Marc Schillaci - Oxatis Founder and CEO

Performance Logistics: The Mystery of Late Delivery Revealed!

Ok, so now we finally know why certain packages don't make it to their destination on time...warehouse employees would rather film the never-ending acrobats of a cardboard box than send it on down the line :-)

The Future of E-Commerce: European Commission Consults the Public

This month, the European Commission launched a public consultation on the future of electronic commerce and the implementation of the Directive on electronic commerce (2000/31/CE).

The 77-question online survey is aimed at everyone touched by this sector: policy makers, businesses, retailers, service providers and the public. The goal is to get a better understanding as to why, 10 years after adopting the Electronic Commerce Directive to help promote cross-border trade, retail e-commerce still makes up less than 2% of European total retail trade.

Out-law published an article shedding some light on the subject for those of you who would like to participate. You have until October 15th to get your questionnaire in. You can fill it out here.

The result of this work will be taken into account in the Commission's deliberations with a view to the adoption in the first half of 2011 of a Communication of electronic commerce.

I highly recommend sharing your opinion, whatever it may be.

Is social media more beneficial for SMEs than large businesses?

Surprising study!

According to a Regus report that came out in mid-July studying 15,000 businesses worldwide, SMEs reap more benefits from social networking than big businesses do: 44% of SMEs acquired new customers through social networking versus 28% of large businesses.

Even though a lot of businesses have been dragging their feet when it comes to using social networking as one of their marketing channels, more than 700,000 SMEs now have at least a fan page on Facebook.

And the return on investment is such that 28% of SMEs are putting a certain percent of their marketing budget into social media.

Mark Dixon, Regus CEO states: "Our global survey has revealed that social networking has finally become an effective business tool, and SMEs are leading the way in this. Whilst the most popular function of these networks remains that of keeping in touch with contacts, small businesses are also successfully acquiring new customers, supporting their retention efforts and interacting with customer groups. This survey indicates that organisations who have not yet ventured into the world of social networking may be missing a sizeable business opportunity."

I couldn't have said it better, even if, empirically, I'm not sure that that these figures are proportionately accurate. 

Be that as it may, I still recommend that Oxatis customers, and SMEs in general, jump on the social media bandwagon, at least for a first round of observation.

Save the date! Oxatis E-Commerce Seminars Scheduled for September and October 2010 in Paris

It's summer and everything's moving in slow motion, including your schedule.
Here are two dates to remember because you just might still have some free time left in September and October! So why not hop over to Paris and mix a little business with pleasure!

• 21 September 2010, during the Salon E-Commerce Paris (September 21-23), Hervé Bourdon, our VP Marketing, will be holding a seminar entitled Social Commerce: A new dimension for new opportunities. You can also find us on Stand J1 for these 3 days.

You can register for this trade show here.

• 13 October 2010, I'll be participating in a conference during the Salon des Micro-Entreprises (October 13-15) dedicated to the theme: E-Commerce, Eldorado or Smoke and Mirrors?
  A few ideas to get those brain muscles in shape and get the constructive thought process flowing.
  I'll be joined by Christine Lorimy, Head of Marketing for La Poste - ColiPoste, by the Fevad and the debate will be lead by Corine Moriou, Senior Correspondent for the French magazine L'Entreprise.

To register and get your free pass, click here.

E-Commerce Academy Winners

Sorry for the wait...but as they say, better late than never!

This time around, the E-Commerce Academy awards were given out on July 2nd during our Journées Oxygène in Marseille, France.

This event brings together Oxatis clients, partners, solution centers and other e-commerce actors once a year under one roof to nurture their e-commerce activities and provide expert information to those seeking it out, all in a relaxed and fun atmosphere where everyone really has the chance to interact and exchange their points of view.

While this event is currently focused on our French market, we are slowly expanding it to include all of the different countries where we are currently present. And this year, we had our first ever Oxatis E-Commerce Partner from the UK in attendance!

So, if any of you are interested in attending next year or in entering your Oxatis site in the E-Commerce Academy, don't be shy...feel free to contact us or leave a comment below.

And without further ado, the 2010 E-Commerce Academy winners are:

• Master
  Jacques Bottemanne for bières du monde

• General
  Olivier Kaufman for terrasse- nature 

• ECP
  Nicolas Tant for Decklinea

• Newbie
  Nicolas de Watteville for e-claireur
  

• Women
  Tamara Tarassova for Altavic-bio

Congratulations to the winners! And thanks to everyone who participated.

 

Oxatis E-Commerce Academy Nominees - Jury Deliberation 24 June 2010

Once again, we had a heated meeting this year to choose the list of nominees for the E-Commerce Academy.

Here's a sneak peak at the nominees that came out of the jury deliberation last week.
An unexpected surprise: Two Italian applicants were nominated this time around.

See you this Friday night, 2 July, for the awards ceremony that will be held in Marseille during the Oxatis event - Journées Oxygène.

Good luck to all the nominees! 

• Master
  Pascal Gesan for alterafrica
  Marc Hauglustaine for aux meilleurs prix 
  Jacques Bottemanne for bières du monde

• General
  Alain Bierry for abp-piscines
  Ydriss Dessay for Cadodes 
  Olivier Kaufman for terrasse- nature 

• ECP
  Christophe Meurant for AchaTendance
  Olivier Baudewyn for Journaux originaux
  Nicolas Tant for Decklinea

• Newbie
  Nicolas de Watteville for e-claireur
  Arnaud Pfliger for climadreamshop
  Francesca Mistrangelo for ClickNails

• Women
  Tamara Tarassova for Altavic-bio
  Sylvia Grandperrin for Les Joyaux De La Couronne
  Angela Carpinelli for Mammabimbo

With professional participation from our jury members:

• Bertrand PINEAU
  FEVAD
• Martine FUXA
  E-Commerce Mag 
• Olivier LEVY
  Blog E-Commerce 
• Christophe LAUER
  Microsoft 
• Laurent BIZOT
  Oxatis 
• Luc LECHELLE investisseur
  ALP Capital 
• Catherine HEADLEY
  Ecole Supérieure de Gestion 
• Gimena DIAZ
  PayPal 
• Philippe STANO
  Graphical Dream

And a big thanks to Jacques Froissant and his team.

A Fund Raising Saga: What do you do with the funds once they're raised?

The saga about our second fund raising campaign is going to end today with a recurring question: "What are you going to do with the 4M€?"

Even if some of our colleagues teasingly suggest that we should buy out all the pizzerias in our surrounding area, (and others who have far more adventurous ideas that I don't dare mention here), we're going to use the 4M € differently.

1.    First and foremost to continue the industrialization of our model on 3 levels

• Style and Substance: Everyone concentrates on style, the site itself, the catalog and things like the "add to cart" button. They concentrate much less on substance.
  What's behind that style? How is my online business connected to the business world (banks, ERP, etc.)? How is it open to other technology? How is it open to other third parties (graphic artists, SEO experts, developers)? How do you optimize sales and average cart values? How do you get the client to come back? These are the real questions.
• Reliability: Of course, all e-commerce players claim to be reliable! But the reliability of an e-commerce platform is like the reliability of an airline carrier.  It's when problems pop up that you can be happy you chose the right company. Oxatis is exceptionally reliable (http://startandgo.oxatis.co.uk/OxMonitoring.asp), a reliability that has been measured for almost 10 years. And like a quality airline, that reliability is acquired through investment, material and  software architecture and especially through the quality of their staff and the procedures  put in place. When you have 100 or 200 merchants, you might think you can tell yourself that you can address the issue later when you have thousands of e-tailers. But this questions needs to be addressed every day, for every merchant.
• Price: The big question...What can you do so the price satisfies your client? There only two ways: 
  - Explain to them why they can't use a shared platform and why they need to pay a lot for a tailor-made solution. It's Oxatis' job to make our solution more efficient, open and customizable so that this argument can be used less and less (it's already hard to use it today, and we'll do everything we can so that it's impossible to use 95% of the time)
  - Assure them that they don't need to pay a lot and with a little work on their part they can achieve what their looking for. It can work. It's craftsmanship and what we did at Oxatis nearly 10 years ago in 2001/2002 when there were only 2 of us and we made up for our lack of industrialization with the 100 hours of work we put in every week.  But all of that has to come to an end. As soon as the team starts to grow, you can't explain to your colleagues that you have industrialized your business model by reverting back to the 19th century where everyone works 70 hours a week!  So, the more time passes, the more you need to do to really industrialize your business model to make your services affordable for the client, valuable for your employees and profitable for the company.  This is achieved through the industrialization and optimization of all business processes: R&D,  customer acquisition, sales, training, technical support, services, customer follow-up, etc…

2.    Become a European leader
Big project! In terms of reach, e-commerce is nothing like Facebook or Twitter. You can't just create a product and wait for people to come and use it.

Even if word of mouth is still big, there's no viral effect when adopting an e-commerce solution because for every company, heading toward e-commerce is a major, complex and thought out step. No entrepreneur worthy of  the name would try e-commerce out  "just to see how it goes". They choose a solution and count on it to see them through. 

And there is an enormous eco-system in e-commerce. Payment systems, marketing systems, logistics systems...but also business management and accounting systems as well, and I'm not just talking about 10 or 15 banks and a few price engines, I'm talking about thousands of resellers, business accounts software manufacturers, etc. that need to be educated, connected, trained…

So, with the ambition to become a European leader, Oxatis can't simply translate its tool into 3 or 4 languages and offer it "as is". We need to establish ourselves in each market,  work on each markets month after month, get them to accept us, etc. Simply put, "act global, think local".

And vice versa, there isn't a Franco-French market. American, British or German solutions are coming or will come to France. And paying for R&D with 500 or 1,000 clients when a competitor is doing so with 5,000 or 10,000 …that can bring you to your knees before you've even had the time to learn how to walk. Of course, it's always possible to "take" a few hundred clients by putting caring treatment up against industrial quality measures, but that won't last very long…

3.    Grow stronger and buy other companies
Here's an even more recurring question… So, I'm going to try to answer it in an open manner.
If we raise a lot of  money while we are profitable in our main market - and we don't plan on blowing millions of Euros in TV advertising (which was the standard in the Internet bubble era), then it's probably because we intend to make a few acquisitions.
I'm not going to pretend the contrary. But… to buy what? Basically, two things can be bought: technology or clients.
•    Technology refers to breaking technologies in our principal business activities or complementary services that may impact our thousands of clients.
•    Clients means a significant amount of customer accounts – a minimum of several thousand real clients (you know, the ones that actually pay, no free subscriptions?), that will allow you to grow even faster.
Here again, it's about saving a year or two of development time. To put it clearly,  a company that has several thousand new clients a year has little interest in acquiring a company that only has a few hundred...unless you're trying to launch an activity in a new country. And still…

4.    Evangelize, make things easier, get involved on a local level
Oxatis plays a key role in "education", evangelism of e-commerce practices and now has the means to fully embrace and take on that role. 
The Instants e-Commerce program and Education/E-Commerce program are more than ever a top priority on the agenda.
I said it when I announced our investment funds: 200,000 sites for 4.6 million SMEs in the UK, 65,000 sites for 2 million SMEs in France, the few companies in Spain, Italy, and other European countries that are under-equipped...it's high time to provide these companies with modern, reliable, standardized and affordable tools to help them towards modernization and a transformation of their distribution channels.
 
So, our teams aren't going to sit around twiddling their thumbs and wait for these companies to find us. We're going to get out there and find them, wherever they are, to educate and support them.

An ambitious and motivating program that these investment funds are going to allow us to accomplish.

Thanks again to everyone: To some...readers, future e-tailers and even competitors, for the interest you've shown in Oxatis. To others...clients, partners, investors and Oxatis team members for the complete trust that you've always demonstrated.

And that brings this saga to a close!

•    If I haven't answered a question you have, feel free to leave it as a comment below. I'll try to answer it to the best of my ability.

•    If you're feeling inspired by the journey ahead and want to join our team, feel free to let me know.

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A Fund Raising Saga: Why should you raise funds?

After answering What does fund raising mean? and When can you raise funds? at the beginning of the week, I'm going to try to answer a question that surprised me a bit, even though it's very well-justified: Why should you raise funds?  

It's so ingrained in my being as an obvious fact that I never felt the need to say it out loud: Raising money is an entrepreneur's  duty nowadays.

I'd even go further to say that it's a triple duty:

•    A duty to your shareholders,

•    A social duty towards your employees,

•    A duty to your country, who supported and helped you create your business.

1. A duty to shareholders who provide you with capital, which is the first liability of the company. This liability is actually what the company owes its shareholders. On the other side, there are the company's assets: R&D, the clientele, market position, the brand and the team, of course.
   
   The head honcho of a modern business (far gone are the days when the family business was created by a patriarch and passed on from generation to generation) often convinces one or several  associates to take part in the adventure as well and, sometimes, collect funds from their entourage. He's indebted to these people. He can't afford to sit there and say "I made my business grow, I pay myself a fat salary, we don't share the profits because we use them to grow even more, the company isn't worth much because it relies 100% on me, etc."  This wouldn't be an honest attitude to have with your shareholders.
   
   A modern entrepreneur's profession is to create value, not simply for himself by securing lifetime income, but for his shareholders as well.
   
   Raising money means developing your business, making sure that at a given moment, others are going to give you money  that will have two purposes: allow your company to grow faster and put a price on the company.


2. A duty towards your employees. First of all, this is mandatory if you want to attract the best talent out there. The talented don't join businesses that stagnate! They team up with companies that have a story to write.  And you need to convince these talents, recruit them and offer them opportunities to express themselves. You need to give them R&D resources to develop the best possible tools, resources to design the optimal material architecture, the ability to recruit other talented colleagues. When you have a really good idea, you need to carry it out as good and as fast as possible or else someone else, somewhere else will do just that! 


3. A duty to your country. I can already see some startled faces and eyes wide open.
   France (us being a French company) is a country that imposes enormous social and fiscal expenses on businesses, but it's also a country where anyone trying to launch a business receives a lot of help from the government.
   
   Therefore, it's wise, and even essential, to take advantage of any possible and imaginable aid out there to create your company. But after a few years, it's pay-back time. The numerous advantages that are offered need to balance out the cost of a job that hasn't been created, or the cost of paying someone's unemployment. 
   
   If you listen to the famous historian and economist Jacques Marseille, every unemployed person costs 50K€/year, or the triple annual income of an average Frenchman.
   
   So let's divide that by 2 to tone those numbers down. That means that a company that received 300,000 Euros in government funding has to create 12 jobs and keep them going. If they only hired 4 or 5 people, then the funds, which are provided by the general public (yep, we're talking about taxes and not money provided by investors or tax breaks for the company) aren't being used properly and the company is clearly abusing the system. And these rules would apply in any country.
   
   At Oxatis, we received a certain amount of government aid. For example, we are in an  underprivileged area of Marseille and a third of the employees we hired had to come from this area...and they were right to impose that requirement (I'm certainly grateful).
   
   We created 40 jobs and we didn't receive 40x25,000, or 1M€, from the government. Therefore, every job that we created saved the government money, and we could do that because we raised money to finance our growth. The help we got to jump start the business at the beginning was very welcome, but that kind of aid should not be taken advantage of!

These are the reasons why you should raise funds. Yep...it's a triple duty. Provided, and it goes without saying, that you use them wisely!

Which brings me to Monday's theme and the last chapter in this saga: What do you do with the funds once you have them?

A Fund Raising Saga: When can you raise funds?

Yesterday, I answered several questions grouped together under the theme "What does fund raising mean?".

Another group of questions that was brought to my attention concerns the theme "When can you raise funds?".

Of course, I don't claim to have the perfect methodology. I'm simply sharing my experience and am not offering an exact science. Every case is unique even if they all share certain  common factors.

Not all companies needs to raise funds. It would never cross a  garage owner's mind to get listed on the stock exchange.  Likewise, a car manufacturer wouldn't hesitate to go and search out necessary resources.  

The analysis is the same for an Internet merchant. A good web agency specializing in e-commerce doesn't have the same needs or the same market as a technology based e-commerce platform.

If you want to raise funds for your business, the first thing you need to ask yourself is if the possibility exists, because you can be a brilliant entrepreneur but not be running a company that is able to raise funds. 

At the risk of sounding a bit mundane - the specialists will forgive me, when a 10M€  fund invests 1M€ in 10 different companies, 5 will fail, 3 are worth about the same 5 years later, one is going to double in value and the last one's value will soar to one x10 or x20.

Let's do the math: 5x0+3x1+1x2+1x15 = 20. 10 invested, 20 back five years later.
That's not bad, but it's no Eldorado!

So, if you've got a good quality company but whose value can't grow 10  fold in 5 years, then you're probably going to have a hard time finding professional investors. If the potential of each of the 10 companies selected wasn't to grow ten-fold, none of them would have been able to raise the funds.

To this vital point, I'd add the quality of the team, which is even more important than the quality of the product or service. Two or three associates is good, but being surrounded by a few particularly brilliant managers is essential. Otherwise, you can keep dreaming.

Quickly surrounding yourself with people that are better than you in certain aspects also shows your ability to recruit the best and get them to stay. Investors know that this is fundamental for growth and are glad to see that you can do it really fast.

So, let's assume that you're in an exploding market, your service is excellent and that your team rocks… you still need to take a look at the competition to see if they've left you a piece of the pie!

Why? Because when a market is exploding, it gives all the followers ideas, and they start thinking "why not us?".

And that's where the  "first come, first served" policy comes into play.

It's always better to be first, because most times there isn't enough room for everyone.
In any case, not many investors will throw their money at the followers if they've taken a look at the leader's project and didn't go ahead with it.

Raising funds, and doing it again, before the others do is also a way of making life much more difficult for your competitors, no matter what sector the business is in.

So, when should you raise funds? As soon as possible while evaluating IF it's possible!

Which brings me to tomorrow's theme: Why should you raise funds?

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A Fund Raising Saga, Got Questions?

First of all, many thanks to all of you for your congratulations after the announcement about the investment funds we raised that I shared with you yesterday.

In addition to the congratulations and shared joy, this fund raising decision has raised several questions that I am going to try and answer here. Sharing some feedback about my experience and the conclusions I've drawn is the least I can do.

I don't have enough time to answer each question one by one. So, I'm going to regroup them by theme and spread my answers out over a few days. The saga of this fund raising campaign, in sum.

Today, I'm going to answer "Raising funds, what does that mean?"
Tomorrow, Thursday, I'll address "When can you raise funds?"
Friday, I'll tackle "Why should you to raise funds?" and Monday "What to do with them?"

If none of these themes answers your questions, feel free to ask them as comments below. I'll do my best to answer.

So, today "Fund raising, what does that mean?"

In 2008, we succeeded in securing 2M€ in our first fund raising campaign, which took 9 months to complete. This indicated a growth market and a strong product/service. The hardest part was convincing potential investors or our ability to perform.

Today, undertaking a second fund raising campaign and completing it within 9 weeks, when the company is much more developed than in the first campaign, is not only an indication of a growth market or a better product/service, but proof that we were perfectly capable of carrying out the first phase of our mission. Surrounded by exceptional colleagues, we industrialized the business and the fruit of that labor is visible and palpable.

This means that the company is great shape, because as everyone knows...those who have, get (and those who have not, get not)! 

Of the 2M€ raised in 2008, one is still in the bank and the other produced exceptional results. This is what allowed us to go as fast as we did.

It's also an indication that the market is balancing out. 

In 1997, we were one of the only ones who invented the concept of an e-commerce platform in the USA. 10 years later in 2007-2008, the balance rested on the multitude of strong competitors that were pretty similar to one another.

But the clients and investors made their choices. And that naturally led to a concentration (did you say selection?).

That brings me to the conclusion that future funds raised by e-commerce platforms will be very sizable or won't happen at all.

They'll definitely involve companies that, like us, have a story, have customers and, especially, have results. When the market enters into this stage of maturity, it "rewards" performance and not ideas.  This is bad news for newcomers, but excellent news for those leading the pack …

That's what fund raising means for Oxatis in particular and for a business sector in general.

Tomorrow, I'll follow up with "When can you raise funds?"

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