56. Catch the Tornado with Michael Vax

Piotr Karwatka

Hello, everyone. Today, my guest is Michael Vax. Michael led the development of the E-commerce platform at Hybris and Spryker. And Elasticpath now helps customers upskill their teams in digital commerce and develop innovative roadmaps on the growth potential. I'm super excited to ask Michael, what he thinks about the architecture driven ecommerce. Is it just a stopover? We're gonna talk about what made Hybrid and Elasticpath so successful. And if the tech cycle repeats itself for today's contenders. Hello, Michael. I'm super happy you accepted my invitation.

Michael Vax

Hi, Peter. Happy to be here. I'm a big fan of your podcast.

Piotr Karwatka

That's great to hear. Maybe let's first start with your professional background and how you got into it. And the managerial roles of the platforms I mentioned in the intro.

Michael Vax 

I started as a developer, and was doing development for about 15 years. Again, different roles as a developer team lead, as an architect, developed a number of email systems in my life, including the source, web email, and this was kind of during the first internet craziness. So we had a web based email done before Hotmail hit the market for people old enough to remember.

Piotr Karwatka

So it was C, C++ and CGI, yes?

Michael Vax 

No, it actually was C++. And at the time, nothing was available. So we even needed to develop. I designed my own application server and was kind of parsing HTTP requests and things like, that's crazy. So this was kind of my development background. And then around this time, I also kind of realized that I have so many ideas I want to do so much. And for this, it's much better to have a team because you just move faster, and work with other smart people. And this is how I moved into the CTO role. Then VP of Development and work for a number of different companies doing a elearning system. And then I was invited to join Elasticpath as CTO. And that kind of was my entry into ecommerce, which was probably 15 years ago. And at the time, I said okay, there's nothing to do there like, there’s just a shopping cart. So since then it’s been quite an exciting journey in ecommerce, which never kind of amazed me how it's moving along. And you have all these interesting developments coming along all the time.

Piotr Karwatka

Absolutely. I'm wondering what kind of CTO were you? I mean, with 15 years of experience as a  professional software engineer. You are kind of, you know, hands on CTO of knowing each line of code or more resting on the people's opinion, like, how was it?

Michael Vax   

Just how it started? Yeah, like me writing a lot of code and getting into this and to future discussion, and all of that. So I was quite active in development. But then I got more excited about the product side, what actually you can achieve with business software, you develop, and then it kind of moved me more to the business to the customer requirements to understand the cause of the market. I'm still relatively technical, but I don't do it kind of I don't have I'm not hands on. And I respect software developers enough to understand that if you're not doing this every day, with your hands and your brain, then yes, technically you can maintain intelligent discussions with architects. But you probably should let other people do more technical stuff.

Piotr Karwatka

Absolutely. As you said, the ecommerce is super exciting, and it's changing a lot. And you spend more than 10 years, being chief product at hybrid Elasticpath than Spryker. Can you say more about it? If you compare those experiences, one to another, the platforms one to another? What's your conclusion in this perspective of 10 years, you know, building this kind of software?

Michael Vax  

Yeah, I see. That's the question. I spent a little time thinking about this. So especially when it comes in the context of our Elasticpath, and Hybris. It's easy to compare them because they started around the same time. And companies were about the same size. For a while kind of typical kind of people. Even technology was the same. They use the same open source Java stack. And both companies can hire smart people and found other successful enterprise customers, for example, isolettes, the past, we've had Google Maps, Time Magazine and Symantec as our customers with the end Hybris was much more successful. Yeah, yeah. And I believe that this happened, because Hybris was really obsessed with product architecture and functionality. I discussed it with Hybris co-founder and other people. They were focusing on products, they were letting partner agencies to do services, and they were rebuilding the product, improving it all the time. Yeah. And this, from my perspective, was the main reason for the difference in the level of success they achieved. Right now Elasticpath since they found the new headless footing. And they have an opportunity to start to grow again. But they lost this opportunity to be as big as Hybris became.

Piotr Karwatka

So you mean, the reason was partially in the focus of the absolutely, that they lost the focus on product, trying to provide the clients with, let's say, end to end solutions, more or less, right? 

It's pretty much the same story I heard about Salesforce commercecloud and Intershop. Like Intershop, focused on the services and providing the customers with end to end solutions. Also focusing on the short term revenues, growth, and no other points and Salesforce commerce cloud, like born out of this concept, ideas, and base was super focused only on product and Software as a Service distribution model. So this kind of situation happens all over. And yeah, that's, that's, that's a good point.

Michael Vax

Yes. I think there's a lot of value in working closely with customers and learning from them. That's the focus. Yeah, we all would agree, but one of the things that you cannot allow us to do is to build features only for one particular customer. Yeah, some startups need to do it because again, they just need to survive. But as we're telling my product managers that a year from now, the only explanation you can give me why this feature was built this way is that it was done for this customer, then you have not done your job as product manager. 

Piotr Karwatka

So, in other words, can I say something like this, if you lost this focus on the product and focus on the customer needs which are usually short/mid term right? The projects last for like money or maybe something like this, you are just the coupling from the market and the needs and how the market changes. So the next question is how you saw the ecommerce software market change over the years and what changed and what is making the ecommerce software products successful. Back then back in the day, when you were on Elastic Path, and over the time and right now how it's evolved.

Michael Vax  

You can see different important trends going on so one is digital commerce and I call it digital commerce because it's a much broader term. Basically, ever since this transactional and dance of digital means we now call digital commerce, it's really broadened in ways that different types of businesses are implementing digital solutions. Those that you wouldn't probably consider the kind of ecommerce, I have very

Piotr Karwatka

You mean it's more broader than just retailers, or just Yes, typical b2b Right wholesalers

Michael Vax  

was a really great experience at Hybris, where we implemented solutions for financial industries. And it's opened my eyes to implement that solution for telco. The internet isn't the best solution for financial industries, for media businesses, for the travel industry, even for the government. And so you probably won't, they won't consider themselves to be ecommerce businesses. But as soon as I have products, they put them in the catalog, they list them online, and they sell them this product or service or combination. So this is sourcing this really is many more businesses, our E industries are getting into digital commerce, and now just been accelerated, by pandemic even saw. And the other thing I see is that we need to solve more complex use cases. And this is natural because as people are experimenting and successful with digital commerce, they want to automate more, they want to improve the customer experience, which immediately comes with this complexity. So ecommerce vendors should be able to meet this demand and develop solutions. For all these use cases. Gotcha. One

Piotr Karwatka

of the use cases probably is kind of a marketplace getting more and more popular. And I know that you were heading this, this line at Spryker. Can you say more about this, this product and what challenges you had implementing it? 

Michael Vax  

Absolutely. I was fascinated by the marketplace model since Apple has released the AppStore. It looks like a really kind of neat idea. Have other people add value to your platform by developing apps so you can sell more iPhones. So this idea of adding, other people adding more value to your business, is an essence of the marketplace. Really. Yeah, I even built a prototype class before I left but unfortunately didn't go further. But that's the developing solution. Spryker brings even more accessible business opportunities brought by marketplaces, as a lot of excitement in the industry about digital marketplaces, businesses are selling concert party marketplace and are changing their business model to become marketplace. We have classic and enterprise marketplace, some of them selling products. I'm also selling services to consumer businesses, consumer to consumer. And so also a bit of confusion. What's a marketplace, am I talking about selling on a marketplace or becoming a marketplace? So I recently published an iconographic Digital Marketplace Explained. That kind of helps to clarify all these things. But the main difference to understand is between classic marketplace and enterprise marketplace. Classic marketplace is simple. If all these kinds of consumers are familiar with your marketplace operator, you bring buyers and sellers together and you make money through commissions and some additional services. Yeah. Enterprise Marketplace is a term introduced by Gartner that actually has more potential and is more interesting. It's basically saying, Okay, I'm a business. I already have my digital commerce infrastructure, or invested into my own shop is B2C or B2B. And now I want to open it to other people. Yeah, yeah. And this really has a lot of potential. Because there's a lot of different types of businesses who can benefit from it. And we at Spryker have a lot of customers and prospects from all types of different businesses industries, like, for example, the obvious one will be the retail area. But they are also our companies, like manufacturers. Because they put this infrastructure and they, they can go directly to consumers, they can go provide infrastructure for the distributors, distributors, or other good industry or type of businesses that benefit from marketplace, because they can provide more, provide additional services, they also can provide digital infrastructure for the buyers, and make also party products. So there's all sorts of potential there.

Piotr Karwatka

There's a lot of potential and they can even act in many different roles, as you said, like, I mean, this manufacturer can be positioned over marketplace and do drop shipping if they have a commercial operations for some distributor, or they can have their own shop, but they are just manufacturers, so they probably need to add some offer from others guys. So having a marketplace is also a great option for those folks. Okay, Michael, what do you think about this architecture driven versus Feature Driven? And the headless? You know, it makes the software vendors build way more generalistic solutions, having less features. But let's say better architecture or different architecture? Do you think it's a trend that will stay with us for a longer period of time or this is just a stop over when the architecture is going to evolve, they will be back to adding more features and verticals?

Michael Vax  

First of all, I really welcome the trend, because I think solid architecture is the best base for a new product's success. Yeah, you cannot build a long term solution on a shaky foundation. So this is a must. So I really welcome customers doing this.

Piotr Karwatka 

But Michael, those platforms, I mean, Hybris, Elastic Path, also had really cool architecture hasn't, I think that they absolutely will. But now it's just changed because the technology evolved? Yes,

Michael Vax  

definitely. True technology evolves. And even the main principles of what people expect from technology or from systems evolve. When Hybris was very successful, everybody expected this big suit that had everything in it. That was what the customer wanted. Yeah. And, of course, there are pros and cons to having it. So I think now, this trend of composable architecture, and API driven is absolutely the right trend. Having said so, I don't think they can get away from adding features. And the reason is that enterprise customers, and as soon as they kind of go beyond the early adopters, will talk to the customers, they don't want to accept long and costly implementations. And it means that you cannot just build a required feature during project implementation. People won’t accept it. So that is something that needs to be done. So some balance needs to be found to build this feature, of course, in a solid and meaningful architectural way. Yeah, so they are replaceable, they have API source and all of that, but you still need to build it. Like I'm a big fan of what you guys don't deserve Vue Storefront. But we already had a customer who had complex requirements and they implemented this one solution and also suddenly found they had several hundred days of developments not accounted for because some features they assumed also probably existed in the front end were not there. So for me, it's saying that you need to do both. But the worst scenario is to start doing features before you have good architecture.

(...)