[Michael Eisenberg — 0:00]

You're like, managing $3 billion, and the founder walks in, and you're assessing this in one hour. What happens in Cafe Venetian that you say, oh, this. If you're not going to adapt, you're going to die.

‍

[Oren Zeev — 0:15]

If your moat is your code, good luck. Okay. It's far worse to miss something than to make a bad investment. Because if you make a bad investment, you lose 1x your money. If you don't invest in something that could have been 100x, you missed an opportunity to make 100x.

‍

[Oren Zeev — 0:31]

Oren, why did you take the solo venture capital path? Because I've had experience working with people.

‍

[Michael Eisenberg — 00:41]

Welcome back to another episode of Invested. I am thrilled to be here with my old friend. I think I can call you that, Oren, right?

‍

[Oren Zeev — 00:52]

Friend? I don't know, but old for sure.

‍

[Michael Eisenberg — 01:00]

My old friend and colleague, Oren Zeev from Zeev Ventures. Welcome, Oren.

‍

[Oren Zeev — 1:21]

Thank you. Great to be here, Mike.

‍

[Michael Eisenberg — 1:23]

Oren, how long do we know each other? It's like since the mid-90s, I think, right?

‍

[Oren Zeev — 1:26]

Yeah, it's 30 years.

‍

[Michael Eisenberg — 1:28]

And our careers have taken a slightly different but same path, which is we're both still venture capitalists, which we both were all those years ago. But I've continued to live in a partnership, whereas Oren is probably one of the pioneers — there are a few others, Steve Anderson and others — of the solo venture capital model. So much so, Oren is now managing, I believe, almost $3 billion. He doesn't have an office. He takes meetings in Cafe Venetia in Palo Alto — a place I haven't been to in a number of years. Oren, why did you take the solo venture capital path? You started in partnerships with Apax Partners. What made you take this solo path?

‍

[Oren Zeev — 2:11]

Because I've had experience working with people.

‍

[Michael Eisenberg — 2:17]

Okay. Explain, Oren.

‍

[Oren Zeev — 2:18]

No, look — and admittedly, I was in a very large partnership. I'm sure it's not as bad in a smaller partnership, but I think in a large partnership, you have all these forces pulling in different directions. And I think people mistakenly think of venture as a team sport. And to some extent it could be, but more often than not, it's more of an individual sport. So many of the partnerships, in theory, they're supposed to leverage the individual, but in practice they handicap the individual, because everything takes longer, everything has to be more consensual. And I'll give you the biggest argument. You know that our industry is so asymmetric. There are mistakes of omission and mistakes of commission. It's far worse to miss something than to make a bad investment. Because if you make a bad investment, you lose 1x your money. If you don't invest in something that could have been 100x or 200x, you missed an opportunity to make 100x. And in parallel and all that, it really affects the top one or two investments in a fund. This is really what dictates the performance of the fund. So even if you had really good, smart partners — which is not a given, by the way; maybe you were more spoiled than I was in this regard — and even if they're not political, and even if everyone really wants everyone else to be successful (which, again, is not a given), your partners will never make you make an investment that otherwise you would not have done yourself. But the opposite is not true. They may prevent you from making an investment because they would ask you questions, push back, slow you down, et cetera. So even if you have these smart partners, and even if five times they really prevented you from making a mistake, and thanks to them you did not invest in something that otherwise you would have lost — it's enough that one time they prevented you, either by explicitly preventing you or just by slowing you down and causing you to lose the deal on something that was truly great. The whole thing wasn't worth it.

‍

[Michael Eisenberg — 4:32]

So all feedback, therefore, is negative in the investment process?

‍

[Oren Zeev — 4:36]

For the most part. For the most part, it's "have you looked at this risk?" "have you checked this?" "have you done that?" I find it difficult to believe that there's a partnership where the partner is not sure he wants to do something and the other partners are pushing — "no, forget this, you should go do it." The dynamics is usually more conservative: "have you thought of all these risks?" — as opposed to the other way around.

‍

[Michael Eisenberg — 4:56]

Sometimes I find that my partners sharpen my own conviction, even. Where I'm on the fence, I'm thinking about it, and they ask questions and try to beat down the deal, and because I'm forced to defend it, it sharpens my conviction. You don't think that exists?

‍

[Oren Zeev — 5:10]

Fair enough. No, this is your partnership, I'm not going to argue with your partnership. My living experience was different. Plus, I do have people that I consult with. But I don't have to convince them, is the point. If I have enough conviction, then even if they're skeptical — I'm thinking of specifically one, someone who's a venture partner who I routinely consult with — but I don't need to convince him. It's a big difference, in my opinion.

‍

[Michael Eisenberg — 5:42]

When you make a decision, how long does it take you?

‍

[Oren Zeev — 5:46]

Oh, very quickly. It's almost always less than 24, 48 hours. And typically there's one issue — up to one issue — that I feel that I need to check. And it's an easy check, like two or three phone calls, or looking at a —

‍

[Michael Eisenberg — 6:01]

What is that? What's the thing you most often need to check?

‍

[Oren Zeev — 6:03]

Just looking at maybe the traction, looking at the numbers, to figure out whether — if I, in my subjective view — I see it as a real signal or just noise. It's typically not the individual founders, because typically I already know them, or they come already very vetted to begin with. It could be one nagging question that I have. For example, in the case of Navan, when I made the investment, my big question was: is there really an opportunity in corporate travel? How open would companies be to replace what they're using? Because it wasn't a new category. There were already very large players. And so I basically called three or four CFOs that I knew and asked them: what are they using? Do they like it? And would they be willing to replace? And regardless of what the answer was to the first question, the second question was "I hate it" — whatever they were using. And then, yeah, if something was better, I would be open. So that was my question in that. You know, when I did Riverside — I mean, we're using their platform right now — again, my question (maybe it was a dumb question, but that was my question at the time) was: why wouldn't this just be a feature of Zoom? Because Zoom was all the rage back then. And I made a few phone calls and convinced myself that they're not necessarily focused on it. And you know how it is when a company — maybe they could do something, but if they're not focused on it, they're never going to do it well. So there's an opportunity for a startup.

‍

[Michael Eisenberg — 7:43]

I asked David Marcus what to ask you, and interestingly he has the same observation about you that I have, which is that you have a very high IQ, of course, but you actually have a super high EQ for people, and very little ego — which I've always found endearing about you. And David Marcus does too. And so, like, you walk in and you're sitting at Cafe Venetia, you're like managing $3 billion, and a founder walks in, and you're assessing this in one hour because that's what it is. And by the way, we're going to come back to Navan in a second. What happens in Cafe Venetia that you say, "oh, this"?

‍

[Oren Zeev — 8:28]

So first of all, it's without an N at the end. It's Cafe Venetia. There's no N.

‍

[Michael Eisenberg — 8:30]

Venetia, sorry.

‍

[Oren Zeev — 8:32]

I'm not sure my wife would agree with the definition of high EQ and all that. But I'm going to use it as evidence. But I'm not sure she would agree — and she's actually qualified, because she's a psychotherapist. Look, I need to feel a few things. I need to feel that I have a real unfair competitive advantage versus other VCs. So it's not like a deal that everyone can necessarily do, but for whatever reason the founders prefer me. And it's basically always based on — it's never based on domain expertise, because I'm never going to be the best domain expert in anything. It's based on personal relationships. Someone I've known, maybe even backed them before. Or a very, very, very strong, multiple-strong first degree of separation. So that's one thing. The second thing is, I need to feel that there's a real opportunity to build a viable company. If we end up selling along the way, okay. But I'm not comfortable playing a game that I know this is just — so I really need to feel that this company has a chance to invent a new category, reinvent the category, and become a market leader. I think the difference between a market leader and number two, three, four is vast. And then I need to like both the founders and the idea. And at least one of them has to be somewhat proven. Meaning either the founders are somewhat — for example, second timers, that's easy, or close to it — or there are some very early signs. It could be very early. It could be a very faint signal, but I have to believe that it's a real signal, indicative of product market fit. So for example, in the case of Riverside, it was two very young brothers. They were at the time, I think, 24 and 20, and the third brother joined later. So at the time it was just 24- and 20-year-old brothers, obviously first timers. So it still wasn't that. But they had a very basic product. They didn't even incorporate a company, but they had a very basic product, and it was even buggy. It wasn't perfect. But they were getting five, six new customers paying 40 bucks at the time — paying 40 bucks per month, every day. And the pace was going up, without doing any marketing or sales. So I think they had maybe $5,000 of MRR. So it wasn't big numbers. They had maybe 100 or so subscribers. But what I was telling myself is: you don't get five or six people to find you and pay 40 bucks every day, going up, without any investment in anything — just word of mouth — unless you hit some real need that's not being addressed by other players. So that was my thinking. So that was an example of something that was still very, very early. By the way, it doesn't even have to be revenues. In the case of Houzz, there were no revenues.

‍

[Michael Eisenberg — 12:03]

I need to ask you two quick questions on that. Do you ever invite the founders to your house, or only Cafe Venetia?

‍

[Oren Zeev — 12:08]

Mostly I don't invite them to my house, just out of respect of the personal space of my family members. But every now and then I do.

‍

[Michael Eisenberg — 12:21]

And in Riverside, were you not worried that this is like a family business? Like our own experience with brothers and multiple family members starting businesses — most often, not always, doesn't end particularly well.

‍

[Oren Zeev — 12:33]

I would say that most startups don't end particularly well. So the question is, do you ascribe it necessarily to the fact that they were... Because I think sometimes we draw the wrong conclusions, right? We invest in a husband and wife, they fight, they get a divorce, the company fails, and we say, "oh, I'm never going to do that again." But we could have invested in two people who are not married, and they would still fight and the company would still fail. So the answer is no, I'm not bothered by that. I have them — I had Houzz, husband and wife. They're brothers. You know my good friend — I didn't invest in that company, but you know my good friend Ori Sasson. You know, he started a company and hired three brothers and built a big company. This is like in the 90s. The listeners are not going to know the name anyway, but it was one of the first CRM companies, called Scopus. And there are many other examples, but they're not necessarily my portfolio, as you know — of very famous, successful companies that became... So no, I don't not do a deal because of that. And I think it's dangerous to draw the wrong conclusion, because it's based on one data point typically. You know, I heard — I once talked to a VC, I'm not going to name them — who told me that they're never going to invest in a company from Santa Barbara. Why? Because they had a company in Santa Barbara, and then they were surfing all day and they didn't succeed. Okay, but you're actually extrapolating from an N of one. Come on.

‍

[Michael Eisenberg — 14:06]

Yeah. And you surf, so that's not even a bug in your mind.

‍

[Oren Zeev — 14:09]

Yeah, but yeah, I just do. But actually, when he told me about this story, it was before I was surfing. So it's not even that.

‍

[Michael Eisenberg — 14:18]

I'm interested about something you said about success. So we have a joint investment in Spines, the AI book publishing company. You said before you want a founder who's had success, at least one of them. Do you regard Yehuda Niv, the founder of Spines, as having had success before?

‍

[Oren Zeev — 14:32]

In the case of Spines, it was very clear that he already had traction when I invested. You invested before me, so I give you credit for that. You did the seed and I came back a year later at the A — when you did it, it was very early. When I did it, he already had something like $5 million of revenue run rate. So this actually falls in the bucket — not in the bucket of second timer, but on top of it, Yehuda had relative domain expertise, because he started — but in non-tech. No.

‍

[Oren Zeev — 15:00]

But in this particular case, it was definitely the bucket of traction from the company, not because of Yehuda's success — because his success was not in a tech business, and it's different. So it was really based on the traction and the rapid growth, which, as you know, continued since then.

‍

[Michael Eisenberg — 15:25]

Yeah. I want to make an observation, by the way, about Spines and about Oren Zeev for a second, which I'm sure somebody else has made before me. So for those who don't know, you were the big investor in Audible, which now everybody uses for audiobooks, before anybody really knew what an audiobook was.

‍

[Oren Zeev — 15:40]

Yeah.

‍

[Michael Eisenberg — 15:40]

And you were one of the original investors in Chegg, the textbook company, and now in Spines, an AI publishing company. What is it with you and books and publishing?

‍

[Oren Zeev — 15:50]

I think the honest answer is that it's a coincidence — but it's a nice coincidence. And I may be, especially if and when Spines is a big success — I may be the only VC in the world who hit gold three times in the book. Actually, I don't even know if there's one who did it twice, so maybe I'm already there. You don't think of books as a venture investment, right? And somehow I managed to be the main backer. I was 40% of the company before it went public for the second time, in 2004, and became a huge business. And Chegg became a huge business for a while and then got decimated, obliterated by AI. But that post-dates — that's years after I was out of the company. So it was also a home run for me. And now Spines. But each of them brought a real innovation and created really a new business. And each of them was — you know, the first two for sure, the third is still a work in progress — a market leader. And books is a big category, you know. So it turns out that even in a category like books, you can innovate — first with audiobooks, then with textbook rentals, which developed into homework help, and Spines, of course, is the one who's doing the self-publishing using AI instead of manual.

‍

[Michael Eisenberg — 17:21]

So you made the observation earlier that you want to make sure the company can be big, and if it gets bought on the way, so it gets bought on the way. You also just made the observation, which is obviously correct, that Chegg got obliterated by AI — and it's obviously after you, the venture capitalist, are out. How are you thinking about moats right now in all of your investments? Like, what is immune from the AI juggernaut that's currently kind of overwhelming the world? It's like a tsunami. If you look at Chegg's stock price — and hopefully put it up in the background of the podcast here — it's like a cliff.

‍

[Oren Zeev — 17:59]

Yeah. So I believe that the enterprise value is probably zero. I think they're probably worth — sorry, negative — I think they're probably worth less than the cash.

‍

[Michael Eisenberg — 18:09]

Wow.

‍

[Oren Zeev — 18:10]

Yeah. So it really got, like, obliterated. Chegg — I don't know if they could have done anything, because Chegg, the whole business was homework help. And they had — I don't know, a thousand or more, I don't know how many — because I was no longer with the company when these things happened — but they had subject-matter PhDs in India helping people. So that's just the essence of ChatGPT or Claude. You know, this is just — yeah.

‍

[Oren Zeev — 18:35]

I don't know that they had any chance. But I think many times, companies do have a chance to adapt quickly. Because if you're not going to adapt, you're going to die. Whatever your moats — whatever you think your moats are — if you're not adapting, you're going to die. But I think more often than not, companies do have real assets that are not just immune — some of them are even worth more thanks to AI. So if your moat is your code, good luck. Okay. Because it's no longer a moat, okay, if it used to be. But there are multiple things. For example, if you have proprietary data, it's not only a moat, it's even a more important moat in the age of AI than it was before. Connectivity, integration with all sorts of archaic data sources — not things that are open or APIs or things like that. But for example, in the case of Navan, think of all the connections to all these archaic systems with the airlines and the trains and the this and that, that's not necessarily available. Then you have a regulatory environment and licenses — for example, in the case of Tipalti, just the licenses took us four years and millions of dollars.

‍

[Michael Eisenberg — 19:59]

Tell our listeners what Tipalti is, because they don't know.

‍

[Oren Zeev — 20:02]

Tipalti is today the market leader in finance operations automation in the mid-market. And their core, they grew from accounts payable, but they're expanding to other automation. And it's a multi-hundred-million-dollar revenue company — also one, also still private — but also a big winner that I helped start. So that's another set of, especially in fintech, you have these barriers. You have trust — brand and trust of customers — for things that are critical, for things where there's no tolerance for hallucination or mistakes, or the probabilistic outcome — it needs to be deterministic. So you have a host of different moats. So some of the moats that used to work don't work anymore. And some that maybe that were less important — like proprietary data — can be much more important. But overall, I think many companies, not all but many companies, have real assets vis-à-vis both a new entrant and also a big lab. Because the big lab is not going to do everything. I think that's also fantasy — to think, oh, Anthropic is going to do everything, or OpenAI is going to do everything. That's not going to happen. Just like Microsoft didn't do everything in the 90s. So the missing ingredient, though, is the adaptability — how quickly a company really dramatically adapts, looking at every function and every product feature and asking themselves: if we're doing it now in the age of AI, how would we have done it? And then just do it. I'm talking about everything — the structure, the org structure, the product, the operations, the development. Everything you have to rethink, and move very quickly. And in this regard, I think that companies that are founder-led and are at 50 people, 100 people, 500 people, 1,000 people, have a huge advantage versus dinosaurs who are 30,000 employees, 50,000 employees, and are not professionally — air quotes — led. And so I'm actually really, really, really bullish about venture in general. Obviously, the last three years since AI — obviously AI is good for venture. Let's start with that, for two reasons. One: any change is good for venture, because if everything is stagnant, startups cannot be successful — the incumbents win. But the real advantage that startups have is when things change. So number one, it's a huge change — the biggest since the beginning of humanity, I believe — certainly for technology. And the other thing is, it's a change that dramatically increases the pie, enlarges the pie — because things that before couldn't have been done with technology are now being done with technology. So technology captures a bigger share. Spines is an example. But not just technology is capturing a bigger share. Before that, maybe a software company, maybe they were selling a license, $400 per month. Now they can sell an agent who would replace the person who was using this seat. And instead of $100 per month, maybe they can charge $10,000 a month — or $20,000, not per month, per year — because, you know, that employee was costing the company maybe $100,000. So both enlarging the pie and a huge change — great news. But my point is that not only is it great news for these vintages — I actually believe that a lot of the pre-AI era companies, the ones that have very, very strong founder leadership, are actually going to also be big beneficiaries, because they bring some real advantages to the game on top of the AI.

‍

[Michael Eisenberg — 24:29]

Yeah, it didn't work for Chegg, but —

‍

[Oren Zeev — 24:31]

No, no, no — someone's going to get killed. You know, Chegg is not going to be the only one, of course. In fairness to Chegg, I don't know if there's anything they could have done — you know, when your entire thing is just so squarely — you know, AI is just doing it like that. Yeah, they had no moat. I don't see how they could have.

‍

[Michael Eisenberg — 24:54]

I want to latch onto the old guy comment you made, because I actually make it all the time inside of our partnership, and to anybody else, about Microsoft in the 90s. When we got started in the venture business, every time you sat around one of those large tables that you talked about before — "oh, Microsoft can do this," "oh, Microsoft can do this." And by the way, when it was in the networking space, sometimes it was, "oh, Cisco or Lucent's going to do this too." That's literally the environment I think I grew up in. You probably grew up in too. And now, when I hear "oh, it's going to be absorbed in the models," you go — here we go again. It's the Microsoft. It turns out that this is not true. And so the question I want to ask you is: what is your thinking model, your mental model, for what the models will do versus what they won't do?

‍

[Oren Zeev — 25:38]

Now you're really, really challenging my IQ. And, you know, I don't think I'm smart enough to really answer that. First of all, I do think it's still worth posing the question — you know, will OpenAI, Anthropic do it? You know, I don't think one should not ask the question. But you cannot assume that they're going to do everything. This is just foolish. I'll give an example from Microsoft. When I did Chegg, last minute I convinced Don to invest a little bit more, so I could get even more. And I brought it back to the committee, and it didn't pass. And the reason it didn't pass is because at least one partner had an issue that — what if Microsoft does it now? And I'm going, what is the connection? You know, they're selling books. Why would Microsoft sell books? You know, there's zero connection. Where did you even get this? Where did you pull this out of? But, you know, he had this — he was obsessed with that — and so he didn't want to risk more money on this. But just an anecdote. So I think you should ask the question, and of course they will do some things, and there will be some fields where they're maybe not going to leave an opportunity. But for the most part, it's not going to happen. They're not going to become a travel company now, or a fintech company now, or a bank or, you know. So I think one has to look at it specifically. I don't know — I don't have a general answer, but I think on a case-by-case basis, one needs to look at it and think.

‍

[Michael Eisenberg — 27:18]

Yeah. I want to spend a few minutes talking about Navan. And I want you to really take me from the beginning of Navan — the first meeting with the guys, which was called TripActions, if my memory serves me correctly to begin with. And really walk us through, because there's so many stories here, right? COVID hit, it reduced the business to close to zero. This has been an up-and-down play. Then the company goes public and the stock tanks, and you go on record on CNBC as saying, "okay, Mr. Market is in action, but wait for the long term. Eventually the stock price will catch up to the business results." And it's come back a bit since then. This has been just an incredible story, I think, from beginning to end. So really, I want you to walk us through — first meeting, ups and downs along the way.

‍

[Oren Zeev — 28:00]

First, I'd known them before. I even had a small angel investment in the previous company, which was called StreamOnce. And then one day I walk on University, and they sold it to Jive, and the Jive office was on Lytton, which is one block away from University Avenue. So really one block away from Venetia. So I walk one day and I see them on the street, and I say, "hey, you guys, you want to have lunch?" Because I just had the window. And they're, "sure, why not?" We're having lunch. And they don't even tell me anything. Last five minutes, they tell me, "oh, by the way, we're thinking..." They were still at Jive — still doing the time that they need to vest. "We're thinking about something new." Immediately I said, "okay, we're going to meet tomorrow for coffee." Or maybe it was the same day, that we just, after lunch, continued to the coffee. And then they pitched the idea. They had nothing — it's just, "oh, we're going to do this." But I got excited. "So okay, let's meet tomorrow and talk about it again." The next day, Ilan comes with a mock-up of some screenshots that he did overnight. And I think in that meeting we just agreed that I'm going to fund it and back it, and we're good on terms. And we raised a toast of — what do you call the Italian equivalent of champagne? Prosecco. You know, we raised the toast, which I never do — I never drink alcohol — but we raised the toast to the success of the venture. I don't even remember if the — yeah, I think the name existed already. But, by the way, in the 24 hours, this is what I did: I called a few CFOs and asked them about this specific question — will people switch? So that was how I invested. They tell me that of course they would have come to me anyway. So I don't know if it was — I don't know if I, you know — but anyway, I literally saw them on the street, so it was serendipity. Although they tell me that they would have come to me, and they could have come to me anyway. So we would never know.

‍

[Oren Zeev — 30:14]

So in the beginning, we had a few years where everything was working great. And it grew very fast. And first of all, we lucked out that — I hadn't realized that it's not easy to get the content. Content meaning the flights and the hotels and all that. But they lucked out and they managed to get it. They grew fast. Everything was going great. I think the first existential crisis happened even before COVID. You know, there are three large airlines in the US — there are other airlines, but there are three large ones that you cannot do without. American, United, and Delta. Delta being maybe the best-run company of the three. And Delta in 2019 decided that they hated Navan, like, with a passion, and wouldn't even tell — and that we cannot use Delta. Which is a death sentence, because we cannot go to a company, a customer, and say, "use us to book your flights, and by the way, you cannot use Delta." You know, it's not some — it's not Frontier or Spirit RIP. That was an existential crisis. And long story short, somehow — actually thanks to Ben Horowitz, who became involved at that point. That's exactly when, the same time, that Andreessen invested for the first time. And actually, Ben helped us figure it out with Delta. We solved this problem. This was a really existential threat — I thought we could have lost the company on this.

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[Oren Zeev — 31:59]

Then COVID hits. And COVID hits — I've never seen anything like it. Because you have a company at that point — it was the beginning of 2020, we are at about $80, $90 million revenue run rate, ARR call it — because it is usage, but it's recurring — and it goes, over one month, it goes to zero. You know, April 2020 — it goes to zero. I remember when COVID just started, someone wrote an email: even if revenues go down by 50%; and someone else says, "you know, they can go down by more than 50%." Went down to zero. Okay, obviously, because nobody was flying. And by the way, consumer flying came back way faster than business travel. Business travel did not come back for a long time. But the main thing is that we had no idea when it would come back. Now, cash was less of an issue — first of all, we'd raised before. But miraculously, Ariel was able in April and May to secure a big investment from Greenoaks, which was structured — because you could not price the company — so it was structured, but it was money. It was real equity and real money. So the issue was not running out of cash as much as it was running out of talent. The reason I say this is because back then, the first two months — no problem, because everyone froze. But come June, you're starting to see companies like Datadog and Zoom and Databricks and Snowflake just crushing it during COVID. And they're all going after our people. And I'm not worried about the travel people, because they had nowhere to go. But the engineers and the go-to-market people — their skills are transferable to any of these companies. And at some point, I think Ariel was the only employee in the company that didn't get an offer from one of these companies. And here, I have to give the greatest credit to Ariel for his leadership. Because that's when leadership is really being tested. And the fact that he was able to inspire enough confidence and enthusiasm that, despite everything, we're going to prevail and we're going to do great — and we managed to keep most of our, almost all our executive team. And maybe we lost 20% of people that we didn't want to lose, but we managed to keep the core. That, to me, is huge. This is the ultimate leadership test, I think, and he passed it with flying colors. Now, on top of that, I would say everything had to be looked at. So first of all, we were the very first company to let people go, because all the customer support people had nothing to do. We let them go within days. And we did it over Zoom, because there was no other way to let go of people. Of course, we got a lot of grief from the press, especially the Israeli press — how dare we fire people over Zoom, as if there's any other way to do it at that point. But again, to Ariel's credit, he was never too bothered by that. He was never too obsessed with whatever the media was writing at the time. But it's not just letting go of people. It's looking at the roadmap, shifting resources. For example, we had a nascent expense product. And the expense, you could still sell, because people still have expenses. So we shifted resources and accelerated the expense product at the expense of the travel. We changed the way we — we've changed the product map. We prioritized features that had to do with, for example, safety. What's the safest route to go from A to B once people started flying again, et cetera. Bottom line, we survived it. It wasn't easy. It wasn't pretty. It took a while, but we survived. I think the day we knew that we would survive it was the day that the vaccine was announced, sometime in 2021. And we knew from now it's just a question of time. And that's when we managed to get also more financing. And then, a year before the IPO, we had another — maybe not as existential, but we were like two months. We had some mistake in the way we were managing things. And we were growing very fast on the expense side, which part of it was giving credit to customers. And the business was going great, and thanks to it going great, we almost ran out of money. You know, it was...

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[Michael Eisenberg — 36:54]

People don't understand this, by the way: it's actually growth that takes capital.

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[Oren Zeev — 36:55]

Yeah, yeah, exactly. So we were like two months from running out of cash, and it was a breach of covenants of the money warehouses and things like that. Okay, so that's another one. And then we go public, and this is the worst public IPO of 2025 by far.

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[Oren Zeev — 37:17]

And by the way, Chegg was the worst IPO of 2013. So twice I've been part of the worst IPO of the year in terms of performance. The company was received super badly. To this day, I don't fully understand why. Even, like, the first minutes, it started to slide down. It went down. It went down from 25 bucks, which we didn't even think 25 was expensive when we took it public, it went down all the way down to something like $8. You know, Michael, at the end of the day, if you know your business is great, why should you even care that the public markets are taking time to see it, if you really have conviction? And the answer is, sometimes it's a self-fulfilling prophecy, because sometimes you could have talent flight, because people start losing confidence — because they see their options are worthless and the equity is worthless, et cetera. And here, again, it comes back to Ariel's leadership. Because you know what the attitude was at the company — and I saw it — the attitude was, "fuck the public markets." That was the attitude. "We are doing great, we're going to continue to do great, and eventually we're going to beat and raise and beat and raise and beat and raise, and eventually the public markets are going to get it." So now, in the last six weeks, it moved from $8 to 18-plus. Of course, I cannot comment on anything specific, but I personally still think it's very cheap. I think this is going to be a massive company, and eventually reality catch — sorry, perception catches up with reality in most cases.

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[Michael Eisenberg — 39:08]

Yeah. How long are you going to hold your shares for? Generally — you don't have to be specific about this one.

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[Oren Zeev — 39:14]

Yeah, no — look, generally, as a fund, I don't think it's my role to hold public shares for the LPs. So personally — I do distribution in kind. I pay myself the carry in shares, and then personally I want to sit for the next 20 years. But that's personally.

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[Michael Eisenberg — 39:39]

Are you holding Chegg still?

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[Oren Zeev — 39:41]

No, no, no, no, no. I got out, actually, too early. Too early. You know, I got out too early because — when I got out, it was still worth about a billion, and it went all the way up to 13 billion before down to zero. But I needed the money. If I didn't need the money, maybe I would have kept it. Specifically in Navan — so from a purist standpoint, I don't think, for any company — I don't think it's my job to hold the shares, and I think I should distribute the shares as soon as possible. But I shouldn't be stupid about it. So if it's so obvious to me that there's a disconnect between the market price and what I think, then I'm going to deviate from the purist approach and wait for another quarter, another two quarters, another three quarters. But then also distribute it over time. I think you did the same with Lemonade. I know, because I was on the receiving end. I was an LP, and I remember I got the distribution every few months, and it went great. I think it worked great.

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[Michael Eisenberg — 40:32]

We still hold a bunch.

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[Oren Zeev — 40:43]

You still hold a bunch. Okay, great. So maybe I'll get some more. So, as an LP. So I do think I want to wait until I feel that the public market understands the company, and then distribute. But over time, to average out — because I don't know how to pick the right time to sell. So I want to sell over time, to average out.

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[Michael Eisenberg — 41:12]

I want to ask you a bunch of rapid questions to wrap up here. What percentage of your founders are Israeli?

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[Oren Zeev — 41:19]

Probably 80%.

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[Michael Eisenberg — 41:20]

80%. What percentage of those — the headquarters are in the US, ff the 80%?

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[Oren Zeev — 41:25]

Believe it or not, I never — I can only guess, because I never prepare any slides for anyone, so I never do these statistics. So I have no idea. But just as a guess, I would say maybe two-thirds headquartered in the US and a third in Israel.

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[Michael Eisenberg — 41:41]

Do you think that's important — for the Israeli companies to be headquartered in the US?

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[Oren Zeev — 41:46]

If the CEO needs to see customers often, then I think it's extremely inconvenient to be in Israel. But if it's a B2C company, or, for example, a small business — so it depends, I think. But it's a personal individual. I think it's better. But I understand that people have their personal priorities as well.

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[Michael Eisenberg — 42:08]

What's something we can't find out about you on Google?

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[Oren Zeev — 42:11]

It's not that I'm good, but I play table tennis almost every day, and in the league, once a week.

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[Michael Eisenberg — 42:17]

You've invested 80% in Israeli companies. I think 25 or so years ago you moved to the US, first to New York and then to Palo Alto. When are you moving back here?

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[Oren Zeev — 42:30]

Soon. With all these woke communists in California now.

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[Oren Zeev — 42:36]

No, honestly, I don't even see it as binary at this point because, you know, obviously our kids are out of the house. Interestingly, both our kids live in Israel. Decided to live in Israel, both of them, despite having grown up in the US. Both of them live in Israel. We have a place in Israel, Neve Tzedek, which we love. And we love spending time in Israel. So honestly, I don't see it as necessarily a binary thing. I think we're probably going to spend time in both houses. We don't have more than two houses. I don't see why we would need more. But, so, yeah, it's not binary. I think we're going to spend more and more time, especially now, because our daughter just moved three months ago from the US to Israel. So we're probably going to spend more.

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[Michael Eisenberg — 43:21]

Last question for you. What's an unpopular opinion you hold that you haven't talked about publicly yet?

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[Oren Zeev — 43:27]

There is now this narrative that, "oh, it's no longer enough to grow 100%, 200%" — you know, "if you're not growing 10x, you're not worthy of our money." This is like the narrative of some VCs. And of course, if you're growing 2x and all your competitors are growing 3x or 4x or 5x — that's not a good thing. But if you're doing something special and good and unique, and you're growing 2x at scale — I'm not talking growing from 1 million to 2 million; I'm talking from 20 to 40 to 80 to 160, and you have real moats and it's sustainable — then I don't think the math changes. You know, I think that in six years you're going to be 64 times bigger than what you are today, if you're growing 2x in a sustainable way. And I think it's become really bon ton, and I think I know why. I think that you sound — as a VC, you sound very good when you say, "oh, for me, 2x, 3x is not good enough anymore. We only invest in 10x." You sound that. So I don't buy that. The math is still the same math. And the thing is, it's also very dangerous when — you and I have lived through this period more than once, actually — that if you only look at top-line growth, nothing is good enough. It also creates very problematic — to say very mildly — behavior. Because you're going to find that the growth is not real. It's not sustainable. Sometimes outright fraud, sometimes it's not fraud, but it's just not sustainable. You know, the InsurTech thing — Lemonade is now doing great, but not just Lemonade specifically. In the space, there were a lot of companies that ended up being worthless, because they were showing great growth — because in a business like insurance, you can always show growth if you misprice the policy. You can have nothing other than mispricing the policy and still show growth. So my point is that it's not just wrong. I think it's a dangerous mindset.

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[Michael Eisenberg — 45:44]

That is a fantastic place to end, by the way. And that is going to definitely be the outtake of the episode, because you are so right. And everyone's talking about, how do I have a little bit of Anthropic, a little bit of SpaceX, and you need all those other things. But there are a lot of great businesses out there — like Navan and Tipalti and Spines and many others. If you've enjoyed this podcast, please join me, first of all, in thanking Oren for coming on the podcast. And you can find out more about him if you follow him on X — and that's Oren Zeev, O-R-E-N Z-E-E-V — and same on LinkedIn. And Oren, really, thanks for doing this, I appreciate it. And if you enjoyed the podcast, please rate us five stars on Apple Podcasts, on Spotify. Subscribe to the YouTube channel for more wisdom from Oren Zeev and some of our other guests. Thanks, Oren.

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[Oren Zeev — 46:26]

Thanks so much for having me. Enjoyed it. Thank you, Michael. Bye-bye.

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