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Thoughtful Edge, Episode 8, From Code to CEO with Elon Salfati
50 Plays1 year ago
Unlock the Secrets of Success with the latest Episode of the Thoughtful Edge podcast, "From Code to CEO". Join us as we explore the captivating journey of a software engineer who made the bold leap into the world of startups and entrepreneurship. Discover the pivotal moments that sparked their transformation, and how their technical expertise became a powerful asset in building a thriving business. In this action-packed episode, our guest shares invaluable insights on overcoming the challenges of transitioning from a technical role to a leadership position. Learn their unique strategies for assembling a high-performing team, staying up-to-date with the latest industry trends, and effectively communicating complex ideas to non-technical stakeholders. If you're a software engineer contemplating the entrepreneurial path or simply seeking inspiration from a true success story, this episode is a must-watch! Get ready to be inspired and empowered as we delve into the key lessons and practical advice that can propel you towards achieving your dreams and unlocking your full potential. Don't miss out on this one-of-a-kind conversation – hit the subscribe button and join us on this incredible adventure from coding wizardry to entrepreneurial mastery! Please follow Elon on his LinkedIn: https://www.linkedin.com/in/elonsalfati/ #leadership #enterpreneur #careerdevelopment #career #thoughtfuledge
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Transcript
Introduction to Elon Salfati and His Career
00:00:01
Speaker
Hello, hello. This is the Thoughtful Age Podcast. And today is my guest, Elon Salfati, who is the founder and CEO of the Salfati Group. And by today's quest is pretty interesting because he has also the engineering career as myself. And I believe they're pretty much of my audience as well. And he made this transition from engineer to founder and to entrepreneur.
00:00:31
Speaker
This kind of way and this move is always fascinating for me personally. And I would love to hear more about this story from you, Elon, today. So could you please tell us about yourself as an introduction?
From Counter Intelligence to Entrepreneurship
00:00:49
Speaker
Yes, perfect. So thank you for the nice introduction. I'm very happy to be here. And I think for me,
00:00:57
Speaker
I started my career around 13 years ago with the Israeli Counter Intelligence Unit, where I did a lot of software development projects. And I think this is where my tech career started. But since then, I've been in software engineering for until today, honestly, even now being a founder. But
00:01:22
Speaker
you know, once you get to a point in your career, the for me, it was at least the obvious next step was, you know, building something of my own. And, you know, if you as an engineer, if you take all this background, all this knowledge, we have like us engineers, we have a lot of tools to take us to the next step. So
00:01:48
Speaker
That's what I did. And since then, I've founded a few companies. And I'm currently, like we mentioned, the founder of Salfate Group, where we focused primarily on actually helping early stage startups, right? So we're a startup studio. Yeah.
00:02:07
Speaker
Nice,
Why Engineers Rarely Start Their Own Companies
00:02:08
Speaker
nice. Those stories are always fascinating because every engineer, like almost every engineer I talk to, has this idea of starting his own company or starting his own product or making or having some pet project at home, maybe doing something in parallel with their main job. But not many of us determined enough to get to some stage when they can like
00:02:34
Speaker
go out and say, oh, I'm going to do that. Is there anything in particular what inspired you to make you the leap from software engineer to a startup founder? Maybe there was a specific moment or experience that was a catalyst for this change. It's a funny one, actually. So I was I think probably one of the early positions that I had was a software engineer
00:03:04
Speaker
at an API security company. And when I joined this company, I was the only software engineer in the company, and I grew the entire R&D. Underneath me, I hired engineers, data scientists, QA, product managers. And it was funny, because at some point, I received this title of director of R&D, because I grew the entire company. There was no VP of R&D.
00:03:34
Speaker
And it was kind of my position, but I never got the title. And funny enough, at some point, after this company hired four VPs of R&D's, filed them after a month, I was the obvious next choice. And when they decided to hire another VP of R&D, that was the point where I said, OK, that's it. In any case, I'm managing this entire product development and the entire team.
00:04:04
Speaker
I deserve better. And that's actually where I met or when I met my previous two co-founders. They just started to ideate around how we can help private banks in Switzerland.
00:04:23
Speaker
And one of my co-founders, who is also born in Israel, but then moved to Switzerland, decided we need someone from Israel to lead the engineering part as a founder. And this is when we actually met. I always preferred to get into a position where I can learn more, rather than financially get more.
00:04:52
Speaker
And it wasn't the obvious choice at that point. Yeah, that makes sense. I was always chasing the opportunity there where I will have more responsibilities, where I will need to learn more stuff, where I will meet more people.
The Edge of an Engineering Background
00:05:10
Speaker
And it was not always about the money. However, money went after that. Yeah, exactly. If you push it a little bit, then
00:05:22
Speaker
This is where you say, okay, I've learned enough and now I can solve the money problem. Yeah, exactly. And then it all comes to some coincidence as well, as you mentioned. You wanted the other position, you wanted to move farther and then you've met some guys who were also determined to do something and then the spark started and started to fire and then it went on.
00:05:51
Speaker
Exactly. Tell me, how has your technical background influenced your approach to entrepreneurship? What unique skills do you think software engineer bring to the table when starting a business? I think the biggest benefit of being a software engineer and a founder, especially when you do this, I think the most obvious transition is getting to a point where you're the founder and CTO of a startup and then at some point you become
00:06:22
Speaker
Well, not everyone. It depends on the personality of someone. But you might become the CEO of that company. And I think the biggest advantages that we as engineers have is the analytical approach. So if you look at many, many startups out there, the CEO is often a business person.
00:06:48
Speaker
Often, they are very driven by their feelings and by their understanding of the world, but it's not analytical. And for me, the way that I manage the company is the way that I manage all the employees. It's always about getting those data-driven decisions. I want to see data. I want to see how many customers are we actually contacting every week.
00:07:13
Speaker
It's just analytical, right? Metrics. Exactly. Metrics. Once you do that and you bring that into the business side, this is where things just become much more, in my eyes, successful.
00:07:30
Speaker
Yeah, that makes perfect sense to me. Very often when I talk to some entrepreneurs and their vision and their imagination of the future, very often they lack those details, those small pieces that will help them progress even more further and being more successful.
00:07:54
Speaker
And it's a good point that you brought up that analytical skills that every software engineer possess is something that might be crucial to every venture, not only startup, but any other company.
Shifting Focus: Technical to User-Centric
00:08:09
Speaker
So in your journey as an entrepreneur, what were some of the biggest challenges you faced while having this transition from a technical role to a leadership position? And how did you overcome them?
00:08:22
Speaker
It's funny, it's actually a product problem, or a mentality problem if you prefer. So I think that as engineers, by default, we aren't so great at building products. We are very good at solving technical solutions. We are very good at
00:08:46
Speaker
identifying how to implement the user flow or how to make it efficient and all those stuff. But at the early stage startup stage, none of it matters. So it's all about the user journey. And it's all about understanding the problem that you're trying to solve, understanding the pain, often actually the emotional pain that you're trying to solve.
00:09:14
Speaker
And at that point, you want to solve for this. It doesn't matter that the product is not efficient. It doesn't matter that everything is in a huge monolith. None of it matters. Are you solving the problem or not? And I think that many engineers, including myself, this is where we aren't great. And once we get to this point of becoming entrepreneurs and we are building this
00:09:41
Speaker
amazing product. And it took us four to five months to bring something that we are happy to because we wanted it to be perfect. And then we bring it out to the new customer and said, well, that's nice, but that's not actually my problem. Like that's their waking in call.
00:09:58
Speaker
resonates with me, with myself. I'm seeing myself and I'm seeing my peer engineers as well. When we look at some requests from the products about building one or another feature, mostly the user is thought about the last, but the architecture, the technology stack, the whatever tag that we want to handle,
00:10:27
Speaker
And...
00:10:30
Speaker
It's a huge point that you brought up that we'd rather point on user and the ultimate experience and not those small pieces that will make engineers happy, but wouldn't make users happy. And it's more crucial when you're in a startup, you want to deliver fast, you want to learn more, you want to gain customers. You definitely don't want a huge amount of tech debt, but just plan accordingly and have your priorities.
00:10:59
Speaker
I would say I will do that later. I will bring up more microservices later or do some other fancy architecture, maybe in a year or really a half a year or several months when I will have enough time. Yeah, that's very, very insightful.
Building a Passionate Team
00:11:20
Speaker
And if we are moving on and talking more about building the teams,
00:11:27
Speaker
How did you go about building your team and what qualities did you look for in your initial hires? And how important was it for you to strike a balance between technical and non-technical team members? I'll be honest, I'm not sure that I already figured it out 100%.
00:11:48
Speaker
I think that I'm still figuring it out, but all of it, I will probably, we'll always figure new things out. But this one in particular is interesting because I've been through many iterations of hiring the first team, right? So it's my third company now. So Party Group is my third company. And I also have many other early state startups hire.
00:12:19
Speaker
I've tried a lot of approaches, right? So I've heard anything from like you lack financial resources, hire juniors, right? And then train them in house and you know, you'll have everything ready and cheap. So that didn't work because like you invest 80% of your time training them and
00:12:44
Speaker
When they are ready, finally, it can take sometimes a year, they just go, right? Someone pays them a trip of the amount. And I've heard, you know, the first 10 employees must be seniors because they will be able to deliver. But then, but then what I did is I hired seniors 10 plus years and they lack
00:13:10
Speaker
the spark, they like the passion, right? So they don't as eager as juniors to like conquer the world often, right? Not 100% but that's what happened. And then eventually, at some point I started hiring based on like the person's fire to the mission, right? Are you, like, do you believe in the mission? Do you,
00:13:39
Speaker
If you could have done anything, would you have done what we are doing? Is it something that you want to do in any case? And I think that passion is the key to hiring good teams because it doesn't matter the experience, if you have the passion, they will learn. And if they are already experienced, they will teach others. So you need like a mix of passionate people, those who will put the mission as first priority.
00:14:10
Speaker
Hmm, interesting perspective. Yeah, it's definitely crucial for any startup to build a strong team and to balance their skills. And as you mentioned, like maybe trying different approaches which works, which does not. But that idea of just trying to match people to your culture, to your mission and to your aspirations, it's very insightful.
00:14:40
Speaker
Ultimately, I believe that worked well and you just started to get more and more people that are engaged, that are more interested in the success of the company. They are ready to bring best of themselves to the work and to the project they do.
00:15:01
Speaker
I like that idea personally because I also believe the culture is an essence of every organization, of every company. I believe it's even more important for the startup to operate that way because there is a scarcity of resources, scarcity of time, and you don't want to waste them on something that's not that important.
00:15:30
Speaker
With that in mind, let's discuss staying up to date with industry trends and technological advancements. As a founder with the software engineering background, I believe you have all the ways of adaptation to learn about all of the technologies, all the new stuff on the market and still ensure that your company remains agile and innovative.
Staying Informed in the Industry
00:15:58
Speaker
So how are you doing that?
00:16:02
Speaker
So it's funny, I actually had this conversation not too long ago with a friend. He asked me pretty much the same question. And I actually didn't know the answer at the beginning. And I felt like I was up to date with most of the stuff. I wasn't too well formed. I think, first of all, a big shout out to a friend of mine at Ido, the CTO and founder of Daily Dev. I love their product.
00:16:31
Speaker
to those who are listening who aren't familiar with the product. It's an extension that sits on the top of the browser. And whenever you open a new tab, you just see a lot of new blog posts and articles around the things that are interesting to us engineers. And I love it. It's always on the top of my desktop. And just keep creating new stuff, just as tight as even.
00:17:01
Speaker
But it's perfect. I love it. And then on top of that, obviously... Wait a second. I'm taking a note. How is it called? It's called Daily Dev. Okay, Daily Dev browser extension, right? Yeah, I love it. Cool team. Cool. And then on top of that, I think, you know, a lot of LinkedIn and Twitter, I try to keep my network.
00:17:31
Speaker
focused on the people that I'm interested in. Usually, me as a founder, me as a software engineer, my network is pretty much a lot of similar personas around me. Just hearing everyone who's willing to share their knowledge with me. Can you share any famous people on the internet that you follow and admire?
00:18:01
Speaker
Yeah, so I really like the CEO of Cal.com. The insights on how to build a startup is incredible. Just generally speaking, I really love open source startups. And some of them go to this extension of becoming an open startup like Cal.com. And they just completely share their entire process
00:18:30
Speaker
everything from internal metrics to how they hire and everything. So it's very inspirational. I am really fascinated about. They go by Levzio on Twitter. He is the co-founder of Nomadlist and also an open startup. He shows everything online. It's quite interesting to see as well.
00:19:01
Speaker
Okay, thank you for sharing. I believe I will follow them as well from now on. As one of my quests previously mentioned that another good source of information on new trends and newer things that are happening on the market is
00:19:21
Speaker
Yeah, expose yourself more to offline events, going to conferences, visiting different places where the people present their work and talk about the achievements and their products. This is also, I found for myself, this is also valuable advice, like just going out more like meet the people and especially the
00:19:46
Speaker
conference on tech, and as I live in the area, we have just an abundance of that. And I believe you might have as well in your area where you live right now. Yeah, definitely. Actually, as a founder, this is, you know, you just meet so interesting people at those events. A lot of eventual capitals, angel investors, and other founders. It's inspiring to see.
00:20:13
Speaker
Exactly, exactly. Now it's just like meeting people. I enjoy doing that. I enjoy like talking to them and like learning about their experience, about their ways and the way they do stuff. Okay, moving on. Let's talk about effectively communicating technical concepts to non-technical stakeholders, such as investors or customers in a way that is both engaging and informative.
Communicating Product Value
00:20:43
Speaker
Yeah, my go-to is not to communicate the technical stuff, it's communicating the benefits. And I think it goes not only to stakeholders or VCs, it goes all the way to the customers and even internally, honestly.
00:21:05
Speaker
It's also something that us engineers often tend to forget. No one cares about the fact that you can click on the keyboard on C and it will create a new, you know, whatever component in the system. They all care about the fact that you made their life shorter. The time, sorry, oh my God, not their life shorter. The task is shorter.
00:21:34
Speaker
It's all about solving the pain again. So if we take, for example, superhuman, the email client, it's not about all the shortcuts. It's not about the user experience. It's about answering and replying to all your network, to all the incoming traffic quickly. That's what you're trying to pitch.
00:22:01
Speaker
And for me, that's the message. It's not about the technical stuff. Rarely, rarely I've encountered people who actually care about the technical stuff. Usually it's at the implementation stage. And usually at that point, you can talk to a CISO, to a VP of R&D, to a DevOps engineer. And then it's very easy to communicate those stuff, right? Because it's like their job. No.
00:22:28
Speaker
Excuse me. Yeah, I see. I see very well the point here. So when you talk to customers and stakeholders, you want to talk about the pain, the problem you solve, the value of that product, the value that product brings to the table and not about that small technical aspects. Yeah. Yeah, especially when you
00:22:53
Speaker
Not coding day-to-day. You're not dealing with the technologies either. So it would be definitely hard for you to explain for a stakeholder how to initialize a bean in Spring. There's something like that. Okay. Okay. I'm moving on then. And as a founder, as an interpreter and
00:23:21
Speaker
giving the demand and nature of running a startup and the potential for long hours and high stress levels.
Work-Life Balance Philosophy
00:23:30
Speaker
How do you maintain health, work-life balance or do you at all? So I'm a big believer at this statement that says if you do something that you love, you don't work it in your life.
00:23:48
Speaker
And honestly, as founders, we get to choose, right? We get to choose what we work on. We get to choose what mission we embark on. And I don't feel like I'm working. I'm pulling insane hours. Don't get me wrong, but I don't feel like I'm working. I would have done it in any way, even if I weren't receiving money for it. So like, I don't know.
00:24:16
Speaker
You get to, you know, you get to walk the dog at the middle of the day because, you know, I can. And I get to walk on the things that I love. I see. I see. So you actually, you don't even differentiate now, like the work in your life. So you just live your life. You just do, you just do things that you enjoy to do. Like either it's walking out the dog or like hanging out with friends or,
00:24:45
Speaker
doing some stuff on your venture or like meeting with customers or working with the team. It's very beautiful. Yeah, it's very beautiful concept. I like that a lot and I'm trying to embrace that in my life too. Just don't perceive your work as just work. If you don't like what you do, why do you work there? You'd rather love your work, you'd rather love whatever you do and then
00:25:15
Speaker
and then everything will start on the cover and then you will realize it is just the life which goes this way. You do that stuff in the morning, then something else afternoon and then whatever it is coming in the evening and like just embrace it and enjoy. There is no other way around.
00:25:34
Speaker
Yeah, sounds good. Beautiful concept. Thank you very much. As we continue, let's discuss advice for the software engineers considering becoming an entrepreneur.
Advice for Aspiring Entrepreneur Engineers
00:25:50
Speaker
Is there anything you can suggest? Is there anything from your own experience that was a key point for you that maybe helped you along the way?
00:26:04
Speaker
Oh, I like this question actually. So what I'm doing today at Selfati Group is that we are helping, like I said at the beginning, we're helping early stage founders reach early product market fit. And the way that I believe startups should be built, it's all about building sustainable businesses rather than only hyper growth startups. And
00:26:34
Speaker
It goes all the way because you will get the best term sheet for a seed investment when you don't need the money. Those are the best deals. And you will build the best team when you actually care about every cent that you spend and when you actually care about every customer that you spend and your entire focus will go into the direction of gaining that business. And at the end of the day, that's the only thing that matters.
00:27:05
Speaker
So that's what I pitch to all the companies in our portfolio. It's all about like building the sustainable business. And for us, software engineers, we get to bring to the table. For me, probably, I would say the most expensive part of building a business
00:27:28
Speaker
Because I accept the fact that most software engineers don't feel comfortable doing the sales part and give you a charge, right? I don't like it. But I think that when you change perspective and when you get to a point where we say, hey, we are building a solution that solves a real pain, right?
00:27:54
Speaker
You need to bring your own resources to get to a point where you can say that. You're solving a real pain. Often, it's something that we can relate to. I'm not selling, right? I'm trying to help people solve the same pain that I'm feeling. And at this point, it made my life so much easier. And the sales part is just not expensive. It's not an expensive thing to do. It's just talking to people. It's just your time.
00:28:22
Speaker
And as software engineers, we bring in the expensive part because you need to build a product and no one will build the product for free for you. It's much harder to learn software engineering and cloud infrastructure and AI and all the crazy technologies that is happening today. So build something, build something small and build it only after you know the definition of the problem. Start with the problem, with the pain, talk to people at the beginning,
00:28:52
Speaker
And once you understand the pain, once you have people who say, hey, yes, I will use this tool, then build an MVP no longer than two weeks. It's hard for us to hear, but two weeks. So 90% of the problem, 10% of the time, this is like how you achieve success. This is how you do business. That's even better.
00:29:17
Speaker
Yeah. So the same concept, like embrace whatever you need to do. Like if you're just selling, just don't play. Don't say it is selling. It is just you're talking to people and trying to solve their problems. Yeah. And as we are wrapping up, and finally, let's reflect on some of your lessons, Lauren's
00:29:45
Speaker
through your journey?
Embracing the Entrepreneurial Journey
00:29:48
Speaker
What are some of the final things you want to recommend or tell the listeners about your journey as a software engineer, turning entrepreneur that you believe crucial, like in both fields? I think don't afraid to ask for help from the right organization. Usually,
00:30:14
Speaker
Yeah, first timers. It's a hard journey to be in. It's an emotional journey to be in. And it's okay to bring a lot of similar minds around you, people that can help you on your journey and us. Don't underestimate the founders community. We all want to help each other. Ask for help. Get guidance on how you do it, even, you know,
00:30:43
Speaker
In many cases, you will need to even get back with your way. And it's fine. It's like your first journey. Entrepreneurship is not one startup. It's about defining your own personal mission and following that throughout your life. And it can change. It's fine. But it needs to have some core that you follow. So don't be afraid to ask for help. And then don't be afraid to start. Just do. People just get so wrapped up in their mind.
00:31:13
Speaker
the product or in defining the marketing or just will it work or will it not? Just try. That's the best way to find out. Amazing, amazing. Just don't afraid and get it done. Just start. Maybe not get it done, but just start. And then you realize where it will guide you or is it going to be successful.
00:31:36
Speaker
Yeah, you know, I think that I actually got this exercise from a friend of mine. I was on the advisory board and he told me once, you know, you hear about all those successful founders, you know, the CEO, Twitter kind of guys. But just as an exercise, if you will go to all those founders and you will scroll through the experience on LinkedIn,
00:32:03
Speaker
Probably 80% of them you will see maybe six or seven other co-founder position at different companies. Usually six or seven positions where they fail. This is how you grow. You need to fail six or seven times to have a successful company. I hope that anyone who's listening and trying, you won't, but it's probably going to happen and this is how you learn. Good statistic as well. Yeah.
00:32:33
Speaker
However, yeah, good advice. Anyway, thank you so much, Elon, for joining me today. And for everybody who's listening, subscribe to Elon Linkedin. I will post the link to the description of this video. And have a good rest of your day. Thank you. Bye.