💡 Founder Spotlight: Alexey Lee

Hi, everyone. Welcome back to Founder Spotlight. My name is Jason Kincaid. I'm on Cloudflare's strategic programs team. I'm here with Alexey Lee, who is the co -founder and CEO of PineMelon.com. Alexey, thanks so much for joining us today. Would you mind telling us a little bit about yourself? Sure. I'm a serial entrepreneur and this is my third e-commerce company. Right now, we're in the hottest part of e -commerce industry, which is online grocery. Unlike others, we are not going after the 15 minutes delivery frenzy. We are going to focus on the U.S. midsize cities and we are designed specifically for middle and upper middle class families with kids. We're going to focus on local first approach briefly. Awesome. I'm going to ask you all sorts of questions about that stuff because it's an industry that I'm curious about. I don't know nearly as much about it as I might and I'm sure you have plenty to share. Before we get there, I'd love to hear a little bit more about your journey. You're a serial entrepreneur. Can you walk us through what was the first company you founded and then how you wound up here? Okay, sure. I started my career as a web designer and programmer. Then, I switched to running my own web studio. It was 16 years ago. Then, after three years of running this business, I started trying to build product companies. My first successful e -commerce company was tiktok.kz, which eventually became the largest online platform for events in Kazakhstan. It was selling around three to four hundred thousand tickets per month, which is quite big numbers for Kazakhstan. Then, after several years, I and my spouse, we started the second business for us. It was an online platform for plane and railway tickets. It also became the biggest in Kazakhstan. After operating for several years, we actually merged our company with the second largest player in this market. Then, we actually sold our shares right before the pandemic hit. Prior to that, because we merged two companies, we had an opportunity to exit from daily operations and to be more like board members. We started looking around for something that we can run for the next decades. When you sell two companies, you eventually don't want to sell your third one because it's a kind of deja vu. You want to build something meaningful, you can be proud of after decades. For sure. It sounds like if you made something that people were willing to buy or acquire, it sounds like you made something meaningful. I understand the desire to want to build an enduring company that you're associated with for a long time. And so, this is your third startup now that you're working on. Before we went on air, you had mentioned that PineMelon, you've got another version of this back in Kazakhstan that's well -established. Can you tell us a little bit? This is a third company based in Kazakhstan, or the predecessor to PineMelon. Can you tell us a little bit more about that? Okay, sure. We started in Kazakhstan in 2018. The company called Arbuz.kz, which translates as watermelon. It's by far the largest online supermarket in Kazakhstan right now. We have around 500 employees. Prior to this year, we raised 3.5 million. With this money, we were quite lean in our approach. We reached that point when we decided that we have to scale internationally. When we were discussing with our current shareholders how to do that, where should we go, we ended up landing here in the US. We raised right now 10 million in our bridge round in order to launch here and to go after a bigger round to scale further. Wow. Well, congratulations. So, are you based in the United States these days? Yeah. It's a huge mental leap for me personally and for my family because at the beginning of this year, we couldn't imagine that we will relocate here in the US. Yeah. Well, I hope you've liked it so far. I'm sure, especially in the middle of a pandemic, I know that would be a big move. It is the move because you want to, as you expand. So, tell me, you're starting in Denver, is it? Yes, that's correct. Yeah. So, yeah, we were strategizing and thinking where we could scale. We were looking at Europe. And actually, before that, I was thinking of moving to the UK. But eventually, when we decided that we have to go mid-sized cities in the US, I decided that since my company is already established and quite mature in Kazakhstan, I can relocate here to decrease the risk of failing. So, yeah, that's why we're here already living for three months. Wow. Well, congratulations again. So, I'd love to hear a little bit more about... So, I think you said you were working in design or design studio before you founded the company. What was the sort of inspiration or inflection point that for you made you say to yourself, you know what, I want to go for it. I want to start a company. Okay. Okay. First of all, I would say that it's an ambition to be the best in what you're doing. So, that's why I decided to start my own design studio. And then after several years of running this studio, I understood that you do something that is usually very short term, because you never know who's your next customer and what you're going to do is what you designed and what you did. So, I understood that when you're building your own product company, you can build really something as you design it and you can be a perfectionist. Yeah. So, that's why I switched to building e-commerce companies. Interesting. So, there's a couple things I want to zoom in on there. The first thing is you mentioned you can be a perfectionist. Now, I know or certainly I've heard from many founders that you got to move quickly. Sometimes you have to, you know, it's not going to be perfect. It's got to be good enough, that sort of thing. So, how does this sort of desire for perfection or perfectionism, how does that work alongside, you know, being a founder? Yeah, thank you. It's a good question. And I think you always have to switch between these two approaches because, yeah, exactly, you have to be fast. And at the same time, if you're not a perfectionist, at some point, you just slow down and you become complacent. And yeah, eventually, you're on the side of the road. So, yeah. Interesting. Interesting. And I take it based on the fact that you started a design studio. So, you're a designer by training. And can you speak to how your experience and expertise as a designer has played into these companies that you've built? I'm sure it goes, you know, obviously, the website, I imagine that you're involved with what that's looking like. But are there other areas where your design experience has really come into play? Yeah, I think it's quite important to have deep expertise in some tech fields when you are going to launch a tech company. And specifically for me, yeah, sometimes I do micromanage, but I think it's for good. And yeah, eventually, you know, these small details allow to get the better final product because otherwise, I see a lot of companies which can grow faster. But you see that they're, I don't know, the whole lousy experience eventually, they lose the market because over time people understand which product is better. Yeah, I would even say, I think that design really can influence trust and sort of credibility. Like when I land on a website, and it doesn't look very intuitive, or the design is not up to par, it makes me go like, maybe I'll go back to this other, you know, site, that kind of thing. So I do think it's very important. Very interesting. So let's talk a little bit. So PineMelon, I already know the answer to this, because I wrote it on the website. But tell us what is a PineMelon? A PineMelon is an online supermarket with same day delivery. We have our own full -time employees, our own full-time couriers. And unlike 15 minutes delivery, we have a very broad assortment. And yeah, and we are focusing on local first. So we're, it's, you know, it's a huge trend across the world to eat local, to support local. So yeah, we believe in this approach. And so let's say I'm living in Denver, and I'm sort of, I'm making a choice between, maybe I've got this grocery store down the street, and maybe they do delivery. And PineMelon does delivery too. The main distinction being that the grocery store down the street may well get their inventory from all over the place. You're working with local farmers, you maintain relationships with them, that sort of thing. Right? Did I got that roughly accurately? Yeah, yeah, you're right. And, you know, we understand that unlike some other markets, which I've been operating in, this market is not a winner-takes-all market. It's usually very fragmented. And if you're doing something good, you always can win some pretty good market share in it. And I believe in it. And for us, we understand that being in a pure online supermarket, and understanding that all these little details matter, we can compete, we can compete not only by design, but also by assortment, by pricing strategy, because we understand what are these micro trends in buying habits of a new generation, because some of the incumbents, they are focusing more on traditional products. And yeah, there are a lot of details which you can compete with. And you touched on this earlier. Can you expand a little bit more on why is there this trend in buying local? And what are the benefits? I think that after the pandemic, everyone understands that the whole supply chain across the world is really fragile. And when you support local, you become more, I don't know, you just understand that even if something happens, again, with this international supply chain, you're supporting your own community, and you can survive, actually. And this is the first point. The second is that if you're living in an up-and-coming city, you always try to find some points to love this city, and you want to support your local community. So I believe that this concept will evolve into a huge trend over time. Very interesting. So tell me a little bit, do you have any co-founders working with you on this? Yes, actually, my biggest co-founder is my wife. We run always our companies together. And besides her, I have some people which came from my previous ventures also to this company. Awesome. I've got to ask, so was your wife your wife before you started your first company together? And how did you go about that? Because I've seen this work before, and I'm just curious about what kind of conversation do you have early on? You know, for some people, it's very strange to work together. And for us, we know each other for, I would say, already 17 years. So it's very, I don't know, it's very entrepreneurial approach, because we feel very comfortable to talk about all this hard stuff at home. And sometimes we also get tired of it. But we also know at which point we can stop. And we feel comfortable if some of us just want to stop. But at the same time, it allows us to get more of this thinking time. So yeah, it's our, I would say, unfair market advantage as well. I love it. The secret weapon, right? You just have, you can read each other's minds, finish each other's sentences, I'm sure. That's great. So one of the things I wanted to ask a little bit, looking back to, say, your childhood, were you looking at various entrepreneurs? Was there something that sort of planted the seed that, you know, years down the line, it sort of flourished? And you're like, you know what, I'm gonna go do it. Was there anyone who you looked up to anything like that? No, I was quite far from entrepreneurial way, actually. And I'm more like a creator. I always liked to draw, to paint and to do programming. So yeah, that's how I started my career. And yeah, I think that that was an inspiration for me. Well, so I guess, was there some, because I know you were working on the design studio, you started the design studio. Was there any point where you saw an interview, or you read a book, or you said something like, you know what, that's for me, I'm just kind of, I'm curious about sort of an inflection point, if there's something where you went from this to like, shifting gears, let's try something different. And it's okay, if there's not like a specific moment, you know. So when I switched from my individual contributor career to run in my own design studio, it was because I was inspired by its famous Russian designer, Artemiy Lebedev. And it was the largest Russian design studio. So yeah, I visited his master class, and that was my inflection point. The second one, I switched to running my own product companies. I was feeling that I couldn't buy tickets to movies online at that time. So that's why I really wanted to design this kind of service. Yeah. You're solving your own need. Yeah, exactly. Awesome. Well, that's how so many great companies have started. You know, you see an opportunity in the market, and you're like, I can do that. And so you did. And so you did. Very cool. So I'd love to hear a little bit more about, because it sounds like you've been operating this company with 500 people or so in Kazakhstan. How have things changed over the course of the pandemic in terms of managing the team in terms of maintaining your company culture, that sort of thing? Like, how have you gone about that? It was really a crazy year for us. It actually was a good year. But at the same time, we were in constant chaos in 2020. And eventually, we managed it. And yeah, right now, we always have to switch between two approaches of how to run company. We call it run and change. Run is executing daily operations, and change is always implementing something new. So were there any things you did that really helped adapt to sort of the new environment? I imagine some folks are maybe working remote. Although with the sort of work you're doing, you do need people who are, I assume, like assembling sort of the packages of food and so on. So I'd be curious, what in the day-to-day did you change? Were you already sort of well positioned to handle this new environment? We actually weren't well positioned. But yeah, it was really hard to adapt to this new environment, because when you have this demand, which is like 10 times bigger than you can deliver, it's crazy. And everything starts to crumble down. And yeah, I think we just- I don't know how to respond to that. Oh, sorry. No, it's all right. It's all right. It sounds like you held on for the ride, and you made it through. And the company is better for it, right? Yeah. All right. Well, well done there. A question I wanted to ask you is, and this is something we're asking all the folks who are joining us with Founders Spotlight is, if you could hop in the time machine, go back and talk to yourself when you were first founding a company, what advice would you give yourself? Mm-hmm. I think there are three of them. First is that not the strongest, but the fittest survive. So you just have to execute well, maybe very slowly, but eventually, if you survive, that's it. Because it's the hardest part, not to win the market, not to grow faster than others, but sometimes you just have to stay along. And that's it, because a lot of other competitors will just die out. And the second thing is, as an entrepreneur, you have to grow very gradually. You have to choose the right size of your next venture. Otherwise, it's very hard to manage, and that's how founders quit their very successful companies early on, because sometimes you just cannot manage very, very big companies without proper expertise and background. So that's how I ended up being here, because my first company was much smaller than my current one. And the third advice is, when you've got to that big size of the company, sometimes you're starting to be consumed by fear of competition, of the market environment, of something else. And having a co-founder is a big thing. And not only having a co-founder, but always talking to the right people is a big thing, because you always have to go out and to try to see that forest behind the trees. Yeah, so don't be consumed by fear, always talk to the right people. That's the third advice. And I imagine it's important to establish those relationships with the people you can talk to early on, so that when those scary moments come up, you already know who to turn to. That's true. All right, very interesting. So here's another question. You mentioned some of the things that sound like aren't your favorite part of being a founder, you know, the fear and all that stuff. What is your favorite part of being a founder? I think that's when you can imagine something and then you can build something out of nothing. And you understand eventually that you build something that people are using every day. And yeah, it's always such a pleasure to understand that you can build something meaningful. Yeah, it's the ultimate goal for me, actually, to enjoy this feeling. Yeah, I get it. You know, you have to appreciate the moment. There's a Kurt Vonnegut quote I love, if this isn't nice, I don't know what is. And I think that learning to sort of appreciate those moments, whether it's as a founder or as a designer, you know, when something really works out and all clicks into place, I think that's part of the trick of life in general, not to get too philosophical. Very cool. All right, so we've only got about three and a half minutes left. I have a couple more questions I can ask you. But before I do that, are there any things that you would love to talk about anything, whether it's Pine Mellon or your own experience that we haven't touched on? I don't know. Let's proceed with the questions. Okay, I'll keep asking them. So here's a question. If you were to recommend a book, I know it didn't sound like there was like a one book or talk or anything you watch that really changed things for you. But I imagine over the years that you've come across a lot of, you know, advice for entrepreneurs, that kind of thing. Are there any resources that you think are particularly accurate, or that resonate with you, whether it's a book, or, you know, a blog post or anything along those lines? Two books come to my mind. The first one is a hard thing about hard things by Ben Hurwitz. And because it's about this steep learning curve. And, yeah, and the second part is, the second book is a very classical book about management. It's called High Output Management by Andy Grove, former president of Intel Corporation. It's a very, you know, it's a good concentrate of knowledge of how to manage big companies. Absolutely, absolutely. I think those are two, two books that you'll find on many successful founders and investors top list. And I guess a quick follow up to that. Are there any lessons you gleaned from those books that, you know, you want to highlight for the audience around, say, management, or around sort of these, these hard things that you've had to deal with? There are a lot of takeaways, actually. And these two books are very similar in many ways. Two specific topics, one on ones matter. So you as a manager, you always have to take care of your direct reports. And you have to conduct this one on ones very regularly. And the second advice is, I think this kind of OKR approach, it first appeared in Andy Grove's book. And this, this is kind of mixed between moonshots and between executing these moonshots in some meaningful results. And I believe Google famously used the OKR strategy. Is that something you subscribe to? Yeah, yeah. Throughout the company. Very cool. Very cool. All right. So we only have about 45 seconds. So I'm going to begin my, my descent, which is to say, I want to start thanking you, because this has been such a great conversation. You know, being able to talk to a serial entrepreneur who also started as a designer, which I think is really a great trajectory to be able to talk a little bit about. So thanks for joining. Any, any parting words you want to share with the audience? You know, checking out PineMill and that sort of thing? Yeah. Thank you for having me. Thank you for interesting questions. And yeah, we always welcome entrepreneurial people, people who love to build great products. So welcome to our company. All right. Thanks again. Alexei, thank you so much. Yeah. Thank you. Have a good day. Bye.