Latest / 1 to 100 / E37: SAAS Economics with Michael Alt

Transcript

E37: SAAS Economics with Michael Alt · 1 to 100

0:00
So you get a pretty good bump then from a usage revenue
0:03
standpoint then we do. Yeah, yeah, I have a friend that
0:08
has a usage based app. It was like 30% bump just from
0:13
usage in November. And in a weird way I was like, I
0:17
don't know if I would want that. It made me feel so good for like
0:20
30 days. And then it's just like, you're
0:21
just like waiting to not feel good again.
0:25
I get double me ahead and then it comes back down.
0:27
It's kind of a customer support nightmare too, right?
0:31
So there's lots of unexpected charges, which is just part of
0:36
having usage charges. People don't anticipate them and
0:40
they're like holy crap, like all these providers build me like
0:42
3X. Yeah, I remember I was using a,
0:45
what was it, Tolstoy. Great app and my bill climbed
0:50
over OK. I was like wait, this just does
0:53
videos on my side. This is way too expensive.
0:56
I I changed so fast, but I I didn't complain.
0:59
I was like, you know why? It's.
1:01
It's what it costs. But yeah, I changed very
1:03
quickly. That's interesting.
1:05
When I, when I took over stamped, one of the first things
1:08
I did was kill the usage charges.
1:10
I just feel like, like for certain things that make sense,
1:14
but what we're talking about, yeah, a, a software that
1:20
collects and shows reviews on your website.
1:22
I just didn't think that the idea of uses charges was good.
1:25
And my, my general philosophy and, and pricing as I don't want
1:29
my customers to think about the bill.
1:30
I just want them to pay it. The more they think about it,
1:35
the more conversation it has, the more they start thinking
1:38
about other options, all that kind of stuff.
1:39
I just want them to be so happy with it that if they ever do
1:42
look at the bill, they say that makes sense, but they're not
1:44
actually actively thinking about it.
1:47
How does stamped scale pricing? Currently it's order volume
1:51
based or sorry, I should I should clarify that I killed I I
1:57
didn't say that exactly right. I killed over its charges.
2:00
So you don't get charged extra if you go over your plan limit.
2:06
It just doesn't send it out And eventually like, we'll, we'll
2:09
waive it for people. Often times, like if somebody
2:11
has like a big Black Friday, for example, we're just going to
2:14
process that stuff for you. But if you start to like really
2:17
scale over time, then we're going to ask you to, to raise
2:22
your plan. But I still don't love that
2:25
model. I get it.
2:27
I understand why it exists. And right now, honestly, I just
2:32
don't have, that's not my biggest concern, that private
2:36
model, but eventually I want to completely reevaluate that as
2:38
well. It's a huge topic for us because
2:41
we're redoing our entire pricing model right now.
2:44
We're kind of in. The same model.
2:47
Yeah, we we also price based on order volume and like you said,
2:52
certain products it makes sense for to charge usage or based on,
2:58
you know, volume, but and you kind of have to be in that
3:00
infrastructure type category, which we are maybe less so for
3:04
reviews, I guess, right. But we do want to move it over
3:07
to more product tiers and slap pricing using the model doesn't
3:13
you know, it caused a lot of conflict.
3:15
And the other thing is that we're looking at scaling outside
3:17
of Shopify. And so when you're talking about
3:19
orders and then you go into lead Gen., how do you face that like
3:24
not really transferable? Yeah, it's also just like that.
3:27
I what I always found was that the difference between like
3:30
each, the difference between 2 Shopify stores can be like
3:32
drastically different, right? Like order volume on like
3:36
fitness equipment versus skin care is like get that orders
3:40
like worth so much more. But then it's also like, OK, are
3:43
you going to like, just like based on revenue?
3:45
And it's like, now I'm taking a piece of your business.
3:47
I mean, none of them are great. Like even we used to use this
3:53
search tool called Algolia in our app and it was like
3:56
incredible. It was like an incredible search
3:58
infrastructure. But like their, their pricing
4:01
model just like doesn't at all make sense for our business, you
4:05
know, And it's just like, oh, like, I wish you just had
4:08
something that like made sense for our use case because like
4:11
the product is great. It just like does like the
4:14
puzzle pieces don't fit together.
4:16
But I guess that also just comes down to like refining your ICP,
4:19
right? And it's just, again, we're
4:20
potentially just not even supposed to be a customer, but.
4:24
Pricing is always one of those things that you can't make
4:26
everybody happy. Yeah, that's impossible.
4:30
That's the thing that if you never built software, you don't
4:33
understand the challenge of pricing because it's like your
4:38
costs are, when you have a physical good, you can pretty
4:41
easily associate the cost. If you're ordering 1000 or
4:44
something, you can pretty easily associate the costs that are or
4:49
sorry, allocate the cost to that depending on what you need.
4:52
But when it comes to software, it's totally different and one
4:54
customer, the cost of servicing that customer is completely
4:57
different than than another customer, so.
5:01
And not always tangible. Correct.
5:04
Yeah, it's not always size of business.
5:05
So it can be just like the questions they have, the things
5:08
that they they need or want the dad, some customers bring you
5:13
benefits too, right. Like some of them will go out
5:15
and sing praises about your product and it's like, OK, well,
5:19
you we give that person something for free, but then
5:21
that doesn't feel fair to everybody else.
5:22
So it's just like this. It's it's a very challenging
5:25
topic for sure. What's top of mind for you guys
5:28
of like a software that you pay for in which you wish was 10
5:32
times cheaper versus something that you pay for that you're
5:34
like, I'd be willing to pay 10 times more?
5:36
You know, what's funny is I don't think that there's
5:39
anything that I buy that I have an opinion on their pricing.
5:44
I'm not just like saying that to be like wishful of how people
5:48
think about us. I literally don't like the
5:51
market is so good at creating options.
5:54
I don't think about it from a pricing point of view.
5:59
I'm just like, I just won't use you or I will use you.
6:03
You know, it's like not it's like oddly, I've I've actually
6:06
not thought that. But it's a factor.
6:08
I guess an example would be HubSpot.
6:11
You know, Hubspot's expensive, there's alternatives out there.
6:14
A lot of people are kind of locked into HubSpot and I can
6:18
see churn increasing for HubSpot over time if unless you know,
6:22
they managed to make themselves more defensible.
6:25
There are other options out there, right?
6:27
And increasingly more and more options that are just as well
6:30
integrated and then? Totally.
6:33
But. I think that's different from
6:35
saying like, hey, Jack, I, I was just going to ask you, but like
6:39
you would just look at the alternative like saying, Hey,
6:43
HubSpot, you should be cheaper. Is, is that how you, is that how
6:47
you think about that? Or is it just like, hey, I'm
6:50
going to look at audio? No, I just wish it was because
6:54
it's so expensive. Are you like in my Slack or
6:56
something? Because like, I'm going to turn
6:59
off of HubSpot onto Audio Monday.
7:01
No way. But isn't that good?
7:04
Yeah, but it's it's not a pricing thing.
7:05
It's a it's AI hate. I fucking hate HubSpot as a
7:09
product. It's but.
7:10
Dude, I think that's a good. Piece of software I've ever met
7:13
and you need 3 full time employees to get any value from
7:15
it. We're using this software.
7:18
I hate it. I hate HubSpot.
7:20
Dude, isn't that good. Like I yeah, I don't know.
7:24
I I. Mean it's not good because like
7:25
now I have to do the work to like get off of HubSpot and I
7:28
would thought when I and when I like initially got HubSpot, I'm
7:31
like, I'm like, OK, like I'm growing up I'm like getting the
7:34
thing that everyone says you're supposed to have and I, I I
7:37
despise every single product decision in that entire app like
7:48
despise and like at the beginning I was like, oh, I just
7:51
need to change the way that I think about it like this is
7:54
super powerful and then like a year later now I'm like, no
7:57
this, this sucks and I hate it and I mean OK, so here's so for
8:02
something I would pay 10 times more for and never look for an
8:05
alternative whisper flow. Oh yeah.
8:07
I think it's the most incredible app of all time.
8:10
So that's interesting manner. I don't think there's a single
8:14
thing that the cost of it doesn't matter to me, but the
8:17
things that I would pay significantly more for than I do
8:21
today are Slack, probably Notion, and Google Suite.
8:26
Everything else is a constant. Do we actually need this thing
8:30
or not? Even when it comes to like, like
8:33
we use a ton of AI, but even like the different AI models and
8:35
stuff, there's alternatives out there.
8:37
So we're not just locked into any given thing.
8:40
We're we're looking, you know, every six to 12 months at do we,
8:44
do we get a team subscription to open AI versus Anthropics, for
8:49
example? So doesn't really deal.
8:52
I just don't find that those types of decisions of like
8:55
payout like from a cost basis, like we, we, we subscribe to so
8:59
many tools like we're tool heavy, we just don't even care
9:03
like $200 in the grand scheme of it, even per employee, it
9:07
doesn't matter. Like if it helps them to save an
9:10
hour, let's go. We subscribe to every model, the
9:14
highest one that they can. Even if they don't use that, I
9:17
don't care. Switch them, you know, if you
9:19
like it, don't use it or if you don't like it, don't use it.
9:22
But same thing for most of what I will say, HubSpot does feel, I
9:26
wouldn't say the pricing is wrong.
9:28
The product is wrong for 2025 and going into 2026.
9:32
And so when you look at other tools that are more lightweight,
9:38
I just read something on Twitter and somebody was saying that
9:41
they switched from HubSpot marketing, which I think is the
9:44
biggest pain point in HubSpot. The marketing and the emails,
9:47
it's so freaking expensive. And so there's just a disconnect
9:50
there and the product doesn't really deliver what you want.
9:53
And so you can switch to something like loops or resend
9:56
or just, you know, basically any e-mail sender.
9:59
And the builders are getting so good and the AI is getting so
10:01
good that you can just AI generate an e-mail, put it in
10:04
there, make it transactional and blast it out to your list.
10:06
And you can build ACRM in cursor in like 2 weeks.
10:11
So I just don't see that. I mean, it's, it's not really a
10:15
pricing thing. It's just a mismatch between the
10:16
pricing product. Well, I was going to say, I
10:18
think like my general bias is similar to Michael's, which is
10:22
in a software company, 100% of your leverage is the people.
10:27
And it's just like hard to think about software's as a SAS
10:33
company, hard to think about a soft about software price when
10:36
that's where all of your leverage is like I got I think
10:43
that's I'm sure. That I'm very digital business
10:44
actually. Yeah, yeah.
10:47
Not just software, I'm sure. Ecom founder is saying.
10:49
Yeah, yes. Then it's.
10:52
Like our like the thinking ecom is like, I mean, we, we all
10:55
serve ecommerce businesses in some capacity, taking their
10:59
percentage of budget that goes towards software versus the
11:03
percentage of our budget that goes towards software.
11:05
It's this is one thing I tell people sometimes, like I
11:06
understand the pain of paying for software because that's like
11:10
it's a massive line item in my business.
11:12
Software is like I guarantee I'm spending more on software as a
11:16
percentage of my budget than than most e-commerce businesses
11:19
are, right? I think that's kind of an
11:20
interesting thing here. Like we, we also feel the pain
11:23
of bad software, bad pricing, all those kinds of things.
11:26
Because for you it's in your COGS and your OpEx.
11:29
So like, I mean the sort of like most obvious way that that's
11:33
true is that for an ECOM brand, their COGS is not software, it's
11:37
like plastic from wherever. But for us, our COGS and our
11:43
OpEx have software in them, so. I literally group those two
11:48
things together when I'm looking at like ways to save cost on
11:51
things. Those are like same bucket base.
11:55
Not not exactly, but like parts that are are fall into our
11:59
overlap between the two things. I honestly haven't ever spent
12:03
more than an hour looking at how to save money since since I've
12:06
been in business. Like it's just not a useful
12:09
exercise. I'm sure I'm probably wasting a
12:11
lot of money in the process, but it just feels like going this
12:16
feels like you're spending time going in the wrong directions.
12:19
Yeah. That's actually that's kind of a
12:22
fun topic because I do think when you are, when your business
12:25
is growing and whatever this, there's some sort of number that
12:29
you hit where the revenue growth is no longer enough by itself to
12:36
justify whatever profitability things you need to get.
12:38
And then you have to start looking at how does cost plan.
12:41
But that's it does feel like a different type of business
12:44
having done both of those in the last five years.
12:47
It's very different. Well, I think it's interesting
12:50
to think about like what is actually bad pricing, right?
12:52
And bad pricing is what your customers don't want to pay for
12:55
it, right. And you know, Jeremiah, you
12:57
brought up earlier, you know that e-commerce businesses get
13:00
to contextualize price with the cost of making that product and
13:04
delivering it to their customers.
13:06
But if you, there's just so many different ways to anchor price
13:10
in a way that doesn't really serve to perform the function of
13:13
what price is, it's to get, you know, your ICP to pay for it,
13:17
right? If you have pricing that I don't
13:19
know you have usage charges and that drives your ICP away, then
13:22
that's bad pricing, right? I think it's a super relevant
13:26
thing to spend time on. Like, super relevant, yeah.
13:30
I totally you're. Saying you're saving money.
13:32
Not it's not just saving money like you're also unlocking like
13:37
broader growth when you add new revenue.
13:39
So like it like I, I really have it right here like all this week
13:45
and I'm like kind of autistic about this stuff printed out.
13:48
It's like I also have like a weird thing.
13:50
I'm like super digital, but then like with money stuff, I need it
13:52
printed. I printed out all of our like
13:54
bank statements from like the last six months and like I was
13:58
like figuring out like we had a lot of profit this year.
14:01
So it's OK. I want to defer the tax on the
14:02
profit. So I was like, where can I
14:04
negotiate these contracts? And if there's some contracts
14:07
for infrastructure where I'm deferring whatever our marginal
14:10
tax rate's going to be on the cash that's in the bank right
14:13
now by another 12 months. And then while committing to
14:16
those and negotiating them, I'm saving on the list price and
14:19
then like getting discounts beyond that for commit
14:23
committing. And so like, therefore for the
14:25
next 12 months, my incremental cost to service a customer could
14:28
be on like large things like Cloudflare or Google Cloud for
14:31
us like 30% less. And so like in that case, I
14:35
could then spend 30% more to acquire a customer because it's
14:40
30% less to service them from like a infrastructure point of
14:43
view. So I think it's like a super
14:44
like really relevant thing to like spend time on is like.
14:48
I just want like one quick point, infrastructure.
14:49
I will say different bucket than tools.
14:52
Yeah, you're talking about like apps and widgets and stuff.
14:54
Yeah. Zach, the other thing I would
14:55
say about that point is just, I think this is where how your
14:59
business is capitalized matters a shit load to that decision
15:06
because exactly what you said, meaning that marginal dollar
15:10
would now get spent on growth. Just to say it out loud.
15:14
That's just not true for us. Like, and that is like the good
15:20
and the bad of like balance sheet basically or like couldn't
15:24
go raising money like if you have a large balance sheet.
15:27
And This is why I don't know if you guys listen to all these
15:29
like VC podcasts, Sadly, I listen to one or two of them,
15:34
but they're, they're like whole thing right now is do not pay
15:39
attention to gross margin. Like it's like pervading like
15:46
venture funded startup space, like in an, in, in ways that,
15:51
which is why like all these companies that are like the
15:54
companies that are 1° over the model, they basically have a
15:58
gross margin. That's like, I mean, it's worse
16:01
than than anything you've ever seen before.
16:03
It's like negative right in in many cases.
16:07
And and I think it's because like balance sheet versus
16:11
operating cash to fund the business actually creates a
16:18
pretty big distinction for how companies are being operated
16:22
today. So I think it's like a very
16:24
interesting question because it's there's like this non
16:29
trivial rift in, in how different companies need to
16:32
operate right now. Like let me say it to you
16:35
differently. If I said what you just said to
16:37
my board, I would get fired, right?
16:39
Which is like a crazy thing. Like it's, it's like 2 totally
16:41
different worlds. Yeah.
16:43
And yeah, it's a, there's got to be a limit to that though,
16:47
right? Like so you're saying don't
16:49
focus on gross margin, but there's going to be a point at
16:50
which you have to at least have some idea of what's possible in
16:54
your business from a gross margin standpoint.
16:56
Otherwise, why would you invest in that given that like let's
17:00
say there is no potential for the gross margins to ever make
17:03
sense down the line? But that's the jam is that
17:05
everyone's trying to get out before that reality reality ever
17:08
fucking gets realized, right? Like that's the truth, right?
17:13
Like you don't ever want to realize that.
17:15
Like the only time you ever need to realize that is if you IPO or
17:20
if you sell to private equity, which is probably an L anyway in
17:23
this in the case, right? So like, you'd actually never
17:25
want to realize that truth in most cases.
17:28
I agree. And from the from the VC
17:31
perspective, like there's, you know, you have to look at their
17:34
incentive model, right? Their incentive model is to make
17:36
people go big. There's nothing makes you
17:38
profitable. They don't really necessarily
17:40
care individually if the companies fail or succeed.
17:44
Now they're looking for breakout winners.
17:46
And so when you hear AVC promoting something like gross
17:50
margins or profitability doesn't matter, I mean, how much of that
17:52
is talking their own book? He's got to wonder, I think.
17:56
Well, it's also there's like it's like they might not be
17:58
there for that checkpoint. Like the whole thing is, is
18:01
checkpoints, right? And it's like, OK, like, I mean,
18:04
even if you IPO, you probably don't even need to justify gross
18:06
margin all that much. It's like 5 years after IPO.
18:09
Maybe you need to justify that. Yeah.
18:11
I mean, not, yeah, I, I, I just think that this like, like the
18:15
cost of serving the customer right now, like we can say, I
18:19
mean, first of all, Michael, it is 100% driven by people's own
18:23
personal incentives as it should be.
18:25
Like this is, I mean, I, I'm not here to defend that point of
18:29
view, right? I'm, I'm just saying it's, it's
18:31
true. And like it is leading to
18:34
operating differences like, and, and I think that's super
18:37
interesting, right? It's like it's just a super
18:40
interesting ecosystem that is like getting created as a
18:43
consequence of this. I think software cost is one
18:46
thing, but actually even even more interesting is like the
18:50
forward deployed engineer or the like the cost of serving
18:55
software right now serving software meaning like us serving
19:01
both between our software costs and our personnel costs is like
19:05
shifting massively and and it's creating like a very big rift in
19:09
two different types of operating models for companies.
19:12
So. Rishab, how do you think about
19:15
infrastructure costs? Because I know we, we're just,
19:17
we briefly are talking about software costs in terms of like
19:21
tooling. But infrastructure is an
19:23
interesting one because I think what oftentimes you see in, in
19:26
software is that like, let's say you go put pharma on AWS, you
19:33
can spend an infinite amount of money there, right?
19:36
Like just adding things. You have inefficient queries
19:39
that maybe, maybe somebody would have to sit down and spend a
19:41
week rewriting a query that could save you $10,000 a month.
19:45
Like that exists. There's opportunities like that
19:47
constantly and software and, and that's something that people
19:50
don't always understand too. So I'm curious how you think
19:52
about that in the context that you're at.
19:54
And like, is it just like there's, I could see a world in
19:57
which like you start out with this thing and then you wake up
20:00
1 morning and you have a $300,000 a month AWS bill and
20:03
you're like, well, this actually matters.
20:05
But like at what points do you start to care about things like
20:08
that? Or do you not ever care?
20:10
Like do you, do you guys never even go back to resolve those
20:12
things, types of things? Only if it's significantly more
20:14
than the cost of the person who would have to fix it.
20:18
Got it. That makes sense.
20:20
So basically if you can, if your investment in the the people and
20:26
time required to make that thing cost like it failed more than if
20:31
there's an ROI on that, then you will invest in that.
20:34
Over what time horizon? So I mean this just happened.
20:38
So like if we see it happen for two months then we will switch
20:47
priorities and then have the person work on resolving the
20:50
issue. Right, so there's a point where
20:53
there is. Yeah.
20:55
But even there just to say the words out loud, the way we then
20:58
execute on it is not actually ideally is not actually to have
21:01
one of our engineers do it. We then go hire someone else to
21:05
do it because the problem is the opportunity cost of our
21:08
engineers time is so high because it is revenue
21:12
correlated. But you can box the cost saving
21:17
problem and hire some external resource to solve that problem.
21:21
I. Mean that's an interesting way
21:22
to approach it. Yeah, it is really interesting.
21:24
I this has been on my mind a lot.
21:26
I'm I'm, I'm actively digging into this massive AWS bill that
21:30
we have and how to make things better.
21:31
So I spent, I spent a couple of hours the other day figuring out
21:36
exactly why our S3 charge specifically is $12,000 a month
21:41
more than it should be. And I found the core issue and
21:46
wrote it up and it'll take like 3 days for an engineer to do it.
21:48
So like that's something where I look at that.
21:50
I'm like, that is ROI positive. Like immediately, where we
21:54
literally have a new engineer starting that's going to be his
21:57
first project and he'll pay his, yeah, effectively pay for
22:01
himself and the first couple of weeks on the job.
22:03
Yeah, we, we had this. So there's, I'm not going to
22:06
name which software it is or which infrastructure it is, but
22:10
there's something that it, it is going to become half $1,000,000
22:14
a year next year. OK.
22:17
And instead but to solve the problem, we then went and hired
22:22
2 contractors to spend 3 months on it and paid them
22:26
significantly less than the half $1,000,000 minus what it's going
22:32
to cost on the new rails. But we did not change what our
22:38
internal people are doing. We're a little bit biased.
22:40
I mean, my background is in infrastructure and engineering,
22:43
so we're incredibly efficient. We spend a lot.
22:46
I will say we don't spend much time on tools and cutting costs.
22:50
We spend a lot of time cutting costs and infrastructures
22:52
because Jeremiah makes a good point and you can save 10K
22:57
pretty easily just by fixing something.
23:00
You can't really do that with a tool.
23:02
I mean, I guess you could, but then you lose out on the tool as
23:05
well. And so then you have to replace
23:07
it with another tool. So the cost of switching the
23:09
tool, if you like it is the opportunity cost is really not
23:13
their infrastructure. It is.
23:15
And we do, we do negotiate with AWS and cloud flare and, and the
23:20
good resources and things like that.
23:21
But there's, there's a lot of opportunity even switching your
23:24
infrastructure from one type of infrastructure to another, a
23:27
huge amount of especially as you scale.
23:30
It's, it's not super important in day one.
23:33
You know, I don't know, everybody's in a different place
23:35
in their business here. But you know, from day one, it's
23:37
like, build it, let's get it going, make some money.
23:40
And then you do get to a point where you say, oh, wait a
23:43
minute, this is getting out of control and we need a new plan
23:46
to figure out the next stage of growth because we just can't
23:49
sustain potentially on the on the infrastructure that was
23:52
created. It is wild how quickly that
23:55
stuff can get out of hand too. I mean, on the no side our, we
23:59
do invest a lot in infrastructure and efficiency
24:01
there. And my, my estimate is that the
24:05
code base that we had three years ago would cost us 10 times
24:10
what our current code base cost us to run because of all the,
24:13
the just little constant changes that are happening there to
24:18
scale down those costs. And, you know, adding indexes
24:20
and databases and rewriting queries and moving, you know, to
24:23
this reporting database structure as opposed to this
24:26
one, like all that kind of stuff, just it that has a
24:29
massive impact on our profitability and the type of
24:32
business that we're trying to run.
24:34
And it's actually the other thing that's interesting about
24:36
infrastructure costs is usually lower infrastructure costs, if
24:41
you're doing it right, leads to better performance for your
24:43
customers. It's they're actually, they go
24:46
hand in hand. And that's something I've been
24:48
really pushing with with our team at stamp to is like this is
24:52
actually like the high cost is indicative of poor performance.
24:57
And if you've fixed the costs in the right way, you fixed the
25:00
performance as well. It's also the only part of the
25:03
business that scales with your size.
25:06
More revenue, more infrastructure cost.
25:08
Like it doesn't. You know, even people cost only
25:10
scale uniformly, but your infrastructure tends to.
25:16
The other reason why it's important for us as well is
25:18
because our actual infrastructure cost doesn't OE
25:20
isn't directly correlated with customer growth.
25:23
It's heavily correlated with data collection.
25:27
And so we always consistently collect and store more data, but
25:32
that's regardless on whether more customers enter the picture
25:37
as well. And so like same thing for like
25:39
with us. Like if we had this original
25:42
code base, it would have you like in a day we would probably
25:46
run through like our our whole month's balance, you know,
25:49
balance sheet like it like it would be impossible.
25:51
So it didn't makes the product better.
25:54
It's like, OK, the more day that we can collect, the more
25:56
efficient we are on the storage and retrieval of the data like
26:01
the better the product is as well.
26:03
So it's what's interesting is that there was one of our
26:08
venture backed competitors who like tried to copy out like part
26:11
of our product and like I think part of the reason and they
26:14
ended up killing it. And I think part of the reason
26:15
why was because of this, like, fact that it did take a lot of
26:20
attention on the data, sort of like stewardship and management
26:27
to even get to something that was meaningful.
26:30
And in a way, it was like, oh, like this doesn't like line up
26:33
with like our business model and like where people should be
26:37
spending time because they're like, this is impossible.
26:39
How are they even doing it? You know, And it was OK.
26:42
It was like iterative overtime wasn't just like if you were to
26:45
try to do it on day one, it just like you just burn cash.
26:48
I, I just really quickly was going to say, This is why I
26:51
like, I'm not too scared of Vibe coders yet.
26:56
The reality is that the getting a prototype in the market is
26:59
easy. Optimizing it to actually be
27:02
affordable to to operate that as a business becomes really
27:05
challenging. Yeah, I totally agree.
27:08
Zach, how many copycats have you had over time?
27:12
An unreasonable amount like a lot of my friends that run
27:15
software companies Like dude this is crazy like actually like
27:20
so so Steven who he had on the podcast, he's like my one of my
27:24
closest friends like I started the business knowing him and
27:28
he's like and like my first copycat came out he's like Oh
27:30
yeah like we have this one we. And then quickly just became
27:33
like, oh, like Zach gets the most amount of copycats in
27:36
perpetuity forever. And like, a lot of them die.
27:41
Some of them stay. Yeah.
27:43
I don't know. I used to bother me a lot more.
27:44
I think the crazy, the the the thing that always like makes me
27:48
feel light about it. It used to make me really mad.
27:50
But now I just think, wow, if people are really lucky, they
27:54
have like 100 years on this earth.
27:58
And it's just kind of funny that like they spent some of those
28:01
years copying me, who is a self-proclaimed.
28:08
And so in in some way, if you spend years of your life copying
28:12
a self-proclaimed retard, what are you?
28:14
Which I find. I should say this is a massive
28:17
improvement. I remember one time Zach and I
28:20
went out for lunch and he was, he gave me a description of
28:23
copycats and he said they are stealing my life away.
28:27
I have spent my life building this.
28:29
They are stealing my life away, so I mean.
28:33
I could feel like that sometimes.
28:36
Sorry, I was going to ask Michael the same question.
28:39
I'm sorry, Michael, I'm not, I don't, I don't know a ton about
28:43
about the business. But yeah, curious what your
28:45
journey has been and what you're and relative to comp.
28:49
I mean all of us have a ton of competition, but relative to
28:51
competition, what your experience has been?
28:54
Yeah. I mean, in software, the first
29:00
thing about software that I think right now is the barrier
29:02
to entry to creating it is lowering every day and the pace
29:08
at which it moves is quickening every day.
29:11
And so the software has always been a super competitive
29:15
business. I've been in the business for
29:17
like 15 or 20 years. And so it's it's not changed
29:22
much, I would say, but it's it's moving faster.
29:25
There's always copycats though, like all the attention swims to
29:30
the direction of the dollar. And when something like software
29:33
is immediately copyable, unless you have some incredible MO,
29:38
even the big businesses get copied and go out of business,
29:41
and it happens all the time. You know, hopefully you get big
29:44
enough that you can just push people out of the ring with your
29:49
size and brute force and market power.
29:53
But the only way to kind of combat that I think
29:57
realistically is to continue to innovate products.
30:01
And so, you know, as you're thinking through the copycats,
30:05
you look at them and say, well, they're just following, you
30:08
know, if their whole thing is just to follow, the chances of
30:11
them actually creating something of value individually is
30:15
ultimately pretty low. And their ability to manage and
30:19
operate a business is probably not all that great either.
30:22
And so, you know, you get you get copycats that are well
30:24
funded, of course. And if you do, all the better
30:27
because it means you're in a in amazing products, right?
30:31
Like dude, if you're getting well funded to copycats, that's
30:34
amazing for you. So the ones that just copy and
30:38
review off and I don't think too much about it.
30:41
Yeah, yeah, it's, it's funny, I, I was telling my team, the other
30:46
we, we've had a bunch of copycats over the last three
30:49
years too. And I was telling my team, the
30:53
only companies that you should be worried about are the ones
30:56
who are not exactly copying us because they've found a
30:59
different secret. And so those ones we should
31:02
study and everyone else who looks like they're copying us,
31:05
even though it's like emotionally more triggering, you
31:08
just don't need to worry about. But the ones who are not
31:11
actually copying you, but who are in your space, you're like,
31:15
what do they know that I don't know?
31:18
I like those because they're, they're not copycats.
31:21
Like the only thing that there's a few small things that really
31:24
pissed me off 1 copying product names.
31:26
It's like dude, put something to ChatGPT and choose a different
31:30
one. Like it's like not even any
31:32
work. And then the other one is
31:34
product icons. Like holy shit there's thousands
31:40
of icon libraries out in the world for free.
31:44
Choose a different icon. Like it's like the lowest
31:47
barrier to like having conviction in the work you're
31:50
doing and the inability to fucking select an icon.
31:53
I thought you were talking about like feature copies.
31:57
No, I I like feature copies like like somewhat, but like if you
32:00
made it better, I'm not that mad if you made a shittier version.
32:04
And now I need to swat the flies away during a sales call on like
32:09
your bad version. Like if I actually have to
32:10
contest and compete, it's like great, that's why I do all of
32:14
the things I do in my life. But if what you are is a family
32:17
that need to swat away like fucking kick rocks.
32:19
Dude, you want to know the funniest one that I found
32:21
recently for us that you'll get a kick out of?
32:24
Someone copied the names of the tears from our pricing page.
32:28
So like, you know how you like named like, like pretend like
32:31
gold, whatever, silver, gold, like we don't name it this, but
32:34
let's just pretend it's silver, gold, platinum, right?
32:37
We called it something specific. And then I went to that person's
32:40
page and they had like literally copied it.
32:43
And I was like, wow, like this is not going to work for you
32:46
guys. Like we already know that it
32:49
doesn't work. So is it unique?
32:53
Is it unique enough? I mean the the price, interiors,
32:56
the naming. Yeah, yeah, yeah.
32:58
Because you can. Because not only can you see the
33:00
title, you can see the bullets under it.
33:02
It was, it was very obviously, it was very obviously copied.
33:05
It was very obviously copied and and also where the tears cut off
33:10
and starved was caught. Like the whole thing was it was
33:12
it was not a coincidence. Yeah, yeah.
33:17
I mean, I'll be pretty candid. I will say, you know, one of the
33:22
first things I do is look to what everybody else is doing and
33:25
then RIP it. I'm not going to lie, like any
33:28
software, that's the business like you should be looking for
33:30
inspiration elsewhere. But we also innovate a lot of
33:33
different stuff. And so, you know, our job is not
33:35
to create the same exact experience.
33:38
It's to take inspiration from what else is out there, see
33:40
what's working in the market, look at the bigger players in
33:43
particular and take what they're doing and then slip it or modify
33:48
it in a way that's more relevant and strip out the stuff that
33:50
they wasted all their time on. So there's there's an incredible
33:53
amount of value going through and looking at well funded, well
33:58
capitalized businesses and seeing where they spent all
34:00
their dollars and not doing that.
34:02
I think this dude, Michael, I think we're saying the same
34:05
thing. I think studying other
34:07
businesses is super important, even studying the people who are
34:11
copying you, because you want to know which decisions are they
34:14
copying and not copying if they're sort of doing it well
34:18
and where are they taking a different tack because now they
34:20
have learned something different than you and you should go and
34:22
learn that thing for. I mean, that is just how the
34:25
ecosystem should like we live in an open ecosystem and thank God
34:28
we do like, for sure that's how it should work.
34:32
And so those are the people who you should be like people should
34:34
be, you know, worried about you because it's like, yes, you're
34:38
going to copy the things that are working, but you're going to
34:40
be discerning. All I'm suggesting is that
34:43
there's people who don't do that.
34:45
And it's like very obvious. It's very obvious.
34:48
It's not even like, yeah, it's very obvious.
34:53
And it's super annoying. Yeah, super annoying.
34:56
The annoying part is that it's like what Zach said, which is it
34:59
actually makes the value of your product area worse because it's
35:05
now just someone who is doing something in a worse way.
35:10
Telling customers that this is the way it should be done or
35:12
this is the way it is done, and now they have an impression of
35:15
how it is done. That is just bad.
35:18
So it doesn't grow the pie. Whereas a good competitor comes
35:22
in and says, hey, actually we have this different point of
35:24
view and now there's a customer that you would not have
35:27
convinced, but they are able to convince and now all of a sudden
35:30
the pie grows. And so like.
35:32
You want, it's like a weird thing.
35:34
You actually want great competitors.
35:38
Yeah, but you don't want like people who, Yeah, who don't have
35:42
the original thought so. And they muddy, they muddy the
35:45
water. So like if they're if they just
35:47
say we're the same or or they copy it and say it's the same
35:50
thing but it's actually not. It just makes it seem like
35:53
you're 5 if they're 5 sucks. Yeah, and copycats are forcing
35:56
function even if they copy you identically, right?
35:59
And they actually managed to pull it off and it's the exact
36:01
same product, same icon, same product name.
36:03
They are just increasing the supply, right?
36:05
They can introduce price competitiveness because they're
36:07
probably going to price lower than you to take market share
36:10
and that's good for the consumer.
36:11
And it's a forcing function on innovation because it forces you
36:14
to build new features to win that market share back.
36:17
So it's interesting. I don't know, I think the big
36:19
difference between a, a copycat because it's, there's, you know,
36:22
entire categories where if you enter that category, you could
36:26
be seen as a copycat. Or if you go into CRM, right?
36:29
Are you a hotspot cat, a copycat, or are you building
36:32
ACRM? You're the product category is
36:33
not copycat. Copycat is someone who builds
36:37
things without any intent other than to do the thing that exists
36:44
on the street in front of them. And what I always find just like
36:48
blows my mind is that the lack of ability to even copy.
36:53
Like it's like dude the starting line was already set and like
36:57
how are you 4 meters behind it? Like how is that even possible?
37:00
Like it was so clearly outlined where the starting line was.
37:04
And then like the idea that like, you didn't even get to the
37:07
starting line when it was like laid out.
37:10
And like, you could literally just like, copy the HTML if you
37:13
really wanted to and copy the CSS, but you made like a weird
37:15
version of the button that's like, not as good as the
37:17
original. I'm just like, holy shit.
37:20
Like how is that even possible? Like, yeah, it blows my mind.
37:26
Just make a better button please.
37:27
What do you think about AI and in the relation to this
37:31
conversation? I mean, there's entire tools
37:35
that you can create pretty quickly category, you know,
37:39
category replace and build. You know, I wouldn't say like
37:42
100% product, but you can build stuff way faster.
37:45
You can build an 80% product use case pretty quickly, especially
37:48
if it's low infrastructure. Like, I think I think that's a
37:52
big category that that's at risk of anything low infrastructure,
37:55
by the way, But what do you think about that?
37:58
Like there's going to be a huge influx of these like small indie
38:02
developers, which is which is me basically.
38:05
But also, but by the way, how do those, how those relate to
38:08
copycast and like, how do you look at those?
38:11
Is that a different thing? I.
38:12
Want to hear what you guys think.
38:13
But I like it. I think it's easier things.
38:16
Harder things become easier to do leaves more time to work on
38:21
harder problems. I mean, when I talked to our
38:23
team about is like a building a widget isn't enough anymore.
38:26
When I started in software, it was like literally my second
38:32
software business, I guess was building widgets for Woo
38:37
Commerce. So just like little literally
38:39
like downloadable code snippets that you would download and
38:44
install on your site. And that was the product and,
38:49
and I started that by taking code out of forums and basically
38:54
packaging it into settings or packaging it up with settings
38:58
that you could then click the buttons and this thing would
39:01
happen on your website. Right now though, with AI, you
39:05
just ask it for that thing and it's going to give you exactly
39:09
what you want for free. And it's actually better than
39:13
paying the 20 bucks a year or whatever it was that I was
39:16
charging for those. So I think that kind of a
39:19
business is really going to struggle.
39:22
That's like the, the extreme end of what I mean by like a widget.
39:26
And then that's, that's replaceable today.
39:29
And then obviously like the, the, it's going to become easier
39:32
to replace pieces of that. But I, I think like in the shop
39:34
fight you could ecosystem, for example, you can't just install
39:38
a code snippet. If you want to do something, you
39:40
have to have an app because of the way it's structured, you
39:41
don't get direct database access and all those kinds of things.
39:45
And so that's a little bit harder, but that's getting
39:48
easier. And I just saw what the
39:49
Shopify's, I haven't dug into all the details yet, but the new
39:52
the winter editions that they announced, they now have AI
39:57
enabled building up custom apps, which is really smart because
40:01
it's going to make that way easier.
40:02
But again, that's basically like a widget, right?
40:04
So that that idea of like building something very simple,
40:07
putting on your site something that you would have had to go
40:10
and pay a developer to do for you in the past is no longer.
40:16
You don't have to pay for that anymore.
40:17
And I think to be honest, things like post purchase up sales and
40:22
stuff like that, like that kind of stuff.
40:24
I think you're going to get to a point where unless there's like
40:26
really meaningful data behind what's being shown in that
40:31
context, there's no reason to go pay a percentage of your revenue
40:35
effectively for an app that does that when you could just build a
40:39
custom app and do that on your own.
40:42
Especially if you've got a catalog of three products, like
40:44
why maybe printing $10 million a month in revenue?
40:48
Well, probably not 10 million, but a million a month in revenue
40:51
on three products. You don't need some really crazy
40:54
sophisticated recommendation engine at that point.
40:57
You're just trying to boost your AOV and you may as well do that
40:59
on your own through with AI. So I think there's like a,
41:02
there's a spectrum, but I think there's we're just going to inch
41:07
further and further into like what what it what is capable and
41:11
ultimately this idea of like just putting code on your
41:14
website and paying for that isn't going to be something that
41:18
people are going to be willing to pay for.
41:19
I. Mean, I think it just multiplies
41:22
truths that have always been true, right?
41:24
Like it's like, OK, what made really great large software
41:29
companies before it's OK. It was like some sort of
41:31
technical mode. If you still have that, you're
41:33
probably OK network effects, if you have some sort of network
41:37
effect in the example of a post purchase upsell, if they have
41:40
the data on like changing user behavior in the in the lane of
41:46
post purchase upsells and your thing is automatically updating,
41:50
there's value in that. And so it's just like, OK, these
41:53
truths that have always been true are just going to be more
41:57
true. And I don't think it really like
41:59
changes much. There's just like less coasting,
42:03
which is like good for the world.
42:06
I think generally there is like a part of me that's like, wow,
42:09
how nice would it be if we could all just like still make like
42:11
weird little themes or something And like have these like super
42:15
simple businesses. But like, I also know other
42:18
people with data only businesses that you'd think would be being
42:23
wiped out right now, but it's like, actually they're growing
42:25
really, really fast because there's like more places for
42:28
that data to go. The, the network effect thing I
42:31
think is very real. That's a very important piece of
42:33
this because even if you're, you're not, there's, I think
42:37
what, what oftentimes we think of with network effect is like
42:39
the like disco I think is a good example where you literally are
42:42
putting like ads on somebody's website.
42:44
That's a very simple thing to understand when it comes to
42:47
network effect. But the real network effect that
42:49
most of us have in some capacity is just understanding about how
42:55
consumers interact with these products and brands and stuff
42:58
and how that can feed into the the tool that you're delivering
43:02
to your customers. And the reality is that the more
43:05
customers you have, the more data you have and the more
43:08
ability you actually have to do something with that.
43:10
So in some ways that is a Moat, like if you are starting from
43:16
zero, it's extremely hard to get to the point where you compete
43:18
on that level. That typically takes years or a
43:21
lot of money or some way of distributing this thing very
43:25
quickly and getting into the hands of a lot of people.
43:27
And I think that's a really challenging thing to do.
43:29
I mean, Zach, that's what for you guys.
43:31
I mean, at this point, you've got years of people using your
43:36
product and building this aggregate data set.
43:42
So somebody coming in and actually doing that same thing
43:45
as so much harder now than it would have been well, when you
43:49
didn't exist. But yeah, now that you've done
43:52
it, it's harder for somebody else to come in and do the same
43:53
thing. Do you think there's like
43:55
economies of scale on the data side?
43:59
There's there's certain things that you can do at scale
44:05
learnings that you can surface. I guess the question is, can you
44:08
utilize them and deliver some value to the customer beyond
44:11
somebody who's starting from zero?
44:12
And that's really the thing that you're always chasing.
44:16
Did you guys see the visual builder from Cursor?
44:20
The AI visual builders. Continue I.
44:23
Use Costa every day. Haven't I haven't seen it, is it
44:25
out yet? Yeah, it's, it's pretty neat.
44:28
I don't know, I haven't used it like to build anything yet.
44:30
But when they dropped their browser and the browsing agent
44:36
maybe like last month or two months ago, they just dropped
44:38
the visual builder for their AI tool.
44:40
It's I'm going to tell you, I think that marketing websites
44:44
are like all of the word fast web flow frame or possibly even
44:50
Shopify as a as AUI and a builder might be like, you know,
44:57
pretty challenged by this. I don't think that there's ever
44:59
been a case where I would say that there was a challenge to
45:02
Shopify, but being able to spin up your own website, especially
45:07
for like simple products businesses and build something,
45:11
I don't know, man, it's pretty impressive.
45:13
You can, you can. Like we looked at it as soon as
45:15
it dropped I was like, man, can I replace my whole web flow
45:17
instance and just build ACRM and just do this all in React and
45:20
just have my developers do it? It's.
45:22
Kind of cool. What OK, this is actually, this
45:25
brings up another topic because you're talking about, you know,
45:27
the idea of challenging Shopify, for example, is or a WordPress
45:31
or whatever. Like those things seem very a
45:34
couple of years ago would have seemed kind of impossible.
45:37
But what's interesting is you look at all those solutions and
45:41
they're really good at being generic, right?
45:44
Like WordPress is the most, it's like the a good option for most
45:51
websites, right? Just like a informational
45:53
websites, Shopify is a good option for most e-commerce
45:56
sites, But those tools don't they're right now, they're often
46:02
times the best for specific categories or specific ways of
46:06
doing things because they're just not something else that
46:07
says built out as those things, but it's becoming easier to
46:11
build those things. So I, I look at this and I
46:14
wonder, is there a world in which like, let's say food and
46:16
beverage, that somebody comes out with a better e-commerce
46:21
platform for food and beverage because it's actually focused on
46:26
what food and beverage needs, which is like typically they're
46:28
looking at retail distribution and gathering insights about
46:31
their customers and using their e-commerce store as a loyalty
46:35
engine more than like an actual sales engine, right?
46:38
Like there's, there's some interesting things.
46:40
Where can Shopify do those things?
46:42
Yes, but it's not like it's not obvious.
46:45
It's not out-of-the-box. It's not it's not purpose built
46:48
for that. And I do wonder if one
46:50
opportunity in this new world might be like more sophisticated
46:53
software that's purpose built and just can get built faster
46:57
than than it. Like in the past it would have
47:00
been worth doing because the investment to to get there is
47:03
too much. But now with AI, it might be
47:05
worth, you know, maybe it only cost a couple 1,000,000 bucks to
47:08
get to that point versus needing 20 or 50 million in the past to
47:12
get. There, you remember when
47:14
headless was pretty big, like there's a big portion to add
47:17
less and then there's kind of like a little bit of deflation
47:21
of that bubble or balloon. I actually think that there's a,
47:25
there's a strong case for the headless economy and AI,
47:30
especially since visual interfaces are so incredibly
47:34
simple from a, from a development perspective that
47:36
kind of solve problem infrastructure things that are
47:39
database data-driven, you know, all of the integrations behind
47:43
the scenes, the APIs, you know, less solved, I think.
47:48
But it actually makes the case potentially that there's,
47:53
there's a future rise of headless again, I don't know.
47:56
I mean, just thinking it through, when we looked at our
48:00
web flow instance, right, our marketing site is built on web
48:02
flow. I don't know if you guys use it,
48:04
but probably something similar. You know, the first thing I
48:07
thought was, well, I could just have a developer manage this and
48:09
build it and we'll build the CRM or do something have the CRM
48:12
you're like, well, why would we spend develop my resources on
48:15
that? After I saw this visual builder,
48:17
I was like, I don't know, man, I'm I'm not there yet, but I can
48:20
see the past now where you could do the visual piece, the UI, the
48:25
website, all of the user interaction and just have
48:29
headless experiences with tools off the shelf that are ATI
48:33
driven and have the AI just build into those tools like the
48:38
especially the good ones like Stripe and Shopify.
48:40
They're so well documented. The AI can just sponsor that in
48:44
and. Spend it out.
48:45
Think you can think the biggest problem with headless and like
48:50
the problem that would persist is that constraints in a lot of
48:55
situations are a feature. And the main benefit you get
48:59
from the constraints that sometimes don't feel like
49:01
features, that feel like constraints is like 1
49:04
reliability, like 2 structure and then three, reverse
49:08
engineering of an error that's happening and then resolved.
49:12
And so like, the question is, is like, OK, is there some sort of
49:17
maintenance that web flow, for example, is doing on their CMS
49:21
every single day? And the answer is yes.
49:23
And it's like more than you could ever imagine.
49:25
And so the question is, is like, if one of those issues came up
49:29
for you, would you be able to resolve the issue as fast?
49:32
And like, could AI resolve the issue as fast?
49:35
And was, is there a proper structure in place that like you
49:37
could bring someone in to like fix it And then like, what is
49:39
like the downside of that potentially happening?
49:43
And it is it your website down for more than 24 hours, which is
49:46
a large percentage of a year. And so it's like, I think we're
49:50
going to be at this like crossroads where it's like
49:51
there's going to be a lot of things that are possible, but
49:54
there is going to be built in risk associated with it.
49:59
And I think like we should definitely push the boundaries
50:02
for it and be like, OK, let's like fuck up a little bit or
50:04
something. But I think a lot of these
50:07
things is just like, I, I don't know if we, if we are properly
50:10
seeing the forest, like beyond the trees with like, if
50:15
something can be done, not, does not necessarily mean that like
50:18
it should be done. And it means it's still cool
50:21
that it can be done. And like it enables a bunch of
50:23
people to do a bunch of really cool things.
50:24
But if we're talking about like actual things that are like
50:26
driving your business, it's like, well, is that really worth
50:30
like the risk for like a bit more flexibility or like a bit
50:34
more cost savings, 'cause like, I, I don't know, I really like
50:37
web flow. And I think that they're
50:38
actually like properly pivoting in this direction really, really
50:42
well, becoming like a lot more flexible for people and like,
50:46
yeah, I don't know. But I mean, I don't know, I've
50:49
been like vodka a bunch of like really random things for my
50:51
personal life and like, they'll break and I'll be like, fuck,
50:56
now I have to fix this thing that I built to like right now
51:00
I've like the weirdest one I have is like I, I have, I made
51:03
like a body tracking app because I'm trying to make my body the
51:06
exact proportions of the statue of David.
51:09
And so like I have like, like you enter in whatever and then
51:12
it shows you plus and minus for like each like measurement and
51:15
stuff like that. And like it broke the other day
51:17
because if something happened with like the air table that I
51:19
was using as a database to sync it and I was usually like, fuck,
51:22
like this was so cool. And now it's just a chore.
51:24
I'm surprised you didn't go for Vitruvian man.
51:27
I feel like that's the. I do.
51:29
I have that tattooed on my leg, actually.
51:31
But yeah, you know, what I had done is we're getting way off
51:34
topic, but I asked Chachi BT like, what the most like, what
51:39
is like the most widely accepted over the longest period of time,
51:43
like a static physique for like, a human frame.
51:45
And they're like, well, like Statue of David.
51:48
And so I was like, oh, OK. And so I asked Chachi BT like
51:50
based on my height what would be the proportion?
51:52
I bet 2nd place was like ANI Arnold Schwarzenegger.
51:55
That's a really high bar, yeah. That'd be a really high bar.
51:58
This reminds me of the conversation we had with Taylor
51:59
Holiday actually, because like in in some ways, you want the
52:02
your software providers to take agency for achieving outcomes.
52:07
And one of the nice things about web flow and not building your
52:10
own version of web flow is that web flow is responsible for
52:12
making sure that web flow works right.
52:14
You can just go, OK, this is done.
52:16
I can focus on other parts of my business.
52:18
I mean, this is This is why I mean, I, because I, I've been in
52:23
the e-commerce place for a long time and woo commerce, Magento,
52:28
Shopify, we're all at one point and they're all kind of vying
52:31
for who was going to be the biggest.
52:33
And there's some major downsides to constraints with Shopify that
52:38
actually like make it objectively worse in some ways.
52:41
The access to your data, all those kinds of things are are
52:44
far harder to get to then something like a Magento or a
52:49
Woo commerce. But the flip side of it is that
52:51
data is safe. Like it's not the way it's it's
52:54
structured. It's extremely hard to actually
52:56
break it. And Shopify is responsible for
52:59
basically making sure this is all online.
53:01
Whereas if you go just spin up a WordPress site on a server,
53:04
that's on you to figure out. And over the last 15 years, the
53:08
industry has moved to almost exclusively Shopify because of
53:13
the fact that you don't have to think about it.
53:15
It just works. And all those other solutions,
53:17
you had to think about them, you had to manage them.
53:19
They are cheaper, they are better in some ways, but it
53:23
requires you to actually dedicate time and resources to
53:27
that. And if you are an engineering
53:30
organization, that makes sense. If you are somebody trying to
53:33
sell products online and that's not your expertise, that
53:37
probably doesn't make sense to invest your time and resources
53:39
into the soft maintaining software.
53:41
I mean the caveat I would make there is think about the long
53:44
tail distribution of E com owners, websites, web flow
53:50
instances, WordPress instances, you know most of those are
53:55
pretty lightweight. There already exists tools for
53:59
the hard parts, which is the hosting and deployment and
54:01
infrastructure. And so, you know, if you look at
54:05
buildings on top of Rails, which are Shopify or Fun Spot or let's
54:12
just say WordPress CMS or you know, even one Flow CMS, Stripe,
54:17
right, to build your experience and then push it to Versailles
54:23
for somebody who has very little tech skills, that is a much
54:28
lighter lift. So I do think that what you're
54:30
saying is true, but I also do think that there may be a case
54:33
where some of the competency and risk has shifted a little bit
54:39
and some of the tool and the infrastructure tooling that we
54:41
have now is so good and so easy to use.
54:43
I mean, I'm sure you all have spun up a WordPress instance at
54:47
some point. What a nightmare that was like
54:49
10 years ago, right? And so like now it's like a one
54:51
click deploy to Purcell with a React app.
54:54
It's like super simple even like my wife could do it.
54:58
She doesn't have any track skills.
55:00
So I, I think that there's, you know, it's interesting.
55:03
It's interesting to look at. I'm not there yet, but.
55:05
Yeah, for sure. I have to jump to in the call.
55:09
But Michael, thanks for hopping on.
55:11
It's been really good to chat through all this.
55:13
See you guys. See you guys later.