It’s like the plot of a Hollywood movie:
Three best friends, with no prior business experience, decide to band together and form a startup business. They hope to create an innovative platform that will shake up the floral industry and help both customers and florists alike.
But, of course, they need funding—and wouldn’t you know it, one of the founders is a world-class poker player.
They enter him into a competition and he wins $30,000 dollars—enough to begin funding their business. The startup takes off, raising venture capital funds faster than you can say “storybook ending.”
While this might sound like the plot of the latest Oscar-nominated picture, it isn’t—in fact, it’s the founding story of floral startup BloomNation, founded by Farbod Shoraka, David Daneshgar, and Gregg Weisstein. Designed as an online “community marketplace,” BloomNation allows customers and florists to come together, giving florists a platform to sell their works of art, and consumers a vehicle to purchase beautiful flowers from local vendors, conveniently and quickly.
Though their story may seem incredible, their success is very real; BloomNation, which recently closed its Series A funding, has raised 7.2 million in venture capital—and they continue to grow, with plans for a mobile app and potential overseas expansion.
With a starting story this incredible, I was sure that the founders would have excellent advice for aspiring entrepreneurs, and I was not disappointed. I had the pleasure of speaking with founder David Daneshgar, who shared his advice for entrepreneurs, and the story of BloomNation’s unorthodox beginnings.
Creating a better experience for both florists and consumers
Like many other new businesses, BloomNation started by addressing a need in the market. Founders David, Farbod, and Gregg felt that there was a disconnect between florists and consumers and that rather than helping to bridge this gap, large floral brokerage services were only serving to make the problem worse. Furthermore, the unique artistry that local florists can bring to the table was being ignored, leaving the florists with little credit for their work.
“BloomNation was created so that all the top florists in the country can come together [and] upload their work of art,” says David, who adds that the large floral companies that allow customers to order online or over the phone are as far removed as possible from your local florist. Not only are all the photos generic stock images, but no personal connection can be forged with the florist whose work a customer is buying.
“It’s almost like the McDonalds for flowers,” says David. “But flowers are not like french fries. They’re not mass-produced. There’s art involved.”
So, from the consumer end, the founders believed they could do better. The floral industry was “ripe for disruption,” says David. “It wasn’t a very good representation of ordering flowers anywhere in the country. You have no idea what the florist can make because you can’t see their work of art.”
Furthermore, the florists that David, Gregg, and Farbod spoke to expressed a feeling of ill-usage. Farbod’s aunt, who was a florist, told them that she “was just frustrated […] all these big businesses were just making money off her.”
[pullquote]“We look at BloomNation, very simply, as the best place to find the best florists at the best prices.” – David Daneshgar[/pullquote]
“We look at BloomNation, very simply, as the best place to find the best florists at the best prices,” says David.
Not only does this involve making sure that customers get beautiful, high-quality flowers, but it means working with florists in a way that showcases their art, and makes them feel valued and respected.
“If you look in Los Angeles, you look in New York, you’re looking at different items that are local to those florists with their name and pictures,” says David. “That transparency that was missing when I was buying, we are solving that.”
From a budding idea to a blooming business
Like many other new entrepreneurs, neither David, Gregg, or Farbod had experience in entrepreneurship. Though David attended the University of Chicago Booth School of Business and had played professional poker, none of them had ever started a business before.
In many ways, David’s experience playing poker was “very entrepreneurial”; he had begun teaching poker classes, and was interested in starting a business, but unsure where to begin. “I’d been moving away from poker into entrepreneurship, but none of us had ever been in a funded company before,” says David.
While David had vaguely considered the idea of starting his own business, it was the idea for BloomNation that drove the trio to actually begin. “This was our first stab at a legitimate startup,” says David. “In business school when we started the company, the first thing I thought about was, ‘This is not going to work, you’re a poker guy, not a flower guy.’” But his passion for solving the problem helped him stay focused and undertake the challenge.
However, once the idea took root in the founders, they encountered their first hurdle: not only were they faced with the prospect of generating one customer base, they would be forced to acquire two—both the florists to buy into the platform, and the customers to buy from the florists. To determine if their business was viable, the founders went into 100 floral shops and shared their vision with florists, asking them questions, and building their trust. “We walked into flower shops and said, ‘Here’s what we’re solving, would you buy?’” says David.
The undertaking from the start was enormous. “If you know how much is going to go into it, you may not be crazy enough to do it,” says David, speaking of the challenges of starting BloomNation.
An unlikely combination: Poker winnings and venture capital
Bootlegging and acquiring venture capital funds seem like polar opposites on the funding spectrum, but this unlikely combination propelled BloomNation to success. Still, David admits their methods were highly unorthodox. “We didn’t think of it […] for PR reasons,” says David, who adds that while they did have some initial funds, using the resource seemed like a no-brainer to the founders.
Entering David into a poker tournament seemed like a natural course of action for the fledgling startup. “From 2005 to 2008, I was one of the top five poker players in the world, so if you have an asset like that, and there happens to be a poker tournament half an hour away, and you happen to need the money, it’s like all the stars kind of align, right?” says David. The three decided to pool their finances and take a risk.
Though the trio was hopeful that this move would help propel them to success, BloomNation was still very much in its early stages. “[We] didn’t even have an office yet,” says David. “[Gregg and Farbod] came to the casino and were working off a poker table while I was literally hustling at the table next to [them].”
The gamble paid off—David won the tournament, winning $30,000 dollars. “I walked over to them and I said […] ‘It’s flower time,’” says David with a laugh. “It was kind of like that […] storybook start that you’d see in a movie.”
[pullquote]“It was kind of like that […] storybook start that you’d see in a movie.” – David Daneshgar[/pullquote]
From there, the trio went on to raise funding the more traditional way—through venture capital investors. As a business student at the University of Chicago Booth School of Business, David had access to the New Ventures Challenge, a startup competition whose previous winners have included the likes of GrubHub and Braintree. Though David initially had no interest in participating in the competition, as he wanted to focus all his attention on actually launching BloomNation, he says that reconsidering and entering the competition “was probably the best decision I made in business school.”
BloomNation won the New Ventures Challenge and started attracting the interest of numerous investors. “The first couple [of] investors we met through pitching them [in the New Ventures Challenge],” says David. BloomNation was then accepted to internet incubator Muckerlab, where they were introduced to investors at Spark Capital and many others—their funders now include Andreessen Horowitz, Ronny Conway, Spark Capital, Chicago Ventures, and CrunchFund.
What advice does David have for entrepreneurs hoping to secure venture funding? Make sure you have proven, paying customers. “It wasn’t like they invested in us with this premonition that we would raise revenue, they wanted to take the risk out of it,” says David. “The idea [for BloomNation] was great […] but remember, the one thing they want to see is customers, and not just customers, they want to see revenue.”
The planning process and successful execution
Here at Bplans, we are, of course, all about the planning process. Though we favor the lean planning method, as opposed to a lengthy formal business plan, I’ve heard time and time again from entrepreneurs about how important the act of planning is. However, the founders of BloomNation weren’t so sure in the beginning.
David was initially skeptical of business planning and said that, in his “poker hustle way,” he preferred the idea of getting out there and obtaining first-hand experience, rather than simply plugging away at a hypothetical plan.
“In poker, I didn’t learn by sitting there and reading books, […] I went out there and just started doing,” says David. “I was more looking for practice than theory.”
However, BloomNation did ultimately create a business plan, as they were required to use one for their involvement in the New Ventures Challenge. David says the process made him reevaluate his dislike for planning.“ I actually […] went back on what I said,” says David. “Now I believe in creating some type of plan, and rather than going out there and just start doing, test on a very small thing to get proof of concept.”
However, David cautions other founders to avoid the trap of immobility that business planning can often create. “There were a lot of people in business school that did really good business plans but couldn’t execute, and their companies aren’t worth much,” says David, “so it’s a balance.” Being able to execute well, according to David, is as important as having planned successfully.
David also warns other entrepreneurs not to let the fear of failure get in the way of their ability to successfully execute. “A lot of your data and a lot of your research is going to uncover a huge hurdle, and that’s a good thing because if the hurdle didn’t exist it would have already been solved,” says David. “Everyone’s been scared, and you need to find a solution. So you still need to execute well.”
The importance of strong relationships
For David, Gregg, and Farbod, BloomNation has always been about building relationships and strong connections, both with their customers and with their employees.
As best friends, the co-founders have had to work closely together, but David says their closeness has helped their success. “We’re all best friends,” says David. “There are weeks where we want to strangle each other, but because we’ve known each other for the last decade, we’ve been able to get through it where other business partners have falling outs.”
David adds that building strong relationships with their florists has been invaluable to their success. “They go to bat for us,” he says and adds that some of his most successful moments have happened outside the office when florists at floral shows recognize the business. “We came for the first time and people knew who we were. They were like, ‘There’s BloomNation,’ and there was buzz about us,” says David. “It made it really exciting because […] when you go out into the world, you’re kind of scared, you’re never sure what the industry is going to think, what consumers are going to think.”
In addition to the importance of the founder and customer relationships, David mentions the importance of positive company culture as well. “It’s not just a nine to five,” says David. “You have to make everyone a family, and that’s the thing—family is not just like a check-in, check out.”
To do this, BloomNation focuses on keeping their employees happy, with things like gym memberships, an office overlooking the Santa Monica promenade, and fun additions to the working environment. “We’re getting a poker table in here next week,” says David with a laugh.
David credits a great deal of BloomNation’s success to their ability to build strong relationships, noting that he often has employees as well as local florists over to dinner at his parent’s house. “Invest in your people and to really make them happy,” says David. “You give them a little, and you can get back a lot.”
Advice for aspiring entrepreneurs:
It is clear from David’s passion that he feels strongly about solving the problem that he and his co-founders saw with the floral industry. Their success has been driven by their commitment to BloomNation, and David advises new entrepreneurs to start a business they are truly passionate about.
“I don’t think people are really willing to change their lives and take a shot,” says David. “I’ve seen people who just want to start anything, and I think the biggest thing is, wait for the right idea to come to you, and when you’ve found that idea and you believe in it, you have to see it through.”
David also cautions new entrepreneurs to go all in, and fully commit to their business venture. “The ‘kind of’ world never works—I’ve never seen someone who was successful at that,” he says. “You have to be all in it or don’t waste your time.”
[pullquote]“The thing that motivates us most is our florists because they believe in us so much,” says David. “I’m so inspired by the amount of love.”[/pullquote]
And, once you have an idea that you are passionate about?
“Try to find proof of concept. Test it out. Talk to people. Don’t just read about it,” says David.
“Once you’ve validated the idea, you have to be in it to win it. I think that’s really important.”
Finally, never stop being motivated by your goal, and by those you are helping. “The thing that motivates us most is our florists because they believe in us so much,” says David. “I’m so inspired by the amount of love.”