Mirakl is a French cloud-based eCommerce software company specializing in marketplace platforms. Adrien Nussenbaum, Co-Founder and CEO of Mirakl, joins Alex to discuss marketplaces, the platform future, and Mirakl’s own platform for marketplace sellers, partners, and operators, Mirakl Connect.
Originally Aired: 10/15/20
00:00 – Subscribe for Tech & Business News Daily
00:21 – Mirakl Co-Founder and CEO Adrien Nussenbaum
00:40 – What is Mirakl?
03:15 – Mirakl Co-Branding/Partnerships
06:25 – Product Mapping
07:44 – Need and Demand Coming From Customers
10:21 – Mirakl Connect Platform
13:23 – Growth w/ eCommerce Startups
16:02 – Aggregating Supply Long Term
21:33 – Marketplaces Will Be Mandatory
24:17 – Different Shades of Marketplaces
26:30 – Mirakl’s Accolades
Hello, and thank you for joining Winner take All, where we talk about the constant battle between large tech monopolies and traditional incumbents. I’m very excited to have a special guest on today’s show. We have Adrien Nussenbaum, the co-founder and US CEO of Mirakl. Adrien, great to have you. Thanks for joining us.
Thanks, Alex. It’s a pleasure, and congrats for your work in this revolution of platforms.
Thank you. And likewise, my friend. Mirakl just raised a monster $300 million round, which I want to get to here in a second. But let’s just start at a high level. If we rewind the clock many a year ago, when Mirakl founded and a lot of where your core product is today, it’s working with these large enterprises that have e-commerce presences, and many of them would be linear business models as we both talk about. And you say, “Hey, you need to embrace the marketplace. There’s all these third-party sellers out there. You need to sell additional products, and you don’t need to own that inventory. And our tool, our technology, our Mirakl products will help provide all those capabilities to build that seller side, that ecosystem of sellers and give you this marketplace dynamic.” How’d I do on that. Is that accurate?
Yeah, I would just emphasize the fact that our value proposition is a bit broader, in the sense that we don’t just focus on enterprise, large enterprise. If we pragmatically look at our over 300 customers today, a third of them are pure digital businesses, either startups that are just starting from scratch, and saying, “We’re starting a new business in B2B or B2C distribution, or commerce, should we adopt an old world linear business model? Or should we adopt kind of a newer business model?” And it’s interesting to see that those companies, despite being digital natives, decide to trust Mirakl and work with us.
And yet, 70% of our business indeed, is working with businesses who have been around, often for a very long time. And I think what’s interesting and what makes our job interesting, is in the past, they did something great to become what they are. They created great stores, they created great products, they store fantastic merchandise. But now they need to reinvent something new, to still be great, but they have the opportunity to leverage what they built. So, that’s indeed how we engage with them, it’s helping them paving the next phase for them.
Absolutely. And I think one of the really interesting things that echoes your value prop to these customers, is that you really, you partner with them in the sense that you’re bringing them a SaaS solution, but I would say many SaaS solutions would be white labeled. I think what’s really interesting is that when you work with your customers, presumably you’re just bringing so much value to the table, that they are building these seller ecosystems, and Mirakl’s kind of co-branded in these endeavors, right? It’s kind of saying, “Hey, sign up for this enterprise’s marketplace business, through the Mirakl portal.” Was it always that way, or was there a tipping point in the journey, where you were able to just create so much value or demonstrated success. Like Best Buy, in Canada, I think one of your big success stories here, that you were able to kind of move into that more partner, co-branded model, or was that always the model?
I think it was in a way, it became the model as we grew, and ourselves created platform economies and platform dynamics around our own business. But if you think of what a platform or marketplace is, as you know well, it’s three parties: the end buyer or customer, the operator of the platform, and the vendor, seller, partner, however you want to put it. So, from that kind of view, Mirakl is completely hidden to the end buyers. They don’t know about Mirakl. Obviously Mirakl is closely connected to the operator because these are our clients and the people we help.
And then, to what you were talking about from a seller perspective, Mirakl has also become a brand. And if you think of what really matters to those sellers, it’s speed of integration, speed of onboarding, it’s security and scalability, and it’s also the efficiency of how they’re going to be able to operate across multiple platforms. So, now we see very often that when we work with a new customer, and they start having conversations with potential partners, very often those partners tell them, “Oh, you’re using Mirakl as a marketplace solution? Great, because we already have the API’s, the connections, and we’ve done the integration.” So indeed this has been, it’s a journey, more than started day one and never stopped.
I know where you’re going, I’m going to get there in a second. I think another example of how you can help that onboarding, that connectivity with the sellers is, you’ve raised this $300 million round, you’re hiring 500 engineers from the press release. One of those critical challenges for sellers to onboard is product mapping, right? You have a centralized product catalog, there’s an interview with the Best Buy Canada customer. He said, “Hey, if we can get multiple sellers listing on the same product listing, that’s going to drive value to that end customer.” So, that’s another thing that you can, I would presume further invest in your ability to your sellers’ products to these different product catalogs, through this tech that you have built and will continue to invest in. Is that a good example of how this round will help, just continue to invest in tools like product mapping?
Yeah. I mean, product mapping is key to things that are fundamental when you’re trying to create a platform dynamic, which is scalability, network effect, and satisfaction of the platform participants. So, it is indeed one of our key areas of investment, among many others, but yes.
Going back to what you were just saying, where now you have multiple customers in the same industry. I think Kroger just launched this year, 2020, Albertson’s launched a couple of years ago. And so, you were kind of alluding to this, you’re starting to see, hey, sellers saying, “Oh well, I already know Mirakl in the food industry. I’ve already maybe integrated because there’s another Mirakl powered marketplace already there.” Do you see that, is that a net positive for new clients like Kroger, or are there any considerations to allay any concerns? If they say, “Hey, Albertson’s is already in food, why do I want to use the same solution?” How do you see the… What’s the pros and cons to overcome any of that?
Yes. There’s no real cons. I think Mirakl is a technology enabler, so our mission is to allow people to evolve their business model into a business model, a platform, which we believe is key to be successful in the future. What’s interesting is that if we go back to the roots of what should be driving anyone’s business, and our friend Jeff at Amazon has talked about it a lot, its customer, the customer. And what we’re seeing, which is driving this growth for our company and accelerated demand, and I would say ability for traditional businesses to overcome their fears, because this is key in becoming a platform business, is the fact that the need and the demand is coming from customers.
And yes, it’s coming from the end customers who want more choice, more pricing, more depth, more flexibility in how they buy. But it’s also coming from a new customer, who are the sellers, the partners of these platforms who are telling some of those companies that you had named, “Hey, we have those great products, we would love to work with you, but we want to do it in a marketplace way. We want to retain the ability to set price. We’re fine working within your rules that you will have set, but we want to be working as marketplace sellers. We don’t want to be working as traditional suppliers.” So this is really for me, one of the key evolution.
Enter Mirakl Connect, right? You actually launched this maybe last year, is that right? My understanding is you’re saying, “Hey, we have relations and brand and visibility with these sellers,” exactly to your point, right? These sellers want to sell through more and more marketplaces, and it’s kind of like an Alibaba-esque model, where you’re not taking transaction fees. But what you’re saying is, “Hey, I want to help other e-commerce, Mirakl powered, marketplace businesses, market or advertise, and connect with other sellers. And we’re going to help aggregate these sellers, and provide that kind of centralized meeting point to help sellers find more e-commerce marketplaces to work with.” Is that right? It’s a very interesting new, or relatively new initiative for you guys, it seems like.
Yes. Connect is clearly the key priorities of the years to come at Mirakl. And when you think of what it is, and I’m sure looking at your background and everything you’ve written, which by the way is excellent, it will normally resonate. But Mirakl started as a technology platform, enabling platform and marketplace businesses. And with Connect, Mirakl is becoming a platform business, technologically enabling platform businesses. And also helping those platform businesses accelerate their growth. And that’s kind of the nuance, Connect is typically, it’s the example of what we’re telling other our clients to do. You’ve gotten to a point where you have assets, you have maybe the ability to drive demand, you have a great brand, you have a partner ecosystem. And all these people are not connected. They’re kind of operating in silos on your linear pipeline business model.
If you create a platform business, you’re going to create this network effect, and scale, by having more of a platform to play around on. It’s exactly what happened to Mirakl. A year and a half ago, we got to a point where we had hundreds of clients operating marketplaces, tens of thousands of sellers being on those marketplaces, and dozens of technology partners developing tools to help those sellers, in fulfillment, B2B payment, pricing intelligence. And Connect was really the natural evolution, which was all these people are connected to Mirakl in some ways, but they’re not automatically connected to one another. So, that’s what Connect is going to do, and ultimately it’s scale, speed and agility, for our customers and their partners.
Yeah. It really is, as you said it, it’s where you had this, I mean you still do, right? You have this linear SaaS business, and now you’re branching out into eating your own dog food, embracing your own platform model. And I can see for, let’s say that 70% of large enterprises, where it could help them get some incremental sellers, from Mirakl Connect.
And the really cool thing I see with this is, for maybe that 30% or whatever portion that e-commerce, startup customer segment comprises, this seems like a huge boon to them. Because it would be much harder for an e-commerce startup to kind of get traditional access to sellers, just because they don’t have as much demand, or they might be in specific niches. So, by aggregating these sellers together, and providing that central meeting point, that seems like, and we all know there’s so many of these e-comm startups that are trying to… And are very pro marketplace, but they have their own chicken and egg problem to solve. So, this seems like a huge opportunity, huge growth opportunity for Mirakl, particularly in that segment. Is that how you’re seeing it also?
Yes. I think of a few customers that recently went live, there’s a company called Verishop, which was launched one by one of the founding members of Snap. And to see them in just two or three months, be able to go live and create this verified shop kind of offering, where they’re working with direct to consumer brands, and they’re able to be extremely fast, go to market. We launched a market-based with a company called Motherly, which is a great… Initially more of a blog or media company focused on women or on motherhood, and being able to quickly, same thing, very agile, launch a marketplace with immediately a number of partners being onboarded on the platform. And in another kind of spectrum, companies like The Knot Worldwide, I don’t know if you’re familiar with them. They’re a big platform for wedding and organizing wedding, and typically trying to accelerate commerce. And those companies really, as you say benefit, and will benefit more and more, from this ability that we will have to provide them with an end to end service.
Yeah. I mean, it’s really interesting. It’s kind of meta, right? It’s kind of like Roadblocks, which is like a metaverse of games. It’s like you’re providing these sellers and you’re platformizing it at the same time. It actually, if you look at the long game, where does all of this end up? We see in the short to medium term, when you have a bunch of platforms and marketplaces competing, it’s good for the sellers and the consumers. When there’s six or seven different versions of Uber, the drivers are getting thousand dollar referral bonuses. And when the platforms compete, the consumers and producers tend to win.
So, by helping to level the playing field, when it comes to attracting sellers, it kind of starts to remind me of another friend of ours, Ben Thompson at Stratechery and his aggregator theory. Where when I look at platforms and business models, they have this two-sided network effect, the demand and supply side network effects that work with each other, that chicken and egg game. For his aggregator theory, it’s mostly just focused on saying, well, supply matters less, and what is paramount is capturing demand. And what we see there, is we see that these large tech businesses are able to just over-index and leverage that demand, because they can take advantage of supply. By aggregating supply, long-term, do you think this helps someone like a Walmart, let’s say who’s trying to expand supply, but they have a lot of demands, but their marketplace is still growing, for example? Could this also be a boon to companies like them, that are trying to compete against Amazon, for example, but have a demand, but always need more supply?
Yes, I think that there’s no alternative to platforms. That’s kind of a broad statement, but I think that if you think very simply, the digitization of the world creates a situation where… We’ve always said the customer dictates, the customer dictates, but it wasn’t true. It wasn’t true. Yes, when you walked in a store and you were not happy, you could say, “I’m not happy, I’m leaving the store.” But you could not dictate what you would find in the store, it was dictated by sourcing, gross margin, advertising of the brands and the vendors. Today, the customer dictates, whether we like it or not. And this is something that was directly resulting from digitization, and it’s just the beginning.
So, in a world where the customer dictates, you need somehow to be able to consolidate, to make sure that you reach the customer’s expectations. And until someone comes up with another business model, the business model of platforms remains the only economically viable and scalable business model to create consolidation. Whether you want to consolidate the whole world like Amazon or Walmart, or whether you want to consolidate the niche of toilet plumbing supply. And I’m a big believer in niche business models, by the way, powered by platforms. I absolutely believe, and we see it with our customers. The billions and billions of GMV that are driven on our platform, they did not exist one, two, three, five years ago. And it’s not southernly money that came down from the sky for customers to spend, it’s money that shifted from one channel to another. And that I believe is a proof of the fact that everyone needs to participate in this platform economy. And I believe that you can be very successful with a thousand partners, you will be even more successful with 10,000 partners.
Yeah. You need more supply, that supply is going to give you that wider product catalog. Hopefully more pricing competition, and all that value then rolls back to that consumer. I guess, last question on Connect, and then I think it would be great to just hear more about, more broadly where you see the company going, and other key priorities for you. But with the large enterprises here, that I guess are the majority of your business, by aggregating these sellers and leveraging kind the brand equity that you’ve built with these sellers, the tools that you’ve built with the sellers, and now enabling say, more e-commerce startups to come in, or potentially say, a large player like a Walmart, do you see that servicing those customers, who could also be considered these large enterprise competitors, do you see that hurting those large enterprises’ ability to build their own marketplace businesses?
No. In the sense that, what I’m going to say is going to maybe sound a bit as a paradox, but having a marketplace may be seen as a competitive advantage today, but we believe that mid to long-term, it’s going to just be a mandatory requirement. And in a way it’s like the second or the third leg of the stool, however you like to sit. I mean, two legs, it’s a bit hard, but you may be very balanced. But that’s kind of the way we look at it. We often get the question of, and I could ask you the question, but how many marketplaces can there be? But did anyone ever ask the question, how many e-commerce stores can there be? Would Shopify be what it is today, if 15 years ago people said, “Oh, you can’t have as many e-commerce stores, because it’s going to be online, so you don’t have to drive, and anybody can go anywhere, so they will focus on…” Bullshit.
There’s millions and millions and millions of e-commerce stores today. And nobody is asking the question, how many e-commerce stores can there be? So similarly, I think that what may be seen as a competitive advantage today, yes, to be the first mover is an advantage in any business. It’s scarier, it’s riskier, but then you know what happens when you don’t do it. But not doing it at all is not an option in… Digitization dictates platforms, or platform strategies.
And I think that’s where also where I see you guys expanding, is saying, okay, in a world where there’s a bunch of different platforms and marketplaces, if everyone has a platform, if everyone has a marketplace, then how do you compete? And what are the other services that you can bundle around that, and so on and so forth. And so, you’re making a lot of investments in those areas as well, right?
Yes. We are making investments in those areas, but they will benefit all our clients. I think that what’s more interesting, and this is really a strategy behind Connect is, even if the rules remain the same, you need to please your customers. And if I’m just looking to replace my sink, and I just need a basic thing, because I’m going to do it myself, I might go to a specific website, and I would be interested in availability, price and delivery time. But if I am a looking at a B2B transaction, where I need many, many sinks, and I need solutions with those sinks, and maintenance, and parts, and yes, I’m buying sinks but I’m buying sinks in a completely different mindset.
And so, I truly believe that there will be a marketplace and many marketplaces where I can buy that sink, and I will maybe choose one over the other, because one has installation services, one has a specific warranty, one has a specific loyalty program. And then I will choose maybe another one, because it has specific B2B payments, capabilities, specific invoicing, it can connect to my e-procurement tool. So, this is really where we’re investing. It’s being either owning those tools, or having direct integration with providers of those tools, that allow to create those differentiated marketplaces, [inaudible 00:26:23] are marketplaces, or have marketplace as a component of their business.
Love it, Adrien. Thank you. And I know we’re kind of running up here on the butt of time, but let me just brag a little bit about you guys. I feel like every analyst out there has you in the upper right quadrant, like you’re publishing stuff with Forrester, they’re ranking you. I feel like Gartner’s ranking you. What are some of the accolades that you could speak to better than I could, that have highlighted Mirakl’s success here?
I think the most important accolade, is the fact that we have happy clients. We have also courageous clients, because they take risks, they venture into evolving their business model. We gave them a name two years ago, we called them platform pioneers, so we’re really investing in this platform pioneer program. And pragmatically, one of the things that came up during this fundraising process, was abnormally low churn rate for a SaaS software company. And there is nothing I would say that talks best to the business. I also think that we have people at Mirakl who are very excited to be part of a company that is creating a market. Because you know, also as well as me, that sometimes it feels like preaching in the desert, and not everyone enjoys it or is suited to preach in the desert.
I think that during COVID when the crisis started, we had this kind of unique, I would say company defining moment, where the French government called us and said, “Hey, there is this shortage of PPE supply, we feel that if Mirakl was to be able to spend a platform that could connect supply and demand, we could help people, and workers, and essential workers and save lives.” And at Mirakl, it took 48 hours, which is quite rapid, to extend a fully functional B2B marketplace, which operates still today, unfortunately. We felt we were going to have to shut it down in the summer, but now it’s almost as high as ever. But within 48 hours, we demonstrated that the platform model is a great business model. We demonstrated that the Mirakl people are amazing people who work hard, and ultimately there were millions and millions and millions of products that were sold. Mirakl did this entirely for free for the French government.
And so, yeah, beyond the accolades, it’s great to have the recognition of Forrester and Gartner. And I think our clients, and our people is really at the end, what makes it very meaningful. And the fact that we’re bringing satisfaction to our shareholders, because it’s important in this world also, let’s not be naive, derives from this naturally, which is encouraging.
Absolutely. Well, Adrien, you’re a busy guy. You’re now a unicorn company officially, so that’s always a fun club to be in. And we wish you the best, hope to have you back on the show. And we’ll certainly be following and watching all the stuff that you guys do, and bringing these marketplaces to fruition. So, thanks so much for joining us.
No, thanks, Alex. Thanks for everything you’re doing. I’m seeing your book here on the video, and I’m thinking I’m going to bundle it in our holiday gift basket to our customers, because I think it’s an excellent read. And thanks for your show, and I hope to see you soon.
Likewise. Thank you, sir. Have a good one.
It was great having Adrien on. We will have another Winner Take All session next week. Thank you everyone for joining us, and we will talk to you soon.
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