Most entrepreneurs gamble when they start a company—few were born from a bet. Inxeption, an E-commerce platform built on blockchain technology, is one such exception. Given the expertise behind it, the company’s success was always low-odds.
In 2006, Farzad Dibachi made a dreadful mistake for a serial entrepreneur – he tried to retire. After a swift rise at Oracle, he left to found Diba—a microelectronics company with his brother—which was later acquired by Sun Microsystems. He then started another company, Niku Corporation, with his wife Rhonda in 1998, and took it public in 2000. He served as CEO and Chairman until Niku was acquired in 2005. Then, Dibachi told Red Herring he thought his “journey in the Valley was done.” He moved to Santa Fe, regretted the decision almost immediately.
“Within about—gosh—two weeks I realized, what the hell have I done?” says Farzad. “I moved the family, went over there. I was 38 at the time and realized that the average age in Santa Fe is 70, and the population is about 35,000 people.
“So I had one of those moments.”
Dibachi whittled time woodworking, but in 2012, after their only child moved to college, he and his wife started a new business. The lighting company, Noribachi, utilized some of the processes and lessons the couple learned in software. “We thought about it very differently than a normal lighting manufacturing business and everything was custom manufactured to order and shipped in three days,” explains Farzad. He was back in the startup game—increasing output; streamlining his service—and New Mexico just wasn’t enough.
Farzad calls it the “hole in the donut”: the space in New Mexico ringed by Phoenix, Denver, Dallas and El Paso, in which little entrepreneurial is being done. “As we got serious about the lighting business, we realized: We need to move to LA,” he says. “You can’t do much in New Mexico.”
Life in Los Angeles was brighter for Farzad’s business. Soon, Silicon Valley pros were making the journey south to see him. It was 2014, almost a decade since Farzad left the Valley—and it was pulling him back in. “I needed to go back to my tribe,” he says.
Two of those who venture south were Mark Moore and Terry Garnett, who had worked with Farzad at Oracle. Moore, an expert in business-to-consumer transactions, took a glance at the Dibachis’ operation and told them he could build a website and sell lighting equipment online, in one day.
Farzad gave Moore a challenge: he would make one of his products half-price, “so it was as cheap as can be.” If Moore could sell it on the proposed website within a month, Farzad would give him a million dollars. The bet was on. Moore conjured a “very, very dumb” site, Farzad recalls. It was “literally one picture, one phone number.” But it didn’t matter. Within an hour Moore had his first sale. On day two he made $17,000. In half a year, Farzad’s new platform was turning over $1m each month.
If Moore was in doubt then, he doesn’t show it today. “It was an underserved market at the time,” he says. “I have some techniques that we use to find out whether people are searching for these types of goods.
“I think our lunch was a Thursday or Friday, so we worked a little bit over the weekend and had a website,” Moore adds. “They just said something to the effect of, ‘Excess inventory sale and we’ve gone crazy.’ There’s the price and a phone number to call for these. And then we drove some ad traffic to it.”
Inxeption was born. “Through software, a business—no matter what it sells—can be responsive to its customers,” says Moore. It disrupts a manufacturing and selling process that has hitherto remained almost identical for a millennium, he adds.
“The idea that you guess at what the market wants, you go build a bunch of them, then you put those on the shelf and then you hire a bunch of sales guys to go take the stuff that you have on the shelf and force people to buy it?” he says. “That’s been done that way for thousands of years. If you really sit there and think about that, you scratch your head: What the hell is this for? Why do you make it without knowing that somebody wants it? And why do they hire sales organization and then to manage that process?”
Moore looked to the way Silicon Valley powerhouses like Salesforce.com have transformed sales worldwide, and asked: could he build an E-commerce platform without sales? Instead he would educate users about the product.
“Then you ask them what their needs are.”
Inxeption is a platform for sellers that simultaneously challenges and differentiates itself from Amazon, the largest such organization on the planet. The company boasts blockchain technology that offers users on both sides of a deal trusted, secure and reliable transactions.
Blockchain is often grafted onto conversations about cryptocurrency—and little else. But the tech has far more uses. Inxeption utilizes it as an indisputable ledger, onto which transactions are recorded. This gives sellers and buyers a sense of security not found in platforms such as Alibaba, for example. Farzad likens the use of blockchain to security cameras: transactions are being watched and recorded, so a seller can’t do something only to refute that it happened later. That can be particularly helpful when a company is making a customized order for a client, as instructions and requests are constantly being passed back and forth.
In January 2019, Inxeption secured funding from logistics firm UPS. “Inxeption’s technology is attractive to UPS because it helps unlock new efficiencies for customers using B2B e-commerce platforms,” Kevin Warren, chief marketing officer of UPS, said.
A few months later, that partnership bore more fruit, as the two companies announced Inxeption Zippy, a platform integration helping businesses market and distribute products on multiple channels from one place.
Now, the company must grow. Farzad says that, until now, Inxeption has been inward-looking, and concentrating on helping its customers. He argues now is the time to “raise a flag and say ‘here we are.’” The company began with 20 employees. It has added ten since. Farzad is happy with that core. His challenge is to scale the staff up without losing its culture and expertise.
Inxeption has come a long way since the lunchtime bet that brought Farzad Dibachi careening back to California with a plan. A fight against Amazon awaits. It might seem madness to steer headlong into such a fierce competitor. It doesn’t faze Farzad. He is confident Inxeption has what it takes to drag a fairly stangnant E-commerce industry into the next, exciting generation.