E-COMMERCE STAR
Vancouver’s Elastic Path Software is definitely not your standard online provider.
It is the biggest e-commerce company you’ve probably never heard of — unless you’re a worldwide company that needs to sell multiple goods through multiple channels and has highly complex vendor arrangements.
Vancouver’s Elastic Path Software is definitely not your standard online book- or movie-buying experience provider or venture capital star. However, through a series of planned inflection points, it has managed to corral a good piece of the market for bigbrand e-commerce platforms.
Started in 2000 by thenuniversity student Harry Chemko, Elastic Path has operated under the general public’s radar, largely because it provides complex e-commerce platforms to big companies instead of simple online-catalogue-style platforms with thousands of users — of which the most familiar is Amazon — employed by most companies involved in online selling.
Last year alone, the 150-employee company helped 200 customers including Google, Virgin Media, LVMH, Western Union and NetShoes generate US$6.5-billion in sales by using its technology.
It does so by allowing marketers to easily and seamlessly make changes to e-commerce sites rather than fight through a thicket of IT issues that previously meant even simple changes, like turning a red buy button to green, could take months to implement.
Mr. Chemko, now 35 and still Elastic Path CEO, explains it this way: “Technology environments today are inherently complex multi-vendor situations. We built a platform using an API [application programming interface]-centric approach that allows our own developers and third parties to take pieces of functionality and integrate them with other apps, such as placing a ‘buy’ button on to another site or network.”
In other words, Elastic Path’s cloud-based software allows enterprise marketers to have a deep, single, view of customers, make highly personalized offers, and have those offers automatically reflected in sales, accounting, customer service and logistics systems. Essentially, it puts the e-commerce system in the hands of marketers instead of IT departments, which have generally felt they have far better things to do than fuss with marketing needs.
The company has had several inflection points that have helped it grow. One came when it realized the giant IT platforms that were the most common providers of large technology platforms couldn’t handle e-commerce very easily. Another lift happened when it built the 2010 Vancouver Olympics e-commerce site, which allowed for multiple buying experiences and provided Elastic Path with huge exposure.
An important inflection point came when it switched to offering its software platform on a subscription basis, instead of as a one-time sale, which has been more typical in the technology sphere. Subscription systems generally mean up- dates and maintenance chores can be done by the provider, freeing up already harried IT departments to maintain their own technologies.
And the most recent came when it began using partners — primarily digital services companies and marketing companies — as its main marketing channel. This was, in fact, Elastic Path’s largest inflection point so far, says Mr. Chemko, because his company recognized that it can’t grow by doing everything itself.
“You need to create that ecosystem around you and partner with other companies. Last year we added 15 high-end interactive agencies,” he said. “Working with partners allows us to scale, and gives us a bigger reach globally. We co-sell with these channel partners and we have our sights set on becoming a partner centre. Most large brands like to work with partners, especially in Europe.”
The subscription system and larger reach have vaulted Elastic Path into a global ecommerce service company because the new systems enable the platform to be more cost effective for users. Even big companies have limited budgets.
As a result, Elastic Path’s services have bloomed. For example, compare its $6.5-billion processed last year to Ottawabased Shopify, which claims it booked $1.6-billion through its system during the same period.
However, while Shopify recently received $100-million in venture financing, Elastic Path’s — er — path has been more orderly, likely a result of its technique of combining continuing three-year strategies with regular inflection points that move the business forward.
For instance, in the past year, it attracted $17-million in funding, with another $5-million round announced just this month. But, because of its strategic approach, regular funding will follow as other inflection points appear.