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Winning Against Heavily-Funded Competitors: Al Lalani, CEO of Social Annex (Part 1)

Posted on Monday, Oct 31st 2016

We often get this question: how do you compete with a bootstrapped startup against heavily venture-funded competitors. We’ve done other stories on this topic. Here’s one that will give you additional perspective.

Sramana Mitra: Let’s start at the very beginning of your journey. Where are you from? Where were you born, raised, and in what kind of background?

Al Lalani: I was born in India. I moved here about 15 years ago. I was 21 when I first moved to the United States. I have an engineering background. I was hired by a company based in Los Angeles. This was around the 1999 timeframe around a year before the dot-com bust. The company had raised around $1 million. At that time, SaaS wasn’t a term but it was a SaaS company. It was a web-based service essentially connecting buyers and sellers of food products. It had about 10 people in the US.

The CTO, who was also from India, wanted to start operations in India. He came out and hired a few people,  and within six or seven months, the company grew fast and we raised about $40 million in Series B. I moved to the US to run a team as we grew both our India and US operations.

Sramana Mitra: Which company was that?

Al Lalani: It was called Agro Buy at that time. It renamed itself to Foodlink Online. It was a B2B company. It’d just got acquired after 10 years of operations. I was there for about five and a half years from early 2000 to late 2005. That was the start of my career. It was a great experience. If I hadn’t joined that company, I probably wouldn’t have started a company.

From 10 people, we grew it to about 450 people. When I left, we were much smaller. It went through a boom cycle of raising a lot of money and not doing as great. I started on the technology side and went to architecture and product management. Then, I ended up in sales over the course of five and a half years. I had a lot of different varied experience, so it was personally very gratifying but also very tiring. We did push the envelope significantly during that time as the company grew.

Sramana Mitra: It gave you a view into the cycle of business. That is good education.

Al Lalani: Yes. It’s one of the reasons why we structured Social Annex a little differently. We bootstrapped and haven’t raised a lot of money to be able to get to the point where we are. It was amazing that the company I used to work for had raised $40 million butdidn’t make as much money as Social Annex is making. It’s an interesting different cycle. I saw, firsthand, how things weren’t certainly done in a certain way.

I definitely pushed the envelope because I was managing a team in India and I was working during US hours. It was burning for me and so I wanted to take a step back. I went into product management for a company called Teleflora. It’s one of the largest floral retailers out there. It’s a strong company and I wanted to learn a little bit more about e-commerce. This was around the late 2005 timeframe. I ran e-commerce for that company in different verticals. There was a direct to consumer business and a B2B SaaS business where we built 10,000 e-commerce sites for their floral customers.

It was a great ride. I was there for about five years. That was the time I wanted to do something on my own. My first foray into starting a startup was e-commerce. I started this jewelry e-commerce startup. I bought a bunch of custom jewelry and built an e-commerce site. The biggest challenge was that I focused a lot on building the e-commerce site without focusing on the end consumer and the market positioning. My first learning was don’t build anything until you know the customer wants it. It took me nine months to realize that the market positioning wasn’t correct. That died a quick death after that.

This segment is part 1 in the series : Winning Against Heavily-Funded Competitors: Al Lalani, CEO of Social Annex
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