Sramana: Let’s talk about strategic partnerships. What kinds of deals do you look for?
Alon Maor: This is an interesting point you are bringing up. A startup should always consider strategic partnerships because it is very difficult to know what the best channels into the market are. Strategic partners can help you get into the market through their existing partners. On the other hand, if you have the opportunity to develop a global independent play in a big market, then dependency on strategic partners can become risky at times.
It is a very sensitive game at times to decide when to pursue a strategic opportunity. Some terms may help you in the near future but prove risky in the long term compared to staying independent. If you are doing something that is compelling and unique, then you should be open and transparent about what you are doing. There is nothing to hide.
Sramana: This whole idea of protecting ideas and keeping them to yourself is not something that I am interested in.
Alon Maor: If someone can imitate your idea, then you do not really have anything valuable in your hands. We were transparent with our competitors and potential partners the entire time. We told them what we were planning on building, and that allowed us to look at ways to work together. This allowed us to sense the market to get more perspective on our value proposition. That allows you to accelerate the evolution of your own product significantly.
I think that you should be engaged with strategic partners in your ecosystem from the beginning. If they have the time and effort to invest in you, it can be to your advantage. Tactically or strategically, you can decide when to take action depending on the opportunities that you see.
Sramana: Right now are there strategic partners with whom you are executing deals?
Alon Maor: We have a few channel partners who are selling the Qwilt product. We do not have strategic partners who are selling Qwilt independently. We are considering selective deals with no exclusivity for a strategic partner.
Sramana: Are Akamai and Limelight potential strategic partners?
Alon Maor: They are not reselling Qwilt, but they are extending the Qwilt value proposition and offering monetization of the Qwilt deployment for carriers who are deploying Qwilt.
Sramana: What is going on in the Israeli startup ecosystem in relation to core technology companies such as Qwilt? Israel is one of the few countries that has succeeded in producing core technology startups.
Alon Maor: In Israel today there is a nice evolution into all of the technologies. You will still find a lot of core technology companies, such as chip companies, coming out. However, the innovation layer has switched. There is something in the DNA that makes us produce core technology startups but I think that distribution will change dramatically, primarily because it is so hard to finance core technology startups.
Sramana: Today it is cheaper to get companies off the ground using software and cloud models. I have friends in the VC business who will not fund anything that does not have at least $1 million in revenue. That is not risk financing, that is growth financing.
Alon Maor: I think that a business is more likely to get financed if you have proven experience. You need domain knowledge. It also helps if the market you are addressing is really big.
Sramana: Very good. You have done an excellent job of navigating the startup environment. Thank you for taking the time to share your story.