The Great Releveling
The biggest announcement this week in commerce wasn’t what was said at Shopify Unite—it’s what was unsaid. Two big moves have bigger implications on the industry and the future of eCom than they do for their intended audiences.
Let’s break them down.
#1: Shopify removes App developer revshare
In case you missed it, Shopify gave their app developers a 20% raise this week by removing the revshare they have charged up to $1M in revenue, per year.
While luring new developers to its platform, Shopify has also created a new market dynamic with the other providers in the ecosystem. To remain competitive, Adobe, BigCommerce, and Salesforce will no doubt follow suit. App developers got a 20% raise, and Shopify’s competitors will take a 20% haircut. This is the Great Releveling, and competition will create ever-greater downward pressure until this approaches the $0 asymptote.
The subtext, though, is more concerning. In Insiders #081, I expanded on the erosive effects of platform ecosystems: “all platforms eventually compete with their third-party partners with first-party features.” Shopify will subsidize its product development roadmap by allowing the market to decide what it wants. Shopify’s recent foray into subscriptions and its partnership with Affirm validate this trend.
What’s more, opening up the floodgates will no doubt create a surge of middling apps. Curation will become more difficult, and in the end, the quality of the marketplace of apps itself may degrade.
In the end, more isn’t necessarily better, and that’s why Grandpappy Apple (GrandpAppy?) stopped accepting calculator apps in its own app store in 2014.
Validating Headless Commerce
Shopify’s biggest product announcements at the event were the unspoken ones. While they have officially made available their new Online Store 2.0 (their evolution of their templating language, Liquid) and Hydrogen (their experimental headless solution), they also have indirectly validated a growing number of headless frontend solutions.
One such solution, Shogun, announced a $67.5M Series C on the same day as Unite. Chord, formerly Arfa, raised an $18 Series A (we had Henry Davis on the podcast to talk about it).
It’s quite the about-face from Shopify CEO Tobi Lütke, who when prompted during the Q1 2020 earnings call said of headless as “near the bottom of industry buzz terms we've ever invented… Shopify has been shipping [headless APIs] out of the box since 2008.” He further explained there have been a lot of “failed experiments” with headless.
I tend to agree. Headless is an implementation detail. But that doesn’t mean buyers aren’t asking for it. Marketing campaigns often create demand for products that are ill-aligned to customer needs. Who actually needed a Hemi engine in their Chrysler 300? Nobody.
I’ve long admired Tobi for taking this stance. But the about-face recognizes that — despite Shopify’s insistence on it being a capable no-code entrepreneurial enabler — developers can manifest industry demand for a technology based on the promise of speed and performance. And speed often equals dollars.
If you want a longform discussion on the topic, and on why Brian Lange hates the multiverse, then check out this week’s podcast over here on Spotify.
No more picking your nose out-of-frame. The UltraSharp 4K keeps the user in frame using AI. This tattle-tale device will follow you around the room and show that you’re drinking beer at noon on a Tuesday (despite not being Sheryl Crow).
Trusted Tweets. We may not get to watch celebrities and billionaires duke it out online anymore. Twitter is considering offering limited tweets for specific, trusted audiences as one of its possible new features, paving the way for a Patreonesque model for paid subscribers.
At least we still have Nihilist Arby’s and the Shopify brand account for our daily dose of ungated snark.
Altruism or Capitalism? Timberland is the latest apparel company to take back its own clothes in order to recycle or resell them. The program will accept used items and recycle or refurbish them in order to have a “net positive impact on nature.”
We have mixed feelings, though. We love nature, but are these companies being entirely altruistic? They are basically just getting to sell their own apparel twice.
[autotune]Welcome to Moeeeeeee’s[/autotune]. The fast casual dining establishment is partnering up with the rapper to promote the Frank’s RedHot® Buffalo Queso Taco on social media. T-pain isn’t just gonna buy you a drank, he’s gonna get the queso on the side, too.
CEO pettiness knows no bounds. Jeff Bezos’ last day at Amazon is July 5th, and his last day on Earth is July 20th, as he flies aboard a Blue Origin rocket to space. The flight will include the oldest person to fly into space — 82-year-old female aviation pioneer, Wally Funk — who was passed over by NASA in the 1960’s, in favor of an all-male corps.
Not to be outdone, Billionaire Richard Branson will be flying into space 9 days before Bezos to prove once and for all who is the most spaciest.