Raj De Datta Transcript
Clint Betts
Raj, thank you so much for coming on the show. You've built an incredible company, which I want to talk about in Bloomreach, and you actually have an incredible background in venture and you're an investor and all these various things. But I thought we would start with your book, The Digital Seeker, which I highly recommend everybody buy, go read, check it out, because it's all about how digital teams win big. It's interesting that to me, I guess in 2023, it's like teams, 'cause all teams are—
Raj De Datta
That's right.
Clint Betts
... digital at this point. What inspired you to write the book?
Raj De Datta
Yeah. Well, first, Clint, it's great to be here with you, excited to have this conversation with you and fun to start with the book. So The Digital Seeker really came out for me of a distillation of a thought process that I'd had over many years building Bloomreach. So at Bloomreach, over the course of 10, now almost 15 years, we had really been working with some of the winners, some of the losers in digital, and observed what they were doing to create these great digital businesses.
So I really felt like it was important that the teams involved in digital, that the leadership teams, that the investors community that was investing in digital understand how to parse out the winners from the losers and what attributes represented one side from the other.
The book was a research undertaking. I decided that I wasn't going to just write what I thought, I was going to go to an interview. I ultimately did probably 100 interviews with different C-level executives at all kinds of industries, in retail for sure, in travel and hospitality, but also in government, in healthcare, in nonprofit organizations to really distill what the key learnings were. Out of that came The Digital Seeker.
What I hope is that it's certainly a book about leadership and how the teams win, but it's a deep understanding of how you get there and what the common attributes are.
Clint Betts
Right, and what did you learn interviewing that many executives and C-suite leaders?
Raj De Datta
What was so interesting was the themes actually really came out really clearly. So the first thing was that you build not for your customer and what they tell you they're interested in, but what they're really seeking. That's why it's called The Digital Seeker. What do I mean by that, to make that really real? You go out and you go say, "Hey, I'm going to go to Home Depot and I'm going to go look for plywood," and so you're a customer of plywood. But what you're seeking is a collection of materials and maybe ultimately, a playbook to go build a deck. You might go and you might say, "Hey, I'm interested in a travel bag," but what you're seeking is a great vacation with your kids.
What's interesting is if you start to build the digital experience just simply to fulfill the demand that the customers are coming to you with, then how different are you than the next person that can go build that experience and sell that same bag and sell that same plywood? But on the other hand, if you can encompass, "Hey, this is where you come to go build the deck, and yes, we sell you some plywood," or, "This is where you come to go organize your vacation, and yes, we will sell you a travel bag along the way."
Now all of a sudden the quality and the level of differentiation of that experience is so deep and so compelling and has so much more of a moat that you win big in digital.
Clint Betts
What role does Bloomreach play in all of this?
Raj De Datta
Yeah, so Bloomreach we think of as a commerce experience cloud, what that means is we're in the business of working with people who sell stuff online. That could be big brands like Neiman Marcus and REI and folks like that, but it could be an emerging brand that is selling sandals online or selling travel services online or selling restaurant reservations. We'll go personalize that experience and make sure that every aspect of the customer experience speaks to the consumer, is highly personalized and ultimately, performs and drives more revenue for brands.
So we work with almost a quarter of e-commerce in the U.S. and the UK. So if you're shopping online, there's a good chance the webpage you're seeing, the email you're receiving, the SMS you're getting is behind the scenes powered by Bloomreach. It's computing exactly what to present to you so that you have a delightful experience as a consumer, and so the brand makes a lot of money, so we're squarely in this digital world. We see a lot of the best, we see a lot of the worst, and we're excited to power so much of it.
Clint Betts
What makes a great customer experience? In your experience, having done this for so long and being in the middle of, again, like you said, some of the best brands in the world, maybe seeing some of the ones who don't do it as well, what makes a great customer experience?
Raj De Datta
Well, I think a great customer experience is one, first of all, some of the best, you almost don't notice. When we all experienced the first iPhone, it just was easier in many ways. When we go out, many of us are subscribers to Amazon Prime, which I think is a great customer experience because it just says, "Hey, I want to buy a lot of products really easily, and I want shipping to be cheap."
So customer experience can stand for different things. It's not always something that you notice, sometimes it just happens. But sometimes it also speaks to this underlying consumer sentiment or customer sentiment where you're like, "That's cool. I was thinking about buying flowers and all of a sudden the journey took me to chocolates, and I hadn't thought about chocolates. But yeah, chocolates are a better idea than flowers."
So there's some sparks that it promotes at times. So you know it when you see it, but it always starts with this notion of the seeker, "What is my customer seeking and am I delivering that?" Then there's a lot that teams have to do to actually fulfill that level of expectation of the seeker.
Clint Betts
A lot of what you're talking about makes up a brand, that's like what a brand is, right? It's not just a logo or color scheme or that type of thing. There's a story behind it, sure, which I think that's probably super important, but it seems like the brand is the experience you have with it at the end of the day. What do you think of that? Is that true? And what makes a great brand?
Raj De Datta
Well, the most important thing about a brand, in my mind, is that instantaneously, it has an association with something. So the most dilute brands are ones where you ask, "Hey, what does that brand stand for?" You think, "I'm not sure. It stands for this and that and this and that." So when it's A and B and C and D, then it's none of the above, really. So let's take a good example, one that I love in the e-commerce world, which is Patagonia.
You can say Patagonia to anybody, and people will be like, "It stands for saving the earth. It stands for the environment," because that's what Patagonia is. Everything is wrapped around it. The fabric, the giving, the culture, the marketing, the product, everything is wrapped around that brand and that brand, and it's pretty hard to do. To be clear, that's a pretty high bar to achieve, but that's when you know it means something.
People agonize over the what, like, "What do we stand for? What is the brand about?" But more important is that you stand for something.
Clint Betts
Yeah. How do you make that authentic, though? I think that's an interesting point, Patagonia, that's obviously authentic to their core. They believe that, they're trying to accomplish that. Like you said, it's become the ethos of the brand, but then you have people who try to do that, and it doesn't come across as authentic.
Raj De Datta
Exactly, and that's why it requires deep inspection. Every company doesn't get to a certain size or scale without being about something. Often where leaders screw up is they want it to be about one thing, but it really isn't. Then they put the want ahead and they say, "Well, our brand is going to be aspirational. It's going to be the one," but there's not enough of an authentic base around it.
I think a lot of what we think about at Bloomreach is the limitless potential of AI. That's a big part of what we do and how we deliver the quality of experiences, and so we stand for that limitless potential. So the question is, as we're speaking to our customers, as we're building products, as we're thinking about our marketing, does that come through?
It's a work in progress because there's a lot of things that will pull you in a lot of other directions as you're building that brand out. But I think it has to be authentic because customers and consumers will see through you instantaneously if it's not.
Clint Betts
Right. When you think of AI, and you're right in the thick of it and it's become a big part of your platform and you just said, hey, it's limitless, the opportunities that can happen there, what about it scares you? What about it excites you? What about it do you think people are missing, particularly on the consumer and e-commerce side of things?
Raj De Datta
Yeah. First of all, when I started Bloomreach, which at this point was in 2009, the thesis was, hey, human beings weren't going to go manually creating websites and apps and writing email messages. AI and machine learning was going to play a critical role in doing that. That was almost the founding statement of the company.
So here we are 14, 15 years later, and actually, a lot of AI has been incorporated into our products and others, but it's finally arrived, I would say, in a very serious way. What's interesting is that it still feels very much like the beginning. What's crazy is that if I were to give you an analogy, it feels like the internet 1997, or it feels like mobile applications in 2009 or 2010. We have a long way to go in terms of what kind of impact AI is going to have. But if we break it down, I think the thing that AI has always done better than most human beings is process large amounts of data, make sense of it, and then do something with it.
In a self-driving car, it processes data related to sensors, and it helps navigate. In an e-commerce website, it processes consumer sentiment and products, and it delivers high-quality search, for example, is one thing we do or more targeted marketing campaigns is another thing we do with AI.
It's really good at taking large amounts of data and making sense of it, but what's happened in the last year has been yet another step function. We've always said, "All right, AI is pretty good at making sense of stuff and doing things that manually we couldn't possibly process, but it can't possibly be creative, it can't create anything."
What's happened in the last year is with this new field of what's called generative AI, we're now in a world where AI can create stuff, and we've seen it, we've seen it with ChatGPT where you write to it and it writes language back. We've seen it with DALL-E where it can create images and paintings. We've seen it with Character.AI where it can create virtual characters, it can be your friend. So it's crazy to think about the fact that we can now open up a world where AI is at the heart of not just execution of manual tasks, and it can certainly do that very well, but also creativity.
Clint Betts
Yeah. Isn't that fascinating? I keep going back to authenticity, though. If you're a brand and a lot of what you're generating creatively or speaking to your customers is coming from an AI, how do you make sure that's authentic?
Raj De Datta
So I often say that AI is what you put into it.
Clint Betts
Right.
Raj De Datta
So yes, it's incredibly powerful, but the AI doesn't represent your brand. You train the AI to represent your brand. That becomes your new responsibility. What you used to do is you used to manually go in and say, "Hey, when somebody goes and buys these flip-flops, I want to recommend to them this additional towel," and used to do that manually as a human being and you're getting the voice.
Then machine learning came along and said, "Every time people buy flip-flops, they tend to buy towels, let's just recommend some towels," and that's where we've been. And now the AI might make sense of the whole thing and say, "Hey, we can go create a custom towel for you. We can go create a whole bag of swimwear. We can create imagery that speaks to you, 'cause you live in a beach town and you're going to feel like you're shopping at a retailer that is your local store. We're going to know more about the flip-flops than anybody else so that you're going to feel like you're talking to the best sales associate ever."
So there's a lot of power that you can harness, but ultimately, when the AI represents you on your website, on your app, in your phone, it's exactly that. It's a representation of your brand, so you have your responsibility to train it to do that because otherwise, it might do a really poor job of representing your brand.
Clint Betts
Right. Yeah, I think that's the thing that you just touched on, their companies need to really hone in on and understand you're training the AI. The AI isn't just coming up with stuff, right?
Raj De Datta
Exactly.
Clint Betts
It's representing your brand and representing what you put into it, I think that's a key point.
Raj De Datta
Another good analogy of that is you used to be the player, now you're the coach.
Clint Betts
Right.
Raj De Datta
So it's still your product on the field, but you don't get to be the player anymore, the AI is the player, but you still got to coach the AI.
Clint Betts
How do you talk to consumer brands and other e-commerce companies about the right platforms to reach customers? There are so many different platforms. You've got Instagram, TikTok, all the social media ones, some that I probably don't even know that you do know where you're reaching your customers. How do you maintain your brand and your experience across all of these platforms?
Raj De Datta
If we've learned one thing about consumer platforms over the last 10 or 15 years it's that they're incredibly dynamic. There was a time when a generation of people grew up on Facebook and now nobody uses Facebook below a certain age, and then Instagram and now TikTok. My daughter uses BeReal, which is another platform.
Clint Betts
Oh, yeah, yeah, yeah.
Raj De Datta
Then you've got a generation particularly of boys, but not just boys whose social platform is their gaming platform. So I think what we have learned from that is that you never bet on one, you follow where the consumer goes and you allocate your resources, your time and your attention there, and you just assume it's going to change next year because that's what happens. It changes about as often as fashion does.
Clint Betts
Yeah. The big player in the space, obviously, is Amazon. How do you talk to your customers and brands and e-commerce players about how to interact with Amazon? Amazon's such an interesting ecosystem all by itself. When you talk about Amazon with your customers, what type of questions are they asking you and what advice are you giving them?
Raj De Datta
You know what's interesting is, five years ago when I was working with all these big retailers, they had deep fear of Amazon, so like, "Amazon's going to come eat my lunch. They've already taken over. They went from books to electronics to home to apparel to so on and so forth, and they're just going category by category and they're eating my lunch."
What's interesting is Amazon, while it continues to do very well, it's also become pretty clear, and just by way of example, if you take the last couple of years, believe it or not, walmart.com has grown faster than amazon.com. That's one thing. Then on the other thing, people have said, "You know what? Amazon might be able to sell everything, but they can't deliver a quality of experience for everything.
If I'm buying eyeglasses, it's still a better experience to go to Warby Parker than to go to Amazon. If I want electronics purchased and also installed in my home for a home theater system, I probably will get a better experience from Best Buy and their services arms than Amazon. So they don't seem quite as daunting.
They're still dominant, there's no doubt about it. But a lot of folks have figured out, if you do a great job of your category in a specialty oriented way and deliver a high-quality experience that speaks to the seeker, you can beat Amazon.
Clint Betts
Yeah. Isn't that remarkable? That's the beauty of e-commerce and the consumer brand space period is if you just have a great product, great brand, great customer experience, you can really go a long way. Has Shopify democratized it a little bit, like anybody can do this?
Raj De Datta
Yeah, Shopify has been one of the great counterweights to Amazon because Shopify came in and said, "Hey, you can go create a store and then you can drive demand to it, and you don't have to just make a living listing your products on Amazon." I think it created millions of entrepreneurs. Now it's going through a tough time because after COVID and as the recessionary wave hits the macroeconomic picture, some of those smaller businesses are struggling. But all in, it's been terrific that millions of brands have been able to get online, a subset of them are achieving a reasonable amount of scale.
Generally what a lot of the brands that reach 10, $15 million of online sales, they then call Bloomreach and they say, "Hey, we now have a e-commerce site that's performing, we want to grow to 50. Can you help us?" We've got a range of ways by which we can do that. So we work with a lot of them, and I think they definitely democratized e-commerce. They provided a terrific counterweight, and they've made it possible for you to build an independent brand at scale and not be dependent purely on Amazon and Google.
Clint Betts
At Bloomreach, you call yourself a Commerce Experience Cloud. Tell us what that means.
Raj De Datta
Yeah, it basically means, hey, if we think about e-commerce for a second here, we're about 25 years in. We're in 2023, it's late '90s when this whole thing started. If we think about what we've done as an industry, I would say what we've done is we've made it possible to buy stuff online and that's great.
But making it possible to buy stuff online doesn't mean people actually will have a great experience when they buy that thing online or will want to keep coming back and back, or will want to buy more of it, or will have a different and better experience than they might have in a store.
I think we're early innings in e-commerce. Believe it or not, where only 20% of retail sales happen online, 80% still happen offline, so we got a long way to go.
The idea of a Commerce Experience Cloud is to say it's not just about selling stuff online, that's what commerce is. It's about creating the quality of customer experience that's amazing. So that consumer has an amazing experience with your brand, buys more stuff, achieves their own motivations for why they bought that stuff and keeps coming back and back and back and creating the kind of loyalty that makes it possible.
So the Commerce Experience Cloud is about doing exactly that and does that in two primary ways. It helps engage more customers to the brand. It makes them aware that you sell that handbag, that you sell that car, and it does that with email and SMS and web and other marketing.
Then once you're interested in buying the car or the part or the vacuum cleaner or the dress, then it will power the e-commerce experience to the website with a highly-personalized interaction so that you and I have very different experiences that speak to us and enable us to then buy that product really easily. So that's what we call the Commerce Experience. It's everything before I hit Add to Cart—
Clint Betts
Right.
Raj De Datta
... on an e-commerce brand.
Clint Betts
What about everything after this sale goes through. Isn't there, there's that whole follow-up piece of it of surveys and trying to get returning customers and things like that?
Raj De Datta
Well, I think generally what we say to people is, "Look, we're going to get people to add to cart, and then once they buy, we're going to get back to them." So that's when the surveys and, "Hey, maybe you want to buy something else," or, "How was the service?" All those things are after.
There is a transactional piece in the middle, which is like, "I got to make sure the packages ship. I got to make sure there's no fraud. I got to collect payments," which is what platforms like Shopify and Salesforce at the higher end do a great job of doing. We at Bloomreach don't cover that space because they do a really good job of making sure that they handle that.
But we're all about the customer experience to get them to buy and then get them to keep coming back and buying more and more.
Clint Betts
What have you learned about leadership in your time leading this company and maintaining a culture and building a team?
Raj De Datta
Well, yeah, no, this is a rich topic. Just to tell you the Bloomreach story in a nutshell, I started Bloomreach in 2009 with a co-founder. We got started with four or five people, and today we're 1,000 people globally. Over this period of time, it hasn't been up until the right perpetually. If I were to summarize our journey, it was a rocket ship early, and then we hit a couple of icebergs, and it was a real struggle in the middle. Then it's been a rocket ship again in the last six or seven years.
So to me, that's what leadership is. Leadership isn't about leading through the good times, it's about creating the good times by leading through the bad times. That's where I think what I have learned is to know why you're doing what you're doing, be authentic to yourself and how you lead, and then communicate in a way that represents that authenticity to your team and be in it.
Probably the most important thing I did in those iceberg years was just say to people, "Look, we're hitting a bunch of icebergs. It's not going well. I wouldn't fault anybody for walking out the door today, but what I can tell you is the destination is still worthy. We still have a lot of the assets to get there, and I'm here," and that certainty helped us get through a lot of those iceberg years.
Clint Betts
Do you feel like the iceberg years are what forged the bonds and relationships within the team and this, "Man, look at what we just did? Look what we just got through and came out the other side of."
Raj De Datta
Well, I think the only thing better than reaching the mountaintop is almost reaching the mountaintop, falling and then reaching a higher mountain top, so absolutely. It is hugely, hugely a bonding and also creates a lot of trust and motivation and appreciation, gratitude as well. So there's a lot of attributes of failure that are deeply underappreciated. We celebrate success a lot, but we don't really think about how failure creates success and why it does. I think those years were really important ultimately to create a scalable, sustainable world-class business.
Clint Betts
When you went from just a few people to now over 1,000, how have you maintained the culture? How have you maintained Bloomreach's brand, Bloomreach's experience from an employee standpoint?
Raj De Datta
I'm a deep believer in culture. A lot of people understand how to talk about culture but don't know how to create and reinforce culture. To us, what we've done at Bloomreach is first of all, the values and culture was a document I wrote before I even started the company. I had started previous companies, and I had seen a degradation in culture. So we wrote those principles in before we started the business, and they remain the same principles and the same values today 15 years later.
They are so inculcated in every employee that I could walk out the door tomorrow and people would talk about the culture and what it represents. It's not my doing anymore, it's taken on a life of its own. So it's been at the heart of everything. We've reinforced it at every turn, and we set a pretty clear mission for the company, which is that this is going to be the single most impactful professional experience of your life.
We try to live up to that goal, we don't always get there, and we recognize that culture is always a work in progress. So that's a very important part of what we do. We have built a collection of operational processes where every quarter, the same way we manage revenue targets and product releases and customers, we manage our culture and our barometer.
We survey, we collect a lot of data, and it's always getting better, and we're always fixing what's broken. So we never say, "Hey, we wrote the principles on the wall 15 years ago, let's just talk about it." We're always tweaking and tuning and improving and fixing. Over the course of the time, if you do 14 years of doing this multiplied by four quarters, the culture gets pretty good and gets pretty real and gets pretty meaningful. So it's no surprise now when we survey people, it's got an employee NPS of almost 50 in terms of promotion of the company.
Through the COVID years when lots of people were resigning as we were all going remote, Bloomreach never experienced any of that because that's how strong its cultural foundation has been.
Clint Betts
Yeah, I can tell you're still super passionate about it, both the company, the industry you're in, all that type of stuff. Having done it for 14 years, what's the future of Bloomreach? How far do you want to take this thing?
Raj De Datta
I think we're scratching the surface. Yes, Bloomreach is exactly where my 14-year-old son is in his life. He was actually born the same month that I started the company, and he's a 14-year-old teenager. We all know what 14 year old teenagers are like, right? Yeah, they're a lot further along than four year old kids, but they got a long way to go. That's how I feel about Bloomreach.
Clint Betts
By the way, thank you so much for joining us. Again, I highly recommend people read your book, The Digital Seeker. I think your insights there are invaluable for people who are in the consumer and e-commerce space. We end every interview the same way at CEO.com. At CEO.com, we believe life is just as much about the chances you give as the chances you take on yourself. I wonder if there's someone who stands out to you who has given you a chance that's led to where you are today?
Raj De Datta
Well, I'll go back to my first entrepreneurial endeavor, which was when I was 21 years old, and I was thinking about going back to school. There was a guy who was my boss's boss's boss, and I was working at a bank in New York and he said, "Hey, I'm thinking about going and starting this company. Do you want to come work with me to make that happen?" I was like, "I don't know anything about entrepreneurship. I don't know anything about anything, frankly, so I'm probably going to go back to school, but sure, I'll spend the summer with you and work with you."
At the end of the summer, I loved it so much, and he trusted me so much, at the time, a kid who was 20, 25 years younger than him. He said, "Look, I trust you enough. We're going to go start this business in Europe, and I live in New York and I can't move. Why don't you go do it? I'll back you and I'll make it happen." I had no experience. There was no reason for him to trust me to do that, but he did.
I moved to Europe at 21 having never been there before and started my first business with him, and he backed me through that journey. I just learned so much and more important than anything else, he gave me the confidence to keep doing it over and over.
Clint Betts
That's incredible. Raj, thank you so much for joining us. Really, I'm so impressed with everything you've built. Congratulations on everything, and let's keep in touch.
Raj De Datta
Sounds great, Clint.