On this bonus episode of Honest Ecommerce, we have Udayan Bose. Udayan is the Founder and CEO of NetElixir, an AI-first Ecommerce digital marketing agency in Princeton, New Jersey. We talk about envisioning the future with generative AI, the impact of disruptive innovation, leveraging AI skills for competitive advantage, and so much more!
Udayan Bose is the Founder & CEO of NetElixir, has been driving success for retail businesses online for nearly 20 years.
With a focus on the digital retail space, NetElixir uses proprietary technology, strategic growth models, and expert campaign management services to deliver exceptional results for their 600+ retail clients worldwide.
Udayan's determination has earned NetElixir partnerships with industry leaders like UPS, Google, and Bing.
Udayan is also a regular lecturer at top universities and has been featured in prestigious online journals such as The New York Times, Forbes, AdWeek, and more.
In This Conversation We Discuss:
Resources:
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Udayan Bose
In the internet world, if you have the right idea, if you are innovative enough, and if you really hustle hard, literally anything is possible.
Chase Clymer
Welcome to Honest Ecommerce, a podcast dedicated to cutting through the BS and finding actionable advice for online store owners. I'm your host, Chase Clymer. And I believe running a direct-to-consumer brand does not have to be complicated or a guessing game.
On this podcast, we interview founders and experts who are putting in the work and creating real results.
I also share my own insights from running our top Shopify consultancy, Electric Eye. We cut the fluff in favor of facts to help you grow your Ecommerce business.
Let's get on with the show.
Hey everybody, welcome back to another episode of Honest Ecommerce.
Today, I am joined by an Ecommerce veteran as we talked about a little bit before this. I've got the founder and CEO of NetElixir, Udayan Bose, welcome to the show.
Udayan Bose
Thank you so much for having me, Chase. I'm excited to chat.
Chase Clymer
I mean, quickly just so people can understand your background, your area of expertise. What are you guys up to over at NetElixir? What are your core service offerings over there?
Udayan Bose
So I mean, my background has been, I think, at the risk of sounding like a dinosaur. I have been in this space since 2001, Chase. And it was truly and absolutely an accidental entry into the online space.
So I joined a couple of my engineering schoolmates and they had started this online gaming company. Now I didn't really have any understanding of online or internet back in 2001 and obviously I didn't really know anything about gaming. I sort of joined them in 2002.
On day one, they asked me to run there and build their online bingo business. I didn't really know anything about bingo. So the first couple of weeks, we had a real struggle because I had to understand and read and understand what bingo and what is online, et cetera, et cetera.
Anyway, long story short, I think two years later, I felt like we had done a lot. The company did extremely well. The company's core brand was called partypoker.com.
It was actually for a fairly long time, the world's largest online poker site. Believe it or not, I had moved on from the company in 2004 to start NetElixir, but that company went on to in 2005 did a pretty big IPO. I mean, the IPO which made us bigger than Google in 2005.
So overall, I think the big learning from me is that the Internet is powerful. And the Internet, if you really have an idea and if you really keep on experimentation and doing stuff and constantly failing faster, there is a big opportunity that you'll sort of stumble across something which can grow really big.
So that was my first brush with the Internet. Started NetElixir back when I was still in India at that time in a place called Hyderabad. My co-founder was my life partner, my wife, Tulika, and I started this company literally out of our living room in Hyderabad.
And at that point in time, it was still small. It was like the pre-IPO days of Google. So Google used to be still fairly small by current standards. And we had filed for an international patent called a new system and method in search marketing.
So I have a mathematics background. So we figured out that if we are able to build a process and a system, which was able to predictably manage the Google advertising part. When I say predictably, in the sense, we knew as to if we invest x, the likelihood of making y was higher than 90% and so on.
So that's how we started off NetElixir. It was a very mathematics-driven company. It has been a mathematics-driven company all through.
And 20 years hence, it seems like a dream because we have been very fortunate to be included in the Google agency leadership circle, which is a collection of the top Google agencies in North America. And I'm very fortunate to have really had the opportunity to work with over 800 brands over the last 20 years now. We currently work with about 120 brands. All of them are in the retail e-commerce space.
And a funny reason why we selected retail e-commerce was we felt that in an area where the margins are extremely low and extremely tight through a combination of mathematics and technology, we can help these businesses grow or scale predictably and profitably. So that's a long background and an introduction of the company.
Chase Clymer
No, no, no. I'm super excited. So to me, I'm going to use layman's terms to describe the first product I guess that you guys launched with. I'm assuming this was like a precursor to even AdWords.
But what you were doing was using math in a predictable way to help your end clients do better on these Google products?
Udayan Bose
Yeah.
So essentially, this was using the Google products effectively. So Google advertising can be... Again, I'm talking about how 2004-2005 was almost a wild west. There were search agencies or digital agencies popping up everywhere.
So if you really look at the different phases of evolution of Google Ads, 2004 to 2007, I call it typically the absolute wild best, where anyone who could have any knowledge of Google AdWords jumped in and sort of tweaked in.
We said that there has to be a better way of doing things. And that's where our technology and the very mathematical approach helped us. And that's where the patent that we had filed really helped us as well because we were using the same Google Ads, but we were able to identify the keywords that we should be advertising.
We were able to finesse and fine-tune the type of ad copies that we should be writing. We knew what day parts we really wanted to run the ads app. We knew what the geographies to target. We knew by 2009 what are the customer segments to target.
And all of them essentially boiled down to mathematics. And the outcomes were quite amazing. So that's how we started off.
Yeah, it's basically making Google advertising work better for you. In fact, our tagline back then, Chase used to be making search work. We were so brash and confident in our technology.
Chase Clymer
Was that the same... Was it back then when you guys decided to niche down so much in Ecommerce as well? Or did that come a little bit later on?
Udayan Bose
Ecommerce was roughly at the same time because we were still back in India and interestingly, the only person I knew in the US was my brother who was doing his master's in Umesh. So I didn't really have any connections.
And typically, I think his dorm room became our first registered office. So this is a bit of a Netflix trivia. And during one of those trips, or my first or second trip to the US, I happened to meet with a gentleman called Cliff Kurtzman. He was a consultant in Houston. And Cliff referred me to a gentleman called Jay Stainfield of blinds.com. Blinds.com, I think, has been one of the most successful e-commerce stories that has come out of Houston.
And we did extremely well using the same method that we had filed a patent for. And their overall Google advertising really did probably about 5X as much before us taking over. It was a phenomenal success story.
Chase Clymer
That's amazing.
Udayan Bose
And Jay became our biggest evangelist. So in fact, it was so interesting that in our first trade show, the Internet Retail in 2006, one of the people in Jay's marketing team was actually representing us at the booth.
So just think of it, how many times do you have a client essentially being your booth representative at a trade show? Just because we didn't really have too many people out here. So that's the story of being very, very fortunate to really work with some amazing customers and amazing partners through this entire process.
Chase Clymer
Well, it seems a little full circle. We met at a trade show at a trade booth.
Udayan Bose
Yeah.
Chase Clymer
Now I have to ask you, when the Google Shopping product came out, I've never been much of a Google expert myself. But I am obviously in Ecommerce and I pay attention to how our clients are making money through paid and all the channels out there.
Was that an exciting time for you guys to get in and apply your systems and processes to this new way to sell items?
Udayan Bose
Yeah, absolutely. Absolutely.
Google Shopping was an exciting time because finally, there was this attempt from Google's side to connect the ads with the inventory as such. And since we, actually in our technology, we had really built in this automatic inventory upgrade as well.
So you run those ads only when the inventory is there and once it drops below a certain number of SKUs, you really stop the ads automatically and all this stuff. So it was definitely exciting.
And I think that Google shopping introduction has to be one of those milestone moments for Google as well in terms of their evolution.
Because before Google Shopping, it used to be called Froogle. F-R-O-O-G-L-E. They hadn't really had much success, but the way that they really repositioned Google Shopping, I think, was quite incredible.
Chase Clymer
That's amazing.
Today, you wanted to talk a bit more about generative AI and how Ecommerce marketers could really seize the future. I guess my first question for you would be...You say the future of search is AI experimentation. What do you mean by that?
Udayan Bose
So effectively, let me just go maybe a couple of steps back, give a bit of a context and then come to this thing.
Chase Clymer
Okay.
Udayan Bose
This is an area I'm extremely passionate about. So you have to stop me, Chase, if I just keep on rambling. But let me give a bit of a context.
I think, this is my personal opinion, that the launch of generative AI last year or last to last year, let's say 30th November 2022 has to be counted as an event of the same magnitude as when the Netscape browser happened in 1994.
It's, if not bigger, right? If not bigger, primarily because the folks who downloaded understandably and who started using ChatGPT, the hundred million of the user number was pretty quick.
Now we, as marketers, constantly have to really stay on top of the new technologies. But more importantly, one of the things which has really helped NetElixir succeed is trying to take the application perspective. How exactly do these technologies work, how can they be used to help our customers succeed online? So that is typically the context effectively within this thing.
Now that was I think the first context, the generative AI or AI per se is as big a force as the start of the Internet, if not bigger because the overall mass of the population sort of reaches out to a significant. This really democratizes the entire internet to an extent.
And the second part is I think it's very important for us to really take the practitioner's approach to this entire thing. Now, when you think about the practitioner's approach, the second phase or the second part becomes important, which is to understand as to what are some of the changes going on in the search landscape or the digital marketing landscape.
Now, if you really look at it, since the inception, digital marketing or digital advertising has been based on, in a very simplistic sense, the cookie tracking mechanism. The cookies are basically the pixels that are there that are able to track you.
And the way it has really worked is this process called the third party cookie system. So the third party cookie system is, let us say I'm giving a gift to Chase, Chase without even asking me can distribute it to about a thousand of his friends or a million of his friends, whatever it is, right? And that's how all of these channels really grew, right?
So Google was able to access the data which the customer actually had shared with you as the Ecommerce company. And then once they start sharing the data, they sort of pass it on to all of their distribution network.
Now that started to change. I think the first thing happened in April, 2021, when iOS 14.5 started giving an option: Do you really want to get tracked? Yes or no, right?
Chase Clymer
I remember that.
Udayan Bose
And that's when things really changed, right? And suddenly Facebook's value, it used to be called Facebook still, their valuation suddenly plummeted and all this stuff, right?
And the reason is because as a customer, if I am sharing or giving you the permission to track me, that has to be limited only to you. Chase cannot suddenly share it with Google and Google cannot share it without a million of its sites. So that's the big difference which really happened.
Now, in this ecosystem, the channels like Google or Meta or any of these channels just have one option. The option is being called in the industry as building their own walled gardens.
Because suddenly they are inhibited because all the browsers start deprecating these third party cookies and you're working with only the first party cookies as such. So you really have to try to preserve and work with the quantum of data that you really have access to, which is actually, if you think of it, fairly limited, primarily because you have been working off third party data.
Because Google is a third party for an Ecommerce company, let us say like Ashley Stewart or an e-commerce company like Amica and so on and so forth. So Amica does not really have the right or the permission to really pass this information on to Google.
So they have to work with a limited amount of data, and that's the reason they start to build a bit of a walled garden so that they are able to maximize. Otherwise, their overall revenues drop, stock prices drop, and all mayhem breaks loose, as we had seen when Apple 14.5, iOS 14.5, really happened.
Chase Clymer
Can I stop you there real quick?
Is that why we're seeing such an inception of all of the major social brands that always have... They also have this advertising component, building shops within their own ecosystem. Facebook shops were forced upon us last year and this year, it's very popular with people.
TikTok trying to get people to do TikTok shops, even almost paying people to do it, it almost seems. Is that because of the data in the walled garden?
Udayan Bose
Absolutely. So everyone now has... I mean, the new ecosystem... Let us say we go into a year from now, 2025 by the time. Chrome, which is being used in the US by almost 60% plus, I think 65% of all the users use Chrome browser. That would have completely gotten rid of this first, the third party cookies. It would be entirely sort of running on this first party cookie system.
Now, as an advertiser, as a channel, as anyone who wants to do any business, it's extremely important for you to really build your own wall garden. Social media channels like Facebook or Meta and TikTok, everyone sort of said that, “Oh gosh, we really have access to a lot of people, right? People who have signed up”, and it became a huge advantage for them.
And as you are rightly mentioning Chase, all these shops really started coming up.
The second part, which again has been very prominent, is the emergence of the retail media network. Just think of it, pre-COVID, no one talked about retail media networks. It was primarily Amazon Marketplace, Walmart had just started, and a little bit. I mean, obviously eBay was there and so on and so forth. But I think there are a very limited number of marketplaces which were there as such.
But now, pretty much anyone and everyone that I know of who has an omni-channel presence is trying to create their retail media network. Again, the idea is the same. “How exactly do we really monetize the customer base that we have access to, both online as well as in stores?” And so on and so forth.
Now, Meta has even a bigger goal, which I think you will see playing out over the next two years.The goal of this connected universe, right? They call it the metaverse and so on. So one is the metaverse and then basically a multiverse sort of a system.
So online or in the metaverse, they really want to connect and really significantly expand because it really becomes a three-dimensional overall ecosystem.
So everyone is trying to build their own wall gardens. And that's where suddenly when you really went back to Google, it suddenly found itself in a position of a relative disadvantage, relative primarily because it had never thought about really closing out its wall card. It had always been an open network and open internet, et cetera, et cetera. And suddenly, this open internet sort of goes off.
Google has to try to do this. So that, I think, is the second context.
Now, how does Google do it? That's where the third component comes in, which is by using AI, because it has access to tremendous amounts of data. But all of that, it's because of the flow, that because it has been sort of collecting the data from the customer's website or any retail website or every website out there, and the third party cookies, it has been able to have the access to all of this data.
So it starts building machine learning algorithms because the future may look a little different, it may not really have access to as much data. I mean, you can still say that Gmail, people sort of obviously log in, so they have essentially, almost like coaxing you, to sign up and so on, et cetera, et cetera, but it's a fair amount of fairly limited and so on.
And a lot of people don't really… They constantly clean off those cookies as well so that they are not trackable.
So how do you really plan for the future knowing that the quantum of data or the quantum of live data that you will have access to on which your entire business is built will suddenly diminish in size, or may potentially diminish in size on a life basis? You start building algorithms or AI algorithms which can use this to extrapolate some of the understanding.
And as a result of which, I think most of you would sort of know of, this entire concept of the universal analytics of Google Analytics's GA3 as it used to be called, deprecating and it being replaced by Google Analytics 4, right? Because it's more of a machine learning driven model and Google Analytics getting in.
Along with that, Google Ads also sort of launched something, modules called the Performance Max. Facebook, on their part, launched something called Facebook Advantage+. So everyone was suddenly from an open and a transparent system trying to convert that into an opaque, almost like a black box-ish system, whereby you didn't have much control in terms of what keywords you wanted to advertise on.
How much do you want to individually bid? The granularity and the control was suddenly taken off just because of this change in the ecosystem.
So that's where, I mean, sort of again, finally getting to the, answering the question that you had sort of put me in the first place is: In such a black box system, how does a marketer really succeed?
The only way a marketer succeeds is going through a phase of rapid experimentation because you are putting in an input, you are collecting and analyzing the output, and you do it on an ongoing basis. So essentially, that's the process that we call the rapid adaptive experimentation as such.
And there are certain variables you can still control, whether it is Facebook advertising or Google advertising and so on. And the variables, basically one is the account setup and the second is the audiences you want Google to target.
And we have really been able to build our own AI platform. We have built about four AI models which has taken us about seven years, which has the capability to do stuff like predicting who's your high value customer going to be, predicting as to what is their propensity of buying again from your website in the next two months, predicting their lifetime value and predicting who is likely to churn in the next three to six months effectively.
And we are able to utilize these audiences as signals in Google and Meta and get them to find lookalikes of this.
So that has been as to how we have really utilized this in the input signal. And the rest is we have built a system of continuous adaptive experimentation which is measuring the inputs, measuring the outputs, and constantly trying to, in an iterative format, identify as to what is the incrementality that we are able to derive from these experiments as such.
Chase Clymer
That's amazing.
Udayan Bose
Sorry, a long answer for us. But I wanted to give a context because just diving in may not really have made too much sense.
Chase Clymer
No, no, no. It was great. And I appreciate that.
Now, you're talking about you... You've mentioned multiple times throughout this conversation that you guys have built out tools to do certain specific things. Do we have to hire NetElixir to get access to these tools? Or are some of them just available on the World Wide Web?
Udayan Bose
Absolutely. So I think, Chase, as we have discussed in detail as well, our company has been very, very focused on just answering a simple question: How exactly can we help businesses of different sizes?
Now as an agency, we work with more mid-size and larger companies, but there are literally millions and millions of smaller companies who probably can really do extremely well with more fundamental tools that they themselves can use.
So we started this website called Alexa Marketplace. This was actually 11 years back in 2012, we started this 2012-2013. And we started building those SEO, SEM tools initially, and just launched it for free. And the site is lxrmarketplace.com, and it currently has about 30 tools whereby you can, I mean, all of these are free tools, by the way.
You can do things like analyze your SEO, find out as to and really spy on your competitor. You can even really sort of find out: Does your site have any broken links? You can find out how you can almost generate meta tags for your SEO campaign. You can actually go ahead and even sort of do stuff like, let us say, competitor webpage monitor.
So this one was pretty interesting because the competition keeps on changing and putting new promotions or new products on the website. This tool automatically goes there, takes a screenshot, and sends that email back to you on a daily basis. And it's free, right?
So I mean, some basics, fundamental tools, about 30 tools. And now that we are starting off, that is, I think, you start to see it in H2, we are now going to be putting some of the tools into AI tools as well.
For example, we are now going to be integrating the generative AI and building some of the tools to be launched on the same marketplace. I mean, obviously, we name it lxrmarketplace.ai.
But our goal, and we recognize us being a small business or SMB as well, I think it's extremely important for us to understand the passion that really drives a small business. And at the same time, the constraints with the small business have to work with.
And from that perspective, I think we feel it is our responsibility to really go ahead and just sort of keep on doing stuff, producing technologies, which really helps millions and millions of small businesses around the world.
For example, Chase, I talked about Alexa Marketplace. We have had more than a million businesses worldwide, which come from 140 countries who have used these tools. So yeah.
Chase Clymer
It's a fantastic little suite of tools. I mean, it's almost too easy to use. I went to the website when I first met you and it just walks you through finding out what tool to use. You just drop in your URL and it will make recommendations for you. You mentioned a few of them.
Are there any other of your favorites that you didn't get to highlight?
Udayan Bose
I think the inbound link checker has been the most popular tool that probably everyone will find out because I didn't know that so many people wanted to find out as to who's linking back to my website.
Chase Clymer
I think a lot of people just don't...
Udayan Bose
There is this perpetual curiosity.
Chase Clymer
Yeah. It's like, “Who knows about me?”
Udayan Bose
As to, “Let me see. Who is leading back to my website?” Yes. So that has been perpetually our favorite tool. In fact, when we launched an app as well, it used to be for a span of about 7 years, the number one SEO tool on the Android store as well.
So it's called the inbound link checker. And it really allows you to see as to who's linking to your website. That's a fantastic tool.
Chase Clymer
We could keep chatting forever here. But I really just want to highlight how long you've been in the game here. This is your 20th anniversary of a business, apparently.
Udayan Bose
Yes.
Chase Clymer
I know this is gonna be hard to answer, but what's most surprised you in the last two decades of working in this Ecommerce industry?
Udayan Bose
Wow. There are just a lot of surprises which have come by.
I think the part which has to be counted as the biggest surprise is despite their size and despite their literally being close to being a monopoly, how a large company like Google can get completely blindsided with the launch of OpenAI's ChatGPT and this entire Microsoft confluence, right?
And it was just quite intriguing to see a company of that size literally in very shaky grounds for at least about six months after ChatGPT really took off. And they had announced the code red, I think, in Feb or Jan of last year, et cetera, et cetera.
That was probably a very humbling moment as such, because it showed how strong the power of innovation is. There are companies of this magnitude and almost like the reach and the strength of Google getting fairly shaken by OpenAI, which was a ranked startup about a year and a half back.
And the one word which shook up the entire space is innovation, right? It was an innovation which was totally disruptive. You can call it a disruptive innovation. And that's the part which was the most intriguing part, exciting part as well.
At the same time, it is the part which really is very exciting personally as a tech entrepreneur for me because it shows again what I had seen or observed during my party gaming days, where we literally went from zero to build a 20 billion pound IPO in 2005.
That in the Internet world, if you have the right idea, if you are innovative enough, and if you really hustle hard, literally anything is possible. So that was a message which has really, again sort of keeps playing out constantly.
And recently was this open AI that shook up the entire space of search advertising.
Chase Clymer
No, I completely agree. I remember the day I got access to ChatGPT. How much fun I had and I was in awe of... Yeah. I was like, “What else can I do?” And I was Googling things to ask ChatGPT to learn what it could do. And it was very eye-opening.
Udayan Bose
We have been constantly publishing our set of prompts as well. Because again, for the small business, when you are really strapped for resources and so on, and honestly speaking, good talent is very difficult to find, as you know, Chase, in this space, right?
I think someone, if you really invest just one hour every day, only trying to really play around with ChatGPT, dabble around with it, and we have these prompt books that we have come up with, which helps businesses, you can do things like create a content marketing plan within less than a minute.
That would have taken probably a good 2 days of your time. And these are not bad plans. These understandably, if you have the right prompts, can be extremely good plans.
But those are the things which are just incredible. You just think as to how powerful technology is and how much of an impact essentially it can really have.
Chase Clymer
Yeah. I think my favorite thing about generative AI, really, but ChatGPT is obviously the one I use the most, is the ability to go from a blank page to something, which is telling it what your goal is.
And then my favorite hack or whatever is, “This is what I'm trying to do. Ask me more questions so we can do it the right way.” It's just... That'll get you such a better outcome.
Udayan Bose
That's a phenomenal one, Chase.
Chase Clymer
All the time. I use it all the time.
Udayan Bose
So my favorite has been acting as if you are the VP of Ecommerce for Macy's. And how would you essentially, if you are presenting a value proposition or a pitch, how would you present, create or customize the presentation? I'm amazed.
Act as if you are a McKinsey consultant. How would you present to this vice president that you just sort of...
Chase Clymer
You know what's funny about that statement? I read that the number one buyer of open AI credits was McKinsey.
Udayan Bose
Yeah.
Chase Clymer
Yeah. They're generating a lot of stuff. I wonder how many consultants got replaced by basically a ChatGPT model. Yeah.
Udayan Bose
So that's the other part of it. So yeah.
I mean, I think there was a great article in the Harvard Business Review last year, which says that I don't think machines or AI would be replacing humans. It's just people who have a mastery of these machines will be replacing people who are yet to use generative AI.
So that's a big thing which I really wanted to emphasize also.
Chase Clymer
I had someone ask me this week, they're like, “Are you guys scared of AI? You guys work with computers you work online?” I'm like, “Not really.”
It's just… You have to adapt. You have to use them. And it goes back to there are going to be people that just don't want to learn how to use this new technology and people will always pay people to do things they don't want to do. That's never going to change in commerce.
Udayan Bose
Right. Right. Right.
Chase Clymer
Awesome. Udn, thank you so much for coming on the show today. You shared a wealth of knowledge. We're gonna have links to all the cool stuff that you talked about in the show notes.
Before we go, is there anything I didn't ask you about that you want to leave our audience with?
Udayan Bose
It really has been a pleasure, Chase, talking to you. I really enjoyed the conversation a lot on this thing.
I think if there was one recommendation or comment I would really want to end with, I'm probably copying one of my favorites, Steve Jobs. I think nevermore has this statement really been true probably, which is, ‘Stay hungry and stay foolish.’
I think that's what effectively I think is an important comment because at this point in time, you really need the tinkerer’s mindset, which can utilize this new phenomenal power that's accessible to everyone called AI.
And you can really make another party gaming happen. I have been lucky enough to witness it and to be a part of this entire story 20 years back or a little more than 20 years back. And I know it can be done.
So I think we are into what has been called the age of abundance. I would almost like to call it the age of opportunities that just exploded at this point in time. So anyone who's creative, innovative, and has a tinkerer mindset, can really build a company which may be beyond even their imagination, how big and how impactful it can be.
So that's all that I have, Chase. Yeah. Thank you.
Chase Clymer
Absolutely. Thank you so much for coming on the show today.
Udayan Bose
Thank you very much for having me, Chase. Thanks a lot.
Chase Clymer
We can't thank our guests enough for coming on the show and sharing their knowledge and journey with us. We've got a lot to think about and potentially add into our own business. You can find all the links in the show notes.
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