💰 Is Shopify Out Selling Amazon 💰 | Volume 8

Acquiring partnerships, acquiring companies, and acquiring a larger audience. Companies are teaming up to take on new challenges and we’re covering the latest proposed acquisition deal valued at $24 billion. 

Before we get into that here’s a peek at what’s to come:  

• Discount days and sales aren’t exclusive to the B2C marketplace
• “Whose… retailing platform… reigns supreme. Let the battle begin!” 
• Bye-bye bitcoin, it’s Libra season

Welcome to December. As they say, winter is coming and depending on where you are located, winter has arrived 🌨🌨. Either way, stay warm, keep hustling, and let’s make this last month the best of 2020. 

Salesforce Seizes It’s Opportunity to Secure Slack 

Slack was first developed, out of necessity, to solve a pain point for Tiny Speck. 

At its core, Tiny Speck was a game development company, with expertise in developing software that makes repetitive tasks engaging and entertaining; see: every MMORPG game created.  

Due to their expertise in software development and internal need for an innovative messaging system, Slack was created (known then as Linefeed). After two years of internal use, testing, and troubleshooting Tiny Speck realized they had created a SaaS product that was ahead of its time and decided to go public with Slack. 

Salesforce is another SaaS product that was released ahead of its time and has done well in gaining a strong market cap of $242.05 billion, however, its share price is down 3.5% prior to the market crash in March. 

And now Salesforce is acquiring Slack for $27.7 Billion, which makes this Salesforce’s most expensive purchase yet. 

Interestingly, the Motley Fool reported, back in June 2020, that Salesforce was planning on launching its own service to compete with Slack; however, a partnership or an acquisition is a safer path into a new market as it opens doors for cross-selling to each other’s customer base which presents greater growth opportunities.  

Slack and Salesforce aren’t going after the same clientele and don’t often cross paths within each other’s markets. Slack supports fast-growing startups while Salesforce’s products are aimed at enterprises. 

At the end of the day, the business world is no stranger to successful partnerships in SaaS; more recently we saw Shopify teaming up with social networks to expand into their marketplace.

As with Shopify, Salesforce could be reaching a point of maturity and will begin to decline if it can’t expand through product offerings. An acquisition will give them the ability to extend its maturity phase by expanding into different markets and accessing additional resources that Slack will provide. 

Key Takeaways: 

• Setting your sights on partnerships and acquisitions open doors for growth
• Working with companies outside of your current industry spurs new skill sets and increases product offerings 

Cyber Monday Isn’t Just for B2C 

Black Friday & Cyber Monday have been the biggest shopping days of the year and are wonderful for B2C sales and e-commerce. 

But B2B players no longer need to remain in a supporting role as marketing tech and business software are getting in on the action! 

The marketing tech landscape has been crowded recently, with over 8,000 tools available within the marketplace. Business software is no different and also packed with plenty of competition across a range of services. 

Although competition is key for ensuring improvements, updates, and pushing companies to perform their best, it can also hurt start-ups and bury the best products in the process. 

That’s why it’s so great to see martech and business softwares partake in Black Friday and Cyber Monday  – and it’s not too late to get in on the action. This year, we expect to see sale prices roll into the New Year. 

In a time of economic hardship and companies moving to online first communication, services and systems, a key way to remain competitive is to play the pricing game. 

For inspiration on how to approach this strategy effectively, take a look at others in the market. For example, earlier this year in June, MailChimp made a move to support small businesses by offering free .com domains for 5 years along with access to their website builder. 

As MailChimp has done, grandfathering discount prices for subscription services is ideal since companies may be recovering from the economic downturn for some time and will appreciate the ability to lock in a year-long subscription for a lower cost. 

Outside of the pandemic, grandfathering discount subscriptions will spur purchases for longer subscriptions, at higher prices, that they may not need. Similar to bundling prices this will cause consumer spending to increase as they purchase the longer subscription fee which would be priced higher than the planned retail package.   

Key Takeaways 

• Major discount days are also a good opportunity to provide discounts and sales without  harming your company’s reputation
• Discounts aren’t just for B2C companies, in time of crisis discounts are seen as goodwill and not as a devaluation in your offering
• Grandfathering subscriptions will encourage consumers to purchase a longer-running subscription spanning than needed, ultimately spending more than they would have otherwise

Shopify Stands Up to Amazon 

Bezos has been facing backlash as Amazon is accused of mistreating its employees, asking the public to fundraise for relief packages.

Amazon is a retailer, acting as a retailer giant, and prioritizing its house brand over other smaller sellers which is in stark contrast to its latest competitor, Shopify. 

Shopify has a drastically different approach to selling and supporting sellers – being a SaaS company they are targeting merchants and want to see a merchant be successful while using its platform.

Recently Shopify has outperformed Amazon on the stock market. Amazon has been a top performer since 1997 and its IPO has grown 85,000% over the years – but this growth couldn’t keep pace with the spitfire growth of Shopify. 

Since its IPO in 2015, Shopify has grown 700%. It has also outperformed Amazon since 2017, as shown on the graph above provided by The Motley Fool. 

Instead of creating a store to push and promote different retailers, Shopify supports merchants in creating their own online retail store and has partnered with social networks like Facebook to benefit their e-commerce platforms. 

By creating software infrastructure, Shopify has strengthened competition in existing e-commerce businesses while allowing new companies to emerge; this has created a selling atmosphere conducive to being on Amazon without having to be on Amazon. 

Finally, Shopify has also presented content excellence by targeting Etsy sellers with an email marketing campaign.

Key Takeaways: 

• Shopify has opened the doors for e-commerce software services to enter the space
• Amazon is losing the monopoly in online retailing making way for new competitors to enter the space 
• SaaS products can shake the status quo as it provides control and places profits back in the hands of the company and not intermediary retailers 

OTHER NEWS OF THE WEEK: 

💰 “FinTech Stripe Eyes Funding Round, $100B Valuation; if it can gain a $100 billion valuation it will become one of the most valuable venture-backed startups of all time.

🛍 Facebook is heavily hoping into e-commerce as it has been one of the most successful industries during the COVID-19 pandemic. As of Monday, Facebook has acquired Kustomer, a CRM start-up for $1 billion to support businesses on Facebook with the overarching goal of increasing Facebook ad spending.  

💻 IoT startup Infogrid, which specializes in retrofitting existing buildings to make them ‘smart’, raises $15.5 million in Series A funding. 

BRAIN FOOD OF THE WEEK:
Like with most things Facebook does, regulators were enraged with the proposed multi-currency pegged Libra coin as it was seen to threaten the global financing security. After readjusting Libra coin to be based solely on the United States’ currency, Facebook’s cryptocurrency is set to launch in January 2021.  

I should clarify here, to avoid another Winklevoss wrinkle, that Libra coins aren’t technically Facebook’s cryptocurrency. Libra coin is a creation of Libra Association, which was co-founded by Facebook, and it will be used on the social network to make it easier and cheaper for users to transfer money online. Very recently, the Libra Association underwent a rebrand to Diem as it tries to distance itself from the known association with Facebook prior to 2021 planned launch. 

And before we all start to panic about Facebook’s past with privacy protection, Andrew Morris of CNet has reported: 

The arrangement was designed to allow the wallet company to be regulated by authorities and prevent money laundering and other financial crimes. The company also said it would keep financial data separate from Facebook’s social data.

TWITTER THREAD OF THE WEEK:

Bottom-Up B2B Companies Always Add a Sales Team by Lenny Rachitsky

ALBUM OF THE WEEK:

Future Nostalgia by Dua Lipa (Best Track: Levitating feat. Da Baby)

Originally Sent Out Thursday, December 3, 2020. Stay up to date with all of our latest findings by subscribing to our newsletter today.