You Need to Be Able to Calculate” Smec founder Jan

SMEC “YOU NEED TO BE ABLE TO CALCULATE”

Smec, a 120-strong Software-as-a-Service (SaaS) company launched by Jan Radanitsch, specialises in managing Google and online marketing campaigns for clients such as Engelhorn, Luisa Via Roma, and Limango. The principle behind the Smec AdEngine, as well as the predictive bid management software Whoop!, is based on automation and synergy effects. A conversation about success factors in e-commerce. Interview: Martina Müllner-Seybold. Photos: Smec

Jan, you had identified a decisive factor in e-commerce when you launched the company in 2007: single-handed action is not the solution. With every cent of advertising budget, your software learns how to spend said budget more efficiently and more profitably. The more online marketing clients you serve, the better it performs. It is a classic win-win situation, but it seems difficult to communicate. Why are scaling and platform effects so hard to explain?

People find it easy to understand linear growth, but exponential growth remains a mystery to our brains. This also explains why so many opportunities in e-commerce remain unseized. Some clients flinch at the point where we advise them to mobilise their entire budget in order to exploit the exponential growth we expect. It is irrational, but inherently human.

Is it because e-commerce in general remains a sinister topic for many?

Naturally, because e-commerce has become enormously professional over the last ten years. Those who invested early and sensibly have a head start that is almost impossible to make up. I do not think it is possible to compensate for that learning curve, especially not alone. This does, however, not mean that one should ignore the digital sales channel. There are some good concepts out there. Farfetch and New Store, for example, are excellent enablers that spare retailers from having to worry about backends.

Surrendering 35 percent of the margin breaks the heart of a retailer…

You need to be able to calculate. 35 percent is a pretty good offer compared to the money I would need to invest in creating an in-house solution. Especially as there are other factors to consider too. The job market in e-commerce is barren. The young, technically expe

Smec, with offices in Linz and London, em- ploys 120 people who manage two Softwareas-a-Service solutions. These products ensure that e-commerce clients optimise their budgets for Google Ads and Google Shopping. Jan Radanitsch founded Smec in 2007.

rienced and gifted employees you would need to turn a regionally successful brick-and-mortar fashion store into the next Zalando are hard to find and retain, even for established e-commerce players.

Here comes the crucial question. Is it even worthwhile in the long run to invest in digital sales channels?

Ah yes, my favourite argument: “But XY is not making any money either…” There is profit, and then there is cash. As long as enough cash is available, there is no need for profit. The economy has changed radically in this respect and one needs to adjust to that. That is why I am convinced that the way forward is digital, whether it is a huge online shop or a small neighbourhood boutique. Maybe the latter’s main focus is not e-commerce, but it still needs a clear idea of what digitisation means in its own sphere. Customer approach, marketing, sales beyond the random walkin customer… there is so much potential!