Episode 250
April 20, 2022

“A Fractionalization of the Consumer Experience”

Welcome to this two-part series of Future Commerce! Today, Phillip and Brian sit down with Ben Jabbawy to chat about SMB, creating content, fractionalization, consumer experience, and more! Tune in now and then listen to the second half of the conversation at eCommerce Marketing School!

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this episode sponsored by

Bells and Whistles At Best

  • If you’re not familiar with the eCommerce Marketing School podcast, they post five times a week, with 5-10 minute episodes taking a customer story sharing some of their tactics, what's working, what's not, and then a handful of interviews as well with operators who are in the trenches working on new tactics for growth
  • Some businesses start because people have a product, and on the flip side, people have a skillset and find ways to apply it, with this…people are finding their natural sales channels 
  • “People that understand how to create content can have tremendous success launching a brand from a cold start.” -Ben
  • Consolidation is happening at the small end of the market, but it's going to jump to the midmarket and enterprise as well
  • “There is a fractionalization of the consumer experience in the sort of the bygone era of installing a million apps in the Shopify ecosystem.” -Phillip
  • Figure out how to be sustainable in creating content, make it as easy as possible, and in a format that's going to work for all 

Associated Links:

Have any questions or comments about the show? Let us know on Futurecommerce.fm, or reach out to us on Twitter, Facebook, Instagram, or LinkedIn. We love hearing from our listeners!

Brian: [00:01:29] Hello and welcome to Future Commerce. I'm Brian.

Phillip: [00:01:34] I'm Phillip. And that was... Wow, that was enthusiastic. We were so enthusiastic because we have, I would say, [00:01:40] eCommerce podcast royalty with us here today. Somebody who should have been on the show ages ago and someone that we are just thrilled to have. Ben Jabbawy is here, and thank you so much for coming on the Future Commerce podcast. How are you, Ben?

Ben: [00:01:56] Guys, that was a hell of an intro. I'm doing great and I'm excited to be here. [00:02:00] I don't know that I would say celebrity is the right intro for me, but I'll take it.

Phillip: [00:02:06] If you're not listening to Ecommerce Marketing School, you probably should be. And it's available wherever podcasts are found. Ben is someone who likes to post the growth of the show every so often on his Twitter. You should follow him [00:02:20] on Twitter, and the growth is amazing. Congrats on all your success.

Ben: [00:02:23] Thanks. Thanks, Phillip. Yeah, I like to post the growth when we're signing up the next round of sponsors.

Brian: [00:02:31] There you go. {laughter}

Ben: [00:02:31] Convenient.

Phillip: [00:02:33] Yeah, the growth numbers are great to post when they're going up and to the right.

Brian: [00:02:38] Build in public.

Phillip: [00:02:38] Tell us a little bit about the show [00:02:40] for those who aren't initiated.

Ben: [00:02:41] Sure. Sure. So I'm the host of this show. It's called Ecommerce Marketing School. It's a little bit of a different format. So we post episodes five days a week and a majority of those episodes are 5 to 10 minutes. They're very tactical. [00:03:00] It's basically me taking a customer story from our work that we do at Privy with our merchants, sharing some of those tactics, what's working, what's not, and then a handful of interviews as well with operators who are kind of in the trenches working on new tactics for growth.

Phillip: [00:03:19] That's [00:03:20] super cool. With so many shows that have cropped up in the last few years, certainly as folks have tried to find ways to engage digitally and grow businesses, agencies for sure have like jumped headfirst into eCommerce podcasting. There's like a sea of  [00:03:40]podcasts out there. What's top of mind for you in trying to be new and differentiated or have you just kind of stuck to the same format and it's worked out for you over time?

Ben: [00:03:52] You know, we started with a little bit of a different format, so we actually originally had my CMO at the time doing [00:04:00] kind of 40-minute interviews, and that was how we launched the show. And they were with big-name kind of marketers from brands, and it was working well, but he and I were having a conversation and he pushed me. He was just kind of like, "Hey, you're the one in the trenches with these businesses the last ten years. [00:04:20] You're the one kind of implementing email, SMS, conversion, stuff. Let's unearth those stories and let's have you be the one doing that." Because as great of a CMO as he is, no one can compare to the founders. And I think [00:04:40] we all can relate to that. So I'm more of a behind-the-scenes guy. I think my wife laughs at the fact that I've got a podcast that's doing well.

Phillip: [00:04:52] Your wife. My wife, Brian's wife.

Brian: [00:04:54] Definitely.

Ben: [00:04:57] But we tried it and just [00:05:00] like created a habit. And I never listened to the show because I hate the sound of my own voice. But we instantly saw great feedback, DMS, and reviews and we were like, wow, and download counts kind of skyrocketed. So we were like, "There's something here, let's stick with it." And that was [00:05:20] a year and a half ago, honestly. I can't believe how long we've been doing this now.

Brian: [00:05:26] Well, and I think something you hit on there, which is like the secret sauce, is you're kind of like an expert on SMB and growing from cold start...

Phillip: [00:05:38] Don't give him too much credit, Brian. Jeez. [00:05:40]

Brian: [00:05:40] {laughter} I know. I mean, if anything, you've become an expert. Yeah.

Phillip: [00:05:44] I think it's the operational eye.

Brian: [00:05:46] Yeah, yeah, yeah, yeah. Exactly.

Phillip: [00:05:48] Firsthand, right.

Ben: [00:05:49] Yeah. Yeah. I think there's something incredibly powerful. I know we're going to talk about cold start, but there's something incredibly powerful about getting [00:06:00] in the habit of publishing content consistently. Everyone talks about it, everyone's like "SEO, SEO content, media company, et cetera", but like being a year and a half on the other side of committing to that, I'm like, Oh wow. I get it. I [00:06:20] get it. So I definitely don't feel like an expert. And we're very low production quality, but having fun and I think it's resonating. So very thankful.

Phillip: [00:06:31] Ben is like low-key coaching us through our own guest guide on what the next question is. I really appreciate that. Having a podcaster on the show as a guest [00:06:40] is a helpful thing. Let's talk about that. I mean, you work with, at Privy, small businesses. It's sort of your bread and butter. It's something that I would have probably traditionally called SOHO, or maybe you can correct this, but like Single Owner Home Office, like people that are growing from zero [00:07:00] and many of them probably don't come in with a bunch of high falutin ideas around what marketing is and a tremendous amount of money to spend on things like performance marketing. What is their perspective and how does that sort of differ from what you might see around on like, say, the Twitter sphere?

Ben: [00:07:15] Yeah, that's great. We call them, by the way, solopreneurs. So [00:07:20] we just...

Brian: [00:07:21] Oh yeah.

Ben: [00:07:21] I hadn't heard SOHO, but I like that. But it's interesting. I think Twitter is all about like early adopters. People that are like sitting at their computer and Twitter's open all day, right? That's [00:07:40] not the majority of small businesses that we see on Shopify. It's just not. And so I think I have a ton of respect for the Twitter community in the commerce world. It's cutting edge. I think there's a lot of kind of support around [00:08:00] it, people sharing their work and what's happening. But the majority of these small businesses are a little bit more isolated. They don't have that community. They may not even have Twitter accounts, believe it or not. And that wasn't necessarily the reason [00:08:20] they got into building their DTC business, so to speak.

Brian: [00:08:25] So what you're saying is the "DTC market," is it mostly made up of these solopreneurs or is it being kind of underserved?

Ben: [00:08:38] Yeah. I [00:08:40] like to geek out on Shopify's earnings reports. I don't know if there's anyone else like that out there.

Brian: [00:08:48] I'm excited to hear what you're about to say next.

Ben: [00:08:51] And then on top of that, there's a service called BuiltWith.com. It's kind of fun. We've used this like I've shared some of this stuff [00:09:00] about Privy's usage over the years too. They're good kind of directional metrics, but BuiltWith shows that Shopify has got about 3 million stores. I don't know if that's true, but that's just what I found. And then if you look at the Shopify earnings or investor presentation covering [00:09:20] Q4, they've got this nice like funnel that they show and it's like classic funnel where it's entrepreneurs, small businesses, and then Shopify Plus like their enterprise. And just using that as a guide, they don't share the exact numbers, but it looks like just over a third [00:09:40] they categorize as entrepreneurs. So if you believe these things even directionally, that Shopify has got about 3 million stores and a third are entrepreneurs, that's about a million entrepreneurs. Now could there be two people in this company? Maybe. But I think it's safe to assume it's somewhere [00:10:00] around there and then BuiltWith shows Woocommerce has a couple million stores. I'm sure some of those are maybe a little bit bigger if you're using WooCommerce, but Wix Commerce has about 600,000 stores. And I think it's probably safe to say [00:10:20] that majority of those are owner-operator. So you're talking about millions that are enabled today through some of the existing platforms.

Phillip: [00:10:30] And those folks know if I were to cold start a direct-to-consumer business myself, I probably wouldn't even go to Twitter to go get that [00:10:40] start. I would start with friends and family, right? I'm starting with the people that are closest to me. Would you say, is that a fair assessment of how most of these businesses started? Start with a groundswell and sort of a grassroots campaign of the people that they have most influence with to be able to start their business. Is that fair or no?

Ben: [00:10:58] No, no, no. It's right. I think there's [00:11:00] kind of maybe there's been an evolution. But I think there are two categories of solopreneur that we see. There's kind of this person that just, like, made the most awesome cookie at home and they're like, "I want to sell this thing." And they land on Shopify or whatever. And [00:11:20] yes, friends and family pop-up shops, communities... Not like traditional pop-up shops in the way we think about them in like Soho in New York City. Literally going to the farmer's market.

Brian: [00:11:33] Right.

Ben: [00:11:33] Going to the school bakery. And then you're bringing that person, "Oh, yeah, you can buy online." Honestly, [00:11:40] we see a lot of success with that. I've got a customer of mine that even to this day they're probably close to seven figures, but six figures, 10% of their sales comes from just local community school run events where they've got an [00:12:00] iPad with Shopify pulled up. So I think that's one. But the other we've seen this evolution and this is more of what you see on Twitter, but I still think it's interesting. For cold start a couple of years ago, people would just be buying Facebook ads. Immediately you launch a brand, you're putting your money into Facebook, [00:12:20] and you're driving sales. And I think that that that's more of the like I'm starting a business because I understand how to get distribution online. I think a lot of that effort has shifted to TikTok right now is what I'm seeing at least.

Brian: [00:12:37] So people are finding natural sales channels, things [00:12:40] they feel comfortable with and they're like, "Oh, I can sell through this. I know how to work this channel." So there are businesses that start because people have a product. There's something that they are like, Yeah, people like this. I can make some money on the side off this," or "I can maybe make a small living off this." [00:13:00] And then the flip side is, "I have a skill set. I have a skill set. I know how to apply the skill set. And so I just need to find a way to apply it." And that typically started with a marketing channel that was easily accessible and Facebook used to be just the money machine. [00:13:20] So you could literally sell anything on it and just make money, which is not as true anymore. But like you said, now the arbitrage opportunity is coming and other places, and when I say that, I know we've said that word a lot.

Phillip: [00:13:35] That's a loaded phrase. But we get it.

Brian: [00:13:36] Yes, it's absolutely loaded phrase. The reason why I say that is because [00:13:40] basically, it's a skill set opportunity. The skillset matched the channel that could just blow up. And so anyway, so I see two funnels for these two types of businesses. [00:14:00] That's what kind of what I took away from what you were saying.

Ben: [00:14:02] Yeah. I mean just to dive into that second category for a sec, I think I hate buzzwords as much as anyone else, but people that understand how to create content, look, you guys are doing it on podcast. So am I. [00:14:17] But people that understand how to make quick [00:14:20] entertaining videos right now and post that on TikTok can have tremendous success launching a brand from cold start. Or people that understand micro-influencers. Not necessarily Kim Kardashian, but like how to go [00:14:40] about and get people that have 5000 or 10,000 niche followers to try their product and post about it. That's another great way to address cold start. So I think people that are comfortable in these new channels may or may not realize it yet, but they do [00:15:00] have huge opportunity. And I think that's why you are seeing more of these creators of that second category launching their own products as well. [00:15:09]  [00:16:20]

Brian: [00:17:51] Do [00:17:40] you see, typically, the second category of business is the one that's more likely to take off? Or is that the first category, that local [00:18:00] product creator? Which one do you feel like is a better foundation for a long-term business?

Phillip: [00:18:10] Blanket statements only, please, Ben.

Ben: [00:18:13] {laughter} No. What I've learned over the years is that every entrepreneur has different aspirations. [00:18:20] And I think that's really important to understand because I've seen so many of that first category that sells locally, community, they bring some of that customer base online and they're just psyched when they get the absolute foundational stuff that we've all talked about for ten years, [00:18:40] when they get that stuff going and they get to six, maybe seven figures. That could be a dream business for someone. They don't care to be, you know, 10 million and scaling quickly and raising venture capital going public. And so that's great, right? That's amazing for that person. And maybe that changes their life or [00:19:00] maybe it just keeps them excited on the side of their 9 to 5. We see a lot of that. But if I were today starting a DTC business, I would rather be in the camp of someone that understands that they need to be the face of their company as the Founder, that [00:19:20] you need to be posting content, organic content regularly, and get in the habits because if you can do that, then I think you have more control even if your goal is not to be the next Warby Parker but to have a solid, [00:19:40] profitable business that's yours.

Phillip: [00:19:45] So let's actually kind of talk a little bit about what that stack looks like for this solid, profitable business. That's certainly something that you've operated at Privy for many years. Now you're part of a larger family and I feel like [00:20:00]... You're in the Attentive family now, right?

Ben: [00:20:04] Yeah. Yeah. So we were acquired by Attentive in June 2021. So it's been just shy of a year.

Brian: [00:20:11] Congrats.

Ben: [00:20:12] Thanks. Yeah, it's been a lot of fun, super exciting. And Privy is continuing to operate independently. But obviously [00:20:20], we're using their resources and able to invest a bit more aggressively, which is been...

Phillip: [00:20:24] I'm curious. I have some exposure to Attentive, certainly a longtime standing partner on the agency side where we've done work with them for years and years. And certainly, a lot of our clients [00:20:40] use them. Traditionally in the SMS marketing space, but now has a larger set of offerings. Seems to be the way that a lot of these marketing automation platforms have found product-market fit is by consolidating a lot of like services without shilling too much. I'm curious how this strategy, [00:21:00] Privy plus Attentive might be panning out, in what you're seeing. I know it's early days in an integration, but how does that partnership enable or empower a small business owner? Traditionally I think of Attentive as being more enterprise-focused. But maybe you can change my mind.

Ben: [00:21:16] No, no, no. That's right. I think Attentive is incredibly [00:21:20] world-class when it comes to mid-market and enterprise. And this is why I was so excited about the acquisition. They liked Privy because of our focus on small business. They liked Privy because the customer support model we have mirrors theirs. It's [00:21:40] about incredible service. And they also felt that strategically, if Privy was a spot where these entrepreneurs could start and we could kind of support them from day one, even with our free plan, some of these accounts, they do [00:22:00] grow and they grow very, very quickly. We all know that. That's one of the cool things about commerce. And so when that happens, we now have a great integration with Attentive and we can make it a seamless transition from Privy to Attentive, versus historically, like before the acquisition, we [00:22:20] have customers that outgrow us. We know we're amazing and who we're for and Privy is not for enterprise. But historically, you would have just churned off of Privy and gone somewhere else. And maybe that experience was great, maybe it was awful. [00:22:40] But now we can kind of create a really seamless customer experience for the brands that are growing really quickly.

Brian: [00:22:48] So interesting. Yeah. So what would you say if you were to go pick a stack of technology to complement Privy, to empower solopreneurs and [00:23:00] SMB? What does that stack look like right now and how has it evolved over the past three years? And where do you feel like it's headed?

Phillip: [00:23:10] And we have to, again, blanket statements only and you have to pick your favorite children in your channel partnerships. Go.

Brian: [00:23:16] Go. Go. Go.

Ben: [00:23:19] No, I [00:23:20] think what I'll do is kind of share my view of the world of commerce. I think that consolidation, where we play for entrepreneurs, solopreneurs, small business... The theme of consolidation is very, very real. Five years ago, I think a lot of these Shopify stores, [00:23:40] and I use Shopify because that's where we have the most merchants, but really I think this is true for any of the ecosystems right now. There was a lot of excitement about downloading multiple apps. And so you would have point solutions. You had leading SMS, [00:24:00] you had leading email, you had a separate website pop-up company, like Privy. That's how we got started. And over time, I think a lot of these merchants just got app fatigue. They were like, "Wait, is the data really flowing the way that it should? Do I really need [00:24:20] to be paying for five things? Oh, by the way, what are all of these apps doing to my load time?" And like, "All the support from this app sucks by the way, and Privy's support is amazing." I'm not going to name names, but you know what I mean, right? So what we just found,  [00:24:36]over time, that mentality shifted and people just wanted all [00:24:40] of their customer data in one place. So my view of the world is that Shopify acts, or the eCommerce platform acts, as the transaction and kind of the back office. Your product inventory, in some cases you're fulfillment. We're great fulfillment partners. And I think merchants [00:25:00] on top of that, that back office, they need a stack for their front office. They need to figure out how they're going to get traffic to their store. That could be Facebook and Instagram or whatever. It's usually the social channels, a little bit of micro-influencer, and then they need a single solution for [00:25:20] how they're going to build relationships with their customers, how they're going to nurture those and bring them back for the first sale and repeat sales. And so I think as we look forward, originally I saw a consolidation happening at the small end of the market. I think absolutely it's going to happen in the mid-market and the enterprise [00:25:40] as well. And the interesting thing about this market is that it mirrors what happened in B2B ten years ago. Look at what happened on top of Salesforce. You had HubSpot, you had Marketo, Eloqua, Act-On, Pardot, all that stuff. And each of [00:26:00] those, if you looked at the features of each of them, there's just so much overlap. They all kind of did the same stuff, but each of them was able to carve out a niche, either based on the segment, the type of service, the costs, or whatever. And I think over time that's likely what will happen in this space as well. [00:26:18]

Phillip: [00:26:19] Segment is a [00:26:20] super interesting way to divide that because it actually plays into an area that we're covering for our trends report coming up here, Visions. I tend to believe that software solutions become sort of fashionable in certain market segments, especially in industry verticals, because there's a [00:26:40] network effect at play in the way that we purchase things. There is a keeping up with the Joneses that happens. You don't want to be the oddball out in your industry, you're the only apparel retailer in your category who happens to be on Magento. Nobody wants to be that person, right? It [00:27:00] makes hiring harder. It makes agency overlap and choice and selection of software and being competitive in the marketplace all that harder, harder to raise outside capital because you become a little bit of a unicorn in like how you're being evaluated among your peers. These things become self-reinforcing narratives that the way that we choose things is we choose them because that's [00:27:20] the way we choose them. It's not necessarily because they were built to be like the thing that powers fashion. However, over time, I do believe that there are effects where you become as a software platform, you become really adept at solving certain problems that do address certain market segments. And in that case, now [00:27:40] it's a self-fulfilling prophecy in that we've become really adept. You made this one other point. Sorry. I was emoting on top of what you just said. {laughter} You made this other point that I think is really important. Ben, you said that there is what I would call sort [00:28:00] of a fractionalization of the consumer experience in the sort of the bygone era of installing a million apps in the Shopify ecosystem. And now what we've actually realized is that in actuality maybe all of these things weren't necessarily contributing to growth metrics. They're bells and whistles at best. In reality, there's like [00:28:20] 20% of features that 80% of our customers are looking for, and we're really going to be excelling at that. Would you say that that is kind of where we are in the industry? It's less about the incremental growth metrics and features and all of these like things that we've tried to, [00:28:40] we were extremely experimental around. And now we're actually going through a moment of back to basics and fundamentals and just being really exceptional at driving customers through the funnel and differentiating based on service and support and loyalty and all those things that happen after the sale.

Ben: [00:28:59] I think you [00:29:00] should come take a job at Privy because I couldn't agree more. That's a big part of our philosophy. I think  [00:29:11]a lot of the vendors in the space have built features that only 10% of people really need. [00:29:20] And it's gotten so much harder as the platforms recognize the need for consolidation to keep it simple enough to get the foundations humming. And so I'm a big believer, and I talk about this a lot on my show, there are probably [00:29:40] 20 things that every single eCommerce business needs to do on their website, in email, in SMS, but none of those are like earth shattering. That's just like basic stuff that you'd expect. But we do [00:30:00] kind of look for the shiny tool in the shed. So it's interesting. [00:30:05]

Phillip: [00:30:06] It's true. {laughter}

Brian: [00:30:06] Interesting.

Phillip: [00:30:08] I was going to add no value. I was going to make a joke about Taco Bell. Go ahead.

Brian: [00:30:11] I mean, I do like jokes about Taco Bell. But I think the interesting thing is I think [00:30:20] you're right from a foundational standpoint. The thing that I would layer on top of that is actually what you said earlier, where it was if you know how to take to make short, funny videos, you can go clean up on TikTok, right?

Ben: [00:30:39] Totally. [00:30:40]

Brian: [00:30:40] And so my question is, okay, let's say you do get those 20 things down and you've nailed them. And honestly, perhaps it's easier to nail them than it's all being talked about. Okay, you have a very clear flow from like [00:31:00] first touchpoint to conversion. Stuff that's simple. Simple like foundational things.

Phillip: [00:31:09] We got it. We got it.

Brian: [00:31:09] What are the opportunities right now? You mentioned TikTok as one, but there are other opportunities where like, okay, if I invest in this, [00:31:20] this is the thing that's actually going to accelerate my business, not another one of these apps that I can go download.

Ben: [00:31:26] Yeah, yeah, yeah. Oh, this is great. First, before I answer that, I want to share a quick customer story. So one of my customers is amazing. She's Gen Z, I think, and [00:31:40] she crushes it on TikTok. It's how she cold start launched her brand. They're called Cove Essentials. Great customer. That alone got her to six figures. Just doing well on TikTok, sharing behind the scenes about her product, whatever. She's [00:32:00] great. And you talk to her and she's like, "Oh, I suck at TikTok," but she's killing it. She finally implemented the most innovative thing in the world. Email marketing for eCommerce.

Brian: [00:32:16] {laughter}

Phillip: [00:32:17] {laughter}

Ben: [00:32:17] And now, she's at seven figures in her first [00:32:20] year and she really credits a lot of that. And so it's I think the problem is you've got to remember those two categories of business owners I talked about? You've got the content creators that are like natural at this that forget and maybe ignore some of that foundational stuff.  [00:32:40]Like Chelsea is a good example of that, but wow, what that could do for her business. And it has. And then you've got some of the community-driven people that are less natural on the new channels, but look for the help around email because they've heard of it and they understand that's important. And so you [00:33:00] kind of need to get to a spot where you're doing both of these things to drive the growth. So I do believe that. But in terms of like, yeah, it's probably not the next app that's going to get you to your next revenue milestone. If I were really, whoever's listening [00:33:20] to this right now, what I would say is look at Future Commerce, look at Ecommerce Marketing School. We're multiple years into this journey of content creation.

Phillip: [00:33:32] Yep.

Ben: [00:33:32] And if you start today and everyone says this, like when they post about content, 12 months from now, 18 [00:33:40] months from now, two years from now, you're going to see a massive difference, and who in eCommerce is doing that? Glossier. I've actually been noticing Fly By Jing.

Phillip: [00:33:53] Yeah.

Brian: [00:33:53] Oh yeah.

Ben: [00:33:53] Launched a magazine the other day like they're doing great content. So there are [00:34:00] some that are doing this, but that's what [00:34:03] I would figure out how to create a habit around that, how to commit to that, and make it as easy as possible based on a media format that's going to work for the founder or the marketer of that business. [00:34:16]

Brian: [00:34:16] Yes, it's got to be sustainable.

Phillip: [00:34:17] There's so much I want to say, but I feel like we should save it [00:34:20] for the second half in the cross podcast here. We never really set it up. We're actually going to be on each other's shows. So I'm really excited about that. And maybe, hey, maybe I can make the Taco Bell crunch wrap analogy here or Mexican pizza. Take your pick. Because I [00:34:40] think that there's something really novel about the idea of like sunsetting things that are working and that are beloved but take your focus away from a core piece of your core competency. So I think that that's maybe something we could pick up from like the Future Commerce angle. But before people take off or go subscribe [00:35:00] to your podcast, where can they find it, Ben?

Ben: [00:35:01] Yeah, so anywhere Spotify, Apple Podcasts, whatever, you name it. It's called Ecommerce Marketing School. So go check it out. And thanks for having me on the show, guys.

Phillip: [00:35:10] Absolutely. And I thank you so much, Ben. Thank you for listening to Future Commerce.

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