Nati Harpaz: Ideas. I have a million ideas. I wake up in the morning with three ideas but it's all about execution. How do you get things to happen? I like people who I have fun being around. Like it's really important. If you're not going to have a beer with this guy, don't work with him. I just had in my mind the conviction that someone needs to do this.
[Voiceover]: Welcome to ADD to cart, Australia's leading e commerce podcast that express delivers all you need to know in the fast moving world of online retail. Every week Nathan Bush from E Suite and an e commerce industry expert will share the news, research and insights that you need to know to keep you at the top of your game and of course keep your customers Adding to Cart.
Nathan Bush: Hello and welcome to Add to Cart. My name is Nathan Bush, host of add to cart and director e commerce talent agency E Suite. Today we have a self confessed crazy idea guy. He his words, not mine. Nati Harpaz. Many of you who have been in E commerce for a while will know Naati from his time as Managing director at Catch and as the director, CEO and Chairman of Octomedia, which publishes Inside Retail. Today Nati joins me as the co founder and the Executive director of Tradesquare. It's a new wholesale one stop shop for business and it allows over 150,000 thousand products to be sold in one place to 8,000 plus buyers. Recently TradeSquare announced Tradesquare Connect which also allows retailers to turn into wholesalers. Now, as you would expect from someone as experienced as Naati, we have a cracker of an episode. We cover topics like the differences between B2B and B2C, why product managers and trading managers are the most crucial roles in E commerce in his view and and why he didn't do any research before launching Tradesquare. He just went for it. He went with his gut. But I feel things go up a level in the second half of our chat where we asked Nadi for his personal advice and we get a load of gems around his way of getting shit done. Playing to your strengths, the people he surrounds himself with and his advice for those considering their next e commerce career move. Honestly, there's so many little pieces of gold in there delivered in Nadi's no BS style that really hit home for me. So let's get into it. Thanks to our partners Shopify plus and Signet. Here's our conversation with Nati Harpez, co founder and Executive Director at Tradesquare. Nadi, welcome to ADD to cart.
Nati Harpaz: Thanks mate.
Nathan Bush: You're sitting on your balcony. And I was like, where are you from? We did the whole Covid chat before and I said, where are you at?
Nathan Bush: And I was like, I'm in Brisbane. And you were like, oh, look where I am.
Nathan Bush: Turns the laptop around.
Nathan Bush: Beautiful coastal view.
Nati Harpaz: You're in Cyprus. Yeah, I am. It's a little island with only about a million people, which is kind of weird. There's hardly any traffic. You can park anywhere you want. It's like warm nine months of the year, so it's really hot in summer. So it's a great lifestyle.
Nathan Bush: Beautiful.
Nathan Bush: And you've been doing a bit of traveling lately?
Nati Harpaz: Yeah, that's the best thing about it. So Cyprus is part of the European Union, so they treat the European Union. If you got either vaccine or you got a PCR test, you can go anywhere. So last week I was in Amsterdam for a conference, in a fintech conference. And now I'm just here in Cyprus. There's a retail conference, actually, a web conference in Portugal in November. I might be there as well. So it's actually. It's great to be around here. I'm waiting to see Australia open as well and everyone getting back into their lives.
Nathan Bush: That's it. I think we're all hanging out for that first retail conference back in Australia.
Nati Harpaz: Yeah.
Nathan Bush: Now, we are here to discuss Trade Square. It's your latest venture and obviously you've got a really fantastic and long history in retail and E commerce, but it's Trade Square that we'll start with. I think you strike me as a person who isn't short of ideas or opportunities in what you're doing, but you have focused in on Trade Square as what you're leading right now. What was the thing that made you go all in with Tradesquare?
Nati Harpaz: I always had this idea of building a platform for businesses to buy. Right. I mean, if you think about it, if I'm a business and I want to buy products for my businesses as wholesale or in bulk, nobody offers that. There was a period of time I was thinking about doing it at Catch, but it was just. It's very hard to run a B2C and a B2B platforms at the same time. It's a different way of thinking about. It's a different technology stack. There's so many differences. So when I left Catch, I still had that idea in mind. But then COVID 19 was the catalyst because I was thinking about. And initially, by the way, the idea was to focus on Gift and Homer only because I was thinking about Agha Fares and Reit fares and all these fares are now being suspended. Little mom and dad shops and gift shops, etc. Which I used to travel to this store and find they've got nowhere else to go. And if you try to go online and find, okay, where can I find? Let's say you want to look for candles as an example. I mean, there'll be 150 different brands of candles, maybe 50 or 60 Australian made, maybe some international wholesalers. There's nowhere you can go and find what's the range available then? What are the prices? What is the review? What are people saying about it? How can I get some trading terms? So for the small business, COVID 19 made life even more difficult. So that actually was one thing. The other thing is I was having conversation with a wholesaler, was telling me what are the challenges for him selling to small businesses. In the old days you had a sales rep, they'll go to the stores, they'll show them and they'll sell. It become almost impossible to do that. A, it's expensive to send someone down. So it increases the cost of goods. And in a world where online is creating direct channel to customers, having a sales rep walk around adds such a significant cost to the cost of goods that stores can never compete with online. As an example, now all stores also have online. So it makes it difficult. The other thing is it's hard to collect money from them and get them to pay. They all want credit terms and everything is sort of manual. So it made perfect sense. What I didn't do, which is very interesting, I didn't do much research in terms of international. What's going on international. I just had in my mind the conviction that someone needs to do this. Someone needs to build a B2B marketplace to help small businesses, on the one hand who want to buy product and on the other one, on the other hand, small businesses want to sell products. So we have a candy maker from Byron Bay, Right. We have a Northern Territory makers of deodorant, right. And they called it stinky Pie, you know, stinky pizza, something, whatever. It's like, sorry, smelling chickens. That's how it's called, smelling chickens. And I thought, that's brilliant.
Nathan Bush: Island in all the territory.
Nati Harpaz: Yeah. So the thing is, if you're a small maker of. I mean, we got a guy in Queensland who make shopping boards, right? He does it. How do you wholesale? I mean, how do you go to the 150,000 small stores around Australia and say, hey, buy my chopping board? It's impossible. Having a platform like us democratizes in a way the wholesale. So not only the big end of town who have big resources and sales, and a small wholesale now with a small maker can now reach out to thousands of small stores. So that was the idea started. And then I had a conversation with a few retailers actually not wholesalers that had vertical integrated products, right? So they had their own white label and brands and they said, look, we really want to also wholesale, but we don't want to wholesale to our competitors or to other retailers. But we are selling to councils. Let's say, for example, it was a baby retailer said we sell to council, we sell to childcare. So we would love to join your platform, but we only want to sell to these channels. So then that's the idea went from a wholesale to retail, so gift and homeware to slightly wider category. And the way we built the platform allows you as a seller, as a wholesaler to choose the channels you want to sell to and black list the ones you don't want to. So we have sellers who are saying, we don't sell to retail, we only sell to hospitality, et cetera. We sell to online, we don't sell to. So we allow customers, sellers to really customize their proposition, right? And then from there on we build lots of features. Wholesale is very different. I mean, there's a minimum order on a SKU level, so a platform needs to support that. There's discounts, volume discounts, so we need to support that. Then we need to support value, order value. So you might say, you know, minimum 10 per sku, but also minimum $500 per cart. So if you buy on a platform, when you get to 300, it will tell you you got to add another $200 from this seller. But then you can have in one cart you can buy from 10 different sellers. I mean, we had a customer who bought from 15 different sellers in one cart. Now imagine, imagine a little store if she had to go now and buy 15 different wholesalers. It's 15 different purchase orders, it's 15 different payments and it's 15 different tracking to see where my order on Tradesquare in one order. She can actually. And if you think about what is a small business, it's a mom and dad operator, they do, they probably stand in the front of the shop half the time selling, right? They train the staff, they stock the shelves, they have to do the buying and they do the accounting at the end of the day. So their life is already difficult if we can help them make their life easier. The other interesting Thing we've done recently is we signed a partnership with the news agency association as a and we signed up like a few thousand news agency who are buying from us now. That world is changing as well because you know, sales of newspapers and magazines going down and these guys need to turned from being a news agent to a retailer in a way and this works perfectly for them because all of a sudden they're now buying toys, they're buying pet accessories, they're buying candle things they can sell in a news agency. And we're getting amazing feedback from them, how happy they are. So we are helping them transform their business. And I'm essentially saying one of my the things, I mean it worked in Cat, it worked in my retail business. Whenever you put new stock, fresh stock sells. It works like magic. I remember we had a jewelry business, we had a delivery every week of new ranges. We put it in the window, it's the first thing that gets sold. So you know, I'm saying the same thing for these guys. Don't focus on buying container loads or buying pallet loads or importing from China. Buy fresh stock on a regular basis every fortnight, put it in your store. Your sales will be amazing because customer feel that it's, it's fresh, it's new. You can look on our platform, what's trending, what's selling. It might cost you a few percentage point more than just importing directly from China, but your life is going to be faster, easier, more efficient and ultimately you'll get better sales.
Nathan Bush: Makes total sense. It must. Some of the rules that you've set up for B2B and wholesale must make trading on platforms like Catch look like a breeze. Some of the complexity in it, yeah, it is.
Nati Harpaz: But I mean we have Einat who's my co founder and CEO. She's an unbelievable CEO and she's really just got it and she's built an amazing development team. So you know, for me, everyone's asked me what is the most critical role in E commerce these days. I mean, I would say one of the main critical role is the product manager. The guy who actually decides how you design the website and what looks how, looks at the numbers and makes the changes. That and the trading guy, the guy who buys the stock, the buying, not the selling, the buying. Gabi always said you make money when you buy, not when you sell.
Nathan Bush: Yes.
Nati Harpaz: I love that quote of his by the way. He copied it from Warren Buffett who said you make money from stock when you buy, not when you sell. It was funny because when we're doing the roadshow for the London Roadshow for catch, because we were on the way to ipo, we were in Hong Kong in an office of one of Alibaba's biggest investors. And on the wall they had the quote from Warren Buffett, you make money when you buy. No one sells so gabby and ours, it was so funny. So it's the same thing here. You need to buy good, you need to buy well. And then it's easy to sell the stock.
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Nathan Bush: Do you find that a lot of e commerce businesses, they've invested a lot in people to sell the stock, whether that be website optimization developers, things that basically help get it out. But there doesn't seem to be that transition from traditional retail to where traditional retail teams are very big on the buying teams. That doesn't seem to transition over to e commerce teams as much yet.
Nati Harpaz: Well, not in the pure play sense. In retailers who have stores and good buying systems and buying teams, then they do really well online. But if you start a pure online business, I mean either you have your own brand and your own vertical product and you're building a brand and that's different because then it's your product. But if you're trying to buy and sell, you really need to know. And one of the things that worked really well at Katch is, you know, Gabi and Ghezi, they grew up in a retail environment. Their dad was a retailer, so they knew all about buying products. They used to go to the markets they sold on ebay. So that was their DNA when I came into Catch actually. So Gabi and Hezi were quite, you know, they walked away a little bit from the business. They had management, they allow management. And one of the things that I saw when I came into the business is exactly that problem Right. I went to Carmen Pola. Carmen is actually just been announced yesterday as the CEO of Mycel, just been appointed. So congratulations, Carmen. If you're listening, he's my brother and I wish him all the best. I had a chat with Carmen and I had a chat to Guy. Guy and they were sort of very senior in the buying and merchandising team. And you know, when I started my role, I just said to tell me what you need. I'm not here to tell you what to do. You've been hearing for a long time, you tell me what needs to happen for this business to be successful. And I sat with every team member actually, and I had a conversation with everyone. And you know, one of the things that resonated with me, with both Guy and Carmen, they said the same thing. One thing they said, take the shackles off. We feel like we've had shackles. We've had these management who run the business like it's an Excel sheet and all they care about is aging. Stock clear, stock move, stock discount, discount numbers. We're not getting the basics right. And they were in a bit of a spiral there. So it was one of the first thing we fixed was the buying and then the function is the selling. And I mean, this is a whole podcast. If I tell you the journey about Catch is a whole story about the transformation we did. The work we've done, it was fundamental. It was from buying to merchandising to marketing to branding to marketplace. I mean, I could talk about it for hours, but absolutely right. I think the point you made around buying, buying leads to selling. And by the way, in Catch, the buyers were involved in the selling as well. So they were the one buying it and they were the one determining what price it sells for. And they were accountable for the sell through and they were accountable for the discounting. Yes, there was some promotional overhead, but we didn't have someone coming in and slashing the price without the buyer being part of the conversation.
Nathan Bush: It's so important for product or buying teams to be connected with marketing or website product owners to understand what needs to shift and for them to work together, whether it's the same person on both sides or you see a huge breakdown in there constantly on Catio.
Nati Harpaz: I mean, Katie even took it to the extreme where the buyer was actually involved in the design of the banner of the product he's selling. So, you know, we have, we call them events. So you'll have an event for, I don't know, footwear. So the buyer will write the Brief. So a buying team had a sales coordinator. So someone responsible sale, the buyer and the buyer admin, you know, buying coordinators. So it's a team of three per category in the same. I mean, it could be bigger categories, but that's the structure. So the buyer will then say, we want to sell, I don't know, evening footwear, for example, or sports footwear. So they'll write a brief that goes to marketing. The marketing then comes back with the design. The buyer and the sales will look at it and say, I don't like this. I don't like that. It doesn't show. Because he knows, for example, if he has 50 pairs of shoes in the event, he knows which top three shoes are the ones should be showing in the banner. He's been there, he's done it for a few years. So our buyers were online people. They were not buyers that come from. They're not thinking about shelf, they're thinking about banner thinking web. So you need buyers who think web. So that's how deeply they got involved in the sort of selling and the buying process.
Nathan Bush: Now, you mentioned before, there's a huge difference between B2C and B2B. And having been on both sides of those, what advice would you give to people who might be listening to this, who are running a great B2C business or a D2C business and going, maybe I need to open this up to B2B as well. What do you think they need to think about?
Nati Harpaz: I mean, the first question is why? Why do you want to open for B2B? And there are a few reasons, actually. I think it's very good for the brand. So think about, I don't know, you sell candles or you sell cosmetics, or you sell home care or you sell TVs, and then all of a sudden your product appears in hotels, right? So you have a hotel and you have a beautiful hand wash in a nice packaging with great smell, great quality, but you're the only one selling it. It's going to be very difficult to turn it into a real brand. If you can sell it to a hospitality business and have it sitting in, I don't know, 20 hotels, then actually elevates the brand because people also get to experience it. And it's quite similar to the idea of the box thing, where you put your things in a box as a marketing. It's essentially also a marketing tool. So marketing and branding is one reason to do wholesale. The other thing is economies of scale. I mean, B2C is great, but wholesale, you might sell at a lower margin, but you sell a lot more volume, which gives you buying power, which gives you scale, which gives you a lot of power. So there's definitely a big opportunity with wholesale. And again, where are you taking business from? So sometimes people saying, oh, am I competing against my business? But in reality you're not everywhere and you're not the one selling everything. And there are other businesses selling similar products. So if you sell. So let's say, for example, baby products, for example, so you might say, look, I'm not wholesaling, I'm only retailing great. But the council, who needs to buy now 50 cots or needs to buy, I don't know, whatever they want to buy two or 300 pieces. So it's unlikely they'll come to you as a retailer. They want to buy wholesale, so they'll find a distributor or the wholesaler who sells it. So that's another opportunity. And then the question is, how do you facilitate it? So most retailers and most platforms don't have an online platform for wholesale. The way they do it is sometimes they get a call or they ask, okay, send me an order by email. It's very manual, it's very difficult. And that's where we come into play and say, well, actually we can help you turn from a retailer to wholesaler. The platform protects you from cannibalization of your own direct channel in a few ways. I mean, you can't see prices on our platform. You have to sign in, you have to apply. Once we approve you, you can see prices, but then there's also minimum order values. So if you're a customer, you're not going to spend, you're not going to buy 10 cots or, you know, five, you're going to buy one. That's what you need. So we protect your directed to consumer channel by minimum order, both on a quantity level but also on an order value level. So we really manage that process of protection. So, but again, back to what you're thinking. First of all, always I always ask why, why do you want to do wholesale? But I mean, we've done, we got cheapest chips, which is a bigger, big retailer as a wholesaler. And you ask them why and they say, well, because we actually have sometimes people coming to our stores and asking us about wholesale. Now we don't want a sales rep in the store who is serving customers to start dealing with someone asking them, okay, but I want to buy 50 of these, I want to buy 40 of that. It's not efficient. And then they actually don't have the tools or capability of doing it. So the best thing to say is if you want to buy wholesale, go to our shop on Tradesquare and you buy there. Yes, the model that we have is a relatively low cost model to the retailer to become a wholesaler. So when you work out the fact that we facilitate the transaction, we pay the metropolitan, we do all that for what we charge. It's a no brainer in a way.
Nathan Bush: And is it the commercial model? Is it a percentage of sale?
Nati Harpaz: Yes, it's just a marketplace model. It's a commission. We have two models. I mean a marketplace general model which is the. It's a commission of sales. And then we have what we call Tradesquare Connect. And Connect is so in a general marketplace, we bring the customers. In a connect, the business brings the customer to us in a way. So they'll put a link on the website that says if you want to buy wholesale from us, click here to shop on our page on Tradesquare that then creates a link from the website into our website where they land on the page and then if they refer the customer to us, we charge them a much lower commission. Cause essentially we look at ourselves as a booking system, as an ordering system, not as a market based customer. So they pay a very low fee. And in addition, at least at this point in time, we're giving their. Every time the first customer comes, we give them $100 off the first order.
Nathan Bush: Okay.
Nati Harpaz: So now they're sending the customer to us, but we also funding $100 off transaction. So it's a great incentive for their customers and it's great for them because they get bigger orders. They get $500, $600. I mean our average order is like $700.
Nathan Bush: Yeah. Okay, good. And it's interesting that you use the physical retail analogy around dealing with customers versus dealing with people who want to buy wholesale. And I think it's the same online as well in that what you're creating there is that when people go, oh, I'll just create a B2B and there's a plug in for it. But it's actually not that simple when you've got to create different pricing structures and a different experience to that DTC online.
Nati Harpaz: Right. I mean, so first you got to sign up the customer and onboard them. So you're not going to approve everyone automatically. So you got to check the form. So someone in the office now needs to look at the application form and say yes or no. In our business it happens in real time. Then the customer might want Credit. Give me 30 days credit. Are you willing to take a risk of 30 or 60 days? We do. So we give them 30 days net which will probably increase to 60 days very soon. So we're giving them credit. Then we also allow you to block the customer pricing metrics. For example, most platforms don't support both minimum SKU on a different SKU minimum order value and then telling a customer is missed and how we can fulfill that and add up all those different features are quite complicated. And then ultimately we also a marketing platform, right. Like we bring the businesses to you, we bring your customers. I mean we had a butcher shop who spent two and a half thousand dollars buying knives. And then the other thing we actually are selling a lot right now is we're selling, we had a few butcher shop who bought spices and you know the different things you can find in butcher shops now. So think about it, I mean so easy for them to buy on Tradesquare at wholesale.
Nathan Bush: That's amazing. And exactly what you said there. You're bringing, it is a marketplace so you're bringing the customers as well as the technology. You've got some great retailers on there. You've got over 100 trade square connect partners. And I noticed that you've onboarded partners like Koala which is really interesting because Koala aren't. They're pretty well known for being pretty
Nathan Bush: good at the tech side of it.
Nathan Bush: What is it that you find really appeals to retailers? Because you've listed some great points around Tradesquare. Is there anything particular that usually really catches their attention?
Nati Harpaz: I think it's, it's the opportunity to sell to a new customer. That's the big one. So I'll give you an example of pets is quite a strong category for us. And we have now customers who are pet grooming businesses. Now you go to a grooming business and it's not a retailer but I mean what a great place to try and sell accessories. You know, oh, I need a new leash or I need a new collar or I need a new coat or maybe some treats. And we have a lot of Australian made treats for pets. So a grooming business now turned into a retailer. So for a lot of these businesses those are not their regular customers. You know, they might wholesale to pet shops but all of a sudden a few thousand pet grooming businesses are buying things that they can retail in their business. So that what appeals to businesses because we're opening a new channel for them and a new customer base. And you know the challenge around Marketplace, which is the same challenge B2C is people thinking, oh, why won't I just sell direct or I'll get my own customer. Well, the reality is customers are shopping on marketplaces and if you think that you don't need to be there, all you're doing is you're missing on sales that you could have had. It's not. If you think that the customer will just leave the marketplace and come directly to you, you're dreaming. That's not happening. You know, the customer wants to buy Nike shoes on Catch. If they can find the Nike shoes they want on Catch, they buy it. They're not gonna go, oh, let me go to the Nike shop. The same product.
Nathan Bush: Yeah. Now, you are an advisor, an investor,
Nathan Bush: a board member, a leader across a
Nathan Bush: number of businesses and have a really strong track record. What has got you excited about retail and E commerce at the moment? What have you got your eye on?
Nati Harpaz: I mean, I think the world of retail is constantly changing. Obviously. Everyone says that. I think physical retail. I've said, I think probably eight years ago, before COVID 19, that the model of retail needs to change. Where physical stores essentially should become flagship stores, experiential place and transaction is happening online. Right. I think online is great, it's fun, but it's always going to be somewhat transactional. And so I think my mind is how we're going to see this change happening where stores become even more exciting, maybe even bigger, with more experiential. And then the trading essentially happens mostly online. What excites me is to see, I think logistics and supply chain is a big, big challenge right now. I'm excited to see how that's going to change with deliveries. You know, I'm also quite conscious around global warming and environment changes and so I'm actually keen to see how the world is going to change to accommodate. Because, you know, obviously online is less friendly for the environment compared to retail, because in retail you move one truck to a store and you, you know, in online it's a lot of movement. So that's a world that needs to change. You know, we need to move everything to electric delivery vehicles. We need to create more efficiencies. So I think. And customers will become more and more conscious and more aware of it. So customers will want to see what are you as a business doing to improve the. To improve the world. So whether it's reselling of secondhand goods like people are doing now, whether it's consolidating deliveries, whether it's using electric vehicles, whether it's emissions reduction, I think that's coming.
Nathan Bush: Everyone's got to play their part.
Nati Harpaz: Exactly. I think that's a big part everyone needs to be quite conscious of. I'm interested in Australia in particular. The B2C space is very crowded with marketplaces. Amazon has proven over time that ultimately they have a lot of funds and they're willing to invest and get the right thing. But I think. I think Catch and Kmart Group is also investing heavily and they're doing some of the right things there. I think there's probably an opportunity being created with them going to a bit of mainstream for someone to capture their sort of deals side of things. So I think there's all these dynamics that keep changing and ultimately I think there'll be. Specialty would have a room. So, for example, if you're a specialty in a category, you want to be really the number one, you need to own the category. So if you're in beauty, you want to be owning beauty, whether it's for your own stock, your white label, your brands and your marketplace. So I think we'll see more marketplace coming up. And they'll become niche. Right. So there'll be a niche for outdoor.
Nathan Bush: You don't think we've reached marketplace saturation at all? You still think there's a lot of growth in it?
Nati Harpaz: I think in a department store we have, but in a niche we haven't. Right. So if you think about, you know, if I'm an outdoor retailer, I should be building the number one marketplace for outdoor, where it's something that the big guys can't do. The big guys can't build expertise in one category. They can't enhance it with content, with video, with experiential, because they have to accommodate for everything. But if you're doing only outdoor, think about the amount of content you can create. The videos, the instructions, how you can bring a marketplace into it, the events. So this is what I would go for right now. I would find a niche and I would say, okay, I want to focus on this niche and I want to be able to be the number one for this space. And I think that's what we're going to see. We're going to see more specialty becoming just a bigger specialty, but encompassing a bigger space.
Nathan Bush: Yeah. And it almost feels like if you are that department store, you're up against Amazon, which is the benchmark. But if you're a specialty, you judged on a different set of criteria, right?
Nati Harpaz: Yep. I mean, think about it. If you want to buy bicycle, you wouldn't be buying bicycle on Amazon or on Cat, you would go to a bike shop. I'm not Talking about a $150 bike, I'm talking about like bicycle and people will buy it online. So the range, the education, the knowledge, the service, it all comes to play where a specialty can do it, where a generalist can't do it.
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Nathan Bush: It must seem funny to you. I remember when Catch first launched their marketplace. You would have been the first retailer in Australia to have dedicated marketplace open up and invite others into your marketplace. But since then we've obviously had Bunnings, Woolies launched their one last week. The iconic have launched everyone's got a marketplace. There's actually know software for marketplaces zone industry now it must seem like you guys were so far ahead of the curve in that thinking.
Nati Harpaz: Yes and no. I mean I joined in 2006. Gabi and Hezzy told me that they've actually had that idea even two years earlier before I joined but they just couldn't get it executed. And you know how it is, I mean ultimately IDs, I have a million IDs. I wake up in the morning with three IDs but it's all about execution, right? How do you get things to happen? And I think one of the things that I do pretty well is execution. And by the way, it's not me, it's building a team. So I built relationship with lots of executives and lots of people who I find working with and we share lots of common values. And then when I go into a project I bring my people with me and sometimes I also use existing teams but it's all about just cut to the chase, get it done. And one of the things, I'm not a corporate guy so when I'm asked to present a 30 page presentation and do all this, that's not for me. If I have a vision and I see it in front of me, I just go for it and I was starting to tell you about the trade square thing. I haven't actually finished the story so I was saying that. But it actually talks to this point. I didn't do international research only after I started the idea and I built it. Then I realized in the US there's a business called Fair.com which has just raised, already raised $600 million and they got a market cap of $7 billion. There's a Europe one called Anchor Store and there's one in Asia. So there's actually quite a few doing what I'm doing. But I actually didn't look them up because it was so vivid in my mind. This needs to happen here. And I was so sure and confident about it that I just went for it. But you know, in other ways you say, oh, you should be spending on all this research. You have to go with your gut. And I'm so, and I'm a commercial guy, right? Like I've been retailer, I've been on wholesalers. It just was a no brainer on all sides. So I just. But this is the thing, right? Like when you believe in something and you know something, it's about execution and it's about the daily decision you have to make, the way you interact with your team and it's about the culture you build. Because if you build a culture of execution, of getting things done, then things will be done and there things might be wrong, you might make some mistakes, you might gonna fix it. But if you've got the right culture and everyone's aligned around it, everyone wants to make things happen, then eventually you get there, you know, you pivot along the way. But that's the most important thing. I mean culture for me and people. And that's why I say it's so important. Because you know, my co founder Enant and I, we have a lot of conversations around building a great culture and the great team and having the support. Because we can't guarantee everything's going to work. We can't guarantee everything's going to be successful. What we're going to guarantee is, is that we're going to keep trying and then we're going to do it with integrity. When I say integrity, I mean if something's not working, I'm not going to keep doing it because I made a presentation two months ago to the CEO and I said I'm going to do it. So now I have to prove it that it's working. That's the bullshit in corporate, right? Because you think about, I said that if we do it this way, it's going to work, but it's not working. But I'm going to have to make it work because I said it's going to work. No, it's not working. You just stop it and you move to something else. You pivot. You know, we did something with Cat. We tried to do a live video streaming with gaming and gamification. We spent a lot of money on it, but it didn't work. I mean, it worked nicely, but it didn't really work as well as we wanted. We stopped it. Right. Put ego aside. It's about what's right for the business. And the problem is, this is a big problem in corporate where, you know, it's the individual first before the company. Like, you put yourself in your career before you put what's right for your company, and that results in bad decisions or in throwing, you know, good things after bad things because, oh, yeah, I made a commitment or I made a presentation or whatnot.
Nathan Bush: It's funny that you mention pivoting and being agile, moving fast, because one of the things that I read in the research of Trade Square was around how you did not set this up as a proof of concept. You were like, we're going big with this right from the start. What was interesting in what you just said then is that just because you're pivoting and you're making quick decisions doesn't mean you have to start small.
Nati Harpaz: Yeah. Or shortcut. So, yeah, I meant, what I meant is, look, we went with Miracle, which is an enterprise platform. It's expensive, it's hard to implement, but it supports growth. I mean, Bunnings, catch Walmart, Mexico, Best Buy, they all run on this platform.
Nathan Bush: And I'm just raised a huge amount of money, right?
Nati Harpaz: Yeah. And look, the CEO is a really good friend of mine. And when they did the first round, I was there like, we were the fastest growing marketplace. I visited them in Paris and I did all the calls with their investors to talk about it. You know, how they. So we have a very close relationship. But it's an enterprise solution, right? I mean, setup cost could cost you $250,000, just a fee. And then you got to do all the technology and then you got to pay. It's not cheap. But I didn't want to go in a year and a half time say, oh, I. Now we have to replace my stack. Why? To rewrite the code. I have to. All this. There's no point. The downside of it is it costs you more money. I mean, it was more expensive and we burnt it through a lot more cash. But you know, I was quite confident in the concept and in my ability to raise money from my investors who trust me that I said we'll just go for it. The pivoting, for example, was okay from just gift and homeware to more generalist B2B marketplace, where it does facilitate retail, but it also facilitates others. That's when trades will connect. That's another pivot. Those are the type of pivots that I'm talking about.
Nathan Bush: Yeah, that makes sense. Now you mentioned you've got a great network of mentors, teams and friends around you. You know, the people that can get shit done that can go on your execution path with you. What are the personality traits that stand out for you that make great retailers?
Nati Harpaz: Yeah, I wouldn't say retailers though. I mean, I have to say that it's not about retail, it's about, you know, first of all, we always look at traits. What are the personality traits you're looking for in people? Right. Number one is integrity. Integrity is really important because I don't want to have to think is this person is telling me the truth or not, is trying to bullshit me, whatever. I want honest people with me. So integrity is one. The second one is someone who gets shit done, no excuses. I like people coming to me with solutions, not with problems. So you say we have a problem with this, this and that and I have a few solutions to offer. Or do you have a solution but not giving up? Like giving up is not an option. So it's got to be a go getter execution, no bullshit. That's another thing. I like people who I have fun being around. Right. Like it's really important. If you're not willing to, if you're not going to have a beer with this guy, don't work with him.
Nathan Bush: You got to enjoy what you do.
Nati Harpaz: Exactly. At the end of the day, you're having fun. If you're not having fun, then you're not going to do good work. Because, I mean, you spend so much time at work, you want to make sure that you're having fun with the people around you and it feels like a family and you do more for the business and for the people around you. You know, I'll tell you, when I was, it's kind of, it's kind of funny story, but when I was in primary school, you know, and the teacher was saying, asking us the question, when you're in the army and you've been shot at and you run forward against the bullets flying against you and you fight back. What is it that keeps you going? Like, what is it that makes you run and fight back? What do you think? Is it your mom? Is it your parents? Is it your children? What is it that makes you. It was something that sort of always resonated with me. And then I'm thinking about it, like, I was like, 12 years old, right? And the answer she gave us was, you're doing it for your mate who's next to you. You're not doing it for your parents, not for your children, for the one running next to you, because you know he's doing it for you.
Nathan Bush: Yeah.
Nati Harpaz: And you're doing it together as a team. He's protecting you, you're protecting him, you're fighting together. It's the same in a business, right? I had the same. And I, by the way, you know, I spent three years in these in the army, so I know exactly what she was talking about when I was actually there. But when I was at Catch, most of my team members were my. We were on a team. I knew that they would stand up for me, and I stood up for them. I was on the fence for a few of these guys a few times, and they were doing the same for me. So this is how. This is how you lead a team, right? And you make them know that you're there for them and they'll be there for you. And that's very critical for me. So I want to do business with people I feel are going to lie on the fence for me, and I'm going to do the same for them.
Nathan Bush: And it's interesting, the point you make there, like, it ties perfectly into that authenticity. And what you were talking before about owning up to your mistakes, because you can only be there for people who are honest about themselves and can own up to their own mistakes, rather than you feel you have to kind of always point it out for them.
Nati Harpaz: Yeah, exactly. I mean, it's also. I'm not a micromanager, right? So I'm a very macro manager, you know, and that's why, I mean, CEO is really. I could do the job, but it's not my natural inclination, right? Because, you know, if you give me a business that needs transformation, that's. That's for me, if you need a business to grow from 1 million to 100 million for me, once you get to a point where, okay, $300 million, we want another 10% growth, that's on me, right? Because I'm not a captain who just takes a ship And I'm the guy who will build the ship and I'll sell it, but I'm not going to sell the ship because it's just not my trick. I usually say that if you give me something that's working really well, I'll probably ruin it because I'll try to change it, I'll try to make changes. And that's not me. I'm making changes and it works really well for me because I know how, I, I know how to fix things and fix problems. But I'm not a very, you know, like the CEO takes everyone for monthly reviews and do their mentoring and all that bullshit. That's not me. I'm like a leader who goes, runs really fast forward and everyone has to run with me. And I need people who can run with me and can think on their feet and execute and not need me to give them exactly everything, every point of what they need to do. I give them the vision, I give them the tools. And the other thing is, you know, because I come from a small business background and when I say small business, I mean my background is I'm a lawyer and I've studied software technology. So I know technology, I know legal, I know business. But I had my own retail store, I had one jewelry store in Bondi Junction which my wife and I built. We built it into a 30 store chain. But I did the myob accounting myself. I did the buying, I did the deliveries, I did the merchandise. I did everything right, I did the marketing. So I went through all these different parts of the business and then as the business grew, I became more knowledgeable. So it's very important, I think for someone in my position, or anyone in a leadership position to understand everything, to be able to have a, if you're talking to your cmo, be able to talk marketing, be able to understand what is SEM, what is SEO, how does it work, what is the mechanism, what is cra, what is lifecycle management? To understand finance, I mean I can understand finance like a cfo, balance sheet, profit and loss. I can understand merchandising technology super critical. And I think one of the problems that I've seen is where you got people in very leadership position, but they come from understanding only one part and they can't relate to the other parts, right? So they think about marketing from an accounting point of view. They're not thinking about marketing from a marketer point of view. It requires a certain personality of someone who's really, really open minded. And I like Ray Dalio. Ray Dalio Has a philosophy that says extreme open mind, right? That says you just have to be so open minded about everything. And this is actually me, I'm a very open minded guy and I'm actually, I change my mind quite often, but I change my mind often because someone comes into my office and points out something that I said yesterday. I was very determined, this is the right way to do it. And then he walks in the next day and says, oh, by the way, I'll say, you're right. Actually, you're right, I was wrong. Let's do your idea. I have no ego about making decisions or about saying something. And then I have to prove I was right. Now sometimes I have a high conviction that I'm right and then I'll fight for it. But extreme open mind and knowing what you don't know is more important that you know what you know. So I always ask myself what I don't know, what people know better than me, what, what value. Hire people that are smarter than you and what they do, right? You get a marketing guy, try to get another. Another mistake. I mean, I'm just sharing different things
Nathan Bush: here, but that's great.
Nati Harpaz: Another mistake I used to do is I used to hire people who are exactly like me. But that's a problem because you actually need people who complement your skills. So for example, I'm not a very organized operational guy, right? Like I don't keep diaries and Mark is like, you know, I'm exactly opposite than my wife, for example, is like super organized. I have a very good memory, so I remember a lot. And I use my phone like I put everything in my diary and that's pretty much as, well as organized as I get. But you can't have that as an operations manager, right? So the problem is the first operation manager I hired was another guy like me, entrepreneur, big thinker, who's gonna get the job done. Like you gotta get the. So. So the next guy I looked for operation is like someone whose methodology, you know, has got a good methodology, well organized. And the beauty thing about, I think Anatya and I, she's the CEO of Tracy, so we complement each other perfectly. Like I told her, you're like my business wife. I have a personal life and you're my business wife. First of all, I have to say I find that women who are leaders have such a higher level of empathy that they do such a better job. I mean, and I admit I don't know. And there's obviously men who've got empathy, but women naturally have more empathy and it's so important for a team to have good level of empathy because people are working with me, not because of my empathy, put it that way. Right. They love working me because I inspire them, because I move things quickly. They can get shit done. There's no bullshit. But I'm not really a shoulder to cry on. People need that sometimes. So Nat is on the one hand very analytical, very smart, very entrepreneurial. She's like the startup person but at the same time she brings that value of being able to build an amazing culture. I had a guy who went in there recently to do some work and he said to me, man, the team you built here, it's an unbelievable and the culture you've got. And so that's so important. So I think enough, for example, complements me. We complement each other. I'm the crazy idea guys who bring these crazy things and well, network. It brings all the sellers and she's the one who actually gets it and make things happen.
Nathan Bush: Yeah.
Nati Harpaz: So it's very important to choose a
Nathan Bush: good partner and did that self awareness of what you're good at, what you're not good at, did that come naturally after a while?
Nathan Bush: Did it click in at a certain age?
Nati Harpaz: Yeah, it's a good point. There's a guy who does some advising for us on recruitment and hiring and I had a conversation with him and he said to me, look, there are three different personality traits and you attend at entrepreneurship, something like that. He had a definition for it and he said that's very rare. It's very hard to find people attend there. But on organizing you're six. So I said to him, okay, how do I get six to eight? And he said to me, don't bother, don't bother about it. And he said, this is what's going to happen. If you're going to try to bring your six to eight, the amount of effort you're going to try and put there is going to bring your 10 to 8 or to 7. So the things you're doing really well is going to, you're going to detract because the energy you're going to have to exert to get your to be organized is just so much it's going to take away from what you do really well. So that's one. Then I did a few other, you know, I spent a lot of time on, you know, optimizing team building and diagnosing people and how to choose people to interview. It just slowly started to occur to me what I'm really good at and what I'M not good at. And then the fact is, you hire people for what they're good, not about hoping that they'll improve what they're not good at. So you hire for traits. And I just realized what my traits are. And my traits are to get things organized. So I can organize, I can take an idea and I can vision how that idea could be executed. Then I put the team together, then I put the business plan together, then I bring the investor, and then I follow them with strategy and with a really good network. And that's the secret. So for me now, the biggest challenge is finding good people all the time, expanding my network, and building relationship with people that I can mentor and help them. Ultimately, one of the things I say to people is, you know, if they're in their early 40s, I'm saying to them, you got to stop thinking about your next job as another job that's going to make you another $20,000. I mean, I had a conversation with this with someone yesterday, because ultimately you're just going to stay in the rat race for the rest of your life. How do you get out of the rat race? You join a startup company or a new company or a company that's going to reward you for the outcome. Don't worry about making 250,000 or 270 or 280. Don't waste my time talking about $30,000. Like, I had a conversation with someone yesterday. Tell me, what are you, what are you going to make in three years time when this business gets sold for, I don't know, $50 million or $100 million or there's an exit, you need to make one or two million dollars, because when you pay capital gain tax on that, you end up with 75% of that money. So if you made a million dollars, you get up $750,000. How many years would it take you to save that money? Even if you made the extra $20,000 a year or $50,000 a year, over 10 years, you'll make 500,000 less tax. You got 250. Yeah. You need 30 years to save $750,000. Right. So. So you really got to focus on the mind shift. And this has been my mind from day one. I'm not interested in. I'm not looking for a job. I'm looking for a partner. I'm looking for an equity. I'm looking for something that. And I'm happy to take a low salary. I'm happy because it's. Yeah, I mean, you can't have it all, you can't have a high salary and I have equity. Right. You got to risk something. And so you say to the guy who hires, you say, look, mate, you got a great business. I'm happy to come. I know what I can do. I know I want $300,000, but you know what, I'll take 250 or I'll take 220, but I want more percentages in the business. I want to be sharing your success. And for an owner, it should make absolute sense. And the trade Swift story is, even though I founded it and even though I put the initial fund and everything, I gave away 60% of the company to the employees. So my partner and all the other ones, they have 60%. So we're all going to get diluted now with we're raising more money. But for me, it's more important that everyone works, feels like they have an ownership and they have a part of it and it's there, and that's why they're working like that. And by the way, we didn't pay wages for the first four months. Everyone worked for the equity and then we raised money and then they got lower salaries. So, you know, but they're working for the big dream. And they, you know, they could make, some of them could make $5 million if this becomes really successful.
Nathan Bush: That's brilliant, mate. I don't think you've left anyone who's listening to this uninspired. Everyone should be finishing up thinking about what the next rocket ship is that they're jumping on. And we really appreciate everything that you've shared both about Tradesquare, but probably more importantly about your journey and what you've learned along the way.
Nati Harpaz: Yeah. And look, what I suggest is if you have a really good idea and a dream, I used to just sit down and write it down on my computer and start to formulate it and how we go da, da, da, and then share it with me, because I'm at a point where I can help businesses sometimes. My journey now is Tradesquare, so I think my mind was going to be 100%, but I can point them in the right direction sometimes. The other thing is we're looking for talent, I think Tradesquare. I'm hoping we'll have a big announcement coming soon and we're going to be adding people to the team and we need, we need some really good talent to join us. And by the way, I feel like a recruitment company because over the last 12 months I probably placed eight or nine people in jobs where I've been asked, do you know this? Do you know that? And I'll just try to do an introductions. So I think there's, I haven't, I haven't started their recruiting company. Even though I should think about, you
Nathan Bush: better be careful because that's how I started my recruitment company.
Nati Harpaz: No, but the point, the point, the point is I feel that I'm. If I help a company, fine. And a person, fine. I mean, I'll make enough money from other things. I don't need to make it from the recruitment. But, but you know, I'm building relationship with people and I'm doing good things for them and hopefully in the future I can ask them for a favor and they'll do it for me.
Nathan Bush: Good things come back around, especially in an industry as small and tight as retail and E Comm in Australia. Now, Nati, if people have listened to this and they go, I need to get in touch, what's the best way?
Nati Harpaz: So email is my email, obviously. You can put it on the podcast natiharpasgroup.com or my WhatsApp, which is 61433 double 26052.
Nathan Bush: Beautiful. We've never had a WhatsApp number being shared before. Yeah, that's great.
Nati Harpaz: No, because actually my Australian number is, I use, I have a local number here, so my Australian number is only the WhatsApp. If you call me on Australian number only when I'm in Australia, which I'm hoping soon when things open up, I'd be able to come home for a visit. I've got, you know, half my family is back there, so I gotta come for a visit.
Nathan Bush: Yes. And for those jealous of your adventures, what's the next country on the itinerary?
Nati Harpaz: I've been to Amsterdam twice in the last month. It's an unbelievable city. It's one of the best cities in the world. And yeah, I think I'm going to. I've been to Tel Aviv a few times. It's also an unbelievable city. You gotta visit, especially if you're in technology. And I think I might be in that retail show, web show in Portugal, early November. So it could be interesting to maybe if things are open up for people to come from Australia, we can do a little delegation. You know, I was in a, in Amsterdam, I was in this fintech shop. Australia had a little standard. It was so weird. It was the only country and what they were doing, they were hunting for talent. So it was the trade department trying to hire people in the fintech space to move to Australia. I don't think their timing was very well with all. But anyway, things will be better soon.
Nathan Bush: So great to reconnect with you and thanks for sharing today.
Nati Harpaz: No problem.
Nathan Bush: Really appreciate it.
Nati Harpaz: Thanks mate. We'll talk soon.
Nathan Bush: So how do I wrap that up into three just three bits of practical advice? I think the beauty of an episode like this one with Naati is that everyone is going to relate to a different bit and take their own little bit of gold out of it. But if I look back, here are my three pieces of practical advice. Number one Fresh stock sells like magic. Spoken like a true retailer. Rather than doing big orders of stock that you struggle to sell through, can you buy more regular, smaller batches of stock? You may not make quite the same margin, but you will have a lot more to say and a lot more to excite your customers with. Number two the Rise of New Niche Marketplaces Even though it feels like we're at marketplace saturation, everything we see, everything we hear is feels like it's about marketplaces. Nadi's view is that there's still plenty of growth for niche marketplaces, so if you are a D2C business, it might be worth thinking about how you can own the category rather than just competing for your brand. Number three Set yourself up for scale, but be prepared to change. As you heard from Nati, despite the little research he did, he was convinced convinced that Tradesquare was going to be big. So he built it with the foundations to scale. Now, it didn't mean that he couldn't change along the way, but he invested early in those foundations so that when the growing started, he could get on with growing rather than going back and revisiting those foundations. To finish up, I have three resources for you. Firstly, if you're a first time listener of Add to Cart and you want to stay up to date with new episodes, head over to addtocart.com and you can sign up for our weekly newsletter. We'll let you know every time a new episode drops, as well as giving you my three takeaways from each episode and a link to the transcripts so you can know that this is an episode that you want to dive straight into. Secondly, if you want a weekly roundup of the best e commerce case studies, tools and research, sign up to the High Five Friday newsletter which is delivered to inboxes at 8am every Friday morning. I read all the e commerce news and send you the bits that I think you can take action from. Sign up at 12 high 12h I g h.com au high 5 and the last thing if you are looking to explore your next e commerce opportunity, head over to esweettalent.com we are a dedicated ecommerce talent agency connecting the best e commerce talent with the fastest growing brands. Check it out. Sign up to the email and get in touch with me if you want to discuss your next move. Until next time, thanks for listening and keep those customers adding to car.
