You must have heard of 1-800-Flowers. Did you know that the company takes 50% of the order value, while the local florists fulfill the orders? That’s a hefty customer acquisition cost. Read how Farbod Shoraka and his co-founders are disrupting the industry.
Sramana: Farbod, let’s start by learning a bit about you. Where are you from? What is the backstory to the BloomNation story?
Farbod Shoraka: I am from Los Angeles. I was born in Iran, but I grew up in LA. I was only two years old when we came over to California. I went to school at Berkeley. I studied economics and graduated in 2004.
Sramana: What did you do after school?
Farbod Shoraka: Like most economics and business students, I thought Finance was the cool industry to go into. Everyone wanted to be an investment banker. There were a lot of people there trying to recruit young talent. My interest turned towards mergers and acquisitions as well as corporate finance. I went to work for Wells Fargo Bank for a while. I ended up getting a position as an investment banker in Los Angeles.
Sramana: How long did you pursue investment banking?
Farbod Shoraka: I did mergers and acquisitions for three years. A lot of my skills came from that background and I still use those skills today as an entrepreneur. Work ethics and presenting something with a high level of accuracy became engrained in me. That really helps me today as I run a startup.
Sramana: When did you get the startup going?
Farbod Shoraka: In my third year as an investment banker, when I was just under 30 years old, I evaluated things a bit. I could go to business school or try to progress from an analyst to an associate, which was a big process and an exciting path to take. At the same time I was learning a lot about different industries. As an investment banker working in mergers and acquisitions, I learned a lot about companies, how they run, and the industries they are in.
I had a lot of experience in technology. Though one particular deal in the floral space, I learned a lot about the floral industry. It was a perfect storm. I started making life decisions. I did not have a mortgage to pay and I was not married. I had the risk profile to leave and do something I always wanted to do, which was start my own business. At the same time, I saw a real problem that I could solve.
I was shocked by how inefficient the floral industry was. I was surprised that nobody had fixed it. It had remained untouched for about 100 years. The Internet hasn’t solved the problems the industry faced. I decided to leave my previous company, and I called a few of my friends to bounce my ideas off of them. I also walked around to a few flower shops to find out if my ideas had the power to become a real company.