Adam's doing a great job analyzing the eCommerce platform's landscape. Not that long ago he had his own skin in the game! I've asked him how it was to startup the company - Moltin - in the city of Newcastle in the northern UK? How they got to YCombinator and what they learned in the process. How they landed in Boston - US eCommerce super-center. We discuss the "The Commerce Magic Roundabout 2020" - enterprise software lifecycle and how companies are gonna hack it.- Piotr Karwatka, Host of CTO-CTO Podcast
Questions asked in the interview:
· Do you see yourself as a pioneer?
· Back in 2013 - did you even use the word “headless”for what were you building?
· Where did this idea for API first eCommerce platformcome from?
· What key problems were you solving?
· Tell us about your founding team and how you built the MVP.
· Did you have some pre-seed, seed investors?
· Do you remember who were your first adopters?
· After two years you applied for YCombinator. Why did you decide for this move?
· You founded the company in Newcastle upon Tyne. I was there once, the city is the size of my city Wroclaw - and actually isn’t really well known as an eCommerce hub. Was it a challenge or an opportunity?
· Let’s go back to YC. What did the application process look like?
· How did YC help you and influence the product?
· How did you pivot the product over the years?
· How did your role at Moltin change from the day youfounded the company till the exit?
· What was the key driver of Moltin?
· What is the most important lesson you learned buildingthe company?
· If you look back: what was your biggestchallenge/mistake ?
· You left Moltin in 2019. What’s your next challenge?
· You recently published the “The Commerce Magic Roundabout 2020” chart. Tell us a little bit more about it please?
· Isit somehow related to the “Crossing the chasm”?
· How, as a product vendor, you can hack it and not get to stagnation too early?
· OK, on the other hand: Starting a new product, having this Roundabout model in your mind, What’s your advice for the founders? Is there a way to speed you way upfrom the innovators to Rocket ships?
· How do you see the future of the ecommerceenterprise software market?
· Is there a place for new players?
· Which trends are over and which are under-hyped?
· What are your thoughts on the e-commerce future in general?
Piotr Karwatka: [00:00:42] Today we are going to talk about eCommerce platforms. My guest is Adam Sturrock the founder of Moltin, one of the first, if not the first headless eCommerce platform. Adam is a great source of insight. Recently he created the eCommerce magic route about 2020 showing how the enterprise eCommerce platforms are doing. I can't wait to ask you more about it. Hey Adam, I'm so glad you accepted my invitation!
Adam Sturrock: [00:01:07] No problem, nice to be here!
Piotr Karwatka: [00:01:10] Adam, do you see yourself as a pioneer?
Adam Sturrock: [00:01:12] Yes and no. I guess I suffer a little bit from some sort of imposter syndrome. I just feel like everything that I work on is more evolutionary rather than revolutionary.
Piotr Karwatka: [00:01:26] I think many people see you as a pioneer because Moltin for many of us was the first contact with the headless e-commerce concept, API first concept. Back in 2013, when you started, have you even used the word headless for what were you building?
Adam Sturrock: [00:01:45] Headless wasn't really a thing back in 2013. We described Moltin as an eCommerce API. APIs were a thing in 2013. We looked at sort of Stripe and Twilio. And we thought, why not the whole e-commerce platform, basically. It took us a while to move away from talking about ecommerce APIs. I think it was commercetools that was the first one to use headless. And then we quickly followed suit. It’s a great term to get the business stakeholders interest, I guess. But it's not necessarily a great term beyond that.
Piotr Karwatka: [00:02:25] So you started doing this before it got popular. How did this idea of the API first e-commerce platform come to you?
Adam Sturrock: [00:02:39] So I was working in an agency with my two co-founders, Jamie and Chris. We worked with WordPress, Magento, Shopify. We built our own eCommerce plugin called Firesale for a Laravel based CMS called Pyro CMS at the time. We came across the same issues, like when we built that plugin that we were facing with Magento and WordPress, in terms of the maintenance headaches, having to run those servers. And each, we had hundreds of clients, all running different versions of those platforms.
And then that last one side of the spectrum from the maintenance. Sort of a scaling issues and things. There are obviously the requirements as well that you get from a client when you're working in an agency where maybe Shopify wasn't a good fit and you had to do a lot of customization. And there’s always a lot of proprietary, frameworks and ways of doing things that you sort of had to let him pick up. I remember my first six months, I wasn't allowed to touch a production website, which is kind of crazy. There's a lot of trading that sort of had to be done a lot of learning. So like I said, we looked at sort of Stripe and Twilio and they were really easy. Like the develop experience was great abstracted where a lot of the complexity and sort of handled a lot of the infrastructure for the developer. So maybe a bit of naivety, but we thought, why not do that for the entire e-commerce platform as an API? And that would sort of solve those maintenance and upgrade cycles and things and the scaling issues. We would sort of handle that for people. And from a flexibility standpoint that separation of the front end from the back end, would mean that you could bring whatever programming language, like frameworks, tools, whatever you're comfortable with, you could pick up and use. And it wouldn't be like a lengthy learning cycle or like a training program or anything like that.
Piotr Karwatka: [00:04:33] That makes perfect sense. I think that this is the shift of the paradigm, how you make the software, because before that you mentioned Magento, WordPress, in those two cases, but not only it was like, you were always creating kind of extensions? Modules? How do they name it?
Adam Sturrock: [00:04:54] I sort of see it like an anti-pattern way. Like it ends up creating spaghetti code and dependencies on each other. And it's like things start to break at scale.
Piotr Karwatka: [00:05:02] Absolutely. And with this headless approach, you are rather creating separate apps, which gives you a whole new level of flexibility, right?
Adam Sturrock: [00:05:11] Yeah. You get flexibility. You can get complexity inside of that as well. But at least you have the tools and ways in which you can work with that complexity to sort of minimize some of those issues which maybe don't necessarily exist in a monolithic approach.
Piotr Karwatka: [00:05:30] Right, that makes perfect sense. Tell us about your founding team and how did you build the MVP?
Adam Sturrock: [00:05:36] Like I said, we were sort of three developers in the agency. We all had experience with Magento and PHP building our own plugins and things. We all quit our jobs at the same time. I remember we lined our notices up in envelopes on my boss's desk, and that was like half the engineering team walking out at that point. We joined the accelerator program. I'm based in Newcastle in the UK Northeast. And there's an accelerator program up here called Ignite 100. So that kind of gave us the funding to do this without bootstrapping it, I think bootstrapping it back then would have been really tough for us from a personal growth sort of standpoint. We were three developers with not much of sales or marketing experience. But yeah, the accelerator, it gave us that funding to build the product. I remember the three-months when everyone was sort of pitching and selling and building their companies. And we were just building a product. You can't sell an e-commerce platform without actually having it exist. So that's kind of what we focused on, sort of the critical path, product cart, checkout order. And within three months we launched, I think it was like August, September time, like 2013, we launched the product and from day one, we had the ethos of developer-first go-to market, attract the developers, like scratch your own itch kind of business. And that the developer would fall in love with the APIs and the abstraction and the experience, how easy it was. And from day one we were solo developers setting up from like all over the world. Other people, just like us who were searching for the tool that we wanted to exist. I remember we had like a... I can't remember the guy's name now, but we ended up printing out his email. It was like a paragraph, like a wall of text with no punctuation. And he was furious! He sent an email, I think it was midnight his time, and he was just complaining that he's annoyed that we didn't exist before because he just spent three months building his girlfriend's jewelry website from scratch, like without Magento or Shopify or anything. And like he's going to rebuild the whole thing on Moltin because it was way better and easier. And solved all his problems.
Piotr Karwatka: [00:07:54] Was he your first adopter?
Adam Sturrock: [00:07:57] He was the first one that launched a store on top of us that we noticed. And that was good. I guess, early indications of product market fit. And we did all different definitions of product market fit and I feel like we kind of finally got there a few years later, but that were the early signals that we were onto something, that we had sort of inbound traffic from organic search, people searching ecommerce API, and Moltin was one of the only ones there on the Google page for that search term I remember sort of re we also faced. Scaling challenges from day one, launching a global product late that we had people signing up from New Zealand and we had AWS servers in Europe. So you can imagine the round trip time, like latency, like even then people were really, really happy with it And they would just manage the caching on their side. So I've just make it work. But yeah, that was three, four seconds, like API response just from the network latency geographically. But yeah, there was a shoe brand in New Zealand called Yours Yours. That was one of the first brands that we saw there. Wasn't just like a hobbyist developer, but someone of a real business that was scaling up, they launched a Moltin and that was really cool to see. And there's a lot of these sorts of like little, small micro moments and little milestones that we were sort of seeing through had that sort of bottoms up approach in our initial, like go to market strategy.
Piotr Karwatka: [00:09:23] Sounds fantastic. Before I go further, I must ask you one question. It's about Newcastle. I was there once, quite accidentally. I remember the city is more or less the size of Wrocław, my city.
Adam Sturrock: [00:09:41] Yeah, it's quite a small city center, compared to London or something like that. You can walk from one side to the other in 10 minutes of the center.
Piotr Karwatka: [00:09:52] Exactly. It doesn't look like Silicon Valley or something. So the question is how is it to start the business in Newcastle, do you see this as a challenge or rather an opportunity?
Adam Sturrock: [00:10:09] I think it's both. Very early on and it was a huge challenge for us from a fundraising perspective, like who are these three guys from Newcastle? No one had ever really heard of us. And I think the positive side of that is that it's very cheap. It was very cheap. I don't know whether that's still the case anymore, but it was very cheap from a cost of living perspective, like in the Northeast of England. Even if we could have raised a lot of money, we didn't need a lot of money. So you could hire developers for half the price of the London salaried developer, for example. There wasn't much of a startup ecosystem when we started the company. We grew pretty rapidly compared to the rest of the Newcastle ecosystem, the funding and the accelerator programs that we went through and things. Very quickly we were able to hire the best talent in Newcastle at the time. Sort of assemble it from all the different agencies in the area. There's a lot of good talent from a technical standpoint in Newcastle. I think it used to be one of the, like Newcastle's best kept secrets, but I think a lot of companies have been moving in now and realizing they can kind of move outside of the tech hubs like London and Berlin done things, which is really exciting, but at the same time, obviously with Brexit and the sort of EU funding being pulled from the Northeast regions. It feels like the startup ecosystem is collapsing a little bit right now, like this year and last year, especially, Ignite 100, there was a coworking space where all the tech startups who were sort of base funded by the EU and some of the multi early investors that have got you funding and that kind of thing. But that is being pulled now. So that's like shrinking pretty rapidly, which is a bit unfortunate and sort of disappointing. I don't see the UK government wishing to replace that level of support. It's probably really tough now to like, do something in Newcastle than it was a few years ago that was like a sweet spot in a moment in time.
Piotr Karwatka: [00:12:17] Thank you for this answer. I absolutely agree with you. When we found the Vue Storefront in Wrocław, it also gave us much longer runway given the cost of development and talents we could find here. So it's absolutely an opportunity, I guess. After two years or so, you applied to Y Combinator second accelerator after Ignite 100. Why did you decide for this move?
Adam Sturrock: [00:12:47] I think it was three or four of us at the time. And we were trying to fundraise in London and all the VCs, maybe one or two late partners at the VCs, maybe they were like America or from Israel or things like that. They knew what an API was, but the majority of London based VCs were very much into FinTech or B2C companies and investments. They didn't even know what an API was. You can imagine how the start of those conversations would go. You would have to not talk about what you were doing. You would have to explain a technical concept first. And that was never going to go anywhere. We had like dozens of conversations with VCs and they just didn't understand. So we realized we were speaking to a guy, I don't know if you know him, Gilt Dippner, he used to work at DFJ and he came up from London. That never happens… You don't get London based VCs coming up to Newcastle ever. He was the first one to make that move, to come and see us. And he sort of recommended that we go and apply to Y Combinator. We all were also being sort of approached by 500 startups at the time. So we had options on the table as if YC didn't work out for whatever reason we could apply it to having just startups.
Obviously the JAMstack came about and there would be sort of react e-commerce and that kind of thing. So we would have landing pages and guides and content around building those things, but it really started at YC when we started to become a bit more sophisticated.
Piotr Karwatka: [00:16:58] That’s interesting. My next question is actually about this - how you pivoted the product over the years? Because as you started explaining it, you were also adapting to the trends like JAMstack.
Adam Sturrock: [00:17:10] Yeah. It was kind of like the Wild West I guess, like in 2013, it was like jQuery kind of thing.
So I kind of moved away from the product. So by like 2018, 2019, I didn't really have as much insight into the internal architecture as I had earlier on. It got way more complicated, I could understand the diagrams, but I couldn't draw one for you because there were so many moving parts. I would do the abstract version, which is simplified.
Piotr Karwatka: [00:19:59] I think it's not a real transition, right?
Adam Sturrock: [00:20:02] Yeah, exactly. Like sort of people gravitate towards sort of what they, I guess, what they're good at or they're interested in, so I guess I was running the sales and marketing team before we raised series A's and that kind of thing. We had two or three people on the marketing side. I remember our first six-figure deal. So it was myself and one solution engineer that retired from Twilio. And that worked out really well. That was the day of points that led to our series A, but we were just sort of figuring out the playbook ourselves, just like looking across at Stripe and Twilio and other API companies like Contentful and Algolia just sort of almost like, I guess, imitating what they were doing as best as we could understand that. But I think it sort of became more apparent later on like, that is what we were trying to execute was a product led growth strategy. And there's like product led.com. There are books about this now and things, but that didn't exist back then. Now it's a lot easier for people to grasp what that entails and what it means.
Piotr Karwatka: [00:21:02] That was actually my next question. What was the key driver of the Moltin culture? I mean, a company can be driven by many different factors, right? Some companies are product driven, some companies are sales driven. Some companies are tech driven. What was it at Moltin?
Adam Sturrock: [00:21:19] We really cared about that developer experience. So we had a bit of a chip on our shoulder with sort of the existing platforms and the enterprise sales model and things. And maybe we thought, um, That the developer should be empowered to make those technology decisions for the business, like what was right for sort of what the business was trying to do.
Um, so that was sort of our culture initially, that sort of led us down that developer go-to-market approach, um, changed over time. Like culturally, we had a really strong culture from like 2013 to like 2017 ish. But over time, that began to change as we raised funding. We were pushed to commercialize and I looked back and maybe we were pushed too early to commercialize, uh, sort of, I see something that product like strategy.
If you look at Contentful or Algolia or something the developer goes to market and you might not make money or much money off of that, but it's about Mindshare. It's about getting market penetration and getting everyone aware of your product or as many people as possible. So that if someone thinks of such this, they think of Algolia someone thinks of content. They think of content for some of the peaks of e-commerce. We were hoping they would think of Moltin. That was sort of the strategy. But over time, as we were trying to find, put them up, as you can imagine, like attracting like hundreds, tens, tens of hundreds of developers into the platform. Every month it was noisy. There was a lot of people in there that were kicking the tires. A lot of people that would like sign up for five minutes, like check it out a little bit and then disappear and things. So it was like a very leaky funnel. And then we had that live chat on the website and things, and that's actually how we managed to speak to the, I guess we'd sort of talk, talk about them and sort of diamonds in the rough where we would actually find companies that like serious companies that would actually want to use Moltin and sort of, it was like a timing thing as well, being there at the right time for them to discover us.
Um, so a lot of things sort of had to go right. The stars would have to align to find the perfect company that they would like pick up and use molten and pay like six figure sums every year for, uh, but they did exist. We got a few of those without a sales team when we were very much sort of focused on products and we, and that sales process was very like solution engineering.
We spoke directly to the CTOs and the developers, which, like, it kind of works for like, I guess like startups, new DTC brands, which is smaller. And there's like, the decision maker is empowered to make that purchase, but we kind of found when we've got more like larger companies, like, you know, in a sales pipeline, uh, the decisions were made by nontechnical stakeholders or by boards.
So by board members, um, absolutely. And it became, it became tough. We sort of had to cross the bridge from a technical. Like an easy technical sale to like something that was like less technical. And I think that's why you saw like, terms like headless appear, which is like, it kind of gives you the opportunity to talk about that too technology and the benefits that it can bring to the company.
But certainly like in the enterprise space, it's very, um, in effect like a commerce platform affects everybody inside of a company. It's like one of the core components. It's like the core engine. Yeah. So everyone, everyone wants to say, everyone wants to know what their day-to-day life is going to be like after the integration.
Yeah. Which makes it really tough. So like, as we drifted more towards like coming back around to the question, as we drifted towards the enterprise space, especially like 2018, 2019 post series a as we commercialized the, the culture changed as we hired like sales team in Boston and that kind of thing, as we tried to like get into the U S market, um, Yeah, it was very, it was very tough.