A #RealDigitalStories session with Vikal Kapoor. Exploring how scaling merchants can revolutionise their post-sales operations, global differences in attitude towards risk and innovation and the future landscape of eCommerce.
In our latest episode of Real Digital Stories, Cas Majid & Matt Jones interview Vikal Kapoor. Below we’ll cover some of the key Q&As from the session.
You can access the full video interview here.
A truly fascinating session which delves into:
- Vik’s impressive background story: from son of immigrant parents to established technology futurist, serial entrepreneur, and investor.
- Life on Wall Street and the differences in attitude towards entrepreneurship, risk, and innovation in the US.
- The World Economic Forum, its positive impact on the world and the need for younger minds.
- Single Source of Truth (SSoT).
- How scaling eCommerce brands can optimise and revolutionise their post-sales operations with next-gen technology.
- The Metaverse and future landscape of eCommerce.
Who is Vikal Kapoor?
Vikal has been involved Fintech, Commerce, and Investments for more that 20 years. The son of immigrant parents he has had a staggeringly glowing career as a technology futurist, serial entrepreneur, and investor.
His impressive background career spans Wall Street, private equity, and venture capital. Influenced through the dynamism of capital markets, PE, and VC at SevenTrainVentures, JPMorgan, Deutsche Bank, Bank of America Merrill Lynch, Bloomberg, Proton, and the World Economic Forum. Vikal is also co-founder of Stateset, PolrLake and Dapps.
Vikal is Founding Partner of SevenTrainVentures, a venture capital and private equity organisation providing innovative, confidential, and un-conflicted strategic growth and investment advice. SevenTrainVentures execute strategic growth and investment for top decile of venture-backed companies from formation to pre-IPO including M&A, sales acceleration, and game-changing partnerships. Their clients include private and publicly traded companies in Fintech, PropTech, eCommerce, AI, Blockchain, Cyber, Data & Analytics, PropTech and MedTech.
Throughout the last 20 years, Vik has led the successful growth, turnarounds and exits of VC-, PE- and LP- backed financial markets, technology, services, and marketing companies.
Vikal completed an MBA from ESADE Business School (Forbes Top 5 Non-US MBA) where he was elected Co-Class President. He has a dual BS in Decision Information Systems and Finance from University of Maryland, College Park and graduated from top-ranked Stuyvesant HS. Vikal has lived and worked in the US and EU; and maintains an extensive global network.
Vik is passionate about philanthropic causes. He contributes to larger causes by working with top global executives on the Digital Transformation Committee for the World Economic Forum; Data-Centre Industry Executives at the US Telecom Exchange and future leaders as an Advisor to YourMarengo across the Columbia University Executive Coaching Program.
He is passionate about setting humankind free are from our countless forms of societal conditioning to enjoy a better human experience, lift our consciousness and kick it with some agendaless conversations, sports or playing with his 3 awesome kids.
The #RealDigitalStories interview with Vikal Kapoor
Q from Cas Majid:
“Vik, how did you get to where you are right now, tell us a little bit about your backstory?”
A from Vik Kapoor:
“Okay, so I’m the son of immigrant parents who left everything in India to bring me here with 20 bucks in their pocket and I was about two years old in New York City. If you remember New York City back in 1980-81, it was the Iranian oil embargo or interest rates were almost 20%, unemployment was around the same and I grew up in the dangerous back streets of Flushing Queens New York.
But you know looking over the next 20 years, the kind of diverse background I got, the experience of having a family from Taiwan as my neighbour, somebody from Brazil as my other neighbour, the kids on the street whose parents left the USSR to come to the US. It’s fascinating to think back at the United Nations type upbringing I got, which really influenced not only my career, in the way I look at things through a lens of very humanitarian, but also knowing that there’s a secret behind every stone that hasn’t been turned over yet. And the ability that you can constantly learn from everyone, and I think just keeping that student of life hat on, a tremendous amount of humility and a thirst for knowledge has kind of like allowed me to constantly learn from others.
You know, I met a woman at a bar the other day Nancy, she’s 85 years old, her husband just passed away from cancer and she was you know a graduate of high school in 1955. Listening to her stories of growing up in Massachusetts, where she was when Kennedy was shot, how she brought up three wonderful kids in the United States, to spending time with a sophomore in high school, who I play soccer with on Saturday mornings. Listening to how he’s staying up until midnight every night working because school is overwhelming and thinking like wow, I didn’t experience either of those, but it’s really fascinating to appreciate everybody’s individual story and I think looking at my own background, being of Indian heritage and growing up around so many cultures so early in life, you realise everybody has a story and through that story, they view the world.
And what does that mean? They’re having a conversation with you right now through that lens, so it’s extremely important to understand their own lens, their own story and that’s where the mutual respect comes from. From learning from their story.”
Q from Cas Majid:
“I noticed that just in the background there you’ve got a picture of Kennedy himself, which I think you’re a big fan of right?”
A from Vik Kapoor:
“Yeah, it’s Kennedy. It’s actually Robert F Kennedy and JF Kennedy throwing a football around and then Martin Luther King below him which you don’t see, there’s also one of Buddha and Al Pacino from the Godfather and my kids and I lying down at a beach at the crest where the wave actually comes and hits the shore and we’re lying down.
So, that’s a very important picture of Kennedy, as I’ve gotten older, I’ve become a little bit less of a fan of John F Kennedy and more of a fan of Robert F Kennedy, more from the humanitarian aspect. But, that’s actually a very important photo, because that’s just before the television debate with Nixon and everyone thought that he had zero chance, but it’s kind of interesting to see the psychological bias that happened on that television debate, because he was the best dressed and nobody told Nixon not to wear plaid shirts on those old TVs. So, it was very difficult to focus on Nixon and what he was saying because everyone’s focused on the way the shirt was looking and some say he somewhat won that debate.
But I actually really appreciate that photo because he was completely in the zone and you kind of look at that photo and he’s just hyper focused before the lights come on into what he’s going to do on this television debate as a young John F Kennedy against a very well-known Richard Nixon.”
Q from Cas Majid:
“So, Vik, let me take you back 20 years, I know you’ve worked with the likes of Deutsche Bank, JP Morgan, you’ve been involved in start-ups, investment, IPOs etc, how did you get into what you’re doing now, tell us a little bit about that journey from where you started, to where you are now with Stateset and SevenTrainVentures, take us on that journey a little bit?”
A from Vik Kapoor:
“Okay, no pun intended with the 7-train journey, but I took the 7-train growing up and the 7 train was actually the immigrant train, where everybody started in Flushing Queens and then ended up in Times Square, so the train is actually extremely important.
So, what I think in terms of looking at Wall Street, I learned a lot, it was a hyper pressure zone, it was front office trading floor style, you’re only as good as your next trade and nobody cared how much you made last year, nobody cared what you did the day before. It was a very performance-based culture of alpha alpha people, top of the class everywhere they went. hyper performing and nobody took things personal and that was something that was really fascinating. Because you could yell, scream and you know curse out somebody next to you and then once the trade was done, you moved on to the next one and everything was business and it’s something that I’ve kind of carried on as I’ve gotten more into the adventure space.
I think the one thing that Wall Street really teaches you, at least that I took away, was arbitrage, you really look for the gaps right, you really look for the value and then you got to go and get that value before anybody gets it. It’s kind of like drawing a line in your in your water right, the line goes away, just as fast as you drew it, you draw a line in the sand, it’ll stick around until somebody else finds it right but arbitrage is just that fast, just that quick, so the entire value creation that I was watching happening while I was on Wall Street a lot of it was actually happening in the VC space and not in Wall Street. But Wall Street was doing a great job sort of capturing it, packaging it and then selling it on right.
I wanted to continuously learn in Wall Street, but I was having a great amount of FOMO as to what was happening in the VC space in Silicon Valley and all these great pockets of ecosystem innovation that I was completely missing out on. So, when I had the chance to sort of become an entrepreneur, I left Wall Street, I focused om really uncovering the secrets under the stones of the VC space, it took a lot of work, I had to cash in a lot of favours and to sleep on some dirty mattresses and. I had to shake off the banker reputation. Which is fascinating to see in the VC space is against. If you think of like a villain and a hero, you know the venture space kind of looks at Wall Street as somewhat of a villain and it’s somewhat of the same as well between the hero and villain story with Wall Street looking at the VCs. However, those tribes are breaking down now, I think now there’s a bit more collaboration. The likes of a FinTech company is working more so with a JP Morgan versus you know maybe 10 years ago, there was more of a disrupter of the incumbent mentality.
So, looking at sort of that that 10-year arc in Wall Street and then the last 10-12 year arc in the VC space, I think there’s a lot of value that’s being created, a lot of leveraging of great technology.
What’s interesting is that e-commerce to me is like a is a phenomenal place to be because, number one it’s the great pulse of the younger generation that has suffered a lot especially now during Covid. They really are staying home, you know some of them miss college they open up Shopfiy sites, WooCommerce sites, and they really got into the ideas of ‘I want to own my own destiny’ and it’s somewhat of a bug that I can relate to. I’ve always had that. The idea of ‘I don’t want to be working for somebody else’ who’s going to determine what my pay and my career trajectory is, and I think if you have that sort of freedom and foresight of thought, of owning your own destiny, you know e-commerce is actually quite liberating.
If you think of an artist, you think of somebody creating a bracelet, or you think of somebody painting, you think of somebody buying goods from Alibaba and then selling them in the United States, or you think of somebody who’s been creative and packaging up a certain amount of SKUs and creating their own SKU and building that really important relationship with their customer base directly, unlike opening up a store where frankly you have sales people that somewhat own your brand. Or, if you have a drive-thru, you’re at the behest of that actual delivery of the food, or if you own a soccer club (or a football club I beg your pardon), you know everybody’s relationship to that brand is their own version of their brand equity, it’s their lens of which they see it right, so a win or a loss, versus like the hiring of a coach versus, what one of your players may have tweeted, or one of your employees may have uncovered from their past.
You know there’s always a relationship that people have with their own tribes and in modern day society and capitalism that tribe is somewhat owned by brands right. The McDonald’s, the Apple’s, the Coca-Cola’s, the Samsung’s, the Elon Musk versus the Bezos right. So, you kind of get that a lot and the younger generation always has a great pulse on like what’s hot, what’s not. I’ll give you one quick story, you know some argue that the USSR broke up and the Cold War ended, you know obviously because Gorbachev and Reagan worked it out. But some argue, it was MTV right. Some say there was so much pent-up pressure by the younger generation inside the USSR, you started to see people say like ‘I want my Pepsi’, ‘I want my Michael Jackson’ right, ‘I want my music’, ‘I want my freedom’, ‘I want to choose what I want, I don’t want it to be rammed down my throat’.
And that sort of breaking free, is kind of like where you see potentially like (a metaphor), the breaking down the Berlin wall. And some argue that taking down the USSR, it was pop culture that did it. And, if you look at modern day e-comm, I think you see that sort of like remnant, or at least the ingredients of owning our own destiny, owning our own brand, having a relationship to our customers, understanding what our customer needs are directly, that first party data. People are thinking ‘I don’t want to have to rip up CSV reports’ or get a third-party agency to tell me what my customers want, I’ll just ask them and being able to have that first party conversation, I think you get closer and closer to the truth as to like what is the customer’s feedback, what do they actually want. You go on Amazon sometimes, it’s not even the right review, there’s pictures of a completely different product, you can see how like AI is distorting the truth and anybody with two brain cells can go down and start to see these are not actual reviews and Amazon is beginning to suffer from that.
The benefit of having your own brand on e-commerce, the benefit of being a merchant, is you’re not susceptible to those entry points of a third party coming in and writing another review. It’s kind of fascinating; Apple’s a really cool example. Apple, I don’t know has say several tens of millions of followers on Twitter and Facebook and have never posted on either of those two platforms ever, because they don’t want to invite negative reviews. Very smart on how they interact with their audience, they maintain only a linear communication. And you can think of the sub brands, the Apple Music’s of the world right, the Apple TVs of the world, they use the sub brands to their brand equity, sort of built up by the education of the of the writers that are talking about each of their sub brands and by that in aggregate, becomes the brand of Apple.
So, a young impressionable mind right now is saying, ‘hey I’m 14 years old mum dad, do I want a Samsung or do I want an iPhone’. Well, Apple is just so elusive, there’s so many wonderful things about it, I do want Apple. Apple anything and I look at e-commerce and it kind of has the tenure-ability where merchants can start to say ‘I want to build my own sub brands’, ‘I want to build my own relationships with my customers’. And now technology has sort of gotten to the place where it empowers even younger merchants the ability to have their own Single Source of Truth, having their own technology that enables them to have a much better conversation with their customers, but also have a much better relationship with their own partners, their vendors, their manufacturers.”
Q from Matt Jones:
“Vikal, I know you’ve worked for on some amazing projects and what a fascinating story by the way. Some could certainly call you a technology veteran, but I’m interested in your involvement with the World Economic Forum, obviously a global, international body, a well-respected body, tell us a bit more about your involvement with the World Economic Forum?”
A from Vik Kapoor:
“Surely, so my involvement is to be part of their digital transformation committee. I was appointed that several years ago and it’s basically very altruistic. I’d say you know top of their game executives, minus myself, have around four sessions throughout the year. We meet in San Francisco, the Middle East, London and then Singapore or Hong Kong, where basically we get together, and we work on public-private partnerships.
We also share our own versions of the work that we’re performing, so for example, I do a lot on the Blockchain side, explain to them like where I see Blockchain disrupting incumbents, how it would help sectors and where Blockchain technology sort of fits into the scheme and everybody brings their own very good perspective.
And I think the World Economic Forum being an independent body, being extremely well respected, I’d say by the one-percenters right, it’s very influential both from a private perspective – private corporations, private money, but also from a public perspective, through inviting many of those who have won voting blocks in their own countries, in their own regions.
So, you really have a lot of strong thought leadership, if there was ever really an influential body nowadays, I’d say more so than even the United Nations, you know which some would argue, it has become toothless to some degree, it’s really the World Economic Forum, which is closer to writing checks, taking on harder projects like climate change, protecting the Great Barrier Reef, mitigating fraud in like driver’s license applications in New Delhi India for example.
Right so the WEF, they really take on what somebody else may not want to take on, so it’s getting bright minds to take on tough challenges you know, I think the WEF does a very good job of bringing us together and facilitating a lot of good conversation. Again, it’s like an agenda-less conversation when we have our breakout sessions, nobody has an agenda, we’re really there to just learn from each other and just try to make it a good place and then we get on a plane and we’re off.
They also discourage anybody using the forum for capitalistic purposes, which I think is very healthy, I know I’m not getting back to my inbox and somebody’s trying to sell me a software or tell me to work with them. If I would like to, I’m happy to do it, but I think that WEF has done a very good job and I think it’ll continue to do a good job.
If you ask me some of the gaps, which you should, every side, you got to do both sides of the ledger, I think they should invite younger and younger younger minds. You know, I used to say as a kid like ‘why aren’t there young kids in Congress’, you know you’re making laws as adults for us, now I’m an adult I’m thinking why aren’t there kids in the room, you know that it’s important to listen to them too.”
Q from Cas Majid:
“Just staying with that and I know you’ve done a lot of traveling around different parts of the world, how does the US differ to other parts of the world when it comes to the adoption of technology and the attitude towards investment? I mean, I’m part of Birmingham Tech Week here in Birmingham and one of the big things is attracting inward investment as part of that Tech Week and we see different nuances from Manchester to London to Birmingham. What do you think the differences are in attitude in those two things, one is investment, attracting investment, risk and the second is how they do business?”
A from Vik Kapoor:
“Okay, well the US being 25% of global GDP, it’s difficult that any sector doesn’t touch the United States of America. And looking at the speed of business globally, having the ability to make decisions and moving up the chain of command to make those decisions really puts you at a fortuitous position. So, for good or bad, I’m not judging, the United States tends to be in that top right aspect of the matrix right. The majority of business happening, also the speed of business happening, which I think gets to a little bit of your point. The innovation that you see in the United States is so welcomed, it’s encouraged. Risk taking is very encouraged in this culture, more so than I’ve seen anywhere else in the world. And I think that starts from the DNA right, I came to this country, and I came to the country with the mindset I have to go from zero to one right as Peter Thiel did. Not only zero to one, but I have to own the journey and there’s no one who goes from zero to one, well if there are there’s few, or they’re lying. Nobody who didn’t fail several times and the other thing about the United States is that it really roots for the comeback story right. You think of like Muhammad Ali second career, you think of Jordan’s second career. I think we want that comeback, and we want that underdog to win because that’s the DNA of the culture.
It’s not one of like ‘I inherited my position’, ‘I inherited my wealth’, ‘I inherited my status’. You know, last names don’t matter here, obviously there’s exceptions to it. You know, anybody, anywhere here could become the next Zuckerberg, could be the next Bezos, if you subscribe success as having wealth.
But, you know there’s so many wonderful humanitarians here who you may not know and they purposely are anon, or they have pseudonyms, or they go nameless and so you also see the United States as the largest philanthropic donor anywhere else by far. The number two is not even close, because people are just extremely generous and that comes down back to the DNA.
Like, they’re trying to constantly provide an ecosystem of helping and Silicon Valley is a phenomenal example of it right. Those who went there in the 80s and the 90s, or was were from there have done well and then have then contributed back by making their own risk investments you know $50,000 here, $150,000 there, which allows a younger entrepreneur to say ‘you know what, I can actually step away and I can work on this risky idea, this innovation’ and have the ability to it and there will be food in my fridge and rent can be paid. And that sort of like you know human equity and investing in human equity, I think is critical. People invest time and money in what and where they see themselves, right. And if you if you see somebody young and you’re like ‘oh you’re like me 10 years ago’ you know, I’m not sure you’re 100% right on what you’re doing, but I’m willing to take a bet, and if you’re 80% right, I’ll help you fill up the gap of the other 20%.
Or here are 5 people I know you should talk to; you know to keep it going right. And I think that culture, that DNA of risk-taking, of inviting that comeback spirit and really looking to take on and solve hard problems is here in the US. Like complacency is somewhat looked at as a bane to your existence right, like we came to this country, we sacrificed, now what? You’ve got to keep it going right.”
Q from Cas Majid and Matt Jones:
“Moving on to where you are right now. We’re really proud that actually a few weeks ago Wow Group of Companies signed a partnership deal with one of your organisations, Stateset. Tell us a little bit about Stateset and also the thing that Matthew was talking about. Matthew, what’s the other thing that we were talking about, which we thought was absolutely amazing? I think you’re referring to Single Source of Truth Qasim. We would love our viewers to learn a bit more about what that means, and in simplistic terms, what problem does Stateset solve?”
A from Vik Kapoor:
“Yeah sure, Stateset solves for the problem that a merchant, a vendor, or a manufacturer in the world of commerce is looking to grow, in order to grow they need the best and latest information at their fingertips to make a decision. The second derivative of that is, ‘what’s in my inventory’, ‘where is my stuff’, ‘how do I service the customer service ticket’, ‘how do I understand my customer journey’, ‘what’s my product journey’. So, those problems are actually complicated problems and there’s an app for that right, and there’s lots of apps for that.
Now, if you’re an e-commerce merchant and you love your trade, you love your brand, you’re building up your tribe, oh my god the last thing you want to do is solve for the post-sales journey, which in our opinion is probably the most important journey to maintaining LTV. A high LTV and a low CAC, because we all go back to purchase from and engage with brands where we feel comfortable on the returns process, on the refunding process, but also, it’s really implicitly telling us you can trust this brand for its quality. Both of its quality of product and quality of service, so the post sales experience is the most understated experience that is being solved for by disparate apps.
So, what Stateset said is like ‘we have to solve for this post sales experience’. So, we asked how do we aggregate the apps that people know and love Apps they’re already using and create one Single Source of Truth, where all of the information like a SKU is the same SKUs across all your apps. The information of Matt Jones in a CRM is the same as Matt Jones in the customer service in Gorgias, or Zendesk is the same as ShipBob, or ShipHero or ShipStation, is the same that’s in your CRM. It’s the same that’s in Stripe, it’s the same when reconciled later and then when your marketing team says, ‘oh I want to run a campaign on Matt Jones’, they know they’re running it on that Matt Jones, not nine others. So, really having that golden source record, it allows merchants to in real time interact with accurate information and seamlessly keep a post sales experience very good. Not only for the customers that are interacting with them, but the forgotten stakeholders really, the employees of the company right. Everybody working on customer service, it’s very challenging. If you have a demanding customer saying, ‘where is my stuff’, or ‘did you process my refund’, or ‘tell me more about your products that are not online’. You know that’s extremely daunting for a customer service rep to have to go and get the information from so many other reports, from so many other apps and by the way, do it while the customer is responding, ‘hello are you there’, ‘hello are you there’, ‘are you a bot, are you human’.
This really makes customer service and employees start to say, ‘I’m going on LinkedIn, I’m looking for another job’ and that’s why you’re also seeing a tremendous amount of attrition in post-sales and merchants are beginning to feel that in their 2.0 versioning. So, as merchants and brands start to evolve, I think the importance of delivering a post-transaction experience is going to become more important and we really took an approach rather than throwing people at it, or throwing apps at it, to really use AI. And, we use some of the best AI on the planet with OpenAI and that OpenAI is able to aggregate all the information and in half a second provide the responses to the questions I asked you, because it’s using intelligent automation to be able to extract the data and then provide the data right back.
So, if you are a customer service rep you can just press generate response and it’ll get the answer that you need, that Matt Jones has been asking, or if you have a return, the returns process is very complicated our customers see that it takes them 22-25 minutes on average. And there’s errors, you know returns process creates labels, you have to reconcile against your accounting books and your systems and your general ledgers, you have to make sure that the return wasn’t already processed, maybe your warehouse is still waiting for it, your warehouse is uploading into their own system, sending a CSV file at night that they receive the product and then they’re sending it over for you, and then you’re processing the return.
Meanwhile, Matt Jones keeps on asking, ‘where’s my refund’, ‘where’s my refund’. So, in order for us to solve for that, we reduce that down to 40 seconds by really giving the warehouse the ability to scan directly into Stateset, the ability for everybody at the merchant to see the latest on the return and automating that with AI, so that all those processes just become one seamless process, rather than having multiple workflows solving multiple processes.
And that starts with the Single Source of Truth, you have to have golden source data, you have to have golden source records, otherwise you cannot reconcile anything.
If you have say a HSBC account and you have a Barclays account for example and somebody asks you how much money you have, you actually have to go to both accounts to get the answer. But if you have a Single Source of Truth app, it’ll have the aggregated information in all the time, And you’ll stop going into HSBC and stop going into Barclays.”
Q from Cas Majid:
“From a merchant’s point of view, I’m just going to paint a picture here. I started my starting my business five years ago online. I’ve got a Shopfiy store, or I’ve got a BigCommerce, but either way, I’ve got an e-commerce website and over the years, my business has grown. I’m now doing really well, and I see exponential growth happening over the next couple of years and I’ve grown what I call the ‘post-it note’ type scenario, sticky tape. I’ve got these apps that allow me to do post sales, sales order processing, some warehousing, some return stuff but I have to log into so many different things, that I’m duplicating information.
So, what you’re saying is that Stateset is a layer that feeds all those apps into one particular layer of information. You log in once and you have all the information to hand, so you can then relay that information internally and to your customers a lot quicker. Is that in simplified terms what Stateset does?”
A from Vik Kapoor:
“Yeah, so there’s benefits both to the merchant and the developers in the back. So, you log in with a single sign on, one password to remember, there’s a search bar on the top and you can begin right there, it’s like your own internal Google intranet, right across all your apps, now just that feature (which is our most popular feature) saves all of our users a tremendous amount of time searching for information.
Right, they can put Matt Jones in there, they can put a SKU in there, they can put a Stripe address in there, they put any kind of identifier in there, or even if they put like blue swimming shorts and all of a sudden, all the blue swimming shorts pop up. The importance of really putting it all together has allowed everyone in a single view to aggregate all their apps and then we put you know a search bar, able to put the AI to process the return very quickly, do inventory management very quickly. Yes, so indeed if you think of just inventory management for example, right now you have supply chain issues all around the world, right? And the winners such as Dollar General and Walmart are winning because they have great visibility into their supply chain and that is the single greatest variable to determining success. And if you’re a merchant and you’re an e-commerce merchant, trying to deliver a great customer experience, well there’s no worse customer experience than not delivering the goods, or sending them the wrong goods. And right now, you see that and we don’t believe this second derivative of supply chain is going to go away, it is only going to become more complex, as you start to see more e-commerce merchants pop up, vendors start to realign themselves as to which merchants they want to serve and manufacturers making larger bets on where they want to go with their own decisions of like electronics versus semiconductors.
You’re going to start to see this new world sort of pop up, where we weren’t really akin to this before, because we took supply chain so much for granted. We didn’t care for it, but anybody who’s worked in supply chain logistics knows that the second and third and fourth derivative of supply chain is that everything is connected, there’s nothing that’s not connected in today’s world and I don’t mean from an IoT perspective, but I mean the food on your table right, I mean the shirt that you wear, the lenses that go into your glasses and the razor that’s on your on your blade.
So, if you really clean up your supply chain, if you really get a great visibility into it, you can create the partnerships. And we see our customers create much better partnerships with their vendors and manufacturers, because they’re all seeing the same information, they’re all communicating on the same Slack, or the same community on Stateset. They also have accurate information to make better decisions, so the derivative of that is the CMOs of our customers are able to say, ‘hey I would love to run a targeted campaign based upon what’s coming off the pallet’. Oh, and by the way, the third derivative of that is like, ‘I would actually like to create a campaign of a product I don’t even have yet’, because I’ve informed my manufacturer if I could create this demand, would you be able to supply it. So, today in our 1.0 world, we see very much like create a demand through your customers and meet the demand and nowadays that’s what e-commerce has become in a post-Covid world. We see in the world very quickly, the winners who are going to be separated, are the ones who say well ‘how can I forecast the demand’, ‘how can I do demand sensing’. When you can do demand sensing, you can say Matt Jones has a wife and she likes this around the holidays. Maybe I can offer this now in October, she can pre-order it and I can send her a packaged wardrobe of things she might like, and she’ll return when she doesn’t like and she could feel comfortable purchasing as like an Interior Designer.
Or, I actually can do demand sensing on say pre-sales and pent-up demand. Imagine a world in a 3.0 state (and we see the world going here), imagine a world where you actually have a website where you don’t own any products. You’re a merchant who doesn’t own any products, you actually know your customers and you say ‘tell me what you want’ and you and use those customer analytics to then inform your manufacturer who’s like, oh I’ll be right back.
That actually happens every time you walk into a Starbucks. They take your cup, they write your name down and by the time you get to the end, your cup is there with the exact product you wanted inside of it. You don’t need AI, you don’t need anything there, but what do you have? You actually have the truth, like a game of telephone that goes exactly to the Barista, back to Matt Jones. That customer feedback loop, in the most simplistic way, is missing from the e-commerce journey. Because we focus so much on growing your GMV, growing your demand, but you never think about meeting that demand and meeting that demand is really going to be the way you differentiate like somebody extremely successful, a brand that’s extremely successful, profitable and I mean extremely profitable. Because they have visibility into their partners, their inventory. Their visibility into the inventory, not just in the manufacture, but what’s in the C, what’s in the 3PL and what’s in your warehouse.”
Q from Matt Jones:
“Vik, are you able to share some results from some of your current customers. What I’d also like to hear as well Vik, is which platforms can you integrate with?”
A from Vik Kapoor:
Yeah of course, so we have over two dozen integrations and we have a new integration every week, based upon customer demands. So, we have all the majors, we purport to say we have the tech stack of choice. So, I’ll take this question a little bit differently. Some investors we talked to, who are actually opening up multiple e-commerce brands, they say they hate the fact they have to keep deciding on new tech stacks.
Could I just have a one-stop shop, tech stack as a service, and that’s really the mindset where we came into like, look you’re an artist, you are a merchant, focus on your customer demand, your needs, we’ll provide you with the most agile tech stack, which is composable for the future. Gartner is using the word composable. it’s basically the idea of future proofing right, but I don’t have to be like, ‘oh in four years I got to rip this out’, or ‘I already have my apps, but oh my god, the integrations cost you know $100,000-200,000 on SPSS or Brightpearl’. Like, I would much rather have an agile system, where I don’t have to hire engineers and admins to constantly upgrade and update APIs. So, we’ve created a system where basically all your apps, and to answer your question directly, Stripe, ShipStation, ShipHero, Gorgias, Zendesk, FedEx, Klaviyo. The majority of the tech stack we have and if we don’t have it, we can rapidly spin it up and we do very often based upon customer demand. But, the interesting thing here is that our merchants (and to answer your question), like here’s an example, they love the fact that we’re also their snowflake. We’re a single point API for them, so they don’t actually have to have engineers who have to integrate into all these apps, do all these integrations and then maintain it overnight. They just integrate into Stateset, they just plug into Stateset, and we become their snowflake. So, we created the first snowflake for e-commerce, where web agencies don’t have to have people updating products on Shopify directly, they can update it in Stateset, and that product update is being done with the accurate information.
And, more so, we can broadcast that, so they have multiple Shopfiy stores, Zendesk, and then they have you know WooCommerce. That one product update broadcasts to all of that, rather than having to keep going in and keep going in. So the benefits really take hold when you think of like, how do I centralise all of the information and then decentralise the ability to access that centralised information. So, our customers find a lot of benefits, we see them growing GMV 30%, quarter to quarter on average, without hiring people.
That second part of what I just said, is actually the most important part of what I said, because growth is going to happen in e-commerce. Right now, you can throw darts, you can create a company and you’ll be fine with GMV, but how will you maintain GMV profitability and that really comes down to productivity and that really comes down to automating all your processes and your apps and we’ve seen customers of ours grow in many ways. One customer has turned on subscriptions, subscriptions is actually the fastest growing segment we are seeing in e-commerce right. It’s analogous to like an AppleCare, when you buy an iPhone, you’re also buying a monthly there. But some are saying, ‘I want to do like the Amazon model’, the subscribe and save model right, so we’re seeing subscriptions, which is very complicated if you think from an engineering perspective. But from a merchant perspective, they just want the ability to add that feature and there are now apps out there that you can add that feature. But, that app is not integrated with your inventory, it’s not integrated with Stripe, it’s actually all those integrations that then take hold and can get into the hundreds of thousands of dollars. What we did with subscriptions, we had a customer turn it on and they got 30,000 customers as new additional revenue within a couple of months.”
Q from Cas Majid:
“Very very powerful application Vik. So, Vik, we’re coming up to the final part of this amazing session. What’s the future? We’ve just seen Mr Zuckerberg talk about the Metaverse and if you’ve been in this industry for quite some time, you’ll know back in 2010, we had this thing called Second Life, which was a virtual world where you could buy your brands and you could walk into stores and all that kind of stuff. Now it’s matured now because the technology is more immersive and people have become more used to these kinds of immersive experiences, how do you see e-commerce changing with this advent of the Metaverse?”
A from Vik Kapoor:
“So, Metaverse, you know what was previously Facebook right. They’re making the big bet on Oculus and the idea and immersive experience. I think there’s definitely room for that, how much room there is for it, will have to be yielded by transactions, like you know, let’s see how much transactions actually occurred. If you feel like you walk into a Neiman Marcus, or a Saks Fifth Avenue, or a Nike store, or your favourite brand and feel like you’re there and transacting? I think we’re quite far away from the Metaverse and the commerce world coming together enough so that we’re seeing it on a daily basis. I’d probably say seven to eight years if I had to put my money on it, at best.
But, I would also say there’s a lot of pushback from the younger generation right now on social media and engagement, they’re finding their own pockets and then turning off when they want to turn off. So, the life of social media in itself I think is a bigger question. What will social media look like in two or three years? As you kind of see today, third party data is the reason why you see social media, Google advertising is flourishing. The gasoline for all of those companies is third-party data. Third-party data I think has a short shelf life, it’s becoming spam, if I want to know what Matt Jones wants to wear, I’m going to ask Matt Jones and when I have a good relationship with Matt Jones and he trusts me, he’ll tell me. And he’ll tell me what his children’s shoe sizes are, and I’ll know when his wife is pregnant, and that’s a good relationship that I’ll have with him, and I’ll be able to service him as I need to, and commerce will become an automated transaction and we already see that world emerging.
It should be an automated demand filling transaction and I think that’s the fifth industrial revolution actually. Automated transactions – I gave a talk a few years ago about on the fourth revolution and someone asked what’s the fifth, and I still hold true to automated transactions. It’ll know exactly what you want, it’ll make it happen. One example of that is your credit card is being swiped by Amazon all the time, we don’t even know it, it’s just an automated transaction on subscribe and save. Something that you did months ago right, imagine that starts happening in other things, like banking, mortgages, pay for things. That actually is happening, if you think about the way I just said it, it’s an automated transaction. But, the buying decision in commerce is still very human-centric. Can that be filled with an immersive experience? I’m not very bullish on it, I think humans fundamentally still enjoy a physical aspect of commerce and if it’s not an immersive, artificial experience, I think live commerce has a better space.
Live commerce, where you know there’s influencers, or there’s those who really know the product, somebody who is in keto and is a keto personal trainer talking about a keto diet and talking about keto products. Or, a chef who says these are the products I use in my kitchen, let’s cook right, I think that kind of experience is going to be more of a Netflix next version, meeting commerce, where you can buy right on Netflix and you say ‘oh my god, I love that’, and then you get back to your phone or computer and it says ‘hey we just saw you watched that with Bobby Flay on Netflix, here are the products that he went over, would you like to purchase any of these?”
Q from Cas Majid:
Vik, that has been absolutely amazing and one final question just before we finish, it’s a question that I ask of a lot of people, is what three things would you take on a desert island?
A from Vik Kapoor:
“Can it be my kids? There’s my short answer, actually you know what the funny thing is, I always thought if I went to prison and I could take something, what would I take? And I was like ‘the only thing I’d want to take is my ability to be sane, calm, cool’. I don’t need anything; the universe is inside us.”
Ending from Cas Majid:
“Beautiful answer Vik, absolutely fascinating. I’m going to leave it on that bombshell, ‘the universe is inside of us’. Vik, thank you so much, we really appreciate it, you’ve been a fantastic guest on our #RealDigitalStories, until we meet again, thank you.”
Want to learn more?
To access the full Real Digital Stories video episode with subtitles, check it out on YouTube.
For more information on Wow Group of Companies, click the link.
Find out more on Vik’s latest tech venture, Stateset, here: https://stateset.io/
