The following interview is a conversation we had with Shaily Garg, CEO & Chief Product Officer of GlobalFair, on our podcast Category Visionaries. You can view the full episode here: $22 Million Raised to Create the Future of Cross-Border Procurement.
Shaily Garg
Thank you so much, Brett. Thank you for having me on board. Thank you.
Brett
No problem. Super excited to have you here. And like, we’re joking there, the pre interview. Thank you for taking this end of day on a Friday. Really appreciate it.
Shaily Garg
Yes, as I was saying, let’s end it with the bag.
Brett
All right, well, let’s do it. So to kick things off, can we just start the quick summary of who you are and a bit more about your background?
Shaily Garg
Yeah, a quick about myself. I am a civil engineer by trade, coming from a very small cords manufacturing family india. I worked at PNG before GlobalFair, wherein saw efficient manufacturing at scale for the world and then started GlobalFair. At GlobalFair, we are effectively a Southeast Asia to us play for cross border building materials. We are india, Vietnam, and us supplying in 36 states. In us did our seed and series a. Series A was led by Lightspeed last year and would soon be going for our next fundraise next year.
Brett
Amazing. A few questions we’d like to ask. And the goal here is really just to better understand what makes you tick as a Founder. First one is what Founder do you admire the most and what do you admire about them?
Shaily Garg
Wow, interesting question. So I personally believe, Brett, in creating a legacy and generational wealth that it starts fueling entire country’s growth. Right? As not a region, not a small segment. So a particular Founder, or let’s say visionary that I love the most, especially coming from India, is Ambani, Mukesh Ambani, who is the chairperson of Reliance Industries. And while he inherited a lot of the business, but he spinned it in such a manner that it literally fueled the entire country’s growth for this decade. Right. So I really love what new age angle he could bring. To an extent that now the Reliance industries is one of the leading industries in terms of tech in Asia, not just india.
Brett
And another question we like to ask, and the goal here is to really understand kind of behind the scenes, what I always tell guests is this doesn’t have to be a business book. The books that we’re really interested in are going to be the personal books. So we got this from an author named Brian Holiday, and he calls them quake books. So he defined a quake book as a book that rocks you to your core. It really influences how you think about the world and how you approach life. Do any books like that come to mind?
Shaily Garg
I love the book called never split the difference. Right. It’s about negotiating in life. And the main crux of that book is negotiate as if your life depends on it.
Brett
Right.
Shaily Garg
It’s written by a former FBI agent and negotiator. FBI negotiator. So I really love that as being a Founder because not just being a Founder, quite frankly, even in your personal life, I think you’re always negotiating. So that’s one. The second book I really love the most, or correlated with was it’s called voltage effect. And it’s more business book, but it’s about how do you turn ideas into great ideas? Basically, it says that every unsuccessful book is unsuccessful in its unique way, but every successful idea has a commonality in it. Right. So I really love that concept of the book and relate to it, quite frankly.
Brett
Nice. I’ve read the first one. I haven’t read the second one, but that sounds like a good read. So I’ll add it to the Amazon cart here after the.
Shaily Garg
Yeah, yeah.
Brett
Now let’s switch gears and let’s dive a bit deeper into GlobalFair. So how we like to approach this is we like to talk about the problem. So let’s start there. What is the problem that GlobalFair solves?
Shaily Garg
So we’re trying to make cross border procurement bread very easy and hassle free as similar to buying from a next door neighbor. Right. So construction material is a very conventional sector. And in that, especially with 80% of material being imported in United States, a lot of it coming from China and Southeast Asia, what we want to do is make that entire transaction procurement, so hassle free that for someone, it seems like they’re buying from a next door neighbor using technology.
Brett
Wow. Amazing. And you have that pitch very clear. So I think you’ve probably said that a few times in the past.
Shaily Garg
Almost every single day, every single night. Yeah.
Brett
And then talk to us about the marketplace. So when you’re building a marketplace, I guess there’s always the chicken and the egg problem, how did you factor that in and what did you focus on first?
Shaily Garg
So, first and foremost, for us, it was always about getting the fundamental of business, right. So to nail, understand the manufacturing and cross border export, cross border supply chain and then build the tech that will make that efficient. Right? So for us, marketplace came in 2nd, 1st came in the problem.
Brett
Right.
Shaily Garg
So we always said that, okay, Covid. Covid disrupted the entire supply chain. Let’s look at the industry which got impacted the most, which was construction materials. Since I come from a very small quartz manufacturing family, I knew a lot about the material on the supply side. So we said, let’s start there and see how can technology add that reliability and transparency such that cross border becomes so seamless. So for us, it first came the problem, the conventional exports, building material, and then we build a marketplace on top of that.
Brett
I’d love to also ask about timing. So I saw on LinkedIn, it was April 2020 that you launched the company. I remember, right. There were some interesting things going on in the world in April 2020. What was it like starting the company there right at the start of the pandemic?
Shaily Garg
Yeah. So I started thinking about it in April 2020. We effectively launched the company formally in August 2020. I think for us, quite frankly, Brett, Covid, while for the world, it was a very big. Had a negative side to it, but for us, it was a blessing in disguise, because Covid literally ensured that sustainable businesses stay in the market. It got that need for a new edge technology, which otherwise, had supply chains not been disrupted, had cross border travel not being disrupted, global fare would not have been in existence. So for me, it was a very exciting time. Professionally, personally, of course, everybody had a lot of impact due to Covid.
Shaily Garg
But professionally, for GlobalFair, I think when supply chain were disrupted because of COVID and especially in construction sector, which contributes to 13% of world gdp, right, with only 1%, 1.7% of technology investment into that sector, for us, it was an easy no brainer that this is a sector very sustainable, money making. There’s a huge cost arbitrage in the mix, and there is a customer waiting to get the product. There’s a supplier, small supplier, waiting to send the product. And tech is the only thing missing.
Brett
Do you find that the suppliers are open to trying out new platforms, or is that difficult to convince the suppliers.
Shaily Garg
To give it a shot because it’s such a high margin and such a pull based market, quite frankly, suppliers, we work with small to medium scale suppliers. For these guys, if there is no tech in between, it becomes almost impossible to get access to that cross border quality demand, right? So in our sector especially, it’s not a matter of adoption, right? Adoption is not that big a problem versus retention. And that retention is wherein the efficient tech as the intuitive, efficient and very seamless tech that you can build is what matters.
Brett
What about from a trust perspective? So I think if you look at any of the consumer marketplaces like eBay, there’s a certain level of fraud that they have to factor in and try to defend against. And then I think even Alibaba, if you look at from the business perspective, I’ve heard of friends having issues there where they buy products and they don’t work out as planned. What does that look like on your end, just from a fraud defense perspective, to ensure that nothing negative is happening in the marketplace.
Shaily Garg
Right? So, very interesting question.
Brett
Right?
Shaily Garg
So that is the value that GlobalFair brings in, right? So we are not just a marketplace, we are a managed marketplace, right? So what that means is, for a customer, it’s GlobalFair’s guarantee and warranty in it is if in a factory, you define man, machine, material, method other than machine, everything is owned or controlled by global fare, right? What that means is QC is a very big part of whatever we send. These are big ticket value items, right? So our average order size is around $120,000. So these are big ticket items in which pre production, in production, and post production, pre shipment, there are four levels of QC that happens. The second part, to the customer, there is a guarantee warranty, no questions asked, warranty on by GlobalFair, which is back to back supplied by suppliers. Right?
Shaily Garg
So that’s the value that GlobalFair provides. A very big value and reliability piece when buying from cross border.
Brett
And what’s a typical order size? Is it 100 grand? Is it a million? Is it 5 million? What’s a typical order?
Shaily Garg
$120,000 is our average order size, and can go up till 1.2 million in a single order.
Brett
Wow. And from a traction and adoption perspective, or just a growth perspective, are there any numbers that you can share?
Shaily Garg
So what kind of customers we deal with are usually big, large scale, multifamily contractors, and commercial hospitality contractors. And what the idea of GlobalFair is to provide all finishes, everything inside four walls, ready to install. So what that means is countertop, cabinet floor, doors, windows, the entire consumables, hardwares that are needed, all job bag ready to install, delivered to job site. Right? So our customers are big, large scale contractors. From that standpoint, in terms of growth, we are growing at around 110% month on month. Very amazing growth in this sector to an extent that last month were EBITDA positive. But any customer that comes with us, right? So versus first order, a customer orders eight x times in just annual scale.
Brett
Wow. What do you attribute to that growth and that success? I’m sure any Founder listening in is saying, yeah, I want that. I want to grow like that, too. What have you gotten? Right. What do you think you’ve just really nailed here?
Shaily Garg
I think one of the biggest was for GlobalFair. That worked was agility. So when we started, we did not start with just this idea and just this customer base.
Brett
Right?
Shaily Garg
It took time to get here, but we pivoted. We changed our model so quick and so fast that we beat the industry, quite frankly, in terms of how it was developing. For example, when we started with a cross border marketplace for seven categories, not just building materials. Very soon, four months in, we realized that this is a supply. The mote in this business would be supply, right? So we said, let’s pick up just one category, grow that, and then we’ll figure out rest of it. So we dropped all the other categories. We said, construction is what we know. Let’s just pick that up and go with it. The second we said, let’s understand exports and construction. So we first went to a customer we knew was already importing. Right.
Shaily Garg
And from there, now, what we do today is in B2B space, end consumer in construction, end factory in construction. And it’s just global fare in between, right? So we disintermediated the supply chain in just two years of existence. Two years, four months, effectively, of existence. We’ve changed our model twice, reached the right customer segment, who is now. So today we operate at 98% retention ratios.
Brett
Right?
Shaily Garg
98% repeats. So effectively, every customer that is coming is staying with GlobalFair. So I think nailing that right customer and right business model, and a lot of times I’ve seen Founder get too attached with the first problem statement that they start with. And that is one key advice that I always give everyone that keep experimenting till you don’t find that sustainable customer and model that you will go after and then go deep in that.
Brett
This show is brought to you by Front Lines Media, a podcast production studio that helps B2B founders launch, manage, and grow their own podcast. Now, if you’re a Founder, you may be thinking, I don’t have time to host a podcast. I’ve got a company to build. Well, that’s exactly what we built our service to. Do you show up and host? And we handle literally everything else. To set up a call to discuss launching your own podcast, visit frontlines.io podcast. Now back today’s episode. How did you make that decision to narrow it down to that one category? How’d you select that category? Because I think for a lot of different founders, that’s always the hard part, right?
Brett
Is to say, okay, we’re going to forget everything else right now, even though there’s a lot of opportunity, and we’re going to focus on this one thing. What information did you use to make that decision?
Shaily Garg
So very early on, Brett, we realized that in this business, as you said, right, quality is a big thing. So at scale, what would be our mode of the business? The mode would be supply.
Brett
Right.
Shaily Garg
The quality supply and scalable supply. So we said, if were to take a hold on supply, it would not be something that we can do for five categories or seven categories. It has to be a single category in which we know in and out. So with that, we said, what is that category we know about?
Brett
Right.
Shaily Garg
So we did do one or two orders in other categories as well. But we said, what is that big margin category in which the tech will make most sense, will be one of the biggest initiators for this exponential growth and what we know. So first target was for us because supply was more, where do we know supply? Since I come from that cords manufacturing family, I knew a lot about supply, right? I knew a lot about material. I knew firsthand few customers as well, from which we could learn. So we just went with it that this is the category we would start with. Supply is what we know, and this is a category for which we know the supply. And let’s go with it, and we’ll experiment it for two, three months and see how it’s picking up.
Shaily Garg
If it does not, then we’ll switch on to the next idea. But we always had an idea b and idea c as well.
Brett
With us, what would you say has been the biggest challenge you face so far?
Shaily Garg
The biggest challenge, I would say, is especially because it’s a blessing and a challenge, both in disguise.
Brett
Right.
Shaily Garg
This is a sector which is very conventional. So while on the supplier side, the adoption in technology is not that big a concern versus on the buyer side, because this is a legacy, relationship based industry, the tech adoption is not one of the most intuitive things that you would find in customers, in us. So what we would then ensure that our technology is extremely intuitive and to an extent that it directly impacts their top line and bottom line right. So we don’t need to sell that. Hey, use the tech versus it becomes a pull based sell wherein they’re using the tech irrespective of us pushing for it.
Brett
That makes a lot of sense. Now, I’d mentioned this in the intro, and I’d love to dive a little deeper into it. So you’ve raised $22 million to date. What have you learned about fundraising throughout this journey?
Shaily Garg
One of the biggest things I think we learned was a founders should invest in storytelling.
Brett
Right.
Shaily Garg
It’s a skill not appreciated enough, but it’s a skill that is most important when you’re fundraising, especially in early stages. So that’s 1st, 2nd, always chase customers versus chasing investors. For me, I think investor would always be an outcome versus ancillary outcome versus the primary focus. In the early stages, especially seed or Series A, you get invested on the team and idea, right. And it’s the highest bet that an investor takes and in that, the execution kicks in later on. So invest a lot in communicating your idea and your team. And second, invest in customer. Ensure that you understand that customer. Right. And the investor and investment will just follow.
Brett
Let’s imagine you were starting the company again today from scratch. Based on everything that you’ve learned throughout the last three and a half years, what would be the number one piece of advice that you’d give to yourself?
Shaily Garg
First, be in customer markets more. I relocated in customer market, I think, one and a half years into the company. I would always say that be in customer markets on day one if that’s needed, or even day -30 right. And then come up. Because then in that case, maybe you reach at that right problem statement and right business model faster.
Brett
Right.
Shaily Garg
So that’s one. And second, invest in storytelling more. These are the two advisors you asked. One, I gave you two.
Brett
What have you done to become a better storyteller? We bring on a lot of vcs as well and do interviews with them and I always ask them, what’s the number one skill that you recommend you look for in founders? And I would say like 70% of them do say storytelling. So it’s a very important skill. But I think you were talking about that earlier. It’s a very hard skill if you’re not naturally good at it. So what have you done to refine your storytelling skills?
Shaily Garg
I think I am still working on it, Brett, quite frankly. But one of the most important things I think helped me was before you are going into a call, you should know what person you’re talking to, right. So if let’s say, to put this into perspective, right? So if I’m talking to an Asia based investor, I would be pitching them manufacturing as a service, as a story, right? But if, let’s say I am talking to a western investor or a UK or a US based investor, I would be talking about labor productivity and construction automation as a story, right? So it’s important that you understand, especially when you’re talking to investors, what kind of investor you are going in with.
Shaily Garg
The second is I always, before I go into any meetings in which I know that storytelling would be extremely important, I do make three to five top pointers around which I would revolve my conversation and that always helps bring the entire conversation to a closure, right? And get the other person, take those four or five key takeaways which you want them to go ahead with.
Brett
Super useful. Now, final question here for you before we wrap up. So let’s zoom out three to five years into the future, what’s the big picture vision that you’re building?
Shaily Garg
Be the Alibaba for B2B Southeast Asia. But I told you it in the very start, right? Our vision is to make cross border as hassle freest and as seamless as buying from an external neighbor, right. And build that through tech and be the largest cross border supplier.
Brett
Amazing. I love the vision, I love the approach and I’ve really enjoyed this conversation. We are up on time, so we’ll have to wrap here. Before we do, if any Founder listening in wants to just follow along with your journey and maybe continue to learn from you as you execute on this vision. Where should they go?
Shaily Garg
So I am active on LinkedIn. I’m also active. They can email me as well. I can share with you my connect. So I am very constantly active on LinkedIn. I’m active on Instagram, on Twitter and best place to approach is always emails, email directly. And I would be happy to help anyone who see I’ve myself lived this journey, been in this journey, have navigated it so far. So I would really love anyone who is looking for any help, any support, any feedback at all.
Brett
Amazing. Well, maybe you’ll have a bunch of founders in your inbox here once this goes live. Thank you again for joining. I’ve really enjoyed our conversation and I’ve learned a lot about this market that I knew zero about. So I appreciate you coming on and educating me and educating the audience.
Shaily Garg
Thank you so much, Brett. Thank you. I love the conversation. Thank you.
Brett
All right, keep in touch. This episode of Category Visionaries is brought to you by Front Lines Media, Silicon Valley’s leading podcast production studio. If you’re a B2B Founder looking for help launching and growing your own podcast, visit frontlines.io podcast. And for the latest episode, search for Category Visionaries on your podcast platform of choice. Thanks for listening, and we’ll catch you on the next episode.