Breaking Boundaries in Fulfillment Tech with Logiwa’s Founder

welcome to the know your ship podcast presented by ehub I’m your
host Frank Dolce aan welcome to ehub we really appreciate your time we
appreciate you coming out here to be on the podcast all the way from Chicago
thanks having me actually this is absolutely such great people I met great
people great time thanks guys oh absolutely I’m glad to hear that well we’re
we couldn’t be more excited to hear about more learn more about you and about
your company and how it started and how you created it I I think about what
you’ve accomplished and what you’ve done and for a guy like me it’s very
impressive I think for a lot of people it’s very impressive so I’m really
looking forward to digging into how you started that the concept where it
came from uh and of course that is laua we don’t call it a WMS though correct
fulfillment management system fulfillment management system we’ll we’ll talk
about that as we as we go on but I think I’d like to start maybe in the
beginning because you’re you’re not uh from the United States of America you
grew up in Turkey yes I am originally from Turkey I I think they call it
turkey now yes in the Olympics I noticed that they started calling say that
again tur tury we call it tur yeah tur tury yes yes so they so and is that the
original is that how we that that was originally the name yes and then did we
did the did we take it and turn it into turkey Americans I think British yeah
let’s do let’s Mo on the British let’s do that British yeah okay so uh you
grew up in Turkey yes and you grew up in a small town yes near uh the border
of Ukraine across Ukraine let’s say AC between Ukraine and my hometown
there’s the Black Sea oh got it okay and in in that small town and and by the
way you’re an you’re an engineer yes by trade I an Industrial Engineer okay
so in that small town uh did did was that something that you grew up
interested in becoming an engineer is that something your family did how did
this start from you for for you from childhood so as you said my hometown
actually let’s say a city small City with uh that time it was I guess 50,000
people around and to be honest from my wider family I haven’t seen any
engineer so I was the first one even I was the first one most probably uh
making it to the university even I remember from our neighborhood there were
two guys and everyone was pointing out those two guys which graduated from
college and we were all talking about those two guys so yeah I was the I am
the first engineer uh actually so were those two guys inspiration for you to
maybe go to college and more for my mom not for me yes yes so so what is the
family what is the family background like is there is there a family
occupation or something that your family did Growing Up my parents are
ordinary people actually my father is a h like he used to do copper like yeah
uh they’re like Ordinary People my mother was working for the government so
just ordinary people my family is ordinary family as well yes so is that
something like we would call middle class in the United States middle class
families or working class kind of family working class middle class I mean we
were not desperate but we were not very wealthy as well we just enough for
ourselves yeah and uh in in that area uh what did it like was the thought of going
to college because in in the United States it seems like it it’s everybody I
mean it’s kind of a natural progression you go to grade school you go to you
know High School everybody kind of thinks about going to college it’s just a
natural thing was that the case where you grew up as well or was that
extraordinary to end up in in college or university those years it was a
little bit rare but my mom still is very passionate about it so she was
really pushing me for a college but it before College it started with high
school MH because in Turkey if you want to go a good high school you have to
pass a national exam like maybe you have similar here as well sure so somehow
I qualified for a school but high school but it was far away from my hometown
like in the capital city and I really didn’t want to go there so luckily that
year they opened up uh a high school in my hometown and we were basically the
first graduates from that high school which helped me a lot during my life
because we were the first everyone was looking for our success and the first
uh like classrooms the first settlement was in a military base actually there
was no school at all they built a school two years after we started MH but
then uh I was a very how can I say bad student in the high school I was
ranked really bottom five or something like that in my high school but then I
made it up to uh University mhm and when I graduated from University I was
ranked uh like top in the top top three yeah so it was a big shift for me
like in high school I was not really a good student because I didn’t like the
education system but in the Co in the University it changed entirely uh and
then uh I think most of my cousins uh are now graduated from the college like
University yeah so so what was the change for for you in terms of your
academics you didn’t you didn’t it didn’t resonate in high school but then
you got to University and it it shifted why why did that change man my son is
listening as well but in the high school I just wanted to enjoy life because
like you’re never going to be a te again right so I just like and I am I was
questioning a lot and uh at that time the education system was not really
answering your questions more like expecting to you to do rehearsals and
everything and I didn’t really like it and I again I even say this to my son
as well just enjoy your life but then at some point you have to return back
to the uh academic world and do it and I did it in the in the University most
of my friends did the other way they were very hard worker in the high school
then and went to University and then started to parties everything so I was
the other way I don’t know why that’s interesting what were like when you say
you were questioning what what were the things that you were questioning in
in high school about like what what you wanted to do when when you got older
or no it’s more like when someone it is still same by the way when someone
tried to teach me something I need to understand the use case and why
otherwise you cannot expect me to like just make a rehearsal MH and remember
things you have to explain me the reason why and what is the use case and
those time our education system was not good at that they were like hey shut
up just learn it this is the this is this is it and you learn this and don’t
don’t ask questions about it yeah yeah and when I when I started University I
just uh found the library and I was there learning myself a lot so then it
helped a lot because I started questioning things and try to understand the
real use case otherwise it’s really tough to teach me something even today
yes yeah even even if a customer ask hey I need this I ask like what is the
use case why you that yeah well don’t you find that helpful especially now to
understand the why the customer might be making that request so that you can
build it correctly or or manage the solution correctly of course it is very
helpful but a little bit difficult as well because like imagine you are with
your friends or whatever you always question why it’s tough as well and then
yeah but it helps with the business life because then you start thinking of
the reason use case of everything and you find the right solution maybe the
solution that the customer or someone is asking is not the right thing maybe
the use case you have a better solution right mhm so this is uh the
questioning part of me yes so is that and and which university where where
did you attend University it’s a it’s a university in turkey called UDA not a
very popular one mhm and where is that located uh another big city called
Busa I think it is the fourth or fifth big city in Kentucky got it okay so at
the university is this when you started to become interested in engineering
no uh in Turkey the system is a bit different so I selected being an
Industrial Engineer before starting to uh the university oh so you have to
make that at least when I was a student uh you had you had to make that
decision while entering you select industrial engineering and you qualify for
it right right oh so in from high school so high school out of After High
School the exam you just enter an exam and based on your score you pick a
department right and then you go immediately and start studying and was that
the right choice yes I I would do it again you would I because I was going to
ask you at some point during this podcast I’ll we’ll stop and I’ll ask you
three random questions questions that may not be related to engineering or
laua or anything house or your hometown SC and that was that was actually one
of the questions I was going to ask uh if you could do anything else what
would that be but maybe you wouldn’t have decided to do anything else I would
be an Industrial Engineer anyways I really triy to be a basketball player but
I am not a big guy you know it was tough so I know how that goes yeah I ended
up being an engineer so were you fairly athletic growing up did you play a
lot of a lot of sports and and the sports in in Turkey what basketball we
talked about volleyball what else were you socer basketball but I I I used to
play basketball a lot in high school I mean a lot maybe I couldn’t be
academically successful in high school because I was playing too much
basketball basketball yeah but then I realized hey I am not big enough and
I’m just from a small like Town mhm yeah well I know you say that you’re just
from a small town but currently we were talking about this in the NBA from
your small town There’s a star yes in the NBA and his name is Alie Al shenin
he’s my he’s from my hometown actually isn’t that amazing and he’s like he’s
doing amazingly well yeah in the NBA right now I think he’s averaging like 21
points a game yes he’s a young star 21 points nine rebounds maybe four uh for
yeah wow very very good stats for a young player no kidding I think he’s 22
years old or something that’s awesome well that’s got to be fun for the for
the town to have him come out of there 611 Center in the NBA that’s fantastic
okay so you’re studying you’re you’re in in the industrial what I would say
in the industrial engineering program I guess at University that’s what
you’re studying to be is that would that be accurate yes okay and so when did
you what path were you heading down as in in that program what did you want
to do with your life as an industrial engineer or did you always say well I’m
going to be in the shipping and Logistics world no so the thing is uh I guess
it was year two mhm I introduced myself to computer right the software
programming and we were I guess program coding turbo Pascal something 5 like
very old technology but the industrial engineering helped me to understand
the business but I decided to build my own company own product whatever you
call it and in order to do that as I said my my family is an ordinary family
I am from a small like City MH and there were no ton of investors those days
so I just thought how can I build a business and I decided to focus on
software because with a laptop or with a computer and your brain you can
build a product and you can build a company that’s where I started focusing
on software development and uh started interest like in uh start interesting
uh the uh software development part gotcha did you work with anybody or did
you were you building this by yourself so first after I graduated from the
University of course there were a lot of offers from very big corporates and
I said no no I’m not going to stay 20 years to become something uh I need to
find a small software company to learn business M so I really uh started with
a very small company like four people that time four had count but they were
representing a International Erp system right a big International System but
small uh operation in Turkey so I started with them to learn business
software how to develop it how to maintain it Etc uh that’s how he how uh I
ended up in software so were you at at that point with that company were you
an engineer were you in sales did you have several different roles with that
company I started as an implementation consultant mhm but this is 1997 I
guess like very early years I started as an implementation consultant but at
some point we were traveling and we were doing implementation in other other
cities mhm and at some point I couldn’t reach out to developers who were in
Istanbul and I started hey I’m going to do my necessity made you like you
know I am in front of the customers and they ask their request so I started
coding uh to just yeah satisfy the customers and like make them happy yeah
and when you were traveling was were you traveling throughout turkey or were
you traveling on a broader scale yeah a lot I mean turkey even I have been in
Nigeria South Africa many other countries but mainly turkey and uh those days
I don’t know if you remember but 1997 in Turkey I was carrying in my server
my PC my monitor in my trunk like even the server because there there was no
proper internet so you have to like install the server when you are going a
demo or a customer visit you have to carry all your stuff with you right oh
my gosh and you know it’s interesting you’re traveling so much and so broadly
was there any language barrier or were you working with people who kind of
spoke a common was it Turk were you speaking English or were you speaking
something else in Turkey it’s always always Turkish but if you go other
countries of course it’s English right English yeah okay got it English is
very common in the business even in Turkey you can do an implementation uh in
English in English interesting okay so you’re an implementation specialist
how long were you with this company oh it’s I stayed maybe three or four
years then I become a partner I was like things happen mhm and uh at some
point I was holding 25% of uh the turkey office yeah in four years or 5 years
mhm I was working really hard and like things happen and just we ended up for
four co-founders we ended up uh creating a new company and we were
representing the Erp company uh 25% of that company and I stayed one year and
uh I made my first first exit I sold my shares to the global uh headquarters
and I decided to build my own uh own business okay and is that the beginning
of laua yes I mean it it let’s say it is the beginning of logistics and
supply chain okay not loiva Loa is different okay but that’s I mean you’re
only at this point what you’re only five or six years out of University and
now you’re starting your you’ve started your own software and what was that
that software that you started what was the basis of that what was it what
was it built to do it was not a software actually I started a company and I
decided to bring top tier Supply Chain management solutions to Turkey
actually those days it was not supply chain it was Logistics MH so I decided
to bring top top tier logistic solutions to Turkey because I had to learn the
business right mhm so Logistics was a new trend those days and I brought uh
some really top tier WMS supply chain systems including a WMS a final mile
delivery optimization solution and inventory optimization solution and we
have done ton of implementations with those top tier systems so you went out
and found those were those Solutions those were separate companies and and
were those companies based in Turkey or elsewhere no elsewhere like United
States Canada like Greece like other countries how did you find those
companies what I mean you just travel check who is good out there uh we try
to bring the best of breed Solutions uh and build an EOS system that can
support each other MH uh that’s how we ended up right finding different
business partners gotcha fascinating and so how okay so tell me about that
company how long did that company run and then what was your next what was
the next thing that you did I think that company ended up 2015 16 mhm but we
evolve by time because we started with those top tier systems and at some
point we realized none of these Solutions is suitable for transportation
management for turkey and because of the regulations and everything so we
developed our own transportation management system for FTL LTL uh carriers MH
and this was 2008 so 2008 we developed our first product uh within the same
company we were were still doing implementation for others but these products
were not competing each other so we developed the LTL FTL solution for
ourselves and then uh it became market leader it was really good solution and
uh I guess it was 2 10 2011 uh we developed our first uh WMS got it and that
was in Turkey in Turkey yes okay that’s interesting 2010 is she at 2010 2011
that’s the start of ehub as well around 20 2009 2010 so we could walk the
same maybe we could walk the same path uh okay so and and that start that was
the start of laua the product Loa yes the company name was la la software
yeah but the but the software basis yes started at that point okay and so at
that point you had now created a w Ms and I think the the interesting thing
is you built this WS in what time period did that take you the the the first
version uh was in front of the customer in 3 weeks it was not completed yes
so you found tell me about that you you found a customer or a customer came
to you and said I need this and you decided that you could build it is that
how so the story is we were really implementing I call it Legacy WMS systems
who has been in the market for 30 years 40 years very old technology old
school and uh this customer was e-commerce they were doing pure e-commerce
and they were looking for a WMS to implement for their e-commerce warehouse
and there was no e-commerce WMS that time even not in us as far as I believe
there was because most of the WMS systems built like 30 40 years ago for B2B
fulfillment mhm and this is B operation e-commerce is totally different
animal uh the operation of e-commerce so this guy knew me from another
company because we implemented some of these top deer WMS systems uh for his
previous company so and then he at some point he was complaining about he was
about to sign a w sign a WMS but he doesn’t think this is the right solution
Etc ET and I said why do you give me like 3 weeks let me bring you let build
something for I had the idea already uh I I knew what I was going to do so
three weeks later I showed him the first very MVP version he liked it and he
said Aran like I see this is not completed when do you think you can complete
this I said like four four months and four months later we were live and we
still have the first uh print out from the packing screens wow with the guy
that’s amazing so that’s the that’s the start of the of your career well I
mean not the start of your career but in this particular space with the WMS
yes and did you so you you built this WMS and you started selling this or or
Distributing this throughout turkey yes we first started in Turkey mhm so it
was a very successful implementation uh the first one then uh of course other
companies heard that there is an e-commerce solution and then uh we
implemented really large uh e-com companies in Turkey as well and in three
years we be became market leader in Turkey we replaced most of the top tier
WMS systems and yeah around 2015 we were market leader and we very robust and
stable in Turkey the only thing is the application was on browser but it was
an on pram solution still so even the first version was a was on browsers so
we never built uh let’s say old technology but it was not working on internet
because internet was not stable so it was working on client server
architecture but on a browser but it was an on pram solution means that you
have to go and install each site yeah yeah and and so why didn’t you just
stay in Turkey I mean I know you you ended up coming to the United States but
you were the market leader in turkey and it feels like things were going
really well what why did you decide to move things were well actually we were
growing uh let’s say 20% 30% year-over-year MH but Turkish market is small
and I have a lot of dreams right so uh it was all planed planned like even
2006 2007 if you look at my decks and presentations to my people some of
these guys are still with me mhm like I was always talking going abroad and
building a worldclass product this was the entire idea and if you stay in
Turkey you cannot build that like world class application at least it was GNA
be very difficult uh if I stayed in Turkey uh and my dream was always create
this world class product and uh 2015 I started talking IPO like public and I
started dreaming about hey I should have a I’m going to have a office in a
highrise in Manhattan New York type of dream because everyone was saying hey
the center of Technology WMS technology is in us but I was replacing top tier
us Solutions in turkey and I was like why not going to the center of and the
biggest market and just dominate that market it was the it was the entire
idea because if you are going to be a world class WMS you should be in United
States which is the biggest market and the center of all these top tier
systems right you have to compete with them sure interesting but you were
already replacing us systems in Turkey so you had you had a sense that you
could accomplish that in the United States of course my product was really
strong and I knew it and the the funny story is uh the funny story is of
course when I decided to move to us uh I started uh working with Turkish
investors hey you know I have a great product I’ll will go there I’ll just
dominate the market penetrate the market and the investors didn’t invest in
us they said hey Aran like with this broken English you know you are Turkish
you’re not going to go there you cannot no this is true by the way you cannot
go and sell in the center of technology in us as a Turkish guy if you even
miss one the other guy is not going to like but it was it was not the story
because here especially in United States if you have a good product they just
buy from you they don’t care if your English is good or not if where are you
from they don’t really care what they care is can you solve their problem can
you solve their problem better than anyone else but even one of the investor
told me hey Aran you’re going to go there stay like couple of months have a
vacation romantic vacation with your wife and you’ll return back and I was
like okay let’s see it wow well something you mentioned just previously I
think is it’s a great business life lesson if you can solve somebody’s
problem then you you have a really good chance of being successful and that’s
what you were doing you were solving somebody’s problem and so you decided to
even without the Turkish investors no investors you decided to make the leap
to the but you didn’t end up in New York so that’s another story so I checked
most of the big cities and states New York is too complicated and after
living in Istanbul I in Istanbul I was driving 3 hours a day average and it
was so stressful like I was very I was full back and forth to work oh wow yes
it’s very normal in inan like 2 hours 3 hours it depends on where you do
because in most of the days you have to pass from one continent to other
through Bridges right it’s a lot of a lot of heavy traffic so New York is too
complicated I really didn’t want to live there and it’s too expensive and
without investment nothing I ended up Chicago yeah and the windy city the
windy city Chicago is more affordable from a time zone different uh time zone
perspective activities in the middle of us so west coast East Coast sure yeah
that works Zone and it’s also a hub for logistic companies very big Hub so
and uh there’s a Turkish Airlines direct flight to isul promo hair Yes
actually now two two flights every day how about that yeah so we select and I
I guess these are all business reasons but the the reason why I selected
Chicago is more like I like Chicago being a big city but also small downtown
very well organized and I remember myself I didn’t drive almost 3 years in in
Chicago I didn’t have a car right I was walking everywhere even though it’s
too cold too windy yes too cold too windy but the summers are amazing summers
are amazing yeah well it’s a great it’s a great City it’s a very walkable
City and you were pretty close to your office where you lived in your office
so that was that that worked out pretty well okay so you make the leap to the
United States you land in Chicago you have your product what were the
challenges that you faced at that time so we came Chicago with an accelerator
program for startups makes sense yeah and then uh when we were in Turkey this
accelerator program asked T we are going to take you to Chicago Chicago and
San Francisco uh for one month or whatever they pay the tickets Etc mhm and
but you need to book meetings before we take you there oh and it’s
interesting I spent enough time with my co-founder and uh we ended up booking
30 meetings wow all in person we didn’t know remot world that time it was all
in person mhm and even this accelerator program I remember we didn’t show up
in Daily stand-ups because we were all customer meetings so we realized there
is a really need for an Ecom new technology WMS system because even from
Turkey if you can book 30 meetings with us companies that is something that
is amazing yeah yeah so uh and and and then what was the result of those 30
meetings I mean you you’re part of this accelerated program you booked the
meetings now you come over and you’re sitting down with all of these
different companies in the US what was the result nothing we didn’t close any
of them but we we understood we understood uh the business model what we
should do because we were an on premise customer on premise uh software for
Enterprise customers we realized if we go that direction we couldn’t be
success ful because you know like we understood we have to shift to a
different business model which is SAS multi talant and remote sales and
that’s that is the lesson we learned we couldn’t close any of those deals wow
so how long were you in the United States or in Chicago before you closed
your first deal or had you closed your first deal prior to so I landed
Chicago first of January 2016 I believe yeah and the tickets were cheaper
because it was first of January remember we are coming without any investment
and I believe it took six months five five and a half months for us to close
the first deal and it was a funny story the first deal and to be honest we
were 30 bucks a day budget in Chicago with with my wife and I yeah oh my we
survived almost one year closer to one year 30 bucks a a day company was
paying the rent but I was spending all my money for uh sales marketing right
know yeah wow that was tough I remember my wife in josco asking me hey Aran
can we buy chocolate I was like once a week yes once a week you could have
chocolate that was the luxury yeah and uh from there we shifted the model we
created a website and we put a demo request form oh great yeah yeah and we
started doing paid search like paid etc etc and then one customer request the
demo request the very first one and we closed that deal Ah that’s great and
it was it was fun because until until that time the only way for to close a
deal is go there 10 times see their warehouse do a lot of Workshop like in
person sure uh this company was interesting because we went LA to to close
the deal mhm and the guy asked me why are you coming LA and we were like like
let’s just come and see your Warehouse let’s see what we can do MH the first
question mark why he is asking like what is there any other way to do to show
your product the only way for us was going in person and seeing the warehouse
and analyzing blah blah blah right and then we spent couple of hours we
showed the product he lowed it and then we returned back to Chicago one day H
I think next day or maybe two days uh when we return Chicago we just he just
sent an email asking for an order form to sign like no negot ation nothing
that he was ready to go the interesting thing is we didn’t have any order
form we were not expecting this so we downloaded an order form from internet
change it yes like we don’t have a legal team as well so we send it and you
know we were expecting like two weeks negotiations he signed it oh my
goodness and then we we understood we have to change the business model this
new generation e-commerce warehouses they don’t have time they don’t want you
to come to your Warehouse Etc today we go and see customers but those days it
was a big Advantage for us because we didn’t have a lot of uh investment and
money mhm so it was a good business model so we shifted to remote sales and
uh inbound lead generation and it worked and and that’s the launching point
from that point now you’re starting to add customers fairly regularly you’re
having some success hiring growing all of those things I think after we after
we acquired 15th customers 15 MH one of those Turkish investors did they call
you and say hey we have some money they they put money because they
understood I guess I am not returning back oh I great I’ll do this uh this
thing then some money we tripled our Revenue with that money we raised uh
money from us investors MH and at the now we are a post B company with uh
eight investors very big ones all like us based MH so it’s a great that’s a
great story it’s a fascinating story so and that all I mean as you look back
from where you started in a small town in Turkey and a dream of building your
own company and what would you say did you would you say I’ve I’ve AC I’ve
accomplished I’ve realized my dream no you have so a funny story I I was in
Turkey I guess two years ago one of my cousin he’s older than me maybe two
years three years I saw him and he was like Eran do you remember you were going
to be the president of the turkey and you were like promoting this yeah and I
was like like he goes like do you still have plan for that I was like no like
politics is not for me I just realized I am too transparent transparent too
direct for politics I’m not gonna do that yeah politics is a dirty game yeah
my dream is uh to ring the bell in front of New York Exchange rat oh this is
this is my dream I’ll I’ll go for it yeah why not well you’ve reached one of
your dreams I don’t know you’ve taken the president of Turkey off the table
that one’s gone so now ringing the bell at the New York Stock Exchange that’s
next well it’s that’s such a great it’s a great story I love getting to that
point from where you started to now you’re in the United States you’re
successful and you’ve built this world class uh platform I I keep wanting to
call it a WMS and I don’t want because I know you’ve changed that so I’m not
going to call it a WMS totally fine we also call ourselves time to time WMS
because people understand WS better but I like the way I like the new phrase
that you use which is fulfillment management system fulfillment management
system so it’s an FMS we’ll call it an FMS okay very good all right well
let’s let’s shift gears a little bit now let’s talk about let’s talk about
laua and what you guys do and specifically if I if I asked you what if I
don’t know anything about your company or know very little about your company
what is the as you look across all of your everything you’ve accomplished
what is the best thing that you do in the logistics industry wow that’s tough
question so I think we pioneered the high volume fulfillment honestly even
most of the top tier WMS systems they still struggle with high volume I call
it high volume I don’t like three years ago we were an e-commerce WMS now we
are e-commerce first but we do retail B2B as well and I call all of these
things high volume mhm MH and uh the thing is even we are changing the
definition of warehousing like we don’t like to call it Warehouse we like to
call it fulfillment center mhm and it is changing that way because
fulfillment centers are different than warehouses warehouses are buil built
for storage and bulk operations if you are going to ship let’s say 10,000 uh
pencil pencils from a B2B Warehouse it is one pallet and in 10 minutes a
forklift driver puts in it into a car and if one pencil is $1 then you ship
$10,000 of product in 10 minutes in a in a fulfillment center which is let’s
say e-commerce or hybrid 10,000 pencils