Episode 220
September 3, 2021

ASMR and the SaaSification of Experience

What does the future of SaaS look like? Find out in this week's episode as Phillip & Brian sit down with Gary Benerofe to talk about attribution, product market fit, headless commerce, and how to drive real growth to your platform. Listen now!

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this episode sponsored by

On Headless, Influencers, and Live Streaming

  • What does digital marketing attribution look like if there are no cookies? And what are people doing in response to this? Frantic behavior. 
  • “Frantic behavior can be exciting because that means there is opportunity to be part of the solution.” - Gary
  • Product market fit is beginning to become influencer fit. Consumers want to buy from experiences and from influencers they trust. Having a “genuine influencer” promote something to a consumer doesn’t take a lot of convincing.
  • The law of platforms is always evolving. 
  • “The platform always evolves where its ecosystem performs R&D for it, and then it makes its strategic bets and product roadmap based on what's getting market share, and in this case, capital allocation.” -Phillip

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Brian: [00:01:42] Hello and welcome to Future Commerce, the podcast about next generation commerce. I'm Brian.

Phillip: [00:01:47] I'm Phillip. And we have, from an undisclosed location, joining us for the first time, a longtime friend, but first time caller, Mr. Gary Benerofe. How are you doing, man?

Gary: [00:02:00] I'm doing great. I'm happy to be here.

Phillip: [00:02:02] And I hear, I don't know if this is true or if we can even say it on the show. So tell me if we got to edit it. But you're fun employed at the moment.

Gary: [00:02:11] I'm pretty fun employed. That is 100 percent true.

Phillip: [00:02:15] What were you doing before fun employment?

Gary: [00:02:18] So I was running eCommerce Agency. I was CEO of Media Spa for several years before we ended up essentially being acquired by Overdose. And after a while in the overdose family, I'm looking at the next chapter.

Phillip: [00:02:36] Nice. Nice. Congratulations.

Brian: [00:02:38] Yeah, it's a big deal.

Gary: [00:02:40] It's been an amazing ride filled with a million mistakes and a few good decisions.

Phillip: [00:02:47] Who do you think had a bigger exit? You or Mark Lavelle?

Gary: [00:02:51] {laughter} I think Mark LeVelle just edged me out.

Phillip: [00:02:53] Just by a {laughter}.

Gary: [00:02:55] Just buy a couple of pennies.

Phillip: [00:02:56] By a couple basis points. Yeah, we know each other because at some point we were coopetition in the space in in the Adobe ecosystem. It's actually how Brian and I started the show.

Brian: [00:03:12] Yes.

Phillip: [00:03:12] We worked at competitors.

Gary: [00:03:14] Interesting.

Phillip: [00:03:14] It made for such better conversations back then.

Brian: [00:03:19] {laughter} I feel like that improved.

Gary: [00:03:21] I used to... You were one of my first reasons to actually pay attention to Twitter as I was getting up to speed in the Magento community and sort of figuring out what was going on.

Phillip: [00:03:30] I'm so sorry.

Gary: [00:03:32] That was back in the day.

Brian: [00:03:34] Old school.

Phillip: [00:03:35] It is.

Brian: [00:03:36] We're reaching way back here.

Phillip: [00:03:38] But Magento is cheugy. We all know this now. I'm just kidding. Actually, I had said some...

Gary: [00:03:49] What is cheugy.

Phillip: [00:03:49] Cheugy? Oh, Brian, you have a really good definition of cheugy. Cheugy is basically something that used to be cool that you've held on to for way too long. And it's no longer cool. But you still think it is. That's cheugy.

Brian: [00:04:02] Yeah. It's like an evolution of the word "basic" a little bit. It's like effectively, if you think something that's really like common place is actually amazing and you think you're a genius because of that.

Phillip: [00:04:21] If you were a white girl and you still like pumpkin spice lattes, that's cheugy. We're onto matcha now. That's what we're doing now.

Gary: [00:04:30] {laughter} Amazing.

Brian: [00:04:31] Yeah. Matcha is pretty cheugy, too.

Gary: [00:04:35] Well, what's after matcha?

Phillip: [00:04:38] Oat milk, I think, was hot for a second.

Brian: [00:04:40] Nope. Super cheugy.

Phillip: [00:04:41] I don't know. We just drink functional water now.

Brian: [00:04:43] Yes, that's correct.

Phillip: [00:04:44] We drink water that is infused with collagen. That's our new thing.

Brian: [00:04:47] That's closer to the truth. There you go. You're on it. {laughter}

Phillip: [00:04:52] We all built a career... I should go back to the reason why cheugy even came up. We all built a career on Magento, nay Adobe, and congratulations on scaling an agency to exit. We had Matt Bertulli on the show not too long ago, a couple of weeks ago, who's now doing, he's changing the world one phone case at a time and doing a lot of really cool things and material science with Lomi and some compost. And it's really, really such a cool story. If you haven't heard that episode, go check it out. But he also is a Magento agency guy who scaled an agency to exit. I think we'll have remembered the monolithic eCommerce platform ecosystem that was the Hybris and Magento sort of era as being like the pre cloud era, as having, you know, created tremendous amount of wealth and a tremendous amount of talent to shepherd us into the next generation.

Brian: [00:06:00] What I think is really interesting about that sort of generation is that it spans both SMB and enterprise. That's what made Magento super interesting is that a lot of people were sort of able to get in and leverage Magento at kind of the high end of SMB. And it's scaled up the enterprise. And that's where I think a lot of that talent like kind of made its way up was through that process, which I thought was so interesting.

Gary: [00:06:29] That's exactly what... I mean, that's part of what got me excited about the work we are doing back then, is it didn't really [00:06:36]... The tech was important. It was the foundation for it, but because the tech could service a company that was doing a million bucks or doing one hundred million bucks or more, you were able to learn about the different challenges of businesses at all those scales. And that became what we were trading on was the sort of strategic viewpoint on how to move from each of those sort of growth stages to the next. And Magento was just sort of the paper to write the script on. [00:07:06]

Brian: [00:07:06] Exactly.

Phillip: [00:07:07] Is that how it works anymore, do you think? I feel like the world changed at some point, and cloud era definitely has rewritten... The operator of today has a very different set of skills to the operators of...

Gary: [00:07:20] Yeah. I mean, if anything, I would say it's only like accelerated the need to be strategic. For every moment that you're not just doing another upgrade to the latest version or fixing a core bug or doing something that takes you away from thinking about how to grow the pie. That, to me has been the sort of fundamental sea change, you know, and that's what everybody trumpets Shopify for, is you don't have to worry about the box because the eCom in a box just works. And you can try and figure out what actually makes you different and why do you exist? Do you exist for a reason more than just because it's really cheap and easy to put up a store?

Phillip: [00:07:59] Ian Leslie asked me, he's the former CMO over at Industry West, now at Bolt... Shout out. He said he's like, "What should I be focused on is the CMO? I feel like I have to be a technologist now, and I work in a brand. I feel like I'm required to be a technologist." And I said, "My litmus test for whether you're a technologist or a marketer is your awareness of cron jobs." If you know what a cron job is, there's a problem.

Gary: [00:08:39] {laughter} Right. Yeah. Right. This kind of goes back to like, you know, you talk about the agency ride. And, you know, one of the good decisions that I made or helped made, was made for me, was my partner was great. My partner didn't do anything that I did because he was a technologist, a true developer, a solution architect. And, you know, I could be, I can pretend in that area, but that is not, I am no engineer. And if he was having to do what I did or I had to do what he was doing, neither of us were functioning at that high a level. And so, yeah. You don't want your CMO knowing about cron jobs. Certainly not if they're stuck.

Phillip: [00:09:22] No. And that's the problem. Right? I think that you you had to build a known technology a decade ago to play in eCommerce. And the thing you were rewarded with afterward was, you know, sort of de facto audience. Anyone who wanted to shop online was a potential customer. It's not the case anymore. And the world changed at some point.

Brian: [00:09:46] I had this vision of Ian Leslie as like Kevin McAllister and Home Alone, and he was like...

Phillip: [00:09:52] Slapping his face?

Brian: [00:09:54] No, he like walks into the store and like he comes to talk to his technology team. And it's like Kevin walking into the store when he wants to get a toothbrush and he is like got questions about it. And then he gets scared and he runs away. And he was like, I'm a criminal. And then... {laughter}

Phillip: [00:10:16] "Is this platform certified by the Internet Retailer 500?"

Brian: [00:10:20] {laughter} Exactly. Exactly.

Phillip: [00:10:23] You know, and someone needs to make this like on TikTok, because this is... We need this.

Brian: [00:10:27] He walks out and is like Kevin and is like, "I'm a criminal." And Ian's like, "I'm a technologist."

Phillip: [00:10:35] "I'm a CTO. I thought I was a CMO." Gary, you've now lived through a couple of is there, you know, pre cloud, post cloud, media spun, and Overdose. What are the things that are happening right now that you've got your eye on in the change of the landscape and what people are wanting to, you know, build versus buy today? And how has that changed from, you know, the early days?

Gary: [00:11:00] Yeah. It's interesting, since leaving agency land, my brain is unclenched and I've been able to just...

Phillip: [00:11:09] Just your brain?

Gary: [00:11:10] Yeah, enjoy learning again and being curious, adjusted my brain to focus on not just producing work, but actually thinking about the next five years, the next 10 years. I think one of the areas that's really cool, and I saw you guys had a podcast on this recently is what's happening with cookies? What is digital marketing attribution look like if there are no cookies? And what are people doing in response to that? And I'm seeing a lot of frantic behavior, you know, and all of that's kind of exciting because that sort of means there's some opportunity. And I think everybody who's closest to first party data or matching identities and, you know, a lot of folks in the CDP space are kind of have a light shone on them right now because they're part of that solution. And so I'm definitely digging in deep on on different companies who have a different take on that and in what the future holds. And I think there are people who think there's going to be massive disruption and there's others who think, look, Google still kind of controls the solution and and they're not going to disrupt their business. So maybe it's going to be a relative no change over the next couple of years. But I like what it's done to the focus on data, on brand, and first party relationships. So all of the things out there like, you know, Live commerce. And I know, Phillip, you and I had had a conversation about, you know, whether or not is this a real trend? You know, are we going to do what's happening in China and see like the ridiculous growth they've had? And to me, I don't know. I think, yes, I think it's coming. I think it'll grow. Will it be as much as we've had in China? I don't know. But the fact that that is another arrow in your quiver to build up a relationship, a marketing channel, first party data, to sort of enhance your life cycle marketing strategy, I think that's a huge opportunity.

Phillip: [00:13:14] I think it's an opportunity. It depends on the brand and the audience. A counterpoint to you would be I've been... If you open up the Amazon app right now.

Gary: [00:13:24] Yeah.

Phillip: [00:13:25] Which means you have to close TikTok. But if you go to the Amazon app.

Gary: [00:13:30] Not worth it.

Phillip: [00:13:31] Scroll down two thirds of the way and there's a live stream, 24 hours a day of something happening. You can watch somebody, you know, doing a QVC style live stream. The couple that really stood out to me was like someone assembling a desk that they bought. And then another one was somebody sort of setting up one of these outdoor coolers that have like a solar panel on top. And for some reason, who knows? I don't know. And in both instances, you think about the billions, the literal billions, of people that shop on Amazon. You know, they had 150 some folks watching live, and I'm thinking to myself, is this actually the future? Does anyone have greater scale than Amazon? And I couldn't decide if like should the viewership be higher or ostensibly given like the content like maybe it should just be zero. I don't know like who who's watching other people put together desks? Aren't there better places to watch that?

Gary: [00:14:34] But, you know, the way I look at that is this is Craigslist before you've got like, you know, some like proper development of like... We don't even know if we have the right product market fit yet, but I'm presuming it's coming. And I don't know, even though it's easiest for the Amazons and the Facebooks and the Instagrams to sort of control the Live commerce platforms. [00:15:00] I'm kind of more interested in what's happening on the direct to consumer side and what gets pushed out from your email channel or on your website to kind of make appointment TV, if you will, or appointment Web video for new product releases and company announcements and, you know, things that sort of engender loyalty and build the relationship. There's so many companies I see out there who have figured out how to engineer some acquisition flywheel. And they have a business online selling a bunch of product, but they have no brand. And therefore, their future is a little bit unclear to me as they try and go across category or expand. And this is just another tool to put people in the company and or sort of micro influencers out there to represent your company in a way that's relatively cheap and can create more stickiness. [00:15:54] So I hear your hesitation, Phillip. And I'm looking right now, there are 74 people watching Amazon Live while a lawnmower is being put together or discussed. But like, you know, you can also go on to the Amazon Web site and look at previous things that were Live, you know, trending by category. And if I'm trying to buy something like a cooler with a solar panel, I might want to go see if somebody can talk about it.

Phillip: [00:16:28] That's true.

Gary: [00:16:29] Yeah. So I'm a believer.

Brian: [00:16:32] I'm a believer as well.

Phillip: [00:16:33] It's down funnel activity. It's not top of funnel is what I hear.

Brian: [00:16:37]  [00:16:40]That, and look what YouTube has done, what YouTube has become. This is Amazon looking at their use case for YouTube and saying, "We want to take that in-house," because people go to YouTube all the time to learn things about how to put things together or accomplish something or use a product the right way. That's a significant part of YouTube watching. [00:17:01] That's what I go to YouTube for whenever I need to like fix my dishwasher. YouTube. Immediately. And then I follow step by step instructions on how to do it. And that video on how to fix that dishwasher has hundreds of thousands of views.

Phillip: [00:17:16] True.

Brian: [00:17:18] That's a no brainer. And if you could preempt some of that, like, "Hey, I really need to buy a cooler with solar power," but I don't know anyone that has this yet. And I really think it's an awesome idea. You're going to want to know what to do. I actually think this is in its infancy for Amazon, especially with like you were saying, Gary, the post live trending category. And so I could see Amazon building up a massive library and actually being competitive with YouTube for explainify and review videos.

Phillip: [00:17:58] And that stuff belongs in the, you know, purchase consideration funnel. You convinced me. I'm there.

Gary: [00:18:09] You know, one other point out, not to beat a dead horse here, but like I think part of what I got lost on originally when I started digging into the space was, you know, how important is the actual commerce in the middle of the stream? And I think that kind of misses the point, because I think this is really more about, like you said, Phillip, it's pushing people from kind of upper funnel to lower funnel. And, you know, I talked to another agency owner who is running some of these experiments with their clients. What they found is that nobody was really purchasing during the the Live feed. But the next couple of days, they had record breaking transactions. You know, so it's getting people to the bottom of the funnel.

Phillip: [00:18:50] Hmm. It's. Gosh, if only there were more attribution solutions... This would be a really great segue if we had an attribution sponsor. Hit us up at Hello@FutureCommerce.fm. Rockerbox. Let us know. If attribution is part of the challenge here... Actually, Matt at Inquire Labs. Maybe you can hit us up. These are all touch points along and omni channel, you know, purchase consideration customer journey. Right? And if Adobe had customer journey orchestration tools to make that happen, I'm sure that that would also be one way too.

Brian: [00:19:31] Wait, wait, wait, hold on.

Phillip: [00:19:34] Ok, vendor procurement at Adobe. It's a thing. Yeah, I find this to be such an interesting... It's like one arrow in your quiver.

Gary: [00:19:45] Yeah.

Phillip: [00:19:46] And it's one that like seems like one of the hardest things to solve for, because you know, like, listen to us, we're a couple bumbling buffoons on a podcast. We've been doing this for a long time. I don't know that we're the best in the world at doing what we do here, but I feel like we're kind of engaging. It's a skill that you kind of learn over time. And maybe, I think it's insanely difficult to find content creators to sort of run this for brands at scale. And then to do it on their platform natively, not to say I'm... All this makes me sound very bearish. I don't like it. I'm sorry.

Brian: [00:20:25] Show title. "Kind of Engaging." {laughter}

Gary: [00:20:28] Well, I mean, I know you're not looking to China to be the sort of harbinger of things to come. But there was, I did read some data that two thirds of Chinese consumers had actually purchased via a Live stream in the last year. En route to a hundred and seventy one billion of sales.

Phillip: [00:20:45] That's because every person is being watched via CCTV all the time, and they count that into the data. But that's... Sorry.

Gary: [00:20:54] {laughter} I'm just saying...

Phillip: [00:20:56] Big if true. That's a huge number. Yeah.

Gary: [00:20:58] Right. Like Shopify did like sixty five billion in 2019 GMV. One hundred and seventy one billion in Live commerce in China. I mean, it's huge.

Phillip: [00:21:10] I have to wonder, you know, if you're engaged in China and you're doing business there and you have all this growth, let's say that you're... Was it Liyia Wu we had on, Brian, from ShopShops?

Brian: [00:21:24] Yes correct.

Phillip: [00:21:25] I'm not a China expert by any means. And that market to me, especially from a commerce perspective, is very different to this one. So I'm just not an expert there. But [00:21:35] what I understand is that if you're doing business there, repatriating those funds, those profits outside of the country is nigh impossible, especially if you're business based outside of China. So like if you're growing that business capability in that market, you're sort of locked in to that market. And this is one of the things like culturally it might be something that is viable for the West to take hold of, and we certainly would pair it like the same kinds of engagements. But the platforms that are making it successful and giving the tools to the creators now can't just necessarily be ported or turned on here in the West. And, you know, so we're like reinventing things many, many years after they've already been created. And I wonder if that's sort of like why we're so late to the game or why we haven't seen larger proliferation of this kind of technology that enables creators and brands to do it at scale. [00:22:26]

Gary: [00:22:26] Yeah, I think that's totally fair. I think it is going to morph. And, you know, I read another piece I was talking about how the people who have been really effective at Live commerce, have not been influencers, as much as like nano influencers. Like you actually don't want a recognizable person because then there's a little bit of disingenuousness about whether or not that product... Feels a little bit more like, I don't know QVC or just a commercial as opposed to something more grassroots.

Phillip: [00:22:54] Say it, Brian.

Brian: [00:22:56] Genuinfluencers.

Phillip: [00:22:57] I knew he was going to say it.

Gary: [00:22:58] Oh, nice. All right. I've learned a new term.

Brian: [00:23:03] I think that this goes... Genuinfluencers are kind of a step beyond this even. They're like people that are not necessarily selling specific products. They're just like cool people that brands sponsor.

Phillip: [00:23:16] Maybe. Purchase considerations happen all the time from nano influencers. I mean, we've given it a name. We were in a team Friday meetings, what we always are in, and someone dropped a couple of book recommendations in the chat. And within 10 seconds I had already added them to my Audible and they're teed up and they're ready to go. Like I don't need a lot of pushing to go get the audio book of Neil Stevenson's Snow Crash. Like it takes zero convincing from me. And that's a nano influencer inspired transaction, which has zero attribution data, by the way, on Audible. I think maybe some of these, like from a category to category basis, are certainly more influenceable. I like reading. I like fiction. Doesn't take a whole lot of convincing to make me buy it. Solar panel cooler is probably a little bit of a heavier lift and requires more information and a longer purchase consideration time.

Gary: [00:24:19] I mean, I think that's kind of one of the more interesting parts of this, which is all of the live streaming stuff seems to happen in the apparel and fashion space. But, you know, maybe and that's I think what's also coming out of China, a lot of that and maybe beauty, but maybe it's our product market fit is around different products, completely different style of influencing, you know, not that hit you over the head with like a lot of flashing and buzzing lights and "Buy Now. Buy Now," but something more genuine.

Brian: [00:29:29] I still think I need to go start my Costco Shopping Channel because...

Phillip: [00:29:33] Brian, you would be amazing at this.

Brian: [00:29:35] I would absolutely crush the Costco Shopping Channel. {laughter}

Phillip: [00:29:36] Costco influencer. This is a complete aside. And by the way, I recognize sort of the problematic, you know, three white guys talking about how China does eCommerce. So I feel like we should shift gears at some point. But I think that there...

Gary: [00:29:56] My wife is Chinese. Does that help?

Phillip: [00:29:57] That does I think maybe a little. My wife's South African. I think that's a vote against all of us in this to some degree. But the last thing I would say is like especially in the Costco scenario, Brian, which we have riffed on for over a year now. I really want you to just go do it. A lot of these things like I know you meander and you're like in search of things. I'm not that way. Like I've got a plan. I order my shopping list for efficiency. Like I'm going to speed run Costco.

Brian: [00:30:33] Yeah. No, I love that.

Phillip: [00:30:35] I would freaking watch someone put a timer up and speed run their Costco. And I swear to God, that would be amazing.

Brian: [00:30:42] Oh, my gosh. I would watch that. It would be so fun.

Phillip: [00:30:45] The Costco Speed Run.

Brian: [00:30:46] Yes.

Phillip: [00:30:47] That's the thing we should start.

Brian: [00:30:48] That's a show title. I'm in to that.

Phillip: [00:30:50] Unfortunately, the Publix near me... I'm in Florida, by the way. This is the most Florida man thing you'll ever hear on the show. The Publix near me rearranged all of their aisles. Like sports drinks used to be on aisle one next to produce. Now it's cereal. It's completely ruined my speed run game, by the way. The local conspiracy theory here is they did that to try to discourage people from shopping there, so they'll return back to the mass shooting Publix, which was just a few miles down the road. It's actually worked. Parking lots full again. Totally. Yeah. That's consumer psychology for you in grocery. Bad friction, good friction. I don't know. Very Florida.

Brian: [00:31:33] Terrifying.

Phillip: [00:31:33] I'm sorry. Can we shift gears? Any last word, by the way, Gary? We'll give you the last word on that topic.

Gary: [00:31:40] I mean, I think we've hit it. I'm pro. You're against. We'll see how it goes. {laughter}

Phillip: [00:31:46] I don't know if that's true. I feel like it's just harder. Yeah, I know. I'm there.

Gary: [00:31:51] I'm just playing with you. There's no way to be wrong because it's already here and it's going to keep growing. Will it've grown faster or less fast than we thought? I don't know. If I'm a brand, I would start developing a strategy here. Period.

Phillip: [00:32:07] 2019... Well, let's say 2020 was the year where we saw a lot of Live stream, a lot of venture money and a lot of capital flowing into Live stream shopping platforms. Certainly a lot of, you know, attention around it and definitely in the startup press. The other eCommerce capital allocation vehicle seems to be headless eCommerce platforms. Just yesterday, Nacelle raising, what was it, 40 million?

Gary: [00:32:43] 50 million, I think.

Phillip: [00:32:44] 50 million, give or take, you know, 10 million. My gosh. Did you guys implement much headless in your time in the agency side?

Gary: [00:32:57] Yeah. It was just ramping up as I was headed out. So did some work with the Deity Commerce tools. Frontastic. I think those are kind of the players that we were working with, but also building up that knowledge like aggressively, you know, a very active Slack channel there, constantly interviewing additional partners, and talking about it a lot and actually starting to sell it. I think from my perspective, it's really exciting that the platform game is getting a shakeup. I think that's from the sort of geek side of me as somebody who's just been head down in the space for 10 years. It's amazing. It's a lot of fun. That's a lot of great new stuff to chew on. I think from a sort of reality perspective, there's definitely a little bit of a bubble going on on the funding side. I think the last few merchant conversations, I would say, that I had as I was out the door, and frankly, even some of the consulting clients that I'm working with now, everybody wants to talk headless, whether it makes sense for them or not. And my big question for everybody is like, why are you interested in it? You know, if you have a real need for speed, it's a great play, you know, PWA's great play. If you have a massive tech team that wants to just run an empire of developers and are really able to drive innovation in your eCommerce practice through engineering. Great. I love a micro services approach and building up all of your own services or, you know, getting rid of the monolith. But for most of the guys that I was talking to who are doing, I don't know, five to 40 million bucks online a shop in a box is great.

Phillip: [00:34:52] Shop in a box.

Gary: [00:34:54] Yeah.

Brian: [00:34:55] I feel like there's a song about this.

Phillip: [00:34:55] Chris, if you're editing this, Chris, drop in {singing} "It's a shop in a box." We need that.

Gary: [00:35:03] {laughter} So, yeah, so I mean, that's sort of my reaction is the devil's in the details. I just saw Finbarr from Shogun posted on LinkedIn, a bunch of their recent launches. And I went and checked them all out. And they are blazing fast. And it's awesome. You cannot attain that, let's say, on Shopify alone. How much is that worth? I think it really depends on each situation. It's probably not worth creating an org that is really tech dependent and loses that the whole value of what Shopify brought to the table, which is to not worry about your tech and become very sort of strategic. And I don't think that has to be the case. But for some of the clients that were coming to us looking for headless, it would have been, and it would be the wrong product at the wrong time in their evolution.

Phillip: [00:35:55] Shogun, by the way, which we mentioned Nacelle's raise, Shogun has a recent markup as of June up to 575 million with their 67ish raise.

Brian: [00:36:13] It's interesting to me that we're seeing these kinds of valuations, given that Shopify is also making a play here.

Phillip: [00:36:21] It's interesting to me as well, Brian. There's so many of them.

Brian: [00:36:28] Yes.

Gary: [00:36:29] Yeah. Count me in. Right. Do you want to compete? Do you want to compete with what is it, Hydrogen? I don't know.

Phillip: [00:36:35] Yeah. Hydrogen being, for those who aren't up on it. {laughter} Less than it was about a year ago, the Q1 earnings call 2020 for Shopify we heard Tobi Lütke, Founder/CEO, say "We've always been headless." Like, you know, it's always been it's an implementation detail. "We've always been headless because we're API first. And that's that." You know, fast forward four quarters and they just announced, sorry, five quarters, they just announced in their Q2 earnings, "You no longer have to deploy to Netlify, Fastly, Cloudflare, GitHub, you know, own five accounts, six accounts, have a front end stack that separately hosted and managed where the dev ops pipeline of its own. Hey, why don't you just do that here natively on our servers? Because we now have this thing called Hydrogen, which is like a runtime environment for headless builds." So that's fun. And this is something I wrote about in The Senses about a month ago, which is it's the law of platforms. The platform always evolves where its ecosystem performs R&D for it, and then it makes its strategic bets and product roadmap based on what's getting market share, and in this case, capital allocation.

Brian: [00:38:06] Yeah, and Shopify is investing in this. They just put out a huge article just in late July about headless and whether or not you should be headless, which I think is that, to your point, Gary, is still a big question, even if there is a native Shopify product to be headless. Is it something that you would need to do as an org is still a big question. I think Shopify wanted to highlight that maybe because their product isn't as mature as Nacelle or Shogun.

Phillip: [00:38:36] It's just an idea, by the way, right now. It's beta.

Brian: [00:38:38] Yes, exactly. So, you know, this is an area that's going to continue to see a lot of heat. I think for sure, when there's this much money and this much talk around something that it's going to be something that I think merchants everywhere are going to have this on their lips and on their minds.

Phillip: [00:39:00] They already have it. Gary, don't they already come asking for it?

Gary: [00:39:02] Yeah, they do. And it's like even, you know, like Fabric, another one that raised, I think a hundred million...

Brian: [00:39:10] Seattle company. Hey-o.

Gary: [00:39:11] They only have a handful of customers at this point. But I think the money is believing that whatever the product ends up being, that team, let's say, is there to get it there. I think there's an acknowledgment that not everybody knows what the final solution should be and who the winner will be, or even if this is a winner take all type of market. But there's enough confidence that there are problems that need fixing that we're going to throw money at this and hope that we evolve to the right solution. And that's what I see happening.

Phillip: [00:39:50] Is it not a situation, Brian, that maybe it's like a very slow burn version of responsive where eventually all sites are responsive. We don't even like call it responsive anymore. That's just how you design.

Brian: [00:40:05] Yeah. Although interestingly enough, with responsive, for commerce it was an extremely slow burn. And then it was super fast adoption. As soon as platforms put out a native responsive theme, whenever anyone upgraded their commerce platform, they went responsive.

Phillip: [00:40:31] It was on the adoption cycle of the the next iteration of CapEx to your eCommerce platform.

Brian: [00:40:38] Right.

Gary: [00:40:38] Yeah. And I think, you know, like I'd be curious. One of the things I'm doing right now is advising a couple of private equity firms and some of their portfolio companies about what they're doing on their on a lot of different things, but certainly on their tech stack and their commerce. And I'm curious. Every situation is different, but hypothetically, you guys had a client doing, you know, 50, 60 million online, has a pretty good website, could be a little bit faster, doesn't necessarily need a platforming. Where does headless fit in? Are you even barking down that tree? Barking up that tree?

Phillip: [00:41:17] I'll ask you the question is the barrier to adoption highly correlated to how much third party code has to run on your front end for you to have a cohesive CX? Because the ecosystem around headless isn't the same ecosystem... The plug and play nature of, say, Shopify or Magento... Less plug and play more like, you know, wire build architect, lay a foundation and play. But you have these ecosystems of third party SaaS platforms that have part of your CX. You know, it's the Shopify, it's the Klaviyo, you know, Okendo, Nosto, Yotpo. Anything else that ends with an O. You know, ithacation of eCommerce like that's also part of the consideration in whether you go headless because it's now you're on the hook to build and support those parts of the CX that they would be exposing to your customer. Is that not true?

Gary: [00:42:28] I think that is true. And it's a lot of homework for these headless guys to do to make sure that they play nice with those guys. It also probably begs the question, do you need 12 different SaaS techs to run your business? And how differentiated are each of those as they all sort of grow and try and scale to bigger and bigger heights and the sort of Venn diagram of their features overlap with the ESPs, overlap with the CDPs and the CRMs and the chat bot guys are now SMS guys and like whatever it is, you know, I imagine as this evolves, you can probably find a way to streamline that that works for the headless play.

Phillip: [00:43:11] Yeah. Callen Jordan calls it the Jordan law of email or something like that. I forget what he called it. Jordan's law. It's like all platforms converge on a marketing stack. It's like, you know, Privy is now Attentive, which is now email plus SMS. Yatpo acquires that SMS bump, which is now SMS. You know, Klaviyo has SMS. They're all the same stack with a different logo eventually. Eventually. Not right now, but eventually.

Gary: [00:43:42] Yeah. And yeah, that's a whole nother trend that I think has some interesting things, some of which I want to talk about and can't.

Phillip: [00:43:53] Thanks for mentioning it. {laughter}

Brian: [00:43:54] {laughter} Yeah.

Gary: [00:43:56] But yeah, when you take over as an agency, and you take over a new account and you roll into their Shopify admin and you see what's living in there, it's like a graveyard of apps. You know, maybe it's not uncommon to run into 30, 40 apps, like five or six are being used, and of those five or six they're using each of them to 10 or 15 percent of their capacity. That probably isn't right.

Phillip: [00:44:26] That's definitely not right, and then I think that, you know, a lot of folks complain about the SaaS tax and it's as if it isn't something that we've all kind of had to opt in to to some degree. It's also like this fractionalization or the platformification of job roles and responsibilities. It's like not an email marketer. I'm a Klaviyo expert, right?

Gary: [00:44:57] Right.

Phillip: [00:44:58] Not an eCommerce expert. I'm a Shopify King. I don't know. {laughter} Whatever. Shopify Guy? What would you say? Last word, Gary. We'll give you the last word on this.

Gary: [00:45:17] All right. My last word is that I think that point is a good one. [00:45:20] I think while you're going to need your Klaviyo experts and your Shopify experts, what's kind of more important is that you're a commerce expert and that you can take those tools and drive real growth. And I think that's maybe something that gets lost in all of this sort of SaaSification of experience. I mean, I'm probably going to anger some people and I say this, but I don't know that the loyalty... Like I've been working for years with Yotpo loyalty line, and I couldn't tell you like what the difference between those loyalty programs is [00:46:01]. I don't know.

Phillip: [00:46:03] There's a pull quote.

Gary: [00:46:05]  [00:46:05]So I'm sure my friends over there aren't going to be happy with that, but that to me sort of explains where you might want to focus to be different and excel. Like you can sometimes like over the years of looking at all these different eCommerce merchants, the guys that impressed the hell out of me and have these really great businesses are usually the ones who have kind of figured out how to grow a particular channel or use a particular tool, like really, really deep. And it might not be... They might be using, let's say, you know, Magento loyalty. Or they might be using some refer a friend you never heard of, but they're using that crap out of it. And I think that's sort of more interesting to me than the depth of your Klaviyo expertise. [00:46:50]

Phillip: [00:46:50] Our next experimental podcast venture will just be ASMR of us whispering the names of SaaS platforms. {whispering} LoyaltyLion. {laughter} And by the way, Kayla Saylor, if you're listening, send Gary a battle card on LoyaltyLion versus Yotpo rewards.

Gary: [00:47:11] Great. Thanks. Thanks for highlighting that.

Phillip: [00:47:14] You're welcome. What are you listening to these days? You're a music guy. What you got spinnin'?

Gary: [00:47:21] What do I got spinnin'? Well. This weekend, with four little kids I had Olivia Roderigo performance of Driver's License. We had four singing and dancing children sing in different lines. It was pretty amazing. But in reality, I'm listening to a lot of Leon Bridges. A lot of Camp and Mt. Joy and Houndmouth. I always go back to Pavement periodically to reconnect with my indie rock roots.

Phillip: [00:47:55] Pavement. I always joke because I've not listened to new music in maybe 15, 20 years. And Brian is very clued in to new music. And he will go on these like just rants like you've done very briefly with, you know, all these new artists. And I just they sound like they're made up. I feel like you guys are just shoving stuff like you're clicking a button on I'm feeling lucky for a band name generator. And I would believe it. Like I wouldn't know the difference.

Gary: [00:48:22] Yeah, that happens to a lot of people, right? They hit a certain age and they're done with music discovery. Not me. Well, actually, especially now that I'm in fun employment zone. I love scouring Spotify and now like, well, this Delta variant is putting a little bit of a damper on things, but I'm starting to buy tickets again and go see shows. Yeah, I'm hoping we get back to that. I need Live music in my life.

Brian: [00:48:56] What was your like go to productivity music when you weren't fun employed?

Gary: [00:49:02] So I'll give a shout out to one of my former colleagues, Kyle Ben Savage, he turned me on the Com Truise. You guys ever heard of this?

Brian: [00:49:13] No, this is made up.

Gary: [00:49:15] Fantastic spoonerism there. It's just like it's literally what I would imagine Tom Cruise is listening to as he's like driving around in Risky Business, you know, on top of the world with his new female interest.

Phillip: [00:49:29] Can you spell that? I'm sorry.

Gary: [00:49:31] Com Truise?

Phillip: [00:49:33] Yeah.

Gary: [00:49:34] C O M  T R U I S E  {laughter}

Phillip: [00:49:42] Oh, oh, oh. Ok. All right. All right. All right.

Brian: [00:49:44] I'm looking this up, actually.

Gary: [00:49:45] Com Truise.

Phillip: [00:49:46] Oh, like Tom Cruise, but Com Truise

Gary: [00:49:49] Exactly.

Phillip: [00:49:50] That's freaking funny.

Gary: [00:49:51] If you want no words and a little bit of vibe. Go check out Com Truise.

Phillip: [00:49:57] Let's roll some Com Truise on the outro here. Fantastic. So good to have you on the show. Gary. What a pleasure. Going to have to have you back. Maybe you run a headless/Live stream show for us. That'd be great.

Gary: [00:50:10] Any time. Any time.

Phillip: [00:50:12] You agreed to it, I heard it. It's a verbal contract.

Gary: [00:50:15] As long as you can whisper SaaS tech names in the background.

Phillip: [00:50:18] You got it. {whispering} Klaviyo. {laughter} Love it. Thanks for listening to Future Commerce. We want you to lend your voice to the conversation. You can do that at FutureCommerce.fm. Join the discussion. You drop us an email. Hello@FutureCommerce.fm. There are two hundred and sixty plus more episodes where this came from, all of varying degrees of quality. You can find those wherever podcasts are found by searching for Future Commerce or subscribe to our newsletter The Senses, which comes out every Friday, or check out our long form thoughts on Insiders. All of that is found, and more, at FutureCommerce.fm. And Nine by Nine. Coming back strong. Get on the list. Nine by Nine will likely be out and/or close to be released, our big annual report of 81 brands that are changing the world. It's got a lot of pros, a lot to dig through. And we've doubled the fun. You'll find out what that means. We went really, really big this year. The Nine by Nine report can be found at NinebyNine.report. Go get that today. Sign up and get on the prerelease list for our prerelease party. NinebyNine.report. All right. Thank you for listening to Future Commerce. And yeah, the world is yours. That's it. I don't know what that means, but it sounded good. I felt it. So I said it. I give it to you. Here. This is my gift to you, the world.

Gary: [00:51:44] Thank you, Phillip.

Phillip: [00:51:46] Thanks. Thanks, Gary.

Gary: [00:51:47] Bye bye.

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