Low-Code Retail Optimization, with GoalProfit Founder Maxim Morozov

Welcome to this Founder Institute livestream. My name is Dustin Betts. I'm community manager at the Founder Institute, and I'm here today with Maxim Morozov, the founder of Goal Profit. This is an FI Austin portfolio company and the world's first low-code retail optimization platform. Maxim Morozov, thanks so much for joining today.

Yeah, thanks a lot, Dustin, for inviting.

Yeah, so before we dive into your company Goal Profit, the first question I always like to ask is please tell us just a little bit first about about yourself or your startup story. You know, what were the experiences, professional, personal, that led you to founding this retail intelligence platform?

Yeah, sure, it was a pleasure. So my background is related to sales and customer success. I have been more than 10 years in selling cool technologies to retail industry, to different big retailers, mostly in Europe, but also I had some projects in the US. As well. So I have worked in Nielsen and after 5 years in IBM. So that's my, the biggest experience in price optimization.

Yeah, so been in the sector prior to Goldprofit. So I'm already familiar with Goldprofit a little bit as an FI company. I know that you have your data-intensive intelligence applications that will evolve with the business, but please give us your version of the short pitch for those who haven't heard of it. What is GoProfit?

So yeah, sure. GoProfit, it's what we call low-cost retail optimization platform. So it's a highly customizable data platform which helps retailers to make more profitable decisions. So it's a data-intensive application. Mostly we help to optimize prices and optimize promotions and markdowns. That's our main value now for clients.

Perfect. Yeah, and we're going to kind of dive into all the details there, but I guess just at a high level, sort of the challenges that these retailers face. I feel like especially now, the past couple months with inflation, sort of at rates we haven't seen in a couple decades, determining pricing is such a huge challenge for retailers. So just tell us a little bit more about that. What are the different facets of pricing challenges that retailers face today?

Yeah, so retail industry, it's quite challenging. I think it's quite challenging business. So, and first of all, it's the biggest industry in the world by revenue, far bigger than industries and oil production, all the rest. So Walmart is still the biggest company by revenue in the world. But yeah, besides the size, it's the industry with a high pressure always on competition, right? So margins of companies are always always under pressure. And for example, 2020 was the— because of COVID situation, this pandemia, it was the awful year for retail. So in the US, I think it was like a heat of bankruptcies in retail industry. So many, many retailers went out of the market with 100 years history. So they couldn't manage their profitability and moved away. So yeah, and Nowadays it's even getting even harder because inflation is getting higher. So the profit, and that's why we called our company GoProfit. So we think our main mission is to help to survive, honestly. So to secure profits, to make more dynamic, more data-driven decisions, and to keep business up and running.

Yeah. When you talk about data-driven decisions, I feel like some of these retailers who went out of business, you could call them legacy retailers. I assume there's there's a good amount of smaller retailers out there who have no systems whatsoever to really help them use data to make these kind of decisions. So there could be people who are starting sort of even from scratch, you can say.

That's true. And I would add also though, so the other thing is the other trend which is also getting higher hits is dependency on IT. So IT people are getting more expensive. I'm not IT, so, but you know, all the engineers, the salaries are getting higher and higher, but it's driven by demand on digital transformation. So all companies want to be digital, right? They trying to hire more IT people, and, uh, you know, salaries are getting higher. So the answer of it, right, is no-code or low-code solutions. So solutions which less require IT resources. So you can build some data-intensive applications with, you know, limited resources of IT. So that's also the goal of Profit's, uh, you know, mission and design. Yeah, that's Interesting insight.

I like how you tied, yeah, that, uh, that the fact that it is low-code to this, like, the, the competition for developers, um, to digitize. So yeah, that's really interesting. So let's kind of dive more, yeah, into Gold Profit and your solutions. Like, tell us a little bit more about the platform, um, and how you're helping, um, these retailers to achieve, um, optimizations.

Uh, sure. So, so Gold Profit as a company was founded around the platform, around the product. We are product company. So it was founded by my co-founder Oleg, who is living in Austin. He built the platform in-memory database, which is quite fast, cost-effective, but what's more important that it has some local tooling. You can build business applications quite quickly. All feature requests or change requests are cheap. And we started the company around this platform, around this technology. And our first client was a mid-sized retailer in Europe who has requested— so they were looking at the market for price optimization, but the problem was that all solutions were too expensive. They were like enterprise level for multi-billion companies. And at the same time, they still need some flexibility like you have in spreadsheets in Excel, right? Which is a standard. So, and that was a proof of concept for us. So we started a project with this client, and after 2 months they signed a 5-year deal with us because they found that it's very comfortable. I mean, it's very useful for them. So they can build application on low cost, it's quite affordable for them, but at the same time they get the, you know, capabilities of enterprise-level solutions from big IT guys.

Yeah, yeah, that makes sense. Uh, totally, uh, great use of the low-code for that more medium-sized business who's not at that enterprise scale. So, um, yeah, if I'm a retailer kind of hearing this, I'm a medium-sized retailer, I'm curious to try out Bold Profit. What is that process like to get started? I understand like you will do like a tailored demo for potential customers. Yeah, what's it like to onboard, I guess, a new retailer who might be listening?

So the idea is to convert your data into money. So you have sales data, you have prices, promotions, you have some other cost activities, etc. So you bring all the data to us, we load it quite quickly in a couple of days, weeks, depends on the size. And after we build for you a tool quite quickly to optimize your business. So to optimize your critical merchandising decisions like what should be your prices based on elasticity and demand and competitors, what should be your markdowns based on your inventories, demand, and, you know, seasonality, what should be your promotions based on your financial goals. So we replace your manual work with spreadsheets with a fully automated dynamic price promo and markdown optimization tool.

Awesome. Yeah, yeah, that definitely sounds like so very useful for somebody who's going from spreadsheets to actually like leveraging their data with, uh, yeah, a more intelligent solution. So yeah, really, really cool. Um, are there other features that, you know, we haven't talked about yet that you want to highlight? I mean, I feel like, yeah, when I was just like looking quickly at your website to prepare for this, um, we've talked about, I guess, more specifics of dynamics and rules-based pricing, but even looking at the the price zone clustering, like geographically. It just seems like, I don't know, is there anything else you want to highlight on the GoProfit platform here?

Yeah, so GoProfit, it's not just a tool, but also we can help with some strategical, you know, imperatives. So we can help you to build your perfect winning pricing strategy. So typically you need to answer a couple of questions. What should be your price differentiation across regions and cities, which is price clustering. So if you have stores in different cities across the country or across even globally, we can tell you precisely where prices should be different, where prices you should keep the same. And again, in terms of your product portfolio assortment, you could have some products where you want to compete aggressively and attract some traffic, and you can have some products where you can get profit. Profit drivers or profit builders. Our tool with embedded artificial intelligence and data science algorithms can help you to identify it automatically.

Yeah. Awesome. My next question is where I always have founders go out on a limb in their industry area of expertise and make a prediction. What is your prediction for how technology and data insights will change small to medium-sized retailers, say, over the next decade? Yeah, what was your vision for the future of retail? As you talk about such a competitive space, I feel like there's going to have to be more and more adoption of these kinds of solutions, but where do you see these trends kind of headed?

Quite good question. Thanks a lot, Dustin. So I think that the overall trend is, is, is to simplify, right? To making everything commodity. One day all technologies, all innovations, they become commodity. So, and now we see that we live a little bit uncertain world. So it's very hard to predict what will be tomorrow. So with market trends, with currencies, right, with economy. So it means that you don't need to, you still plan for 3, 5 years ahead, right? But you need to have something very flexible to bring your benefits right now, today, and get the quick return on investments. Okay, because not to invest a lot because you don't know what will happen tomorrow, maybe you need to, you know, to change your strategy. So yeah, so I think that flexibility is, and agile approach in general, is getting in times of uncertainty, it's getting more more trendy, more popular. So, and everything which is too complex, you know, requires a lot of effort, time to implement, long time to market, it's getting, you know, less demanded now on the market. So that's what I see.

Yeah, yeah, that makes a lot of sense. I think that totally jives with the, as you said, like the unpredictability. And yeah, you need to have that flexibility and not have so much hassle maybe with some of these like enterprise-level solutions that require more technical expertise. So again, a good reason for your solution being low-code, it's much more lean and able to have that flexibility. Yeah, that makes a lot of sense. Where is Goldprofit headed next? I know around a month ago you guys announced a pre-seed funding round. Congratulations on that. Is there any news or updates you want to share with the FI community, asks for the audience, or just tell us about where you're headed next with Goldprofit?

So yeah, we were happy to that. We bootstrapped, you know, we started just on our own funds. We are happy to be in Founder Institute accelerator program. It helped us a lot, you know, to shape the company. And after we have spent almost 1 year building the platform, building the product, so we just now are starting to scale business. So we have just a couple of clients now and And we invest this funding into more pilots, more projects, more clients, and grow globally. So the company, you know, by design, it's a global company. So I'm living in Finland, so my co-founder in Austin. So we have employees all over the world, so different continents and countries, and we are happy to have this kind of remote, fully remote company. So the idea is we keep improving the current price optimization suite of software. But in long-term run, we are developing the platform. So we want to be one day a standard for retail industry, for retailers, for CPG companies, consumer commerce itself. So like the standard how you manage and build intelligence applications. So maybe next Oracle or something like that. So that's a long-term plan, but now we are playing in the niche. And trying to get some proof of concepts.

Definitely. That's really exciting stuff. Congratulations again on the round and growing the team and yet being a fully remote global team. That's exciting, I think, for a company like yours and the solution that you're deploying. This has been really interesting. Learning about the convergence of retail data, but then applying this low-code methodology to help reach more retailers today. I think we're all certainly really looking forward to keeping up with Gold Profit at the Foundry Institute. And where you're headed next. But Max and Moritz, thank you so much again for joining us today.

Thanks a lot, Dustin.