It’s been an eventful year for Miva, the pioneering ecommerce platform. Its longtime president became C.E.O. and the company raised $18 million of private equity, which is the first such investment in Miva’s 20-year history.
Rick Wilson is the former president who is now C.E.O. And he joined me to discuss Miva, independent ecommerce, and the impact of Amazon. Our entire audio conversation, and a transcript of it, edited and condensed for clarity, is below.
Practical Ecommerce: Please bring us up to date on Miva.
Rick Wilson: It has been an exciting year, a lot of changes. I officially took over the company as C.E.O. back in April. I had been running the company on a day-to-day basis for a number of years.
The first 10 years of our ownership structure we, for a lack of a better term, bootstrapped the company. We grew significantly, from roughly 1 million dollars in annual revenue back in 2007 to the mid-teens now. We’re still privately held, but we raised an 18 million dollar round of growth equity this year from a private equity firm. The employees are still, collectively, the majority owner, which was really important to us in any deal.
Ten years ago people saw us as a small-to-midsize-business platform. We’ve really shifted to what I consider the mid-market for ecommerce. Companies doing 1 million dollars in annual sales to 50 to 100 million online are perfect for us.
PEC: Do you still offer a licensed product or is it entirely SaaS?
Wilson: We offer what we consider a hybrid SaaS. We have a SaaS-hosting architecture. It’s very similar to most SaaS hosting architectures. It runs on all the standard setup behind the scenes — VMware, EMC, Cisco Blade servers — the kind of things you’d see in a typical private cloud.
We’ve built a middleware layer internally, so if you host with us, which 99 percent of our customers do, then you get that SaaS middleware layer that handles all your provisioning and your billing and similar services. But at the end of the day, whether your installation is here at Miva or on your own servers, or you choose to put it on a hosting company of your choice, fundamentally, those installations are all your own single personal installation of Miva.
PEC: What is the monthly fee for your platform?
Wilson: For our smaller customers, it’s pretty static. If you’re under 100,000 dollars in revenue per year, you’re going pay $80 a month. If you’re 100,000 to 500,000 dollars, you’re going pay roughly $250 a month. If you’re between 1 million and 10 million dollars in annual revenue, you’re going to pay from roughly $1,500 to $5,000 a month.
PEC: Who are your private equity investors?
Wilson: It’s a company called Bison. It has an interesting model in the world of private equity. Private equity is usually known for coming in and buying majority or total ownership of a company that has an interesting market presence
What made Bison unique is Bison invests in owner-operated companies where the owners are still really bullish about the future. That was our situation. That was what really drew us to them. I guess it was a little over a year from our first meeting to when we closed the deal. I probably delayed it more than I had to, but it was really important to me. Picking an investment partner is like picking a spouse. And it was important to pick a company that I felt we could work with for the long run.
PEC: What will the proceeds be used for?
Wilson: It allowed us to sell some stock of existing shareholders. No one sold all their stock, but it allowed them to sell some of their stock. And then, the rest of the money will be used for growth.
While we’ve been well known and pioneering, especially for people who have been in ecommerce for a long time, we haven’t traditionally used paid marketing. We haven’t done a lot of pay-per-click advertising, for example. We don’t rank number one on search engines. We’ve often been called the best-kept secret in ecommerce. And so the money is going be used to change that.
We’re not following anyone else’s playbook. But we are definitely taking a far more proactive stance on sales and marketing now.
PEC: With the rise of Amazon, Miva being able to raise $18 million is seemingly a vote of confidence for the future of independent ecommerce. Is that accurate?
Wilson: Yes, it’s accurate. But the threat of Amazon is real. As a consumer, I use Amazon routinely. Not for everything, and I try to be conscious of when am I defaulting to Amazon and I could be supporting someone else.
Amazon is currently the best, most efficient way online to buy a commodity product. And it has done a good job of becoming the search engine of choice for ecommerce.
There’s a lot of nuance to that. Back in the day, there were a lot of people who made their living by having a good distribution relationship with a manufacturer or a supplier, and being okay at search engine optimization. And then a number of things have happened.
First of all, Google has changed. SEO is no longer what it was. From roughly 1997 through 2010, companies could rank highly in Google and leverage that position as a middleman. That leverage is gone.
Google has crushed it and Amazon has crushed it, too.
PEC: What will U.S. retailing look like in, say, five years?
Wilson: You see hints of it already. If you go to one of the Amazon stores, or if you’ve shopped at an Apple store, you can definitely see hints. Consumers no longer see a difference between ecommerce and commerce.
Even though Amazon is dominant in commodity products, today is the golden age for people to start new businesses and build a brand from nothing. Think of all these new upstarts in products like mattresses that their business models weren’t even conceivable five or 10 years ago. I think you’ll see a lot more unique applications of our technology over the next five or 10 years, based on some of the things you see today from the large players.
PEC: What’s on the horizon for Miva? Acquisitions? An initial public offering?
Wilson: Things like acquisitions, we’re always open to. We made a few in the past — three in total. We’re intrigued by the possibilities. Eighteen million dollars isn’t enough to go on a big shopping spree, but it’s enough to at least give you some credence to go look at some things.
An IPO is similar. We’re not yet in a position where an IPO is in our short-range future. I don’t think an IPO in and of itself is a worthwhile goal. My goal is to build a great place to work that my employees like, and create a product that helps my customers succeed and compete with the likes of Amazon.
We can take the most complex of ecommerce sites that routinely require either open-source platforms that are essentially so customized they’re almost a fork, or very high-end, very expensive platforms, and we make them achievable and affordable to mid-size companies, which allows them to lean into their competitive market.
That’s the future of Miva, to keep growing. I expect us to go from 125 employees to 250 to 300 over the next three to five years.