Building One of the Fastest-Growing Startups in the Nation with Afif Khoury

Startups get the party. Startups get the party started. Startups get the party. Startups get the party started.

You want tech and tacos Tacos and tech you know we got tacos and tech is on smash border green guacamole keep accountants counting beans Contador Quentan frijoles found us trying to raise some queso la vida San Diego school of rappy rapping fire tortillas round jalapenos in these modern times a crappy and coffee my coding yoga posse fold the body origami we be surfing Coronado eating tacos El Gordo the taco stand in puesto lucha libre and sombrero Got a shout out to coast angels by the ocean watch the sunset La Hoya shores Entrepreneurs trying to get funded When San Diego Startup Week is popping in the summer Oceanside to Tijuana Estee be full of hustlers from couch surfing to penthouses right on the beach Tech leaders who who believe stars are within reach we interview and founders who be shooting for the Moon SD TechOS with your host Neil Bloom. Come on.

Startups get the party.

Startups get the welcome to the Tacos and Tech Podcast where we discover cutting edge San Diego technologies and the builders making it happen. I'm your host Neil Bloom, San Diego's Tech Ambassador and together you're going to put a face to the name of today's tech leaders with our own blend of local lifestyle.

Startups get the party. Startups get the party started. Startups get the party. Startups get the parties.

I want to take a moment to thank our friends at Cox Business who have enabled us to tell these amazing stories of local leaders, technologists, founders and funders. Cox is actually a 121-year-old family run business that thinks in terms of decades in building community a lot like we.

Do in building our startup ecosystem.

For years the local Cox Business team has helped us grow through partnering at San Diego Startup Week, South Dakota. Quick pitch and celebrating our local technical leaders at the Top Tech Awards. The Top Tech Awards are happening later this year but after applications are open now to submit for your favorite cto, CIO or VP of Engineering to be recognized as a Top Tech Leader. You can Apply now@toptechawards.com Thanks again to.

Cox Business and welcome back to the Tacos and Tech Podcast. I'm your host Neal Bloom and we are doing this virtually first time in quite a while but we are really happy to have Afif Khoury, CEO of Sochi Online. Hey Afif, thanks for joining us.

Hey Neil, thanks for having me.

Sof, we go pretty far back. We go back to Evo Nexus days when we both had, well, you have your company and I was with co founder company Portfolium back I think it was like 2013. Is that when you got in?

Yeah, that sounds about right. Yeah, absolutely. Those were some good times back then.

Yeah, definitely. We each had our path since then and we want to get to know the story that's been going on for you since. Do you want to give us a quick high level of what Sochi is?

Yeah, sure. So Sochi is a marketing platform, specifically local marketing platform. And the problem that we really solve is for large multi location enterprises that have hundreds or thousands of locations, which means that they have tens of thousands of digital pages, whether it's social pages, review pages, listings pages, they have their local marketing all over the place and at the local level. And that workflow is extremely complex and and truly can't be solved without powerful technology. And so we end up serving as the backbone for all of their multi location marketing needs. Local marketing needs. And so we kind of think, you know, a lot of us, a lot of people call us marketing technology. At the end of the day, we're really solving complicated workflows. We're also workflow technology.

Wow, okay. Super important to tons of businesses. But I want to hear how you got into that because I think you've had a pretty varied path.

Right.

You, you're a UCSD undergrad, is that right?

Yeah, yeah, alum. Neuroscience and genetics was my background and what I studied and actually was working in a genetics lab for a little while and was fortunate enough to make a pretty interesting breakthrough and get published in the Journal of Cell Biology. So was a scientist through and through and then somewhere along the line made the obvious choice to go to law school and business school, which doesn't make sense to anybod, including my now wife who I met when I was a genetics nerd. So I did go to law school and business school, but I went to Northwestern for both. So that's Northwestern Law and Kellogg School of Management. But really I chose Northwestern because A they gave me a ride, but B attendance wasn't mandatory. And what I was really doing is I was starting a company called symptomcare.com. it was a self diagnosis software platform, really the first of its kind where we licensed thousands of medical records from Harvard and Yale and other publishers and turned it into a software program where you could self diagnose and then of course connected it on the back end to drugstore.com and a number of other vendors back then and was doing that while going to law school and business school, not really going to class. And the nice thing is attendance wasn't mandatory, so I could just show up and take the exams. What was interesting then, it was I enrolled in 99, and then in 2000, the bubble burst and I was running a tech company in that first person and got to experience everything that happened, the drying up of the capital, our licensing partners went away, almost went bankrupt themselves, etc. And so I found myself needing to get a job, and so I went and became a lawyer. Interesting.

Take us through a little bit more about just going into the legal world. I mean, you were obviously really passionate about genetics. Was it specifically to get into the IP space of genetics like you wanted to come back to your original domain?

You know, I, until today, love the sciences and big fan and very active in the investing community in the sciences. So I stay very close to it. But I fell in love with software and really the law school, business school was just a way of not going to medical school and being able to run my company. You know, I had grown up in a household where being a doctor was a big deal, and so when I chose not to do it, I needed a replacement. So I sort of, you know, took those exams, got into a great school, made sure that I had time to run the company. But what I was really doing is chasing after my first. My first software play.

Got it. So you. So you knew you want to be an entrepreneur pretty early on.

You know, I didn't know what you called it. Right. I just had this fire and passion that knew that I couldn't fulfill it sitting in a. In a classroom much longer, let alone going down a path that would have been very long into the medical profession. Again, love the sciences. So it wasn't easy, but was staying close to it because symptom care was all about, you know, diagnosis and medical conditions and. But. But using software to bring that to the masses. So, yeah, I guess that was an entrepreneurial spirit back then. It was just a niche. Interesting.

Okay, so you. So you did. You grew up in San Diego or where'd you actually grow up?

I did. I mean, I immigrated when I was about 12 years old initially to the San Mateo and Foster City area up north, Northern California. But pretty quickly after that came down to San Diego. So I was down here 6th grade, 7th grade, 8th grade, middle school, and then stayed for high school and college, as you noted earlier.

Got it. And then you went off to the Midwest. And then at some point came back.

Yeah, I came back to the Valley. So I became an attorney. I went with a big tech law firm, went into their science division, corporate M and A very focused on science and medical device and pharma companies. And then kind of again, that itch to software slowly brought me back over to the software group there. Within that law firm, I was at Wilson Cini for many years. Came back to San Diego, got married. Came back to San Diego because. Really, because my wife wanted to, if I'm being honest about it. But obviously I love it here because wilsoni was opening a San Diego office. So I got to help open that office. And then I stayed an attorney for a while. Then I went to help Gunderson Detmer open their San Diego office. Another great firm with a great group of lawyers. And then I left that to go raise a venture fund to start to get back to closer to operating and tech. The law was great. I love the M and A work. I love the complexity of some of those deals, but had really gotten too far away from what I really wanted to do, which was ultimately, you know, run a company.

Got it. So what time frame was that they started your first venture fund?

2010.

Okay.

Yeah, I left the yellow brick road of the law. They do a really good job of dangling that carrot in front of you to keep you. But I took a risk. I raised a fund. Ended up being a $70 million fund. We made some great bets. Now, you might remember the financial crisis of 09. So 2010 was still a very interesting time for venture, but there were great valuations, and I had great family offices that I worked with. And we made significant investments, not just in the dollars, but in the impact. We invested in food production and water reclamation, a number of really, really amazing projects, but we were open to anything. We also invested in digital marketing, which is kind of part of the path of how I now got to Sochi.

Got it. So it sounds like it wasn't purely just kind of a tech investment. It was. You're looking at some services and things like that, too.

Yeah, no, all those. When I mentioned food production and water reclamation, it was all tech. Yeah, you know, vertical farming, et cetera. Just ways to solve really big global problems. Which has kind of been a theme of, you know, sort of how. What keeps me interested. My wife is a school psychologist, and she's diagnosed me a long time ago as having some level of ADD and adhd. And I, you know, so to some degree, I need that next thing that gets me excited and just wherever there's a challenge we want it to be. And especially we felt like we could be part of that solution. So I did that. You know, in law I did that with Symptom Care. I did that in how we invested and we did that with Sochi. We took on a really massive problem that a lot said was probably not solvable. Interesting.

I would imagine there's a little bit of add in all of us entrepreneurs for sure, of some sort.

That's true.

We're always chasing something. So you were solely investing out of your fund, but it sounds like it may have overlapped a little bit with starting your own company. So at one point did you say, hey, I want to get back to running a company, a software company?

Well, I've been saying that in my head ever since. I couldn't, you know, I had to give up on Symptom Care. But when I actually got to do it was when we were getting to the end of Fund one. We'd invested in a digital marketing company that was in the social media space that was doing pretty well. And I started to really get involved with them, helping them with biz dev, et cetera and ultimately took over as CEO and then sold that company. And the lead engineer who was, you know, hundreds of thousands of miles away, sitting in Thailand. I'd never met him, only spoken to him over our Skype line. That'll age me a bit. Yes, there was Skype at one point. Yeah, him and I got got on this thing where we're like, hey, we see a new pendulum swinging and we think that all these brands that are enjoying their big pages on social media with 10 million fans, that they're going to realize that all that interaction is going to go local. And it was a big bet and it was one that a lot of people didn't believe in. The VC said no to us, but I really believed in it. So I took frankly whatever money I had left and some of my kids college funds at the time and I said, let's go, let's start this thing. I think this is where the market's going. And him and I started building and now we're at 164 people and offices in two states and multiple countries and it's going pretty well.

Wow, that's incredible. And your co founder is still in Asia? I know he had been for a long time.

No, so. So we finally were able to bring him over. It was maybe the most awkward meeting between two people you could imagine. So you know, think about this. For five years I've been staring at his image on a Skype, you know, on a screen, via Skype. And then one day he walks in my office and I'm already a little bit awkward, I'm a bit introverted, so what was I going to do, hug him? So I just put my hand out, shook his hand and said, let's get to work. It was awkward, but he's definitely one of my best friends and really have enjoyed working with him and love having him here in person.

Yeah, that's great. So he's in San Diego?

He is, yeah. Used to sit stone throw away from my office so I could see what he's up to. But all that's changed in the last few weeks.

Yeah, in these Corona times we're recording this early April, you literally could be anywhere in the world all over again wearing anything. Yeah, yeah. So did you kind of wind down your fund at the same time you started Sochi or what happened?

Yeah, great question. So we were in conversations of doing a second fund and obviously, you know, I went to the family offices, I said, hey, it's been a great run. We actually did phenomenally well with that fund. Everyone's capital was returned in year two. That's because we had some early exits and then the rest of the investments were going really well. So I stayed on some boards but worked it out with them where I wasn't going to do fund two. I was going to go run the company and actually at some point they became investors in that company. So it all worked out well.

Oh, that's good. And did you miss investing? Did you get back to it?

Yeah, I do keep investing. So I obviously continue to have an interest in technology and specifically in the sciences, which I love staying close to. So I formed a fund called Axon Ventures with another partner. We have relationships with a number of family offices and high net worth individuals. Whenever we see deals that we like, we vet them, we bring in technical experts. When we're ready to cut our own check, we'll go show it to everybody else and then form a separate investment vehicle and invest together. So we've made about, I don't know, maybe 20 of those investments over the last four or five years to the tune of probably around 15, 16 million. I think every single one of them are San Diego based.

Oh, that's great. Do you want to mention any of them specifically?

Well, Etiko is one that went out, so I can certainly talk about that one. I think the others are all private and probably should keep it that way we tend to keep a tight lid on, on those things. But a lot of great science Companies are all 100% either medical device pharma or some other form of biotech.

Got it. Well, congrats on Etiko, another Evo Nexus company who I think we were all in Evo at the same time.

Absolutely. So I had the inside track on that.

Yeah, it's good. I mean, that's kind of helpful. In San Diego, being a smaller community, we get to know a lot of the companies around us.

Well, it is. And obviously there's not a lot of capital, so it's, it's, it's also great for the community and do what we can to, to make sure the companies here that are really good are getting funding and getting exposure. And you know, I'd love this to be the place where my kids come back to run their own companies. And so whatever, whatever I can do to help that I'm trying to do.

Awesome. Well, take us through a little bit then, like how the company's grown. I'm sure there's been pivots in terms of business model from back in 2012, but take us through that a little bit.

Yeah, I mean, you know, we built this for the, for that brand use case. Right. Again, how would a burger king manage 150,000 digital pages that say Burger King? That to you and I, that's, that's Burger King. We don't care that it's some local franchisees version of Burger King. It's the brand. But it turned out when we first built it that the brands were still sort of ignoring their local presence. That, that what we thought the pendulum that was swinging, we thought would swing a little bit faster. So our first pivot wasn't so much in the platform, but it was in our target customer. We decided to turn to the agencies into smaller verticals to find buyers that were paying attention to this local problem. And we were able to generate enough revenue then and to grow to sort of allow the brands, which was the initial use case, to come around. And then now the brands is our fastest growing segment. We have over 75,000 businesses on the platform. We've been Inc 500 the last two years. We're just named Financial Times 500. I think one of only two San Diego companies on that list. And we were top 100 fastest growing companies in America. So the growth has since really exponentially grown. We had seven people at Evo. We now have I think 170 and it's going really well. Man. And the good thing is it continues to throw really difficult challenges at us.

I mean, specifically right now, working remote, maybe. How's the team doing? 170 people, all working from home.

You know, it's amazing how resilient humans can be when you throw something at them and when they band together and when there is a culture that allows them to still feel part of something, even when they're not physically part of something. Right. In our case, we have a tremendous culture around that, around work ethic, around relying on each other, not working in silos, and that transferred extremely well for us. I can't speak to a lot of people who may be struggling with it, but there's a sense of loyalty and responsibility to one another and nobody's dropping the ball. In fact, we're all sort of complaining that we're working harder than we ever had. I don't know what's leading to that, but I wake up, I barely roll out of bed, get clothes on and get at it. Usually spending 14, 16 hours in meetings, doing work, et cetera. But the team is all there, they've all banded around us. We're committed to them, they're committed to us. So it's gone really, really well.

That's awesome. What's like, revenue? Not just revenue, but how are customers doing? How can you tell from.

Yeah, I mean, so obviously, you know, we work with big brands, but. But ultimately what we're helping them is, is with their local communication. And you can imagine everything in local, especially in certain verticals, has really been decimated. There's some verticals that, you know, this has been like the Ice Age now, right? So travel and hospitality, health and fitness. Luckily, our customers are across a very broad spectrum of industries, so some are not doing as well, some are doing really well. Surprisingly, the ones that are not doing well, we are leaning in with them. You know, we're giving them free time on the platform, we're giving them more services than we ever can, but they are using our platform more than they ever have. You know, it's sort of their communication lifeline. And so, yeah, we've seen a bit of a downturn there. Not in usage. Usage is through the roof, but just in the ability to sort of sustain. So some of these smaller local locations of larger brands, they might have two to three months of Runway. And so they're holding on through all this and we feel for them and we're working with them, but the enterprises as a whole are going to be fine. Right. These are the same companies. We're going to expect to see when we come out of this and we go down a strip mall and you see all these stores and logos that you're used to. They all roll up to an enterprise that's typically very healthy who has good balance sheets. So we're fortunate because we sell direct to the enterprise. Our partners are the enterprise we help them with. The local part is struggling a little bit, but will also be part of the reason that they'll rebound faster because they have been communicating so well and do have these distribution channels.

Okay, well, I'm glad to hear that you guys are doing okay. You already looking into some of these business resources, some of the stimulus packages like the PPP loan or anything like that?

Yeah, ye. We are. I mean, look, it's my. I have two goals here is, you know, one is our customers supporting them. We know they're going to come out of this. We know we're going to come out of this and together we're going to go on to bigger things. But in the meantime, we're also very, very weary about our employees and their health. I mean, they have families, they're dealing with a lot. It's a very stressful time for them. We want to hold on to all of them. And we had just, luckily we had just raised capital literally a couple of months before all of this hit. Right. So we closed our Series C. We're well funded. We obviously still have to run a prudent business, but we don't want to be too reactionary and we want to make sure we take care of all of our employees and keep them around. So financially, very healthy. The revenues are still there. Our Q1 was actually extremely solid. I do expect to see some kind of a slowdown for sure. But my key is to not let anyone go that, you know, in the ordinary course of business we wouldn't need to. These, these PPP programs for tech companies, I, I think that's the purpose of them. Right. If you have good employees, that that should keep their job. And notwithstanding Covid and the reduction in business would have kept their job. This is what the government wants you to do as a business. It wants you to hold on to those people, spend that money on employing them and keep your business going. So from that perspective, I think it's a great program and I hope more companies do take advantage of it.

Absolutely. We'll make sure we put some links in the show notes here too for that. What are you hearing from your portfolio of companies? Pretty similar in terms of slowdown of business, but Trying to sustain the employee pool.

Well, the scary thing about investing in the sciences is there's typically no revenue. The good part about that is there's typically no revenue. So, you know, there isn't really a revenue effect. A lot of our companies are working on novel treatments or novel approaches to solving problems, medical problems, and they're not typically, you know, in revenue, they're not distributing product, they haven't been FDA approved at the time that we invested. And so in a lot of cases it's while they also need to make sure that they're well funded and they're, you know, if they're coming up on an, on a funding need in the short term, that's, you know, they're going to find that it's a tighter funding community. But right now most of them are not in that situation and they are in the sciences. And so our personal investments are not suffering from that. They are sort of R D companies that are continuing to make great progress. That said, obviously I'm very close to our VCs and VCs that I built relationships with and I know that that community is struggling and the tech community in general is really concerned and there are some companies that are right in the thick of some of the worst hit verticals. It's certainly all over the map.

Yeah, definitely. We've got kind of a vintage of companies probably similar age as you like cloud beds and some of these others in San Diego that, you know, hospitality and travel also. Luckily cloud beds just raised too, so.

Hopefully that raised and they have some of the smartest guys you're going to find in San Diego and you know, maybe your life. Right. So they're going to be fine, they're going to be great. But you're right, from a, from an industry perspective, they are right in the, in the eye of the storm.

Yeah. So it's cool to see the San Diego community kind of rallying for that. You know, a lot of speaking of cloud bids, like using their platform for good.

Right.

In Corona where they kind of leaned in and said, how do we turn our hospital, our hotels and hospitals? Are you seeing similar use of your platform at all? Like is there, I'm guessing obviously a local communication kind of function where a lot of your kind of using it as like crisis communication or other things like that.

Yeah, I mean you nailed it right on the head. Crisis communication, absolutely. A lot of the messaging now is about, you know, how do we be helpful, how do we offer resources and social media is a huge medium for that delivery services and all sorts of notifications and what's in stock and whatnot. So yeah, our platform, which is traditionally a marketing platform, is more of a information distribution platform at this time. Also from a business model for us, we're looking around at our customer base and we have multi location brands, but we also have some of the largest property management groups in the country and we've begun to put them together because there are storefronts near all of these apartment buildings and those relationships are really valuable with everybody staying at home and to help the businesses, the local businesses forge that relationship so they have a customer base in their neighborhood that they can service through these properties. So we're finding creative ways of helping them sort of connect and get through this together.

That's great. You're also super involved in the community. I mean, you've not just in Evo Nexus, but you've been involved as kind of a mentor. Same with Connect and all those organizations too. Are you seeing any of these organizations kind of do anything different now for the companies in times of Corona or are people still kind of focused on their own business and not, not as much community? What are you seeing?

You know, look, there's people that have always been extremely giving of their time. Mike Cran, Rory Moore, you know, the heads of Connect and of Evo and many, many others, I wouldn't dare start to list them all that are continuing to try to help. The question is what, what can you really do? Right? I mean, business owners now need to be as, as prudent as possible. They really need to dig into their financials, make that cash last. Obviously, introductions to the right investor groups, advice on what to do, how to make cuts, where to cut without giving up your future. All that's really important. But this is what's making this so dire. There isn't actually a solution. I mean, short of getting the cure and the vaccine and the test. I mean, there's different parts of the solution, but, but outside of that, you know, there are no hero hail Marys to be thrown here. I saw a post on LinkedIn that was half joking, half serious. But you know, we talk about all these unicorns all the time now. Everyone's praising the camels. You know, camel is well known for holding on to its water and being able to cross the desert with very little. And that's now what the best companies need to do, right?

Yeah.

So, you know, I think, I think there's a lot to band around and give advice and. But the situation is in fact quite dire and companies do need to do make some difficult decisions right now.

Yeah, well, it's good advice. I think what I'm curious to know is that, you know, what are. We're all like at home? We're missing a lot of our comforts, being with our teams, being out in the community. Some of our foods. Missing some of those, too. I know. I've got my favorite taco spots that, you know, I'm sure that the owners there wish they could have a delivery service as robust as some of these others. You finding are you able to get some of the foods that you want or are you missing a lot of those things in San Diego?

Yeah, I mean, I'm not eating that much these days, but we're certainly not. Or certainly not going out. You know, we. We keep the full. The fridge full. I've got four little boys here at home, so they. They pretty much wipe it out daily. But yeah, absolutely. We're not able to get out and eat that. You know, just socialize, eat that great food. We're kind of cooking every day, trying to be creative, but probably failing a little bit.

All right, so. So Corona ends in. In a positive way. At some point, we. We get back to our life. What are you gonna go. Do you have a meal you're gonna go have outside the home first?

Oh, that's a good question. I miss sushi.

Okay.

There you go. Yeah, absolutely. That's number one on my list.

Do you have a favorite taco spot that you will go visit? Or maybe they've found a way to do delivery to your home already.

So look, man, there's a lot of great taco in San Diego. I mean, we'll go up against just about anybody, and you almost can't go wrong. But oddly enough, my favorite taco in all San Diego, it's a fish taco, and it's at Pacifica del Mar. Not just because of the great view they have, but the taco is actually incredible. I think they only serve it at dinner, or maybe it's lunch. I might have it backwards, but it's actually phenomenal. Not many people know or talk about it. It's my favorite by far.

Okay. Over there on 15th. Yeah.

Right. Yeah.

Little spot. We should look and see if we can do delivery, maybe get some delivery. Pacifico, maybe they're.

They're still trying to hold fresh tacos, kind of, you know, you want them fresh. Right. Right off that. It's true. Delivery might get soggy. Etc. But yeah. Yeah.

Are you finding any favorite foods that new foods that you're cooking at home.

I'm a terrible cook, honestly, and, and my wife is so busy with the four boys that a lot of times she's asking me to help on that front and so it's my fault that we don't eat very well.

All right, all right, fair enough. So a lot of things to look forward to when we come out of this. You're a social media software company. Are you on social media? Is there a place that people can find the words of wisdom from you?

You know, I'm Most active on LinkedIn. I'm a bit of an introvert, so I'm not sort of out there as much as I like to be. I'm really the best place to find me is on LinkedIn. You know my. Just search for me and search for Soshi and you'll be able to find me.

Yeah, awesome. We will find you. We'll link to you and Soshi in the notes. Afif really, really great to chat with you. I wish I was seeing you in person and cheersing you over a nice local craft beer, but we'll do that when we we emerge from this triumphant.

We certainly will. Thanks for everything you do, Neil, to keep the energy up in the community going.

Thanks afeef. Appreciate it.

Thanks for joining us on the Tacos and Tech podcast with Neil Blum. Thanks again to Cox Business for helping make expanding the reach of the San Diego tech ecosystem big. Shout out to School of Rap for our rad intro music. And thanks as well to Nest Podcast Network where we are recording live inside their studio at Nest coworking in Bankers Hill. You can find Neil Bloom on Twitter eelbloom as well as fresh brewed tech and tacos in tech Pod on Twitter too.

Startups get the party. Startups get the party started. Startups get the party. Startups get the party started. Startups get the party. Startups get the party started.

You want tech in tacos, tacos in tech. You know we got it.

Hey.