Founder Focus: How Ibrahim Mesbah, CEO of Revolution Parts, Bootstrapped His Way to Profitability

Welcome to another episode of Founder Focus with Steve Greenfield, founder of Automotive Ventures, This ASBN original series dives into the inside stories behind some of the most impressive entrepreneurial journeys. In this segment, Greenfield sits down with Ibrahim Mesbah, who is the co-founder and CEO at Revolution Parts, a company focused on making it simple and affordable for car dealers to sell auto parts across multiple channels. The Revolution Parts platform powers more than $425 million in sales and reaches millions of unique buyers globally.

Transcription:

Steve Greenfield:
Welcome to this week’s Founder Focus segment, where we dive into the inside stories behind some of the most impressive entrepreneurial journeys. Founder Focus takes us on an intimate conversation with innovators and entrepreneurs and the great companies that they’ve built. This is Steve Greenfield from Automotive Ventures and thanks for joining us.

Steve Greenfield:
This week, I’m excited to welcome our guest, Ibrahim Mesbah, who is the co-founder and CEO at Revolution Parts, a company focused on making it simple and affordable for car dealers to sell auto parts across multiple channels. Including e-commerce, online marketplaces and wholesale. The Revolution Parts platform powers more than $425 million in sales and reaches millions of unique buyers globally. We’ll spend some time with Ibrahim today, retracing the steps from the very early days of launching a custom software development company to the current day where he’s leading a very successful company with 76 employees. So with that, let’s welcome Ibrahim to the show. Welcome to the show. It’s good to have you here.

Ibrahim Mesbah:
Yeah. Thank you for having me, Steve. I really appreciate the opportunity to spend some time with you and just would love to talk more about Revolution Parts and answer any questions that you and your viewers have. So thanks for the opportunity.

Steve Greenfield:
Great. So why don’t we start with an overview of the company and what can you tell us about Revolution Parts?

Ibrahim Mesbah:
Sure. Yeah. So maybe just to start with kind of like what gets us up and drives us everyday, right? So we fundamentally believe that buying parts is pretty complicated, right? It’s not as easy as having a consumer or me and you pick up our phone, pull up the Amazon app, order something and have it be delivered to our house within an hour. Right? So we see a lot of fragmentation in the experience. We see a lot of complexity, inadequate data or incomplete data. Not available pricing and availability across different options. So there’s a lot of waste and fragmentation and really what drives us as, and our goal is to really transform the way parts, buyers and sellers connect. And we do that by removing a lot of friction and waste out of that experience. So we want to create a frictionless marketplace where buyers and sellers instantly transact and make that really easy and delightful.

Ibrahim Mesbah:
So we’re at a high level. Revolution Parts, like you mentioned in the intro, it’s an e-commerce platform. It’s a one-stop shop that allows franchise dealers to very easily and quickly sell parts and accessories online across all channels. We can plug into an existing website, we can set up a separate web store or they can still on any of the marketplaces, eBay, Amazon, and Walmart. And really do this all by living within our platform. The way I explain it to people, if you’re familiar with Shopify, so far, we’ve built Shopify for car dealerships.

Steve Greenfield:
Great. That’s very impressive. Very impressive. So let’s rewind the clock a little bit. Take us back to when you had the spark that really sort of set you in motion for Revolution Parts.

Ibrahim Mesbah:
Yeah. So, one of our friends, when I say our friends, my co-founder Andreas and I have known each other for over 15 years, we’ve worked together since college, right? And one of our common friends ran a parts department at a local dealership here in Phoenix called Showcase Honda. So we play poker, we get together and play poker for a while, but in one of those instances, right, there’s a lot of discussion around, “Well these are all the challenges I’m having”, and I’m an engineer by trade and so is Andreas. Wow, I can’t believe you’re having those type of challenges. One example was an order got placed, he got an email with the credit card number and the shipping department shipped the order. It’s like, “Oh crap, I need to collect money on those”.

Ibrahim Mesbah:
So by the time they type in their credit card number, the thing gets declined. Obviously there’s a whole lot of issues with that in the first place, right? Sending credit card number and clear text in an email. Or just simply updating pricing right now is a big hassle. So he often sold stuff and lost money on it. So, it was very surprising. And at the time we were at PayPal, right? So working at PayPal, which was owned by eBay at the time. So got a lot of experience and really grew a big passion for e-commerce and easily, and safely, and securely connecting buyers and sellers. So I had to dig in. So we started digging in to really understand why this is so complicated. He had a website, was a legacy provider looked at that and just really felt that, “Wow, I could have a really big impact”.

Ibrahim Mesbah:
I could help solve a lot of these problems make their lives better, allow the dealership to be more competitive online. So that was the spark. The more research, we do a lot of research, and what we found was there was a big gap. And it’s because a car dealership can’t just sign up for, let’s say Shopify and start selling parts, right? There’s an order of magnitude of complexity when it comes to the sheer number of skews and all the relationships and all the auto specific experiences and things that you have to create. Right?

Ibrahim Mesbah:
So a lot of folks from the industry saw that gap and that need in the marketplace and built a software company. So we came at it from the other end, right? We’re software guys that saw the gap and we decided, well let’s start with helping him out on the side, solving smaller problems and started to see a big difference and really realized it was a great opportunity for us to take our passion for e-commerce and kind of experience with these modern consumer shopping experiences and eBay and PayPal and all that.

Ibrahim Mesbah:
And really take that passion and have a big impact in a really big industry, in the auto industry, not just helping my friend, but it was very clear I could help any dealerships be more successful online and more competitive versus aftermarket.

Steve Greenfield:
That’s great. So let’s talk a little bit about Founders. I mean, you said that you have known your co-founder Andreas for 15 years. So there are entrepreneurs that go down the path of being solo entrepreneurs and then you read blogs and books about like how important it is to have co-founders. How do you think about, the path that you guys went down together, as opposed to having been a solo entrepreneur?

Ibrahim Mesbah:
I haven’t done it the other way. But I can tell you, I really appreciate having Andreas. Every day it’s almost like my, sounds kind of silly, but almost like a second wife in a way. And we balance each other out pretty well. Which is great, even though we both have a technical backgrounds. But, he’s more passionate about the details, and the numbers, and the legal, and the business case, and the partnerships. And I would say more operational and really excited about the vision. And he kind of tries to bring it down in terms of here’s what we can do right now. but anyway, it’s a really good balance. I can tell you at this point, I can really relate to people saying, “Well, being a CEO or entrepreneur is a very lonely job”.

Steve Greenfield:
Right.

Ibrahim Mesbah:
So, I can’t imagine not having him there. There’s a lot of discussions that we have. It’s a rollercoaster, ups and downs. And having somebody there as a sounding board and as a partner, an equal partner, that we could hash this out and make some of these bigger decisions. And it’s great. So I would definitely recommend that if you can find somebody you can get along with, have really passionate debates with, but still walk away committed and have a good relationship, but just remembering that it’s not personal, we are not going to have the same opinion about everything, which is great. That’s what you need. But, we all have the same goal, the same vision, and the same passion, and drive, and purpose. And so, I certainly recommended, I honestly can’t imagine doing it alone.

Steve Greenfield:
That’s great. So, you talked a little earlier around the rollercoaster of entrepreneurship, the highs and lows. What’s the hardest decision you’ve had to make as an entrepreneur?

Ibrahim Mesbah:
So, this is still pretty painful, but, okay. So it’s been a really strange and painful year for a lot of people this year. And we’ve been bootstrapped this year. Right. We haven’t raised any money. We took the engineer approach where with frankly been very conservative and very thoughtful and methodical, all right, I got X new customers. This is when I can hire the next person. Who should we hire? And we were really building Revolution Parts as we were growing. So ,it wasn’t a natural thing for us to say, “Let’s just go out and raise money and go fast”. So it was very, but anyway, so to answer your question, when COVID hits in March, it was a pretty scary time, right? So we got slammed with a lot of dealerships asking for cancellations, bill forgiveness. This was our first downturn in the industry.

Ibrahim Mesbah:
But I guess what we learned later, this is just something that happens every downturn. A lot of dealers and dealer principals send letters to their vendors asking for bill forgiveness. I think a lot of big companies proactively do that to kind of take market share from smaller companies that can’t really afford to to skip invoicing for a few months. Right? But we got hit really hard with that. And it was pretty scary and the forecasts were pretty grim around, going to see about an 80% contraction. Our dealers were shutting down their wholesale. It was really bad. So we had to make a really hard decision to part ways with people which we’ve never had to do. So that was a very tough thing to do because we have a pretty good team. We take hiring pretty seriously. So, it was heart-wrenching to have to part ways with some of those people. And luckily, we were able to hire back some of them, but not all of them. So yeah, I’d say that was a very new and painful experience for me.

Steve Greenfield:
Okay. Yeah. That makes a lot of sense. It’s been an interesting year, for sure. Yeah. So let’s turn the tables on that. And let me ask you, what’s been the highlight of your entrepreneurial journey so far?

Ibrahim Mesbah:
So, if I were to pick one thing. It’s kind of tough. Like I said, it’s been a roller coaster, a lot of highs and lows, right? So this year, a couple of good things happened recently. So we launched our very first OEM Parts Store with Mercedes-Benz. And that was a pretty big highlights because, we’ve been traditionally really focused on relationship at the dealer level. And this is an opportunity to really partner closer with an OEM and really amplify some of the success that we’re able to deliver for our dealer partners. But, that is a pretty good partner and pretty good validation that, Mercedes-Benz is super protective about their brands. So selecting us as their partner, I think that’s just a really good milestone. We also closed a small round of funding with an automotive investor.

Ibrahim Mesbah:
That’s been another highlights. And again, more validation that these guys that are, first of all, would like to give us money and back us and partner. So, yeah, but just in general, in terms of wherever we are as a company, like you mentioned in the intro, I think we have about 80 people now actually over $12 million in revenue. It’s pretty cool to just sit back and look at how far we’ve gotten. Bootstraps and where we are now. And the way I really think about it is we have a pretty good foundation. We have pretty good product. I think the market or the industry starting to recognize that, which is great. We have a great team and the foundations there. That was the first lag, right? So, now we’re taking a deep breath, “All right, great. Now how do we build a billion dollar company?” We all believe there’s a huge opportunity. And that’s what’s exciting.

Steve Greenfield:
So, so what’s the best piece of advice you’ve ever received?

Ibrahim Mesbah:
I’ve received a lot of good advice. The best piece of advice. I would say, trust your gut more. Which I know sounds pretty so old, but every business, every industry at every stage is different, right? So, just because somebody you respect says that this is how you should do this. I think just really, if you’ve gut says no, and you’re the entrepreneur, you’re in the business and the company trust that a bit more. And the other advice I would say is just surround yourself with people as much as you can that have been there, done that, and really try to kind of, I don’t know, use osmosis to try to learn from some of their mistakes or get their perspectives, and then finally trust your gut to make the right decision.

Ibrahim Mesbah:
And I try to do this. It’s really tough as you know, to get time from some of these, you know, founder, CEOs. But, when you do, it’s really impactful. They always have a really good perspective and really can distill down kind of someone’s their experience and their industry and their company. And a lot of that, what is very relevant. Also reading online. Like I read articles, YouTube videos and stuff like that. And you see how founders and other entrepreneurs handle big decisions or how they address their companies or their teams when good times, bad times. And it’s also an opportunity. You’d be surprised if you reached out, “Hey, do you think we can get on a 30 minute call?”. A lot of those guys.. “Yeah, I actually love to talk and help and chats.” So I’ve been very fortunate. A lot of people have taken me up on that.

Steve Greenfield:
So there’ll be a lot of entrepreneurs or want-to-be entrepreneurs who have tuned in today to listen to this. What’s the most influential book or books that you would recommend to them?

Ibrahim Mesbah:
Okay. So, because I feel bad, I’m probably not going to remember the name of the author, but because we’re in a space right now where we’re ultimately trying to change behavior, right? When I look at the space we’re in, what COVID has done is I think it’s accelerated a lot of the shifts to a lot of people are now shopping online more, more than ever before. Right? So we saw a big spike actually, right after this stimulus checks went out. So, that’s great. But on the wholesale side where we believe there’s a huge, a bigger opportunity to have an even bigger impact there, we’re trying to change behavior. A lot of that business is still done over phone.

Ibrahim Mesbah:
So, one of the books that really resonated with me, it was a book that I think every entrepreneur should read, especially if you’re trying to do something that’s very different. It’s called Crossing the Chasm. And it talks about how you go about getting adoption, like in the early days who you should target, what do they look like? What’s really important. And then how do you cross the chasm and go more mainstream and get wider adoption and how the business and the messaging and the brand and the positioning needs to evolve and the offering. I would highly recommend that for every entrepreneur.

Steve Greenfield:
Yeah. You’re not the first entrepreneur on this show to mention that book. I think we’ve had it mentioned three times now. Yeah. So let’s, abstract ourselves from current and fast-forward five years, In five years, where might we find you and what will you be doing?

Ibrahim Mesbah:
So, I’ll still be hopefully at Revolution Parts because I am passionate about what we’re doing in the industry and believe we’re just starting to scratch the surface. But, I would say… So right now we help franchise dealerships in the U.S. sell parts online. And we power about $425 million in GMV or parts sold, processed, and sold through the platform per year. Five years, love to be in the U.S. working with more manufacturers like Mercedes-Benz, really powering that omni-channel experience. So, retail, wholesale, digitizing, helping to digitize the parts department so they can be more efficient, close for business. But, I also see us expanding. We just launched in Canada last month. So really be expanding globally. So I’d say North America, then maybe Europe, and also… Our vision has never been to just do auto parts, right? So a lot of the challenges that we’ve solved and continue to solve really also apply to other adjacent markets like heavy-duty trucks and heavy equipment, motor sports, et cetera. So I think you’ll see a more diversified Revolution Parts that’s plugged into many digital retailing flows, OEM partners, retail, wholesale, U.S. and globally.

Steve Greenfield:
All right. Well last question for you, since you are in the automotive field, I have to ask. But right now, if you could own any car in the world, what would it be?

Ibrahim Mesbah:
So right now I drive a BMW 3 Series 335. I love just the feel of the car and when the turbo kicks in, just hearing it. My wife showed me, she said, “Did you know, they just made an M8? Check this out.” Wow. So, I would love to have that car if I could. Yeah. Maybe I should say bigger there, but no, I love BMWs, I love my car and that car looks beautiful.

Steve Greenfield:
Yeah. Well, a good mixture of performance and being a daily driver for you. Right? Well, thanks for making time today. It’s been great to dig into you and your past and the business. And I really appreciate you carving out a bit of time for us.

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