The Anti-Headcount Billion-Dollar eCom Playbook | David Cost, CDO (Rainbow Shops)
David Cost explains how Rainbow Shops competes with Amazon, Walmart, and Shein — not by scaling headcount, but by turning the right partnerships into an engineering advantage.
How many engineers does it take to run the ecommerce site for a retail company that does over a billion dollars in revenue per year?
Well, if you’re Rainbow Shops, the answer is just 2.
Most ecommerce teams assume scale requires more engineers, more tools, more complexity. Chief Digital Officer David Cost has built something many people in ecommerce would say isn’t possible — a lean, fast-moving digital operation that runs on vendor partnerships instead of a massive internal team. Two engineers, hundreds of programmers’ worth of output, and none of the overhead that comes with scaling the traditional way.
In this episode, David shares:
A detailed, under-the-hood look at the specific vendors they use to stay so lean
His playbook for using strategic partnerships with vendors as an external dev team
How being a testbed for new tech gives them a competitive edge
And why their choice of ecommerce platform was vital in enabling Rainbow’s digital strategy
1. The anti-headcount playbook: running a billion-dollar e-commerce operation with two engineers (4:13)
Most e-commerce companies respond to competition the same way: hire more engineers, build more in-house, scale headcount. David’s team is doing the opposite:
“We use our two full-time internal engineers and then we partner with a lot of technology vendors who, in some ways, are almost extensions of our staff.”
The lesson for any product leader operating under resource constraints: headcount isn’t the only way to scale capability.
The right partnerships — not vendor relationships, but genuine partnerships where you influence the roadmap — can give you access to incredible infrastructure without the overhead of building or maintaining it yourself. This applies whether you’re running e-commerce, a SaaS platform, or an enterprise product team with a constrained budget.
2. How platform choice can be a strategic multiplier (4:45)
Rainbow spent over a decade on Demandware (later Salesforce Commerce Cloud) before making the decision to replatform to Shopify in 2021. That decision wasn’t just about features — it was about ecosystem leverage.
If you’re going to build partnerships with vendors who extend your stack, you need to be on the platform they’re building for first. In this case, that platform is Shopify.
“If you’re gonna develop a new piece of tech that’s gonna work in the e-com world, you’re gonna build it for Shopify first.”
Being a large retailer on Shopify — where large retailers are relatively rare — gave Rainbow something valuable: the ability to be a launch partner for new technology in exchange for influence over how that technology gets built.
This is a model any product team can adapt. You don’t need to be the biggest player in the room; you need to be the right partner for the vendors who are solving the hardest problems in your space.
3. A native mobile app — with zero mobile engineers (22:09)
Rainbow has a native iOS and Android app. Yet they have no mobile engineers.
Using a platform called Fuego, Rainbow essentially mirrors their Shopify setup into a native app experience for both platforms, complete with push notifications, with minimal ongoing lift.
“We pick up native apps along with push notifications, and in a world where we’ve already hit peak email and probably hit peak SMS, push is the next frontier.”
App users at Rainbow convert at higher rates, repeat purchase more frequently, and carry larger average basket sizes. About 20% of Rainbow’s customers prefer accessing the brand via app rather than browser. David’s view is that you can’t move people between those camps. You have to serve both.
The takeaway: There’s a class of capability that looks expensive and technically complex from the outside but has been commoditized by the right platform partner. Native apps used to be one of those expensive, high-maintenance investments. For teams willing to find the right partner, it no longer has to be.
4. Checkout is not where you innovate (27:21)
One of David’s strongest convictions: checkout is the last place a product team should spend engineering resources trying to differentiate.
At Rainbow, Shop Pay now accounts for nearly half of all transactions — a number that dwarfs Apple Pay (sub-10%) and has eroded PayPal from 20% to 10%.
The broader PM lesson here is about knowing where not to compete.
For every problem your product faces, there’s a version of that problem that someone else has already solved better than you ever will with your current resources.
The key is in identifying which those are — and getting out of the way. Shopify’s checkout is nearly impossible to replicate, and the teams that have tried to build proprietary checkout flows have paid for it in engineering debt and conversion rate underperformance.
Links
Chapters
00:00 Introduction
02:14 David’s product journey
03:18 How Rainbow runs with only two engineers
04:13 Rainbow's decision to migrate from Salesforce Commerce Cloud to Shopify
10:16 How Rainbow uses AI to support a lean team
13:31 Rainbow's partnership with Lica for AI-generated product images
19:34 The future of personalization in ecommerce
25:14 Shop Pay and Rainbow's checkout features
28:32 Conclusion
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