We spoke with Raad Mobrem, CEO and co-founder of Venice-based Lettuce Inc, an order management system for small to medium sized businesses. Lettuce is backed by Launchpad LA, as well as having recently closed a $2.1 million round seed round.
Raad is the CEO and co-founder of Lettuce, a simple and intuitive cloud-based order management system that enables small businesses to capture, track, and process orders in real-time. He is an expert in design and user behavior. His products, ranging from consumer goods to software, are award winning and top sellers in their respected markets. Lettuce is his second venture after successfully exiting his first startup. Check out Lettuce at www.lettuceapps.com. Raad can be followed @raadmobrem.
What inspired you to create Lettuce?
Originally my cofounder and I had a socially conscious dog toy company. It took off way faster than we thought it would and we were getting anywhere from 10-500 orders a day. This turned out to be quite challenging for us since we had a finite amount of cash and we needed to figure out how to scale and manage the orders in an efficient way. The first thing we did was hire people, which helped, but we realized we needed software technology to streamline the whole process. The biggest issue we had was that for each order we received, we spent about an hour per order just inputting the order information into our various systems, such as accounting, CRM, credit card processing, shipping etc. In effect, this meant retyping information six times, and with hundreds of orders a day, you’re basically screwed.
So we looked at solutions available to us, such as SAP, Oracle and NetSuite, but they were all beyond expensive. We also looked at other cheaper versions but they proved to be totally inadequate. Since we had a technical and design background, we decided to build the solution for ourselves. We spent about three months building the MVP for us internally. The system had two parts: the first was an order management system that would connect to the services we were already using, such as QuickBooks, CRM, inventory, FedEx, USPS, UPS, and credit card processing. The second part was an iPad app so that instead of taking orders at trade shows using paper, we could process the orders in real time through the app. This reduced the entire order process from an hour per order to about two seconds. It was just glorious!
How did the other trade show exhibitors react to this?
They began to notice that our booth had no paper and started to look like a colorful Apple store with long tables and iPads. When they saw that we had automated the backend process, their reaction was pure shock. Then they would ask us to build them the same solution but we couldn’t since this wasn’t designed to be customizable. It was built internally for us, and it was also part of our competitive advantage. A month later, we started getting phone calls from people in different verticals, like the shoe or fashion industry, and they asked if we could make the software for them.
So all this got me thinking whether we were on to something. We did a lot of research, including going to trade shows guerilla-style as an attendee, talked to the exhibitors and ask them if they had this problem and how much they would pay for it. At that time we had our MVP and we showed them what we could do. They were blown away and I could see the pain in the businesses eyes. It was so frustrating for them and I wanted to change that.
That’s when we started to realize that this market was pretty big. I’ve always wanted to do something that would help others, which is why our toy company was socially conscious, and this was a bigger way to do that. Small businesses are the core of our economy and we need to build technology that empowers them.
How did you get your first customers?
That wasn’t too hard since we already had the relationships and a product. Since we built the product for ourselves, we had already found the product market fit. However, since this was just an MVP for us, we had to rewrite it in order to be customizable and scalable. We spent about a year on this process, and finished the base in January 2012, and launched in September 2012.
How was your experience at Launchpad LA?
Amazing! It was everything we could want and more. They would provide introductions and meetings with investors and mentors where we could gauge their interest. The best part was that we were in an environment with other startups and like-minded people, and the two of us were not alone. It was inspirational. They gave us great office space, they opened up their unbelievable network, and they gave us a lot of advice on things we were unsure about, like fundraising. Although we had an idea of how to fundraise, we had never done it before and they really honed that down to an art.
What things did you learn about fundraising?
Have a simple deck and understand what investors are really looking for in your slides. If you create a deck that is creative in everything but is out of order, investors won’t like that. You want to make it so easy for them so that it’s not a pain point to get to the next level. You don’t want slide seven to be in slide two. Also, I learned what a proper email should be. If your email is too long, they won’t read it. So you have to make it nice, short and sweet, which is really hard. And I get it now. These people are really busy and they get 150+ emails a day. It’s unbearable.
Finally, they are investing in the founders…granted the product and market is great. The investors “read” the founders to make sure we can grow a really big company. Be professional, be unique, make them like you, and know your stuff. If you don’t know your numbers or business, you will not get funded.
Well it must have worked since you raised a $2.1 million seed round.
Yes. CrossCut led, along with Double M Partners, Baroda Ventures, Zelkova Ventures, 500 Startups and a handful of angel investors, including Tom McInerney and Clark Landry. Our big focus right now is on testing. We told our investors that this stage is all an experiment and we’re going to do a ton of tests on things like which sector to target, what distribution models work the best, and how to tweak our product for more growth.
So do you see the startup journey being very experiment driven?
It depends on what stage you’re at and what type of company you want to be. Our goal is to be a very large company, and so at this stage we can afford to be very experimental. If we wanted to be a $50million company, we would have a shorter runway. But since we want to be large, our seed round is primarily focused on experimenting. So then when the time comes for our next round, we can say we tested 200 ways of acquiring a customer, 20 different markets, these are the top three markets to go after, this is our sales and marketing process etc. It has all been tested, analyzed and we just take the best of the best and we put more money towards that.
What have you learned as an entrepreneur so far?
None of this is really difficult. It’s not brain surgery. It’s a bunch of little things that you need to focus on. It’s like a golf. When I used to play golf, every time I played poorly it was because I would say to myself “I want to shoot par” or “I want to shoot 72” and I would think about that. Then whenever I did a bad shot, I would think “damn it, now I have to try so much harder to get to 72!” Then I started thinking about golf in terms of every individual shot, not even every hole. I just want to hit that shot really well, then I’d focus on the next shot, and I would get par or birdie. By the time I go through the whole course, I was shooting even or a little above or under par. It is the same thing with startups. You have all these big tasks you have to do. Break them down into the small little tasks and focus on those. You have one little thing done, and then another, and soon enough you’ll have the big thing done. When you focus on the details that way, you can really move at a fast pace. You obviously still have to think about the big strategy, but once you have the task to do, you go shot by shot.
Lastly, what inspired the name Lettuce?
It’s a pun: “Lettuce (as in let us) do it for you”. Plus everyone knows what Lettuce is and it actually symbolizes being fresh, growth, and good for you.