Despite the limitations of electronic data interchange (EDI) software, the rapid growth of e-commerce continues unabated. Although EDI is a critical technology suppliers and retailers use to transact with one another, the legacy software serves as a bottleneck to allowing even more trade to occur. Convictional, founded by Roger Kirkness and Chris Grouchy, aims “to enable every company, of every size, to automate B2B trade” by replacing EDI software suppliers and retailers currently use. The startup recently raised a $40M Series B round led by YC Continuity with participation from all existing major investors, including Lachy Groom and FundersClub.

Convictional cofounders Chris Grouchy (left) and Roger Kirkness (right).

Frederick Daso: What are the specific challenges of implementing a one-click solution to enable retailers to connect and transact with wholesale suppliers? What did you learn from implementing a similar solution for retailers interacting with dropshippers that do or do not apply to wholesale counterparts?

Roger Kirkness and Chris Grouchy: Our general learning was around how much value could be created for both retailers and sellers by automating as much of the process as possible and reducing all bottlenecks between first partnership conversation and first order. With dropship and marketplace models, the order, inventory and fulfillment data needs to flow between trade partners in real-time so that the end customer has a great end-to-end e-commerce experience. With wholesale, much of the same applies, including rapid supplier onboarding and real-time transactions, but with added features such as the ability to streamline the order quoting process, supporting purchase orders, and advanced price lists.  

Daso: When it comes to developing Convictional’s sales and marketing efforts to execute at scale, how will you rapidly experiment to find the repeatable methods for different distribution channels you rely on to reach new customers?

Kirkness and Grouchy: We apply the same learning mindset to our go-to-market activities as we do with product development. As we build our sales and marketing efforts, our approach will be to use experimentation and data analysis to increasingly gain clarity on who our customers are, what problems they’re trying to solve, and where they go for resources and collaboration to solve these problems. We’ll be present in the channels retail executives trust with the content, tools, and conversations so that we can guide them as they consider transforming their dropship, marketplace and wholesale businesses. Currently, the initiatives we’re focused on are content marketing via our site and LinkedIn, partnerships and increasingly in-person events. We are excited to be participating in ShopTalk this year with customers and partners.

Daso: Convictional has increased the number of orders by nearly eight-fold and its platform Gross Merchandise Value (GMV) by nearly five-fold. But how much has Convictional been able to decrease supplier churn for retailers?

Kirkness and Grouchy: We think about supplier churn as the number of suppliers who never get transactional after a mutual commercial agreement to partner is made. We recently commissioned research that indicated that with Convictional, retailers can 10x the number of suppliers they onboard per month. This difference reflects the issues with the status quo process whereby suppliers who would love to sell through new B2B channels like retail, fail to do so due to the high effort traditionally required. Roughly 70% of commercial vendors signed in to Convictional succeed in reaching the first order state after successfully connecting to a retailer, which is double the success rate with suppliers who do not use Convictional and are forced to connect with a retailer’s EDI system.

To summarize, we have made it twice as likely a supplier makes money from the retailer's program once they sign, and 10x faster to participate.

Daso: For Convictional to realize its vision to “enable every company, of every size, to automate B2B trade,” there is a heavy focus on the supplier enablement movement, even more so than in past stages of the business. How does such a focus change how the retailers operate to fulfill more orders?

Kirkness and Grouchy: When a retailer can onboard as many vendors as quickly as they desire, their business changes in many important ways. Firstly, they can fulfill their promise as a retail brand to their customers to continually offer relevant, unique, and fresh products to their target market. From an operations perspective, the merchandising teams can truly expand their approach to product assortment planning now that technical barriers and IT project timelines are not the bottlenecks for adding new products. We’ve also seen that supplier enablement unlocks retailer development resources, from supporting supplier integration and data issues to higher-value projects that drive better customer experiences. There is a direct line between supplier enablement and increased revenue growth and enterprise value for retailers.

Daso: The onboarding speed that Convictional provides to suppliers connecting with retailers allows the latter to test what categories of goods are the best to sell. What observations have you been able to glean from this experimentation from retailers such as MADE.COM or Indigo?

Kirkness and Grouchy: We’ve learned that these new product assortments can be launched and tested rapidly. In as little as 60 days, a retailer can connect to Convictional and begin selling 3rd party inventory from curated suppliers. After that one-time integration, they can get new suppliers transactional in days. The speed that Convictional enables makes product assortment experimentation possible and largely transforms how retailers bring products to market. We strongly believe this is the future of retail. Leaders in this space understand the direct relationship between sourcing and connecting great suppliers and how they serve their end consumers.

Daso: What capabilities will Convictional dedicate resources to developing for retailers that choose to stick with EDI? Is there still a large segment of retailers that would prefer to stick with EDI?

Kirkness and Grouchy: Convictional already supports EDI connectivity into the platform, and we’re committed to continuing to improve this integration process. Many retailers still use EDI; however, EDI only covers a portion of data integration needs requiring to support great digital shopping experiences. Rich product content, for example, is something that EDI is bad at supporting, so almost all existing EDI integrations in retail need to be augmented with non-EDI processes. We’ve learned that retailers more tolerate than prefer EDI explicitly. For all of its shortcomings, it remains the dominant standard. Our position has been to offer the connection path of least resistance, whether EDI or API.  

Daso: How do you two, as co-founders, institute professional qualities such as “learning with grace” and “trust” within every Convictional team member, especially as the company grows rapidly?

Kirkness: Chris is the one that knows how to learn with grace; I thrash around a bit more. Trust is also a challenge because people join having had various professional experiences, not all particularly reinforcing trust. To me, the amount of effort you have to invest in trust-building is somewhat proportional to the amount of institutional power you have. One way to build trust is to give everyone a global view of what is actually going on in the company. I CC the entire team on investor updates, which means that there’s no dissonance in ‘how things are going’ between the view that investors see and the view that the team sees. If things are good or not good in a particular period, having integrity and being consistent about that results in trust.

Learning with grace wise, it is a process. We find that young, ambitious people who join often end up hyperextending themselves either on effort, hours or both. We have started to encourage people to write a personal sustainability plan. Rather than decide what level of effort is expected and impose it on people, we focus on doing self-awareness work that will reveal to each person what sustainable work effort means for them as a person. Some people work long hours, some work normal hours and others work unusual hours to accommodate lifestyle preferences. All of these to us serve to make it possible for different kinds of people to work for the company, and further for those people to avoid burnout in the at times is a difficult process. If you know that you and the company are aligned, that you’re giving a level of effort that is sustainable for you, and you make time during those work hours to include learning, it makes it possible to learn in a sustainable way. Learning is not easy, but you can ultimately factor the slack, reflection time and supports needed to make it possible into the overall work picture.

Scaling wise, we are mostly focused on working with managers to do the same thing: tell people what’s actually going on in the same way they would to us as founders or anyone else, give them all the data and all the resources we have to solve problems, and encourage people to do reflective work that will lead them to the answer of how they can maximize their sustainable impact. If we model these things and actually do what we say we are going to do, it will positively affect each layer of management and the team at large. If we fail to model this, fail to talk about it, and give language and meaning to it, then it won’t have the intended effect.