Everyone is aware and in awe of the steady, rapid growth that Salesforce.com has had in recent years: 2015 saw growth like never before, with an estimated 1 million jobs projected by 2018 that will be directly enabled by the Salesforce ecosystem.
CloudCraze is poised to lead on the forefront of cloud innovation for 2016. CEO Chris Dalton has been growing his executive team since investing in CloudCraze in mid-2015, and expanding into the Salesforce ecosystem to deliver B2B and B2C enterprise eCommerce.
As Salesforce’s only enterprise-class eCommerce partner, CloudCraze provides clients the ability to quickly deploy mobile storefronts, generate online revenue, and easily scale for growth, all in a matter of weeks. With their continued growth and commitment to cloud innovation, CloudCraze is playing a key role in the Salesforce community and ecosystem.
I recently had the opportunity to speak with Dalton about the rapid growth and innovation that CloudCraze has experienced, and where he sees the future of B2B and B2C eCommerce.
How did your company get started?
Just to give you background, from the early ‘90s I got my first job out of school at Arthur Andersen, just as it was splitting from Andersen Consulting. I found out quickly that I didn’t like the corporate environment and was not going to stay on the path to partnership, so I set out on my entrepreneurial journey in Chicago in ’92.
I’ve been in the entrepreneurial space since then, and have been fortunate that along the way there has been this great evolution of technology. I’ve built and sold a number of different products and services around Internet web enablement.
If you remember the years ‘95 through ‘99, a lot of tech was all first generation and companies were asking themselves questions like, “How do you build a website?” and “What is a website?” I remember jokingly talking to the chief technology officer of McDonald’s and he said, “I don’t know if I’ll sell any more french fries if I put up one of these website things,” and I said, “You never know, scratch and sniff might come along someday!”
It’s been a fun journey -- my partners and I sold one of our first companies into a company in California called USWeb that was a big startup, pre-bubble. I watched that company balloon to a billion dollars and ten thousand people in a 24-month period of time, all through M&A. It was right during that heyday of all things crazy, and blew up in 2001 post-bubble. We had watched it rise and fall and thought it was a good time to launch a solid consulting business centered around eCommerce, content management, and building websites.
We built a company called Acquity Group, which organically grew for 13 years into a thousand people in 13 offices across the US and international markets. We took the company public on the NYSE in 2012, and I ran it as the public CEO for a year. Then ultimately, we were approached in 2013 to sell the organization into Accenture, which is now Accenture Digital.
Throughout most of that entire journey I have been on the services side helping companies, specifically in eCommerce, use the tools and understand how to maximize and expand the channel. I’ve gone through all of the iterations starting with desktops and mobile devices, into tablets and wearable things, all the while helping companies figure out how commerce intersects with each.
Throughout the past couple decades, companies have been taught that they had to use technology to custom build their platform with software providers, such as Hybris, ATG, Blue Martini or others. These software companies would start with a white sheet of paper and ask, “What do you want your website to look like?” Millions and millions of dollars and a year or more later, a customer would get to a solution.
When we sold Acquity Group, we started to recognize that organizations weren’t keen on spending tens of million dollars on a website that took them two to three years to deploy, so we set out to find a cloud-based technology that could bypass the time and resource drain incurred by current providers.
I have worked in both the B2B and the B2C sectors, and if you look at the evolution of B2C, B2B was undoubtedly the laggard. But when we looked at the total adjustable marketplace of B2B, it became apparent that it was four times the size of the B2C marketplace-- in the trillions of dollars. So our focus became to help B2B customers in this arena.
We came across a company called CloudCraze that had built an eCommerce solution natively on the Salesforce platform starting in 2010. They had five years of operating experience, focusing on their skills in perfecting integration in the Salesforce environment. Salesforce, along the way, had gained significant traction to become the predominant player of cloud.
We caught it at the right time; the other Acquity Group founders and I acquired CloudCraze and brought our intellect and knowledge around all things eCommerce, and with the wealth of experiences we had in working with Salesforce previously, we were able to convince Salesforce of the massive opportunity for a commerce cloud amidst marketing cloud, sales cloud, service cloud and all the others.
It’s been a great six months, and a fantastic transition. The value that stands out to CloudCraze users is the ability to deploy commerce now in a matter of weeks. An average launch time is eight to ten weeks, with a starting cost of about $240,000. The notion that major companies like Coca-Cola, Adidas, or GE can deploy a commerce platform at such a low cost is wild. Companies get the comfort of knowing that their platform is sitting on Salesforce and can deploy rapidly at a fraction of the cost. It’s a no-brainer.
We’re making major marketing investments in 2016 and are excited to continue to get the word out about CloudCraze’s unique differentiations. We’ve had impressive traction, and I think we’ll see more and more success as businesses continue to see the value in conducting commerce on a CRM platform in a much faster and much more cost effective way.
So CloudCraze was bought by Salesforce?
No, it wasn’t bought by Salesforce. If you assess the Salesforce ecosystem, they’ve got about 3,000 Independent Software Vendors, or companies that have built solutions on top of the Salesforce platform. We were able to show Salesforce the tremendous value to drive to it, and have since become a Platinum partner in their portfolio.
Over the past two quarters, we’ve grown the CloudCraze team, been able to expand our company development, marketing and product engineering efforts, and have seen impressive business lift as a result. Now, the goal is to continue to grow in order to become a dominant player in the space.
What are your tips for entrepreneurs who are looking to take on a startup; to come in and buy it to take it to the next level? That’s a very attractive prospect for a lot of entrepreneurs.
There are a lot of people who would love to be able to buy a startup and grow it into a successful company, but they either have to have the capital themselves or raise it through external sources. There is a lot of money to be had in the market, but the challenge in raising funds from external sources is that you have to show that you have an experience base so investors want to put money behind you. You can get money, but most VCs are looking for operators with deep experience.
So, my first recommendation is: if you’re going to try to solicit capital to support your interest in buying something, you have to demonstrate to VCs that you have the operating expertise to run the business. We had enough capital that we didn’t have to go after institutional money to raise it, which was a major benefit in that first phase. But, even as we entertain the option of doing additional capital raises in the future, I’m pretty pleased that the pedigree and history that we’ve had over the years is going to support a more efficient way to gain credibility and accelerate the process of getting the capital.
If you don’t have those tools, you have to be strong-willed and convicted enough to encourage the VCs that you will be able to support and substantiate your desire.
Again, money and access to money is more abundant than it has ever been, but institutions want to back people who have the expertise and strategy it takes to run the businesses, and you have to do so in an uncrowded segment. AdTech is one area I see a lot of entrepreneurs come in with new ideas, but it’s a crowded space that is complicated to venture, and complicated to explain. So, keep it simple, make sure it’s niched around an industry or solution, and have a very solid financial plan that you can show them.
Apart from money, what other capital can you bring to it? I know if you have the connections it makes a huge difference at that level.
It’s important that you bring capital to the table even if it’s an insignificant amount. Putting skin in the game yourself is something VCs like to see. Showing that you are not just a broker who will get bored with it and walk away is an important aspect.
Salesforce has done really well by building that ecosystem and community. Are you looking to build another ecosystem under your part of that ecosystem?
That’s a great question. Salesforce went about building a community in a smart way-- by opening up the AppExchange. They’ve cultivated many entrepreneurs to build on top of that platform, which has created tremendous wealth and value. I read in a recent Diginomica article that Salesforce projects their impact on GDP will be 272 billion dollars, just because of the exchange in the ecosystem. They’ve done a great job of it.
What we’re doing is building a commerce platform on top of the Salesforce platform, but we’re opening it up for people to build market templates around industry segments.
So, let’s say you have a particular expertise in CPG or manufacturing, and you think that segment needs to have specific capabilities in commerce that address particular needs. You can layer in a capability on top of our product and that becomes a market template for that particular industry.
We’re encouraging third party providers and other sorts of payment processing tools to build on our platform extensions and capabilities for our customers. For example, a company called SteelBrick does pricing configuration on the CloudCraze platform, which integrates with some of our complex B2B customers that need pricing quote configuration capabilities.
Another company in our ecosystem is called InsideSales.com, which does predictive analytics around buying patterns to identify when and how customers buy. Integrating predictive analytics into our cloud-based platform is very advantageous-- it furthers the stickiness and expandability of the solution.
Are you planning to work with other competitors of Salesforce to expand your offering as well? Or will you just stick with them?
Our strategy right now is to definitely stay with Salesforce. I really believe that Salesforce has led the pack, and the market growth that they’ve had on a year-after-year basis is far outpacing anything in the competitive landscape, which we’re very excited about. We have been closely watching what Heroku is doing with their app extension layer on top of the Salesforce platform, which would give us the ability to extend outside of the core Salesforce.com platform. But I don’t think you’ll see us wandering into any other CRM technologies.
What is your prediction for B2B commerce? Where do you see that going over the next five years?
I have spent many years in this space, and there is a fair amount of saturation in the consumer-centric realm of commerce. The digital B2B industry is already a trillion dollar marketplace—four times larger than B2C—with tremendous potential for CloudCraze. The B2B SMB segment is also still emerging towards ecommerce, so there is huge market expansion for helping these companies move online as well.
The services industry will do well in leveraging technology like CloudCraze for deployment, and I think the technology companies will as well. The evolution in B2B is really moving towards become more B2C centric. What we’ve learned over the years is that people desire a B2C experience in the B2B environment; they want product reviews, rich content, and side-by-side comparisons of products. I expect B2B innovation will continually improve those pieces of the customer experience.
Cloud technology is a hot topic; it’s become something that every B2B commerce provider says they do. But the more that you dig underneath, the more you have to ask what the deployment process looks like. Is it a cloud solution that is turnkey and can be deployed in a number of weeks? Or is it a combination of solutions contained in an expensive package?
We’re very excited about being the first of our kind in the B2B space, and the first eCommerce platform built natively on the Salesforce platform. This is an ideal time for customers to learn more about the product.
Murray Newlands would be thrilled if you’d share this story with your networks. You can find him on Twitter (@murraynewlands), Instagram (murraynewlands) and Vine (murraynewlands) and learn more about his work at www.murraynewlands.com
