2020 June-July Analysis Featured

Investor spotlight: STACK – the Georgian browser to rule them all

STACK takes a fresh look at what browsers can offer internet users, allowing them to gather all their favorite apps in one location, avoid clutter and enjoy a smoother surfing experience

Nerds may bicker and disagree on the finer differences between internet browsers, but now that Internet Explorer has finally been put out of its misery, most lay users of the internet can agree that differences in speed, extension availability and privacy considerations are largely negligible and functionality and appearance are more or less uniform across Safari, Chrome and Firefox.

But one Georgian startup hopes to change that.

Stack takes an innovative approach to web-browsing that may particularly appeal to internet power users and multitaskers, allowing them to gather social media, messaging, e-mailing, education and productivity apps all in one place.

The app offers a smoother, more convenient web experience when compared to the traditional browser, which demands users skip from page to page, or at best, from tab to tab, to interact with various web apps and pages. If Stack has its way, many may soon gladly say goodbye to the days of endlessly searching and trying to locate misplaced windows.

True to its name, Stack lays out web applications horizontally across a user’s monitor, providing a flyby, control panel overview of their workspace, facilitating quicker access to apps, and freeing up time that would otherwise be gobbled up in the search for that one elusive Wikipedia article you keep misplacing…

The birth of a browser

Stack was born of a different project back in 2018 called Senti, a learning tool that was to make use of a time-spacing algorithm: instead of saving all those crucial tidbits of information that one stumbles over throughout the day – why is a camel spider not considered a real spider? how big is our sun in comparison to other stars? what is a legless lizard? – to return to them never, Senti would have kept learners to task with frequent reminders.

The problem: the team was divided between Georgia and the Netherlands, and one team member was working in another company at the same time, which limited access to messaging and other internet applications.

“So our CTO, Zviad Sichinava, built what would later become the prototype of Stack in a weekend. We were collaborating remotely with so many tools at the time, and the browsers did not give us the horizontal, stacking functionality that we needed, given we were working with a number of apps. Stack helped us get around these problems”, Stack CCO Giorgi Laliashvili says.

When it launched in 2018, Stack bucked a launch trend by making the application initially only available to Mac users; Windows and Georgian-language versions were released just this past March.

Laliashvili explains the choice to withhold from releasing an early Windows version of the app by the fact that “the uptake rate of new products, early adopters and the tolerance towards bugs is much higher among Mac users than it is among PC users in general.” The small, focused launch of Stack also gave the young startup the chance to solicit feedback, and monitor user experience and reviews. The long wait for the app’s Windows release also fed the fire and interest of PC users to give Stack a spin.

Now, Stack has more than 60,000 of users, and predicts that by 2021, it will have hit 1 million. Currently, the majority of its users are located in the US, Japan and South Korea.

Tweaking user experience

Laliashvili sees several bumps in the road the company will have to address.

When Stack was conceived, its creators knew it could be of great interest to power users of the internet – project and social media managers, designers – because it solved a pain point that many experience of needing quick access to many apps simultaneously.

“But we understand some people don’t have this problem, and so for them the basic concept of Stack might not be interesting. However, such users tell us they continue using Stack because they find the experience slicker, smoother and more efficient”, Laliashvili says.

Another issue with the Stack experience is distraction. A double-edged sword for an app whose purpose is to help people multitask, there are naturally concerns that an app that displays so much information simultaneously may, at times, pose more of a distraction than present a useful tool.

“We haven’t done any studies on this issue yet, but we are planning to do one as fast as possible because now we have a substantial number of users”, Laliashvili notes.

The browser has partially addressed this issue by recently introducing a focus mode, which blocks out the alerts and activities of other stacks, and which is regularly used by 35% of the app’s users.

Further plans to address the experience include the creation of mobile platforms for tablets and mobile devices to provide a synchronized experience across devices and platforms.

How’s a browser to make a buck?

Stack has built itself up from a mix of early stage bootstrapping, state investments and contributions from friends and family. Now, Stack is actively seeking to join forces with larger VC firms and other interested investors.

“First we approached our friends and family, and this help materialized at the same time as when we received a GITA grant for 100,000 GEL. [Our friends and family] saw that if the government trusts us, then they could, too. We were able to raise another 100,000 GEL or so from our own circles. We later joined in an accelerator, from which we received 100,000 euros, after which we began work on looking for seed funding”, Laliashvili says.

Stack had just signed agreements with investors in Silicon Valley when the coronavirus pandemic hit this winter and the world went sideways – though for the company, perhaps for the better:

“That one force majeure clause? That one clause about if something terrible were to happen…? Well, it happened, and the contracts were cancelled”, Laliashvili says, but points out the company has emerged from the pandemic on far better footing compared to their situation before the coronavirus sent the world into turmoil.

“Of course we were disappointed when VC firms announced they were suspending their investment activities…but now we see they are awakening again, and this time around we will have different terms of investment. Before the pandemic, we approached investors asking for help just to stay alive. But now, we’re not only surviving – we’re thriving on our own. The next round of conversations we have with investors will be significantly different from the first one.”

In March 2020, Stack made several large steps forward: it began promoting a paid subscription of the application to give users additional functionality features, released a Windows version and translated the app into Georgian.

“The situation we’re in is 10 times better in terms of user growth, revenue, and team spirit. We have this feeling that we not only survived the pandemic, but we grew stronger”, Laliashvili says.

However, Laliashvili says, the current business model Stack has introduced is temporary. The subscription system is being leveraged as an approach to assess the value of the application, and what it’s worth to customers – and thus to investors:

“Stack is not just a browser. It’s an application management tool, and these things are not free.

But without a substantial amount of users, it’s hard to gauge the value. To do that, we need customers to pay for it! How much they pay gives us that information, and then we can go to investors and prove to them that we are worth it, that we will use their money to grow exponentially, and not burn cash”, Laliashvili says.

The real aim, he notes, is for Stack to generate income from search engines, which are willing to pay browsers to be the default search medium across their systems. In 2019, Google paid Firefox $500 million to be the default search engine in Mozilla, while it paid Apple $12 billion in 2019 to be the default engine on Safari across all platforms, Laliashvili pointed out.

Born in Georgia, grown in Georgia

Currently, the Stack team is almost entirely located out of the Netherlands, and its interaction with Georgia is limited to the fact its founders are Georgian and it is incorporated in the country.

But as the company grows, Stack will seek to dig its roots deeper into the country it was born of, Laliashvili hopes:

“Our next step will be to open a Dev. Shop in Tbilisi, which will make the company much more ‘Georgian’ than it is now and we will be able to hire Georgian talent, even though as of now, the entire team, all seven of us, are Georgian to boot…”