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- [00:00]
A
This clip of Making it with John Davids features John talking to Omer Tariq, founder and CEO of Cart.com so I'm curious about the way that you think about this startup or when it was a startup. Maybe you still think about it as a startup. You know, a lot of people go into business and they're thinking about product and customer experience and that sort of thing. But you mentioned that this was really looked and felt like a private equity play for the beginning. And even now you just mentioned cagr compound annual growth rate, which is a metric that's used, I guess by companies. But you know, it's almost like we're leaning into the private equity world of you're buying these things and as soon as they come into the cart.com machine, they get more valuable and they grow faster because of this infrastructure you have. So do you think about this like a tech startup or are you really thinking about it like a private equity firm?
- [00:54]
B
Honestly man, I don't know how to answer that question. I'll, I'll, I'll give it a shot. The way I think about it is that I spent all my life being the customer that we're now serving. So like, I know nothing about supply chain software services. Like I've Never had a B2B company, right? But I've had an E commerce company, I've been part of a retailer. So I've, I'm now selling to who I used to be, so I understand their pain points. And then I used to be a finance guy for like the longest period of my life, right. So I knew that in addition to solving a business problem, I had to solve a unit economic problem both for myself and my customers. And I think when I thought about it with those two lenses, we built cart.com, right? So we didn't have like this dichotomy of like, oh, we're going to build it like a private equity roll up or oh, we're going to build it like a tech startup with MVP and product and you know, testing and all that. Like it was so somewhere like we just sort of enhanced, we focused on solving a pain point that I just knew existed. We didn't do any market research. I was like, I was on the other side. You got to believe me. Yeah, we should just build us.
- [02:06]
A
You felt it in the trenches and you felt, I mean this was like a really high class problem because like you said, you sort of have to be doing 10, 20, 30 million to even know this problem exists. And then as you get bigger and bigger like this is the sort of thing that billion dollar companies feel as well. But you're not going to read about that in Fast Company or Entrepreneur magazine.
- [02:27]
B
That's exactly right. That's exactly right.
- [02:29]
A
So when you're. Okay, so you've gone from zero to. I think you have 2000 employees now.
- [02:34]
B
Yeah, like 1600 or something. We go up and down based on peak volume. Right. Sometimes we hit 2000 because you have to hire a lot of temp workers for certain times.
- [02:42]
A
How much of your time, you know, your time personally or just as a leadership team is spent on like fundraising to continue the growth engine or, or let's like, you know, sit down and kind of operate and, and clean up what we have. Are you, are you always in fundraising mode?
- [02:55]
B
I mean, yes and no. In the sense that, you know, we've raised a lot of capital in the last few years, so we've had to be in fundraising mode for that, like forever. You know, even though we're a profitable company, you know, we're like total cash flow positive this year. You know, our intention is to be at least and we're very capital efficient. But like, remember, I only have five years, right? So I am looking at global expansion right now. I'm looking at acquisitions in the European UK region. I'm trying to hit a billion in revenue by 2027. I'm trying to take the company public by 2027. So capital helps, right. We don't need it, but if it comes, then it helps accelerate those visions.
- [03:40]
A
Okay. You're a $500 million revenue profitable, cash flow positive company.
- [03:46]
B
All pretty cash flow positive. Yes.
- [03:48]
A
Isn't that sort of. So don't you have investors on your back saying, guys, like what just grow faster, you shouldn't be profitable?
- [03:54]
B
Yeah, yeah. I mean, we have investors on both sides, right? Which is, hey, don't raise any more capital because I don't like dilution. Just self fund it and grow slower. And then we've got investors that are like, dude, just go raise a bunch of money, double your business, keep going that way. Right. So we have a good balance. And I listen to both of them.
- [04:13]
A
You listen to both of them. You listen to one on Monday and the other on Thursday at 500 million in revenue. Obviously you just stated your goals like get to a billion by 2027, go public. What are the constraints right now? Because a $500 million revenue business is something that most entrepreneurs will never touch, even super successful ones. What are you thinking about at this level?
- [04:36]
B
What are the constraints? I mean, look I think the first constraint is like scaling without imploding, right? Like, the reality is we're still just a four year old company. And I mean, trust me, like, it hurts to be 500 million in revenue right now, right? Because like, it takes heroics. And I mean, I'm just so proud of my team that I have like everybody that works at Cartoon, they are walking into the gladiator ring. They understand that they're not coming to work a side hustle, right? This is going to become their life. And I think.
- [05:13]
A
And why is that? Why do you say it's difficult to run a $500 million business or to be in a 500?
- [05:20]
B
It's not difficult to run a $500 million business if it has been around for 10 years. Because if every year you're growing and then you're investing to bring up your infrastructure, then you're growing again and then you invest to bring your infrastructure up. Like you don'. Have as much mayhem as you would if you're growing this much. And then you're like trying to get up to the. And then you grow again. So you're like your operating infrastructure as a company is always behind the ball to like. And then, and, and then. Oh, by the way, we operate in an environment where you can't just waste money, right? So like you have to make money. So it's like that's another constraint which is, you know, four years, 500 million revenue would not be as painful if, like, from a capital standpoint we had lots of it, then we would be like just throwing money at the problem and making some of the pain go away. We can't do that. You have to be good and make money and move fast. Which in that quadrant of, I don't know, quality money and speed. You can only get two. For us, it has to be all three. And that's really hard.
- [06:23]
A
I remember talking to the Shopify guys early on when they were still a private company, relatively small, and they were saying, we're literally changing everything every three months. Like our org chart changes our stuff, like our systems. You know, things that work when you're $20 million don't work when you're 100 million. And if you're growing at that pace every three months, that's what it's like.
- [06:46]
B
I, I could not. I. That's literally what I would say. That's, that's what we're feeling.
- [06:51]
A
And so is there a. I mean, you already mentioned the goal is, is, is to IPO in 2027. Are you kind of like on track to do that is there are the big hurdles you have to cross.
- [07:02]
B
Yeah, I mean look, I think we're on track. You never know, right? Public markets, you know, when you, when you think about going public, there are other macro factors that you have to take into account versus just micro. Like I don't know if the world is going to shit and we're suffering stagflation and the market's down 40% and interest rates are high and nobody has any money. And unemployment, it's at 8%. Like you don't want to go public that time. Right. Bad idea. So you know, depending on kind of what's happening in the rest of the world, we aim to do that in 2027.
- [07:33]
A
Do you see cart.com as kind of your. Like is this, do you have, I know you think in five year increments, but do you have other sort of plays in you or do you see this as your, as your sort of grand piece of art?
- [07:46]
B
You know, it's a good question. I haven't thought about it that way. I think this is the biggest thing I've ever worked on and I think this has the ability to be the biggest thing I'll probably ever work on. So if those two things are true, then it would be the latter versus the former. I think this is the big thing, that this is my grand piece of art.
- [08:08]
A
Because as you scale, as you scale at the levels you're at where you're at 500 million in revenue, this could easily get to a billion. This could be 2, 3, 5 billion in revenue and, and then at that point or even before that, this thing could be other things. So the fundamental vision you had on day one of let's unify the E commerce stack. Yeah, great. That could be product one, but then there's other things you could do.
- [08:31]
B
Yeah, I mean honestly man, if our luck doesn't run out and we keep executing, this company will last for 500 years.
- [08:41]
A
Thanks for listening. Get my best stuff to your inbox@johndavids.com I'll talk talk to you next time.