Andrew: Hey there, Freedom Fighters! I’ve been waiting for years, literally years, to do this interview. I’ve known this inside information. Jordan has told me this. And because it had to do with Shopify, a major online e commerce brand and a company that a lot of us love, he rightfully said, Hey, I just can’t do this.
I think one time, Jordan, you pulled out at the last minute, right?
Jordan: did. That’s right.
Andrew: You did the pre interview. It was on the calendar. And then, ah, all right, let me introduce you. Jordan Gal. Has been on the podcast before he has been in e commerce for many years through many different companies. Um, I interviewed him last when he created cart hook, which was essentially a checkout optimization platform.
It was all about getting somebody to. It was a store to get more sales from the store. I think initially it was about card abandonment. Somebody adds stuff to the store, to the, to the shopping cart, then they disappear, and then it eventually became, well, why don’t we just make the shopping cart so good that people don’t disappear?
And then the thing took off all good. Except that he integrated with Shopify, and Shopify loved their shopping cart. I mean to the point where for years, I would see a beautiful looking store, I’d go, I don’t even know who built it, but I, I like it. And then I would go to checkout, and I’d see the Shopify URL, the domain in the URL, and I’d go, It’s so beautiful, and they still insist on using the Shopify URL?
I didn’t realize how married Shopify was to it, and how insistent they were that people used it their way. Anyway. Jordan, uh, did well, but he tried to change their shopping cart experience, which they didn’t like. He did a whole bunch of business doing it, and then he said, you know what, I gotta move on from this.
And then he created Rally. Rally is a checkout solution for e commerce brands. I invested in it, not because I even understood what he meant when he said, this is for headless checkout. I go, what the hell is headless? I don’t even know. But because I saw this guy. Battle for years and just triumph. And I said, I got to be on board and I want to be inside.
And I am, and I’m proud to do it. And I could say that we’re going to find out all the inside information that I wasn’t allowed to share for a long time. Thanks to two phenomenal sponsors. The first, if you’re hiring developers, I want you to go and check out lemon. io slash Mixergy, you’ll get a great price, phenomenal developers, and second.
I’m going to tell you later about these new types of organizations, decentralized, autonomous organizations, and why you should check out origami, which created some of the biggest ones. But first Jordan, how big did the revenue get, which with, uh, your, uh, Shopify e commerce solution, Shopify checkout process.
Jordan: So at its peak, uh, Cardhook got to six million ARR and very profitable. Maybe 50% profit.
Andrew: so you’re banking three million a year from this business that you were like a Shopify outlaw on.
Jordan: Yes, we were on the the Shopify black market, off the app store, word of mouth, uh, couldn’t be on the inside. I’m excited to kind of get into it. I can already feel myself like experiencing the last few Um, years, like emotionally, as I think through the memories, uh, I’m really happy to be back on here. Thank you very much for having me on, for investing in rally, for being a good friend along the way.
Uh, I’m really excited to be here.
Andrew: You talked about the six million in revenue, very profitable. Tell me about any health issues or family issues as a result of all the pain of dealing with that and then we’ll get into the story of how you got there and what’s going on with Rally.
Jordan: So I, I regularly think of our friend, Elon Musk’s quote on entrepreneurship, right? Staring into the abyss while chewing glass. And eventually you stop staring, but the chewing glass never ends. I, I think that’s very fitting. That’s like a few sentences to encapsulate the experience. At least for the most part, for most people.
You know, some people get lucky and everything unfolds in front of them and it’s easy. And even those stories have drama and difficulty inside of them. Uh, My story was, you, you mentioned the word battle in the intro. It has been a battle. I did not set out, I mean, I don’t know about most people, I set out to have a nice easy time and make money.
That was my goal. That did not happen, and I guess it, it happened in unexpected ways.
Andrew: You know, I I guess, to be honest with you, you’re very fit, you’re a good looking guy, I was watching your weight for years. I said, he’s gonna get fat. There’s no way that he’s dealing with this without somehow taking it out on his body. And you didn’t. It looks like you did okay, no major health issues.
Jordan: No, no health issues, uh, not physical. Uh, I, I never associated myself with the word anxiety before ever in my life, uh, but over the last few years that that has come up. So the, the internal battle, just that fire raging for that long, it’s, you know, what really helped me is at some point I turned to therapy and that has been incredible.
It happened right around the time my co founder and I, uh, at Cardhook split
Andrew: Okay, wait, wait, let’s go back,
Jordan: Yeah. Okay. We got, we got a lot
Andrew: start from the beginning. I love that you just introduced that because you’re going to talk about the difficulty there. Cardhook started 2013 with the idea of doing what? Let’s go through the whole story.
Jordan: easy, right? Think about my mindset here. Back in the day. I’m like, how do I get 10 K in recurring revenue with a software product? That’s basically my only goal. My previous career was like investment banking, family business and real estate stuff. Eventually my family business, we were like, we love each other more than we care about business and money.
So let’s go our separate ways. And what that meant for me is going toward the internet. That was my passion for a long time. And so yeah. I got into e commerce because my brother started an e commerce company. That’s what we talked about in the last Mixergy interview. We figured out how to sell things online and then we sold that off.
It was okay. It was nothing major, a few hundred K. And then I started software for e commerce merchants. And the first idea was just looking at our, literally our credit card statements as an e commerce merchant and looking at what we spent money on every month. And we identified that one app that we spent money on every month was a cart abandonment app.
And it was an absolute terrible piece of software. We paid a hundred bucks a month for it. And we would never cancel it because it gave us 20, 30x ROI every single month. So I was going simple. Let me rebuild a better version of that because I want to be in their shoes. I want that, but with a better product, I’ll be in good shape.
So Cart Hook started. As a card abandonment app that sent emails to people who started their checkout but didn’t complete it. Simple as that.
Andrew: Who built it?
Jordan: So, a friend of mine built it. I, I don’t code. I’m not technical. But I had, I had a lot of knowledge from e commerce. And my first challenge was finding a developer.
Or a technical co founder. I, I assume that is a common theme with people who are not technical. So, it always requires a little bit of luck. I was in San Francisco for three months with my wife and our kid and two dogs in Noe Valley. We were checking the place out to see if we wanted to move there. We were on like this tour of a different city every month or two.
We ended up in Portland, but that’s a different story. While in San Francisco, I bump into a family friend at the laundromat. And this is like what I thought of as like, this is like the whiz kid younger brother. I knew his older brother and we start having lunch together. And eventually I convince him to build the first version of Cardhook.
Yep. I give him a piece of the company. And, and then I start selling it and that’s it that the first year I grind it out kind of part time, get it to like two or 3000 bucks a month in recurring revenue. Do
Andrew: How’d you get your first customers?
Jordan: you remember Dane Maxwell and the foundation? Right, memorable, memorable set of interviews.
Absolutely. I, I use a lot of his techniques and I combined it with a lot of the like appropriate person direct cold email. I forget that also an interview of yours.
Andrew: I still use that. That was the email that you sent to someone to say, who’s the appropriate person for me to talk to about this thing? The person who’s above the person you’re trying to reach forwards it to the person you’re trying to reach, and then they’re more likely to open it. It doesn’t work as well as it did before, but it’s still an effective mechanism.
Jordan: No, right. Outbound tactics always have to move around with the times. But back then that worked. And what I did was I built an outsourced system where I went to built with. And downloaded lists of e commerce companies that were on platforms that we integrated with. It started off with Volusion and then WooCommerce and then Magento and so on.
And we’ll get to the Shopify integration in a bit. That is what leads into the other product. And I would hand that off to a VA. For like six bucks an hour and they would qualify. So they’d go to the site, make sure it’s in English, make sure they’re selling physical products as their primary business.
And then the next, the next VA would find the contact info and then load it up into sales loft at the time. And then emails would go out. And all I knew is I would then get appointments on my calendar to do demos. So I had like this beautiful system and everything I did at Cardhook. Was in that vein because I was bootstrapped and I basically just took a few bucks of my own and said all right What can I do with you know, 50, 000 bucks to like get this thing underway and get it to a decent, you know Revenue level.
Andrew: Okay. And then what’d you do to get it? How big did it get? I guess before you moved on to the next part of the business, which is the the shopping cart
Jordan: Right. So this was really critical for us. We got it to about 10, 000 bucks a month in revenue It took, it took maybe 18 months, maybe two years. I think we were at about 5, 000 bucks a month in revenue. And I went to New York to see friends and family. So I was on the road and we went back for the holidays.
While there I had, I hung out with my friends from college. I went to Michigan. All my friends went into finance. They all made a lot more money than we did than I did. I went to investment banking for one year and ran away screaming. So that was just not the right path for me. In my. In my hangouts and my lunches and, and, and getting together with my friends, I told him about this software company that I built and a few of them, you know what, you know what it was, I got an acquisition offer from another guest of yours, Adi Pinar,
Andrew: Ah, I know him. Well, I was in his house. Yes in South Africa.
Jordan: guy. Great entrepreneur. Uh, he emailed me at some point and said, Hey, do you want to join forces? I’m starting this thing. Do you, you know, can I acquire Carto? Come join me. We’ll work together.
Andrew: was the thing at the time? This was WooCommerce
Jordan: No, I think it was the new one. Maybe Convezio. I think what turned into Convezio, maybe it started with a different name.
Andrew: it was like the conversion Software.
Jordan: tracking. Um, uh, yes. Uh, maybe it turned into email messaging. Yes. So, so I took that and not on purpose, but partly that into investment interest in the company. So I was having lunch with a friend and I told him, Hey, I got this acquisition offer. And then of course that planted his head like, yo, it’s too early.
Like you should just raise the money. I would give you 25 grand and I kind of like, Oh, that’s cool. I appreciate that. And kind of just put that aside. And then I brought it up to another, another few friends. And by the end of the trip to New York, I had like 75 K committed of friends. And I was like, Ooh, I think maybe I can do something here.
Jordan: And now I’m not technical. I’m starting a software company. And it’s, it’s decision time. Do I keep doing this part time or am I going all in on this and getting serious? And I thought, if I’m going to do that, I need to find a technical co founder. And very fortunately I found, uh, I found one in, in, in Ben.
And he joined, he brought a few friends and they put in money. My friends and family put in some money and we raised 275, 000 bucks and we were underway.
Andrew: All right. And so then at that point, did you start to shift towards a shopping cart or did you stay with abandonment with cart abandonment?
Jordan: Okay. So here’s what happened. We focused on card abandonment for I think realistically is about a year. We got it to about 10, 000 bucks a month and then we did a An integration deal with Cratejoy. Do you remember Cratejoy, Austin company?
Andrew: Yeah. I think I even interviewed the founder. They would send you this crate of stuff or send it to your friends that you sent a gift to I think.
Jordan: No, no, maybe they started that way, but it turned into an e commerce platform specifically for recurring revenue. Basically specifically for subscription boxes and fruit of the month and coffee of the
Andrew: had that wrong. Okay.
Jordan: Okay, uh, that’s actually related to some later stuff with Recharge and Shopify, but that’s, that’s for a bit later.
So we did a deal with them. They were going through hyper growth and this experience taught me a lot. So I emailed the founder and I said, Hey, we’ve got a few merchants on CrateJoy. They’re asking us for card abandonment services. And the guy said, we’re, we’re, we’re dying. We keep getting requests like that, but we have no time.
We’re in hyper growth. And can you just build it for our platform? And we’ll just put you into our admin so we can just send everyone there. And I said, absolutely, of course. So we built it in such a way that they put us inside their admin. And all you had to do was just, you know, copy paste your user ID from Cardhook and then boom, you had Cardhook Cardabandamon.
Andrew: Wow. Okay. That is a killer deal.
Jordan: a killer deal, killer deal. And what that did. Is that put our growth on autopilot. So we basically did no marketing and no work between 10k and 20k a month because it was just crate joy going through hyper growth and a certain percentage of their merchants want a card amendment and they would just sign up with us and we would grow.
Andrew: That’s a killer deal. Were you able to get other deals like that? There aren’t a lot of opportunities for
Jordan: no, there aren’t. I use that as a model, even today, and the way I think about integrations with partners, and this is what I explained to my team also, is you reach for the ideal. What is the ideal? The ideal is literally getting built into their admin that everyone sees it, and it’s the only option, and you can start right away from inside the partner’s admin.
That is the ideal. Right below that is them doing a case study and writing a blog post right below that is just an email right below that Is us writing a blog post so it’s like this hierarchy of what can you shoot for as an ideal partnership? And then how far down do you have to come to compromise with reality and then you keep aiming for the ideal over time?
Andrew: great model
Jordan: It was, it was, it was great. And what that did is it allowed us to take what seemed like a very, very big risk, which is to build a second product when you have a four person team and like 110, 000 in the bank. Okay. So why would we build another product? What happened was we kept getting inbound from Shopify merchants saying we want card abandonment.
It didn’t require some type of a, what’s it called? It happens on the blur event as opposed to some type of a page refresher, a page action. And that was our claim to fame because that was usually reserved for the much more expensive versions of Cardabandamit and we were bringing it down market. So why would we?
Um, integrate with Shopify and have our magic taken away and then have to go compete with everyone else who’s looking at their API that you could just make a 9 a month app, you know, in a weekend. So I didn’t want to put us in that position. So we kept saying, no, no, no, no, no,
Andrew: Wait, wait you Well, why wouldn’t you want to do it someone else could do it, too You’re saying but I thought it was a technical restriction that they wouldn’t allow you to put your they wouldn’t allow you to put your Script on the Shopify platform And so every time someone from Shopify who had a Shopify store contacted you and said I want to do card abandonment I thought you had to say we couldn’t do it.
We just don’t they won’t allow us.
Jordan: No. So that’s the checkout product in, in, in just a sec, the cart abandonment you could, but we basically have to neuter our most important feature and become just the generic cart abandonment app that looked at their API. And we had basically had no special sauce. Right. Everyone gets the same little design space in the API and everyone has the same exact features.
And then you’re competing on things like price and being in like the cool kid, Twitter club, which I didn’t, I didn’t think that was an advantageous place to be on WooCommerce on Magento on Volusion on all these other platforms. We could do exactly what we wanted and give the experience to our merchants that we wanted.
Andrew: mean to be slow here, but I want to make sure that I understand how it worked. It was someone would enter their email address on the Shopify store. Then they, on the checkout page, which was hosted on their domain or on Shopify’s
Jordan: on Shopify’s domain.
Andrew: on Shopify, you were still able to capture that email address. And then if they didn’t complete the purchase within a certain amount of time, you could go back and say, you didn’t complete this purchase. Here’s an offer to encourage you to buy. And you’re
Jordan: a set of emails.
Andrew: You’re saying anyone was able to do that on Shopify in a way that Shopify opened it up and you said I don’t want to be anyone.
What did you want to do that was different from that?
Andrew: want them to hit submit.
Jordan: Yes, that’s right. You have to go between page one and page two. And in that event of clicking to page two, that’s when it gets written to the API and that’s when everyone else can grab it and that is.
You know, that’s not as advantageous. If you think about a checkout, let’s say on Volusion or on Magento back then, and it was one page. Like it’s pointless. There is no page refresh. So that’s why we built it that way. So we kept saying no. Eventually what happened, I don’t know how, how detailed or honest to be on this.
I’m high as fuck. Okay. I’m, I’m in my house now I’m late at night. This is my, one of my favorite things, right? A little edible. And then you, you, you, you, you start to think differently and I’m looking at the Shopify checkout page and then it dawns on me, I bet. Right. Okay. Let me take one step back here. Two steps back in my e commerce business, the one that sold physical products that got me into the e commerce world.
I was the person responsible for conversion rate optimization. Okay. So I got really good at understanding conversion and what you can do to impact conversion, everything from the button color to the words, to the trust symbols, to everything else. So, I’m looking at this with an expert view to conversion, and I’m looking at the shop of iCheckout, and I know the context is that this company, this platform’s taking off.
This is the hottest thing in e commerce. And yet I look at their checkout page and I think to myself, this thing sucks. It’s three pages instead of one. Now maybe on mobile 3 is better because it’s all within the same view. Back then on a desktop you just want a one page checkout. Every time you force people to go to another step you lose people.
You can’t do anything to it. You can barely even upload a logo. You can’t change colors. You can’t optimize. You can’t add trust symbols. You can’t change any of the warnings. If you get something you, it’s not your checkout. It’s not even on your domain and I think to myself, Damn, I bet the bigger opportunity is providing Shopify merchants with a better checkout page.
And then that light bulb goes off and I can’t extinguish that light bulb. That thing is glowing every day I go to work on my cart abandonment app. I’m thinking, hold on a second. I think that’s just a Much bigger opportunity. Eventually I bring that to my co founder, Ben and our two engineers, rock and yawn, right?
It’s just four of us now. And I go, guys, I got it. I got a crazy idea. I think, I think we got to build a new product. And they’re like, dude, we have a hundred K in the bank. We have four people. We’re making like 11, 000 a month. Are you sure that’s what you want to do? And we kind of sat on it and debated it for a few weeks and eventually it was, yeah, that’s what we got to do.
So that is what led into the Cardhook checkout product.
Andrew: And Shopify didn’t want anyone to do that. They didn’t want you in their platform at all, right?
Jordan: I didn’t know
Andrew: to say
Jordan: time. I didn’t
Andrew: you didn’t. You just assumed, Hey, look, they don’t care. In fact, did you even think that you would be in their app store?
Jordan: We took bets on how many downloads we would get in the first week.
Jordan: All right. Yeah. So let me get into it. Right. So here’s what happens. We start getting serious about the idea and. I, I basically mapped out here is what I think the market wants. If there’s any talent, I have an entrepreneurship. It is identifying that I am horrible at my to do list.
I am horrible at time management. I guess I’m decent at fundraising. I’m basically bad at everything. I don’t know how to code, but I get a sense of what the market wants and that is my thing. That’s my superpower. So I said, we need a one page checkout. That’s fully customizable. It’s basically the opposite of what Shopify offers.
A three page checkout that you can’t customize at all. So we start working on that and at some point, you know, I get the same thoughts as you do. Is Shopify going to be okay with this? We look at their terms of service. No, they’re not okay with it. Who, who are we if not people who ignore those things, right?
Now, I like to come off like I’m risk loving, but I’m a little bit conservative at the same time. It might be the immigrant thing. Um. So I start reaching out to people at Shopify because I’m poking, I want permission, I want, I want to understand what the risk is. Eventually I find like a developer advocate at Shopify and he’s like, damn, that’s a great idea.
You can’t do that right now. However, we are about to release a checkout API and what that would do is it allow you to build your product idea, but use. Shopify’s checkout API to ensure that Shopify receives the payment revenue. And if you do that, you’re good. So I say, okay, that, that, that’s legit, right?
That they weren’t public at this time, but it was obvious that they were making money off payment processing. And you don’t want to poke a bear in its business model, right? That’s the spot. So I said, guys. Now, now we’re adding inside information into the mix. We got it. We got to go. So we start working with this developer advocate and a few other people on Shopify’s team about how to build this.
We work on it for months and then it’s the, you know, it’s submit to the app store and then it is the, the, the Eve. The night before we think this thing’s going to get published in the app store and we’re taking bets. How many downloads is this thing going to get in the first 24 hours? Right? There was nothing like it.
It would have shocked the entire ecosystem because everyone wanted it. Everyone was complaining about it and Twitter and support threads and everything else. And we were, we were going to come out with the product that the market wanted most. So obviously it didn’t turn out that way. What happened was on the day was supposed to be released.
We get an email. Real short. Sorry guys. Can’t do it. Uh, uh, can’t, can’t release this. Uh, thanks very much. Bye. Sent.
Andrew: the developer advocate.
Jordan: No from someone else. And I’m like, I’m destroyed. I remember the moment because, you know, those like emotional moments in your life. Like the adrenaline hits and it’s like a scar because you’re…
Your psyche is basically telling you avoid this at all costs. So let’s, let’s leave a scar here. So we’ve remembered this. Yeah. So I remember, I remember getting the email and then walking outside my house in Portland, and I just remember thinking. I just lost everything. I just took this huge risk, I tried to mitigate it, but with this information and I screwed it up and I lost my money.
I lost my friend’s money. How am I going to explain? What am I going to do? Basically, so I’m in a depression for a few days and then I go to the grocery store. I remember the moment I look at my phone and I see someone send me a screenshot and say, check this out. And it is a screenshot of a message board that’s well known in the e commerce world.
And it is Ezra Firestone, who’s a great guy. Leaving a screenshot of his new checkout app that’s about to be released by Shopify and aren’t you so excited to get on the waiting list?
Andrew: Released by Shopify?
Jordan: No, released by him by Ezra.
Andrew: By him. On Shopify. So they’re not giving him permission either, but he has the same idea as
Jordan: Oh, no. Oh, no. He got permission
Andrew: So they did give him permission for the same thing, but not you?
Jordan: because they were friends
Jordan: so first I go inverted into anger world and then when I come out of it, I say, oh my god This is an opportunity. This is our chance. So Ezra Rightfully, it was close with the guys at Shopify because he switched his affiliate business from promoting big commerce to promoting Shopify and became one of their biggest affiliates for years.
So he rightfully earned his respect from the people at Shopify because he was a critical part of their business. However, I’m uninterested in being treated differently than someone else just because you’re friendly. And so I saw it as an opportunity. So I go home. And if there’s, if there’s maybe another talent, I have an entrepreneurship, it’s writing emails that get people to do what I want them to do.
A key, key skill these days. So I write the most important email of my career up until that point to Toby Harley, the developer advocate. Like everyone that I’ve worked with at Shopify, basically saying, you know, this aggression will not stand. Like there’s no way I’m ex what? Yeah. Everyone, the CEO, COO, everyone I worked with and basically put it all out there.
There is no way I’m going to accept our app being treated differently than Ezra’s, so you need to fix this. It was wordier and more convincing than that, but that, that was the gist and that kicked off a. An argument inside of Shopify and what to do with a third party checkout, the conclusion at the end of the day, partly to their credit, I have to admit, they eventually came back to us and said two things.
Number one, you can do it. Number two, you can’t be in the app store. Number three, I guess three things. Number three, you have to not use our checkout API. You have to do the payment processing yourself. I was very confused, but I will take that. Yes. The strange thing about it is that they were specifically telling us, take money away from our platform.
You can run your own checkout, but don’t use our checkout API. Don’t process payments through us. You process the payments yourselves, which was very strange to us, but we will take it as long as we can just continue on and not have this thing totally fall apart.
Andrew: If I’m understanding right, the, that is a huge upside because now you can even keep the processing fee that would ordinarily go to them. You’re not just a software vendor. And the downside of that is you’re not in the app store, which is where you would get the majority of your customers and recognition and, uh, and social proof through all the, the ratings there.
Jordan: But that, that’s a compromise. You have to take in our
Andrew: Okay. Yeah. I get it.
Jordan: Yeah. So I basically say, got it. Thanks. And then go silent. I didn’t email them. I didn’t talk to them until we got to a hundred million dollars in processing.
Andrew: Wow. Okay.
Jordan: So I believe they assumed we would just kind of go away and die because we were some random software company that no one’s ever heard of.
We had no VC backing. We have no network and we can’t be in the app store. It was a safe assumption on their part, but they were wrong.
Andrew: How did you grow it to that? You know what? Let me just say quickly, anyone out there who needs a developer, I usually do a longer ad. I should tell you lemon. io phenomenal place to get great developers from parts of the world, but they don’t usually get paid that well, but they are killer good and effective.
They will match you with those people. And because they’re not in parts of the world where Jordan and I, and you, if you’re listening to me, chances are live. You get to pay them less and they get to be happy because it’s still higher than they would earn locally. And they get to stay where they love instead of traveling to San Francisco, where Jordan and I both decided we don’t want to live.
So those benefits and so many more are available to you. If you’re a regular customer of lemon, if you want even more, use my URL. I will get credit for sending you over and return. You’re going to get an even lower price than they give everyone else. Go to lemon. io slash mixer G lemon. io slash mixer G.
How did you get to such a big user base?
Jordan: Okay, awesome. I, and I, I wish Lemon IO existed back when I started because that was the hardest, scariest part of the whole thing. Like, how am I gonna convince someone to build this? So once we had a one page checkout that was customizable, we started listening to merchants. We would, I, you know, I did what I needed to do.
I’d go into the Facebook groups and drop shipping was blowing up and there was something very specific happening in the market. ClickFunnel. Was taking off right in its heyday. Clickful is extremely successful company, amazing marketing, ridiculous community building a lot to learn from that company.
What happened was ClickFunnels was built for digital products, selling courses, selling webinars, selling coaching and consulting, and so on. People were using ClickFunnels to sell physical products. A lot of that was because their founder, Russell Brunson was showing how he did it. He was doing
Andrew: selling his own book at free plus
Jordan: Free plus shipping.
Andrew: selling it right.
Jordan: That’s right. So he, okay. The issue is ClickFunnels had no concept inside of their database, inside of their app and their admin of the things that you need as a merchant to sell physical products, shipping, taxes, order fulfillment, order management, re all that didn’t really exist in ClickFunnels back then.
So you had people who were becoming successful and selling physical products, but they were on a platform that was not built for it. So many of them were moving over to Shopify. When they did that, they lost one of the most critical things that ClickFunnels offers, called post purchase upsells. One click upsells, post purchase
Andrew: and they’re huge on that. They have all these different ways to do post purchase upsells and even in purchase upsell, all that stuff. Okay. So you’re saying if somebody tried to sell a physical product, all that was gone.
Jordan: Well, if they moved over to Shopify, all of it was gone. So you had, you had a bad bargain to make as an entrepreneur. You could stay on ClickFunnels, sell your physical products with post purchase upsells the way you want, and then deal with the CSV exports and uploading it to ship station and, and tearing your hair out that way.
Or you can move over to Shopify with a much better e commerce management. platform, but then you lost all the marketing power of being able to sell someone something for 5 and then offer them something for 50 that they could very easily buy within the same transaction.
Andrew: Okay, I see that. Alright, I thought they were gonna send people just to Shopify for the checkout. You’re saying no, they were gonna have to give up everything and switch to Shopify or stick with, uh, stick with ClickFunnels. That wasn’t the bargain they wanted, and so in you walk in, and you say what?
Jordan: And we say we have a one click checkout, excuse me, a one page checkout. We have customization, and now, thanks to Shopify’s point of view on this, we are doing the payment processing. And along with the payment processing comes something very important, the payment token. And the payment token is what’s required in order to have post purchase upsells.
To charge the card multiple times inside of the same transaction, You need to be the holder of the payment token. So here we are in the perfect position to add one more feature post purchase upsells into our checkout. And I went deep enough into ClickFunnels lands and ClickFunnels, Facebook group and message people and became friends with them, got them on calls that I was convinced this is it.
What we need to build is a bridge between a ClickFunnels landing page that could then go over to the Cardhook checkout. Cardhook post purchase upsells, Cardhook thank you page, and then we would send the order information into the Shopify backend so they could manage it the way they want. Not bad. Yes.
Andrew: yeah, and now you’re also tapping into their spirit of upsell, sidesell, whatever sell that I can’t ever get the names right of. Yes. Got it. And they’re all informing the product helping you get more customers But also helping you get a product that has the digital marketers, you know ability to get more sales out of a customer
Jordan: right. But for physical products now,
Andrew: physical products.
This is amazing.
Jordan: yeah. And, and that was the right product at the right time. And we launched it. And from day one, we’re absolutely overwhelmed with demand, absolutely overwhelmed. We, we, we launched it for 99 bucks a month in a pretty simple landing page and we got hundreds of signups and the truth was the product was not ready.
But we want to, obviously you launch early. So we launch and are immediately overwhelmed. And then immediately people like, yo, this is a great product, but it doesn’t have this and it’s not quite working. What do I do next? So we, we, we decide, yo, we got to slow this thing down. So first thing we do is we change the price from a hundred bucks a month to 300 bucks a month.
And what happens? Nothing. Demand stays exactly the same.
Jordan: all of a sudden we’ve realized, Oh, we’re onto something much bigger than we thought. And we’re wrong on the pricing. And now what we need to do is get serious about this. And what that meant was we stopped signups. We forced a demo. You cannot sign up for the product with like your own account.
You got to talk to us first. So we really learned what we’re talking about. We had to slow it down. We couldn’t, we couldn’t handle 300, you know, people in a week. Cause the product was, was barely ready for anything. That’s
Andrew: you’re saying if you had 300 people sign up in a week, it would be 300 people who are disappointed, and you’re saying you’d rather have fewer people disappointed, and learn from them, and get them, gotcha, and have them feel more connected to your roadmap and trust you. Wow,
Jordan: you can wreck your reputation, right? Because we were looking at the Facebook groups and people like, Oh my God, this new thing card hook. You have to look at this. And so we realized we were onto something, but we didn’t want to ruin the reputation of the product in ourselves. So we slowed everything down into demos.
And then I put my demo head on. I probably did 20 demos a week for six months straight, but we learned everything and got to know everyone. And the challenging thing was that the product was genuinely. Not able to satisfy what people needed we knew what we needed to build But we did not understand the nature of a checkout product and what that entails It is not like other products where you apologize if something goes wrong and the emails don’t go out for a few hours And then it kind of catches up and no big deal if you have do anything wrong at all You’re costing people money.
So that impacts the deployment process the QA process the coding Ever it affects everything which we now know, you know six years later But what kept us going was the enthusiasm. People would come onto a demo with me and they would, it would blow their mind. They would be like, hold on, I’m getting my friend to join this zoom.
And they would call their friend and say, Joe, you have to get on the zoom right now. I’m sending you the link. You will not believe this. So when you get that kind of a reaction to showing your product, you know, you’re onto something, but it was a very strange year of amazing growth. We did a hundred million in processing the first year, but in reality, I called it a conveyor belt of torture.
People would come into the product, use it, get chopped to bits by our mistakes and bugs, and then come out the other end bleeding and begging for mercy and saying, I love you guys, but I cannot use it. Let me know when it’s ready. Which was very painful. It was product market fit without quite being able to satisfy it.
Andrew: without the product. It was like idea market fit,
Jordan: Yes. Yeah. Okay, fine.
Andrew: Okay. And so then how’d you get the product up to speed? You mentioned earlier that getting, uh, developers was one of the biggest pain points. How did you get over it?
Jordan: So we got lucky in the first developer hire that we made was someone named Rock from Slovenia and Rock is now my co founder at Rally and my very good friend. So you can kind of tell how lucky we got in both the quality of person and work. Um, At some point, we came to the conclusion that fixing this current product is not going to work.
We have to start from scratch. We got to build version two. And that’s what he did. He basically took it upon himself. All right, I’m going into the lab. I’ll see you guys in six weeks with version two. And it really hit like a maximum amount of pressure where there were so many people who wanted to use the product.
So many people that are currently using the product and, and complaining, but hoping it would get better. It was really like. If version two comes out and it’s good, we are off to the races. And if it’s not good, this might just all fall apart. And he, he did it. He showed up and hit it out of the park and version two just satisfied people and was much more reliable and much more effective.
And from that. Moving forward. It was just an absolute boom off to the races. The next year we did 200 million, then 400, then 800 million. And in total, the process, the product process, 2. 8 billion in revenue.
Andrew: Okay. Let me pause now and ask you, what does it say for your co founder? If this guy rock is able to come in and in a few weeks, create a product that just works when your co founder wasn’t able to do it, having been intimately involved in every part of the business up until that point.
Jordan: Sure. Well, let’s, uh, okay. Let me do some clarification here. Charlie. My family friend who built the original version of the product is a developer. He built the original cart abandonment app and then got his dream job offer in San Francisco when the company was doing like 800 bucks a month. And I was like, Charlie, you have to take that job.
And then I ran it by myself for a while until I met my new co founder, Ben. And he joined and he’s a product manager. He’s not, uh, not a developer. So it was never up to Ben to build the original. That’s what we hired Rock for. We worked with agencies. We tried a bunch of different things until we, until we found Rock.
So it didn’t say anything about Ben in that way. Uh, it was just the truth of the matter. This is the developer that we hired and he did a great job on it. Um, yes. So that, all this stuff is more, more nuanced than it sounds, right?
Andrew: Okay. All right. You did eventually part ways with your co founder. Buyout
Jordan: Uh, yeah. In, in. If you think about that year of tremendous growth and at the same time, huge amount of lost opportunity and frustration and pain. And I was the person responsible for marketing. And my co founder was the one responsible for the product. And that included the tech. And in that difficult time, we became strained.
And. If I’m being totally honest about it, at that point in time, as a founder and CEO, I did not have the skill set to make it better. To figure out what needed to happen, what we needed to do, what people to bring in, what processes to change, and I came to a point where I did not know how to make it better other than letting him go.
And that was rough, and, you know, it’s just one of those moments in your career that you look back on. You’re not sure if you made the right decision, you’re not sure if you regret it, you’re not sure if you’re smart for it. It’s just unclear. It was a very painful thing, because I care about him a lot.
He’s a great person and colleague, and he’s off doing great things on his own. But that’s, that’s what I did. Sometimes you just kind of do what you think is right, and what you think needs to be done.
Andrew: know what? One of the things that I had seen in San Francisco, a lot of was this type of situation with co founders. And it is really tough and the good ones eventually will make that break because it’s hard. It’s hard from a lot of different directions. Personal, emotional is the hardest, but also how do you extricate someone from a cap table if you need to, or just make sure that they, they don’t come back at you and take over the company and then logging them out of everything and finding out what they had a power over that they were working on that’s legitimate, that you can’t anyway, all that.
And they do it and I respect them because they did the heart one of the hardest things that they had to do And then I remember also looking at them saying if that person who you co founded this Expendable if it means that this vision can’t come to life. I as a friend am clearly expendable and it was both Scary and at the same time a moment of respect and it’s just is what it is
Jordan: Yeah. It was, like you said, it was emotionally painful as painful for the business. It was a difficult thing and, and I did it and had to move forward. Uh, and it, it made things more complicated for sure. Uh, but we just kept going and eventually,
Andrew: he’s still in the e commerce
Jordan: Oh yeah, absolutely.
Andrew: I know, right? Okay,
Jordan: And what happened to us, we learned a lot along the way on, on how to sell this thing.
You know what I really learned along the way when I look back on it, I learned how to. Not assume that everyone’s advice and the best practices and the things that everyone tells you to do. Those aren’t always the right thing to do for your situation in your business. And there comes a point in time where you have to take control and do what you truly think is right.
So we did a lot of things that ended up being counterintuitive, like At some point when the product was better, we opened up free trials. We were getting three to 400 free trials a month for a 300 a month product. Ostensibly the dream, right? A hundred K plus in potential MRR signing up every month with their credit card in order to get to the product.
Sounds amazing. It was a It was a washing machine of 15% in monthly churn. And so I, what I did was I had a conversation with Shauna who was running our support at that time. And I said, Shauna, what percentage of the time spent by the people in support and success is spent on 50%.
And I walked away from that and took a walk around the block and I said, that is a disaster and I’m responsible for it. I’m letting my employees be made miserable by people who are not going to become paying customers. And even worse than that, the people who are great paying customers are getting the least amount of attention because we don’t have the time.
We don’t have the bandwidth. Um, to, to work with them and treat them the right way. So we made the decision to do two things at the same time. We shut off free trials entirely and went back to forcing a demo and we raised prices from 300 bucks a month to 500 bucks a month and added a 50 basis point transaction fee of a half a percent transaction fee, a huge jack up in the prices and cutting off free trials.
So reducing the number of people that came into the product, right? Risky.
Andrew: And what happened to revenue from that?
Jordan: First month or two. Everything plummets. So because the churn continues from the previous months, but you’re not bringing in nearly as many people. So revenue dropped for the first time. I think we were about at about 200, 000 a month at that point in time, 150, 180, 200 K a month, something like that.
And And it takes about three months and then everything stabilizes. And then it’s like, that happened in July. By September, churn is at like 3% for the month. And the people that have come in that are ending their trials after going through a demo with a higher price, they’re starting to kick in and we start to level off.
And then it starts to go up a little bit and then a little bit. And then by the end of that year, December of 2019, we are at about 225 to 250k a month and at like 1% monthly churn. So I look back at that period and I think, okay, we took this crazy risk and it worked. The company is quieter, healthier. The best customers have the most attention.
Andrew: At some point before I get to some point I should say this interview is sponsored by origami if you are at all curious about Well decentralized autonomous organizations work then why I thought everyone had moved on past it because they all thought that this was crypto And we’re done with crypto, but I’m glad to hear it because I’ll tell you this is not crypto thing, even though it obviously uses the blockchain.
What it is, is a way to say to a community of people, Hey, you know what? Let’s all work together towards the same goal. I will give every one of you tokens, so that you have some kind of, um, currency to use for voting, and we’ll all work towards a goal. And that goal has been, in examples that I’ve had, Real estate, I’ve talked to people.
I’ve talked to people who’ve done it for investing and so on. And since we’re all working together, instead of saying, thank you for helping out the organization, we could say, well, thank you. And here’s some tokens to give you more voting power in the organization. It basically is a new form of organization where communities.
Uh, communities of customers, communities of, uh, real estate users, communities of any kind can come together and make sure that everybody gets to support each other and every member gets, uh, value for the work that they’ve done. All right. It’s kind of a mouthful. I do a whole series of interviews where you can hear the stories behind this and see what’s working and frankly also what’s not.
Go check it out at joinorigami. com slash podcast. Join origami. com slash podcast.
Jordan: For the record, I’m a huge fan of that concept and I think it is
Andrew: What is it? Yeah. Yeah. What is it that you get excited about there?
Jordan: Maybe we’re skipping ahead a little bit, but that’s actually the original vision of rally to build an e commerce platform that shares ownership with the merchants that process revenue through the checkout.
Andrew: And you do that,
Jordan: Not yet.
Jordan: The market has basically eliminated that as an option between the market and the sec. It is no, it is not currently an option, but I think that is an inevitability in business models on the internet.
And it’s just a matter of time until we get some clarity from the SEC and the market kind of comes around on a lot of these concepts. And a lot of the tech is buried where it should be, where the tech is, and the concepts are brought out to, you know, normal language and, and, and concepts
Andrew: yeah, it shouldn’t be about blockchain and even frankly, tokens maybe you can use, but not much more than that. Like, I think about an example like me and Zapier. I love Zapier. I was their first customer. I dealt with small issues that they had there, right? There’s no upside for me other than bragging rights, which is why you might hear me talk about it quite a bit, right?
A lot of people are in that situation where they take a risk on a company they believe in and their biggest upside is I got to suffer first because I believed in this. And so they talk about it a lot because that’s the only upside that you get, that you look smart for having used it. It would be nice if they said at the early days, look, We’re going to give you some tokens here and in return, every time you help us, we’ll give you a little bit more tokens in this thing that will have at least governance so that I can come back and say, I’ve been with you a long enough time, I’ve suffered enough that I can tell you with my tokens, I should have more voting right here than somebody who just joined up and maybe down the road, um, A little bit of revenue sharing, maybe down the road.
Um, maybe down the road, a little bit of, of equity sharing. And there’s an organization that had just done this through origami. Origami took a company called collab land. Collab land is used to log into discord servers. They basically say here, the people who belong in the discord server here, the people who don’t.
Collab land said, why are we the only ones deciding this? Why are we the only ones fighting to promote this? Let’s give all of our members tokens. We’ll convert into a Dow. And now every member has an incentive to go to every discord server that they’re on go. Hey, use Collabland or to come back to Collabland and say, Hey guys, you’re being stupid and I’m not going to sit back and switch over to this other gating software.
I’m going to help you recognize that you’re making a mistake so that you could improve and my tokens become more valuable. Anyway, I could go on forever about this. Let’s come
Jordan: So could I ? I, I think that is actually, uh, the slingshot, uh, for modern day Davids against the internet Goliath. I, I think I just, uh, but butchered a few analogies,
Andrew: No, you’re right.
Jordan: that is what can be used against established. Incumbents that can’t do it, right? So if I want to take on Shopify, I’m not going to out Shopify Shopify, right?
They’re already public. They’re already tremendous. They’ve huge resources. The right way to do it is to start an e commerce platform that provides merchants, their ownership, uh, based on the success of the merchant and their contribution to the platform. So that it’s like making a pitch to a merchant that says it’s like getting it to Shopify early, but instead of just the founders and employees getting rich, you, the customer participate in the upside.
As you should. So I think that concept is inevitable.
Andrew: and we keep talking about the revenue because revenue and equity are important. I think it’s equally important for both sides to give the people who are early on who get tokens an incentive to promote the business and an incentive to also, um, To tell the business when they’re doing wrong.
And I’ll give you an example of someone, uh, of someone who’s getting help from their community this way. Y Combinator founders created Orange. Orange is a decentralized autonomous organization of these, uh, YC founders who are investing in new companies. One of them contacted me. He starts asking me questions about this company.
I go, why are you asking questions? What’s your connection to it? He goes, I was assigned in the Dow to go research this company because this company is in real estate and I, as a Y Combinator founder, raise money to invest in a real estate startup and to build it up, so they signed it to me. Now think about that.
They have over a thousand people like this guy, Elson, who. Who know their area of the world really well, who now have an incentive to go and deep dive into the company that they’re considering investing in. You get some of that in VC firms, but mostly it’s outsourced hiring, or they say we’re focusing on just the five things that we know really well.
Here, they could expand beyond and go deep dive into everything. And once they get funding, I’ve seen this, a team of people who are, who are in the DAO say we better go and promote them. Little things like tweets, introductions, parties, whatever it is, cause we, we help them. We get not just back, uh, back our backs padded, but we get more tokens for anyway.
All right, let’s come back to this story. Coming back to, to cart hook so we can close it out and come to rally at some point. Shopify said this thing that we did, we’re not doing it anymore. We’re not allowing outsiders to kind of be half in, half out. We gotta have the whole platform organized. What did that sound like when it came to you and how did that impact the business
Jordan: so this is what I think of as a guillotine that hung over our heads the entire time. And the, the, the odd part of the experience is that the more successful the business became, right? Think about years of work, years of grinding, years of fail this, fail that. You finally hit onto something.
You finally hit product market fit and you are one of the lucky people whose company just explodes, right? We raised another few bucks. We ended up raising like 500 K. And then this thing took off on us and hits millions in ARR profitability. And we are. We are on our way to the dream, and this guillotine just kind of hanging out over you, it made for a very strange experience, that the more successful it got, the scarier it got.
Because you had more to lose. And I, I, there were, there were four or five times throughout the years, that something would come up. Someone would send me a tweet, someone would send me an email, someone would send me a screenshot, a text message, that made me think, It’s here. It’s done. It’s over. I remember once I dropped my kid off at nursery school and I got a message while parked after dropping the kid off and the ride from the nursery school to my office in Portland.
I basically just planned out, all right, here’s how I have to tell everyone that they’re fired and here’s. You know, here’s what I need to do today if this really happens the way I think it’s going to happen. It didn’t quite happen that dramatically, but at some point when we got to about a hundred million dollars in monthly processing credit, we’re over a billion dollars in GMV run rate.
Shopify finally comes to us and other third party checkouts and says, it’s, it’s over. It’s time to, to come in and sign an agreement with us and make, make the changes that we need you to make.
Andrew: and what did that do to the business? I mean, I have it here in my notes. I don’t know how much, um, I shouldn’t say, you should say what happened.
Jordan: So they were smart about it. They knew that if you just cut an API, you’re going to have, you don’t care about the software company, at least they don’t care about the software company, but you have hundreds of merchants that are going to be very upset. And that if you’re in a platform environment and you’re, you are a compliment, let’s say you’re an app on a platform, your shield.
Is your customers because the platform might not care about you, but they care about their customers and our shield was pretty good because we had some big we had native deodorant and like these big merchants and so they didn’t just cut off our API access. They basically said, what you have to do is give us a very large share of your revenue, which was an outrageous amount that I told him.
Absolutely no way. So we ended up in this very scary standoff for a while. Eventually we compromised on a more reasonable number. And then what they did is they cut off our ability to add new merchants. And you know software, Andrew. What happens to a software company that can’t add new customers? Dies a slow death.
And so as soon as that happened, I understood. One, I got to sign this deal. It’s the only way to protect shareholder value, protect the team, the employees, the rev… Just, it would be irresponsible of me to just say, screw it, I’m not signing it, we’ll take our chances. The other thing I knew was that I was out of there.
I… Don’t want anything to do with Shopify. I have no interest in playing ball according to their rules This is not a winning game for me and I think for others also And so when I signed that agreement that was basically me signing the end of my portion of the card hook journey. And so I did the responsible thing.
We built a team, we built the type of post purchase upsell app that is acceptable to them, that works with their checkout, that you can go off and see in the app store right now. Uh, it’s being operated by the company that, that bought it from us. And then I had to figure out a way out of that situation.
So I went to our investors and I said, here’s the deal. It was a hell of a ride. Thank you for the support. You saw our, our performance speaks for itself. It’s now time for me to move forward in my career out of this situation. So I’m going to start a new company called rally where we’re going to offer the rest of the internet.
Our checkout, um, know how. And. Let’s figure out a way to do that amicably and fairly and in a way that everyone wins.
Andrew: Okay. And I know that we can’t get into the details of what that agreement was. Right.
Jordan: Yeah, I mean, the details I can’t share, but the parameters, what’s the right thing to do in that situation? It’s to give the Cardhook shareholders a piece of rally and that’s what we did.
Andrew: in addition to what happened with the sale,
Jordan: Yeah, that’s right. Everyone kept their equity and I said, I talked to some investors that are willing to back us and to get this company off the ground and I will share a portion of the upside with everyone on the Cardhook cap table and that, that, that was the fair thing to do.
Andrew: Okay. So then you go to create rally and now when you pitched it to me, when you told me about it, you said there’s a new way of doing e commerce it’s headless. It’s basically a database of information that then plugs into whatever front end website design people want. And then the rest of the tools just get added on like a shopping cart and everything else, right?
And so to me that seems very decentralized seems very fair. You don’t like your shopping cart You don’t have to count on whatever web builder you’re using to say it’s okay but it also seems to me like You you don’t now have a home base of people who are all working together You don’t have a home base of people who are going to promote you You don’t have a you don’t have any of that right that you had with shopify
Jordan: That’s right. Oh, what happened in e commerce and what was. Expected to happen. It hasn’t quite turned out exactly what people expected, but back then when I started the company, what was starting to happen is a natural unbundling, right? So the internet and parts of the internet go through these bundling and unbundling cycles.
Uh, at first things start off very decentralized and then AOL comes in and bundles everything and it works out better and then it starts to drift out into these different pieces in e commerce, Shopify did an incredible job of. Bundling the stack to make it easier to get your shopping, uh, site online.
And that bundle included the front end, which is the storefront where shoppers interact and add things to their card and click buttons and the checkout. That’s the second piece where the payments happen. And the third piece is the backend where the order management happens. Shopify did an incredible job of doing that.
And they were rewarded for doing a great job at that. What was starting to happen is as these merchants got more sophisticated, they started to want to stretch out beyond this very tightly bundled package. They wanted to start using new tools on the front end and new tools on the backend. And that’s, you know, that turned into the app ecosystem in the backend.
So you don’t have to use Shopify’s email. You could use Klaviyo. You don’t have to use. Uh, Shopify payments, you could use Braintree. You don’t have to use. So it started to become more unbundled. And we saw that trend happening. And with our checkout experience and expertise, we identified that the most valuable part of that new ecosystem where a merchant could pick and choose the best front end, the best backend, the best this, the most valuable part of that ecosystem was the transaction layer.
And our experience with the checkout was perfect for it. And it was one of these moments of. Well, something bad just happened. We just built this great company and it was about to shoot to the moon. I was going to retire and, you know, and, and then it didn’t work out that way. And we, we got this new lease on life.
We got this new opportunity because of the bad experience. We now are in a better position than we could have expected. I firmly believe the Shopify ecosystem is going to create very few big outcomes. Klaviyo, PostScript, a few others, but generally speaking, I don’t think it’s, it’s great for small entrepreneurs that want to just do things on their own.
Maybe they want to bootstrap, but, but it. It puts a lid on the potential of other software companies, uh, because of the nature of the platform and the competition there and the API set and the platform controlling it
Andrew: Yeah, they intentionally, you mentioned earlier that cart hook is in the app store. And of course it’s in the app store. And if I scroll a little bit, I see a few other products that do the exact same thing that they’re promoting because what they’re, they have no incentive to let you be the giant in their platform.
I know you’ve got to go right now, right?
Jordan: They do not want anyone to be the giant. They want to be in control and every once in a while, someone gets away from them like a clavio and they can’t control
Andrew: What about this then? What do you do then to get new customers when people are moving to Shopify? And Shopify is not just doing the stack that you talked about. They’re also getting into the marketing side of it where they’re partnering with Instagram, partnering with, uh, with YouTube. And YouTube is not saying we’re gonna allow you to sell from Shopify and a million different platforms that we don’t know.
We’re saying, they’re saying just Shopify. And so that just makes it a bigger and bigger dominant player.
Jordan: Yes, but anytime you have a platform with a base that’s so wide, right, a million plus shops, it is inevitable that a portion of that customer base And that’s what creates the opportunity for the next platform to be built, right? There is a fantastic article that talks about a lot of these concepts, including crypto called why decentralization matters by Chris Dixon.
And it talks about the platform lifecycle that goes from cooperation to competition with both its customers and its ecosystem. And this thing happens over and over and over again. It happens with Google, it happens with Twitter, it happens with Shopify, it happens with any other platform. You become dominant, you start to extract, you start to turn people off, you lose the glow of, you know, arming the rebels, you’re such a nice group of guys, and then it turns into this, how do we get out of this?
How do we form a new thing? And so Rally was intended to be the checkout layer of the new ecosystem. happening in e commerce, whether you call it headless or composable, that vision has been delayed by the economic issues over the last few years. The right, the boom’s over and now replatforming and spending a bunch of money in the optimism in e commerce is greatly diminished.
Andrew: Wait, so you’re building up today so that when things get so big that even a 10% or 2% increase in sales is significant and people have the team and the bandwidth to make the switch.
Jordan: Yeah. Well, We never put ourselves in a position to depend on that, uh, headless ecosystem. I say delay specifically because it is inevitable that it happens. It’s just not happening now or yet. What rally does right now is it goes off and finds existing merchants who already have a business up and running on Salesforce commerce cloud or commerce tools or something else, and it improves their checkout experience and.
It’s almost happening in parts. So these large online retailers, they want to modernize and where should they modernize first at the thing that makes the most difference in revenue, which is the front end and the checkout. So right now we’re going and working with existing enterprise merchants to improve their checkout experience.
And as we do that more, we build up the rally pay vault of shoppers, uh, and our capability and. Basically bide our time as this new ecosystem forms.
Andrew: and in the future you see a world where there are more and more ways for people to buy maybe something That Shopify hadn’t considered like an open AI type shopping experience It’s somebody builds a front end that person’s gonna say I could build a shopping cart experience or I could Just let rally handle that and they’ll or maybe they won’t even have the opportunity to say I could do this or that the market Will just say I want I want to pick my own shopping cart.
Jordan: Yes, it, it has the elements of becoming a winner take all model. The, the checkout, because what we’ve done is built a shop pay like vault feature. So when you go through our checkout once, when you come back to any of our checkouts, you can buy very easily, right? You’re recognized through the network, but it’s not.
Not only one platform in Shopify and one payment processor in Shopify payments, it works across the web regardless of platform or payment processor. So it’s like
Andrew: that matter in a world with, with Apple pay and Google pay? I mean, my credit card is recognized everywhere anyway. And so is my name, et cetera.
Jordan: Yes, so we integrate with Apple Pay and Google Pay because we should because it should be up to the merchant It should be up to the merchant which payment methods they offer their shoppers However, it’s still true that over 50% of people go through the guest checkout and fill out their first name last name city State zip and credit card info and for those people we effectively have a net that catches them So that they only have to do that once and then next time they come back as soon as they type their email address in They’re recognized.
If they’re cookie, they just go to the last step. If not, they get SMS and then we pull all of their information from the vault.
Andrew: Okay. And Apple is never going to have an offer expires in 57 seconds, 56, 55, et cetera type of thing that adds a level of urgency or a level of upsell. All they want to do is do the credit card processing bit of it. And the rest is something that you are going to specialize in to allow someone to, to allow a store owner to have all those features that you’ve known.
And then the credit card gets handled by Amazon or typed
Jordan: That’s, that’s right. So we integrate with everyone in the alternative payment. Method space, right? Affirm, and Apple Pay, and Afterpay, and Stripe, and Braintree, and everyone because we are the underlying checkout. We’re like the marketing layer that sits on the web that makes the purchasing process better, but we’re not doing We’re not, we’re not a Stripe competitor.
We’re not doing the payment processing. We’re not an Apple Pay competitor. We just integrate with all
Andrew: All right. The website for anyone who wants to check it out is rally on. com. Nice design. You keep upgrading your design personally, Jordan,
Jordan: of them. Thanks, Ben.
Andrew: this looks good. All right. Thanks for doing this. I’m looking forward to seeing how it plays. Actually, I don’t even have to look forward to it. You’re so fricking good with those investor updates.
Sometimes I think those are those are the substack of the really successful people where the companies you invest in you put a little Bit of money in and then you end up getting deep insights from company founders in their in their email investor updates and in conversations
Jordan: I, I have this month’s open in my inbox right now in the compose window. So you’ll get one soon. Uh, thank you so much for having me on. It was a great trip down memory lane. I hope people learn from it and enjoy the story.
Andrew: All right. It’s rally rally on. com. Bye everyone.