TRANSCRIPT
This transcript was completed by an automated system, please forgive any grammatical errors
SUMMARY KEYWORDS
people, business, app, reviews, customers, shopify, retention, merchants, brand, year, called, big, categories, acquire, costs, founders, create, awesome, e commerce, question
SPEAKERS
Noah Rahimzadeh, Jim Breese, Mariah Parsons
Noah Rahimzadeh 00:04
Hey retention pros. I'm Noah Raheem today and I lead partnerships here at Malomo. I'm super pumped to continue to chat with ecosystem experts alongside Mariah, who you all already know and love, say hi, Mariah.
Mariah Parsons 00:16
Hey, everyone, as you probably know, retention Chronicles likes to bring in some of the best retention focused brands in the Shopify ecosystem.
Noah Rahimzadeh 00:24
Well, we don't just feature brands, we also feature some great thought leaders in the Shopify ecosystem that serve brands.
Mariah Parsons 00:31
And because we always want these conversations to be fun, you'll hear us talk with our guests about what they're excited about and what's helped them get to where they are today.
Noah Rahimzadeh 00:39
We hope you'll stick around to learn and laugh with us retention Chronicles
Mariah Parsons 00:43
is sponsored by Malomo a shipment in order tracking platform improving the post purchase experience, be sure to subscribe and check out all of our episodes at go malomo.com.
Noah Rahimzadeh 00:59
Sweet Welcome back, everybody to the next episode of retention Chronicles. Really excited for today's episode, we're joined joined by Jim breeze who's head of growth at app hub. Jim can probably do a much better job explaining app hub than I can. But I recently came across them at a couple of conferences at the end of 2022. met John who I think might head up BD or something similar for XM. Ops. Yep. And we talked in just seemed like a natural fit to have these guys on the podcast. So really happy to have you, Jim, and appreciate you joining us.
Jim Breese 01:41
A Thank you for having us, Noah, Mariah, really appreciate it.
Noah Rahimzadeh 01:44
Awesome, awesome. So Jim, you know this, but we'd like to start every episode before we get to the shop, talk on a couple personal notes. So we'd love to hear one or two things that you're really excited about in your personal life right now.
Jim Breese 02:01
Yeah. I mean, there's two main things I have like a few focus points this year a lot is to be around. I want to get a dog this year. I had a dog for a long time. And our last dog passed away in February last year. So I've been kind of waiting and say, Alright, it's now time to get a new one. So I want to get a dog this year, and I want to get a West Highland terrier. I think we had one when I was growing up. And now you see him all over Instagram, like gotta get it again. So that's one thing. And then I think taking a trips like taking a lot of trips this year. I want to go to Hawaii. My wife is from there. So we'll go out to Hawaii and kind of do an outer island trip and see some paradise. I'm in Detroit, Michigan is gray. It's 35 degrees. No
Mariah Parsons 02:40
Hawaii.
Jim Breese 02:41
Yeah, it's no Hawaii. So there's that and you know, maybe just exploring the Upper Peninsula of Michigan and kind of get to see some more nature and more, you know, things like that. Awesome.
Noah Rahimzadeh 02:52
So I had to look up West Highland terrier.
Mariah Parsons 02:55
I did the same thing. I had to confirm I was like, dawn on the Caesar.
Jim Breese 02:59
Food, you know? Yeah. Yeah.
Noah Rahimzadeh 03:02
Nice. That's awesome. Mariah. Do you have a dog? I haven't had a dog since I was like a kid.
Mariah Parsons 03:09
Yeah, growing up. We had one. A French Bulldog. The cutest thing in the world. Her name was Bree. So definitely after the French cheese, but yeah, that's the only dog I've ever had. But I mean, if it was up to me, and I didn't have to have the responsibility. I feel like I'd have many pets but yeah,
Jim Breese 03:28
totally, totally. I love these just make your life so much more vibrant. You know, having a dog in the house. I'm here working in my house all day by myself. It'd be nice to have like, you know, something to kind of hang out with and just like tooled around with during lunch or whatever. So we'll see. Yeah, it
Noah Rahimzadeh 03:43
forces you to get outside too, which is not always easy for us in the Midwest. Yeah, especially during these months. So that's awesome. And then Jim Hawaii is like literally top of my list of anywhere in the world that I want to go I've I've visited a lot of places but I'm even outside of the country but Hawaii I haven't been to and of all the places in the world I think it's like literally at the top Have you been before?
Jim Breese 04:10
Yeah, I've been like I think six or seven times my wife is from there. So we go there like we used to go there every year the pandemic hit. She's been back subsequently since the pandemic started but I'm going to be going back with her this year so it's it's a beautiful place you know, and you're like wow, this is part of our country here you know, like these are it's such an amazing place you know, the plants there the the water it's just an amazing the food the people. Yeah, I love it there. So I'm excited to go see the other islands I've been to a wahoo for every one of our trips. So I want to go see kind of, you know, the big island and some other places that are a little more remote and kind of get that vibe in there. The island vibe.
Noah Rahimzadeh 04:47
Awesome. Are there any things that are there any places or like excursions that you would say people don't think about but when I go for the first time, for example, I should absolutely do but I won't like necessarily find different discus search best things to do in Hawaii?
Jim Breese 05:02
You know? That's a great question. I think that one of the things that I didn't know was being out there was shrimp trucks. So there's this thing like where you drive down the kind of the highway, there's these trucks, there's one called a home and I don't remember the names, but you'll see and when you're going up on the east coast of a wahoo, you can start to see on the highway these trucks and they're so good, but the line is so very long, too. So I think that's one of the things is to get the shrimp trucks and try to find some smaller beaches that are kind of off the beaten path. You know, I think that there's a lot of beaches like in Waikiki, where it's like, Hey, this is where all the tourists go. But if you can kind of get like, where the locals go, that's, it's really really cool. You know, we got to see sharks clean is called shark's Cove just kind of snorkeling and seeing animals and just seeing different little tide pools and stuff. It's very, very interesting. You know, something you don't get out here in Michigan has tons of beautiful water to explore. But what's out there is just something else. So yeah, lots of food Golka and get all the kind of local food they got local kind food. It's awesome.
Noah Rahimzadeh 05:58
Yeah, like one of my favorite foods, even here in Indianapolis is like ASA equals and what's that? What's the one with like tuna and salmon?
Jim Breese 06:11
Oh, hockey balls. Yeah, okay. Yes. Yeah.
Noah Rahimzadeh 06:15
So I would be in hog heaven
Jim Breese 06:17
there in Hawaii. Yeah. And why Lou, I think is what it is. There's a couple, like every How would you call it the grocery stores have like some awesome, pokey. So you go out to like, I think it's Wailua. And they have some awesome grocery stores out there. They kind of have all different kinds. So yeah, if you like fresh fish, go out there and get all the kinds of fresh fish from the smallest places you can think of. sounds incredible. Yeah,
Mariah Parsons 06:40
this is making me want to just play the trip. After this call.
Jim Breese 06:44
Food. Food land is the greatest like, grocery store out there. They've all this kind of food you can take with you out there. But um, yeah, it's just it's a cool place. I love it. That's awesome.
Noah Rahimzadeh 06:53
All right, maybe the next Malema Summerfest
Mariah Parsons 06:56
I was gonna say do you think convinced the team? So awesome.
Noah Rahimzadeh 07:01
Before we get into gym, I'm also curious. You're in Detroit now. Have you always been there?
Jim Breese 07:07
Yeah. So I grew up in Detroit. After college, I'd moved out to Los Angeles. Actually, I spent 11 years out there. And then in the middle of the pandemic, I moved back to Michigan. So I've been here for about two and a half years now. So yeah, I'm gonna kind of just in Detroit, East Lansing, went to Michigan State University. And then yeah, I went to LA I lived in downtown LA lived in Pasadena by the mountains. It's just like, it's a beautiful place. California is an amazing place to go spend and I cut my teeth out there for you know, all my bit my business stuff. And it was like being a very hyper competitive environment. This one startups were kind of being like the cool hot thing. Everybody had to have a tech startup or they were working in tech. And it was just like, the place to be at so I'm very grateful for my experience out there in California. Well, that's I'm sure it taught you a lot. Yeah. Oh, yeah. You're playing with like, all the top players in that space. You know, I know great. You know, San Francisco is got a lot, but there is a lot of people still in there is a tech scene in LA. They may not seem like that, but maybe more entertainment tech, but there are a lot of things going on out in LA, and you're very connected to San Francisco. It's just like a one hour flight or up there, you know, so it's not too far.
Noah Rahimzadeh 08:13
Right? Yeah. That's a great transition. Because my next question was like background, what did you go to school for entrepreneurship or general business? And I was just, like, Well, what was the How did that all play out?
Jim Breese 08:29
You know, I didn't really think a lot about going when I went into college, what I was going to do, like a lot of my friends were like, we're going into the business school and doing finance and I was like, Okay, this seems like fun. I'll go do that. And I'm really good with math. I was doing like AP Calc and things. I was like, Alright, let's do finance. And so I got a degree in finance and then and then that was pretty much it. I learned entrepreneurship is like as a kid, I was the one selling Pixy Stix and like going to Costco and getting stuff and like selling stuff on my locker
Noah Rahimzadeh 08:54
costs. The parents pick up like the 50 pack of m&ms. Yeah, actually got in trouble for that. Like, they're like, You can't run a business out of your middle school.
Jim Breese 09:05
I was competing with the school store. And I was like, I don't care out of the locker. Yeah, I'll do it for ADA. Don't worry about it, you know. So that was kind of the thing. It's, you know, I like to find value. I like to help people. I think entrepreneurship is a great vehicle for helping people solve problems. And it's something I like to do. I like to think about a lot of things and then go execute on them. So entrepreneurship was just a natural progression of my finance background and just other things I've been involved with.
Noah Rahimzadeh 09:30
Awesome. And so when you moved out to LA, did you actually like start something yourself? Or did you just join a join a startup like, what was that path? Yeah,
Jim Breese 09:39
I had a very long different. See, lots of turns in my career. I went out there. I had no job planned. And I went on Craigslist, and I started selling insurance like kind of a scammy insurance job and it's just like something that keeps me going, you know, and then I worked at Panda Restaurant Group, so they own all the Panda Express is around the world and I I got a lot of great experience there. It's probably one of the best corporate jobs you could ever get. They take very good care of their people. They also like drill into you great operations and execution, excellence and things of that nature. And they allowed me to work in different departments, I was in the I started in the mailroom, then I went to finance. And then I went to brand marketing. And when I was in brand marketing, I was like, oh, man, there, there's a lot of good opportunities in foods. So I started a tea company. And I moved into that and started a loose leaf tea company is when like, Teavana was really poppin. And Starbucks was leaving their golden years of Starbucks. And then from there, I got more into like content marketing and, and blogs and things of that nature. So I didn't really work too much in tech, myself, but I did a lot of consulting in tech for marketing. So my background got more into marketing. As I progressed, my career, I just thought there was just so much cool stuff with marketing, I thought marketing was scammy, when I was growing up, you know, just TV ads, and you know, the phone book, right. But then I started using, like, you know, Facebook ads and Google ads and kind of peeling back the layers of what can be a great marketing tech stack and a great marketing, you know, content strategy. And I just fell in love with content. So a lot of the businesses I built, I've built with content, you know,
Noah Rahimzadeh 11:09
awesome, awesome. And then take us take us to APA. Like, what, what ended up leading to that?
Jim Breese 11:18
Yeah, so I worked at a CPA firm for in the cannabis industry specifically. And I did a lot of work there a lot of content work there as a CMO. And one of the ladies or one women, I got hired, she worked there for a while. And then we both kind of left the company the same time, I was helping consult on her business. And then she gave me a phone call, you know, after a while, and it's like, Hey, I met this new startup called App hub, and we need someone in growth, would you want to interview for the position and it was like from, you know, that first call, maybe like, three weeks later, I was at the job. So wow, I was just like, that's like, my biggest advice is like, you know, always help the people that are around you. Like, I'm a big proponent of doing free work. You know, I think it's important to do free work to help people out to get into other people's businesses and see how they're running what they're thinking about. And that's kind of how I got this job, you know, and I've gotten most of my jobs, you know, not the corporate job, but a lot of my jobs came through doing free work, demonstrate your your ability, and people will pay for it, and they see that value.
Noah Rahimzadeh 12:15
Yeah, that's a really interesting take. I've, I have a similar, I guess, mindset, but it's more derived from like, so many people helped me when I was younger. In my career, I started I co founded a company out of school, and then worked for a bunch of like, litany of enterprise mahr tech companies, I think for probably a lot of the same reasons that you ended up going the marketing route, Jim. But now I just find so much value in like paying paying that forward. Yeah.
Jim Breese 12:47
Even if like nothing directly comes back, like the feeling of knowing that you just help somebody that like was once or like, You were once in their shoes is just so awesome. Yeah. And you get smarter. You know, the more things that you touch, the more businesses you get into, like, I was invested for a while and just like had a startup founders group, and I got to work with like, 12 different founders every month, you know, on their businesses, and they were all at different stages. So it was a very, it was like my MBA, you know, Vistage was a great experience, too. So I think it's excellent to do good work for people and free work, if you can, if you can afford it. I know people have. It's a polarizing topic. I can understand that. But you got to pay it forward. Yeah. Yeah. Whatever you can do, right? Yeah. Create your own luck, you know, no one's gonna give you your opportunity. You got to create that for yourself.
Noah Rahimzadeh 13:29
Absolutely. Okay, so getting into Apple a little bit. I would, I would argue it might be like the most unique partner that we've sort of had on the podcast in the sense that, my, my take on it and like, correct me if I'm wrong, but you're almost like an app aggregator, like you bring apps in and kind of stitch them together to create. Maybe it's not a one size fits all, but it's like ala carte options that all talk to one another and sort of hit the most prominent categories across the Shopify app stack. And that that is probably ignorant of me to say Shopify, because I don't know if it's all exclusive to Shopify, but that's my understanding. Tell me what, like, where I'm right where I'm wrong.
Jim Breese 14:17
Yeah, I mean, so at its very, very core, we are an app aggregator, but that is a very unsexy term. And it really pulls away the kind of No, no, it's this isn't a category we're in right, like, but I think, you know, there's a thesis out there that there's a lot of great technology out there. And there's a lot of great builders out there and they like to build amazing products, but they need help with a lot of different other aspects of their business. You know, finance, marketing, taxes, customer support, HR, like no one likes doing any of that stuff. You know, developers like to sit in front of their computer and develop. So we wanted to give these like founders, a little bit of liquidity, and put them into a container to focus on building valuable products while a team of professionals can come in and do each discipline and help with everything else. So you know, we've acquired a fair I'm on a company's I think seven or eight companies at this point in different sectors, mostly Shopify primarily on platform at Shopify. And then there's some that are off Shopify, like reviews.io and viral sweep, and then some of the other ones that are on Shopify have connected with Bigcommerce WooCommerce. But yeah, Shopify plays a big part in to our business. You know, we're kind of tied at the hip for the moment.
Noah Rahimzadeh 15:22
Okay, that was so much better said than. So, real quick, are all the just to be clear, are all of the apps under the portfolio Shopify compatible or some not today?
Jim Breese 15:39
Everybody is Shopify compatible, so everybody is on Shopify? That's yeah. So everybody is on Shopify, it's some new off platform as well.
Noah Rahimzadeh 15:46
And then I think I heard this correctly. But it was it was actually a question I had, when you acquire a new app, new company, you typically it sounds like, leave the founders in place to continue to develop their product, and just figure out how it fits all together, which I'm sure you do, way before the actual acquisition. But
Jim Breese 16:09
yeah, I mean, there's two types of deals, you can either bring the founders, you give them the option, you know, like, some people have been working for a decade on these products. And you know, what you've come to find out is that they want to continue to build, I feel like they were looking for an event like this to like, say, all right, to validate, we did the right thing, now, we have the juice to go and squeeze for like a lot longer. So most of our I think all of our apps, the founders are still there, there's actually two of them that they're not there. But that's okay, we've had we have developers, like in house developers that take those over, and we let those brands persist as well. Like, we haven't rolled up everything into like one brand name, you know, and we can get into that a little bit later about the different kinds of strategies for aggregators, but yeah, you know, bring, try to bring the founders in, because they have that core vision, at least bring them on for a certain amount of time. So they can do the transition phase and kind of give us the, you know, peek behind the curtain. So we know how to actually build a work this app, you know, taking over our code bases now, no easy feat. So you know,
Noah Rahimzadeh 17:05
absolutely. And I'm happy you brought up the idea of like, interoperability across the stack, do do all of the apps today. And I know reviews.io is very recent, right? Yeah, at least the public announcement of that, do all of them when you acquire them? Like is there an immediate plan to integrate them across one another? So that if somebody wants to plug in by all of them, and plug them all in seamlessly, like that's an option? Or is that like, super near sighted for me to even think that that are easier for me to think? No,
Jim Breese 17:41
it's not ignorant at all. I think that's that is like the crystal vision, we'd love to have to be a blow I have a lot that a lot of interoperability between the apps. But look, there's two ways to create a platform, you either rebrand everything as the parent company and bring everybody kind of interoperable, or you allow these brands to kind of grow on their own and create their own name brand. We have kind of gone with the ladder there. And people are still kind of like in control of their destiny. There is some interoperability, there's you know, tech integrations, things of that nature. But if they can this, like the second, third and fourth year of our business, we'll do a lot more of deeper integrations, deeper ability for customers to get out get a bulk discount, but you know, we're kind of working on, it takes a long time to build these types of things up. You know, m&a is you think, Hey, you just give them some money. And then you bring the business in, it's a lot more, there's a lot of, you know, gelling that needs to happen and things that need to come together to combine businesses combined cultures to combine customer bases even so it's a long process. Yeah.
Noah Rahimzadeh 18:40
Yeah, that makes sense. So you have you said seven or eight apps under the portfolio right now. I'm curious what went into, you know, the what are what goes into the evaluation process? And then I'd love to start with like, the current portfolio and then get into what your what categories, you're really interested in taking a deeper dive in, what do you think will flourish in 2023 given, you know, the macro economic conditions and what we're seeing across the E commerce space more
Jim Breese 19:14
specifically? Yeah. So the question like so what we have now we have reviews that IO viral suite conversion bear, which is a suite of like, you know, 20 different apps. And then we have Robo Turk, which is address validator, Appa calm, which has a couple apps, rich returns, order bump, and then next sale. So that's our current portfolio. And that's been built over since October 2021. So the past, what 1415 months, 16 months, we've been putting that together reviews i o being the latest one for us. And then, you know, assessing app and so your other question is assessing apps to acquire right. You know, so I mean, the the market is full of great apps and lots of opportunities, I think, and you know, when we looked at all the Shopify apps, all 7000 of them, we continue to look at them and they're all different stages, you know, we had like Matt Tennant house and Arjun Batra from our, our CEO team. And then Matt is on our m&a team. And then our, you know, investors, everyone is looking at sending us leads. So you go through a lot of leads, you go through a lot of off platform stuff as well. And it's a long due diligence process, you know, you got to talk to these founders are all at different stages of their business. And if you find a funder, that's way too early for us, you know, you still stay in contact with them, because our business will be around for 5678 years. So when you're ready, and you're at XYZ, you know, spot, then let us know, and we're going to try to stay in contact with them. But I think a few main things to look at when you're doing m&a in this space is like this app has to solve a real problem. You know, we've had an environment of 0% interest rates, and like VC money that just flooded in, and like everybody that had an idea was able to get funding, and it was not conducive to building, you know, real value, and you're seeing those things being flushed out of the system. So I think solving a real problem is number one. And for us, they've got to be a market leading solution with a core product market fit, you know, where it's like, hey, if the lights or if the marketing stop today, you would still be able to keep your your core business going, that people still would find you, they still love you. Another one is excellent reviews, you know, you can have a great app, a founder can tell a great story, they may be a marketer, they may be a presenter and are like look at this great thing, and it does all these good stuff. But it's like no one's giving you feedback on that publicly through reviews. And that's kind of a red flag there. Another thing we look at is high retention rate or improving retention rate, right churn is a really big thing. And if people don't find value in your app for the long term, then we're we can be bleeding money at some point. And lastly, I think he's still having juice to squeeze I brought up earlier, you know, like, if you're at the peak, and your valuation is could also be way too high, potentially, or is like there's nothing else to do to tangentially connect you to other parts of the market or to create new feature sets. I mean, there's always going to be opportunity, but I think there needs to be a few obvious, you know, forward path to success in there. But also, there's a lot of like, you know, variables, it could be lots of different types of businesses, you know, the ones that I named earlier, they're all at different stages that we've acquired. And that's what makes our platform great is because when you join app hub, as a founder, or you know, bring your business in, you get to learn from everybody else in like, where they're at, and their different sets of knowledge and what they've experienced. And you know, it's not just about creating cost savings, any PE firm can create cost savings, you know, it's about creating true learnings for the founders so that we can improve these apps and you know, improve the value of the business.
Noah Rahimzadeh 22:36
Yeah, yeah. That's, that's some great criteria, I think, and really helpful to get like a view into how you assess. You said, the crazy stat of 7000 apps in, in the Shopify ecosystem alone, and it's probably, you know, there's probably been 10 More launch today, at least, yeah. We obviously fit in that space. Maybe? Well, first question is, there's inherent overlap a lot of times like across across apps, even if they're not solving for the same core problem, right. A lot of them will have some functionality that overlaps with, like, for us, we have some partners that offer lighter weight versions of what we have, but we still partner with them, because they're really good at what they do well, and we're really good. We do well, how does that sort of play a factor in your evaluation? So I would, would you acquire a company that has some overlap with an existing portfolio company?
Jim Breese 23:36
Yeah, so we've done that. Exactly. We've done that. So we have conversion bear, which is a set of apps. And they have an upsell app called honeycomb. It's a very good upsell app it's in but its pricing model is different than the other one, which is called order bump, an order bump is primarily focused on Shopify Plus and so it's just you know, you kind of address different markets. One is selling up market one is selling to mid market, it does have a market and plus people in there so it's just you know, it depends on where it fits, is it going to cannibalize us? There's a lot of considerations also like how far is the product what kind of penetration does it have into the market? Things of that nature so yeah, nothing's off the table you just kind of have to look at each deal and individual basis and say what what are we looking to get out of this you know, you can buy a company you can buy a creative revenue, but you know, what are you actually looking to acquire from them that help your portfolio go to that next step? And that's going to it's a very nuanced analysis you need to make every time you go to make an offer on a company.
Noah Rahimzadeh 24:30
Sure. And then in the case of reviews for reviews on IO, for example. I'm curious if anything specific about like reviews themselves like you've and set it in, you know, your your criteria when you're evaluating apps that reviews are super important. Mariah and I, you know, I think have the same belief, especially as it relates to like our merchants and including reviews on product recommendations on our tracking He was like a really nice use case that we launched last last year. But I'm curious, just just generally speaking, is part of it also, like being like really bullish on a certain category of app or like a certain problem that needs better a better solution? Or is it really just looking at like the fundamentals from a business perspective? Does that?
Jim Breese 25:26
Yeah, no, that makes good question. And, you know, there are some categories where we really need to go and get something and reviews was one of them. You know, it's it's a critical process. I think it's like 93% of people in E commerce like that our consumers use reviews to make a purchase decision, you know, and so going to find a market leader, the market leader reviews on IO was a very important thing to go and get. But I think it's also focusing on core fundamentals I brought up earlier a lot of bad behavior was fostered during these kinds of like, like 0% interest rates, where everyone can kind of build something. But when you get to like, what is ecommerce what is happening in commerce, and it's like, word of mouth marketing is very important. That's how things spread. And this is a new way reviews. Io is a new way to spread that word of mouth marketing. And it's just, it's a beautiful app that does so many amazing things. Calum and Tom and their team have done an amazing job building this over the past. Like past decade, I think 1112 years, you know, in this whole team, you know, I don't know everybody at the team, but they've done an excellent job. So it's focusing on, you know, certain categories that are not going to go anywhere, you know, like, you might see some fancy like, Oh, these tag managers and this thing, and like something is very technically like, it's bleeding edge. But there's certain things that are just like core to the essence of sales and transactions and reviews to IO is one of those. Yeah, yeah,
Noah Rahimzadeh 26:44
we are. We are super bullish on reviews heavy on reviews. Yeah. Also, like even for Malomo, right in your eye, like, we're always looking for that social proof and validation. However, we can get it.
Mariah Parsons 26:57
Yeah. I mean, it's like one of those things that I feel like now. I feel I forget who you're talking to know about this in a other in another podcast episode. But like Amazon, I feel like set the president because they, like are so heavy with those reviews. And now it's like shopping online. You know, you see something without a lot of reviews or something that doesn't have any reviews. And you're like, Is this a new product? Like what's like, because no one tried your game? Like you're rolling dice. Exactly, exactly. And especially with, like, I just noticed my own habits. And if I find something from say, like an Instagram ad, or a Facebook ad, and then I'm still like, a little bit skeptical, sometimes just depending on if I don't know the brand, or if like, they're not verified whatever. And so if you go into, like, their website, and there's no reviews, then you're like, Okay, this is just like, I'm not ordering from here, it's not worth the risk. If like, you know, there's going to be like, Is my product going to be shipped to me if people try this? It's yeah, it blends into a lot. For like the consumer, and then also, just like merchants and buying habits and like, so both the tech and the Yeah, the consumer side of it, super lives
Jim Breese 28:19
are busy, we have so much data coming into our life, you know, like, we do Lean on people, you know, like, alright, it's got, you know, one, it's got 50 reviews, and one's got 200,000, you're gonna go to 200,000, you know, read now we're gonna get to the point where minimum 10,000 reviews on a product on Amazon, or you're like, not going to look at it, it also that creates some bad behavior, too, you know, with merchants, paying for reviews and things of that nature, which I think Amazon is doing a good job flushing that out of the system as well. But yeah, I mean, reviews and social proof and testimonials are very, very important into convincing your customers that they're making the right choice, even as a $5 item or a $500 item. You're still reading reviews on it, right? Because it's that moment, once you open the package, and it doesn't work. You're like, What the hell, dude, why? Why did I even buy this even? It was like 30 cents. You know, like, for example, like we bought, I had some fun do last night for the first time. We bought five domestics. And they were like, They came all janky and it was and I was like so, so mad. Because they didn't have reviews on there. I was like this one, like, they look good. You know, like, they had great pictures. And I was like, this is where I broke my kind of, you know, model of like, only get the highest reviewed ones. So yeah, it's just a small thing where I was like, I was disappointed but so we end up using forks last night, which is okay, it worked out but just like you wanted that fondue experience, you tried to create it and you were let down. You know, that was part of our experience last night. Yeah. Never write that like
Noah Rahimzadeh 29:44
That's awesome. How was the fondue? I was excellent and had fun day for so long. And it's top of my mind.
Jim Breese 29:51
I've never I've never had it. It was my birthday yesterday. So yeah, she surprised me and I had not she's like we're gonna make something you've never had it before. We're in. So we made our own fondue. I don't know where we're like cheese is a couple types of cheeses and then like tart cherry juice cornstarch, my I had some wine that I've made a couple years ago, there's been aging, so I put some wine in there. And it was just, it was a beautiful like, and I made some homemade bread. And it was just excellent. So
Mariah Parsons 30:17
happy birthday. So fun. Yeah.
Noah Rahimzadeh 30:20
Sounds like a lovely birthday dinner.
Jim Breese 30:22
It was excellent. That's awesome.
Noah Rahimzadeh 30:26
Okay, so when you look across app hubs portfolio, now you got reviews as the latest, what are the categories in 2023? Whether you know, there's there, there's obviously a lot of assumptions about what we're going to see on the macro side, there's a lot of E commerce specific assumptions. And I think there's no consensus really. So whether or not those assumptions play a part or not, where are the gaps and app hubs offering right now that are like sticking out two or three categories where you're like, we are really keen and looking heavily into these spaces?
Jim Breese 31:00
That's a good question. You know, and that's, that's a question I think, a little bit more for Matt. And I think it's, you know, it's not any specific categories. It's like, our job is to build revenue and to grow a business. And it may not be in specific categories. But I think, looking at it in a sense of what businesses are going to do really, really well this year. I think those are going to be apps that save merchants money and demonstrate tangible ROI, there is no question about it that the macro is not is it's not going to improve, like by q2, and like everything's hunky dory, you know, like, there's still Max pain to be felt. So I think that, you know, merchants are turning out of ecommerce, and those that are sticking around or slowing down their tech spend. It's like a real fact of our business. Like, if you work on Shopify, you have the built in Shopify churn sitting on your turn as well. So you need to solve a real problem and not just build something you think that merchants need. So I think they're, you know, for 2023, something that sexy and hot, I think is AI, you know, I'm on Twitter, you see all these people talking about it, I don't think it's gonna replace people, I think it can like reduce the human time spent on things. But I think it's going to turn marketers into like narrators or prompters, versus having to do all the heavy lifting, you know, like, Jack GPT, please write the 10 Google Ad titles that are 30 characters for XYZ business that are optimized for high click through rate, you know, tell it what you want it to do, it will get you 85% of the way there, then you can massage things. But overall, I think it's going to get back to again, great operations and the basics of E commerce, you know, like, along for a long, long time, people have been creating businesses that were not really businesses, they were just VC funded growth machines that grow at all costs, but they weren't really putting out that ROI. So I think cross selling and upselling is going to be a big thing. You know, like, some merchants don't even know that that exists, and that there are tools to do that. You know, and this literally shows ROI immediately. I think Analytics, you know, beyond just like CLTV and revenue, like give me actionable insights like ga 4.0 is turning on for everyone in July. If you don't have your tag implemented, you better get it implemented. And what can you pull from that tag? And how, you know, what actionable insights can you give to people? I think store design is going to be super cool, like Malomo. I love the kind of ways you optimize like the most viewable pages, people are checking their shipping status, like, you know, 567 times, that page is very, very valuable real estate. So what can you do to make more money on that page? So I think that's going to be something special, we have a new app called checkout there. That's on Shopify, for Shopify, plus they have a new Shopify has a new API for checkout. So it's been one of the ones he launched as of recent. So it's not always about buying apps. Sometimes we're doing more development on the internal side, too. And I think marketing automation is going to have you know, it's really big heyday, you know, there's been a lot of marketing automation coming, but I think it's becoming more for the average merchant, you know, you have to understand merchants are not tech people, in most cases, they need it very, very easy. That's why things like Zapier are very successful. So you know, you won't be able to give a merchant the feel of having a full time employee for the cost of a steak for like a one steak dinner, you know, per month, if you can give them that kind of value, you will have no problem keeping them as a customer. So those are my few categories, I think that are going to back to basics type of things.
Noah Rahimzadeh 34:11
Yeah, it's it's funny that you said AI. I immediately thought So John, on your team, who I again, I met in Toronto at Shopify, his conference this year. We sort of hit it off, you're having some drinks, and we ended up talking about podcasts. And he recommended a podcast called prof G pod, which I which has become by far my favorite podcast find of 2022. And I was listening to it this morning, and he was doing his 2023 predictions. And he said AI is going to be like the biggest thing in 2023. So sounds like between you and Prof. G
Jim Breese 34:48
Yeah, I mean, there's no confirmed. Yeah, and you look at like, like, I think yesterday Microsoft said hey, we're gonna roll chat GPT into Bing and make it like an actual search engine and not just some like, nebulous tool that nobody but their grandma Unlike people that work in corporate because they can't install Google Chrome browser use, so I think you're gonna see like a big cannibalization, like of Google, you know, of their ad platform. Because now I can go there, I don't have to worry about the top ranking article, I just asked chat GPT, what's the answer to this, and it gives me enough to like be directionally correct. And then I can maybe have a more pointed search. But you know, a lot of stuff is going to go away, I think for you might see search volume decline on a per capita basis, we'll see. But I think it's a very exciting time. I don't like that. I don't think it's going to replace us as marketers, I don't think it's going to replace tons of jobs. But I think it's going to make us much more efficient. help us be more creative, get past creative blocks, like, again, give me 10 ad titles, like some days, I just have a headache and a block. I don't want to do it, but I have to redo ads. So give me something to work with. And then I can, you know, you can't edit anything if you don't have a first draft. And if chat GPT can get you to first draft very quickly, you're gonna be in a much better position to be an effective marketer.
Noah Rahimzadeh 35:57
Totally, totally. Yeah, the the chat GBT thing is just incredible. It sounds to like, you know, a lot of the predictions are, you said, sort of get back to basics. And a lot of the more tactical, I think, advice that you had was sort of around, like, understand how to grow through your base, and don't just focus 100% on acquisition. So would you agree with that? And if so, like, what role do you think retention now plays in like this new age of cost savings and needing to be really efficient with your growth? Yeah,
Jim Breese 36:36
I think like, hey, look, user acquisition is great. But a lot of user acquisition over the past few years has been, you know, through paid channels, you know, grow, it all costs, whatever it costs, get them in there, we'll make it back over time. But that like that kind of is gone. Now. I think retention is probably the most important thing, for any business to stay alive, right? It predicts current revenue and future revenue. It's almost like a net promoter score as well, to a certain extent is like, Hey, do people really care what we're doing here. Because if you have like a very low retention rate, it's very like, demeaning on your mental state, when people are like, we worked our asses off to get people from the door. And then like, they're leaving in two months, like we haven't gotten even maybe, you know, 70% of our money back, depending on the way you acquire them. But I think retention is going to be the most important metric for SaaS companies going forward, like you just cannot ignore the fact that money is falling out, fix the holes in your bucket before you go add new features, or go acquire new customers, because optimizing the few percentage points on your convert on your registration page, you know, having interactive exit funnels, for a cancellation, all those things are going to play a much bigger role when you go and have the ability to go acquire more customers, because now that bucket has a lot less holes in it. So I think it's very, very important to not ignore the fact that if you have high retention, you have an issue. Or if you have to, if you have a low retention, you have an issue, you need to take care of that because it's not just going to magically fix itself. Because you see founders were like, they just don't get it. Well then explain it to them, demonstrate it to them, educate them, show them, you know, yeah, so retention is going to be big.
Noah Rahimzadeh 38:10
Yeah, I've said this that on the podcast before, but it's like, it's just always top of mind for me ever since I saw it a couple months ago. And it was a Shopify number that said, like 20, or sorry, in 2013, the average ecommerce merchant lost $9 For every new customer on that first purchase. Today, it's $29, maybe, you know, it's more than three acts in 10 years, and that's continuing to rise, while at the same time return retained customers coming back for repeat purchases has grown from a revenue standpoint. So like, you're losing money on acquisition, you have to keep them to just get to break even, while at the same time your customers who are coming back are actually making money on every single purchase. So to your point, Jim, you know, I think that I totally agree with you, obviously a little bit bias, but I also believe that there's data there to back it up. And I think that brands do 100% need to start optimizing not just like, their mindset and their approach, but like their stack, to, to retention and maybe even think about investing more there than the traditional acquisition channels this year.
Jim Breese 39:29
Yeah, I mean, spend q1, figuring out how you can pull a few knobs run a few tests to see if you can improve these metrics, you know, it's about the you know, the integral of over small things over a long period of time, and if you're, you know, gonna be around for a while then do those small things. They may seem very unsexy and unfun. But like, you're going to need to test your checkout page if you're a merchant, you need to do that you know, like there will always be a winner in the AB test. So run the test and if you have the winner now great you at least can feel good when you go to bed that we have The best page that we could possibly have, but yeah, you need to work on retention and spend q1 doing that, while things are shaking out with the macro. You know, we have no clue what's going to happen.
Noah Rahimzadeh 40:09
Right? Yeah, I'm, I'm a little bit pessimistic as it sounds like, things, things are gonna get worse before they get better. Yeah, I
Jim Breese 40:19
mean, look, the the Fed has like, very crude, broad tools, and they did a bad job with letting inflation run high. Now they're gonna have to over tighten, to make sure that they don't let this thing perpetually run. Now we're gonna start copying over last year's larger inflation numbers. So you may see like, year over year inflation go down. But if it's still persistent, you might see them like back off, and then you get a second dip of in for a second wave of inflation in the third or fourth quarter this year. We've and this is all conjecture, you know, I have no idea. This is just like a thesis, we guess at it. But, you know, people's pocketbooks are being squeezed. You know, so we'll see what's happening with it. I think it's an interesting time to be watching watching the world. You know, I It's a lot, but it's something interesting, and it really affects your life. So you should pay attention to it.
Mariah Parsons 41:05
For sure. Yeah.
Noah Rahimzadeh 41:07
Is there what happens in that case? For E commerce?