00:00

DOSSCON1 we really wanted to position as a community summit. We thought it was kind of a funny, you know, reframing of DEFCON 1 and also conference, but really we think about this as a way for us to bring together a number of operations professionals, brand executives, just overall like technologists, leaders, capital allocators, and really just share time with a relatively light set of agendas and talks. And a lot of time for us to all meet and actually get to know one another and talk about our hardest problems.

00:36

That's really the whole point of this, is just bringing people together so that we can discuss the things that we actually are working on and the challenges that we're dealing with in a way that, you know, takes us away from the day to day hours of grind and lets us kind of open up our aperture for the things that we think about and the problems we want to solve. So as a kind of a backdrop for all this, the sequence of things I think we want to set agenda wise for the day that we really want to hit on is we are building a software company that is a platform, but in its own way, the community of people here is a part of the platform.

01:15

We see this a kind of broader and growing movement where leaders and companies are challenging themselves, they're challenging their own employees. How can we all work towards deconstructing the status quo in how we use technology, how we deploy it into our businesses at the smallest sizes? Where there's, I know people who are here, I think, that are running their business by themselves as one person. And then there are people who are here who have been CEOs or CFOs of public companies.

01:43

And across that entire scale and entire range, we have people who are challenging the status quo on what it actually means to use technology in the workplace to make your businesses better, to do more with less toil, to eliminate waste and, you know, overall reduce the pain of using systems and doing your daily job, but also to just like seize opportunities and drive value faster in ways that we haven't been able to before. These are the things that we talk about with ourselves, with our customers, with our partners, sometimes with our spouses and our friends, much to their, you know, annoyance. But this is what we want to bring everyone here for today.

02:18

So with that, I'm going to kick off kind of the first discussion and really just the what we think of as a backdrop to the backdrop of why are we doing this as a company? What's the point? Why ERP because no one really wakes up in the morning and gets super excited about organizing business data and building business software. Some of us do, but most people don't. So why is this interesting at all? And we've been positioning this as ARP, and it's an adaptive resource platform. The reason that we use the word adaptive is really, I think, the most important part of the story we want to tell today. So that's what we're going to get through. So there's a. I can't remember what this quote is actually from, but the, you know, ERP is dead, long live ARP.

03:09

The, you know, and I put it in quotes because it's a very, I would say, borderline naive and bold thing to say. But as someone who's been, again, much to kind of my own admission of nerdiness, a student of the industry, this is not something that's not happened before. The industry has been written and rewritten multiple times over the last 50 years, maybe even, let's say, 70 years, depending on how you slice it. The, you know, ability for us to actually defiantly say that's true. I think we can look back into time and tell a really clear story that the story of ERP itself is a story about computers and how they're used in the workplace.

03:51

So if we go all the way back, you know, we can even take it, you know, let's say a couple thousand years back to Mesopotamia, the word, the ledger. You know, people used to do receipts on stone ledgers, which is where the word ledger gets used in the glass. You know, using DOSS is a little bit easier than that. But the whole point is that this is not really a new concept. And for us to try to change it is actually a natural part of the progression.

04:17

And so, you know, when we think about how mainframes were, you know, utilized by largest banks and by the government to count people's, you know, information for the census or to account balances for, to count balances for the largest companies and their, you know, what they owed bank of America to then SAP building applications on top of that, Oracle building the database and, you know, the real first relational database and then building more applications on top of that, moving those into PCs and moving them ultimately into the cloud. This is just a part of the journey. And we see, you know, that we think there's an opportunity for us to take, I think, a stewardship type role, informing what this means for the industry and for the customers and the people that use this.

04:58

And so given this broad horizon and kind of the backdrop of this, I think there's, I can't remember the exact stat, but some odd hundreds of billions of dollars are spent on this over a number of years industry today. Despite all of that, the results are a little controversial. And this is not just my opinion. This is, you know, the efforts of many people who have, many of which in the room here have done this for their entire careers. And the results are like, as I said, it's been very hard to get the right output. So why is it still so hard? It's because we're doing something difficult. It's not, you know, fortunately for the people in here, we're not doing something easy and we're failing at it. We're doing maybe one of the hardest things possible.

05:47

And succeeding against the odds is the best way to frame it. What we're doing is we're taking the high dimensionality of the last mile of what represents a business and how it works. And we're trying to make it in an information model. We're doing so in a way that is something we can't mess up. You know, again, people say don't touch it if it's not broken or if it ain't broke, don't fix it. With ERP, that rings especially true because if you shut the system down, sometimes it means equivalently just shutting down a company's business. I heard from, I think, a leader one time at a logistics company that they said that if their ERP went down, trucks would stop rolling in two hours and the business would be insolvent in two weeks.

06:27

And so these are the kinds of stakes that people deal with when they think about these systems. And so the final part that really makes it super hard because it wasn't hard enough already, is that the applications have to stay in step with reality. If you change the strategy of your business and you're a retailer and you decide at a certain point that we actually need to unwind our retail positions and move towards E commerce. But your entire information model and your ERP is built around a retail business. Well, you might have to go through a two year implementation before you can become an E commerce company. And that's not how quickly the world works. The world moves faster. And so for us to be able to adequately address these problems, we actually had to build something completely new.

07:10

And again, being a student of history, we did so with a lot of reluctance. Arnav, who's in the back of the room, him and I sat at each, stared at each other and sat in a room and really said, are we going to do this? Because everyone else who does this doesn't do a super great job at this. And so we thought really hard before, I think jumping, so to speak, jumping off the cliff. But we came up with a few primitives and a few kind of axioms that really we think are the underlying principles that allow us to achieve the results that we have so far and where we're going.

07:45

So composability, which is really solving that last mile of complexity, durability, which is making it so that you're not going to vibe code your accounts payable and just maybe send someone a check that they shouldn't receive and then accelerated, which is that I think everyone in here is aware of how long these systems take to implement. We probably should make them faster. And so the goal is to build an adaptive resource platform. Adaptive really being the key part here, which is you need to adapt the applications for the business's strategy and not adapt your strategy around what the applications can do. We'll have a talk on this in a little bit later with a couple members of some people who have run professional services organizations at the world's biggest and best ERP companies.

08:29

And they'll tell you the answer always ends up being use the system out of the box as much as you can. That can be a challenge for companies that need to modify the system to serve the strategy of their company. And so dealing with that fundamental tension was one of the things that we knew we would have to address. And so fundamentally, if we think about what this product is, well, everyone kind of jokes online that ERPs are just databases and you make them look a little nicer, and in some cases you don't make them look nicer, sometimes you keep them as they are. We started under a very similar premise. And so we have the core, which really divides into its main two parts, which is the stuff that I store, related to our master data and our transactional data.

09:11

And for folks who have been in, you know, involved in large scale Oracle and SAP implementations, this is not a new concept. We're, we're not inventing anything at all. We are using the things that have been, I think, innovated on for the last 50 years. And we're trying to do the best we can using what everyone has come to understand about business data, which is that you take these concepts, you report on them, you use terms like inventory. And inventory is a representation of sales orders and SKUs as they get matched together, and then you fuse them through a ledger and the ledger tells you about what happens, what is and what will be. And it has a twin, which is the finance and accounting component of it. And it turns out they're kind of the same thing. They just apply to different concepts.

09:54

You know, one of them is the flow of goods and then the other one's the flow of dollars. And, you know, again, the very clever people who designed and built a lot of these systems in the past realized we can actually put them together entirely and put a rules engine that allows us to make it so that when I change something inside of our, you know, inventory, that it actually goes and flows correctly over to our finance and accounting systems. And, you know, neither of them will ever be out of sync with one another. And went ahead and designed DOSS under the exact same guiding principles.

10:24

And so when you end up putting all this together, you get this very nice box of durable applications that does what you think it's going to do and is able to be capturing the core essence of how you transact with sales, finance, accounting, inventory, procurement, freight, all the different things that flow goods into and out of your business, that flow dollars into and out of your business. That's all great, but what about composability? When we have third party applications, how do we actually bring in and operate on systems that are not our own product? And so if we stack up all these applications, this is all great, and it's a very cool Nucleus looking thing.

11:06

But ultimately, if we want to bring real value to a lot of the market today, where there's a proliferation of vertical specific products, industry specific products, and products that are specific for even the largest companies in the world that, you know, you have your own internal applications you've built, we need to be able to connect to them as if they were a part of the product itself. And we thought about that from day one. And, you know, ARNAV and I's joke about this is that our answer to everything is we will build it. And we did. And in this case, it's basically building a lot of integrations to other people's applications and treating them with the kindness, courtesy and respect as if they were our own. And, you know, that was, let's say, 36 months ago when we started out building this.

11:51

After 18 months, we released the first version of the product and now we've rolled it out to 70 organizations plus around the world. Some of you in here, some of you in here soon, and then hopefully some of you after that maybe go through some sales processes. Please. But these are businesses that range a wide set of capabilities. We're not going after one specific market and saying we're going to go and solve the bakery problems for every bakery in North America. We're saying we want to solve the meta problem for companies that are roasting coffee or they're demolishing buildings or they're distributing vegetables. And sometimes those vegetables, they call them fruit, but, you know, who cares? And they're fabricating metal.

12:35

And that's really the power of building a composable system that you don't have to box yourself in and at the same time, you don't have to box your customers in. And, you know, we have. We think the only thing that's not true on what's going on here is that we don't have dark mode. And so our framing of a lot of what we do as a company is being stewards and partners to our customers. But I think the part that's extremely painful for me is that we know that we can do better and we know that we can always go faster. And that in selling to them and in working with them, we still put a lot of risk on them in their business. We put a lot of risk and time on their calendars.

13:19

And we have to do more if we want to change the industry and change the experience for our customers the way that we think is possible. And so three years, and actually this is, I think, the exact third year anniversary since we incorporated the company. We're going to kind of pull back what we think is the next chapter for the business. So we definitely nailed the first two. Composability. We may have a little too much of it. Durability, definitely, but it's not fast enough. And it's not saying that the, you know, the platform doesn't load quickly enough. It's that the effort and energy that you have to put in order to make it real and to make it model itself after your own business, it still takes too much time.

14:02

But that's not going to be true starting, let's say, in the next couple of weeks as we roll out dossbot, which is a kind of a funny thing because we couldn't figure out what to name it. And we're like, let's just call it dossbot. And unfortunately, it made its way into the code base and now it's dossbot. And so it is exactly what you would think it is. It's the reincarnation of Clippy, for those of you old enough to remember Clippy. And it's built directly into DOSS. And so it's not a layer on top, it's woven throughout. And the idea is that it can do all of the things that you are used to doing by hand and it can understand your business in its information model as well as you do, and sometimes even better. And here are some simple examples.

14:44

We'll show you a live demo in a minute. But here's dossbot helping me out with understanding some inventory status. Here's some stuff where it's going through and actually creating different views on top of our data and reports. Here it's actually going and figuring out which packaging materials are in our master data are incorrect. And it really has shocked me in every way since we started building it, how deep of an understanding it has of the information model. The company's inside of its context. So I'll turn over and start showing a quick demo on this. But bear with me as I get the screens pulled up. This is actually a live demo. So here we are inside of an instance of DOSS. And I can see here, I've got a bunch of tables. So we've got this massive table we can see here. Great.

15:33

So we've got about 200,000 records on here. Nice. And we can see dossbot hanging out in the corner. And let me just go in and see. I'm gonna delete this view because I was testing this out earlier and let's just see how it does. So I don't really want to read all this stuff because it looks like a bunch of logs. And dossbot's gonna go to work for me and take a detailed look at everything inside of our system. And I can actually see it thinking it's chugging along very hard, hard at work. And it's going to take a look at whatever is inside of our products tables and try to understand what I would describe as the ontological structure of the data model.

16:18

And based on this ontological structure, it's going to understand exactly how it can build representations that are useful for us. So let me just go and open this up. So I asked it to just go through and take a look at some of the views inside of the tags table, inside of the tags on top of our logs. And based on what it finds, can it just like build some reports for me? And so this is helpful. It's like, okay, but now I gotta go create all these. So I'm feeling kinda, you know, it's a Monday, so let's just, I don't know, three of them. That seems useful for the Team, right? Let's go make three. Okay, I'm just gonna type. Hey, feeling tired. Can you just make a few of these that seem important? Oh, I typed it three times. There we go.

17:10

Well, let's see how it does. And so this is the. It's really going to have to work on this one. It's going to be like, man, he needs some help. And so it's going to plan out its steps. And so that's the nice thing about this, is that, you know, we take a lot of, I think a lot of this for granted for folks of you who are used to using ChatGPT and other systems is that they get pretty good at interpreting the things that we think are, you know, maybe a little hard to be coherent about. They're like, you know what, we've seen some weird stuff on the Internet. You'll figure it out. And so here we go. Okay, again, I don't want to go look for these. I'm going to just be like, dude, just send me the links, man.

17:50

Can you just send me the links to the views, please? There we go. Good job, dossbot. Thanks, buddy. Okay, let's try it. Let's see. Okay, that's useful. What did it do? Okay, it created a view for me of all my subscriptions. That's nice. Wow, this is a lot of subscriptions. If only there were a way for me to filter down. Let's go back to when we were talking to dossbot and be like, actually, can you make me a new view of all of my subs that are recurring, that are larger than IDK to $10? Oh, there you go. Oh, it failed. OK, well, see, this is the lovely part about doing live demos. And so what's really nice though is I can just go back up here and be like, hey, in our Shopify order logs, please, and dossbot will get back to work.

19:17

And so this is the, this is why it's still in closed beta. But that is one really cool thing about this, is that, you know, we don't have to put a ton of engineering work into the actual intelligence of the, you know, air quotes, the AI agent that's in the system. It's, it's actually the underlying platform and infrastructure that it can work with and the ergonomics of it that make it so powerful because if we look inside of here, it's actually running a bunch of very simple steps. It's going and saying, I'm going to go get a bunch of our tabular data, I'm going to go look at it. And then, great, I went in and I made a view for you to go check this out. Awesome. Recurring subs, over 10 bucks.

20:00

And that's the magic of this, is that when you build a composable system and you make it super ergonomic, not just for human beings, but for LLMs, you benefit from the fact that I think just down the street, all the geniuses at OpenAI, they're going to make our lives a lot easier. And all we have to focus on is writing really ergonomic software for language models to interact with. So that's one fun example of how dossbot functions in practice. Let me log out and let's go do another one and let's go try. Let's go try a really challenging one. So this one's kind of funny because I noticed this was on Friday last week. I was working. I was working on this. I noticed that there was something really weird happening in our work orders.

20:52

And I think there's something wrong with the SKUs for this business. I don't know what they did. I'm pretty sure I was the one that uploaded it. So, you know, mea culpa. But there's something wrong inside of their product catalog and I don't really know what it is. I don't really feel like figuring it out. And so let's see what dossbot thinks. This one might take a little bit because it's gonna have to go look at a lot of stuff. So it does what a normal person would do. It's gonna just go and see and look around inside of the data structures and it's gonna query quite a few things, it's gonna get information on its tables, and we'll talk in a little bit about the other capabilities that we're gonna add to dossbot.

21:27

But the idea is that right now it's just operating as a person would and looking around inside of the content and at the schemas of the tables. What's going to be really cool is in the coming months, we're actually going to give it a lot more capabilities to be able to make updates to the system, obviously in a very safe manner, as if it were doing migrations.

21:47

And I think what's going to be really powerful about this is that because the underlying apparatus for this is just running SQL and running code, it's actually pretty good at understanding how to do it better than I would because, you know, it's not that I am not great at writing SQL, but I'm going to go to ChatGPT and have it write it for me anyways and then go and verify the ability to go and make those commits and then roll them back if you need to is going to be built into the underlying system. So you can make analysis like this and then go and immediately drive their corrective actions. And so let's see on here. Yeah, this is exactly what was wrong. I noticed that when were doing our work orders, were not transforming the inputs into the outputs correctly.

22:32

And it's because they know. And it actually noticed this that some of our skews are self referencing where the finished goods are referencing inside of the raw material themselves. And it was just an issue in how the data got uploaded. And so in this scenario here, which of the items are circularly referenced? Can you make a plan for me to fix this, please? I don't want to get fired. And let's see what dossbot does. Let's see if it's feeling sympathetic for me today. And so that's what's really nice about this, is that we are only a few tool calls away from dossbot actually being able to go and reconcile these problems itself.

23:18

And I think you can kind of follow the train of thought here, which is that if it's able to take actions on its own, it's able to synthesize and understand problems on its own. All we need to be able to do is create more frameworks for it to be able to receive context about what's happening in the business and take action on what's happening in the business. And so we'll show in the roadmap slide. But a lot of this is going to include being able to run it in the background as workflows, which is a native part of what we do inside of the product already. It's gonna have the ability to actually take file inputs from third party applications. So very commonly people are receiving emails and you're like, I don't know what this thing is.

23:56

It's a sales order, maybe from some distributor. I don't wanna think about this. Let's let dossbot think about it. Figure out what table to put it in, which sales order it's associated with, which invoice it might be associated with, and run three way matches on its own. And then all we have to go in and do is basically take a look at the results. And so it's working hard on this. Okay, let's see. Nice. Wow. 45 minutes to one hour. You've got this. Okay, I feel a lot better about this now, guys. I think I have my job still. Thank you. Oh man, dossbot has a lot of. It's a little bit on the nose, it's got a sense of humor. So. Wait, wait. Ground bird? What the hell is this thing? I think this is a pet food company, if I'm not mistaken.

24:49

Okay, so yeah, it looks like we are referencing the cow and the other bird in the bird. That's not right. So we can go fix that one. We'll fix our multipack SKUs. Yeah, this all makes sense. OK, cool, that's great. Thanks. So, you know, as I'm going into this meeting with my boss, I am a little nervous that I just honestly don't understand how the system works at all. And so I'm gonna ask for just a little more help. And let's see, can you just make me a diagram spot that tells me how our whole system works? Because I think my boss is gonna quiz me on it. And genuinely, again, I'm worried about getting fired here. So let's just see what dossbot thinks. And again, you can see the kind of prompt engineering we're doing here.

25:37

Guys, we're asking for an ASCII erd. You're not gonna have to ask for that in the future. It's gonna be able to make charts and graphs and flowcharts for you and it's gonna actually be able to represent. Oh my gosh, it's doing a lot of work. This would have been a lot of time for me to go figure all this out. And so in the future, you know, as we're rolling out more and more features for dossbot, it's not going to need to be able to be prompted so heavily to tell it what to do. Let's see, let's see if its brain melts trying to do all this work. Let's see what it do. Okay, well, wait, what is this? I don't know what this is. Let's see. Oh my gosh. It made me an entire diagram of our entire data model. Jesus Christ.

26:38

Okay, I'm going to print this out. I think my boss will be impressed. So this is what's possible as a result of it having a very rudimentary understanding of the data model is that all of the intelligence that comes inside of large language models that continue to get better week over week, we get for free. And not for free for a dollar for a million tokens, but mostly for free. And again, the multiple years of hard work putting into this almost like game engine. For the LLM to go and roam around in and figure out things like this. It's doing this to kind of use our. This is my favorite reference for this in the company is it's kind of like what's his name in Shawshank where he's digging out of the prison with a spoon. We're only just now giving it spoons.

27:35

When we give it more technology and more tooling to be able to go and build more effectively on top of itself, you're not going to get ASCII ERD diagrams like this. Instead you're gonna get a full blown visualization of the entire data model and you're gonna be able to roam around in it like Matthew McConaughey at the end of Interstellar. And so that's what's gonna be possible in just a few quarters as we continue to productize dossbot further and further. And with that I'll jump back over to. And so we just showed some examples on this. What is it gonna look like when it's gonna be able to go and say what are our SKUs that are low in quantity? Can you go and figure this out for me? I don't feel like thinking about it. It's Monday. All the way down to.

28:26

I need to come up with a new framework for how we're creating sales commission. Can you look at how we do it today? Can we map out what we might wanna do in the future and then go in and apply those changes? This is the stuff that's possible when you build a platform. And here's a roadmap of some of the rough stuff we're gonna go do. Pretty excited about a lot of these.

28:43

I think the coolest one in here is gonna basically be what we end up rolling out in the next couple weeks, which is gonna be the ability to actually screen share and you can follow basically have it follow along with you as you do tasks and it'll pick up context and you can then ask a question based on what it's seeing as opposed to what it's just, you know, being texted in. So that's gonna be really powerful. I know our implementation team is gonna be super happy about that one. And so, you know, in classic Billy Mays form, that's not all. The dossbot story is really just a piece in the puzzle or I think if anything you can say is the. It's the connective tissue that sits inside of everything.

29:24

And as a company we think we're just getting started and so what we want to do and now in 2026, is really start laying out what we think are the building blocks to the next few years, the next decade. And the first step in that is taking what we built as our integrated data platform and really expanding it out horizontally on top of everything, underneath everything else that we want to build. That basically means making Data Studio its own standalone BI product, which is going to be immensely exciting. All of our customers ask for this and we want to have one less thing that you guys have to pay for. We want to have one more thing that you can get for free as a part of what we've been able to deliver in our platform.

30:06

Similarly, we want to be able to roll out an embedded EDI network. I think I wouldn't need a show of hands, but I would say most people in this room have dealt with EDI at some point in their life, much to their own dismay. And we want to make that a less painful experience for everyone, including ourselves. So in a way it is a little selfish, but we do really want to make it easy for everyone to bring on new trading partners. We want to be able to power this all with what may eventually be an open source framework that fuses together transactional data and analytical data as a best in class database solution built on best in class database solutions. We want to be able to power this all with a workflow engine that actually just compiles down natively to code.

30:48

And so again, human beings are not the bottleneck here. LLMs are able to interact with it natively and then we want to back the whole thing with what's basically a git like version control system that allows you to bring in future versions of DOSS and merge them in without going through a year or multi year or sometimes decade long migration that involves hundreds of thousands of hours of professional services. This is the future that we're painting. And it all runs on our own cloud. It runs on third party clouds that you may or may not be using already and may want to use and have the optionality to use in the future. And if you're one of those super special top secret people that has to run it on prem, we can help you with that too. And of course Dustbot's everywhere.

31:31

The idea is that we want to be able to take every single thing you do in your company that's related to operations, finance, the moving of physical goods, the moving of dollars, and the data that stitches that all together and make it be so that you can have an entire operations cloud that supports all that. And the idea is that it's a cloud that's built for real world companies, not just for information companies. And, you know, this is something that we're going to be rolling out in 2026, and it's really the vision that we wanted to share with all you guys. So thank you, everyone for coming and for the first section of this. Thank you again to all of our partners who have, you know, made the long trek out.

32:04

But this is what we're working towards and we really are happy to be able to share all of it with you every day. So thank you.

00:01

Luke Whiteman

I'm Luke everyone. I'm on the exec team here at DOSS and I'm joined by Eileen and Ravi and I'll let them introduce themselves. But yeah, we're going to be talking a little bit about some of the transition and focusing on the platform shifts and technology that has been for a long time in this space and how it's evolving over time. And very lucky to be joined by these two who literally helped shape the original platform shift here. So yeah, Eileen, if you want to start.

00:28

Eileen Tobias

Hi everyone, I'm Eileen Tobias. Wiley, Arnav, Luke, everybody else, thank you for having me. I've spent the past three decades or so working in technology companies here in Silicon Valley. First 10 years at Hardware companies like Hewlett Packard, Brocade Communications and then in 2005 I had the opportunity to join NetSuite. For those of you who know Jim, he hired me. So I joined about 18 months before our 2007 IPO and its state right up until the acquisition by Oracle in 2017 led FP&A there so it was like working at four different companies. Private company, newly public, return to growth, you know, maturing SaaS company and then after the acquisition by Oracle took a VP of FP and a role at Dropbox was part of the leadership team there that took Dropbox public in March of 18.

01:19

Eileen Tobias

Was there for a couple years and then most recently I was CFO of a healthcare analytics company called Komodo Health and since then, since leaving there in 23 I've been advising some early stage startups and doing some part time CFO work on a couple of nonprofit boards and happy here to be here to talk about my experience with cloud erp. I'll turn it over to Ravi.

01:40

Ravi Ramakrishnan

Thank you. I thought we only overlapped at NetSuite but HP was also. Yeah, I worked at HP too. My name is Ravi Ramakrishnan, I am from the Chicago area. Good to see so many Midwesterners here. And I also started my ERP journey long before NetSuite. I was. If you don't. If you promise not to call me a dinosaur. I was one of the first three SAP certified people in the US when all of the documentation was in German. So that I.

02:20

Luke Whiteman

Did you. Do you speak German now?

02:23

Ravi Ramakrishnan

I learned quite a bit.

02:25

Luke Whiteman

Learning German through SAP documentation is hardcore.

02:29

Ravi Ramakrishnan

Yeah. And then I joined NetSuite which is also an interesting story but after NetSuite around the 2020 time frame I left NetSuite and joined a few other non ERP companies. One was trade AI again, that's also a Bay Area startup. They're still in business, they build workflows. It's a platform company. And then I joined an FBA, FP&A company based out of New York, it's called Cube Software, still there. And then more recently I came back to ERP and joined a private equity. It's a conglomerate of manufacturing ERPs. The company is called ECI Software Solutions. I ran the delivery for all of those, I would say half a dozen ERP manufacturing ERP products for them. And I exited recently because it changed hands. So enjoying the break. Good to see you again.

03:27

Luke Whiteman

Yeah, yeah. Thank these guys for coming by. It's nice to have so many partners that are coming and supporting and having these conversations with us. I think the bigger theme here that Wiley talked about and we'll be talking about throughout the day is this concept that for decades businesses have struggled with rigid software. But there's a platform shift underway and operations and finance leaders are kind of waiting for what's next. And they've observed what's happened over the last 50 or 70 years in the space and they're excited for the future. And so it's great to have two people who have a lot of experience with that first platform shift and kind of talk about how they think it will manifest as we move through this next platform shift.

04:15

Luke Whiteman

So yeah, I want to start, I think by rewinding a little bit and going back to the beginning and asking both of you, when you look back, what was misunderstood about the cloud ERP transition when you were originally building and working on it. Eileen, we'll start with you.

04:35

Eileen Tobias

Sure. So I think what was, what comes to mind on that question is, you know, when you go back to the late 90s, early 2000s, Cloud was still, was a revolutionary concept and a cloud based ERP, we were the first of our kind. I think there was a lot of skepticism and reluctance to put data in the cloud, especially when you think about companies, financial data. And so a lot of what we were doing was the proof point that the cloud based technology, the real time access to data, the power of the suite, would power companies in a way they hadn't been prior. And so that was worth taking the risk on adopting the new technology.

05:20

Luke Whiteman

Yeah. And Ravi, on the customer end, were customers excited to take part in that transition or were they nervous and apprehensive?

05:30

Ravi Ramakrishnan

So that's a good question. Nobody told me the actual value proposition about cloud ERP that I realized way into my first implementation; it was a large enterprise rollout at TJMax. What really struck me was the pain as an implementer, the pain that I was going through before Cloud ERP became what it is. And that was the proliferation of versions. If you go to any, even in a small Oracle or an SAP shop, especially Oracle, you will see multiple versions of databases, multiple versions of the application layer, just running one instantiation of a company's business. It was such a pain. And Oracle at that time was growing through acquisitions. So every time it was acquired, somebody figured out, I'm going to use this combination of weblogic that they used to call at that time, and this combination of database and net net,

06:35

Ravi Ramakrishnan

When somebody goes there and does an audit, you'll see that, whoa, what is this? I thought we had one instance of Oracle applications and all these versions I came to NetSuite. And then during the first implementation I realized that all of NetSuite customers are one code base. And every time you upgrade that code base, the platform with which you customize NetSuite also gets upgraded. So they are in lockstep. For me, that was the aha thing about the Cloud ERP and the way they do the upgrades also was very unique at that time in the sense that, you know, at that time I'm talking 2, 3, 4,000 customers, but over a four week window, all of them get upgraded.

07:26

Ravi Ramakrishnan

I can guarantee that if today you go and log into NetSuite and any instance, scroll down to the bottom of any screen, you will see 2025.2 guaranteed.

07:38

Luke Whiteman

Interesting.

07:39

Ravi Ramakrishnan

So I thought that was the big thing for me. And then of course, a lot of smaller things. For example, when we used to implement Oracle or SAP, there were these questions. How often do you backup my data? Customers used to ask, because they're used to running it in their data center and now it's in the cloud and it's really an irrelevant question because we don't just back up your data. So I think those are some. And how secure is my data? Just as secure as American Express's data. So I think those were some things that I thought were really good about that shift that happened.

08:24

Luke Whiteman

Yeah, yeah, that's interesting. When you guys were - Eileen, I'll direct this one to you. But as NetSuite was building out this transition and focused on scale, but before it was the industry standard, were there specific architectural or product bets that you guys made that you were very intentional about as you were going through that transition?

08:48

Eileen Tobias

Yeah, good question. I think the fundamental value proposition of the Suite was a great bet that we made at that time and for everyone in the room, we've all seen it sort of ebb and flow with data all in 1 system versus point solutions. But really at that time most legacy solutions, except for maybe Oracle and SAP, which were not really accessible to the SMB space companies were using many different legacy on prem point solutions and really going through a lot of pain to get access to data. And so that architectural bet of data in the cloud and real time, you know, you make a, make a transaction, any part of NetSuite, it's reflected across the entire suite was really a fantastic architectural bet that we made.

09:38

Luke Whiteman

Yeah, yeah. And did customers, Ravi, was that, did that resonate with them and were they thinking about that in the same light or were there other aspects of the cloud transition that were really critical to them?

09:50

Ravi Ramakrishnan

You know, I have a lot of asks as you. As DOSS transitions into whatever they're building. You know, an interesting way of looking, answering that question is a call that Seb and I had with a VP at RSM last week and he also goes back to the SAP and Oracle days and he's, he was with us at NetSuite and he said something which resonated with me. It's like that shift happened. But really from an implementation perspective, nothing has changed.

10:23

Luke Whiteman

Interesting.

10:24

Ravi Ramakrishnan

You still take anywhere from six months to sometimes even a couple years to implement. And there were some projects that went on for a very long time. So nothing's changed. On the implementation side with Cloud ERP, I wouldn't say. I mean I have seen SAP implementations like Wrigley in Chicago was like five years and Coca Cola was like, I was involved in those. Those were like multi-year global; HP itself runs on SAP, my previous employer. And so I've seen those. But from an implementation perspective, I'm really looking for Arnav and gang to really change the paradigm here. Yeah, like you still, you know, they try to keep it under control but whenever you write an SOW, it's always, you know, at the minimum 30% of your bill goes towards implementation.

11:20

Luke Whiteman

Yeah, yeah.

11:22

Ravi Ramakrishnan

I'm coming from a non-NetSuite private equity firm where I had responsibility for half a dozen manufacturing ERPs. Like I said and same thing there, it's really, implementation has not changed. I would really like you guys to change that.

11:41

Luke Whiteman

We're trying. We're trying.

11:42

Ravi Ramakrishnan

That is my big ask and I'm not saying it should all be magical. Anything I'm learning about agentic AI, the Human in the Loop H I L T that's a new acronym that I learned is going to be there and I think it will become all the more important with business applications that are critical. But I hope you find us an answer. I think that's where I would call this a transformation rather than saying, okay, ERP went from data centers to the cloud and now there is this agentic thing. But what did it do to me as an implementer?

12:19

Luke Whiteman

@dossbot implement my ERP? It's not.

12:22

Ravi Ramakrishnan

By the way, on that note, we had a sweet bottle when I was there. You know, a shout out to my boss's boss who is in the audience, Jim McGeever. Jim is. He's very humble. He doesn't know this because I never reported to him directly, but anything that we wanted to do as Skunk works in the technology thing, we could do at that time. We did some what you call as fdes now. We had an entire product team in the professional services organization at that time. It's basically the FDs that you call today.

13:02

Luke Whiteman

Yeah. It's interesting how many things, how many bets were taken in the space at Oracle, NetSuite, SAP that actually were very early, of course, at the time were very innovative. And now 50 years later almost, we're looking back and like, wow, it was just too early. Right. Like the idea was totally right. And as we start to deleverage some of the implementation stuff from human labor.

13:25

Ravi Ramakrishnan

And he definitely encouraged us to do that, which later on under Oracle, all of that went away. And then I left. Sure.

13:34

Luke Whiteman

On the implementation side because I think this stuff is really fascinating, anyone who is a student of the ERP space, which hopefully actually not that many people are, other than Wiley, who's just the turbo nerd of it. The canonical wisdom, like the Larry Ellison pitch and all the pitch was don't customize. Right. Take this thing out of the box. It will be easy to implement and it will work. And I'm curious about almost the difference in perspectives here, Eileen, on your end, like how did this really simplify implementations and management? And was that felt internally in the organization? And then Ravi, on the customer side, did this actually occur at the ground floor level and on the road of implementation, how long did it take before ultimately customers did deviate from that out of the box? So, Eileen. Yeah.

14:28

Luke Whiteman

If you have a perspective on how successful the out of the box implementation work really was or perceived internally at least.

14:35

Eileen Tobias

Sure. Actually in the early days we were more of the mind. The system is highly customizable. Tell us what you would like to do, we'll do it right. And so we had a lot of customers who would just really try to customize the system like crazy. And over time, we started to realize that implementation times were lengthening. There was a lot of customer dissatisfaction. And so we started to verticalize the company on a lot of different dimensions. So we started with sales and then we started. And then we started verticalizing the professional services organization and started selling packages where we were really leading the customer in terms of, you're a software company, this is the prototypical best practices way to implement NetSuite and to use it. And we had. That program was called Suite Success. And we had a lot of success with it.

15:36

Eileen Tobias

We had a lot of.

15:39

Luke Whiteman

We saw.

15:39

Eileen Tobias

A lot of shortening of implementation times. Customers getting more value out of the system faster, utilizing bundles of features in a way that really made sense for their industry and their vertical.

15:55

Luke Whiteman

Interesting. Yeah, but it wasn't necessarily the initial concept or idea.

16:00

Eileen Tobias

It was not the initial concept, but we really saw a lot of success with it. We started with software and then we rolled it out to a lot of other industry types. The conventional wisdom would say, well, you're going to be, you're going to get up and running faster, you're going to be using it in a best practices way. The folks who are helping you implement are going to be experts in how to get you up and running on the features that you want to use. They'll help you with. Well, really we would start to sell bundles of preconfigured reporting, etcetera. So it's really like, this is the way you should implement if you're this type of customer. And we saw a lot of success with it, you know, in line with conventional wisdom.

16:43

Eileen Tobias

But I'm sure Ravi can share, you know, some edge cases that was, you know, that probably covered, you know, 70, 80% of your typical customer and a typical industry type. But there are always the examples that say, well, that's not going to work because our business is special. Special. And you know, there's, and then there's that whole question, are customers really special or do they just perceive that they're special? Right. And so anyway, I'll turn it over to Ravi because I'm sure you have some stories about that.

17:13

Ravi Ramakrishnan

It all depends on how the implementation team engages with the customer. If you go to the customer and say, ask them how do you run your order, for example? You've already fallen into the trap right there, because he's going to say how he used to do it in the SAP world and your software is different. But now as an implementer, you're going to try to mimic that garbage into this through customizations and the Deloitte. I worked for Accenture Anderson Consulting when I learned SAP and that's where they make tons of money doing this. So they ask the question, when the customer says jump, you don't ask how high? You say why should I jump? That should be there. So we actually, when I ran my team at NetSuite, we told everybody that you need to change the way.

18:07

Ravi Ramakrishnan

You don't let, I think this is Jim's, I'm going to steal it from him. You don't let the customer guide you. You should guide the customer. You don't go to a software customer and ask how do you run your business? You've fallen into the trap right there. We are a software company in the Bay Area, NetSuite at that time and we sold ourselves for nine plus billion dollars. You should be telling them, not asking them. So I think that transformation within the services team and I still take that even though I left NetSuite, I do the same thing. It's like don't ask the customer. So that answers your question. Is, is it possible to run something without any customizations? When before that talk track changed, we had only one suite at NetSuite. There was nothing like NetSuite for retail. NetSuite, we didn't have that.

19:05

Ravi Ramakrishnan

And then that started what is now called as Suite Solutions. And there's some precursor stories to that. And that's when that journey was what changed how NetSuite sells. So if you again, the customer persona is also very important. Right. If you are a startup that doesn't have any legacy attachments, I would say do not even try to customize anything. Adopt the solution quick time to value, get the product, start playing around with it and then we'll figure out do not customize just for customizations. So I think the customer persona is also very important. If you go to somebody who's got a lot of legacy data, then chances are that. And then with erp, let's also be careful. There's configuration and then there's customization. You can never get away from configuration.

20:02

Luke Whiteman

And how do you define the difference?

20:04

Ravi Ramakrishnan

Yeah, some people call it onboarding, some people call it implementation, whatever it is. But that configuration still has to be done. Right? There's no way that you can get around that. But it's the customization part and I can, you know, the sweet success. We used to have a stairway for each of the verticals, the first step of the stairway is always with zero customizations, we say, because any customizations that make up that, we already build it into the system. So yeah, lots of stories there, but it depends on the customer persona, in my opinion.

20:38

Luke Whiteman

And how is the customization defined? Is customization writing code versus configuration as using the application or were there more nuances?

20:47

Ravi Ramakrishnan

No, configuration is different. Customization is really changing the business process to the way the customer wants it. And that you call it core. We have something called, what is it called? Suite cloud. At NetSuite, which is in lockstep with the application layer. And so every time it gets upgraded, that also gets upgraded with newer features. But of course now it has completely changed. That's the part that changes tremendously with Agent. I don't know what all DOSS does, but I think tremendous opportunity there for you to make an impact.

21:24

Luke Whiteman

Yeah. And Eileen, as you guys were distilling these best practices and baking them into the product, how did you gain confidence that the best practices that you were designing were truly best practices? And how did you distinguish when a customer pushes back and says, no, I think this is the right way to do things like where do you draw the line?

21:48

Eileen Tobias

Yeah, I think we, so we started, to Robbie's point, we were a software company. We started with the software vertical and so we took our own in house expertise and then we also looked at, you know, thousands of other hundreds or thousands of other customers that had used NetSuite over the years and so just looked at what works, what's not working as well and packaged up, you know, what works and then, and what.

22:14

Luke Whiteman

Was that process like internally? Was it really like people in a room sitting down? I mean, like, okay, tell me how you guys built this, how you implemented this and just sharing knowledge, or was it more analytical and focused on the data and the data models?

22:27

Eileen Tobias

I think it was a combination, but more the first, you know, just drawing on the expertise of our PS organization, our solutions consulting organization, the dev team, in terms of what features were being utilized, what weren't being utilized, et cetera. And so we had a whole project team that went off and we're building out these packages by industry type. And while we had a lot of success with that, leading the customer and getting uptake with these, you know, pre configured packages, of course there were lots of opportunities to customize for the customer and really getting them focused on, you know, customize what really makes sense to customize. Don't start with, well, we're special and we need to, you know, do everything from scratch.

23:16

Eileen Tobias

Start with what are considered industry best practices for, and then focus your energy and resources and time on the things that really make a difference. Like for a software company, rev rec would be an area where you really want to spend time on customization, but you don't necessarily need to rework your AP workflow or your HR workflows or that sort of thing, right?

23:38

Luke Whiteman

Yeah. You don't need to reinvent finance and account.

23:40

Eileen Tobias

Yeah. I mean there are these meta workflows that every company in theory is selling something, buying something, paying some hiring people. Right. And so there are these workflows. Regardless of what system you use, for the most part, many of those will work or work pretty well. And then you can spend your time customizing for what really makes a difference for your unique business.

24:02

Luke Whiteman

Yeah, I love it. It's, it's. This is the original Palantir forward deployed engineer that everyone is in love with now. You guys were already inventing it. Okay, I want to move us along. We've been talking sort of about the past and implementation. I want to talk a little bit more about the companies themselves and the transformations they're going through. So Ravi, you've obviously worked with thousands of these different customers. What distinguished or separated companies that were truly transformed by the product and the software and the process of implementation versus those that just bought the software and didn't actually make broad transformation in their business. Like, were there distinguishing factors in the leadership teams or the companies themselves or the industries they were in?

24:51

Ravi Ramakrishnan

Yeah, so transformation, again, you know, a lot has talked about and I think that's an area where hopefully AI brings a lot of change because we still don't. We are all talking about outcome based pricing and things like that. But I think there was an interesting exercise that I think Jim and Tim did at one point when I joined NetSuite that was interesting was they took, I saw this presentation, I don't remember the genesis of it, but they said, let's take 10 companies and compare what is it that happened during pre sales and what is it that they are live with today when they saw that you show them all this jazzy stuff, but what you implement is very vanilla. It's not much. That actually, again, his adage at that time was sell what you can deliver and deliver what you sell.

26:00

Ravi Ramakrishnan

And that was a big moment for us. And I think that's where most of the implementations, they go off track in the sense that we forget because when a Project stretches for six months to eight months. You forget what really started, where did we start and what is the outcome that we're trying to achieve. And all these methodologies that we come up with, they're all, you know, nothing has changed. I mean, from SAP to coming down to this private equity firm where small implementations, you look at the methodology and you go 30 years, you know, you start with requirements gathering, you write all these documents, nothing has changed. And engaging the customer during this process is again, there are three kinds of customers from an implementation perspective. Customers that say, do it for me, I don't have the time.

27:04

Ravi Ramakrishnan

You guys come and do everything for us. Customers that say, I'll do it myself. Like a startup or somebody who hired a NetSuite person who has done these and he says, I'll do it myself.

27:16

Luke Whiteman

I don't.

27:17

Ravi Ramakrishnan

But then the SaaS companies are successful even in non-ERP environments. Customers that, in places where we say, do it with me, right, I'll show you how to do it, but let's partner.

27:30

Luke Whiteman

And those were the ones that were the most successful.

27:33

Ravi Ramakrishnan

And you want to drive 80% of the traffic in that direction. And this is not an ERP discussion. Even when I was with trade AI, I would show them during the onboarding process how to build the first workflow. But when you came back, I want you to build the second workflow. I'm still on the call, but I want you to do it. And when you do that, you will see that a customer is more engaged and they're very successful. And sometimes people say, oh, this customer is logging a lot of tickets. They're probably going to churn. I say, no, that's a good thing because they're engaged. When you look at the tickets, you know what help they need. And then you put an enablement package and you say, go and teach them this stuff.

28:18

Ravi Ramakrishnan

So logging a lot of tickets is a good indication that they are engaged and we can help them. But when they don't engage at all and the CSM is like, no news is good news kind of a thing. Definite churn. Because you go to them after a year and they say, oh, by the way, we don't even use your product. Why is that a surprise? Right? So I think that's the way you have to look at it is if you can engage the customer on any SaaS product, I think eventually outcome will be good.

28:51

Luke Whiteman

Yeah, yeah, that's super interesting that the. It's like any bad press is good press, any press is good press sort of thing.

29:01

Ravi Ramakrishnan

I think again, I don't know. Again, very little knowledge of DOSS. But I think what will be good press. I often hear when I'm on calls with you guys, people are working 16 hours, 20 hours and I go take a step back and do an assessment of, you know, you're not going to scale by doing this. If you keep on taking all the burden on your team, this model is not going to succeed. Think of a situation where you turn this over to a partner or to a customer and they manage it. Do they have the skills, has the partner been enabled to handle this? I think that should be. Again, you might already be thinking about it. I don't want to say no, but I'm just saying that put yourself in the shoes of that situation.

29:52

Ravi Ramakrishnan

Once you do that, I think you will be able to scale much better. Otherwise, if you keep on hiring guys that are working 60, 20 hours, unfortunately, that's not going to be a. Yeah.

30:04

Luke Whiteman

I think we know that we see something very similar internally, because we interact with most of our customers over Slack channels, which is both good and bad. Right. They have sort of unfettered access to the team. But on the positive, we can almost intuitively measure how engaged they are with the platform by how active they are in Slack and it creates more work for our team. But it's a positive signal on the stickiness. It's not necessarily scalable and something that we definitely know we have to address over time.

30:32

Ravi Ramakrishnan

We didn't have Slack when I was there. Yeah, even if you had Slack, the customers don't have access to it. But we tried this at Trey and that was like amazing.

30:45

Luke Whiteman

Yeah, yeah. The high bandwidth stuff

30:48

Ravi Ramakrishnan

You could clearly see a community automatically emerging out of that whole process.

30:52

Luke Whiteman

Yeah. And Eileen, I mean, NetSuite went through its own massive business transformation. Do you what's your perspective on what makes a company successful or the type of company that can actually transform their business?

31:07

Eileen Tobias

Yeah, I think adding on to what Ravi was saying, I think there are a few keys to a successful implementation. So one is you need leadership. Buy in that we're buying this system and we're going to implement it. We need a timeline, we need a date that we want it implemented by ideally, I mean, this is challenging when you're dealing with small companies that don't have a lot of resources. But ideally you want a project leader who's spending. If it's not their full time job, they're spending almost all their time on it. And I think the other key is you mentioned customers who want to do it. Themselves. I think most companies have much more success if they are willing to pay for delivery resources. Right.

31:55

Eileen Tobias

When you say I'm going to implement on my own, that often doesn't, really, doesn't really work that well.

32:02

Luke Whiteman

It's a little overly optimistic.

32:03

Eileen Tobias

Overly optimistic.

32:05

Ravi Ramakrishnan

And then I think even. Sorry for interrupting. But even when the partner implements, they're not up to tune. They're not in tune with everything that's happening with the product. And there's risk there too. That's why partner enablement is. Partner success is just as important as customer success.

32:24

Eileen Tobias

I think also too, the company needs to know what's your end goal. Right. How are you going? What workflows do you want to use in DOSS and what workflows do you want to use outside of DOSS? Right. Have that in mind and understand what is the transformation that the company needs to undertake to be successful. I think the other thing too, I think there are a lot of companies that think, well, I don't like the system I'm using right now, so I'm going to buy a new system. And unless you're willing to really go through the transformation of getting up and running and really using that new system in the best way that you can use it and figuring out which of your processes can be out of the box and which could be customized.

33:13

Eileen Tobias

But you will probably dislike your new system just as much as you dislike the old one if you're not willing to put the work in.

33:20

Luke Whiteman

Yeah.

33:20

Eileen Tobias

To get up and running and to use it in the best way.

33:24

Luke Whiteman

Yeah, yeah. We see this and have this conversation a lot with leaders when we're going through the sales cycle and get asked this question and the answer is almost always we can help you to some extent. Right. And we can only take you so far. But at the end of the day, there is a degree of courage that is required by you as a leader to make this happen. And that sometimes resonates really strongly and sometimes it's sort of a turn off for the customer who is looking for something that will just be implemented overnight and turn on and sort of solve their problems, which is not always realistic.

33:59

Eileen Tobias

You can't buy really any system, but especially something as important as ERP and just think, well, it's going to get implemented and I'll flip a switch and I'll come in on Monday and it works. Right. Like you have to really put in that, put in the work and dedicate the resources and get your leadership buy in and then the employee buy-in that we're going to put in the time to make it work in the workforce.

34:23

Luke Whiteman

Yeah. It's like the team is almost as important as the product is. And in many ways the implementation and the transformation is the product and your ability to deliver it is just assisted by the platform.

34:36

Eileen Tobias

100% agree.

34:39

Luke Whiteman

Okay. Talking a little bit more about the workflows and moving from the team and the implementation over to the product. On the finance side, I guess finance ops and supply chain. What. Eileen, I'll start with you. What do you think the workflows are that are most ripe for AI innovation and AI progress on bringing them out of kind of the manual labor world and into a more of an automated world?

35:08

Eileen Tobias

Sure. I'll start with the finance workflows and then perhaps Ravi can chime in on some of the other workflows. I think the finance function is ripe for the advances of AI. If you think it's a function that has a really interesting mix of a lot of repetitive tasks and then. And then a fair amount of one off tasks. Right. And then we also have a lot of data that we are crunching and then we are also looking for ways to more quickly understand the data and make recommendations and report insights. Right. So I think that AI has the possibility to really revolutionize the finance function, especially in areas. I'll give a few examples like revenue recognition is a lot around ingesting very complicated contracts, depending on your industry. Right? Yeah. And then making a recommendation for how that revenue should be recognized.

36:05

Eileen Tobias

Again, I'm software background, but that is an area where companies, as they grow, if they can't take advantage of something like AI, they basically have to just keep hiring more humans as the business gets more complicated. Right. And it's a lot of time spent looking for exceptions and doing research. And so if teams can take advantage of a tool like AI to automate much of that, then people can spend more time on either interesting contracts that have really thorny provisions or they can be moving on to other things. And so I think rev rec is a great example. I think forecasting is another area where AI should be able to help with, you know, take this large amount of past data and help me formulate a forecast.

36:56

Eileen Tobias

And then some of the other workflows like time and expense reporting and processing or just I think overall getting the close process shortened. Yeah, yeah.

37:07

Luke Whiteman

Finance leaders don't want to keep doing reconciliation all day long. That's not.

37:11

Eileen Tobias

Finance leaders do not want to or have their teams do reconciliation all day long. So I think it's fascinating and a lot of opportunity for improvement and automation in the finance function. I mean I've been in finance for three decades and even when I first started we all talked about well if we could just get away from the day to day grind, we could be more strategic, we could be better business partners, we could serve insights quicker. And we haven't found that many ways for the past three decades to do. I mean there have been incremental changes but I think if I can really help move that forward, can really revolutionize the function.

37:49

Luke Whiteman

Yeah, actually operationalizing it is quite hard and it seems that the revenue recognition certainly that's a lot of people are working on that today and there's been a lot of recent progress and movement on that side specifically. So it seems like an early use case.

38:03

Ravi Ramakrishnan

Yeah, I've seen a couple of things in the supply chain, demand forecasting and then also dynamic routing is another one that people are tackling on the operations side, mostly the document generation and processing seems to be an area. Finance is interesting because they always want the big bang. It's not like in the other areas. It's like you can have an incremental. Even when I worked for Cube, CFOs would always be like, you know, I want the whole thing to be implemented. So there's no. Yeah, 90% is chaotic. Right. Obviously in that field.

38:54

Luke Whiteman

Yeah. When you have to be 100% accurate and right on something, it's hard to be 90% accurate.

38:59

Ravi Ramakrishnan

And all of these irrespective, especially in the what I'm seeing, even with non-ERP applications, we're seeing human in the loop is so important and I think for all of these also we have to have a human in the loop until you build the trust with the agents. Right. Over time, what parts of it that I can trust, what it's doing, observability becomes very important at that point.

39:25

Luke Whiteman

Yeah. It is scary to take non-deterministic systems and apply them to things that must be correct.

39:31

Ravi Ramakrishnan

Yeah. Because you talk to a business person and say these models are non deterministic. Right.

39:40

Luke Whiteman

Yeah.

39:41

Ravi Ramakrishnan

Stay away from.

39:41

Luke Whiteman

Yeah, yeah. Maybe on my reporting.

39:43

Ravi Ramakrishnan

So I think that's the challenge. But you need to get there, otherwise you will build another, you know, the same AP or GL that have been there from the 70s. You're going to build it with probably agentic AI, but what have you achieved?

39:57

Luke Whiteman

Yeah.

39:57

Ravi Ramakrishnan

Right. So I think you’ve got to think differently about what you're building, not just another technology.

40:07

Luke Whiteman

Yeah, we appreciate the advice. Well, no I mean, when we're doing implementations and we're looking through the product or even the sales cycle and we're demoing finance and accounting is always a funny one because we're like, yeah, this is AR, this is AP. It looks the way you want it to look. And it doesn't look any different than it has finance for a reason. But there's this obvious like, okay, well then what's next? Right? And yeah, people are gonna start solving it for sure. Okay, I've got one more question for y'all, which is a good closing question. Advice. What advice would you give to operations or finance folks that are evaluating software systems and platforms today in the current software environment as opposed to 15 years ago.

40:54

Ravi Ramakrishnan

From an implementation perspective? Like I said, my thing is to tell your people not to go there with a questionnaire and say, how do you do it today? That talk track has to change. I think that is consulting 101 in my opinion. The moment you do that, you fall into the trap and you say, I used to do it like this. And then you try to mimic all of that. Unnecessary. You should. Number one is to stay away. Then you start to really move towards that outcome based model. What is it that really is the outcome that I'm trying to achieve? And I think from a consulting. And I've been a consultant for years and I always do that. It's like, what is it that we're striving to. And don't forget that it is six months to a year implementation.

41:48

Ravi Ramakrishnan

You will forget that and I think be grounded in the truth. And no matter what methodologies you put in place, make sure that you address that along the way and not forget that. I think that is the best way to really show otherwise. That is why 70%, they say, or Wiley had 75% of the projects fail. After 30 years of doing this, we still see those numbers. Right. I don't want you guys to build something that is just another. Yeah, you get the point. Yeah, yeah, I'm a little biased because at the end of the day, we are customer facing, right? For us, it's like the outcomes. And we also, when you work for a private equity firm, it's like, I don't care about customer satisfaction. I just want the bottom line. Right? And it's like, how many hours are we billing? And it's.

42:45

Ravi Ramakrishnan

Yeah, yeah.

42:48

Luke Whiteman

Outcomes talk for sure, Eileen.

42:52

Eileen Tobias

Yeah, I think for anybody who's evaluating systems right now, we're at this inflection point with this massive revolution with AI. If NetSuite was disrupting ERP 25 years ago. You know, now we're at a point where there are DOSS and there are other, lots of other examples out there of companies that are AI native from the start. And I think for finance leaders who are looking at systems, I think should seriously think about, you know, what can you and your team get out of AI like we were just talking about, and does it make sense to purchase AI native or look at what some of the legacy players are doing with AI? But I think that would be, you know, the number one thing that finance leaders should be looking at and then.

43:41

Eileen Tobias

And then talking about some of those other things that we were just talking about in terms of, you know, making sure you have the, you know, the right budget, the right buy in, the, you know, the exec leadership, the exact sponsorship. I think as you're evaluating and making decisions about an ERP implementation, I think you need to make sure that you have all of that in place as well.

44:00

Luke Whiteman

Yeah, yeah. Makes total sense. Okay, this is great as, I think, quite informative and fun and it's always nice to talk to you. Ravi, nice to meet you in person for the first time. And Eileen, you guys, again, all the people that. Yeah, thank you all. Give these guys a round of applause.

00:01

Drew Sutton

Thanks everyone. Excited to be chatting here with Anthony. Excited to be able to share some insights from his experience over at Verve. Introduced myself initially here. Drew, one of the founding sales members here at DOSS. Been here for about a year or so, which is crazy to see how far we've come. And so excited to be able to help brands like Verve and Anthony and be able to work with folks. So, you know, in. In terms of just introducing Anthony here, Anthony is basically the chief retail and operations officer over at Verve Coffee. Really brought in to do a lot of the transformation for the business and really begin to help them continue to scale as they're moving up. So I’ll let you go ahead and introduce yourself. Excited to have you here.

00:43

Anthony Fassio

Sure. Yeah. I've been in food my whole life. I was born on a fourth generation farm and kind of grew up in agriculture. And out of high school I was like, let me get out of here and get as far away from the farm as possible. So I worked in manufacturing for free, Frito, Lay and Pepsi. And then about halfway through my career I was like, what's happening on the other side of the kind of food world, the food supply chain and sort of overall operation. So I went to culinary school and when I came back to the U.S. I landed in New York City and started to work for this small little burger place called Shake Shack.

01:20

Anthony Fassio

And at the time we had about eight Shacks and were just about to open Kuwait City and kind of helped grow that brand and then kind of moved my way through, eventually made it to the west coast, worked for an ice cream brand called Salt and Straw. And now at Verve doing coffee. So burger, ice cream, dessert and then.

01:41

Drew Sutton

Coffee, doing it all. Did you have a favorite Salt and Straw flavor?

01:45

Anthony Fassio

Oh, it's the almond brittle. Almond brittle, which usually only comes out in December for the holidays.

01:52

Drew Sutton

Coming out for it.

01:53

Anthony Fassio

Yeah, it's my go to. It's the one where you just like start eating the pint and then you just like eat the entire pint.

02:00

Drew Sutton

Yeah, it's a good way to do it. Well, yeah. Excited to have you here. Excited to chat more detail about your experience at Verve as well as some of the previous experiences you've had. So really, you know, the context of today is to really go deeper into like some of the war stories you've had across obviously some of these businesses that you've been in that have been some really cool brands and have grown a ton of as well as some of like the lessons that you've learned and diving more into some like just like practical Tips and things like that. So excited to kind of dive in here.

02:28

Drew Sutton

And I think one of the first places we want to start is just, like, kind of a fun, you know, fun question in terms of just, like, getting really into, like, the war stories, getting down into the trenches of the actual businesses you've been in. Do you have, like, I guess, like, your most chaotic moment that you've experienced at really any of these businesses?

02:45

Anthony Fassio

But, yeah, I don't know if that's a fun question. It's more like PTSD type thing, but, I mean, running out of product, you know, like, as you scale a brand, and if you're missing an ingredient or if you're missing just sort of your finished goods and not having it's really stressful. And having a component where you're manufacturing or roasting the product and you have this distribution model of trying to get the product to either your cafes or to your grocers when you run out, it's just, like, crazy stressful. We recently went national with Whole Foods. Our brands. Verve's about 50% retail. Our own cafes in the US and in Japan, and then the other 50% is wholesale.

03:28

Anthony Fassio

And we just went national with Whole Foods, and we ran out of product at a certain point, and it was super stressful to not just figure out what we needed to roast and what we needed to do, kind of get out there in the distribution, but we had to pace it and take time to go through the distribution channels. And it took. It was just. It was a long time, and it was very stressful. But we figured it out. We rectified it. Whole Foods is now full of coffee, and hopefully forever will be. But that's a. You know, you think it's a simple. It's a simple component of, like, oh, yeah, we roast coffee and we throw it in bags, and that's it.

04:11

Anthony Fassio

But then when you realize, oh, how do I get to that grocery in sort of rural Florida on the other side of the country, then all of a sudden, it becomes incredibly complex.

04:24

Drew Sutton

Yeah. Makes sense.

04:25

Anthony Fassio

Yeah.

04:25

Drew Sutton

Yeah. I feel like we've heard, you know, just from my experience talking to, like, hundreds of different businesses and customers experiencing similar types of things. Seems like there's some natural piece of, like, there's just growing pains that come with a business and trying to figure some of those things out. But I would. The other piece that I've heard a lot about is, like, forecasting being really difficult. Right. And it's like some weeks you have it blow up all of a sudden, and your production needs to get moved up really quickly. So, like, I'm just curious, like, how you've experienced that or thought about handling those types of things. Is that just natural of like a growing business and like, how do you avoid some of those kind of pitfalls?

04:59

Anthony Fassio

Yeah, I mean, that was the issue. That was the issue that we had in grocery is our. I was saying to Nate at lunch, we had, let's say it was 35 were the units that were purchased 35, 35. Feeling pretty good about 35, 510. And it just was like, where did that come from? And it turns out that there was a promo that we were doing that was promoting it. So that was like internal, like, lack of sharing that information. But then Whole Foods was doing another promo on top of it, and it coincided with Prime Day, and so it just was like this huge explosion. And so being able to forecast has been one of our elements that we're really working on.

05:43

Anthony Fassio

And that's a big component of what brought us to DOSS and to just kind of work through our historical data and our historical sales, but also to be able to more quickly capture customer invoices when they're. When they're coming in. To be able to help with the forecast.

06:00

Drew Sutton

Yeah, makes a lot of sense. It's like a good problem to have, but it also hurts your customer experience.

06:05

Anthony Fassio

And all the things. I was super stoked when I saw 510. I was like, yes, that's amazing. Then I was like, wait, where is the 510?

06:14

Drew Sutton

We don't have that. Yeah, yeah, it's brutal. I think, in terms of, on that note, in terms of expanding.

06:22

Anthony Fassio

Right.

06:23

Drew Sutton

It's like started in California, not too far from here, down in Santa Cruz, where you guys are headquartered, and really expanding, as you mentioned, like going to Florida and going to some of these other places and really thinking through, like, what does that look like? What does that scale look like? I guess, like, what do you think has been the most difficult thing in terms of actually handling those complexities and being able to, like, navigate those kind of more difficult logistical issues that you have to come up with?

06:50

Anthony Fassio

Yeah, I think it's really just the lack of data, or at least the. The reporting and the accessibility to real time data. Look, verve is 18 years old. It's quite old, and it's organically just kind of slowly grown over the years. And Colby and Ryan are two co founders. We're just two barista dudes that wanted to bring better coffee to Santa Cruz. And Verve has A very strong brand. And the brand is out there and it's just continued to grow and it's continued to promote their growth of the business. But when we got to this phase, kind of realizing that in order to really grow to say double or triple or quadruple the organization, we need to be a lot smarter, figure out our supply chain, figure out our operations.

07:39

Anthony Fassio

Yes, we're a coffee company, but the real business is operations and just the ability to manufacture and distribute and execute on that. And if your operational excellence isn't there, then no matter how good the brand is, it can only go so far. And so we have all the data and yet we don't, like it is there. We're obviously transacting and we're selling things and we're purchasing things, but to be able to have it in a way where it can inform us on the leadership team, but really our managers is where we're just missing straight out.

08:17

Anthony Fassio

And so when our managers, the individuals that are really driving the business and having an impact on it, don't have the real time information, then it just comes down to either intuition or you just run around like a chicken with its head cut off, trying to fill up and capture issues that are happening and you're just struggling and just like forever behind the eight ball. And so that's something that we're really working hard on of getting our managers the real time data so they understand the impact and the decisions that they're making.

08:57

Drew Sutton

Yeah, it makes sense. And I think just kind of a follow up question there, like what do you think has kept them from having that? I mean, is it just real time data? Is that the biggest thing or is it just like not having visibility into it, or is it not being, is it not kind of in a good format where they're able to utilize it well? Like what is the kind of major roadblock there for them to actually like be able to utilize that?

09:16

Anthony Fassio

Well, I think it's, you know, 18 years and when you organically grow, you have systems that are there, but no one's really looking at how to kind of build the architecture of the entire system. And I think that's been the biggest miss. And so the data is there, sure. But we don't have a mechanism, in some cases, we don't have a mechanism to get this information to those managers. And then it becomes this, okay, well how can we find it? Can we cobble something together and we can do it, but then it becomes ad hoc every single time because let's say you run a pivot table and the SKUs are named this and for whatever reason the SKU name changes. You run the pivot table again and now the whole thing breaks and the information's not there.

10:04

Anthony Fassio

And so not being able to have that sort of, that one sort of philosophy and the architecture over how all of the data is going to flow and how all the data is going to report has been something that we've really missed.

10:20

Drew Sutton

Yeah, spreadsheets. On spreadsheets.

10:22

Anthony Fassio

On spreadsheets. Spreadsheets. On spreadsheets. And then you realize that this core system just doesn't integrate with say your accounting software because it just doesn't. And nobody knew that. And they kind of run in parallel. And so you build these spreadsheets, you put them together and it just becomes very laborious and it just takes away from the core focus of where the team should be.

10:47

Drew Sutton

It's like spending time on all the manual processes and things like that. Rather than growing, leading kind of into the next question here, I guess in terms of your next phase of growth being a little bit more forward looking here, I guess, like how are you thinking about scalability across the operations? How are you thinking about solving for some of those problems that you have and kind of driving it into that next, you know, stair step of growth for you guys?

11:11

Anthony Fassio

I mean, one way how we're solving it is with DOSS and just like being able to pretty quickly come into all of the systems that we have and just kind of lay on top of it and pull all the data to at least be able to get some of that reporting and some of those mechanisms to our manager. But as we look at scaling kind of in the next phase, we're really targeting on margin kind of margin management. And I think it's really important that you're rock solid on what your margins are, whether it's by sku, by customer, by channel, all the above.

11:47

Anthony Fassio

And so we're doing this exploratory phase of really being kind of honest and clear in terms of what our margin is across all those components and then using that to kind of drive our strategy in terms of, okay, cool, the margin heroes assume more of those, the margin sort of diminishers. Let's either fix it or remove it because from a profitability standpoint it's not going to be able to scale. And so if we're going to again like double, triple, quadruple the organization, those diminishers will start to really add up pretty quickly. And in a very, coffee is a very tight cash flow business because you are purchasing usually 12 to 15 months in advance. And so it's a lot of cash outlay and you don't convert that into revenue for quite a bit of time.

12:38

Anthony Fassio

And so being able to get rid of those margin diminishers pretty quickly is going to just also give us some of more of that free cash flow to get to that next phase of growth.

12:50

Drew Sutton

Yeah, makes sense. Yeah. And it's interesting even, you know, in talking to a lot of other customers and brands out there, it's like kind of shocking how many companies don't know what their margins are or just like not that dialed in on it, which I assume is just because you're growing so much and you're focused on growth and revenue. And it's like, I guess going to that next phase, it's really about like dialing into the details and getting more specific on some of those things, understanding what, working well, what's not, those types of things.

13:16

Anthony Fassio

Yeah. And I think being honest, right. Because we have this sort of. Colby, our co-founder, we kind of joke about like, okay, which department did the margin analysis, did the margin calculation. Because the sales guys love, all the salespeople are very optimistic and their margin is always amazing. And the finance people are always a little bit too on the other side where they're throwing anything that comes in if like, you know, oh, you ordered paper. And so we're going to throw paper into that calculation. And so I think it's important to come to a margin calculation philosophy so that it is clear and consistent throughout the organization, but then to just be honest. Honest with what the true margin is.

14:04

Drew Sutton

Yeah, that's funny how that works to their favor a little bit.

14:08

Anthony Fassio

Always. Always.

14:10

Drew Sutton

I think in terms of just like how you think about some of these scaling growth pieces of the business, how did you make the decision or how are you thinking about the decision between utilizing people and utilizing versus, maybe versus or. And technology as you're kind of going along this. And when you're evaluating those types of things, are you looking for things that are more like feature sets in terms of like being able to help in certain areas? Or are you looking more for just like overall transformation? Like, how are you just kind of evaluating that piece of the business as you're starting to scale?

14:47

Anthony Fassio

I think what we're realizing is when it comes to technology, you have to look at it holistically and not just solve, not just get technology for a certain piece of the business. Like you really have to understand how it's going to flow through every function, all the way to customers and back from customers, through the finance and accounting division and of course the different operational functions. And so we're looking at that holistically. And I think in this day and age, like my personal philosophy is over index on the technology and then have enough team members to be able to really utilize the technology. But also they need to be at a skill set where they understand the impacts.

15:32

Anthony Fassio

If they don't use the technology as it's supposed to be, as it's intended, then it will not be good, it will fall apart and it won't work. And I think as I've seen organizations organically grow, when there becomes a pain point, you tend to just go hire somebody and then you hire another person and then you turn around and you look at that business function and you're like, wow, that's, there's a lot of people on that team. And so we're kind of taking this moment now of like, all right, cool, clean slate. Let's over index on technology, really build it holistically and then we can rearrange our team members and their skill sets and their passions and desires into the right parts to be able to really kind of like execute the. Execute the technology.

16:25

Drew Sutton

Yeah, makes sense. And how do you think, I mean it kind of leads into this a little bit, but how do you think about just like staying lean as a team? I feel like a lot of brands try to stay lean with people. I mean, obviously probably have to supplement it with technology in some capacity. But how do you think about when to actually hire somebody and like when it's kind of time to add to that team versus just staying lean and trying to make it, grind it out, make it work, those types of things. And maybe it's budget, maybe it's those things. But like how do you guys think about that from like a leadership perspective?

16:54

Anthony Fassio

We try to remember that, you know, our core business is roasting coffee and sort of delivering that to our customers. Either that's through our cafes or through our wholesale customers or through the grocery channel or DTC channel. And so we try to put as many resources in those functions first and then try to have the technology to support the kind of non-revenue generating the secondary functions like HR and legal and accounting, finance, all incredibly important. But there are, for our business, there are great technology solutions for those type of functions. And then we can keep the roasters, which is a specialized skill, we can keep our green coffee buyer, which is a very, you know, sort of relationship and experience type of role.

17:52

Anthony Fassio

We can really focus on the team and the time there and less on the sort of the administrative components that are very consistent from industry to industry.

18:03

Drew Sutton

Focus on the higher kind of higher value leverage.

18:06

Anthony Fassio

Was that the question you asked me?

18:08

Drew Sutton

Yeah. Yeah. Okay. Yeah.

18:09

Anthony Fassio

Okay.

18:09

Drew Sutton

Close enough. Yeah. So thinking back in terms of like, you know, obviously you guys are still growing, but have definitely created a great brand. Being able to like now give back to other people that are going, going through this. Do you have any just like maybe one major tip in terms of folks trying to scale their company and like, especially within like food and Bev. But like, what would that be if you had like one top tip for them?

18:36

Anthony Fassio

I'd probably say two. I think one is like, know what your margins are and if you don't figure it out before you make any other decision on growing the business. Because it's possible that you're making the wrong decision and investing in the wrong either the SKU or the channel or the product or the customer kind of first and foremost. And then the other that we learned very early on at Shake Shack was you have to codify the business. If it's an operational F and B, you need a standards guide and you need to build the operational infrastructure to be able to kind of build everything on top of that. We were just opening Kuwait City and I remember this so vividly.

19:20

Anthony Fassio

My role was to write the standards guide and the OPS infrastructure for Shake Shack because Shake Shack was born out of a fine dining restaurant. So it was a bunch of fine dining people that were like, hey, let's do this burger thing and let's replicate it across the world. And I remember our Middle east licensed partner said, great, here we go. How long do you cook the burger for? And I was like, I'll be right back. And I went to our main culinary guy who came out of Gramercy Tavern, amazing restaurant. And I said, mark, how long do we cook the burger? And he said, well, not too much, not too little. And then I knew, I was like, I got it. Okay.

20:06

Anthony Fassio

And so then we spent the next year of just really like testing and getting it super codified so that we could write this manual that not only supported our international license partners, but really gave us the strength domestically in our corporate owned shacks to be able to build off of. And so those two things like really know what your margins are and then make sure you're building your operational infrastructure and getting the business codified because from there you have the foundation and the whole structure to just like build on top of.

20:39

Drew Sutton

Yeah, makes a lot of sense. I was going to ask about KPIs, but I feel like you kind of hit it there in terms of just like really focusing on margins, figuring out what's working well. And then from a process, I guess maybe from a process standpoint, like, are there specific KPIs and things that you use to like, align the team around? I mean, it sounds like in this case, burgers.

20:56

Anthony Fassio

Right.

20:57

Drew Sutton

Figuring out some of these operational processes, what they look like, how to scale off of them. But yeah. Is there anything specific that you usually use? I mean, either Verve or previously?

21:06

Anthony Fassio

I think, you know, KPIs, we try really hard to only give the team members the KPIs that they have kind of control or agency over. I've seen in organizations where you kind of give like all the KPIs to, in theory, sort of give a big scope of what the business is. And I find that to be not very. You don't see a lot of results driven from that. And so really being segmented on which KPIs are going to who and do they have full agency over those KPIs and really focusing the team around that has helped to kind of just drive results. Because when people know that they are responsible for results and they are monitored, then we all just. We all kind of just step up and we want to achieve it or even beat it.

22:00

Anthony Fassio

And then so that's kind of how we organize it. And then we have just this kind of general KPI philosophy of like, just better than yesterday. Right? Like, yeah, we have targets, and in certain cases we look at those. But in most cases we're looking at KPIs of how did we do yesterday compared today, today? And are we incrementally getting better? And if we are, great, and if the trend is not, then we have to stop and kind of reset and rethink and get back on track.

22:32

Drew Sutton

Like a forward progress is good progress.

22:34

Anthony Fassio

Yeah, Right.

22:36

Drew Sutton

That's great. And I feel like, especially with the KPIs, it's like having something that's more in control, that you have control over is more motivating than something you're just like, well, I could work really hard and not get there. And it's like, how does that add motivation and energy in terms of just like thinking back, if you were going to start over at Verve or any of These. Is there certain processes or things that you would put in place first in terms of just like we've answered some of these, but just understanding even things that you'd maybe implement earlier on. Right. Kind of being able to do over a little bit.

23:14

Anthony Fassio

I think I'm an OPS dude, so this is weird coming out of my mouth, but I think financial accounting and like rock solid financial accounting is something that I would implement way earlier than it tends to get implemented. I think if your founder ran the product is going to be just stellar, right? Like just have the passion and the vision and the, the obsession that the founder has. Your product is going to be there operations in our industry and F and B and in coffee, like it will figure itself out. People will tend to, you know, figure out how to operationally get things moving. Might not be the most efficient, but that will work itself out. You can turn around one day and just realize like there's no financial accounting, there's no real financial analysis and data of the organization.

24:09

Anthony Fassio

And when you start to make big decisions and when you start to really put fuel on the gas, fuel on the fire to really grow, then that's where it kind of falls apart. And so I would really make sure at a younger stage that the financial accountability is there and it's solid and then kind of run from there.

24:35

Drew Sutton

That's great. Yeah, makes a lot of sense. Got to have a solid foundation to run off of. Kind of changing gears here from past to future, looking at upcoming trends and things that you're seeing within the industry, within technology, within whatever it might be. Is there just like a specific trend or idea that you're having like a big bet on or very high on in terms of like within supply chains and ops? And then is there anything that you feel like is just a little bit overhyped so far?

25:05

Anthony Fassio

I mean, I think we're really betting on AI to bring data and information more timely, more quickly and to actually drive results and to more laser focus, decision making and action. I think we're really betting on that. You're starting to see some of that in our industry, but like not quite so I think there's going to be more of that. And then I think a trend that we've kind of realized since the pandemic is that customers and consumers within food and beverage are incredibly fickle. And it used to be that you were super loyal to your burger joint or your ice cream shop and you would just go There and that's how you would get the product and enjoy the product.

25:55

Anthony Fassio

But times change and sometimes people shift from going to our coffee shop to buying on direct from us or going to the grocery and whatnot. And so I think consumers are going to continue to be more and more unpredictable, which has really forced us as a kind of omnichannel type brand to make sure we're showing up where customers are in different channels and kind of across the board. And I think that's going to continue.

26:27

Drew Sutton

Yeah, makes sense from the AI side of things as you're talking about being like a big bet as you're thinking about it. You mentioned it feels like it's maybe been a bit slower kind of getting into food and Bev to some extent and obviously is like relatively new. But what do you think is like, is it adoption? Is it just not having the right infrastructure in place to use it well, or what's kind of making that a bit lagging on that side of things?

26:49

Anthony Fassio

I think maybe it's a little bit adoption, but also just the infrastructure. Some of our restaurant focused platforms like our POS system or inventory management system either have yet to engage AI or are just barely starting to. And those that have, I feel like they just did it because they're supposed to and they found whatever partner they could to say they have AI and it's not really working or functioning. So I think with time, especially in F and B, that you'll start to see some more specific AI components for just kind of the tech solution across the board.

27:30

Drew Sutton

Yeah. This may feel like a leading question, but do you feel like DOSS? Yeah, not where I was going with that, but I like it in terms of just like brands, do you feel like brands that adopt AI early are going to have like an advantage in the market in terms of just like, is it that powerful in terms of like understanding their data, their customers, things like that or you know.

27:55

Anthony Fassio

I don't know. Yeah, I don't know. What do you think?

27:59

Drew Sutton

I mean, we'll see. Yeah, yeah, yes, Wait and see. Okay. In terms of. And I'm going to ask, open the questions to the audience here in just a second. So be thinking for questions you might have for Anthony, but kind of last question for me is, you know, if there's one thing that you could fix, you know, wave a magic wand and fix industry wide as an OPS pain point, what would that be?

28:23

Anthony Fassio

I mean today tariffs like for the coffee industry, that's been just a major impact to the cost of coffee. And you all probably seen it and continue to see it in your coffee shops. But I think also inflation and just the continued cost of just operating across the board has made it really difficult for the coffee industry because we, when you listen to your grandfather, he always talks about the price of gas. Right. But the other thing that he always talks about is like how much a cup of coffee was. It is this benchmark that people have in terms of how the rest of the economy is going.

29:09

Anthony Fassio

And so that's been difficult for our industry to have now a 6, 7, 8 $9 cup of coffee and sort of being that core center thing that people do habitually every single day and to kind of benchmark off of that's been kind of. Yeah, yeah, period.

29:30

Drew Sutton

Yeah, makes sense. Tariff stuff is definitely difficult on those types of things. So.

29:35

Anthony Fassio

Cool.

29:36

Drew Sutton

Well, now we're going to open up questions to the audience, so feel free if you have a question.

Audience Question

How do you balance margin heroes vs. laggers without losing the core of the business and brand?

29:45

Anthony Fassio

Yeah, so the question is around like when you're scaling and growing a business, how do you kind of balance the difference between the margin heroes, the margin laggers, but not losing the core of the business. Right? Yeah. And I think I've seen brands that have the administrative, the. Well, let's say that the elements that are not core to the business. When that is all figured out, then a brand scales very well. It's when you say like, hey, I've got a great product, I've got a great culture, I've got a great brand. So that's what we want to scale.

30:25

Anthony Fassio

And when you start to grow and you realize, oh, I have to spend a lot of time running around making sure that my cafes have coffee and all of a sudden that sort of support system that is there to in theory grow the brand and the company is failing, that's where the shift goes to. And so when the shift goes there, then you start to make concessions and you say like, I just can't get coffee there in enough time. And so now we have to add 30 days to our shelf life, to our expiration. And slowly but surely that's where things break down. But, but if you have the whole structure that's there to support the brand, the product and the culture, and if that's working, then you can keep focusing on the brand, product and culture.

31:15

Anthony Fassio

And so that's, we're at this stage now where we're really feeling that and we've got to build, we've got to make sure. That our infrastructure that's there to support the growth of what really matters is working. Because as we continue to grow, we spend less time on those core functions and we're spending more time on all the other sort of ancillary elements and activities in order to just make it work.

Audience Question

What have you brought from your previous roles in agriculture and food & bev that make you successful today?

31:43

Anthony Fassio

Yeah, I think so. I mean, I think the brands I've worked for have always had strong connections to the farmers and growers of the ingredients and the food. And so that's something that's just like personally passionate to me. I think, you know, farming is in my blood and it's there. And that sort of like connection to the earth is very strong.

32:09

Anthony Fassio

And I think that comes through with just like culture and how you think about your partners and producers and suppliers, how you think about your team of just like always being kind of rooted in the fact that we're all here, we're kind of on the same mission and we're going to get there at the same time. I think it's been a big element and then just we had a bunch of chickens growing up and like, you know, I always joke we would give them Christmas Day off, but they kept laying eggs and so you had no choice but to just kind of keep showing up and being there. And I think using that kind of a philosophy with like, no matter what, we've got to get it done. Not to say that you work non stop or you don't have breaks.

32:54

Anthony Fassio

It's just that the mentality of like, no matter what, you have to go collect those eggs. No matter what. We have to get past this hurdle. No matter what, we have to solve this issue with this customer where we failed them. No matter what, we're going to scale. And I think that's helped a lot. Just sort of like drive forward in an industry that can be grueling and can be just kind of low margin and just like relentless in a way has helped me just like love it and just like stay totally connected to it.

Audience Question

How do you manage the 12-15 month coffee purchasing cycle with changing consumer tastes?

33:24

Anthony Fassio

I suppose a pro in the specialty coffee industry is that our customers really look to certain brands to kind of help guide them where they should be. And so we take that very seriously. We take our position as an industry leader in coffee to help kind of navigate here's what's, here's what you should like in a way. But I will say that, you know, coffee, like wine, you may have your favorite winery, but every vintage is very different from year to year. Coffee is an agricultural product and depending on the rain and the humidity and the sun, it can change and it can change from lot to lot and it can change from year to year. And so we really can celebrate that and celebrate like, hey, you may know this particular producer, this particular coffee from Honduras. Here it is again. We love them, it's amazing. But this year it's going to taste like this.

34:32

Anthony Fassio

This year it's a little bit different and we can play a little bit with the roast and kind of help change the flavor profile a little bit. But we try very much not to do that. We really look to be farm level all the way to street level and respect what is coming from our producers and kind of just bring that forward. So that's how we manage kind of the flavor profile changes of consumers. The more difficult thing for us is we're a growing brand and we don't yet have a lot of technology and forecasting and we think the business is going to look like this in 12 months. But then all of a sudden we're going national with Whole Foods and the game changed. And that was brought about three years earlier than it was supposed to. That's where we really run into struggle of like, okay, now what do we do?

Audience Question

What do you look for in a brand to decide if it’s worth giving it a shot?

35:25

Anthony Fassio

I think, you know, Danny Meyer, who started Union Square Hospitality Group and Shake Shack, he said if the product's not good, then it's only going to go so far. And so for me and having a culinary background and just like a care of that when it comes to food and beverage, it's got to be, it's got to knock my socks off. And it was funny. At Sol and Straw, I never really liked ice cream. And I was talking to them and getting to know them and everyone's talking about the ice cream and how amazing it is and how delicious and you like these wild flavors. And so I was like, I gotta go try this.

36:09

Anthony Fassio

And I went and I tried it and like I was, my head just exploded. And I was like, this is amazing. And then the continuation and the innovation of like, hey, every month we're going to do something different. We have at least five coffees that we change every single month at Verve. And just that care and continued passion around like bringing something new and it is short lived because it's a special agricultural product and it's not going to be the same forever is something that we really celebrate. And elements like that really get me excited. And so it's got to taste and be delicious and amazing. And then I always want this like kind of this creative innovativeness to it.

Audience Question

How do you prepare your staff for the scaling and transition to new technology?

36:59

Anthony Fassio

I think you know what I find is that technology is getting more and more user friendly and so, and it's also getting a lot more intuitive. And so then it becomes more about, okay, well, who, who has the right kind of general mindset for this type of technology platform? So, like our inventory management, I have a regional manager who's just obsessed with like inventory and how much it is and their pars and they're constantly looking at it. So that's the right type of like, mindset to be able to be like, okay, you don't know technology, you don't know inventory management systems, you've never seen that. But you have the general sense that I think you're going to be really good at it. And she's crushing it. She's like, oh my God, this is amazing.

37:47

Anthony Fassio

But to be able to train on technology today I find is a lot easier than it used to be, certainly. And so just kind of looking at that and saying, okay, who's got the general sense of what the technology is intended to do or achieve? And then putting that personality paired with it, I have found has been very helpful. And this is for us internally, where we've got these people that have not used these systems before and they're amazing humans and they're great. They've been with the company for a long time. And so it's more about like, okay, well, where do we just kind of reposition them? I think if were to hire now, maybe we'd hire in certain ways of do you have experience using this platform? But even so, I think you hire the right personality for the brand and for the function, and then they can kind of learn the platforms and the technology otherwise.

Audience Question

How do you manage the cost increase from tariffs for consumer pricing?

38:45

Anthony Fassio

Yeah, questions really around like tariffs and how do we manage that increase in cost and what do we pass on to the consumer and what do we don't? And then just like the lead, the purchasing cycle and whatnot. Yeah, it's. So a funky thing happened in the coffee industry last December. Well, last year's harvest was one of the lowest ever, specifically in Brazil. We don't buy a lot of Brazilian coffee, but Brazil produces more coffee than any other country in the world. And so the commodity market is based off of Brazil. Brazil had an extreme drought and the crop last year was very low. So the price started to already kind of increase.

39:37

Anthony Fassio

Then they got heavy rains which just like wiped out sort of the next phase. And so last December, the coffee before it's roasted, it's called green coffee. Green coffee. The Cost per pound was higher than it ever had been. And so that was in December. And so already the industry, were freaking out. And then now come tariffs on top of that and there's a 50% tariff on Brazil specifically. And so this extremely high green coffee plus these extremely high tariffs have just like really like rocked the coffee industry. And everybody's kind of reeling from that right now. And so we look at tariffs as being kind of short term for us.

40:22

Anthony Fassio

We've also, Colby, our co founder has been going to Origin since the beginning and so we have in some cases 18 year relationship with producers and because we have that relationship, we've been able to manage the cost in a way we pay higher than anybody else and we have forever in the industry and we continue to. But we've been able to get certain lots of coffee that nobody else has access to, better quality, better specialized. And so that's helped. But then also on the tariff side we look at that as short term but the cost of green coffee has gone up nonetheless. Like we're passing that. We're about to do a price increase next week and it's just something that we have to continue to look at.

41:12

Anthony Fassio

There's other coffee brands that have a specific surcharge that they call it a tariff surcharge of three and a half percent and I presume they'll hold that for a while. And I suspect that surcharge will eventually go into their menu price and not just simply go away. But we're feeling it right now because right now we're starting to receive some of the crop that we purchased back in December and earlier this year. It's starting to come about but we're still working on our previous inventory.

Audience Question

How do you rectify gaps between current state and growth goals?

41:53

Anthony Fassio

The question of like, so we're growing and like here's where we want to be, right Versus like here's where we currently are and think it's two part one of like how do we know where to go and then how do we sort of like rectify the delta between the two and the tech, specifically around the tech. Well, sort of by accident we took a strategy of we're going to just go build a whole new system rather than like let's take our current system and let's see what we need to evolve, what needs to change, what needs to shift, what are the gaps that we could just plug in. And we said we'll just go build a whole new system. And so that's what we're currently doing. We're still running the old system in parallel. And we're kind of building the future of exactly what it would look like. And in a way, it's like if were starting the business today with all the experience and knowledge that we've had in the industry and in technology, what would it look like? And that's what we're building. Just like a total rebirthing. And then this is a question for DOSS.

43:04

Anthony Fassio

At some point we flip the switch and then the old system really sort of ends and the new system just kind of takes off. Which like, took me a minute there personally to get there. Right. Because it's like, well, we've got these systems and we've been there and there's data and there's all this stuff and we know how to use it. And so like, obviously we can just like contort it into something else. But then when we realized there's like 50 systems and 50 contortions that don't really go anywhere, it just became super clear that we need to just go build it from scratch and then kind of make this, make the transition on our supply chain and kind of warehouse team.

Audience Question

Can you speak to a few workflow examples where bodies get thrown at problems instead of technology solutions?

43:47

Anthony Fassio

When I first joined Verve, I noticed there were a lot of people, there are a lot of people for not a lot of, really not a lot of velocity. And I realized, oh, that person came because USPS is like its whole animal and it just like engaging with them is something. So like we kind of hired that person to deal with usps and then that person kind of got hired to like put stickers on labels because we never quite knew what kind of product were going to be roasting that day. And so that role kind of got created and then before we knew it, we grew. And so then we had this whole little team of label people just so that we could be quick and responsive because we didn't have any kind of forecasting and data flow.

44:34

Anthony Fassio

So those kind of things just kind of organically grow. But it can very quickly all of a sudden become a little bit of a monster. And then you. The first part of your question was, oh, around like process flows and specific to like finance and accounting. Yeah. And I think that is where logistics in our industry is like just this gnarly beast. And not having the accounting components really dialed in to be able to sort of track all of our logistics. We do some further manufacturing with some co manufacturers and so we've got product moving around all over the place because coffee is expensive. Verve owns it all the time. Because it's a liability for our co manufacturers and so we always own it.

45:27

Anthony Fassio

And so really understanding where our inventory is and in what phase of sort of further manufacturing it is super critical that we have a pretty good control on. It's the logistics of either doing LTL or FTL and like moving product constantly around the entire US is kind of this a little bit of a black box and it's expensive and it's also carrying our most valuable sort of inventory and losing that or not having a good sense on that. It's been a big component. So as we go through margin calculation and this is the moment of becoming honest with yourself of the logistics component per pound, the cost per pound is pretty significant. And so not having the financial or the workflow into finance and accounting, it's been sort of this crux that we're working through.

46:21

Drew Sutton

Cool. Thank you guys for the questions. We're. We'll have some time later. You'll be around doing some networking, so feel free to bring questions to Anthony. But yeah, thank you guys for the questions. Thank you guys for listening and thank you for being here. Appreciate it.

46:38

Anthony Fassio

Thank you.

00:00

Eshaan Kaul

Okay, cool. Well, welcome everybody. You know, this session will be on, you know, the future of commerce trends shaping tomorrow's market. For this one we're going to try to make it a bit more interactive, a bit more fun. So if you guys have any questions kind of throughout the panel, feel free to just raise your hand and we'll take them as they come in. You know, it's a very interesting topic here and we have Nate joining us. I'll let Nate give his intro. Yeah.

00:26

Nate Moyer

Hey everybody, my name is Nate Moyer. I co-head the disruptive commerce and Internet practice within the innovation economy at J.P. Morgan. Pleasure to meet you.

00:34

Eshaan Kaul

Absolutely amazing to have you here. I guess to really get started from your perspective, what does disruptive commerce mean or how would you define that?

00:45

Nate Moyer

This is like you're starting with the hard questions first. I was actually polling a few people out there to see how they would define it. But the irony is that it's hard to define, but you know it when you see it is kind of what I say. And I think that's always challenging when you run a group that you don't really know the true definition. So we did come up with one and that is generally institutionally backed, high growth consumer firms. And if you think about like subsectors that would be, you know, pet food, bev, beauty, wellness and we do some retail too, in addition to some lifestyle and fitness. So anything you're, you know, eating, drinking, feeding your pet or you know, visiting in sort of a high growth retail type format.

01:26

Nate Moyer

We created the category because what were seeing from our clients at J.P. Morgan is that this set, again sort of loosely defined, had very specific needs. That was a little bit different than like let's say the average company growing at 3% GDP. So they required faster, you know, products and services that a bank like J.P. Morgan can offer. They needed advice and they needed it quick because they were scaling so fast. We try to think of things of like helping companies look around the corner and what we found is that it needed a specialized group of people. So we stood up a group to address that. And so again it's like I can't give you like the definition of like 25% growth rate or you know, only addressing the VMS channel. But you know it when you see it.

02:11

Eshaan Kaul

Yeah, that makes a ton of sense, honestly. Yeah, I mean, honestly, the world that we live in right now is so, you know, it changes so fast, right? Things are always evolving. Things are always changing. What would you say are like Some of these macro forces that are being applied today and like what are really the biggest changes that it's driving?

02:32

Nate Moyer

The macro in my opinion is like a really interesting topic. And if you look at that 10,000 foot level data, you know, it tells a particular picture. I mean, I think we might argue that's not exactly reality. And what I mean by that is that at the macro, I mean you're looking at this pressured consumer. I mean you've got unemployment, we're seeing, at J.P. Morgan, we have a lot of data. So we see like card balances are higher, deposits are lower. You see it in the consumer sentiment survey and it's trending down. But the reality is like people are spending and that's what's like so interesting. And so like we ask the question, well, who are these people?

03:15

Nate Moyer

And what you find is that the 10% of income earners are spending 50% of the spend or they account for 50% of the spend and that the bottom 60% account for 20. And so like, think about that like bifurcation. And it's just so interesting when you're a consumer business and you're trying to target your ideal customer. I always think about it as you're kind of looking at these two segments and it's like, well, who is that person in the 10% that speaks to your brand or your product and how are you going to target them in the best way possible because they're the ones spending all the money. The rest of that spend is spread out across, well, 90% of everybody else. And I think the question is how do you get to them?

04:00

Nate Moyer

And you're looking at a lot of those spenders and they're young, they're generations younger than us, generations younger than millennials, and they're using the next phases of commerce. And that how and who is going to be really important to target those folks for the brands that we work with and a lot of the brands in the room.

04:19

Eshaan Kaul

Yeah, I feel like with that there's a couple different strategies that people can kind of deploy. Like people have multiple sub brands which target like different, you know, geographic or, you know, wealth kind of segments. Right. They'll do ones that are more high end brands like I guess what other strategies or ways of approaching that problem do you see that are quite effective?

04:43

Nate Moyer

Yeah, I mean that's, this is like, this is the heart of it all. Like this is a tough, you know, I mean it's really understanding that customer. And I think like, you know, when you're A company and you're looking at your band of, let's say it's like 10 different customer profiles is like, what is that message for each one? And I know that throughout this conversation and others that people are having, that I heard here is like, you know, AI is going to be a part of that because brands have to think through those questions that you posed and really find a way to hone in on that. These are, I mean generally small brands, scrappy, maybe raise some institutional capital, but that's earmark for particular things.

05:22

Nate Moyer

Like how are you gonna address those 10 customer segments without utilizing some piece of technology to make it most efficient and get that best message out to the right people?

05:31

Eshaan Kaul

Yeah, I mean, kind of going off of that, it goes in like these consumer expectations and how you kind of even, you know, target your brand towards these individuals. Right. How do you think through that? Like how do you understand what these consumer expectations are and how they're evolving over time?

05:50

Nate Moyer

They're evolving quickly and they'll probably continue to evolve. I'd say in my opinion that the expectations of customers are as high as they've ever been. And I think part of that is that they're quite informed. I mean there is a wealth of data out there that people can go obtain and form an opinion around. I think I have like a personal belief, if that's what you want to call it, that I think they're more informed than they really are and they're picking up on information that either they don't have the full understanding or they don't quite understand what they're gathering. From an expectation standpoint, I think product, you're still looking at sort of these macro trends that have carried over the last, let's just call it decade of health and wellness. The better for you.

06:40

Nate Moyer

A lot of the plant based things, I mean people want health, they want it to be functional, they want to see where it's coming from, they want it ethically sourced. And I think from a platform side, you know, you have to meet these customers where they are and that means mobile online. You have to provide an elevated experience. And I think customers today, like you have to transact in a sound, safe, efficient and in some cases global manner. If you're looking at, I always use like, sort of like examples of this, but just last week we had a company file and another company go public. One was Once Upon a Farm, which I think is a super interesting story. So you just talk about sustainability and ethically sourced.

07:27

Nate Moyer

I mean this company has over 100 or just under 100 co-manage where you can read about what they're doing, what the product is. And this is a non discretionary, you know, purchase for these folks, like children, like you know, they need to read that label and they need to see like where this product is coming from and who's manufacturing and who's developing it, where the inputs are coming from. There's another point and this is all public by the way, these points because it's from their S1 but talk about meeting the customer where they're at Once upon a farm, 40% of their sales come from a click. And for a CPG brand for those out there, like that's super high.

08:04

Nate Moyer

And they make a point in this one to talk about the competitive set and the Competitive set's at 10% so they're 4x more efficient in getting that customer to spend. So like, and if you think about that from like the DTC kind of landscape, like you're getting all that data about your customer you're smarter about, you can target the next product to them and then from the retailer side if it's that clicks going through their rails, that's more efficient and more cost effective for the retailer. So they're liking that too. So when you talk about like expectations and how companies are solving them, I thought that was like a really good example of one and it's benefiting them and it's allowing that company to differentiate themselves and address the equity capital markets in this case and you know, raise significant capital from institutional investors.

08:49

Nate Moyer

Yeah.

08:49

Eshaan Kaul

Wow, that's an amazing example. I actually was just looking at that company, you know, filing their S1 which is absolutely insane. I don't think we've seen like a CPG company go public in quite some time.

09:01

Nate Moyer

It's amazing. And, and you know, they've got the growth story and like what makes it even more amazing and I'm probably going to butcher the number, so I won't say it exactly, but they're not profitable. And so like you just said what's the last CPG company that went public? And like I might answer, yeah, maybe there's one or two. But like what's the last one that went public that's not profitable? Yeah, and that's really interesting.

09:22

Eshaan Kaul

Yeah, I guess with all these trends and you know, all of this information that's constantly coming out, how do you kind of keep on top of all these trends like personally? And then what would be your recommendation for others to kind of stay on top of this and remove you know, all of the random noise from what's actually real.

09:41

Nate Moyer

I'm laughing. I just turned 45. So me keeping up with the trends personally is about as funny as it's going to get. We do have a wealth of data at J.P. Morgan. It's like a little bit of the like embarrassment of riches. You know, for a chase card perspective. We're in one of every two households from a chase card perspective. Like we process merchant card transactions that all the retailers that you guys know, Starbucks is a good example of that. So like every card you scan in a store, we see that data, we actually run the wallet for them. So we're seeing the ins and outs of that flow which I think is pretty interesting.

10:15

Nate Moyer

If you guys are JP Morgan clients or prospective clients that have a relationship with us, you have access to a platform called Morgan Markets and that's our equity analyst portal. So you can learn a lot there. So again there's so much. But to get to your question about kind of sifting through the noise. Cause that's a lot, right? And it is at kind of that 10,000 foot level. We use a lot of anecdotal evidence. We have 1200 clients in my disruptive commerce and Internet business. So we look at that data that other I described earlier and then we kind of kick the tires with real life examples of the clients.

10:51

Nate Moyer

And so we can either learn it anecdotally if we're evaluating a new, let's call it a credit ask or we might call them up or we might do a panel like this and learn something. And I think that's so important and this is a dated story but I think that it's worth telling. And do you guys remember like the better for you ice cream craze? And that's what everybody talked about. Halo. I wasn't going to use any names but we have Arctic Zero Light and Halo Light and then some of the like the strategics brands. But think about the energy I'm picking on you now because like you said it we're going open forum here. But think about all the energy that like poured into that space and the capital and the interest and the retailer interest clearing out shelf space and everything.

11:36

Nate Moyer

And the reality was is that the product kind of, I should say the marketing beat out the product. In that case again I'm trying to be really sensitive because they're real businesses and they didn't command an aggregate across those companies like a multi billion dollar valuation and it was just multi hundreds which is fine. It's better than I'll ever do. But, like, it's just such an interesting story because, like, when were looking at all that, we tasted the product and every time someone came back and was like, I don't know, I think I'm still going to reach for the Ben and Jerry's because I'd rather have the third. Is that your.

12:11

Eshaan Kaul

Yeah, I love Ben and Jerry's.

12:12

Nate Moyer

Okay, what's your favorite? I'm flipping the script.

12:15

Eshaan Kaul

What's the favorite flavor, man? Milk and cookies.

12:17

Nate Moyer

There we go. Okay, mine's mint chocolate chip, but right. Like, it just wasn't the category that everybody thought. And I thought it was so interesting because every single data pointed to that it was going to be the next, you know, Microsoft. And like, it. It wasn't because repeat purchases just didn't happen. And. Okay, like, so you can eat a pint of ice cream. That. That actually sounds amazing for the cookies and cream thing, but 280 calories, 4 grams sugar, whatever, or 10 grams protein. Like, I don't know, it just wasn't enough. So anyway, thanks for the story, guys. This is an example of that, of sifting through all that data and like, you just really have to kick the tires. And a consumer, like, you have to talk to the customer.

12:58

Eshaan Kaul

Yeah. Makes a ton of sense. I feel like in this world that we live in, with information just readily available at all times, you kind of have to take that step back and look for the anecdotal data. And almost always when there's this mismatch from anecdotal data to just like the raw data, anecdotal is almost always correct. And that's kind of where you have to lean towards.

13:19

Nate Moyer

Totally.

13:20

Eshaan Kaul

That's what I've seen in my experience.

13:21

Nate Moyer

But I think that's like where the consumer is wrong and there's all this information, but I think that maybe not all wrong, but part wrong. And if you look at. And I'm going to again, like, botch the data, but it's something like you'd rather give a negative comment than a positive one. And then I go read reviews of high growth CPG businesses and 99% of them are positive. And I'm like, well, this doesn't match like this, you know, this data that everyone says is like, you lead with the negative. So I think it's just interesting you're looking at the data.

13:51

Eshaan Kaul

Yeah, absolutely. I guess shifting more to like, the investment side and, you know, the investment landscape in general. How would you say, like, the investor priorities have shifted in disruptive commerce over the past like couple years.

14:03

Nate Moyer

Yeah, I'd probably like take the couple years and like multiply it by two and just go like a few years before. COVID Sure. Yeah. And actually Hannah and I were talking about this earlier but like, oh yeah, there she is. I'll probably have her come up and you know, show me up here pretty soon here. But the investment dollars that poured into there came from early stage investors like VCs which were non-traditional, like sort of CPG investors and saw angle with tech which was like using online tools and using data to build a real business and capture a cheaper customer which ultimately didn't pan out. And it seemed like every incremental customer became more expensive. And then Apple changed the policies that kind of, you know, messed that up as well.

14:55

Nate Moyer

And so if you look at it again like back to the ice cream example, like I'm not trying to like talk bad about any of these, they're all great companies. It's just the value, the valuation expectations were off. But if you look at that aggregate valuation from peak to now, I'd say that if you pulled out any given company it's down 70% to maybe even 95% if you're looking at something like the alternative protein companies. And so investors today I think have gone back to like a back to basics model. And you know that profit or the growth at all costs is now turned to like you must be profitable. It used to be 24 months, I'd now argue is probably 12 to 18 months in which you have to have like a clear visibility into that.

15:34

Nate Moyer

I'd say that investors, and we'll just go slash strategics are looking at deals that are now probably 100 million plus or triple digit million plus, maybe even 200 depending on the business model. Whereas before, like we would get a lot of interest from like on my platform from like 25 to $50 million in revenue. I don't think you see that as much anymore. And people really need a proven concept. And just like we're kicking the tires around the data, like they're really kicking the tires around these potential acquisition targets.

16:02

Nate Moyer

I think if you can touch on what the customer wants and you've checked the boxes that I've sort of laid out like the financial KPIs and like scale KPIs, I think the question that those investors will ask is like will these businesses, despite checking all these boxes, be able to capture like the new methods of commerce that we are Seeing and that we will see. To me that's like the next question.

16:30

Eshaan Kaul

That's interesting. Do you think there is like this first mover advantage then like for these new trends that are kind of happening and being shaped and all this kind of stuff, does that first mover advantage kind of still exist in the CPG food and beverage kind of side? Or is that not really a thing and people are kind of, it's kind of the second, third, fourth, fifth people that are learning from these mistakes and the market's actually shaping more over time. And you kind of really want to see this form before you're making these investments. Or is this like not really a reality anymore?

16:58

Nate Moyer

Yeah, I mean that's a really good question and probably like answered with anecdotes. So where it's working is like David. Right. So you know, top and or best in class, like sugar to protein ratio, they just bought their ip. Right. So like if you've got the barriers to entry figured out and you've created your own moat, first mover, like I'm all in. As we know with cpg, like building that moat is difficult. Yeah. And so being the first person out of the gate and like having everybody learn from their mistakes or raise the most capital or you know, hit the shelves as fast as possible and probably spread out too thin, I think could be difficult. And so I would be very cautious about that.

17:48

Eshaan Kaul

Makes sense. Okay, which segments would you say? Like, you know, D2C marketplaces, all this kind of stuff for like especially hot right now.

17:58

Nate Moyer

I mean they're all hot. I don't know if there's any like heads nodding, but I think they're all growing at a double digit CAGR estimated over the next nine to ten years. I think you just. Despite the fact that like A marketplaces or I'm sure like social commerce or B2B2C is like what you're referring to. You know, these are double digit keggers with high expectations and hundreds of millions of dollars of pouring into that. If you just look at the big three TikTok shop, Walmart.com, amazon, I mean they're investing hundreds of millions of dollars they're doing. Amazon doesn't break out their figures completely. But like if you triangulate enough like I mean you're talking about over $300 billion of transaction value, gross merchandise value in 2024. They haven't published 25.5. I mean it's just amazing. I just, I wouldn't sleep on DTC.

18:47

Nate Moyer

Because the whole purpose of that, even though the VCs kind of got it wrong a handful of years ago, is that you own that customer and you own that journey from when that customer interacts with your brand through the purchase journey, through everything. And data is so valuable that if you lose it out to the marketplaces or you just go social commerce, you're not there all the way. And that's going to have an implication.

19:16

Eshaan Kaul

Makes sense. Yeah. I mean, I don't think we could have this conversation without talking about AI, so.

19:23

Nate Moyer

I knew it, I knew it was coming up. I warned you guys.

19:26

Eshaan Kaul

So how would you say like AI is kind of reshaping this space?

19:32

Nate Moyer

Super hot topic, obviously. Like we could. There's so many different facets, like, given that this is like more of a disruptive commerce like CPG in nature, there's a handful of I guess, facets of AI that I think one are super interesting and two, that I think we should all strive to understand or at least improve on if we're doing it already. Because I think it'll, it's the game changer. One of those is just, it's the content.

20:01

Eshaan Kaul

AI.

20:02

Nate Moyer

And so like AI driven content I think is so interesting and I think we talked about it before, like different customer profiles. I think the winner in that space is if you can get the best message to your customer by doing it efficiently. And AI is great at that. And so if you can get the one message out about your brand or your value proposition and can multiply that and you know your customer, which is another part of it, I think you're going to be in a really good spot. I think this predictive analytics is really interesting too. And there's a lot of talk about that. I think this is actually maybe the furthest of a handful of the like more CPG driven categories.

20:42

Nate Moyer

But how many times for like those in the audience are just anecdotally like, is the hero SKU like out of stock? When you're going to the webpage and it's like your favorite product or the product that you just heard about and you go. And it's like. And I was, I always think it's like interesting when they're like four times sold out and you're just like, geez, didn't you let guys learn on the second or third time to like make more? And then you flip it and then you're like, when is the non hero skew like in stock? And if you're in retail and you Discount it because you're a growing company and working capital matters like what does that mean for your brand? And now you've like lost your top line.

21:23

Nate Moyer

You've positioned your brand in a way that was not intended, that one might argue negative or neutral at best. And I don't know. So I think that those tools will be huge. So that's really where I think we should be focused on. And if you add another, I guess it's like the hyper personalization at scale where. And this is targeting. You got the best message out now. This is your message to your best customer. And if you can figure out who you need to go to and make that experience, it's like what we talked about. This is what the customer is expecting. Now in this evolved customer, they've got everything else free shipping, free. This, it comes fast, it comes immediate.

22:14

Nate Moyer

You're just really going to have to hone in that message to that person and it's just going to be critical and you can succeed without it. But that's, I think you have to think of things in like whether it's a vacuum or in like a super competitive dynamics in an industry that carries little moat outside of marketing. Like you're not just like in a vacuum competing like you're competing against everyone else. So if everybody else starts getting good at this like it's gonna be a problem. I think it's just a matter of what were talking about upstairs, which I thought it was like really interesting. Like what can you take on? It's like if it's one step back versus two steps forward, like yeah, that's a great trade.

22:52

Nate Moyer

Until like you're doing three things at once and it's three steps back and you're a small company and you're like, okay, well how am I going to dig out of this? And then it might be too late.

23:01

Eshaan Kaul

Yeah, yeah. It's honestly very interesting because there's like this whole phenomenon where you're talking about something or just thinking about something and somehow it pops up on like Instagram or Facebook and you get an advertisement there. Yeah. And it's clearly just very good targeting. And like some companies have this just like super, super dialed in.

23:20

Nate Moyer

We do like a pipeline. Sorry to interrupt. Like we do a pipeline review in my Instagram's like, you know every client that we work with, I'm like, you guys need to pay me more. I'm like broke trying all my clients products. Like after this portfolio review, I can't even help myself. Sorry.

23:33

Eshaan Kaul

Yeah. I mean, honestly, some people do such a good job where I'm like, I don't know. I feel like I'm pretty difficult to convince. There's, like, a lot of things where I'm like, I don't need to try things. I don't need to try this new stuff, whatever. But it just keeps popping up, like, the exact right time. Like, damn, I kind of want to get it now. It's like, it's really interesting that, like, if you just keep hitting them over and over again and kind of at the right time with different messages, one of them is bound to land. Because, like, I've seen, like, this one gummy. It's called Create. It's like a creatine gummy. And, you know, I'm not even working out that much right now, but somehow they've framed it.

24:08

Nate Moyer

I wouldn't have guessed. Yeah.

24:10

Eshaan Kaul

Somehow they framed it as if this is just like a daily creatine thing you should just take and it's good for your health. But that was just one of the touch points out of, like, maybe 20. Yeah. And that was enough to be like, maybe I should just take it every day. Why not?

24:23

Nate Moyer

Right?

24:24

Eshaan Kaul

Like, that's.

24:24

Nate Moyer

No, I totally. I'm, like, strong until the fifth time. And then I'm like, let's just do it. Yeah. Yeah. But you guys are. We've been flip. I get to flip the script, too, right? Because you were going to go out to the audience. So I get to ask you questions, too. Like at DOSS. Like, this is something that you guys are considering all the time and already doing so, like. Like, what's your take on it?

24:47

Eshaan Kaul

Yeah. With AI, Honestly, our take is that you really need a strong foundation.

24:53

Nate Moyer

Right.

24:54

Eshaan Kaul

There is. There is AI. You can kind of tack on top of random other systems, and it will give you some sort of lift and be kind of helpful. And it's more, like, cool and like a party trick than anything else. And then there's like, actual systems that are built for AI and built with AI in mind, and those systems can truly transform the way you work. And that's effectively what we've gone and done at DOSS. We've laid this really solid foundation, and when you embed it into, you know, companies, it allows you to actually have transformational change across the entire Org. And more of this will come out over time as we develop it. But it's going to be pretty crazy in the. In the future, you know, in the coming year, where we develop a lot of really cool AI.

25:40

Eshaan Kaul

You Know things where actual like jobs are getting augmented in sense of like they don't have to do a lot of really manual stuff that they should not be doing and they'll get a lot of really cool insights from a lot of data and the data is actually clean and it's going to be really cool to see once you've laid a really solid foundation. So I think that's probably the most important thing is having a solid foundation, clean master data, all of this kind of stuff. If you can set it up well then you can utilize AI more effectively.

26:08

Nate Moyer

Yeah, I saw the Walmart CEO, I think it was last week, said that I will change every job in their organization at a company like that. I mean that's a pretty impactful statement.

26:20

Eshaan Kaul

Yeah.

26:20

Nate Moyer

And you know, you read past the headline and they're training their employees to basically work differently. And my takeaway from that was that it will change actually like the business model and like the paradigm in which like that business operates including like people and how they work on a day to day basis. And I think from a DOSS perspective it's like earlier stage startup, younger people adaptable which is I'm sure a benefit and you guys feel that and can stay ahead of the trend. But I do. Cpg, you know, historically is a pretty like it's a legacy industry and we're competing against legacy players. It'll be really interesting to see how the overall industry reacts. I less worried about disruptive commerce specifically because of the nature of our loose definition.

27:11

Nate Moyer

But it's just such an impactful comment where I was like wow, this is actually he's just acknowledging a full like paradigm shift. Yeah, it's not like oh we're going to launch a marketplace. It's like he's basically just saying the entire Walmart will be changed.

27:25

Eshaan Kaul

Yeah, yeah, it's really interesting honestly and like perfect segue into the next question. So how would you say like these incumbents are adapting or maybe they're not, you know, to all these disruptors that are popping up?

27:39

Nate Moyer

Yeah, I mean it'd be interesting to hear if anybody has any other anecdotal experience. But I think the incumbents, or let's just call it like you know, entrenched strategics. And I'm just thinking about like kind of cpg, like retail right now has historically found it pretty difficult. My gut is that it will continue to be difficult because being authentic as part of your brand is so important and more important than ever I might argue. And that seems like the one hurdle that they can't just get over. I mean, I think we all know like they've got the resources. I mean they've got the cash, they've got the people, they've got the rails, you know, they've got the supplier and like distribution network. I mean they've checked every box.

28:28

Nate Moyer

But they somehow can't cross the chasm of releasing a product where everybody is, you know, fervently excited about. So I think it will continue to be difficult. I just think that what we're seeing and we talked a little bit about it upstairs, it's like it's not going to be the 20, it's the sub, sort of 100 or sub $50 billion businesses. Like, it's just that you need to prove more now and then they'll go after you. And then you just saw that with like the Pepsi Poppy deal, lesser evil Hershey, I mean it's all happening Celsius, like there are deals getting done and if you look at those brands, I mean they stand for something. They actually all fall under the umbrella of sort of the better for you or function or both. And so they've rode that wave, which is a powerful one.

29:18

Nate Moyer

And all those businesses were scaled too. Again, it's not the $50 million brand these days.

29:24

Eshaan Kaul

There's this mass consolidation in food and beverage. These massive companies, Mars, Hershey's, whatever, Pepsi, just buy up all the incumbents when they reach just certain percentage market share. Do you think like that's just going to become the norm? They're going to kind of keep going down? Or is this like, do you think CPG brands or food and beverage brands can fight this and still go public? Like a Celsius or something like that?

29:48

Nate Moyer

Yeah, like Once Upon a Farm. I still think it'll be few and far between. Like they, those strategics carry so much value and again like the rails and the people and just the synergies that they bring to it all. I think it's a, it'll be a future that will continue to exist and it's probably will look a lot like today. Yeah, I mean that's kind of my take on it. I just like further consolidation I think is just going to be really tough. And I think that those behemoths count on us collectively to deliver the next, you know, X. And whether that's standalone, which would be amazing if it can be. I mean the public markets have been treated these companies, I shouldn't say unfair, they've. But they've really cut them down.

30:34

Eshaan Kaul

To size.

30:35

Nate Moyer

And so if you're the, you know, the CPG brand, I don't even know how willing you are to go test it. And so that's kind of another question too. And it's just a tough road out there. On a quarterly basis, I guess it might change from quarterly to. But you know, right, like that's a, it's a tough road out there. I mean there's a lot that you have to address.

30:55

Eshaan Kaul

Yeah, yeah, I guess going back to like the founder disruptor kind of side. Like what are some of these like common scaling mistakes that you see some operators make? And what advice would you kind of give them to get them on the right track maybe, or some pitfalls you've seen?

31:12

Nate Moyer

Yeah, I won't like, I'll leave out like the specific pitfalls but they're like categorically. I think it's that step function scaling issue. And you'll see it at like, and you'll see it at other stages. This is just my kind of take. But like, or it's a good way to think about it like 0 to 20 to 50, 50 to 100 and like, let's just call it 100 plus. And we talked about like a paradigm shift. I feel like those are like mini paradigm shifts within a company where it might be your management team, your operations team, it might be your, you know, partners, synergistic partners that are helping build your brand.

31:50

Nate Moyer

The founder that can take the company from 0 to 20 is not likely the founder that's going to build this business to the hundred plus and like the once upon a farm like public story. And we talk a lot about that. And after the happy hour, during the happy hour, I'd love to hear you guys thoughts, but loaning $100 million to a business that doesn't have the right finance team, but super passionate entrepreneurs is like, that's not like the J.P. morgan game. Bringing in a strategic. Despite the fact that they have all these expertise to invest in a brand that's not run in a professional way to their standards and like, you know, there's like operating it and then to their standards and it's real and we see it a lot. And so it's also hard to make that break.

32:43

Nate Moyer

So, so who's telling that founder, hey, like let's find you a role as a president. And that conversation I've seen get pretty tricky. So I think that's one thing to just look out for whether you're on like the investor side or Sort of the partnership side from lending or operational capabilities is we think about that a lot and it comes up a lot from a risk perspective. And were chatting about this not long ago but like think about like the last five years that we've all had to deal with COVID and this really affected CPG brands too. But like Covid just recently, the tariffs, geopolitical concerns, I mean it's like mind boggling what people have been through. And I'm borrowing the saying, but risk is what's left. When you've thought of everything. And inherently disruptive commerce are risky businesses.

33:40

Nate Moyer

So when you've thought of everything like you've come up with your plan to address Covid, which no one did, you've already come up with your plan to address tariffs, which few people did in my experience from our portfolio. And so you look at this like world of risk that's just there if you've done everything right and address the new risks that come up and then look at the new risks that have come up and these are like showstoppers, like I mean terrorists, full showstopper. And that's. This is not advice, this is just like what's happening. I wish I had advice, but you just have to think through that.

34:18

Nate Moyer

And even a big business like J.P. Morgan, 320,000 people and global business, largest bank like we do, we basically cut 20% of plan and see how we react to that and stress test the four letter word out of the business. And we're hearing that from our leaders down. And I just think that's a very appropriate way to go. Especially if you think that the past could be our future which was a lot of turmoil.

34:47

Eshaan Kaul

Well that perfectly.

34:49

Nate Moyer

Was that super positive?

34:50

Eshaan Kaul

Yeah, that was great.

34:54

Nate Moyer

It says zero. As I'm like we're all dead.

34:58

Eshaan Kaul

Well, I mean it goes perfectly into the next question which hopefully isn't, you know, equally as grim. I guess like looking five years out, right. This is really like the, you know, I guess billion dollar question, right? Five years out. What does disruptive commerce look like to you?

35:12

Nate Moyer

We gotta define it first, right? Yeah, we're gonna need everybody's help on that. I think one thing that I like think about which would be exciting and again like maybe we're all too old to think through it, but I'm just convinced that things are going to jump off the page a little more and be less two dimensional. I'm not really sure what that means but if we're headed towards this new models of commerce and people are doing things differently and it's people half our age that are doing them. I just can't see a world where we're still whipping flat things out of our pockets and transacting. And so again, for me, it's hard to fathom the AR kind of goggles. And I know that Apple's launch didn't go that well, but fast forward five years, who knows? I think about five years.

36:01

Nate Moyer

I didn't have a kid five years ago. Covid didn't happen two months ago. This is kind of crazy now that we're opening up, but I had spine surgery two months ago. I didn't know that I needed that. And I didn't live in Park City two months ago. I lived in la. So like that's two months. Like five years is going to be crazy. But I do think that things will. It just seems a little two dimensional based on the audience that is now transacting and engaging with brands. And maybe we need everybody's help to imagine what that non two dimensional world is. But I just, I think it'll look a little. Look and feel and we'll interact with things just like a little bit differently than today.

36:42

Eshaan Kaul

Yeah, when I think about that, I see like, I see Wall E, you know, like all the scenes from Wall E where people are just floating around.

36:49

Nate Moyer

Oh, yeah.

36:50

Eshaan Kaul

And there's like this screen in front of you. Yeah, it's. It's scary stuff. Okay, cool.

36:56

Nate Moyer

Does we ended it on a bad note again? No, no, it's all good. It's all good.

36:59

Eshaan Kaul

That's, that's way far in the future.

37:00

Nate Moyer

Okay, good. Let's say 50 years.

37:02

Eshaan Kaul

Yeah.

37:02

Nate Moyer

Because none of those people could walk, right? It's terrible.

37:06

Eshaan Kaul

Yeah. Everybody take creatine gummies? You guys will be just fine.

37:09

Nate Moyer

Don't worry about it.

37:11

Eshaan Kaul

All right, we'll open up some questions. Anybody have any questions for Nate?

Audience Question

How do you analyze the strategy for investing in new commerce platforms and growth trajectories?

37:19

Nate Moyer

If you just look at sort of the investment alone in it, which is like sort of the numbers that are easier for us to track. And then on the anecdotal side, those are a little harder because they're newer models and we haven't engaged with them fully. But if you look at on the capital side and look at just some of the estimates that like the McKinseys of the world are putting out with like, I think it's like mid 20% keggers, like for 10 years. And you look at a pattern IPO, 40% growth, billion dollar plus revenue, sole purpose engaging brands and making it easier for companies to do that and transact. I just, I'm not sure I see another world where like those don't play a meaningful role in the everyday consumers experience. I just, I'm just not quite sure if it's like tomorrow or a year from now.

Audience Question

What operating metrics do you pay the most attention to beyond the obvious ones like capital or TP? How should we think about market performance across SEO, social, and similar growth strategies?

38:14

Nate Moyer

Yeah, from a like a financial KPI perspective, I mean definitely depends on like the segment where like beauty is going to, I mean we focus a lot on gross margin too. And like you know, I know I gave my intro and I probably didn't give it complete now that you're asking this question. So we are lenders, so we do look at things a little bit differently than our equity side. We do early stage loans, just have like an equity link component and like compete with like sort of an svb if that's the easiest way to like think through it. But gross margins like mean a lot to us. And I know you didn't mention that.

38:48

Nate Moyer

And like if you think about that as like how a company scales, like, I mean it's critically important, right? Because like all of a sudden if you're scaled enough and you've created enough of a company customer base and you can, and it depends on your accounting too but if you can kick out that marketing function then you see like the true sort of operating rhythms of that business and like that's going to be really important to the strategics too. And so like usually that's like one of the first questions and so a lot of people can chase growth which is another like financial metric which I know you didn't bring up but that's at the expense of another like which I think is like a more critical one for the LLM question. I'm not, I'm not sure, I, I, I don't know yet.

39:31

Nate Moyer

Again like we're seeing things kind of on the lending side in that realm, like similar to the other question just a little bit later. What I am curious about is if we do have a plan to address how to target customers, like will it change? And I think people thought through that through the traditional CAC and then Apple ships it and the next day it's changed. And so whatever my answer is, I'd probably have an asterisk next to it and be like beware of what's around the corner on that one before you plow everything as an investor into the next model.

Audience Question

Any advice for early-stage or pre-revenue brands on inventory financing and what lenders look for?

40:11

Nate Moyer

I mean really good question and we get it a lot. And so we do work with earlier stage brands and in the little breakout session above because we just talked about like some of the venture loans like we do work with pre revenue companies. They have like very specific reasons why we're working with them. Whether it's like an investor that we're an exceptionally close with or you know, they've raised a large enough amount of capital where risk is kind of like negated. Right. Because they have sitting on $50 million of liquidity and you're like, well I can lend you five. Yeah, yeah, exactly, yeah. Which you know, we have a handful of those.

40:50

Nate Moyer

But what I would tell a brand that is either like not eligible at that level or commanding that level of attention through, you know, their influencers or followers is to have like a tightened up ship and like know what you're asking for, know how much. That's a tricky one because like it's, you're like, well I don't want to dilute myself. But then like you got to pay interest and principal at some point and like and that starts to add up. I mean that's like you go sideways on that and that's kind of losing the company. J.P. morgan, you know, we're a global regulated bank, as everybody knows, we are playing at, I would say on the like sort of risk scale outside of that venture component, like we're playing on the lower risk side.

41:34

Nate Moyer

There are a handful of players that generally we'll make an introduction to or suggest and be like, hey, these guys are really good at that 5 to $10 million segment in this space. Generally we stay pretty close to them so we know that they bank the next VMS company that's similar, has a similar business model but we're always like down, it's so casual. We're always down to like give advice to folks and be like, and I'm a big fan of art of the possible. And so like if you're a $20 million brand and in your head you're a $50 million brand tomorrow, which is what you show on paper. Like we can do some pretty interesting math and describe like what it's like to work with us if that's what you, I don't even know if aspire, if that's what you plan to do.

42:18

Nate Moyer

And there's plenty of other really great capital solutions and some of those are equity and some of those are debt and some of those are non bank debt and it's not a one size fit all. And we are more than happy and willing to help people along that journey because it builds goodwill for us and we're generally just interested in learning about the business and the Founders,

Audience Question

With more brands selling through Amazon and other online platforms, how are investors adjusting traditional inventory financing and risk models?

42:40

Nate Moyer

if I'm thinking about it correctly, we're actually making some adjustments to that because so many of our companies now work with Amazon. And so you're sort of bending the traditional way of leveraging AR and inventory and margining that to get some sort of availability and utilizing some of that Amazon inventory, which is basically going like this with like no ar.

43:08

Nate Moyer

And so we can see that through data, which is interesting and come to a conclusion where, you know, this inventory is turning super fast. Amazon may or may not own it. We feel pretty confident that it will be gone if they don't replace it because it's a great product and a great brand and great people running it. And so I will say that our model is changing because of these new sort of commerce models. I think my. I don't know, I fear, I guess, but like a consideration that I would have is like, that took us some time. People have been selling Amazon for a while and we're now just starting to like dip our toe and like being a little bit more creative. If you guys all know how fast all this stuff is going.

43:48

Nate Moyer

If like Amazon and the other, you know, Walmart.com and TikTok, like if you, if we have to look at it differently, I do kind of worry about how fast it'll be till we have a really great view and we're not behind the eight ball. And I'm sure that there'll be a competitor much like you see in the fintech space, doing something really interesting there.

Audience Question

How should brands balance building a strong product moat with maintaining margins, and decide where to focus among competing channels?

44:24

Nate Moyer

So it's a really good question. I think it's up to us and my team to stay ahead of that and get really smart and guide our risk partners, the keepers of capital, to make bets where we feel like the risk is appropriate. That's the hardest part. And that was a little bit. That's the easy answer. Cause I just kicked the can down the road. But I mean, that's what everybody's wrestling with.

44:37

Nate Moyer

And so a lot of times what you'll see is folks will get really honed in one channel and prove themselves and know their customer and know who they are as a brand and really create an environment where like, you know, they've got a plan, they're through. Let's pick on like retail for an example. You know, again, they know who they are. There's a particular gross margin profile for that. And they might be like, hey, we're ready for that next step because we've scaled enough or we're going to raise another piece of capital. They could raise that because they proved out their retail presence. I mean what you've seen over the last. I shouldn't have started with retail, I should have started with DTC because that's the easiest to kind of start on...

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