Personalized

Iaki Shabbatis built several e-commerce sites and recognized a massive gap in the market: businesses needed better personalization. At the time (mid-2000s), the internet was still largely one-size-fits-all. He saw an opportunity to leverage AI and automation to create more personal, efficient digital experiences. The vision was ambitious—become one of the most versatile and powerful personalization solutions available.

Personalized was founded in 2008, but it took three years of focused R&D before Iaki entered the commercial phase in 2011. "I have some other ventures, other businesses, and the company is funded privately," he explained. The initial investment was around $2 million, sourced from his own capital and private funding. Rather than chasing external venture capital, he bootstrapped the product with discipline, ensuring the core technology was solid before selling it.

The early customer acquisition strategy was clever: white-label partnerships with digital marketing agencies. "The first few years we were relying mostly on marketing agencies. We provide more as a white label or an option to a branded personalization platform," Iaki said. Agencies would license Personalized and offer it to their clients under their own brand. This meant low customer acquisition costs and sticky, long-term relationships—agencies had near-zero churn because they were deeply embedded with their clients.

About two to three years before this interview (around 2015-2016), Iaki made a deliberate strategic shift: go direct to end customers. This owned the relationship but increased CAC significantly—from near-zero (agency licensing) to about $2,000-$2,500 per direct customer. "What's more important for us as a company is that we now start seeing more about revenue coming from direct clients," he explained. With an average customer paying $500/month, that meant a five-month payback period—healthy but not instant.

Churn was split: agencies had essentially zero churn (they stayed for years), but direct customers churned at 10-20% annually. Iaki tackled this by improving onboarding, simplifying signup, and qualifying prospects—ensuring they had sufficient website traffic to generate the data needed for personalization to work. He also launched on Shopify to reduce CAC through marketplace channels.

By the time of this interview (August 2018), Personalized had reached $250,000 in monthly recurring revenue ($3M ARR) with 500+ customers. The company had raised $3 million in total funding and was already profitable and cash-flow positive. Growth was strong at 20-30% year-over-year. The 15-person team was split between Israel (R&D) and the US (marketing operations), with Iaki spending most of his time in America. "No [plans to raise capital]," he said. "Basically, we plan to invest more into our marketing, and this is, again, as I said, the company is already profitable."