Payment startup Bolt sued by its most prominent customer
bloomberg.com
bloomberg.com
> 75% of people (85% if you include mobile) abandon your site at cart checkout - that's a trillion dollar problem in the US each year.
Well, I can see at least two problems with that claim.
First, anecdata, I'll often be forced to get to the checkout stage just to find out what shipping is going to cost me -- this may be more a problem in my region (Australia) where shipping can be onerous, and vary wildly between vendors, so it's an inevitable, but quite time-consuming way of comparing total costs.
Second, even assuming that number is accurate (it's not clear how he got there) those trillion dollars are very much part of a zero sum calculation. It reminds me of the old hyperbolic claims that piracy was removing billions of dollars from the economy.
It's also somehow "more real" than wishlists in the ecommerces that support it (not all of them do).
But my transaction didn't vanish, it wasn't abandoned, I consciously moved it to a competitor who won't ask me for my date of birth. No money disappeared from the economy, no more was added, it just went to a company that moderates it's demands for data.
And retailer, if I could tell you this I would but you don't offer a feedback collector during checkout and by the time you've followed up on the abandoned checkout I've probably already received the item from your competitor.
Some merchants offer PayPal or Card or Klarna as options on the first part of checkout. Those are fine.
Some merchants though, have given their entire checkout process to Klarna and the card and other options are downstream of entering the Klarna checkout process. This means that you'll have the date of birth question, and also be sending your transaction data to a credit company, even if you're still paying fully by debit card.
Two examples I recently encountered were UK PC parts merchant, I've being sponsoring a child of an impoverished single mum ( https://docs.google.com/document/d/1NCHV1pcTyvtbbE-mBDFhE1K7... ) and he'd managed to earn enough to purchase a custom computer - he's only 12 and this is such an achievement. We used pcpartpicker to design the build, and two of the suppliers recommended by that in the UK have fully given up their checkout process to Klarna. I switched ordering those parts to Scan and Box instead.
A movie quote springs to mind: "A person is smart. People are dumb, panicky, dangerous animals and you know it."
In practice, “Date of Birth mandatory” is a merchant controlled setting in Klarna [0]. I’ve used Klarna for card countless times and never hit a site that requires it. I’m guessing GP saw it once and never bothered to update his dataset (a surprisingly coming problem among us intellectuals)
[0] https://www.klarna.com/assets/sites/6/2021/09/20095942/user_...
So I've followed up and called one of the retailers to ask why it's mandatory and got "We use Klarna and Klarna requires it, but you can enter a fake one and still get through as it's not verified.". This is awd-it.co.uk which was one of the two merchants in which I encountered it.
I suspect they're wrong though, and that you are right. Klarna didn't require this, but someone at this company configured it. Perhaps it's something about PC components for gaming computers, some kind of data gathering that helps protect against kids using their parents card.
There wasn't a way that I could configure not to give it though... I'm just a customer. Whilst I could use a fake date I'm more likely to treat this as a "your data is about to go to another third party" red flag and shop elsewhere still.
I know there were dozens of switches to flip when we switched to a new storefront and shopping cart vendor a few years ago, and I missed a few initially despite my experience with setting those up in the past. That's what sandboxing is designed to catch, but I can picture PHBs in every industry saying "damn the testing, full speed ahead!" with no thought for consequences.
We have very good data on that kind of thing, and everyone in e-commerce is intimately aware of how that works.
The 'buying funnel' is so segmented that operations will definitely have a bunch of layers for 'checkout' or 'shopping cart' anyhow i.e. 'browsing' 'intent' 'initiated' 'partially completed' 'completed'.
And very aware of what pricing shock, shipping shock etc. does to the funnel.
75% abandoned is about right because most carts these days are not filled with 'intent to purchased' they are used kind of as a 'bookmark'.
Anyone integrating Bolt would know that.
It's also not 'zero sum' - online buying behaviour is not fully rational - it's instinctive. (We are conspicuous consumers - we likely don't need 1/2 the stuff we buy!)
For example - a 2 page checkout, streamlined with absolutely do more in sales than a longer checkout process.
Bolt is very legit concept, with a networking concept i.e. that they already have your 'data' in the system from purchases at other sites, they can make checkout at your site quicker.
All of that said, I'm not fully sure how defensible it is.
Lastly, it's weird that they are sued. E-Commerce people are not dupes, they would have some sense about how well this could work and would definitely have some skepticism and not sure what kind of guarantees bolt would offer anyhow.
Typically I was only ever going to purchase the item(s) from one vendor, but need to generate & abandon multiple vendor carts to work out the cheapest option. Like many things in life, I assume everyone does this, but acknowledged that this may in fact be uncommon.
With my second point, I might have been ambiguous in my comment about reliability of the number -- I was not disputing the 75% (or 85% on mobile) claim, as I have no doubt there are good numbers about this, and it's probably reliable to extrapolate those numbers from the various larger online shops that release those stats.
I was suggesting the 'one trillion dollar problem' was a dubiously sounding figure -- apart from very large, very round numbers inevitably sounding like hyperbole, and something someone trying to sell me something to 'fix' that problem would very much want to talk up, there's the non-trivial problem of obtaining the total-$ figure on all those abandoned carts across every vendor's system over the year.
The zero-sum reference is to the implied (and ludicrous) claim that if a trillion dollars worth of sales were abandoned, every year, and just in the USA alone, those dollars are still 'out there', unspent, sitting in someone's cookie jar, and all it would take is for a more streamlined checkout system in order to magically summon them forth and deliver them directly into the pockets of Bolt's customers.
I am not aware of your username, but who has very good data?
I'll often return and complete the purchase a day or two later once I have become commited.
There is an entire industry built around the idea that their solution is what made this happen.
Problem being, it's really hard to prove it didn't.
https://pay.amazon.co.uk/blog/how-amazon-pay-addresses-cart-...
Of course they need to tell a story about increased revenue to the retailers, because otherwise why would they voluntarily give Shopify control over their relationship with their customers?
If I am on my phone, I am more likely to complete a transaction if I can just hit the Shopify Pay button. If I need to complete some form that looks like it is from the early 2000s, I might wait until I am in front of a computer, by which point I may lose interest. (There is a lot of middle ground between these two extremes though.)
Similarly, I am more likely (when there are multiple alternatives) to revisit a merchant that uses Shop Pay because of the reduced friction.
(I don't doubt the 75-85% figure, rather the $1T one.)
from the article.
Best of luck to them in court, but you don't put something like that into a contract just for fun and so hopefully the judge will tell them to cut the shit and honor the deal.
Whenever I see people making the "get your stuff done", I think of sports teams. Owners don't tell players, "The goal is to win the super bowl. Go figure it out." They hire managers, exercise physicians, and dozens of other specialists that prescribe detailed programs of physical training, practice, and even what to eat, to maximize performance.
The point is that management has value. Someone has to do the work, of course. But someone also has to figure out how to organize everyone, ensure things are done in the right order, the right people are meeting, and communicating, and such, and yes, tell people whether they're doing enough work, or need to be doing more, and maybe even when to show up for work, or how late to stay. Management's job is to connect the highest-level goals with the actions of the people lower down in the organization, and that very much includes things like controlling the quantity of work and how long people are in the chair/at the screen.
I'm not saying management is always done well (it's not) or that you can never have too much (you can). Only that, most people don't want to be told "Go run a business. Figure it out." They need milestones and pacing and to have huge nebulous goals broken down into smaller chunks that can be measured and scheduled. People want to know how to do the job well, whether they're doing enough, and whether things are on schedule. That's management.
If you don't like it, there are plenty of career paths like outside sales, consulting, or others where you get to more or less make your own hours.
I see where you're coming from, but I think there's a categorical difference between those two.
The first you want to maximize, the second is a (blunt) tool to achieve the first.
If people prefer to work 4 hours in the morning and 3 in the night, vs 8 hours in one go, vs 10 hours of low focus vs 5 hours of hyperfocus, it should be up to them, provided they deliver.
As a manager, it's your job to suggest something, but also to understand not everyone works the same way.
I think OP's point is delivery is a function of others' work habits. If everyone on your team works 8 hours straight, and you're doing 6 to 10AM and then 7 to 10PM, you're running uphill. Flip the defaults and those working 9 to 4 lose. Forcing this entanglement is management's job.
4 day work weeks just look sensible to me. A massive privilege, for sure, given most people will still have to work 5+ days a week for the foreseeable future. But honestly the difference to my life (for the periods of time I've pulled it off) of having a 3- vs a 2-day weekend is ... transformative. And I'm better at my job for it.
A 4-day workweek arguably puts MORE emphasis on everyone in the company knowing exactly what they need to be doing. The company needs to be better run, to take advantage of the productivity boost of happier/better rested/more motivated employees 4 days /wk.
Nobody is saying all management is useless - what's being discussed is different philosophies of management.
And I doubt the manager telling you to sit down for 8 hours straight will get more output out of you compared to the one that tell you to get output done by X, working in your own time.
All the problems with performance in companies I've seen were either due to staff motivation (caused by personal reasons, low pay, working on a shitty codebase / project, bored of the same job after years) or because management was forcing too many meetings or not having clear requirements or changing requirements up all the time (being agile still has a cost, even if you stopped writing documentation).
They provide the facilities and a prescriptive plan to get the team where they need to be game ready. Drills, strategy and ensuring everyone is operating as a team on the field.
Tuning their body is the responsibility of the player. The teams aren’t sending them a list of what to eat, how to train or what exercises to do. That’s on the athlete.
Of course they do have specialists to help if the players needs but it’s not “total control for performance”
This is definitely not the case in European football. A single player can cost a team £100m in transfer fees, wages and agent commissions. It is in the club's interest to make sure that player is fit enough to play as many games in the season as possible. Players have curfews and will be fined by their club if they're spotted drinking alcohol or eating pizza after hours. There are vacation days and 'cheat days', but otherwise diets and lifestyle are tightly restricted.
It wasn't like that 25 years ago, when club football was simply a multi-million dollar sport instead of a global, multi-billion-dollar empire. Alcoholism was rife in the English league, as were poor diets due to the absence of coaches and managers who understood the importance of nutritional science.
Source: I applied about a year ago with relevant experience, large consumer site & +$2B/yr payment gateway experience. No reply. Made a fake resume, cutting my experience in more than half, but included 1.5 years at Google and they wanted to start the process.
Not a single one had a 1-click checkout button on their product pages. Presumably, for the exact reasons you mention. I had to add items to a cart, go through an upsell modal, get to a checkout page (or some sort) and then I could click on the " Checkout" button.
It seems that the reason that no one has seen a Bolt 1-click checkout button on a product page in real life, is because it.... doesn't exist?
The one saving grace option I give them is that the behaviour may be different as someone who does not have a Bolt account. It's possible that they are tracking users, and dynamically changing the "Add to Cart" button to a 1-click checkout if I'm signed in to their system.
This behaviour would still explain why people have never seen it.
For years - YEARS - ecommerce RFPs included "one click checkout?" as a requirement, even while it was an active Amazon patent. Once the patent expired, our platform team implemented a one-click checkout feature. There's nothing fancy about it - you need a saved address and a saved payment tender, et voila. And still, the merchants would list in requirements, "One click checkout, must-have"
And I don't think even once in fifteen years of doing this did anyone ever actually use it. It helped me with demos, for sure.
In reality, Bolt and Fast weren't responding to a burning need for one-click checkout - they are (were?) responding to Shopify's locked down checkout, but they're all chasing the same greedy idea: use a "quick checkout" process to build a marketplace ecosystem, a la Amazon, and skim a percentage of every dollar in the orders that pass through them to do that, selling on the idea that quick checkout will boost sales. Which it might for some brands... but it usually doesn't have a noticeable effect.
But being a drop-shipper on a centralized marketplace is not what brands want. Amazon is, at best, an unpleasant necessity. You get a boost in sales up front, and if you make enough noise, Amazon starts selling advertising around you, and if things are going REALLY well, they spin up their own knockoff brand. With any luck, by that point you're a strong enough brand to drive people to purchase directly from your site, and then some startup comes around suggesting they can give you a better checkout experience than Shopify... and as you hear the pitch, it's transparent that they're just doing the same brand-erosion thing as Amazon and Shopify, and that erodes trust.
For a shoe company, they realize that most people buy one pair at a time, so while they hope they can upsell you some shoe-shine they realise that their possibility to expand the cart is pretty low. I imagine one-click could work well for them.
A RC parts store on the other hand, there is huge room for cart expansion there. If you just sell someone an RC plane in one click, they may not even be able to use it without more purchases. They'll be wanting to add a receiver, some batteries, spare props etc.
- 1-Click used to be patent protected until 2017. It may very well be possible that the news of the patent expiration didn't reach everyone, or that people are still afraid of patent trolls.
- unlike Amazon which has the payment and shipping information on file for every customer (which many people are), a random web shop selling sneakers won't, so the user has to go through the checkout process anyway.
These might be up-sell or cart expansion opportunities. When a purchase is complete the user is likely to bounce.
But if you click "add to cart" and you're presented with similar items, related suggestions, etc. Then maybe you shop around more, add a half dozen items to your cart as you go.
On the other hand maybe you add it to your cart, look around a bit more, but have time to rethink the purchase and bail before completion.
I'd guess some research has been done to shed light on the behavioral patterns, but they're also going to be highly specific to different product segments. If you're shopping for 2 or 3 new shirts you might be easily be persuaded into a 4th. But if it's cell phones then you're done after the first one, and you already know if you want a case or not so accessory upsells above & beyond the buyer's original intentions are probably more limited.
Have you even read the article? ABG as part of lawsuit want 5% of stake in business for 30M (valued at 500M currently). Obviously their customer who is suing them want a part of business says something.
Also article clearly mentions forever21 uses them.
My comment had nothing to do with ABG, or them wanting whatever is in their contract. It was commenting on that fact that I, not apparently the parent commenter, has ever actually seen the Bolt product in the wild. That’s weird for something apparently valued at 250x their ARR.
Regarding ABG’s claim to a 5% stake, you can’t comment on what that means without knowing the terms that apply.
I’m not sure 249 counts as “many, many”
ABG claims they have a warrant. Bolt says no. Not sure how any third party can say anything to the veracity of these claims without the contracts. On the facts, it's no more ridiculous than an early employee exercising far in-the-money options.
ABG is forever21, they're the one suing bolt.
It might just say that they want to be able to take that stake and liquidate it now quickly while the private markets still have a high value on it.
It's literally you drop it in to your website and it improves your checkout experience.
And I imagine they acquire customers by ringing them up and showing them improved conversion stats.
The article in qusetion literally includes the line:
> Because Bolt’s business relies on having a large network of consumers
It has literally never occurred to me to select/deselect an online store or purchase/not-purchase something based on who the payment processor is. I usually don't even know that until after the decision has already been made and I've hit the "proceed to checkout" button.
Who are these people who are like "well, I wanted (or didn't want) $THING but then I saw which of the many basically identical forms I'd be filling out to complete the purchase and changed my mind"?
Anyway some of the shops that use Bolt are here: https://www.bolt.com/shop
And the reason that companies like these end up being valued so high is that like Stripe once you integrate them into your backend you don't pull them out unless something is 10x better.
How do they explain this valuation in a market where payment processors are a dime a dozen? I purchase a lot of stuff online, and have yet to find a merchant that uses Bolt.
It's instead a polished, hosted UI component that integrates with payment processors.
And the valuation is because they have a lot of customers and they clearly make a lot of money.
Their ARR is reportedly $40M.
This gives a ARR multipe of.... 275x. Which is ridiculous.
And, as you mentioned too, they're not a payment processor. They're a hosted UI. It would be interesting if the cost of processing fees is accounted for in the reported ARR numbers.
Clear from what?
The one click checkout has already been solved. It’s Apple Pay. Any time I see that on a retailer i always use them because of how easy it is, all payment info, shipping info, etc are prestored, and if they integrate Apple Pay directly or through their merchant processor my trust level immediately increases.
It does help increase conversion as i do abandon some carts without that and it makes me a repeat shopper of the places that integrate.
It is a solid concept the real issue is that between Fast and Bolt it looks more like the wrong founder CEOs rather than anything else. One is completely shady and the other spends way too much time on twitter and is now potentially caught misleading customers and investors.
If they had focused more on their business and moving quickly but sustainably one if these two companies would be succeeding instead of both of them looking like they have massive issues.
1. Grow with Big Commerce 2. We see a hard push to headless commerce, and Bolt becomes the "Shopify of Checkout" or something similar specifically for the headless use case.
Once you collect a CC from your customer, you just need a reference to that token to charge at will on something like stripe (or even better, schedule a charge in 5m to give undo capabilities).
That said, reading their claims I'm inclined to side with Bolt, ABG is just experiencing some normal integration pain.
The amount of edge cases you need to handle is astounding.
At this time it seems like ABG is upset that they can't get the 5% stake and trying to damage the company as much as possible.