Sramana Mitra: Not all of e-commerce has the mobile characteristic. For example, if I want to do fashion shopping, I am absolutely not interested in doing it on my mobile. I want it on my cinema display. I want to have as much information as possible.
Fashion is a gigantic category and I think it will produce a lot of online brands in due course. There’re actually people in London who are thinking that they want to be the online fashion capital of the world. People in New York and San Francisco are thinking the same. There’re a lot of people wanting to take a claim to that.
What are the drivers of mobile e-commerce? What category are you seeing that are particularly interesting for mobile?
Tod Francis: I may surprise you by taking on fashion. Think about not only how you want to see it, but when you’re able to see it. Mobile will affect fashion because fashion and shopping is often entertainment. What do you do when you have downtime? You want to be entertained or distracted and mobile will have a big impact.
We actually have real data on this. We’re in a company where women can sell clothes out of their own closets into a marketplace. When we launched the new mobile platform, it just took over the web dramatically.
The mobile experience is, by far, the most productive experience. Why is that? That’s because people are on their mobile when they have time off. Based on that experience taking on fashion, I agree with you. I think everything goes mobile. It’s hard to imagine things not going mobile especially if you consider an iPad or these larger phones.
I actually think entrepreneurs should look at a business and say, “How can I bring mobile and bring a better and improved experience versus anyone else?” I think it will change absolutely every category and the web will, in the longer-term, turn out to be more of a research site. More harder core research experience and mobile is going to be where you’re doing stuff.
Sramana Mitra: The point that you made about the phone becoming larger is actually the real driver. That makes visual merchandising viable because in these tiny phones, visual merchandising is not very compelling. In the larger phones with a better display quality, visual merchandising is viable.
Tod Francis: On the same business, they’re selling thousand dollar handbags with mobile flips because people are like, “This is Prada. This is beautiful. There’s another piece. I better get it now. It might not be there when I get home.” That’s the other value of mobile which is buy now. I think it is going to affect all the categories. I’ve really come around on this over the years. This is where we’re going to be transacting.
Sramana Mitra: I want to ask you to give advice to our audience on where are some opportunities to look at. If you can provide more concrete pointers, that would be great.
Tod Francis: I’m going to take the approach of look around you for the opportunity. What I mean by that is it’s probably something you’re already familiar with because if you’re going to win in a consumer business, you need to have a passion and any knowledge base in that category that’s better and deeper than anybody else. Maybe not like classroom better but you have an instinct on how it can be improved.
I know people who started bicycle companies and are doing really well. It’s not venture-backed, but it’s a really good business. This is an unusual example. They realized a lot of people needed them. My point is find something that you see a gap in and something where you believe can be improved and then start to do. Don’t sit around waiting for the right time and lots of different business plans.
You should start selling products and learning from your customer. It’s through that iterative cycle that you’re going to learn if there is a need there or not. You have to be patient because these companies take time. There are very few overnight successes in consumer businesses. They’re usually about 5 years or 10 years older than you think.
Have patience. Find a category. Make sure there’s a business model in there. Make sure there’s a margin in the transaction, so if you get a high volume, you’ve got a good business. If you secure the trust of the customer, there are opportunities to go to other places with them. What’s the purchase cycle in that category? So you start to think about that when you look at businesses. Just do it and learn.
Sramana Mitra: Thank you for being with us Tod. It’s a pleasure having you.