The CEO tapped to float one of the world's best-known e-commerce platform providers works to a simple formula: Find a powerful story and deliver on it.
Brent Bellm says gaining and keeping investor confidence is all about the quality of your story. Now the chief executive of e-commerce platform provider Bigcommerce is poised to tell a new story as he prepares his company for a US public listing. It’s sure to be quite a yarn, because Bellm is an expert in the art of investor confidence.
Bellm doesn’t aim to be in the fiction business, though. He is also a believer in making sure your story matches your reality. So another part of his task is to drive Bigcommerce through real change. Here, Bellm has a trusted two-part strategy for success: know your customers’ needs before they do, and offer them something different that you think they’ll love.
Bigcommerce has always been able to win fans. Mitchell Harper and Eddie Machaalani founded it in Sydney in 2009 to help small-to-medium enterprises (SMEs) sell goods and services online. Today, the fast-growing technology company serves more than 80,000 SMEs and has offices in Sydney, San Francisco and Austin, Texas, where Bellm is based.
Since joining in June 2015, Bellm has been reshaping Bigcommerce; its story now is that it can win in the bigger end of the market.
An eye for retail
Bellm joined Bigcommerce because he believed he was in a unique position to help.
“That’s part of what it takes,” he says. “You’ve got to believe that there’s something about your background and experience that won’t just be successful there, but will be more successful than anybody else occupying that role. Otherwise, go and do something else where you’ll have more impact.”
If Bellm sounds confident it’s because his achievements can back it up. The former McKinsey & Company consultant has worked in retail and e-commerce for 15 years, leading holiday rental website HomeAway through a US$3 billion NASDAQ IPO in 2011, despite disruptive competition from Airbnb. HomeAway was acquired by travel company Expedia in November last year for US$3.9 billion.
“The story has to remain credible and then, over time, the results have to back up what you said you would do."
A decade before joining HomeAway, Bellm headed corporate strategy at eBay, co-leading the US$1.5 billion acquisition of PayPal. He went on to guide the post-acquisition strategy that he says helped grow the online payments company from a US$236 million business to the giant it is today. When it split from eBay in 2015, PayPal was valued at US$50.8 billion, while its former parent company’s worth had shrunk to about US$34 billion.
“All of [PayPal’s] growth has fundamentally come from the strategy we put in place in the first couple of months I got there,” says Bellm.
“I think most people inside the company would agree with that statement.”
Strategy for success
Bellm’s strategy always starts with the customer. His first move at PayPal was to improve the offering for merchants outside of eBay. He then developed a strategy for international expansion, later becoming the founding CEO of PayPal Europe. Next up was the creation of new products, such as PayPal Express Checkout, which gives buyers another way to pay, and an all-in-one payments solution called PayPal Payments Pro.
“Those things now power at least 70 per cent of PayPal’s gross payments volume,” says Bellm.
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“I think it was one of the more successful strategies of that internet era.”
Within months of joining HomeAway in 2010, Bellm had again developed a strategy that he believed his customers would embrace. He created a global network from what had previously been an amalgamation of independently run international holiday websites, including Stayz in Australia and Bookabach in New Zealand. He then mapped out a logical and consistent pricing structure, introduced e-commerce to the offering and developed ways to improve the user experience.
“The same four points of the strategy that we agreed on in 2010 were the story for the IPO in 2011,” explains Bellm.
“Having that clear story about who is your target customer and what is your compelling plan to serve them better and grow the company – that’s about winning investor confidence. You also have to paint the story that says it’s a large market with growing opportunities and you’ve got an offering that can be better for the market than your competitors.”
Maintaining that investor confidence comes down to the delivery of results, and Bellm says you mustn’t sway from your storyline. “The story has to remain credible and then, over time, the results have to back up what you said you would do,” he says.
“If you keep doing that, the investors will be rewarded and that’s what they want.”
Winning the mid-sized market
A highlight of the Bigcommerce story is set to be an IPO in 2016, although Bellm declined to share details at the time of our INTHEBLACK interview. What is certain is that his appointment represented a big change for Bigcommerce. Machaalani stepped aside as CEO to join Harper on the board and Bellm began creating a story to capture the attention of the mid-sized online retail market.
As it heads towards a listing, Bigcommerce’s new focus will be on this mid-sized market and on smaller businesses that want to grow.
“That’s where the big opportunities are,” says Bellm, “because that revolutionary cloud-based leader position has not yet been claimed. We’re claiming it, and we’ve got to earn everybody’s recognition of it.”
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Mid-sized companies have traditionally installed big software packages on their own servers or even built solutions from scratch. Bellm predicts that those days are numbered.
“I think that the installed software model in the mid-market is going to go the way of the dodo in the same way it did in the low end of the market,” he says.
“It’s just waiting for the company that has the feature sets and the capabilities to rival the really complex mid-market packaged software.”
Bellm believes the Bigcommerce offering is a superior solution to installed software for 40 to 60 per cent of mid-market merchants. His goal is to lift the figure to 80 per cent.
“We have built a strategy here at Bigcommerce around exceptional differentiation in the things that matter most to mid-market merchants,” he says.
In pursuit of larger customers, Bigcommerce recently acquired mobile point-of-sale technology company Zing to help expand its retail channels. It has attracted large brands, such as Samsung and Cetaphil, since the launch of its high-volume retailer platform Bigcommerce Enterprise.
“Now it’s about executing all the related functions and operations to support it,” says Bellm.
Rather than walking away from the small end of the market, Bigcommerce is positioning itself to appeal to the more ambitious merchants.
“We used to say ‘start your beautiful online store today’. There are now lots of companies that can say that,” says Bellm, “but nobody else can say what we are going to say to those starter merchants, which is ‘this platform will help you scale your business faster and more successfully than any other’.”
As he continues to shape the story of Bigcommerce, Bellm is setting high standards for every character.
“I have zero tolerance for ignoring or admiring problems and opportunities,” he states.
“My expectation is that every single person in the company is a leader. The belief that we can overcome anything empowers people and breeds optimism rather than cynicism.”
Will the Bigcommerce story be a best seller? Much of this depends on Bellm’s strategy, and he’s determined that the narrative will be clear.
“As long as you’ve got the direction and the explanation right, people are going to buy it,” he says. “There’s been no sign of dissension in the [Bigcommerce] ranks, even though we have refocused and shifted the strategy. Everybody is on board. Everybody knows where we’re going.
5 questions you need to ask as you head to your IPO
Brent Bellm knows how to steer a company through an initial public offering. Among his key questions:
1. What is your company story?
You must have a compelling story to tell your investors.
"The IPO process is fundamentally about convincing prospective public sector investors that your company has a long-range growth story that merits their investment in you so they'll get a good return," explains Bellm.
Sticking to your story will help maintain the confidence you have earned.
"The less you have to adjust your story, the better you got it originally."
2. Is your strategy watertight?
Bellms says an IPO is a reflection of both past performance and future opportunity.
"Past performance is done. It's the future where companies trip themselves up if they don't have their strategy and execution nailed and then perform to expectation,” he says.
“If you don’t have clarity around your strategy and execution, then there’s a very high likelihood that either your strategy will need to change over time…or you’re going to financially underperform.”
3. What do your customers really want?
Bellm says customer growth is key to expansion.
“If you solve the customer’s problem first, you create a tonne of value, and that’s what leads to growth opportunities for the company,” he says.
“Don’t target company growth first; target customer growth first.”
4. What makes you different?
Bellm is a believer in the Net Promotor Score – an index used to measure the willingness of customers to recommend a company’s products or services to others.
“You have to have the functionality that [customers] want and the value that satisfies them,” he explains, “then you have to have one or more differentiators that blow them away and make them love you and rave about you.”
5. Is your company aligned?
If your story is to be believed, company operations must be working in harmony.
“It’s all about focusing on the market with the right product, the right value proposition, the right sales, the right marketing, the right partner, the right strategy,” says Bellm.
“All that needs to come together.”
This article is from the February issue of INTHEBLACK.