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The FODcast
In the FODcast (The Future of #DigitalCommerce) we explore the real career stories of the people who have made it to the very top of the sector and those who are working at the cutting edge of innovation and change right now. Listeners to the podcast gain insight into the journeys industry leaders have taken to be where they are today, the challenges they are facing now and their aims for the future.
The FODcast
Revolutionising B2B E-Commerce: Insights and Strategies with Vendure’s David Höck
In this episode of The FODcast, we delve into the transformative world of B2B digital commerce with David Höck, co-founder of Vendure. From his beginnings in mechatronics engineering to reshaping the digital commerce landscape, David’s journey offers invaluable insights for businesses navigating the complexities of B2B.
Vendure’s open-source, headless platform is a game-changer for companies managing multi-region and multi-language operations. By addressing the limitations of traditional solutions, it empowers global brands like IBM and QVC, as well as smaller enterprises, to thrive in an evolving market.
💡 Key topics we explore include:
- The vast untapped potential of the B2B market and how to drive innovation
- A deep dive into composable commerce vs. monolithic systems—and which suits B2B best
- Balancing founder priorities while navigating venture capital challenges
- How AI and automation can enhance the B2B experience without losing the human touch
- The growing influence of younger generations in shaping B2B customer expectations
🎙️ Why listen? This episode is packed with actionable insights and forward-thinking strategies to help you stay ahead in the competitive B2B e-commerce space. Whether you're a founder, a digital commerce expert, or simply intrigued by the future of B2B, this is a must-listen conversation that could reshape your approach.
Simply Commerce is the leading supplier of talent into digital commerce across technology, digital marketing, product, sales, and leadership.
Find our more about our approach and our services within digital commerce recruitment here: https://simply-commerce.co.uk/
Welcome to the latest series of the podcast, where we bring you the latest insights into the future of digital commerce. In season six, we continue to interview some of the most respected professionals in the industry as we broaden the topics to cover what it takes to build a business within e-commerce, navigating through business change, as well as the future of technology within digital commerce. As we continue our journey to have one of the best podcasts within commerce, we ask you to like and share within your network if you enjoy our content. And we're back. Hello and welcome to the podcast the Future of All Things Digital Commerce. Today, I'd like to welcome David Hoke, co-founder of Vendure. Welcome, david.
Speaker 2:Hi James, Thanks for having me. It's a pleasure to talk with you today.
Speaker 1:Thank you for joining me. I'm looking forward to this one. So Vendure is an open source headless commerce platform headquartered in Austria. Vendure first came on my radar in 2023 and it's been great to see the business grow over the past 12 to 18 months. Today, we'll be focusing on the future of B2B commerce. But before we jump in, why don't you tell the audience a little bit more about yourself, as you have an interesting career for Vendor as well?
Speaker 2:Yeah, absolutely. I started out in a completely different area, in mechatronics engineering, so like getting my hands dirty building machines, then switching mostly into the software engineering part of that, which is by far not like web engineering. And yeah, someday I I got a call and I was asked like to join an e-commerce startup. Um, and I thought, well, to be honest, why not? I've did some web web engineering work, uh like privately, some side projects and stuff like that. Um, and yeah, then I joined there and uh, in two and a half years I've basically experienced everything uh high growing like really fast growing startup. Uh like does all the problems, all the issues and all the opportunities you have, all the things needed for e-commerce.
Speaker 2:Um, and after these two and a half years, I've basically started my own agency where we have our focus on B2B e-commerce, and that's basically because I've just like made a combination of like my both of my like expertises, which is e-commerce and this mechanical engineering B2B world. Yeah, and that's how I came along. Nice, well, there we go Started in mechanical engineering, p2p world.
Speaker 1:Yeah that's how I came along Nice. Well, there we go, started in mechanical engineering and here we are now. So, yeah, no thanks again for joining me today. So we've had a couple of conversations offline and I'm really looking forward to this one. It's going to be one of our first podcasts that's focused specifically within B2B. So, yeah, let's get started. Let's get started with with, uh, with venture. Then, um, talk to me about how the, the venture business, specifically came around yeah venture is like.
Speaker 2:I think is now six six years old already. Uh was originally created by my co-founder, michael um, uh and and it was basically it started out pretty easy. He was working at a company in austria, like after moving to austria because of his wife, um, and he was working there on a headless cms system and his parents have an like online e-commerce business in the uk and he built a php based system way back in the days and it was like old and then he got basically in touch with these new technologies like JavaScript and headless and all these things and thought why not go headless in e-commerce and maybe find something open sourced? And then he did some research and basically the result was there isn't any like, there is no option on the market right now, and that's basically how Avenger was born. So it was like 100% scratching your own itch. And then he started building it from scratch, like from the first, basically first line of code onwards. It was open source on GitHub and that's how it started six years ago and I've joined this mission basically in 2022, when we had a similar challenge in in in my digital agency, because we saw a major shift in the e-commerce or in the in the software development area, where most developers that are coming out of like university and stuff they are mostly used with or mostly used to JavaScript based technologies and not PHP anymore, like PHP was somehow dying.
Speaker 2:I'm not saying PHP is dying, but it was somehow. It felt like that. And so we also did our research and looked out there what's on the market. Open source wasn't a requirement and TypeScript wasn't a requirement. And that was how we found Venture and I basically, yeah, basically texted Michael on LinkedIn and said, hey, let's meet up, let's chat, maybe we can do something together.
Speaker 2:And basically, from there on it's history and now, like two years in, we are one of the leading open source headless commerce platforms. We are powering like really really large brands like IBM, breitling, qvc all these like really big companies, but also thousands of smaller brands because we open source and that's the great thing about it we have about 200 contributors that are basically actively contribute to our code base, so we could say we have like almost an organization of 200 people, if you want to like compare to the proprietary world. But yeah, that's basically how it came along. And with Venture, we are really focused on these highly customized, multi-language, multi-region commerce scenarios where these off-the-shelf software systems like Shopify, and maybe also Magento to a degree, are not working anymore in your business logic, in your business model or also in terms of performance, where these platforms are not sufficient enough anymore. And that's when you pick Vendor in best case.
Speaker 1:There we go, in best case. I like it. And over that period of time you service clients across the globe. Right, I know you're expanding in the UK. You're obviously busy in the dark region. Do you cover? Do you cover further field as well in the states? And what have you, david?
Speaker 2:yeah, yeah, absolutely so. Our, our users are from the US to Latin America, to like, of course, europe to Australia, asia, like everywhere, like everywhere. Basically, it's completely global. We think global and e-commerce is a global thing. I think most brands nowadays, most big companies, they do business in more than just one region and with more than just one currency. So that's the nature of our projects basically to be multi-region, multi-currency and multi-language.
Speaker 1:Perfect and correct me if I'm wrong, but I believe the platform is you're aiming as B2B, as your target audience for the majority of the customers.
Speaker 2:Yeah right, we don't have a 100% focus on B2B. Yeah right, we don't have like a hundred percent focus on B2B, but we saw that our platform has the best ROI in the B2B space and in the marketplace space. So, basically, when you're building a very sophisticated B2B platform, venger has great features for you that basically kickstart your project and make it really efficient for you to build something like that. And the same goes for marketplace platforms like sharing platforms, b2b, b2c, even like peer-to-peer. We've seen everything, even with the blockchain as a payment gateway. So these are the typical scenarios. B2c is also something that is interesting to us, but, to be honest, we are competing there with Shopify and BigCommerce, and in 99% of the cases, I would recommend Shopify to someone who reaches out to me to talk to Venger. Basically, I would always recommend Shopify because it's always about the return on investment and that's mostly bound to the complexity of the project, and if you have very basic requirements, shopify is just perfect for you. To be honest.
Speaker 1:Okay, I mean I would. I would agree, I think, for I mean Shopify comes up a lot and I mean it. I would agree, I think, for I mean Shopify comes up a lot and I mean it's obviously pushing the complexities and it's pushing its way into enterprise and it's doing well, but I think it's safe for any. What you may refer to as a simple build. Shopify is very hard to compete with and that's why it's cleaned up a lot of that market to compete with and that's why it's cleaned up, cleaned up a lot of that, uh, that market. Um.
Speaker 1:But before we move on to b2b um, we're recording this at a time in which you've just um made quite a large decision within venture. Obviously, everyone looks to to grow a business and, uh, obviously, often growth can be accelerated with funding um. However, in the last couple of weeks, you guys have actually made the decision to to turn down uh vc investment, haven't you? So I think it'd be really good just to talk about that and uh, just, yeah, just understand, kind of, why you went through that process and how you came to your decision yeah, absolutely.
Speaker 2:We. We turned it down basically, uh, in in june this year and we've communicated that like just two weeks ago, um, and basically it was pretty simple because at the beginning of this year we were on this um, like, we had this vision of of like creating the next generation of e-commerce software. Um, that has a lot of impact, basically, uh, like this next unicorn, basically already, already, I would say like we had this dream of like have raised money and serious amounts of money. So we thought we need to do the same and then we sat down, basically Michael and I, my co-founder and we set some baseline agreements, up, some basic non-negotiable terms for us when we're entering negotiations with VCs, and over the time, I had 220 calls with VCs, so a lot of VCs were there with a lot of inbound requests. Of course, already, because of our growth journey, we quickly recognized that we started to bend our non-negotiable terms that we agreed on before, and one of them was that the open source project, as it is right now, should always be the center of everything we do. So basically, our revenue stream should be built upon the open source project and should be an extension to it. So, pretty simple set we want to give you everything for free and if you want to walk faster or want to take a train, basically, or take a plane, you can pay for it or you walk by yourself. So that was like the approach we had and that was not really what the OVCs were looking for.
Speaker 2:So the OVCs pushed us really hard into thinking about going cloud native and building basically a cloud infrastructure as our main product and having the open source project as a top of the final marketing strategy or tool that basically generates leads, and that wasn't really what we were looking for that basically generates leads, and that wasn't really what we were looking for. And then we basically turned down the investment, to be honest, at some point, because we saw that we are bending or we are trying to create a business model that satisfies the investors and not our clients and customers and users and developers, and that was a no-go for us. And then we basically said, okay, if we're not taking any money, we need to find a way to grow, because there needs to be an alternative out there. And then we basically found a way with my agency that I founded, which got rebranded to Elevantic now that we basically merged both companies together and found a way that we can basically fund the growth of venture through the revenue we generate in the digital agency through venture.
Speaker 2:So, basically, what we do is we're building this really sophisticated, very complex venture projects that were in a certain area. We are building that with Eleventic and with that we are basically funding the development of Ventureio platform and with that, we are basically having freedom. We can do our own choices. We are independent of anything. We can say everything we want, we can do everything we want.
Speaker 1:We can make mistakes with our own money, basically, um, and I think that level of independence and freedom gives us like, yeah, also a certain confidence that we are able to to to pull this off, to be honest I, I certainly, uh, respect the, the sticking to the stand in your ground and looking at what your non-negotiables were and saying, joe, actually, if we get this money, then our non-negotiables might as well not be there because they've been stripped so much.
Speaker 1:So I think that's a really good point.
Speaker 1:And I think the second point off the back of that, dave as well is Joe, there's always a way and, whilst it isn't the way that you first anticipated, you managed to find that way in the end and I mean, from what I can see and hear, it sounds like it's working for you guys right now. So, yeah, and I'm sure, joe, whilst that was probably a very long and stressful process going through the VC funding, I'm sure you learned a lot as well. So, despite not taking the funding, I'm sure it certainly wasn't a waste of time, and there's a lot as well, um, so, despite not taking the funding, I'm sure it, uh, it certainly wasn't a waste of time and, uh, there's a lot you can learn from it. So, no, awesome, it's, um, it's great. I'd love to know how many companies out there do take funding and and do bend their non-negotiables and then, later down the line, go on to maybe question whether or not it was the right decision. Um, but hey, not sure we'll ever know yeah, you will never know.
Speaker 2:Maybe you, we will know, because what I've seen is I think at some point you also need to be realistic and think of is your companies, your software, a venture like a vc case? Um, is it possible to 10x within seven years, you know, is that really possible and is that something you can do as a founder? And I'm 27. I'm in my younger years, I would say, but my co-founder is also young, of course, but he's like 40-ish right now. He's at the beginning of his 40s and he has kids and he wants to move at a certain pace. That's maybe not fitting into the VC path when you need to basically hammer it's hammer time basically where you need to pull off these 16, 17-hour days, and I think that's not possible anymore, which is totally fine. Priorities change and that's fine, and I think we find a way now that helps and supports the growth of venture and we are in the long run anyways. So we don't think about like five years, two years and then exit. We think more about decades that we're spending and building this product.
Speaker 1:You've both clearly got time on your side with that as well, so I guess that also helped the decision. Yeah, we all know VC investment requires some very lofty targets. So, uh, yeah, it sounds like it was the right call for you guys. Um, so, um, so yeah, I look forward to seeing how the platform continues to to develop and push boundaries and make its impact globally. Um, but let's, let's jump into um b2b. That's where the the majority of today's conversation is going to be focused on, and just looking at kind of the b2b market. It's obviously a market that comes up in a lot of conversations right now. I think many would uh agree that it's primed for uh innovation and it's primed for opportunity lots and lots of legacy technology. Still, what's your take on the on the b2b market at the minute, then, david?
Speaker 2:I I'm very bullish about the B2B market, to be honest, and there are two simple reasons. First, it's way, way bigger than the B2C market. So in terms of size and volumes in the B2B market, like outscores B2C by at least 5x, depending on, of course, which region it is. And second, there's so much room for innovation. I think B2B and B2C behaves completely different when we're looking at the B2C market now. There are established technologies, there are established patterns and processes of how things are done, and I think how you can make a difference in B2C is not about the platform you build. It's more about the marketing you do. It's about these KPIs like custom acquisition cost and the cost of a lead and things like that. So basically, you need to buy those customers as cheap as possible and have the highest average basket value that you can create, basically to basically be in the profitable zone as soon as possible. I think that's B2C summarized. Of course, it makes a difference if you have fulfilled a million orders a year or a thousand orders a year. There's a difference, but the principles always are the same. So, like these basic patterns are always the same in B2C, so these basic patterns are always the same in B2C.
Speaker 2:On the other hand, if you look at the B2B sector, every company is different and that's by the nature of how they grew, basically, because some of them are family businesses. They have grown over decades and other companies basically have been acquired and then put together and consolidated and merged and whatever these really legacy ID systems that you just described, which are really old and don't offer the capabilities that you would need nowadays. And, on the other hand, you have an audience that gets younger every year, because those B2B buyers, they tend to be younger and also have the same requirements as they have when buying privately. So they basically expect the same level of user experience in their job or on their job when they're buying like screws or hoses or anything else, as they do in their private life when they're buying from amazon.
Speaker 2:And I think that's where it is uh like yeah, that the big difference of expectations, uh, and and and possibilities comes together. And that's why I think it's so interesting, because there's so much to that. The opportunity is so, so, so big for companies to to nail that and and really become a market leader or a regional market leader. Um, I don't see that in the b2c anymore. I think that it's very saturated already and, yeah, the players have made their their uh like their tactical choices already and I think it's way, way harder in the b2c to win again okay.
Speaker 1:I mean, I'd certainly agree that the the b2c market is is far more evolved than the b2b right now. And if you look let's just take fashion retail as an example I would say the vast majority 99 percent of fashion retail brands are online. They are on a relatively modern platform within the last 10 years. Even if it's something more legacy like a woocommerce maybe, they're still online. They're still generating revenue with a okay, uh performance. There's obviously a lot of room that can be uh. There's a lot of room for improvement. They could be using a newer version of a newer platform. They could be headless, they could be whatever.
Speaker 1:But when I look at B2B, I mean I don't know this personally, but I hear stories of global businesses that still do order taking by a pen and paper, for example, which is crazy. They're doing like hundreds of millions of pounds worth of orders, if not more than that, and they're still doing it using a pen and paper, which could get lost, could be misinterpreted. I mean there's all sorts of problems that can come with the back of that. So if you're looking at where they both are from a standing point like, b2c is here, b2b is all the way back here. Do you know what I?
Speaker 2:mean yeah, yeah, here. Do you know what I mean? Yeah, yeah, absolutely. And I think in p2p you also have like the it's, it's a, it's a. It's a very big range of how you're taking orders, because you might have the, like the pen and paper channel. That still needs to exist because you have that clientele that is older and is used to that and you cannot just like remove that from your, from your sales strategy, and, on the other hand, you have these, like really the young guns, I would say, like coming from university, having two years of experience in what they're doing, and then buying from these businesses and they want to do it online, they want to do it self-service, they don't want to reach out to the sales, you know, and basically that's the range and everything in between, and you need to fulfill everyone's desires and everyone's requirements and I think that's the most complex part of B2B actually.
Speaker 1:Okay, why do you feel as though that B2B has fallen behind over the last say I don't know 10, 15 years? Is it because of the complexity behind it and companies have just decided to just stick with what they have? Or is there maybe a few reasons?
Speaker 2:Yeah, the complexity is for sure, one factor. That's a thing I mean in B2C. Your product has one price, one list price, and you might have some discount codes in the cart. On all the level In B2B every customer has a different price. So that alone is already like it's a different order of complexity to a system and to an IT infrastructure.
Speaker 2:But what I've seen is there was this mindset of it works. Why change it? Like never change a running system or winning system right, that was the credo of so many companies out there. And also the demographic change is now an accelerator of the rapid digitalization in B2B, because the last 20 to 30 years years you had the same people in these buying positions, right, and now they are leaving these companies and the younger generation is is is coming into these roles and they have completely different expectations of how how they want to buy and how they want to perform in the job. And I think that's also where I have to do a certain like level of expectation management, because they come in and they think you can change everything overnight and you can become like digital native and digital first just by a week. But that's not possible.
Speaker 2:Like B2B businesses, they are there for decades, mostly, or longer 100 years, 150 years. So this change is not only a technological change. You don't need to change your platform or add new platforms or new software. It's also about change management, like the organizational part of it, how you structure your organization. You need new roles, new, a new mindset. You have to, yeah, embrace a certain agile way of working, all these things that are completely new to this. B2b businesses, um, so yeah, that's the two-sided coin. Basically, one thing is technology, the other thing is change management in the organization, and I think that's where B2B is generally slower than B2C, because B2C always was very marketing driven and driven by rapid change, by the markets, by the consumers, and that's, I think, for me, the most important reason why B2B is so far behind.
Speaker 1:Okay, interesting. We spoke a lot about business change in this series on the podcast over the last few episodes, and it certainly seems to be an area that is undervalued by a lot of organizations. One thing, changing the technology and what have you, but actually, does the business know how to use it? Does? Does it know how to get the most functionality out of it is? Has everyone got the right mindset and what they need to do next?
Speaker 1:So many different uh factors are so important when it comes to business change and process change and all that kind of stuff, which I don't think gets uh, gets enough attention or enough investment in itself. So so, um, okay, looking at the technology itself, though, um, I mean technology itself has come a long, long way over over the last 10 years. How do you feel about technology specifically for, for b2b? If we look at the platforms out there, for example, some of the bigger ones that we've mentioned shopify I know that's working hard on its b2b platform my understanding is that it's not quite there yet compared to the b2c. Um, you've got other platforms that are also working hard for b2b, and some are known more for b2b than b2c. What's your, what's your thoughts around all of those david?
Speaker 2:yeah, I think shopify, like everyone, is trying to push into the b2b space because, as I've said, there's a lot of potential in there, um, and that's also important for these big players to to have a look into, because that's where they can, like increase their revenues and their profits, right, um, but I think there are certain requirements to a platform that is maybe not, maybe Shopify is not even able to fulfill them at all at some point, because, yeah, they also have a platform that is like a couple years old, not just invented last year. So, in the b2p market, like we adventure, we usually look up to players like commerce tools, um, cilius, spryka, of course, um, all these platforms that have really had to focus on b2b from the get-go, basically from the beginning, basically. So, um, and, and they are basically I I would call them hidden champions because so many people actually don't know them. I mean, commerce tools is very well known, but spryker if you tell someone about spryker, not everyone knows that who is in the e-commerce scene? Um, so I think that that's, that's. That's a difference.
Speaker 2:Generally, I think there is the cloud how we call it is something that is harder to utilize in the B2B space because you have to do so much configuration and customization. That is sometimes impossible with a cloud product, and also sometimes you have these very specific requirements that it might be. There's a requirement that it needs to be hosted on the company's own IT infrastructure in their headquarters, you know. So that's also not possible with a cloud software. So I think in terms of technology, it needs to be the number one requirement. The number the most important requirement from what we hear nowadays is ownership.
Speaker 2:Ownership is really important for them because I think we are past of these days where everything had to be a subscription and it was really nice to just rent software. I think we are now. Now their awareness has increased and they see that if you have hundreds of vendors, software vendors, where you're paying subscriptions every month and you never actually own something, you never actually own the data, you're kind of limited because you're locked in. It's really hard to move away and especially now with these AI things coming up, data is even much more important than owning your data. I mean, if you don't own your data, you cannot utilize AI at all, because that's used to train these models. And I think that's where we with venture with our open source approach, where you basically control the stack, you control your infrastructure. You can host it in the cloud if you want, but that's your choice. That's that's where we are trying to yeah, build our usp basically okay I mean, see, it makes sense.
Speaker 1:Um, data right now is possibly one of the most important areas for businesses. Um, I mean, it's always been important, but we're seeing businesses invest tens of millions of pounds into getting the right data and and and what they then do with it. Um, so you need to own your data for sure. Uh, 100 interesting. You mentioned about spryker there. I I would definitely.
Speaker 1:I think some of the work we were doing in the dark region is very well known, but I know it's really struggled to make a name for itself in the UK. A lot of the feedback I had from working in Germany and what have you was really positive about the platform. It does go to show that it doesn't matter how good the platform is. It's all about the marketing to get it into the, into the country at the right time and the right target audience, and what have you as well. Absolutely so, I think. Um, what would be really good just to wrap this up, then, on the, the b2b front, is with with we, we're seeing a change. We think there's going to be a lot of investment and opportunity in b2b. Is that primarily down to the fact that we have a new generation of people moving into leadership positions that want an advanced customer. I say advanced, they want a customer experience that they're used to outside of work as well as. Is that really what's driving the change in your opinion?
Speaker 2:yeah, I think the demographic change is is the leading force in that transformation, but not only just because of these younger generations coming into these b2b buying roles, into these decision maker roles. Um, that that's one side of it and that's very important, of course, because they have different requirements, uh, to their like suppliers and what they expect from their suppliers in terms of data they can get or self-service options they have. They love to be under control, they love to be in the driver's seat, basically, and they want to be able to do everything themselves. I think if you look back 20 years, everyone just picked up the phone and called the other guy and said, look, I need this, and that that changed a lot how the communication works in general. But I think there's a different aspect too. I think in every European country, and also in the UK and also in the US and I think in most Western countries, we see a trend of less younger people coming, that the birth rates are plummeting right now and we have these companies that basically need to grow and they need to grow at least at the inflation rate and the investors. They want to make profits and everything, but you have less people that are able to drive this revenue because they're just missing. Of course, now AI is coming in and with AI you are able to automate some level of work where you might need just like one or two people instead of like 10.
Speaker 2:In some areas that could be true, but I think, especially if you look in sales, like into selling things to companies, this human to human interaction interaction is so important.
Speaker 2:So I think in B2B, you now need to utilize these digital platforms, these self-service options, as much as possible so that your salespeople that are out there in the field have the time to interact with the humans like that are working in your, in your clients companies. Right, and build these relationships, because competition is getting harder. Prices are like we have a lot of pressure by china and other like um asian countries in terms of prices. So the human-to-human relationship, I think, will still be critical to every company's success, but you just have less people available to do the work. So you need to take away all this crappy administrative stuff that they do all day long and that starts from like getting crm data up to like, up to date, or or like pym systems, like product information data, everything like that. You have a lot of automation options. You need to take that work away and let your sales people do what they can do best interacting with humans. Right, and I think that's why demographic change is the underlying force of that p2p transformation okay, um, I like it.
Speaker 1:Interestingly, I had a session with somebody earlier this week and she works for a business that has created a, an ai led negotiation chatbot tool, and one of the points she mentions at the end of the conversation is that we may well find ourselves in a world where all of the b2b negotiation is done via automation. Um, because we're at, humans, don't like negotiating, basically, um, it's, it's uh, it's the. The art of negotiation is, uh, it's declining, basically, um, which is a real shame. Um, but uh, yeah, I've found that quite interesting and it isn't something that I ever thought of beforehand. But, uh, that's true, it could, it could, it could happen. But I mean, I'm firmly in the camp with as uh, as humans.
Speaker 1:If we use ai alongside us when it comes to sales and relationship development, then it then, uh, we can really do well. But there's, you can't, for me, you can't take away that face-to-face element in, uh, in relationship building and and what have you? Um, but yeah, um, just quickly. Then that change is expensive. Do you believe that it's also time consuming? Um, is there the money and is there the desire for that to happen in the b2b market next year?
Speaker 2:yeah, I think. I think this year was at least in europe, I would say one of the toughest years um, especially after covid and our interest rates and everything that went up. I think next year will also be tough, but I think there's an upward trend again. So I think right now is the right time to invest, basically because right now your people have a bit more time, because it's not the season where everything is really stressful and you're not working at full capacity. Basically, so you could use and invest this time into building your digital future right. So I think next year will be very interesting.
Speaker 2:There are a lot of trends happening right now, with AI, for sure. Ai negotiation is, for sure, a thing, because humans, by nature, are not. They don't want to go into conflicts. They tend to like find a workaround, a way by to not do it, but still, humans are needed into keeping relationships between companies alive. I think that's the most important part. So, yeah, 2025 is there are a lot of opportunities.
Speaker 2:But I think that's also a big problem for companies, because there is so much out there that could be done that they are left in this decision paradox. They are not sure what to do first, and I always recommend companies to do the basics right, and when the basics are done and they're working, then you can look at AI, then you can look at different things. But the most basic thing to do as a B2B business next year is get your data right customer data, product data and everything else around it right, because that's the basis for everything else. You cannot build great digital platforms, great digital tools without having the underlying customer and product data. That's just not working and I think that's exactly why so many projects fail because they start off with a vision and very ambitious, like utilizing the newest technology, but they forget about the basics. And yeah, that's basically a project that's basically built to fail basically already by the beginning.
Speaker 1:Okay, get your data right then. I think that's a very good starting point. Something you mentioned there is. There's been a lot of change, and that's certainly correct earlier when you mentioned commerce tools and obviously they're very pro fully composable, best of breed, different vendors in different areas. What we've seen more recently is some platforms that have composability in mind but are possibly more monolith in their approach, with a headless front end. Do you of the two? I mean, what, in your opinion, is best for b2b businesses is? Is there like I don't want to say a one size fits all, because there really isn't? I don't think, but but what's the best approach for companies in the b2b space?
Speaker 2:I think composable is not the answer for 99 of b2b companies, to be honest, because especially when you do, when you do your first steps in the in that area, you should not, um, yeah, use composable. I mean it's the same as if you get your driver's license. It doesn't make sense that you drive a porsche with like 700 horsepower right from the first day. The chance that you basically crash it is very, very high, and I think that's the same with composable commerce. It's very complex. I mean the opportunity. When you do it right, the outcome could be great. But there are so many chances that you take a wrong decision and end up in a situation where you have spent millions of pounds without seeing any result, and that's very likely when you do that as a B2B business which has no experience at all with that. So what we tend to recommend is a flexible, monolithic solution. Monolith means basically everything's tightly coupled together, or at least tighter coupled together, and eventually we're now phrasing or bringing these terms of a moduleth, which is a modular monolith, and we believe that it makes sense for these B2B businesses to start with the least amount of complexity possible. Get your basics right, bring your solution live, go out to customers, teach them, train them, get it live, and after six months you basically look back, analyze where are bottlenecks, where are things that are slow or not really working 100%, and then you basically split up your monolith into some decoupled modules, and that's exactly how Venture is basically built. So we have this core platform that brings all these core capabilities that are needed for e-commerce, but then you can add your own plugins and decouple certain components and certain capabilities completely from venture. So if it's like stock management or product management or order management, you can basically pull these capabilities out of the core and do it yourself. And, yeah, basically improve the platform bit by bit, like step by step, the platform bit by bit, like step by step. And I think composable is, um, I mean composable itself is sold mostly with that plug and play idea. Like you have these tools and then you plug it together, you have a extremely scalable solution which can scale to billions of users.
Speaker 2:But if you look into reality, how many companies have billions of users? But if you look into reality, how many companies have billions of users? Most don't, especially in B2B. They have, I would say, a couple of 10,000 customers, maybe 100K or 200K. They have a lot of products, but the amount of orders is also way lower than in b2c because the average order value is much higher. So I think that the full benefits of composable you can really utilize them with a b2c model where you have, like, high order volume, millions of customers and things like that. But in the B2B space it's more about the process, intelligence, mapping these processes in the right way so that customers are able to check out and buy themselves, things like that. So I would always recommend going monolith, trying to find a flexible solution that enables you to build a few decoupled modules when there are bottlenecks that could come up over time but not go composable.
Speaker 1:to be honest, Okay, you're far more educated in this space than I am, so it's always good to get everyone's insights. I think one of the areas that I'm regularly told is one of the more complex with B2B is the ordering part, where, because different companies will get different prices for the, the amount of volume that they order of certain products. Um, am I right in assuming that with b2b focused monoliths and that's something that can be built into the platform sort of out of the box, or is that an area where you would possibly still have an API to something best of breed?
Speaker 2:With most monolithic platforms that have a focus on B2B, that's possible out of the box. You always need to connect your e-commerce platform to an ERP system where you get these metadata from the customer and the discount groups and all these things. You need a source of truth, of course, but most monolithic e-commerce platforms have these capabilities built in actually capabilities built in actually, um. So it's not really about that. Again, it's about the data. It needs to be your p system. It needs to be accessible for the system, like the external platform, all these things. And, as someone who is like a digital native, for us it's like really we think of that. It's like common sense to have that right, get your data right do you have?
Speaker 2:everything in one place. I think that's you wouldn't do it any other way, but for these businesses that are like starting in 19 something it's not commonly like available, to be honest, like in some businesses, the employees don't even know where this data is and where it lives and how to access it. So, as an implementation partner, it's also your yeah, basically it's our task to do a discovery with them, basically dig into their own, like organizational structure from an it side to see where is this data even stored, how can we access it, how can we even open up these APIs to build these platforms? And, yeah, so I think it's not, again, it's not down to the technology that you use. It's more down to how your business is set up. How much documentation do you have internally, how good are your employees trained and how well do they know how things work within your business, because that's crucial for every b2p e-commerce project right and b2c as well.
Speaker 1:I think it goes back down to the yeah, yeah goes back down to the uh, the phrase.
Speaker 1:You don't you. You understand the gaps and the challenges in the business and the vision of the business. Then you pick the technology. You don't pick the technology and then work backwards. I think that just summarizes it pretty well. And uh, nice, cool, okay, well, last question then uh, I think, certainly from the chats that I have, manufacturing is one of the uh, the the key areas within b2b. That's primed for opportunities next year. If you sat manufacturing side, how would you approach your commerce? Replatform, slash transformation?
Speaker 2:Depends on if it's a replatform or like a platform implementation project. I think that's quite a difference. I think if you have an existing platform in place and you have problems issues with that, I wouldn't necessarily focus too much on the technology. I would look into just the supply chain, the information supply chain, how we call it. So basically, try to find these bottlenecks in your organization where information is missing, processes are not mapped or not efficient enough to be combined with these digital sales channels, things like that. And if you've analyzed everything and you basically excluded every possible bottleneck in your organization itself, then you could think about replatforming, because replatforming usually costs a lot but doesn't bring any value to the end customer in most cases, grade or to that extent where it would like, yeah, satisfy a financial guy who says, yeah, there's a great ri on this project now, because you can't really feel it like a replatforming. In best case, the customer doesn't even recognize it from like the looks and everything. It just is smoother and faster. Of course that's that's, that's great improvement, but there's no visual change in most cases.
Speaker 2:On the other hand, if I'm implementing a project or planning to implement or build a solution, I would really look into my existing systems. So I have my ERP system. Is there an API available? What data is accessible? Is the data in the ERP system? Is there an API available? What data is accessible? Is the data in the ERP system? Is there a certain quality standard? Are there rules in place that validate the data in there? All these things. The same goes for the product data in your PIM system. Is everything where it should be? Are there APIs so that the commerce platform can connect to it? All these things.
Speaker 2:Check it and really do a deep analysis. Do it before, because finding these issues now and resolving them now is much, much cheaper than doing it 12 months into the project, because then it's really expensive in most cases. Months into the project, because then it's really expensive in most cases. And when you have everything documented and ready to go, then you can start reaching out to implementation partners, thinking about technology, because then you also will see in that process what your requirements look like. Because in certain cases you will see I'm not really able to map this process within my ERP system. That means my e-commerce platform has to do that. Or in other cases, you see it doesn't really make sense to basically store all the data in my e-commerce platform because I have a PIM system in place that could hold all this information and manage it in there. So, with doing the analysis, it's giving you a lot of confidence and it gives you a lot of good requirements for the commerce platform already and then it will reach out and look at the technologies that are available.
Speaker 1:Nice. That analysis up front is something that's really important to any successful transformation is really understanding the gaps in the business and the future scope of the business. Where do you want it to get to? What are you trying to do by upgrading the technology? What is the objective? If you don't understand the gaps or what you're trying to do, it makes the decisions very hard. Um, so nice, thank you, bro. All right, well, um, probably a a good spot to. To wrap it up, I guess the time's absolutely flying. I just looked at the clock and we've nearly been an hour.
Speaker 1:So yeah, very uh very much engaged in the conversation. Thank you, um yeah, thank you for joining me, david. I enjoyed that.
Speaker 2:It was a pleasure Always great to speak to people who are enthusiastic about e-commerce and everything around it.
Speaker 1:And that is us. As our listeners know, we are entirely focused within the digital commerce space and always interested in speaking to those that share the same passion as us. I think it's fair to say that there's still there is a lot of opportunity in B2B, so I found this conversation really interesting and I hope all of our listeners did as well. On that note, if you did, please do like it, share it, subscribe to whatever method of the podcast you listen to. We're getting some really, really good traction at the minute and season six is getting some great numbers, so let's make that, let's help that continue and get it in front of as many people as possible. Brilliant, I will see you next time, thank you.
