#404 Last-Mile Advertising: Alex Nocifera on Disrupting AdTech & MarTech for Local Brand Success

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Mehmet: Hello, and welcome back to a new episode of the CTO show with Mehmet. Today, I'm very pleased joining me from the West coast in the United States, Alex Nocifera from Loma. Alex, thank you very much for being with me on the show here today. The way [00:01:00] I love to do it, as I was telling you before we started the recording, I like my guests to introduce themselves.

Mehmet: Because no one can introduce himself or herself better than themselves. So I'll keep the floor to you. Just let us tell us more about your background, your journey, and what you're currently up to. And then the floor is yours. Cool.

Alex: Well, Mehmet, for inviting me onto your show. And, um, Um, you know, a little bit about me.

Alex: Um, name is Alex Nocifera. I am a father of three, uh, crazy boys. Um, a husband of, uh, just one. And, um, I, uh, reside in Los Angeles, California. And, um, I am for professional. Purposes and entrepreneur. I've, um, I've launched, this is, I'm on to my fourth venture capital backed, uh, [00:02:00] financed company. Um, and, uh, sort of in the spirit of segwaying, they're all rooted with technology that helps, you know, sort of, um, defend and accelerate and drive value to a constituent, um, you know, from a product standpoint.

Alex: Uh, perspective. Um, and that's it. So I'm, you know, always it's a tech enabled, um, uh, mission always with my four companies that I've built and sold in some cases and still, uh, two of them are running. So, um, that's a little bit about myself.

Mehmet: Great. Great. And thank you again, Alex, for being here with me today.

Mehmet: Uh, let's start with Loma, right? So, and every time I've speak, I've spoken to an entrepreneur like yourself or a founder, I asked the traditional question, you know, what was the motive of starting Loma and what challenges, problems you've [00:03:00] seen in the marketplace that you said, okay, we need to start this to solve these problems.

Mehmet: So we'd love to hear a little bit the background of Loma, Alex. Okay.

Alex: Sure. Um, Mamet, I, um, have spent, uh, a deep amount of time with one particular constituent. So this constituent is, um, these are brands who operate storefronts. Pretty simple, right? Like, you know, in the United States, there's about three and a half million storefronts and maybe some refer to that as offline commerce, you know, and obviously the big trend over the last 10 plus years has been online commerce, but, um, you know, still three quarters of the, um, GDP, you know, economic movement in the U S still offline commerce, you know, it's almost 75%.

Alex: And, um, I have spent close to 20 [00:04:00] years helping these type brands, um, drive consumers like you and I into these storefronts to buy products. Um, you know, everything from food to household. Um, you know, products to, um, services like going and getting a workout at a fitness center, um, but everything. Um, and so how I discovered what Loma is building was in my last company, which is called field day, field day dot app.

Alex: Is a big 10 99 marketplace of people who do marketing tasks. So everything from like handing out a flyer to handing out, you know, materials, um, to making calls on the behalf of these type brands, because again, it's always about trying to influence consumption in a geographic area. And so while I was, [00:05:00] uh, operating field day, I really, really, Um, became intimately aware of, uh, a lack of systems to do their job.

Alex: And this, this particular constituent with constituent within the brand is a marketer. And I just really detected that the marketer lacked systems and efficiencies on how they manage their sort of chaotic, decentralized, fragmented world. Um, and when I say that, I mean, you know, they had locations in New York and in LA and the Bay area, you know, Chicago, and in some cases globally, um, but they never had one central system to manage.

Alex: And in the sales world, that's a CRM, you know, it's a customer resources management, but in their world, they didn't have that. And that was sort of the root. uh, identify or discovery that we wanted to go build software for this constituent to do that right there. And that's how Loma was born.

Mehmet: Yeah. I like to hear these stories, [00:06:00] Alex, you know, like, um, especially solving real challenges, real problems, and this time for marketers, um, and this space have seen a lot of, I would say, evolution and a lot of, uh, you know, newcomers.

Mehmet: perspective to it. So how have you seen, you know, this, you know, from, you know, affecting, I mean, this, this evolution from the trends that started to appear, like, of course, AI automation, um, and everyone who wanted also to kind of adapt a digital transformation if, if the world is correct here. So, um, How have you seen these trends and you know, how it's affecting, um, that segment of the market, especially because, you know, they, they work on their brands and they need to get the best out of the technology.

Mehmet: So what you can share with us about that. [00:07:00]

Alex: Sure. So let's just think about this. Let's think about I'm the marketer, you're the consumer, and let's just think about 20 years ago. So Alex, the marketer is trying to influence Mehmet, the consumer. And you're in my area. You're in this geographic area, say you're in the Bay area.

Alex: And, um, 20 years ago, the amount of information as a consumer, you as the consumer, the amount of information you were ingesting, Was literally a fraction of what it is today. So like the numbers are today. Mehmet as a consumer is ingesting over 10, 000 impressions a day. Why? Mostly because this guy in my pocket, this mobile phone is just this big fire hose of information.

Alex: Okay. So as a marketer. I've got a really crazy hard job today to try to influence Mehmet because he's in so many places. He's not just the, you know, 20 years ago, I thought about you and your car. [00:08:00] So I thought I would buy radio and I would buy out of home media. And then I thought about you in the evening while you're in front of a TV set.

Alex: So I bought some TV spots and then maybe you, you know, you were a newspaper reader. I mean, these are, by the way, for the youth, right? Watching this or listening to this, they're like, who watches TV, who drives, I take an uber and who, uh, um, reads the newspaper. What is a newspaper by the way, right? So, but 20 years ago, those were the main buckets of where marketers spent money to try to influence Mamet, you know, that has dramatically changed, like not just even dramatically, it's completely, you know, been turned on its head.

Alex: And if you think about it, if you zoom out, you know, what, what kind of industries have kind of been built up and it's almost to your point in your question of like, There's so many different things out there. Well, there was this market called advertising technology ad tech, and that's been built up and there's what, in my opinion, as an entrepreneur, what, what that proved is there was [00:09:00] very low bar of entry.

Alex: So there was just like a flood of. Like tens of thousands of companies that built advertising technology. And then once you add all that ad tech on top of that became a layer of called MarTech marketing technology. And there's a ton of companies in that. When I think about just from a venture capital perspective.

Alex: You know, money rushed into ad tech money rushed into MarTech. And then once they realized there was very little to no defensibility on these companies, there was there, you know, there were some historical wins. You could argue, um, Google was part of that, you know, I mean, you know, the bulk of Google's revenue is through search engine marketing and search engine optimization.

Alex: And, you know, they bought a company called AdMob, which was ad tech. With mobile and all these industries got built, but but what wasn't what what we're focused on is building a layer that helps this constituent. And [00:10:00] again, this constituent is undercover, a whale, meaning they're, they're running big, big budgets.

Alex: And these are billion, multi billion dollar companies that we're, that we're servicing. And they just didn't have a layer that helped them manage ad tech, and helped them manage, The marketing tech chaos within the configuration of their system. So there's a real form factoring here that Loma, um, um, sort of optimizes around and the form factor is a storefront.

Alex: Oh, and then there's 500 storefronts. So when you think about this, like modular multi node configuration, that form factor is sort of becomes a layer in itself. And that layer in itself is really, you know, like, you know, we often call it, you know, you know, the system of record or sort of it's become an operating system for brands with lots of storefronts and that helps manage these large oceans of [00:11:00] advertising technology and marketing technology.

Alex: And I think that in itself creates a very unique, defendable. Mote, if you will, as, as a company that's building technology and building software for this, like, again, this constituent that operates multiple nodes. In the offline commerce world. Does that, does that answer your question?

Mehmet: Absolutely. And this is, you know, I have a follow up question, which is just popped out of my mind because you, you mentioned about, you know, how things were done and you walked us through, you know, the revolution of.

Mehmet: You know, and no one can deny like what Google have done with, with the, uh, the ad system in the search engine and how they integrated it in the mobile by buying AdMob and, you know, putting it even in our email systems and so on. And you talk Alex about something called last mile, you know, delivery kind of, of, of the advertisement to the, to the, to the end user, which is [00:12:00] me, you, everyone.

Mehmet: Right now, Do you think the challenge is to know where I am now from? I mean, not location as maybe geographical location as where I am, you know, spending the most or the majority of my time. Am I spending it, for example, um, Watching Netflix. Am I like doing it more as watching YouTube videos? Am I doing it outside?

Mehmet: Maybe i'm not using it the digital device currently, but still From a marketer perspective and you know This is something I believe in especially when we talk about brands and branding That you need to to put this in the mind of of the consumer And by the way, this applies to B2B and I know maybe Alex, you focus more on, on the, maybe the B2C space, but even in the B2B space, I'm big believer that the more we see the brand, the more like, you know, we will remember it later.

Mehmet: And then we would start to say, Hey, you know, [00:13:00] like I've seen this before. I've seen it in the neighborhood. So walk me through this. Last mile delivery if i'm maybe i'm i'm putting it in uh You call it last mile advertising. I know this but I mean i'm It's like very similar to the concept of last mile delivery.

Mehmet: Like I want to make sure that my brand is seen Wherever I am, whether geographically or whether digitally. So tell me more about this concept, last mile advertising.

Alex: Yeah, Mehmet, and also just consider it's a really complex formula. Like there's multivariables here. Like, you know, yes, Mehmet is geographically somewhere.

Alex: Right. And then you have to account for, to your point, what, what is the device that's feeding him the information? It's, it's mostly mobile. I would say, you know, mobile is, is anchoring time spent on a screen. But what's happened with that, and I swear, this is a whole nother complete Other discussion topic that has so much depth to it [00:14:00] is just this notion of diminishing return.

Alex: So if I bought ads on mobile, like again, pick your channel here, YouTube, Tik TOK, et cetera. I mean, the cost to get real estate right now. Is absorbed absorbent absorbent late high because you know, obviously that's what the demand is. So add dollars have like title waved over there. And so the cost and really what that presents and that just sort of blows up a model because you start to put in your investment hat and if everyone buys a certain equity, what happens?

Alex: Price goes way up. And then all of a sudden you just start to wonder because it drives the market cap way up. Well, am I going to get good returns? And that's what this is all about. This is about getting returns. If I put a dollar in the meter, I need to get ideally five, six, seven times return based on my margin profile, based on my ticket average and value, lifetime value of customers and all that stuff.

Alex: So going back to your question, it's in this formula of last mile influence, right, is I know Mamet's in a geographic area. [00:15:00] That's pretty straightforward at this point, right there. Everything's geo tagged at this point. Right. And people have sort of like. Become comfortable with just letting the world know where they are.

Alex: And, um, so geo fencing is still sort of a massive weighted variable in this formula, but then I just started getting to other elements. Like, um, I look at then go outside that mobile device. It's not that I'm saying mobile isn't. A key variable in the formula of trying to influence Mamet and consumption.

Alex: It's just not the only variable is my point. And again, when we look at last mile influence, we look at three core sort of disciplines. One is frequency. So kind of you wove into your question, what are the number of times I needed pepper my met with to get him to kind of go? Oh, that brand's in my area. I think the number seven.

Alex: So I need to get frequency. And by the way, for me to get you to see something seven times [00:16:00] might mean I need to hit you 70 times because maybe it's a 10 percent sort of influence ratio. So, cool. The second point, so first point is frequency. Second point is diversification. So now to this point of like, I need to hit you on YouTube, I need to hit you on TikTok, but let's also think about where Memet is.

Alex: Maybe Memet goes into an office and we've now done some B2B advertising that influences the company to maybe buy, to let them know that there is a restaurant. Near the office that can serve them a healthy lunch. So we've actually built a channel that helps brands advertise the businesses in the attempt to influence their employees.

Alex: So diversification, I'm hitting them on digital. I'm hitting them on offline. I mean, I I'm hitting them on their mailbox as the, as they go in and get all their bills. And all their, the, you know, the crap that's in the mailbox, we're hitting them in the mailbox, but the point is diversification. We're not betting on one horse.

Alex: We're betting on 20 horses. [00:17:00] Okay. So frequency diversification, and then the third variable in this discipline is context. So there's a big weather system and it's pouring rain. Okay. There is, um, a big event. There's a big holiday. There is, um, something particular to this local market. Um, we lay, we, we really, um, empower and enable brands to leverage context in that sort of one modality of this discipline.

Alex: So I can speak to Mehmet where he is because you know what, context is king. If, if someone comes up to me and it's about trust, if someone comes up to me and has that local vernacular, they know about my community, maybe they know about, you know, certain areas of my neighborhood. When I know that, that we're speaking that language, that is this massive opportunity to gain trust.

Alex: And if the brand can gain trust, what it does is it, it [00:18:00] helps, um, effectively, uh, engage with one of those seven touch points that they finally tip and go, I'll try this. Cause that's what this is mostly about. The advertising that we focused on is mostly, mostly about new acquisition. We're not, you know, there are plenty of channels out there that help.

Alex: Someone drive frequency, which is like, you know, loyalty channels. If you're a loyal card member of a certain brand, you know, that's their opportunity to give you messaging that trying to get you to come in more often, what the, the areas that Loma focuses on is trying to influence Mehmet to come try that product once.

Alex: And then the brand has built a product and a service that says, look, I can get Mehmet to come in once he's going to fall in love with rather our products or services, you know, the value that we've. Developed as a consumer product. So, um, I do want to stress, we do a ton of B2B. We do a ton of B2C. Um, they all have the same [00:19:00] principles at this point, frequency, diversification and context.

Alex: Um, and that, that's the discipline that we feel is required again, based on that 20 year trajectory of ad tech chaos, um, MarTech chaos. Now you need to build a layer that's form fit for marketers. That operate lots of storefronts and it really to me. I mean, I don't know if it's coming off is so clear, but it's clear that there's so much noise down here that you needed to put something form fit for this type configuration to be able to kind of really clear out the noise and make sense of how to reach consumption and local last mile influence.

Alex: In an area where I sell product or I have a service, et cetera.

Mehmet: And I think the consumers, they are aware of this noise and they don't like it. Right. I like, so I, I hear it from at least the people I know in, in, in my, in my circle, you know, they, they feel [00:20:00] like they are bombarded with, with nonsense. Um, Campaigns, but you know, they say sometimes we see something which is really tailored to us, something that really it's letting us feel, you know, like it's you know, it's for Mehmet or it's for Alex or it's for, I don't know, right?

Mehmet: So, so this customization, this is, you know, the way you can drive it to become more personal. It's, it's, it's key. And I think here where, you know, I want to understand a little bit from the nitty gritty, if I might say from the technology perspective, like how much, you know, like utilizing data and, and having these kinds of data driven, Um, guidelines or, or, you know, maybe, um, analysis that you can provide, you know, to, to these brands so they can, you know, understand where, what, to who they should do things.

Alex: So it's, again, in [00:21:00] that, in the spirit of this very complicated formula, and I, and I think the complication is much to do about opportunity, right? In the spirit of this opportunistic formula. Um, data is everything, right? So, you know, if I spend a dollar and I want to get five back or six back, I need to know in real time what, um, what, what the discipline is yielding in returns, right?

Alex: So it's, you know, I think, When we think about this like 20 year evolution and the opportunity to sort of like disrupted, I think the mistake, a lot of channels, not mistake, but the, the, the non return, the non returning value proposition that I've heard for years from marketers. It's like, I don't care about shares.

Alex: I don't care about clicks. I don't care about telling me your click through ratio was 2%. What I care about is did it, did it, did it give me 5 back on my [00:22:00] dollar spent? And so when we think about the first data driven opportunity, it's, it's clear cut attribution, right? So understanding again, remember our constituent has a physical store.

Alex: So in Loma's software, we ingest the data of that store. Okay. And the two sort of, uh, variables that make up that sort of attribution opportunity are simply transactional volume and then the average transaction value. So I can tell you the number of receipts that were printed and the average cost of those or the average spend on those receipts.

Alex: Okay. So that makes up, that makes up sales. Okay. So tickets and ticket averages. And so when in Loma software, they go out and start to spend money across this diversified spectrum of channels, they're able to quickly see in the first day, first week, and obviously you can't expect. Um, you know, the world is going to get solved in a day or in a week, but you can [00:23:00] start to see a behavioral change and it's not about clicks and it's not about shares and it's solely about did more people start to come in and buy product.

Alex: And that's the truth. In my opinion, that's what we're always talking about with our customers. Let's get to the truth quickly, because by the way, if it's working, let's push a little harder on the gas pedal if it's if it's not working and you're not seeing an uptick and the way you do that. Measurement and analysis is, um, PPNOC pre post net of, of this controlled study.

Alex: So like you could look at other units, other storefronts that are very similar in profile, or you could look at different time periods and you can then start to say, all right, well, last week we did X this week, we did Y. It's up five points. Okay, good. But maybe there's an excuse. Maybe the weather was weird.

Alex: All right. Now, how about last month and this month or better yet this exact week with a storefront that's very similar, that wasn't spending any marketing dollars. So you can do this attributable [00:24:00] analysis in real time. And that's to me, the game changer, believe it or not, there are no systems out there that we're doing this.

Alex: And I think I know why, because The uniqueness of what Loma is disrupting here is when I said, um, you know, we've sort of aggregated the ad tech options is that's what we've done. And that hasn't yet been done in this multi, uh, location. Commerce world and what what what we've done Loma's done is we've aggregated all the different options to reach consumers And by building this marketplace of options It we come in as agnostic.

Alex: We're neutral. We're switzerland here. We don't we're not here to Tell you any one channel is better than the other. Um, by doing that, it gave us a lot of leverage to go to the brand and say, Hey, we need that sales data because I can tell you as, as someone who has operated as one of those marketing vendors, [00:25:00] when we went to the brand and said, Hey, we need your sales data to tell you the truth.

Alex: They're like, well, you're just one little vendor. So now Loma has come in as this agnostic aggregator. And it's enabled us to yield and plug into their point of sale data to get the truth. And that truth, again, will start to give you a story on return on ad spend clarity quickly. So that's that first one.

Alex: And then, by the way, Mehmet, you bring up such an, a big opportunistic point. Then, Once you can get into the context and when I meant context, it's really what you said better, which was personalization on the local front. So we figured out in the first 30 days that we yielded a 5 percent uptick based on the diversification of channels that we spent on.

Alex: But then what we did to further the experiment is we added a layer of personalization in the advertising that we we said, Hey, we're trying to go after a certain demographic. Say we're going [00:26:00] after, you know, tech, uh, professionals, and we started to layer in tech vernacular and context within the advertising message.

Alex: Okay. Now I can measure once we added that we were seeing an 10 percent uptick in traffic and maybe transactional, uh, Averages on spend. And so you're now able to really fine tune the dials and really pull the levers or not pull the levers based on understanding the efficacy of your investments, uh, in a shorter period of time.

Alex: And I think that like, when I look back at the industry, And this constituent not having these systems, I just think to myself, there's been a lot of waste in spend because they just didn't have the clarity of how their investments were yielding returns. And I, and I will say what makes the most sense now, because that's, that's this, this constituent I've always.

Alex: Called this like battered, abused constituent, this marketer inside these type of [00:27:00] organizations. And guess what? The data is, it proves itself. They are the first, they're the highest churning role inside of these organizations. And guess what? Why? I mean, because they haven't had the systems to measure the efficacy of their ad spend and their, their marketing dollars that have gone to work and.

Alex: That's almost like our core mission is to help this constituent get better at proving how good They were at their job on driving ad dollars and yielding returns Um, but the last point to summarize the data and the technology Like plumbing of this formula is really the opportunity to do this at scale with quicker returns quicker yielding, uh measurement Analysis and clarity.

Alex: And that's, you know, it's all rooted in, because I'm not even talking about the automation, uh, AI element where, you know, you're eventually going to be able to help predict. And recycle [00:28:00] good decisions into the system faster. And it's less to do about removing the marketer out of the equation, but it probably helped the brand need less resources due to the technology and the automation opportunity versus the way they've been doing it today with lack of systems, lack of man, it's all manual.

Alex: And it's like, to me, throwing darts in the dark of like, how, okay, let's, let's throw a hundred thousand on this channel. But they really don't know what that hundred thousand got in return. Um, and that's the, to me, the holy grail of marketing, this, this sort of predictability of yielding returns.

Mehmet: Absolutely. And, you know, I would say also, Alex, like, I, I think, you know, what, what you're talking about, it proves itself because I know like you work with, um, large scale brands and, you know, some of them, they would have, you know, Tens of thousands of, uh, uh, of stores as well, because you mentioned the physical stores aspect, which is, I believe also, it's, it's very [00:29:00] important.

Mehmet: So my question is, you know, and this is like little bit more on running the business more than the technology itself, um, dealing with large enterprises. And I know like you deal with Starbucks, Walmart, and these big names in the U S and actually Starbucks and Walmart are known all over the world. So, um, yeah.

Mehmet: Have there been any like operational challenges, you know, to get the needs of these big names, you know, and, and, you know, get them, you know, signed up with you. I'm, I'm a little bit like curious about, you know, this aspect of, of, you know, reaching out to such big, uh, uh, giants in, in, in, in, in the market.

Alex: Yeah. I mean, I've worked with both Walmart and Starbucks in, in, um, past lives. Um, and I can tell you, you know, they are obviously the, you know, sort of the [00:30:00] respected 800 pound, you know, gorilla in there and their segment. And, um, you know, you, you know, I remember I had this, wonderful advisor, um, John Richards, who spent, you know, um, meaningful amounts of time in the leadership group at Starbucks during their real steep growth period.

Alex: And John was just, just. Just truly amazing mentor and advisor on, you know, always advising, just be careful what you wish for because they are, you know, they're going to big and they're going to sort of, uh, pull you into some certain needs that you might not be ready for and, and it might actually disrupt.

Alex: What you're building in a larger, broader scale, meaning you're not just building a company for Starbucks, or you're not going to just build a company for one big, I know you want them. And that there's sort of like a sex appeal to having that big of a name in your customer portfolio. Um, [00:31:00] but you know, I, I think as an entrepreneur, you have to evaluate if you're ready to dance.

Alex: With the big, the big guys like that. And, um, you know, in the case with Starbucks, it was, um, you know, my first company, um, Ripple TV, and we had built a TV network for retail that helped them talk to customers inside of the store. And help drive a new revenue channel through opening it up to local advertising and regional advertising.

Alex: And, um, we did it for every Seattle's best coffee, which was a Starbucks owned. Um, and, uh, it was a, we had a great experience, but, but I think we did employ some disciplines that made sure to guardrail them from, you know, rag dolling us to doing whatever they wanted. I mean, we, we, we had to at times say, no, that's not, that's not It's not a feature yet released and it's on the roadmap.

Alex: It's coming. Um, but it's, it's discipline. And I think it's, um, it's, it's not a [00:32:00] perfect science. It's, it's a little bit of you as an entrepreneur understanding operationally, your capabilities and your, you know, the flex of where you could break and, um, and, and having the discipline to tell a big customer that, that, that you're not ready to support that.

Alex: That request or feature that they're asking for. Um, so it's totally, um, dependent on where the company, you know, exists today. I mean, I will say with Loma in present state, you know, we're working with some global brands. And, um, and again, it's because we've, we're striking a nerve. That, that helps them engage.

Alex: And again, back to the point you made is talk to the mimets of the world personally. In a local market with some scale, measurability and discipline, um, on their own. And that, that, you know, I think we're, we're, we're still a baby company, you know, we've got about [00:33:00] 20 national brands right now, which was really proud of because.

Alex: We are still a baby in the infancy stage, but we've captured the attention of some of these larger systems, because I actually do believe what Loma is doing and disrupting in the market is actually the value proposition sort of exponentially balloons at scale. So like the bigger you get, the harder this becomes and the less it gets done.

Alex: And so brands, as they get bigger, tend to rely on some larger media sources that are less personalized because it's easier to, you know, put a million bucks into a meter. And spread this out with this, like, you know, broad, um, generic message. Um, and, and what we're trying to do is almost like flip that on its head and say, look, you could still spend a million dollars and have the broad reach and reach volume, you know, millions and millions of consumers, but still do it in a modular way.

Alex: Where it remains personalized at the local level to try to again speak that local language and yield that sort of personalized [00:34:00] engagement Which is what exactly what you said as a consumer that will crack through the noise quicker than all the generic messages that are coming In to your inbox or your to your into your firehose of media, you know, that's that's hitting momentum,

Mehmet: right?

Mehmet: I want to shift a little bit gifts, uh here Alex and talk more about You know the entrepreneurial journey Itself, right? So this is your fourth, uh, you know, V. C. Backed And, you know, the moment when, when we, we get introduced, you know, it's, it's like really rare to see this, you know, successful, you know, serial entrepreneur, like yourself, uh, Alex, the initial question that came to my mind, why?

Mehmet: Every time it was VC backed or am I missing something like, uh, you know, but because nowadays we've seen like the first time founders [00:35:00] usually, they prefer to go bootstrap and then, you know, um, maybe on their second company, third company, they would go and raise money from VCs. So for you, it was like always VCs, right?

Alex: No, not necessarily. So, um, it's a good question. And I, I think, you know, when I think back 20 years ago on my first company, Um, I needed capital because I was building a company that was hardware included. You know, so what we were doing is we're putting up big flat screens inside of retail that we had to build our own little, there wasn't like a real form fit device that could slide behind the TV and, and power what we wanted to do at the local level.

Alex: I mean, this was 2004 and five and believe it or not, you know, like this, you know, the smartphone wasn't. And, and they didn't have this, these small devices with cellular and mobile capabilities and all this stuff. So like we had to build it, we built our own and that just [00:36:00] took money. And, and, uh, the first money that I took in on my first company was not VC.

Alex: So the first money was just, uh, What they used to call back then was a friends and family

Mehmet: And

Alex: so I went out to friends and family and said look i've started this company. We're building a tv network and um, Thankfully I was able to go raise a million dollars in friends and family And then we really started to gain traction and guess what friends and family can't subsidize you Any meaningful scale and traction.

Alex: So we were forced into the venture markets and I, I, you know, being here in LA I can tell you in 2005 Venture capital was not what it is today here in los angeles. So I what it did is it forced me up into the bay area um, I I could talk I feel like most of the gray hair you're seeing here was from those days because I would go to Vc in los angeles Back then and talk about like the growth and scale opportunity and they, they just, they weren't [00:37:00] true early stage investors, nothing against them.

Alex: They were just, they were wanting to, you know, break down our financial models and time. I'm just like, look, there's still not enough revenue here. Clay here to work with it's, it's really, we're getting the distribution. And then once you get the, the, the chicken, the eggs will come and, um, you know, Literally, I mean, I can tell you six solid months here in L.

Alex: A. trying to raise money with VCs. One week up in the Bay Area with what they saw our story is, you know, we, we closed millions in our, what we, what we then called a series a, which today would be called a seed round. Um, honestly, my met, I, I probably more so philosophically as an entrepreneur, like the bootstrap route.

Alex: Um, I think you build better companies when you have to do it on your own dime. And, and, but what, what, um, I'll try to do the quickest version of what, why it became more of a VC backed entrepreneur is, [00:38:00] you know, I, this is an early lesson from my father, which was OPM, right? Other people's money. And when you're, when, you know, the whole premise of a VC is they're investing in disruptive, Entrepreneurs, right?

Alex: It's a whole reason they're, you know, they're, they're, they're investors. That's not, they're, they're investing in nothing else. So why not get subsidized by them? And one might ask, well, you lose control of your company. Not if you design it, right. If you design it right. And, um, don't raise too much too quickly.

Alex: And you're sensible about the price of how you raise money. I mean, I, I, I see it happening still today. We're just, you know, entrepreneurs. Uh, for whatever reason, want to raise at the highest valuations and show this like real illiquid, uh, sort of growth trajectory. But the reality is the game we all play is about liquidity and about making investors money and making employees money.

Alex: And, um, You [00:39:00] know, if you're, if the, the, the, the stories that we read about are usually the 1 percent of the 1 percent and they're on this like rocket ship trajectory and they're the, you know, unicorn, they've become this unicorn. But again, for you, if you're valued at a billion, the liquidity markets go real thin, real quick.

Alex: I mean, you're rather going to be a public company or you're going to have to sell for tens of billions to get the returns on for the investors who came in and that just shrinks your. Your probabilities of, of getting those, those people, these constituents, the investors and the employees, you know, real meaning on the stock that they have in the company and the equity that they have in a company.

Alex: So it's, um, I, I would sit here and say to an entrepreneur, if you can build without bringing in that outside money. Um, I think you're going to start your company better because you're going to be more disciplined in how you [00:40:00] spend money, how you hire people. I mean, it's going to cost you more if it's your pain, not their pain at first.

Alex: But then once you get to that intersection of, all right, God, we've got signal, we've got some product market goodness going on here. Now I want to gas it up a little bit and grow. I just think that's the most. Optimal rule intersect to go buy, like go raise other people's money, which is to me, the best, you know, tech entrepreneur money is venture capital out there.

Alex: And unless you've grown to enough point where you can unlock private equity and that's less dilutive. Um, but it, it, either way, I I'm not really one camp or the other. The only reason I have, um, and it's not fully true. I, my second company. So my first company did raise a lot of venture capital because we needed it.

Alex: We, we were, we were at. A hardware driven. We had both, uh, venture capital and debt, but the second company I really didn't, and I, I sold that company, um, in [00:41:00] 2012, uh, to a public company at the time, Velasquez, which is now Veritas. And, um, I really never raised venture capital on that. I did that one all on.

Alex: Sort of that bootstrap model the company's three Company number three is still active field day. We did we have raised over five million in venture capital and then loma has raised um a little over a million in venture capital and uh, I I You know, I am not here to go raise a bunch. I want to raise the right amount And, and give a good returns to the investors who do come in and give good returns to the, to the employees who have stock that put in their life to build this company and, and grow the company like we're doing.

Mehmet: Yeah, uh, because you know, you know, I'm I'm into this nowadays Alex a lot So so just you know, I like the way you described it on Advising the founders when to go I just had an episode released [00:42:00] Couple of weeks back, uh, from, uh, the guest was Gagan Singh, who is, uh, the CEO of Wows Global. They advise, um, founders on, in, in Southeast Asia on raising.

Mehmet: He mentioned two nice things, which like really, you know, when you are talking, it's like in sync, he was talking about two things that usually founders, they need to think about. The track record and the traction, right? That these two Ts and for first time founders, I know it's kind of a challenge and this is, you know, the route you took Alex, which is like friends and family.

Mehmet: We still call it this way till today or angel investment, whatever you want to call it is the right route because once you have the traction, so this will help you, even if you are not like a, you are a first time founder. So, but they, the people will start say, okay, they've built something. They have kind of product market fit.

Mehmet: I would consider to, to invest in them. Right. And now on the second time, so they have now the track record. So the traction, [00:43:00] of course, still important, but they have the track record, which will help them. So what you just mentioned is exactly the same, you know, I would say path of what I usually tell people to do, because, um, don't get me wrong.

Mehmet: There are some people that they are, you know, willing to take the risk even on a pre seed round and put money. I mean, there are VCs who invest in pre seed companies. They still have, you know, just as an idea, they will build it. And, but I tell people usually if you have, if you are idea stage, go to an accelerator, go to a incubator, you know, and try to do things there.

Mehmet: And, you know, maybe you get some traction down the road and then you can raise VC money because. Don't let us not forget that VCs is they are managing other people's money as well. So they need to Um, you know to understand and see you are capable of you know, growing this business to the next level But thank you very much alex for sharing this as we are almost coming to an end alex any [00:44:00] final Uh, you know thoughts or final You know, things you want to share with us and where people can get to, uh, get in touch with you and know more about Loma.

Alex: No, it's been an enjoyable conversation. You know, lomaplatform. com is our URL. Um, you know, we're, we're always. I'm definitely always, um, curious to talk to investors who might have liked something they've heard, even if they're, um, you know, we're, we're not today actively raising, but, you know, I know we will be at some point, um, so investors can reach out.

Alex: It's Alex at Loma platform. com. And, uh, if, if, uh, we have a brand who, uh, caught wind of our conversation, who's operate some storefronts, um, We would love to talk to them off, obviously, of course. And then the other constituent that we do [00:45:00] serve is a marketing company. That's trying to sell products to this constituent because we have a marketplace and they could put their storefront, their offering and their value, their, their marketing technology inside our storefront.

Alex: And it gets bought by these national, um, these, this us based, um, Uh, retailers. Uh, so we, you know, we, we, you know, I always think about three, the three constituents are, we've got the investor, we've got the employee. And then we've got the customer. Um, so, and really in the same spirit with the, the employee, if there's any technology enthusiasts out there that, that would, that like, that have liked something they've heard, reach out.

Alex: I would love to talk to you, uh, you know, about a possible role inside of Loma. You know, we're always looking for people who obviously. You know, grok the the mission we're on, you know, they believe that there's something broken and they want to help fix it Or, you know, they believe in the [00:46:00] local personalization the last mile And they want to take a role in trying to disrupt it and solve it And you know, obviously we'd love to have those people on our mission with us um um, so going forward but so thank you mamet for inviting me on and I I Enjoyed meeting you and enjoyed the conversation

Mehmet: It was my absolute pleasure.

Mehmet: I, I believe very soon you would go international as well. I know like today you serve the U S market, but I believe very soon you will go outside, right?

Alex: Absolutely. Yeah. I mean, I think, you know, building them, I mean, you know, when you think about how we built a marketplace in the U S there's a lot of, um, sort of standardized, normalized Elements here that enable us to do that.

Alex: There's some like Moore's law elements here because, um, so if we were to go into, uh, an emerging market, another market, we'd need to make sure that they had a breadth of, of marketing technology vendors [00:47:00] in there for us to sort of aggregate, and I think that's pretty much the case globally at this point, I mean, not some markets better than the others, but, um, the answer is yes, I don't know if it'll be in 2024, but definitely 2025.

Mehmet: Great. So again, Alex, thank you very much for your time with me today. I know as a founder, how busy things can get, and you took, you know, this time to share your insights, your experience, and, uh, all, you know, the holistic, I would say approach about the next, uh, wave of this, uh, brand marketing and the platform that you have built, uh, with Loma to share it with.

Mehmet: You know, enthusiast, as you said, and marketeer and you know, everyone close to your industry. So thank you very much for sharing this information with us today. For the audience, the website, the links that Alex mentioned, they are available in the show notes. If you are listening on your favorite podcasting app, if you are watching us on YouTube, [00:48:00] this will be in the description.

Mehmet: And this is usually how I land my episodes. If you just discovered this podcast by luck, thank you for passing by. I hope you enjoyed if you did so please give us a thumb up subscribe and share it with your friends and colleagues and if you are one of the people who keep coming back again and again thank you for doing so keep sending me your suggestions your recommendations you don't like something you like something I would love to hear all the feedback from you and as I say always thank you very much for tuning in we will meet again very soon.

Mehmet: Thank you. Bye bye.