Wednesday, October 20, 2010
Interview with Matt Compton, CEO of ShopIgniter.
For this morning's interview and profile, we thought we'd chat with Matt Compton, CEO of Portland-based ShopIgniter (www.shopigniter.com), a developer of social e-commerce software. We spoke with Matt about what the firm is all about.
What is ShopIgniter?
Matt Compton: We're a social commerce software company, at a very high level. We believe that the social web is helping to transform e-commerce, and our software helps brand retailers to take advantage of that. We have three main products. Our first product is a social promotions engine, which is really about activating a retailer or brand's network. All retailers and brands have a set of customers, and those customers are potentially a great source of references, if you can get them talking on the social web about your product or brand. Our software enables those retailers and brands to run referral and promotions, VIP sales, time-based sales, and group-based sales, which all are inherently social in nature. Consumers are likely to pass them on to friends via Facebook or Twitter.
Another amazing trend, is that people are now spending more time on Facebook than on Google. It's something like on in every six minutes online is spend on Facebook. For a certain demographic, more than 25 percent of a shopper's time is spent on Facebook. Because of that, brands and retailers have to be able to merchandise and sell in those environments. The second piece of our suite enables a social store in Facebook, which can take a transaction in Facebook, as well. The third piece we run, is a full e-commerce platform. It's not just a widget for Facebook, for retails and brands who value social commerce, we allow them to run their entire e-commerce business on our platform. It gives them full management at the back end for product management, user management, inventory, and group pricing. It's a very robust store management platform, which can run a Facebook store, a dot com, or run both. That's when you get real the real magic that happens between the social web and the dot com environment.
How much ecommerce actually is happening on the social web and with sites like Facebook?
Matt Compton: Retailers and brands need to think about the full sales funnel. Ultimate, it culminates in a transaction, which is the full measure of ROI. But, there are a bunch of steps before then, including product discovery, brand discovery, and purchase consideration. There are many steps on deciding what products I might buy, that ultimately culminates in a transaction. If you think about that funnel, starting from discovery to a customer actually pulling out a credit card, there are touch points all along the way. Social is a great part of that funnel. The most powerful influencer of product decisions are reference comments, coupons, or offers, or when someone you know purchases a product. Plus, going back to really simple e-commerce optimization fundaments, is you want to minimize the number of clicks required to purchase something. If someone is on a dot com site, you want to transact on that dot com site. But, if they're on Facebook, you want to transact on Facebook.
What's your background, and how did the firm start?
Matt Compton: It's a pretty cool Northwest story. ShopIgniter is representative of the technology companies in the Northwest. I was a VP at Yahoo, but had grown up in Oregon. I moved back up here in 2008, and became a venture partner at Madrona Ventures for a year and a half. I looked at over a hundred companies for potential investment, and tried to figure out what to do next as I wanted to get back into an operating role. ShopIgniter came to the top. The founders liked me as well, and we matched. Madrona invested $3M in a Series A in March, and Tom Alberg, the founding partner of Madrona, who also sits on Amazon's board, is one of our board members. The founders, Alan Wizemann, Dan Warner, and Jason Glover, had founded the firm a year and a half prior, bootstrapping the company. They got the 1.0 product out, and had already secured around 80 customers, and really showed what a small, aggressive, scrappy technical team can do in bootstrap mode.
You're entering into a fairly crowded space, with lots of e-commerce software out there, what makes you different?
Matt Compton: We're very focused on the social commerce space. The social web is changing how ecommerce is conducted, and is changing every channel in e-commerce. It's touching every dot com, physical retail, and changing mobile e-commerce. That's a big transformation, in one of the biggest technology spaces in our country. We're focused very heavily on those aspects of e-commerce that can be altered or transformed by the social web. One important point is, we don't necessarily have to run a full e-commerce platform. For a customer who already has an in-house system they like, or is using another system they've invested a lot in, we're happy to integrate with it. The innovation that is happening in the retail model--whether it's VIP sales, time-based sales--it's about how customers are activated to influence and ecourage and convert friends and their network into new customers for retailers and brands.
Finally, is there any specific kind of brand or type of retailer this makes the most sense for or where you're seeing more traction right now?
Matt Compton: The big picture, is it's for every seller online. Optimizing customer networks is becoming the new SEO of the next decade. Everyone is going to have to figure out how to manage the network, and enable them to drive business. It's a pretty broad swath that this makes sense for, and we have products for all of them. Although there might be some small mom-and-pops small businesses where there are already good solutions for straight e-commerce, and which we might not make sense for. But, the midmarket all the way up to Fortune 200 retailers, the social web can really impact their business.
Thanks!