Colombia & New York Connect To Chat about the Future of Commerce
Commerce has come a long way from the early days of digital shopping, and future innovations connecting companies to their customers could make it even easier for startups to compete—especially on the international stage.
In the past, consumers were just getting comfortable with ordering books or making travel plans on the Web. Now, they can make purchases on mobile devices, from anywhere and at anytime. This ongoing evolution of e-commerce will mean more opportunities for startups to do business across borders, according to a group of panelists at the IT & Software Business Matchmaking Forum, hosted in New York by ProExport Colombia, with some help from VentureOutNY.
ProExport Colombia is tied to Colombia’s Ministry of Commerce, Industry and Tourism and encourages trade and foreign investment in the country. I moderated last week’s discussion, which featured Mariya Nurislamova, CEO and founder of ScentBird; Gillian Morris, CEO and founder of Hitlist; and David Teten, partner with ff Venture Capital.
Everyone knows commerce on the Web and mobile makes it easier to connect with customers around the world. The challenge, however, is finding the most effective channels to reach them. For example, jumping on every major social network to push a brand can be counterproductive, said Nurislamova, whose New York-based company recommends and ships perfume samples to customers to try before purchasing full-size bottles. “I think we’re all a little tired of the chatter,” she added.
Instead, she suggests that more shrewd uses of social media, such as YouTube videos of folks trying on Warby Parker eyeglasses, can resonate more with consumers than blathering on about deals. Using the Web to show consumers how a product fits or looks before it is ordered electronically, she said, is an example of digital commerce breaking down buyers’ early reservations about ordering online.
That said, not every online order will be perfect. So companies such as Zappos, Nurislamova said, make it easy for their clients to try out products ordered electronically and, when appropriate, return them.
Interest is also growing in “emotional” commerce, she said, as companies try to understand customers’ tastes and then offer items that could match their mood. “How does a woman want to feel when she wears a specific product?” Nurislamova asked.
These and other strategic opportunities, she said, can help international startups compete in markets that incumbent companies have not yet dabbled in. For example, she said selling luxury items such as jewelry online is something not yet dominated by Amazon.
Creating homegrown hubs for startups might help them launch internationally, though she cautions that the process takes time. Nurislamova said her native Russia, for example, wants to create a community for entrepreneurs in Moscow that mimics the success of Silicon Valley—but that is a lofty expectation. “It’s a culture that you can’t build overnight, which is not to say other countries shouldn’t try,” she said. “But I don’t think that cloning Silicon Valley is a possibility.”
There is still some low-hanging fruit in digital commerce that startups can take advantage of, said Hitlist’s Morris. She said while e-commerce has shed a lot of the dead weight found in the traditional retail environment, there are still other opportunities for innovation. TripCommon, her New York-based startup, developed the Hitlist app, which lets users consult friends to decide where they want to go on vacation.
Morris said there is room for startups in mobile to differentiate themselves versus traditional e-commerce giants, which simply replicate their online experience on phones. Airbnb and HotelTonight, she said, have stood out in tourism and hospitality by designing mobile experiences that are completely different from the Web. For instance, HotelTonight, she said, lists five or fewer hotels at a time on a smartphone screen rather the dozens usually found on a full website. That helps drive spontaneous decision-making, she said.
In spite of the potential for digital commerce to level the field internationally, Morris said startups outside the major technology hubs may face pressure to move.. When she co-founded her company in Istanbul, Turkey, she was advised by others to relocate to Silicon Valley or New York because of the access to funding and mentors. “I wonder when it will be just as easy to 100 percent start your startup in Medellín or Bogotá, and have the same resources, opportunity, and ecosystem you have with the venture capital community in the U.S.,” she said.
If Colombian officials and other leaders want to encourage talented entrepreneurs to come to their countries, Teten of ff Venture Capital said there could be ways to steal interesting startups from the U.S. He said the Canadian government already has a systematic way to help its local startups come to New York, while retaining their footholds on native soil. “They know it will create jobs back home in Canada,” he said.
Further, Teten said Colombia, and other countries, could take advantage of confused immigration policy in the U.S. “Chile figured out the American government is really, really stupid about immigration because we’re dysfunctional,” he said, referring to foreign citizens who get educated at U.S. universities, but then must leave after graduation. Chile saw an opportunity and so encouraged such talented people to come to South America instead, he said. The Colombian government could adopt a similar approach, offering work visas to graduates of top U.S. universities, he added.
Another way startups in Colombia could become more competitive would be to innovate not just in software and apps. Teten said many non-U.S. governments have focused on nurturing startups in the digital space, but he thinks Colombia could explore devices and other markets. “Some of the most successful tech startups in recent times have been hardware companies, like Nest,” he said.
Technology driven changes in commerce make it possible for more startups to operate seamlessly around the world—and Colombia could benefit from this trend. For example, Teten said Bottlenose in Amsterdam, one of his portfolio companies, tracks and visualizes trending topics that relate to businesses. Its software finds patterns in data, which Bottlenose has access to thanks to international media platforms such as Twitter. “The fact they’re in Amsterdam is neutral, in many ways it’s positive,” Teten said.
Being in Amsterdam means lower costs and reduced attrition of employees compared with operating inside the United States, he said. “You don’t have the noise of being in Silicon Valley or New York.” And as technology makes a company’s geography less relevant, more opportunities may emerge for Colombia and beyond. “It’s much easier now for a non-U.S. startup, or a company that is partially based outside the U.S., to build an internationally successful company,” said Teten.