In today's episode, Steve speaks with Ben Jabbawy, owner of Privy, an onsite conversion app for e-Commerce platforms like Shopify and BigCommerce. Tune in to hear them discuss the end of the partnership between Mailchimp and Shopify and what it means for Shopify retailers.
Episode Transcript — The Future of Email and Shopify With Ben Jabbawy of Privy
Narrator: You're listening to the Spend 10k A Day podcast brought to you by the performance marketing experts at MuteSix. This is your source for cutting edge insight into the world of online advertising. From the team with more Facebook case studies than any other agency on the planet. Here is your host, Steve Weiss
Steve Weiss: Hi everyone, welcome to another amazing episode today. The Spend 10k A Day podcast, today I have an awesome guest. Right from... coming in from Boston where the marathon is going on. It's Marathon Day in Boston, everyone's at home drinking their pints, taking a day off of work. Except one person, he's still in the office crushing the game. Ben welcome to the podcast man.
Ben Jabbawy: Thanks Steve. Pumped to be here.
Steve Weiss: So Ben runs a company called Privy, I'm sure everyone or most of our listeners, if they don't know already, they are going to know now. Privy's one of the top Shopify apps on the platform. You could tell... Ben tell us a little more about Privy in your words, and then we'll talk about the agenda for today which is talking a little more in-depth about the Shopify, MailChimp fiasco that's coming on.
Ben Jabbawy: Absolutely. For those aren't familiar with Privy, we're an on-site conversion tool that sits on top of your e-commerce store whether that's Shopify, BigCommerce, or whoever. What you'll do with Privy is design displays that sit on top of your site with multiple goals. It might be to capture more e-mails, reduce cart abandonment, design upsell models or anything like that. Today we're on over 100,000 e-commerce stores through a premium model.
Steve Weiss: Got it. Interesting. How did you get into, just out of curiosity real quick, how did you get into the industry of conversion rate optimization on Shopify? What did you do before this to actually inspire to build such an amazing tool?
Ben Jabbawy: I grew up in a family with two small business owners. I was the technical one in the house. Being an engineer from my dad for his business, my mom for her business would say, "Hey, build us a website, what's e-mail marketing? What's Facebook ads, Google ads, etc.?" I found that as I was starting to do some of these things repetitively for them, and some other small clients that I had. I found that one of the biggest challenges was that each of the businesses, and my parents that I was working with, recognized that e-mail was the biggest ROI driving channel for them. Yet they had an incredibly hard time growing their e-mail list. That was kind of the moment where I realized, man, like, there's got to be something that adds sophistication, in terms of the way that you try to grow your list. That was the real kind of beginning idea behind Privy.
Ben Jabbawy: It took us a while, we were working with different businesses in different industries, mostly small retail businesses. Then one of those happened to sell online on top of Shopify, that was kind of the moment where we realized e-commerce specifically is devoting so much energy to e-mail as a channel, and that's really where we should focus our attention.
Steve Weiss: The quote unquote aha moment.
Steve Weiss: Aha. Interesting man. Remember we first met, where were we man. I think it was in Boston, it was at the Klayviyo Conference, I remember, from being an agency owner, someone who is really deeply involved in the Shopify ecosystem. I just kept hearing everyone talking about Privy. I didn't really know exactly... I don't know everything, let me just say that. I don't know all cool Shopify apps, I try my best, but people get surprised if I tell them even though I'm CEO of a company I don't know everything. I didn't know about Privy, and I didn't know exactly the capabilities. But I remember when you were telling me about the vision...we were walking; if you remember, we were walking across that long, I guess it was a little drawbridge near the Boston Harbor. I remember you were just telling me, I was like "Wow, that's really interesting man". I guess I was really impressed, I was like damn you just had this idea, and you just executed.
Steve Weiss: Now we're at a really interesting junction, because I think what we're talking, we're at the Klayviyo Conference, we're talking about Shopify, Klayviyo's there and MailChimp guys were there, remember. All the partners were there. It was like a fraternity, everyone was there. The cool kids were out, and now all of a sudden two of the big brothers are fighting. They're not happy with each other. It's like the Klayviyos, or should I say the MailChimps and the Shopifys, they're not getting along now. It's really interesting just how the ecosystem changes when there's a disagreement between two parties.
Steve Weiss: What's your take on number one, why this came about? Obviously I'm thinking MailChimp is going down market, they're getting in with Squarespace. Shopify wants to control the, obviously, purchasing experience, get the data back. In your own experiences, why did this happen one, and what impact does this have on the overall ecosystem?
Ben Jabbawy: Yeah. I think there's a long, long history that, obviously came through as a fight around MailChimp launching shoppable landing pages powered by Square. And Shopify kicking MailChimp out a couple weeks ago. But I think, if you take a step back and think about the Shopify ecosystem as a whole, app developers like Privy, for years have had to kind of adhere to Shopify's terms of service.
Ben Jabbawy: My take is that that includes a couple things. The way that handle data. The way that we work and refer business to Shopify, and also the way that we pay revenue share for downloads from the Shopify app store. Now, no one's really confirmed this with me, but one thing that I'm almost positive on is that MailChimp, for years, because they're MailChimp, has never paid Shopify's revenue share as part of the partner program. So, if you think about all these different things colliding, you got MailChimp launching shoppable landing pages. And even though they're never going to build a Shopify competitor, that's a bit of a threat to Shopify. For years them not ever paying rev share, I think in the increasing frustration with folks at Shopify about all of those things, just kind of lead to this being the right time, for both MailChimp and Shopify to say, "You know what, we've never been amazing partners, let's just part ways."
Steve Weiss: We're not paying you. You know, you guys really don't like us. I've never once heard a Shopify partner refer MailChimp. Yeah, you guys should go to, MailChimp is your solution. It's always been like Klayviyo, Klayviyo, Klayviyo. That's been the partner of choice for every Shopify person I talk to at Shopify. But, yeah, it's really interesting.
Ben Jabbawy: Yeah, yeah, and look I think what's super interesting is there's a handful of companies that have really grown up inside of the Shopify ecosystem. Privy's one of them. Klayviyo's one of them, right. So, from day one, companies like us have kind of done things based on market demand within Shopify. So, if we have a lot Shopify customers, merchants asking us to sync contacts over to Shopify, we're going to build that, right? Or if there's opportunity to kind of get more market share within Shopify by doing things a little bit differently, when Shopify reaches out, you're going to do that, and I think that's something that companies like MailChimp or other big marketing automation companies like HubSpot, just really will never do, just because they've already grown up outside of Shopify, so they do business the way that they want to do business, not the way that Shopify wants to do business.
Steve Weiss: Interesting, what do you think.. How does this effect the ecosystem, I guess my bigger question is: Is this kind of just this one-off spat of "you're not a good partner, this isn't a fit, let's move on, just both parties move on." Ir, is this a fact that Shopify Is looking at this from a competitive revenue model vantage point? Did they say, "Listen, we need...We're publicly traded now, we have to hit certain revenue calls, our stock." Did they look into new avenues? "We need to be doing email, and we need to be doing this?" just because there's so much revenue being left on the table and, with that, how does that affect...Is that the mindset they're going after, and if it is, how does that affect all the other players in the ecosystem? If you know what I mean, I talked to O'Shein from Recharge, he's one of my close friends, and he's got an amazing platform as you know, and I asked him, I was like, "Hey man, do you think that Shopify would ever get into subscription billing?"
Steve Weiss: I'm always curious about that because I think that what makes Shopify magical is that they brought all these amazing people and talented people together, you know?
Ben Jabbawy: Yeah, so, I think there's a lot there, but what I would say is, you're right. Shopify, I think they did a billion dollars this year, they're now valued in the public markets at 24 billion, and they need to take big swings that will drive a lot of revenue, I think one of those things is driving more revenue through their stores. The GMB number, right, so you'll see a focus on Shopify Plus for sure. I think the other thing is, what service does every commerce business need?
Steve Weiss: E-mail.
Ben Jabbawy: Exactly. So, I think no one at Shopify will admit this, but I have a sneaking suspicion that Shopify will roll out e-mail this year.
Steve Weiss: They have to! I mean, it's... Ben, they have to, it's just money on the table, it's the biggest no brainer of no brainers, if we're going to speculate on it, obviously they don't want to announce that, they...it's just...so no brainer, you know?
Ben Jabbawy: Yeah, I know, but I think, to a lot of the e-mail companies out there that may be scary, but I also think them pushing MailChimp out, or MailChimp quitting, whatever you want to call it, it's going to do a couple things. So, even if Shopify rolls out an e-mail program, I think what you've already started to see is Shopify working more closely with the other existing e-mail vendors inside the Shopify ecosystem and app store that are playing by the rules, and I think that they're gonna be a bit agnostic, and really partner and push those email providers to merchants because, again, they're getting the rev share kickback for that.
Ben Jabbawy: So, you know, whatever Shopify rolls out on the email side, my gut tells me it's gonna be the most basic email solution out there for the majority of Shopify merchants that do less than five orders a month. And that's fantastic, but they'll also need to partner with all the other email marketing vendors out there and really push them, because today, or come May 12th, when the MailChimp app actually does not work, there's close to 300,000 active Shopify merchants that use MailChimp. That's a ton of business that's about to hit all the email marketing solutions inside of Shopify, so I think every single email vendor in the space is going to get a really nice tail wind this year.
Steve Weiss: It begs a question, though, and I think as entrepreneurs, me and you are thinking about operationally becoming operationally profitable today, and what are we doing to operate our business, we're operators. But then again, on the other side you have investors and you have people that are more future looking. Especially when you're talking about M&A and opportunities that come to the e-commerce space, if Shopify does get into email, I don't know how that relationship is very positive with other email providers, Shopify going to market is saying "we're going to work closer with other emailers, while at the same time building our own" sounds like the old Facebook marketing developer program where someone will come out with a really cool feature, then Facebook will copy it.
Steve Weiss: That's kind of what it sounds like, and I feel like it's this love hate relationship where the Clavias of the world, they've gotten a lot of trust, there's a lot of trust back and forth over the years, they come up together in a lot of ways, but how do you retain that trust if you do come out of the email program. What's to say they're not gonna go after other revenue, I mean they come out of the email program, what's to say they're not going to look at other areas of the ecosystem and say, "Hey, we could build that too and make X amount of cash on the table." You know?
Ben Jabbawy: Yeah, no, I think that they probably will, and I think, I don't know if you're heading out to Unite, the Shopify partner conference in June, but I think a lot of people are on edge to see how they react on this MailChimp thing. Because, yeah, it wouldn't be the greatest look, but at the same time business is business, and if their merchants are asking them for basic versions of email, or basic versions of subscription bulling, then as entrepreneurs in that ecosystem, you have to be prepared for a world where that happens. It's not the greatest look, but the way that I think about this market is, e-commerce is still in its earliest of days, right, and I don't know how closely you follow the B2B world?
Steve Weiss: I do.
Ben Jabbawy: You saw on top of Salesforce where sales force was, call it 10 years ago, booming, and it still is, but you had Exact Target, you had HubSpot, Marketo, Pardot, Eloqua, all these marketing automation email companies, integrated with cell scores, and they decided to buy Exact Target and offer that to all their customers, and what ended up happening was, even though Salesforce had their own email marketing solution, each of those other companies still went on to build hundred million dollar, billion dollar companies. I actually think that ultimately if Shopify does roll something out and it is that most basic email functionality, it's just going to educate merchants around what they need on day zero, but as they grow up they're still going to need more sophisticated solutions, and I think it's just gonna bring more educated merchants to the table for all the other email vendors that are ready.
Steve Weiss: Yeah, I agree with that, actually. What I'm thinking about, we have a CRM department and we're always trying to be very unbiased in terms of who we recommend, obviously there's Clavia, there's Bronto, there's Listrak, there's a whole plethora of people in that space, and I think that that should be the...email should always be the best performing marketing channel. We advise our clients to really understand their revenue per user, their revenue per email that you're generating, this is really interesting data because the cost per sending out email is not going up at the rate that the cost to reach someone on Facebook or Google is coming up, so if you're really good at the CRM and you really understand how to build flows and how to really build, split test your automations, then you can really have a big win.
Steve Weiss: But getting back to Shopify, in-housing email versus non in-housing, do you find it kind of ironic, I used the word irony here, Ben, because I think everything is kind of ironic, this Shopify MailChimp thing happens and back in the little bit of news that no one hears is, "oh look at that, Clavia just raised 150 billion dollars. Oh, some of your partners puts 150 million in or so in to Clavia" I just thought in business the irony of stuff is very interesting to me you know?
Ben Jabbawy: Oh yeah, oh yeah, amazing, amazing, and honestly I think it's... even the fundraise from Clavia, it's such a good thing for the ecosystem, I think there's gonna be a ton of investment coming into the Shopify app ecosystem, I think Clavia was one of the first break outs for sure, but there's a ton of other companies out there that are going to raise money, there will be some M&A, I saw that pixel union just got bought out by a hybrid PEVC perm that wants to buy more Shopify partners. There's just so much growth inside this ecosystem and it's barely scratched the surface still.
Steve Weiss: Couldn't agree more man, and, I love chatting people with you, people like O'Shein, you guys are a lot smarter than me when it comes to the Shopify ecosystem, and I learn, just because I want to go back to my team and my clients and share intelligent thoughts on what's going on, because I get these questions asked a lot, and the reason why specifically that I reached out to you and had this idea for this podcast was because I feel like our listeners are also actively trying to understand how this impacts their business, and whenever there's something that goes on I think it's really compelling to talk about it, and everyone has a different view on it. I really appreciate you taking the time out, I know you're a busy guy and I just wanted to say that.
Ben Jabbawy: Absolutely, and actually, if there are merchants listening, just so everyone's fully up to speed, the key things to remember in just a couple bullets are, the MailChimp app for Shopify will no longer work as of May 12th. That means your integration with MailChimp is gonna go from automatic to very, very manual. So you basically have two options, you would need to add a automation vendor like Zapier or ShopSync, which add costs so you can continue syncing from Shopify to MailChimp, or you're going to need to look for a new email vendor within Shopify, and if you just head to the Shopify app store they have a nice email marketing category to check out the right solutions for you.
Steve Weiss: Yep, and if you need any email capture or audience conversion optimization, there's a really good app that I keep forgetting the name of it. What is that name again? I keep forgetting it it's...
Ben Jabbawy: Yeah, head over to the app store and look for Privy, I think we're one of the top apps with over 100,000 merchants. P-R-I-V-Y.
Steve Weiss: Oh V-Y, one V. P-R-I-V-Y, okay, cool. Before we wrap things up, man, I think we hit a lot of topics today, is there anything else you want to share with the audience, or do you think we're home free?
Ben Jabbawy: No, it was great, it's great to catch up, Steve, and thanks for having me on.
Steve Weiss: Yep, definitely appreciate you coming on, and awesome podcast. Cool.
Steve Weiss: All right guys, that's it, another great episode of the Spend 10k A Day podcast, keep following up with us for more updates on everything Shopify. Thanks, and talk soon.