Farzad Dibachi Is Driving a Supply Chain Revolution With Inxeption

Farzad Dibachi.

Farzad Dibachi is helming his fourth startup, Inxeption, which has experienced skyrocketing growth in digitizing the global supply chain.

Farzad Dibachi’s Inxeption Is Solving the World’s Logistics Challenges

Before the pandemic, everyone knew that many things they bought were made in China to save labor costs, and they were happy to get them cheap, expecting vendors to make sure the shelves were always full. 

Suddenly, a shortage that could once have been filled by having a truck bring products over the border with Mexico made everyone aware of how challenging it was to deliver anything from overseas. Along with COVID-19, “supply chain” and “logistics” have become household words.

Consumers discovered that even if a case of toilet paper (not to mention semiconductors necessary for both gas and electric cars) made it to a U.S. port, it needed to then be off-loaded, picked up by a truck to deliver to a warehouse, and then distributed to other warehouses and stores. 

Farzad Dibachi, co-founder and CEO of Cupertino, California-based Inxeption (pronounced like inception), knew trouble was coming when he founded the business in 2017.

“Think of Inxeption as the Amazon of industrial commerce, connecting buyers with suppliers of mission-critical products, even providing financing with generous terms in half of the transactions,” he told Startup Savant. “When we told anyone in Silicon Valley what we were trying to do, the response typically was ‘Good luck trying to boil the ocean.’ In the 70s and 80s, venture capitalists were backing pioneers who were addressing the world’s biggest problems, but now they just want to find less risky ways to print money by milking what is already there. I’ve never taken investments from VC firms because their priorities are not the same as a true entrepreneur, which is to start a revolution, but we do have major individual investors whose outlook aligns with our long-term plans.”

Having grown 100% in each of the past couple of years, Dibachi anticipates that Inxeption will have a run rate (revenues projected out to the full year) of over $600 million by the end of 2023.

The Diba Diary

Dibachi has had, by any standard, an extraordinary career.

His family arrived in the US from Iran in the late 1970s. He graduated from San Jose State University in 1984 at 19 with degrees in mechanical engineering and computer science while having already worked for a year as an engineer at General Electric.

After two more years at GE, he became a director of engineering at Tandem Corp. from 1986-90, then was recruited to Oracle Corp., where he worked closely with its legendary CEO Larry Ellison for five years. 

He eventually headed Oracle’s New Media division, tasked with developing internet infrastructure for the first large-scale deployment of residential video-on-demand. He also played a key role in Oracle’s efforts to pioneer the network computer, the foundation for today’s internet-enabled devices with cloud-based software applications.

In 1995, Farzad, his wife Rhonda, and his brother Farid founded Diba, which created the first internet-enabled TVs, consumer devices, and smartphones. Upside Magazine had Farzad keep a diary of the startup process, posting it in a widely acclaimed weekly column that resulted in a tidal wave of emails from other entrepreneurs asking for advice. That led to a bestselling book by Farzad and Rhonda published in 2002, “Just Add Management: Seven Steps to Creating a Productive Workplace and Motivating Your Employees in Challenging Times.”

“It was an almost-real-time look at the challenges, the triumphs, and the curveballs faced by a startup,” they wrote. Sun Microsystems acquired Diba in 1997 for $75 million, where it became the foundation for the consumer technology group. 

Their book is a very detailed examination of how a knowledge workforce should be optimally managed, lessons that have general application to any industry, though many books seem unfamiliar to them.

“In hundreds of hours of conversations with customers, we learned that executives are pulling out their hair in frustration because they can’t quantitatively measure progress by knowledge workers,” they wrote. “A two-step process is needed, designed to achieve a critical corporate goal: transparency. This first demands that managers establish and enforce a professional workplace focused on results….Second, time-tested management techniques are needed which are too often ignored. Managers need to set and broadcast priorities and enforce processes. It’s called accountability management.” 

Farzad admitted he was a late convert to realizing the importance of process. To many knowledge workers, this equated to the “smell of bean-counting and bureaucrats, of nerdy, operationally inexperienced systems consultants who cash a paycheck based on finding something wrong with everybody’s system, no matter how good it is.”

The Evolution of Serial Entrepreneurs

The Diba experience led to the next startup, Niku Corp., in 1998. The Dibachis, along with Oracle colleagues Mark Moore and Terry Garnett, created the first comprehensive suite of enterprise management applications and early cloud-based software services to increase productivity. Niku went public in 1999 and was acquired by Computer Associates in 2005 for $350 million.

In 2011, Farzad and Rhonda founded Noribachi, a maker of advanced LED lighting, in Santa Fe, New Mexico, before moving it to Los Angeles in 2012. 

“We wanted to see if you could go about finding a way for people to save 50% on their power usage without changing their habits at all and we had been experimenting with different clean tech products, including solar,” he told Inc. magazine in 2015. 

One night when he left the office, Farzad noticed a 20-foot light pole in the parking lot that was very bright, and the next day, he deconstructed the light fixture to discover that it was just an analog 1,000-watt bulb. He got permission from the landlord to change it to an energy-saving digital LED, and research led him to realize other applications.

“We can integrate sensors into lights in mall parking lots that signal whether or not the snow should be plowed that morning,” he told the magazine. “We just designed an off-the-grid system for a railroad company for remote crossings, with security cameras, phone connections and motion-activated lights.”

The Dibachis also learned the hard way not to mix business and personal life, as most startups tend to do.

“We acknowledge the need for crunch time, but in general we discourage marathon working sessions,” they wrote. “We want productive, efficient knowledge workers who go home at a reasonable hour every night and who relax on the weekends. We don’t encourage dinner meetings or off-hours socializing among employees. The more lines blur between private and work lives, the more personal and emotional issues will invade the workplace, affect morale, and interfere with general productivity.”

After making Noribachi the fastest-growing LED light maker, he and Rhonda decided to deploy some of its technology for another startup and leave the manufacturing to the company, which is now a partner of IC Energy Solutions.

Digitizing the Global Supply Chain

In 2017, the Dibachis, Moore, and Garnett founded Inxeption to “digitize the global industrial commerce value chain.” 

“We actually went about creating an Amazon-like system in the opposite way they did,” Farzad explained. “They started by offering anything you wanted online, but came to realize the customer actually placed more value on how fast they could deliver it. We first developed a highly-efficient global system that could ensure that our customers could get supplies faster, which was a priority once the pandemic hit, and that built trust. Then we were able to add shopping cart functionality for our 1,500 commerce partners in the marketplaces we serve, which currently emphasizes solar panels and energy storage, but we will be expanding to a handful more verticals by the end of this year.”

With just 250 employees managing this “complicated as hell” global process, he says Inxeption has opened a regional office in Louisville, Ky., to be close to the manufacturing heartland, as well as adding business development leaders in Frankfurt, Medellin, and Shanghai, with plans to keep expanding. They can manage the volume with highly sophisticated APIs, software application interfaces that communicate with each other.

“We have a fully integrated value chain, combining real humans making phone calls to other humans at the big shippers to get things done for our industrial commerce partners, who individually would not have this kind of clout,” he noted. “We can make sure that all six steps from, say, a manufacturer in rural Vietnam to a retailer in a big California city are expeditiously handled and we track the cargo from beginning to end, which no other logistics company can do.”

Dibachi has figured out how to solve the supply chain crisis without even having to boil the ocean. “I’m glad the VCs were too scared to tackle the logistics problems of global trade, which has left me with no serious competition.”

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Scott S. Smith

Scott S. Smith has had over 2,000 articles and interviews published in nearly 200 media, including Los Angeles Magazine, American Airlines’ American Way, and Investor’s Business Daily. His interview subjects have included Bill Gates, Richard Branson, Meg Whitman, Reed Hastings, Howard Schultz, Larry Ellison, Kathy Ireland, and Quincy Jones.

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