Ever wonder how successful businesses get started? Do they start with a structured business plan and stick to it or do they evolve over time? BusinessNewsDaily asks small businesses to take us behind the scenes and reveal the truth about the struggles of starting and running a small business.
Zao.com is a new company that has created a unique referral program via social media sites that allows companies to pay a referral bonus to people outside their company's workforce, offering an incentive to friends, family, etc.
CEO, Ziv Eliraz, tells BusinessNewsDaily how he came up with the business idea and how his idea has evolved over time.
BusinessNewsDaily: How long have you been in business?
Ziv Eliraz: Zao officially launched in beta in April 2012. The idea has been in development for over a year, and the company was officially incorporated in September, 2011.
BND: Did you have a formal business plan or did your business just evolve naturally?
Z.E. We had a very specific idea of what we needed to build the service, what it would cost and how we expect it to perform in terms of revenue and customer adoption. Now that we have launched, we spend a lot of time listening to our customers and prioritizing coming features based on feedback and usage.
BND: Either way, how close has your business stayed to what you originally envisioned it to be?
Z.E.: We are lucky to have had an overwhelmingly good response to our vision. Employers love referral hires, and even though it’s the number 1 source of hire, it’s pretty amazing to us how no one has tackled this problem holistically, head on.
BND: How did you finance the business at the beginning or at any time you were in business?
Z.E.: About half of our initial funding came from angels, and the rest came from the fact that our early employees agreed to work for well below what they could get elsewhere – and in retrospect, I think that’s a really good thing, because the only people that join your team are people that are so passionate about getting it done well, that they’re willing to accept a substantial pay cut.
BND: How much did you invest?
Z.E.: The seed investment was several hundred thousands of dollars. We’re now completing a larger Series A.
BND: If you had it to do over again, what would you do differently when starting your business?
Z.E.: For now, there are no regrets, but we’re only just getting started, so it’s too early to tell… ask me again in a year or two! I can tell you that we’re learning something every day, so I am sure that in hindsight, there are things that we could have done differently, but the most important thing that we did do right was come out with a first version that had the core feature set quickly, so that we can start learning from feedback as fast as possible.
BND: What's your best advice for someone with a great business idea who wants to give it a shot?
Z.E.: "Give it a shot" sounds a lot like "try" and I subscribe to Yoda’s advice of “Do, or Do Not. There is no try." I think that for it to work you need to be ready to commit to making it work, and understand that it’s going to take a while. A lot of people say “believe in yourself and the idea” – but I would say that you need to understand that a great business idea is only the start – so be sure you know what you’re getting in to, and that you’ve got a burning desire to solve a problem. When we started Zao – it started on the basis that we felt there are many broken things with job boards and external recruiting agencies, and that referral hires, which are the best form of hire, are still managed as if the Internet and social media weren’t invented. Even though we have very solid ideas on how to solve the problem, like distributing rewards to trusted friends outside the company, smart use of social networks and gamification, we treat these as starting points which are getting refined almost on a daily basis. What drives us is a passion to solve the problem, not any one business idea.