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Digital Marketplace Success Strategies From Nautical’s CEO

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Digital Marketplace Success Strategies From Nautical's CEO

Despite the unstoppable rise of the online marketplace model, it remains challenging to build ecommerce marketplaces. There are so many vendors, third-party apps, devices, and consumer preferences to account for.

The question is no longer about your online presence. It’s about how far you can reach.

That’s why Ryan Lee, together with co-founders Niklas Halusa and James Throsby, decided to build Nautical Commerce, a multi-vendor platform that aims to make marketplace technology accessible to businesses of all sizes, from startups to enterprises.

In this Q&A-style interview, Lee shares the inspiration behind founding Nautical, the common pain points of ecommerce brands, and how entrepreneurs can stay ahead in today’s competition.

Let’s take a look at some of his experiences and advice.

Nautical’s Founding Story

In June, Nautical Commerce raised $30M to scale multi-vendor marketplace technology.

“This funding is validation that we are focusing on the right problem, specifically an issue that is having a huge impact on the ecommerce market,” Lee told SEJ.

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“Plus, there are a variety of marketplaces, and right now, we are primarily focused on a couple of marketplace models. This funding will allow us to cast the net a little wider and help more organizations who have dreams of becoming multi-vendor marketplaces.”

What inspired you to start Nautical?

Ryan Lee: “There were three things that inspired me to found Nautical:

One: I had the unique opportunity to peer 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 wasn’t approachable.

I saw a clear opportunity for Nautical’s marketplace platform to power these businesses much faster than the typical two- to three-year implementation timelines and massive capital outlays.

Two: My previous experience really sat 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 startup.

Everything I’ve done to date has focused heavily on the back office. I am very passionate about the back office and the opportunities to optimize and reduce manual and labor-intensive work.

Three: I saw so many retailers struggle to be both technology companies and retailers. Most technology companies have 90% margins. Retailers that manufacture and distribute goods that end up in the hands of consumers don’t. Because retailers run on thin margins, they aren’t able to build the same way a technology company would.

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We’ve seen organizations try to be both – Sears, JCPenney, Borders – and ultimately they failed because they weren’t focused on their biggest value for customers.”

Overcoming Ecommerce Hurdles

What do you think are the common pain points of ecommerce brands? Do you have a few go-to strategies to approach them?

RL: “One of the most common pain points of ecommerce brands is getting new product lines in front of consumers with the intent to buy. We’ve been in this world where marketers are casting the net wide by blasting advertisements all over the place.

For a while, it was relatively easy to find out where your buyers are, but now – with the privacy changes to iOS 14 – finding your customers and targeting ads is a lot more difficult.

Now, it’s imperative to offer all the products a consumer would want when they arrive on your site and also participate in marketplaces. When shoppers visit a marketplace, there is a higher intent to buy. I am excited to see how marketplaces grow and become a channel for increased revenues.”

What’s the one greatest but most underutilized opportunity in the SaaS market right now?

RL: “So many businesses are focused on optimizing the buying experience. But for marketplaces, distributors, or any business with suppliers on their platform, removing the friction to sell and participate in that ecosystem is just as important.

The most underutilized aspect of SaaS is the back office automation that companies like Nautical are helping digitize. A lot of companies are digitized online and can support ecommerce, but they aren’t digitized in the back office.

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Organizations tend to throw labor resources at that problem which they ultimately have to scale linearly with revenue growth. Nautical can help businesses using the marketplace model to scale without having to linearly add headcount to grow.”

What recommendations do you have for fledgling ecommerce sites and brands to help them get off on the right foot?

RL: “For ecommerce sites and brands wanting to get off on the right foot, make sure you aren’t trying to build your ecommerce stack out yourself.

Leverage enabling technology that gets you up and running quickly so you can validate your business model and experiment with new vectors and products.

Businesses that think they can be both a retailer and a technology company ultimately fail. You have to choose a 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 simply marketing. For many companies, your website is your publicly-facing brand.

A digital marketer should be focused on more than just clicks and paid ads. They should deeply understand their audience to serve them helpful content and create strong brand affinity.”

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Speed Wins The Competition

Any advice for junior marketers who aspire to a leadership role in optimization, data application, and FinTech? How about those launching their own startups?

RL: “The term that resonates here is ‘analysis paralysis.’ There is no amount of data that can teach you what you can learn from just doing it.

My recommendation to new entrepreneurs that 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 the least amount of capital upfront.

It’s very easy to formulate a grand plan that takes two to three years to execute. The problem is, that’s two to three years and capital investment you’ll never get back. If you can compress that to 30, 60, or 90-day increments, that gives you a clear advantage over any competition because of speed to market. And speed wins.

I practice martial arts, and we have a saying, Speed beats strength, and technique beats speed. Speed always beats someone who is more capitalized because you get to learn faster.

The technique in this analogy is having the experience in that industry. Even if you don’t have ecommerce experience, speed is definitely something you can have as an advantage over someone who’s well capitalized.”

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Featured Image: Courtesy of Nautical Commerce

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WordPress Considers Historic Development Change

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WordPress Considers Historic Development Change

Matt Mullenweg, developer of WordPress and CEO of Autommatic, proposed no longer adding new features to the WordPress, pivoting instead to a plugin-first policy.

This new approach to the future of WordPress has already resulted in a new feature intended for the next version of WordPress to be dropped entirely.

Canonical plugins are said to offer a way to keep improving WordPress on a faster schedule.

But some WordPress core contributors expressed the opinion that publisher user experience may suffer.

Canonical Plugins

First discussed in 2009, canonical plugins is a way to develop new features in the form of plugins.

The goal of this approach is to keep the WordPress core fast and lean while also encouraging development of experimental features in the form of plugins.

The original 2009 proposal described it like this:

“Canonical plugins would be plugins that are community developed (multiple developers, not just one person) and address the most popular functionality requests with superlative execution.

…There would be a very strong relationship between core and these plugins that ensured that a) the plugin code would be secure and the best possible example of coding standards, and b) that new versions of WordPress would be tested against these plugins prior to release to ensure compatibility.”

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This approach to features and options is also referred to as Plugin First, to emphasize how features will first appear in the form of plugins.

These plugins are called canonical because they are developed by the WordPress core development team as opposed to non-canonical plugins that are created by third parties that might limit features in order to encourage purchase of a pro-version.

Integration of canonical plugins into the WordPress core itself would be considered once the plugin technology has proven itself to be popular and essential to the majority of users.

The benefit of this new approach to WordPress would be to avoid adding new features that might not be needed by the majority of users.

Plugin-first could be seen to be in keeping with the WordPress philosophy called Decisions, Not Options, which seeks to avoid burdening users with layers of technical options.

By offloading different features and functionalities to plugins, a user won’t have to wade through enabling or disabling functionalities they need, don’t need or don’t understand.

The WordPress design philosophy states:

“It’s our duty as developers to make smart design decisions and avoid putting the weight of technical choices on our end users.”

Canonical Plugins the Future?

Matt Mullenweg published a post titled, Canonical Plugins Revisited, in which he made the case that this is the way that WordPress should be developed moving forward.

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He wrote:

“We are reaching a point where core needs to be more editorial and say “no” to features coming in as ad hoc as they sometimes do, and my hope is that more Make teams use this as an opportunity to influence the future of WordPress through a plugin-first approach that gives them the luxury of faster development and release cycles (instead of three times per year), less review overhead, and and path to come into core if the plugin becomes a runaway success.”

The first casualty of this new approach is the cancellation of integrating WebP image conversion into the next version of WordPress, WordPress 6.1, currently scheduled for November 2022.

Plugin-First is Controversial

The shift to a plugin-first development process was subjected to debate in the comments section.

Some developers, such as core contributor Jon Brown, expressed reservations about the proposal to switch to developing with canonical plugins.

They commented:

“The problem remains that there are too many complicated plugins standing in for what would be a simple optional feature.

Plugins are _not_ a user-friendly option to core settings. First users have to discover there is a plugin, then they have negotiated yet another settings screen and updates and maintenance of that plugin.”

The commenter used the example of a commenting functionality that is currently served by mutliple bloated plugins as a less than ideal user experience.

They noted that having one canonical plugin to solve a problem is preferable to the current state where desirable options can only be found on bloated third party plugins.

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But they also said that having a settings option within core, without the need for a plugin, could present a better user experience.

They continued:

“Now, I do think Canonical plugins are a better situation than 6+ bloated plugins like exist here, but so would a single checkbox added to the settings page in core to do this. Which would further improve the UX and discovery issues inherent in plugins.”

Ultimately, the commenter expressed the idea that the concept of canonical plugins seemed like a way to shut down discussions about features that should be considered, so that the conversation never happens.

“Canonical plugins” seems like a weaponized tool to derail discussions the same way “decisions not options” has become for years.”

That last statement is a reference to frustrations felt by some core contributors with the inability to add options for features because of the “decisions, not options” philosophy.

Others also disagreed with the plugin-first approach:

“Canonical plugin sounds grand but it will further increase maintenance burden on maintainers.

In my opinion, it’s no go.

It will be much more better to include some basic features in core itself instead of further saying – It’s a good place for plugin.”

Someone else pointed out a flaw in plugin-first in that collecting user feedback might not be easy. If that’s the case then there might not be a good way to improve plugins in a way that meets user needs if those needs are unknown.

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They wrote:

“How can we better capture feedback from users?

Unless site owners are knowledgeable enough to report issues on GitHub or Trac (let’s be honest, no one reports plugin issues on Trac), there’s really no way to gather feedback from users to improve these recommended/official plugins. “

Canonical Plugins

WordPress development is evolving to make improvements faster. Core contributor comments indicate that there are many unresolved questions on how well this system will work for users.

An early indicator will be in what happens with the cancelled WebP feature that was previously intended to be integrated into the core and will now become a plugin.


Featured image by Shutterstock/Studio Romantic

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