Yuval Kaminka, Founder & CEO of Simply, on Why Running Out of Money Was a Gift, Opening the Company's Bank Account to Every Employee, and Using Music and Art to Heal

0:00A few years ago, the business basically stopped growing. Full disclosure, I thought we should write off the company. If Aleph or anyone else would have injected a little bit of money to help us out, we wouldn't be around today. We want to build a huge company, we want to go into every home, we want to go public, we want to create something meaningful that is in every home in the world. That's like the type of company that we're building. Your growing revenue per employee is just almost a nine-month plan to get to where you need to get to and it happened in three months all of a sudden. What happened?

0:31During the war, you said it started October 7th. Unfortunately, your nephew was killed. And I. And I. Your co-founder, Rui, passed away. Two years ago. Two years ago. At age 44, suddenly. How did that affect you personally, and how did that affect the company? And then we're going to go from there to the near-death experience. Looks like it's a fun episode.

0:55Welcome back to another episode of Invested. My guest today is Yuval Kaminka, the founder and CEO of Simply. Welcome, Yuval. Thank you. I'm going to start in an uncomfortable place, can't I? Shooting immediately. Okay, let's go. Yeah. So you have what I would call at Simply two defining experiences, including one for, full disclosure, we're your investor, where I thought we should write off the company. I remember that. You remember that. Also, a few years ago, the business basically stopped growing. And so what I'd like you to do just to start off is to describe in just a few sentences what it is that simply then named Joy Tunes does.

1:42What's your business? And then I want you to start really with that first challenging moment, we'll call it, which is already back, I think, in 2015 or 16. Is that right? Or 17? When did that first challenging moment happen? It's been a journey. Start with what the company does in three sentences. Okay. So, simply builds a companion, a creative companion for every single home, every family, every person. It makes the pursuit of creative hobbies simple and fun. And it means in every home, in every family, there's at least one person that wants to be able to play an instrument, draw, craft, dance, sing, cook, something which is a very human self-expression.

2:33And they are very difficult skills. And we're building tools to make it very, very easy for you. And it's working amazingly well and increasingly well. Yeah, I know it's difficult because my mother tried to get me to play a musical instrument. She got me a piano teacher. No. A guitar teacher. No. I didn't try drums because I'm clumsy, but my brother did. No. Actually, we may be the only family that doesn't answer to any of those creative skills, but I did manage to pound out. But that's a point. Like in every family, you would have, you want to do that, right? You're looking for a best way. You just described, okay, I don't want to do it with a teacher.

3:10I want a skill. I want to be able to do that. I want to play piano. I want my kids to play piano. I want to dance. I want to, my daughter wants to dance. My kids are drawing and want to draw better. And, you know, all that applies to every single family, every single family. Anyone can do it and anyone can do it way better than what they're doing it now. All right. I think that's, that would be the point. Not necessarily you become a professional pianist. Maybe you will and maybe you won't. I'm not, I'm not the judge of that. But you can get to a level, every single person can get to a level that you're having fun with a hobby, that you're at a skill level, that you can just, when you're looking, when you can sit down and draw something and have fun with it.

3:54Every single person can do that. I will say that my nephew, Yehuda, he taught himself to play piano using Simply Piano. So the first product was Simply Piano, then at the time called Joy Tunes. You want to just describe what the product is? So Joy Tunes is almost a different company. Right. It was not just, it wasn't even a small pivot. It's like a huge, very separate, more education-based company through teachers and education systems and so on. And then we shifted to Simply, which is a huge expansion on many levels, also not just music. Expanding from music to arts, craft, and so on, all the creative domain.

4:33Why don't you describe the piano product, describe the draw product, and then we're going to go from there to the near-death experience. So both products are beginner to capable, getting you from nothing. I don't know how to approach this. I don't know what to do. I don't know in the piano, I don't know where to put my hands even to a level of capable, the basic capable, where I can play with two hands and have fun. Enjoying as well. It's not a copy. Most what you have, the comparables is a copy by reference by copying just what YouTube reference or something, which is not a tangible skill. but actually by drawing something that you want to draw or your child wants to draw, learning about perspective, dimensions, reflections, shading, and so on, and the method to do it in a super, super, super fun way.

5:23All of them are working amazingly well. Draw is at the forefront of growth. Okay, we're going to talk about that a second. Okay, so go back to 2016 now. the company had gotten started in 2012 13 when did we get started that was Joy Tunes roughly around that time I get it I think that the point that you're referring to is a point where the transition that's exactly the transition point we had this board meeting where Eden from Aleph we had this conversation about okay Joy Tunes is a company with the most value that I've seen, in his words, that I've seen to consumers. We have to start. It's not like we have to monetize.

6:12And that was a shift to Simply Piano of not doing through education systems and teachers and so on, but doing something which is direct to consumer. The shift has simply started. And kind of 2017 is a year that simply started. You were out of money, basically. You were close to out of money. And we were out of money. we're approaching it was a very it wasn't a fun point it was a very defining moment we created a very aggressive plan that included firing a third of the company and we were small a third of the company in any size is very dramatic but it was very family community like it was a very dramatic moment with a very strong plan of how how we not just get amazing growth, but also reach break-even and beyond, kind of own our destiny over this fact.

7:09And at that point was also the write-off. I remember a conversation with Ed and following a board meeting with the plan, Ed then said, you know, I just want you to know companies do not survive something like this. And we can't bring in more capital inside because we have our fiduciary duty. So just truthfully, we can't do that, but I will support you in any way that I can, which as you know and when listening, we know it's not a trivial thing to say because usually people don't pick up your phone at that point. And he was, I will help you in whatever way that I can. To me, it was a very depressing moment because, Eden, but we have an amazing plan.

7:53Like it's going to work. Like why are you writing us off? I'm okay with not getting the capital, but this is, we're trying to be supportive, but it's actually a downer. And we had a plan that was kind of June, and we had a plan, I remember the dates and everything. By the end of the year, we will get, or the first quarter of the following year, we will get to break even, even remember the financials, the numbers, everything. And we get to that within three months. And we give a talk to everyone as part of the onboarding to the company. We're now over 200 people. and the team and punching way over a way.

8:28The ARR per team member and all these metrics are kind of over all the benchmarks and everything. And every single person that joins today has, we have an onboarding session about that moment to something in which is very strong learning in our journey. But especially the freak out was actually not firing people at that point and all that entailed was a few months after when we saw unbelievable growth in terms of velocity. The two principles of the company, the cultural principle of the company, were born there, and we were lucky, we were fortunate for that to happen to us, that we ran out of money.

9:13Otherwise, we wouldn't be around today, the things that we learned there. If Aleph or anyone else would have injected a little bit of money to help us out, we wouldn't be around today. It was a learning that we had to go through. What are those two cultural principles? The two principles that we have are co-building, that we all are, everyone's not leadership and employees. We're all team members that are co-builders. Being a co-founder is, this is usually what we, when people say co-founder is what they mean. But being a co-founder is you will do anything. Like this matters to you. This is your baby.

9:51You will fight for this. You will have resilience. and persistence and you will do whatever it takes and you were there in the beginning at the spark, which matters, right? It is a point that it matters. We're taking that temporal element out, but the same principle of this is yours. You are a shareholder. You fight for this. This matters for you. You are impact driven. You will do whatever it takes. No ego. Nothing is too small. That is a very strong element. That is the co-building part. And the impact velocity is a combination of get shit done and first principle thinking. And what turned it around so quickly then, right?

10:28You made the point that it was like almost a nine-month plan to get to where you needed to get to, and it happened in three months all of a sudden. What happened after you fired a third? By the way, my recollection is it was more than 40 % of the workforce, but I could be off. It was a third. It was 21 people to 14. Again, very small, but a dramatic moment. and the two so the manifestation of the two these two principles because what we did is okay we took everyone that remained and full transparency of everything we opened the bank account on the screen everyone this is the amount of money we have these are the simulations this is what happens if we succeed this is what happens if we fail this is like everything this is the plan the plan The plan had this amazing element of focus.

11:23There's something so crystallizing about a near-death experience in that sense, figuratively, of course, that just makes it like, okay, these meetings and this conference we were going to go, it doesn't freaking matter. Like, this doesn't matter and this doesn't matter. And we started the whole pod system that we work in squads. It started there. Basically, these are four things that we have to get right. Our plan consists of four things. Each one had an owner. All of us are shared resources, but each one had an owner. And this owner was obsessed. And all the team were obsessed about everything, about the entire plan.

12:01And it just worked very, very, very well. Everyone stayed. We worked around the clock. And we had very smart tests. And we only did these four things. We didn't know. No distractions. A guillotine of focused worked extra hours. and I think we were lucky that I think all four were successful, but it's like the plan. So we even had Alta, we had these kind of synonym for it. So it was moving Simply Piano. It's the beginning of Simply Piano and the monetization of it. So it was the A, the first A was Android. It's a very tactical. So Android, lifetime value, we did 6x on lifetime value that year. Teachers, we had a very strong teacher community from the past, and we gave it for free for teachers.

12:53It was how to monetize in a smart way for teachers so they support us and not mad with us because we have to monetize with them. And Apple relationships that I sense were very, very close with all the platforms and with Apple specifically, but it started then. How did you make the decision to share the bank account with all the employees? That's unusual. That was easy. That was the easiest. From all this plan, from everything, that was the easiest. We still do it to this day. So every all hands of the company that we have every month and a half or so, there's a full count of how much capital we have.

13:33It's just a form of context that we should all share. it's not transparency as a principle because there are things that are not that are not personal agreements employment agreements not everything is transparent but there needs to be a reason not to share something versus the opposite and a lot of places a lot of companies need to know if you need some context we will give you and we will make it know everything is available Everything is open for everyone, every context. I can't guess what context you need and don't need. There needs to be a good reason why not to, and sometimes there are good reasons.

14:14Your employees could freak out from that. They see the cash balance. They see how much money you're spending per month. Won't your employees freak out?

14:23So sometimes you do need to manage expectations. Freak out is destructive, right? But if we're in a situation, we haven't been since that time, But let's take that moment. It's understanding the situation, understanding that, yes, there are outcomes of this. But now you get a lot of so many ideas and responsibility comes from the team now that they're thinking of. It's not someone from finance thinks of ideas how to cut budgets and start fighting with everyone else. The team comes out. You know what? we could open source this or we could use another service so I don't need to fly out, whatever, or something like they find.

15:09We even had, on many occasions, we even had to tone it down a little bit. It's like, okay, you know. You can drink the expensive coffee. Yeah, the capital matters, but it's okay. This is impactful. You should, you know, this is a good spend to have. So take me forward now. Growth stalls in the business, right? What year are we talking about now? that growth kind of stalls out for a bit? So from 2017, from the transition to simply, we had amazing growth. Amazing. Amazing growth. And then post-COVID, COVID was very, very good for us. We're going to come back to COVID in a second, but yeah. Okay, so post-COVID, growth stalled.

15:50I think it's not necessarily very much as a decision. There was a point, again, part of this first principle and way of thinking and being very focused on things is that in the crisis that happened after COVID, it was like, okay, growth is not rewarded by market. Like the proxy for the predictive for a successful company right now is not growth. It's runway, capital efficiency and runway and so on. So we made, okay, if that's the case, we can really invest in improving our capital efficiency, our modeling, our infrastructure. like a country does in times of crisis. Like, let's work on infrastructure and roads.

16:35So we worked a lot on roads for that. So this was a purposeful decision to - A very purposeful decision. Because you believe the stock market, basically, or investors didn't reward growth enough. Exactly, and we turned to profitability very quickly. But it's hard to restart growth from there, isn't it? And it's, again, it's Eden, again, and I'm going to quote him a lot. We're very close. We like him. We like him. I think we all tend to like him. Good guy. Keeper, for sure. Listen, keep him around. No, my wife says if I wasn't married to her, I'd be married to Eden. Your partnership with Eden is one of the biggest mysteries of life for me.

17:18Like just how different in the relationship that you, you two are in the way that you think about the world. It's amazing. It's like, you don't know this, but I analyze this with people from Aleph that joined our team after a lot and with Edwin a little bit and so on about this relationship, of these beautiful relations that you built, but we can talk about that. Yeah, I didn't know that there was a psychoanalysis going on behind my back, but I'm glad to hear that it turned out okay. Yeah, there's a lot to say. We can talk about it. But it was a purposeful decision, and then Eden had that reigniting growth is going to be very difficult, but because what we did at the time was building the roads, the infrastructure, the modeling, the engines.

18:12We started Simply Draw at the time, and so on. So there is a question of pacing a little bit, like moving to both, like, sometimes like mission takes a little bit of time, even just, you know, cohorts accumulating again, right? Like just like the dynamics of subscription business and so on. It takes a little bit of time. But the acceleration was actually like we moved from being flat for a year and a half or so post-COVID to 25 % growth and then 35, 30-something percent growth and now 50 % growth. So I want to talk about COVID one second. Because I think that was also the seeds of some strategies.

18:53So COVID hits. you have by the way this beautiful office is very musically and creatively inspired with music instruments and drawing and it's just a beautiful space and everyone goes home but everybody goes home and they're all looking for creative hobbies so take us through what happens in COVID and particularly some of the decisions, business decisions you made during COVID that caused the company to really accelerate Interesting, so there were two big things that happened at COVID. One was that the go home, but that we got a very good view of a passion for people. So it's more of, we got this, we said it's like you get a crystal ball that tells you the future and gives you an underlying of human need going back to where we started, right?

19:46Basically everyone wants to play a piano. We only had piano. we had the beginning of guitar at the time. So we only enjoyed COVID and the piano times. And so everyone wants to play piano, basically. Now they have a bit more time, which is a question of tools, of how accessible and easy and so on. So we got this glimpse of the future. And at the same time, just marketing was very cheap. So the combination of these two things created a very strong effect. We were very cautious. even the analog that I used was, it's like I'm going to, as a company, I want to build a huge, we both want, you know, we want to build a huge company, we want to go into every home, we want to go public, we want to create something meaningful that is in every home in the world.

20:32That's like the type of company that we're building. So as a company, it's like I'm going to the gym and I'm always working on my muscles, but someone came in at night and replaced all the weights to be featherweight. and that's the parallel to the marketing spend just being like very cheap and efficient. So working as a company, I can enjoy it. It's like, look at me, I'm amazing. It's like, but I know that this is not real. Like I'm not actually much better at growth as a company and that one day, and we knew that because we were, we had amazing data science that went over every quarantine in the world.

21:11So we could actually predict everything that's going to happen. So we knew these weights are going to go back. So if I want to work on my body, if I want the muscles of the company, I need to work extra hard. I need to stack weights on top of each other. And so we didn't squeeze the lemon. We didn't, so we worked more on usage and retention and content. We accelerated working on guitar. Like we had, okay, this thing is happening. We need to prepare for when it de-accelerates, which is why after it was a decision, like post-COVID, the fact that it was a decision to stall growth and move to profitability was that it could be a decision and not, you know, this panic move of, oh, no, growth.

21:58No, we knew. Talk to me for a second about your background. By the way, were there any marketing gimmicks during COVID? Like, did you give it away for free at all? I believe you added a family subscription at some point. It wasn't a gimmick. Okay, well, things that we wanted to test out. We did give some things that we do to this date when there is a big crisis somewhere. So we like to give it for free. So we started, we had this time. I think the first quarantine was in, I'm not mistaken. I think it was in Italy. And I think we did, we gave it for free there in the beginning before it was the kind of - So when there's a quarantine in Italy, you just say, okay, simply it's free in Italy.

22:41Yes. For how long ago? If I recall, it was a time ago, but if I recall, it was like a month or two. Okay. There was free. You have the privilege to work on a domain that gives a lot of comfort to people in times of both good and what's less trivial during bad times. So it comes with some level of responsibility during these times. Yes, it was a calculated thing, but not a gimmick. If you're interested in finding out ahead of time what's going on in Israeli tech, what the latest trends are, who's breaking not only news, but breaking the trend lines, then you want to subscribe to Aleph's newsletter.

23:20And you can sign up right in the show notes in the description of the show. Please subscribe to the newsletter. What's your background? First of all, do you play an instrument? I play now with our things. I'm not a musician before. I have a very clear kind of cyber type background. Most of my kind of first degree during high school was kind of in the office in the army in the right units. So kind of the journey was laid out to me. The path was laid out for a cyber track. I worked kind of algorithmic research in cyber companies and B2B enterprise companies and so on. but I was always drawn to impact that I wanted to see in the world, ideally in people's hands, but not necessarily so.

24:14Like it's not B2C versus B2B, but it's more like this is a change that I want to see in my humble way, kind of small way that I can affect it. I want to be part of that. So first of all was maybe, you know, being the forefront of that was actually academia, like science. So I went to did my master's degree in Weizmann Institute with computational neuroscience, basically computer science and neurobiology, and was really enjoyed it immensely. I remember the pitch I was considering the Hebrew University versus Weizmann and Weizmann Institute. It's like someone asked, well, what if we finish all our coursework?

24:53Like, you know, that's on a scholarship basis. So can we just go home? And the answer was, I don't think you understood. You come here, you're a researcher. It's like, if you finish, go read papers and research something. That struck me. It's like, I have to be here. This is amazing. And I did way over on my kind of courses. And in courses, I became this teaching assistant. I did a bunch of stuff. And I really, really, really enjoyed it. And both my advisors offered that I continue working and funded me for a while further further to continue a PhD with them. But with a lot of respect for the science, I felt I needed the application of things.

25:35I felt like there's so much that I researched here and I was exposed to that I think can be already used to do things out in the wild. So you're like a neuroscientist and a biologist that's helping people do creative hobbies. Is that the right way to think about this? Yes, I did explore a bunch of stuff. So I'm not like I was agnostic to. You wanted to start a company. You didn't care what you did. No, I wanted to solve a pain. And what was the pain? And the pain that we started with that took us on a lot of different routes, but the pain that we started with was this pain of starting an instrument.

26:12So it started with music. The psychological pain, you think? The psychological, all these kind of 90 % of kids that are starting out with learning an instrument and don't finish the first year. Is that a cost pain, a psychological pain, a talent pain? It's not a cost pain. It's not a cost pain. Like, you know, as a parent, you would pay any price for a kid. Like if they only continue, it's like I'm okay with almost any price for it. It's worth so much. So it's a motivation. Why is it worth so much? It's a motivation problem. It's a motivation over these exercises. Like with any skill, you'd have this.

26:46so it's not it's very similar to a lot of education and skills and sports and so in that sense like this beginner to capable challenge is common to a lot of domains and it's a real issue, it's a real problem a lot of great companies built amazing tools in sports that are exactly kind of implementing solutions for that exact pain of how to get to the capable and how to maintain it, how to continue with it. So you mentioned before that during COVID you released the app or the service free and to encourage usage in numerous countries. That began a trend because also during the war, post-October 7th here, and during the war with Iran, you also released it free.

27:34You want to talk about that? October 7th that hit us and the country hit very, very hard. And in the beginning, like most in Israel. We did everything that we could think of to help from housing and closing to the fact that making sandwiches, like we ran around trying to find places that we can assist as a team. And with the passage of time, it became more and more outside. We're actually in a domain that is like our day job and we don't need to invent something. Our day job is super, super, super helpful for healing processes of people. And we can do that. So we started doing more where we're uniquely positioned.

28:16That included opening our apps for free here. And it was for a long time, for like a year. It cost us a lot of money to do that. We did this for a long duration. And then also various different projects. And I think the highlight of them was the rehabilitation. We'll cover that in a second. But Israel wasn't the only place you opened the app to, right, over the last couple of years. So we opened in several other areas, but it was mostly we focused on the region. We did see spikes in usage in the entire region. During the Iran War in particular? Yes, in the Iran War, you really could see kind of spike.

29:04The whole region is lighting up. The whole region is lighting up. There's something that... It's like an orchestra in the Middle East. or a drawing first of them at least. Yeah, so there's something about this domain that transcends kind of borders, very human and transcends like the universal language and the universal parental need and a personal need and a human need that transcends all these fights and borders and conflicts and so on. It's just amazing and light for everyone. What are some of the comments you got from parents in particular, either during COVID or during the war, about how their kids experienced the accident?

29:40We get very emotional responses. We have a lot of, it's interesting to be in a company where it's very common during a user interview that people cry. Really? From joy, from being proud if it's a kid or for themselves of achieving something. Let's say even like a measure of, okay, we think we got it. Like we have a good product market fit indication when you see these strong, very strong reactions to something that we created. And definitely, and kind of for people that are enduring something, which is more difficult, fighting a disease and like this is something, and elderly, obviously, these are things that fill a void, help fight various, you know, and loneliness and so on beyond.

30:34For every demographic, there's something that is very important for them than they can achieve with this. If it's a teen, it's an X factor. For every demographic, it achieves something which is very emotional, very fundamental. Is there any specific picture that was drawn that stands out in your head that somehow someone shared as part of a user survey? There are so many. I think one that I can relate to was this generational. generational like you'd have a child a father and a grandfather all holding uh the same drawing that they kind of each one drew a version of their own and they had there was a picture that was shared of three of them together and was that was kind of okay that was this is a beautiful moment you know where that came from in the world um i think this was uh in the tel aviv area so uh during the war started october 7th unfortunately your nephew was killed yes Yanai.

31:35Yanai. Yanai. You want to tell us about Yanai?

31:40Yes, it's on the more sensitive side. But Yanai, he was a search and rescue officer, and he came that morning, and he became, during both his life and what he did before, and these final moments that morning, a symbol of leadership, even though he was a very young leader and learning the ropes of it. But he challenged a lot of the common wisdom to create his own path of how he thought leadership could be. And it was based a lot on love, on empathy and love. you have to love people, you have to be empathetic towards them, you have to understand them. There's this one, without, again, without going too deep into it, this one story, the people, commanders that he, that reported to him, and he gave them an exercise at the beginning of some course, of a leadership training course of some sort, and he gives them an exercise of a scenario when a soldier or something is behaving in this way or that way and so on.

33:06It's like, what do you do? And they were, you know, the punishment. He can't go home. He has to do these chores and so on. Like there was this punishment entailed with that. And he said, okay, I'm going to add new information for you. And this new information is that it's a lone soldier. is kind of family and they have financial challenges. And is he troubled by that? Like when he goes back over the weekend, he needs to get a job and he needs to kind of help out. And his girlfriend dumped him or whatever. It's like, I'm going to add more information. Does your answer change? Like what are you going to do?

33:42It's like, okay, obviously our answer changes and we're going to do this or that. We're going to help him, assist him and so on. But how could we know? It's like your job is to know. if you want to be a leader your job is to know you need to know what's going on with the people that you're leading for you to help them to be the best versions of themselves and that is that is beautiful and that is so non-chirpile that's inspiring and he spent his nights talking to his fellow to his soldiers to other people and he didn't sleep at all. He spent all his nights just talking to people and he had his notes and he did a lot of house visits and he helped in whatever he can.

34:33So that's the type of person. And he became part of what you said you want to talk about later. But part of the music room that we later opened. And he came, for those who don't know, his beach, basically, area just north of Gaza. that the terrorists landed on and began shooting up many people, and they're searching rescue missions there to help the people, civilians, to get out. But we have something that we don't normally do on this podcast. We have a clip. This is the first of two clips we're going to play. It's amazing. A 20-year-old kid, you know? Unbelievable. Only at night can you see the stars, guides us in this room.

35:17With every tour that comes through, we honor Yanai and tell his amazing story. Here, we honor him with the plaque and a bit of Yanai's story. Yanai's coffee cup. His parents say it was left everywhere, even at home. Probably his cup from the base. They found it there, and they turned it into this sculpture at Petzalel. At the ceremony, his parents asked one thing. Whenever you can, invite someone for coffee. Someone you want to talk to, someone you're fighting with, someone you'd like to get to know. Invite them for coffee. Ten, fifteen minutes. It opens the relationship. His dad said at the ceremony he'd call it all hours.

35:51Dad, this soldier needs a washer. Dad, I need... He was so open, he really wanted to help. Finding these people as he went. That's truly inspiring to me. A kid like that, 20, it's amazing. The thing that struck me about this clip about Yanai is the quote. At every night or every night, you see stars. And the double entendre, which works even better in Hebrew than it does in... Only at night do you see the stars. Yeah. and it says so much it's also very related to Simply which is that there's all these people around the world with these hidden talents and only when you can kind of get to them in the darkness of their own home on some level which is hey this app and service comes where you can discover your own talent do you find stars it's like striking it's almost like a family trait to be able to find these hidden stars around the world it's a very strong It became a mantra.

36:49It's from a poem that my brother, Janai's father, Yael, wrote him before and became a mantra of Janai. And it felt very fitting in the room where in a time of darkness, there is light, you find rays of hope, and you find good people. And there is a lot of what's in the room. our domain, which is a domain of light. Of spreading light, of giving hope and giving light. Not only in darkness, it's just light. A little birdie whispered to me that he played the piano too. He played the piano. Did he pick it up from Simply? Or was he talented? He was self-taught. Yeah. He was self-taught. A little bit of Simply, but mostly self-taught.

37:45Not lessons and tough-talk pianist. And a very shy one. And so, you know, this video we just saw showed his coffee cup, the memorial coffee cup, which he left around the rooms to help him keep awake at night. At night, because he didn't sleep at night. He drank a ridiculous amount of coffee. A ridiculous amount of coffee. It is 20. Yes, a ridiculous amount of coffee to be able to keep himself awake to talk to people. So I mentioned before that we explored so many ways in what way we can be helpful. And then the connection was made with Professor Amitai Zee from Sheba Hospital. He's a manager of the rehabilitation hospital at Sheba Hospital.

38:35And he had this vision of how music learning is a fundamental part of a healing process and not, not something secondary, um, which is very revolutionary. It's like very innovative, um, in the world. And we hit it off immediately and it was an amazing, very, very rapid process. Uh, we found, uh, generous donations, um, the Greenberg Greenglass, uh, family, um, that helped with the construction of a music room, Harmony Music Room, and a donation that we brought. We being Simply. We being Simply, yeah, for the spark, right, of Simply, of instruments and devices and subscriptions and music therapists.

39:27We connected with the Jerusalem Academy of Music, and they came in and brought their students to help with the ongoing activation of the room. and it's beautiful and kind of in our terminology in our domains there's a product market fit and a very strong one the music room is fully booked departments are fighting over it they all want it became something very crucial as part of the healing processes for all various demographics there's a community of makers that are building instruments that are helping for those with disabilities that need different types of instruments Maybe a good time to mention that they are looking also, like they need donations for musical therapists because they want to expand this program and have more therapy inside the room.

40:17My son-in-law, he talked about this very openly, was wounded in 2014, and he was a musician, played guitar, and he couldn't play guitar after his injury. And a bunch of guys who were good at hacking things together got together and built him a special implement for his finger and his hand so that he could squeeze the chords on the guitar. And he went back to playing. He ultimately recorded a song with Tzahi from Fauda. What's his name? Tzahi Alevi from Fauda. He recorded the song with Tzahi Alevi from Fauda. Beautiful. You know, about basically the road of life. and I see firsthand how music is part of the rehabilitation process through my son-in-law.

41:11You're very regimented at simply about ROI. I mean, I've never seen a company more maniacally focused on ROI and KPIs. Is there any ROI or KPI to this music rehab room?

41:26yes I think the ROI is us right is our own the definition of the ROI doesn't have to be a very numerical one it can be it's more being having a strong purpose being very deliberate about things about how the success look like and being very focused like if this if we're going to do this we need to do it right and this required a lot of resources and bandwidth to do it right but it was very important for us to know that there's product market fit like if this was another room that is half empty and devices that are broken it's like no no we have to make sure that there's kind of enough that there's maintenance and there's support and that continues and so like that's the only way to do this it's not Who built the room?

42:18The construction came from this donation that I mentioned that's from the hospital side, the Friends of Sheba. And everything inside it and the therapy, the ongoing therapy came from us. Came from you. Did you help build the inside of the room? No. The design of it came from us. The design came from us. Yes. I thought I'd heard something like that from you. Yeah, we designed the room with the hospital. Let's see the clip.

42:52You know, rehab basically depends on the motivation of the rehab individual. Liat was an example of someone whom we couldn't, we could hardly penetrate her very depressive mood and depressive attitude and the lack of motivation. It was a truly rare encounter. She came in in a wheelchair. She didn't speak at all. She was very much within herself, at bed, hardly going out, hardly cooperating with physiotherapy, occupational therapy, and other means of rehab that we offered her. And her eyes literally lit when she was offered to come to the room. She didn't want to sing. She came with her wonderful family.

43:47So I told her, okay, I'll sing, and you just breathe between the lines. I can't really go into the details, but I know roughly what happened. I had multi-system injuries all over my body, injuries to my face and eyes, as you can see, unlike myself. Look at her today. Today she walks without a cane. She's out of the wheelchair. She speaks. The rest is history because she's done a huge mileage via music therapy that she's not oxidized anymore. If this room hadn't been built, I don't think I'd be where I am today because this room just helped me grow and give me strength in my heart. And it just happened all at once.

44:30One day I simply started talking again. I swear it, they worked with me a lot. Speech therapists and all. I started speaking again. the first word I said was mom and she was over the moon. And somehow I was talking again. Seriously, even the doctors don't understand why or how it happened. Do you realize how crazy that is? So when you see that story, the music room brought her back to speaking. How does it make you feel?

45:03It's obviously speechless. speechless. It's like I don't...

45:14I'm very proud and happy that I'm part of this, that I had some stake in this, that we had some stake simply as a team, as everyone involved in this. It's beautiful. I heard that somebody described seeing an amputee sitting down at a drum set. and asking, wait, can I record my songs here? What do you feel the first time you watched someone like use the room and say, hey, an amputee is going to record his songs here, play the drums or record his songs? So maybe the silly answer would be going to the, to being deliberate. I want to see day seven retention. It's like I want to see not the first enthusiasm, I want that result.

46:07I want the end result of the... Liat speaking. Of Liat speaking. I want to see that patient continuing time and again and not coming because the first impression is important and it's great. It's like you come and you jam a little bit and so on, but will this person come the day after? It's like when I was there recently, immediately, Like, my instinct was to go around and check that everything is working and to see. And I found this amplifier that wasn't kind of, okay, we need to replace that. And, like, did they clear the room for me to be here or was it empty? And so, like, I want this. This is not this kind of poster thing.

46:51We want this to work. And it looks to be working, so we're starting to replicate. Like, we want to do more. Where are you going to replicate? That's what I was going to ask you. Are there other countries, other cities? So the immediate thing that we did, which is a slightly different use case of this, was we launched it several weeks ago, was with Tel Aviv Museum on the drawing side of adding this element inside the museum for families and kids and delegations and art therapy and everything to be able to interact with the art of the museum and draw pieces of art from the museum there. And it just started recently.

47:34And there are two amazing product market fit. How do you define product market fit? Despite the fact that there are a lot of things that are broken, the projector isn't necessarily screening the drawings, and it's not necessarily tight with everything. And still, we have tens of thousands of drawings made. And this is like in a few weeks with 15 to 20 stations there in the museum. Like we have tens of thousands of drawings made. You take the art from the museum and then you kind of... And then it's like it gives an instruction with Simply Draw. It gives an instruction, a tailored instruction for how to do to make this drawing.

48:13And, you know, in a session that's fitting for the kind of capacity in a museum and so on. Like 20 minutes of drawing of some art element from the museum. and then you broadcast that, like you put this on the projector and it shows it on the wall. And you have this moving gallery of drawings that the kids are now part of the musician of the gallery. And again, full all the time to the point that they have to force people out after closing hours. They kind of close the light on kids. And now we want to look at expansion, both locally, kind of do more of this, and then, or in parallel, start doing in other countries, U.S., obviously, and in different and other, in more use cases as well.

49:06So we have kind of museums, we have hospitals, we didn't do children's hospitals. I think it applies very strongly there. Someone recently brought up prisons. That's kind of a rehabilitation of, that is interesting for us as well. I think there's a lot we can do. This wasn't your only interaction, unfortunately, with Lost during this time. Your co-founder, Roe E. It looks like it's a fun episode. No, it's, I think, an important episode. I know because there's this unique combination of retreating company that brings us joy. I mentioned my nephew learned to play the piano with this. My kids have all used Simply, by the way.

49:43They're more musical than their father because they got it from their mother. And I have run into thousands of people, probably at this point who have taken on a creative hobby through Simply, and it really incredibly brings such joy. And I think the striking thing about this company, as we mentioned the challenge of laying off a third of the company, the growth stalled, at least from our perspective, you say it was the infrastructure. Either way, it doesn't matter. Restarting that growth is stunning. This is such a scientific company. You really created this pod structure that so many companies have emulated, which I want to come back to at the end.

50:19And you're a totally KPI-driven company, and you've just overcome an incredible amount of things. And whilst accelerating, you're bringing more joy to the world through this. And so, as I said, your co-founder, Rui, passed away two years ago, two years ago now, at age 44, suddenly. Suddenly, I understood Disney, yeah. and within I think five or six months of your nephew. And Rui I think was with you in the Army Union. He was your commander in the Army Union before starting the company. How did that affect you personally and how did that affect the company?

51:04So the effect was obviously meaningful.

51:11besides being one of the most brilliant people I've ever had the privilege of working with and I worked with a lot of very, very, very smart people he was my best friend we had a lot of past between us traveling in different places in the world and our partners, just the two of us and with our partners he was my best friend and the impact of it is obviously, okay, so it impacted the company. Obviously, he was a beacon for a lot of people and he held a lot of stuff and a lot of people depended on him, including myself. And so kind of over the past two years, almost three years, a lot of people have been asking me where do I find kind of the strength of everything that happened with this very, very difficult time on a personal level?

52:12Do I find the strength to continue with the startup grind and with board meetings and investors and all that? And my response is that it's sort of the other way around, like working in something like what we do and with the people that we do this with. is what gives me strength to deal with everything that is happening. You once, I don't know if you remember this even, but you once asked me years ago, how do I deal, how do I cope with the loneliness? Now, being the loneliness at the top. And I remember, I don't know if you're, again, if you remember the response, I pondered upon this and then I said, well, I feel the full spectrum of emotions that you have, like good and bad, often on a daily basis, but not loneliness.

53:08One of the principles of that co-building, which is implemented, we bring people in, we expect this from them, and we grow them into our partners. I have a lot of partners. I lost a co-founder as a company. We lost a co-founder, but we have a lot of co-builders. so we overcame or we grew we didn't grow stronger because of this but we did grow stronger and the weird thing is that business has been amazing in the past two two or three years your growth and your revenue per employee is just stunning and everything is and so on so this is because of this very very very strong partnership and the way that we work that allowed that so the loss is much more on the personal level and I have Roy with me.

54:01I ask him questions. He disagrees with some of my decisions. I know which. I have an argument and unfortunately for him, I have an advantage and I win. But not always. Sometimes he wins the arguments and I do feel a gaping hole of regret, regret is the right word, but of a miss, of him not being around. He would be so proud of what we're doing and the results that we're achieving and he would have an amazing freaking fun time. He would celebrate in all the things that we're doing with AI and beyond and everything that would have so much fun. Before I get to the wrap-up, I want you to talk through the pod structure because you've also really innovated on this many years ago.

55:03And the company has grown a lot since then, both in revenue, a number of employees, even explosive weight and strength formed itself through AI pretty meaningfully over the last whole bunch of months to a year. But the pod structure persists. You've built what I think is an incredibly scalable, replicable, almost maniacal model? So it's first principle meets organizational structure. It's the same thing. It's, okay, what is it that we want to achieve and what's the best way to achieve it? So we start with an OKR. We start with an objective. Okay, we want a certain effort to happen. And then we go into, okay, what's an exciting team to achieve that?

55:48Who needs to sit? It's a very practical question. Like who needs to sit next to whom in the open space for the most amazing results. And that's basically a part. So you want it to be, it's a min-max question, but you want it to be the smallest amount of people to be able to run fast because the more people, it's like more opinions and more processes and more like, it's like it becomes, you can't have a brainstorm with 10, 12 people. Definitely not more than that. But these people, this small team will have an unbelievable amount of context on the problem and the challenge and the business challenge that we have.

56:28And they will do whatever it takes to achieve that thing. And creates often, doesn't have to be, but it often creates a multidisciplinary team and so on. And the way you write that it's very scalable to the point of, I just need to break down these OKRs. I need to break down the achievements, the business achievements that they want to achieve. And it could be all the developers are sitting together. Like I could say, oh, you know what? They want an infrastructure, software element, infrastructure. That's like, that's what I might plan for the next six months in some area. It's like, okay, so we need five developers working together and doing just that.

57:09So just being deliberate about not, okay, all developers are sitting together, and other departmental, all marketing, and that optimizes on communication between them and on training, on the job training and so on. It optimizes on that, which is okay. But if we're optimizing on something else, we would want a different structure for that. The disadvantage, which is why this time is also exciting, is that it's unbelievably bad with onboarding. It's like training someone to this train of thought, to or you're going into being kind of having only two developers in a team and you're immediately thrown into kind of I need to work, I need to understand the customers as a developer.

57:55I need to understand the customers and the marketing and working with the marketing person and the product and the designer and everything. It's like an overload. So it's very hard for onboarding. It's very hard for hiring. It means that we hire problem solvers more than disciplinary professionals but problem solvers. and as you can imagine where I'm going with this, it's amazing with AI. Like the fact that, first of all, I can hire less. So it's like I need to onboard less people. So hiring, obviously, but a lot, a lot of positions, but hire less, every person could do more. And the sheer fact that we always hired for problem solvers and not necessarily a lot of experience in Java, but like someone that is, I will solve this whatever in whatever way possible, is very fitting for the revolution that's happening.

58:44So I want to wrap with the following. So we talked about your nephew and we talked about my partner, Eden. Eden has a rule that you never invest in brothers and families, and it's a recipe for disaster. It comes up here all the time because for some reason there are a lot of brother founding teams in this country. It turns out that as simply your brother, Yigal, as, I think, the head of music. Music, and he's leading now a kick-ass music AI research team. Your mother, who I believe is a psychologist, is that right? It was the head of the Israeli HR Association. Not a psychologist. I'm not HR. HR, pure.

59:26Israeli HR. So, Dr. Shlomit Kaminka was your chief consultant on performance reviews or a consultant on performance reviews at some point. I think not formally. We had help from, if that's a point, we had one of my brothers, another brother. There was a time where another brother actually conducted research. He has a PhD in education and he conducted formal research for us on the impact of what we're doing. So it was kind of a controlled study with unbelievable results. But yes, he was part of the company for a little bit. Are there any complexities in this? Of course. And I would say, so, you know, we spoke about Ooi.

1:00:12Ooi as my best friend, regardless of simply. So I started with my brother and my best friend, the company. It has to, so this would not be, as tips go, this is not, you know, okay, you should start your company with family and friends. I know exactly they know my capabilities I know their their capabilities and we have this fundamental strong trust between us which means that we did in the beginning we we spoke a lot we had unbelievable communication like everything is open you don't leave though we had these rules like you don't leave anything behind like everything is open feedback anything everything is open and expectation settings that we all knew that we are here for the company meaning there will be a point or there might be a point where we can't grow to be what the company needs us to be.

1:01:08I kept saying that for us as a CEO, that this is not this ego trip, right? Like I'm on this path. Every person that joins the company breaks my record for how many people I let. I didn't know if I'll enjoy being a leader of 100 people and if I'll be good at it. and I have the same question now on 500 people, if I'll enjoy it and if I'll be good at it. And if I don't, I need to trust people that tell me that we need, as a company, need someone else to lead. So the same type of expectation we had between us, and we separate hats. So on Shabbat dinner, we don't talk about work. And you managed to keep to that?

1:01:50Zero talk about work at? 10%. And if there's disagreement, who makes the ultimate decision? So it's based on our ownership in the company. Got it. It's a context. There isn't a formal hierarchy in terms of who is valued more. There's a hierarchy of context, of ownership and context. Igual is an owner of his domain. I do not make decisions in his domain. Last question. You're still on the journey, as simply. Some would say in the beginning. Some would say in the beginning. And obviously, the last two and a half years have been a journey. If you were giving one piece of advice, either to yourself or to other people out there, what would it be?

1:02:44It's always the advice that always comes up often is the here all the time. And I would give myself in a heartbeat is velocity. It's always about velocity faster. That's the startup advice. That's the startup advice. The first advice you give it for the last two and a half years or 12 years, however you choose to think about it. Work on things that matter. And it's actionable. It's not just this. So there's no double bottom line. I don't believe that. And it's not like we're going like crazy and we have this huge companion in every household and we're in the future of how this world is going to look like in the world of AI you know with people that have more time and more need for this and we're strong believers where we see that AI is elevating humanity and elevating creativity for people and we're part of this trend that is happening in the world that is going to be that is evolving.

1:03:47This is something that is very strong and want amazing financial outcomes for you guys uh freaking amazing outcome financial outcomes but to have the strength to do that over time with things that can that happen for us it's like you know no one predicts that in that startup journey of what happened to us but but things there is so much grind like in the regular path there's so much and you need to have so much strength, so much resilience, it needs to be, or it's much helpful if you do it on something that you believe needs to happen in the world. That gives you so much strength and with people that can share the load with you.

1:04:28Do you worry about competition, like Duolingo thinks about giving away music for free? It's not that I'm wary of it, that we're aware of, we look at competition all the time, and there are obviously, it's a very exciting domain. So there are obviously a lot of interesting competitors out there. We learn from them. We know they learn a lot from us. We learn from them and we just, we're better. Like we need to make sure, regardless, it helps us having a competitor, helps us define how you're going to be better. If you're lacking that, you need to disturb yourself all the time and how can I be better.

1:05:12With a competitor, it just makes it easier. So it's very helpful. Yuval, thanks for joining us on Invested. I appreciate it. If you enjoyed this episode of Invested and found it meaningful, because I think this was an extraordinarily meaningful episode of Invested, please rate us five stars on Spotify and Apple Podcasts. Subscribe to the YouTube channel. Don't forget to subscribe to the newsletter. And if you're looking to follow Yuval Kamika, you can find him on both LinkedIn and Y-U-V-A-L-K-A-M-I-N-K-A. That's both on X and LinkedIn. Thank you, Yuval. Thank you.