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In this interview series, we are exploring the subject of resilience among successful business leaders. Resilience is one characteristic that many successful leaders share in common, and in many cases it is the most important trait necessary to survive and thrive in today’s complex market.
I had the pleasure of interviewing Jay El-Kaake, founder & CEO of Fera.ai, an app for Shopify stores that lets merchants gather, show and grow their reviews, customer photos and other social proof content. Previous to that he started the most popular eCommerce loyalty software in the world called Smile.io. Combined, nearly 100,000 eCommerce merchants worldwide have used software that Jay founded.
Thank you so much for joining us! Our readers would love to get to know you a bit better. Can you tell us a bit about your backstory?
I’ve always had a soft spot for helping retailers sell better. My family came to Canada as refugees from Lebanon, and my dad started retail stores right away. As a kid, I remember going to work with him and loving to help him make his store better. Alas, his retail stores never survived, and I always felt I could have done more to help.
At the age of 10, I discovered programming and became obsessed with building things. When I found out I could build software to sell things online I was in love. This turned into helping other struggling retailers out there so they didn’t have to suffer as my father had.
As a young adult I followed my dream and studied software engineering at the University of Waterloo. While there, I created Smile.io. A few years later, I stepped down as CEO to complete my MBA at the Ivey School of Business and started work on my new idea to battle the world of ‘fake news’ and decreasing consumer trust in companies.
That idea has now become Fera.ai — an app for eCommerce merchants that lets them easily collect, showcase, learn from and grow their reviews, customer photos, customer videos, and other social proof content. Fera.ai works for Shopify, BigCommerce, Magento and a few other eCommerce platforms.
Can you share with us the most interesting story from your career? Can you tell us what lessons or ‘take aways’ you learned from that?
When we were scaling the company, I wanted to bring in someone new to lead the business side of the operations. I had always believed that the best people to hire should check 3 main boxes:
- Eager to learn
The reasoning behind this is because we can always train for the rest of the skills, but you can’t train for character traits. Following this hiring philosophy had worked out for the company really well so far.
I found someone who seemed good (or so I thought) and we were accepted into the Y Combinator program as a cherry on top. The person I had chosen to hire checked the boxes, but a few red flags came up that I had ignored. He was banned from the Shopify office before due to malpractice and I felt his business practices were a bit sketchy, but who was I to know? I was just an engineer after all. I also justified my decision because all the proper legal documents were in place. I wasn’t worried.
A few months passed and problems started to arise. This person stopped answering messages for days on end and started performing extremely poorly. He was paid very well and it was becoming embarrassing to my team, clients and partners. I reviewed the legal documents and after several warnings given to the person, I decided to give them a very generous severance package (way more than the contracts had required). I thought all my bases were covered and our company could move on.
This is when I learned that I missed a very valuable checkbox when hiring: INTEGRITY.
After terminating the employee he exploded. He sent emails to anyone he could reach and lied about several things. He attempted to defame the company to punish us for letting him go. Not only that, but he destroyed company property and even caused several of our largest clients to cancel their accounts. He cost us millions in value, which for a startup is a big deal!
It took me nearly a year of heartache and pain to finally clean up that mess. I learned that this former employee didn’t care about his reputation in the eCommerce industry. He didn’t care about the contracts he signed. He didn’t care about the other people’s jobs he was jeopardizing. All he wanted was revenge and he knew he could damage the company.
The lesson I learned is you must test for someone’s INTEGRITY during the interview as well as check your other boxes.
You need to be able to answer this question: When sh*t hits the fan — how will they react? Unfortunately in a startup environment disaster scenarios happen all the time — it’s necessary to move fast and iterate for innovation. When that happens, hire the people you count on to stand by your side.
Now we always check for 4 things:
- Willing to learn
- Has integrity.
When this person tried to sink the company out of anger, the other employees offered to take pay cuts to help offset the losses. That’s integrity. I’ll forever remember their kindness.
What do you think makes your company stand out? Can you share a story?
After 15 years in eCommerce, I’ve built up a good sense of what is going to grow and what isn’t. I’ve seen eCommerce titans rise and I’ve seen them fall. What always happens is one company comes up with an innovative idea, then 100 other offshore companies copy the idea and offer it for 10x cheaper. How do North American companies compete? By coming up with the next big thing, rinsing and repeating. Offshore companies can copy your software but they can’t copy your brain and your team’s culture.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?
One person? Oh man that’d be a hard thing to single out. One person that comes to mind with respect to my story above is the VC Aaron Michel at 1984.
I think back to the Y Combinator days when my former #2 — my trusted confidant — betrayed me, my investors and my employees by doing his best to try to sink the company. At the time, we were planning an equity raise and to hire more people, but this person made it so we could no longer do that.
I was utterly heart-broken. I couldn’t eat or sleep for weeks. I dragged myself out of bed and tried my hardest to figure out the next steps. I felt like I had failed. I knew we still had a good business and that this person was wrong, but how could I miss such an obvious hiring factor? How did I let him talk me into thinking that being banned from the Shopify office was not a big deal? I was near tears. Even thinking of it today I get teary-eyed.
A few weeks later, I met Aaron from the VC firm called 1984. He had connected with me through a friend’s company whom he had invested in recently and asked to chat. 1984 was interested in investing, but in our call I was upfront and honest with him about what had happened.
Even after knowing we weren’t raising capital he and his partners continued to talk to me and help me see that it was not all that bad.
His theory was simple and he said, “All great companies go through a minimum of one event that may have killed the company.” His perspective was that we’d already gotten over that hump and we were still thriving, so I should be happy. The worst was over and we had won — so the future outlook was positive and I should focus on that. His perspective was mind-blowing at the time and made me feel so much better!
Perhaps the universe has a way of bringing amazing people to your doorstep when you need it the most.
Ok thank you for all that. Now let’s shift to the main focus of this interview. We would like to explore and flesh out the trait of resilience. How would you define resilience? What do you believe are the characteristics or traits of resilient people?
Resilience is the ability to weather the inevitable storms that every business faces. You must be flexible, willing to change, willing to fail and most importantly willing to keep going after you’ve failed.
Entrepreneurship is a guessing game at best. Even the smartest people in the world would agree: you can’t predict the future 100%. As long as that is true you need to be able to proceed when things don’t go as planned or else you’ll eventually be bogged down by all your baggage.
An example of resilience is evident through silicon valley startups. I’ve come to the realization that startups in the California valley are no more intelligent nor hard working than any other startups in the rest of the USA or Canada. The difference is that they are extremely well funded. They are able to go completely in the wrong direction for 6 months, see markets (like BTC) crash and lose all their clients, then keep going for another year with a totally new idea. CASH gives them the ability to pivot and weather economic ups and downs. This cushion of cash helps them to be resilient, and boy do they have a lot of it.
When you think of resilience, which person comes to mind? Can you explain why you chose that person?
A recent example is O2 Canada. I worked out of the same office building as their small team before and watched them hustle day after day. There were countless situations where their leaders Peter and Rich jumped through hoops to keep their vision alive.
Then, when things were looking bleak… COVID hit! But guess what O2 Canada makes? Masks.
In business you’re always just working hard to get lucky someday. Yes they did get a bit lucky in a very unfortunate situation, but they worked very hard along the way to get there.
Has there ever been a time that someone told you something was impossible, but you did it anyway? Can you share the story with us?
About 10 years ago, back, when I was starting Smile.io, my co-founder Mike (who took over as CEO when I left) pitched that eCommerce was going to be bigger than retail by 2025. That fact was important to our strategy since we planned to focus on becoming the leader in the eCommerce loyalty software.
We were laughed out of the room by some investors…”How could shopping in real life be worse than digital life?”
We were disheartened, but our spirits were lifted later we landed OMERS Ventures as an investor, who was also an early investor in Shopify (SHOP). Guess who’s laughing now?
Did you have a time in your life where you had one of your greatest setbacks, but you bounced back from it stronger than ever? Can you share that story with us?
Leaving my first company was a really hard decision, and it was super depressing to think about where I was in my life at that time. I had sunk everything I had into my first company and even dropped out of my last semester of engineering school to do it.
I was a broke college drop out with very little to show for it… Kanye made it seem so much cooler than it actually was.
It took about 3 years to get back on my feet. One year to finish graduate school and two years to pay off my debts. I worked relentlessly and was ready to give it another shot with Fera.
Did you have any experiences growing up that have contributed to building your resiliency? Can you share a story?
I had the privilege of being friends with someone named Mike Mcdonald who held the title for the youngest person in the world to win a world-series championship poker tournament at the young age of 18. He won 1M dollars at the European Poker Tour in 2008.
Mike had accumulated funds to enter into these tournaments by playing online poker games. He knew his odds and he would play them. Before long Mike was entering into tournaments that would cost up to 100,000 dollars as a buy-in. People would fly from all around the world to play in the tournaments and they were expected to last multiple weeks sometimes. He was playing a few tournaments per month.
One day Mike recently came back from a tournament trip where he was kicked out within the first hour. It was broadcasted on national television to millions of viewers and was expected to go on for a week. I met up with Mike and asked, “How does it feel to lose a 100k dollars buy-in tournament in the first hour?”
His answer was priceless. “I don’t know, well I guess it feels nice since I have the rest of the week to relax,” he said. Mike knew his odds and he knew that he can’t win them all. He knew that he just had to play a large number of games and look at the big picture.
Mike has since won 12M dollars more playing his odds. Good job Mike.
Resilience is like a muscle that can be strengthened. In your opinion, what are 5 steps that someone can take to become more resilient? Please share a story or an example for each.
1. Hire for integrity.
Your ship is not always going to be smooth sailing. The environments change — maybe not now — but definitely at some point. Chaos will ensue, and when it does, who can you count on to move gracefully?
People with poor integrity will be quick to kick you when you’re down and this will greatly weaken your resilience.
2. Get comfortable with your failures.
We all make mistakes and things don’t go according to plan. Being resilient requires you to be able to admit your mistakes so you can power on. Most people don’t do nearly enough of that.
3. Practice persistence.
Resilience is about weathering small failures along a route of mastery. This takes a lot of time and you need to get good at not getting distracted by the next new and shiny thing. This is way easier said than done. As long as you are following your market patterns and data, you’re going in the right direction then your persistence will pay off.
Persistence is resilience’s best friend.
4. Invest in yourself.
With more knowledge, more training or more power you are going to be able to stand ahead when things are tough. Don’t wait until things are hard to better yourself. Do it in advance.
5. Hire a pessimist.
A good CFO will watch your spending habits and will offset your optimism with pessimism. Walt — our CFO at Fera.ai — has already done that for a few times and I’ve been grateful for it. I wouldn’t consider him a pessimist but he’s certainly more realistic than I am.
Innovators are optimists by nature and it’s good to have someone who can offset your crazy thinking with some backup cash for tougher times. You’ll thank him/her later.
You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
War just seems like a massive waste of resources for humanity. There are still people in the world dying of hunger and somehow some countries still think it’s a good idea to put all their funding into military spend… just does not make any sense to me!
Imagine if governments invested in equipment for agriculture, clean water, and basic education for people around the world in addition to STEAM programs where applicable. Perhaps higher education levels, abundance of food and the strengthening of struggling economies would allow humanity to be in a better position overall.
We are blessed that some very prominent leaders read this column. Is there a person in the world, or in the US with whom you would love to have a private breakfast or lunch with, and why? He or she might just see this, especially if we tag them 🙂
I’d love to sit with Simon Sinek and hear his take on what COVID and mass work-from-home society is going to do to leadership. How will leaders change in the COVID world?
How can our readers follow you on social media?
This was very inspiring. Thank you so much for joining us!