"eCommerce is booming and Shogun is super hot. Round A closed in the late 2019, Round B one year after - raising additional $35M USD. I'm super excited to host Finbarr Taylor - CEO and co-founder. We're talking how Shogun got to what it is right now. They started as Ruby on Rails based page builder, switching to Shopify marketplace that led them to positive ROI - and only after this, after 3 years raising their first round. Now they're keeping exponential growth while developing the second enterprise grade product. Finbarr is sharing his views on coupling/de-coupling cycles in the enteprise software which makes our discussion even a little bit philosophical ;) I love this episode." Piotr Karwatka, Host.
You’re building Shogun from 2016. But you had your first seed round in 2018. What did the product look in the early days?
How did it all get started? How did you find the right product-market-fit?
It became hot last year - Round A in Feb, Round B later that same year. What happened?
Was it the Covid19? How did it impact your business?
Who’s the Shogun Ideal Client?
How are you positioned between Webflow, Wix, Shopify ?
Are they the typical Shopify client? Do you need to educate them if they need additional products like Shogun? Why do they need it?
How do you manage offering two different products for two different audiences? (page builder vs. frontend)
Who’s making the call - marketing, tech folks on the merchant side? Agency/freelancer?
Is Shogun actually an option for Enterprise clients?
What will Shogun look like in next 3 years - market position and product wise.
Piotr Karwatka: [00:00:40] Hello everyone, today my guess is Finbarr Taylor, founder of Shogun. Shogun is a front-end for e-commerce with great building capabilities with features that are absolutely great and today we'll be getting to dig into it. Hi, Finbarr thanks for accepting my invitation.
Finbarr Taylor: [00:00:59] 87. Yeah. Thanks so much for the opportunity. I really appreciate it. It's great to be chatting with you today. Yeah, really happy to tell you a little about Shogun and myself. I'm originally a software engineer, uh, studied Computer Science in Scotland and moved to Silicon Valley, uh, where I worked for Groupon and Pebble Tech. And yea, then Y Combinator.
And then along the way I founded Shogun and somehow it's kind of blown up and I'm amazed at how big it's become, but we're having lots of fun and loss lots to do still. So yeah thanks so much for having me on the show. That's awesome.
Piotr Karwatka: [00:01:29] So you work at YC, but now like, you know, being a startup in their portfolio?
Finbarr Taylor: [00:01:38] Yeah. It was a great experience. I worked there for about a year and a half I got to build internal tools for things like finding great company, managing their portfolio they've they have like a pretty comprehensive CRM system for all the companies we've invested in. It's a cool piece of software. I built the first version of startup school, which has become really huge now as well, and some other things, but it was a great place to work. I really enjoyed getting to meet, you know, getting to work with and meet with the people that work there and just seeing how startups actually happen in Silicon Valley and getting to read about how the companies were doing.
Piotr Karwatka: [00:02:19] Absolutely. That's a good point so far for this one and half year, you have firsthand experience with those successful startups, some of them unique when you decided that it's a way for you as well.
Finbarr Taylor: [00:02:32] So actually when I was studying computer science, I was reading, you know, this was back in like 2010, 2009. I was reading Tech Crunch and Venture Beat and all these blogs and seeing that tons of successful companies raising lots of money and they were all in Silicon Valley. And so most of them at least were in Silicon Valley with companies we learned about, and I had this dream of going there and trying to do it myself. And so I applied for jobs there and moved to Silicon Valley with the expressed intention of starting a company myself a few years to get a visa and figure things out. But I did start a company a few years after arriving and then I started another company a couple years after that. So yeah, it was actually before YC and the Shogun story is a little interesting because we started it in 2015, worked on it full-time for about a year. And then we didn't think it was going to work. So we all quit. And then I got a job at YC and while I was working with Shogun and blew up on the site, and then I had to go back to working on again.
[00:03:36] Piotr Karwatka: [00:03:36] That's super interesting. Can you walk us through the evolution of the product? Because the position of the first initial version in 2016 were completely different than a than today.
[00:03:47] Finbarr Taylor: [00:03:47] Yeah. So we are originally, you know, back in early 2015, we started Shogun as a page builder for any website and originally
[00:03:57] Piotr Karwatka: [00:03:57] something like, like Webflow right?
[00:03:59] Finbarr Taylor: [00:03:59] No. Not exactly. Webflow is as a complete platform where you can sign kind of build up, build whatever you want. Shogun was originally designed to plug into any website. So any existing website. And that was the way it works.
[00:04:15] Actually, the first version was we built a gym for Ruby on Rails, where you could drop a Ruby on Rails project, and it just turned your existing real site into a drag and drop page builder. And you can like add pages to your live running rails application. It was pretty cool. But we didn't find a great fit there.
[00:04:32] And we ended up having this incredibly lucky break in the Shopify App Store around 2015, where friend of ours said to us, Hey. Make this page builder work for Shopify I'll pay you for it. And they did, and sort of tens of thousands of other people. So yeah, just super, super lucky break, you know, hard work and a lot of luck.
[00:04:52] Piotr Karwatka: [00:04:52] Wow. So, so it was the, the press people that was into Shopify marketplace, right?
[00:04:57] Finbarr Taylor: [00:04:57] Yeah. So that's right. We, we launched in the Shopify app store October, 2015, and we, you know, we had this one paying customer already and somebody else signed up. But at that point we'd been working, you know, for 10 months or so with no salary, no revenue, no customers and Silicon Vallye is an expensive place.
[00:05:16] And so we all went and got jobs, but what happened is. Every day, every couple of days we started getting more installs and it felt really slow at first, but it just built and built and built and got faster and faster and faster. And you know, it scaled rapidly over the next year and a half.
[00:05:36] Piotr Karwatka: [00:05:36] Gotcha. That's interesting because the, the first round you, you have, I mean, the financing was 2018, if I'm right. So between this, you know, 2016 in 2018 those two years it was completely organic growth growth, yea?
[00:05:53] Finbarr Taylor: [00:05:53] Yeah. So yeah, I mean, it grew from, so from October, 2015 to May, 2017, It went from $0 a month to about $15,000 a month. It was growing,
[00:06:08] Piotr Karwatka: [00:06:08] it was profitable
Finbarr Taylor: [00:06:12]It certainly was, yeah, it was very profitable. And it was growing 15 to 20% per month, which felt quite, it felt quite slow when we're, when we're only at 15,000 per month. But what we realized is, you know, 15% growth compounded over 12 months is actually 535% growth. And that was the point at which we were like, okay, this thing is going to be really huge. Yeah, so that was when I went back to work on a full-time and my, my co-founder Nick, he'd moved to Thailand in the interim and he came back on a full time as well. And our third co-founder Damian, he was working for a pharmacy technical pharmacy, which ended up doing really well. And so he didn't want it back. We we're also good friends so Nick and I came back to working on it. Full-time in May, 2017 and then we worked full time for most of that year. Well, I mean, we've been working on it full-time ever since actually, but we worked on it without raising any funding for most of 2017 and it was a profitable endeavor.
[00:07:08]And then we got into YC at the end of 2017. So we had this money and then a few months later you know, we had YC demo day and we raised 2.1 million seed round at that point. Gotcha.
[00:07:21] Piotr Karwatka: [00:07:21] Sounds sounds amazing. I mean the Shopify market-based show you the way the distribution, because the Ruby game is something totally different.
[00:07:32] It's not even on-prem right now. You, you entered to kind of SAS, right? Typical SAS. And at the point when you ride this The syndrome you already expanded over the Shopify marketplace. I mean having standalone onboarding and Sonoma product, or was it later at that point?
Finbarr Taylor: [00:07:57]All of our acquisition was coming to the Shopify app store. We did, I mean, it was still the page builder for Shopify, although it was, we've gone pretty deep on it. I think in January, 2018 or around that point in time, we also launched. For big commerce. So, and we had an integration with big commerce AMR Shopify around that time, and big commerce started to grow and do really well as well.
[00:08:16]But yeah, no, it was at that point, we were still, it was just the page builder product for Shopify and big commerce. And. You know, we were iterating on that product and really focusing on it and it was growing and doing really well. And I think by that point in time, you know, March, 2018 was when we raised a C bond. We had like four people, four or five people on the team. So still very small at that point.
[00:08:39] Piotr Karwatka: [00:08:39] That's really awesome. And are those marketplaces, so you know sourcing sourcing channels for the, for new customers or has it changed?
[00:08:48] Finbarr Taylor: [00:08:48] Yeah, so fast forward into today, you know, and now we're in March 2021, which is crazy. So three, three years later we have two products at this point. So we have Shogun page builder, which is the page, the original product page builder for big commerce, Magento, not Magento and commerce cloud as well. And that product just continuing to do incredibly well. We're acquiring through a bunch of different sources.
[00:09:11] We still do get a lot of acquisitions through the app store of, of Shopify, but we also other acquisition channels that we've layered on top. And we have a second product called Shogun Frontend. Shogun Frontend is a complete replacement storefront in a box and it builds a progressive web app. It's like a progressive web app builder kind of at the intersection of three major trends, headless commerce, JAMstack technology. And low-code no-code. So we're helping people build mega fast websites with less code than they typically would have to. And yeah, so that's our second product, but the acquisition on that is very different to the acquisition, for sure.
[00:09:49] Piotr Karwatka: Absolutely. I think that there are totally different segments, right? I mean the Shopify and even big commerce and other platforms are more like SMEs and so probably it also changed the way you approach the clients. Actually, my next question was about exactly this. I mean, who's, who's making the call. Are they more like, agencies freelancers making shops for their clients. I, I get that. This is a case for web hub where often they even have this structuralize pricing model. Or maybe is that like CMOs or CTOs calling you? How, how this process looks like onboarding for new clients?
Finbarr Taylor: [00:10:33] You know, it really varies anyone on the sides of the store. You know, we work with the agencies and they make referrals. Sometimes it's CMOs and times of CTOs. Yeah, it just completely depends on the size of the clients. Yeah, it's different to page, but, you know, page builders like a self-serve product show in Fernandez market enterprise products.
Piotr Karwatka: [00:10:55] Absolutely. So the, the value proposition is completely different. You almost answered to this question, but have you had this need to educate the market of your product from what you said? I guess not really. It went just off, like in there with the Shopify marketplace.
Sounds like the missing puzzle. ProShop define some of the negatives. But with this front end, the front end problem is different cities.
Finbarr Taylor: [00:11:23] I think, you know, there's a lot of education happening in the marketplace. Other companies are educating people around like headless wrestle web apps. And so are, we were just doing it in a different way. And I think there's a lot of great technology out there that is helping people build Headless stores on the rest of those, like you start one is awesome. You know it's taking a very different approach and I think it's a great fit for a site, different customer profiles of us, and probably like one is better for bigger customers. There's definitely a lot of education happening in the market. I think that people are, people already know that speed is important. So you don't have to do much education around that. You know, with a progressive web app, you get a much faster website. And so people understand that speed is important. So you don't have to educate her on that. But I think generally education is required around, well, what is a progressive web app?
[00:12:30] And what is that? And what does it mean? And those two things are separate things, but people often conflate the two. And so there's just, you know, we, we have some great educational materials like there's a URL, get sheldon.com/what is headless commerce with dashes it within the words. And it's a really long form piece of content describing exactly what headless commerce is. So when we were kind of doing some, some education as well as you know yeah, kind of continuing to work with our existing product and existing customers,
Piotr Karwatka: [00:13:03] that sounds super interesting. Okay. Let's, let's get back one year from now. Last year, I suppose it was crazier for you. Because you close to investment rounds, like around a, in February, around the later the same year.
What happened last year?
Finbarr Taylor: [00:13:18] Yeah. Well, so actually we raised the series A in October, 2019, but we didn't announce it until February 20. Yeah, so it was kind of a few months later. But, yeah. So what happened is we raised a series A when we decided we were going to build a second product. And so we went to our officers and we talked to some other investors and said, Hey, we've seen this opportunity to build this new product.
[00:13:41] She'll be in front end. I'm working to scale the team significantly in order to build this So that was when we raised a series A and Shogun Pagebuilder was doing super well and growing really, really well. And so it was kind of like, hey, we have this super nicely growing business. We're building this enterprise product on top.
[00:13:55]And that was the pitch and people people you know, give us give us the mind to being great investors you know, fast forwarding a year later to 2020. You know, I think we've been in an incredibly fortunate position. In, in the, you know, in the industry that we're in two things have really helped us out in 2020, you know Corona viruses has been a huge you know terrible thing thing for the world. But we, we really have been very fortunate in two respects. One is we're a fully remote company before coronavirus, so we didn't really have to adjust in any way. We just kind of kept going. Of course, it's had a toll on our team and a lot of people that have been badly affected by it, but in terms of our working style and everything, nothing had to change business as usual business as usual that we're, we're giving people extra time off and things like that, but more or less business as usual.
[00:14:45]The other thing is a lot of transactions went online instead of in person. So e-commerce really has seen a major boost. And so our business saw a major boost last year. And so both of those things, well, I think mainly the second one was what was of interest to investors. You know, the fact that e-commerce suddenly became this very hot topic. You know, we were approached by Accell in October, 2020, or September, 2020, and they, yeah, they made it very easy for us to raise a series B.
[00:15:15] Piotr Karwatka: [00:15:15] That, that sounds awesome. I suppose that even this year is from what I see is even hotter. I mean you know, guys where some guys were waiting how will this pandemic and eCommerce grow? And it is completely awesome, like 10 years into one year compressed. So I see a lot of, you know, investments and rounds closing this year for e-commerce, which is absolutely awesome.
[00:15:41] Finbarr Taylor: [00:15:41] It's crazy.
[00:15:42] Piotr Karwatka: [00:15:42] Yeah. It's really crazy. To be honest, I'm I'm a huge fan of this local let's call it part of the trendline, which you are and what their thing is. The next big thing in this in this environment, like what, what kind of tools are we going to expect? What kind of tools you as a shotgun founder would like to. Have combined with, with Chicago and you know, how you see it as like a system growing.
[00:16:09] Finbarr Taylor: [00:16:09] Yeah. You know, it's, it's super interesting. I think that there's a few trends that we're seeing happening right now that there's a kind of, you know, software goes through these cycles of bundling and unbundling where you know, large companies Mars, they bundle a whole bunch of different things together. And then they grow to the point that they have ecosystems around them that are so big, that there are areas to start unbundling parts of the bundle and make just those parts better. And those are such big opportunities because the ecosystem has grown so large. So you're seeing that with the Shopify ecosystem, like Shopify is absolutely massive and there are lots of.
[00:16:47] Players in the ecosystem that have been able to just build slightly better, or much better versions of different parts of the Shopify ecosystem and each companies. And so, you know, I think that, that we're in a real unbundling cycle right now, and people are kind of, you know, building all kinds of really high quality components that can be you know, combined together.
[00:17:08] People are talking about like composable commerce, like this idea that you can. Yes, add together the best in breed of may different parts. So maybe you choose one thing for your front end and you choose one thing for your information management and something else for your checkout and something else for your e-commerce and you can combine them all together.