Startup general interest

Bill Gurley’s insights into the future of ecommerce – know your customer and personalise

By October 1, 2015 4 Comments

A Fireside Chat with Bill Gurley of Benchmark: The Future of Ecommerce — September 15, 2015 from Sailthru on Vimeo.

Gil Dibner recommended this video with Bill Gurley in a recent post about the five forces of venture capital. It’s 50 minutes and I very rarely watch videos this long (the opportunity cost is too high), but I’ve been consistently blown away by Bill’s insights on his blog and decided to at least start this one. That was a good decision because I stuck with it to the end.

If you’ve got the time and you’re interested in ecommerce I highly recommend watching it yourself.

If not these were the points that stood out for me:

  • Google is vulnerable to Amazon because Amazon has become the first place people search for products. Bill calls this ‘funnel reversal’. Google used to be at the top of the funnel, but Amazon has now taken that place for ecommerce searches. That’s significant because the top of the funnel is the most valuable place to be.
  • Future ecommerce opportunities are in areas where the customer experience can be so radically better that people similarly go around Google. Amazon Prime is a night and day better experience than starting on Google. Creating new experiences like that going forward requires a deep understanding of the customer. That experience can manifest itself in product customisation (Bill gave the example of Warby Parker, Spoke and Lost My Name are good examples from our portfolio) or in amazing services (Bill gave Uber as an example, Thread is a good example from our portfolio). He noted that Uber has succeeded in going round Google to the extent that the search term ‘limousine’ is tracking at 20% of it’s peak seven years ago (probably for San Francisco searches).
  • One key to understanding customers is what Bill calls ‘money balling’, i.e. knowing everything that every customer does in your business, running the deep analytics and employing data science to draw insights.
  • Customer retention is where a lot of companies could do better. Many businesses are great at acquiring customers, but leave money on the table when it comes to keeping them. This comes back to knowing your customer.
  • Anxiety relief – humans will love it when you take anxiety away, and offering anxiety relief is a key benefit that ecommerce companies can offer. When we order from Amazon anxiety is minimal because we have a very high degree of trust that the price will be fair and the delivery will arrive on schedule.
  • He mentioned a couple of times that Google playing is playing defence in important areas and that large companies are much stronger when they play offence. There’s a growing number of smart people who are concerned about Google’s prospects.