Despite the unstoppable rise of the online marketplace model, it is still difficult to build e-commerce marketplaces. There are a lot of vendors, third-party apps, devices, and consumer preferences that need to be taken into account.
The question is no longer about your online presence. It’s about how far you can go.
That’s why Ryan Lee, along with co-founders Niklas Halusa and James Throsby, decided to build Nautical Commerce, a multi-vendor platform that aims to make marketplace technology more accessible to businesses of all sizes, from startups to corporations.
In this Q&A-style interview, Lee shares the inspiration behind founding Nautical, common pain points for ecommerce brands, and how entrepreneurs can stay ahead of today’s competition.
Let’s take a look at some of his experiences and advice.
Nautical’s founding story
in June, Nautical Commerce raised $30 million To expand the multi-vendor market technology.
“This funding is confirmation that we are focused on the right problem, specifically the one that has the most significant impact on the e-commerce market,” Lee told SEJ.
“In addition, there is a variety of markets, and at the moment, we are mainly focused on two market models. This funding will allow us to expand the network and help more organizations that dream of becoming multi-vendor marketplaces.”
What inspired you to start Nautical?
Ryan Lee: There were three things that inspired me to found Nautical:
First: I had a unique opportunity to look behind the veil and see that many organizations were facing a similar problem in that they wanted to enable multi-vendor commerce, but the technology just didn’t fit.
I saw a clear opportunity for Nautical’s marketplace to get these companies up and running much faster than the typical two to three year implementation timelines and huge capital expenditures.
Two: My previous experience was really at the intersection of commerce, fintech, and logistics. This includes my time working at Apple and launching Apple Pay internationally, my role as Chief Product Officer at a FinTech startup, and working for a B2B logistics company.
Everything I’ve done so far has focused heavily on the back office. I am very excited about the back office and the opportunities to improve and reduce my labor intensive manual work.
Third: I’ve seen a lot of retailers struggle to be technology companies and retailers. Most tech companies have margins of 90%. Retailers who manufacture and distribute goods that end up in the hands of consumers do not. Because retailers operate on such thin margins, they are not able to build in the same way a tech company can.
We’ve seen organizations try to be alike — Sears, JCPenney, Borders — and ultimately fail because they don’t focus on their greatest value to customers.”
Overcoming e-commerce barriers
What do you think of common pain points for ecommerce brands? Do you have some transition strategies to deal with?
RL: “One of the most common weaknesses for e-commerce brands is getting new product lines in front of consumers with the intent to buy. We’ve been in this world where marketers go viral by blowing up ads everywhere.
For a while, it was relatively easy to see where buyers were, but now — with the privacy changes in iOS 14 — finding your customers and targeting ads has become even more challenging.
Now, it is necessary to offer all the products that the consumer wants when they come to your site and also participate in the markets. When shoppers visit a market, there is more intent to buy. I’m excited to see how the markets grow and become a channel for increased revenue.”
What is the biggest, yet least exploited, opportunity in the SaaS market right now?
RL: “Many companies are focused on improving the buying experience. But for marketplaces, distributors, or any business with suppliers on their platform, removing the friction of selling and participating in that ecosystem is just as important.
The most widely used aspect of SaaS is the back-office automation that companies like Nautical are helping to digitize. A lot of businesses are digitized online and can support e-commerce, but they are not digital in the back office.
Organizations tend to throw labor resources at this problem which eventually has to scale linearly as revenue grows. Nautical can help companies that use the market-to-market model expand without having to add linear headcount for growth.”
What recommendations do you have for fledgling e-commerce sites and brands to help them get off the ground?
RL: For e-commerce sites and brands that want to get off the ground, make sure you don’t try to build your own e-commerce suite.
Take advantage of enabling technology that gets you up and running quickly so you can validate your business model and try out new vectors and products.
Companies that think they can be a retailer and technology company eventually fail. You have to choose the path.”
If you had to sum up the role and value of a digital marketer, what would it be?
RL: “The world is digital. Today, digital marketing is just marketing. For many businesses, your website is your audience-facing brand.
A digital marketer should focus on more than just clicks and paid ads. They must have a good understanding of their audience to offer them useful content and create a strong brand affinity.”
Speed wins the competition
Any advice for aspiring marketers looking to take a leadership role in the optimization and application of data and financial technology? What about those who are launching their own startups?
RL: The term that resonates here is “analysis paralysis.” No amount of data can teach you what you can learn from just doing this.
My recommendation to new entrepreneurs who want to validate their passion projects or business ideas is to find a platform that allows you to validate your business model as quickly as possible, with minimal upfront capital.
It is very easy to formulate a grand plan that takes two to three years to implement. The problem is, that’s two to three years and a capital investment that you’ll never get back. If you can compress that down to 30, 60 or 90 days, that gives you a clear advantage over any competition because of the speed to market. And speed wins.
I practice martial arts and we have a saying, Speed trumps strength, and technique trumps speed. Speed always beats anyone with more capital because you learn faster.
The method in this measurement is to have experience in that industry. Even if you don’t have e-commerce experience, speed is definitely something you can enjoy at the expense of someone with good capital.”
- Buying Enterprise SEO: 7 Essential Tips for Winning the Long Game
- Market Marketing, Management, and SEO Tactics [Podcast]
- Ecommerce Marketing: The Ultimate Guide
Featured image: Courtesy of Commerce Maritime