Founders: Yoav Vilner, Danni Friedland
Investors: Felicis Ventures, NFX, Eight Roads
Year founded: 2020
Employees: 120
Capital raised: $56 million
The history of technology is full of product launch failures. It happened to the legendary Steve Jobs in 2010, when he presented the iPhone 4 on stage and wanted to demonstrate its Internet browsing capabilities. He tried to enter "The New York Times" website, but the device refused to connect. The embarrassed Jobs asked the audience to disconnect from the overloaded WiFi network, and went on to present the device's photo library instead.
This also happened to the great Bill Gates during the Windows 98 launch. The operating system crashed during an attempt to connect to a scanner, and instead displayed the "Blue Screen of Death". A year later, the animated television show "South Park" parodied the incident by having Gates executed for the operating system malfunction.
The blunders experienced by those executives on stage also happen daily to salespeople around the world who come to demonstrate software before potential customers, and at the moment of truth experience a crash or malfunction. In view of this risk, many software salespersons prefer to show the product’s functionality with a pre-packaged presentation or demo video. The problem with these demos is that they don’t convey the product experience properly, and potential customers don’t really get a sense of the software.
Resolving the conflict between development and sales
Startup Walnut offers salespeople a middle ground: not the real product which could crash at a defining moment, but instead a demo that looks like the product and with which the customer can interact. This demo can be sent to customers by email, so they can play with it, even without a salesperson present, and it can also easily be adapted to the needs of a specific customer. However, the salesperson cannot make drastic changes to the functionality of the demo that do not exist in the original product - such as adding a completely new button - without the approval of a superior.
The company, founded in July 2020 by CEO Yoav Vilner and CTO Danni Friedland, develops software that allows the salespeople to create demos themselves, even without any knowledge of programming. This is important, because sales departments usually have a hard time getting help from development people in building a stable demo that can be shown to customers. "At every enterprise we visited, we heard about this conflict between sales and development, and it only gets worse as the company grows," says Vilner. "Sometimes a salesperson has to wait as long as six months for a developer. Because the salesperson doesn't get help from development, they come to the client with a demo that crashes, and that costs the company tens of millions of dollars in deals."
Walnut’s solution for business demos operates via the Chrome browser. In the first step, Walnut’s software captures screenshots of the client's product. It then analyzes what it sees on the screen, whether a button, a link, a line of text, or another element. Finally, users can edit the functionality of the various elements, and create a clear script for their potential customer to follow when trying out their product. The demo’s disadvantage is that it does not include all the functionality of the real software, and clicking on a link which has not been defined in advance by the salesperson will lead the potential customer to a dead end.
A young sector with great potential
Walnut's first investor was Avishai Abrahami, CEO and co-founder of website building tools company Wix. At first glance, the similarity between the tools offered by the two companies is clear. Walnut has a visual editor that enables salespeople to design and tailor the demo to their clients, in the same way as people use Wix build a website.
But Walnut's tool also contains elements reminiscent of other software. For example, it allows for guiding potential clients through the labyrinth of screens, similar to what Israeli assistive software provider WalkMe does. In addition, Walnut includes an analytical component, a kind of Google Analytics, that enables salespeople to analyze which of the potential customers who received the demo actually tried it and how much time they spent doing so.
Walnut mainly serves large enterprises, and it charges tens of thousands of dollars for an annual subscription to use its software, with the final price determined by the number of connected users. According to Vilner, the company has hundreds of customers, among them Adobe and NetApp, and its annual revenue is in the millions of dollars, but he does not elaborate further.
Walnut has about 120 employees around the world as part of its work-from-anywhere (WFA) employment policy. Besides Israel, Walnut has developers in Brazil, the US, the Netherlands, Ukraine and Sweden. "This policy has allowed us to continue growing -- even last year, when it was impossible to find new employees in Israel," says Vilner.
The sector in which Walnut operates was initially recognized in a blog post published by Gartner Group in August of last year. In that post, Gartner noted demo/product experience as a potential new category. The other two main players in the "Sales Enablement" or "Sales Tech" space, both of which, like Walnut, were founded in 2020, are Boston-based Reprise, which has raised $82 million to date, and Israel’s Demostack, which has raised $51 million so far.
The Most Promising Startups rankings are part of the annual Enterprise Technology Summit held by "Globes" and JP Morgan.
Published by Globes, Israel business news - en.globes.co.il - on December 14, 2022.
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