On Raising $2.3M & Building A Cannabis Delivery Software
What’s up! My name is Hilart, and I’m the Co-Founder and COO of WebJoint – the cannabis delivery software that powers ~33% of the market in California.
It sounds great to say that “out loud” now, but the truth is that most business textbooks would probably tell you that a business like mine had 0 chance of success. In fact, we did a lot of things wrong.
For one, we decided to build a business in what used to be an extremely unstable, unpredictable, and (sometimes) illegitimate industry.
California legalized cannabis for recreational use about 3 years ago, but we’ve been in the cannabis industry for nearly 7 years now. Yes, that’s right, WebJoint 1.0 was born before California fully legalized cannabis. At that time, cannabis was considered high risk, and investors wouldn’t want to touch it with a 6-foot pole!
Two, when we first registered our LLC, my business partner and I were just 18 and literally had to learn everything the hard way. We basically just jumped into the deep end, and earned our pseudo-MBA on the “streets.” In fact, the majority of our team shares a similar story of being extremely young and learning how to fulfill their roles from the school of hard knocks.
Three, we decided to service the single smallest market within the cannabis industry itself. So small it’s almost non-existent. As of today, there are only about 308 licenses in the state of California for cannabis delivery services; a lot of which aren’t even live and operational. Most people, even within the cannabis industry, thought ~300 business was too small and decided to place their bets elsewhere. In fact, servicing brick-and-mortar dispensaries, distributors, manufacturers, or cultivators would’ve given us a much larger market, and theoretically a much higher chance of success.
Instead, we decided to service cannabis delivery businesses, and against all odds, we raised ~$2.3 million to do it.
The WebJoint Retail Delivery Software Suite is our flagship product that helps business owners manage their entire operation from A-Z. Everything from their eCommerce website, to their POS, CRM, inventory management, driver dispatching, legal compliance with California’s seed-to-sale tracking software METRC, and more is all done within our software.
WebJoint Direct-to-Consumer is our second software product that just launched this year. We built it after amassing 30%+ of the delivery market and understanding that we can control cannabis order fulfillment throughout the entire state of California. With our D2C platform, we can create a cannabis marketplace for anyone that wants to be able to sell cannabis state-wide. When a customer places an order, we can simply dispatch that order to the nearest delivery service anywhere in the state.
Some of our more notable clients are MJ.com, Hits-Blunt.com, and Hyperwolf delivery. We’re also currently working on onboarding Weed.com, Cannabis.org, and many more big names that you’ll be able to order from by the end of the year!
What's your backstory and how did you come up with the idea?
Although I started WebJoint when I was 18, I’ve been an entrepreneur for as long as I can remember. I truly consider business my “hobby” and it’s what I’ve always done for fun. I started my first business when I was 13, and since then I’ve tried every business model under the sun.
As long as you can pay your rent, and keep food on the table, now the majority of your day can actually be spent focusing on bringing your business to life.
My first business was an educational Youtube channel/website, in which I taught graphic and web design. Speaking of jumping in the deep end, I would literally learn graphic and web design the same week that I was teaching it. It’s like the teacher was just one chapter ahead of the students. At the time, tutorials in video format were scarce, so I would simply learn from blog articles (which no one wanted to do), and create well-edited videos on the subject.
From there, some of the most notable businesses I started was a clothing line, an image hosting website (back in the Myspace days), and a $1-a-day subscription-based web design firm (based on the Dollar Shave Club business model). The image hosting site got so popular that my web host literally shut me down, and at that age, I didn’t have the funds to keep things going. Sprinkled between those more notable businesses are about a dozen other websites and businesses that I tried, and failed.
The story of how WebJoint came to be wasn’t anything close to an “aha moment”. In fact, it’s a story of pivoting until you find your success. Which is the biggest lesson to be learned here.
When I had just graduated high school, I really wanted to make a professional, subscription-based website that taught web design. Back then, there weren’t a thousand websites that had online courses like there are today.
I approached my now business partner, Christopher Dell’olio with the idea, and he enthusiastically jumped on board. However, our first journey as business partners was simply the creation of a web design firm. The idea was to use the skillset we had, to be able to earn enough money to hire a development team and bring the educational website to life.
Our original web design firm was just a general firm that serviced anyone in any industry. We didn’t find much success there, but a turning point for us was, in fact, finding a client that owned a dispensary. My business partner had freelanced for him in the past, and he was opening a second location that needed a website.
Once we built that site, our eyes got opened to the cannabis industry as a whole. We realized that we didn’t gain any traction by being a general web design company, so we decided to niche down and became a cannabis web design company. Once we did that, it was a night and day difference.
WebJoint was born after us having built about a dozen websites for cannabis business owners. Over time, we started to get a behind-the-scenes look at their business operations and discovered ways we can create value with software.
Take us through the process of designing, prototyping, and manufacturing your first product.
The immediate challenge here for us was the fact that neither I nor my business partner had the skill set necessary to code a full-fledged software. Chris has some technical knowledge, but we needed a true CTO.
Thankfully, through some previous connections, Chris was able to secure us our first developer and we were off to the races!
Billy, our first developer, did the coding, while Chris and I steered him in the right direction. By this point, we had learned a ton about the cannabis industry, so we already had a good idea of the things we could automate through software.
Webjoint 1.0 was crude, and only had about 5% of the functionality it has today. Our aim at first was just to make a website builder for the cannabis industry. That way, we could charge clients a monthly fee and start generating recurring revenue. Plus, by having the clients use our software to build the websites themselves, we would be able to scale much easier.
At the time, website builders like Shopify or Squarespace would shut you down if they found out you’re a cannabis business. Plus, we started packing our website builder with a ton of cannabis-specific features that our clients wouldn’t be able to find anywhere else at the time.
Describe the process of launching the business.
At this point, Chris and I were still working out of our bedrooms at our parents’ house. We started the business with $100 in the bank account and had 0 connections to investors, so we launched Webjoint the only way we could.
The plan was to continue running our cannabis web design firm and take on projects to funnel the money into building WebJoint. At this point, we had ditched the online course business idea I had originally approached Chris with altogether.
The two-business combo worked really well at the time because we were also able to find our first WebJoint customers through our web design firm. We started convincing some of the custom web design customers to just try out our new website builder instead.
Instead of paying us one, larger flat fee, we now accepted a small monthly fee, which was a huge bonus for them. Of course, the idea was that in the long run, we’d benefit by charging them that monthly fee for as long as they remained a client.
We started slow, onboarding one client at a time, and taking in their feedback. Each customer always had slightly different needs and expectations, so by listening to them we were able to improve the software day by day.
When we felt like we were ready to scale, we started doing some heavy marketing.
Since launch, what has worked to attract and retain customers?
There are 2 key takeaways I want to touch on here.
1) Marketing our general web design business was almost impossible, but marketing our more niche businesses always came naturally.
We never struggled with marketing once we made the conscious decision to enter the cannabis industry. Even with our web design firm, when we niched down into cannabis it became crystal clear where to find our customers, how to speak to them, and what they were looking for.
In the early days, we did a lot of manual outreach by going to places like WeedMaps.com (yelp for cannabis businesses) and emailing the dispensary owners with a cold pitch. It was really as simple as that.
2) Marketing can look vastly different depending on the industry you’re in and the type of product you have.
For example, in the cannabis industry, businesses cannot use any traditional forms of media for advertising. That’s right, no Facebook Ads, Instagram Ads, Google Ads, etc.
Plus, because we’re in a highly regulated market, there’s only a limited amount of license holders to market to. Before California introduced the new recreational licenses, there were an estimated ~10,000 businesses throughout the state. Now, 3 years of licensing after, there are only about 700 dispensaries and 300 deliveries.
So it’s a quality, not quantity, game when it comes to our niche B2B software.
What works best for us today is simply focusing on creating a quality product to maximize word of mouth and referrals. Being in a blue ocean here helps a ton as well because we’re not drowned out in a sea of competition.
Besides that, we’re heavily involved in the community throughout the State of California. If there’s a cannabis event, you can find the WebJoint team there in mass. Because there are only a few hundred business owners to target, it simply works best for us to meet them in person and form a working relationship.
Lastly, for those business owners that we can’t get around to meeting in person, our SEO has always helped us as well. We come up first or second on Google for targeted keywords like “cannabis delivery software”. And of course, being in a specific niche within a specific niche helps make ranking higher on Google easier as well.
How are you doing today and what does the future look like?
Cannabis delivery is a small, small part of the industry today, but we’ve ultimately placed our bets on it continuing to grow throughout the years.
By getting in really early, we’ve been able to find tremendous traction and stand out as a clear market leader with a ~33% market share. As California continues to give out cannabis delivery licenses, we’re here to continue servicing this industry and have deeply entrenched ourselves in the community.
Also, new states continue to legalize cannabis year after year. We have our eyes set on any state that enables cannabis delivery and wants to continue to bring our world-class cannabis delivery software to new markets as soon as they’re ready. We have a healthy head start from the competition since we’ve been focusing on this niche much longer than anyone else, and I’m extremely optimistic about the future.
In addition to growing our first product, we’ve also launched our second product earlier this year: the WebJoint Direct-to-Consumer platform.
Because we’ve built the largest licensed delivery network in the State of California, we’re now able to leverage it in unique ways. If you’re a delivery service that uses our WebJoint Delivery platform, you can apply to become a fulfillment partner for our D2C platform.
The idea here is that we’re partnering with key players, such as MJ.com, or Weed.com. And we’re making software that pulls live cannabis inventory to their website. A consumer anywhere in California can visit their website, sign up, and place an order.
When that order is placed, we simply send it to the nearest delivery service that uses our delivery software. That way, we already know what inventory they have, where their drivers are, and if they’re able to successfully fulfill that order.
Essentially, in its present form, WebJoint empowers anyone - whether you’re an influencer, a marketing agency, or a regular John/Jane Doe - to start their own cannabis eCommerce marketplace by leveraging our network of state-licensed cannabis deliveries.
Through starting the business, have you learned anything particularly helpful or advantageous?
I tried to fit these lessons into the paragraphs above, so you could get the context as to what happened for me to learn those lessons, but I’ll summarize here.
1) Niche down, and then niche down again
- Trust me, you don’t want a market with millions of people in it. In fact, you want the opposite! The smaller the niche, the easier it is to make a name for yourself. It’s easier to market more strategically and speak their language. It’s easier to rise in Google search results, easier to stand out as a market leader, and the list goes on.
- If you don’t want to take my word for it, maybe you’ll listen to the CEO of ServiceTitan, Vahe Kuzoyan. ServiceTitan is a billion-dollar software company that just recently raised $165 million, and their Total Addressable Market (TAM) nationwide is only about 10,000 businesses. If that doesn’t tell you that you don’t need your market to be millions of people, then I don’t know what does!
2) It’s impossible to fail if you pivot enough
- I had to pivot six times before I found considerable traction. If I had given up in any of those moments, then the business would have simply failed. Instead, we took what we learned from the previous experiences, improved on what we thought needed changing, and continued.
- I didn’t get to touch on all of these throughout the interview, so here are all the moments we had to pivot:
- We first set out to build an online course website.
- Then we decided to make a web design firm instead.
- Then we switched up to a cannabis web design firm.
- Then we switched up to a cannabis website building software.
- Then we added POS, inventory management, etc., and became a full-fledged cannabis business managing software for both dispensaries and delivery services.
- Then we niched down further, decided to stop supporting dispensaries, and only continued to build delivery-specific features.
3) Bet on the future
- Especially with software, what you’re building today, won’t be done until 6 months to a year from now. So what the market might want in a year, isn’t necessarily what it wants now.
- We used to service brick-and-mortar dispensaries but we stopped because we realized we were too late to that game. The cannabis POS providers that are doing well today came from states like Colorado, which had legalized years before California. The cannabis delivery license, however, is brand new in the cannabis industry and we’re still early enough to ride that wave.
4) The people around you matter
- Many people feel like entrepreneurship is a lonely journey, but I’m here to tell you that it’s the opposite. And the people around you can really make or break the business.
- When it comes to WebJoint, my business partner and the rest of my team have really been there to provide the much-needed motivation to pivot and continue pressing forward even when we hit a brick wall. I’m one specific type of person with specific strengths and weaknesses. But you really need many different types of people with different strengths and weaknesses. Don’t look for a business partner that is the same as you. In fact, my business partner and I are literally opposites (think Shaq & Kobe).
- In my personal life, I built WebJoint with a girlfriend who’s now my fiance. The emotional support and understanding coming from your significant other, or anyone close to you is vital for your mental health while going through this journey. You don’t have to go at it alone.
What platform/tools do you use for your business?
This is a great one for other like-minded/OCD/organized entrepreneurs such as myself. The right software and automation is the difference between a well-oiled machine and a complete mess that’s bound to explode at any moment.
At our core, our sales, marketing, and support teams all use HubSpot. We have complex automation built out for each department and integrations when necessary.
For example, Hubspot is integrated with our website for inbound leads, as well as Mailchimp for email marketing. It’s integrated with Aircall for phone calls, and will eventually be integrated with our backend software. That way the lifecycle of a client is tracked from the moment they enter the website, to when they get their demos, then receive training/onboarding, to if they ever leave.
Our product team uses Zeplin for design collaboration, and development uses Jira for organizing our dev cycles.
For overall communication with the whole team, everyone has a company email, a Slack account, and Zoom. Lastly, we all use Sunsama & Google Calendar to track our daily tasks and appointments.
What have been the most influential books, podcasts, or other resources?
I’ve found that listening to other CEOs talk about their real-life experience has been the most useful tool for me.
For reading, StarterStory is the best at this of course.
For listening, I recommend the “How I Built This” Podcast by Guy Raz. Particularly the episodes on WayFair and Slack are great.
For watching, I recommend Youtube in general. Although you want to be careful here because there are a ton of snake oil salesmen that talk the talk but haven’t really walked the walk. Youtubers I recommend are Alex Becker, Sam Ovens, Neil Patel, and Russell Brunson.
Advice for other entrepreneurs who want to get started or are just starting?
People often ask me if they should just quit their jobs if they're serious about starting a business. My answer to this is always no! If you don’t have any income coming in, then it becomes extremely stressful and difficult to focus on creating a business that might not generate revenue for months to come.
Instead, there’s a happy medium for anyone willing to follow it.
If you know that you want to become an entrepreneur, don’t go out looking for the highest paying job. The $100k, $80k, even $60k a year jobs will command your full effort and attention, and leave you with very little energy to work on your dreams. Not that it’s impossible, but working 40, 50, 60+ hours a week leaves almost no time left to spend on your own business.
Instead, get a part-time job! Things like waitressing, being a bartender, or even a pizza delivery driver. Seriously.
The beauty of these jobs is that your job becomes your “side gig”, not the other way around. As long as you can pay your rent, and keep food on the table, now the majority of your day can actually be spent focusing on bringing your business to life.
Are you looking to hire for certain positions right now?
Our next hire will most likely be another Customer Success Specialist. This is someone that’ll need to know our software inside and out, to help onboard our new clients and provide ongoing support.
We’re also always looking at applications from talented contractors. People like UX/UI designers, developers, writers, etc.
Where can we go to learn more?
I’m not very active on social media these days, à la the lessons that Alex Becker preaches. However, you can follow me on Instagram (@hilartdotcom) or add me on Linkedin (Linkedin.com/in/hilart) if you’d like.
To stay up-to-date with my company, you can visit our website, Instagram, Linkedin, or Youtube channel.
If you’re interested in the cannabis industry, we actually have a fun series we’ve been recording called Connecting Cannabis. I run around interviewing friends in the industry, such as Craig and Marc Wasserman from Pot Brothers at Law.
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