Commerce.com, Inc. (CMRC) Earnings Call Transcript & Summary

Well, welcome, everyone. I'm Terry Tillman from Truist Securities. And welcome to the Truist 2021 Technology Internet and Services Conference. As I said, I'm Terry Tillman. I cover application software and SaaS companies at Truist Securities. I'm extremely pleased to have BigCommerce joining me today. We're going to have an interactive fireside chat. Before I begin, I need to read a disclosure. This call is arranged by Truist Securities Research. It's for use by institutional investors and issuer clients as defined by FINRA. If you're not an institutional investor or issuer, please disconnect at this time. And for required disclosures, please see our website at truistsecurites.com or our equity research library. On today's call from BigCommerce, I'm extremely pleased to have Brent Bellm joining, he's CEO; as well as Robert Alvarez as CFO. If you hear me say, RA, that's just -- that's another way of saying Robert Alvarez. So sometimes I might say R.A. interchangeably. So don't be confused by that. Thank you all for joining me today, BigCommerce team. Hope you're all well. Why don't we get going? How does that sound?

Do it, Terry.

That's great. Thanks, Terry.

So I had a long list of questions, and I think you may have even had access to them. It's too many questions. I'm just going to go off script right away. So BigCommerce, the idea of open SaaS for e-commerce. I get a lot of questions, well, why would I use that? I mean doesn't everybody just choose Shopify? Or whatever I have preexisting, I'll just stick with that. Why do you win business? It seems like I get kind of passionate and have all kinds of answers to it, but I think you have better answers than me. So I want to hear why you're winning a lot of business. And what is different about the market you're going after versus others?

Yes. So first of all, the present and future of e-commerce platform technology is SaaS. It is not owned, licensed and managed software. If you go back in time 6 years ago, it was overwhelmingly on-premise software with Magento and open source being the leading choice of companies, small, medium and large, B2B, B2C all around the world. It was -- it's taken a long time for the technology standard to migrate over to Saas. You named Shopify and BigCommerce were the 2 biggest SaaS platforms in the world. Shopify started 5 years ahead of us with a focus on SMBs. And they offer what we characterize as a closed SaaS platform in that when you buy Shopify, they want you to also buy and use Shopify payments, Shopify shipping, [indiscernible], lending, email marketing, point-of-sale software, you get it all as an integrated package. Well, that is a great solution for small merchants who say, I don't want to be bothered with a bunch of different choices. I don't have a need to optimize my choices for my business. I'm happy to run a playbook that has worked hundreds of thousands of times for other businesses. That's the Shopify offering. And we think it's a great offering for noncomplex businesses. The reality, though, is that most of those businesses, upper SMB, especially mid-market and large enterprise, are complex. Do want or benefit from optimizing their e-commerce approach to their product, their systems. Maybe if they're migrating sites, they want to retain all of that. And so our offering is what we call open SaaS. It's open because both the product is open and our partnership strategy is open. The product, in our case, has far more flexibility in the APIs and the components, micro services of our platform, to be able to integrate and make choices. For example, one category of e-commerce is called headless, and we do headless better than any other generalized platform because we are so open and able to integrate with a separate front-end digital experience, and they really can't do that. And on the partner side, as an example, if you buy BigCommerce, you get to [indiscernible] without penalty from among the very best payment providers in the world. And whether you're talking about PayPal and Braintree or Stripe or Barclays or Chase or Adyen or Checkout.com, these are the best payments companies in the world. I think they all do something different than one another, but they do payments better than Shopify does. And you get to pick without penalty. You get to pick among leading point-of-sale software players with BigCommerce. We have great integrations and partnerships with the market leaders like Square, Clover owned by Fiserv, Vend, Heartland Retail, Teamwork Retail. In Europe, Epos Now and Zettle. An expanding list of the best-of-breed point-of-sale providers. We've got partnerships on the e-mail marketing side with dotmailer and Klaviyo and Mailchimp, we don't compete with them. So there's a choice in the world. And the world needs choices. You have tightly integrated closed hole in the Shopify model, which is very attractive to a subset of the world's businesses. And then with BigCommerce, you basically have open SaaS, a successor to open source or Magento. And anybody who's looking at e-commerce very simply who thinks there's one size fits all for the world's businesses, hasn't talked to many businesses, right? I mean e-commerce is as big as the world -- it is becoming as big as the world economy in the sense that all product sellers need to have an e-commerce strategy. And the world is giving them 2 extraordinarily good platforms that are SaaS: one open, one closed. And the world's businesses will each pick which is best for their particular needs.

Yes, yes. And I was curious just to also help with some folks who may not know the story as well. The sweet spot for your customers. And I know a common kind of way to look at customers is maybe the GMV, the gross merchandise value. But maybe you could talk about a sweet spot for your customers, maybe in that mid-market and enterprise? And typically, what type of SKU they're attaching around their business from BigCommerce?

I'm going to give you a -- I'll get you to a complex answer. But the story here is that we, like Shopify, started as an SMB-centric platform. When I took over for the founders 6 years ago, we had risen to #2 in the world. But what was clear to me when I came in is that the world didn't really most need a strong #2 to Shopify. What they needed was a SaaS platform to take on Magento in the mid-market and a SaaS alternative to open source. And so I shifted our focus at that point in time from being the leading SMB platform, leading mid-market, going up against Magento, and making SaaS open enough to fully compete with open source. And we think of mid-market as a site doing $1 million to $50 million in online sales, independent of the size of the brand online and off-line or the parent company. But now the complex answer is that our strategy is explicitly and purposefully disruptive. And when I say disruptive, I mean classic textbook Clay Christensen, who gets case study after case study after case study of disruptive technology, by definition, always starting where we did at the low end of the market, the part that's underserved by the incumbent. The low end just wants something simpler, cheaper, faster, easier to use. That technology then builds scale there. And if you choose to, like we have done, adds functionality and performance and then goes upmarket, right, extends up market, and offers the mainstream of the world, the mid-market, in our case, 80%, 90% of the functionality of the incumbent, Magento, but at 80% less cost. And that's what we've been doing for the last 5, 6 years. What's notable, though, is that disruption doesn't stop in the mid-market. If you succeed there, you have the choice to keep going up into large enterprise. That's exactly what we have done, and we are now competing very effectively in that segment that used to be owned by the IBMs and Oracles and SAPs of the world. And Magento, for that matter. The site is above $50 million to [ $1.04 billion ]. And one of the things that has really helped us in the last year is in quick succession. All of the tech analysts who evaluate and rate the enterprise e-commerce platforms have now come out and positioned BigCommerce as being fully competitive as either a leader in the large enterprise segment based on capabilities or a strong performer at the far extreme of best strategy and best direction. That's true of Forrester for both B2B and B2C. And by the way, you won't see Shopify on either of those reports. They don't do B2B, and they weren't evaluated as enterprise capable for B2C. That's true of Gartner for B2C. That's true of IDC, who has us as a leader for both B2C and headless and gives us a great rating for B2B. Paradigm gives us a great rating for B2B. So what's exciting for us is that in the large enterprise segment, a lot of these really big companies start their search only narrowed down to the folks that the analysts, the Forresters and Gartners, say are the best platforms, right? They're like if the experts don't say you're one of the best platforms, we'll then exclude them from our RFP. A year ago, we didn't have those ratings from any and now we have it from all of them. So we're finding ourselves now in evaluations and competitive opportunities that we weren't getting a year ago, pre those reviews and pre our IPO. And we think that that's a lot of upside for us as we go forward, potentially winning large enterprise deals.

Yes. I know I would be excited to see that. And we do a lot of research. And so we see the movement upmarket. It's exciting to see. I'm curious about headless. I have a lot of companies say, oh, no, we do that or we do this. My sense is you got to have the right architecture. You just don't all of a sudden make your platform headless if it's not the right architecture. But like your first-mover advantage, what kind of sustainable advantage do you have architecturally with headless as the world shifts that way? I mean how quickly can some of these other vendors, modeled-up vendors actually kind of re-architect and get headless? And then secondly, it does seem like Europe, there's a lot of headless going on there and so that would be good for you all as you're growing your European business. But is this an international phenomenon? Or is it going to be more regional around headless?

Yes. Headless is enormously hard to do because what it basically does is it separates the technology that a business uses to create its customer experience, the customer-facing web pages, the design and the hosting of those from the back-end platform that powers the product catalog the shopping cart, the checkout, the order processing, tax calculation, accounting and ERP integration and all other systems integrations. Those are a lot of integrations. And when you then separate them because if a platform like us is originally built to create and manage the user experience within the platform. And in our case, it's our stencil framework with its themes and theme editing and design editing, completely then separating those requires an enormous amount of openness in almost every part of the platform. You've got to have the APIs, and you've got to have the scalability of those APIs. So it takes a long time. Now in our case, we have a giant leg up on our SaaS competitors because we decided back about the time I joined, that this is something we wanted to do. So we got started on this in 2015. By the end of 2016, that's a long time ago before headless was even a popular term, we launched our first 2 customers, General Electric and Harvard Business Publishing, extremely advanced cases, custom use cases. It's been one thing to have the custom use cases in the APIs, it's another to build commercial plug-ins, something that is a reusable plug-in. And so we started then in 2017, working on our first commercial plug-in into WordPress. And WordPress is the most popular content management system in the world, roughly 30% of the world's web pages and businesses created in WordPress. WordPress is a CMS without a commerce back end. If you want to commerce enable a WordPress site, which a lot of businesses do, you need to have less extension. And up until then, the most popular was WooCommerce, but then we enabled BigCommerce as a SaaS alternative to Woo as a reference implementation. And since then, we have connectors that have been built into nearly all of the leading digital experience platforms. At the high end, you have ones like Adobe Experience Manager and BloomReach and Sitecore, custom frameworks, integrations that we have into Next.js, Contentful, Drupal, Acquia and Progressive Web Apps. And we have all of those. And I think if you just simplify it all down to it, roughly 30% of the world's e-commerce sites are headless. And you get there partly just from cross-sites. Really, there are 2 platforms that do headless best. This is IDC talking. We, as a full feature e-commerce platform, do it best, and then there is a pure micro services player out of Germany that does it well. But the point is less about how big is headless and how big a part of the future is it. It's big, present and future. More importantly, though, is it demonstrates just how open and flexible our platform is, and adaptable to the needs of businesses. And you can even do hybrid with us. You can have stores created within BigCommerce, running alongside headless sites and Progressive Web Apps all in one account.

Yes. R.A., I'm going to get to you in a minute, I promise. So stay tuned. I wanted to -- or R.A., you can take this question. But -- so I like the idea of going up market and kind of the disruptive kind of approach you've had, and you just moved upmarket and have seen that happen. And so it's a great playbook. Is your platform have everything it needs to do $1 billion, $5 billion-type GMV customers or does it depend? How much more work do you have to do on the platform to meet the needs of some of these large potential replatforming opportunities?

Well, a $1 billion site, it's all one platform. It's all one multi-tenant platform. And so if a merchant comes in with $1 billion, that's still a single-digit percentage for total annual process volume. And so in aggregate, platform is perfectly scalable to a business of that size. However, we always have to look once you get that big, or even a smaller site that does really, really intense -- time-intensive things like a flash sale. You've got to look at the specific components of the platform that it's hitting most heavily and just make sure that those are ready for that volume. And that's one of the neat things about multi-tenant SaaS, is that every time we get a new big customer, we then go through that testing. And we find some new area to make that much more scalable. But the answer is yes, we can handle sites of that size.

Got it. Got it. And R.A., I was curious, I think you all reported 51% ARR growth on the enterprise segment in 4Q. There will be implications on subscription revenue as we move forward based on what you're doing on enterprise ARR. How is the progression going to look on subscription revenue overall as we go through the year, considering that we also saw that enterprise ARR growth accelerating throughout '20?

Yes. We were really excited about that further acceleration. Our enterprise business was really a high-growth business, even pre-IPO, pre-COVID. But post IPO, it had accelerated even further. As I think about subscription versus PSR going forward. It's good that 70% of our revenue is tied to subscription. We have high visibility in terms of gross new targets. We've got our sales capacity, productivity models pretty dialed in, in terms of gross new MRR. Our churn metrics are really strong because if you think about our business, we focus even on the small business side, established businesses. And then mid-market enterprise, great unit economics, really strong unit retention. And then when you add in our kind of land-and-expand revenue model, they add stores, we monetize PSR. We feel great about that. Where we have to be careful is forecasting GMV, right? Last year was a big year for GMV on the platform. This year, we have to lap that uncertainty around when folks are going to kind of get back out there with the vaccines. And so where that affects us is PSR because majority of our PSR is payments today and upgrades. Our pricing models are based on GMV upgrades and order-based upgrades. And so if we're too aggressive in forecasting GMV, then our upgrade forecast will be too large. So as I think about the guidance that we set, we're breaking out subscription versus PSR. We've got the components of that subscription, gross new retention, strong visibility, upgrades. We just have to be careful. And so think about this year as one where revenue and ARR will likely be similar. The one thing I'll say is we are talking to more billion-dollar-sized merchants, to your question. Harder to forecast when those deals are going to close. On average, our mid-market enterprise deals are closing within a couple of months. Some of these large enterprise deals may take longer than that. But if we close a handful of them, then there's probably some good upside in our subscription numbers.

Yes. On the -- even though there's 2 separate revenue lines, they're the kind of -- they are really coupled to GMV. And as you have these midsized or enterprise customers, and they're just doing great and seeing huge volumes, so they're going to go up to the next tier. Like is that actually -- because I'm trying to think about that compared to you signing a new kind of $1 billion GMV customer, just a bunch of $50 million ones, okay? That wouldn't be bad if you got some of those, too.

That wouldn't be bad that either, no.

Yes. Is there probably more dry powder in the model around the GMV driving folks into new price tiers? Is that probably where you have the most dry powdered subscription revenue?

Yes, I'd say so. Again, we're not going to get ahead of our skis on that front. I mean we're 2 quarters in being public, right? So we've got to make sure we're building a strong track record. And yes, I mean, if the GMV levels are elevated throughout the year and we see continued strength in bringing on big GMV, large GMV merchants, then, yes, for sure, there is upside built in.

Yes. And then -- and for folks that -- you all reported, I believe, on a Thursday, we had a lot of earnings reports. So it was just a flurry of activity during that time. For folks that didn't have time to maybe go through the fourth quarter and all the nuances, could you help us again kind of normalizing 4Q PSR revenue for each one situation?

Oh, sure. Yes. So we had a -- majority of our PSR today is payments. We are starting to monetize other solutions and services. And so if you think about BigCommerce's share of wallet opportunity, today, majority payments. Tomorrow and the future, we should be able to do a really good job of monetizing shipping and fulfillment, omnichannel, point of sale, marketing, tax accounting, all the other ancillary services from the ecosystem. We take a very different approach to the market. We bring best-of-breed partners who we feel are true experts in those categories. And again, we're trying to meet the needs of larger enterprise merchants. So that's where it resonates. And the flywheel comes to us in 2 ways. We monetize the PSR, but we also monetize because the partners are now referring BigCommerce into deals. In Q4, we had an advertising partner. The first deal went really well, exceeded expectations. We went back to the table to renegotiating new contracts. The new contract had minimums built in to where we have to recognize revenue ratably. The prior contract was all variable where we refer a merchant, they incur ad spend, we get a rev share. And so in Q4, had the terms been the same, kind of contract, the first contract continue, our PSR would have been 74%, 75% year-over-year. Because we had to ratably recognize that minimum into 2021, it impacted kind of the year-over-year growth rates. But couldn't be more excited about the partnership. We're going to do more with this ad partner. And it's just a good example of how we're going to start monetizing the ecosystem and the platform in new and different ways, right? This is rev share on ad spend, nothing to do with GMV, right? And so as we mature as a company, as we get better about automating the merchant experience, partner experience, couldn't be more excited about our ability to generate new revenue streams from the ecosystem and really start to build that flywheel in terms of our approach. It's going to show up in PSR in a lot of cool ways.

Yes. The -- I think sometimes I need to kind of keep myself reigned in. I get excited, okay? So with your PSR opportunity, I'm always bugging you all about like shipping, fulfillment, POS, other payments providers. It does seem like you have a slew of opportunities. Like it's a hard question, but just it sounds like this is a big area of upside in the future for sure. But trying to kind of keep expectations and keeping reigned in, which is hard to do, is '21 like still a lot of market development and kind of putting seeds in the ground? Or are there some actual areas that you're all pretty far along? And yes, you're being conservative. They're not in the model, but there are some things further along than seeds in the ground. Anything you could say to that?

Yes. I mean, in general, I would say that we spent the last couple of years building out these integrations, identifying who the best of breeds are. And we're starting to see the revenue streams. We're excited about omnichannel and the revenue opportunities in omnichannel, shipping and fulfillment. There's plenty of opportunity to increase take rate and grow revenue through rev share from those transactions. Point-of-sale. Point-of-sale is exciting because if you're a point-of-sale company, you don't want to lose your merchant because you don't have e-commerce capabilities. And so point-of-sale for us is exciting because we've got these terrific point-of-sale partners who are now referring us into deals. It may show up in PSR with rev share, but a lot of them are going to show up in subscription. Tax, accounting, ERP, starting to bear fruit. But I'd say it's still early days, anything nonpayments, but the opportunity is really exciting.

Okay. And I think...

Because, by the way, we don't have to build those solutions, right? We have to focus on our e-commerce platform. We've got to be the best with our APIs and integrations. And now we've opened it up to a point where we've got, whether you're a local payment provider, you can integrate into BigCommerce. We're not the bottleneck anymore. We've really streamlined things to where we've got partners that can develop on to the platform and really speed up and accelerate those integrations, and that comes into play with our international expansion efforts. But the great thing about us is we're -- all of our mind shares, building out our e-commerce platform, we've already identified who we think are best of breeds across the ecosystem. And that rev share is going to be high-margin revenue because we're going to only capture net revenue. And we're not going to have to be bogged down or have to invest in building out solutions that, quite honestly, we couldn't build them as good as they can. We're not going to build a payments offering better than the players that Brent mentioned, nor shipping fulfillment, email marketing, point-of-sale. But we know who the best are and we've got some great options for the merchants we focus on.

And actually, maybe just one last question on this, R.A., and then I was going to come back to Brent with a question. But when I looked at some of your materials in your slides, it showed that just the broad partner ecosystem as it stands today, and obviously, it's going to evolve, but there's a lot of different buckets. If you're really hitting on all cylinders, is there actually more revenue than in subscription than in PSR? Because I was just thinking a lot of this is rev share and other things. But you just said a minute ago some of this is definitely going to end up with subscription. So in a perfect world, any way to kind of balance the partner ecosystem goodness between PSR and subscription?

I guess it all depends on the pace of growth with subscription, right? Like if our subscriptions grow even higher than we think, then PSR as a mix may not get to 50-50. But is there opportunity for us to be 50% subscription, 50% PSR? I think there is over time. I also think if you look at our international breakdown, can we get to 50% U.S., 50% international? Yes, I think we can. So it really depends on the pace of growth with subscriptions, but there's a ton of opportunity in PSR and how we monetize that.

Yes. We have -- Brent, maybe I was going to -- you all had some good press a couple of weeks ago about Walmart. And you have to help your merchants sell wherever there's relevancy in activity. So it makes sense that you check boxes, whether it's Facebook, Instagram, et cetera. But can you talk about the Walmart Marketplace? And I think you all have some incentives in place to actually kind of garner some new merchants. And so would this be a different type of merchant than what you're normally seeing? And just generally, I'll stop with this rambling question. Maybe you can just help us beyond the press release and kind of maybe what this means for the business with that announcement.

Yes. At a high level, one of our strategic pillars is to be the best platform in the world for omnichannel selling. Omnichannel selling means that not only is a business set up and optimized to sell as much as possible from their own branded website, but also to have the seamless integration into leading third-party marketplaces, social networks like Facebook and Instagram, advertising channels like Google Shopping, and to sell as much as possible everywhere consumers are on the web. So Walmart specifically is a big deal because Walmart has become now the second biggest e-commerce site in the U.S., ahead of eBay, according to eMarketer. And that then means that next to Amazon, the most shoppers are doing their primary shopping on Walmart relative to all the other websites out there. And it's a really exciting opportunity for a lot of brands. Remember, back in the store-based retail days, Walmart was famous for only wanting to stock on their shelves the top 2 brands in every category. If you're not a top 2 brand, you don't get in a Walmart store. So think of all the great brands out there, small, medium and really large who weren't top 2, not on Walmart shelves. Well, with the Internet, Walmart is no longer limited by shelf space. They don't have to constrain themselves to the top 2 most relevant brands. They can add more, and they don't even have to stock the inventory because of their marketplace capabilities. And therefore, great brands, small, medium and large, who meet Walmart's criteria for being allowed on their site, can now get access to that giant customer base of Walmarts. And we're seeing huge enthusiasm. It's not always the same merchant, like the merchant that got super excited when we announced an integration with Wish, is not necessarily the same merchant who is super excited about Walmart, but the fact that we're adding each of these major channels and letting each of our customers seamlessly integrate and optimize as relevant for their product and their target customer. It really showcases not just the power of the platform of ours, but also open SaaS at work. Because open SaaS, again, means we're open to partnerships like this and trying to make the very most we can of them.

Yes, yes. And I think you do have some promotions in place to maybe it'll stir the pot and get some new merchants. Could this be meaningful as a driver of new merchant activity or too early to tell?

Too early to tell. We have certainly received some outreach from merchants who are excited about it. But will it be a driver of new customer acquisition or a factor influencing them, we'll find out. I think the primary thing that we look to achieve with integrations like this as quick adoption among our existing customer base who really wants that.

Yes. I was going to ask you kind of a question in terms of like big picture things that are kind of emerging, kind of exciting new areas or frontier, so like augmented reality. I'm sure there's a lot more that can happen with AI and personalization, selling on social. And actually, there's other things too like one-click checkout. This is not an insignificant thing, it really is. You've got some good partnerships there, buy now pay later. But what are a couple of things for investors to leave today with -- yes, no, this is maybe future stuff, but it's already having an impact today.

There's a lot of things I could talk about, but for an investor covering us, sort of in no particular order, I would say, first of all, the expansion of our product into ever more complex use cases as we add functionality to our core open SaaS platform like native multi-store capabilities. Second is geographic expansion. An investor can already see that our business is absolutely booming in Europe. But really, all of that strength and success or nearly all of it is out of the U.K., where we have all of our business people today. Continental Europe, we only just recently opened the websites in France and Italy and Netherlands and Spain and Germany for self-serve sign-up. But we'll be investing ever more in sales and marketing and partnerships on Continental Europe. But our ambition is truly global. It's not just Europe and not just Australia, New Zealand, where we're also very strong. It's across Asia, Middle East, Africa, Latin America. We really believe our platform is the best open SaaS platform anywhere in the world. And as we localize it and adapt it to different markets, we'll be able to enter and compete over time, if not as effectively as we have in the major English-speaking markets, at least quite well. And I ran PayPal Europe for 4 years. And my last company, HomeAway was a leader in major markets, and all the major continents. This playbook for global expansion and competition is something that I'm doing for the third time now and really excited about it. B2B is a giant opportunity for us. As I mentioned earlier, we get great reviews from each of the B2B platform analysts. We're not a purpose-built B2B platform. But for sort of simple or semi-complex use cases, we can often be the best solution on the market in terms of price, usability, great user experience for customers. And so we love adding to our B2B capabilities, either directly or with partners, and competing for more B2B. We already talked about headless. We already talked about omnichannel. And we already talked about what we're doing with additional partner revenue in various categories beyond payments. So some -- those are some of the biggest drivers today. You started talking about things that I think are more potential for a year or 2 from now. Some of these I'm really excited about. I mean, I saw an amazing demo earlier -- is it this week or -- yes, earlier this week -- last week -- end of last week of a virtual reality shopping experience from a company that excels in AR/VR. And they're like how do we commerce enable this? And I said, well, you work with us because nobody does headless better than we do. You're creating that headless shopping experience, right? We can power the product for sale and the checkout and all of that, we're the perfect partner for you, right? If you're a leading edge at AR/VR, we are the perfect partner for you. And we're really excited to explore those opportunities as leading-edge companies do that AR/VR work.

Yes, yes. The...

One of the things I just emphasized, anytime you see a potential trend that is game breaking in e-commerce. The message from us is that we're not suddenly going to become an AR/VR company. We're not going to become an AI company. We're not going to become a buy now, pay later or any other variant of payments company. We're the best platform for those leaders to partner with. We're the most open platform, both product-wise and partnership-wise. We're the best partner for those companies. And we look forward to bringing the leading edge capabilities to market faster and better than our competition.

Yes. Yes. One thing I was going to ask, I'm a pretty good listener, and I've seen it in my own work. I mean there's just some really old technical debt e-commerce platforms out there powering these larger GMV customers. I do think you're all signaling that there is more and more opportunities for you there. How does that compare to what was going to be a large opportunity with open source, whether it's the Magento or just -- I'll just broadly define open source. Is this starting to become as relevant as the open source opportunity? Or is it still pale in comparison to that? And maybe an update on that open source opportunity. Because we've seen the milestones, the end-of-life and all that kind of stuff. But what are you seeing in the field, actually, people saying, hey, I'm ready to move on.

Well, anybody can see that open source reached its peak 5, 6 years ago and is now declining. Whether you look at Magento or any other open source option, it's declining. And it has a lot of share. There's a lot of share that it will be giving up for many years to come. It won't go away. I've got a lot of respect from Magento and we've tried to learn an awful lot from them in terms of developing our strategy, which we frankly want to be the SaaS successor to Magento and open source. But it's the case that most companies, if SaaS can do what you need it to do, you're far better off picking Saas. There'll be 20% of the time where you need to have the source code. You need that nth degree of functionality or customization, which Magento has better than any other platform and where Magenta is still going to be the best choice. But that's maybe 20% of the use cases today versus 100% of what they were getting 6, 7 years ago. The past is on-premise software and any investor hearing that is not surprised, right? They all lived through open source waves and other software categories. I think, e-commerce -- I mean I bet -- in my career, I bet on a SaaS platform and failed back in 2000, 2001. It was too early to pull off that technology. And as I watch the evolution of the industry over the last 20 years, I was sort of surprised and impressed, starting in 2008, 2009, with the rise of open source, which is not SaaS. I said, man, SaaS still isn't here. It still isn't winning in e-commerce platform technology. But when I had the opportunity to come in and take over for the founders of BigCommerce in 2015, I can't believe that this opportunity is still here, but I'm going to get it right this time. This time SaaS is going to win. And we know what to do. We know how to make SaaS open, and therefore, be the viable successor to open source Magento.

Yes. Yes. I wanted to ask about partners. You all put out some press and added some partners in recent quarters. And these are -- I'm talking about agencies and just other folks in that kind of supply chain that really help power and kind of design the next kind of generation websites for these brands. But going forward, is there still a lot of hunting for key agency partners? Or do you have everybody you need for the most part now and now it's just getting past the first couple of wins and then realizing, yes, we thought they were in it for the long haul, but now we're going to lean really into them, and so it's not exclusive? But yes, we wanted to make a bet on them. Now we're going to really go at it. So where are you in kind of the agency side?

I would guess we're maybe 40% of the way to our full potential. And there are a lot more agencies that historically may be focused on Magento or focused on even Salesforce Commerce Cloud or Adobe or -- sorry, Shopify, who now see that we've got the best open SaaS platform on the market and either want to start working with us or want to build the percentage of their implementations that they do with us. We've noticed a giant uptick in interest in BigCommerce since the IPO. Before the IPO, it's pretty hard. If you're one of the majors, if you're an Accenture, a Deloitte, a Capgemini, it's pretty tough for you to go into a Forbes top 1,000 global company and recommend a private company relative to the large market cap competitors of ours, the Salesforce, the Adobe, the Shopify, the Oracle, IBM, SAP. That's a hard recommendation. But now that we're public and there's transparency and credibility and confidence, and people can see that we have more momentum than any of those other players, other than maybe Shopify, it's a much easier recommendation. And it becomes a way up when you add on the Forrester, Gartner, IDC stamps of approval, which, again, we didn't have a year ago. So that combination of now being a transparent, well-capitalized public company with all the big stamps of approval. We're in a totally different league today. And one by one, the folks who might have been interested in what we were doing a year ago now were saying, okay, the time is now we got to jump on this opportunity before it passes us by.

Yes, yes. The -- we've got about 5 minutes left, and thanks for the time again today. I know you're all busy and you've got a lot going on, but it's -- I think investors find this very useful to hear the story again. But this is a question that's not answerable, but I'm going to throw it out there. The growth we've seen in digital, in e-commerce, I mean, it's been off the charts. So as we're globally going through a lot of things right now, distributing vaccines and just kind of starting to open up for business, if you will, in some brick-and-mortar settings, I think it's becoming an age-old question, well, what's the new going to be? Is it a reversion back? Or is it something in the middle? Now who knows what it's really going to be, but I would love to just kind of ask you kind of philosophically kind of how you think about it or what's your opinion. Because none of us know. Even if we have some return to brick-and-mortar, my sense is, and you all know I do a lot of this work, there's a lot of bad websites out there. So even if they weren't doing anything in '20, they've got to re-platform. So I would assume you still have plenty of big catalysts. But how do you all think about or how do some of your smart agency partners think about? And what are your customers seeing on? What do you think happens in '21 as we start having a more vaccinated population and we're getting back to some sort of normalcy, community-wise?

Nobody knows for sure. But when we articulate the following, everybody seems to not, number one, that the changes in both business, behavior and commitment to e-commerce, realizing it's essential and a big part of their future [ ends ] in consumer behavior. The breadth and depth of shopping that they're willing to do online and they think is a better experience than what they did before, those are permanent changes and an acceleration of what we would have gotten to anyway by several years. Secondly, that you can't but look at the numbers and think that we are still early innings. The Census Bureau in the U.S. came out with its 2020 year-end e-commerce report a week or so ago. It's still only 14%. I thought it was going to be higher than that. It's still only 14% of U.S. consumer spending. Now 3 of those 14 points came last year. It took 26 years to go from 0 to 11, and it took 1 year to add another 3. I mean that's a giant step forward, but we're only at 14%. And does anybody doubt that we'll go to 20%, 25%, 30%? I mean maybe even 35%, 40%, 45% over time of all consumer spending. It used to be, oh, yes, but think of the big categories. Nobody's going to buy groceries online. First, it was like nobody's going to buy apparel. You got to go to a store and try it on. Well, that was just true starting 15 years ago. And then it was nobody's going to buy groceries online or DIY. And how much in groceries have we learned to buy because of the pandemic? I really do think that this is, in human history, the biggest and fastest global economic transformation, and I keep saying that, but I haven't heard anybody say, yes, here's a better one. I haven't heard anybody challenge as this being the biggest and fastest global economic transformation in history. And what I love about our business is that we're at the forefront of it. We're basically aspiring to be the single most innovative disruptive platform at the forefront of that transformation in the world. With a particular model of open SaaS, it's best suited to companies that really want to optimize e-commerce for their specific business. So it's a giant opportunity, and it's going to last for decades.

Yes, yes. I hope so. It sounds good. The -- R.A., maybe I had a question for you. In terms of -- in 2020, you saw a lot of retail plan activity. And if I'm not mistaken, by February, March, and like -- look, retail plan, that's kind of the lower-end SKUs. They may even be a bigger merchant that's just trying to go online for the first time. But I'm curious, can you remind us again how you're thinking about the compare into '21 in retail plan business and activity compared to what you saw in '20, and if you see a reversion?

Yes. I would say you can see it in our numbers. The mix shift has been going on for a while, larger accounts or enterprise accounts, accounts greater than 2,000. We were stoped last year because even the retail segment of our business really accelerated. Like in Q4, I mean, it was up 30%, and then you had our enterprise accounts up over 50%. As we think about kind of this year and multiyear out is different. But just this year, we're probably going to temper that down just because of how -- it's hard to figure out or attribute how many small business merchants signed up starting in March. But I will say the ones that did, the profile and characteristics of those cohorts were really strong. I mean these are real businesses, established businesses. They got up and running fast. They started transacting even faster than cohorts prior to March of last year. But in terms of like forecasting the business, we're going to obviously kind of wait towards larger accounts, enterprise accounts. And if we get pleasantly surprised -- because keep in mind, we're internationalizing the platform, right? We're -- we've got marketing sites now in multiple countries. We've got self-serve enabled in those countries. We could get a good uplift in small business sign-ups as we spin out -- spin-off BigCommerce-enabled sites in other geographies. But we're not going to build that into the forecast. I think that would be a nice upside for retail plans.

That sounds good. I think it's -- you had another of a long list of potential upside drivers to my model, so I'm excited. Thank you all so much for the time, Brent and R.A. Really appreciate it. Daniel, thank you also. And thank you for folks that tuned in, and hopefully, you got some value out of this. And I'm looking forward to '21 and getting progress reports 4 times this year -- or 3 times this year, I guess, and then 1 next year. But good luck with everything and looking forward to staying in touch.

Thanks for the coverage, Terry.

Yes. You all take care. Bye.

Thanks, Terry. Appreciate it, everybody. Thanks. Bye, everyone.