Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy, where I interview entrepreneurs about how they built their businesses. And I do it with lighting that’s way too. This is way too bright. Meanwhile, it’s an audio podcast. I don’t know why I’m futsing with the lighting so much.
I noticed you are too. Omair Tariq is the founder of cart.com. He says it’s the world’s first end-to-end e-commerce platform. He also is going up against Amazon and Shopify. I don’t know why. But I appreciate the battle. I invited him here largely because the guy’s got a war chest. He’s buying up everything and he’s got a history, a
track record of actually creating an amazing e-commerce success
story before cart.com.
He owned blinds.com, ran it and then sold it to home Depot. Good to have you here, man.
Omair: Hey, uh, great, great to be here. And, uh, looking forward to our discussion today.
Andrew: I feel like, uh, I saw your eyes do something. When I said that you own blinds.com. You were one of the early people there. Right. But you ended up leading
it towards the
end, not technically the founder. What’s the
Omair: that’s right. So, uh, the founder was, was Jay Steinfeld. Um, I was hired to actually lead finance when they were about a $20 million, uh, or so business. Uh, the, the role was to lead finance, uh, buy companies for an organic growth and then organically scaled the organization to hundreds of millions of dollars.
And, and, you know, I’ll ultimately either go public or exit to a larger company. Um, over the five ish years, I was there. you know, the company sort of
scales from 20 million to hundreds of millions of dollars. We, uh, you know, raise some capital with a couple of institutional investors and then ended up exiting to home Depot back in 2014.
Uh it’s undisclosed.
Andrew: Did you own a significant, did you end up with tens of millions of dollars at the end of that is out we’re
Omair: I didn’t, that’s why I started the car.com.
Andrew: and still how much money did you put into cart.com?
Omair: So my co-founder and I, we started
car.com with a chunk of
about $20 million
of our own funding before we
got any institutional investors to come in. Um, and, and we did that because of the Yeah. Actually two reasons, right? One the level of conviction we had on what we were building. And two, we knew that, uh, what we wanted to do this time was not just build a company to, uh, you know, hundreds of millions of dollars but, uh, ideally build the world’s most valuable.
Andrew: Because you’re going to be the software backend to all the future online stores that don’t end up going exclusive to Amazon, for example.
Omair: They think about us this way. Um, you know, yes, that’s right. There
is a software component to
what we do. We power the backend of websites, just like a Shopify does or a Magento does.
Um, but you know, if you think about the problem we’re trying to solve here is that Amazon. The only company in the world that has a completely two end e-commerce as a service platform, which is a brand or a product company.
You can just send a pallet of product to Amazon and Amazon kind of takes care of the rest. They own the entire digital and physical operational infrastructure and technology infrastructure. As required to be successful in e-commerce. And you know, that’s a very attractive value proposition for products and brands and entrepreneurs that want to go digital.
Um, however, it comes at a cost, which is um, one, you know, Amazon takes, uh, you know, 35, 40%, uh, share of your GMV, uh, to Amazon does not let you have a relationship with your end consumer and you don’t own the customer. You don’t get to be a brand. And then. Uh, number three. And in many cases, Amazon competes against you, uh, with their own products.
Um, so, so when, when, uh, when an entrepreneur or a product or brand gets tired of that, and they say, Hey, you know what, I’m going to go launch my own website and go direct to consumer. They typically go on a Shopify, uh, which is an amazing platform, uh, to go from zero to one. Um, however, these brands and products and entrepreneurs realize that Shopify.
Does one thing for them, which is helping them launch a website. And then in order for them to actually execute on the e-commerce call it operations of the business, whether it’s marketing or fulfillment or payments or conversion optimization, they got connect to all these different apps that are out there.
And, um, you know, that’s not a big problem in the first, you know, few years or when you go from zero to a million bucks in sales, but as you cross that threshold, you realize. Holy crap. I’m on one. Uh, having to be the middleware between all these apps that don’t actually talk to each other, uh, to, I gotta like figure out how to navigationally figure out which app do I actually connect to, to do what exactly, because it’s so fragmented.
And then number three. Um, the total cost of ownership is extremely high because each one of these apps are different, uh, businesses that require, you know, X percent of your contribution margin to, for them to stay alive and, you know, $500 here and 2% of GMV there and sort of add it up to 20 plus apps and operating partners.
You know, these brands don’t have the, the dollars left to invest in driving growth
Andrew: see, they seem to have, I mean, when I’m talking to companies, like brumate, they seem to have enough of a. But you’re saying that there’s even more there because they’re sharing too much. And because they’re, they’re spreading their expenses across all these different, um, all these different providers.
And so you want
to do the software like Shopify does, but also the three PL services that
somebody would sign up for. And also all the plugins that somebody needs. You want to do everything. When you say end to end, you mean every single
Omair: yeah, When people ask us, where’s our app store, we
Andrew: It should just be all included
if, and that
even means the shipping. you want to handle shipping for them. I mean, obviously you’d use a service
ups, but you want to hold onto the product and then send it out.
Omair: That is correct. Uh, so today we have nine fulfillment centers around the country. Um, and you know, there is, uh, uh, you know, north of a hundred million dollars in
GMV flowing through our fulfillment centers today, um, only to grow to hopefully, hopefully, hopefully by. Uh, by Q2 of next year, it’s going to be closer to north of half a billion, um, just through our fulfillment centers.
uh, we’re, we’re one of the, I think we’re the only company outside of Amazon, that’s actually crossed the chasm of being a digital and a physical company. So we’ve, we own aspects of e-commerce. Uh, but yeah, you’re right. Um, I do want to um, double click on one thing you said, which is someone like grew make, which is a great product, by the way, love roommate.
Um, part of the reason they’re able to be successful. On a Shopify platform is as partially because of their margin profile. Um, not every product that is being sold online has the luxury of being north of 50% margins. Um, and, and, and the reason that is relevant here is because on average e-commerce margins are 20 to 40%.
That’s sort of like the industry standard. And then when you’re giving 15% of your margin, Um, a three PL provider, which is what on average, it costs. And then 1% for payments and call it in another five or 6% on miscellaneous conversion, optimization tools and so on and so forth. You’ve kind of left, you know, 20, 25% of your gross margin, uh, on the ownership of the actual technology and operational infrastructure.
So if you’re a 40% or 30% margin business, after paying for your labor, how much do you have left for marketing? Not a
Andrew: All right. Let’s come back to then the money that was put into the business, $20 million. I’m guessing that it’s your co-founder who put the bulk of it. It was okay.
Omair: Yeah, that’s right. He’s been, he’s been very, very, very successful as an entrepreneur,
um, has had, uh, two to nine figure exits,
uh, prior to this. Um, and, uh, you know, he’s got the purple thumb of entrepreneurship. So, uh, he’s, he’s, he’s done well for himself, but. You know, he, he gets out of bed every day because he wants to keep building and
Andrew: What did the idea come from?
you noticed it.
Omair: Um, do you know the
Andrew: Had you noticed it, had you realized that this was an issue, it seems like it blinds.com
you guys were doing, you guys did all of this appliance.com. Everything that you’re describing a cart, right? You had the site, the operations, the shipping, the whole
So how did you even realize that this was.
Omair: Yeah, look. Um, if you look at the 10 biggest e-commerce companies in the world or 20 biggest e-commerce companies in the world, there is going to be one thing. That’s going to be common amongst them. They are fully vertically integrate. And own the entire e-commerce value chain, which is they own their own fulfillment centers.
They own their own custom built technology platforms and they do their own marketing. They have their own conversion optimization processes and so on and so forth. Um, they are not on a Franklin stack of apps and technology partners. Um, so email@example.com and then at home Depot, as we sort of like scaled those businesses from tens of millions to hundreds of millions, and then from hundreds of millions to billions of dollars at home Depot.
If it was very apparent to us that this verticalized infrastructure is actually what is needed to unlimitedly scale e-commerce and, um, You know, as we, as he, and by the way, Jim had done the same thing, right? My co-founder, he had started a company called Arctic outdoors back in 2015, where he sold.
Coolers online. It was a competitor to Yeti, Phillip competitor to get Yeti still the businesses still around that business went from zero to like $236 million in his first year of operations, And, you know, he originally started off at big commerce and very quickly realized that that is not. So switched over and built his own custom platform.
And he had, uh, uh, you know, extremely lucrative, gross margin profile to be able to go pay for it. And also he was a wealthy entrepreneurial in the sense that he had had previous yet. So he was able to invest significant amounts of capital to go build the infrastructure that was needed to scale the business.
Once he did it. It’s scaled. And So when we, when we got together, um, we both kind of came to it with the very explicit conclusion of, in order for you to be successful in e-commerce and scale of as a profitably, you got to own the entire verticalized chain. And then we looked around and looked for people that were doing that.
And the only person that was.
doing that was Amazon and they owned half of the internet. And, uh, we were like, Hey, you gotta, we
Andrew: big did he get Arctic outdoors? I guess it started
out as Arctic coolers. He and his brother built it up. And then they went beyond coolers
all kinds of outdoor stuff. I see tents on their side. How big did they get revenue wise?
Omair: Yeah, I mean, look in the first year
Andrew: First year,
Omair: million. Um, and you know, first year they did
Andrew: idea. Okay.
Omair: Yeah, that, that business, uh, when, uh, you know, complete
plat speed, uh, in, in, within 12 months of starting, which is incredible story,
uh, you know, so that was five years ago.
Um, the business has continued to grow very successfully and you know, where they’re at today is not publicly disclosed except for the First year,
amount. Uh, they actually exited the business for a majority, uh, uh, sale to wind point partners,
Andrew: So this is a hundreds of millions of dollars
Omair: Um, so, so
Andrew: know what,
so the thing is when I see him, he just
Uh, good old boy, like a nice guy. He’s probably running a nice business. he cares
about coolers. I had no idea
that business was that big. How’d you to hookup.
Omair: Yeah, he’s, he’s an incredible guy. you know, he, he went to
San Houston state, you know, no, no, no, no. Ivy league school for him comes from a very humble background and, uh, you know, started his career as a, as a CPA at Deloitte and, and really did well for himself there and realized that there was an opportunity.
Uh, in the R and D tax consulting, uh, concept around taxation. And he started a company called line group, uh, which, uh, you know, if you’re a Houstonian, you kind of in the middle part of. Uh, the city, there was a big old skyscraper that has a line group on it. So, you know, he built that business from ground up to, uh, you know, hundreds of millions of dollars and had his first exit there, uh, when he sold that to a private equity group.
Um, and, uh, you know, He’s he’s, he’s a hands-on good, old, good old Texan. Um, you know, kind of get into the weeds and get stuff done, kind of guy. And, um, He had reached out to me, um, back in summer of 2020, actually. Wanting to, uh, potentially see if there was a way for me to come work for him and Arctic, uh, he was at that time looking for a CEO and, um, you know, I wasn’t necessarily looking to leave home Depot, uh, to, you know, work for established company.
Um, and, and however, so we sort of like never got a chance to connect. And then one day we, we were able to connect, uh, in August of 2020 and, uh, spent about. The meeting was supposed to be for 30 minutes, ended up talking for about two and a half hours. And we didn’t talk about Arctic at all. We talked about cards and we talked about disrupting the e-commerce space.
And, um, you know, that night he, he texted me and he was like, Hey, I just bought the car.com domain name.
And I was like, oh my God, How much did you spend on it?
me how, what you spent on it. And I just completely lost my mind when I heard it. Uh, it was in, it was it?
was a seven figure purchase, um, pretty, pretty, pretty high up there.
Um, and, uh, you know, so, so
at that point it was, I remember it’s 10 o’clock at night. And I’m sitting next to my wife and I tell her like, Hey, I’m leaving my job and home Depot tomorrow. And she’s like, really, you know, an officer there what’s going on? Where are you going to? And, you know, she was expecting me to say, I’m going to Amazon or Google or Facebook.
These are the companies that I talked to prior. And I was like, no, I’m going to start my own company. And he’s like, oh, she’s like, Okay.
great. That’s phenomenal. But what are you going to do?
I was like, well, I’m going to, I’m going to, I’m going to build something that takes on Amazon or Shopify all in one, one slash. ah,
she’s just like, you got to do this with, and I said, I’m going to do this with this guy called Jim. Uh she’s like, who’s Jim. I’ve never heard of him. Like, yeah. I met him today. Uh, so the story got more ludicrous as I told that to her. And, you know, as. Uh, our more thoughtful spouses, uh, sometimes talk sense into us. you know, she asked me to go back to sleep and we’ll talk in the morning. And in the morning I woke up and I resigned from home Depot. And I didn’t tell her
Andrew: you literally did not tell her for a month and a half that you put your
Omair: I didn’t, I didn’t want her to freak out and.
Andrew: Wow. Are you still married?
Omair: It’s a pretty
Omair: Um, I had
Andrew: the, but it seems like the
thing that the two of you came together on was. You had an advantage over other e-commerce businesses in that you built everything from soup to nuts, everything from the website to, uh, to the shipping, to the fulfillment, to everything.
And you, and the thing was that you said we could bring this to other businesses. You know what though? Oh, mayor, doesn’t it feel like what you’re doing really is just saying, we’re going to take all the pack. All the products, sell the services that they’re paying for already, and we’ll do it together and we’ll integrate it into one.
The the end, the business still doesn’t own all that. They now are trusting you instead of several
other service providers, but they
don’t own it themselves.
Omair: Yeah, there are, there are three distinctions though. Uh, very fundamental ones. Um, the first is we actually very much like Shopify, uh, integrate with all third party solutions. So if a brand comes to us and says, Hey, I don’t want to do end to end, everything with you. Um, I want to keep my marketing tool with Claudio and I want to keep my fulfillment with a three PL provider.
I just want to use you for your platform. That’s totally fine. And we’re, we’re, we’re, we’re like we think like apple from a, from an experience perspective, but not philosophically. We don’t want to force you into our ecosystem. Right. We want to be brand obsessed and we want to do what’s better for. That’s the first thing. the second thing is for brands that come onto our end-to-end platform and, and trust us with their business Uh, one of the most fundamental things we do for them is not only do we provide them with a completely unified front. But we actually provide them with a completely unified backend. And what I mean by that is we actually integrate all of the data on their end consumers and give it to them so that. They can be smarter about how this segment personalize and how they tailor their operational execution to their brands, to their end consumers.
Right. So. That is a huge difference between like what an Amazon or even a Shopify does. Like where’s the only company in the world that collects all the data on the end consumers of these brands and then gives it to them so that they can be smarter about it. And then the third thing is because we are philosophically not trying to force you into our ecosystem, even in the event, when a brand only uses us for our online store from platform or just fulfillment or just for marketing services.
Our technology is so unique that it actually brings. Franklin stack that they have in a singular place where even though let’s say you’re on our platform, but you’re using a different third party, a third three, PL you’re using someone else for marketing services. So on and so forth, we have built connectors to every platform out there and every marketplace out there that actually allows us to still provide that unified experience to these brands, just so that they can be smarter about their business.
And we. Because we believe that if we help these brands grow and we show our
obsession with them, they’ll ultimately bring all of their business to us.
Andrew: Meanwhile, meaning what you’re saying is they could use cart to list on Amazon. They could use carts fulfillment. If they’re selling from Shopify.
Andrew: Okay. All right. Let’s let’s talk about how you got here. If you don’t mind me going a little bit further back, I kind of
talked a little bit about your co-founder and his background Your background is way different. You were born in Dubai in,
when was this?
Omair: I was I was, I was an
eighties kid. I was, I
Andrew: in the eighties? What was, what was Dubai like in the eighties? Sorry you were
born there. What was it like in the
Omair: wasn’t like it is today. I’ll tell you that. Um, you know, my, my parents had migrated to Dubai from Pakistan and, uh, you know, the father had moved there to hopefully start a better life for the family. And, uh, had actually moved to Dubai much earlier than, than I was born there. And my mom, uh, continued to live in Pakistan for a period of time.
And then. Uh, you know, right before I was, born, she was able to move to Dubai and the family’s sort of like an United, um, I grew up there, uh, man licensed Dubai was very strange in the eighties? Um, you know, and, and the early nineties where you didn’t have all the. Uh, call it exuberance and amazing things that Dubai has today.
And you sort of like grew up in a small city in the middle of a desert, uh, with a ton of money from oil and gas and, you know, the immigrant population just sort of like starting to grow. Um, and you know, I, I felt, uh, pretty, uh, I would say, uh, I would say, like, I dunno, a fish out of water there because it was just, you know, a country or a city.
State that never felt like home because, you know, even if you were born there, you’d never sit
there and you still had
a Pakistani passport. And so it was a strange experience,
Andrew: Did you have less access because you were, You were not a citizen. You
Omair: a hundred percent man, way less access. like I mean, look at, you know,
just, you can’t, you can’t you back then.
You couldn’t own property, for
example, uh, you couldn’t get access to the best schools as easily. Um, and you know that from a very
stage, uh, developed a very
rebellious, um, attitude,
uh, you know, that I
Andrew: Could you rebel in Dubai
So yeah. Could you rebel in Dubai
Omair: Well, uh, you could either go along
whatever was being thrown at you,
or you Could rebel I chose Estee Lauder.
Andrew: and what was rebelling like for you?
Omair: I mean, you know, I didn’t, you know, I grew up with, uh, with not a lot of friends and uh, did my own thing and, um,
finished school. Three three years sooner than everybody else, because I didn’t want to stick in the same class as my classmates.
know, I finished high school at 15. Um, and, and I just kept, I just
myself in, in books and astrophysics and theory of relativity and.
Andrew: So you’ll rebellion was to, to work harder and graduate
Omair: And, and to me that was to,
be, that was, you know, if I work hard enough, um, and I, I
put in the right amount of effort, um, I’ll, I’ll create my own city one day. Uh, you know,
Andrew: And that’s the other thing that I heard that you got from being in
Dubai, that yes, you are an outsider there, but you also got to see this country develop out a nowhere, become a whole other thing. And you told our producer that you started to see what was possible, that if all these people can
transform, then you could
if they could build a city in this way that they did, you could build
yourself or maybe your own city.
Omair: Yeah, look, and, and two things came to me. Right. One was the. The art of the possibility. Right. Which was like, what could be created from nothing like, you know, literally Dubai was a desert. Palm trees and camels, and it was transforming in front of my eyes, um, in a way that is just unimaginable to see the skyscrapers go up.
Like nobody can explain to you that you know, three months later you crossed the same street and there were four buildings and then that you didn’t have, it was just incredible. But then the second thing that, you know, also I got from it. It must be built on the back of immigrants that were being brought to the country and not given the same rights as the locals and not given the same opportunities as the locals.
And to me, those two things sort of intersected at the core of my rebellion, which was one, anything is possible to be created. Number two, you don’t really have to P you know, treat people like shit. If you actually give them the opportunity. To be successful alongside you, you can create so much more. So when I, when I multiplied those two things together, I was like, man, one, you can build anything too.
If you actually reward and recognize people that are building it for you, how much further could you get? Um, and, and, you know, at the very, very early age, um, I sort of saw that and, um, you know, it
of became, uh, I would say a core of what I ended up becoming over time.
Andrew: You know what, the other thing that stands out to me and we’ll move
on from your childhood to blinds.com in a moment. But the other thing that stands out was
that you were entrepreneurial even back then,
that you made airplanes better than
other kids, and you decided to sell them. And that’s the type of person you are.
Omair: Yeah. Look, I, when, when, when, life is hard and you know, you’re
going to school or are surrounded with, with people that are. Exponentially much better off than you financially and socially and so on and so forth. Um, you kinda just have to figure it out to stay relevant And um, you know, it’s, it, it was a tough sort of growing up period, but it taught me that.
I could get creative think beyond the box and, and do things that were not linear. Um, and you know, for me, if I didn’t have enough money to buy stuff at the canteen and,
um, I found a way of
having money to buy stuff in the canteen.
Andrew: Bye. That’s, that’s gotta feel great. I loved earning my own money as a kid. I mean, I love it now, but there’s something about doing it as a kid that was even more exciting. All right. Speaking of, I should tell you that this interview is sponsored. If anyone out there who has an idea and needs a website, this kind of competes with cart,
but you tell me if it does the blogging and content publishing part cart is not going to specialize in right.
Omair: That is correct.
Andrew: The woo, the woo commerce part. When I say that WooCommerce commerce could be used to turn a HostGator hosted WordPress site into an online store, you’re going to say you don’t need to know
you tell me, would you suggest that people go to cart or if they start their own business, start with maybe a WooCommerce
Omair: Yeah. When you when you want to start your business, you should
it on a Shopify or WooCommerce. When you want to grow it, you need to come to cart.
Andrew: Alright, this is by the way, one of the reasons why some sponsors get
a little nervous about sponsoring this, I bring them up in the, in the interview and sometimes a guest says, actually, nobody should use a sponsor. I got a better. And other times they say what you do, which is a little more of a nuanced thing that you could build on WooCommerce and then grow to cart.
I’ll say this, if you need an easy website that you can take with you, if in fact you own your content, you own your site. You can move it to a different hosting company. Anytime you want. You could do what I did. Just get a low price by going over to HostGator. They do really well. They’ve never caused any issues.
Well, I shouldn’t say never. I don’t. I remember one time Michael had to call them up for something. I don’t know what. But they solved it. The site’s up, everything’s working and I’m really happy to work with them. And if you want to work with them too, I’ll give you a URL where you’re going to get their lowest possible price.
Here it is. It’s hostgator.com/mixergy hostgator.com/mixergy.
Alright, blinds.com another great name, especially back when, when the company
start. I think you got into it back in 2010,
Omair: Yeah, no I’m so, so Jay Stein field, the gentleman who founded the company, I mean, got into the internet business back in the nineties, uh, he actually got into the internet business before Amazon did and, uh, you know, And his first website was I think no brainer, blinds.com. Um, and from that, he sort of like grew the business prior to that he actually sold blinds out of a van and then had a small retail store here in Houston.
Uh, him and his wife ran and then this internet thing came along and he was one of the early adopters who launched a website on it And, you know, as the years progressed, um, I think, uh, at some point in the early two thousands, he was able to get the domain. Blinds.com, which, uh, to be honest, we came a point of influxion, uh, for the
company has as the credible relevant, only category owner, uh, for blinds online.
Andrew: You mean dramatically just changing the domain name back then dramatically change the revenue.
Omair: Uh, well, looked at the revenue
doesn’t change just because of having a good domain name. What ends up happening though is because you own the domain name three things happen. Number one, you get more credibility right away. Where, where if you’re buying from a no-brainer blinds.com versus a blinds.com from a consumer perspective,
you’re just going to have a perception of blinds.com.
Bigger older, more credible. The second thing is by owning that domain name, you do get big benefit on search engines, right? Because when people are searching for the keyword blinds, uh, and You own the domain name, there’s just inherent benefits of that. the third thing that happens is when you own a domain name like this, it allows you to attract.
Much easier, which is, which is kind of crazy to think about, but it’s a real thing. And it’s part of the reason why to be honest, we, you know, one of the reasons why we acquired the car.com domain name, which was, we knew that in order for us to build, you know, a trillion dollar company, we’re going to have to attract amazing levels of talent and significant amounts of capital.
that was going to be really hard if our
was like, you know, I don’t know, cheap,
simple card.com or something.
Andrew: Yeah. Or even if it was more of an enterprisey name, I think that it, for some reason, having it beat cart.com, even though it’s not consumer-facing. Does give it a ton of credibility,
frankly. So does the
amount of money that you guys
raised let’s stick with blinds.com for just a little bit. You ended up running the company.
Am I right?
Omair: So I was The I was the CFO there and ultimately became the chief operating officer.
Andrew: Ah, okay. Chief operating officer was J the CEO right to the end.
Omair: Yes, that’s correct. Yeah. He was The CEO and founder.
Uh, you know, I couldn’t keep retired.
Um, I think a few years after exiting to home Depot, I forget exactly the year it was And, um, you know, so that was a little bit of a sunset on around the same time. The businesses also had also become pretty embedded within the broader home Depot organization, which is kind of what happens when, you know, a large company buys a smaller company.
So. Uh, most of the roles got verticalized and, and the business sort of like continued to and continues to exist today out of Houston, Texas, and focuses on a very specific, uh, configurables product, uh, vertical and, and as well as, you know, um, allowing home Depot or I actually catalyzing home
to dominate the world of black.
Andrew: I am seeing pictures of Jay online. He seems to be super happy right now. I see him in, in shorts, like really short shorts sitting in a box of books or near box of his book. Uh, and he’s now
looking, it looks like he’s doing a lot of non-profit work. He’s doing something with, uh, Keller. He’s doing something with some kind of Arab Israeli school
system where he’s getting the boat together.
he’s now at that point in his life.
he’s, uh, I know He’s teaching, uh, at
rice university and doing a bunch of four advisory roles. Uh, he’s also an investor in cart, uh, which, which we’re grateful for. Uh, yeah. Yeah. And, uh, you know, which is, uh, but, but Yeah.
he’s. He’s an awesome entrepreneur. And, uh, to be honest, during the time that he built a.com company, uh, in Houston, um, you know, there were a lot of odds against him from a talent attraction perspective and
attention from the coastal VC’s perspective.
And it was a different era and, uh, you know, but.
Andrew: what did you, what did you do
help change the company? One of the things, one of the reasons why I asked specifically I’ve worked hard to get you as a guest. Usually guests come through. I read about you. I read a little bit, but I didn’t get a sense of what you did. All I got a sense of was that you had incredible reputation in the industry.
But when I, when I read up on you,
it’s just sold the company to home Depot ended up
there. What is it that you did to
the company? Why is it that, that you are
Omair: so. I think about it this way. When a company goes from $20 million
to hundreds of millions of dollars, that journey, um, is you can’t just grow up to be a. $400 billion business. All of a sudden, um, there are, uh, strategic decisions. There are operational execution plays. There are organic and inorganic execution
plays that are capitalization and capital formation plays that are talent attraction team
Andrew: All right. Let’s pause for a
moment. let’s let’s double click on that capitalization What was
And what was the
So, so think about it
this way. Right? So if you’re a a hundred million dollar business And
let’s say your EBITDA is three to 5 million
bucks, Um, you’re only able to go as fast as your EBITDA allows you to, if you’re investing most of it or all of it to grow your platform and go full blown world domination mode.
Um, there is a very deliberate capitalization strategy that needs to exist as you think about scaling faster.
And by the way, it has to be very deliberate because don’t want to raise capital too quickly because then you have too many cooks in the kitchen, but at the same time, you don’t, you don’t want to take too long because then your competition outplays you.
So that whole strategy around. Who do you acquire to gain market share? How do you raise capital to invest in the right things and be able to successfully execute those investments from the outside capital and institutional investors that? you brought in And set the company up at a stage where you have the option to do one of three things.
One continue to operate the business very successfully and the business continues to be profitable and you can keep doing that And life is good. Too, you can take the company public because their fundamentals are good. The business is in a predictable growth stage and you have the optionality to top into the public markets.
Number 3, 1, 1, and two exist. Someone wants to buy you. So having that optionality and be able to get the business to that
requires a lot of execution from an operational financial process technology
Andrew: so then how do you think about capital allocation? how do you think about How much to invest it? What is the, what is
it that you do? That’s
different from what we’d expect that you do, which is put on a spreadsheet, what you think next year is revenues are going to be what the expenses are, how much is
left and see how much
is there to invest.
than that basic overly simplistic view? I
Omair: Well, I think I think, I think, um, I think that view? actually, the way you described it is how large companies traditionally allocate capital and just respectfully, I think it’s wrong. That’s not how it should be done. And that’s not how we did it of lions. The way you should allocate capital is you should start with.
Cause consumer or your customer, you try to understand one, the pain points that they currently have? to the pinpoints that they’re going to have. And three, the preferences that they’re
have super important pain points that
they currently have pain points that are going to have and preferences that they’re
Andrew: take me through it
Omair: You got to understand.
Andrew: blinds. What do you mean? What’s the preferences that they have? What’s the pain that they
Omair: Yeah. So think about it Right.
you’re, when you’re selling something as complicated as blinds,
uh, you know, people can imagine buying lines online. It’s an, it’s an anxiety inducing like process because you have to measure your blinds. And by the way, you have to be accurate to like, you know, one half or one fourth or one eighth of an inch.
By the way, if you have three windows in your living room and you measure one of them, not all three of them are going to have the same width. That’s just how all homes in America are organized. Most people don’t know that, but going through that process and doing it online, trusting yourself in a DIY job of a complex product, getting stuff delivered that actually fits your windows.
That is really hard. And, and, and if you think about it, What, what blinds.com did or what we did over there is it wasn’t about selling blinds and having to get a little bit of assortment or the best pricing, the best promotions. We built a strategy that removed the insights from the process of buying blinds.
Now that requires technology and operations. And, and, and, and content and, and, you
know, strategic execution that allows the consumer to feel comfortable doing the transaction
Andrew: what, what
do you do
Omair: and, you know,
Andrew: the way, if you see me looking at the computer here is because I’m going to blinds.com to see for myself
what what’s different. But the first thing that I see at the top of the pages enter the width and the height of your window. What? So it looks like the they’re leading with the anxiety.
What’s what is it that you do that’s different. And how does
that connect back
to projecting income in a business to know how you can allocate your
Omair: Yeah. So think about, think about, uh, three or four buckets. The first bucket is on the top, right of the website. You’ll probably see a really friendly person and a number and a call center number that says, Hey, you can call us anytime between these hours. And when you call someone, you actually speak to an expert.
Um, the. Call center that we firstname.lastname@example.org was not just a call center that is service oriented. Uh, we staffed it up with world-class experts in selling blinds and selling blinds online. So these were people who you would call and talk and virtually they would guide you through the process of buying blinds in a way that nobody.
That’s the first fundamental anxiety reducing process. Number two, we tell our customers, look, man, we have a short fit guarantee. You mess up. Don’t worry about it. Donate your blinds and we’ll send you new ones. I don’t know how much, you know, anxiety reducing how much more in dice. And that is I would use again to get right number two, number three.
And this was something that was launched during my time. There, I was actually the one that launched this. Which is okay. If you’re uncomfortable measuring and you’re uncomfortable installing, then we have a process where you pay us a hundred bucks or whatever, and we’ll send someone to your house.
They’ll measure your entire house. Even if you’re buying just a block and just one way to measure the entire house, we have it for the future. And then you can place the order. We’ll give you the measurements and then we’ll send someone when your product arrives two days after the product arrives the day after the product arrives, they’ll come and install it for you.
You can do the whole transaction online, never get out of the sofa and installed blinds or yourself or measure it.
So, you know, we crossed technology and operational chasms when it came to. Allowing our customers to
feel comfortable like, Hey, this is a no regrets
move. And then, you know, we
coupled it up with
content and education and videos and marketing and people like real people
Andrew: so what you’re saying is there with blinds, what you did was
you just kept seeing where’s the anxiety, where’s the problem. Where’s
How do we alleviate that Okay. And so now coming back to cart, you get the idea. And the first thing you do is you start to create, and then you keep coming back to your customers, the store owners, and saying, what else do you need?
And just instead of creating it on your own, you’re, you’re acquiring
the business that gets the customer,
the service they need. Am I right?
Omair: Yeah. Um, think of it this way. We are investing on behalf of our brands. So. Why does a typical brand that’s doing 2 million or 5 million or $10 million in sales a year, not have access to the same enterprise grade end to an e-commerce platform and operations as a home Depot or as a best buy, or is it target?
Why is that the case today? We want to change that. So, and we’re so aggressive. And so obsessed with our brands to change it, that we are going to go buy it. If we have to,
going to go build it. If we have to, we will do whatever it takes to get you there and access
Andrew: I’m I’m on GMC right now. GMC is one of your customers, right? GNC, excuse me. GMC is the car company. Yeah, DNC the, the, uh, the supplement and health food company, health product company. So if they’re one of your customers and they say, you know what? I see that some of our cus some of our competitors have phone numbers at the top, right?
We want to have a call center. They might come to you and cart we’ll then go and
acquire a call center or have one already. That’s the vision that you have.
Omair: Absolutely. So, absolutely. So I’ll give you an example, you know, there, there is a customer today that, uh, we’re working with they’re, they’re doing about a hundred million dollars in online sales. Um, they came to us with a very fundamental problem. Their problem was, Hey, we’re a 25% gross margin business.
And the cost to maintain our technology platform is causing our EBITDA margins to be negative 5%. How can you help? And, and we said, well, look, we can do your marketing, your technology platform, your call center customer service as a service and parts of your fulfillment or all of your fulfillment. And we can give you a better price than what you’re paying today to operate all of that yourself.
Omair: And, uh, we, we, we did the math and we did, right. So we’re in the process of getting this customer onto our platform now, and that customer in the next six to eight
months is going to be EBITDA positive because they’re taking advantage of our end to end platform versus
their own Franklin stack.
Andrew: All right. So when our producer asks you,
first step you took, you said we actually did the opposite of what everyone else tells you to do. We didn’t go and do customer validation. We just knew what we needed to build. And we started to build
that. Why was it so
important that you, that you.
Omair: Look it, you.
know, imagination and creativity by definition exists. Around a world that hasn’t been created yet. And, you know, we knew that we had to be really imaginative and creative and what we were trying to build. And we, we didn’t have a playbook of like, oh, let’s go try this and see iterate on it.
However, what we did have is both Jim and I had had built brands from tens of millions to hundreds of millions and billions of dollars. And we knew what worked and what we looked for, what works. In a democratized way. It didn’t exist. So we were like, look, we don’t need to talk to like 50
people to do this.
It’s been Gemini. We had experience of doing this like three or four times and three or four different places. And we were like, let’s go build
it. I think they will come.
Andrew: so what’s the first thing that you built then without asking, just knowing that if you built it, they probably would.
Omair: Yeah. Yeah, no, look, I mean the
let’s build it and they will come. It was basically the entwined call response form, which was how can we very quickly,
and speed was a thing here. And a speed was a thing here. Not just because of our conviction. but, our conviction was so
undeniable that we were like, this is so obvious if a problem that like, I don’t understand why nobody else is
And you know, now we understand why nobody else is doing it. Cause it’s really hard to do. But we were like,
Andrew: but, but so the first, the first
thing that you
built was the software to create essentially
a Shopify or Magento WooCommerce. The software was the
Omair: the first thing.
we did is we acquired. A company that had the online store from platform, the company called American commerce. That was the first thing we did because we knew that the anchor asset or the nucleus of this end to end e-commerce as a service platform is going to have to be a robust.
Capability and a software solution that has existed for more than three months. Right? So we found, we went shopping and found a company that had been built over 15 years and a platform that was
10 times more feature rich And flexible than a Shopify, but 10 times easier to
use than a Magento or Salesforce commerce cloud. and,
and, you know, we were like, Okay.
we’re going to go buy
that and then start building it around
it. That’s the first thing we did.
Andrew: Okay. I see that. That was January 20, 21. And then did you start well, so then you also end up getting
customers because they had, they, they, it was a robust,
uh, customer base. I’m assuming then you go to those customers and say,
what do you need next? Or what should we be improving here? And then you improve and fix,
Omair: That’s that’s
Andrew: an augment.
Omair: that’s that’s it? Yeah.
Look, I mean, once we invest in significant amounts of capital and acquiring capabilities And we’re still acquiring capabilities and we’ll continue to acquire capabilities when a customer asks for something, but the iterative step there was, we built the first call it version of an end to end platform.
And then we started talking to our customers and cross-selling and getting a feel for like, what were they willing to pay? Whether they’re willing to pay anything for the extra. A one-stop shop capabilities. And how much were they paying and what were they asking for that we didn’t have? And how did they want to do business with us?
And based on that continuous feedback loop that we were getting, by the way, we had an
advantage because we acquired a company that had existing customers, right? so we had a captive audience. Um, and then, you know, we just got
laser-focused on what they needed and started building a blanket.
Andrew: And so what’s the next thing.
Omair: So, you know, we’ve made seven acquisitions to date. Uh, we’re going to be closing on, uh, probably three or maybe four more acquisitions before the end of the year. Um, you know, we bought, uh, third party logistics capabilities, marketing services, capabilities, um, you know, we’ve, we’ve acquired. Uh, we’ve act we’ll hire people to come be part of our organization.
Uh, you know, we are, uh, in the process of buying a significant platform, upgrade capabilities that are SAS solutions that are being added to our end to end offering. So we can provide a one-stop shop for as many things as possible. So, um, you know, if you think about e-commerce
right, like the three fundamental pillars are marketing.
The storefront And fulfillment.
Um, all of our acquisitions
have been sort
like based on those, on the, on the, um, uh, souping up of
Andrew: And you raised, is it 143? Ours to do this.
Omair: That’s right. Since inception.
Andrew: Okay. And the whole idea is we’re going to go on an acquisition
to acquire all the pieces of e-commerce that our customers need. And if we can acquire it, then we’ll build it. And that’s the whole model here.
only thing I’ll change here is we’re going to go
into a brand obsessed Britain, world domination
mode of which acquisition is part of the strategy.
Andrew: What is, what else is There then?
Omair: There is the organic field, if a product and technology that unifies the entire infrastructure on the front end and the backend, there is the, um, uh, efficiency vectors of providing your brands with things like marketing attribution and leveraging data science, commoditizing the use of data science at, for every brand in the world.
Why should only a target or best idea, be able to use things like multi-touch attribution? Um, you know, There is a, there is a significant, you know, people, you know, look, that’s the thing that makes the news as when you buy a company, the thing that doesn’t make the news, which it should more than you buying the company is what you’ve built in 10 months.
Right? Uh, our product today has magically brought
together the entire end to end e-commerce experience for these brands in a way that. Nobody has been able to do ever,
and, and I
think is even more overpowering and, impressive than the acquisition spree.
Andrew: And then there’s also
the cross selling. So you get customer from one business that you acquired that then finds out about the other
service. And so it seems like even if you weren’t
it, if you just made it available and
cross sold it, that the that the overall revenue would grow my right.
Omair: right. That’s exactly right.
Andrew: All right.
Hey, I saw you smiling as we were talking about it.
The other thing that I saw as I was
looking is, dude, you fricking built what’s your workout regimen. Is it weird that I’m asking you that
I’m looking at your triceps? You’re you’re clearly you’re, you’ve got to be on a desk. I can’t see it right now, but you’re on a desk because you’ve got to keep that poor iPad of yours from falling
over because we insisted on, on a
specific app, but I keep looking at it.
What’s your workout
regimen. How often are you?
Omair: Yeah, look, I used to be 220 pounds, uh, and uh, in my early twenties because, um, you
know, I was just eating McDonald’s
drinking Coke all the time. I was like fat, like bad
Andrew: I got to look up a
Omair: you know, and I love, and I love
eating. I love
eating food and I’m a foodie and always will be a foodie. Um, until I went into a Zara
store and try it on some slacks and there were too long and I asked the rep there.
I was like, Hey, do
you have. Slightly shorter
version of this waist size. And they were like, we don’t want clothes for your, your body shapes are
Omair: I was like, all right,
man, I’m going to change my body shapes. So since then I’ve been working out a
Andrew: How often are you working out and what are you doing to keep from eating so much?
Omair: You know, I, I will say before starting cart, I was working on five, six days a week.
Now, obviously I can’t do that. Uh, but you know, three, four days a week, uh, I, I try to go in the
And do my early morning meetings from the gym, um, which, which is great, but, um, I don’t eat healthy, man. I
eat, I cannot stop eating good food.
That’s not something I’m willing to give up in life. However, I’m willing to work with. And, And,
Omair: and burn it. That’s no good. I work out, I do weight training and, um, and just,
you know, uh, it’s, it’s a
away for me to, um, stay mentally and physically fit to, to do what I’m, what, what I’m doing
Andrew: but when you say that you’ll do a meeting from the gym, you’re saying that you’ll do a meeting on the
Omair: Just to zoom. Yeah. So
yeah, just on the phone or zoom. Yeah, absolutely. My, my team is used to be, uh, you know, at this
huffing and puffing and they know, they know, that I’m working out hard
healthy so I can keep building what we’re building.
Andrew: Dude now I wish that we’d done this call from, uh, from the treadmill. I don’t see any photos
of, of fat Omera. I’m seeing photos of you looking super
dapper, like even in the tech crunch article, the tech crunch article, uh, on your latest res there’s a black and white photo of you and the other executives.
You’re looking like you’re in, like, I don’t know, some kind of magazine, some photo shoots gotta feel good, right. To look good
compared to what used to look like.
Omair: Man Photoshop is a real thing. And, you know, uh, I’ve, I’ve went back and eliminated all of the bad photos on the internet. Now I’m kidding. But no,
it’s like, you know, it’s, it’s part of being able to work. As hard as we do at card is you’ve got to stay healthy
and sane otherwise. Um, you’re, you’re not
going to be able
to, uh, you know, do the things
we’ve been able to do in such a short
Andrew: I bet, by the way, you don’t have to go back and delete any photos. Your name is so fricking common that I see people from all over the world
with your name. So
that it’s so perfect.
Yes. All right. The company name
is cart.com. Um, and I think this is an impressive
play over here, but frankly, how could it be any less considering the team that you put together for this?
So, congratulations. Thanks for being on.
Omair: Yeah, this has been the most fun interview
done. And I’ve done some
interviews with tech crunch and no offense to all the other reporters. This isn’t an amazing
spin, a lot of fun.
Andrew: biceps, gotta bring up childhood.
I, uh, thanks for being on here and thank
you to my sponsor HostGator for, uh, for, letting me have my sponsor, my guests talk about them in any way they want. Thanks. Bye everyone.