Stories of modern business.

Courier Weekly Friday 11 September 2020

Courier Weekly Friday 11 September 2020

Courier Weekly

Can the no-code movement lead to an explosion in new business? We talk with Joe Cohen, founder of Universe, to find out. Plus: Dan Frommer explains why the ‘curator’ business case for multi-brand e-commerce is disappearing. 

DANNY GIACOPELLI: Welcome back to the Courier Weekly. I'm Danny Giacopelli, Courier's Editorial Director. Today on the show we catch up with Dan Frommer from The New Consumer. While the pandemic has broadly benefited e-commerce companies, it hasn't been good for everyone selling things online, particularly those that consider themselves curators. We'll find out more why from Dan a bit later on. But first this week, I wanted to really dig deep into a topic that's caught our attention at Courier lately, you might have seen the words, 'no code' everywhere you look in the last few months. It's been popping up everywhere. But what does it mean? Well, sometimes it's referred to in the context of a movement, the no-code movement. Other times it's considered a category – startups classify themselves as no code companies. But basically, it refers to software platforms, or tools that give you greater creative control without needing to know how to code to tell the computer what to do. Well, my first guest today is Joe Cohen. He's the founder and CEO of Universe, a no-code platform backed by Google Ventures that basically allows you to quickly build a website on your phone. Joe is based in New York, and he's a super-passionate advocate for the no-code movement, and he's a good spokesperson for how he thinks no code can cause an explosion in entrepreneurship in the coming years. Here's Joe.

JOE COHEN: I've been thinking about no code before it had a label. I've been obsessed with this space for over seven years. No code is an incredibly imprecise label. It's a shorthand that's useful, because it's category-defining, and we're having this conversation in the context of it. But in and of itself, there's no objective definition. We can parse what it means, I can tell you what I think of when I hear ‘no code’ and what it means at Universe; the way I see it is if you consider the evolution of software, we are shifting from a world where you needed to talk to the machine like the machine works, to a progression where you can speak to the machine in your own language as a human, and the machine can figure out what you mean. You're not having to change how you speak so that you make sense to a human. At a high level, that's what it means. When we say 'no code', we're saying that you don't need to use code to tell the computer what to do. Before 1984, if you wanted to use a computer, the way that you spoke to the computer, just to use it, just to check your messages, you needed to write code. If you wanted to open a file, if you wanted to create a Word document, you were writing code to do everything. You were using what was called a command line. 

DANNY: The famous black screen with the blinking green text.

JOE: Exactly. And then, in 1984, Apple came out with the first Mac. The real innovation was this graphical user interface. It was called a GUI, and that GUI allowed you to manipulate and use a computer without having to write on a command line or write code. We have been living in the wake of that revolution. From '84 until now – and the iPhone and mobile phones are an evolution of that – we've seen what happens when you make using a computer not require code. 

Now, what people are awakening to is that that's only one half of the story. The other half of the story is actually creating with the computer. It turns out that when it comes to creating with the computer, we're still in the dark ages. For most good creations, you need to write code. We have yet to hit that GUI inflection moment. We're at that precipice right now and that's what I think the world is reacting to. It's incredibly exciting because as much as the computer is a really useful tool as a consumer or a user, it's exponentially more useful as a creator. We've seen what's happened when a tiny group of people is able to write code – it changes the whole world. Imagine what is possible if you do that at the scale of all the users of the internet. 

Once we make that leap towards creating software without the need for code, there are different versions of that. It's not monolithic. Templates were sort of the V1 of this. Templates are absolutely no code, you don't need to write code. The thing with templates is that they're not generative. What I mean by that is, the template is prescriptive. When you start using a template, you know, more or less what your site's gonna look like. That's the point. The point is to show you a vision of what it's going to be like, and allow you to get there. But that is very different from code. Code is inherently open-ended. It's composable. You can take any two pieces of code, put them together and make a unique combination that has never been made before. That's the magic of it, because it allows for open-ended expression. 

I'm going to geek out for one second here: one way of thinking about this is to consider the English language. Every day, every human who uses the English language is composing completely unique sentences that perhaps never in the history of the world have been created. You don't need to be a poet or savant of any sort to do that, it's just the natural course of using a language that you're creating all of these unique combinations. The magical thing is that someone can understand that without knowing that precise combination of words. We can have a conversation, I could string together this unique combination, and you'll get it. The question is, could you do that with a no-code system? Could you have a system that was composable in the way that English is composable? In the same way that code is composable? Where the outcome is not predetermined, but it's also not esoteric. It doesn't require that you learn some Byzantine language in order to figure out how to divine out what a computer actually means and how it works. 

That's the challenge in the way that we interpret it. Can we build this new alphabet for the internet that allows a person who is not a professional technician to manipulate things and express an idea online in an open-ended sort of way?

DANNY: From such a world that's being created, if you could break it down into something as crude as winners and losers, I imagine at first people might say that there's no need for programmers in the future. Actually, it seems like you'll need more programmers than ever to make such a world exist.

JOE: I do think that the nature of who a programmer is will change. To make a simple web page, you're not going to need a programmer in the future and you shouldn't. That's not a role that you need humans to do. We often think of automation as taking away factory workers' jobs; automation will take away a lot of knowledge-worker and software jobs. 

DANNY: But won't you need more programmers to sustain the back end of that no-code system?

JOE: You will absolutely need programmers to build the infrastructure for it, but it's a further specialisation and abstraction. It's not clear if you'll need more people – you might need far less. I like the analogy of a Linotype machine. In the early 1800s, if you went to the basement of the New York Times building in Manhattan, you would see hundreds and hundreds of people individually typesetting pages of the newspaper for the next morning, and they'd be doing it in a mad dash. They would take every single letter and place it on the press and layout every article. There were people trying to come up with a machine that automated this process. One guy came up with this thing called the Linotype, consider it a typewriter. It would pull the letters manually and set them into the press. 

What ended up happening was, for every six people who were manually doing this, one person could operate a Linotype. People were going nuts. There were riots in the streets, people were burning down these machines, because it was taking away their jobs. What ended up happening was the Linotype won, and the price of publishing plummeted, because you only needed one person to operate that machine. 

In response, the New York Times started adding new sections to the newspaper: a metro section, a national section, a politics section and then people started new newspapers and new magazines. You had this flourishing of publishing, because it had been democratised and the price, the cost had come down. I think the same thing is gonna happen with software. I think that you're going to have a limbo period where there is a loss of jobs, but then you're going to have a long-term flourishing. At the end of the day, humans should be doing what only humans can do, which is be creative and be imaginative and ingenious. The reality is that a lot of programming right now is just construction, it's not thinking work. Over time, you're gonna have a loss of those kinds of jobs, and a gain of more sophisticated ones, and that's gonna be better for everybody.

DANNY: What would the macro view look like? Will that lead to the creation of more startups?

JOE: I think so. In my vision of the future, you have billions of people starting companies, but they don't look like traditional companies. Sometimes there is only one person working on it. Sometimes a person might have five things that they're working on. In a way, it's very interesting. Pre Industrial Revolution, everyone was a maker, everyone was a business person, everyone was an entrepreneur. Then in the Industrial era, we realised that you could add machines to build stuff. We could actually turn humans into quasi machines, and build these meta machines, where humans plug in as cogs in the wheel and they could produce vast amounts of goods humans could specialise. That's the weight that we live in and that made the modern world. In a weird way, I think that we're going to enter a post-Industrial almost pre-Industrial era, where everyone is going to become a maker and a creator again. That's for two reasons. One is, by necessity. The machines are eating all of the jobs that were automatable in the way that humans needed to do it in the past and in the industrial era. The other reason is that it's now possible with just a phone someone can music, they can write a book. They can start a business with a device that fits in your pocket. So for two reasons you're going to see the individual creator revolution.

DANNY: Right now, there's a certain amount of funds that you need to start a company, to hire a programmer, and that carries with it a bit of risk that not everybody can take on. If you democratise it even more, it might lead to everybody and their cousin starting a business, but they might not all have the chops to do so.

JOE: But that's great, who cares? The way I look at it is, of course, there will be more failure. But with each thousand times more failures, you're also going to see a thousand times more winners. Think about how incredible the world would be if you had a thousand more winners, a thousand more brands that were interesting, a thousand more companies that were building useful tools, and a thousand more people were thinking about how the world could be better. That's a better world for everybody.

One way of thinking about it is to consider Instagram. It used to be that, before Instagram, to be a photographer you needed to be a professional. Way back in the day, you needed to develop the film yourself. So you weren't just a photographer, you were a developer, you were a chemist, and you're doing all these things. Then Kodak came around and made developing easier and democratised it. The cost is still prohibitive. Fast-forward, Instagram, take a thousand pictures a day on your phone, for free. People are doing it a million times more than it ever was done and we're consuming images at a faster rate. Are there more crappy photographers? Absolutely. There are a million times more crappy photographers. But there's also a million times more good photographers, and we're all collectively getting better on a daily basis at doing it. 

The thing that people don't realise is entrepreneurship isn't some innate skill. It is a practice like any other. The more that you can build the muscle of it, the higher likelihood you are that you're going to find success. So, yes, you're gonna have more failures, but failure is the driver of future success. It's how we actually practice and so if we can build this muscle on a hyper scale and at a hyper speed, you're going to end up with a generation of people who are much better at creating things and bringing things into the world. I would argue that the reason why the rate of failure is so high is because this muscle is incredibly undeveloped. We don't have the resources and the ability to actually flex it out in a low-stakes way. I think you're going to see a lot more failure, and I think you're gonna see a lot more success. It's going to be a much more interesting, engaging and dynamic world because of it. 

DANNY: That was Joe Cohen from Universe. And just before we go, Courier Weekly listeners should know Dan Frommer well by now. He's a business journalist, and he runs the always excellent newsletter The New Consumer. Dan recently wrote a great piece about how while Covid-19 has broadly benefited e-commerce, it hasn't been good for every single player in the market. Recently, a really great online clothing store called Need Supply announced it was closing its doors. Dan thinks this is just another signal that the curator business case for multi-brand e-commerce is disappearing. I wanted to find out what he means by that. So I rang him up at his home in Los Angeles. Here's Dan.

DAN FROMMER: It all started with a pair of shoes. I forgot the event. But I needed a nice pair of shoes and it's hard to find the right nice pair of shoes. My wife who is a fashion writer knew of Need Supply. It had been already fairly big online at that point, and found me this really incredible collaboration that Need Supply had done with Alden, which is a heritage footwear brand. It was the perfect combination of a classic shoe, a silhouette, but updated in a warm, black nubuck leather. It was definitely the most money I'd ever spent on shoes up until that point and actually until now, but I wear them all the time. 

DANNY: Obviously, Need Supply recently shut down. This really, really great men's retail brand, and it's not the first time. As you point out in your piece, Union Made, another really good specialist menswear online retail brand shut down almost a year ago to the day.

DAN F: Yeah, it's happening. We're seeing it and some of it is pandemic-related and some of it's not. It's tempting to try to take different points and try to draw a line between them. Each of these businesses probably has pretty distinct problems of their own, whether it's rent or whatever it is. Union Made was online and global, but it was also a store in San Francisco. My understanding is that the store itself is what drove a lot of their financial problems. We've seen a lot of multi-brand retailers that are online, global and have built a very strong reputation, fan base, and email subscriber list, still go under. Need Supply is the one that – of the last six to 12 months – hurts me the most. 

As I talked about in the piece, it's really hard being mid-sized. That's kind of true in a lot of industries, I think it's definitely true in retail. When you're tiny, and you can really control your costs and maybe there's just a few of you, you can eke it out. If you're huge and have scale and your suppliers depend on you to write big orders, I'm thinking of a Mr Porter, you can make it work. It was actually a really great product for the users. They had a good selection, but not too big of a selection. It felt like most of the things in the store made sense. They appealed to what a Need Supply shopper would want. They sold women's clothes, they also sold home goods and design and books, but it all felt cohesive. It represented the nice part of being mid-sized. But it's hard. If you're competing to acquire customers with much bigger players, and then if you're competing for mindshare with the smaller players that can still do really interesting small projects, it gets tricky. In Need Supply's case, they'd also taken on another brand, Totokaelo which was a struggling retailer from Seattle that was also iconic and then had opened the store in New York City that was just a money pit. There were a lot of moving pieces, but alas, when a pandemic hits, all plans go out the window and it looks like this will be one of the last weeks for Need Supply.

DANNY: In your piece, you pointed out how once upon a time you would go to one of these online menswear or womenswear destinations to be told what to buy. Now you might go to Instagram, TikTok or to an influencer that you trust, not necessarily type in www dot whatever dot com.

DAN F: Yeah, the thrust of my piece is that curation used to be something really unique that a retailer could do. If you only shopped from the brands themselves, which not too long ago you couldn't even do because they were all selling wholesale, you got a very monotonous experience. These days, pretty much every brand, except for some of the top, top luxury brands are trying to build a direct-to-consumer business. They have an online store that is hopefully well run, they have their own stores in many cases, they do some interesting collaborations with other brands. Usually, the goal for them is to build a long-term direct relationship with the customer, and sell their goods directly to them even if it's overseas. Especially here in the US, if you order stuff from Europe, sometimes the shipping makes you a little uncomfortable, but then you save the VAT, so it equals out. 

For the last couple of decades, the multi-brand retailer had this really special thing with its sense of curation, of bringing together brands from around the world and showcasing them. In Need Supply's case, they had also had really great photography, everything was super high res. When I'm deciding whether or not to invest in a piece of clothing or a design piece, I want to see the grain of the fabric. That's the kind of little thing that so many online stores overlook, they set their image quality so low. At Need Supply, you could always get a really good sense of what you were buying. They merchandised it very well. I loved their extraordinarily minimalist website. It felt relaxing, but also gave me a sense of discovery and that was a great part of it. 

And then this sense of curation. Nowadays, we're all curators. I mentioned in the piece that the last two investments I made in clothing, I learned about through email newsletters. I didn't know that this tiny store in Paris was collaborating with Solomon shoes on a weird pair of shoes, but I sure bought them. More recently, I bought a jacket. Both of those came directly from the brand. Curation, which used to be the role of the retailer, is now something that happens all the time, everywhere. Whether it's an Instagram feed, or an email newsletter, or a Pinterest board. That's not to say that you can't survive as a retailer, because curation is out there. Especially over the next couple of decades, it's probably going to redraw the map of what we think of as a store. We have this whole curator economy, and a lot of them are looking to build businesses through e-commerce. Some of that will just be traditional affiliate marketing, some of it could be an actual storefront that they set up and whether they hold inventory or do dropshipping, I'm sure there's going to be a lot of different options out there. The idea that today we're all publishers, maybe next week, we're all retailers is kind of interesting. I'm not sure who's going to do customer service for all those influencer stores but someone will have to figure that out. 

Big picture, this sense of curating a bunch of products, a bunch of brands – as I say in the story, taste and real estate curation and distribution were the things that really powered retail for a long time – has become a little trickier. They're competing with their own suppliers, they're competing with much bigger companies to acquire customers. Really, if I want to buy the same four items, I could end up buying them directly from the vendor or the brand either at the same price or even a lower price or as part of a loyalty scheme. Certainly, if it doesn't make the retailer weaker, it at least takes away some of the relationship that used to exist. 

DANNY: That was Dan Frommer from The New Consumer, and you could sign up to Dan's email newsletter at newconsumer.com. And that's it for this show this week. As always, if you've got any questions, comments or feedback about anything at all, you can reach me at [email protected]. And make sure to head to our website to sign up and subscribe to our latest Workshop products. I've got a great new email newsletter out and a podcast that breaks down key business terms and tells you how you can apply them to your own business. I'm Daniel Giacopelli. The Courier Weekly is back again next Friday.

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