Imagine being a small business, fighting against the tide of big retail giants in the digital space. What if there was a platform designed to level the playing field, geared towards a community-focused digital solution for local retailers? This episode is a heart-to-heart chat with Kate Giovambattista, visionary founder of Beyond Main, who has been championing the cause of small retailers with her innovative platform. As a former Vera Bradley executive, she brings her deep insights on changing consumer behavior and the digital struggle small businesses experience.
You’ll learn about Beyond Main's subscription model, different from typical commission-driven models. We delve into the highs, lows, and everything in-between, of running a bootstrapped start-up. Tune in to hear about the crucial role of customer feedback in shaping the platform, and the exciting journey of onboarding 615 businesses. With perseverance, passion, and a will to support local businesses, Kate's story serves as a beacon for any small business owner seeking a digital edge or anyone curious about the dynamic world of e-commerce.
Imagine being a small business, fighting against the tide of big retail giants in the digital space. What if there was a platform designed to level the playing field, geared towards a community-focused digital solution for local retailers? This episode is a heart-to-heart chat with Kate Giovambattista, visionary founder of Beyond Main, who has been championing the cause of small retailers with her innovative platform. As a former Vera Bradley executive, she brings her deep insights on changing consumer behavior and the digital struggle small businesses experience.
You’ll learn about Beyond Main's subscription model, different from typical commission-driven models. We delve into the highs, lows, and everything in-between, of running a bootstrapped start-up. Tune in to hear about the crucial role of customer feedback in shaping the platform, and the exciting journey of onboarding 615 businesses. With perseverance, passion, and a will to support local businesses, Kate's story serves as a beacon for any small business owner seeking a digital edge or anyone curious about the dynamic world of e-commerce.
Welcome to the Third Growth Option podcast, where we talk with business leaders and innovators hungry to drive growth that can be faster than internal organic growth and less risky than acquisition. Your moderator is Bernal Dunke-Schpuller, chief Sherpa and CEO at Realign, who has led private equity-owned distributors through turnarounds and growth. With battle-proven leaders from all frontiers, we want to provoke thinking about business growth beyond conventional wisdom and binary choices.
Speaker 2:Hey, I'm Bernal, your host, talking today with Kate Germambattista, founder of a digital community and e-commerce solution for local retailers called Beyond Main, which Kate started in 2019, after spending over a decade or so selling to retailers, specialty retailers, independent retailers Most of that decade or so was with a very beloved brand, Vera Bradley. Welcome to the Third Growth Option podcast, Kate.
Speaker 3:Thank you for having me, Bernal. I'm really excited to be here today.
Speaker 2:Yeah, so you're building something pretty special, right? I'm already helping hundreds of mom-and-pop retailers and, I'm sure, soon to be thousands of local retailers and their customers for them to meet each other online. So I just really want to learn about Beyond Main and why did you feel compelled to build it, how are you doing it and what kinds of weaving and bobbing are you doing to get here so far? But let's start with digital transformation. Right, there's this digital transformation challenge pressure. When you and I spoke before this episode, you were talking about just eight or 10 years ago 2012, 2015 timeframe this idea of Beyond Main formed in your mind because you kind of watched e-commerce the difference between big retailers versus small mom-and-pop retailers. What was going on digitally at a 30,000-foot level?
Speaker 3:Absolutely so. As you mentioned, I spent about 10 years working for Vera Bradley Designs, which is a women's handbag accessory company, and at the time the brand was experiencing really significant growth. We grew to be about a half a billion dollar company out in the market and really specifically grew off of the relationships with small independent retailers across the country. So I think at our peak we were around 5,000 specialty retail partners and really my role at the company was to help facilitate and support our small business sellers everything from sales to inventory planning, to their marketing calendars, to their customer experience and how they really delivered and showed up for our customers that were seeking them out in need of the brand's products. And it was around the 2012 mark where we really started to see kind of the ground shift right.
Speaker 3:Consumer behavior was changing. Third-party marketplaces were really on the rise Amazon, ebay, etsy was kind of beginning to take hold, and small businesses really struggled with how do I compete in this space? More and more journeys for the consumer were starting on tablets, desktops like their PCs or even their smart phone devices at the time, and what I started to experience was small businesses were getting wedged out of that consumer journey process, and so at the time, big brands were really scrambling to try to beat digital first right. You kept hearing be digital first, transform your digital presence. And even at the company I was at, we were taking ownership of that right. We were saying how are we going to craft an online experience for our customers, how are we going to show up in this space?
Speaker 3:And small businesses really didn't have the guidance, they didn't have the tools, they didn't have the education or the know-how or the capital to really invest at those same levels that big corporations were to deliver on what these new consumer behaviors were kind of telling us. And so we started to see a rise in showrooming, where consumers would come in and take pictures of, like, all these fabulous things they were finding at their specialty stores and then searching online for a price comparison or whatever their needs might be. And it was just such a growing like concern and broken record. I kept hearing over and over and over where it felt like there needed to be a space created for small businesses online that really reflected the community aspect that they're a part of and that they execute and do so well. Right, I'm sure you could rattle off a number of small businesses that are really active in their community, their core anchors in their community, just like we think about department stores being anchors, anchor tenants and walls.
Speaker 2:And the small neighborhood shopping districts, like local shopping districts.
Speaker 3:Exactly. So we really set out to say, well, what is the digital reflection of that for main street communities or, you know, downtowns? What does that look like? And that was the core question that we just began trying to solve what does that look like? How do consumers want to experience their small businesses in a digital setting? And just from there it kind of grew right. It grew to what we have today, what we're in market with and what we continue to kind of grow as a small community-led digital marketplace experience that can really help elevate or start or elevate a small businesses journey in the online space.
Speaker 2:And just for listeners that are maybe not that familiar with independent retailers and mom and pop retailers. But the statistics that I you know. You hear different numbers. You know I think they're between 60,000 and 100,000 mom and pop retailer locations around the United States. Does that sound about right? Order of magnitude?
Speaker 3:Well, ours it depends on, yeah, like a lot of the. So there's 30 million, over 30 million small businesses in the United States alone. Small business, by the government's kind of standards, is 500 or employees are less. But when you actually kind of dig into those numbers and you're looking at, you know under the 20 employee mark you're actually still well over. You're almost at 2 million, 1.5 to 2 million.
Speaker 2:But that's total businesses. My number is just retail stores.
Speaker 3:Yes, just retail. Yes, that's probably somewhere in that vicinity.
Speaker 2:And to me, like whether it's 50,000 or 250,000, it's a significant number of sort of highly individualistic, very different from each other. It's not like you know, there's 10,000 McDonald's out there, but they're all 10,000. Mcdonald's are sort of the same right, but these 50,000 or 100,000 retailers are all pretty different. So you said to me the other day what we're doing is about mom and pop retail and marketing and technology, and I was thinking so you're at this intersection of mom and pop retail, marketing and technology, and mom and pop retail, I think, is very individualistic and not scalable, because if they were really scalable, you know that one store location probably would have become a thousand store location, right, or a thousand location store or marketing is obviously, you know, an octopus. That's very complex and changing. And then you take technology into it, which is changing like by the day. So talk about this intersection of these three things a little bit and what makes it so challenging, and I think it's part of why you love what you do, right.
Speaker 3:It's very complex, right, it's definitely we tend to think of things as like systems thinkers. So we look at I studied exercise science at school. So if you think about the body right like it's made up of bones and organs and tissues and vessels and they all have to work in conjunction right To have a functioning, healthy body. And we tend to look at this through the same lens what goes into a healthy and vibrant community? We kind of start there and our partnerships really form and where we feel like our best Success cases come out of is when we have really strong kind of components within a community that we can lean on and leverage and they can Enter, work together. So when you speak about the intersection we look for is there an entity, organization that is leading activities, marketing activities in your community on behalf of your small businesses right there, doing the community events? So that's one core element. If there isn't one, can one be formed, can kind of be the leader right, the point person for programming like this.
Speaker 3:And then we look at the small business make up themselves and you know, do you have a healthy mix of retail, service, food based businesses in your community and how are they working together and how are they marketing themselves independently and also as a collective community, and are they collaborating? Is their collaboration within them? And then, finally, we look at the community engagement level. Is there a strong sense of civic pride and community? You know engagement that's taking place and how can we really leverage those three things together through a digital setting? So for us that shows up as close market. So you know, as consumers we can go and we can search by a specific town or zip code or place we want to travel to and kind of find and discover new businesses across all those different sectors retail, service and food within a specific geolocation study, learn about them, understand what their business is about.
Speaker 3:It's like a we call it our digital window, right, it's like that.
Speaker 3:It's the same concept as your Window that you present or your street level business like how are you showing up what's your digital window into your business and allowing communities to kind of craft that experience as well for visitors.
Speaker 3:So there's definitely a huge marketing element as well as a focus on how we drive commerce, how we drive traffic, which actually sort of feeds into our core business model. So we, even though we're a marketplace experience, we are subscription based service. So for small business and for a community it's a fixed cost that they can just understand year over year is going to be a part of their operational expense and really skies the limit on how they want to continue to leverage it from a commerce perspective or from a traffic driver perspective and marketing driver. So that helps a lot of our partners understand the investment they're making up front and the continued investment that they'll have to make. But how they grow and how they leverage it can look different for each small business owner. Right, they may look at it more as a marketing expense or they might look at it more as a software operational expense for them to drive sales.
Speaker 2:And I think it's really interesting how you're doing your pricing model and the sort of subscription versus commission free, so Subscription versus commission. I want to ask some more questions about that. But before that sort of going back to the intersection of mom and pop retail marketing technology, obviously I'm not even going to ask a hundred questions around how did you build the technology and what is behind all the technology? Because it would probably take days and not so Suffice it to say there's a lot's going on behind the curtain in terms of technology. So you had the idea, you built the initial PowerPoint to explain it to people, a website and some kind of MVP minimal viable product to get going. And because you started this in 2019 and you had 10 retailers, I think in 2019, in your first year so chances are that to get the first 10 retailers, you had a minimal viable product. It wasn't perfect, but it was good enough, right? Talk a little bit about the marketing required to get those 10 and now hundreds of retailers. How are you building this community of believers?
Speaker 3:I wish that there was a super simple answer and I think if you talk to most startup founders, they're going to say the same thing you do the unscalable things first, right? So those first 10 businesses were meet, go and door to door, having conversations with the business owners A few of them I already knew I had relationships with because it is the community that I live in. So I was able to lean on some of those relationships to say will you give this a try? I'm going to assist you, I'm going to show you how to use it, I'm going to show your staff how to use it. It was a very, very high touch. We still, in a lot of ways, are very high touch because it's the small business sector and everyone's Situations are a little different. But we have increased our efficiency through the software, so it's a little bit more self-guided. There's a lot more tutorials.
Speaker 3:We've improved our process, but in the beginning it was me hey, tell me about your business, would you like to join this online community? And just kind of selling in the concept. There was really only one conversation back in those days where I felt like I had huge resistance, but for the most part, everyone really understood it on the onset, like, oh, this is great, it's an alternative to Amazon, it's an alternative to Walmart, it's an alternative to shopping at the mall and it's a space for me. So that was kind of driving message initially, and at the time in 2019, which doesn't feel like that long ago, but it was still pre-pandemic online adoption was very low in the small business sector. We were still looking at 80, 85% of small businesses did not show up online, did not have a website.
Speaker 3:But e-commerce and online presence definitely jumped during the pandemic years, which is it was, I think, a forcing factor because there was no other opportunity for revenue. They had to stay in business, and so they adopted an online platform or threw it together really quickly and just kind of were forced to get it going. But at that time it was still no, I don't need it. It would be a lot of what I'd hear and I'd say but if you had it, imagine all of the additional customers you could reach, imagine the additional sales, imagine the relationships you could continue to foster and build. And so it was just kind of getting them to take that first step. But it was door-to-door in the beginning and then you know, at that point. They see their peers and things start to grow a little bit faster and it starts spreading to other communities and you know, so it was very grassroots.
Speaker 2:I love the term you just used do the unscalable first right. Because I just had breakfast with my CPA actually this morning, right, and we were talking about community building and he has an idea of how to build a community around his CPA practice by bringing in all kinds of other service providers, right, so it becomes a higher value add instead of just you know what do you call the tax return factory. Okay, got it and I said the exact same thing to him that you just said here you got to go sort of mono, a mono first right, just one person at a time. And you know it's the old saying yeah, we'll go national as soon as we go regional, right?
Speaker 3:It's just the baby steps and for us it was really important because it's a very iterative process, like the technology as well as the training and the educational tools that we have, and we need that experience we need we look to our customers to guide what's developed. We look to you know customers on both sides. Small businesses is also shoppers as well. What do they want out of this platform? What experience are they expecting? And those take time and it's a continued effort. So it's definitely an iterative process, even from day one through now. Today we're still learning, we're still updating, innovating, making changes, improvements.
Speaker 2:You've made big strides from the first 10 retailers you have. I mean, how many communities are you in, how many shopping districts, how many retailers?
Speaker 3:Yeah, we're growing rapidly. Last I looked this morning I think we just saw our 615th like business join where we're mostly in New Jersey and now South Carolina, because that's where our kind of support contracts have been initially signed. But we do have retailers kind of popping up all over the country but of real density in South Carolina and New Jersey right now.
Speaker 2:That's great, you know, from 10 to 615, that's something to be proud of. So let's go back and talk about the pricing model. So you know the economics. You kind of landed on a subscription model and it sounds like you're very intentional about not being commission driven, which you know the people that are commission driven are like well, you know what's good, we both take the same risk and reward as sort of the pitch on commission. But the pitch on your subscription model is what, or the thought behind it?
Speaker 3:Well, it goes back to sort of that intersection of abilities, right. So there's a marketing component to it, there's a community building aspect to it or community sharing aspect to it, and when you look at the marketplace space and other players that are out there, over time what happens and tends to happen is disincentivized to actually continue to operate on that platform because of a commission structure. So if you look at others that have reached high scale levels, like DoorDash or Uber or Airbnb, you know across the service sector, businesses actually look for ways to off-platform customers from actually going through those. They want to show up there because they know people are searching and using them, but the commission fees actually end up. They lose money on the sales, sometimes Like it's 25, 30 percent. You know, in other marketplace settings you're also having to pay additional fees to advertise so that your business or your listing show up.
Speaker 3:I just looked at that as not a recipe for success, for a sustainable and long-term platform experience or partnership, because we do see this as a partnership. We're partners with our businesses, we're partners with our communities and we're partners with their states or national organizations. So it felt like having a core subscription that was fixed, that you could count on and budget into your, you know yearly expenses felt more right for this sector in a way that they could continue to grow and leverage it over time without the added pressure of but you're taking 25 percent of my margin on every sale. So that's what led to the subscription focus.
Speaker 2:Has that subscription model evolved? I would have, maybe you started with, you know, just one level and now you have, you know, the bronze-silver gold subscription model. Is it continuing to evolve?
Speaker 3:It's a great question. So we did start initially with only full commerce. That was our only subscription offer and now we have three ways to play, essentially. So we have a free. We have a free medium offering where any small business can join, create like a directory, listing and feature products, pictures, videos, events you know all kinds of great things about their business and get discovered.
Speaker 3:And then we have a gift card program, which our gift card program allows them to sell digital gift cards for their business that can be used online or in store. They can participate in community gift cards that are offered. So think of it like a downtown Charlotte gift card, right? If they're a part of the commerce program, those cards can be redeemed at their store if they're a Charlotte-based retailer. And then statewide cards, if those exist.
Speaker 3:So our partners in South Carolina have a we Shop SC gift card that's statewide, can be used at any small business that's participating in the commerce side of things. So they have access to that as well as our main platform card. So it opens up this like ability for you to receive funds in a number of different fashions that might be gifted out there. And then that's $360 a year. So that's the fixed cost and there's no commissions, obviously, on anything that's purchased. And then the full kind of full stack of software features that has a reservation system, it has e-commerce, end-to-end inventory management, customer relationship database kind of all the core components you need in a website and e-commerce site. That's $600 a year.
Speaker 2:That one walks, talks and does the dishes.
Speaker 3:Walks, talks and does the dishes. Yes, we help in it. And we keep adding, like that's what's so great about it, is the with. Through the subscription, we can keep adding new features that can be embedded into the channel the different categories of participation, as we identify them as needed.
Speaker 2:One thing that's struck me about you and what you're doing with Beyond Main you know, in conversation we had before this episode and even in this conversation is like you are really passionate about what you do and these mom and pop, retailers, and building community and doing it with some slick technology behind it, and I don't think you would be able to do what you're doing successfully, because it's really hard what you're doing, without being really passionate about it. So what sort of gives you the biggest joy and what is the biggest sort of frustration then? Oh God, why?
Speaker 3:Yeah, definitely both on both sides. I think the joy part. I have just always loved small business. I love the settings, I love the experience, I love the personal touches. I've never been sort of a mass market type of retailer shopper. I don't love going to malls. It just was never a space like I felt like I enjoyed this right. But I always loved walking downtown, seeing new communities, experiencing like their space, talking with the business owners and learning their backstory and why they chose that specific mug to sell in their store. There's usually a story behind it and I got a real deep education in that when I was with Veribaddi and also in my consumer products like company experience before that. But I really loved that experience of it and just getting to know the small business owners, understanding how involved they are in their communities. They really do contribute quite a bit and I think that's not something that's always communicated to the broader community, their residents, but it's felt immensely and when they depart those communities it's felt immensely as well. So part of it is a community preservation drive and wanting to see downtowns vital in thriving and new business owners coming into the mix, while also heritage business owners kind of staying current and modern with what's happening around them. So that's like the positives.
Speaker 3:For me, some of the frustrations are we're a startup, like we're bootstrapping, we're not some major VC backed company. It moves very slowly at times. You know, we're our small team. We'd love to invest more and continue to develop our site, our platform, to keep it and we are we are. It's just, I would say. Sometimes the slowness of how things have to evolve in this is frustrating for me, because you always want to go faster and go farther, but it's manageable. So that's definitely a frustration, but other than that, the good positive things outweigh the frustrations. Yeah, very kind Business owners are very kind and I think that's a different experience sometimes too.
Speaker 2:So in this conversation and I'm sure in many moments over the last five years, you've reflected on the. We didn't have any then, 10 retailers and now 615 retailers in the last five years. What are your thoughts of the next five years?
Speaker 3:Well, our goal has always been to be the leader, the national leader in searching, discovering and shopping from small businesses and communities across the country. So that's what we're still driving towards. It would be to have national representation across all 50 states discoverable on our platform, and the ability for shoppers to shop locally wherever that may be for them, like local may be a that cute town may visit in Maine.
Speaker 2:If you have 615, we know that, if they're, whether they're 50, I mean there's tens of thousands more retailers you can. You want to get on your platform. But in addition to that, do you see operating very differently in the next five years, or is it just gradually adding some more people and adding some more? Do you see yourself operating very differently in the future than in the past?
Speaker 3:We internally, in some ways being able to have, you know, obviously expand as we grow as a company, being able to offer the same level of service that we can to our existing customers and partners, now making sure that kind of stays intact.
Speaker 3:So, yes, like internally, our team will grow. So I do see that as a big change, but not so much on the subscription front. If anything, we hope to, as the community grows, be able to leverage better economies of scale for small businesses so we can just keep adding lower credit card processing fees if that's a possibility down the line, negotiating with that on behalf of our partners, finding other tools and resources where we can kind of become like a hub, a rewards hub for accessing other things that are really important, sort of helping them lighten their load in some ways. Those are some of the challenges and it feeds into that. You know, intersection of it's a holistic approach Like, yes, it's Ecom, we're trying to drive sales. Really, you know, ultimately we want to see small businesses growing their online selling channel by 2% each year, just like we saw big business doing that over the last two and a half decades. So that's a priority as well.
Speaker 2:It's actually very encouraging that what you started five years ago and have had success getting from 10 to 600 plus, you believe in as strongly today as you did five years ago and you believe that to get you know from 600 to 6,000 to 60,000 or some number like that basically requires you to go after the same thing, but just better, faster, cheaper, right or better, faster, more efficiently, and keep fueling it with the passion you have for it and sort of amplifying that. So I think it's wonderful what you're doing, congratulations.
Speaker 3:Thank you. Thank you, I appreciate the time to talk about it.
Speaker 2:Yeah yeah. If folks wanted to reach out to you one-on-one, is there like a website or email address or something?
Speaker 3:Absolutely, mom. My email is just Kate K-A-T-E at beyondmaincom B-E-Y-O-N-D-M-A-I-Ncom. Kate, at beyondmaincom. And if you're a retailer listening or you know someone that interfaces with small businesses, you can have them joined free at beyondmaincom.
Speaker 2:Or if you're a customer and just want to shop, you can also go to beyondmaincom and check out the businesses and the locales that were in and I'm going to remember, do the unscalable first, because we always, you know, want to get sort of ahead of ourselves by oh, let's take it on scaling. Well, just wait until you have the first customer Right, or the 10th customer.
Speaker 3:Absolutely. Do the hard things first and learn from them, and then you can get to the scalable eventually.
Speaker 2:Exactly. Thank you so much, kate, this was great.
Speaker 3:Thank you, beno, really appreciate it.
Speaker 2:Hey, if folks want to explore other growth topics, you can find me on our website, realignforresultscom, or just email Beno B-E-N-N-O at realignforresultscom. Thank you for listening and keep growing and bye Kate.
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