Despite the unstoppable rise of the online marketplace model, building e-commerce marketplaces remains a challenge. There are so many vendors, third-party apps, devices, and consumer preferences to consider.
The question is no longer about your online presence. It’s about how far you can go.
That’s why Ryan Lee, along 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 to companies
In this question-and-answer-style interview, Lee shares the inspiration behind Nautical’s founding, common issues facing e-commerce brands, and how entrepreneurs can stay ahead of today’s competition.
Let’s take a look at some of their experiences and advice.
The history of the foundation of Nautica
In June, Nautical Commerce raised $30 million to scale technology in the marketplace from multiple vendors.
“This funding is a validation that we’re focusing on the right problem, specifically a problem that’s having a big impact on the e-commerce market,” Lee told SEJ.
“Also, there are a variety of marketplaces, and right now we’re primarily focused on a couple of marketplace models. This funding will allow us to cast the net a little further and help more organizations that dream of becoming multivendor marketplaces “.
What inspired you to start sailing?
Ryan Lee: “There were three things that inspired me to found Nautical:
One: I had the unique opportunity to look behind the veil and see that many organizations were facing a similar problem as they wanted to enable multi-vendor commerce, but the technology was not accessible.
I saw a clear opportunity for Nautical’s marketplace platform to drive these companies much faster than the typical two- to three-year implementation timelines and large capital expenditures.
Two: My previous experience was really at the intersection of commerce, FinTech and logistics. This includes my time working at Apple and launching Apple Pay internationally, my role as a product manager at a FinTech startup, and working for a B2B logistics startup.
Everything I’ve done so far has been very focused 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 many retailers struggling to be both a technology company and a retailer. Most tech companies have 90% margins. Retailers who manufacture and distribute goods that end up in the hands of consumers do not. Because retailers operate on thin margins, they aren’t able to build in the same way that a tech company would.
We’ve seen organizations try to be both — Sears, JCPenney, Borders — and ultimately fail because they weren’t focused on their greatest customer value.”
Overcoming the obstacles of e-commerce
What do you think are the common problems of e-commerce brands? Do you have some strategies to address them?
RL: “One of the most common problems for e-commerce brands is getting new product lines in front of consumers with intent to buy. We’ve been in this world where marketers are casting the net through ads all over the place.
For a while, it was relatively easy to find out where your buyers are, but now with the privacy changes in iOS 14, finding your customers and targeting ads is much more difficult.
Now, it is imperative to offer all the products a consumer would want when they come to your site and also participate in marketplaces. When shoppers visit a marketplace, there is a higher purchase intent. I’m excited to see the markets grow and become a channel for increased revenue.”
What is the biggest yet most underutilized opportunity in the SaaS market right now?
RL: “Many companies are focused on optimizing the shopping experience. But for marketplaces, distributors or any business with suppliers on their platform, removing the friction to sell and participate in this ecosystem is just as important.
The most underutilized aspect of SaaS is the back office automation that companies like Nautical are helping to digitize. Many companies are digitized online and can support e-commerce, but do not digitize in the back office.
Organizations tend to devote labor resources to this problem that ultimately must scale linearly with revenue growth. Nautical can help companies using the marketplace model scale without having to linearly add headcount to grow.”
What recommendations do you have for e-commerce sites and fledgling brands to help them get off on the right foot?
RL: “For e-commerce sites and brands that want to get off on the right foot, make sure you don’t try to build your e-commerce upstream.
Leverage enabling technology that gets you up and running quickly so you can validate your business model and experiment with new vectors and products.
Companies 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 digital marketing, what would it be?
RL: “The world is digital. Today, digital marketing is simply marketing. For many businesses, your website is your public brand.
A digital marketer should focus on more than just clicks and paid ads. They should deeply understand their audience to provide them with useful content and create a strong brand affinity.”
Speed wins the race
Any advice for junior marketers aspiring 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 by just doing it.
My recommendation to new entrepreneurs looking 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 seed capital.
It is very easy to formulate a grand plan that takes two to three years to execute. The problem is that it is two or three years and you will never recover the capital investment. If you can compress this into 30, 60 or 90 day increments, that will give you a clear advantage over any competition due to speed to market. And speed wins.
I practice martial arts, and we have a saying: speed beats strength and technique beats speed. Speed always trumps someone who has more caps because you learn faster.
The technique of this analogy is to have the experience in this industry. Even if you don’t have e-commerce experience, speed is definitely something you can have an advantage over someone who is well capitalized.”
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Featured Image: Courtesy of Nautical Commerce
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