Sramana: What metrics did you use to solicit funding? Where were you in terms of revenue?
Farbod Shoraka: We used two key metrics. This was very early stage investment, so it was really about the idea and vision. We needed to demonstrate that there was a product market fit. We were able to show that we were doing transactional volume on the marketplace. We were able to show that florists were excited about our products by demonstrating how many of them were signing up every day as well as the amount of products being listed per day. We showed our general metrics to the investors. It was not about having a large or small revenue number but showing that there was something there worth exploring.
Sramana: How many florists were signing up at that point?
Farbod Shoraka: We had about 1,500 florists across the country. We had about $60,000 in revenue at the time.
Sramana: Was your business model of 10% per transaction already validated by that revenue number?
Farbod Shoraka: Yes. The investors could see that there was revenue generated from the marketplace. That was enough to get us going.
Sramana: You have a straightforward concept. It is a large market and you are taking 10% of that TAM. A lot of flower orders are made through the Internet, so this does not sound like a hard story to sell.
Farbod Shoraka: It was a very understandable concept. The industry was well known, so we did not have to prove out a new market. It was very clear that the incumbent had a lot of problems. Those were the two big things that made it unique for us and show that we were worth investing in.
Sramana: How much did you raise in 2012?
Farbod Shoraka: We ended up raising $1.65 million from some of the big venture capital firms.
Sramana: What were the milestones that you achieved with that $1.65 million?
Farbod Shoraka: The seed round was used to build out our platform to sustain growth. A lot of our resources went into building the infrastructure of BloomNation as well as creating a robust platform for florists to conduct all of their business through us. Having the point of sale system was big. We built an in-house email management system and a customer management system. We provided everything they would need to have a successful business as well as the analytics to understand how to make their business better.
Sramana: What has been the impact in terms of scaling your business?
Farbod Shoraka: Now we are close to 3,000 florist. We are trying to create a curated, high quality experience. Instead of just allowing everyone to sign up at BloomNation, we are selecting quality, service-driven florists. When you go to BloomNation.com, you should have an experience that is far better than every other florist site out there. We have coverage now. Almost every search nationwide has coverage. Our goal now is to cultivate the top florists to ensure we can create a truly unique experience for our customers.