I firmly believe that you must do something to get outside your comfort zone on a regular basis. Facing intellectual challenges and startup fears also drive founders. Interviewing Michael Lagoni, the CEO of Stackline, provided some tales on point. Stackline is a retail intelligence and software company founded by a group of industry veterans and headquartered in Seattle, WA.
Online shopping concept
Mary Juetten: When did you start?
Michael Lagoni: In 2014, on a flight from Seattle to Cleveland, I started sketching out ideas for a software platform that provided all the tools business leaders would need to track and manage an e-commerce business. From my experience in the industry, I was keenly aware of the increasingly complex array of data and services it would take to grow sales online, and I set out to tackle that problem for brands.
With $300 in the bank and a 400-square-foot studio apartment for an office, Stackline’s beginnings were decidedly humble. Originally I was focused on e-commerce consulting services rather than SaaS. Early projects focused on analyzing clients’ e-commerce performance and advising them on growth strategies.
To scale, my goal was to make $20,000 a month in recurring revenue. But I needed help, so I reached out to one of my friends from college, Mitch, and tried to get him to move to Seattle. But he rightfully wanted to hold out until the company was generating enough revenue to justify his cross-country move.
As part of his encouragement in that regard, he told me about an upcoming coffee trade show in Seattle and good-naturedly tasked me with going booth-to-booth to see how many clients I could sign up. But I was so anxious about the entire process that I walked out of the convention center minutes after walking in. Shortly after, Mitch called to ask how it was going, and I realized then that I absolutely couldn’t let him down, so I headed back in with more moxie and managed to sign up three clients on the spot. Those early days were full of experiences that called on stores of courage we didn’t know we had; from cold calling at trade show booths, to hesitantly renting our first real office space, to finally hitting our first CES floor where a few big partnerships really helped accelerate the growth of our business. It’s been an incredible ride.
Juetten: What problem are you solving?
Lagoni: Stackline combines the power of data, machine learning, and industry expertise to help brands find new ways to win in an increasingly digital and data-driven retail ecosystem. Our software, tools, and services work in concert to provide brands with a comprehensive view of their e-commerce performance and a set of insights to drive their growth.
Backed by e-commerce data, our clients can track the metrics that matter most to their business, from advertising spend and traffic to inventory and ratings, giving them the ability to pinpoint cost-savings and new revenue opportunities that impact the bottom line.
Juetten: Who are your customers and how do you find them?
Lagoni: We are firm believers that success in modern business requires intentional partnerships between people, data and breakthrough technology. Our team empowers thousands of the world’s most dynamic brands, such as Google, General Mills and Sony with the tools they need to be successful in online retail.
Our client Sonos shared this: “Working with Stackline delivered powerful results by growing our market share, delivering insightful analyses and scaling our advertising reach across Amazon.”
We find that many of our new customer leads come through referrals from past and current clients or from clients that move into leadership roles at other brands.
Juetten: Who is on your team? How did past projects and/or experience help with this new project?
Lagoni: Stackline was founded by a group of former Amazon employees, so our collective expertise in the industry has granted us a unique perspective on what’s possible for our clients and how they can navigate the complexity of these digital ecosystems to find growth opportunities.
Juetten: Did you raise money?
Lagoni: We were actually profitable from day one, thanks to the revenue generated by the consulting and services side of our business. We have no need to raise outside capital. Our customers in many ways are acting like venture capitalists and helping guide our R&D. Their needs drive our product innovation.
Because we’ve structured the business this way, employees own 100% of the company. That creates a culture of passionate collective investment in the success and health of Stackline.
Juetten: Startups are an adventure — what’s your favorite startup story?
Lagoni: We have a team member, Alex Rowe, who facilitated the real estate deal for our newest Seattle office. While our team at the time was aware this was happening, we didn’t know the exact timing. One morning, Alex stood up from his desk and announced, “Hey, everyone, company announcement: pack up your stuff — we’re moving to our new building at noon today.”
That was our advance notice. And to add to the chaos, he informed us that we didn’t hire a moving company, so everyone had to move their own furniture and equipment.
If you would have been in downtown Seattle that day, you would have seen 30 people carrying their monitors and boxes of their own belongings and office supplies through the streets of South Lake Union.
I know that sounds crazy — and it is — but this gritty DIY approach has been the backbone of our approach from the start. We believe we have to be adaptable and willing to overcome any challenge that’s thrown at us, anytime. The raw metaphor in this story is something we can all laugh about and be proud of at the same time.
Juetten: How do you measure success and what is your favorite success story?
Lagoni: Our success is a direct reflection on the success of our customers. The growth margin and incremental returns that we help drive for brands is our primary key performance indicator. We ran an analysis of the year-over-year Amazon sales revenue across our whole stable of client partners at the tail end of 2019 and discovered that on average, our clients’ sales grew 44% more than their competitors’ over the same time period.
Juetten: Any tips to add for early-stage founders?
Lagoni: We often hear about founders staking their company’s fate on ‘bold bets’ in their earliest days. Before founding Stackline, I wish I knew that taking a chance of that magnitude would require far more than just the courage to make a single fateful decision over a single time-constrained period. In our case, it demanded a multi-year investment of patience and resilience. I think many people are taken in by the popularized version of ‘tech CEO culture’ that suggests we all have 30-hour workweeks and unlimited resources.
I see our company as part of an alternative ideology — one that prioritizes self-funded innovation and profitable growth. What I tell young founders and CEOs is that approach requires a huge amount of grit.
Every leader will need to find something that can sustain them through a lot of uncertainty and ambiguity for a very long time. What sustained me at first was simply fear — can we actually build what we set out to build? It wasn’t always fun nor glamorous, but that relentlessness is now core to our company culture. And that fear I used to have has morphed into gratitude for the incredible team that continues to sign up every day for the bold bets it takes to keep innovating.
Juetten: What’s the long-term vision for your company?
Lagoni: We may have just entered a new decade, but Stackline has always needed to think one to two years into the future and continue to plan for new products and features that can materially improve our clients’ bottom line. We believe the expansion of our data and services to new geographies and retail platforms will allow us to stay at the forefront of the industry.
Michael’s view of the need for resilience is something that many founders cannot grasp. Regardless of workload or fundraising, keeping on is a critical success factor. #onwards.