Gili Raanan is the founder of Cyberstarts, a VC firm focused on cybersecurity. We cover how AI is redefining the cybersecurity industry, the most important signal of a quality founder, and the best lessons from his early investment in Wiz.
Principles & Lessons:
- Prioritize Urgency over Importance in Problem Selection:
- Solve Problems by Starting with Customer Pain, Not Technology:
- Combine Key Decision-making Personas into a Single User:
- Resilience as the Central Indicator of Founder Success:
- Evaluate Founders through Their Reasons (the "Why"), not Their Achievements:
- High Valuations Reflect DNA, not Merely Market Hype:
- Founder Productivity is Driven by Intrinsic Passion for the Craft:
A fundamental lesson is that choosing an urgent problem creates a faster feedback loop, accelerating learning and development. Wiz’s success underscores this principle, pivoting from an initially "important but not urgent" idea toward a genuinely urgent one, enabling rapid adoption. As Gili explains, "the most important thing in my mind is to go after an urgent pain point that generates a sense of urgency."
Successful innovation should start with clearly identified customer pain points rather than technology-driven solutions searching for applications. This principle emerged from Gili's early experience, developing CAPTCHA technology that lacked a viable business model despite universal adoption. Thus, Cyberstarts’ “Sunrise Methodology” explicitly reverses this, building solutions only after confirming genuine customer pain through rigorous validation.
Product-market fit dramatically improves when the buyer, decision-maker, budget owner, and user are embodied by one person. Wiz’s rapid growth was possible largely because their target (the CISO) encompassed all four critical personas, simplifying adoption. Conversely, if these roles are fragmented among multiple people, it indicates weaker market alignment and higher friction in adoption.
Intellectual brilliance alone doesn't predict entrepreneurial success as reliably as demonstrated resilience does. Gili highlights resilience, specifically the capacity to overcome genuine adversity, as the critical trait in founders. The founder of Fireblocks, Michael Shaulov, epitomizes this trait: despite severe setbacks—like losing six initial customers to bankruptcy—his resilience, shaped by challenging childhood circumstances, enabled his exceptional adaptability and eventual success.
To deeply understand the potential of entrepreneurs, it’s essential to focus on their reasons behind choices, rather than mere accomplishments. Gili stresses that the real insight comes from understanding "why they chose job A instead of job B, why they picked that partner in life instead of another partner." This emphasis on motive and decision-making logic provides deeper insight into the founder’s character and potential.
High valuations, while seemingly risky or expensive, typically reflect intrinsic attributes of companies destined for exceptional performance. Gili argues valuations remain consistently high for truly transformative companies throughout their lifecycle, stating explicitly, "the expensive deals, the pricey companies, are pricier from day one." Investors who pass solely due to high valuation often miss the most impactful opportunities, demonstrated clearly by Wiz’s trajectory.
Productivity in engineering teams, crucial for maintaining rapid innovation, is deeply tied to intrinsic motivation rather than merely talent or experience. Gili cites Wiz’s hiring strategy, emphasizing software developers who code in their free time, effectively multiplying productivity beyond standard capabilities. He notes, "he would source people whose hobby is writing code...those are the people you like to hire." This lesson highlights passion as a fundamental driver of sustained, high-impact performance.
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