Irad Ben-Gal Tells Us How a Retail Tech Startup (CB4) Grew When Retailers were Shut Down

First of all, how are you and your family doing in these COVID-19 times? 

Irad Ben-Gal: I’m holding up OK. Like everyone, I’ve been home a lot more than normal. I’m normally traveling a lot between Tel Aviv and Palo Alto to teach classes and NYC to work. I think I’m driving my wife and children a little crazy though!

Tell us about you, your career, how you founded CB4.

Irad Ben-Gal: I’m head of the AI & ML Lab at Tel Aviv University. During the course of a research project with a team of PhD and MSc students, we developed some pretty unique machine learning technology. That’s what kicked off this entire journey.

How does CB4innovate? 

Irad Ben-Gal: Most AI and Machine Learning models need a lot of data and different kinds of data to be effective.

Our machine learning technology can use a super tiny amount of data to analyze complex systems and correlations within the data, figure out how that system works and tell the people in charge of that system when something funky is happening or about to happen.

We took some time to explore different use cases, including:

• Working with dairy producers to identify individual cows who were acting abnormally (not easy when you have tens of thousands of cows!)
• Helping banks ID suspicious activity
• Helping telecom providers anticipate when their network might get overloaded and prone to failure

Eventually, we found the perfect use case with brick and mortar retailers. Retailers use CB4 to really understand what’s happening in their stores with just a fraction of data from their cash registers/POS system. Most retailers have a Mount Everest worth of data to understand what’s happening on the e-commerce side of their business. For their brick and mortar stores, by comparison, they have an anthill. The trick is to use this data wisely and find hidden patterns in it that can tell the story of what’s happening with your business.

How the coronavirus pandemic affects your business, and how are you coping?

Irad Ben-Gal: The pandemic had a huge effect on us because most retailers had to close their stores! Obviously, this was not good for a tech company whose end users are store teams. But then something funny happened…

Most retailers use analytics tools with predictive models that rely on historical patterns and need a lot of data to work. For retailers, that could be as simple as using sales from this time last year as a benchmark. So if you sold 200 boxes of Cheerios last May but only 100 this May, you flag that as something unusual to have your store teams check out. But during this pandemic, you can’t expect anything to be like it was last year or last month, including sales. So what started happening is that grocers and other essential retailers noticed that a lot of their normal reporting tools stopped working? It was a black swan event in terms of analytics that prevented using conventional analytics tools.

What was amazing is that because we only need a tiny amount of recent data, retailers were still able to use CB4 to boost sales in their stores during a pretty crazy time. We actually ended up partnering with some of our biggest customers and growing during the pandemic when most of us were bracing for the worst!

It kind of reminds me of the scene in Forrest Gump where there was that crazy storm, after which the only boat left to catch all that shrimp was the Bubba Gump boat.

Did you have to make difficult choices, and what are the lessons learned?

Irad Ben-Gal: Absolutely. When the pandemic first hit we had to completely change our strategy in a very short period of time to focus on essential retailers only. It was difficult to deal with but helped us come out of this stronger than we started. The main lesson we learned was to  take quick decisive action and prepare for the worst. Another lesson was to use innovation as a pivot to safe land.

How do you deal with stress and anxiety? How do you project yourself and CB4 in the future?

Irad Ben-Gal: While I’m not the athlete I once was, I definitely use physical activity as a way to distress, specifically surfing where one has to learn floating with different waves :). After some stops and starts with figuring out the best use case for the technology, it feels like we’ve finally got some really strong momentum in partnering with some of the largest retailers in the world. Sometimes it’s hard to believe this is happening, so I’m very grateful to our retail partners, the investors who believed in us from the beginning and of course, and most importantly the entire team at CB4 for meeting every challenge head-on with grace and humor.

Who are your competitors? And how do you plan to stay in the game?

Irad Ben-Gal: That’s tough to say. There are some really interesting companies in the space right now. You have large players with deep pockets like Microsoft and SAP. You have innovative retailers like Kroger who are developing their own technology.

I think our competitive edge has always been that we’re a REAL machine learning technology company, which happened to fit really well with retail vs a retail technology company which is trying to get into machine learning.

Your final thoughts?

Irad Ben-Gal: Be kind to each other and yourself AND ENJOY THE JOURNEY.

Your website?

www.cb4.com