Launching, growing and 'exiting' a startup is difficult and statistically improbable. Lyron Bentovim has done just that with The Glimpse Group, and as a former CFO, CEO and current business school adjunct professor, has an amazing view of what it takes for early stage startups to succeed. Lyron shares some of his experiences and perspectives - a must listen for startups and investors of any stage!
Follow Lyron here: https://www.linkedin.com/in/lyronbentovim/
Check out the Glimpse Group here: https://www.theglimpsegroup.com/
Lyron Bentovim
Hugh Seaton: Welcome to Constructed Futures, I'm Hugh Seaton. Today. I'm here with Lyron Bentovim, president and CEO of the Glimpse group. Lyron. Welcome to the podcast
Lyron Bentovim: Nice to be here.
Hugh Seaton: So I brought you on, for disclosure of our listeners, lyron was my boss for a number of years at the Glimpse group, and I got to see firsthand how his breadth of experience as an investor, as a, he was never a lawyer, but he was trained as one, as well as an MBA. And he's been a CFO, he's been a CEO and that breadth of experience led to a start-up process where I was actually believe it or not there kind of when they started. Cause we had a common friend and we're actually one of his, co-founders all the way through to an IPO last year, actually. So an incredible journey.
And I wanted to bring on Lyron to talk a little bit about some of his views and some of his experience. So Lyron again, welcome to the podcast and let's talk a little bit about your experience and what brought you to the Glimpse Group.
Lyron Bentovim: So to start there, you have to go back many, many years. I grew up as the previous tech cycle started and that basically is the cycle that took us from an analog world to a digital world.
And, basically PC, mobile and internet technologies as they started becoming commercialized in the early eighties, really changed our world over the 30, 35 years from the early eighties until the mid 2010s. And I've basically grown up in that space. I've seen the changes that they made on our world. And in 2015, I saw that we're at the beginning of a new cycle.
That is like that. And that's what basically brought me to found the Glimpse group.
Hugh Seaton: And uh, along the way, you actually went through a number of experiences, right? I think you spent some time at McKinsey, but also have actually kind of seen both the public and private trajectories companies can take. Right.
Can you talk a little bit about that?
Lyron Bentovim: Sure. Yeah. So I believe that each experience that you go through in life basically makes you better prepared for the next one. And I've always believed from a young age to kind of basically get a diverse set of experiences that really leads you to understand the world from a different perspective.
Even going back to one of my essay going into my MBA. I was talking about the fact that, as I was working through college and I actually worked full time many times to two full-time positions while I was studying. And I managed to get the all the set of experiences that you can get.
So I worked in the financial industry on the public side and the private side, I worked in a government agency, I had my own startup. So really kind of bringing all these experiences together and allows me to basically go in and lever these in, in an MBA program and then take them as an executive in a variety of roles.
Hugh Seaton: Taking all that, when you stood there and said, okay, I think that VR and AR are a big part of the next cycle. How did you think about how to start? How did you think about all right, look, we don't have you know, 50 developers that can do this. You guys really did bootstrap.
I mean, you've got some, some startup money and some of it was your own, but, but there was really a process of going, you didn't go and get $10 million even though given your network that might've been possible. You, you started and kind of ratcheted your way up and really grinded it out. What was the decision to, to how to on how to start like that?
Lyron Bentovim: So a couple of things came into play here. One I've learned that early stage industry is not necessarily a race, but a kind of slow building, it's almost like a marathon versus a sprint. And if you run too fast in a marathon, you run out of energy very quickly. And usually you won't finish the race. And I try and apply that into how we're doing this.
And actually, if you look at the companies... we were founded in 2016. And when you look at the companies that raised the most amount of money in this space in 2016, all of them don't exist and it's not because they didn't build the right solutions or that their products weren't good enough. They were just too early.
And when they came time for them to raise the next round of money, they couldn't support that because the market was not there yet. And when you raised big amount of money, you both raised the expectations of what you're doing and you basically put a very high threshold of success that you'll need to surpass at the next capital raise.
Hugh Seaton: You said something once that I loved is I think it was a partner of yours. Right? Who said, look, being early and being wrong look the same, at least in the beginning.
Lyron Bentovim: Yeah, it's kind of one of my favorite sayings because it's so true. Because if you don't know, you don't know, it just looks exactly the same.
And if an outside investor looks at a company and that company as invested $5 million in developing a product, yet they sold $10,000 worth of that product. They don't know if the product sucks or if the product is great and the market is just not ready for it. Or maybe there was no market at all.
They don't know. So when they don't know the easiest decision for them is to not invest further and not throw good money after bad money.
Hugh Seaton: That makes a lot of sense. And also even if there is a market coming down the road that may not fit their investment profile, right. They may not want to wait five years to get a payback or 10 or whatever the number is.
Lyron Bentovim: Exactly. And especially when they're kind of asked to invest a pretty significant amount of money. And I see kind of one of the challenges in my view of the venture industry is they're looking at those companies like potential drug addicts. So the venture industry as a whole, when they invest in a company, they don't invest in them with a long-term perspective saying, okay, let's put together a five-year plan. Make sure if you you're well-financed to execute on your plan, and then run the company. They're basically expecting a company to go through all of the money that they get within 12 to 18 months. And what that means is in a sense is a company that is raising, let's say 5 million doors we'll exit that kind of easily a five-year-old nor investments with a burn rate of around 400,000 doors a month.
So that puts that company in a really tough spot because they are now hooked on money. They're burning $400,000 a month. The better get some money quickly. Otherwise they will die. It sounds very familiar to a drug addict.
Hugh Seaton: Yeah, it does. And there's another side to this that's interesting. And there's two questions, actually. One is about business plans and the other one is about team.
Let me start with the team. It's not obvious that someone who had a really good idea and was able to get some early traction, knows how to intelligently deploy 400 grand a month. Do you see that? And that you're going from zero to that in six to eight months.
Right? If you think about it as a, as a 12 to 18 months, total burn, that means you're going from, you know, a couple of people in a WeWork, Or not as the case may be, to 20 people or whatever the number is that you're able to, to deploy that kind of money. And then the second question is, can you do that well. In your experience as somebody who's seen a bunch of different companies, how does that usually go?
Lyron Bentovim: Not well, I can tell you that and you raise a really, really good point.
So you're in a sense, forcing the company to ramp up very, very quickly. And yeah all of them show the VC some plan where this is the money we need, and we're going to throw this with R and D and this was marketing and so on, but now they have to execute. And what they're executing on is not on their product roadmap or go to market strategy.
They're executing on their burn. And they're ramping up very quickly, which means they're probably not picking the right people, probably overpaying them, or they don't really care what they're paying them. And they're spending money left, right and center because they have it kind of, honestly their pockets are full.
And then they get to the point where that money burn is now sitting on their shoulders. And they're forced a year later to go look for more money. And usually that more money will actually want them to increase the burn. So they're getting even more and more hooked.
And at some point, many of them will succeed and there'll be kind of the unicorns of the future, but most of them will not, and they'll be failed companies. So their forcing, in a sense, the startup to get to the point where you either become a unicorn or you're dead, which I think is just wrong for companies.
Hugh Seaton: Yeah, it speaks to the other thing I wanted to discuss, and that is writing a business plan.
So it's kind of a truism now in the, in the startup world that nobody needs to do a business plan and no one's gonna read it. And it feels to me a little bit, like just because the VC has too much going on to really dive into a 20 or 30 page business plan doesn't mean you shouldn't do one. How have you approached that.
Lyron Bentovim: So in my view, a business plan is less the document and more having a real plan of what you're planning to do. What are you looking to build? How are you going to build it? How would you know if things would work or not work? What kind of tests are you going to do X month into the process to make sure you're going on the right path?
And if you need to pivot you pivot, none of these are in a standard business plan. You can Google kind of basically a business plan and you'll find a bunch of gurus that will tell you exactly what you need to put in that plan. 95% of what's in the plan is totally BS and useless. But you're kind of trying to hit that sweet spot of make sure that your plan looks exactly like the investors want to see.
But you're not really thinking about your business and what you're trying to do. You're trying to kind of write a plan that will kind of appeal to them. That's the wrong way of looking at starting a business.
Hugh Seaton: What you just described is, rather than it being a business plan, you talked about what you do, is more about a, almost a set of assumptions and tests, right?
Like, so you're saying, we think this is the way to go to market and I can attest that that is how I saw a Glimpse work, is we would try things. And then we would try something else when, when the success wasn't where we wanted it to be. Or we, it had, you know, it had gotten as good as it was ever going to get and we needed to do something else.
Is that, so is that how you kind of look at this? This is a series of hypotheses, or even a group of hypothesis that you're playing with and waiting for evidence to either help you with or disprove.
Lyron Bentovim: Yeah, I think that's how you should look at life. You basically trying to think about what you want to achieve and then take the first step and say, if I'm on the right path, here's what I would see.
And go execute and then see what you get. If you're getting what you thought you were getting is clearly you're on the right path. If you're getting something different, do you need to evaluate whether you didn't execute right. Or maybe your hypothesis initially was wrong and then make an adjustment.
A business, especially in the early stage industry is a very fluid thing. If you're coming in very set on building something and kind of not willing to budge most likely you will fail.
Hugh Seaton: And this is what the early days of Glimpse were, right. It was you and DJ and some others getting out there. And this is why everyone says founder led sales are so important, right?
Is that you need to be understanding what assumptions are wrong and what assumptions are are either right or close to. And I think you're still on sales calls today, if I know you.
Lyron Bentovim: Yeah, and the only way to really know in the early stage where there is no mass adoption of a technology where you see kind of, you can read the newspaper, what people are doing, you need to talk to the customer and understand what they're looking for.
And then once you provide them with something that you've built, what they think about that, how they use it, why they use it, why they don't use it. Are there willing to invest in it and invest. is not just cash, even though cash kind of is a component of that, but invest their time in working with your solution and working with you to build that solution.
So if you find customers that are willing to work with you and spending their time and their money side-by-side with you, that means that you're onto something. And then it's an execution game.
Hugh Seaton: Love it. And as an aside, you know, our focus on cash in and cash out, was something I'll always carry with me is that it was front and center of how we thought of everything.
We talked vision, for sure. We talked about market and trends and all that, but the day-to-day was, do we need to spend that on HubSpot or whatever the thing was and get the sale and get the sale early, get the sale fast. Cause at the end of the day, when cash runs out strategy's pretty irrelevant.,
Lyron Bentovim: Yeah, once you ran out of cash, the game's over. So if you don't want the game to be over, you need to think about every step in what you're doing and whether that's going to kind of make sure that you're winning the game or not. And if it's not kind of critical to win the game, when you're in a scarce cash situation, you pass on that and you figured out how to get what you need to get done without it.
Hugh Seaton: I have found a disease that early founders often get when things aren't moving as quickly as they want, as they spend money on things that make them feel like momentum. Hopefully that doesn't usually last. We obviously never did that, but I've just seen a lot of folks, you know, they'll get the swag or they'll spend money on marketing materials and so on when that may not really be necessary to close.
You had a really strong opinion, for example, about trade shows and, and how they're hard to, hard to make payout depending on the category. And I think that's a really important insight, right? Is that yeah, you had some good meetings and you maybe got to speak to some people, but did you really get enough out of that to, to justify the thousands of dollars it took to fly there, get the ticket, you know, do a sponsorship.
Construction is loaded with those events and some of them have value beyond being a sales opportunity, but I think it's important to view them that way, as opposed to necessarily looking at a hardcore ROI. Right. Because it's hard unless you're selling swatches of clothing or something really, really kind of touch it sales focused, it's really hard to make some of these marketing activities payout.
Lyron Bentovim: Yeah. And you and I can look back to some events that you and I did together. And now with kind of a, what, three years of perspective on them, we go back and say, okay, you kind of, we went to that event. We kind of invested.... And it wasn't a big investment. Just kind of mostly our time actually can, if you think of it and what did we get out of it? We can think of all the meetings we had and all the leads that came from them and kind of, you can summarize them. And that number is not a very big number.
Hugh Seaton: That's right. Instead of grinding and hitting the phones, which unfortunately is still, still critical. So Lyron, I want to switch gears real quick. One of the things that we just talked about thinking through cashflow and being careful about, you know, just really into it, right? Like into the details. It's one of the things I also have really admired about you and other CEOs, I respect is the ability to shift between the day-to-day details and then, you know, kind of change context to the higher level picture.
One of the things that, that you did early is bring in a CFO. And that's a part of a bigger story at Glimpse that I thought was interesting. And that is the use of professional services. Now, as someone who's got an unusual exposure to law, as someone who was trained that way, but, you know never practiced, Even, so your sense of it is better than most. But I think it allowed Glimpse to do certain things earlier because of the fact that you took such focus on professional services, as opposed to, you know, QuickBooks, can you talk a little bit about what made you think like that?
Lyron Bentovim: So as I look at how we built the company you want to build the right foundation. And you want to, from the beginning, operate in a professional way and having run significantly bigger organizations, I wanted Glimpse, so I'll say it in an interesting way, we talked earlier about like the swag and all the different kinds of marketing things people use and, you know, in a sense they're trying to make themselves look bigger than they are. And I wanted to do that, but in a different way, by actually acting in a professional way. And when we work with a professional, real companies, which was always our target audience, they expect something in the other side, they expect some, professionalism in how they interact with a company.
And that's the foundation I wanted to build. And the other thing that was very important to me was I wanted to focus on the vision and execution of building that business. And I needed someone to make sure that my ship runs. And that's why, I brought Maydan as my partner in very, very early.
Hugh Seaton: I've worked in a number of small entities that have had a more professional finance function than you would have thought at that level. Another one, believe it or not was an ad agency in Hong Kong where the owner of that entity put in somebody as a de facto CFO. I don't think that was his title and the degree to which that kept a discipline in how the company operated was, is really hard to overstate. I mean, knowing that somebody's watching it and it isn't just the CEO who does it on Sundays, but actually really paying attention. I think has a real impact on both of the top line, because somebody is telling you in pretty clear terms, what targets we need to hit that aren't strategic, like the CEO, but are like, no, no, here's what the numbers look like.
And again, a CEO can do that, but I really liked the fact that there's a. Professional function in there, kind of early. And that you also did audits. You brought in professional services to a degree that, as I say, startups often don't and I noticed that you did audits earlier and more often for a company then is sometimes true. What led to that?
Lyron Bentovim: Well, our plan from day one was to go public and we achieved that. And we achieved that for many reasons, but the one reason to allowed us to actually take advantage of the market opportunity to opened up was because we had audits.
If we did not have audits, we would have not gone public because it would have taken us another year to get ready to go public. And we basically turn it around in six months because we already had all the audits and we just need to close them up and put them in front of the SEC. So we started auditing the company from year one, where we had almost no revenue.
The auditors were actually laughing at us because they were like, why do you want us to audit this? Are you sure you want to pay us for this? And we had to really think hard internally. And we did it every year. I remember kind of putting it in front of the board and saying, yeah, we need to do another audit now. It's going to cost us another 50,000 dollars. Are we sure we want to spend that money on that versus getting another developer or another kind of business development professional. And it was a hard discussion, but because part of the vision was to go public. We had to make that investment and that commitment to making sure that everything was organized in a way that allowed us to go public when the opportunity opened.
Hugh Seaton: Yeah, I remember them and they became more frequent. Right? I mean the first year, I believe it was like the year. And I think the next year was like twice a year and then quarterly or something like that. But it seems like, you know, as the business became more complex, you obviously audited more specifically, is that, is that a purposeful trends, you know, kind of transitioned from longer time spans because it's mostly expense to tighter and tighter getting to quarters.
Lyron Bentovim: Well, so let's say it drew, it was driven by two different things. So the audit is obviously done annually, but what we started doing is managing the company and as a professional company with outside independent board members. And once you do that, and that's a very important step for that. I have pushed intrepreneurs that I've worked with to do as early as possible.
Bring in, even though you might still be in control of your company. And, this is especially true for startups that are raising money, either from angels, high net worth or companies that are bootstrapping and they don't really have a need to raise mass money, bring in independent directors that you trust and believe in, put them on the board.
And let them kind of do that role, even though in theory, you own the company, you can come of, just tell them to kind of go, uh, go away because you're not obligated to have them there and they don't have a stake in the company or a significant stake in the company. Yet having those there and reporting to them on a quarterly basis, how the business is doing, how you're doing versus what you're expected to do.
Where are the challenges that is as valuable advice as I can given give an entrepreneur.
Hugh Seaton: There's a difference between managing and governance that I don't know that people always appreciate. And I totally take your point that someone talking to you as in a governance role is different from someone talking to you in a management role, right there, you're reporting to them in a very linear fiduciary way, instead of them guiding you and hope. I mean, there's probably some guidance that goes on too, but the role of, of someone in a, in a governance mode is meaningfully different from someone who's in a management role.
Lyron Bentovim: Yes. And you want to make sure you have people there that understand that they're not there to manage you.
They're there to guide you and govern the company and really push you to make sure you're running the company in a professional way, not by telling you what you need to do, but by pushing the standards on you. And it's an, a very important distinction. The board doesn't manage the CEO, the board governs the company, and make sure that the CEO is focusing on executing the goals of the organization.
Hugh Seaton: And that speaks to how you think about board members, right? Is, I mean, there's definitely in the startup world. A pull to get people that have a great resume and well, not even resume, then have a great reputation and reflect well on the company. You want that in a board member? No matter what, but I sounds a little bit like if you're getting a board together, As important as their, their optics might be, what you really care about is that they are good at that. That they're good at being a, a board member as opposed to a high flying salesperson or a technical wizard.
Lyron Bentovim: Yes. Now it is very important that they understand the role of the board member and they're there to play that role. And that role has kind of the governance role we talked about, but also the role of a sounding board.
And the sounding board is not someone you come in and say, I want to kind of try and kind of get into this account, kind of that. Can you help me do that? Or I'm trying to kind of basically build this product, any thoughts on how I can do that. It's more of the challenges, the day-to-day challenges of building a business.
It's very lonely being a CEO of any company and having people that are on the inside, but are not involved in the day-to-day is very, very important.
Hugh Seaton: That makes sense. How did you think about not getting specific? Because I think you've got a nice and diverse board, but as you thought about that, what were you looking for?
Kind of, we just discussed that the fact that they know how to be a, a board member, but from a skillset standpoint, did you think about what you were going to need going forward? What was complementing you now? How did you think about composing your board?
Lyron Bentovim: So initially I looked for people that I looked up for in terms of their ability to play a role in helping us execute the vision, not by doing it, but by being there as almost like guideposts as we're running and executing and looking for people that I trusted, to basically give me the truth the way they saw it and not, honestly, just going to say, oh, I'm getting some options here. I have a free ticket. Like, let, let me just sit here and kind of see what happens, but people that would give me the truth, tell me what, you've been trying to do this for a while, and this is not working out. Have you thought about something different? Those are the types of people I wanted to bring on.
Hugh Seaton: Yeah, that makes a lot of sense. So if you were to think about the first six months of coming back to the startup world, and again, you've, you've done this yourself, you've seen a lot of them. What is your, your, your like one or two bits of advice for the first six months and 12 months? Assuming they took on a little bit of money.
Lyron Bentovim: So, when you look at every startup, it doesn't matter what you're doing. You always have what I call the chicken and the egg problem that in theory, your business would be great if you had everything that you wanted to build and it was already built. And, but when you try and distill it down to a small element, It doesn't really work. So let's use an example of something that we all know let's use LinkedIn as an example. Right.
So if you look at LinkedIn, there's nothing really complicated or proprietary about anything that LinkedIn is doing. And LinkedIn is a great business. It works and it works in a variety of ways, both as a service, allowing people to network and connect, as a recruiting tool as a staying in touch tool, because there's a lot of different things that it works.
I think it works economically. Obviously they sold to Microsoft and continue to do well under Microsoft umbrella. But LinkedIn only works because when you have everybody there. Well, if you and I started to wanting to start LinkedIn today, I don't think LinkedIn has any patents that will prevent us from doing something that looks exactly like LinkedIn.
There's no secret sauce and there's no IP protecting that. And in reality, if you look at the value of LinkedIn, let's say we raised a billion dollars, which is significantly less than what LinkedIn would be value to them as a public or private company outside of microsoft. We can build LinkedIn and then some. Probably way better, but we're missing all those people.
And LinkedIn does not work without the people. So that's the big problem, right? So let's say you want it to do something slightly better than LinkedIn. You had a great idea of how to improve on LinkedIn and you want to build that as a business, but if you start day one.
And only you and three of your friends are on there. Even if you manage to get someone to sign up, they will come in and they say, well, there's only four people here and I don't even know them. Why would I want to sign up? So how do you create a way of making a mini LinkedIn that is still valuable to those people and then levering that value to build a bigger business.
And so any business you're thinking of. Would work at scale or many of them would, but you need to figure out how to make them work without scale. And how do you sell that vision to those early users, create value for them and lever the early users to bring more users in and eventually build a self-sustained business.
Hugh Seaton: Yeah, that makes a lot of sense. And that's thinking about a roadmap in terms of, is there enough early value that I'm going to get people to come in and stay and then build everything that comes with scale, whether it's a network in case of LinkedIn or just a deeper dev team.
So your feature sets in the case of like B2B. Great advice. Hey, so I want to bring this into a landing by talking about, so the audience for this is a construction technology ecosystem, and there's a, an entity that joined the Glimpse group in the last year. I believe it is called Auggd.
Want to just talk about what they're up to a little bit? And I think at some point we'll get, we'll get the GM of that group on as well. But, I wanted to hear a little bit about how you guys are viewing, AEC, construction, to the degree you can speak to it.
Lyron Bentovim: Sure. So I see kind of the AEC industry as one of the major opportunities for immersive technologies. That the need is very clear. And on the other side, it's actually been probably my most frustrating industry as I look at all the industries and how they're adopting. In terms of the disconnect between the solutions that are available.
And I'm not just talking about our solution, I'm talking about all the solutions that are available for the industry, either the ones that are still the only ones that people have tried to build and couldn't take off. And the adoption of the industry and the industry has been very slow to adopt. In a sense, the AEC industry, if I kind of distill it down at the end of the day is creating a vision for something.
And selling that vision before it's actually ready and available to be seen, whether you're building a new building or renovating an existing building, or just renovating kind of a house or an apartment, you're constantly designing and then executing. And you basically have to take a leap of faith that it would look the way you expect it to look.
The immersive industry and Auggd, our subsidiary that does AEC is definitely playing in that space, gives you the ability to see something either before it's been built just as it's been designed, but in context, so you can actually place it where you need to see it. So it's not just a 2d or 3d render that you can look at in your computer, but you're actually placing it either real size out the right place.
Or where you can actually see it. And I think that's a very, very needed, opportunity whether the real estate has not been, built and just being designed, or even for existing real estate. The ability for someone that is not physically where that real estate is to see it and kind of really feel that they understand it.
And so this is the opportunity and we've done a lot of work with leading real estate developers with architecture firms. And so there's been a success and there's been a lot of other successful others in the industry. But when I look at the industry as a whole, I'm actually surprised it hasn't taken off as much as it should.
Hugh Seaton: It is definitely an interesting industry that way. And trust me, the listeners get it. Cause they've all been, they've all been there with almost whatever they're building. It tends to be slow to adopt things that they don't see immediate value. And sometimes that needs to look like things they were just doing.
So it definitely is a challenge. Well Lyron, thank you for being on and, and really kind of walking through a masterclass on how to think about startups and early stage companies. I've loved hearing about a lot of your thinking. thanks for being on the podcast.
Lyron Bentovim: Oh my pleasure. I enjoyed the conversation and look forward to many more.