Challenging Goliath: How UrbanStems is Uprooting a Multi-Billion Dollar Industry

By Cameron McCool on
Challenging Goliath: How UrbanStems is Uprooting a Multi-Billion Dollar Industry

Ajay Kori never imagined he'd become a floral industry entrepreneur. But after several disappointing experiences sending bouquets to his long-distance girlfriend, he began to wonder if there was a better way to send flowers.

It didn’t take Ajay long to discover that the multi-billion dollar flower delivery industry was dominated by a handful of major players resistant to change. Despite offering a less-than satisfactory experience to customers -- the people who were paying to send flowers -- flower delivery companies were raking in huge profits with minimal effort.

Eyeing room for improvement, Ajay co-founded UrbanStems, an on-demand florist that lets customers send floral arrangements to their loved ones for a flat, affordable fee. Deliveries are made within an hour of being purchased. Upon delivery, senders receive a photo of the flowers arriving at their destination.

Launched in Washington D.C. on the week of Valentine's Day 2014, a year and a half later UrbanStems continues to grow at breakneck speed.

We spoke with Ajay to learn what life is like at the helm of a startup whose sights are set on toppling giants.

 

What is the elevator pitch you use to describe your business?

UrbanStems is an on-demand florist. We deliver beautiful bouquets in under an hour, starting at $35 including free delivery. That’s the quick and short of it. The broader story is that we’re taking on the way the flower industry works.

Starting a business is challenging enough. What's compelling you to take on an entire industry?

The internet has made everything better and cheaper -- with the exception of flowers. Anyone who’s sent flowers on any of the major sites knows that you have to order days in advance. What arrives seldom looks like you actually ordered. The flowers often die pretty quickly. And the worst part is, you end up spending a ton of money on the entire experience. So a lot of people have just sort of given up on sending flowers, because it is such a crazy and not fun experience.

When we began to develop the idea for UrbanStems, we started with the customer experience first. We thought hard about the ideal way of doing things, so that it would be fun for people to send flowers on a whim to their girlfriends, their best friends, to their coworkers -- to anyone -- and just make someone’s day in an instant. Working backwards from there helped us identify the things we need to put into place to deliver the best customer experience. Now we have a vertically integrated supply chain. We have our own bike couriers. But most importantly, we have a system where someone can hit a couple of buttons on their phone, and have a gift delivered in under an hour, all for $35.

 

The way that this system has worked has been the same for about a hundred years, so people are hesitant to believe that UrbanStems is a totally different experience. Consumer expectation is about as entrenched as you can get.

It’s interesting that while flowers are delightful to receive, the industry built around delivering them wasn't overly concerned with delighting the sender -- the customer who pays for the flowers.

Yeah, that’s actually something that we think about a lot here. It’s so funny that flowers end up making someone’s day, and yet, so often they make the person who actually sent it feel miserable.

The reason for it is that the industry is based on a hundred-year-old system that has never been changed. There’s something called a ‘flower wire’, which is what all the flower brands that you know of overlay on. What happens is, you place an order with a flower delivery service, and they send a description of the bouquet you ordered through a flower wire. A local florist re-creates what was created in some studio by one of these big companies.

The result of having so many different players involved is that it really adds to the cost of the order. And when you look at it from a local florist’s perspective, they’re getting this order that’s branded with a big company's name, and they’re getting less money for it too. So, for them, there’s no incentive to do a really good job because they’re getting paid less, they’re not getting any credit for it, and they have no chance of a repeat customer. Justifiably, they put their priorities into the customers who actually walk into their store, and the online orders get put together last.

 

It sounds like the industry is ripe for disruption. Have you received any flack from competitors who don’t want things to change?

Obviously the bigger players in floral, the wire services, don’t like us at all. Executives from some of these companies have even commented on some of the press we’ve received, just being very dismissive. It’s kind of funny. I think that obviously we are a threat in that the customer experience we provide is so much better. But these are very, very big companies, and they don’t want to change much if they don’t have to. I think they’re kind of hoping that this is just some kind of fad that will go away. But from what we’ve seen it’s absolutely not.

 

Even though we’re a much bigger team now, Jeff, and I, and some of the other co-founders will go do deliveries if we’re having a bad day, just for fun. It’s such an uplifting experience because people get so happy.

Any business that comes along and provides a better solution is bound to encounter resistance. And sometimes the feedback from opponents is for the better, sometimes it’s for the worse. How has it affected you?

I was reading an article recently -- I can’t remember who it was by -- where the author was talking about how anything of value that’s been created only occurred because that person hung on long enough, past the inevitable stages where every entrepreneur, including myself, wonders “Is this a good idea? Is this crazy?”

Real value is created when you hang on long enough to get past all the doubt, where you’re finally delivering something that is a great experience, and the world recognizes: Oh, this is just a better way of doing things.

But it’s not easy when you have so many big companies and an entire industry, really, that think a different way. When you’re going against that and you’re a tiny player, you have to weather a lot of friction. But as that author wrote, and as we’ve seen ourselves, the person that can hang on the longest can end up proving that there is a better way of doing things.

 

You co-founded UrbanStems with your friend, Jeff Sheely. Has being a duo been helpful to building the business?

Absolutely. I think it’s very hard to do anything like this by yourself. Jeff is an incredible guy, and I am lucky to have started this business with him. In general, many of the top startup accelerators in the world rarely accept single-founder businesses into their programs. And that’s because they’ve observed that it’s much harder to be successful with just one person at the helm.

As a startup founder, it’s common to have days where you wake up and you don’t even know what you’re going to be doing that day, or where things are going. There’s just so much uncertainty. It’s much easier to be going against the grain when you have someone else alongside you. Once you start running into some resistance it’s pretty easy to doubt yourself. But if you can turn to someone and ask: “We’re doing the right thing, right? We’re doing the right thing for customers?” And your business partner responds: “Yeah!” Then it’s easier to keep proceeding against those headwinds.

You also deliver other things. A morning survival kit. Gourmet S'mores. How do people react when they receive a package from UrbanStems?

This is the really cool part of starting a flower company. Every day we see our number of orders increase. And every single thing that’s going out the door is making someone’s day. When we started the company before we had a lot of resources, Jeff and I did the deliveries ourselves. We got to see first hand just how special a gift is when it’s sent from someone who cares about you, and how happy flowers make a lot of people.

And even though we’re a much bigger team now, Jeff, and I, and some of the other co-founders will go do deliveries if we’re having a bad day, just for fun. It’s such an uplifting experience because people get so happy. It’s definitely one of the upsides of starting a floral business.

Real value is created when you hang on long enough to get past all the doubt, where you’re finally delivering something that is just a great experience and the world recognizes: Oh, this is just a better way of doing things.

What were you and Jeff doing before you went into business? Did you ever in your life think: “One day I’m going to be a floral industry entrepreneur”?

Ha! The short answer is no. Jeff and I met in college, and we’ve always been kind of tech nerds. When I was in high school I started a company and sold it for over a million dollars. I was one of those guys who was more comfortable with the computer than with girls. And Jeff was kind of the same way. In college when other people would go on trips or go to the beach, we would stay home and stay in the dorms and code different sites. We both had jobs after college, so we decided we’d come back together and start a company at some point.

The idea for UrbanStems came about when I was in a long distance relationship and I had horrible experience after horrible experience sending flowers. The thought of ‘Why can’t we disrupt this process?’ was always in the back of my mind. I put a bug in Jeff’s ear. I kept wearing him down. And finally we started a flower company.

 

Did you say you sold a company for over one million dollars while you were in high school?

Yes. It was a really stupid website. Nothing technically proficient. It was a bunch of dancing cartoon characters and the online fortune cookie -- silly things that got millions and millions of people to visit the site. It was like Buzzfeed version 0.5. It was a great experience. I was a teenager and it was during the dot com boom. Mergers and acquisitions were pretty active, so we got acquired.

What did it feel like to sell your first company as a teenager?

It didn’t feel any different, because I think I didn’t even talk to my high school friends about it that much. Running the company was something I would have done whether I was making money or not. I don’t even think I really celebrated that much. It was just something I did for fun. And I like doing things that I care about.

 

As a startup founder, it’s common to have days where you wake up and you don’t even know what you’re going to be doing that day, or where things are going. There’s just so much uncertainty.

I get the impression that you’re as much in love with the process of being in business as you are with the outcome.

That’s a great insight. Is this a therapy session, too? (laughs)

The reason I bring that up is that it’s a hallmark of someone who’s got entrepreneurialism in their DNA. Do you bring the same level of intensity and devotion to each of your projects?

If there’s one thing I’ve learned developing UrbanStems, it’s that I’m a builder. The process of building I think has always been in my DNA. Every team meeting we share some of the customer stories from the week and some of the best reactions we’ve had. Being able to build something that’s creating happiness really drives me. It’s fun to build something that’s making people’s lives better.

 

Who’s responsible for the amazing floral art on your Instagram account?

Yeah, I or Jeff can’t take any credit for that. We have a couple of awesome photographers who love our flowers, and are happy to do those things if we just continuously supply them with flowers. We got lucky. They are just wonderful people who are super creative and who love playing around with flowers. It’s just a fun thing to do. We get to give them all kinds of flowers, and it’s really fun for our customers.

When you’re not focusing on the business, how do you spend your down time?

I’m working out at the gym, or at happy hour. That’s all I have time for.

 

Being able to build something that’s creating happiness really drives me. It’s fun to build something that’s making people’s lives better.

Do you have any advice for other entrepreneurs who are on the verge of turning an idea into a business?

Just go do it. The way that we validated our idea was that Jeff and I drove to Costco and bought a bunch of flowers. We then sent an email blast out to our friends and just said: “Hey, we’re delivering flowers today. Send us back an address if you want us to deliver flowers to your significant other for $15 or $20,” or something like that. A bunch of people responded, and we drove around the city for an entire day delivering flowers. It was exhausting. But we learned so much.

Our first site was some horrible Squarespace template, but we got orders through it. So don’t spend too much time thinking about what the perfect offering is, because you’ll never figure it out by yourself. You just need to go out and figure out what the least amount of things you need to do to offer whatever your idea is —which is a lot less than people think — then go out and do it.

Despite the risks you’ve had to face, what are some of the best things that have come as a result of choosing to be an entrepreneur?

I feel like I’ve learned so much about myself, how I operate, how I build things, and how I lead a team. I don’t think I’ve learned more at any period in my life than I have over the past year and a half. Most entrepreneurs would say the same thing. I think it’s just a wonderful learning experience no matter what happens. And I think that’s really, really valuable.

--

UrbanStems delivers stunning bouquets in NYC and DC in under an hour, starting at $35 (including delivery). The company has plans to expand across the U.S. in the coming year.

Follow UrbanStems on Instagram and visit UrbanStems.com.

Join over 10,000 subscribers and get our best articles delivered to your inbox.

Thanks for subscribing!