On a Mission to Disrupt Ecommerce
Cart.com CEO and cofounder Omair Tariq on exiting to Home Depot, democratizing e-commerce, and putting Texas on the entrepreneurship map.
This article was originally published on Texas CEO Magazine on April 7, 2021.
In the early years of his career, Omair Tariq got a full education in building, scaling, and exiting a business. As one of the initial employees of Blinds.com, Tariq was instrumental in growing the brand to the point that it caught the eye of Home Depot, who acquired it in 2014 for an undisclosed sum.
Tariq stayed on the Home Depot team for several years after, but recently he’s heard the call of entrepreneurship once again. Last year, he left Home Depot and founded Cart.com with fellow entrepreneur Jim Jacobsen. The new venture provides brands with end-to-end e-commerce software and services, on a model that shakes up the current ecosystem. As Tariq tells us in this interview, he believes that a business’s value begins with its vision—and that not enough entrepreneurs are thinking big enough in that department.
Texas CEO Magazine: You were the 36th employee at Blinds.com and helped grow that brand and exit to Home Depot. What was that experience like?
Tariq: I joined the Blinds.com team in a finance function. At the time, it was really small but had an amazing culture. When I started we were at 36 employees, and over the next five years the business grew by a factor of six or seven. Working with our CEO, Jay Steinfeld, and other people on the team showed me how to scale businesses really fast in a way that doesn’t implode the culture.
That experience taught me so much. I got to experience the scaling-up process across every function: acquisitions, raising money, hiring people, setting up organizational goals, setting up the entire FP&A [financial planning and analysis] function, optimizing marketing, being data-driven. We hired a talent pool that knew how to disrupt the e-commerce space. All of that enabled the organization to then exit to Home Depot in 2014.
Texas CEO Magazine: That’s the kind of exit that every entrepreneur dreams of. How did it feel going through that?
Tariq: Honestly, it was scary and exciting at the same time, kind of like a rollercoaster. Home Depot wasn’t the only company trying to acquire us. There was a lot of attention toward what we were building.
It was about four to five months from when Home Depot approached us to closing the transaction. The whole due diligence process for a public company is intense. We had to align on the right post-acquisition strategy and really think about how our technology could catalyze Home Depot’s growth trajectory.
We got to work with some really sharp people on Home Depot’s strategic business development team. Together, the two teams executed an extremely successful M&A transaction. Something like 80 percent of M&As fail, but we actually grew the business by a factor of four in the coming years. It’s a story to be written up in case studies.
Texas CEO Magazine: How much do you think the name Blinds.com contributed to the venture’s success?
Tariq: It’s hard to quantify the value of a domain name like that, but I don’t necessarily think it helped us get acquired. I think the domain name helped us become a category killer, though the success wouldn’t have happened if the rest of the pieces were not in place. People get this wrong about e-commerce a lot. They say, “Hey, I have a great domain name and a cool website, so this will be a huge business.” That’s almost never how it works. You have to optimize marketing, merchandising, conversion, post-transaction, customer service, photography, visuals on the website. It’s that entire ecosystem and the end-to-end journey that determines how successful a business becomes. If you do have those pieces in place, a domain name like Blinds.com becomes a game changer.
Texas CEO Magazine: What was your next step after Home Depot?
Tariq: After the transaction in 2014, I stayed on the HomeDepot.com leadership team for another six years. Most recently I was Chief Operating Officer of their configurables business out of Houston. I was leading a very large team and a very large P&L. I eventually left Home Depot in the fall of 2020 and started Cart.com in September.
Texas CEO Magazine: As you were thinking about your next venture, I’m sure you had many different thoughts and ideas. What made you choose to pursue Cart.com?
Tariq: I saw a few things happening that upset me. One was seeing brands and retailers trying to go digital and most of them failing at it. When I double-clicked on why they weren’t successful, it was because they only had three options, none of which met their real need.
The first option was selling their product through a marketplace where they don’t get any of the customer data and the marketplace takes 20 or 30 percent of their revenue. These brands get in bed with the devil. Though they take advantage of the traffic that comes to those marketplaces, they are unable to have a relationship with their end customer. They’re no longer brands; they’re just product companies.
Option number two was building their own end-to-end e-commerce infrastructure and value chain, as bigger companies like Home Depot or Wayfair or Target have done. But that requires a tremendous amount of capital investment and infrastructure. And even if you have the capital, it’s really hard to do. You have to hire the best e-commerce and digital talent. If you’re not already a digital-first company, a lot of the e-commerce talent doesn’t want to come work for you. It’s a chicken-and-egg thing.
Option number three was buying an out-of-the-box website on Shopify or BigCommerce or Magneto. Those are really good solutions when you’re growing your e-commerce business to the first couple of million dollars. The challenge is that none of these website platforms provide an end-to-end e-commerce ecosystem. They provide different apps for marketing and logistics and customer service, but they’re built by different companies and don’t all talk to each other. Their code bases are different. But to be successful in e-commerce, you have to have an end-to-end, fully holistic e-commerce infrastructure. Those brands were having to pay for a tremendous amount of custom integration. Even if they have figured out custom integrations for all those apps, each one is taking X percent of their margin as they compete with Home Depot or Walmart or Amazon, who don’t have to pay that margin to 20 different apps.
That set of options sets companies up for failure. Nobody was in these brands’ corner. There was no one-stop, turnkey solution that owns the entire e-commerce value chain. It’s a very daunting task, and that’s probably why nobody’s doing it, except for one company—Amazon.
Jim Jacobsen, my cofounder, and I felt we could do it. Jim, in his past life at RTIC Outdoors and a couple of other places, had scaled brands to $200, $300 million in sales. He did a lot of the same stuff I’d done at Blinds.com, along a parallel track, also in Houston. As part of that journey, he had built the entire e-commerce value chain, from the factory floor to the customer’s door. We realized that these bigger, successful brands end up building the end-to-end e-commerce value chain for themselves but don’t open it up to the rest of the world. Jim and I said, “Hey, let’s go build it, like we did in the past. But instead of building it for ourselves, let’s build it for the rest of the world.” That led to us starting Cart.com in September of 2020.
So we believe we’re solving a $1 trillion problem, and more importantly, in some cases enabling certain brands to survive. There aren’t a lot of good options to go digital in the way we enable these brands to go digital.
Texas CEO Magazine: You’re currently a mentor with Capital Factory. How did you get involved with them?
Tariq: I’ve been a mentor there for a few years. As I was going through my journey at Home Depot, I realized how blessed I was to become so well-rounded in a short period of time. I had this unique experience of taking a business from a few million dollars to hundreds of millions of dollars, and then becoming part of an organization where a few billion dollars were going to many, many billions. So going from one to 10, and then 10 to 100. I wanted to give back, and for me that was building more entrepreneurs and enabling more people to become successful.
I started mentoring startups in a very unorganized and unstructured way. I would just show up at startup incubators like Station Houston and offer to help. I’d been part of one of the biggest consumer exits here in Texas, and I knew what we did and the mistakes we made. I always enjoy sharing that with up-and-coming entrepreneurs, and talking to them to discover what they’re doing. I would even say that that was the reason I went back into building a company—I saw how much fun they were having as entrepreneurs.
Later, Capitol Factory reached out to me because there aren’t a lot of e-commerce companies that have exited to a Fortune 100 company. That enabled me to get onto their network of entrepreneurs to help them out. Since we started Cart.com, I’ve gotten less deliberate about mentoring, because we’re grinding 19 hours a day, building something from scratch. But I enjoy doing it.
Texas CEO Magazine: Is there a particular nugget of advice you typically give to entrepreneurs?
Tariq: Sure. I like to talk about the three ingredients it takes to build a successful business. Marc Lore, who built Jet.com, talks about these three as well. You’ve got to have a compelling vision. You’ve got to have capital to execute the vision. And then you’ve got to have the talent to use the capital to execute the vision. If you have these three things in place, it’s hard to stop you.
My other advice for entrepreneurs is to think bigger and be willing to take on the big guys. They’ve got to get out of bed and say, “I’m solving a problem that nobody’s willing to solve.” That’s what ultimately results in great companies.
It all starts with the vision. Because of how many startups there are, entrepreneurs have gotten more conservative about their ideas and haven’t gone as big as maybe they should on the vision. And that’s okay; they’ve still built very successful companies, but I think the world needs more people like Elon Musk and Jeff Bezos and Steve Jobs. At the end of the day, that’s how you change the world. If you’re an entrepreneur, what gets you out of bed is a need to build something great. When you have a vision that’s larger than life, the capital and talent part becomes really easy. A lot of entrepreneurs think, “If I have too big of a vision, I won’t ever get the capital.” Really, it’s the other way around.
At Cart.com, we’ve put a big vision out there. We really want to democratize e-commerce. Since August 2020, we’ve gone from just Jim and I to about 68 people. We’ve raised a significant amount of capital and acquired five companies. We’ve put together a leadership team from the best companies in the world, from Facebook and Google and Uber and Wayfair and Home Depot. We wouldn’t have been able to do that if we didn’t have a vision of disrupting a $1 trillion industry. But because we have that vision, we got the capital and the talent very early in our journey.
Texas CEO Magazine: What are your thoughts on angel investing? Good, bad, neither?
Tariq: I’m a big proponent of angel investing. They really are angels for a lot of these startups. They come in at the last minute and they’re not as stringent as institutional investors. Institutional investing has become very framework-oriented; if you don’t fit their framework of investing, they don’t invest in you. But investing is so much more than just frameworks. A structured approach to investing can be useful, but at the end of the day, you’re investing in people. The entirety of a startup’s value is in the people leading it. If they’re building something that is outside your wheelhouse, instead focus on the characteristics of the leaders. Bet on them. Because ultimately, it’s people who build great companies.
A lot of angels are ex-entrepreneurs or ex-CEOs of large companies. They’ve been there and done that and they can relate to the pains of having to raise capital from institutional investors. So I highly encourage entrepreneurs to reach out to angel investors in the early stages, when you don’t have a real business. These angels can sometimes prop up your business and give you structural ideas that help you succeed in the long term. A lot of great companies are built because of what angels are doing.
Texas CEO Magazine: What are your thoughts on the startup scene in Texas? How has it evolved during your time here and where do you see it going?
Tariq: I’ll be honest. A decade ago I would have never thought that Texas was the place to build technology and consumer startups. I thought Blinds.com was a purple squirrel here in Texas, in the middle of oil and gas country. Today, it’s very different. Places like Capital Factory are enabling these startup ecosystems and an increasing number of venture capital and institutional investors are moving down to Texas. We’ve got a lot of great entrepreneurs and a lot of great talent.
I think Texas will surprise the entire world in what it’s capable of. We have always been perceived as the oil and gas state with some healthcare and NASA. People never think of Texas the way they think of California when it comes to startups and entrepreneurship. I think that’s about to change in a massive way in the next decade. I wouldn’t be surprised if we start leapfrogging the Silicon Valleys and New Yorks of the world. We’ve got the right mix here. We’ve got a very favorable tax system. We’ve got great academic institutions, between Rice and the University of Texas and the University of Houston and many others. We’ve got great talent coming out of those academic institutions and a lot of people who made money in oil and gas who now want to diversify into other industries. If you’re a Texas entrepreneur, as long as you have that compelling vision, you’re going to be able to get the capital for it.