document.write(''); E-commerce and tech companies have a lot to learn from each other - Simo Baha

E-commerce and tech companies have a lot to learn from each other

The opinions expressed by the entrepreneurs are their own.

There are lessons to be learned every day in the business world. Often we look to companies in our industry or vertical for winning examples and strategies. This is a great habit, but sometimes you have to look beyond the familiar to find new unique approaches to growth that you can adopt.

As someone who wears many hats and has been involved in all kinds of online startups, from SaaS healthcare platforms to an e-commerce brand that creates wild pools, consumer real estate markets, and even card games, I’ve realized that there’s something to learn from everything and everyone. have:

Nowhere is this more true than in the sometimes disparate worlds of SaaS (software as a service), technology companies and direct-to-consumer e-commerce companies. Apart from the major differences between software and physical products, the way these companies operate can be contrasted. Sometimes you need to step into both worlds to realize how much two industries have to learn from each other.

building brand loyalty

E-commerce has traditionally focused on building brand loyalty as a means of growth. This should always be a priority, as 72% of global customers say they feel loyal to at least one brand or company. These businesses build loyalty through referral programs, freebies, rewards, stellar customer service, and overall great engagement. While each of these franchises can also apply to technology companies, building brand loyalty within SaaS becomes more organic through product innovation and efficiency.

The first lesson technology can learn from e-commerce is that intentional branding to earn loyal SaaS subscribers is critical to retention. That means innovating with user feedback in mind, which can be more effective when customers and clients are closely involved in personalizing the platform. In this way, these customers go from being passive users to being completely dependent on what you have created for them.

There has been a movement in SaaS to open up development, allowing users to decide the next best features to build. This builds brand and loyalty as they feel a part of what you’re building and stay to see their ideas come to life. Put a cherry on top and don’t be afraid to throw in the odd piece of freebie to get a great reaction with the product. E-commerce, on the other hand, can learn from its technology counterpart to break out of the brand loyalty route and adapt its core products to meet market needs.

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When we hear about tech companies scaling rapidly, it’s often due to Moore’s Law of network effects, which refers to when more usage lends itself to a better overall experience and greater value for all users. That is, the more players, the more winners. This allows tech companies to receive free, organic advertising when active customers bring more users to the platform.

In contrast, when you look at e-commerce companies, they have historically grown through advertising campaigns. This is where the next lesson comes in. e-commerce companies must learn how to better leverage external resources. This includes partnering with influencers, ambassador deals, leveraging positive word of mouth and prioritizing organic sales through referrals.

With eCommerce, it’s easy to get stuck in a digital bubble where blasting digital ads and social media ads en masse into the ether seems like a ceiling. But e-commerce companies thrive when the digital world meets the real world, and they can learn a lot from the time and attention tech companies give to their users.

Related to: 5 Dos and Don’ts for Growing Your Tech Startup on a Budget


Every business strives for efficiency, but e-commerce can teach tech companies to be particularly lean, rather than overly focused on staff and headlines. For example, e-commerce brands are using various tools to outsource people’s needs to help their companies scale faster. Examples include inventory management software platforms, data entry, automation, virtual assistants, analytics plugins, remote website developers, AI customer service, and much more.

Ecommerce companies don’t run day-to-day operations the same way your typical brick-and-mortar store does, which means efficiency isn’t a preference, it’s a necessity. Tech companies must learn to leverage their in-house technology stack of partners—your software and technologies needed to run your platform—which can also turn into a referral network.

SaaS has been affected by a recent shift in the market that calls for massive cost cutting, leading to recent layoffs as companies become more capital efficient and focused on profit rather than growth at all costs. E-commerce tends to stick to the basics and is naturally required to be profitable in order to operate. This is critical now that the market has changed and all eyes are on the financial health of tech companies, not just their growth.

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Synergistic teams

At the end of the day, it’s still about people when we put the tech logistics and business jargon aside. Yes, we may be reading headlines about AI and automation getting better and smarter by the day, but there are still no signs of it replacing mainstream roles. Both e-commerce and technology companies need to harness the power of a synergistic and cohesive team that can drive speed, efficiency and innovation. The role of the founder should always be to steer the ship in the right direction, to keep it on course, to promote the company, and to achieve prominence.

If there’s one thing I’ve learned, it’s that expansion doesn’t happen when you’re too close to the book. Think outside the box, act like every dollar you spend comes from your life savings, and it will motivate you to innovate a little. Some of our most valuable lessons may be right in front of us, prepared and ready to apply to a brand new business environment, waiting to be unleashed.

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