I lead acquisitions at WeCommerce. We buy SaaS businesses making $500k-$50M ARR. AMA!
Hey everyone!
I’m Elise DeCamp. I lead acquisitions at WeCommerce. I've done it all in e-comm- from building sales teams at the seed stage to building and selling a Shopify brand to even making venture investments. I love the community within the e-com ecosystem. It's super collaborative. It feels like a unique moment in time as we have seen Shopify grow exponentially over the past five years and most of us have been able to ride the wave.
At WeCommerce we buy, build and operate awesome and (usually) bootstrapped businesses. I come from a family of "bootstrapped" entrepreneurs. At the dinner table my parents were always talking about monthly sales numbers and marketing tactics. I love how scrappy you have to be to succeed and how rewarding it feels to achieve your goals.
We look for businesses that have fast, product-driven growth and low churn. On the acquisition side, my day to day consists of having intro conversations with new founders/businesses, evaluating opportunities, researching the landscape and working with our tax, finance and legal teams to go through an acquisition. On the operating side, I work closely with our portfolio teams to ensure everyone is growing together in the right way and that we are helping each team accomplish their respective goals.
The current WeCommerce portfolio consists of Stamped, Four Sixty, Pixel Union and Out of the Sandbox. With that said, we just announced our most recent acquisition of Archetype Themes (which I am very excited about!).
I am here hoping to help fellow founders with any questions about building and scaling SaaS startups on a budget, be it marketing, sales, positioning, hiring, selling your business, etc.
AMA!
Hi Elise,
Thank you for taking questions! This is a question with a ton of variables to it, but here goes, what kind of multiple do you typically like or expect to purchase a business at? Thinking Yearly profits times __? Or, if that’s not the main factor when your team buys a business, what is? Thanks!
This is a really common question! And I wish I had a more common answer :)
Unfortunately, as you said, there are MANY variables at play. The ones we consider are from a quantitative perspective are: the growth rate of the business, the churn rate of the business, the number of customer, the ACV of the business, the LTV/CAC ratio, the size of the team, the TAM, etc. From a qualitative perspective we are thinking about: the future of the sector, the competition in the sector, how much capital we will need to put in for the business to reach its full potential, the team and the resources needed, the maturity of the product, etc.
This can truly land us at a 1x multiple for unprofitable, early, tricky businesses or in the double digits for fast growing, high margin businesses. At the end of the day, profitability is really important to us (which makes us quite different from venture capital) so we value EBITDA more than top-line revenue when considering an investment and are always thinking about the EBITDA multiple more often than the profit multiple.
Hope this helps but feel free to follow up!
Hi Elise, thanks for the ama.
So how does one get on your radar? So you hunt and acquire internally or is there another process?
Thanks!
No process. We receive inbound emails often from founders and partners as well as do outbound outreach. Feel free to reach out! [email protected]
Hi Elise,
Thank you for the AMA!
I see that you are focused on Shopify stores. I know the strong points of Shopify, but what would you say are the worst things about Shopify as a platform to build and run an e-commerce website?
Also, what is the main motivation of stores that use the Shopify Plus plan, as opposed to the more basic ones?
Thank you!
Woah, tough call. I would say Shopify is probably the move for the majority of e-commerce stores needs. I think the minority should be using a headless CMS + backend solution. But that is only for high traffic stores. Plus has benefits such as expansive feature offering and lower transaction rates.
Thanks a lot!
I'll follow up if I may, as you have an enormously relevant experience :)
So, my hypothesis is that right now to create a competitive online store for a DTC brand you need to 1) get Shopify, 2) select, install and pay for a bunch of addons (from marketing automation to cookies to everything else), 3) get a designer/developer to set up a custom theme, because the stock ones never cut it.
So, launching takes quite a bit of time and money.
I think that there is a way to optimize this, hence we've built a "Shopify + Klaviyo for DTC brands", with emphasis on a website builder built for modern e-commerce, marketing automation, and having all the small things that most online stores need (but not more than that).
It's a huge project and we're far from done, but from what I saw already with a few fashion brands that we've launched, that cuts the startup cost from 10k$+ to the price of a monthly subscription.
But given Shopify's brand power, I'm struggling to find an angle to convey that to more people. So I'm kind of searching for pain points.
Given your experience in seeing/talking with all the e-commerce brands, would you say those pain points are at least somewhat relevant?
Sounds like there is a greater conversation here! DM me on Twitter and we can find time to chat :). @eliseatwecom
Hey Elise,
Thanks for doing the AMA! My question is more general, but where do you see ecommerce is heading? Are we at a point that it's getting saturated after years of growth or do you believe it's just the beginning?
I believe this is just the beginning honestly.
Sure, we have seen outrageous growth in the past year and we (probably) cannot expect the same metrics in the following years (assuming other variants do not cripple physical retail). As an example, there are about 8 billion people in the world, half of them have smart phones and only a quarter of them are shopping online. So there is room for more growth 100%.
I can’t decide if HOW people shop is either cultural, or types of shopping products are adopted at different paces (i.e. live shopping and its saturation in Asia vs. US) but I do think that will dictate the future of e-commerce in many ways where shipping and logistics dictated trends in e-commerce the past five years. There are so many questions I have about the future of e-commerce. How will e-com services implement blockchain? How will merchants respond to the de-coupling of front end and back end technologies? How will the creator economy continue to alter (and increase) our consumer behaviors?
Lots of questions but I have no doubt that consumer behavior is inherent to our identities and that there is still plenty of room to grow.
Wow! How about that for an answer. Thank you so much! I truly believe you are right. Especially looking at the bigger picture. You get the feeling that its getting saturated as people start ecommerce businesses left and right, but then you miss the bigger picture. Its mindblowing that only 50% has access to smart phones and only half of those are shopping online. Thanks for your perspective on this!
Hey Elise,
I run an Amazon FBA business - not sure if your familiar with the model - but what would you do if you had a product with a good average rating and was selling well but the market is being undercut by another e-commerce seller who has a full line up of products and is, well, a full business with capitol ready to outspend competitors.
I will say I am familiar but certainly no expert! I would also consider most marketplaces to be fairly similar so I relate this (in my mind) with the Shopify marketplace.
My take is- double down on differentiation. The winner at the end of the day in a marketplace environment typically wins either due to price or due to customer service. If you are going head to head with a seller with more resources, it’s unlikely price is something you can compete on. I would go full force on customer support. Go above and beyond and surprise and delight your customers (the Tony Hsieh way) in order to become the leading seller. Literally whatever you have to do to make that happen. I think that is your only option outside trying out other product categories.
Or build a brand and focus your efforts on Shopify and other marketplaces!