An Interview with Fundamental CEO, Justin Rasekh, and advisory board member, Ali Saheli.
Social Messaging, currently serving approximately 1.2 billion users, marks an amazing trend that is expected to surpass traditional social networking sites as the aforementioned decentralized mobile format gives users a greater independence, anonymity and control that sites like Facebook sadly lack. Fundamental Applications is positioning itself to take a slice of this lucrative sector and is seeking to close a transformative acquisition of Foro Technologies that will significantly grow its offering and market footprint, while boosting its brain trust with a key advisory appointment of Ali Saheli, Co-Founder and CEO of Foro.
Before we get into in tech, I want to touch on the power of this appointment by illustrating Ali’s background and what he is bringing to the table. Ali, tell us a little about yourself.
ALI: “So basically I started programming when I was a little kid where I made my first program at the age of seven. So it’s been with me my whole life. I did my undergrad and master in computer engineering, and after graduating, I built a bunch of projects and sold off the small ones. Then I started working at a Vancouver-based software company called Recon Instruments. It was there, at the age of 21, that I built Foro, a mobile marketplace for students. I grew the user base, expanding it to universities, and launched the company, Foro Technologies, using funding from investors in the Silicon Valley, Vancouver and Montreal. Which brings us to now.”
Foro Technologies reached some renown before Fundamental began the process of acquisition having been added to the reputed Montreal-based incubator program, FounderFuel in 2014. How is it that you and Justin met and how did that relationship develop?
JUSTIN: “I can field this one. What happened was back when Fundamental Applications was listed in the fall of 2014 we had one main product in the mobile chat space which was Serum, which is also an anonymous mobile messaging app. So I was reaching out to a few friends of mine who were living off-shore at the time, but had their hands in a lot of tech deals. One of them referred me to Ali saying I should speak to him because he is running one of top four anonymous chat apps called Truth. Of course I recognized the brand and I recognized the company, so I asked for Ali’s phone number and one thing led to another. Ali was actually in town from San Francisco after visiting one of the major tech players down there. We met, went for lunch and sparked up this conversation about the mobile chat space and where he saw the industry going, and we stayed in touch afterwards. Ali eventually moved back to Vancouver and we re-connected. In doing that, I ended up asking him to join our advisory board. Then after joining the advisory board, things took shape. Ali and I have a great business chemistry and we work very well together, which is incredibly important in any corporate endeavor. Besides that Ali had core technologies which I saw tremendous potential for in the Canadian markets so the acquisition just made sense. So here we are together working day in and day out striving to grow both companies.”
Describe the synergy between yourself and Justin. What niches do you respectively fill within Fundamental’s team?
ALI: “I would say that I more the product guy and Justin is great with the business. I think about what people need in terms of the product, what features we need to change or add and how we can scale it. That’s my expertise to make a great product and Justin expertise is with the monetization. For a successful product such as this, you can’t have one without the other. Justin is not only great with monetization, but he has a tremendous amount of experience and knowledge in how to market it and roll it out.”
Now onto tech. Foro Technologies is responsible for the runaway hit anonymous mobile messaging app, Truth, which hit iTunes top 100 mobile apps 2014 with over 160k registered users. Can you tell us a little about Truth and how it might, once the acquisition closes, augment Fundamental’s anonymous mobile messaging app stable, which currently contains the unique anonymous messaging app, Serum?
ALI: "About a year ago, we sat down as a team and began to think through an issue. We all wanted to talk to our friends with anonymously and honestly. You see, Facebook, Twitter and other social media platforms, you’re always worried that if you say something, people are going to judge you for what you said. Wouldn’t it be great if you could give feedback to your friends without getting judged? So we built Truth, an anonymous messaging app that would allow you to talk to your friends without them knowing who you are. Without revealing your friends’ identities, the system would still allow you adjust the context where you ask your question, like making the question available to friends who go to the same school, live in the same city or have mutual friends. After we launched it, it took off in high schools, colleges, workspaces and just kept growing.”
JUSTIN: "Let me speak to the integration of Truth. We intend to combine both Serum and Truth and roll them out as one complete product, whether that product is called Truth or Serum 2.0. There are some great aspects to both offerings which when merged together, will create a fantastic opportunity. We will have the proven branded background of Truth and its user base, combined with some uniquely innovative tech we developed in the Serum product. So it’s just a matter of what the adoption rate will be and what the smartest decision will be in regards to the roll out, but we’re definitely intent on making the two great products one.”
Truth won’t be the only innovative app to be brought over to Fundamental Applications’ portfolio once the acquisition is complete. Foro, a socially driven mobile ecommerce app designed to allow students in universities to buy and sell items with other students at the same campuses without the worry of craiglist creeps and untrustworthy deals, has the potential to fill out Fundmental’s pipeline. Can you explain how Foro’s unique technology works?
ALI: “Two years ago, I was selling and buying my snow boards and I realized craiglist was a real pain. There are so many people scamming the prices, they fail to meet up with you or they aren’t who they say they are, so I thought wouldn’t it be great if I could build a system that only students could buy and sell on. Where they would need to verify who they are through their university email address so they can’t scam me. So we built Foro. It is mobile-only so you can take pictures of the items you are selling and if you’re buying, you can see who you are buying it from. What interesting is, we also show you mutual friends, so if you buy something from me, you know immediately if we have any mutual friends which further adds to the verification process and strengthens trust. The app also gives the seller proximity which allows the buyer to figure in convenience and logistics when they are searching for possible purchases. All this gives the users the freedom of buying and selling directly without the inherent problems carrying out transactions with complete strangers.”
What is Foro’s demographic, what is its current market footprint and what is the potential of this market?
ALI: "Foro is a marketplace for students. We launched it initially at UBC (University of British Columbia) and it took off. People weren’t going downtown or using traditional systems like craiglist, they were buying and selling off each other directly with Foro. Right now we have about 7,000 Foro registered users, but we’ve barely even tapped the potential. For instance, in Canada we have a total of approximately 2.0 million full and part-time students attending universities and colleges. And in the United States, you have approximately 21.0 million full and part-time students attending universities and colleges. You can imagine the size of the demographic if you expand it to encompass the globe. We want to capitalize on that market, which we think has been largely ignored.”
How will this potential acquisition change Fundamental’s demographic?
JUSTIN: “We always thought that Fundamental Applications was geared to serve millennials and we still will be. The Truth app itself has taken a life of its own and of course there’s a corporate entity involved with that app, but primarily you’re going to see younger kids using that app – high school students, university and college students. Foro is currently only targeted at university and college aged students, so we would be staying right within that niche of supplying our services to millennials.”
Given this considerable offering ammunition that is potentially at hand, how would Fundamental guide itself over the next 12 months when the acquisition is complete?
ALI: “If all goes according to plan, we will push on the continuing rollout of Foro. Now that we’ve joined forces, we have to be really aggressive in terms of expanding Foro. We would expand Foro from UBC and SFU to all other western universities. Then we’ll move out to McGill, Concordia and other Montreal-based and eastern universities. We hope to be dominating the major universities and colleges in Canada by the end of 2015. We would also branch out to universities in the United States by the second half of this year. We are already in two universities in San Francisco, but we would expand further into other states. The one thing we would really have to focus on is monetization. We would have to grow out our payment systems and get a cut of every transaction.”
JUSTIN: "As far as milestones go, again if everything goes to plan with the closing of the acquisition, we basically have an agreement we put in place that has to do with the transaction that deals with user base growth. I have to say I’m not really concerned about those milestones as I feel we will hit them immediately upon rolling out a marketing strategy in Canada. So what I’ll say is hang on tight and watch the users grow.”
So why should investors jump on board in 2015?
JUSTIN: “I think it’s pretty cut and dried situation. We have a proven user base. We’re not hauling around an idea that needs to be pushed through development, we have a working product, branding and two years’ worth of marketing. If you look online for either Foro or Truth app, you going to find great reviews in major publications like TechCrunch and Mashable to name a few. So in the end, when this acquisition closes, we’ll be bringing proven products that solve real problems in everyday lives. And beyond that, you would see a direct return in monetization from Foro four weeks from today. That’s key for a tech investor, or any investor for that matter, that we have monetization and a proven product that already been shown as a useful tool over and over again. To reiterate, you’re not investing in an idea, you’re investing in a proven company.”
FULL DISCLOSURE: Fundamental Applications is a Stockhouse Publishing client.