PARTICIPANT: –successful is because they
continue to reinvent themselves when necessary and they’ve won awards in the industry, technology, innovation,
because as you know, every week, things change so fast. I mean, talk about Facebook and some
marketing in the social media, social, mobile and mobile market, Facebook, I mean, a whole
chapter in text is dedicated to Facebook. I mean, that’s so telling. A whole chapter
is dedicated to it. That’s how much, how fast things change. Anybody?
MANISH: Thank you. Thank you, Jean. I really appreciate it. I’m really excited to be here.
I know you guys can relax. I won’t ask you any tough questions. So what would be really
helpful, because I’d like to share my knowledge and experience, maybe if you guys just want
to say one or two things that – Oh, let me start by introducing myself. My
name is Manish Chowdhary. I’m the founder and CEO of GoECart. We are a leading e-commerce
retail software company. We help mostly small to mid-size retailers set up their online
store fronts and manage them, and also their back office operations. It’s a cloud-based
software that is used by hundreds of clients, some of the popular names you might recognize.
The majority of our clients are mid-market or small emerging companies that are established
but they’re not quite the household names; however, we have a few of those as well.
Why I’m qualified to speak a little bit about this is I’ve been involved in the e-commerce
space since 1998. I was involved with one of the first turnkey e-commerce solutions
on the planet back in 1998. I don’t know how much you guys know about the e-commerce software
space. Basically in simple words it’s a shopping cart more commonly known as but there’s a
lot of more involved today besides the shopping cart. So back in the day in ’98, Yahoo was
one of the first turnkey commerce platforms out there, and there was another one called
Monster Commerce that became incredibly popular. I was part of that team, we have built that
software, and that became hugely popular, perhaps more popular than most of the solutions
you might be familiar with. So I go that far back from early days of e-commerce software
till now, which is now e-commerce is a huge, huge industry as you know, approaching about
10% of retail in 2016. So 10% of all retail transactions expected, B2C, being conducted
online, that’s one out of ten. That’s huge. This industry didn’t exist until almost 1995
when Amazon set up their online store. With that said, you know, what would help
me a lot is if you give one or two things that you’d like to learn very quickly so I
want to make sure I cover those in addition to whatever material Jeannie wants me to cover.
PARTICIPANT: All right. I blanked out. Something to learn?
MANISH: What would you like me to share, from your perspective?
PARTICIPANT: Just like how you worked through in terms of the shopping cart and how
you translate as well as potential opportunities… MANISH: Okay, excellent.
PARTICIPANT: I think it’s great for other companies, but having you, you know, how did this actually
get started from your college dorm room to what it is today, because part of our project,
you know, building an e-commerce site, so just some helpful hints or anything you have to go about it.
MANISH: Excellent. Thank you. PARTICIPANT: I used to intern in a small company
and the CEO also started his business from his dorm so I’m wondering how you started thinking about this
business idea and how long a time and what kind of your … you company till now.
MANISH: Thank you. That’s awesome. PARTICIPANT: from the start. I want
to know how you grow your company from the very early stage …
MANISH: Awesome. Thank you. PARTICIPANT: I’d just like to know about
the company strategies and … MANISH: Great, excellent. Is there a whiteboard?
I know that Jeannie wants me to cover some technology stuff. I think you’re interested
in technology, what’s needed for e-commerce. We’ll cover some of that, I’ll cover my story,
and I’ll make it contextual with the technology space. One of the things that from a technology
standpoint what’s needed to create an e-commerce presence – is that in essence…?
PARTICIPANT: Mm-hmm. MANISH: So, first and foremost, in order to
set up an e-commerce – and I’m going to talk more in context of retail. You know,
e-commerce comes in various flavors, from content and selling virtual goods online to
selling content to subscription to travel and others, so I’m going to focus more on
physical goods, so things like what Amazon does. That’s what we help at GoECart, with
retail. So in order to set up an e-commerce store, first off, what are you going to call
this store? Just what name would you want to call it? The first thing that you need
to do is to first come up with a name, right? PARTICIPANT: True.
MANISH: So what name would you like to give it? Let’s create a fictitious store.
PARTICIPANT: ABC123. MANISH: ABC123. Great. So do we need a domain
name? We would need a domain name, right? That’s number one, because first you need
to come up with a name, then we need a domain name. Let’s go register the domain name. All
right, so here, domain name. Where are we going to go register this domain name? Any
idea? PARTICIPANT: GoDaddy.
MANISH: GoDaddy. Perfect. That’s perfect. Okay. You can go register to GoDaddy.com.
We can go to NetworkSolutions.com. So that’s the number one thing that we need. Now we
have a domain name. So what would you like to sell on this website? Anyone, please help
her out. Let’s make it a collaborative venture. How about that?
PARTICIPANT: Subscription boxes. MANISH: What are these subscription boxes?
PARTICIPANT: Subscription boxes for snacks. MANISH: So you want to sell snacks online?
All right, let’s call it snacks. So, product, we need a product. So once we have this, we
need to source. So you’re planning to fulfill these goods from your basement or you’re going
to…? Are we going to keep inventory for this item that once you start getting orders?
What are we going to do about that? PARTICIPANT: I will keep the inventory in
my dorm room. MANISH: All right, perfect. So we’re going
to come back to that. We’re going to sell snacks on ABC123.com, and assuming that’s
available on GoDaddy, we register the domain name. We’ve come up with what we’re going
to sell from ABC123.com and we’ve got products. So would you like to get paid for this item
or are we going to distribute it for free? PARTICIPANT: Get paid.
MANISH: You’re going to get paid, right? So you do want to collect money?
PARTICIPANT: I want profit, yeah. MANISH: You want profit. That’s great. That’s
a good idea. So actually we were thinking about this at GoECart when we started the
company that we will make a profit, so that’s why we are here. So we need payment, right?
We need to collect payment. That’s important. On ABC123.com, we’re going to sell snacks
and then we’re going to make some money and we’re going to have that money deposited into…
are you putting it in your checking account, savings account?
PARTICIPANT: The company? MANISH: Money has to be deposited somewhere,
right? PARTICIPANT: Yeah.
MANISH: Do you have a business checking account? Maybe we’ll need a business checking account,
right? So, we’ll need a bank account, number one, right? Without a bank account, money
will not stay, so a good idea is to create a bank account. All right, so now we’re going
to sell snacks on ABC123.com and you have a bank account. Now we need software in order
to sell all this, create a website. Do you have technology experience? Can you build
a website on your own? PARTICIPANT: No. I will have that done.
MANISH: So that plays a huge role in how you select an e-commerce software. You don’t have
technology experience, so you would be more comfortable going to somebody else, like a
company that provides this as a service. We have a choice now, a software selection, right?
Now this is very complex and that’s part of your first too. So how are we going
to decide which software to buy? The three considerations in order to decide this…
so when you make an e-commerce software, you have to think about three things: how you’re
going to buy and pay for the software, how you’re going to build it, and how you’re going
to manage and operate it. So the question is: Do you want to put a lump sum money up
front, one time, and then own the software? That is, buy or rent, which is either owning
the software, or sometimes we have something called free, which – anybody heard of free
software? PARTICIPANT: What’s that?
MANISH: Open source software. In the e-commerce world, there’s a company called Magento. Have
you heard of it? Or WordPress, anybody? PARTICIPANT: Yeah.
MANISH: WordPress is free, right? You can go to their website, you can download the
software for free. If you have a server in your dorm room, you can host it for free as
long as you get a domain name. This is an important consideration, so you have to decide.
In order to make the software selection, you can go with free – and I’ll come back to
it. There’s nothing free. If a software was free, companies like us would never exist,
you know. That’s open source. What’s your preference? I forgot your name.
PARTICIPANT: Milly. MANISH: What’s your preference? Would you
like to pay a lot of money or some money one time and own that piece of software? Or would
you like to pay a monthly subscription fee, a small monthly subscription fee each month?
Or would you prefer owning the software and pay, say, $5,000 all at once? What does your
cash flow permit? PARTICIPANT: Small payment.
MANISH: I like that because that’s what we do at GoECart. We are in the subscription
business. So you would prefer to rent the software, right? Now we have several options.
So SaaS, which is Software as a Service, is one option. Now how are you going to build
it? In order to build this e-commerce website, you’ll need – would you like to have a logo,
graphic design? Would you like it to represent your brand?
PARTICIPANT: Yeah. MANISH: So you’ll need a logo. What else would
she need if she wants to build a website that should look really cool and can sell some
really cool, healthy snacks? What should this website have in addition to a logo? You just
have a logo right now and a name. PARTICIPANT: Design.
MANISH: Design, yeah. That’s a good idea. We should design this site. What else should
we have on the site? PARTICIPANT: Pictures of items.
MANISH: Pictures of items, perfect. Yeah, without pictures, I don’t think anybody would
be able to visualize like how healthy those snacks are, so images. What else?
PARTICIPANT: Navigation bar. MANISH: Navigation. That will be a part of
design. Then in order to build this, would you now have to connect it to this bank account
somehow? We would need to connect it so you get paid on the website, right? What else?
Are people concerned about putting their credit cards online?
PARTICIPANT: Yeah. MANISH: So should we think about security
or not really? One of the guys whose card was at Target? You know about the Target breach?
You guys get a lot of this in the mail? PARTICIPANT: Some.
MANISH: Okay, good. But online, that’s a huge concern: security. So we have to think about
security. What else? Anything else in order to build this e-commerce website that we should
be worried about, thinking about? PARTICIPANT: Customer database.
MANISH: Customer database, okay. We need customer base. It looks like for the most part, you’ve
got the design, the logo, product images, and payments – kind of the building blocks
of e-commerce – and then perhaps maybe an email account might help, right, if you want
to communicate with customers, so CRM, some kind of customer relationship, which falls
in this category. PARTICIPANT: And I’ve got fulfillment.
MANISH: Yeah. So once you get the order, we should talk about fulfillment. So, Milly,
do you have the expertise to do all this? Can you design the logo? Can you design the
wire frame of the website? Can you create high quality images, make sure it’s all going
to be secure and have all the CRM? Can you build it? That’s the question.
PARTICIPANT: I cannot build it. MANISH: You cannot build it. Some other folks
here, anybody more in the technology space that can build the site on their own? Well,
that’s a consideration because not all online retailers are that technical. So if you were
super technical, you could potentially build this. You could get free software, you have
an engineering background, you’ve done it before; in that case, you could potentially
build it. But in this case, you are going to
outsource this. You’re going to outsource
this building of this thing. That’s an important consideration because
first we started with how we’re going to pay for it. If you have a lot of money, you can
buy enterprise software, pay it once, own the software. That’s more capital expense,
you know, when you’re capitalizing and putting up a lot of money. Or you want it to come
out of your debit cash flow, then you’re renting the software, which companies like GoECart
provide Software as a Service. There’s a small fee you pay each month and you’re able to
rent the software. You don’t own it; you pay for the utility of the software. It’s very
similar to your Netflix model, where you don’t quite own the DVDs that come in the mail;
you simply pay for the service or usage of that, which is what a company like GoECart
does. Or you can go with an open source, then you
have to choose whether you’re going to build it, that means, do you have all the expertise
needed to do it yourself or do you want to hire a group of programmers, designers, and
all these other people that can work under your supervision, under your premises, and
build this for you if you don’t have the expertise. Or you can hire a firm that will do this for
you. That means they can design the website, create high resolution images, put it up on
the site, and then security. Then the question is how to manage and operate.
Once again, even if you got the free software, you got it, you build it – Emily, do you
have the ability to put service in your dorm room? Do you have high bandwidth connection
that you can house the server in the dorm room?
PARTICIPANT: No, not in this cloud. MANISH: So that’s a consideration. I mean,
if you had high bandwidth connection, you have a raised floor above the ground, like
a feet because if the water spills it won’t go into your server. Or how are you going
to do backup? You know, if you were to host it in your dorm room, you could think about
backup, redundancy, unless you have huge generator in your dorm room connected to your room facility.
I mean, those are considerations that you have to think about managing and operating,
because that is a choice that you have to make.
Even if you got all these, you rented a software, where will you want to put it on your hardware,
your infrastructure, or you’re going to outsource that piece as well. That’s an important consideration.
Cloud is one option, or you can do it on premise, which is the delivery model. These are two
delivery models. There’s a third model called ASP, which is basically you buy the software,
you get someone to build it, then you rent some space but you’re putting your bought
software on rented infrastructure. That’s the ASP model. You still own the software.
Or more recently emerging companies like GoECart, what we’ve done is basically you rent the
software which comes with the infrastructure built in to the cloud, and all you have to
do is operate your store. You don’t have the overhead of managing the infrastructure, uptime,
backup, security, redundancy. So that’s one kind of solution, which is what you might
be familiar. Like a Gmail, all you do is you use the service, you don’t worry about upgrades,
you don’t worry about any kind of security; that is all the responsibility of the provider.
Whereas if you buy the software and you create your own infrastructure, now you’re responsible
for making sure that your hardware is always up to date. If Windows releases new updates
and security patches, you have to take the responsibility of upgrading that, making sure
your firewalls are well set, and so on. So those are all the considerations that you
must take into account when you’re making your software selection. Is this helpful?
PARTICIPANT: Absolutely. MANISH: Are you guys with me?
PARTICIPANT: These sound familiar with you guys, right?
MANISH: A piece of content or something new. So those are all the considerations that go
into a software selection, a high level. That’s more of the basic consideration then you go
after feature and functionality, right? So, Milly, you’re going to sell snacks. How are
you going to ship it? Are you going to have your own trucks?
PARTICIPANT: No. MANISH: No? You’re supposed to service. That’s
good. PARTICIPANT: …
MANISH: That’s perfect. So you’re going to use USPS. Are you going to go and stay in
line every evening after school and take your boxes up there? How do you plan to optimize
this process? PARTICIPANT: Pick up.
MANISH: Pick up? Okay. Would you need an account with them to make sure your packages are labeled
and ready to be handed over to the mailman that comes in so it’s a very quick operation?
PARTICIPANT: Yes. MANISH: So you should consider getting an
account with USPS. There’s a company called Endicia or stamps.com. Have you heard of them?
PARTICIPANT: No. MANISH: They will help you. So even before
the mailman shows up, you can have everything ready, your shipping labels are ready, pre-affixed
to the package, and the USPS mailman just comes and picks it up; you don’t have to worry
about it. So how would you like these people to pay on your website, using credit card?
How should people be able to pay on your website, on ABC123.com?
PARTICIPANT: Any form of payment. MANISH: Any form of payment? Which payment
do you use generally when you shop online? PARTICIPANT: Credit card.
MANISH: Credit card, okay. So you will need a way to hook up your credit card. In that
case, in order to hook up a credit card, what you need is a merchant account. Have you heard
of this, a merchant account? PARTICIPANT: … look at the transaction,
what happens when you take orders, it goes through credit card of the customer …
MANISH: So you’ll need a merchant account because that’s the company that’s underwriting
so that when you charge me $10, it is going to go to merchant account who in turn will
deposit the money to bank account. So any company that you’re familiar with that you
can get a merchant account with, any provider that you guys are aware of? Have you heard
of PayPal? PayPal has a product that can give you a merchant account, and there’s one other
small detail which is called Payment Gateway. PayPal gives you both of these. PayPal is
a good option, I think. And then there are a number of other options like CyberSource.
There’s also other tools like if you were selling expensive stuff like furniture that
you want people to take advantage of financing, there’s a solution called Bill Me Later, which
is very effective. I don’t know if you’re familiar with that.
PARTICIPANT: It’s part of e-commerce. MANISH: It’s part of PayPal now, so you can
finance. There’s also additional options like layaway, which is, you know, when people are
saving for a certain purchase, there’s a company called e-Layaway that will help. On the merchant
account side, you’ve got companies like First Data, Cyber Source. These are big, big companies.
Bank of America, Chase Paymentech, Chase Bank does that.
So now that we have snacks to sell on ABC123.com, we have a PayPal account, we have decided
how we’re going to build it, and then we’re going to look at feature and functionality,
and then you decided you’re going to use USPS to ship the goods. Now that the order has
arrived, you said you’re going to do your inventory, right? You’re going to keep the
inventory in your dorm room. Are you going to manufacture these products or are you going
to buy them? PARTICIPANT: Probably purchase them.
MANISH: Purchase them, like you’re going to get it from Kraft perhaps? Kraft has any healthy
snacks? Or some other bigger manufacturer, right? So how are you going to source these
items? Are these items going to come from China or elsewhere? Healthy snacks, you have
to think about if you’re not going to manufacture them, you need to source these items from
somewhere. PARTICIPANT: Just because based on these examples,
it’s going to be hard to have like a presence or business for a product. When it’s physical
product, it’s better to … higher for certain things that we’re required …
MANISH: Well, it really depends because these physical goods are consumed more of. Because
there’s a lot of moving parts, it’s harder to manage this; however, wherever the barrier
to entry is low, the competition is generally higher. So if you were trying to sell some
electronic, e-books or what have you, most of those electronic products, informational
products, they generally go straight from source. I don’t know if you guys follow what’s
been happening, Amazon and Apple, for their iTunes, have completely gotten rid of all
the middlemen, you know. They take the content straight from the producer and deliver it
straight to the consumer, without a lot of intermediaries. You don’t need a lot of intermediaries.
That’s why there’s not a lot of room. Unless you have a very unique product that you are
producing on your own, the opportunity for being a retailer, an intermediary, for electronic
good is a very hard thing; in fact, there’s no value addition.
So you have to think about sourcing. That’s an important consideration because now if
you’re going to skip your inventory, you need to talk about sourcing. That’s where you can
go to sites like Alibaba, from alibaba.com. So what you want is you want to have enough
number of vendors. There’s a
website called wholesale.com, because you want to buy in wholesale, right? You want
to make some profit. So if you buy for $5, you will be able to sell it for 8, 9, 10.
So you need sourcing. There are tons of other si9milar sourcing websites out there, or you
make your own connections, direct manufacturer distributors.
So now that you have domain name, you’ve got your products, you hired a company to design
logo, design and all that, you’ve chosen to pay as you go. SaaS is a pay-as-you-go model,
meaning, you start buying, like, say, GoECart software. If you were to sell it one off,
that’s going to cost a quarter of a million dollars, or more possibly, but because we’re
able to provide the SaaS subscription service, you could get started with as low as a thousand
dollars a month. That’s on GoECart. However, the price point has come down significantly.
You probably don’t need the complexity that GoECart has; you can get something really
simple. There are solutions out there like – have you heard of Shopify? Shopify is
very easy to use, simple, we don’t quite directly compete with them, but you could get started
with something as little as, I think, about $19.95 a month. They can hook you up with
a SaaS-based software, easy to use. They’ve got designed templates and you just drop your
logo, pick a color scheme and put your products in through the admin web-based control panel
and determine your pricing. They have built-in integration, so that’s GoECart with all the
carriers like USPS, and you got your payment. One more thing, how are you going to secure
this website? What will you need to prove to others that this website is secure?
PARTICIPANT: Something with encryption. MANISH: Encryption is a good idea. So you
need what we call an SSL certificate. That’s the lock that you see on certain sites when
you go on certain pages. You can get it from which company? Any popular logos that you’ve
seen regarding security? Have you heard of VeriSign? Have you seen GeoTrust or even Norton?
So that’s the one that needs to be installed on your domain name that’s specific to your
domain and that does encryption because the whole concept of SSL security is the data
has to be encrypted between your computer all the way to the server. That’s why you
need SSL. Have you heard of something called Hacker
Safe or McAfee Secure? Have you seen that logo on certain websites? It’s called McAfee
Secure; it’s like McAfee logo. So that’s an additional layer of protection that you can
display to the consumers, to boost their confidence that not only are your snacks healthy, their
credit card is going to remain safe as well, not just their belly but also their credit
cards. That’s an additional layer of confidence. These are called third-party seals.
Another good idea would be – are you planning to take good care of your customers, Milly,
or once you take their money, you’re going to forget about them or…?
PARTICIPANT: No. I want new subscriptions. MANISH: You want new subscriptions, so you’ll
take really good care of them, right? Have you heard of Better Business Bureau, I’m sure,
BBB? PARTICIPANT: Yeah.
MANISH: So if you take good care of your customers, you’ll have a good rating at BBB. Those are
confidence marks or trust marks. That might be another good thing to add to your website.
Would you like your customers to talk about you on the web, give you reviews so that other
customers can be attracted to your website? PARTICIPANT: Yes.
PARTICIPANT: How about social media? MANISH: Yes. Okay, social media is great.
We’re just going into that. PARTICIPANT: Yes, segue.
MANISH: So as we go through this, so now we’re talking about marketing, promotions, customer
retention, and we’re talking so much about the technology stack, because we covered all
the layers of technology. So would you like people to talk about their experience on your
website in terms of what kind of service you offered?
PARTICIPANT: Mm-hmm. MANISH: Now we’re talking about ratings and
reviews, or we’re going to talk about customer… these are the voice of the customer. That’s
the way I’d like to think in terms of overall picture, and you can get that in multiple
ways. You can get people to rate the transactions after purchase, and those are generally called
product reviews. You might be familiar with it. When you buy something from Amazon, do
they send you an email saying, “Hey, rate the item, rate the transaction”? Product
reviews. Would you like people to share that item with their friends, if they liked something
that they had a good experience with? Say they found something that they liked on your
site, would you like them to share? PARTICIPANT: Yes.
MANISH: Good. That’s a good idea. So those are social sharing. What tools can you use
for that? Have you heard of a tool called ShareThis and AddThis? These are tools. Platforms
like GoECart come built in with product review capabilities but there are also third-party
tools out there that you can use. It’s called PowerReviews, BazaarReviews, and things like
ResellerRatings. Many websites, once you’ve made a purchase, at the very end, they ask
you to take a survey. Have you noticed that? When you buy something online, they’ll ask
you. Most likely that’s a company called BizRate. So now that you made a purchase, what if you
then made a purchase, would you like someone to “like” that item? That’s a Facebook
concept, and that’s where Facebook comes into play – Facebook, Twitter, social media.
So, for example, you like something, that’s the easiest way to share because with the
Facebook “like,” it will immediately show up on your friends’ wall. Pinterest is becoming
very, very popular; in fact, Pinterest is actually, believe it or not, is the highest
converting social network for e-commerce, much higher than Facebook and Twitter combined.
Pinterest is money. So start pinning because Pinterest has recently introduced new features
that not only allow you to look at pictures and collages but also product pricing and
availability right on Pinterest boards. That’s a new functionality called Pinterest Rich
Pin, which Pinterest is making a big push for.
Twitter is really good when you have things like flash sale, when you want to track. Milly,
if you had a lot of people that really liked your brand and you made a spot decision that
you’re going to do a four-hour special sale, how are we going to get to them?
PARTICIPANT: Social media. MANISH: Yeah, social media and Twitter. You
can just tweet that item, use the hashtag #supersale, #supersalemilly, and people who
are following your brand can immediately get that notification in a non-intrusive way.
You know that email is becoming very hard to reach now. Are you guys aware?
PARTICIPANT: In the text it tells us that the number one way to convert sales at this point
but that doesn’t mean… MANISH: Yeah. ROI from email marketing for
e-commerce is the highest marketing ROI, but the world is changing, and it changed last
year. Anybody knows why? Their movement, there’s a trend that’s happening in email. Gmail did
something. PARTICIPANT: All these tabs.
MANISH: Yes, exactly. Gmail has now promo tabs, so … super saving emails and her
blast, it doesn’t show up in the inbox. So what’s happening is the open rate and the
click-through rate from email marketing has gone down significantly. It’s trending downwards,
which is why social is going to play a much bigger role. Another big chain that’s happening.
How are you going to drive traffic to this website?
PARTICIPANT: Marketing. MANISH: Marketing. Organic SEO, maybe you
want to rank high, don’t want to pay a lot, maybe you want to do hard work, get the site
rank high on Google. Yeah. So, SEO is another big component from a marketing standpoint.
We covered social. Would you like to cover more, Jeannie, on the social side or…?
PARTICIPANT: Instagram as well, as an emerging medium. I mean, Pinterest – it’s very interesting
what you’re saying. It’s just that Pinterest probably doesn’t have as much density right
now. It’s smaller in terms of population. MANISH: Yes. So what’s different between Facebook
– Facebook is great for conversation and brand building. So if you want to talk about
creating a community, it’s more for engaging people into your brand. But generally speaking,
what we find, the retailers are not getting as much click-through traffic from there.
If you try to sell on Facebook, it doesn’t quite work just as well and it’s more meant
for creating a brand, building awareness. Pinterest users are more in a buying mode.
Facebook users are kind of hanging out, so it’s a great place to target them; however
you got to balance them out. Twitter is more suitable for any kind of event-based marketing,
as opposed to general. Instagram, I think I just read today that Instagram user base
is approaching to be close to Twitter; I don’t know if you knew that. Yesterday a study came
out. The number of users on Instagram are approaching to be close to the number of users
on Twitter. That’s a huge number. PARTICIPANT: That’s huge.
MANISH: That’s a huge number. PARTICIPANT: Because they are working right
now on creating … to become a business plan, so they’re working right now on …,
which would be the most senseless marketing plan.
MANISH: And Pinterest because a lot of people, a lot of retailers, are not – a lot of users
are not fully aware of the huge opportunity to get on early and take advantage of that.
The intent of the users on Pinterest is they’re on the buying mode because they are collecting
items, they are trying to look at stuff, as opposed to a conversation of friends that’s
happening on Facebook. So Pinterest is actually four times more effective in terms of e-commerce
ROI for social than Facebook or Twitter; in fact, it drives more traffic to retailers’
website. We’re talking about retail here; we’re not talking about other publication
or any kind of news site or those kinds of stuff. So this is very, very e-commerce-centric.
We’ll take a pause and ask how you’re doing in terms of time and questions. Is this helpful?
I can go into any area that you want further, but maybe a few questions and then I definitely
want to share my story that you guys asked for. But I wanted to save that for the end.
PARTICIPANT: I have a question. Is that okay? MANISH: Absolutely. We’ll let her ask one,
and then it’s your turn. PARTICIPANT: I know you said that Shopify
is not really your competition. I would like to understand why, because from my perspective,
looking in as a consumer, theirs is a platform that’s hosts e-commerce. Is it because
they target a different audience than you guys do, or they don’t target retail?
MANISH: Yes. Can I erase some of these? PARTICIPANT: Sure.
MANISH: Cool. Thank you. This is a simple scenario, right, where you have it very simple.
Milly wants to get started in her dorm room and start selling healthy snacks. Let’s see.
Once business grows, once Milly’s doing, say, a couple of million dollars in sales, she’s
going to have growing pains, and that’s one of my story as well. As you get bigger, let’s
say, we’ll take an example of a brand. I’ll use a live example of one of our clients.
This client is called Norman Camera. They are, I think, founded in about 1957. They’re
located in Kalamazoo, Michigan, about three hours from Chicago. They’re a third-generation
family-owned business. They have two retail stores. They sell cameras and photography
equipment. That’s what their business is, camera and photo equipment. Two retail stores,
both in Michigan, one in Grand Rapids and one in Kalamazoo. Where do people go to buy
camera equipment these days? If you think about buying camera, if you were to buy online,
where do you start your search? PARTICIPANT: Google them.
MANISH: They’ve got two stores, and some of their customers, they go to Amazon. Any other
website like Amazon? Have you heard of eBay? Do you think people buy stuff on eBay?
PARTICIPANT: Mm-hmm. MANISH: Best Buy, Buy.com which was recently
acquired by a Japanese company called Rakuten. Best Buy, for example, and Sears maybe – these
are all what we call marketplaces. This is a new breed of websites that sell other people’s
stuff. Did you know that Amazon sells more stuff from other retailers than themselves?
Amazon is very smart because they figured, “If I don’t have to house the inventory
and we make the same amount of money simply taking orders on behalf of Norman Camera and
I can make 20% commission on selling Norman Camera’s stuff and we have such huge traffic
on our website, 100 million plus visitors, so it makes sense to create a marketplace
and let all these other people sell their stuff on my website and make it the earth’s
largest selection.” That’s how you make the earth’s largest selection: by not trying
to put everything in your warehouse. So they have two retail stores, Amazon, eBay,
buy.com, Best Buy, Sears, all these different marketplaces. When you search for camera on
Google, you see pictures at the top of products, and on the side you see Google Shopping. Are
you familiar with Google Shopping? PARTICIPANT: Mm-hmm.
these are what we call comparison shopping engines, CSE. That’s the term, comparison
shopping engines. Have you heard of NexTag, PriceGrabber, any of these, Shopping.com,
Shopzilla? This is the way you go and compare prices when you want to. Mobile – do you
think people are shopping on mobile sites? So, having a good mobile experience is important.
Now they have been in business since 1957. They’ve got two stores. They sell from in-store
but they also use these two stores for fulfillment. They have a point of sale, you know, the terminal
that you walk up to with the bar code scanner and swipe card machine and everything else?
They’ve got two stores in the front where people can come, scan the bar code, check
out, and they also ship these items from both these locations throughout the world. They
also have to put the same items on Amazon, eBay, buy.com, and also get these same items
to be listed high on Google Shopping, NexTag, and they have to deliver great mobile experience.
They’re thinking about, you know, when they have some items that go on sale, like clearance,
or anything that’s nicked and sort of lightly used, they don’t want to sell that on their
main website, they don’t want to damage that brand, so they may consider creating a second
online store just for clearance. It’s a little bit like Filene’s Basement, compared to Filene’s
or back in the JCPenney, or it’s basically you’re separating your primary brand, so it’s
called multi-site. So now this is where the complexity comes
in. Just imagine trying to run all these things. When you have that great camera equipment
that might be extremely expensive, say $5000, you may have only two of those in stock because
you don’t sell a lot of, but you want to make your inventory and your products available
across all these channels. Just imagine. That’s the omni-channel problem. How do you allow
customers to buy and be serviced across any channel of their choice on any medium?
Wouldn’t it be nice if a customer could go online, look up the inventory in the Kalamazoo
store and decide to place the order online but say, “I want to have it picked up, I’ll
pick it up in the store, as opposed to you shipping it to me via UPS.” Or they pick
it up in store, they travel elsewhere, they decide to return it, they’re in New York.
“Do I now have to go back to Kalamazoo, Michigan, to return it or can I mail it to
you?” Then they call the call center. When you sell this kind of stuff, equipment, most
people have questions; I mean, photo equipment is very complex. So you have all these various
channels. Now that’s why the problem gets extremely
complex in order to fulfill the demands of today’s highly empowered consumers that want
to shop across all these different channels, at their preference, and be able to buy and
return things anywhere they like. You have limited inventory because as a retailer you
don’t want to carry a lot of stuff because inventory that doesn’t sell is a problem.
It’s a huge problem because you’re going to take a loss of it. You’re actually paying
for housing that inventory, the insurance, the real estate that you’re using, and if
it doesn’t sell, it goes out of style very quickly because Canon is going to release
the next soon, and if that doesn’t sell, you’re going to have to sell it at a very high discount
and you might not even recover your money. That’s what GoECart does, what Shopify does
not. When you have this level of complexity and you’re a small to mid-size retailer, your
hands are full. You cannot possibly manage. If you had two units of that camera, SLR,
Canon, digital camera that costs $8000, you want to make that item available simultaneously
across all these channels. But as soon as you get the order for one, you want to be
able to let all the channels know immediately that you now have one less so you don’t oversell,
because when you oversell and you can’t fulfill that order, customers have a bad experience
and they don’t like it, and that will show up in your negative reviews. Not just that,
you’re missing on the opportunity to sell across all these channels simultaneously if
you don’t have a great software. That’s the problem that GoECart solves with the GoECart
360 product. Shopify was better designed for Milly when she was very small, when she was
getting started. Not to mention that Shopify does have some larger customers; however,
the problem of multi-channel, omni-channel, is a big one, and that’s what GoECart system
does that’s very different. PARTICIPANT: So can they integrate
without making the investment, I’m assuming it’s a lot in order to invest for Milly?
MANISH: Yeah. So once merchants reach a certain size, you know, they quickly come to the realization
that they need something more sophisticated, and that’s when they would make the transition
to GoECart. They’ll bring all their content over and they’ll pretty much be able to migrate
that domain name over to GoECart. The end customer doesn’t know the difference; they
can’t tell that the software has changed hands, but behind the scenes all of a sudden, on
the GoECart platform you get tons of additional capability to manage all these channels. I’m
not saying that every retailer is going to have all the same channels. Some people may
have more retail stores; some people might only sell on Amazon, they may not have a multi-site,
multi-store. They may not have a call center; some people might do more in the call center.
So every variation of that is possible. As long as you’re using at least two channels,
then the GoECart system is highly attractive. If your business is extremely simple and you
don’t have a lot of volume, then something simple like Shopify or Yahoo Store – there’s
tons of options out there, Yahoo, 3DCart, BigCommerce, Volusion. This is where you start.
So there are good systems but designed for a simpler operation.
We haven’t even covered the back office, which is where all the inventory, pricing, and promotions.
Has it happened to you, say if you checked out a product online and then you go to their
physical brick-and-mortar store and they can’t accept the coupon that you found online? Has
it happened to anyone? Or the price is different? PARTICIPANT: …
MANISH: Yeah. PARTICIPANT: …
MANISH: See? PARTICIPANT: …
MANISH: Yeah. So those are all the challenges that the onmichannel brings because it’s no
longer acceptable to say, “Sorry, that’s a web-only deal.” Those days are gone. Every
channel has to work, play nicely with every other channel, and that’s why it’s so important
to have a consistent experience across everything, you know, orders, fulfillment. We only talked
about – obviously Norman Camera also has a lot of products that don’t sell a lot so
they don’t carry them in their stock, so they have what they call drop-ship relationships.
Now how are we going to manage an order that comes in from your customer has to be sent
to a supplier for fulfillment and managing that relationship, that transaction workflow,
all the way to ensure that’s there’s no degradation in your fulfillment commitment?
PARTICIPANT: …. MANISH: You know what drop-ship means? Say
Milly’s ABC123.com, she sells snacks but she doesn’t want to carry that inventory in
her dorm room because there’s no space and she would prefer to get that order and, say,
send it to somebody like you who has the inventory and you are her supplier. So instead of she
shipping the items directly to the customer, she simply instructs you to ship the items
to the customer on her behalf. So customer thinks it’s coming from her; however, it’s
coming from you. So you are representing her brand but you’re doing the fulfillment. That’s
the drop-ship relationship. So it gets fairly complex. Just imagine an
order that came from Amazon to the customer that has to be sold to drop-ship and then
finally you have to submit all the tracking information like the USPS so the customer
can track the order, and it has to all happen without missing a beat, without missing the
service level commitment. If you promise the customers a two-day shipping, it better arrive
in two days. That’s how complexity goes quite exponentially, and small retailers need a
platform like GoECart. Does that answer your question, Jeannie?
PARTICIPANT: Yes. Does anyone else have any questions? Thank you very much for that.
MANISH: Maybe two minutes. I know that a lot of people had asked me about the story, which
I didn’t want to… PARTICIPANT: You have to tell the story.
MANISH: I think you said, “What are the challenges between then and now?” GoECart
product was born – we were first a service company. We were building e-commerce software
for other companies. We realized that my passion was about building innovation. It’s really
hard to innovate, or it’s a different kind of innovation in a service industry because
you’re always working to please the client. You’re working to pretty much deliver on the
specifications that they have given, as opposed to a vision for a product, like an e-commerce
software. We saw it was a very crowded space. All those
guys are extremely well funded, just so you guys know. I mean, they have a ton of money.
Shopify just raised $100 million last year, late last year. BigCommerce raised $30 million.
They have founder of AOL, Steve Case, on their board. Yahoo, obviously you guys know, very
big, popular. Volusion is also a company that has raised a lot of money, $30 million dollars
in debt last year. So we had to find something. We had to find what we call a blue ocean.
Three years ago, after doing a lot of research, we said, “Hey, how are we going to compete
in that space? It’s not going to be easy.” That’s how we looked at this challenge. What
customers were doing was they’re trying to piecemeal a lot of different software to make
this omnichannel, multichannel, work. Large enterprise, big companies like Amazon or,
say, Gap or Walmart, these people have a lot of technology know-how, they have the resources;
they have the bandwidth to put it all together. But if you’re a small to mid-size retailer
like a Norman Camera, I mean, they’re still a pretty large company in the tunes of tens
of millions of dollars, but it’s really hard for them to compete and try to stay on top
of technology and put all these pieces together. When you have multiple software, if one software
gets upgraded, it breaks the other software; it’s a continuous problem. That’s how we said
we’re going to build a suite that is going to unify all these different channels into
one easy-to-use product. That’s how GoECart 360 was born, about two and a half or three
years ago. Prior to that, we were competing with those guys, and it was really hard to
compete. So one of the lessons learned is you have
to find a very unique value proposition. It is very hard to compete with established companies
in your space without something that’s unique. So jumping in and trying to do what they’re
doing, unless you have incredible execution prowess, meaning you can do better in terms
of executing the new competition, then you should try to compete with them; otherwise,
it would be really hard to gain market share against somebody like that because it grows
in scale. Most of these people are what we call Software as a Service subscription revenue.
The scale becomes so large that it becomes harder for less established competitor to
compete. That was a lesson learned that we had to come
up with a new way, we had to provide something that was so unique that we wouldn’t ever be
competing with those guys. Even if we were competing, we’d be competing against individual
components of the software, as opposed to the suite itself. So we were competing on
philosophy that “hey, you know, you’re getting a unified product, as opposed to if you are
more interested in building and connecting these different software together and integrating
them, then you’re better off going elsewhere.” That has what was worked for us really well.
What else? Any specific questions? PARTICIPANT: They want to know how you got,
like what happened when you were in school. You were in university and working, all of
a sudden, one day, you’re like, “I’m going to build an e-commerce company.”
MANISH: Okay. Way back when, there wasn’t any light bulb and it was… [Laughter] You
know, that’s a hint. I went to the University of Bridgeport in
Connecticut and I was very, very fortunate to get a full scholarship. This was in ’97.
I went to school there in ’97 to 2000. I was very lucky. But there was a friend of mine
who came from Romania; he was lucky too but perhaps not as lucky as I was. He got partial
scholarship, so he had to make up for the remainder of that money somehow. He was a
foreign student so he had to figure out how he’s going to make the rest of the money.
This was in ’98, ’99. So what he figured out was he was going to build these computers
in the dorm room and assemble them and sell them on campus. Somehow I got introduced to
him. What he was doing was he would collect an
order from a friend and go to the computer fairs on the weekend because to put together
components or assemble a computer back then used to cost about $300 to $400, to get the
processor, the motherboard, the hard drive, the chassis, and monitor, the cable, and all
that. He had to get them piecemeal, build a computer on a Saturday, come back with the
components, and later that afternoon build that computer and sell it, collect that money.
Now he had enough money to build the next computer, but he had to wait a week because
the computer fairs were once a week. So I was lucky that I had full scholarship
and I was also working and had a really good job, so I was making money while I was going
to school and had zero debt. So I said, “You know what, I like what you’re doing, but we
need to scale this up. How can you do ten of these a week as opposed to one?” “Financing
is a problem because the computer fair guys don’t give credit, so I have to pay the money
when I go there. I only have enough money to buy one computer.” So I said, “All
right, we’re going to collaborate on this and we’re going to now buy ten computer parts
and we’re going to have enough in stock that if we get an order during the week, we can
build it and sell it immediately rather than waiting for the next week’s order.” That’s
how it got started. We started getting more and more popular on
campus, to the point that now a lot of these students wanted to, at the time of tax return,
about this time, they’re like – you know, we started selling about fall and then everything
was fine. Around April, people started coming to us saying, “Hey, we need a receipt. We
need to write this off as an educational expense in our tax return.” We’re like, “Receipt?
We don’t even have a company. How are we going to give you a receipt for the IRS?” That
was sort of an “aha” moment or the light bulb. We’re like, “Oh, we got to go create
a company so we can give these people receipt.” We now had to start paying sales tax to the
state as well. That’s how actually technically the company was really born.
Then once I graduated, they kicked me out of campus. It’s like “Enough of the free
stuff that you had for four years. You have to make room for new people.” So I found
a place very close to campus. The closest apartment I could find to campus, we set up
our shop there and slowly we made the transition. I mean, assembling computers, this was back
in the Dell days. Those branded computers used to be expensive and students couldn’t
afford them, or they didn’t want to pay that kind of money. I mean, that has changed dramatically.
Now nobody thinks about building computers because you can buy something off the shelves
so cheap, so inexpensive, but back in those days that market existed. That’s how we got
started. And then we quickly realized that that was
not sustainable at the scale we were doing it, so we started getting into software and
custom software development. We did services for a while, then we were building sites for
other people and then we built an e-commerce platform that I told you about earlier, so
we were the product development company for that product that became hugely popular. Then
once our relationship ended, GoECart was born because we said we could do it better. So
we had a lot of struggle because we didn’t raise any venture capital, we didn’t raise
any outside funding; we tried to do it all organically in-house. That was a very tough
decision, meaning, it was hard because in order to scale a business, software or any
other business today, you’re up against a lot of competition and you need to move swiftly,
you need to create a great product that requires a lot of investment. So we struggled for a
while. Then we took a look at how we were going to
compete, and that’s when we came up with the GoECart 360. That was a turning point in our
company. We had to do a pivot; we had to change our strategy. So GoECart came into existence
about three years ago and has been incredibly successful since.
PARTICIPANT: Did you raise money for that or did you…?
MANISH: No, no, we didn’t. PARTICIPANT: …
MANISH: Yeah. So that’s a choice that you have to make as an entrepreneur, what you
want to do. I mean, I didn’t have any experience doing that capital raise, so I didn’t know
any better. But once we had so much battle scars along the way, we figured that we can
build this product based on the business that we had created and we didn’t want too much
of distraction, so we went on stealth mode for about 18 months while we were servicing
existing customers, building this new platform, and then we released it. So very lean startup,
lean product development methodology, if you’re familiar with that concept of minimum viable
product: Create the product, test it, get feedback, iterate, as opposed to make all
kinds of assumptions up front and only if you go to market you find out that those assumptions
are no longer valid. So it’s really all about iterations that we did. That’s the way how
we built the product, and we continue to do that even for adding additional features to
the product. That’s, in short, kind of the story.
PARTICIPANT: Thank you so much. And do you have any questions? We still have to finish,
you know, we have 20 minutes left, we have to go over a couple of things. But thank you
so much. MANISH: Well, thank you, guys. Thank you.
I’ll sit at the back and let you guys wrap up.
PARTICIPANT: Okay, thank you.