45. Challenge Accepted. with John Surdakowski, founder at Avex, Shogun Investor

"I spoke to John about how eCommerce changed across last 10 years - he has a really nice perspective, he's based in NYC and has been doing business for years with some of the market's top brands as the CEO of Avex designs and Investor at Shogun. We talked a lot bout Shopify and Shopify Plus, including their latest Shopify Unite events and all the announcements around those new releases. Great chat!" Piotr Karwatka, Host.

Topics discussed:


You started your career in marketing, NYC with some of the top agencies: BBDO, MRM. That was about 15 years ago. How has the market changed?

Was eCommerce a thing when you were taking your first steps?

What was the typical eCommerce strategy for a brand back then and how has it changed over time? 

SEO, SEM optimization was a serious point in any strategy about 2009, 2010, a lot of tricks and hacks. I suppose it all changed with more direct contact via Social Media and white-SEO all these sort of things. What’s your advice for a brand entering eCommerce in 2021?

The technology landscape is totally different. How do brands choose technology at the moment?

Who’s making the call? Is it the CMO or the CTO?

Headless is getting more and more popular but I still see even global brands starting with monoliths like Salesforce Commerce or Hybris. Why's that?

Do you think that Headless is a halfway step?

What stuck me even more that some global brands, getting online are doing first steps with … Shopify? Isn’t this an SMEs offering? Why is it so?

Is that why you became one of the first business angels for Shogun?

How about the latest Shopify Unite? A lot of announcements which are most exciting to you?

Do you think Hydrogen is a threat for Shogun?

Do you think the No-Code / Low-Code is the missing puzzle for headless to fill the offering monoliths did before (one-stop-shop kind of positioning)?

I witness more and more companies investing into their own dev-teams to catch up with the market and the changes. Is there still a space for eCommerce agencies?

Transcript:

Piotr Karwatka: [00:00:00] I'm super excited to host John Surdakowski, Founder at Avex. We're gonna talk about all things e-commerce. How has it changed? From the early 2000’s to today. John is also an early investor at Shogun. So we will probably talk about Shogun and Shopify, as well as about all the new things happening on the market.

Hello, John, I'm happy to have you here. 

John Surdakowski: [00:01:12] Yeah, well, it's  great to be here. I'm excited to talk about e-commerce and maybe we'll even touch  a little bit on some of those guitars you got back there. I'm sure we could relate to that. 

Piotr Karwatka: [00:01:23] Yeah, absolutely!  Let's start with your background and the early days of your career, how you started in marketing in NYC with top agencies. Do you remember your first project? What did the early days look like? 

John Surdakowski: [00:01:39] Yes, sure. Even going back before that, my first job out of school in design and kind of marketing, I was working in the Diamond District in New York City for a jewelry company, just really editing photos and doing some light graphic design for their eBay store. And from there, I moved on to working at a hip-hop record label, which was really cool. I got to work on like hip hop websites back when flash was really big (flash animation). And I got to work on some hip-hop websites and I got really into the New York City club scene. There was a really high demand as far as graphic design for invites and animated emails and sending out flash. So I built my network of, you know, club promoters and brand promoters, and that kind of led to working for a company called Strategic Group. That was more into marketing. I met some people there and for a small agency I started to do consultant freelance, and a bit for some of the larger kind of Madison Avenue giants. Like you mentioned, MRM McCann, Erickson. BVDO did a lot of design and Flash. After that, I really got bored with Flash because it was kind of dying out.

You know, the iPhone just came out, Flash wasn't as big. So I taught myself more UX, UI and taught myself how to do front-end development, WordPress development. And then I just started taking on freelance projects from there. And I just wanted to design websites, code websites, and blog about responsive design and best practices and semantic HTML and things like that.

So that's what I did. I quit my job and I just started to work on my own projects and that snowballed from there, I started to get bigger brands. I started to hire some people and that's what led to the start of ABAC. 

Piotr Karwatka: [00:03:35] Gotcha. You know, considering the history of e-commerce, those years were super revolutionary, I would say. But let me ask you, when you were at the MRM BVDO was the e-commerce thing. I mean, you mentioned that you were doing some, you know, graphic designs for eBay shops. So marketplaces are always the first to market e-commerce, wasn't that popular? When did the brands start thinking about e-commerce back in the day? What was the inflection point? At what point did you see something like, whoa e-commerce is a thing I need to focus on?

John Surdakowski: [00:04:23] Yeah. So I’ve kind of seen it evolve over time. Like I remember when I was freelancing many years ago, like there was no Shopify, there was no platform that you could just spin up. You had to do it yourself. Either build a platform from the ground up. Or what I remember doing is like, we spun up like HTML pages with PayPal buttons for smaller brands who just wanted to sell online. So that was just like, the way that it's evolved and grown is, it's been tremendous over the past 15 plus years.

But working at some of those larger agencies, e-commerce was not something that they were focusing on. I do feel like that was smaller, like development shops and some shops that only focused on e-commerce because they saw the future. But these bigger marketing and advertising agencies, it was all, you know, MasterCard and doing things like banners and ads for them or copywriting for them, or pharmaceutical companies.

And, you know, the brands that were getting into e-commerce I feel were, you know, those were just different engagements and we didn't really even see it back then. When I kind of saw it, e-commerce was getting bigger. We did a Magento build for a legacy brand called PONY sneakers some years ago. Maybe that was like 2012, 2013 or something.

And that's what kind of sparked it for me. I was like, okay, well, this is where I want to be. And it did take a few years to really dive fully into e-commerce. We were kind of doing a mix of e-commerce and just like brochure, web. But once we started to get more and more into Shopify and building some of those stores is really where I started to see the value in.

With e-commerce you're not just designing and building for a brand who doesn't is not generating revenue from their website, or it's more of just a brochure website. You can actually help these merchants scale their businesses. And you don't need to build things completely custom and bespoke from the ground up.

So that's where we kind of saw that turning point, that value and where we started to work on bigger projects and on bigger brands. 

Piotr Karwatka: [00:06:30] Gotcha. That makes perfect sense. Just one more question about the history and we switched to the marketing strategies. That's something I think also changed a lot. I will ask you about the technology landscape as well. You said that Shopify was an inflection point. I totally relate to that. I also feel like it was, at this point of time, probably 2010, 2012, those years changed a lot also for Magento and other platforms, like it was sparking new projects. Everyone felt that they need to be in e-commerce but the marketing strategies, how they apply also changed, right? I mean, I remember that in those years there were a lot of tricks and tips, you know SEO, SEM optimization, that kind of thing. Very often very short term that would give you some free traffic or cheaper traffic.

Google is fighting with it constantly. Do you have any advice for a brand doing this in your marketing strategy? If somebody today doesn't have e-commerce it is probably strange. If you’re entering the market, what would you advise to the guys? Because I feel that those three no longer work.

John Surdakowski: [00:07:54] Yeah. So I remember years ago, you were able to throw a bunch of keywords on a page and you could rank number one on Google. You could throw a bunch of ad dollars towards Google search placement, as well as Facebook and Instagram. And you could kill it. You could create a multi-million dollar store just by the right targeting and in some way that still exists, like, especially right social media marketing, but it's a lot harder. It's a lot harder now, especially with iOS 14 and 15 updates, privacy and collecting data. Companies like Apple are seeing the future when it comes to privacy, being extremely important to the customer and less and less are brands going to be able to just target somebody and then generate millions of revenue just from some well-placed ads.

So for someone who's just entering the market now, you still need to focus on SEO as a longterm play. So not black hat SEO, not trying to like, you know, game the system. You need to just have good content and follow best practices because you could get some, you know, long tail keywords that rank, and that could get some revenue, but it should be a constant focus.

But there’s no one track solution there, same thing with social media. You still need to have good content, good copywriting, and good targeting for your social ads. And that should be a channel, but everyone needs to focus on this omni-channel approach or this omni marketing channel approach where yeah, you're focusing on SEO, you're focusing on social. But more importantly building a community and that's a long-term thing. So building a community, building a platform, being able to focus on brand and just optimizing every single touch point. So that could be customer experience, customer service, user experience, conversion rate optimization, SEO, paid social, paid search, all of those things.

You have to take a holistic approach to it. Put out really great content and have an amazing product and really focus on the customer experience. And that's where you're going to grow. And it's going to take some time, but that's where you're going to see the biggest ROI. 

Piotr Karwatka: [00:10:06] Gotcha. That's fantastic advice.

Thank you for that. I think we can switch a few years in a few years later today. I would like to talk with you about the detectability. The CTO to CTO name of the podcast, you know, requires us to talk tech. 

John Surdakowski: [00:10:28] Yeah, of course. Let's do it, happy to talk about. 

Piotr Karwatka: [00:10:32] Yeah, I would start with a pretty business question.

There’s something that always struck me. You have all those brands, right? In NYC. It's the best place to have contact with no top brands when you, when you start the project with you Would you turn how they choose the technology, who's making the calls. That's my first question. The other one is what are the criteria?

I'm asking because, you know if you look at it from the tech angle of that you have huge brands, you know, billions in revenue. So we think like, okay, they need to have a serious stack, right? I dunno they need, you know, maybe a hybrid, whatever, like, okay. Hybrids may not be like top market right now, but it's a very serious platform. But they chose Shopify. So as a tech person, you’re thinking ‘what the heck’? Like what is going on here? It makes no sense. So give us some explanation how it works, like how they choose this tag. Who's making the call. What are the criteria?

John Surdakowski: [00:11:38] Yeah, that's a great question. And a few things to unpack there. I agree with you. New York is a great place to be. But it's a very tough market. And to be honest, a lot of the brands that we work with aren't even in New York, they're all over the country, all over the world, but they do have the same problems. They need a technology stack. So it really depends on the brands that we work with.

So we work with a range of brands. We have some brands that are startup brands who are looking for a lot of advice, a lot of consulting. To help make those decisions. We have some in the mid range who have made some of those decisions and they know what they need. But they might need some advice. And then there's the larger enterprise brands who might have an existing tech stack and it needs to be more sophisticated, but they all have similar problems.

Honestly, they want to make their technology stacks and there you call them. A bit more simple now, not that doesn't mean that it's not sophisticated, but you know, when we're thinking about complex tech stacks, whether it's  It's a tool, right? It's the end of the floor.

Piotr Karwatka: [00:12:40] And they want to be probably first to the market.

John Surdakowski: [00:12:45] Well, they want to be first. They also want to simplify it in a way. So a lot of the requests that we hear is that, look, we have a custom platform or something that's headless or a form of headless, or maybe it's just the PWA. Or maybe it's a Magento. And even that is complex for them. And either they don't have an IT team, or maybe it's just so complex that they can't update content or they can't add SAS products. So I think a lot of the reasons why these brands are flocking toward Shopify and Shopify Plus is because it could be an all-in-one system for them. And even with a headless set up on Shopify, there's still all of these SAS products that work with the platform and they want to be able to. Get great content out there a lot easier. They want to be able to optimize their site for conversion. So they're looking for that return on investment. So sometimes a more minimalist approach to their technology stack is something that's going to fulfill that it's going to make it easier for them to move faster.

It's going to be easier for them to release new feature developments now without having to worry about all these complex tech stacks. So I think simplicity is one of the major things. 

Piotr Karwatka: [00:13:53] Yeah. So they are no longer stuck to the IT department with their own release cycle bottlenecks, all the problems they usually have because they can just experiment a lot. Way more often do changes into continents. So I suppose that was one of the reasons you became the first business angel for Shogun, isn't it? 

John Surdakowski: [00:14:16] Well we weren’t the first business angel, but we came in on one of their latest rounds, which was a much larger round. Incredible growth. So one of the reasons why I invested in Shogun is  because that is one we worked with the platform, it's a great platform.

The Shogun frontend has a lot of potential for the future. It's still early. But headless is definitely something that is growing. Look at even Shopify as unite updates. They're starting to focus more on headless and she'll questions about it, not minutes. Sure. But Shogun has proven for years with their program page builder to kind of like say, okay, We know what Shopify and big commerce Magento merchants may need to be able to simplify the content management system and expand on it.

And they're applying that same logic and technology to Shogun front end for headless. So I see it as a huge opportunity and a lot of brands are going towards that platform for a more kind of, I wouldn't say simple, but a more minimalistic approach to headless. 

Piotr Karwatka: [00:15:19] So yeah, so that, that makes perfect sense.

So what, what you're saying, like things like headlines and other things that are, you know they probably are milestones, right. But they are on the way to solve bigger problems. And the bigger problem is to have. Architecture, which lets your business folks do the changes as often as they wish while having it's still scalable and easy to maintain by the type of people.

But for Shopify and Shogun, probably you don't need your own maintenance team because it's just... 

John Surdakowski: [00:15:56] Sometimes you do. It depends on the complexity of it. We have one merchant that's on Shogun and yeah. Content updates. They can make it like being able to reorganize like content types, all of those things, they could do that.

But the technology is still pretty sophisticated where they do need us to work on some feature updates and developments. So, you know, the more features and functionality. I think companies like Shogun or Shopify release. Yeah. It does get simpler for some smaller merchants to be able to do things that they always wanted to do, but it also opens up a lot of opportunities for developers to do even more great things.

You know, the more they open up the more that you start being able to leverage things like the store for an API and React and like all these new features that are coming out. The more complex things could get, and you're going to need agencies to be able to help with that, or at least Shopify experts to be able to help with that.

Piotr Karwatka: [00:16:57] So how I read, what you said is that there is a lot of space for agencies, but maybe the focus is moved from, you know, keeping it just up and running, which was, you know, a case for Magento, maybe our other platform, like, you know, you spend 80% of your time keeping it up and running because we always had some failures, some outages, scalability problems, all sorts of these things. And right now with the APIs, you can start both things, but there are features and there are business value. So that makes more sense from the business side, right? 

John Surdakowski: [00:17:32] Yeah. A hundred percent. I'm breaking this out into a few, or maybe even a couple of different categories, like looking at low-code or no-code or you know, being able to just spin up a Shopify theme, the ones that are available, if you're a small store and you just want to start selling, you can do that really easy and start even putting some really robust functionality on your store.

But on the other side for the more complex things, whether it's building a React app into your store. or using a JAMstack PWA headless, it's going to allow for even more complex things. So larger merchants are going to be able to leverage Shopify agencies who have that experience to be able to deploy that functionality and be able to work on those things.

So I think it's both opened up a lot of opportunities for some of that advanced development. And it also is now putting some of that power in the merchant's hands, because maybe they would have hired a freelance developer or Shopify agency, but they could do it themselves. So I think the ones in the middle that, you know, are maybe just focusing on team setups that might not be as much as popular as it was.

‘Cause merchants could do some of those themselves now, especially with like, you know, sections everywhere or, you know, the theme Store 2.0, being able to use some of the themes out of the box. I think that's going to help them, but they're still going to need Shopify people who have a deep understanding of Shopify to do more of that complex functionality.

Piotr Karwatka: [00:19:04] That makes perfect sense. Let's talk a little bit about the Shopify Unite. I’ve heard so many announcements and then, you know, it's even hard to to list them, and all of them were super exciting for me. Like the first one was this hydrogen in front and the second one was actually something pretty technical, but I first heard of it, how they let the developers do the back-end stuff. I mean, for me it was, it was it's first time I saw a real use case for web assembly, right. Because you know, having Craig in the browser or adults JS this kind of proof of concept is core, but it's not a business value.

And they share with this business. So that was fantastic. And I'm wondering what was the announcement that excited you the most? 

John Surdakowski: [00:20:02] There are so many, and, you know, I wouldn't say one of them is excited to be the most, but it's like a combination of things. So I think Shopify made a conscious effort to be able to, instead of making Unite about you know, the shareholders and about how many new merchants they have, or about the growth of Shopify plus or money and like, you know, their, their idea for the future of, of like the growth of the business. They've really got back to their roots of developers. Like a hundred percent, which is a breath of fresh air.

And I don't think like the stock market and investors really understood that, that like, look, they're really trying to focus on. The developers. Because the developers are the ones who are going to innovate and they're going to be able to use things like hydrogen and being able to use things like opening up the back end, more focusing on the storefront API.

And they're going to be able to be the ones that, and, and also the removal of the app store fees for developers. Great for developers, but people aren't even understanding what the by-product of that is going to be, because now that you have a hundred percent of that revenue going towards the developer there's going to breed more developers who are amazing developers who are coming to the platform to create great things.

So that's going to attract bigger merchants. That's going to increase those merchants' revenue and their sales, which are going to increase Shopify as revenue and that's going to bring innovation. And one of the things Shopify does similar to Apple is that when developers are creating really great products and really great apps, I wouldn't say they steal them, but they end up making them part of the core functionality, you know?

So like that's something that's going to almost be like free R&D for Shopify. So there's a lot of potential there. So opening that up and allowing, and even something that was announced before Unite being able to edit the robots.txt file was something that developers have been wanting to do for years.

And now we can do that. So even little things like that, it just shows how much respect they have for developers. So now a lot of these things. To be able to, you know, code these apps or be able to install this functionality and, and host it with Shopify. It's becoming a more sophisticated platform if you want it to be.

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