What Whym learned about consumer trust that changed our approach to social commerce.

Spring 2021

New commerce takes guts, Whym has your back.

Whym has been on a journey to open up a new model for online commerce. Along the way we’ve picked up a few insights, and today I’d like to share with you a few.

Consumer trust and ubiquity drove PayPal to worldwide success.

This section is a bit of a history lesson, but it’s imperative.

In the first few years of the 2000s, the dream that anyone from their garage could start an online business penetrated deeply in the worldwide brain network.

But the idea that a consumer would trust a random person selling in their garage with the consumer’s credit card information did not land nearly as well. Stories of online credit card theft ran amok in the news cycle, and even large brands appeared in the news for having cards stolen from their databases.

Companies like Adidas still offer PayPal today as a faster (and trustworthy) checkout solution to re-entering your credit card information.

PayPal became a household name for more reasons than having the features necessary to carry a wallet from merchant to merchant. PayPal’s most essential competitive advantage was a Brand that consumers trusted. And a go-to-market plan that grew their audience as fast as possible. Every time you saw the “checkout with PayPal” button, you felt safe, and you knew the transaction would be fast.

eBay eventually realizes that the ubiquity PayPal had created would give them a massive advantage. So they purchased PayPal to create a synergy unlike anything else seen online. eBay magnified its growth potential by gaining access to wallets being built anywhere online (by PayPal), and PayPal heightened its growth potential by becoming the exclusive checkout provider for eBay.

One critical decision was made at this moment (and likely re-discussed for years) that could have destroyed the entire party. Luckily these two companies made the right decision.

eBay still offers PayPal as their only alternative payment solution today. Google and Apple Pay are also offered, but these solutions still use direct-credit-card processing and are not considered alternative payment companies.

The most important decision these companies ever made was to keep PayPal and eBay separate brands and companies. Each focused on their specific core competencies.

This decision was ultimately determined to be so significant that in 2014 the companies split ways. A decision that further solidified and leveraged the benefits of that choice. Imagine the alternative “Checkout with eBay” button we could have had. Not good right?

New “faster payment” solutions become possible thanks to a shift at PayPal away from ubiquity.

You heard me right. PayPal chose to let competitors into the market. Let that sink in.

PayPal’s 2014 split from eBay was not only driven by the need to keep the PayPal brand focused on online consumer trust. Another key driving factor was a recent acquisition of the banking technology company Braintree (who also owned Venmo). The Braintree acquisition was a clear move that PayPal was going vertical and taking on new competitive targets and markets.

This new vertical approach by PayPal made partnerships with other payment processors like Stripe impossible. Without partnerships and with more online merchants unwilling to move to Braintree, the “Checkout with PayPal” button became less available to buyers across the internet. PayPal gave up the chance to solidify horizontal ubiquity online, choosing the alternative of owning the bank and penetrating new market segments. It’s a wonder why it took five more years before this new open market void left by PayPal would receive an answer.

Enter Fast.co, Shop Pay, Bolt.io, and more. You do not need innovative thinking to understand these businesses.

PayPal left an opening, and they filled it. We’ll see who wins.

PayPal made the right choice. The charts simply don’t show it yet.

At Whym we believe that PayPal ultimately made the best decision for their company. Just a few years ago, they OWNED the wallet used by the entire e-commerce internet. That level of access granted them insider knowledge about the industry, and that insider knowledge led them down the path they are on today. Whym thinks we have a clue about what we all missed:

While investors are watching predictive charts that e-commerce will grow by another 20% this year, PayPal recognized that these charts are trailing indicators. The leading indicators tell a far more important story: The average user only spends 5% of their time on e-commerce websites these days and over 40% of their time on social media and other content-focused outlets.

E-commerce is forced behavior, and it will pop like a bubble.

My partners and I believe this likely indicates that “natural demand” is not the critical force driving e-commerce growth. E-commerce growth is forced behavior, and it will pop like a bubble. At Whym the phrase we use to describe this forced behavior is [for incumbents] “all roads lead to e-commerce.”

What happens when a better road opens up?

Social media has the right idea on where commerce needs to happen for the new generation, but their model is terrible.

Social media companies believe they have a corner on viewership. This ephemeral notion has led them down a road where every provider is attempting to “add commerce” to their stack. The mindset that “commerce is a set of features” that we can add to any platform is short-sighted, has no vision, and lacks any sense of innovation.

Instagram Shop, Facebook Shop, YouTube Shop — Who let the middle-managers in the engineering departments develop the business plan strategy? These companies are getting lazy.

We have seen some exciting innovations: Video game appearance packages, Reddit Karma, Discord Boosts, Twitch Badges. These products make a ton of sense in a social entertainment environment. That said, social commerce has a problem:

Brands DO need to meet their consumer wherever their consumer is online, and their consumer is no longer browsing their e-commerce website. So social is where you will need to meet them. However,

• Brands are not going to hold a long-term interest in allowing companies like Instagram to be the gatekeeper of every transaction (paying to acquire the customer over and over again); and
• Consumers will want a relationship with brands that is longer-lasting than the ad they just saw a moment ago.

That is why D2C brands engaging in commerce over shops hosted by social platforms will never work out. It’s not a proper D2C environment.

Whym is first to market with an alternative answer that we believe is likely to pop the e-commerce bubble AND set the industry’s standard into the future.

I’m happy to share Whym’s equation with you because we know that any competitors reading this are at least 18–48 months behind. Whym is in-market and operational with good feedback from buyers and sellers.

• Smaller competitors will need to pivot, which takes more time and more money. This money they’ll need to raise.
• Larger competitors are drowning in lawyers who love to slow everything down. And they are burdened with defending cash cows, existing contracts, and existing agreements that they can’t sacrifice.

Here’s the Whym equation:

1. Channel Ubiquity: Whym meets your customer where they meet you. We work on every messaging service, every social network, and every advertising environment without integration.
2. Consumer Trust: Whym is a consumer-facing brand, extremely horizontal, and focused on excellent consumer experiences. That means that as we grow, consumers will encounter our brand on every platform they use and will continue to associate our brand with exceptional checkout experiences.
3. Medium-centricity: We built more than a checkout feature; we rebuilt key e-commerce features specifically for this new commerce medium. Incumbents aim to protect their e-commerce cash cow. So “all roads lead back to e-commerce.” Whym has no cash cow to protect, so our road keeps the consumer inside the channel throughout the transaction.
4. Multi-channel Wallet: Brands meet their customers on a variety of channels. If any brand converts a customer on any channel, all brands now skip onboarding (for every channel) wherever they meet the same customer.
5. Over the Top: Brands maintain a direct, over the top, connection to their customer. Whym does not inject itself as a middle-man into the relationship. Convert your customer once, keep them, and drive repurchase conversion directly without paying for conversion again.
6. Platform Ubiquity: Use your back-end of choice. We know you’ve got a business to run here, and we won’t ask you to change anything about what you use already. Merchants today easily onboard with a self-service onboarding that can take as little as 5 minutes of your time.

We have more insights we can share. Learn more and reach out to us directly. Schedule your onboarding or investment call today.

I’ll share with you one last part of our secret sauce:

Whym operates under the direction of a kick-ass team of ex-Snap leaders who saw the Snap company through its IPO. Each member has over 15 years of industry-relevant experience and has seen multiple startup exits. We have the perfect equation of “hustler/builder” that investors know are the foundations of a massively disruptive company.

Schedule your call to meet the team. We’re excited to meet you.