This week we have the pleasure of talking to Saba Mohebpour — the Founder and CEO of Spocket.
Spocket is a leading platform that connects over 60,000 online entrepreneurs with thousands of vetted suppliers. It’s focused on empowering online entrepreneurs by solving the trillion-dollar inventory distortion problem via the dropshipping model.
The man behind this business is no less impressive — Saba is a Techstars’ alumni and a member of the C100 (a preeminent global community of Canadians in the tech industry). He’s also a contributing writer for Forbes’ Technology Council and a recipient of the Forbes 30 under 30 award for the retail vertical.
I remember reaching out to Saba a few years ago after watching a video of him talking about his journey as a founder (it’s a must watch). Saba just oozes a refreshing entrepreneurial energy and has such a clear vision for his life. I’m always learning something new through our interactions, especially as it relates to where commerce is headed and how new technologies are poised to disrupt the industry.
The interview below delves into how Saba came to Canada with dreams of becoming a medical professional, only to find his way to the tech industry instead after a chance encounter. It also covers what Saba has in store for Spocket and how he sees the dropshipping industry evolve over the coming years… among other things. 🙂
You immigrated to Canada in September 2012 to study medicine, with a childhood dream of learning neuroscience. What happened? How did you end up in the tech industry building Spocket?
Correct. I moved to Canada in September of 2012 to finish my pre-med degree at UBC and to apply for medical school. It was my dream to become a neurosurgeon since I was seven-years-old.
It was August 4th, 2014. I was sitting in my dorm room at UBC and was watching this interview with the founder of Summly. The guy was seventeen-years-old and built an app that Yahoo acquired for $30 million. I thought to myself, how could a seventeen year old write software? I was in my last year at a great university, and I knew more about math and physics than him. It made me realize that I could potentially learn to code as well, and see whether I’m able to follow a professional journey similar to his. I started programming that same night.
For my final two semesters, I skipped 90% of my classes and sat at home and programmed — we are talking like seventeen to eighteen hours a day. I put my social life on hold as well, for the most part. I didn’t have money to join a bootcamp, so I bought a $10 course on Udemy and downloaded a free book by Apple. That’s what it cost me to learn programming: $10.
That was my introduction to programming, the world of tech, and building products. After that experience it took me three years and more than fifteen failed products launches till I landed on the idea of Spocket.
With over 60,000 merchants relying on Spocket, and thousands of others using competing platforms, have we reached “peak dropshipping”? How can dropshippers compete and continue to differentiate in an increasingly competitive marketplace?
Definitely not. Dropshipping is part of the very large gig-economy market — the same market that consists of Uber drivers and Airbnb hosts. A vast majority of Spocket’s business — 95% to be exact — is generated in the U.S. and our American business continues to grow rapidly. But the e-commerce and dropshipping markets are growing even faster worldwide. Spocket doesn’t even service those markets yet.
So to answer your question, I don’t think there is any limit to how much we can grow in the next four to five years. Sure, after that timeline — and depending on how the market evolves — we might hit the ceiling for the SMB dropshipping market. By then Spocket will be servicing the SMB dropshipping market in more ways than one, so there is always the potential for more ancillary revenue generating opportunities.
Dropshippers are basically founders of their own online businesses. I think of Spocket as more like an incubator. In reality, when you operate an incubator such as Techstars or YC, you don’t expect that the majority of startups become big businesses. The failure rate is high — close to 95%. Dropshippers are operating in the same space and they are building their own “mini startup”. Some may scale and become super big, and many will fail. For Spocket the winners make the effort worthwhile and more than compensate for the losses of the failures.
I’m generally of the view that e-commerce is a rapidly growing market, and that means it can support more sellers and e-commerce entrepreneurs who want to become successful in time. And when the whole market grows, more dropshippers will have a chance to make their business successful.
Spocket recently announced integrations with Wix and BigCommerce, after establishing itself as a leading Shopify partner since 2017. What are your future plans for growth to maintain all of the exciting momentum?
We are currently in a close partnership with Shopify, Big Commerce, Wix, and Squarespace. We also recently launched our partnership with Alibaba and have a view to announcing four new ones this quarter.
These partnerships are super important for us. We help our partner merchants on these major commerce platforms supply their stores with great products from vetted suppliers. In addition, we help the commerce platforms attract more customers since we are removing customer adoption barriers for them — largely through finding products or holding inventory on behalf of new merchants.
It’s a huge win-win situation with our partner network. We also launched Spocket in eleven international languages, which is our first step toward going international and beyond the North American market.
Last year you wrote about the pandemic’s negative effects on employment and how side hustles are a viable path to a secure financial future. Spocket saw its merchant base 2x between March and July of 2020 as people launched side hustles through the platform. Do you expect to see this interest in side gigs sustain in 2021?
It’s hard to predict what will happen in the future, but it’s also hard to believe that the e-commerce and online “hustlers market” will get smaller. I’m of the view that it will grow for at least another five to six years.
The growth that we experienced last year was what we previously expected to happen in two to three years rather than eight months. But that’s to be expected when the physical world shuts down. We might see a small reduction in side gigs post-pandemic, but I don’t imagine that it will be a major or sustained change.
These days everyone wants to diversify their sources of income. What’s better than a side hustle that can supply you with extra cash every month?
What product trends and categories are you seeing emerge out of the pandemic among dropshippers?
Without giving away any confidential information, I’ll say that we experienced bursts of demand for specific product lines in different months. For example, early on in 2020 we saw a big spike in the number of masks being procured and sold, to the point that most of our suppliers were out of inventory. We had to work hard to onboard more and more suppliers that sell masks. Beyond the variability in demand for personal protective equipment, I’d say that for the most part our top categories were the same ones that were also popular before the pandemic.
In some circles, the word dropshipping has become notorious for fraudulent activity. A recent analysis by Fakespot of over 120,000 Shopify stores revealed that more than 25,000 were engaged in counterfeits, privacy leaks, or buying fake reviews. How do you see the dropshipping software industry tackling the issue of fraud?
Absolutely, and that’s why I started Spocket in the first place. Before Spocket, the majority of dropshippers were using suppliers from overseas that were not reliable and selling counterfeit products. For merchants, relying on these types of suppliers came with many side effects, including but not limited to slow shipping, return and refund issues, several chargebacks and disputes, payment accounts getting blocked, and cease and desist letters from various brand owners.
We tackle all of these problems simultaneously, which has contributed to semi-viral growth for Spocket over the past three years. We mostly focus on local suppliers that are based in the U.S. and Europe. We have international suppliers too, but they aren’t our main focus at this time. We vet every single supplier before onboarding them to our marketplace, and we have checks in place to keep the quality of products high. In addition, we deal with all of the returns and refunds to make sure our merchants can scale their businesses without being worried about these types of issues.
As you mentioned earlier, you’ve had your fair share of experiences with failed ideas early on in your entrepreneurial journey. What has kept you motivated to continue pushing forward in the face of adversity?
I’ve gone through a lot to get where I am today. Don’t get me started on that! But I think all of the pressure that I have had to endure over the past 29 years has helped to make me the resilient and resourceful person that I am today. I started Spocket with $200 in my bank account. I had to work three part-time jobs to pay for a co-op student to help me out build the first version of the product. That experience was the ultimate exercise in resourcefulness. Now I enjoy the pressure. If everything is smooth, I don’t get as excited. I’ll create challenges for myself.
One lesson I learned is that happiness comes with solving problems in life. The more problems you solve, the happier you are. As I’m scaling Spocket, I’m facing new types of problems every day, and that is what keeps me going. It’s pretty exciting to be honest.
How would you describe your leadership style and who do you look up to?
Elon Musk — because of SpaceX. I would like to tackle the space industry some day. I’m aware that my ambitions will need a lot of capital up front. Will need to get to that point first.
In terms of my leadership style — it’s all about communication and ownership. I like to hire people that know what they are doing, and can take full ownership in their area of expertise. That opens up my time to focus on other important matters such as market expansion and sourcing other key hires.
You’ve openly spoken about how in the early days of Spocket, many VCs told you the idea would never take off. What would you say to founders who believe deeply in their idea, but leave discouraged from meetings with potential investors?
Investors don’t know everything about all markets or the future. A lot of them pretend they do, but most of them don’t. You know your business better than anyone else, and you should know your market better than anyone else.
In addition to that, I would also rather build my businesses to a point where it is defendable before raising any money from VCs. I did that with Spocket, and that’s also the main reason why I had to work three jobs to pay for my first employee. I wanted to show proof to investors that this is a growing market with a future worth investing in. I didn’t want to run around pitching to 100 investors with the hope that maybe one would invest — I wanted it to be obvious.
I never went after investors. They approached me to invest in Spocket. And I attribute that to a focus on execution as opposed to fundraising.
As a parting gift, what’s one video, book or other resource that you’d like to leave our readers with that will make them smarter?
I have read Ego Is the Enemy by Ryan Holiday and The Subtle Art of Not Giving a F*ck by Mark Manson over three times, and re-read them every quarter. Each time these books give me a different perspective.
Some other books I like include The Denial of Death by Ernest Becker, Free to Choose by Milton Friedman, and Understanding Beliefs by Nils Nilsson.
This interview was edited for clarity.
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