Despite the unstoppable rise of the online marketplace model, it remains challenging to build ecommerce marketplaces. There are so many vendors, third-party apps, devices, and consumer preferences to account for.
The question is no longer about your online presence. It’s about how far you can reach.
That’s why Ryan Lee, together with co-founders Niklas Halusa and James Throsby, decided to build Nautical Commerce, a multi-vendor platform that aims to make marketplace technology accessible to businesses of all sizes, from startups to enterprises.
In this Q&A-style interview, Lee shares the inspiration behind founding Nautical, the common pain points of ecommerce brands, and how entrepreneurs can stay ahead in today’s competition.
Let’s take a look at some of his experiences and advice.
Nautical’s Founding Story
In June, Nautical Commerce raised $30M to scale multi-vendor marketplace technology.
“This funding is validation that we are focusing on the right problem, specifically an issue that is having a huge impact on the ecommerce market,” Lee told SEJ.
“Plus, there are a variety of marketplaces, and right now, we are primarily focused on a couple of marketplace models. This funding will allow us to cast the net a little wider and help more organizations who have dreams of becoming multi-vendor marketplaces.”
What inspired you to start Nautical?
Ryan Lee: “There were three things that inspired me to found Nautical:
One: I had the unique opportunity to peer behind the veil and see that many organizations were facing a similar problem in that they wanted to enable multi-vendor commerce, but the technology wasn’t approachable.
I saw a clear opportunity for Nautical’s marketplace platform to power these businesses much faster than the typical two- to three-year implementation timelines and massive capital outlays.
Two: My previous experience really sat at the intersection of commerce, FinTech, and logistics. This includes my time working at Apple and launching Apple Pay internationally, my role as Chief Product Officer at a FinTech startup, and working for a B2B logistics startup.
Everything I’ve done to date has focused heavily on the back office. I am very passionate about the back office and the opportunities to optimize and reduce manual and labor-intensive work.
Three: I saw so many retailers struggle to be both technology companies and retailers. Most technology companies have 90% margins. Retailers that manufacture and distribute goods that end up in the hands of consumers don’t. Because retailers run on thin margins, they aren’t able to build the same way a technology company would.
We’ve seen organizations try to be both – Sears, JCPenney, Borders – and ultimately they failed because they weren’t focused on their biggest value for customers.”
Overcoming Ecommerce Hurdles
What do you think are the common pain points of ecommerce brands? Do you have a few go-to strategies to approach them?
RL: “One of the most common pain points of ecommerce brands is getting new product lines in front of consumers with the intent to buy. We’ve been in this world where marketers are casting the net wide by blasting advertisements all over the place.
For a while, it was relatively easy to find out where your buyers are, but now – with the privacy changes to iOS 14 – finding your customers and targeting ads is a lot more difficult.
Now, it’s imperative to offer all the products a consumer would want when they arrive on your site and also participate in marketplaces. When shoppers visit a marketplace, there is a higher intent to buy. I am excited to see how marketplaces grow and become a channel for increased revenues.”
What’s the one greatest but most underutilized opportunity in the SaaS market right now?
RL: “So many businesses are focused on optimizing the buying experience. But for marketplaces, distributors, or any business with suppliers on their platform, removing the friction to sell and participate in that ecosystem is just as important.
The most underutilized aspect of SaaS is the back office automation that companies like Nautical are helping digitize. A lot of companies are digitized online and can support ecommerce, but they aren’t digitized in the back office.
Organizations tend to throw labor resources at that problem which they ultimately have to scale linearly with revenue growth. Nautical can help businesses using the marketplace model to scale without having to linearly add headcount to grow.”
What recommendations do you have for fledgling ecommerce sites and brands to help them get off on the right foot?
RL: “For ecommerce sites and brands wanting to get off on the right foot, make sure you aren’t trying to build your ecommerce stack out yourself.
Leverage enabling technology that gets you up and running quickly so you can validate your business model and experiment with new vectors and products.
Businesses that think they can be both a retailer and a technology company ultimately fail. You have to choose a path.”
If you had to sum up the role and value of a digital marketer, what would it be?
RL: “The world is digital. Today, digital marketing is simply marketing. For many companies, your website is your publicly-facing brand.
Speed Wins The Competition
Any advice for junior marketers who aspire to a leadership role in optimization, data application, and FinTech? How about those launching their own startups?
RL: “The term that resonates here is ‘analysis paralysis.’ There is no amount of data that can teach you what you can learn from just doing it.
My recommendation to new entrepreneurs that want to validate their passion projects or business ideas is to find a platform that allows you to validate your business model as quickly as possible, with the least amount of capital upfront.
It’s very easy to formulate a grand plan that takes two to three years to execute. The problem is, that’s two to three years and capital investment you’ll never get back. If you can compress that to 30, 60, or 90-day increments, that gives you a clear advantage over any competition because of speed to market. And speed wins.
I practice martial arts, and we have a saying, Speed beats strength, and technique beats speed. Speed always beats someone who is more capitalized because you get to learn faster.
The technique in this analogy is having the experience in that industry. Even if you don’t have ecommerce experience, speed is definitely something you can have as an advantage over someone who’s well capitalized.”
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Featured Image: Courtesy of Nautical Commerce