Crushing 140+ competitors with UX
How Ouriel's obsession with UX and customer support made ZenGo stand out in an extremely crowded market
Ouriel Ohayon is the CEO and co-founder of ZenGo, a crypto wallet that has become well-known for its unmatched security, user experience, and customer support. If you are not familiar with the cryptocurrency industry, this might not seem particularly noteworthy.
However, as the former Head of Marketing at Linen Wallet, I know firsthand how difficult it is for any crypto startup to emerge amid the chaos. There are over 140 crypto wallets available on the market and no barriers to entry. Many competitors have been around for over a decade, with some having budgets of hundreds of millions of dollars. Additionally, some wallets benefit from a powerful network effect, making it challenging for any other wallet to compete.
Despite being late to the party, ZenGo has already managed to gain significant market share. All things considered, this is quite impressive. With almost a million downloads on Google Play, a $20 million Series A led by Insight Partners, and having crushed hundreds of competitors along the way, it was a great pleasure to have Ouriel as a guest on this week's episode of Founder Secrets.
Early Career in CPG
As a marketer, I've always been fascinated by how effectively ZenGo has executed their marketing strategy. They've designed an amazing brand and marketed it perfectly. As it turns out, this is no coincidence. Ouriel's first job (way back in 1994 - sorry Ouriel, you're getting old!) was at Reckitt Benckiser, a consumer goods company where he served as an assistant brand manager. Later, he worked at Danone, a European CPG giant with over €25B in revenue.
Ouriel recalls, "That's where I learned what it means to create something that excites people in a world that is extremely noisy. It was a humbling lesson of forgetting everything I knew about marketing theory and finding what really makes sense for a person to choose your product."
The transition to tech
After working in the CPG industry for three years, Ouriel realized that big corporations were not for him. "I loved working at Danone, but soon realized that I hate things that move slowly."
After leaving Danone, Ouriel landed in an incubator where he had his first exposure to tech. That's where he realized that building a startup was the only path for him. He recalls, "I actually applied to another company, but two weeks later I resigned. I just couldn’t imagine doing anything else except starting a company. It was the early days of Yahoo and Amazon, and I had no clue what I was going to do. But I knew it was going to be exciting."
After brainstorming with some of his colleagues from business school, Ouriel launched an online gaming company in February 2000. They raised over $3M in funding and became one of the top 100 French websites. The company was acquired in 2003 confirming that Ouriel's decision to pursue startups was the right call.
From startup founder to VC
After selling his first company, Ouriel wrote to the founder of TechCrunch and offered to launch the publishing company internationally. That's how he ended up becoming the founder of TechCrunch France.
Little did he know that writing for TechCrunch would catch the attention of VCs who saw him as the perfect person to ride the internet wave. As Sequoia’s Mike Moritz would tell us, VCs and journalists often share a lot of the same strengths. Ouriel still remembers talking to them for the first time:
Ouriel: "Look, I'm not a VC. I have no idea what a VC does."
VCs: "Don't worry, you will learn. No one knows, even us."
Ouriel shares that one of the lessons he learned in VC – which founders can also benefit from – was how to say “no” respectfully. You see hundreds of founders, and you have to say no to the vast majority. So you get very good at it.
So what is a “good” way of saying “no”, according to Ouriel?
Do it fast.
Justify why you said no.
Provide constructive feedback.
Be as empathetic as possible.
Solving crypto’s biggest problem
After spending over a decade in the VC industry, Ouriel launched ZenGo in 2018 to address a major issue in the crypto industry: seed phrases being constantly lost or stolen.
For those unfamiliar with crypto, a seed phrase is a secret recovery phrase consisting of 24 words used as a password for crypto wallets. Unlike passwords for web 2.0 software, a seed phrase cannot be recovered if lost. No one knows it except the wallet owner, and there is no central authority to help. If a seed phrase is lost or stolen, all the assets associated with it are lost forever. That's the downside of having full control over your crypto.
According to blockchain analysis firm Chainalysis, up to 23% of all bitcoin (BTC) may be lost forever due to forgotten or lost keys. That amounts to $120 billion worth of Bitcoin. Below are some reviews left on one of the most popular crypto wallets. Here’s how bad it is:
Solving this problem was not easy. It required a solution that would allow users to maintain full control of their digital assets while also allowing them to recover their wallet if they lost access to it. ZenGo solved this problem using Multi-Party Computation. This technology enables users to secure their crypto wallet using their biometrics instead of managing complex passwords, making the wallet extremely resilient to external attacks and to the user's own errors.
Unmatched customer support
If you've ever had to deal with customer support from major crypto companies, you're likely aware that having the worst UX in tech is not the only problem with crypto. And when you combine bad customer support with a complex UX, it's a complete nightmare for any beginner crypto user.
Ouriel is extremely proud of ZenGo's customer support, which he believes is the most important aspect of the company. Since launch, they've had half a million conversations with an average response time of under 2 minutes and an average issue resolution time of 30 minutes. Ouriel recalls, "Our investors thought we were crazy for doing this, but I knew it was the right approach in this industry. So we've built a methodology, set of tools, and information system that allows us to understand the problem and find the fastest point of resolution."
Their philosophy is to never let a user remain unhappy. "Users can be extremely unhappy. Sometimes it's our mistake, sometimes it's not. But it doesn't matter. We consider every single user as a human being, we speak with them as such, and work really hard to transform any negative interaction into a positive one." According to Ouriel, that's the key to turning users into ambassadors.
Maintaining Morale through Crypto Winters
2023 is a tough year for the economy as a whole, and an especially tough time in the crypto sector. So how does Ouriel maintain the ZenGo team’s morale, even when the going gets tough? He cites three principles:
Look for all signals of good news (e.g. positive data points, newsworthy wins), and communicate these to the team.
Hyper-communicate the direction of the company and the vision, and show confidence in that vision. This obviously significantly comes from the founder(s), but it can also come from other C-suite executives, or any employee in the company.
Create awesome working conditions and a great atmosphere. Where people love coming to work and hanging out with the team. One example of this – publicly recognize the contributions of employees.
(Bonus idea – move your company to Tel Aviv, where ZenGo is – it’s an awesome city!!)
The most important founder trait
Having seen thousands of founders as a VC, a journalist at TechCrunch, and a founder himself, over a couple of decades, Ouriel has a clear take on what is the most important characteristic for founder success:
“The number one quality of an entrepreneur – I’m going to maybe surprise you, but it’s not how smart or hard-working he is, or what companies he worked at before, or even the number of exits he had.
There is one quality that makes the entire difference – which is how resilient they are to pain.
And the reason I say that is because anyone who tried to create anything in a particular startup knows it is so so so difficult. You have to handle so much bad news, all the time, from Day One.
And people say it gets easier over time. But it doesn’t, it’s the opposite. It gets more and more complex. And this takes you down. This will take you down.
And I think the people that succeed are those that survive that. So you have to be a survivor, not just a fighter. And surviving requires you to be extremely resilient to pain, and to endure. To be there. To just stay alive, no matter what. And to not let go.”
An absolutely epic quote. And a great note to end on.
To conclude, ZenGo is living proof that winning in startups is all about solving problems, building a kick-ass product, caring about your users, and being resilient. Endure. Stay alive. Don’t let go.