go raise capital when, you know, a very, very well-known, guess which one, one of the biggest social networks in the world, just called you. And you have to, you know, of course, you're going to disclose it to any future investor because you're not going to raise capital and get a lawsuit a week later. Of course, they never sued us. They never called us again. But good luck, right? So the market was starting to take a shift.

16:48The big players are doing everything they can to make our lives miserable. And the result was that I wanted out. So I didn't regret it, even though it came with a lot of separation anxiety. Yeah, the separation anxiety is very common in our post-exit founder community, as you know. So how did you achieve that closure? How did you move on? It was really difficult because what happens when you sell a company for not, you know, $3 billion is that even investors that made some money or gained some, some of them are happy, some of them are upset. And I had a whole, you know, by that point we'd raised 20 something million dollars.

17:27And, you know, we had co-founders and employees and everyone to take care of. And you never know, like every single person that you tell it, some of them are ecstatic, some of them don't care. And some of them are mad because they thought you're their ticket to God knows where, right? So a lot of it had to do with dealing with relationships and finding out who really was there for me and who wasn't. And not to say that I was perfect, but I did my best to get the best outcome for everyone. And so a lot of the investors were amazing and supportive and happy with the results. And others were, you know, awful.

18:08anywhere from you know just bad mouthing you behind your back for selling the company when they thought you shouldn't have sold the company and different things like that so a lot of it had to do I think it was probably a year of just kind of you know staying out of the out of the light talking to people you know having conversations some of them really unpleasant conversations with people that the people who maybe invested $25 ,000, but felt like they weren't included in the decision to sell. And often, or not often, but some very aggressive. So it's a tough situation. And some people might have thicker skin.

18:47But for me, I really needed, it wasn't a breakup where like one day I sold the company and I was gone. It was more like, okay, I, you know, there's a whole waterfall that is coming after this and I have to deal with every single component of it. It was also interesting because often when you sell a company, they ask you to stay on. We had merged with a competitor and then sold. So their competitor really, their competitor's CEO really wanted to stay on. And it was a perfect scenario because as I said, I was fed up. So I literally sold and the next day didn't work for the company. So it was a very sharp separation.

19:24Okay. Did you keep any financial interest in? Yeah, I still do. We'll go, you know, I still own, the sale had, you know, was broken down for cash port equity. And as you mentioned earlier, the acquirer who was supposed to go public soon after, but the markets, obviously COVID and everything, the markets making it difficult, is now supposed to go public. So it would be nice. Nice if that goes well, but we'll see. You'll have a good outcome. So you're happy you kept a bit of your equity? Yeah, no, look, I still like the company. So a lot of the people still work there. It was a great place to work, I think.

20:03and it would be nice to have a happy even happier ending for everyone involved because everyone will get some more cash personally i've been a lot more successful as an investor than as a founder meaning that i've made a lot more money on other people's exits as part of your venture investing after you exit or you're talking about your investments even before you exited yeah no after Now that I do my own investments afterwards, some of those companies have grown to be unicorns and done much better than our sale. And so instead of tens of millions, we're talking about billions in sales. And so it's just compounded, right?

20:42So as an investor, I found that I have done better. And I think I may end up being a founder again, but I think version one of Gil as a founder, looking back, there's a lot of things that I could do better because I'm learning from the founders that I invest in today. So for many of us, it's actually very hard to transition from a founder into an investor, just psychologically. Because what's required from a founder is so different than what's required from an investor in terms of your personality. So what's your take on that? I don't think I was a regular founder ever. I was very much a people person.

21:19I built an amazing team around me. People wanted to work with me with all modesty. you know we consistently would check if people are happy we never had people leave the company people only wanted to join and we built something that I felt was very special for everyone involved but it allowed me to attract people that were really really good at what they did so I think that component is a really good fit as an investor too you know people want me on their board people I think you know a very supportive investor so a lot of those qualities kind of transform. If you're the type of founder that's a very diligent CEO that needs to know everything that's going on, that micromanages the company, that was never me.

22:06And those qualities create really, really good founders. They're not the only qualities that create really, really good founders, but they're often seen in really good founders. for me I think my personality was always a good fit for someone who's an advisor or an investor and I think a lot of the founders that we work with feel like they get a lot of value simply but from the fact that I tend to analyze and understand what's going on and kind of give them a clear vision when often you know you get tunnel vision when you're a founder and that's what I did for my company you know I had an amazing CFO I had an amazing marketing person I had an amazing COO and those guys, I let them do their work and just kind of helped whenever it's time to notice, oh, wait, you kind of missed something or there's something else you should look at.

22:54I was the type of founder that I think easily transitioned into this position. Yeah. But there's a variety and I don't think I was the best founder. You know, I think there were better, not that I was bad, but there are definitely better founders out there and I'm finding that out every day. So basically, it was your people skills that made you a successful investor. It's a combination of people skills. And I have this ability to kind of envision, kind of build out where I think the challenge is, where the strengths are, and kind of really quickly analyze and understand strengths and weaknesses.

23:30It's kind of like a SWOT analysis in the head. And then one other thing is I just have, you know, some people have different gifts. My gift is I have a positive approach, meaning it's very hard to convince me there's no way to solve something. And I usually come up with a creative way around a problem or to solve it. And I think, one, people like to be around that. And two, I think it's very effective often. So as a founder, you're constantly bumping into walls and it can be very, very disappointing, very depressing. and you can lose faith. But for me, for some reason, in life, in business, I always see a way, you know, to move forward.

24:14If you're talking to someone who is just selling their company, what would you tell them not to do? It's a great question. Well, I think, you know, the number one piece of advice for me is that to understand whether it means to be humble or to be less judgmental of yourself, to understand that you're only part of the equation. what you sold your company for, whether or not you failed or succeeded as a founder. A lot of it has to do with luck. A lot of it has to do with decisions that were made with limited information. So if the sale is amazing, you know, stay humble. If the sale is just okay, don't be too hard on yourself.

24:53And if you didn't sell or, you know, it was a bad ending, you know, take some time, pick yourself up, recognize what you did right and figure out how you build, again, And then that's one piece of advice. The other one is, you know, think about everybody who is with you on this journey. And how do you make sure that you don't leave behind people that were unfairly treated? So, you know, we all know about options. We all know about equity. And the result often is that people end up, when it's time to sell a company, end up realizing that they own a lot less than they thought they did. They got diluted.

25:30They didn't realize how much stock they actually had, all these things. So if you haven't been transparent until now, which you should be, is my advice. But if you haven't, make sure you have these conversations. At the very least, let them know that it matters to you, that you care. But more importantly, do what you can to make sure everyone got what they put into this company. I'm sure these were not very easy conversations for you. And you said it took you a year to deal with all of them. It was interesting for us because we were kind of in between. People made money, but it wasn't the dream money that a lot of people had hoped.