In this episode, we talked to Rishabh Jain, co-founder and CEO of Fermat Commerce, an influencer-driven e-commerce platform. Find out more on how this app can help you drive more sales and scale your brand further!
Rishabh Jain: So I grew up half in upstate New York and then half in India. So I was actually born in Syracuse.
It's like a small town in the northern part of New York and then I lived there until I was nine, and then my dad went back to India along with a lot of the IT outsourcing of the mid nineties. So we moved to Bangalore at that time and I grew up most of my life in in Bangalore. And actually interestingly moving back to India.
So in New York I was the only one of two kids of color in a community that was all, you know, white. And then moving back to India, interestingly, I was one of the few kids with an accent. So even in India, I was, you know, sort of like not a local for roughly three years. I was trying to acclimate and then found my stride, honestly, just by being nerdy and studious.
So in the absence of being able to talk to other kids, just studied and sort of tried to for myself, prove myself that I was just smarter than the other kids. That was, honestly, my childhood. Was largely that until came to college or back to the us but yeah, that's like quick sort of peak into what my childhood was like.
Connor: Yeah, that's interesting only because I had a similar experience of moving from the UK to New Zealand when I was 11. How do you think that impacted you?
Rishabh Jain: For me, like I said, it pushed me into just being more studious and I think planted this chip on my shoulder that I carried around for at least two decades, that I just needed to prove myself because I would often get picked on and all of these things.
And so yeah, I think it made a pretty dramatic impact because I started to define my identity based on how good I was at my studies and at sort of understanding things of the educational nature. Yeah, it pushed me to make decisions about my education and even my work that were really focused on that for a very long time.
Connor: Yeah. I'm sorry that you got picked on. The kids kids at that age are horrible. That's exactly what happened to me as well. It's just endless names, teachers, and everybody kind of just othering you.
It's not fun, but that sounds like a pretty productive capitalist trajectory to be like, I'm just gonna put my head down and get on.
Rishabh Jain: Yeah I don't say this to say that I think that this is necessary to be productive. Just to make sure nobody's sort of hears this the wrong way. I just think that you handle experiences in different ways. It definitely gave me very thick skin, which I'm thankful for. You know, it's like, again, it could have gone in a totally different way. It could have been traumatic and all these other things, but luckily for me it was, it just gave me thick skin and yeah, it pushed me to just work really hard, basically.
Connor: Yeah. That's great. When did you leave Bangalore and how did you end up back in the States?
Rishabh Jain: Yeah, so I went to boarding school for a couple of years before I came back to college, and then I started college in 2005, so I went to UPenn, it's in Philadelphia for college and was there for four years. Had my junior year internship right in the middle of the financial crisis. So was working one of the top three banks on the trading floors, saw desks emptying right in front of my eyes.
It was actually very, one of the most educational, you know, periods of work, I think was working during the financial crisis and especially timely now that we are, you know, basically in another pretty bad market, and at least in the US by some, by most definitions, we're in a recession and the stock market is definitely not doing well. And so, yeah, just understanding how people's behaviors and motivations change in down markets is actually really helpful.
Experiencing recession and lessons he learned from it
Rishabh Jain: I'll tell you a couple of stories that I think really exemplify what exactly that period was like. So the first thing that happened was I was reading some financial magazine on my computer. I think it might have been the FT or Industry Relevant magazine, basically.
And I got pulled aside by the vp and he says to me I kid you not, he says to me, what are you doing? Why aren't you working? And I was like, No I am working. I'm reading the Financial Times. And he said, that's not working. Why aren't you building a model? I was like, well, I'm done.
There's like nothing left to do. And so I figured that the most productive thing for me to do is just better understand the markets. And then he says to me, in order to have this job, you don't need to be a rocket scientist. You need to be the guy who wants it the most. That stuck with me just an absolutely incredible amount.
And I think that it also exemplified that moment in time where employers thought that they now had all of the control. So you're in a down market and you know, stereotypical wisdom is in a down market. Employers have more power and labor has less power, right? It's like there's less jobs and therefore the power balance shifts. It turns out actually that that's not exactly correct.
So what ended up happening is there were nine people who were interning at this particular bank that summer. They gave offers back and only one got accepted and the single person who accepted to work there again happened to be somebody who had repeated interactions with this bank, and so actually had a longer duration relationship. Everybody else who had only worked there just that one summer and who was treated poorly, they all said I have better options. Like I don't need this.
And it turns out that actually in down markets it's not the case that everything just gets worse. It's the case that everything becomes more bimodal. And so instead of a very large distribution where everybody gets pushed to the mean and everything is sort of go-go times actually the people who, or the companies or whatever who are doing well end up becoming in higher demand and the people, companies, whatever, who are doing a little bit worse, end up becoming in much lower demand.
And so it was just a really useful thing to experience firsthand and to sort of understand that right now, that actually the job to do is to make sure that you're sort of living in this world of, hey I'm one of the people, companies, services, whatever it may be, that is actually superior, and so you want to be paying more for me at this moment in time, not cutting it.
Connor: Yeah. So a beautiful point. How do you think that people can keep tabs on that efficiently? Like I understand where you're coming from, but like it's probably some general principles.
Rishabh Jain: Yeah. I think that the most important thing is just understand what is the motivation of the person who is hiring you or buying your service or product, or whatever it may be. Because if you can understand like, hey, what is the thing that they are now most nervous about actually accomplishing? Then you can just position yourself as person, company, product, whatever it may be is actually effective at that thing, right?
Because actually what ends up happening in a down market is it's not like your boss, wherever you work, is saying, hey, I'm okay with lower productivity, with less resources. That's like, that's never, that's never what happens. Like what happens is we have less resources and we need to do better, right? Like that's always what the rhetoric is at every company.
And so just understanding that, and understanding that like, wow, people are gonna be under immense pressure and therefore if I'm an employee service provider or product provider, I just need to lean into that pressure that the person on the other side of the table is now experiencing is actually very, very useful tactic.
So that's sort of how I would think about it, is just understand that nobody is getting the communication from their higher ups that, hey, like less growth is okay.
Interpersonal relationship tips
Rishabh Jain: Okay, so generally speaking, this is something personally I had to work on quite a lot. I went from being the shy kid to like, over college and then grad school ended up, you know, becoming more assertive of my view.
And then at my last job, actually was able to be quite assertive and vocal. And so I actually had to train myself to then go back in the other direction, ironically. And so I think that the best tool that I have for people is every conversation has to start by understanding what the other person is looking for.
So actually, interestingly, for people who are listening to this pod, I was actually asking before the show started, hey, what is it that actually people who listen to this pod are looking for? Right?
And so starting every conversation with just asking the question, like, what are you hoping to accomplish out of this is actually the most effective thing to do and just listen for that before offering your point of view and that I have found is like extremely useful.
So just rewinding back to what we were talking about in terms of the power dynamic, what that means is if you ask the person, hey, I know it's a tough market. Let's just say it's your boss, or, Your employer, whatever it may be, the person who buys your service, what is it that you're most worried about right now, now that we're acknowledge that we're in the down market? Now that we're in the down market? And then they'll tell you, and then you can just tell them, hey, here's how I think I can help you.
Make sure you start with a really deep understanding of what that person is worried about. Personally, I had to actually create two meetings. So the way I sort of share how important this principle is to other people is I'm so bad at it generally that I start with one meeting, hey, this meeting's purpose is only for me to understand. I'm actually not gonna give my point of view and the other person knows that.
And then the second follow up meeting is for me to offer how I think I can help or how what I think needs to change. That's like a highly tactical way that somebody can do it. If they're not sure how effective they are at this, often what'll happen is they'll be done with their point of view in 15 minutes, and then you can, as long as you have enough time to synthesize, then you can just not have the second meeting.
How he started his e-commerce journey
Rishabh Jain: I started college at UPenn. They happened to have this program where you do engineering and Wharton, and so I got a degree in material science and in finance and. Like we talked about my oh eight experience.
I was amongst the eight, not the one person who took the offer to go back and so you know, I said, see you later wall street. Basically never to return as of this point in time. I went on to get my PhD basically, so I spent a year in London studying physics.
Then I went on to get my PhD in solid state physics at MIT. And then as I was graduating, purely by chance, actually, I met this person who worked at this advertising technology company who convinced me to apply for a job there. My sort of plan at the time was to take a traditional semiconductor new business jobs.
So think about your Intels applied materials. So real silicon basically, not software. Instead, chose the software route. And then ended up leading customer facing technical teams for the first half of my tenure there. And then the second half built new businesses inside of the company, so built through new businesses inside, and then after trying to quit once in 2018, managed to quit successfully in 2021. And started my own company late last year is, I hope that wasn't too much of a mouthful, but that's basically the quick journey of how I ended up where I am today.
Connor: I mean, it sounds like you're, you are working at a reasonable job or like a brilliant job. You know, leading a team, how did that look where you must have been thinking about starting your own company before you left? You didn't just have on a whim and did you know what you were gonna do when you left? Yeah. You probably did, right?
Rishabh Jain: Yeah. Well, yeah, sort of. I had a rough idea. But I mean, anybody who does a startup will tell you that, you know what they think they're gonna work on it. It just sort of, you move and meander and pivot.
Yeah. I had a really good job. I think it's one of those situations where I basically told myself, if I don't do it now, then I am definitely never doing it, right? Because everything, at least for me, for my mental state was lined up really well. I had enough of a cushion for a safety net if the startup thing doesn't work.
I had proven myself in the sort of corporate world, and so if I ever needed to go back to it, I felt comfortable that I could. Interestingly, we were trying to have our first kid, my wife and I, and when I actually quit, I knew that we were going to have her in later that year. And that was actually the biggest motivation for me to leave.
I know some people might say, hey, if you have additional responsibilities and things like that doesn't make taking the risk harder. And for me, I found that have a baby daughter and having, having her made me feel like if I don't do it now, like I wanna do things that'll make her proud basically.
And then it was a zero questions asked thing. It was like, if the way I wanna lead my life from this point moving forward is I only wanna do things and make her proud. It actually made it very easy for me to leave, and I didn't, I just didn't think about anything else after that point.
Connor: Just a vague non-specific goal that you can sort of, you know, balance back to after studying physics. How did you become interested in e-commerce?
Rishabh Jain: I mean, I literally ran into this guy. I'll tell you the full story. So basically, I was gonna go into one of these physics jobs like applied materials, Intel, that sort of thing. And then I was just walking around the MIT career fair and this guy literally stops me in the middle of the hallway and says like, hey, can I tell you about Live Ramp, which is the name of my previous employer. And I said, sure, but I'm not a software engineer.
And he was like, Yeah, don't worry about it. We hire lots of people who are not software engineers. And I was like, okay, I keep trying to tell him why I would not be qualified to talk to him. And he was like don't worry about it. And then he gives me his card and I kid you not, After giving me his card, I went back to my lab and gave it to my lab mate who was a software engineer, and I said, hey, you should talk to these guys.
They were super nice, but it's not for me because it's a tech company. And then he emails me and then he said saying like, hey man, I would really love for you to apply for this job, yada yada. So I go through the interview process and one of my interviews was with this guy who I kid you not was wearing a graphic t-shirt, a blazer, converse shoes.
And he had like these streaks of silver hair, and he walks into the room and he says like, hey name is, his name was Mike. I mean, literally the reason I joined this company. My name is Mike. I have this funny title called Chief of Staff, and I was like, what does that mean? Like, what is a chief of staff? You know? Like that's not a nothing burger title. He was like yeah, I know. It's just like a catchall bunch of stuff. I work closely with the CEO.
For our interview, why don't we reive special relativity. And then I was like, what is happening here? You know, like the rest of my interviews were like loosely about tech at at least not specifically about the domain that the company was working in. And I was like, if I'm gonna work, I wanna work with people like this, and if I don't take the chance now, then I'll never do it again. And so that's how I ended up working in Ad Tech.
And then I ended up spending six years there and I was lucky I grew. I actually joined as an individual contributor, basically on, on like the technical support team. And then I grew very quickly. Luckily. Yeah. And so that's like basically what landed me in the world of e-commerce. I think one of the things that a lot of people don't appreciate is ad tech is literally why e-commerce exists. Like the reason we have all of these large, direct to consumer brands that we know and love today.
Do you know Gymshark, for example? Or L Yoga or Away Luggage or all of these companies? Warby Parker. They were, mm-hmm. all born because the Facebook advertising machine was so good at helping small businesses find audiences and sell online. This connection between e-commerce and ad tech, I think unfortunately are a lot of people don't appreciate effectively.
So I was working in the world of ad tech and then I saw what was happening in e-commerce because, you know, there's this like extreme dependence on each other. That's why I decided after I left my previous company to just start accompanying the e-commerce tooling space.
Connor: Yeah. I have had some lovely conversations around like the beginning of Shopify and you know how people just had the tools at that time to just make it work so much easier than traditionally.
Rishabh Jain: Yeah, exactly. Or 2020. 2020 apple made its first announcement saying, hey, we're no longer gonna allow you to track users from one website. I think it was in April of . 2021 that they actually announced the dates. So they said, hey, it's gonna release in the 14.5 release.
So like, yeah, this app tracking transparency framework, and I think at the time people didn't really appreciate just how impactful this change was. Which I mean, if they did appreciate it, then we wouldn't have seen stocks slide so significantly once iOS 14 effect fully took. But people did not understand it.
And so that was when I as like, I left the company in January and when I saw that announcement I was like, Okay, we gotta build in this space. And then my co-founder was also working at Live Ramp at the time, so him and I decided to work together. Yeah. And basically we started the company later that year to help e-commerce companies have tools to operate in a world where privacy does not allow you to track consumers from one website to another.
Future of e-commerce
Rishabh Jain: Okay, so first of all, I think that online is more likely to allow for small stores to have a fighting chance than brick and mortar just because of the amount of investment required to open a brick and mortar store.
I think like online in general is not withstanding. The changes of privacy online in general is a way to allow small businesses to flourish. And then the second thing I think is that, yeah, a lot of people, a lot of companies rather need to make tools that allow smaller businesses to have a fighting chance relative to large aggregators. Because the conundrum is always that as you aggregate, you get scale, and therefore your unit economics are better and therefore you can give better prices to consumers.
Now, I think there's two ways that you end up with a consumer that you end up basically competing with that the first is you allow tech companies to help you build tools that because they virtually aggregate a very large number of small and medium sized businesses, they can give you the same economics that a large aggregator has. Right? So that's what Shopify has done for a lot of businesses relative to Amazon. On a bunch of axes.
And then I think the second thing that you can do is you can just create relationships in a more effective way than large aggregators. So this is where I think the influencer point is actually really important. There's a lot of people right now who would, you know, make the claim that, hey, traditional brands are gonna die, and the only brands that are gonna exist are those that are run by influencers.
So, you know, nominally speaking, it would be like the equivalent of saying, hey I think fashion house, like a Lululemon is not sustainable in the long term, but skims like Kim Kardashian's brand is because it's associated with a person whereas Lululemon, like you don't know anything about the individual who started it.
And so having that sort of human connection is actually a more durable brand strategy. A sort of brand in and of its own accord. Right. So those are the two things that we need to be thinking about as we're thinking about how does small and medium size businesses stand a chance in versus aggregators.