The Future of eCommerce Agencies is Discourse

Phillip: [00:01:09] Hello and welcome to FutureCommerce, the podcast about the next generation of commerce. I'm Phillip.

Brian: [00:01:14] And I'm Brian.

Phillip: [00:01:15] And we could talk about all kinds of things today. I mean, there's so many things we could talk about. We're in the midst of Adobe Summit. It was like a million announcements there that we could unpack. And I have so many thoughts.

Brian: [00:01:32] A few recycled announcements, I feel like.

Phillip: [00:01:34] Oh, my gosh, so many recycled announcements. And vagaries, lots of vagaries. We could talk about MailChimp inexplicably re announcing the eCommerce platform that it acquired two years ago.

Brian: [00:01:45] Yeah. What was that all about? Like, I feel like we've had this conversation like five times.

Phillip: [00:01:51] Easily. We could talk about the iOS 14 updates and the death of the third party cookie.

Brian: [00:01:58] Again, a conversation we've had.

Phillip: [00:02:01] We could talk about that.

Brian: [00:02:02] I mean, not iOS 14, but like the death of cookies and like these are all things that were inevitabilities that we've discussed in the past.

Phillip: [00:02:11] Exactly. And I mean, we could talk about any one of these things and how they have no bearing on the future.

Brian: [00:02:17] You know what? We might need to dedicate a whole episode to yet again, but second hand is dominating the news cycle right now.

Phillip: [00:02:25] I'll tell you, man, my ThredUp and Poshmark stock are doing quite well, man.

Brian: [00:02:31] REI, like, doubled, doubled their used good sales in 2020 or something like that. Yeah. Lulu just announced their second hand program.

Phillip: [00:02:42] Exactly. We could talk.

Brian: [00:02:43] I mean we've been talking about second hand for years though. Like this is all stuff that we knew was coming.

Phillip: [00:02:48] Oh yeah. Since 2018 we've been talking, Listen StockX is going public. I mean there's so many... I mean there's so many things we could... We could talk about all of those things. I think you know where I'm trying to go here, but we're not going to talk about any of those things today. {laughter} Because like we could talk about all this.

Brian: [00:03:08] I want to talk about those things, but we like it's not like we haven't talked about similar things.

Phillip: [00:03:15] I mean, I kind of I even would love to just get into talking about my first couple of Angel investments. And like, there's so many things I would like... I'd like to talk about the growth of FutureCommerce and this team and how we have like eleven people who make this thing happen. And it's a full fledged business. We have like flippin' payroll and AR and AP, and it's like, how do we even have that? That's crazy. Didn't we just start a podcast? Like, when did this become a business over the last couple of years? There's so many things that we could unpack. But I would love to just take a little bit of a different turn today, man. I'm thinking like...

Brian: [00:03:50] It's late night. This is the late night, Phillip.

Phillip: [00:03:54] This is.

Brian: [00:03:55] You guys miss late night Phillip, don't you? I miss late night Phillip.

Phillip: [00:04:00] This podcast was founded on me being sleep deprived. That was the whole point in the beginning. {laughter}

Brian: [00:04:05] Oh, absolutely. Absolutely. And then we sleep deprived me the other direction.

Phillip: [00:04:11] Oh, sorry. Yeah. This man gets up at five o'clock in the morning to record podcasts. I am not even kidding. The dedication that he has to this craft is unmatched in the podcast space.

Brian: [00:04:21] Well, you as well. {laughter}

Phillip: [00:04:25] But here's the thing. We very infrequently these days, I mean, because we've got a packed lineup like coming up, we have Rally, the fractional ownership investment company, is coming on the show pretty soon. We've got folks from Nuun. We've got Magdalena Kala coming. We have a packed agenda in the next four to six weeks. And we're not going to get another chance to have a conversation with just the two of us in the next month. But I want to have a conversation that is like not so much about the here and now or not even so much about the implications of the here and now on the future, but more about how did we all get to this place right now? And by we all I mean, Brian and Phillip.

Brian: [00:05:07] {laughter}

Phillip: [00:05:07] How did we get here? Because [00:05:08] the only real, tangible thing that any one person has is their experience and it informs their decisions. Your experience informs the decisions that you make and your future you is an amalgamation of all of your past behaviors and decisions. And yes, you take some good advice along the way. But at the end of the day, you are who you are because of the things that you've seen and the experiences you've had and what you've been through. And I think that all of that actually has a huge bearing on the way that we think of whatever the future is, because the future is determined by what's happened in the past. [00:05:49] And no, this is not being recorded on 4/20. And no, I'm getting super deep into it right now. I thought maybe let's unpack a little bit of, like let's talk about how we even wound up in eCommerce. And I thought maybe we could kick off today's conversation, Brian, with maybe just I ask you a bunch of questions. What was your first eCommerce job? Or what was the first project that you did in eCommerce? And like, how long ago was that and what were the details of it? And I want to pull at some threads because I think that that's going to be a really interesting set up to where I kind of want to get today.

Brian: [00:06:24] Technically, my first eCommerce job was my first job out of college because I worked for a company that did payment processing.

Phillip: [00:06:34] You hated this job, though. We just had this conversation. You hated that job.

Brian: [00:06:37] Yeah. And that job was interesting. I learned a lot about payment technology. It was really interesting. That was sort of a natural transition to my first true eCommerce job, which was at an eCommerce agency called Classy Llama, which was a fun time.

Phillip: [00:06:58] Great name.

Brian: [00:07:00] Great name.

Phillip: [00:07:01] Great name for...

Brian: [00:07:04] Classic name.

Phillip: [00:07:05] A classy name.

Brian: [00:07:07] Classy name.

Phillip: [00:07:08] Classy.

Brian: [00:07:08] We did all kinds of really interesting implementations. Actually, some of my favorite...

Phillip: [00:07:14] It was an agency.

Brian: [00:07:15] It was an agency. It was an eCommerce agency focused on Magento. When I was there, it was exclusively Magento. So apps for today, given that it's Adobe Summit.

Phillip: [00:07:26] So you're talking about this was sometime in the past then. Circa what year was this?

Brian: [00:07:33] 2012.

Phillip: [00:07:35] OK, so like right in the middle of the Magento heyday.

Brian: [00:07:39] It really was. Yeah, it was right after the eBay acquisition, which had just happened.

Phillip: [00:07:44] Which was I think at 2011/2012.

Brian: [00:07:47] Yeah.

Phillip: [00:07:47] Yeah. Absolutely. Yeah. So big fanfare like that's when the annual events used to kind of they were getting rowdy around that time.

Brian: [00:07:55] Oh man. Imagine was crazy.

Phillip: [00:08:00] Imagine being the annual Magento conference.

Brian: [00:08:04] Sorry. Sorry. That was a little bit of industry. It was very like insider speak.

Phillip: [00:08:08] I mean, I know what you're talking about, but others may not.

Brian: [00:08:13] You do.

Phillip: [00:08:13] So what were you doing At Classy Llama?

Brian: [00:08:15] Yeah. So I was actually a project manager. I was working with clients to build eCommerce websites on Magento, do a lot of digital transformation and help them sort of take their business that maybe was digital, maybe wasn't digital and like create an eCommerce store that had some connection to other things that they were doing in their business.

Phillip: [00:08:43] Of all of the clients that you worked with, were there any notable sort of global brands that sort of come to mind?

Brian: [00:08:52] Yeah, several. My favorite projects by far was with 3M, where we actually...

Phillip: [00:08:59] This was a big case study, I think, at the time.

Brian: [00:09:03] This was a big case study. There was a video that we did, a whole bunch of stuff, eBay came out and did a video on it. Actually, 3M was the first business to get on to the Magento responsive theme.

Phillip: [00:09:25] Oh, God. Oh, wow. This is so long ago then. This is an ion ago.

Brian: [00:09:29] This is so long ago. You asked me.

Phillip: [00:09:30] I know. I'm just putting it, I'm centering it in where in the history of eCommerce this was. OK, this is great. I love this.

Brian: [00:09:37] Yeah. And actually so...

Phillip: [00:09:39] But you guys had to build that from scratch.

Brian: [00:09:41] We did actually. Classy llama, we worked out a deal where like it was practically a three way deal where like we built the Magento responsive theme. We built the theme that 3M was the first instance of, and we sort of built the 3M version of that theme in parallel to the theme creation. So this is prior to headless, this is prior to progressive web apps, this is back when we couldn't really use the Mobile Web on our phone, like the Web on our phones. Like there was the Mobile Web and then there was the Web. And we talked about them disparately, like they were distinct entities.

Phillip: [00:10:26] There were totally different things. Yeah. Especially back then, because, like the old way was that you would manage a separate mobile site.

Brian: [00:10:37] Correct.

Phillip: [00:10:37] So you would use some kind of technology like where you would sniff what the user agent was of the browser and try to determine, is this a mobile browser? And based on that or some very, very forward thinking websites, those were the forward thinking websites. Most websites would have a "click here to Mobile."

Brian: [00:11:00] Yes.

Phillip: [00:11:00] Like you go to the mobile site and navigation item for going to the mobile site. OK, so you built this theme...

Brian: [00:11:06] Yeah. So we built the theme, and we implemented it on 3M as well. And we had a big case study on it. And it was cool because I actually helped... That was one of my first business development efforts as well. And so I actually kind of helped lead biz dev and manage the project, which was quite the time. It was quite, quite a bit of fun. And so that ended up getting featured significantly at Magento's big Imagine conference, annual conference in Vegas. And there was a video and a whole bunch of things around it. And 3M took the stage and the CEO of Classy Llama took the stage. And it was a really fun time, it was the heyday of that sort of that world. And that theme ended up being, I believe, the fastest and most adaptive, responsive theme in the world for eCommerce, for a period.

Phillip: [00:12:13] Well Magento, I think, around contemporaneous to that time period, owned the Internet retailer 500 and the 300, which those are.. Like it was... Yeah, it is not hard to believe that. In fact, I believe not too long after that, that theme shipped by default with Magento

Brian: [00:12:34] No that's when it started. That's when I started shipping by default. Correct.

Phillip: [00:12:38] We met for the first time at that. This is so funny that you...

Brian: [00:12:44] That's when we met. You're right.

Phillip: [00:12:46] That's actually how we met. So this is a funny story because I'll tell it because I'm the one who is insulted

Brian: [00:12:51] {laughter} Have we told this story on the podcast before?

Phillip: [00:12:53] Never, not once.

Brian: [00:12:54] Oh, man.

Phillip: [00:12:55] I'm very sure. So my very first occasion, having met Brian Jay Lange was just after this event where he and many other people from this agency were all very happy and celebrating, as well they should have been because it's a landmark achievement. Seriously, like, I cannot stress enough what a mark on the culture of that moment, the work that you guys delivered had, it's such an incredible thing, actually. But anyway, so I got invited through some means to a back room, in the hotel room poker game, which I believe is illegal.

Brian: [00:13:39] Yeah, hold on. How much of this do you want to talk about? {laughter}

Phillip: [00:13:43] No, no, no. I'm just saying, like, we were we were in the back room playing poker.

Brian: [00:13:46] We were. We were in somebody's room playing poker. That's the reality.

Phillip: [00:13:49] We were in somebody's room playing poker. This is how it happened. And one, you've known me long enough now, how many times do you think I've played poker in my life prior to that day?

Brian: [00:14:00] Two.

Phillip: [00:14:01] Yeah, like maybe three. {laughter} Very few times. I'm not a card player. I think that's pretty obvious. And it was so obvious, actually, that when I was trying to shuffle, trying being the operative word, Brian Lange looks at me and says, do you need help with that? And I've never been so insulted and emasculated in my life as that moment. And immediately I was like, I hate this guy, but I kind of love this guy. Very hard to hate Brian Lange, because, he's honestly the nicest and most generous person I've ever known.

Brian: [00:14:37] No. Stop, stop, stop, stop, stop.

Phillip: [00:14:38] But you guys, man, you guys blew up after that. There was a party that you had the year after that was like... Was it that year? It was the year after.

Brian: [00:14:45] It was a couple of years later. Yeah.

Phillip: [00:14:47] You guys then went on to incubate an accelerator, like a branded accelerator, that was like a I want to say cloud product. Right?

Brian: [00:14:56] Yeah. I think it was a little ahead of its time, like it wasn't cloud technically. It did have cloud partners, or like it had hosting partners, I should say. Yeah. I mean it was a really interesting time for really insider speak here. Like that was when Magento was going through the huge transition from Magento 1 to Magento 2, which if you know anything about Magento, it's practically a new product going from 1 to 2.

Phillip: [00:15:25] Yeah. It's probably the thing that actually broke the whole community. I mean, like that... I'm not kidding.

Brian: [00:15:33] {laughter} It bifurcated it. No doubt.

Phillip: [00:15:35] Yeah. Yeah. And bifurcated like the skill set needed to operate a Magento 2 site was exponentially higher than Magento 1. And that's saying a lot because Magento 1 wasn't for the faint of heart. What a freaking weird time. That's so that's crazy how much that all changed. But you guys launched this like huge product.

Brian: [00:15:58] Accelerator.

Phillip: [00:15:58] I remember that you were basically spearheading the partnership effort around trying to get folks on board, right?

Brian: [00:16:06] Yeah, yeah. It was quite, quite a bit of fun. A lot of friendships and a lot of partnerships made along the way, getting to know the community. I mean, I got to know so many people through that effort. And I think it had a really big impact, actually, just in terms of like kind of pulling together people that hadn't had a chance to speak. And just generally, actually, you know, I will say this about that Magento period. It was so friendly. I can't even tell you how friendly it was. People came together around eCommerce, like it was just this family event almost. And yeah, I mean, there were some rivalries and there was competition. But like some of those, you know, some of those conferences, that community leader conferences and and Imagine even, they were like very different from any conference I've ever been to since or have ever been to actually.

Phillip: [00:17:08] Yeah.

Brian: [00:17:08] In terms of like people really enjoying each other and like caring about each other and wanting to build something together and understanding that it was all part of... It really was a rising tide lifts all boats situation. I know that that phrase is a little overused and a little bit criticized at this moment. But back then, in that moment, that's how it felt and everyone felt that way that was at some of those events.

Phillip: [00:17:39] Here's something that's completely just crazy. There was in 2013, there was an eMarketer report that estimated the global eCommerce penetration or like global worldwide eCommerce being around 1.2 trillion dollars. That was 2013, you said? 2013. Right around there.

Brian: [00:18:20] 2013/2014.

Phillip: [00:18:22] Yeah. When you contrast that today...

Brian: [00:18:27] Might have been 2015, actually. Somewhere in there.

Phillip: [00:18:31] Ok, well. {laughter} I pulled 2013. So, yeah, around that time period, eMarketer had estimated global eCommerce was at 1.2 trillion and US eCommerce was at something to the tune of 450 billion. Today, global eCommerce is at 5 trillion.

Brian: [00:18:55] Wow.

Phillip: [00:18:55] And when you think of... When you say, oh wow, the Magento community was so, so friendly, it was actually because it was the dominant platform. It was the largest. As small as it was, it was the largest player in quite a small little sector of retail overall. An incredible amount of volume flowed through little agencies like, you know, like the one you worked at. And the when I worked at. And we worked at competitors at the time. How do you think, I'll put you on the spot... How do you think some of those early experiences and working in agencies changed the way that you're thinking of how eCommerce impacts people today? You write a lot on Future Commerce Insiders about the psychology of brands. Well, you have your own particular flavor, like you like to unpack a lot about the way that brands come to be or the way that they behave from the point of view of the leadership that are tasked with with running them. How do you think that your experiences over the last nine or 10 years in eCommerce have shaped the way that you're thinking? And why do you sort of write and think about the things that you do? And does any of that have bearing on your past?

Brian: [00:20:23] I think so, definitely. [00:20:27] The beauty of working at an eCommerce agency is that you get to see so many different styles of leadership and styles of going after projects and commerce. And so you see the people who have a very clear vision for what they're going to do. And then you see people that are not as clear and they don't really know why they're doing what they're doing. They're just employing tactics. And I think that there's a lot of that out there. And it's really refreshing when you do run into someone who is very mindful about what it is they're doing and why they're doing it and have thought about that and took time to reflect on it. And it helps them drive where they're going to go next and what technology they employ and when they need to make a change, and how to invest money, and how to understand their customer and interact with their customer. And I've seen just about every flavor of that. [00:21:41] But I know you have too. And I think that's one of the huge benefits of having worked for an agency, is just being able to experience, like you said, so many different things and different ways of seeing the world and like maturity levels of an organization. I think it's given me a really broad perspective. And I understand what it is that I would look for when I go to consult with someone that. I've got my angle on how I would do things. And it doesn't always fit with who I consult with. And you've got to find middle ground. And that's OK. I think that all of business is finding middle ground.

Phillip: [00:22:32] {laughter} I mean, all of life is finding middle ground, Brian.

Brian: [00:22:37] Yeah, it is. It is. And I know I write with like a very strong bent. That doesn't mean I don't understand what it takes to get things done. And I think that that's something that's really important. And I try to splice that in here or there it's like, OK, like I get it. I'm speaking very distinctly. I'm making very, not sweepings, that's probably the wrong word, but taking strong positions. And I understand that oftentimes strong positions have to be tempered with "And so here's what our budget actually is." And like what it actually translates to. What those strong positions translate to when it comes to investing money and interacting with people. And maybe I'll write a whole article just on this. I think we all need to do what we can based on what we know, and I think I got at this a little bit in my most recent article, which may be surpassed by another one by the time we actually post this.

Phillip: [00:23:45] Just say the article.

Brian: [00:23:47] Yeah. Yeah. So that was on power structures and sort of the difference between Aristotle and Foucault and like how we think about interacting with our customers and how we think about how the world is shaped. And one of the things that I get into with like how I believe, like Foucault is actually probably a closer model to where we need to be than sort of the Aristotelian model.

Phillip: [00:24:21] Just for people who don't know Foucault is like a famous philosopher.

Brian: [00:24:26] Yes. So, yeah, Foucault is... His take take on the world was that power structures sort of are what define us. And we're like a piece of metal in a blacksmith's hands as opposed to Aristotle who said that we had innate things that sort of shaped us from within. Foucault was sort of like it's all sort of from without. The only way to sort of have any influence on those power structures is to engage in discourse. And I think that's sort of the reality of it is, you know, we all come into situations that we have less control over than we would like to think that we do. When we get hired by brands, when our agency gets hired by a brand or we get employed by a brand, we're all stepping into existing power structures. We're all stepping into existing structures between brand and customer. And expectations are set around those things. Those expectations have power on what we can and can't do. And so understanding how to navigate that is a conversation. And when you can have those conversations and you can engage in discourse and you're ready and open to listening, and actually there's a vulnerability that comes with that that actually can supplant your position of power sometimes. You have to do though, if you want any shot at being able to influence anyone, you have to come from that position of vulnerability. If you want to have any actual power, you have to be transparent, and you have to be ready to engage. And so I think that that's what agency life has taught me, is that  [00:26:14]that is the only way to make a difference with someone is to open yourself up to conversation and listen and take in what people have to say, so that you can bring what you have to say to things, too, and maybe, just maybe, you might be able to make a difference in their business. [00:26:35]

Phillip: [00:26:39] Oh, that's powerful stuff. I think that wow, geez, well said. There is something that you said in there that is the sort of nature versus nurture, which I think has come out quite a bit. And we spent a lot of time in the early days of the podcast talking about this, which is this like tendency or an eventuality that we have in eCommerce to resort to the basest of means in order to engage the sale. And that happens, that that happens has happened over and over, and there are certainly examples that have come up over the years where when we started becoming very interview focused and trying to invite people on to talk about how they do something more than that, they could exist outside of that. There's a really interesting thing that you wrote about there, that there's this I do believe that is kind of the nature of commerce. The nature of commerce is that businesses are in business to be in business.

Brian: [00:29:19] Right. To secure the transaction.

Phillip: [00:29:22] Yeah, that's the whole point. Right? But is there the conversation that we've been trying to have is like, is there space for more? And do we expect more or can we deliver more? [00:29:34] And not to say that we have to change the world, although I think that that's possible. I think we can have some effect on how we engage in commerce. But at the end of the day, like a business has to make a profit because it's very difficult to operate a business that isn't profitable. So, yeah, there's a whole conversation there around can it be more? And you're proposing, hey, from my experience and the things I've seen and all the people that I've talked to and my vantage point of having talked with and formed relationships with dozens, if not hundreds, of leaders at businesses of all sizes and all scales at all stages and all maturity curves with their variety of backgrounds, is that there's something more. And the thing that's more is discourse. And the thing that's more is for us to learn from each other and to have reasoned debate and for us to challenge ideas and for us to create something together that couldn't exist without either party involved. [00:30:37]

Brian: [00:30:37] Yes.

Phillip: [00:30:38] Wow. That blows my mind because that is very succinctly what I want everyone to get from the content that we create, because that's effectively what this is. It's engaging in a conversation, even if that conversation is fairly one sided sometimes. It's engaged in a conversation or starting a conversation around things that are ill defined. There are things that are really well defined in eCommerce, like conversion rate optimization is extremely well defined. You can go take a course on it. Not so well defined is how a specific tactic might not be the best way to approach a relationship in the long term for your customer. And I love that you have a really even keeled response to that to say that, yeah, but sometimes like there are realities, like there are things that you have to do in this world, like we have to make plan. We have to make plan. And like there are things that we have to compromise on from time to time in order to reach the larger goal. But if you can't define what that larger goal is, then you never know what it is. And is it only a sales target? Is that really all that it winds up to be? I mean, that's part of it. But are there other things? Wow, that's huge.

Brian: [00:32:03] Yeah, I think you're absolutely right about what we're doing here. The end game here is that these conversations would lead to things that make a difference, and I think we talk in generalities, we talk about big ideas. We talk about things that are coming, things that are not as tangible, maybe as things we could be talking about. Because you and I have been in this for a long time.

Phillip: [00:32:41] What I've coined is inactionable content. I actually kind of prize the content that doesn't resolve to some sort of discrete action. Like everything is actionable nowadays.

Brian: [00:32:56] Yeah. And most of the people listening to this already know a lot of the things they need to do, it's not like you're listening to this podcast and you're like, I don't know what my low hanging fruit is.

Phillip: [00:33:10] Exactly. It's like I the problem that you probably have is not enough budget, not enough time, not enough expertise, not the right tools. I get like you are sometimes in the role of eCommerce leadership, you're kind of stuck in a place of inaction, not for lack of desire or lack of knowing exactly what the next thing is you need to do. It's lack of all the things in order to get it done. And especially if you are extremely reliant on outside agency resources. We've seen that to be troubling and problematic for a brand. Especially if you have a large amount of, you know, legacy software or technical debt or unrealistic goals, but no resources in order to meet them.

Brian: [00:34:02] I bet 50 percent of our audience, I could say right now, you need to improve your product data. And 50 percent of our audience would be like, yeah, I need to approve my product data. I don't have all the information that I want to surface there. It's not there. Or it's a mess.

Phillip: [00:34:22] There's so many things that you just see. It's every single brand just struggles with. That's the other thing. For all of the of the lack of respect that eCommerce Twitter can heap upon folks that that basically run agencies say, well, you don't actually run the day to day in the brand. Well, I spent ten years running the day to day and brands. So I think I can speak with a little bit of experience here, and now the last eight at an agency. The number one thing when we ask our customers in an agency, Brian, the number one thing, when we ask them what it is that they want the most from us, you know what they tell us it is? They want to know what other people are doing. The number one thing is like we want your insight based on all of your experience with fifty five other clients. And they prize that because there are clients that are both further along in their maturity story and less mature. There are new entrants that are doing things completely differently and there's legacy that have been doing the same thing for five years and have sort of a well oiled machine around it. And they want to learn from all of that. Nothing's off the table. They want all of that wealth of experience sort of delivered as a based on our experience, seeing all of what's possible, we can help you guide a strategic map to growth. That's the thing that they prize the most. It's not platform expertise. It's the benefit of having mere exposure to fifty five different ideas. How could you possibly discount that as being valuable? Like that is insanely valuable. And in fact like it's more valuable in some respects than folks who have only ever worked at two large FinTechs in their career. They have a certain kind of experience, but do they have exposure? So I think that there's like it's all necessary and certainly not to throw shade at folks who have those kinds of experiences. I think it's all important. But at the end of the day, I don't think the agency world gets enough respect and agencies are concentrators of talent. Like they are concentrators of expertise. And the last time I looked, technologists make the decisions that create the experiences that your customers interact with.

Brian: [00:36:55] Yeah.

Phillip: [00:36:56] I mean, they do that in concert with other people. But technologists make the decisions that choose the platforms and the ancillary technologies that are the things your customers engage with. And unfortunately, by the nature of the beast, agencies are great concentrators of that because those technologists want to be paid a market rate that most brands cannot afford and cannot concentrate enough talent into their organization to have the kind of scale or have the kind of efficiency and again, the mere exposure to new ideas or even tooling that you would get by working with a platform expert. So that's sort of the upside of having seen eight years at agencies. When I worked in brands, we hired agencies all the time. I mean, that was part of our strategy. We also, I ran application development at an eCommerce startup, and I had a team of 12 people and my team of 12 people were augmented all the time with agency partners. So it can be done and it can be done equitably. But yeah, certainly any strength overextended can become a weakness. And you can certainly overdo that.

Brian: [00:38:11] So looking ahead, what do you think, Phillip? So we've seen agencies play the role that they've played. And honestly, this is really interesting as well. I think you hit the nail on the head. It's really hard for brands to be able to maintain talent or keep talent that's going to be able to support the applications that they run because it requires a very large breadth of knowledge in order to be able to support all those applications or implement them. And so you see the role of the agency continuing to sort of maintain its place in the market due to the fact that, like, systems... There are more systems than ever. I guess I'm leading you here. But... {laughter} Where do you sort of see the role of the agency evolving to in the next two or three years here?

Phillip: [00:39:06] Well, so let me rephrase the question just a little bit.

Brian: [00:39:12] Sure.

Phillip: [00:39:15] There are agencies that you employ, like let's put the word agency aside, because I feel like it has some baggage that comes along with it. There are all kinds of agencies.

Brian: [00:39:29] Outside help.

Phillip: [00:39:30] Right. No. Professional services, and in the world of professional services, like any professional services firm, there are times at your scale in your maturity in a corporation where it is more efficient and more desirable for you to bring that talent in-house. When you get to a certain size, having in-house legal counsel is extremely important for you as a business. There's a time and a scale where having in-house financial operations and accounting is important for you and your business operations. There's a time. There's all kinds of professional services, accounting and legal being two examples of things we may not consider to be agencies, but are effectively the same business model, where you're fractionalizing time of expertise of something that you really don't need full time concentration of. And you want it at your fingertips, at your command, maybe on retainer to do a little bit of work that has high impact. That is exactly what performance marketing agencies do, it's exactly what eCommerce platform implementers and system integrators agencies do, it's exactly what CX strategy agencies do, like the one I work for. They deliver the same kind of professional service. Their area of expertise is pretty different. And at some point when you get to a certain scale, it is more desirable for you to have more of that talent in-house, for you to achieve a better outcome. Amazon, even Amazon, augments a lot of the work that they do with some agency help along the way. They have in-house PR, they have some out of house PR. They have, yes, this is true. I know you're an Amazonian or ex Amazonian, so don't give me the eyebrow. There are times where you go when you hire Zaner or I'm sorry, you hire or VaynerMedia because there's a very specific kind of thing that you're trying to create, or there's a very specific. There are times where you may reach for that sort of thing. Anyway, the whole point that I'm trying to go to is [00:41:52] I don't think the nature of agencies or the future of agencies or the future of professional services will change, because this is how professional services sort of work. The longer that a professional services business is in business, the bigger that it gets over time, the more risk averse it becomes. And a new crop of scrappier, smaller upstarts with sexier and trendier technology stacks and capabilities will come along. And there's an M&A cycle there. There's a concentration. And so there's this life cycle of agencies and there's a life cycle of brands that hire them. And those brands grow up and become big brands that acquire. I mean, look at you know, there have been big direct to consumer brands that have acquired their agency of record to have that capability specifically in-house [00:42:45]. The one... It's late Phillip right now. But I think Glossier was... This is such... I'm so bad with this right now. I forget the one. There's a great example of this, but there are times we're bringing that in-house is certainly not just desirable, but maybe like vital for your success. So what's the future? I mean, the future is I think the future is the same as it has been. But I'd see an evolution coming in the way that agencies deliver services. There was a Ted Schadler of Forrester put out a report, called The Future of Service Orchestration, late last year. And he suggested that like the value model of agency and creative output and especially around platform expertise of the likes of Adobe enterprise software implementation will change in the next five to ten years to more of a shared success model, where the agency will benefit as the brand who's realizing the output of the work benefits. So this is finding ways to monetize the work that is delivering on the ROI that is more tied to the outcome than it is tied to the hours that went into it. And I find that to be incredibly fascinating. And that's where I think a lot of innovation could be had, especially on the agency employee experience side, which is always tied to billable hours.

Brian: [00:44:23] Sure.

Phillip: [00:44:23] So go ahead.

Brian: [00:44:24] Allow me to play devil's advocate to that, though. That model could have employed many years ago. And I think that many agencies tried to employ that model, and it never actually manifests because agencies don't want to run risks. They want to get paid for the work that they do.

Phillip: [00:44:43] Oh, sure. Yeah, yeah.

Brian: [00:44:44] Because they've got cash flow, you know, cycles that they've got to make sure that they fulfill on. And also brands don't necessarily want that either, because those models typically mean that the cost scales, and so they're going to have to pay out on on every dollar as they grow, as opposed to making a capital investment up front and seeing that kind of investment prosper and multiply and scale. So I see that model and there are things about it that I like. I like the idea of shared success. But I also see businesses ultimately rejecting that model by their nature and what they want out of business. That's a bit of an Aristotelian argument that I just made there. {laughter}

Phillip: [00:45:46] Read the report. And I feel like the thing I was predicting was more Foucault sort of inspired.

Brian: [00:45:53] Yes, correct.

Phillip: [00:45:53] But I think this is actually being done by very large, very large and very visible consulting firms. And I think that that's a really forward thinking approach and one that I think, again, maybe it's not directly tied to, say, revenue outcomes, although it could be. It could also be tied to hay making, getting the project done by a specific date no matter what. Like, if we're going to get paid, you know, at a certain rate, we have to deliver by a certain date. I think that those are also incentives, because here's here's the real fact. The incentive in the agency is to do less work, to deliver the same agreed upon scope. Because that's how you realize a profit. So the less work that you do, follow me now... And we're both agency people, so we get it, right? Like, the less work you do, the greater the profit at the end of the day.

Brian: [00:46:53] Yeah.

Phillip: [00:46:53] So the idea is let's tightly define the scope, so that we can continually manage that scope, so that we don't wind up doing work that we didn't anticipate for freezies.

Brian: [00:47:06] Right.

Phillip: [00:47:06] And if you can take that conversation out of it and this is why I think so many agencies preferred Agile, which is not a solution, if you ask me, at all. But that's a whole other conversation.

Brian: [00:47:16] Whoa, whoa, whoa, let's not open that can of worms. There's a a lot of interpretations of that word.

Phillip: [00:47:21] Yeah, I know. That's so loaded right now. And anyway, I mean, we could talk about Basecamp if you wanted today. That's a whole other story, too.

Brian: [00:47:31] No. Let's not talk about that today. {laughter}

Phillip: [00:47:35] But there's around that specific idea, it's like if you were more incentivized to what the client's incentives were, like an on time delivery or ahead of time delivery and helping achieve revenue targets. Not just the project scope targets. So think about how much more aligned your business objectives become between the two businesses. Now, your business objective as an agency is no longer tied to I need to get a red button on this page because that's what scoped, and it's more what can I do to drive sales and growth, because that's how we get paid at the end of the day? I think finding ways to align your incentives so that you're working together and your business outcomes is the future. That is value orchestration. That's the goal. Not the billing model.

Brian: [00:48:32] I think that works as long as everyone is reasonable, because if everyone's not reasonable.

Phillip: [00:48:39] Say that, again, for the people in the back.

Brian: [00:48:42] That model works if everyone is reasonable.

Phillip: [00:48:48] And very rarely are people reasonable, especially if they're under pressure.

Brian: [00:48:51] We're going to get into a like whiplash like situations like, I don't know. Did you ever see the movie Whiplash?

Phillip: [00:48:58] I did not see the movie, but I know of what you are speaking. There's some abuse that takes place in that movie.

Brian: [00:49:04] Dude, what are you doing with your life? That is one of my favorite movies of all time. And J.K. Simmons plays this drum teacher and Miles Teller is like this drummer. And the drum teacher just keeps pushing him and pushing him and pushing him and pushing him. And the ultimate goal is like, they both want the same thing in many ways. And that is to create this incredible, like jazz drumming situation or whatever it is. I don't understand jazz that much, but I felt like I've run that gantlet before. I've been in situations where maybe J.K. Simmons was Jeff Bezos and I was Miles Teller. And I was running red lights and getting hit by a Mac truck and still drumming. I think that the end of the world that we live in, especially in eCommerce, especially in retail, is driven by margins and driven by incremental gains quarter over quarter. And I mean, that's just business in general.

Phillip: [00:50:17] I was going to say that's just capitalism, baby.

Brian: [00:50:19] It is. It is. And so [00:50:21] I think there is sort of an element of innovation that sort of gets to those things. There's also an element of squeezing things out. And so I think you've got to be really careful about how you create those incentives that you're talking about or both sides end up getting burned. Because they both create unrealistic expectations that result in no one being happy, even when you do create things that are incredible. [00:50:48]

Phillip: [00:50:49] That just comes down to having the right kind of leadership. And I think that, yeah, you're right. I have met my fair share of unreasonable expectations, unreasonable, unrealistic expectations from leadership. Certainly not, what was the word that you said? If everyone's reasonable. Yeah, unreasonable. That's the thing, right? Like, not everybody is reasonable all the time, especially in the mid-market. Extremely. Especially in the mid-market. And yeah. That's the thing. So but we started this conversation thinking about how your past sort of informs your future and if you had to start a business and loaded question, because we already did, if you had to start a business, would it be an agency?

Brian: [00:51:46] No, probably because maybe that's just because I've been in agencies for so long, I feel like it's something that wouldn't put me in this sort of situation that I want to be in, which is...

Phillip: [00:52:06] Is it that it's not a challenge?

Brian: [00:52:07] I know agencies. I know agencies well. I've been doing agencies for a long time. There's things that you don't learn at agencies. There are certain elements of like ownership or other things that I would love, I mean, that we have here at FutureCommerce where it's like it's a different sort of engagement. And I'm sure that all the brand operators are out there like, yeah, it is. Like it's a totally different beast.

Phillip: [00:52:42] I've had to live with software for five years that I created and then hate myself after. And processes and hiring the wrong people. And shoot, I've been through all of that on the brand side. It's not cake, but I totally feel that. I totally understand that there is such a temptation in the work that we do at FutureCommerce to field the odd consulting engagement. And you can certainly learn from things like that. But we have exposure to that to some degree. Right? We see the RFPs and the RFIs, and we see... We kind of see what's coming down the pike already and especially at such a big scale. So it's really hard to be disciplined, to not create a professional services component to a business like ours, which is like to just double down on media and say we create content. And because the fact is we have in flux every day of people that are looking for us to, oh, well, maybe you can create content for us. And we will do that on occasion for the right folks. And we've been partnered now, we're in Season 2 with Resilient Retail and co-creating that with Kristen LaFrance and the Shopify retail team. But those are few and far between for the number of outreaches we get about this. I don't know. I'm kind of with you there, I think it's there's a very natural tendency to, if you're in an agency, to want to have a product business, coming back to your experience around creating that product. And if you're in a media business to take on agency consulting type work.

Brian: [00:54:25] Yeah.

Phillip: [00:54:27] All right, let's kind of get to the end here.

Brian: [00:54:34] Yeezy. Yeezy is at the end here.

Phillip: [00:54:36] Really? We could. We could talk about the Gap thing. We could talk about those things. I feel like knowing where you've come from helps you better understand. It helps me better understand why you are informed the way you are and why you give the advice that you give and why you say the things you do in the mediums and the content that you create. I'm talking to you, Brian.

Brian: [00:55:09] Oh. Yeah.

Phillip: [00:55:09] I think that is so much more context, even for me, and I've known you a long time. That so much more context for me than I had even before we started the show. Thank you for being so open and and sharing all of that. This amazing.

Brian: [00:55:27] Thanks, man, no, it was really, it was good to talk about. Yeah, I mean, you know me about as well as anyone does. So it's amazing that we can still learn things about each other and from each other. I think that's what discourse allows for. And, you know, so pick up the phone, talk to your vendors, talk to your friends, talk to your spouse, talk to the people in your lives, talk to everyone. Because it's actually it does make a big difference, you know, and obviously it's got to be productive and it's got to be to the point... Or maybe it doesn't even have to.

Phillip: [00:56:07] Productive, productive. What is productive?

Brian: [00:56:09] Yeah what is productive?

Phillip: [00:56:09] I do think there's something to be said about, yeah, having just developing a rapport and developing trust. Someone said to me a long time ago about you can't make withdraws on an account that you've never made a deposit into. And we talk about like emotional deposits and emotional withdrawals, even in business, even though we know business is business, like a lot of times, when things come down to the wire, tensions get high and you need to have those relationships in order to not bounce emotional checks. People get frustrated. People get really concerned. People get worried and upset and sometimes angry. And when you have a good rapport and you've had, you know, that discourse, that's what sets the stage, gives you the margin that you need to play with so that, hey, so that you don't ruin the relationship altogether. And that's been the hardest thing, honestly, about working in an agency is managing the complexity of so many of those types of relationships. It's like the biggest blessing and curse. It's like this really big mixed bag of wow, like we have so many great relationships with people for like operating their eCommerce, four, five, seven, eight, 10 years and and seeing them through so many ups and downs. And then but at the same time, it's like the more clients you bring on, the less attention you can pay to any one of them. The fractions get smaller and smaller and and then you sort of have to duplicate yourself and you have to give up some of that and you have to let other people own those relationships. And now you're not as involved as you were in those accounts. And yeah, it's just such an interesting thing to see happen and grow over time. And such is the nature of the beast.

Brian: [00:58:13] Yeah. Actually, just to kind of wrap things up, I actually think what you said there is really, really important, which is [00:58:23] if you want to be able to extend sort of your ability to influence and to sort of have relationships and to create something of value, you actually have to duplicate yourself and that has to be done through relationship as well. [00:58:45] And so, like I really believe in the investing in other people, so that they can invest in others the way that you've invested in them. And so I think what you just said is actually it's not a bad thing. And yeah, spreading yourself then is is definitely not something that is good. There's a time and place for that. But I think being able to invest in people so that they can sort of also invest in others is an essential part of that discourse. Because you can't talk with everyone. You can't have a relationship with everyone. So that's a good way to sort of end it.

Phillip: [00:59:31] Please, let's wrap it up. There's no nice way to wrap this up. I think everybody gets where we're coming from. But I think just having more understanding about where what your and my background is and how it informs how we think is something that we've never done on Future Commerce.

Brian: [00:59:48] And I'll have to dig into your background next. So get ready for part two.

Phillip: [00:59:54] That would be like I'd be like...

Brian: [00:59:59] So when I say part two I mean, like part three, four, five, and six... {laughter}

Phillip: [01:00:02] Mini series. I don't know how to be not long winded about something like that. Who was the person that we had on early days in the show that we had to split into multiple episodes because just...

Brian: [01:00:14] Oh Roemelle. Brian Roemelle.

Phillip: [01:00:15] Brian Roemelle. Oh my gosh, we've got to have that guy back on the show. Yeah, that would be a Brian Roemelle type of epic. We will spare everybody from it today.

Brian: [01:00:30] 3 AM. Let's go.

Phillip: [01:00:31] Please. No. Fantastic. Thank you so much for listening to Future Commerce. Hey, it takes literally no time at all, maybe three seconds, to go give us a five star on iTunes or on Spotify or wherever it is, wherever the heck it is that you listen to podcasts. Really helps out the show. If you can't do anything else, please go do that. If you'd like to support the show. Hey, we are ad supported. It would be wonderful if you could visit one of our sponsors. We are so thankful to have them partnered with us to help bring this show to you. And hey, we also would love you to subscribe to our newsletter. We have two of them that go out every week. And the first is called Insiders. It's a long form essay about the things that matter and the world of eCommerce and how you fit into it and how you can change the narrative and change really commerce for the better from your own perspective and your brand. And you can get that FutureCommerce.fm/Subscribe. And the second is called The Senses, and it comes along with that subscription. And they're both free. The Senses goes out every Friday, and it's about the world around you and brands that occupy the space in that world and how you relate to those and how they relate back to the world around us. It's something that we are really just seeing so much engagement on. And it is a very more traditional style newsletter with a tiny little essay because we just can't help ourselves. But if you want to support the show and all the content that we're creating, we have a new quarterly report coming out called, Service is the New Storefront, here in the next few weeks as well.

Brian: [01:02:04] Yeah.

Phillip: [01:02:06] You're not going to miss any of this if you get on the list. Go to FutureCommerce.fm/Subscribe, and you won't miss a darn thing. All right. Thanks for listening. And we'll catch you next time on Future Commerce.

Brian: [01:02:18] Thanks, everybody.

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