Seth Pierrepont, General Partner, ICONIQ (00:12): Sam, always great to see you. Thank you for being here, doing this with us. Excited to dive into the Swap journey and hear about all the important decisions you’ve made and lessons learned along the way.
Sam Atkinson, co-founder and CEO, Swap (00:25): It’s great to be here. Thanks for having me.
Seth Pierrepont, General Partner, ICONIQ (00:27): You’ve had a fairly uncommon journey to becoming a founder. Walk us through that journey and how you ultimately came to start the company.
Sam Atkinson, co-founder and CEO, Swap (00:37): It is a bit of an uncommon path. I would say the first 20 years of my life, all I wanted to be was a professional football player. I played for West Brom Albion, the football club, until I was 16 years old. But I think the thing that I took from that probably is mostly the disappointment in not becoming a professional football player and then starting to have to think what I would do next. I then went to university at Trinity College in Dublin and straight after that I went to work at a law firm, left to do an MBA, but during the MBA I met Zach, who’s my co-founder here at Swap now, and we actually founded our own e-commerce business together. Totally different to working as a lawyer, so we were figuring out what stock we needed to buy, how we shipped it into the country,
(01:18): then how did we market it? We’d never done marketing before. How do we manage our cashflow? And again, I think what I took from that was more the how do you go from zero to one. We didn’t actually get to one. I went to work at McKinsey for a couple of years. My experiences there were kind of seeing how big retailers do some of their operations, but also how to really focus and do things quickly and jump around to different topics, which I think is really important when you’re a CEO at a startup. I then wanted to go back to the entrepreneurial or startup world and joined Juni. I saw a little bit about what it takes to run a venture-backed startup, what it’s like when it’s going well, what it’s like when it’s not going so well, and all the different things that you need to do to keep the business going. And I think it was pretty inspirational for me as well to see those guys doing it and it kind of gave me the confidence that said, okay, I can go and try and do this again with Zach. And that’s what led to founding Swap.
Seth Pierrepont, General Partner, ICONIQ (02:10): Circling back on what you said about Slow Goods, walk us through a little bit about starting that business and the key lessons that you learned that ultimately you took with you to found Swap.
Sam Atkinson, co-founder and CEO, Swap (02:21): Actually, a lot of the problems that we had with Slow Goods are some of the ones that we’re trying to solve at Swap. The genesis for the business actually was Zach. He worked in textiles for 10 years before we met, and so he had an amazing network of textile manufacturers all over the world. We basically tapped into his network to bring amazing handmade, home-made products into the UK and we were distributing them from here.
(03:03): This was 2018 to 2020. Obviously the key thing was how do you try and run a sustainable business? We raised a small bit of family and friends funding and then we would run out of money way more quickly than we thought, and then we’re like, okay, we need to get some more money. And then cross-border was a really big thing. We were shipping stuff from all over the world.
Actually many products that we bought were from Africa and we were getting hit with duties and tariffs and then all the import costs, and then we were shipping them out to customers all over the world and we were paying those duties and tariffs again, and we didn’t bake that into any of the pricing that we were doing. And so then we realized that our margin was not what we thought our margin was. And so I think we suffered a lot of the operational pain points that we are trying to help brands with now. But also then, I think we learned what it takes to run a small business and how important those margins are to keep it going.
Seth Pierrepont, General Partner, ICONIQ (03:34): Then you’re at Juni and you decide now is the moment to circle back on entrepreneurship and try this again. Was there a moment while you were at Juni that prompted you to step out and solve this pain point that you clearly had felt firsthand?
Sam Atkinson, co-founder and CEO, Swap (03:50): I wouldn’t say that there was a moment. It was a journey that I knew I wanted to take again. I’d say the moment when we decided to quit our jobs was actually when I cold-called a potential customer and sold them on the idea. We told them what we had, we hadn’t quite built it yet, and they were like, cool, this sounds great, let’s go ahead. And then I rang Zach and I was like, look, we’ve got to go for this now, we have a first customer. And so then we both basically just quit our jobs and started building Swap.
Seth Pierrepont, General Partner, ICONIQ (04:20): And what was the first product that you launched that that customer was excited about?
Sam Atkinson, co-founder and CEO, Swap (04:25): It was our returns product. It’s a huge pain point for retailers still even now. And so that was the first wedge that we went to market with and I think it really resonated with brands, especially here in the UK.
Seth Pierrepont, General Partner, ICONIQ (04:36): What has impressed us most about Swap is the early resonance you’ve had with some pretty incredible e-commerce brands. Maybe talk about some of those early customers that you were able to sell to and bring onto the platform.
Sam Atkinson, co-founder and CEO, Swap (04:52): In the UK specifically, we worked with Pangaia, we worked with The Frankie Shop, we worked with a really fast-growing brand called Odd Muse, and we were able to sign these brands pretty early on in the journey within the first year of launching. What we’ve realized is all of the founders or directors or managers in these e-commerce brands are in WhatsApp groups with other e-commerce brands. And so if you do one thing wrong, then they’re going to put it in there and say, hey, don’t use this tool.
Seth Pierrepont, General Partner, ICONIQ (05:15): If—
Sam Atkinson, co-founder and CEO, Swap (05:15): If you’re doing a good job, they’re going to say, hey, you should check these guys out. Also, I think we did a really good job with the early team members of hiring people who really knew the space. We had a suite of people who worked at Shopify and at Klaviyo before, who are companies that I think we look up to and want to emulate in some way. And I think having people who really knew the space meant that we were able to talk to the customers straight away and really relate to them.
Seth Pierrepont, General Partner, ICONIQ (05:38): Equally as impressive as your success in Shopify has been your success with some of the other partners, especially the ones you’ve been announcing recently like Avalara. What is Swap bringing to that ecosystem?
Sam Atkinson, co-founder and CEO, Swap (05:49): It’s funny actually with Avalara, I don’t think they mind me saying, they’re obviously a very different company, and so we’re in a Slack channel with the whole Avalara team and they can’t get over how quickly everyone replies in Slack and how quickly we move. We actually started using Avalara to get our cross-border product off the ground. One of the things that we do is we calculate the duties and taxes in the checkout for a customer who’s buying from one of our merchants, and we used Avalara to start with the first version of the product, and so we had a commercial relationship with them to start. But then it’s really evolved from that point. We offer a suite of cross-border services to merchants and what we’ve partnered on is being able to bring that to their customer base, and the first customer should be going live in the next couple of months, which is really exciting for us.
Seth Pierrepont, General Partner, ICONIQ (06:32): The pace at which you guys work I think is something that we immediately noticed. One of my favorite stories from when we were conducting our diligence on Swap ahead of our investment was our call with Johan the night that his wife was in labor and he took the call from the hospital and you could hear her saying, get off the phone, this is happening now. So actually in that moment I was like, you need to get off.
Your cross-border product is called Global, which you released around this time last year or so. Tell us a little bit more about it.
Sam Atkinson, co-founder and CEO, Swap (07:11): The whole premise of the product is to help a merchant sell internationally just as if they were selling domestically. So that means in practice we’ll calculate the duties and taxes in the checkout so the brand can ship delivery duties paid, which means the end customer doesn’t get hit with any surprises when an order gets shipped to them. We’ll help them set their pricing strategy. We’ll then handle all of the customs clearance, which is actually becoming a bigger thing with the tariffs that are coming in. And then we handle all of the tax filing for you locally. So if you are a UK brand shipping to the US, we’ll handle your US state tax registrations and filings. Basically, you have peace of mind as a merchant to sell into those countries.
Seth Pierrepont, General Partner, ICONIQ (07:50): I remember when we first met and you were telling me about this Global product, and my first reaction was almost like a sigh of relief, like this is finally going to be solved. So from a personal perspective, I’m very glad that it’s taking off like wildfire. Needless to say, we’re thrilled to be on the journey with you and Zach and the rest of the Swap team. Maybe share a little bit about why you chose to partner with ICONIQ in this round and what you’re hoping to get out of our partnership.
Sam Atkinson, co-founder and CEO, Swap (08:17): I think the personal side of it has always been really important for me, and I think from the very start we always felt that we could trust these guys and if there was ever something not going well, we could pick up the phone and talk it through and you’d be able to, with all of the companies that you’ve invested in, you’ve seen everything a million times, and then navigate that with us.
You guys have been super helpful with the Shopify introductions. Obviously Shopify is our main partner in the ecosystem that we work with, and so we’ve had conversations with the CFO at Shopify and the head of product partnerships that you set up. And obviously that’s a big, big thing for us. From the start we’ve seen the network that you have and how you’ve been able to bring that not just to me, but also to the team members who are going to work with us.
Seth Pierrepont, General Partner, ICONIQ (08:56): Well, it’s been amazing to work with you guys. Maybe just one last personal one. Do you have a habit or non-work ritual that keeps you grounded?
Sam Atkinson, co-founder and CEO, Swap (09:08): Me and my wife have a dog called Rafa, named after the tennis player.
Seth Pierrepont, General Partner, ICONIQ (09:12): Okay.
Sam Atkinson, co-founder and CEO, Swap (09:13): Interestingly enough, because my mom wanted our firstborn to be called Rafa.
Seth Pierrepont, General Partner, ICONIQ (09:18): Okay.
Sam Atkinson, co-founder and CEO, Swap (09:19): After—
Seth Pierrepont, General Partner, ICONIQ (09:19): The tennis player?
Sam Atkinson, co-founder and CEO, Swap (09:19): Yeah, after the tennis player, because she’s obsessed with Rafael Nadal. So we bought a dog and called him Rafa instead. Just to handle that one. He’s a working cocker spaniel. He needs lots of exercise and so we take him out every morning at the crack of dawn, and every night at the end of the night, and I think it’s a nice way just to relax and just—
Seth Pierrepont, General Partner, ICONIQ (09:35): Good way to start and end the day.
Sam Atkinson, co-founder and CEO, Swap (09:37): Exactly.
Seth Pierrepont, General Partner, ICONIQ (09:37): That’s amazing. Really enjoyed this. Thank you. Thanks for making the time.
Sam Atkinson, co-founder and CEO, Swap (09:43): Thank you.
