Fabric is a headless commerce platform designed to modernize and replace complicated and expensive legacy commerce solutions. The cloud-native platform is API-first and modularized, which provides virtually unlimited commerce capabilities for retail, direct-to-consumer, and B2B companies.
Under the direction of co-founder Ryan Bartley, Fabric has been in the research and development stage for the past few years. In October 2020, the platform became generally available, Faisal Masud joined the company as its new CEO, and they announced receiving $9.5 million in seed funding.
Bartley and Masud are no strangers to commerce or each other, as they both worked together at Staples and eBay for several years. They also have decades of commerce experience. In addition to Staples and eBay, Bartley worked at Dell, and Masud worked at Amazon, Groupon, and Alphabet’s Wing. It’s their combined experience in complex commerce processes, along with a robust headless commerce platform, that makes Bartley and Masud confident that Fabric is poised for significant growth.
In my interview with them, they described Fabric as being Amazon-like in regards to its commerce capabilities. They were also critical of Shopify Plus and its ability to provide the best commerce solutions for large businesses’ needs. They stated that Fabric has built both the software and the team and sees themselves as partners that can help companies solve commerce problems quickly, correctly, and affordably. We talked about how Fabric was started, what makes Fabric different from other commerce solutions, and what the future of commerce looks like.
- Why Shopify threatens Amazon and what they’re doing about it
- Why Shopify Plus isn’t built for enterprise-grade customers and what its true Achilles heel is
- How Fabric solves the multi-channel commerce problem
- How being stuck on a single platform hinders your ability to reach all sales channels
- How Ryan Bartley took Fabric from being an idea in his head to becoming a startup company
- What got Faisal Masud to leave Wing to become the CEO of Fabric
- What headless commerce is, why it’s the future, and the unique way Fabric is approaching it
- Why B2B commerce can’t be fully automated and requires a team of experienced people (a partnership) to solve complex problems
- What the future of ecommerce looks like
Jon Henshaw: Today I’m interviewing Faisal Masud, the CEO of Fabric, and Ryan Bartley, one of the co-founders of Fabric. Fabric is an API-first headless commerce platform, which we’ll learn a lot more about throughout the course of this interview. Both of them have extensive experience in the commerce world. Ryan was the Manager of Product at eBay for Checkout Transactions and Returns, while Faisal worked at Amazon as a Director of AmazonBasics and AmazonWarehouse and more, and his recent position before joining Fabric was the COO of Alphabet’s Wing delivery service. So welcome to the Coywolf Podcast, Faisal and Ryan.
Faisal Masud: Thank you. Thanks for having us.
Ryan Bartley: Yeah, it’s great to be here.
JH: Yeah, I originally reached out to Faisal after reading a very interesting Substack article, which was entitled Will Shopify Scare Amazon Into Another Webstore Fail? I was like, “Okay, I’ve got to read this.” It had some pretty interesting things in it. Faisal, you described how Amazon is feeling threatened by Shopify and attempting to go the Webstore route again, while Shopify is trying to go after larger businesses, which was actually kind of new to me and actually sent me down the rabbit hole of figuring out what Shopify Plus was. But you kind of stated that but they’re both likely to fail at that. So can you expand on that a little bit?
FM: Yeah. So the part about Amazon talking about coming up with a Shopify competitor is no new news. Its Project Santos has been tagged in a bunch of articles about how they are about to launch a competitor product. The failure of Amazon Webstore was not something that anybody was surprised about, because the product that they had built was very much built for merchants selling and wanting to sell on Amazon. So if you weren’t going to have a robust offering on Amazon, then frankly, it was not the right product for you, and it was really built …
At Amazon, there’s this one general rule that if you’re not part of the core products or the core businesses, typically, those other side gigs don’t work out. I mean, Checkout by Amazon or Amazon Pay or Amazon’s Auction Store, any of these little side projects … Amazon Fire Phone. Webstore was very similar to that, where it was sort of a side gig that they tried a couple times. After a bunch of efforts, they kind of gave up.
What they didn’t realize was that the Shopify was going to become such a dominant player, because a lot of merchants just can’t have that same sort of ecommerce in the box experience on Amazon. Shopify has done an incredible job building out a real product suite with their marketplace for SMBs. Where they are falling down is once you reach a certain scale, these apps are not built for enterprise-grade customers. So that’s where kind of Fabric comes in.
But to answer your question, the Webstore failure multiple times is not permitting Amazon from coming back in. I feel like they’re being forced into doing this by Shopify, just because, naturally, if you look at Cyber Monday and Thanksgiving, they beat Amazon on GMV (Gross Merchandise Value). I mean, that’s a staggering statistic. If you think about the fact that this ecommerce platform now has enough merchants to take on Amazon’s marketplace, that’s very threatening to Amazon, and the largest reason for that is Shopify can turn on its marketplace whenever it wants. They’re saying they’re not going to, but I don’t believe them.
JH: Well, it is interesting, because when the Shop app came out, that was the first thing that came to mind. I was like, “Oh, this is just waiting for them to turn on the marketplace.” Right now, they’ve made the app so that it’s a way to sort of shop again or maybe kind of find some shops. It’s not the same type of thing that we would think of when we think of Amazon’s Marketplace. But yeah it seems like they could turn it on anytime.
FM: They can, and, frankly, when they first launched Shop, I was quite shocked at how … I found it quite irrelevant, because you don’t shop that way as a human being, right, when you’re shopping. You shop on the store, and then you go to that store’s app. Then you go do what you have to do. This entire app is built around tracking your orders, which to me seems a little bit nonsensical, because when was the last time you tracked your Amazon order?
JH: Well, for me, as you say that, I’m thinking. Have you ever heard of the Deliveries app for Mac and iOS?
JH: Okay. Well, that’s fine. That’s an app that I use as a consumer where I add things, and it’s funny that you said that that’s kind of the core part of Shopify, or the Shop app, I mean, because it’s one of those things where I’m actually really confused with the Shop app now, because I’ll get notifications for things I didn’t even know I ordered from a Shopify shop. I mean, it’s really bizarre. I get all kinds of weird push notifications.
FM: To that point, Jon, I don’t understand. I don’t go to Shop if … You’re not a marketplace. Why am I going to your app? Why? To do what? It makes just no sense. I don’t know, Ryan, how you feel, but I downloaded the app because I heard about all the hoopla, and I’m like, “Okay, well here. What do I do now?” It was dysfunctional, because a bunch of merchants, no real coherent way of navigating, and I didn’t understand.
So I think the struggle here is Amazon’s trying to be Shopify, Shopify is trying to be Amazon, and both of them are completely missing the mark in the middle, which is marketplace shoppers shop differently to the way DTC shoppers shop. They go to the brand, right? That Allbirds customer’s not going to go to Shop to go shop. They’re going to go to Allbirds.
JH: Well, one of the things that you mentioned in that article was something along the lines of who is Amazon and who is Shopify, and I think Ryan had used the Star Wars reference of rebels. What are your thoughts about what were just talking about in relation to that, Ryan?
RB: Yeah, I think Shopify’s came out and said that they’re arming the rebels. I think it’s a cute reference, and I’m a kid of the eighties. I enjoy the Star Wars reference, but if you really think about Star Wars, there was a rebel group that had to have some magical powers and a few lucky breaks to defeat the big Death Star in Star Wars. So it’s kind of my same feeling, too, is that’s actually what Shopify is. I think intending to give the right tools to this group to compete against Amazon. But as you look at Amazon and what tools that they’ve built and their capabilities, they’re light years ahead and more advanced across the board than what Shopify could ever build or ever consider.
So I think they need to be very considerate about who they’re waking up and picking on, because one thing, Jon, that I see in the industry for small business, if you think about it, a small business, when you’re starting out, you’re starting in tests. You’re testing a market, and you’re touching a customer, and you’re testing a product. Where are you going to test that product on? The place where eyeballs are. So Shopify ends up being a listing app for marketplaces. So you fire up Shopify, add your store. You have no traffic to your store, and so you list your product through Shopify’s interface onto Amazon.com, eBay and other marketplaces. So for them to pick a fight with where your customers are shopping is kind of head-scratching to me. I see Amazon as an enabler for SMBs to grow into a brand. Then as you grow into a brand, then you should start to invest in your brand experience in your own direct to consumer business.
JH: That seemed to be what I picked up on kind of towards maybe the end of the article, was just sort of both of those platforms are decent places to start or get visibility as you sort of build your store or build your brand. Then when you get to a certain size and have certain needs, that you would move over to something like what Fabric is providing. Does that sound about right?
RB: Yeah, absolutely. So if you think about it, as you grow as a business and you have found a customer and found a product that is resonating with an early adopter, well, what do you do to grow up to mid-market brands? You have to expand your customer selection, right? To go from early adopters to hopefully lots of different kinds of customers. That entails you to expand your product selection so you’re not just selling one thing that got traction, but you’re becoming a destination to add more share of wallet. Then below that, then you have to not sell out of your house or your single location, that you may be selling across multiple different touch points. So those channels make a difference.
Amazon should play a role in that, as well as your own direct brand channels, where you need to build your brand. Then you need to think about expanding into other things, like wholesale or retail. So as you grow up as a company, the tools that you need to enable what we call multi-channel commerce, where you’re selling across all these different touch points that a consumer or a business may touch, you need tools to enable that. So that’s where Fabric comes in. As you grow, if you’re a high-growth or an established business, then we’re giving you the advanced, but still approachable tools to be able to manage that business growth.
JH: Yeah. It seems like, at least what I gathered from what I read online from your site, it’s essentially saying don’t be stuck on a particular platform. Be able to connect with all the channels. So I want to get into more into what Fabric does. I think it’s really interesting. But I want to take a step back, especially for the entrepreneurs that listen to this podcast, and just ask you, Ryan. I just want to ask you what prompted you to co-create Fabric, because this actually started … I think you started this four years ago.
RB: Yeah. We just, I think, finished our year three, and so going onto year four. So yeah, the genesis of the company is very simple. My background is in scaled ecommerce. So I worked at three different companies that did over $10 billion in e-comm revenue, all the way back to the days that Dell Computers, when it was one of the fastest growing companies in the world. Everybody was looking at their business model, and we were building early kind of ecommerce infrastructure and experiences. At that time, I managed over a $10 billion business unit, went onto eBay Global Marketplace, where I met Faisal, and was leading several product and technology teams. So got to see the good macro view of ecommerce.
Then my final operating experience was at Staples, the office supply superstore, where people don’t realize Staples is one of the largest B2B ecommerce companies in the world. We were managing under Faisal’s leadership over $12 billion of B2B ecommerce business. So Jon, what I saw and those experiences was we were building super-advanced tools, because, frankly, we had the resources to do it. I was also leading mobile at Staples, where I was buying all the software in the industry, left, right, top to bottom to enable commerce. What I realized is the market for ecommerce software just wasn’t stepping up and solving the problems that brands need. So typical founder story.
And so, typical founder story. I wanted to go solve the problem that I solved for myself and my team, but do that for everybody else. Because as I talked to companies that had grown or were scaling, they had the same issues, and no one was solving for it, and I didn’t think anybody could solve for it as well in the market. Because it requires that level of sophistication that only you get at really large marketplaces like Amazon and Alibaba, and eBay, and a few others, where you understand the tools that can be built to enable merchants and marketers. And so that’s really why we started Fabric is just to solve for giving those tools that others can’t build, and those advanced tool sets, as well as solving for, frankly, old software in the market. If you look at the ecommerce platforms that exist today, they were architected 15 plus years ago. Pre mobile, pre-cloud, and they frankly haven’t innovated. So it’s shocking to me as I see it. Commerce happens in every single organization in the world in some form or fashion. Meanwhile, there’s only a handful of companies that offer capabilities, and those handful of companies haven’t innovated. So for me, it’s truly solving for that big market need.
JH : Well, what you just described is, of course, hugely ambitious. Nothing’s small and going, I don’t know if I want to use the word against, but is working with a lot of really big players that are already there, but of course not solving the problems that you’re wanting to solve. I know that you and Faisal have a huge amount of experience with it, but I’m just curious to know. What’s the starting place for that? And I’m asking from a point of view of there’s a lot of people, maybe not a lot of people, but there’s plenty of people out there that have a lot of experience around something. They recognize a problem and it bugs them and it’s a constant itch that they want to go solve. But how do you go from that to literally the startup? In other words, how did you essentially find your co-founders and say, “We’re going to do this, and this is how we’re going to do it.” Did you have to pitch? What did that look like? How did you … That’s a huge step to take, I think.
RB: Yeah, agree. For me, it was actually very interesting journey. I worked in large companies and we’re building these advanced tools. And so the benefit of that is we did a lot of R&D at eBay and Staples and those other scale businesses, and have lots of scar tissue of what worked and what didn’t. So literally we were the customer of the product that I’m building. And I think that just gives us a very quick advantage.
As people look at what we built over the last couple of years, they’re shocked at the scope that we have. They’re shocked at how advanced we are. And most startups have a problem or identify a problem, but they go through this incubation phase that no one talks about, no one ever shares in the news. It looks like they’re overnight hits, but typically there’s a few to several years where a startup wanders in the desert, trying to figure out the right product market fit, the right customer set ,the right everything. Where I think because of our experience, we didn’t have to go through that phase.
We spent a little bit of time upfront when I started Fabric with the co-founder, working on a couple of things. One is technical architecture. We knew that we wanted to start this business at a time when technology and cloud platforms had advanced to a certain level. And so we spent about six months really doing R&D on technology, and making sure we made the right technology choices that will last into the future. And then of course we spent a tremendous amount of time with customers, our expected customers, just understanding and revalidating all the things that we needed. And I think that goes back to really Faisal’s leadership. Coming all the way from Amazon, of being super customer centric. And it’s very simple. If you focus on the customer and you identify insights around what they need or what they want, and then you build to that, and you keep listening and you keep doing that. So that’s what we’ve done at Fabric.
So yeah, starting with a beachhead, me and a co-founder basically at a card table, and then scaling up very quickly over the past couple of years has really been a fun journey for me as an entrepreneur.
JH: Yeah. And it came out, I think, in October. So it took at least a few years, like you said. Sort of an R&D to be working on this and then to eventually launch it. And it looks like around that time, Faisal, that’s when you came on board, when they were ready to make the product public. And before you were … Ryan was just talking about how you worked at Amazon, but you also right before that you were COO at Wing, which is an alphabet company for delivering, I think, on little planes or something like that. Drones, Which is interesting in itself. But what was it that kind of, I don’t know, lured you? That made Fabric and what Ryan and his co-founders had built that got you to want to leave that and then go over and work with what Fabric’s doing.
FM: Yeah. I guess the short answer is that I was close to the co-founders, and Ryan and I have worked together for a long time now. I think probably going on 10 years now. Ebay and Staples. We’ve always remained in close contact, and I still remember the day … I don’t know Ryan if you do. They called me and WeWork work to talk about how to productize some of the work you were doing. And what felt like an epiphany back then of not being consultants, but actually being product developers, years ago, for me, I always stayed connected to the team. So I knew what they were up to. And at Staples we went through a pretty large exercise of getting rid of our legacy platform on IBM WebSphere. And that journey onto micro-services was sort of the underlying underpinnings of why even Fabric today is so relevant, and how Ryan went about in this journey, seeing all the gaps.
I think, for me, it was more the onset of COVID and the acceleration of ecommerce. I think my first statement to Ryan when I saw the tools was, “Why is the rest of the retail world using such crappy tools when Amazon has the best in class internal marketing, merchandising, inventory planning tools? It’s a massive disadvantage for retail. Why not level that playing field?” And that’s what got me excited.
I also was pretty close to one of the investors who came into our extended seed round. So there was a bit of a conversation back and forth on, “Okay, where do we take this?” And for me, it’s less about what Fabric’s going to be going forward, it’s about how big an impact we can have on the world of commerce. And I think the magnitude of what Fabric can do is unprecedented in this space. So that’s what excited me. And of course working with Ryan, we know our styles and we’re different in different ways, and really compliment each other in our approach. So I felt like this was a good place to … If I’m going to jump into something where I’m going to be CEO, this is probably the place to be.
JH: That’s pretty deep. I’m curious to know what your take is on what is unique about Fabric, which to me at the high level is that it’s headless commerce. It’s not something that is tied specifically to a platform. Whereas Amazon marketplace requires Amazon, and Shopify, at least not Shopify Plus, requires the hosted platform. WooCommerce requires WordPress. What is it about headless commerce and how Fabric is approaching that that is unique and different, and you think sets you apart?
FM: Yeah. I guess I’ll break it down to a few things. I’ll let Ryan talk more to the headless part because that’s pretty obvious, the thesis of this on Ryan’s vision of how he came about to thinking of what to address first between building the headless CMS, and then this suite of APIs. I would say there’s a couple of differentiating factors with us.
We can build … Many people can build headless commerce. There’s no unique IP there. And it’s understood that it is the path forward. What differentiates us is a couple of things. Number one, the management team has over 50 years of ecommerce experience. And it’s one thing to go with a platform, it’s another thing to go with a partner. And having built over a dozen businesses from zero to in the billions of dollars for every single one, and having built brands on the internet such as Amazon Basics from scratch, and built reverse logistics, and being COO at Google for Wing, Project Wing, I think the amount of use cases that you can throw at our team about what’s wrong with your ecommerce business, I would probably say 99% of those use cases between our team we can solve for you. Because we’ve been there, done that, seen it.
If you look at our other companies that are doing this, they’re either, from a headless perspective, very attached to Shopify, or the team doesn’t have that level of general management experience where they’ve built businesses from scratch, such as the ones that I did at least, and products that Ryan ran, where we took it to scale and beyond. And having worked through an omni-channel multi-channel complex environment of technical debt, I think we bring something to the table that’s very unique to us, which is a team that understands how to run a business. You can’t say that for a lot of other companies out there selling the same software, because they have been in either technology teams or sales. Not general managers.
So you tell me you have a skew. We can walk through the permutations of how to promo it, how to liquidate it, how to do collect freight, how to do damage allowance. Walk through any part of the co-op funding. I can help you understand what’s the right way to do it, based on your circumstances. I think that partnership and what we have stood up as a pro serve division inside of Fabric called FDS, it’s our Fabric Digital Services arm, where we help B2B companies that don’t have a mature product management function seriously on board Fabric as a platform, but provide that product management as a service and solutions architecture. I don’t know of other people who can do that, or have that capability. And I think it’s the combination of the team, the services layer, and the platform and the experience that really sets us apart from anything else out there. I know that’s long winded, but that’s my thinking on that.
JH: Yeah. Ryan, what’s your take?
RB: Yeah, Faisal talked about the general management part, which is, I think, a huge differentiator. And then you couple it with our product and platform background. And so if you could see me, I’m doing a bunch of air quotes. I was early in ecommerce, before people even understood what ecommerce would be or become. I had background as an early cloud computing product manager, again in air quotes, when people couldn’t explain what the cloud was. And so we’ve kind of been on the forefront of platform evolution and platform change. And Jon, what I saw on the platform side was the internet of the platform itself is a world changing multi-generational kind of thing in our lives and it touches every part of our life. And what had been missing to date was the commerce layer, which is shocking to me. So if you think of Amazon Web Services or Microsoft Azure, they built services like compute and storage and networking, the underpinnings of software. And then you can build anything on top of it. You can build Netflix on top of it, right? Who can dream that up, a streaming service and you can build anything else on top of it. Well, no one had done that for commerce. And so that’s really ultimately where I think Fabric goes is becoming the commerce layer of the internet.
And another good analogy to this, Jon, is I’ll take Stripe as a good example. Stripe has done a tremendous job solving for payments. So you as a developer can simply add Stripe to your application or your user experience and you can take payments, and they’ve solved for all that complexity, but there’s still lots of nouns and verbs in commerce that have no equivalent as an internet service. So content, product, inventory, pricing, promotions, orders, all the basics of commerce never were built out as commerce services for the internet. And so that’s what Fabric’s doing foundationally so we kind of think from first principles there. And then we build up to applications and then you can imagine it becoming a full platform or suite for a company.
So just taking those two things, hey, we’ve been there and done that from a general management perspective and seeing every use case. In addition, you add on the kind of engineering and platform firepower, then I think that’s a pretty good combination to build a scale platform over.
JH: Yeah. Just listening to both of your descriptions actually makes that Substack article make even more sense to me now as far as, Faisal, what you were trying to get across. And it kind of leads me to thinking about Shopify Plus or other services that are trying to go this direction. And what I heard was that they’re trying to do something from the tech world and something they’d been able to automate easily for say, small businesses, and go into an area that is much more complex in every aspect. And I think what I’m hearing is that that’s going to be really difficult for them to succeed in doing that, especially because they don’t have the 50 years of experience type of thing that was mentioned earlier. But with that being said, I think that’s pretty clear as far as how you feel about that.
But one of the things, Faisal, that I heard you talking about were we can do this, we can do that, we understand where you’re coming from, but that does sound very service heavy to me. You know what I mean? As in, it’s not software, it’s also going to take human beings who are going to solve these problems with you and that type of thing. Do you foresee or are you already there to some extent where the software will handle the type of things that you were describing?
FM: Yeah. I guess first of all, when you enter the B2B landscape, you can’t avoid the service component and if you do, you’re going to lose. You can provide platform for these companies that are billions of dollars and run large external sales teams and internal sales teams, but have never really dabbled in running their own commerce online with the team internally. Think about walking into a multi-billion dollar B2B company that has one IT guy and everything outsourced to some international location and running on some old school stack with no real understanding of customer experience, how to sell online and standing up a store that’s actually going to generate in the future, probably 50% of their business. So we see this as a massive gap in the market for who actually gets to sell to them.
The advantage we have is we have a network of SIs that work with us, systems integrators, that provide a lot of this outside of what we do. So it’s really a hybrid approach right now where as we grow the company, completely divorcing ourselves from their day-to-day issues on how to manage the product is not valuable, right? If you look at AWS, how they got everybody on board, they had a whole ProServe arm to do that. You only hear about AWS the platform, you never hear about the professional services revenue. The solutions architecture part is actually very critical because you’re walking into highly customized software that has technical debt for decades. You can’t solve that by just providing a platform and say, here’s our platform, thank you. It just doesn’t work.
JH: Yeah, it makes sense. I actually learned that the hard way myself. Several years ago, I had a digital marketing app that agencies used and we kind of early on, we were serving SMBs, but we kind of wanted that enterprise money. And so we made a play for enterprise and boy, that was a wake up call as far as the amount of effort and time and touch that that was involved. And what I learned from it was it’s really hard to do both. There was no reason why we couldn’t have shifted into just doing an enterprise and been very successful at that. We tried to do both and it’s funny because even going back to the Shopify sort of analogy, I guess, our approach is more Shopify-ish, where we were doing SMB, self-serve, that type of thing.
And achieving the needs that our enterprise customers had was pretty much impossible without having human beings with experience who knew how to solve very specific problems that they had.
FM: Yeah. And you’re actually calling out Shopify’s Achilles heel. For Shopify to turn this Titanic around in a positive way, it’s a huge shift they’re coasting on with great revenues. And all of a sudden go from selling at the SMB level to enterprise, it’s not a self-serve quote, unquote. There’s no such thing. We will build it and they will come, that’s complete BS. It doesn’t work like that when it comes to B2B. Like your experience, it’s going to require a choice. Are you mid-market enterprise? Are you SMB? Because you can’t be both. We have made a choice, a deliberate choice that Shopify Plus is our on-ramp. We do not touch anybody below that. We don’t want to. We have no desire to because that is not our wheelhouse. And by the time you are thinking headless, you need to be doing 10, 15 million.
Otherwise, you’re really better off on Shopify and it’s a perfect platform for you. But if you’re going to deal with large scale enterprises where commerce cloud and ATG and SAP live, there’s no way you can avoid getting systems integrators third parties involved in the human part of the equation. We believe product management is still a very new concept. It’s nascent in these legacy organizations that they don’t really understand the difference between product and project. And it is important, it is our duty to make sure, and it would be highly responsible for us to think that here’s our platform, go figure it out. Those implementations will fail. So we believe that in the early years, it’s going to be a critical sort of core competency for us to provide that similar to what AWS did, and now GCP does too.
And we don’t believe that that’s not a creative to our overall vision and ethos of what Fabric does. But longer-term as these companies mature, there’s less need for that and we become a more robust hardened platform where they just come in and use the platform versus anything else.
RB: Yeah. Jon, I think that’s a great kind of insight as well. People talk about Shopify and its growth, but meanwhile, they still have a very small market share of the small business market. WooCommerce, which is a plugin for WordPress has the largest majority of market share. And so there’s lots of work to be done to kind of transition or win that small business space and that’s why we see a lot of companies focus there. Meanwhile, as you scale as a company to a mid-market business, those tools don’t fit for you. WordPress is a great tool, but it’s a generalist tool as well to publish content. You have to start to become way more specialized in terms of capabilities around the brand experience. So if you think about a company that’s growing into a mid-market or is an established business, you have to become a brand.
People have to think of you as a destination and you have to build up that brand equity, which means your experience has to be differentiated. You can’t be like everybody else. You can’t have the same products and you can’t have the same experience. You have to be different and that’s what makes you a brand. And so those kinds of tools, I think, are the ones that we’re building out as well, which you can use any tool. You can use WordPress and make it work with a whole heck of a lot of effort if you want to push it into the kind of scale businesses.
JH: So with headless commerce, sort of the promise of it is obviously you’re doing on a big scale, enterprise scale. The promise of it is that you aren’t limited in your channels per se. You aren’t limited in the way that you can sell or sort of have a transaction. And I haven’t spent much time with this. My expertise and experience is mainly SEO and that kind of thing. I haven’t done a whole lot in big ecommerce. And so I think a lot of my listeners are probably in that realm too. And so I would love for you to just provide the people who are listening some examples of the really neat things you can do with headless commerce. I mean, from this idea around micro-services and the different… I think of ways where, oh, I can take your API and use Swift to build an iOS app for whatever store. What are some things that are pretty neat that you can do?
RB: Jon, I’d say there’s a couple of angles to that. The first is just taking modular pieces of software and being able to recombine them in different ways. So if you’re a company, I don’t know, like a game developer, if you think of a game developer, they want to have in app purchases and micro-purchases. Those are all concepts. Commerce concepts, you need a product, you need inventory, you need pricing, you need promotions, you need a cart, you need payments. And so if you take headless approach, then you’re just combining those APIs and you’re building that experience in a unique way. And so that’s one of thinking about headless is you can get the best of the capabilities and recombine them, just very similar to how I think of the big cloud platforms as well, where again, you’re taking compute and storage and networking and building something over the top of it.
The second thing is really around scaling to different channels as well. So today, how does commerce happen? Well, that happens in retail stores and there’s a digital component to that. It’s growing obviously this year with COVID as an accelerant in ecommerce, what’s known as ecommerce, where you go log on to a website and you make a purchase. But the question is, where’s that going? What’s the end points where people shop and how do they shop? Those are going to change over time, and Jon, I don’t know how they’re going to change. I just know that-
JH: That was going to be my next and last question, but go ahead.
RB: Yeah. I don’t know how it’s going to change and what it’s going to look like, the form factors of shopping or procuring or discovering products, but you know customer experience always changes, and so as you think about that, we did some early work at staples around voice reordering in an office because it’s friction to go to a website to place a replenishable order, and I think you’ll see the rise of social shopping happen as well, and so those end points, you have to be able to plug in your commerce capabilities to meet the customer, wherever experience that they want to be at. So that’s really what headless commerce is about is if you break it down into a set of services and APIs, then you can recombine it into whatever experience makes sense for that customer in that channel.
JH: So even though you just said you wouldn’t answer it, maybe Faisal will. What do you expect from the future of ecommerce, three, five years out? Where do you see things going? A and you could even kind of say, this is why I think Fabric is positioned well for that, because it sounds like it is, but what is the future of ecommerce? Where is the puck going? What should people be thinking about?
RB: Well, let me start and then Faisal I think can add the more interesting bits, I’ve been in ecommerce for the last 20 years, and every year, it’s growing up and to the right, and so a simple prediction is digital commerce will continue to grow. It’s a shocking kind of statistic, much like payments. I mean, if you look at how money flows around the world today, still 85% of money exchange is paper money, so digital is still a very small part of just payments in general, but the same with commerce. It’s grown in the most connected nation in the world, to the US, to over 20% this year, but that still means 80% is not digitized. So I think, Jon, you’ll see that trend continue, and that would continue for the rest of my lifetime where it’ll continue to grow, and so I think just being in the market of enabling that is exciting for me. I know there’s probably more straightforward predictions and interesting ones that Faisal can provide.
FM: Yeah. I think your question is, as it pertains to Fabric or in general? Because I have a few-
JH: In general, in general.
FM: Yeah. In general, look, I think that ecommerce, up and to the right, agree with Ryan. It’s going to keep growing. Nobody wants higher prices, slower delivery and more friction. Everybody wants more selection, lower prices, faster delivery, and don’t want to move from their house, they want it all delivered, so those fundamentals don’t change. What is going to be different is the mode of receiving that order. I mean, I worked at Wing, I can tell you that drone delivery is not applicable for urban locations and it probably won’t be for a long time period, but typically, suburbia has always suffered when it comes to, you know, ideal, legitimate services, right? Urban locations always get the instantaneous gratification versus suburb and rural don’t really get the same level of whether it’s food delivery, product delivery or any other kind of delivery, it’s always slow. So you’ll see delivery modes come in, such as drones or others.
Second is just the influx of packages and how people consume ecommerce, and Amazon used to have a program years ago called Amazon Tote, which was, they would not bring the box to you. All the products will come in a tote, so you don’t now just collect and carry it all the time. I think when ecommerce becomes bigger than 20, 25%, at some point, receiving these large boxes just becomes a huge problem. So you’re going to see trends that are going to emerge and lots of new businesses are going to spawn out of that. And commerce is here to stay, the key question is there were predictions earlier about voice commerce and others that have just kind of failed and haven’t really gone anywhere due to privacy issues or others.
The one thing, it’s very clear, B2B commerce is going to explode, and they’re still sitting on some draconian, 1.0 version of their website. And outside sales is going to change dramatically to digital sales, and so those thousands of salespeople in a company that’s a couple of billion dollars, you don’t really need those people doing that. They could be doing much more productive work than just trying to make sales over phone calls. So where does that all go? We think that B2B commerce is going to be a gigantic opportunity, and from the numbers I’ve seen, it’s probably bigger if not the same size as B2C. So I see a lot of opportunity there, but you’ll see a lot of innovation in robotics, last mile delivery, the form in which you received the packages, and more and more omni channel blurring the lines with online.
And the early days of ship from store are failing and there has to be a model that works better, and you’ll see a lot of pure play ecommerce retailers opening stores. You’ll see more of that because the economics are just upside down. If you’re just an online player shipping stuff that’s heavy and bulky, so having that physical presence is not a bad thing, and you’re going to see it across the board. It won’t be just commerce for products. You’ll see it in food and you’ll see it in other categories pretty significantly.
JH : Yeah. It’s interesting to see Walmart go the route of Amazon, where it’s always been physical stores and to then see Amazon go the other way, and even leverage things like whole foods and having their locker boxes and stuff like that.
FM: Yeah. Just one thing to note on there is that there’s winners and there’s losers in this space, as far as who’s going to be the winner and who’s going to be loser, and I feel like the companies that are going to do well here. Of course, Shopify is going to do really well, Amazon’s probably going to do really well too, but the ones that are just always chasing and not really leading from the front in innovation and they never have aren’t going to remain the eBays of the world, just surviving on a thread somehow, with the old platform. And part of the reason is just the talent. If you can’t attract the talent, you’re not going to build a great product, and Walmart has similar issues. So we believe that we want to be on the right side of that equation, building out a top notch team, so we’re very excited about this.
JH: Yeah. From everything we’ve talked about, it sounds like Fabric is really well positioned to be the facilitator of that. In other words, Amazon going to do Amazon and Shopify is going to do Shopify, but all of the other businesses who have very large commerce needs, we may end up seeing them being able to do that because of what Fabric is building and also providing from that hybrid model.
FM: Yeah. And you know it’s funny, we didn’t even talk about pricing and costs and things like that, but just these legacy providers, it’s absurd the amount of money that these companies have spent in re-platforming, and we find that word to be a really bad word because we don’t believe in re-platforming at all. We are very modular and our approach. It’s absurd that there’s no competition in it either, and the last thing I would say, Shopify doesn’t have to lose for Fabric to win. The landscape is so enormous that you can add another five parties to this equation, or 10 or 20, and there’s enough there for everybody to stay extremely busy and build very big businesses.
So we’re excited about the fact that we’re leveling the playing field for a lot of these retailers who have old, stodgy tools that don’t really have the workflows that you need to really build a great product and experiences online, and we also want them to bring all of their best tools to their merchants and marketers so they’re not bringing a knife to a gunfight. And they can compete with all the right competitors out there, and and that’s why we’re excited that we’re building the right team.
JH: Well, with that Faisal and Ryan, thank you for taking the time to talk about this headless commerce and what Fabric is doing, and the whole landscape of everything and where it’s going. I really appreciate it.