Chase Clymer
I sell bagels online. We're doing great. I've been a TestParty customer for seven months. I just got a demand letter today. What happens?
Michael Bervell
Yeah, and that's obviously the annoying thing — that might still happen, right? Because anyone can file a demand letter for anything.
Chase Clymer
You can sue anybody in America for anything.
Michael Bervell
I think the challenge is, okay, well if you're right, you then have to pay to prove that you're right.
Chase Clymer
Honest Ecommerce is a weekly podcast where we interview direct-to-consumer brand founders and leaders to find out what it takes to start, grow, and scale an online business today.
Hey, everybody. Welcome back to another episode of Honest Ecommerce. Today I'm welcoming to the show not one but two brilliantly smart individuals solving an extremely annoying problem in the direct-to-consumer ecosystem, especially here in America, where some of these brands are getting hit with some litigious lawsuits. It's quite frustrating. We've dealt with it at the agency. I know that everyone is going to know exactly what we're talking about in short time.
Michael and Jason are coming to us from TestParty. Welcome to the show, gentlemen.
Michael Bervell
Chase, great to be here.
Jason Tan
So much.
Chase Clymer
Absolutely. So for those that are unaware of TestParty and kind of the solution you bring to market, what's the elevator pitch? What are you guys doing over there?
Michael Bervell
Yeah, so super quick elevator pitch — we keep companies from getting hit with ADA lawsuits. And the way that we do it is we fix the source code of your website. We're the only player that actually comes in and fixes your website. We do that using a bunch of different tools, agents, automated scanners, manual testing, scanners that we've built ourselves that are one-of-one internally. And based on all of that, we use a bunch of coding tools directly in your codebase to fix the issues.
So we're currently working with over 130 brands across the US and Europe — major brands that you've probably heard of, like Leline, Lavaine Bakery, Peak Design, Dime Beauty. There are so many other ones, Cuyana, that we work with. And yeah, we keep all of them compliant and also improve their SEO and GEO by doing it.
Chase Clymer
Absolutely. It is a very unique tool out in the landscape there. So before we get into how you guys are differentiating your product and helping these merchants, quickly, maybe some education — like, if I haven't been served with an ADA lawsuit yet and I don't know what that is, which would be surprising for our listeners here — I feel like most of them are quite in the know — but what's happening in the ecosystem? Why is this a problem?
Jason Tan
What—
Michael Bervell
Yeah, I mean, what tends to happen is there's a couple of ambulance-chasing law firms. We see it being the same fourteen to fifteen firms that will essentially give small payouts to people who are blind or low vision or have disabilities to file a lawsuit on behalf of a firm against a specific company. That's not an issue if the company actually has issues on their website. But what tends to happen is everyone can get sued, whether you're compliant or not.
What also tends to happen is when people look at what to do in these sorts of scenarios, just because you fix your site doesn't mean that you're off the hook. And so a lot of people end up having to pay settlements. So there becomes this kind of weird economic arbitrage where even if you're compliant, the cost for you to defend your compliance might cost $15,000, $20,000, $25,000, in addition to getting compliant, whereas the settlement might only be $10,000 or $12,000. So a lot of businesses — we actually saw last year there were about 5,000 demand letters filed.
We'll just choose to settle for $10 grand. And these are the public demand letters that we see. There's a lot more that are private. So we estimate — that's why most businesses have heard about this — there's probably 10,000 to 15,000 demand letters, settled demand letters, and actual publicly filed demand letters every year, settling for these kind of low-five-figure ranges, right below the threshold of actual litigation or actually getting in front of a judge.
We have seen with certain cases — like there's one called Jones v. Moscot, with Moscot Glasses Company — where they took it all the way. They said, "We're going to pay the $25,000 or $30,000 to prove that we're compliant." And when they did this, the judge completely threw out the case and said, "Yeah, you guys are compliant. There's no reason why you have to pay any sort of damages here" — no class action lawsuit there.
But that's the situation, I think — if you make your site compliant, you truly do have a case. And if you don't, you tend to be in this weird economic arbitrage that exists in the legal system, where it's too expensive to defend. And whether you're right or wrong, people just choose to settle either way.
Chase Clymer
And if I had received a demand letter once and chose to settle, is this issue behind me?
Michael Bervell
Probably not, right? Because there are so many of these firms. Maybe it's behind you once, but not the other 13 major firms that tend to do these sorts of filings. And also, they're filed by state. So you can be in the Second District of New York, you can be in Illinois, you can be in California — these are some of the big hotspot states. Minnesota has a lot of filings as well, a bunch in Florida.
And so, at least in our case, because we've seen so many of these cases with customers coming to us with a lawsuit in hand, what we end up doing is having essentially defense packets. If you're a TestParty customer and we fix your site, here's how we recommend defending, here's some legal counsel that we'd recommend hiring, all that sort of stuff. But yeah, this is the really interesting challenge that we're trying to solve — how do we change the economics so the brands are the winners and not the legal system, which is incentivized to essentially pay out lawyer fees.
Chase Clymer
Yeah, and I guess it's a good time for me to get out ahead of this — everything we're talking about here is kind of hypothetical. We are not lawyers and we are not giving you legal advice, so obviously just want to be upfront about that.
Michael Bervell
Of course. My mom would be so disappointed in me — she wanted me to go to law school so bad, and here I am just a little tech nerd.
Chase Clymer
And now you're fighting lawyers.
Michael Bervell
Yeah, exactly. Maybe that's why. Take that, lawyers.
Chase Clymer
All right. So now, these ADA lawsuits come from — there is a law on the books that is terribly worded and is being, in my opinion, extrapolated and forced to fit into a window for an Ecommerce retail view. And that's where they're trying to get the grounds for these lawsuits.
So first and foremost, the problem — and Michael touched on it before — it's like we're not saying that websites shouldn't be accessible. We're saying the absolute opposite. All websites should be accessible for folks that need to browse and shop in ways that aren't native, where they aren't experiencing any hardships in navigating the website. But what we're saying is that the lawsuits are filed because of a terrible, terrible law. Do you have much more to say about that?
Michael Bervell
Yeah, the law itself that's kind of the base of this is the Americans with Disabilities Act, the ADA, which was passed in the nineties. Some of the big proponents were the Kennedy family and a few others. And what's interesting is that it was actually passed during a Republican administration — the first Bush president ended up passing this law. And what's interesting about the law is that, of course, when it was passed in the nineties, there was no Ecommerce. So it was mainly focused on buildings, you know —
Chase Clymer
Yeah, it didn't exist.
Michael Bervell
— ramps, how high is the sink in your bathroom, do you have elevators in your building? And that, by and large, has actually been super helpful and positive. And actually, if you're a physical Ecommerce business, depending on your revenue, there are actually tax breaks you can get for making your physical store more compliant. Right around COVID, some lawyers saw that you could use these same laws around discrimination in physical space to do what was done in the early 2000s — drive-by lawsuits, where people literally drive by a building and if they didn't see a ramp, they'd file a lawsuit. And they said, "Hey, we could do the same thing online."
And so there was a whole class of people who did the same sort of stuff online, saying, "Maybe it's not a ramp, but a blind person can't use this website because their screen reader doesn't work with how the site is coded." And that became the same kind of claim moved from offline to online. Of course, in the physical space, there are literally building laws — your sink has to be this height, your ramp has to be at this pitch and this angle. Whereas online, there are guidelines, the Web Content Accessibility Guidelines, but none of this is written down in the law. It's not written down in the ADA.
And so there's this gray area where it's really hard to say "we do these things by law," because of how it's written in digital space, whereas you can in physical space. And so what that results in is a gray area where people can file claims even though you are passing all these sorts of standards, and it requires you having to go and defend yourself in front of a judge — who, once the judge sees it, thinks, "Yeah, of course, this is the global standard, the WCAG, that people agree with," but you have to go and prove it. Whereas in physical space, where it's written down in the law, in the ADA and all these amendments themselves, it's a bit of a different case. So that's a bit of the legal background and history.
And when we first made the company, even before we started selling into Ecommerce, all we did for the first two or three years was go to accessibility conferences and actually meet people who had lived experience, to hear what it's like to be a person with a disability in the US, and how that affects offline and online shopping. And I think, in an interesting way, these suits have changed a whole class of people's ability to interact with the internet. It's estimated that it's many trillions of dollars of spending power, either directly from people with disabilities or from their families. People are more willing to shop at a Walmart than a Target if Walmart's more accessible. And that affects not just the blind individual, or their family, or the disabled individual, but their whole family as well, and their extended family, in terms of where they want to shop. So it's actually pretty interesting, because we see those numbers in our customers — they tend to be more profitable and make more revenue as well.
Chase Clymer
Absolutely. And I do want to point out that the compliance standards you spoke about earlier — the Web Content Accessibility Guidelines — this was created independently and has nothing to... it references the Americans with Disabilities Act, but it is not tied into that law by any means. But it has become kind of a cornerstone of "this is how you make a website compliant," even though it literally isn't mentioned at all.
But the one thing about WCAG that I always like to point out, or maybe just to distill it down a little more, is that there are levels of compliance — it isn't a binary yes-or-no answer to whether or not you are compliant, which adds a whole other level of sophistication to all of that.
Michael Bervell
Yes, yeah, exactly, that's exactly it. And it's like industry-accepted knowledge tends to become the baseline of the law in a lot of industries if there isn't a law codified. And obviously, that's one thing we're pushing for whenever we get to travel to DC a couple of times a year — hey, can we get these laws to be really clear, so it's less of a gray area as to what actually needs to be done? I think that preserves a standard for businesses that they have to comply with, and it still gives, if you're violating that, a clear path on how to argue it, and it gives people who have disabilities really clear answers for what "good" looks like, that will make their life better as well. So that's the dream scenario here.
Unfortunately, as part of our VC-funded roadmap, that might not happen next year or in the next few years, but it's definitely something that we want to push for in the industry, broadly, for change.
Chase Clymer
So back six years ago, COVID is happening and these lawsuits are starting to come about. There were some early entries into the marketplace as proposed solutions, and they kind of all got dumped into a bucket called an "overlay solution." Could you explain what that is and does, and how it ties into this gray area, and maybe potentially isn't actually helping?
Michael Bervell
Yeah, Jason, I know you've been thinking about this a lot. Go ahead.
Jason Tan
So these overlays, or widgets as they call them — there's a couple of really famous ones out there, like AccessiBe and UserWay. And there are actually quite a few widgets if you just look across even the Shopify App Store. I think the easiest way to describe them is like the difference between an Instagram filter versus Photoshop. When you're posting a photo using an Instagram filter, you can make it look different — more saturated, more contrast — but you're not changing the photo itself. You can never actually change the underlying photo. Whereas with Photoshop, you can literally clone part of the picture and completely doctor the image, but in a creative, professional way.
I think overlays are much more similar to the Instagram filter approach, because they don't change anything underlying. They don't change the code. They're actually really easy to install — just one line — and that's kind of their allure, at least for Ecommerce. They feel similar to an Attentive widget or some chatbot that you just install with one line. But their promise is that they're going to fix every single accessibility issue on your site.
So what they can do is increase certain text sizes, they can change certain colors on the page, but they can't fix the structure of the page. If your top navigation isn't supporting keyboard input or screen readers, they won't be able to just add that functionality to what you already have, because that's something much deeper in the code. You have to respond to the events that happen when a keyboard user tries to interact with your site. And so that's kind of where their promise fell short, and essentially the FTC fined one of the major players there for misadvertising and false promises to customers.
I think the industry is largely moving away from that, other than, you know, very small businesses that, for the first time, are trying to tackle this problem and don't understand that this is very much a band-aid solution — almost in the literal sense, on the website, of just putting a widget there. And when they realize this, it's usually because they get sued again and they try to say that the widget is sufficient, but it's not, and then they end up pursuing a solution like ours that's much more at the root cause.
Chase Clymer
Hey, everybody, just a quick reminder — please like this video and subscribe if you haven't. We're releasing interviews like this every week, so don't miss out. Now, back to the interview.
And I've seen this posted online, and I don't know if you have any proof behind this claim, but it's starting to get to a point where these popular widgets are being used as a way to become targeted by these lawsuits.
Michael Bervell
Yeah, we have evidence of that in looking at some of these demand letters. We're at a very trusted part of our customers' lifecycle when they come to us — when they're getting a lawsuit in hand and they have to pay a settlement and they're like, "What do we do?" And so a lot of our customers will just send us their demand letters, and we've seen in specific demand letters a lot of these widget companies named explicitly — essentially evidence that if you have these widgets, they're going to say specifically, "Because you use this widget, we're filing this claim."
And so that's been interesting to see — there are cases with a paragraph naming twelve widget providers, many of whom are on the Shopify App Store, explicitly named in some of these ambulance-chasing lawsuits.
Chase Clymer
Yeah, that's unfortunate — when you think you've found a solution to a problem and then it comes back to bite you. The overlays — the quick answer is it doesn't seem like they are going to protect you from getting a lawsuit. How is TestParty different? What are you doing that is actually going to protect my brand?
Michael Bervell
Yeah, I'll talk about what we're doing differently, and then also how we came to the idea, which was mostly Jason's experience, because it does help inform the solution. What we do differently is fix it at the source. And what that means is, rather than adding a color filter on top of your website, we're actually going into the website and adding alt text. We're going into the website and adding more descriptive link text. We're rearranging the code, the heading levels, for instance, so that there's a logical heading order. There are all these things we're doing that are mostly non-visual, that actually just make it an easier experience for someone with a screen reader device to read your website.
I like to think of it as — yeah, we're building the ramps, we're building the revolving doors, we're building the elevator in an existing building — versus what an overlay provider might do, which is just adding something that's maybe a visual experience that doesn't change anything else. The benefit of that is that the way a screen reader interacts with a website is by looking at the code of the site and reading it out, and so on and so forth. That's the same thing an AI agent would do, or a Google search bot, when they're trying to pull your data for SEO. And so making your website better for an assistive device, which is in effect just a computer or a tool, makes your website better for all computers and tools, not just the accessibility-focused ones. So that's been a great second finding, beyond the first act, which is social-impact-focused and all that sort of stuff.
But I think it's always interesting to hear from Jason, his stories on how we actually got to this idea, because we had been building stuff for years in the social impact space, and accessibility to us just seemed like the no-brainer when we kind of stumbled upon it three years ago.
Jason Tan
Yeah, I was a software engineer at Twitch about three years ago, and — this is not a unique problem to just Ecommerce — most large companies outside of Ecommerce have all experienced accessibility lawsuits, and Twitch was hit by one of these. I was on the iOS mobile team, and this was the first time I'd seen legal really get involved with engineering, which was a very intense experience. And it was also when I noticed that a lot of it was so unfamiliar to even some of the best engineers that I knew, which was very surprising, because for feature work, I think there's a very clear experience gap between junior, senior, and staff engineers. But with this, we were all kind of scrambling to fix these completely unrelated tickets, because accessibility covers entirely different classes of disability, and the features required to support those are quite different.
And so, from that experience, I think Michael and I learned a lot from being able to see how a site gets fixed. It took a really long time — maybe three to six months — and they certainly didn't address every single defect out there, because they had a custom-built mobile app and a custom-built web app as well. And I think that's when we looked at other companies getting these accessibility lawsuits, and something really struck a resonance with us — that we could actually help them, especially Shopify, because with this entire ecosystem of Liquid and Hydrogen and very, very standardized themes, it makes this entire fixing process much more streamlined, and it makes sense for an AI agent product to be able to find those patterns and essentially learn from how we fix sites by hand at first, and become a productionized version, so that every Shopify store can get the same type of compliance fix as if we were doing it by hand.
So yeah, I think that was kind of the origin, and we just went so much deeper into Shopify and realized that the entire ecosystem was riddled with this troll lawsuit industry. And I think we've done a great job of making sure that everyone, no matter how big or small their store is — like Michael said, we have 130-some, and it really ranges in terms of size and revenue band between our stores now — but all of them get the same level of accessibility because of what we shipped as a product.
Chase Clymer
Absolutely. And Michael, earlier you mentioned that you're meeting these brands at a very unique crossroads, where they've already been hit with a lawsuit. At that point, I'm already screwed — are you going to be able to help me?
Michael Bervell
Yeah, this has actually been a great case study. We've seen brands come to us with a lawsuit — we sprint to fix it in like seven days, and then they take that evidence to a judge, to their law firm, to say, "Hey, we didn't know this was an issue, and we know you got your demand letter, but we fixed it already." And we've seen cases where we've done a fix within a week of them getting even a demand letter email.
And because it's trolls, right — their incentive is to go after the slowest, lowest-hanging fruit. I often say, in this case, when you're outrunning trolls, it's kind of like outrunning a bear — you're not trying to be the fastest person, you're just trying not to be the slowest. And by not being the slowest, you're giving yourself room to build up your systems until you have evidence of compliance and the whole program in place. So yeah, we've definitely seen people settle for $1,000 or $2,000 instead of the usual $12,000 or $13,000, even when they're coming to us before being a customer, lawsuit already in hand. And then, of course, with our current customers, our incentive is to push back always, because we know their sites are compliant and they have months and months of evidence.
Chase Clymer
Yeah, talk to me about that. If I'm using the product — you know, I sell bagels online, we're doing great, I've been a TestParty customer for seven months, I just got a demand letter today. What happens?
Michael Bervell
Yeah, and that's obviously the annoying thing — that might still happen, right? Because anyone can file a demand letter for anything. But then what happens is great.
Chase Clymer
You can sue anybody in America for anything.
Michael Bervell
For anything. Right. And that's — to me, it makes sense, but I think the challenge is, okay, well, if you're right, you then have to pay to prove that you're right. And so we're trying to tip the scales where the cost to "pay to prove" gets really cheap — whether it's using one of our legal partners who handles our cases for usually a pretty reasonable amount, compared to finding your own specialist, or we provide a lot of evidence. So essentially you'll have a SWAT team from our company helping you defend your case with evidence. If there's anything they're sending in a letter, we go point by point to see if it's legitimate or not. Ninety percent of the time, it's not legitimate, because it's just these ambulance chasers using templated letters.
And then we'll also do other interesting tactics, like looking at, based off IP addresses, did they actually visit the site on this day? Is the lawyer who's filing this demand letter — is their own site even accessible? There are all these other things that we've seen be helpful for defense, that we build in for our customers in defense packets. But in our case, less than 5% of our current active customers have been hit with a demand letter, which is far better than the average accessibility company, where there are about a thousand widget lawsuits in the last 12 months across 5,000 companies — so a 20% incidence rate. So we're pretty happy with how we've been performing with our customer base.
Chase Clymer
Absolutely. Now, we talked a whole bunch about how this all works and what happens if you do get sued. I'm assuming there might be some listeners out there who are like, "Whoa, is my website accessible or not?" And I know the answer to this question, but our listeners don't. If I want to go test my website and figure out what my exposure looks like, or maybe just start a conversation with you over at the TestParty team, what should I do? Where should I go?
Michael Bervell
Yeah, well, definitely reach out to us, testparty.ai. I feel like we're the best company in the space, specifically for Shopify especially. But even outside of that, there are great tools that are free — Axe Core, Google Lighthouse, WAVE — those are all kind of free tools that you can use to at least get a quick scan and see where you're at on your site.
And of course, Shopify out of the box tries to make their stuff accessible, but the more things you tweak and change, the more likely you are to break things. And it naturally happens, even at a company like Twitch, where Jason used to work, that was owned by Amazon — a multi-billion-dollar acquisition. They broke stuff with their thousand engineers, and they continue to break stuff. It's just a natural process.
And so, obviously, we're always happy to help, but even if you do it on your own, our mission as a business is just to make a more accessible internet, and that doesn't always tie back to revenue. Sometimes we'll do deals that aren't cash-flow positive, because we know it's going to have a bigger impact, and that to us is more important. So happy to give away those free resources — Axe Core, WAVE, Lighthouse — so people can Google them and make sure that their own sites are accessible.
Chase Clymer
All right, Jason, Michael, thank you guys so much for coming on the show today, sharing all those amazing insights about accessibility.
Michael Bervell
Awesome. Thanks so much, Chase. Great to have you. Good to see you.
Jason Tan
Thanks, Chase.
