The journey from Idea to IPO is a tough one. In this five-part series, we look at how the founders scaled their startups and reached new milestones.
When Ali Asaria was founded TeaULIPHe was missing one, seemingly important thing: a product.
The serial entrepreneur worked at Blackberry and founded Well.ca, an early e-commerce success story. After selling that company, Asaria was looking for his next challenge. He knew he wanted to be in retail – he had a wealth of experience, intellectual property from Well.ca and a team of mobile commerce experts on hand – but he didn’t have a specific idea of what product to build. Is. So, he did something that became the hallmark of Tulip’s approach to business: He asked potential customers what they needed.
“We went to the biggest retailers and asked them about their toughest problems. They’d say, ‘Look how badly my stores are doing; the software behind them is so old school,'” recalls Asaria. “We saw their problems and knew we could solve them really quickly if they gave us the chance.”
In 2013, he used insights from those conversations to create Tulip, an omnichannel retail platform that allows companies to sell via web, mobile or in-store. However, Asaria quickly realized that companies didn’t really want a perfect omnichannel platform, even if it solved all their problems — “too many words,” he jokes. Within months, he turned to clientling, the retail term for customer relationship management. Tulip developed a way for luxury retailers—including Mulberry, Salvatore Ferragamo, Kate Spade, Coach and Michael Kors—to stay connected to their highest-spending, most loyal customers.
Luxury retailers have long made building and maintaining relationships with their customers a priority. Traditionally, their top employees kept “black books” filled with those buyers’ contact information and purchasing preferences.
“The problem with these retailers was that if Harry Rosen left Store Associates and joined Ralph Lauren, they would take their black book with them,” explains Asaria. “Those black books are one of their biggest drivers for sales.”
Tulip digitizes those records, making it easy for employees to let customers know when a long-awaited dress or shoe arrives at the store. Importantly, the company’s platform also allows the retailer to “own” that information.
solving customer problems
This dedication to solving its customers’ headaches is one of Asaria’s greatest strengths, says Dennis Ensing, chief enterprise consultant. Mars planet, an innovation center in Toronto. As one of Asaria’s advisors mars momentum, a program that helps high-potential ventures scale their businesses, Ensing teamed up with Tulip to fine-tune this business idea. He was impressed by the care Asaria took to ensure that there was a good product-market fit, and how he empowered his team to contribute to that process. “The number one thing about tulips is its culture,” says Ensing. “Ali’s team makes decisions about priorities together. Ali is skilled at designing products himself, but the company’s success comes from his openness to accepting input from many others.
Over the next six years, Tulip became one of the largest clienteling companies in the world. By the end of 2019, things were looking good: Tulip had acquired six of the top 10 luxury brands in North America as customers. It also announced a partnership with Google Cloud that will allow retailers to use the tech giant’s machine-learning capabilities to better understand their customers and identify sales opportunities.
Then, the pandemic hit.
“It became clear that stores were going to be closed. New investors were questioning how they could invest in a category that was about to be closed.” “It was also a huge growth phase for e-commerce. Basically, everyone started thinking we made a huge mistake betting on stores.”
Re-tooling the business to meet changing customer needs
Like many businesses in those early days of the pandemic, Tulip went into survival mode.
First, the company reduced its workforce by 12 percent, a process Ensing helped Asaria navigate. Ensing and other Momentum advisors also helped the company find emergency funding—advisors in the program introduced Asaria to two sources of government funding that actually helped save the business.
Asriya says, “We were so short of cash when Covid hit that I don’t think we would have survived if it wasn’t for MARS’s support.”
Then, it was time to think about the business itself. Initially, giving up was not an option for Asaria and his team. They were considering moving away from luxuries and into markets such as groceries. But soon, he realized there was ample opportunity among Tulip’s existing customers, who trusted the company to help them navigate these uncertain times.
In fact, “business just flew during the pandemic,” says Asaria.
It was time to once again ask customers what they really needed and how to provide it. And, oddly enough, it all came back to the problems he and his team identified in their first conversations with retailers. The software that large chains use to run their stores is often 25 or 30 years old; Replacing it can be a multimillion-dollar endeavor, so many people kept trying to squeeze another year out of their current systems… until the pandemic made that option unviable.
“Covid was the tipping point,” he says. “Retailers were asking basic questions of these systems, like: My employees are at home, can they transact from their phones? But these 25-year-old applications were not designed for the Internet. We were dragging the system along for so long, and then it broke down.”
Suddenly, Tulip’s customers were ready to rethink the purpose of the store and invest in becoming significantly more agile. This became the tentacles of an entirely new business strategy, with Momentum helping Asaria and his team through a series of high-level planning sessions. Within weeks, they came up with an entirely new vision for the company, recast its mission, set new goals, and figured out how to flow this new strategy throughout the business.
the result was a Exponentially Large Product Offering: A holistic, cloud-based system that includes clientLing, point of sale and other tools across all sales channels. In short, their software can now run an entire store.
solution scaling
The impact on Tulip’s bottom line has been profound. The company re-hired everyone it laid off and attracted new customers beyond luxury retailers, including Purolator and Indigo. In June 2021, it raised US$28 million in Series C funding round led by growth equity firm Arrowroot Capital.
Ensing says that much of this success can be traced to the culture that Ascaria created in tulips. “That team is tight. They’re not afraid to challenge each other. But at the same time, there’s a real sense of camaraderie,” he says. “Simon Sinek says culture eats strategy for lunch. I think the tulip is an expression of that.”
Next, the company is looking to expand its workforce, particularly through prudent acquisitions of businesses in the same space. They also plan to aggressively expand into new markets, especially in Asia.
“The story for Tulip is no longer just about how we prove ourselves at the door,” Asaria says. “It’s more about how do we measure something that’s doing really well so that we can take it to the next level. This is a whole new chapter for us. It’s exciting.”
The MaRS Momentum Program works with high-growth Canadian companies to accelerate their path to $100 million in revenue. Is Your Business Canada’s Next Anchor Company? Find out more and apply to join Program,
