We recommended Bloomstack last June. We liked founder and CEO Eric Delisle’s idea of combining all the systems and platforms cannabis operators use into a single platform. Not only was it a great idea, but it also seemed to be working. Bloomstack was picking up new customers at a nice pace and seemed to be on its way to help make the fast-growing cannabis industry expand even faster.
That was then. And it seems like a million years ago.
Bloomstack is now raising again on Wefunder. And a clue that not all went according to plan is that it’s raising at the same valuation — $8.5 million. Usually there’s a story behind a flat raise.
That is indeed the case with Bloomstack.
Shortly after its raise, Eric decided to upgrade its software. Looking back, Eric said he had no choice. It was taking entirely too long to make basic changes or roll out incremental features. And he needed to make changes in order for Bloomstack to grow.
Unfortunately, this wasn’t an ordinary upgrade. He wanted to base the new software on the same architecture that gaming software uses. It’s incredibly powerful and fast, providing much higher levels of stability, performance and simplicity. Eric was convinced that it was worth doing. He thought — and I have no argument with him — that it would give Bloomstack a pathway to market dominance.
But gutting the old software and replacing it with entirely new programming took longer than he anticipated… much longer. The company’s cash reserves shrunk with every passing month until there was no cash left. So Eric provided Bloomstack with substantial cash infusions from his personal savings.
The company could have — perhaps should have — failed. But Eric kept it going. It was more than sheer stubbornness. Eric believes what he has developed is unique. To his knowledge (and mine), no other company is adopting gaming software technology to backstop business operations.
Not only does Bloomstack’s no-code software replace about five to seven software programs… but it also gives a company with no coding expertise the ability to build its own apps and customize and add features in mere hours rather than weeks or months.
Only now can Bloomstack truly feel like it’s turning a corner.
On Friday, Bloomstack will try out its powerful new software in a real world setting for the first time.
The product will need some tweaking. Eric readily concedes this. But there is now a clear timeline for the product to reach the market. It begins beta testing in June and should be ready for commercialization by the end of this year.
So getting through the next six months or so is crucial. It won’t be easy. But Eric is determined. “This is not a deep hole,” he said. “We’re going to do this.”
Eric has no plans to give up. Not when he’s so close to launching an enterprise-supporting software that he believes is better than anything else out there and has the potential to take the market by storm.
So this is what Eric is doing to ensure the company keeps forging ahead.
- He’s in bootstrapping mode and has moved to India to take advantage of the low cost of living and labor.
- He bought a beautiful parcel of land near Mumbai, India’s financial capital. Called BloomValley, he’s turning it into an Airbnb resort. And as soon as next month, Eric says, it will be profitable. It’s also, Eric adds, an official Bloomstack asset. Its revenue will be used to fund Bloomstack version 2.0’s beta period as well as support the sales and marketing that would soon follow.
- He’s also raising up to $125,000 on Wefunder. Think of it as a bridge round that will help Bloomstack get over the hump and begin its next phase of rapid adoption and serious revenue generation.
- He’s significantly cut back on expenses. Burn has gone from $75,000 to less than $20,000 per month. He has six full-time paid employees. Others are working on a sweat-equity basis. Combined with Airbnb revenue and the capital raised on Wefunder, it should keep the company running until it’s ready to commercialize in five to six months.
I believe Eric’s plan is sensible and has an excellent chance of working. Which means the company has staved off going under for the next six to 12 months. That’s critical because it will give the company enough time to acquire customers and build back revenue.
That said, Bloomstack can barely afford further delays. Eric is employing a freemium model, giving away an installable version of its new platform that can run on a laptop without an internet connection. Cannabis companies will still be Bloomstack’s biggest targeted segment, but only in the short term. Bloomstack wants to eventually become the software company of choice for companies across the board.
That said, it’s not what early investors signed up for. But given the company’s difficult circumstances, Eric’s plan isn’t a bad one. There is a pathway here for survivability and perhaps even for eventual prosperity.
Bloomstack isn’t the first company to pivot in order to avoid going under. Many startups have done this and later emerged stronger and with a much-in-demand product that paved the way for rapid expansion. Instagram, Twitter and PayPal are just some of the companies that have undergone similar journeys.
I should also add that investors in Bloomstack’s previous raise on Wefunder have NOT lost money. The company has the same value as before. And despite its travails, the light at the end of the tunnel is very real. Thanks to Eric’s own capital infusions and determination not to give up, Bloomstack has been given a second chance.
From here on in, a lot of things have to go right for the company. But its upside is still intact. It may even be more intriguing than before. So, if you don’t mind the risk — which is still substantial — I encourage you to check out Bloomstack’s raise page.
And if you still have questions, feel free to contact Eric directly.