Michael Lagoni’s startup journey began five years ago with just $300 inside a tiny 400 square-foot Capitol Hill apartment. The former Amazon manager had come up with an idea to help retailers better manage their e-commerce operations. He wanted to build a working prototype, get a few customers, and just like most other tech startups, go raise capital to scale the business.
But Stackline never raised investment — it didn’t need to. The company was profitable since day one and has quietly grown into a leading retail intelligence startup helping more than 500 clients such as Sony, Starbucks, Google, Unilever, and others improve how they sell products online.
In a startup world where raising venture capital may seem like the only way to grow quickly, Stackline is an outlier.
“Looking back, it’s been one of our biggest advantages,” Lagoni told GeekWire. “We don’t have an outside group of investors we have to manage. We don’t worry about financing rounds or managing a board of directors. All of our focus is on our employees, products, and customers — nothing else.”
From the beginning, Lagoni and his three co-founders — Mitch Keidan, Michael Masaki, and Raj Ramasamy — had a big vision to build a proprietary software data platform for online retailers, but knew it required a huge engineering effort. As a result, Stackline initially got started by providing consulting services for consumer brands, acting somewhat like an agency.
The company funneled its profit from the services business into the development of the data platform. Two years later, Stackline rolled out what is now its flagship product that helps consumer brands manage their e-commerce operations across sites such as Amazon, Walmart, Best Buy, and others. It also has patented data-capture technology across the online shopping landscape that gives clients a better idea of how they benchmark against the competition.
“We offer all of this proprietary data that customers could never collect on their own and then we have really sophisticated algorithms that analyze their data every single day, find the key insights, and make the recommendations for how these brands can better operate and grow their business,” Lagoni said.
From there, Stackline’s growth skyrocketed as it went from having a handful of customers to managing more than 500, including some of the world’s top brands. The team also went from four people to 50 employees.
“We’re not this typical technology company that raised a bunch of money upfront and tried to figure it out later,” Lagoni said. “Instead we built our own cash flow system — the services business — and that funded the development of all the technology we launched two years ago.”
Stackline still offers consulting services, and particularly for clients that need help figuring out how to advertise products online. The startup manages more than $600 million in ad spend on Amazon.
Lagoni said the company has a diverse set of competitors, from market data measurement companies such as Nielsen or NPD, to traditional consulting firms that advise brands on their online retail strategy, to new entrants such as fellow Seattle startup Gradient that help optimize advertising spend.
“What makes us different is that we’re the only player in this industry that has an entire spectrum of data tools and services that all connect under one seamless ecosystem,” Lagoni said.
Stackline has plans to expand across the globe and release new services. It expects to hire up to 100 additional employees in 2019.
Some investors may see Stackline has a lucrative opportunity. But Lagoni plans to keep bootstrapping.
“We have no need to raise outside capital,” he said. “Our customers in many ways are acting like venture capitalists, as they are paying such a significant amount for our services and products. They are funding the future development of those services and products. It’s almost like we have our own in-house investors from the customer side.”