eCommerce prospects for the coming years

Transcript

Brandon: Jeff, how are you doing?

Jeff: Really good. How are you today?

Brandon: Yeah, it’s good to see you again, man.

Jeff: Yeah, indeed. Great to catch up. 

Brandon: Well hey, I appreciate you taking a few minutes to reconnect. I’m sure we could talk forever, but we’ll try to keep it short, concise, and to the point for today. So, maybe as a starting point, give us an introduction to yourself, who you are, what you’re doing, and that will probably kick off the rest of it for us.

Jeff: We’ve been in the e-commerce space for more than 20 years. The brand we’re running right now is Abbot Kinney Agency. It’s a bit of a transition back to what we used to do a lot of, which was supporting key brands. We’ve already added a couple of key brands in the last month or two, and things are really looking great. Historically, in the last five years, we’ve been doing a lot of banking and shipping. For example, with Shopware, we did a bunch of white-label support for their launch in the United States, adding on systems. But because I’m based down in Venice Beach most of the time, where there are a lot of fantastic brands, we’ve tried to reorient ourselves to provide what we do to them.

Brandon: Amazing. And Jeff, if you had to guess, here’s a question that I’m sure you weren’t ready for, but how long have you been in this e-commerce space?

Jeff: It’s been a while. It’s been 20 years. I was headed to law school way back when, and a friend was running operations at a firm in Vancouver. I came in as a temporary thing in the sales space, then started running the sales and marketing departments. I realized I was making more money than I would as a lawyer and having more fun. The way I put it to people is, the lawyers I know — some of them are spectacular — but in business, we get to work in collaboration. That’s what it’s been about, knowing you guys too. It’s all about a lot of people who are running an agency thinking, “I’ve got this all running internally,” and they don’t realize the power of collaborating with other people. There’s huge benefits.

Brandon: Yeah, it’s honestly so true. In fact, that’s always been my approach. I’ve been in this a similar amount of time, and it’s just like, yeah, you just do great things with great people. So, just put great people in the room and solve things. But I’m sure your journey has been interesting, right? There’s been lots of ups and downs and all that stuff. What are maybe some of the challenges, those roadblocks that you guys have come across while you’ve been building?

Jeff: I’ll tie into some things that we really pay attention to. In the core of our enterprise, we really focus on primarily two things: we look for people that are highly intelligent and people that have integrity. The funny thing is, if I run into people who are telling me all the time how important integrity is to them, I get really worried. People that talk about integrity a lot are often lacking in it, so it’s a bit of a weird one. A lot of this is long-term stuff. You’re not really going to find out a lot of the integrity stuff until years down the line. The intelligence stuff, you’ll find out maybe a bit earlier. You just keep building the relationships deeper and deeper. We try to be very nimble and flexible. I didn’t think things with Magento would pay out as long as they did, for instance. In my experience, you often have a window of three to five years with a new technology where the value and opportunity are particularly large, and you can make a lot of profit. Then it gets saturated, your margins start to thin out, and competition starts to come in. But the good thing about competition is that often people aren’t that nimble. So, if you start pivoting again, you can find that new thing, and that’s the fun of the technology.

In this space, there’s always a new thing to do, and that’s where you gotta focus on strategy versus process. Because we all start making money in the process. We’re like, “Oh, we’re making a lot of money on Adobe,” and you just try to keep repeating your process, and that can get you in a lot of trouble when things start to get saturated.

Brandon: Yeah, you know, that’s good advice. Yeah, I mean, every time is shifting, right? They always shift fast. It’s one thing I love about our industry is how fast we move and these different things. It’s the one thing I hate too, right, because you’re just constantly trying to keep up.

Jeff: Yeah, you know, that’s why you need to do what we do. Not if you’re a developer and you have to learn a new language every couple of years. That’s tough. Yeah, we just have to learn some new buzzwords, that’s right.

Brandon : Yeah, good point. Don’t let that secret out too far, though. Okay, no, I’m teasing you. 

Well, that’s awesome. I know we’ve had the opportunity to work together, right? At Abbot Kinney, we’ve done some things together. What can you tell us a little bit about how it goes? What did we work on? Any impressions?

Jeff: So, I say to people all the time, like, if you look back 10 years ago, we were very proud. We did all of our development in the United States and Canada. We had an office in Vancouver. We were doing a lot of video-on-demand work with companies like Cisco, Verizon, Redbox, Technicolor, the Telecoms in Canada. But we found that we didn’t have a huge team at that time. We had a team of around 30. Within six months, nobody was showing up at the office, and we were paying close to 20 grand a month for this beautiful office in the Sun Tower. It’s one of these beautiful buildings in Vancouver with the brick and the green tin roof, and it’s a great office, but what a terrible expenditure. I also found, through that process, that I’m going to trade shows and I’m trying to sell people on this idea of quality, of localism. Eventually, I started to see that nobody really cared; they just wanted quality work. That took us to an interesting place of expansion where we started looking at different regions, different countries. And it brings us really to meeting Igor in person at Meet Magento, understanding his background, which is just truly extraordinary. An incredible person, all those checkboxes of things I’m talking about: super high intelligence, integrity, the teams of people that he works with and supports are extraordinary. And then you move that ahead, and the thing I recommend in the industry: if you’re going to start doing this kind of stuff, do a test project. Because it’s great, the people interview well, it’s great you have some confidence, but, you know, take it a little gently. From that test project, we went right into something very important to us, which was working on some of the Shopware work. And these were very serious projects with very important outcomes, and they went really well. Of all the folks I’ve ever collaborated with in this kind of space, I’ve been really happy about it. So, it’s like you guys get an A+ in my book.

Brandon: Oh, well, yeah, that’s very kind, very kind of you to say. We certainly try. You know, there’s all sorts of projects, shapes, sizes. There’s all sorts of things that go wrong along the way, and that’s inevitable in some sense, right? So, you just work through those. Any of that kind of thing comes to mind, you know, that happened during our time together in a project?

Jeff: One of the things that we see in the industry a lot is a lack of foresight, so lack of documentation, lack of planning. People just want to get the money, they want to get the project flowing, which I understand completely. What we’ve done, which I think is a bit unique, we’re pretty heavy on the documentation side. So, when we go into the projects, we really explore things very meticulously, and it can be a bit arduous sometimes. I haven’t felt like it’s ever cost us a deal, but I definitely think it could. The benefit of it, though, when we get into the project, we’ve got everything very well defined. It’s not to say there aren’t change requests, it’s not to say things don’t change, but working with you guys, we had things well-documented. The folks followed the documentation very well, the change requests were dealt with appropriately, additional budgets as were required got added in. QA processes, in particular, that’s a major one that people don’t — people are always like, “Oh, I need a developer,” but the QA processes are kind of unsung heroes, and you guys did brilliantly at that. That’s something that we take a lot of pride in internally. If you look back at how we did development 11 years ago, our QA processes were not great. We depended a lot on developers testing other developers’ work instead of seasoned QA specialists. And we learned a lot of lessons through those processes, and as we grew, it’s a completely different job.

I’ve seen that in the industry where people take — when you’re a small organization, you’re growing, you do the same thing any entrepreneur does: you try and stretch everybody. And that’s a tough thing to do to people who are technical. Entrepreneurs do that because they’re bad at everything. It’s like we’re in the business of being bad at everything, but if you’re smart, you solve that solution by making sure everybody who works with you is super specialized and super detail-oriented. And you don’t actually do that much as an entrepreneur. You eventually, over time, you’re just a cheerleader for all these incredible people who focus, you know?

Brandon: Yeah, you know, I think it’s pretty common on the agency and US-side to work overseas and work with developers in all regions of the world. And we get kind of used to that. In fact, we just know how to work through these processes. But oftentimes, what I see is from a merchant perspective, they struggle a little bit to know what to choose, how to do that. Any ideas? So, for merchants listening or coming up, anything from their side that you would say, “Consider this when you’re looking at developers and groups”?

Jeff: Warren Buffett has a business partner, Charlie Munger, who wrote this article, “The Psychology of Human Misjudgment,” like 20 years ago. Probably one of the best things I’ve ever read. You should read it every year. People go to trade shows, and trade shows are great. We meet a lot of clients there. I’m really happy about the face-to-face and the influence we can have on people. But things like this podcast, information online, is exactly what people should do. Because if they actually do their research, they’re going to come across IT Delight and they’re going to come across the track record and they’re going to come across the history of Igor. And the data points from the research are going to illustrate that this is one of the best organizations in the world they can work with. Now, the problem is, people go to trade shows, they meet somebody face-to-face, they have a drink, they get a reciprocation tendency triggered, they get all these other different authorities. If you meet somebody face-to-face, the impact of their authority is amplified. And getting more information out there like this where people can not just meet you guys at trade shows but can actually find you online, can get the information and do their research properly and make an informed decision, that’s very valuable. And I don’t think the world’s going to change. I don’t think that’s how things are going to work. You guys are going to have to keep going to trade shows because that’s how a lot of deals get done and how you influence a lot of people. But hopefully, this will have some small impact, and some people will use it as research to get somewhere and trust you guys.

Brandon: I love that you said that. I attended ShopTalk last week in Vegas, that was great. Yeah, on my way to Adobe Summit next week, also in Vegas. That’s way too much Vegas for anyone, just for the record. But you’re right. In fact, I had a conversation with one customer as well and I said, “Well, you’ve had a lot of chats, a lot of — you’ve seen a lot of things.” I said, “What stands out to you?” And he’s like, “Everything stands out. What stands out is how do I actually choose? How do I go through the process and say, like, I mean, every — and I said, that’s — it’s full of shiny objects, right? And so you really do have to spend the time.” And I said, “Don’t overthink it. That’s the thing. I think we overthink it a lot when we just need to go back to the basics and really do the fundamentals well.”

Jeff: Well, and it’s like, look, when we looked at working with IT Delight, we did do the research because we are focused on that. And it’s like, the summary of Charlie Munger’s article is like, it’s illustrating all these ways that we affect and influence each other. The bad thing is, we can’t actually solve these things. Now, the good thing is, if you surround yourself with some extraordinary people and you make group-based decisions based on auditing and accounting, you can actually remove the bad decisions. And that’s a great point. And that’s the thing I would recommend to people is like, don’t go to a trade show and make the decision by yourself. Take it back to your head of finance, your head of marketing, review what’s out there in the market, and make a thoroughly researched, informed decision. Not just, “I like this guy, this feels good” decision, which, I don’t mind, we’re gonna still get a bunch of those. We’re out there connecting, we’re out there doing the networking. Human nature is gonna be what it is. But I like to see really bright people that are making really informed decisions, and I think that I try to spread that kind of wisdom as much as I can. It tends to favor us as well.

Brandon: Yeah, I was gonna say, you guys do a great job at that. I’ve always been impressed. And, to be honest, that’s one of the things that I love, and not enough brands actually take us up on these things. I offered to some that I’ve had relationships with over the years, I’m like, “Let me in on your process. Let me help add value. I make no money from that. I couldn’t care about that. I care about you.” 

Jeff: I seriously think all of you guys. Igor has been nice enough to visit me in person in Venice, and we’ve done some really interesting things, both in the e-commerce space and then I’m also trying to help him on some other projects with some academics he knows based in Ukraine and Italy. And there’s all sorts of really interesting things coming out of the collaboration. That’s the other thing I’d say to people in the industry is don’t be myopic. Yeah, a lot of the conversations you go to these trade shows and everybody’s focused on you’re doing two or three types of development and they’re just focused in, and everybody’s gonna get run over in the next little while. Like, AI is coming hard and fast and anything that’s not AI focused, we’re all gonna be pivoting unbelievably rapidly over the next two, three years. And a lot of the stuff that we’re doing strategically — I’m not really gonna get into too much in this conversation — but I am going through that stuff with Igor. We’re setting up new SaaS things that we want to do with him. We’re doing some strategic foresight work. Like, we’ve got a couple of softwares we’re launching this year that are strategic. I won’t get into those right now either, but with all the key industry partners that I can have collaborations with, we are just doing standard development, relationship building projects together. But when you have these kinds of powerful collaborations, you should look at software you can build and launch in new sectors, which is very risky, but we’ve been very fortunate. Like, we launched a medical business about three years before COVID hit, and with that slowdown during COVID, we would have been in a tough spot. We did better than we’ve ever done through that time.

Brandon: Goes back to where you started our conversation, and the pivot, and understanding what’s going on. I was gonna ask you about what the future of commerce looks like, and you’ve already started to hit on those. But anything else you want to add in terms of what you see from your perspective and your experience, where we’re headed?

Jeff: I really — I hope that Google’s teams, Microsoft’s teams, Amazon’s teams will — I think a lot of us in industry have to push them to be more collaborative. It can get really scary to put out a bunch of AI tools because you feel like you’re just gonna get replaced almost instantaneously, so what’s the point? But the reality is we have to work with these large organizations to create a lot of these efficiencies. I think in the next five to ten years, a lot of what we’re going to be doing is just providing an interface between people and these AI systems to create all this efficiency. Might only last five years, might last three years, and then all of it’s all replaced, and then it’s a pivot again. And it could be that a lot of us in tech start working a little bit more aggressively and directly with entrepreneurs where we’re actually just right in-house with them. Because things are gonna get streamlined, but if people stay stuck in process, they’re gonna get run over, as they always do. Yeah, if they look at strategy and if they stay nimble, this is gonna be one of the most magical times to be in tech because the opportunities are just extraordinary right now. But you can’t just keep doing the same thing. And we’ve got things like this right now. I’ve got my son home for spring break right now, and we’ve had incredible changes in history. Now, work from home is completely acceptable, kids on calls and being around and having an interruption with a kid, you don’t even have to cringe about it at all anymore. Completely acceptable part of it. It’s like we’re all starting to live in this beautiful reality where we can work with people all over the world, and we can see our families, and we can succeed and be happy and be healthy. We don’t have to just sit in an office smoking cigarettes all day and drinking six whiskies with the boss after work because we’re scared to get in trouble. And it’s a healthy time for growth and human happiness, I think.

Brandon: I agree with you. That’s great. Jeff, thank you for your insights and for your kind words.

Jeff: You guys are the best, and I say it from my heart. I wouldn’t have done this if I didn’t think you guys are the best.

Brandon: That means a lot. It really does. And we’re excited about all those future projects and the things that we alluded to here, obviously, that are kind of in the back. Yeah, it has been a pleasure. Thanks again for the time, and I’ll let you go for now. But I appreciate you. We’ll do this again.

Jeff: Sounds good. Appreciate it. Thanks, buddy. See you.

Brandon: Thank you.