Monday, April 1, 2019
Catching Up With Eli Portnoy, Sense360
For this morning's interview, we had a chat with Eli Portnoy, the CEO and founder of Culver City-based Sense360 (www.sense360.com), which is developing analytics software which leverages mobile phones for data on customers. We've spoken with Eli before, but it's been a few years so we thought we'd catch up with him on how Sense360 is doing. Portnoy is a serial entrepreneur, having previously founded ThinkNear, a startup which went from the Techstars startup accelerator to an exit in only 14 months.
For those not yet familiar with Sense360, what do you do?
Eli Portnoy: We started Sense360 four and a half years ago. The hypothesis was, companies are in an extremely competitive environment, and it doesn't matter what company or industry they are in, it's been one of the most competitive environments we've seen in a long time. That competitiveness is driving companies to make better decisions. The only way to win is to make consistently great decisions. Our goal, is how do we empower business leaders to make better decisions. The way we've done that, is by going out and aggregating a bunch of data sets, to help businesses better understand and better serve their customers. That's the basic premise of the company. We're a bit over 30 employees now, and we've been growing pretty fast.
How are things going with the startup?
Eli Portnoy: From a stage perspective, we now have a very large number of Fortune 500 companies that are clients, which includes, for example, five of the top six burger chains in the country. We're now in use at one of the top convenience stores, the two top casual dining chains, all of them massive enterprises. It's mostly food and food sector companies using our data to make better decisions. We've grown over 3X every year over the past three years.
Why it is that you've seen the most uptake in the food sector?
Eli Portnoy: We started with food as our first category, and we have been very focused on it, specifically with quick server restaurants. We spent the first to years servicing this one core vertical, and we're now started to expand to adjacent markets, including the closest relatives to quick serve, including casual dining chains. We've had lots of success there. What is our next adjacent market is convenience stores, and it's turned out there really well, and we now have products for grocery stores and are getting our first customers in that industry. That's very exciting there, as well. It's always been about focusing on a vertical and find adjacent markets. That's why we aimed at quick serve first, because expansion from there is pretty natural.
What specifically about the QSR market was so attractive as a first market?
Eli Portnoy: It's both highly competitive, and not well served by data, and it had become a market share war. The market itself is now growing, so every single chain that wants to grow must take market share from someone else. It leads to a lot of the similar dynamics to baseball, with money ball. There are only 30 teams in baseball, so for someone to win, someone has to lose. That means you are forced to use data much earlier in the process to grow. Those dynamics lead to an accelerated use of data.
Is there a new source of data that you have, or what exactly are your customer using?
Eli Portnoy: We have multiple sources of data. The basic premise, is we're asking people, through surveys, to understand why they did something, and what they thought about it. We're asking for their permission to share their data, including behaviors, what they did and when they did it. For attitudes and context, we're getting feedback from surveys and other similar means, and asking them specifically for permissions for access to behavior information, such as location and other similar data.
What's the biggest lesson you've learned from this time around in a startup?
Eli Portnoy: There are so many lessons you learn on how to build a company. Having gone through previously experiences, the difference this time is instead of lessons and data points of one, now that I'm working on another venture, you can see some things and try to avoid mistakes. Of course, you make new mistakes, although your second one, you've already learned lots of lessons about company building, team building, fund raising, and how to build a board. With the first company, I gained lots of interesting insights in how to construct a company from nothing. With this new company, there have been a second set of things I've learned that are very specific to our industry, and to our product, specifically. That leads me to the number one lesson. There are just two components on how you construct a business. First, how do you build the product you are trying to build for that market. The second piece,is how to figure out what needs to be done in a completely new market, and that takes deep humility, discovery, and exploration to figure out.
Have you been surprised on how many new things you've learned from this startup?
Eli Portnoy: I always felt there wer going to be many new things to figure out. So, having to do that with this business does not surprise me, because there are always a lot of things to figure out. Company building is hard, there is no way around it. There are so many things that have to go right, so many decisions you have to make right. There is so little to lean on, so you're constantly trying things to see if they work. If it doesn't work, you have to be open that you're wrong, and course correct, and move on. I think that's the case both with Thinknear, and also Sense360, and it's probably made me more humble. I'm not surprised at all, and expected that.
There's a lot of talk about where are we exactly with the economy, have you thought about that and how you might handle any market change?
Eli Portnoy: It's a tight market right now when it comes to labor and competition, but we are over built in a lot of way. I think the number of investments has led to saturation in nearly every product area, and I don't think there is any question we're in a very hot economy. That said, almost nothing goes up without coming down. From my perspective, there are two ways to prepare. One, is make sure you are building something really, really important to a business. Not a vitamin, but a painkiller. And, make sure you're managing cash and expenses in a way that allow you to weather any storm. I think, other than that, there's not much one can do except be aware that we have it really good right now, that ti's a hot economy, and it doesn't always stay this way.
Finally, what's your big goal in the short term, and what are you working on now?
Eli Portnoy: For us, it's all about providing customers with better decision making toos, and making it easier for them to consume and make decisions. We're continuing our expansion strategy, and continuing to build products for additional customer types.
Thanks!