S3E04: Big Chat with Brent Bellm

Welcome to Commerce Famous, a podcast that celebrates the celebrities of our industry. Join us for a conversation with the tastemakers in ecommerce. In their daily lives, these are just normal everyday people like you and me. But to us, they are commerce fans. Alright.

Welcome to Commerce Famous season three, episode four. I've got an exciting one for you today. I have got mister Brent Bellum joining me. Brent, good to see you again, sir. Delighted to be here.

Excellent. Well, the the the concept of Commerce Famous is very apropos for you, but it's essentially people who at trade shows or events in ecommerce, they're celebrities. And then when they go home, they're just, you know, Joe Schmo, an average guy, a family man, etcetera. And, I've seen you at events, and, obviously, we've known each other for years, but that kinda described you perfectly. Yeah.

I certainly, the part about not being famous at home and a Joe Schmo in the house, that is me too. Absolutely. Well, let's kick things off a little bit. Maybe introduce yourself, a little bit to those who don't know you, and then I'm gonna pepper you with questions about your background, and we can talk a little bit about, the good old days of ecommerce together. Great.

So I'm Brent Bellum, at home in Austin, Texas where I've lived for the last fifteen years. Although, you know, my career and life has taken me to lots of different spots in The US. I've lived in four European countries, but originally, both sides of my family from a little farming town in rural Southern Illinois, corn and soybean country. Very nice. Well, so most notably, we know each other from your days at BigCommerce, but your journey started off obviously, much before that.

Can you maybe take us through a little bit of your career starting maybe at McKinsey and kinda how that got you in ecommerce and and maybe start there? Sure. So graduating from college in 1993, I knew I wanted a career in business, didn't know what industry, didn't know what function. So I joined a consulting firm to get exposure to a bunch of different options. And in my third project, had the pleasure of working for one of the three biggest retailers in The US.

It was one of the big discount chains, you know, Walmart, Target, Kmart, one of those three, and fell in love with retail. At the time, retail was brutal because the big box formats, in particular, Home Depot and Walmart were taking over the world, and then the Internet came to the rescue. You know? Couple years later, ecommerce started to take off. First ecommerce ever was 1994.

And by the time I got out of business school in 1997, you know, early days of of ecommerce, brands weren't yet going direct to consumer for the most part, but new retailers were starting to appear online. The old ones were embracing it. And I realized that this love I had for brands in retail, was going from a very tough industry now to one that would be dynamic, innovative as far as the eye could see. So I've been ecommerce focused really since 1998. And when I finally got out of debt, I grew up in a poor family, so I had a lot of debt from undergrad in business school, but I got out of that debt by 1999.

And I for the first time, I'm like, okay. Now I'm unfettered. What am I gonna what am I gonna bet my career on? And at the end of 1999, beginning of two thousand, I bet on one of the first ever SaaS ecommerce platforms called Escalate. And at the time, you know, there are a handful of them in The US.

They didn't call them SaaS back then. It was ASP model. But there was Yahoo Stores, Volusion, Blue Martini, and Escalate, the one I joined. Right idea, couple years too early for anybody to pull off the technology in a way that was scalable and sustainable. It wasn't for another, you know, call it four or five years, you know, before Shopify and Demandware really got it right.

Of Course, Shopify building from scratch, Demandware turning the inner shop platform into a multi tenant SaaS platform. But I was a I was a predecessor to those, and so that didn't last, you know, for me more than a little over a year. Then went to eBay, but mostly PayPal for almost ten years. So I'm giving you the the the Yeah. No.

That's good. Once. I was the head of strategy at eBay. The main prod the best project I got was, like, recommend what we do in payments. We need to turn eBay into an actual commerce engine, not just an auction site.

And I recommended that they buy PayPal, which then happened. And when eBay bought PayPal, all the famous PayPal mafia people left because they didn't like the eBay people, wanted to go do new things. EBay is like, okay. What do we do with this payments company now? And I had good payments experience from the nineties, consulting to one of the early international cross border Internet payment gateways.

And I I looked at all the things PayPal could do that nobody no bank could do, no payment processor could do. And I was like, this is, like, the greatest business I've ever seen. And, yeah, it can be a checkout button on eBay, but more importantly, this can revolutionize merchant website payments, first ever wallet. It can revolutionize person to person. It can revolutionize cross border and international payments.

So I spent the next eight years you know, first three years were as head of strategy, basically, creating helping create express checkout, merchant services products, getting them into pure credit card processing, getting the international model right. Then I went to Europe, ran Europe for four years out of Luxembourg and Ireland, came back with its global head of product for a year before getting lured to Austin and DRBO and HomeAway, basically, to do for them what eBay had done, which was go from a non transactional, non ecommerce, no payments integrated travel company to one where bookings could be done on-site, and that was the primary way of of of transaction. So I had to convert them into an ecommerce business just like we had done at eBay. And so that was 2010 to 2015. We IPO'd HomeAway a year into my time there, public company for four years, and it ended up selling to Expedia and getting rebranded VRBO or Vrbo, shortly after I was lured away from there over to BigCommerce and then was, you know, CEO of BigCommerce for almost ten years.

IPO ed that 2020 and still public today. Alright. That's, that's the one that's I mean, we can I mean, I'm gonna dig into some of that? I'm gonna I'm gonna go back into into the way back machine. So you have an amazing query.

You've taken two public companies public. You were part of the the the spark that made PayPal what it is today. I mean, you've got an amazing experience. Commerce famous is proudly presented by Shopware, the leading open source e commerce platform for mid market and lower enterprise merchants. More than 50,000 clients already processed over $25,000,000,000 in annual GMV through Shopware.

Find out more about Shopware and the best value in e commerce at shopware.com. Take me back to the meeting within eBay when you and maybe a few of your other peers were looking at the PayPal business. You were looking at, you know, how it got its start. Obviously, it was deeply connected to eBay at the time because that's where all their distribution came from. But take us through some more of that industrial logic, why commerce and payments needed to come together in that moment.

Because, frankly, that was one of the first marriages of payments and commerce that that we saw in the industry. Yeah. So before this happened, the way eBay would work is you would have an auction, and you'd win the auction. And then you're basically stuck in no man's land negotiating as a consumer with the seller. How am I gonna pay you?

The predominant payment method back in 2001 were checks and money orders in the mail. I mean, think about that. Think about how delayed it is. Think about how risky it is. Think about what a pain in the butt it was.

It was a terrible user experience, and it was pretty obvious that the right solution was to integrate the option of instant electronic payments. The question was how because eBay itself was not the merchant of record. It's not a retailer, that's taking money on behalf of sellers. It needed to come up with a solution that would let them do it. And at the time, credit card payments, you know, required a merchant account.

You'd have to go to a a a bank who would then need to get your business information and underwrite you. But, of course, most of the sellers on eBay are individuals like you and me. They're mom and pop sellers. They're not businesses. They don't have a a record.

And it wasn't obvious, you know, how on earth you can get merchant accepting capabilities to each one of these individual sellers. You needed a different model. At the time, there were two options out there. There was there was PayPal, which was acting as a master merchant for these individual ones. It was like, we'll take on the risk in giving them instant credit card acceptance, something nobody had ever done before.

That was one of the many revolutions PayPal had, and why it was just absolutely taking off on eBay even though eBay wasn't supporting PayPal. It was just something that they would put a snippet of code into the listing. And then maybe in the post auction results, they would send a notification to the buyer and say, hey. This is one of the ways I accept payments. Rarely would it be the only one because there were, in fact, fees, of course, with PayPal, whereas checks and money orders are free to the seller, though a major risk for the buyer and pain in the butt for both.

And then pay eBay had bought a separate business that had been incubated with or by Wells Fargo and had integrated it, and it was an option on a single digit percentage of their transactions back in 2021. And part of my job was looking at that and saying, you know, can we make this a lot more successful as our proprietary thing and not have to buy PayPal. And, you know, on the one hand, my answer was, yeah. We could we could do a lot more and better with what we already have. However, it's way smarter to buy PayPal because look at all these other things PayPal can do that it can't.

There was so much that the famous founders of PayPal had innovated and built into their model, not just the instant acceptance and underwriting, and no real underwriting. And they just took the risk with with a lot of good fraud at the time management built into what they did. But also having bank imbalance as payment method, that's, you know, one of the most important things is that to this day, PayPal's competition in wallets is still, for the most part, credit card based. And credit cards come with if it's a credit card, not debit card, interchange that starts at 1.9% and goes up from there, That's a really high cost structure, whereas PayPal gave consumers, for the first time ever, access to ACH based payments and balances, which were more than half of all of their transaction volume. Those were basically free.

There was zero cost to a PayPal balance to PayPal, less than a penny cost on an ACH transfer. And so if that's more than half the they had half the cost structure of all of the other payments server per, services providers, merchant account providers, banks that they competed against. And anytime you're in a totally commoditized market and you've got half the cost structure that everybody else does, you are in heaven. And you look at that type of, that type of competitive advantage, it was just so overwhelming to me that this is one of the most innovative and, you know, in the truest sense of the word, disruptive businesses to come out of the Internet era. Now interestingly, they've made choices in the year since to not lean on that set of competitive advantages, and they, you know, kind of went a bit in an AmEx premium product direction.

Back when I was at PayPal, there was a series of years where I basically was setting the changes of pricing in The US and in Europe, and all I ever did was lower price. Never raised price. I lowered price. Because I look at this cost advantage. We can go set our price systematically below the banks and the other payments competition for every size of merchant in every country and still be ridiculously profitable.

Let's compete on price. But try less than 2010. There was a different mentality. They wanted to be a premium product more like American Express. They gave up a lot of that funding advantage.

You know? And so now you see the PayPal payment market's 3.5%. It's to me, it's it's it's it's one of my pet peeves that in America, there is an average deadweight tax of 3% on ecommerce, which is the cost of electronic payments. And it doesn't have to be that way. Like, if we were paying with banks, like, some countries, Germany, where we just had a lot lower interchange, some countries like Australia and France, that 3% cost would be something a lot closer to half a percent, which is where it should be.

So it's one of the frustrating things for me in the evolution of ecommerce is we're all savvy. It's 20% plus of the consumer economy today with a deadweight tax of 3% going to payment processors. And you may say, well, as a consumer, I got a little bit of that back in points. I just assume have it all cost 3% less. Yeah.

Me me too. Well, let me so I think you've hit on a couple of things I wanna go deeper on. The first is the timing at which you were at eBay and PayPal. Who was the CEO of PayPal at that time? Was this Peter Thiel era, or was this after him?

Well, the quick answer was PayPal was the merger of two companies, one founded and run by Elon Musk, the other founded and run by Peter Thiel. There were a bunch of books have been written about the dramas of how that then merged, and they IPO'd. Peter Thiel was the acting CEO of PayPal. They had IPO'd when eBay bought them, and there was real antagonism, dislike, disrespect, two way between eBay management and PayPal management. You know, the the the PayPal mafia are, and I say this adoringly, because I I think in spirit, I'm closer to them.

They were sort of an anarcho capitalist, very libertarian, very provocative, very anti MBA, anti consulting type mindset. And, you know, eBay, was full of very bright, largely ex MBA, ex consultant, far more deliberative, conservative, and it was a culture clash on values, on belief systems. You know, none of the famous PayPal mafia people stuck around. You just go through the long list of people. I mean, there there may be a few that were around for a few months post acquisition, but most of them were gone.

Basically, they closed or only transitioned for a few weeks. And as a result of that, you needed a whole new leadership team. Some of it was populated with, you know, folks within PayPal who rose up and others were folks coming over from eBay. But you also need a whole new strategy because the strategy before acquisition was how to beat eBay on eBay. Well, now eBay owns you.

Where do you go? It left to its own devices. EBay would have just executed a checkout button on eBay and said, okay. We're done. That's what we bought them for.

But as head of strategy, I said, no. I recommend we go global and we go merchant services, and there was a lot of opposition to that. There was a lot I'm not gonna name names, but it was the overwhelming majority of people on the eBay side said over our dead bodies, are you gonna go out there and arm the enemy? The enemy are all these merchant websites. Don't go solve problems for them.

You know, we didn't buy PayPal to do that. And I said, you're out of your minds if we don't do that. This is, like, the best payments business on the planet. We can make this worth a lot more than eBay, which, of course, is what ultimately happened if we make the right bets and we made the right bets. And the bets weren't obvious.

You know, express checkout wasn't obvious. Pure credit card processing in conjunction with that wasn't obvious. How to run and solve payment problems around the world when the problems are totally different in Germany and The Netherlands than they are in The UK and France. But, anyway, I'd it was it was a fun era, and I don't think eBay's given enough credit. I mean, so often you hear these stories of acquisitions gone wrong.

That was an acquisition that really went right. And I can tell you having been there at the time, none of what PayPal ended up doing or very little of it was obvious. There was a lot of innovation that happened within eBay, and it was in the face of the typical, innovator's dilemma. You know, this isn't in support of our legacy business. This is actually in opposition to our legacy business.

But we came up with those recommendations. We did them anyway. If Clay Christensen were still around and writing a book about innovator's dilemma all over again and how to do it right, you know, innovator solution, there should be a chapter in there on, you know, what eBay and PayPal did because it it was all this all the obstacles that you would predict, but they but we overcame them. Yep. You disrupted your core business.

Well, let's talk about how you got distribution. You know, anybody who listens to the all in podcast will hear David Sacks talk about PayPal's killer strategy was really distribution. They got a lot of merchants using PayPal, and that PayPal button became synonymous all over the Internet and all over the world. One of the things that when I tell stories, about, you know, the histories of companies like Stripe and even PayPal, I really talk about them coming to prominence because they were the default on inside of places like Shopify for Stripe and with PayPal, the default on inside of Magento. Those two things really mattered.

Were you part of that PayPal world when those decisions were starting to be made? Yes. In in fact, a big part of it happened when I was running PayPal Europe, and it started in Europe. So this is this is, you know, late two thousand five. And we we decided in early o three, we're gonna build express checkout for merchant websites, and we're gonna gonna get into pure payment processing.

But it takes time to build those products. The real products, you know, with an API based set of solutions, I may be wrong on this, but I tend to think they came out in early two thousand five. Right? Maybe it was o four, certainly wasn't o three. In the range.

Yeah. In the range. It was late o four or early o five. And then the question is, how do you get distribution? So I go from being head of strategy to head of Europe.

And what I instructed my team to do was basically our problem in all cases is it may be easy to get a merchant convinced that they wanna take PayPal, but making that easy for them and not a custom and risky engineering integration requires the shopping cart or ecom platform they're using to already have pre integrated PayPal. On top of that, if you were to go to any given ecommerce platform, you know, I can name off the ones in Europe, like, you know, back in the day, you got press PrestaShop and Oxattus and Venda, you know, ones in The US, and you go to payments, you know, that payment that that shopping cart has a lot of influence on the merchant, which one to use because the merchant is oftentimes setting up their online site for the first time. Well, which one's best for me? I said to my team, I want you to go to every one of in your respective countries, job one is business development. You go to the top 10.

I wanna see a list of the top 10 shopping carts and ecom platforms in order. I wanna know, are we natively integrated or not? And if we're not, pay them to do it. Bribe them. Pay it's bribe's the wrong word.

You're just wrong word. I get it. Buy your way in. But, also, I wanna know how we're ranked. Are we ranked first or not?

You know? If they're doing it alphabetically, pay them not to do it alphabetically. Like, I wanna be number one or number two in as many cases as we possibly can. And so that was the guidance to my teams in Europe, and they knew whether you're the UK team coming up with your list of shopping carts and platforms in The UK or the French team or the German team. You're going you're trying to create relationships, earn the integrations, get the integrations done the right way, you know, with PayPal, with the express checkout button.

That's extra work. It's a lot of work to put that button at the top so that if you choose express checkout, you then bypass the billing address, shipping address, and personal information field. That's a lot of extra work versus sticking it at the bottom. You've already gone through it all, and all PayPal is at the bottom is an extra payment method. And I said, I'd never want to see PayPal doing pure credit card processing if we don't have an express checkout integration option at the top.

That's where we make our money. The credit card processing is much thinner margin. We make our money when people go through the wallet and half the transactions are bank or balance. So pay the extra money to get them to do the extra work and integrate a wallet the right way. And, of course, now we're used to that because we see Apple Pay at the top.

We see Shop Pay at the top. We see, you know, sometimes Amazon Pay at the top as real express checkout buttons. But the hard and heavy lifting was going to the individual shopping carts and trying to become their number one partner, and lead offering to merchants. It's it's funny when we talk about it like this because it's so obvious today as you just stated. Right?

It's hard to go to a website that doesn't have a button that allows you to check out really quickly. But back then, I lived through it the same way you did. It was a lot of hard conversations. It's convincing them of the conversion improvement, the economic impact to their business. It's a better experience.

Like, I completely agree with everything you said on the battle you were fighting. You were certainly there during the times. I'll tell you a little bit of, fascinating logic that we learned in Europe. Roughly 35% on average all of all PayPal transactions in Europe back at the time were truly incremental to the merchant. Meaning, if the merchant hadn't accepted PayPal, the transaction wouldn't have happened on the merchant website.

What fluctuated up and down was what was PayPal's share of checkout. But of its share, regardless of what that was, and it would range from 1% to 40%, the wallet that is, how many of the trans it was roughly 35%. And how do we know that? We actually asked the consumers. We went back to the consumers and said, you know, a day after completing a purchase somewhere, thanks for using PayPal on merchant x.

Yes or no. This is a two question survey. PayPal hadn't been accepted. Would you have still completed that transaction using another payment method at the same time? Yes or no.

If the answer was no, tell us why. We get 10 different answers. Don't trust the merchant. Didn't have my credit card handy. Credit card got declined.

I like paying by bank. I had a balance. I'm in country x. They didn't have payment method y that I need. You just go through the list.

I don't like sharing my credit card number. It was 10 different reasons of various percentages, but it was, like, 35% of the transactions. And I often scratch my head when payment companies or other companies talk about, you know, incremental sales and the convoluted ways they come up with estimating it, which are usually transparently bogus. You know, there's one way you can actually get the right an actual number. You go ask the consumers the point blank question.

You know, if PayPal if American Express hadn't been accepted, would you have done the transaction at the same time just using another payment method? I've never heard that answer from American Express, but I know what that answer was at PayPal. It's 35%. That's amazing. That is a unbelievable statistic.

Alright. So I love I love your payment background. I definitely love kind of the the industrial logic around why PayPal, got acquired by eBay. Well, I'd love to transition a little bit, to your time at BigCommerce. Kind of skipping over the fact that you took a company no one ever heard of, rebranded it into ZRBO later, and got it taken public.

That's a huge deal, but we'll skip over that for now and get into your days at BigCommerce. I actually I don't think you probably remember it, but I actually met you at IRCE a long time ago when Amy Nyquist, a mutual friend of both of ours, walked over and started talking to you. And I said, she was running strategy for us at Digital River. And I said, who the hell is BigCommerce? And she said, oh, well, a friend of my husband, Brent Bellum's the CEO.

I don't know. Do you remember any of this? Is this sort of a I I do. And Mark Nyquist, her husband, I only ever Nyquist. He was in my business school section, and I have great affection for Nyquist.

Yeah. Yeah. And so she put BigCommerce on the map. And so that's kinda when I started to pay attention to you guys because I saw you had a relatively big space at IRCE, and you had a lot of people listening to your story. And so I'm I'm intellectually curious how you take an Australian product, bring it really to The US and break through.

And we're having that some of that same success here in Shopware North America. But I kinda wanna hear from you. What did it take to break through a really noisy, market? Let me give you ever everyone the the the landscape of who we're competing against at the time. 2009, it was Magento, which you obviously had some experience with.

It was, s it was Hybris. 2009 was ATG and Oracle. It was IBM WebSphere. Shopify was really nobody yet, and you joined BigCommerce. So how do you how do you walk us through what happened to BigCommerce to really break through?

Okay. So the quick, summary before I came in. I came in in 2015 and took over for the founders. 2015. Okay.

Got my dates wrong. You had well, you had the date wrong just like my role. So company was founded in 2009 in Australia by Eddie and Mitch, two great guys. There's they had had a preexisting email marketing solution called InterSpire that had an optional downloadable shopping cart. And after six years of building a pretty successful email marketing thing, they got sick and tired of the limitations of the shopping cart, and they're like, downloadable shopping carts are insecure and too hard to use.

What the world really needs is a great SaaS platform for SMBs. And so they decided to launch that in o nine. They said, if we can get to 10,000 merchants within a year or so, we'll go all in on this, and they did. Right? At the at you go back to 2009, there were a bunch of SaaS products around the world.

Again, survivors from the nineties, Volusion, Yahoo stores, plus, you know, probably another 20 of them that had some kind of scale, some kind of scale being at least 10,000 merchants, but no dominant one yet. Shopify was five years old, not yet dominant. So they launched in 2009. They get 10,000 customers within a year. They decide to go all in.

Their problem was 80% or more of those were in North America. And they're trying to run this from Australia, wrong time zone, wrong location for go to market. They need to raise venture money, you know, and there's a lot of interest in that in The US, but those venture investors say you gotta move your headquarters here. And so in 2011, they took their series a from General Catalyst. In fact, Larry Bond, the lead investor, was also the guy who worked with Stefan Schombach to incubate and then fund Demandware back in the day.

Stefan Schombach, advisor and series a investor, their thesis was a world needs a Demandware for SMBs. Okay? So 2011, Eddie and Mitch do a tour. They didn't just look at Silicon Valley for whatever reason. They took a look at Austin too, and they picked Austin against all odds because when they visited Austin, everybody said, hi.

How can we help you? When they visited Silicon Valley, everybody said, who are you, and how can you help me? You know? And they're like, okay. We we like this Austin place.

And so they came here. They built it for four years. The problem was Mitch never moved to The US. He was CTO. Eddie's CEO never fully moved here.

His wife got pregnant. She's like, you're staying here in Sydney. This is where we're gonna have our kid. And and so they're running into the problems of, you know, leadership on the wrong side of the planet from the bulk of the team, at least the go to market part of the team, and also the company was just getting to a scale that was beyond their experience. So in 2015, with Eddie's full support, the board, the management team went looking for a successor CEO.

And the problem for me as I looked at it, on the one hand, I've got a passion for ecommerce. On the other hand, they had already lost to Shopify for SMBs. Because in 2015, Shopify had had a five year head start to begin with, had already IPO'd. You know, they were three times BigCommerce's size at least before the IPO. But then post IPO, they hockey stick up.

The credibility, the awareness, and BigCommerce is, you know, a distant number two. Not that far ahead of number three through number 20 for SMBs, but a distant number two to Shopify as a SaaS platform for SMBs. And I I told the board and the management team bad news and good news. Bad news is there's no magic wand that I have to wave and beat Shopify. And if you keep doing that, you know, the company's never gonna be a sustainable, successful business.

That's the bad news. Good news is I have strong conviction that what the world needs from us or somebody is actually a SaaS platform to move up into the mid market and take on Magento. At the time, Magento twenty fifteen, 800 pound gorilla. Mid market and increasingly enterprise, they had 20% share of the IR 500. Built with would give them 20% share.

I mean, they were absolutely dominant. Mid market and above b to c and increasingly b to b because they were also expanding into that era area. And, yes, I did have a lot of familiarity with Magento. You know, we were partnering with them when I was running product at PayPal, and, ultimately, eBay bought Magento, which I saw coming. I was part of that, not long after I left PayPal and eBay.

And for all the respect I had, I'm like, it's a crime against business humanity that in the year 2015, there's not a great SaaS platform for the mid market. We're gonna become that. Now you can't just say we're targeting the mid market and then suddenly handle complexity and be mid market appropriate. It require a change in not just positioning, but product strategy, go to market strategy. And what we termed it and why we were getting buzz at that time at IRCE is we called it open SaaS to compete with open source.

The big advantage of open source is that you get the code base, and you can modify it and extend it to your heart's content. The disadvantage at the time with most SaaS products, including BigCommerce, it's what you see is what you get. Like, it's delivered over the web. And unless there are APIs and decompositions of the product into microservices, you're extremely limited in what you can extend, integrate, or modify. And I said, we've gotta change all of that.

We've got to basically open up every area of the product and basically build our product on top of the same APIs that our partners and our customers can use when our native capabilities aren't everything that they need. And so we just we we just basically the day I arrived was the day we said new target is mid market and above. Yeah. We'll keep serving SMBs. It was probably 90% of our business at the time I arrived.

But I knew we could not beat Shopify, for SMBs. And and we really focused on mid market and above, this concept of open SaaS. And the reason why we gained a lot of excitement around it was on the agency side. Agencies knew, increasingly, that SaaS was the present and the future. I mean, yeah, there were a bunch that were wedded to all the old on prem installations that, you know, not just Magento, but WebSphere and Oracle and SAP.

But the smart ones were like, SaaS is more secure. It's higher performing, much faster to implement, much lower cost to maintain. And they wanted to see a SaaS platform, though, that would let them customize and integrate the way complex mid market and above businesses require. And so by talking about open SaaS and, over time, delivering that through our product, we gain a lot of excitement, especially from those, you know, old Magento silver gold agencies who wanted a SaaS alternative. Like, most of them wouldn't give up Magento, but they're like, okay.

For our customers for whom SaaS is better, what is the SaaS option? And there really wasn't another good SaaS platform in the mid market. There was Demandware, but Demandware was enterprise. They had priced themselves out of the mid market. They weren't even targeting the mid market.

I know this because Larry Bond was on both boards at the time. He's like, you guys don't overlap. It's years before you overlap. And I'm like, you know, Larry, if you hire me as CEO, it's gonna be under three years before we're overlapping. Right?

Mid market is the start, but it's the same product strategy that takes us to enterprise. That's just classic textbook disrupted innovation. We're we're coming. We're gunning for Oracle and IBM and SAP and Magento at the high end and Demandware. That's that's where we're going with all of this.

And so the agencies, subset of them really liked that story, that product option. But then the tech partners liked it too because our open approach was also one where we're we we recognize the complexity of businesses. There's not one payment solution that we think is optimal for every merchant. So we want to partner with and integrate optimally choice that, you know, all the leading ones who are willing to work with us. And, oh, we wanna do that with search engines and shipping options and, you know, everything else.

We are not trying to be a one size fits all prescriptive solution that might work for cookie cutter small merchants. We wanna be the most open and flexible, but with preintegrations and partnerships with the leading enterprise and mid market third party solutions already in our ecosystem, already in our marketplace. And so I think that forward approach to biz dev and partnerships was also very well received at that time. Yeah. Well, you definitely you were definitely masterful in the positioning.

And, you know, it's really interesting in retrospect. I joined Shopware for a lot of the same reasons you just described. When you go and listen to Adobe, who's an amazing company, talk about the market, they talk about SMBs and they talk about enterprises as if there's this whole part of the world that doesn't exist, this mid market. We call it the flyover states of ecommerce. And so the mid market when you recognized was largely underserved.

And I also agree on your Magento, assessment. Again, when I joined Shopware, the plan was to go after all of these Magento merchants with a with a modern offering similar to what you did. Now what I found is in Europe, we did amazing. We won, like, 3,000 Magento merchants. But in the North American market, you guys already ate them all up.

So you guys had a tremendous amount of not a ball, but the ones that were were were obvious fits. You guys did an amazing job. How do you think about can you say a little bit more about your partner centricity, the go to market model with these agencies? Because that's what I found, after after kinda going after the market and really treading on the on on the path you already made in with these agencies. BigCommerce really had some of the greatest people in ecommerce.

I mean, the relationships you built with these agencies were really, really deep. Can you talk a little bit about the mindset and how you accomplish that? Because I think that's really notable. Yeah. Throughout my ten years at BigCommerce, there was a consistent theme that for mid market enterprise merchants, about 80% of them used an agency for their implementation and management.

20% would do it themselves, and that 20% was sort of at both ends of the of the distribution curve. It was either large businesses with really simple needs, and so they could just basically use the self-service SMB product. Or, alternatively, they were big complex organizations who had an IT staff, and they're like, well, this is how we save our jobs. Right? We can do this ourselves because we're good enough, but only if we save the money of the really expensive agencies that we would instead need if we were implementing Magento or another enterprise solution.

So that's the 20% that wouldn't use an agency. The 80% in the middle, I mean, these are mid market and enterprise businesses are complex. And whether you're using an agency for strategy or design or systems integration, just set up training configuration, agencies can add a lot of value. And for BigCommerce, traditionally, these are public disclosures. It was basically fifty fifty.

Of the 80% that was agency work, about half of it was sourced by the agency first and brought to BigCommerce, and the other half was sourced first by BigCommerce, and then we'd introduce agencies or the agency would be found later in a sales process. Yeah. So unpack for me a little bit of the the 80% in the middle on the the partner driven part of BigCommerce success. Yeah. So the go to market strategy was really clear.

Remember when I said when I was building PayPal merchant services, job one was going to the shopping carts and getting integrated into the shopping carts and ecom platforms. As we're going into the mid market at BigCommerce, job one was go to the leaders in the mid market today who are the agencies doing Magento implementations, those gold, silver agencies. And with as many as possible, work your way in. I think within the first year by the end of the first year after I arrived, so by mid twenty sixteen, my brand new agency team had reached out to and built a relationship with roughly a third of the named SilverGold. I think the number was 57.

Magento had 57 named SilverGold partners around the world, and I think a third of those had become partners of BigCommerce within that first year. And over time, we kept targeting that group to grow up. We weren't saying get rid of Magento. We know that Magento solves problems that SaaS can't solve, but you're doing the best work for the best companies in the mid market. We wanna be your SaaS option, and we'll compete head to head every time the the benefits of SaaS are better.

You know, I give a shout out to Dan Furtig, who was really great. We probably hired him to be our head of agency partnerships around 2016, I'm guessing, and he really did a terrific job. We took a bet on a relatively junior person because we saw the raw talent, the the partner centricity, the hustle, and that's one of the prouder hires I made or we made in my ten years of BigCommerce where, you know, you're not betting on a resume. You're betting on the human sitting in front of you and saying, I think that human can really be the partner leader that our partners want from us and that, you know, great talent that we hire in will wanna work for. I love that story.

So let me let me tell you a quick a quick a quick one. So, obviously, you were the last guy that I met with, you and Russ, before COVID. We were both in The UK, and they did the mandatory fly back. We're shutting down the world. Yeah.

And I remember how good a negotiators you and Russ were because you understand the core value prop of us as a partner trying to work with BigCommerce. This was at Digital River. Yep. And, then fast forward five, six years later, I'm in this role at Shopware. I'm talking to a partner, and we're trying to negotiate terms.

And I said, hey. Listen. Just give me whatever you did with Russ and Brent, and I'll sign that. Because I knew how good you guys were thinking about partners, how well you were at monetization. And so I took a lot of advantages from you from all the hard work you did, in in with partnerships.

Yeah. And and what Russ did, Russ was on the technology partner side of things. Dan was on the agency partner side of things. And and our philosophy on the tech partner side was, yeah, Russ is a really good negotiator. And in particular, payments was very strategically critical to BigCommerce because we made the choice not to compete in payments.

Yeah. We could copy Shopify, but I came in with the conviction from my payments background that it's not one size fits all. There are a lot of payments problems around the world. The ones Digital River solves best are different from the ones that PayPal solves best versus Stripe versus Adyen versus all the others. And because our target customer is not one size fits all but complex, we need to work with a lot of different people, but then the deal we would have with the payments partners is we're not going to compete against you, but we need to get we need to get, you know, a reasonable rev share from that profit stream, you know, to help fund the business and grow the business.

And and so, you know, Russ was very effective at negotiating partners to a market rate. And in some cases, you know, those payment partners were used to paying that, and in other cases, like, they'd never done it before. And they would kick and scream and say over our dead bodies, we can't afford that. I say, this is what the going rate is in the industry. Like, we wouldn't name names, but this is what other people are paying.

And if you're not willing to pay that, either we won't integrate with you and partner with you or you'll be commensurately lower down our recommendation tier and, you know, you just won't get as much business. So that's kind of how we approached it. And the payments partners welcome that because they knew the alternative, at least in the Shopify case, was sell. You're you're you're not in at all. Or if you are in, it's with a poor integration that delivers only a subset of your best capabilities and differentiators and a heavy financial penalty for using you and no recommendations for using you.

And, like, we were the polar opposite. We were actually trying to innovate and create competitive advantage with our payments partners. Like, we felt like we're in this together to innovate, and I loved innovating in payments. We did a lot of innovation with partners in the BigCommerce checkout that, you know, don't get recognized as much relative to what Shopify has done, and they've been very innovative. But BigCommerce with its partners did really innovative things too.

Absolutely. Well, let me let me ask you a question. So, I when you when you when you decided to leave BigCommerce, I sent you a nice note because what you accomplished in the market is really, really amazing. Honestly, if it wasn't a Shopify, there'd be a statue of you in front of BigCommerce for what you accomplished. Honest to god, it's it's amazing.

And let me tell you why. So if you think back to all the companies that have ever been a commerce platform, k, all of them, BigCommerce might be number two or three in all time in terms of revenue derived just from commerce. Two or three. Digital River got to, like, 400 at one point. Shopify is obviously very big.

BigCommerce is at three fifty ish. You know, who else was there? ATG never got that big. Magento never got that big. Who was it?

I think Magento got bigger than that. I maybe I'm wrong. I thought they got I think they got they got bigger in terms of GMV serve, but they didn't get bigger in terms of their take rate. Their their pay cover was all revenue at 400,000,000. So, anyway, top two or three business ever invented in ecommerce, and I think you deserve a lot of the credit for that.

Well, we're we're we're top five at least. And, you know, it's, I'm it's always with a mixed I have a mixed feeling, because I wanted to beat Shopify. I wanted the world to have a super strong alternative. And in fact, I think that's what BigCommerce is in b two b. Like, don't take my word for it.

Andy Hoare, for a couple years running, has rated BigCommerce the best mid market b two b platform in the world and, you know, right up there with SAP in an enterprise b to b. On the b to c side of things, you know, I think we're the best for a subset of merchants. But, boy, Shopify was an incredible competitor. And there were there were a few years where I thought they were asleep at the wheel, and paying no attention to mid market and above. They were positioning themselves as the anti enterprise platform.

They weren't paying attention to b two b. They woke up. And when they woke up, just the the mountain of resources that they could throw against product, both their own original innovations and then the things that they would copy, from us or others was very tough to compete against. And, you know, they're just they're a great company, but, you know, they're also not philosophically that that open company. Right?

They're not open when it comes to front ends. They're not open when it comes to payments. They're not open you know, they've got a cherry picked partner in every category. And I would have liked to have gotten BigCommerce instead to a billion in revenue, right, and be that much larger because I do think the world deserves world class choices and world class competition. And I think that's what BigCommerce is in b two b, get catalyst all the way live on the front end.

It is for merchants who want that flexible and world class front end for b to c as well. But I always I always felt like Shopify sucks so much air out of the room, out of the conversation in terms of awareness. They won a lot of business they weren't the best platform for, and we couldn't spend our way out of that. We couldn't we we tried our best with reputation and positioning, but it always felt like we were a fraction of the size that the platform deserved on the merits. You know?

And in hindsight, I can think of a few things I would have done differently and better, but it's also pretty tough. You know, like, it's a competitive industry. I recall, Jason. Go back in history again. So here's a little anecdote.

When I left Escalate and joined eBay in 2001, I'm head of strategy. And part one of the things I was working on was informing management about the alternatives that online sellers have. And, you know, eBay didn't really know that much about shopping carts and ecom platforms. And I said, in 2001, I can name I can give you a list of 250 of them around the world. They're a dime a dozen.

They're competitively priced against your take rate. They're easy to use. They give the merchant a branded storefront. There are different features for different merchant capabilities. There were 250 of them in 2001.

By 2009, when BigCommerce launched, there were more than 500. By 2015, there were still roughly 500. Like, not too many had not that many got launched and funded after 2010 because there were already so many of them. There was already so much competition. It's tough competition.

And I was pretty humble coming into BigCommerce because I'd already that's like the one failure in my career. That startup escalate that I joined at the beginning of 2000 was the one company I joined in my career. It's like like, we didn't pull it off. I knew what it felt like to be in a start up that wasn't winning, and then to have to, you know, take your tail from between your legs and pick up your pride and go start over again somewhere else. And then in 2015, I was coming into a company which had already lost in its core segment to Shopify, had 500 competitors, and was wanting to go up against the big boys in the mid market and enterprise.

But I had so much conviction that there wasn't a SaaS solution, and that's what the world needed, and BigCommerce could do it with what it had. That I said, I will bet my career, and I will bet this company on that move. And, yeah, we pulled it off. We we IPO'd. We became profitable.

But you can see today, you know, it's a it's a humble stock price and market cap, not something a lot higher. And some of that is a result of just how tough the competition is, including the biggest of them all, Shopify. And, you know, inevitably, as a CEO, you look back and you say, well, they're good decisions I made and I think you deserve more flowers than that. The fact that you identified an underserved market with a with a unknown in this market to go address the mid market, to open up this open SaaS story, to build the relationships and hire the talent you did, to actually go public. I mean, you you deserve a lot of credit.

You did a lot of great things. Well, that's kind of let's say, Jason. I I I I it would be delightful to be remembered that way. That's how I think of you. I don't know if I will be, but, alright, at least I've got one person, out there.

So thank you. Those who try to enter a market against a market dominant player, come and go and do that, have success, and then you come talk to you and I, Brent, about how how it's done because it is a very difficult thing. We've had our success as well. I think we're the fastest growing commerce platform in in in North America, but it's doing the same plays you talked about, finding the underserved, being open, building strong relationships and basically outworking your competition. It's not easy.

So let's, let's close with this. People would love to know how are you staying busy? What have you been up to? And then I'd love to know from you, who do you define as commerce famous and who should I invite on this pod to talk about their history in commerce. So let's start with the first.

What are you up to these days, and how are you staying busy? Well, I'm, a trustee of the University of Austin, which is a new university that we launched here a couple of years ago, and we're taking on higher education. I played a significant funding role backing a major piece of legislation here in Texas, the Texas Ibogaine initiative, which is, 50 the largest ever government sponsored support of, psychedelic research, in particular, this Ibogaine, medicine, it's from the root of the Iboga tree of West Africa, is the single most effective medicine ever discovered for treatment of PTSD, for treatment of addiction, especially opioids. It's just a miracle drug in getting people off opioids for treatment of traumatic brain injury. There's emerging evidence that works really well against depression as well.

Now all psychedelics are currently or most of them are schedule one prohibited drugs, but I think there's a window of opportunity with RFK Junior in the White House to at least move them from schedule one to, you know, an easier path to then do the right clinical and medical trials, to get FDA approved for treatments like this. And, you know, due to loss within my family due to depression and suicide, this is an area of, real passion for me and my wife and and trying to make a difference in in other people suffering from mental health challenges, you know, whether it's depression like our son had or, the things I became so effective against PTSD, TBI, and and addiction. So that's been a major thing. I've had, you know, dozens of companies pitch to me, you know, for CEO roles, board roles, CXO roles. And it's still probably my intent to to take on one of those.

I just haven't found one yet that gets me as excited as my last four. I had so much fun and joy at BigCommerce, at HomeAway, at PayPal, at eBay. That that's sort of my bar, and I'm 54 years old, which means I'm still full of I I'm I'm I'm full of energy. I think I'm better than ever before at being able to be a good leader, but I have time for maybe one or two more in my career. And I don't want the, you know, the last thing I do to be a whimper instead of a bang when the prior four things felt, at least to me personally, like bangs.

So I'm I'm looking for something that really gets me jazzed, but, you know, generally, I and I and I've and I've been dabbling in starting something, you're thinking about starting something with someone else that just hasn't come to fruition, may not. Is more likely I I I take over something. But, yeah, I gotta be opportunistic. Like, the best and most exciting companies typically don't need a new CEO. Right?

You're gonna have to fix you're gonna have to fix something. Yeah. It's it's it's companies that are sort of past their heyday, and I'm just not interested in that. I'm also finding final thing I'll say is that these three industries that I've worked in in the Internet era, meaning ecommerce, fintech, which was PayPal, Internet travel, which is HomeAway, are mostly late stage industries in terms of the innovation disruption from the Internet. Like, the winners are mostly already determined, and what's happening in terms of innovation today isn't what it was ten years ago or twenty years ago.

I think I'm more likely to go to a new industry or a subset where it's earlier innings. Mid innings are early innings. And there are still industries that are very early innings in terms of being disrupted. Like, human health and health care is very early innings. That is ripe for disruption.

Yes. Education, as you're playing a role in education as we speak, needs to be disrupted. That's right. Although it's not the Internet that's doing the disruption. It's a it's a new it's a u we're very disruptive, but it's a but it's very much a physical university.

So I'm still looking. It's I would have not anticipated, you know, eight, nine months at this point, but I've just seen too many things that haven't cleared my bar. And so I am still awaiting. Nice. Well, I knew you wouldn't be bored, and clearly you're not.

And it sounds like you've really poured in your heart and soul into some things that matter. So kudos to you for having the conviction to make a difference. I think all those things you just talked about are really impactful, probably more impactful than driving somebody's revenue an extra 15%. So I think your I think your time is being invested as it should. So congrats to that.

Thanks, Jason. And in your answer to the question, like, famous, well, have you had on Stefan Schombach, a man for Nutri yet? You have. No. He would be an excellent one.

Would you make an intro? I'd love to have him on. Yeah. I mean, I don't know Stefan super well, but I could. And then, of course, you know, Roy Rubin or one of the other Magento founders might be interesting.

Roy Rubin was the first guest on the pot. So we've had him. Yeah. I was thinking some of the old good BC people like Mark O or Jason Flagg, Russ Klein. You had a you had a killer's row of of great talented people over there.

Yeah. We sure did. Yeah. You could also do r a, r c f o, who really was the glue that held the company together when the founders were in Australia. Yeah.

You could pick any of those folks. Right on. Well, Brent, thank you for investing an hour with me. Love the level of transparency and honesty, that we go deep on things. You've had such tremendous experiences.

Thank you for sharing them with us. Well, it was fun. I enjoyed the questions and hope the folks who have lasted this long got something worthwhile, out of it. Grateful to you, Jason. Thanks, buddy.