Type

Thesis

Published

January 2022

Reading time

4 minutes

On the Genius of Bolt and How They Found ‘Whitespace’

And Why We Back Founders Who Seek It Out

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By Steve Sarracino, Activant's Founder & Partner

 

Type

Thesis

Published

January 2022

Reading time

4 minutes

Every mature market was once an empty space. It’s in that whitespace where new things are made in the world. Whitespace is risky, and a curious mix of timing, talent, and tenacity has to gel for nothing to be turned into something. Technology startups operate in this whitespace.

Often, whitespace remains unoccupied because people scoff at the possibility—they dismiss that anything worthwhile might be found there.

But founders who spy opportunity in whitespace and who are bold enough to take the risk in building there are the most likely to build multi-billion dollar businesses.

That’s what happened in the case of Bolt, a startup that is redefining the checkout experience. Every single online retailer has a checkout experience—but so many companies in the space missed the bigger picture and the breakthrough possibilities.

The ecommerce and fintech market have been two of the fastest growing markets in the last 20 years—and that growth shows no signs of slowing down. So how is it that Bolt took over checkout and fixed what so many people passed by?

The answer to that question requires a brief bit of background: In the commerce market or stack, three components power the path from consumer interest to sale to completion of purchase. There’s the content management system (“CMS”), the functionality that drives a website and a shopping cart. Numerous companies provide CMS technology of various kinds, including Adobe in the early days and Shopify today.

The next part of the stack: the order management system (“OMS”). This is where the unseen work gets done: inventory management, the logistics around moving the goods, and complex integrations with ERP to provide for accounting for orders, returns, chargebacks taxes, and much else. Oracle and IBM (Sterling) were dominant in OMS early on, then cloud based players emerged. Today, OMS has evolved to focus on what companies call “headless commerce”—meaning they function with any CMS.

The third and final part of the stack is fintech or payments. Some businesses in this space are household names—Stripe and PayPal, to name just two. The established players, including Visa and Mastercard, benefit from regulation and moats built on interchange fees. But those moats also insulate them from customers—and it’s why they missed the weaknesses in retail checkout.

All three of these components, CMS, OMS and payments, are necessary to manage online commerce—but the problem was that the design of these products was often clunky and inefficient and not customer-centric. Amazon made ordering online easy, but searching Amazon for what we want is difficult and the overall experience has become cumbersome and outdated.

In late 2017, I first heard about a startup working on “checkout.” They were trying to integrate the key components of customer, payment, inventory, and personalization—and fix the pain points along the way. It seemed so basic—again, every site has checkout. Bolt’s dynamic founder, Ryan Breslow, wondered why it was such a broken, fragmented experience.

I first met Ryan at his small office in the South of Market area in San Francisco. Right away, he struck me as having that mix of vision and grit evident in the best founders. By the time he went to Stanford, he had already started several companies, and during his time in Palo Alto, he was in maker mode, founding a crypto club, a business fraternity, and the beginnings of what would become Bolt.

The best founders in the world relish whitespace, because they know its possibilities. Ryan is one of those. He understood that checkout was one of those curious corners of the digital world that so many had overlooked or taken for granted—but that the user experience was fundamentally broken. And he and his team set out to fix it.

Today, Bolt has achieved a $6 billion-plus valuation, and the product itself has fixed much of what was inefficient and ineffective about checkout systems. With one click, consumers can conduct commerce across brands and platforms, and retailers have one solution for customer data, inventory management, and payment details for enterprises and commerce platforms. It’s seamless, and the results speak for themselves.

Bolt is not the only case study of a company that examines what has been overlooked, but it is a powerful illustration of whitespace within a crowded sector. Fintech companies are some of the furthest-reaching in the digital world—and yet, in spite of that ubiquity and success, every single player managed to overlook checkout and miss the signals about its potential for improvement.

There is whitespace to be found like this in every sector—and it is the place where breakthrough companies can be built.

Get in touch if you're building something like this.

 

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