A team of former Amazon employees and retail leaders, keenly aware of the unique challenges that e-commerce brands face, launched Stackline, a retail intelligence and Software as a Service (SaaS) company based in Seattle.
Stackline’s story debunks many commonly held beliefs about starting a software business. CEO Michael Lagoni explains how Stackline approached the challenges of funding, hiring, establishing company culture, and customer alignment.
Lagoni and his partners launched their e-commerce startup without funding from outside sources. Lagoni explains, “As bootstrappers, we see a lot of upside in self-funded innovation and the early pursuit of profitability. Thanks to the consulting side of our business, we have been profitable since day one.”
He points out that although founders choose different business models and end goals, media attention focused on venture capitalist funding rounds may be sending the message that VC funding is the “only way to get their dreams off the ground.”
“VC funding is not the answer to achieving every goal in SaaS entrepreneurship,” Lagoni says. “In some ways, our customers actually act as VCs — helping to direct our research and development and drive our product roadmap. We chose that route conscientiously because we wanted to prioritize a return for our employees and collectively own the decisions that move our business forward.”
He comments, however, “Not every business has that opportunity, and we recognize there can be advantages that come with raising capital from outside. When you’re backed by investors or VCs, you tend to get access to networks of experts who have seen it, done it, and overcome it before. They can help navigate business decisions with the right resources and insight at pivotal moments, but the trade-off, of course, is autonomy.”
Lagoni observes that successful founders often spend a disproportionate amount of their time focusing on hiring. He says this is due, in part, to the responsibility they feel to find people with leadership potential, skills and personalities that will drive growth for the business at critical stages.
“It’s crucial for company leaders to be intimately involved in the industry they are serving,” says Lagoni. “Clients and prospects want to feel understood, so building a team of people who can empathize and who’ve fought the same battles builds immediate trust.”
He says Stackline looks for people with “tremendous grit who are willing to roll up their sleeves and do the work that others won’t.”
Lagoni says Stackline asks a lot from its employees in terms of adaptability and tenacity to keep up with the e-commerce and SaaS industries, as well as their own company’s growth. He recalls a particularly vivid memory of how his team rose to a challenge:
“In the early days of Stackline, one of our team members, Alex, was directly involved in getting us a new office. And while we were all aware the office move was looming, one morning he unexpectedly made an announcement: ‘Everyone, time to pack up. We’re moving at noon!’
“While another team might have needed advanced warning and a moving crew to make that work, our team embraced the DIY-nature of the move and wasted no time packing up furniture and equipment and carrying it on foot through downtown Seattle. A line of 30 people shouldering boxes through the streets of South Lake Union must have been a sight, but it turned out to be such a fun bonding experience.”
Lagoni comments, “We’ve grown a lot since then, but grit, flexibility and willingness to dive in remain core values, and that story is an essential part of our company lore.”
Stackline’s success is tied to its customers’ success. “Our product and features come directly from the conversations we have with brand leaders every day. Our goal is to improve their bottom line,” says Lagoni. “User feedback is critical. We think one or two years ahead to predict what will happen in the industry and develop solutions and features within our platform that will align with the industry’s lightning-fast evolution.”
He advises new startup founders, “Treat every customer as if they were your only customer. That mindset will help you deliver the highest level of service and give you access to the feedback you need to refine and differentiate your offering.”