Alasdair McLean-Foreman came to America with virtually nothing and has already started and sold two startups. He is now on his third. Alasdair’s venture, Teikametrics has raised $65 million in funding from top-tier investors like Granite Point Capital, Jump Capital, Centana Growth Partners, and Lydia Jett.
In this episode, you will learn:
- Amazon and the future of eCommerce
- The supply chain and inflation situation
- Alasdair’s top advice when thinking about starting a business
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About Alasdair McLean-Foreman:
Alasdair McLean-Foreman is the Chief Executive Officer and Founder of Teikametrics. In 2001, Alasdair founded an e-commerce company in his dorm room which grew into a multi-million dollar company selling high-end sporting goods. The company became one of Amazon’s first Third-Party Retailers in the sporting goods category in 2003.
He also founded the weight loss and fitness company Trainer and has built and provided e-commerce solutions to large organizations including Newscorp, The Times of London, L’Oreal, and The New York Marathon. Alasdair earned a Bachelor of Arts in Economics at Harvard University where he was captain of the Track and Field Team and a member of the Great Britain and England national track teams.
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Read the Full Transcription of the Interview:
Alejandro: Alrighty. Hello everyone, and welcome to the DealMakers show. Today we’re going to be having the battle of accents here. We’ve got the UK accent; we’ve got the Spanish or Spanglish, whatever you want to call it, but we’re going to be learning a lot about building, scaling, financing, coming to the U.S. with absolutely nothing, and being able to make it. I’m sure that you’re all going to very much enjoy the episode today. So without further ado, I’d like to welcome our guest today. Alasdair McLean-Foreman, welcome to the show.
Alasdair McLean-Foreman: Thank you for having me.
Alejandro: Let’s do a little bit of a walk through memory lane, Alasdair. You grew up in the UK in Southeastern London. How was life growing up?
Alasdair McLean-Foreman: Yes, I grew up in Southwest London, actually, and living above a retail store. I was very fortunate to get an opportunity to come here to the U.S. What led me here was university, so I was able to go to Harvard Undergrad and Harvard College. There, I studied economics and ran track, and I was captain of the Harvard track team.
Alejandro: And why did you come to the U.S. because, in London, you have amazing universities as well?
Alasdair McLean-Foreman: It’s a great question. I like the question. Yeah, I was actually running for the Great Britain Athletics team. I was one of the top athletes over the 800-meter distance. I was set on training for the Olympics and going to stay in the UK, but my high school math teacher said, “In the U.S., you can continue your athletics, but perhaps also have an opportunity to get a great education as well.” So I literally went on a dial-up modem, and I remember this. I Googled “top universities in America Harvard, Yale, Stanford.” I got the prospectuses. I looked at them. In my mind, I really wanted to go to Stanford. It seemed like Sunny California, and the coach of Stanford didn’t write back to me. I ended up doing quite well in the national championships for 800 meters. Fortunately, the Harvard coach wrote back to me, and the rest is history. I remember actually getting a chance with the acceptance letter and thinking to myself, “Do I even want to go?” My mother said, “Just go. The worst-case scenario is, you can come back.” It’s always been a holiday for me here. It’s a great mindset: just keep the holiday going.
Alejandro: As you’re talking about mindset, how would you say that being an athlete and running, how do you think that the discipline to be able to be in shape, to be able to run those competitions—what do you think that discipline—how do you think that has shaped the way that you approach whatever is in front of you, whatever challenge you have in front of you because I think that is similar to being an entrepreneur the way that you also need to use that discipline and the mindset that you apply. So how would you say that has helped you to really be who you are today as an entrepreneur?
Alasdair McLean-Foreman: I think you’re spot-on. I think the athletic endeavor teaches you discipline, running in particular. What you put in is what you get out. Of course, there is natural talent, but you cannot be a world-class athlete, and you cannot aspire to be an Olympian if you don’t put in the sacrifice, put in the effort, put in the energy. That’s one. I also think it’s incredibly valuable to understand how challenging it is. It’s a rollercoaster. I always say that to our team of employees today, and it’s not a linear path, and it’s absolutely the same thing with running, injuries, bad races. I think that applies to all sports. That mindset is incredibly important, and there are a lot of analogies that you can pull across into business and, in particular, entrepreneurship. What I like in particular about running is, it is answering a question of doubts. What is the human limit for me? That’s also the same thing with the business: Can we always get better? Yes, of course, we can. Is there always a way to be more efficient? Can we grow larger? It’s like the no-limits mentality, which is critical.
Alejandro: In your case, you came to the U.S. You were running; you were at Harvard. How did you end up getting into this whole entrepreneurial journey?
Alasdair McLean-Foreman: It really was in the spirit of coming over to the U.S. with not very much. I came with a couple of bags. I actually didn’t even have my parents drop me off at Heathrow Airport. I said, “I’m just going to go. I’m going to grab my bags. I’m going to go on the train.” I flew over. I got on the underground here in Boston, which is called the T, and came to the Harvard freshman dorms. It was quite shocking to me, in a nice way, how much of an ordeal it is with proud parents moving their sons and daughters in. One of the most intimidating things was just the amount of resources you needed: thousands of dollars for textbooks. The first job I ever had here in the U.S. was bathroom cleaning on campus. There was actually an opportunity to sell products. That came about because I had a watch that was given to me by the Great Britain Track Team. The watch broke, and I called the manufacturer. It was one of those things that I’m sure you’re familiar with. It’s a [7:03]. It was press one for consumers; press two for [7:09]. I pressed two, and I said, “What does it take to become a dealer?” It said, “You need to place a purchase order.” I placed a purchase order. It was a very interesting time in eCommerce. We’re talking 2001, and you still have this problem. What are the channels? Is it brick and mortar, or is it online? At that time, the manufacturers didn’t know how to manage the online channel. So I was able to get a dealership, a wholesale contract with zero overhead because I was selling from my dorm room. I built a website, and it was all about products for athletes, by athletes. This was before Google shopping. This was before Amazon and before any sort of real shopping website. It was very well-indexed on Google. I went from being a very poor student to a less-poor student. I got the buzz, the thrill, and the adrenaline of selling products that I loved.
Alejandro: Let’s talk about what happened with this business. Your first company; first exit. It’s not bad.
Alasdair McLean-Foreman: It was a long journey, and actually, what I’m doing today is a direct connection to that, and it’s taken quite a while. I was one of the first product sellers on Amazon back in 2003. On that website that I built, I kept selling products that I liked. There were some lucky breaks, which relate to products and trends. One, in particular, was Timex partnering with Garment to launch the first speed and distance watch. To me, it was mind-blowing. It was a product that you could wear that would precisely track speed and distance. Every other product was [8:54]-based technology. Of course, today, smartwatches will have GPS built-in—the majority do. That was a super-exciting one. Every time anyone Googled Timex speed and distance, you were getting me to come up first. That product took off. I just kept adding on different brands. I called up Sunglasses. I called up Nike. These manufacturers would show up in my dorm room, Kirkland House. They would be like, “What are you doing?” I was just this college kid, and I said, “I want to sell your products.” Some of them even said, “You have to have a brick-and-mortar store.” Then I rented a brick-and-mortar store and then called them up again and said, “Here I am.” I was able to scale quickly, but it did have a lot of challenges because I actually got to a point where, in my mind, I was telling my friends, “I’m making a million dollars a year,” but really the difference in retail of making and gross margin are two different things. So I didn’t track my costs that well. I was struggling right when I graduated from college. I ended up sleeping in the office. I had overextended myself. I now had overhead. It was not a linear path, but I was able to then exit out on a two-year in/out deal and able to think about an opportunity to do something new, which is what led me to this.
Alejandro: Let’s talk about what led you to this because the most immediate one you did was Traineo. Traineo was the absolute most immediate step before you get started with the business. So what was Traineo about because another company here and another exit, too? So, good stuff.
Alasdair McLean-Foreman: Traineo was a good one. What I wanted was when you bought the watches, a place to get a training program. I had this vision of an online training program, and I was really passionate because I could see some competition coming to sell the same products, and I wanted an interconnected experience. Of course, with Peloton and such like, such a huge multi-billion-dollar industry today. I actually did meet the founders of Fitbit back then. Around the same time as Traineo, there was RunKeeper, which ended up selling to Asics for about $100 million. MapMyRun ended up selling to Under Armour for over $400 million. I was just a little bit too early. We didn’t execute on mobile. It was before iOS launched, just to give you a timeframe. YouChieve hadn’t even launched. I filmed myself with a camera and used a different non-YouTube service and input that into this content—just to give you a sense of the timeframe. The vision was good. The execution wasn’t up there, but I think it was the first foray into building complex ways of applications, dynamic Web 2.0 applications. In fact, at that time, I was looking for someone to help build it with me, and I emailed Mark Zuckerberg, who was also in Kirkland House, and he said, “Thanks for thinking of me. I’m pretty busy working on something,” and that something became Facebook. I was one of the first 2,000 members of Facebook at the time we launched our campus. What ended up happening is I ended up exiting Traineo to News Corporation. They bought the technology to white label for one of their properties in the UK called The Times of London, which is obviously a world-renowned newspaper. That was then pivoting into digital. I ended up selling my core eCommerce business, but what was really interesting from that 2003 invitation was to be one of the first that probably sold us on Amazon to 2010. I could see that it was much more efficient to sell goods off of our website and more efficient to sell them on Amazon. Of course, today, Amazon has a 40% market share of eCommerce. What I was able to see is a little bit of an early shift as Amazon Prime was launched, as Amazon Fulfillment was launched. I took some of the engineering team, and I did a lot of the design myself. I took some of the group from Traineo to start working on optimization for Amazon. That was a big idea. That led to building an agnostic view of Amazon as a trading platform. I ended up spinning that out and calling the company Teikametrics, which is what I’m building today. Teika is the Japanese word for marketing price. I studied econometrics. What Teikametrics does is empower every seller on Amazon, every seller on Walmart, and every seller anywhere around the world to have AI and optimization. Amazon is on one side of the table—lowest prices, maximum selection, and convenience. Those are the Japanese mantras for consumers. But I’ve left the pain of the seller, and they’re on the other side of the table struggling with inventory, supply chains, optimization, and that’s what we’re giving them with AI.
Alejandro: In this case, how do you guys make money? What is the business model?
Alasdair McLean-Foreman: It’s a partnership with every one of our customers. We have some of the world’s largest brands like Lego. Every piece of Lego around the world is optimized through us, and that’s on the upper end. That’s one of the outlies and super exciting for us. But what I find interesting is the hundreds of thousands and millions of Amazon sellers and direct consumer entrepreneurs that are able to go to market. It’s really the American dream. We’ve met incredible entrepreneurs and helped them go from zero to multi-millions. As an example, Solo Stove. You may be familiar with it. Everyone in my neighborhood has one, and here in the Northeast, they just went public. It was started by two brothers just as a product that is a smokeless fire pit. They are able to go to market with Amazon, Shopify, build a million-dollar business, and that’s what gets us up in the morning as a company. That’s really our core focus. We now have 300 employees around the world. We have ten billion dollars’ worth of transactions through Amazon or Walmart. To answer your direct question, we take a small percentage of the transaction, and if you’re really small, we don’t take anything. What we’re trying to do is take the world’s best AI engineers, folks from Amazon, Facebook, Compass, Expedia, and build a piece of software that can help sellers make better decisions on the other side of the table.
Alejandro: In terms of capitalizing the business, how did you guys go about capitalizing the business?
Alasdair McLean-Foreman: Very early on, it was bootstrapped. I was able to finally, after all of those entrepreneurial years, all of those challenges, with a capital-intensive business retail, and that’s one of the things that caught me out just because of the challenges of inventory turns, gross margins, and inventory. After I exited out of that first retail business and Traineo, I finally had a little bit of money. I really wanted to get to a position where the product was stable. We didn’t really focus until 2017 on building a software company. In 2017, it was clear that you could build a multi-billion-dollar SaaS company because the market is so large. I got a ton of rejections from VCs. Every VC came up to me and said, “Amazon is going to eat your lunch. Why can’t Amazon do this?? I’m thinking to myself, “I’ve been an Amazon seller since 2003. There’s no way Amazon is filling this gap because Amazon is optimizing for its profitability. That’s even a famous phrase from Jeff Bezos, “Your margin is my opportunity.” Amazon, over the years, has taken more and more out of the transaction. Today, it’s about 30-40% take rate.
Alasdair McLean-Foreman: The idea that you would ever trust Amazon to run your business is just crazy. But anyway, VCs saw that, and VCs also looked at some of the technology that we’re using for ad optimization and said, “Look. We think this is an ad tech company. We’ve seen floors in this category before. But what they missed is this vision that we have to power all of the levers, pricing, inventory, advertising, and you need those things you’re selling on Amazon. What was incredible is I ended up meeting the head of Econometrics at MIT, Dr. Jerry Hausman. Jerry has been the Godfather of Econometrics, the field of Econometrics. I was able to meet Jerry, which was an incredible experience, and he fell in love with the business. He said, “I’ve been doing this type of stuff for Home Depot, Starbucks, Tesco’s in the UK, and you’re sitting on a goldmine because you can get this structure data and build the brain.” He was very intellectually stimulated. Once Jerry invested, the table shifted. We had partners from Baupost, the hedge fund here in Boston. High net worth individuals in Boston. It was so cool to have them as the first investor. We’ve raised three rounds of capital since then.
Alejandro: You’re talking to it; it seems like when Jerry invests, it’s like signaling happens. So how important is signaling when you go out and raise money?
Alasdair McLean-Foreman: It’s a great question. I still don’t have a full understanding of the entire VC map. I think one of the challenges as an entrepreneur is you may only do, hopefully, not that many deals in your lifetime. Whereas, if you’re on the other side of the table, VCs are looking at hundreds if not thousands of companies. I think there always is a question for an entrepreneur: is there a playbook? What should the playbook be? Do VCs add value? Does brand matter? Does signaling matter? I wouldn’t say, necessarily, that there’s a set formula. The more I work through it, the patterns of who is the partner? Who is the actual individual that’s going to help you? I think that is the most important. That’s the person who is in the company with you—going back to your question regarding Jerry joining. I think that created the right type of investment in the beginning, where we were very lucky because we didn’t create a board at the time. We structured it as convertible notes. We were talking to an investor and a set of investors that were associated with that lead who could see the bigger picture, which gave us time. I think more than signaling; it was the way that Jerry understood how big this could be even though it was very early and just buying into the vision. I think with SaaS, in particular, there’s a huge emphasis and why it’s attractive in that trace. That still happens today. Maybe that’s the tension. Show me proof versus promise. Obviously, as the entrepreneur, you’re wanting to be valued more on promise versus proof, but with a SaaS company, it’s like, show me your metrics. Show me exactly how you’re performing. Jerry is a scientific advisor today. We’re still talking about: how do we think beyond? How do we think in the future? It’s more his mindset which is valuable than the actual signal. Signal is really cool, though. Ben Bernanke was one of his students, the stories he has and the stuff he’s done in his lifetime are amazing.
Alejandro: When you go from dealing with individuals to getting people enrolled at the level of Intel, getting Intel as an investor is big time! How does it transition when you are looking at onboarding individuals to when you are looking at onboarding a company like Intel?
Alasdair McLean-Foreman: I think it’s the same thing. Intel has a great vision. Intel, as a company, is one of the founding pillar companies of Silicon Valley itself. Of course, Silicon Intel. What’s interesting is their evolution into AI. They’re one of the preeminent investors in AI in the last five years. But what was really good was the partners at Intel, the way that they engaged with us, the thought process, and that was the determining factor. That coupled with their vision, and they can see that there’s an opportunity to build a huge company. If you’re sitting on the data that even Amazon has of thousands of brands, and you’re modeling all of that, and you have the trust to allow automation to exit, it’s a multi-billion-dollar outcome. That’s what we’re shooting for, and that’s what Intel is shooting for. I think they’re a company that’s in an interesting space now on the investment side. Intel Capital has made some of the largest and highest volume of AI investments in the recent years.
Alejandro: Before, you were alluding to vision and the future. If you were to go to sleep tonight, and you wake up in a world where the vision of Teikametrics is fully realized. What does that world look like?
Alasdair McLean-Foreman: I think it means that every single eCommerce seller or anyone trying to sell anything has an account with us because they want to know their metrics, they want to know what their data is, and we’ve got the database. They can help every seller. I think that’s possible. Now, the output of that is hundreds of billions of dollars of transactions and billions of dollars of revenue, but it’s aggregated scale. There are companies in the next ten years that are going to be like that. If you and I tried to build the next Amazon, it would be really difficult. If you and I tried to build the next Facebook or Google, it would be very difficult, but there are going to be billion-dollar companies that are valued based on their data, artificial intelligence, and automation. We think we’re one of those companies. That’s exactly what we’re doing. It’s exciting. When you look at the market size, there are 50 million businesses that are in our targeted addressable market globally. We have thousands of businesses. We don’t have millions, and we already have a path to being a public company in the next two to three years. I think we’re very early. As I say to our employees, we’ve only just started the [24:37]. It’s a sunrise industry. There are only about 15% of retailers online. We’re going to see that increase as a rising tide. But it’s about scale. What’s exciting is scale in a way that Amazon doesn’t because Amazon is trying to monetize the consumers.
Alejandro: What we’ve seen now with COVID and the way that it has accelerated the activity online, it’s unbelievable how eCommerce has been booming. You’ve been doing this since 2015 with Teikametrics. You would have never foreseen anything like COVID, but I’m sure that perhaps COVID has accelerated maybe a little bit where you guys were at and also, perhaps getting closer to that vision being realized. Would you say so?
Alasdair McLean-Foreman: There’s an overarching narrative where we’ve seen step-function and a lot of acceleration around eCommerce in general, but it hasn’t been easy for brands. COVID hit, the supply chain has contracted U.S. selling on Amazon or Walmart or even Shopify. It was challenging—Amazon limited only selling certain types of products like specific essential goods for some period. That was 2020. Now, in 2021 and 2022, we’re still dealing with the supply chain issues. It’s about 90% more than it was this time last year to ship a 40-foot container around the world. So there’s this huge supply chain impact. One of our core values is to be customer-obsessed. Our customers, the brands, have had a tough time. It’s our responsibility to help them. I think there are people at the root level, Amazon, Google, the big tech companies, maybe transaction companies, who have done really well. Big techs have done really well. A lot of the brands have struggled. We’re helping them. We’re growing. The big picture, though, you’re right. This has been an accelerant. What I think is happening is the volume in GMV, gross merchandise value, is shifting. We’ve actually seen Amazon have less market share. It’s gone up, but as a percentage, it’s less. So people are buying from other channels. We’re seeing emerging channels like TikTok and Instagram with method changes and perhaps have more of an incentive to be an eCommerce company. We see Amazon becoming more of an ads company. For the first time last week, they released on their earnings score a nine-billion-dollar revenue line, which was the ads product, which is a big part of what we do. There’s a lot of change, and a lot of it relates to big tech and where the people buy. That’s in the U.S., in Asia with [27:46], Flipkart in India, [27:50] in South America. It’s evolving, and it’s happening at a fast speed.
Alejandro: That’s definitely exciting. Now, for you, it has been an incredible entrepreneurial journey, everything from coming to the U.S. with 800 bucks and doing the studies to now being on your third business. You’ve been part of successful events, part of learning events during this journey. Let’s say I was to put you into a time machine and bring you back in time, and maybe bring you to that moment where you were at Harvard and thinking about building something. If you had the opportunity of chatting with that younger self and give your younger self one piece of advice before launching a business, what would that be and why, given what you know now?
Alasdair McLean-Foreman: That’s one of those really good ones. I’m not going to cop out of the question, but I think life sometimes just—no regrets mindset, in a way, some of the learnings become—maybe I’ll just go with that and tell you because actually the struggles of sleeping in the office and struggling as a seller, were the genesis of Teikametrics. I was like, “Look. If I failed in these ways, and I had half of a degree, what about the person that’s trying to sell x-products who may be a product person or may have some amazing inventory. Actually, it’s more about life and business as a journey, and to perhaps not be so focused on the short-term and think about the bigger picture. Actually, that’s full circle right now because we’ve got these incredible AI engineers and data scientists. The one thing that they don’t have is they didn’t sleep in the office. They didn’t deal with those problems, and it’s really important that we go back there and try to embody that customer obsession. I just don’t think I could have done that if I had some of those problems. I see it as being patient and trying to learn as much as possible. Hopefully, that’s not giving up on your question. I really do believe that, though.
Alejandro: Well, that gives the opportunity to ask you a bonus one, especially for the entrepreneurs that are listening. What do you think kept you going when you were sleeping in your office?
Alasdair McLean-Foreman: That’s a really deep question. I honestly think you’ve got a finite amount of time in this world, and you should maximize your opportunity. Actually, America has been so good to me—coming with nothing, and it’s all been upside. The worst-case scenario—what is the worst-case scenario at the end of the day? You and I are immigrants, and there’s an advantage there. We’re very fortunate. I think that’s the competitive advantage that immigrants in the U.S. may have because it is one of the best places in the world. I believe it is the best place in the world to start something, fail, pick yourself up, and you’ve got that culture of just picking yourself up and going for it again. And never give up. I love that feeling and that opportunity. You’ve got a finite amount of time, so why not just go for it.
Alejandro: I love it. For the people that are listening, what is the best way for them to reach out and say hi?
Alasdair McLean-Foreman: You can find me on LinkedIn. That is my most active channel. Add me on LinkedIn. I’d be happy to chat about anything entrepreneurship and anything we’ve just talked about, or I can help with anything. Thank you.
Alejandro: Amazing. Thank you so much for being on the DealMakers show today, Alasdair.
Alasdair McLean-Foreman: Thank you so much for having me.
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