OpenStore Struggling to Pivot, Getting into Software with OpenDesk Support Software
I don't know much about OpenStore, except these facts:
* One of the first "Shopify aggregators".
* Raised $150M and was reportedly at almost $1B valuation at one point.
* It has acquired over 50 brands.
* In 2022, his number one goal was to acquire "ten times more" companies with a goal of "acquiring a business a day."
* It "automated" the offer process more than most other aggregators.
* In 2022, the company said "eventually" it plans to move merchants to a single platform.
And here are some other facts about these previous facts:
* Most startups become worthless, because they are startups.
* Most acquisitions fail because the acquired business is not worth much.
* Most acquisition synergies even between two great businesses are never realized without destroying what made one or both special.
* Automating a bad business process (acquiring bad startups) tends to accelerate failure.
Now the company releases some new facts in an updated interview:
* The company now says it needs to make very few acquisitions because it now "wants to pick only the winners." (duh)
* The company is releasing its internal customer service software to the world, because "it's good enough for us." Of course, it's based on AI. (duh)
Let's review:
* We used to want to acquire a company a day. We built a lot of automation to do that.
* Now we want to acquire almost no companies.
* Our biggest opportunity is now in software.
* But we are not going to build software that generates any revenue, instead we are just going to shave a few pennies from outsourced reps in Phillipines (?) by moving to AI.
Don't call it a pivot -- instead, call it a reboot. I wouldn't think Gorgias or Zendesk are too concerned. The company is aiming lower than this in the market. Instead of building automations for their own customers who apparently are not succeeding ... they are going to sell to other brands below $1M in sales most of which are also not going to succeed.
The churn in this tier of the software market is unreal. That said, the new business sounds better than the old one!
Still, I ask simply: who is going to trust this operation to run their software stack?