Forbes 30 under 30: Interview with Filip Rakowski

Within a few years, he went from programmer to a co-owner of one of the fastest growing Polish startups. Today, Filip Rakowski wants to make his Alokai technology a global standard in the e-commerce industry.

FORBES: How do you go about spinning-off a company worth $80 million from a software house?

Filip Rakowski: You definitely need an internal system that supports innovation. The founders of the software house, brothers Tomasz and Piotr Karwatka, built this in their company. Thanks to this another successful firm, Open Loyalty, grew out of its structures. And Alokai came from the fact that we came up with an idea on how to solve a pressing problem.

What kind?

Internal. At the software house, we did a lot of projects with Magento, a popular platform for creating e-commerce systems that frontend developers found extremely unrewarding. That is why we started looking for a headless commerce solution that could remedy this.

Headless commerce?

In the past, online stores were built in such a way that you chose a platform for creating e-commerce systems, for example Magento or SAP Hybris and it was there that all the necessary elements were created: frontend, backend, content management solutions, payments, orders, etc.

Technologies like this are powerful harvesters that are fine for a small website, but not for big e-commerce companies. Then they become slow, expensive and difficult to maintain.

Sooner or later they start to slow down the business. This is where headless commerce comes in handy, which consists in separating individual elements of the system, for example frontend and backend, so that they can be conveniently managed.

And you figured out how to build a platform that makes it easier to create a frontend.

Exactly.

You, meaning who?

We, meaning Piotr Karwatka and I. We worked on this project together, afterhours. And when we had the first version of the product, we put it on GitHub - an open source platform for programmers who help each other in the development of technological ideas. Soon, we had around 5,000 people interested in our solution.

Clever. You outsourced how to solve the problem.

The charm of open source. It was decisive for our success. We operated in unknown waters, and thanks to this we were able to create something new together. 

Initially, we didn’t even know within which app-building technology we should code our product. In the end, it turned out that we chose well. We chose Magento, which is well known in the open source community, and Vue.js, which was the great unknown at the time.

Knowing what we know now, however, we probably wouldn't have bet on it.

Because it was too niche?

Yes. Back then, platforms like Vue.js appeared practically every week. Many of them didn't survive on the market. And we were lucky to bet on one that survived and with which we grew together. 

At one point, our project became so popular that we became stars of the Magento and Vue.js communities — we went to conferences, gave interviews, promoted both technologies.

How long did it take you to spin off the separate company?

About three years. During this time, the product matured inside the software house, grew in scale, and the Karwatka brothers had an idea to make it a global standard and a separate business. 

It was also necessary because only after separating the software house from Alokai, other software houses could start using it.

How was your founding team formed?

Patrick Friday was the first to join us, previously working at the Droids on Roids agency, who helped us move from the technology to the sales phase. Later he became the CEO of Alokai, and I was assigned the role of technology director.

But before we split off, the brothers invited me and Patrick to the office, talked about the idea of creating a separate company, offered us shares and introduced us to Bart Roszkowski.

Because although Patrick and I were young and ambitious, we didn’t have business experience. Meanwhile, Bart already built three other companies - including a well-known insurance market comparison site, mFind.

That was January 2021. Two months later, we wanted to spin-off Alokai, but it turned out to be more complicated than expected.

It’s not so easy to spin-off a business from the structures of a software house, reconciling the interests of all shareholders and constructing the shareholding structure in such a way that investment funds would later want to invest in the business.

In the end, it wasn't too bad. In Series A, you raised $17.4 million, completing one of the largest rounds of funding last year in Poland.

True, but we paid for it with months of negotiation. When we went from Wrocław to Warsaw to finalize the investment process, 10 people sat at the table for two hours, signing new documents. A terrible waste of paper... 

Anyway, we found out that we managed to get accepted to the Y Combinator [tech startup accelerator], even though we weren’t counting on it. There was so much going on that we filled out the application on our knees — it took Patrick and Bart no more than an hour.

How did you convince the most famous startup accelerator in the world?

With the fact that we’re creating a new market category with the help of technology. And that we operate in an open source model, which sparks general curiosity. Everyone around was asking how we make money from it.

And how do you?

At the beginning, back at the software house, we did it in the "time and materials" model — companies paid us to build a system for them using our technology. But later, after Alokai was spun off, it became clear that we couldn't be a service company. 

So we started licensing our product, at the same time offering companies support in implementing the technology.  We focused on large enterprises. At the moment, we support about 40 companies that have already set up over 1,300 stores with the help of our tool. We’re racing forward.

How do you convince corporations [to buy your product]?

The strongest business argument is the speed and convenience of using our headless frontend. If a user engages with a good interface on a [retail] website, they are simply more likely to buy [a product]. We see it in the statistics. 

Our solution not only makes life easier for programmers, but also leads directly to  increased revenues.

I'm impressed with the way you talk about the business. I was expecting to meet more of a programmer than an entrepreneur, but apparently you've already crossed the Rubicon.

Maybe I'm not a purebred businessman yet, but the last time I wrote a line of code was a year ago.

How is that for you? You started coding at the age of 13. You've been doing this half your life.

The change wasn’t easy, but it also wasn’t completely unfamiliar. Before Alokai and the software house, I already had my own business. 

From junior high, I was building websites, and then, thanks to client recommendations, I sailed into open water — designing homepages for companies such as SAP or Accenture.

In other words, you were a one-man software house.

In the beginning, yes, but I was getting so much work that I had to hire some friends. We were doing quite well. At one point, we automated the website development process to such an extent that we completed projects that usually took two months in two weeks.

So why, having already gained programming experience, did you go on to study IT in college? You must have been bored.

No way. My studies gave me extensive knowledge in every field of computer science. It was really demanding. Only 14 out of 150 people in that first year computer science class at the University of Wroclaw graduated. I also liked student life very much and was involved in a lot of university activities. 

But after some time I stopped seeing the value in classes that prepared us mainly for a career as researchers. Projects started piling up, so I moved to Wrocław University of Science and Technology, and later to extramural studies. 

I wrestled with the idea of quitting my studies for a long time — but try explaining that to your grandma... Eventually, I finally did it, focusing on my work at the software house.

Why exactly there? You could’ve picked any software house.

the software house operated mainly in the eCommerce industry, which gets me going the most. In addition, the recruiter contacted me and invited me for an interview. I thought I did average, but they accepted me nevertheless.

Then it turns out they hired me because a project needed firefighting. They threw me into the deep end. After a rapid onboarding, I immediately went to work. But I like that kind of thing. I like to learn on the go.

Do you consider Alokai as your second entrepreneurial pursuit, or as your debut?

A debut, because before that I was in charge of something like a one-man army. Now I’m facing completely different problems at a much higher level of complexity.

I don't see many similarities to what I did before. I had to jump from being a developer to the role of a person responsible for communication, because that's what management comes down to.

How do you learn a new role? Books, podcasts, experience on the job?

Books and podcasts are indispensable tools if you run a startup. As an entrepreneur, you don't have the slightest chance of growing as fast as your business, so you must use all the learning methods available so as not be left behind. 

For me it was a great help that, as a programmer, I had to constantly learn new things — sometimes having to master a certain technology overnight. Thanks to this, I don’t find it stressful having to solve more and more new problems. 

However, what’s worse as a manager is that I can no longer see the tangible effects of my work as before. Accepting this new model of working required a mental shift from me.

How do you deal with responsibility? You already have over 100 people on board, investors, and greater commitments.

It's a good idea not to think about it, because a lot of things can go wrong in a startup. We've made so many mistakes so far that I don't even want to wonder where we could've ended up if we had avoided them.

I perfectly understand people who, after selling their first company, don’t go to sun themselves in the Maldives, but roll up their sleeves and build the next one. Of course, then another class of problems arises. That is why, after selling a second company, you have to build a third. The appetite grows.

What attracts you most about being an entrepreneur?

No restrictions. The fact that when you have an idea, you just put it into practice without having to consult management and without clashing with procedures. Even a lack of skills doesn't limit you, because you can always learn or hire somebody. Entrepreneurship is agency and unrestricted freedom.

This freedom led you as a startup to a high valuation and an insane pace of growth. What next for Alokai?

Each startup has several phases. The first is chaos — people have undefined positions, a lot of employees are hired for their individual skills. It works for about 100 people, then you have to control it — build structures, implement processes. And we’re at this stage. 

To this end, we’re recruiting experienced people who have already gone through such processes. And we do it to scale, to consolidate our position of a global leader in the frontend platform market, where more and more heavily financed companies appear, such as Frontastic, which was recently acquired by commercetools. 

We’re focusing on the US market, which currently accounts for approximately 30 percent of our revenues. In addition, we are developing our product in a Software-as-a-Service model, attaching analytical tools to our software. 

Frontend opens the door for us, but in the long term we believe that it is thanks to the functionalities accompanying the basic Alokai solution that we will have an advantage over the competition.

Do your personal goals coincide with the company's?

Alokai is most of my life right now. When I’m not working at the company, I’m learning something that can help me manage it better. But I'm slowly approaching the point where my competences will become lower than the skills of the specialists and managers we employ. 

With this change, my role will also have to evolve. I assume that in the near future I will stop being the director of technology and become the company's "evangelist" — going to conferences, talking to programmers, convincing the world about our technology, and building the Alokai community. 

It is not easy, because programmers do not tolerate cheap marketing. You need to know how to get to them. It is not enough to say that thanks to this or that solution, their company's revenues will increase. You should go into details and show the technological possibilities, and they will draw conclusions from it.

Why are you doing this? Why are you building Alokai?

It gives me tremendous satisfaction. And although sometimes I work twice as long as I did at the software house, I don't experience moments of doubt and I don't feel the risk of burnout. 

We have a unique opportunity to achieve something spectacular — to become a global standard — and we want to use it. At the same time, I’m learning a lot of new things at a dizzying pace.

In addition, there is one more factor: money. Any entrepreneur who claims this doesn't motivate them is probably lying. Because, as my girlfriend says: money does not bring happiness, but lack of money doesn't allow you to be completely happy.

Republished courtesy of Forbes Poland. Original interview written in Polish by Krzysztof Domaradzki —  available here .

Photo by Piotr Waniorek.