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EPISODE 4

The Fathers of Modern eCommerce with Roy Rubin and Yoav Kutner

Full Transcript

Jary Carter: Welcome everybody to Digitizing B2B. I’m Jary Carter and welcome to this very special live podcast recording today. I’m really excited to have two very distinguished guests here with me, Roy Rubin and Yoav Kutner, both the co-founders of Magento. And really excited to talk with them here today. Roy and Yoav, welcome!

Yoav Kutner: Thank you.

Roy Rubin: Thank you Jary. That was good to join the team again.

Yoav Kutner: We never left. We never broke the team up.

Jary Carter: All right. So as we get started here today, I want to jump right in and get you two talking. I’ve been with both of you at a lot of different events and in a lot of different places. And one of the most common questions that we get is for people that ask to tell us about your background. How did you two meet? Tell us about the early days.

Yoav Kutner: Roy, I’ll let you start and then I’ll just correct all the mistakes you’ve done.

Roy Rubin: I was fortunate enough to meet Yoav through a mutual friend. I think we both at the time went to UCLA, and we had a friend that said that we should talk, and we did that. Yoav joined what was then iRubin Consulting, which is a company before Varien even. Varien was the company that Magento was really developed out of. But before that, there was another company that I was running while I was a student at UCLA, and it was a web development company. This is in the early 2000s, so almost 20 years ago- hard to believe. Yeah, we started then. I think back then, I was fortunate to really stumble across osCommerce back in the day.

Roy Rubin: And that was really what I think gave me and the team and Yoav, who joined very early on, I think the understanding of what eCommerce meant and how much opportunity there was to build, not only a business, but also certainly serve customers and merchants and understand where we can add value along the way. As time progressed, Yoav and I really understood there was an opportunity to build something more sophisticated, more advanced. I think we also matured as a company and really understood that our user base, our merchants really had a different set of needs and expectations from not only an eCommerce vendor but form the core technology as well.

Roy Rubin: So as we continued to really hone in as a company and really move up market and work with larger and larger of a customer base, we started to think about what the new generation of a platform would look like. And that was the beginnings of Magento. Yoav really took hold of that and ran away with it and developed what turned out to be a very popular and successful product.

Yoav Kutner: So this is the book version, and a really good one. But some of the backstories behind that I think are also colorful. So yes, me and Roy we were introduced by a mutual friend. And my first reaction was, “Well, I don’t want to do web.” So that was the first, I think interaction we had. The second interaction, I ran into class late because I had an exam and I was running late. And I sat down, I look to my right and I see Roy, he’s sitting there. And I’m like, “What are you doing here? It’s a computer science class.” He’s like, “No, you’re in my class.” So then we started talking again, and eventually we really decided to work together, which everything else that Roy talked about is true.

Yoav Kutner: I think yes, I think a lot of the experience we’ve developed working with companies, especially in the early, I’ll say early days of the B2C eCommerce world, taught us a lot about how merchants were approaching this new category that was existing on the market, which was more and more sellers were starting to sell online. There was brands that had to go online. There was companies that had no idea how to start selling on the online channel. And we were there learning early on how companies tackle that and what they need to be successful. I think a lot has changed since then, but that is really how we started learning. And the experience we had working with so many companies with different industries, different needs that they had, really established everything we learned that needed to be in the Magento product later on.

Yoav Kutner: So I think that was extremely useful to start as a services company, learn from companies how they need and what they need to build the right product for them.

Jary Carter: I heard both of you draw out the idea of like starting from a services’ company, really having customers pull you into product. What are your thoughts on that, Roy? Do you see companies coming out, product companies coming out of services businesses having an advantage in that space?

Roy Rubin: I think so. It’s always, I think, useful to have a very strong customer perspective, and I think that’s what we learned over the years. We were in business for at least… we started in 2001 and Magento was really developed in its more intense phases around 2007. So six years of really honing in and working with what was then hundreds of accounts at the time, understanding the pain points, seeing the technology cycle go through a few cycles of just innovation. I think it gave us a lot of insight. I think it would have been very difficult for us to develop Magento without having that really deep customer understanding and really understanding where the market was going, where the pain points were, what they were looking to really address in their needs and their project.

Roy Rubin: I think it would have been very difficult for us to develop a product like Magento without having that deep experience that we’d developed over that period of time.

Yoav Kutner: It definitely helps when you work on real life problems and solve them to learn what is actually needed. So instead of guessing and speculating about the market and just building a product that you have no idea if people are going to use or not, the services side of it gives you an insight into what really is needed. And when you solve the same problem over and over again, you say, “Okay, if that’s such a common problem that companies need to solve, that goes into the core product of what we build and everything else can stay as customization,” and you really learn.

Yoav Kutner: So being on the services front, you really have your ear on the rail track and you hear what’s coming, you hear what people need, and that really helps build a better product for a general purpose use.

Jary Carter: Yoav, you’re on venture round two in founder role, and still in the early days. Could you just maybe for the audience just compare and contrast the two ventures a little bit and your experience?

Yoav Kutner: Yeah, it’s interesting actually because I think when Roy and I started and the company started, I don’t think we had the vision for the company will be. I think we were working in creating a really good business, and Roy was leading a very successful business at that. And then we pivoted towards a product company. So I think we were really seeing opportunity and capturing it and going after it in a very kind of opportunistic way. We were figuring it out. The second time when you have the full cycle of a company and you see what can happen, you have a different vision, of course, you have a different mindset about what do you want to build.

Yoav Kutner: I’ll say we learned a lot of things that we did at Magento and at Varien and with iRubin even before. So starting the company for the second time, you have a list of stuff, you say, “Well, we won’t do the same mistakes and we learn from that, and that’s a good thing. I think what we did learn is that we just create new mistakes.” So you still have the same mentality of rolling with the punches. We are a very small company still compared to corporations that we worked with after we sold Magento. So we’re still nimble, we still fast. We still listen to the market and adapt to that.

Yoav Kutner: We actually used what we learned at iRubin and then Varien, etc. And we do have a services arm. We do still work with companies directly. We spent the time working with companies when we started this actually doing Magento implementations. We really had an insight to how the market works and operates today from a different standpoint: not as the company behind Magento, but as a service provider to the ecosystem. So we really used that. I think on the VC side or on getting your brand out, it’s much easier, I’ll say that, because people know you, and that’s a big plus. No doubt about that. I think having that helped.

Yoav Kutner: But on the other hand, set expectations. The expectations were high. “These are the guys that build Magento, what are they going to do next?” So there’s good and bad for these things, and I think we really benefited from that. And I can struggle than some other fronts, but I think having this thing under your belt is something that really helps to start you off at a better point than you would just from scratch. We do really have some set of things that helped us get faster on the ground. Oro was created, and within about five weeks we were profitable. We were able to save enough money to start our own product line. So we learned that from the beginning.

Yoav Kutner: And like I said, the good things we learned and we used, the bad things we learned, then we changed, and then just created a new set of problems for us to deal with. So I think what we brought with us is the idea of having the same team working together, learning how to accept the punches as they come and deal with them and just take this attitude, and build a new company. It’s always great to see this happening, I think.

Jary Carter: That’s a great answer. Really interesting. Any perspective you want to share on top of that before we move them into some of the trends, market trends, Roy?

Yoav Kutner: Yeah. I think Yoav really did a good job in addressing it. Look, the bottom line is I don’t think there’s a template or there’s a boiler plate for how to get it done right. I think that when Magento was started, this was 2007, 2008, the market looked very, very different. We were at the verge and then the collapse of the economy. It all came down. We went on a path that was handed to us, and it turned out to work out, everything really. We were fortunate and lucky and somehow survived, I think, the early stages at least. And then certainly we were able to capture the growth and continue to build on that.

Yoav Kutner: But I think Yoav made a very good point to say, look, there’s always going to be challenges as there’s always going to be opportunities, I think, within any company. And the experience certainly helps. But I think there’s always new things to learn and to address and to grow from. I’ve been involved with Oro, but certainly with a number of other companies over the years since I’ve left Magento, and it never looks the same. And there’s always a unique and interesting challenges that continue to keep you up at night and continued to be exciting, honestly. That’s why the sport is so fun, and that’s why we’re all playing and it because it really keeps us on our toes and keeps us an engaged and involved and always challenged.

Jary Carter: It is a fun sport! All right. Thanks for sharing the background, what you two are up to. I want to fast forward now to 2019 because a lot of the folks that are on this call are really tracking B2B trends. For you two, what are the practical B2B trends that you think we’re going to see in 2019 and over the next handful of years?

Yoav Kutner: Sure. I think, so focusing on the of the B2B market, that’s where we are today. I think we are seeing more and more companies going online, identifying that they have to rethink how they are doing business, how they interact with customers. The medium of web that maybe it was so foreign for them for so long has to be one of their main investment today to stay on top of what’s going on today in the world. So again, we have all the stats that we mentioned over and over again, like for example, that we have like 94% of buyers, B2B buyers, starting everything online, so everything they do.

Yoav Kutner: And this is again, not something that should surprise anybody. I think today we definitely see that the world is evolving in the B2B space. We bring our habits that we have on our day to day lives to our workplace. That means that when we have to search for something or we have a new project we have to start buying for, we’ll go to the web first. We won’t necessarily look for the next conference or convention and the schedule at six months out and hope to meet some salespeople that will give us everything we need, we’ll go to the web today and start a search, start getting pricing, communication, start communication with new companies and new vendors we will work with.

Yoav Kutner: So the world is really evolving in the B2B space, again, unsurprisingly, because everything else we do in life evolved as well. So I think we are seeing a big push right now in the B2B space by companies that are very low tech compared to what we were familiar with in the B2C space, but that are making this real big transformation for their business and trying to understand how they will stay relevant with these new technologies. What that means for their sales team, what does it mean for their processes, their customers. What content do they need? A lot of the B2B catalog suffer from very low quality content- from imagery to descriptions, information. So having a lot of effort to do that as well.

Yoav Kutner: So I think there’s a lot of things that we’ve seen today that these merchants have to change on their thinking, on their approaches, and we are seeing this happening now more and more often. And it’s actually exciting because it does remind me a lot of what we were seeing, like Roy was saying, about 20 years in the B2C space where people were figuring it out. And I think that’s where I actually am very excited about being around this because it really gives us a chance to innovate. If we look at the B2C space, I think we’re running into where it is becoming a cookie cutter, a solution for everybody.

Yoav Kutner: Everybody’s asking for the same thing, everybody has the same list. And let’s be honest, whatever they see on Amazon, they want to have. But in the B2B, it’s not there yet. There’s no one solution that everybody’s striving to copy. Different industries that have complete different requirements. So we’re still seeing this place to innovate. We’re still seeing that in the B2B space, we have to custom tailor the application to their needs, and that I think is a big thing that we’re seeing in the B2B space today versus the B2C. So again, I’m very excited about being around this space right now and innovating towards that and helping companies go online for the first time.

Jary Carter: Great. Roy, what are you going to add to that?

Roy Rubin: There’s two or three things that I think from top of mind. I think one is, companies are looking to see operational efficiencies from any technology that they use. And I think that’s got to be at the very top. So the product, the technology really has to deliver on that and create an operational model for the business that creates a value add, and that’s something that’s absolutely key. The productivity has to be there. It has to be material to their business. Otherwise, it just doesn’t make sense and the projects tend to fail and it doesn’t really change the dynamics, I think at the bottom line for businesses.

Roy Rubin: So if the, if the operational efficiencies and sales efficiencies and productivity is there, that tends to be an important aspect, I think for any business. So now, assuming that’s there, I think the customer journey is also something that’s really critical because if you can create an experience, whether it’s a mobile experience, whether it’s a web experience, whatever the experiences may be, if you can create a model that creates, again, more efficiency on behalf of the customer, they have access to data, they have access to pricing as Yoav said, the catalog is fresh and updated and is available, those are all things that are really going to be key.

Roy Rubin: And if you create an environment and a model and a journey that really helps customers be more efficient in the way that they interact with the business, that’s certainly a big value add. And I think, again, that’s something that would be top of mind. And then maybe third, and that’s maybe more long-term, something that I’ve been thinking about for a long time, and that’s around the data driven commerce side of things. What does access to data do in terms of help merchant’s better price, better operationalize their inventory? How does artificial intelligence or machine learning play a role in all this? How can we use the data that we have as a business to better optimize the way that we handle our operations?

Roy Rubin: I think that that’s certainly something that is coming around over the years, and something that will be more material as time goes on.

Jary Carter: I heard you guys talking about the customer journey, customer experience. Where do things search and personalization fit into this? I didn’t really hear that from you, but maybe a little bit more from Yoav. Is that because that’s table stakes, getting search right, getting personalization right, this customer self-serve model. What’s your thoughts on this?

Roy Rubin: For me, I think search has to be table stakes. We’ve been talking about search for 10 years. It’s not something that’s new. It’s challenging. I completely understand the challenge involved with it. But it has to be something that is done right, and I think to be expected to be efficient and capable by now. We’ve all been trained by Amazon and others that we search for things, and Google. It just works; we don’t even think about search anymore. And I don’t think that should be any different in the way that we conduct business with our partners as well. Personalization I think does speak to what I mentioned terms of data.

Roy Rubin: Because it’s part of what a data driven model looks like, a data driven platform looks like. I think those two things are critical. And hopefully, search’s off the table by now. But I definitely respect and understand that it’s still challenging for many companies out there.

Yoav Kutner: And especially we see in the B2B search is so important. We are talking about sometimes catalogs that have millions of SKUs, products not finding what you need or not getting relevant search results for what you are actually looking for is going to be a key success for a B2B website. If a buyer comes to the website, can’t find what he’s looking for fast and efficiently, they are going to hit back and go back to Google and go through the second website on the list and search there. So I completely agree with Roy here. It has to be done right and efficient and it’s a key feature for a B2B website today.

Jary Carter: Yoav, you’re swimming in this like, I think you and I were in like three meetings in the last week where people are talking about this search and data modeling and getting search and their data right. Do you have like 30 seconds on that that like would be tools for a company somewhere that is trying to figure out how to get search right with hundreds of thousands if not millions of products in their catalog and not a huge business and not a huge team for this?

Yoav Kutner: Right. And that’s, and that’s always the challenge. I think. Again, like going back to the data in the B2B space is not as clean or as robust as we are getting used to seeing in the B2C space. I think that is definitely a challenge, and this is what’s going to differentiate companies. So unfortunately, there is no secret that we can share here and everybody’s going to become successful. There is an investment to put into cleaning up the data, adding data, creating good imagery, like I said, having the right attachments or if it’s a product data sheet, if it’s a description of the product, so having that right.

Yoav Kutner: You don’t have to look at a thousand products and say, “I have to do this overnight.” You can really start by learning what is the most used, viewed, searched products on your site and start there. And as you start, you’ll see the reaction and the success of that and you will continue investing in it. So I think a lot of times we’d come to companies and they say, “We can’t do this overnight. We can’t fix everything at one go.” And the answer is don’t. Just do the baby steps to get started. And we’ve seen companies that we’re investing in that and that’s actually what differentiates them from the competitors.

Yoav Kutner: That’s why people come over to them first because they know they can find, learn, search and actually find the products that they need in a much better way than their competitors. And that’s what’s going to differentiate, I think a lot of the B2B sites. So again, no magic bullet for this. You really have to invest in it. Unfortunately, if you’re in an industry where the product feed of the data feed that you’re getting is very basic, you’ll have to differentiate it and learn what your customers are searching for. So definitely, use a product that has the capabilities of giving you what are the top search terms, what results are coming up, who’s searching for what so you can actually segment the customer groups.

Yoav Kutner: So maybe you have servicing multiple industries as your buyers and you want to have the right data for every industry that you’re servicing because they might look for things differently. If it’s a like, you’re mentioning, we would just set a dentist supplier. A dentist will search for some of these tools that they’re buying, they’re different than doctors because there were selling things that both doctors and dentists need. So having this different approach, different search terms and showing the relevant results for that industry is again, key. So I think even in that industry, we were surprised that that’s needed. But I think that’s definitely something we have to address in this space and provide the right tools for people to have successful search implementations.

Jary Carter: Yeah, thanks for that. I want to shift gears and I want to lift us up a little bit. eCommerce generally. So let’s move out of B2B. Both of you are tracking trends in eCommerce generally, not just B2B. What are some of the eCommerce trends that you’re seeing? We’re hearing things like … And there’s always something, there’s always some passing fad. Some of them stick, some of them don’t, whether it’s Crypto payments or Blockchain. Roy, you talked about AI, which now is teetering between buzzword in reality for some companies. And I know in talking to you, you have a bit of a divergent view, you both. You have a divergent view of what trends are going to stick and what aren’t.

Jary Carter: Roy, I’m going to start with you. Tell us what trends you’re seeing and which ones matter and which ones don’t.

Roy Rubin: I think the biggest trend over the past, I would say maybe five years or maybe a little bit less, it’s really the direct to consumer model. You’ve seen a lot of really interesting brands emerge over this period of time that are able to scale and grow and really build a great business by going direct to consumer. And I think the natural progression of that is that some of these guys have actually started to open up their own retail establishments as well, so the online to offline model as well.

Jary Carter: Are you talking about, just to put a finer point, are you thinking like companies like Bonobos, Warby Parker, these types of folks, or is it somebody different?

Roy Rubin: Yeah. The Pelotons. You’ve got a number of them that have, a good, healthy number of them that have come out and build just great direct to consumer businesses. And that’s something that we haven’t seen, I would say, historically. That’s something that’s come of late. Warby Parker, for example, is one of the early ones that really did a spectacular job. So, that’s something that’s really interesting to look at, and to monitor and to see what’s going on there and at what can we learn from, from the success of these organizations. So that’s a huge trend and it’s, I think that’s really the, I think the biggest story of the last five years. Especially in a world of Amazon where everything’s commoditized, you don’t think twice before really shopping anywhere else.

Roy Rubin: Right? So how do you create a differentiated experience, a brand experience that can out compete Amazon. And I think these guys would fall in most part done a very good job in creating successful businesses. The second big thing over the years, and I think we’ll continue to see that that mature and progress is mobile. And I think the entrenchment of mobile has certainly come a long way over the years and it’s now really the paradigm that we’re all used to and working with and really transacting. So I think that’s something that’s going to continue to develop and be a lot more common over the years.

Roy Rubin: And when I say mobile, it’s not just about having a catalog and being able to shop online, it’s the whole experience end to end in which you can find a product quickly and efficiently, you can add it to your cart, and you can check out all within seconds. And I think the biggest shift has been certainly the checkout process as well. The ability to with Apple Pay and Google Pay and PayPal, other payment methods and that really work efficiently on mobile. They’ve really streamlined the experience where now it’s actually faster to the shop on mobile than it is online. So I think that’s a game changer and I think something that is certainly worth looking at in the B2C sector, but also in the B2B sector.

Roy Rubin: Because if we can create experiences in B2B, that parallel, the success of what we’ve seen in B2C, I think it becomes super interesting. And then the third thing is exactly what I talked about on the B2B side, which is how to stay to impact merchant experience, merchants business, and then the consumer experience as well, the personalization side. And I think those are all things that really make an impact. And I think things have progressed over the years and I think things will continue to be an important part of how merchants evolve their business long term.

Jary Carter: I’m just going to jump straight to you, Yoav, because I know you have some additions to this.

Yoav Kutner: Yeah. We did differ on some and we agree on many. I think just on the mobile side of it, I completely agree. Again, that’s something that we’re used to from our private lives, our mobile devices are everywhere and we’re using them. And when you come to work, it’s again, no difference. So we’ve done a really nice implementation with one of our clients. And most supply company that actually created this mobile app for the stores that are buying from them.

Yoav Kutner: So instead of going to a laptop or using an old, the scanner that they used to have to ship or, we learned from another customer, they used to ship these special barcodes that costed them 150 bucks, everybody has these mobile devices so they can just download an app, that’s purposely built for what they have to do and do it efficiently, like Roy said. And we’ve seen a huge success for that. Companies in the B2B space that invested in having purposely built app, help their customers use it, be more efficient and in turn, they love this supplier and a brand that they’re working with.

Yoav Kutner: And we’ll just use them more often because it’s easier than the competitor. Lowering the bar and having a better access and user experience for your customers in the B2B space is as important, and like Roy mentioned, mobile is definitely, it used to be the way to go and now it’s the default way, I think. And I think it’s very important not only to think of your customers in this set case, when we’re talking about B2B, we have to remember that there’s two sides. There’s the customers and the companies that you’re selling to, but this is your sales team, and they all are also on mobile devices.

Yoav Kutner: We really have to have both the front and the back office or the admin panel or where the actual sales teams are working, to be mobile optimized or have the ability to even create a purposely built mobile app for them to make them efficient. And again, you’ll just benefit from that as a B2B merchant because definitely your customers and your customer experience will be good, but your sales rep will like using the application as well. And the communication between the two sides is going to improve on that.

Yoav Kutner: On that front, I absolutely agree, we have to invest in mobile and really reinvent how we’re thinking about the B2B sales with mobile in mind. When it comes to AI, I think at least what we are seeing on the ground, unfortunately, again, going back to the data and how, the data is still not so clean, I think we’re unfortunately a few years behind the B2C space. So yes, definitely everybody wants it and everybody thinks that that’s the way to go. But when we actually come and talk to companies that are about five to 10 years behind of what’s going on in the B2C space, I think we should educate them on that.

Yoav Kutner: We should lead them on that, but I’m not going to put that as the highest item up there for them right now. I think it is about changing the customer experience for their customers and for their sales team before we start overwhelming them with the AI and artificial intelligence and machine learning, I think they’re still not there, but it’s coming. For sure, in the next couple of years, we will see more and more demands for this and more and more products that will be offered in the B2B specific space that involve AI and machine learning.

Jary Carter: So my final question, Yoav, you hit on this in the beginning, and this is the idea that in 2019, some companies specifically in B2B are just getting started, they’re just launching these digital initiatives.

Jary Carter: What advice do you two have for a company that really is just starting a digital initiative or has maybe done a little bit of online selling tactically, but is really just really now starting to make digital a big part of their strategy?

Yoav Kutner: Absolutely. I think again, if we start with the assumption that the B2B space is a bit behind the curve off the B2C, so we’re looking at 5 to 10 years behind, and again, I’ll share with you some of what we learned is, we’ve dealt with companies that don’t use email. We would send an email, they would print it out, put it on the desk of somebody that would write an answer back, give it by hand and give it to their secretary and they would type it into the email of the client then sends us via their response.

Yoav Kutner: I think again, a lot of times we are, we have to slowly bring them up to speed and start small. And it can be as simple as to just exposing a catalog, even not the full catalog but a catalog online, discussing the pricing strategy- how are we going to display price? Because a lot of B2B pricing is very complicated in terms of what you can expose, what is going against the channel, etc. So having some of these things in discussion. But if I even simplify it a bit more, I think we have to determine their MVP. What’s the product that will get them as the first step out there?

Yoav Kutner: And different companies have different needs, and their customers are asking for different things. And when we sit down with a company, a B2B merchant that wants to go online, a lot of times we’d just start the discussion with them and understand what are their current pain points. And we just met with a customer for example, and their biggest pain point is in their industry, customers want to filter by price, but bringing the price schema that they have right now, it was impossible.

Yoav Kutner: To solve that problem for them, will already cause more and more of their customers to use their website. Again, identifying what’s the real need, what’s the pain point that they’re having right now. If they have a website or if they’re trying to go with the wrong technology online or if they have nothing, and start there. Determining the MVP and starting small, not necessarily biting everything at one bite and choking in it, usually. Starting small steps, its iterative process and phased approach, and that will definitely make them successful.

Yoav Kutner: We have to have, and like I said in B2B, we have two sides to the equation, there’s the customers and there’s the sales team, and a lot of companies that we deal with have both, and we have to cater to both of them. In order for a B2B, and from addition, to be successful, definitely the customer experience has to be relevant and good and fast and efficient for the customer to use, that they’re not to pick up the phone and call the company. But on the other hand, we have to remember, we have also the sales team.

Yoav Kutner: Having both sides of the equation and implementation that actually takes both of them into account is key. I think from our customers, a big need is to identify who are the stakeholders and bring them to the table early on so we can actually build the product that works for how the companies are operating today and shifting that into the digital fun space. I think those are the definitely a big ones, and of course, getting feedback constantly, learning both from their customers and from your internal users, your sales team, your customer support team, etc. What they need, what will make them even more successful when doing this product.

Yoav Kutner: Again, if you keep this phased approach, building something for both sides or whoever is using actually the website in the company, and not forgetting that internal people need to use that, and the back office has to be working for them, and getting feedback early on so you can adjust and fix the problems. What’s causing people some aggravation with using the technology? I think those will be keys for success in the B2B implementation.

Jary Carter: Let me shift to some audience questions because we’ve got a queue here of questions coming up. The first one’s probably for you, Yoav, and it’s talking specifically about Oro commerce. It says, “Is the Oro commerce a strategy to leverage headless eCommerce, and to create an efficient mobile experience? Does Oro commerce plans and natively utilize PWA, which is Progressive Web Apps, GraphQL.

Yoav Kutner: Yes. Yes to both. And we’re actually in the process right now with the integrating with some of the PWA store front-ends. There’s definitely things that we are … GraphQL and PWA are things that we’re doing right now. We actually have already mobile implementation, headless implementations off OroCommerce. So we are working with some partners to have some PWA store fronts like I mentioned. And that’s something that’s definitely actively being worked on right now here during this year, and you’ll see a lot of this coming out in 2019.

Jary Carter: Yeah. Roy, I don’t know if you have anything to add on this idea of mobile apps versus progressive web apps versus mobile optimized experience or if it all matters, in your opinion.

Roy Rubin: Look, I think it all matters, I think the implementation of how you address the mobile as a retailer may be different depending on the types of clientele you have and types of goals that you’ve set for yourself. I don’t know if there’s a one size fits all. I don’t know if there is a one solution for every problem, but you got to look at the project and really identify what’s important to you and how you keep costs down to a reasonable model and sustainable one of course as well, and what your R&D budget and appetite is towards addressing the problem that you’re trying to solve.

Roy Rubin: It’s hard to answer that without understanding the real needs of the client in this case, but there’s great solutions and I think the market has continued to evolve and innovate, and there’s a lot to now think about and really implement depending on what it is you’re trying to solve.

Yoav Kutner: And I agree with Roy, I think this is key. Again, and I was joking about, but we’ve seen this trend come a few times in different technologies, Flex was definitely one of them. We actually invested in building a store front that was completely using Flex back in the day. That was actually our first product, if you think of it. We never released it, but that was definitely our first product. But the idea was that, again, the technology cannot necessarily dictate to the company what they need. As long as the solution works and works efficiently and does what it needs for the company, they won’t necessarily care if there’s no big benefit in them adopting new technology.

Yoav Kutner: And a lot of times, with new technologies, there’s a cost, there’s a risk, there’s things that you’re doing differently. And again, I know today a lot of these things are solved. But as an example, for when we were starting with these kinds of client side applications, we were losing a lot of SEO value, so we had to solve that back in the day. Today, there’s a lot of promises this is solved, but again, we’re still yet to see real huge implementations that are leveraging a lot of these technologies in a successful way.

Yoav Kutner: And second, just putting the investment on the other side, a lot of these technologies come with a promise of “You’re going to save a lot of time and money, but you have to invest a lot to upfront.” Again, having these two approaches is always something that needs to fit the customer needs, the budget, and not just run and adopt shiny technology. I think that’s not a good advice for a company to adopt just the newest and the shyness because they’re going to many times end up with a big bill to pay for that. Again, I think lead was the right solution rather than the newest solution, is the key here.

Roy Rubin: I think a goal driven development in project sort of philosophy is something that really can come a long way. I think a lot of people just try to shove things in and try to check the boxes and don’t take a step back oftentimes and say, “What are we trying to solve for? And what’s my strategy long term?” And I think that got to be the single most important part of the advice is: take a step back, think about your goals. What are you really trying to achieve? And then find the right technology to really plug in and deliver. But that’s something that’s really key towards a successful implementation.

Jary Carter: There was a question about that with AI. His question is, “Look, it seems if I’m going to do AI right, I’ve got to adopt software, that’s kind of expected to efficiently begin to do work within my organization and have AI. Do you see this as a must have or do you see this as people needing to adopt technologies or off-the-shelf AI software tools? Or are you seeing people build things in-house?”

Yoav Kutner: I think we’re seeing a more often than not … Again, in B2C, you have enough data, and I think the secrets questioning AI is always how much data do you have and what’s the quality of the data? And AI is improving constantly with working with smaller sets of data, that’s what they’re oversimplifying. What they do is optimizing to work with the least amount of data and result in the most accurate predictions or results that they are building for.

Yoav Kutner: Again, I don’t think that this is necessarily the first item that a B2B company has to think of, because a lot of times, especially in the B2B, you have a relationship with your customers and with many of them. So you know a lot of what they need in the day-to-day basis. And just putting back our services discussion that we had before, when you work with real customers and you’re solving the same problem over and over again, most likely, more people have these problems. So a lot of your customers will tell you what you need to build and what they’re looking for, and you can apply that across the board and open it up to new customers and new companies that you would work with.

Yoav Kutner: And if you solve this problem for a hundred of your customers, you might have a thousand more companies that are looking for or are suffering in the same way as your customers are. So I think before running and solving like in the B2C where we have faceless customers and we’re trying to solve to the right group and what products are bought with what products, etc., many times in B2B we have the answers already. So I think applying what we know first as phase one and using that as the base for what we’re building versus just going in and start building these complex AI tools and integrating them will definitely help.

Yoav Kutner: And I think should be the phase one before we run out and buy and integrate with all these tools. Again, just my thought and what we’ve seen on the market today.

Jary Carter: Great. Thanks for that. All right. Let’s talk about cloud versus on premise. How are you presenting or thinking about the agility versus security aspects specifically for a B2B company?

Yoav Kutner: I know Roy has a big view on cloud. I’ll let him start and then I’ll tell you what we’re doing here.

Roy Rubin: Look, I think that the cloud should be a big part of the company strategy. I think that’s, certainly where the future is. I think the economics have come there, I think their ability to scale and grow have come there, they’re certainly a security element to it. And I think some companies are very sensitive to that and others may not be as sensitive to it, but I would certainly recommend and urge companies to look at the cloud and really understand the value that it can drive to their business. And hopefully find any implementations that incorporates it to some extent if not, its entirety.

Yoav Kutner: And I completely agree. I think cloud is taking over and we’ve seen more and more companies are open to using a cloud environment to host their solutions as long as they’re secure, follow all the security standards, be SEC compliant. Then for some industry, there are other standards that they need to adhere to. And that’s key, if we have this basic thing, the next is innovation around the cloud. With cloud technology, we are able as the vendor to build an environment that will fit the product that we’re building versus what we’ve seen with on-prem, is where you have to struggle every time, how do I scale it? How do I run it? I need more teams to run it.

Yoav Kutner: As the vendor, we know our technology better than anyone else hopefully, and we can build an environment that does everything that you would expect for it and you don’t have to pay for it over and over again. So just from a price wise, I completely agree with Roy. I think the strategy we took here at Oro is again, just understanding that some of these companies are not as evolved yet or not ready necessarily to bring up older data out. We do provide and deploy any work kind of strategy so you can deploy into our cloud.

Yoav Kutner: You can deploy on-prem, you can use third party clouds if that’s where you already have relationships and the contracts with. So we support the full gamut of that. That said, we allow us to move from the cloud to on-prem, and then of course, on-prem to the cloud, which we’ve seen the big move right now. And I think having the ability to customize and hand touch anything that you need to is another key to success. Again, you can start simple, if you want the application to run almost as a one size fit all, it’s just a bunch of configuration, the cloud is there for you.

Yoav Kutner: But when you start becoming more mature and you understand more of what you need, then you want to start really going into deep customization. You want to choose a solution that will allow you to do that as well. And again, the cloud is there for you to support the infrastructure and not to prevent you from customizing the applications that you’re running. So that’s the approach we took, we allow our customers to run in different environments, different thoughts. And that, it should be the standard to them. And you should not be tied to a single technology to run your application, and that’s where we’re seeing it.

Yoav Kutner: If it’s price or if it’s security, and most often than not, we’re seeing the shift is to use the vendors purposely built cloud for the solution they’re built.

Jary Carter: All right! A couple more here because they just keep rolling in, you two. This is an industry question. What are your thoughts in marketplace for B2B? And then the second question’s probably more for you, Yoav, what’s Oro’s strategy to provide a solution for marketplace B2B business models.

Roy Rubin: This isn’t an area that I know too well, so Yoav, I’ll let you dig in on this one.

Yoav Kutner: Sure. Marketplaces and in specifically B2B marketplaces. Again, let me start actually from the B2C quickly. In B2C, we’ve seen this trend off augmenting your offering to your customers through third party vendors and sellers. And allowing your customers to have this user experience of interacting with you as the seller, the main company, and then providing these third party sellers to add to the products that they sell. Maybe it’s to drive better pricing, maybe it’s a better offering.

Yoav Kutner: In B2B, I think, again, like I said before, we are behind a bit on what’s going on in the B2C, but we are seeing this trend and there’s a big reason for B2B companies to have a marketplace. And it can start from something that we don’t think so much in the B2C world, but it’s actually services on top of the products that I sell as the manufacturer. So if I have a product that needs an installer, or it needs a professional to run it, we could offer you geographically located a service provider that uses our product, so when you rent it or purchase it, you also get the services in it.

Yoav Kutner: That’s one type of marketplace we’ve seen in B2B. The other one is again, pretty similar to the B2C, where you’re trying to augment your offering to your customers. And we’ve seen this from very, very big companies. Since they have the main products, I’ll say, or the main items that people are buying and they need another set of products just around it to run it, to maintain it, to install it or whatnot. Having a marketplace, will have them more stick to you as a customer, They’ll come to shop on your website because they know that they can buy the main parts that they need from you as the manufacturer, but then they can buy everything around that as well in one place, so they don’t have to go around the web and look for relationship.

Yoav Kutner: And again, if they’re already in B2B having an established relationship with you, they trust you, they know that you brought up quality merchants to the table and they will rely on your brand and security to purchase from them. We are seeing this trend in B2B and it’s growing. Mirakl is definitely a tool that we’ve actually partnered with and have an implementation in to works right now to work on. So we are seeing this trend and Mirakl also identified this kind of fare solution to build for B2B.

Yoav Kutner: Again, B2B comes with a set of different requirements when it comes to a marketplaces not like in B2C. I’ll just name a few of them quickly. For example, we need to have a bidding, so open bidding. A customer can come to the marketplace and ask for price from multiple vendors or from a single vendor. That’s something that needs to be built in. We should be able to geographically locate vendors because a lot of times that matters, where the items are coming from or who’s the service provider. So this is definitely something that we’re seeing.

Yoav Kutner: We just signed a big deal for an oil company in Brazil called BCG, that’s actually doing this huge marketplace around what they’re offering and having this deep marketplace. But we’ve seen so many different examples of this. Again, something very interesting, very exciting for us to build in the B2B space as well.

Jary Carter: I’m going to end on my final question for you two, which came up as we were talking here today. I think for a lot of companies, starting this digital journey is a lot like starting a business and a lot like really sort of launching a new business within an organization. There’s lots of pushback, there’s lots of startup risk and startup costs and those sorts of things. When you two, in the early days or maybe even the late days of Magento, you two have been entrepreneurs for a long time, both of you being in and around entrepreneurs.

Jary Carter: I’m going to leave this question pretty broad. One of the things that gets talked about in entrepreneurship is this idea of managing your own psychology. You don’t have somebody motivating you, you don’t have somebody pushing you, and if it fails or succeeds, it’s all on your back. And a lot of time that pressure can be really, really challenging for a founder. So I’m going to let you maybe talk about that in a way that would be productive for people. Maybe either just starting out at a business or getting this going for the first time. What’s the psychological element that you would share with somebody?

Yoav Kutner: I’ll just start by saying I was very lucky because Roy was pushing me and driving me the whole time. So I probably didn’t suffer from this problems as an entrepreneur, Roy definitely a one of the biggest drivers and set very high goals and expectations for our company. I think that was definitely one of the reasons Magento was successful, his leadership and having us all rise up to what we were capable. I think he demanded a lot from us and we did our best to match his expectations. So I think the leader is definitely important to have a successful company in this space.

Roy Rubin: Yoav is very kind. I think a leader without a great team doesn’t go far. I think, the team is as important. It’s a really good question, Jary, and I really need to think about it. It’s not something that I could probably be very intelligent about just off the cuff. And I wonder if to some extent, is it something that can be learned as far as the motivation and the entrepreneurial spirit? Or is it something that is just sort of inherent in how, is it genetic? Is it something that you just pick up as you, either at birth or you just pick it up as you grow up just being next to people that are entrepreneurs?

Roy Rubin: And I don’t know that I have an answer for it. I’m sure there’s great studies out there and scholars and academics that have studied this over the years. But to some extent, look, it takes a lot out of you, I’ll tell you that. It’s very lonely at the top. Even if you have the best team in the world and the best partners in the world, at the end of the day, you wrestle with the decisions. You lose a lot of sleep at night. You really self-doubt yourself all the time, even when certainly Magento and other things that I have been involved with have been successful, it never is easy, you just self-doubt yourself all the time.

Roy Rubin: And maybe it’s just for me, I don’t know- it’s a great question. I think that it’s very individual and something that takes a lot out of a person. And people deal with it to various degrees and circumstances and react differently. I know that at the end when I left Magento, I needed to just decompress because it took the life out of me. And that’s the way that I coped, I traveled for a while afterward and I just needed to disengage. But people can do this over and over again, and my hat’s off to them. I don’t know how they do it. They’re strong individuals with a lot of appetite, and I can only learn and embrace and continue to learn from those types of people.

Jary Carter: Well, I appreciate the candor and openness from you two. The reality is, people look back at Magento and other things that you both have been involved in, you sort of see it as just everything going up into the right. And I know being in it day to day, if it provides any comfort to those people that feel like it all comes easy, when you have a hit, it’s still really hard. You feel like you’re not going to be successful, you’re always looking around the corner at the next up-and-comer. And you both articulated that really well, that just because you’re in something that’s successful, it doesn’t always feel that way.

Roy Rubin: It it’s only successful in hindsight. At the time, you’re putting out fires every single day. You don’t even know what tomorrow’s going to bring. So it’s tough. It’s a tough business, it’s a tough sport, as I said before, but it’s gratifying and it’s fulfilling and it’s exciting. And you wake up every morning and there’s a lot of energy and your blood’s always running fast in your veins. It’s a lot of fun.

Jary Carter: Well, you two are the absolute best, you can’t make a match better than these two. Thank you so much for participating today. Roy, Yoav, thanks so much. I appreciate it guys!

Yoav Kutner: Thank you, Jary.

Roy Rubin: Thank you very much.

Jary Carter: All right.

Yoav Kutner: Bye, bye.

Roy Rubin: Cheers. Bye, bye.

 

 

**For more about the differences in designing your website for B2B vs B2C check out our blog.**

Key Points
  • In the B2B space different industries have different requirements, which leaves room for innovation in customized solutions.
  • What is the key feature for the best customer experience? Efficiency- B2B buyers want their experience to be as effortless as B2C as possible.
  • Yoav's advice: You can't fix everything overnight. Take the baby steps to address your company's pain points for digital transformation.
  • Roy's advice: Have a goal-driven philosophy for your digital development to identify the long-term goals you are aiming to achieve.
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