Latest / Talk Commerce / Innovating ERP Solutions for Small Brands with Kyle Hency
Transcript
- Brent Peterson (00:02.124) Welcome to this Hawaiian shirt themed episode of Talk Commerce. Today I have Kyle Hensey, who is the CEO of Good Day Software, and it is gonna be a good day for an interview, Kyle, right? Give us your, go ahead, do an introduction for yourself. Tell us your day-to-day role and one of your passions. Kyle Hency (00:02.897) you Kyle Hency (00:17.166) Amen. Every day is a good day. Kyle Hency (00:24.971) Absolutely, so Kyle Henze, I'm one of the co-founders and CEO at Good Day Software. In former life, I was one of the co-founders and the CEO at Chabis. So over the last kind of 15 years, been in this, you know, mostly Shopify ecosystem building, very much identify as a builder. As I think about my passions in life, they're kind of twofold. I was fortunate that enough that we sold Chubbies in 2021, I was able to take a bunch of time off. I found that incredibly boring. And truly, I have a lot of passion in my life around just building, building and competing. And secondarily, I'll say, I have three young kids, seven, five and two. And I am just getting into the age where they're starting to compete in sports and finding myself getting more and more engaged. and just remembering that I grew up playing sports and loving that kind of camaraderie. so I feel myself getting pulled back into that and elements of my passion coming out. Brent Peterson (01:31.21) That's awesome. Yeah, good. I appreciate that. And my kids are older than that. my kids are my son is anyways, going to run his first marathon with me this fall. So I'm not sure if he wanted to do it, but it was sort of a challenge and he's going to do it anyways. Before we jump. Yeah, thank you. Before we. Kyle Hency (01:51.942) Good on both of you for diving in. That is a real challenge. Brent Peterson (01:58.914) go into content, we're gonna talk a little bit about Chubbies and maybe I'll have a question. Did you wanna call it El Gordo in Mexico? And then if you downsize, is it Skinnies? But in all seriousness, we're gonna do the free joke project and that wasn't the free joke and they're gonna be much worse than that. All I wanna do is get a rating of one through five on the joke. So here we go. When my friend Frank died, he wanted his remains Kyle Hency (02:17.979) the Kyle Hency (02:23.259) Jeff, I'm here. Brent Peterson (02:27.918) placed in his favorite lidded German beer mug. His last wish was to be Frankenstein. Kyle Hency (02:38.065) man, this is great. Okay, one to five. Haven't listened to the podcast in the past. I think that's 3.5. I've heard a lot better and I've heard a lot worse. Brent Peterson (02:48.782) All right. All right, good. Yeah, well, we're off to a good start. I appreciate that. Thank you. All right. So tell us, give us a little bit of your background. Tell us about Chubbies, what it did. Tell us now about your new song. Yeah, give us a background on Chubbies and where you came from. Kyle Hency (03:04.177) Yeah, So yeah, me as a human being, went to school on the West Coast, came out of school, worked in finance, spent three or four years in that. We started Chubbies as a kind of a man, corporate jobs, not for us. Let's start something where we can kind of control our own destiny. Looking back, that might have been one of the most impactful decisions in my life. I started Chubbies with three of my best friends on earth. three of the most talented people I know. We spent 10 years building it from nothing to something really special. The brand continues to grow and thrive inside of solo brands. And one of my best friends and co-founders, Rainer, is still building that. As a human being, I very much think of myself as a brand builder because that's where I spent the vast majority of my career. And while we were building Chubbies, we were fortunate to also build a software platform called Loop Returns. We were solving a specific pain point we're experiencing at Chubbies with Loop, and then we spun that out, and that's now servicing 5,000 of the most exciting brands on Shopify. And that experience really informed what we're doing with GoodDay, and I've spent a lot of time over the last five years really going deep in the technology platform space. these brands and as I think about what I'm doing with Good Day, I don't really think about all the minutiae of it and the craziness of like man building an ERP to compete with NetSuite seems hard. I think of it as I roll out of bed every day to help my fellow brands and make sure that they are learning from mistakes we made and that the technology they're using is vastly better than the technology we used, you know, five plus years ago to build Chubby. So... probably feeling more purpose than ever. And I think even going into this holiday season, having all these like really great conversations with brands, you can still feel that this world is unresolved. There's so many great brands that if you experience them from their sites or the cool campaigns they're doing, you lift under the hood and, man, this is tough. They're being managed in a really archaic way. And so I do think there's a lot of opportunity. Kyle Hency (05:25.125) with good data to kind of bring them into the new age of how software can support them. Brent Peterson (05:30.486) Yeah, absolutely. I'm a big believer in EOS as well, and in terms of how a framework can help them run their business. you know, we sold our business in 2021 and I'm going to credit having that sort of framework underneath, outside of all the software you use, have some sort of have some structure put into how your operations work and making it, making it look good for somebody to purchase because it is working well, right? I think that's the most important part. What do you see as operational challenges right now for brands? Kyle Hency (06:05.937) Well, the one, we just two weeks ago, we hosted a dinner with 10 brands. It was a mix of existing customers and some prospective customers. And it was a good format for me to kind of say, hey, brand friends, like come in, let's have a dinner. Holidays right around the corner. Let's kind of see organically where the conversation goes. Quickly it got to, hey, what's your campaign for the holidays? What's your like big moment? There was a lot of, frustration around getting inventory stateside, getting set up and feeling good going into the period. There's a lot of frustration around, man, we might just start these promotions on Halloween because it seems like the entire world is just starting so, so early, which I think there was a, I don't think, I know there's a lot of trepidation and that's not why people get into brand building, right? To spend, yeah. a fourth of the year while they discounting all of the work they're doing is not an uplifting activity. And so it was just kind of interesting to see how different people were attacking that. But it's clear that we're like in that hot zone of holidays just right in the distance and everybody's getting prepared. And like, look, I think that's partly our world where it's like, make sure you have the goods. And that's partly kind of campaign driven marketing world as well. But you could feel the tension in the conversation. But also one thing I do want to say that always amazes me at these dinners is that the e-commerce brand and technology ecosystem work so hard to support each other. None of these brands are competitive. And man, they're working really hard to make sure if they have information, these other brands are learning from it. And I just think that's so special and not always the case. when you're building something. So I always encourage brand founders to get out and talk to their peers and just be open and share what you're learning because you can learn something from anyone. Brent Peterson (08:07.404) Yeah, and I think a good way too is to get outside of the community you're in and join it or just look at it and join another, not join, but at least attend another conference from a different community. I came from the Magento community, which is incredibly collaborative. And, and it, you do learn things. And I always encouraged people from Shopify to, to at least come to an event and see what's happening in the Magento world. Kyle Hency (08:32.347) Of Brent Peterson (08:34.124) I think Shopify is great, but it doesn't have everything. It doesn't have the corner. It doesn't have everything and everything, right? So there's always something you can learn. I should have asked earlier, tell us the problem that Chubby solved. And then let's just talk a little bit about the problem that Good Day solved. I feel like maybe I jumped ahead a little bit too quick. Kyle Hency (08:41.457) Bye, Griff. Kyle Hency (08:51.055) you Kyle Hency (08:56.965) No, it's all right. You know with Chubby's, the real insight was that, and this was true on day one when we got in the room to say, what is it that we, where do we see opportunities? The opportunity was we didn't feel, and again, you gotta kind of like rewind your mindset. I was 25 years old at the time. So we didn't feel like the brands that were. growing up around us, specifically in the apparel category, we're speaking authentically to us as men the way a beer brand might. When I talk to my friends in my mid-20s, they're funny, they're quirky. Sometimes they're wild, right? And that's how we interacted and that's how we showed up for each other. When we're experiencing these brands in our mid-20s, we're kind of like, it's kind of like stuffy and serious. That's just not... That's not us, that's certainly not what we would build. And so the whole voice and spirit of Chubby's was born out of that. I corner, I key in on that because that is so true today of Chubby's. If you follow the brand in social, if you look at the things they're doing, the same thing exists. That same voice is there. And over now 12 years, they've made almost every article of clothing. They've tried almost every crazy campaign and fun thing you could do with your community. And they're doing more and more and more at bigger and bigger scale every year. Pretty remarkable for me to look back and look at that. the actual kernel that was there in the beginning that has kind of held true is this idea of there being a big void there and we can fill that void for at least a part of the audience. And I also think the secondary thing that was true in the early days and continues to be true all the way down to the name of the brand, which is it's pretty irreverent, it's pretty polarizing, it's not meant for everybody, and that's fine. We built the brand in a way that it was really welcoming to anybody who wanted to be there and purposefully trying not to be closed off to anyone. And I look at that and I'm just like super, super proud that that is how the brand continues to show up. And I think it's pretty unique. It's pretty unique for a men's brand to do that. Brent Peterson (11:16.95) Yeah, I think that I kind of heard two things out of that. Number one is you built the brand on a specific segment you were looking at, but everybody's welcome to participate, right? Kyle Hency (11:29.891) Absolutely. And that isn't random, right? That has to creep into every conversation you have every day in marketing. so I think the team has continued to do a really good job of that. Brent Peterson (11:44.422) So talk a little bit about Good Day. You came out of Chubbies, which is a brand, and now you're running in software. Did you learn? it? And I this happens a lot with founders. have an actual business. I mean, not that good. They have a DTC business or manufacturing, whatever that business is, and they build a solution that works for them. And then they realize that that solution may be better than their previous whatever they were doing. Is that kind of the way it went? Or tell us that story about how you went from one to the next. Kyle Hency (12:15.419) Yeah. Yeah, think, well, I'll start by saying I would encourage a lot of brand builders to think deeply about the problems they're having and whether or not there are technical solutions for them or if they should build them. I do think the most real solutions come from the people who are most closely operationally engaged with the details. And candidly, in our position with GoodDay, our excitement is born out of real raw pain for years. We had such a hard time scaling our business. Despite the community growing, despite our audience growing, it became hard to manage our inventory in our business. You know, we had some specific moments. One was we were a Shopify D2C business only, and then all of a sudden we had five retail stores that we were managing. So then we're managing six business units. And then all of a sudden we're layering in a bunch of retail relationships with Dick's Sporting Goods and Shields and really cool places that are distributing our goods. Man, a whole nother layer of complexity. And we just started breaking underneath that. And so when that started happening, the business itself started stalling. It was frustrating. And we started looking for answers. And in our case, we ended up spending a million dollars over three years building a really complex set of custom software on top of NetSuite to make it work for us. And the mission with GoodDay is to hey, take the power of a lot of that tooling that we did build for ourselves and simplify it and bring it down market. And we do have this belief that I think is partly contrarian to some people, which is it's not just huge brands that have these problems. I'm telling you, I'm talking to hundreds and hundreds of brands and Kyle Hency (14:10.563) really small brands, sometimes a million in sales, are super, super complex. And so I would just say that I think this mission of bringing these powerful tools down market is very similar to a lot of what Magento and Shopify were doing 10 years ago when Demandware was the big show in town. And they were just making it easier, right? And so we think of Good Day in the same light. We're trying to make this tooling more accessible and easier for for smaller and smaller brands. Brent Peterson (14:42.668) Yeah, I mean, would you say the bigger platforms are trying to fit everybody in and, you know, NetSuite would be one of those that would be there and also their legacy, right? They've been around for a long time. so they have a lot of, and I don't want to say and they have a lot of legacy features that have been born out of over a long time. And it makes things incredibly complicated. And also it makes things maybe not work so well in today's world, or maybe it worked 10 years ago. Is that some of the problems you're trying to solve? Kyle Hency (15:17.393) Absolutely. mean, you know, looking at these legacy ERP systems, they were built assuming that their customers would be able to develop software on top of them to make them work. So they're horizontal in nature, right? That's where it works for 15 different verticals. And for it to work for retail, you have to build a lot of stuff to make it work. And I just think the future of where we're going is you're going to get that vertical solution out of the box. And that's just the nature of innovation, right? And we're just at, I think that that kind of simple innovation has happened in most other categories. The reason I think it hasn't happened in ERP world for brands is because it's hard. I could tell you from 18 months of building, when you layer in all the inventory complexity and then you layer in connecting that to your accounting and financial systems, and then you try to marry all of that up. The reason nobody's done that is because it's hard. And so that's why we've assembled the team we've assembled. That's why we have the financial resources we have to attack this. It's a serious problem. It's a huge build, but it's a worthwhile effort. And look, 18 months in, we have really, really exciting brands already using GoodDay as their centralized operating system. If you had told me when we started that it would move that fast, I would say I would be pretty surprised. It's moving a lot faster than I would have anticipated. Brent Peterson (16:46.174) Yeah, do you think that, mean, two parts of that, like today's world, makes it easier to move faster in software because software is more pliable maybe, and then there's more opportunities for you to build solutions that work. And then is it different in terms of you're attacking a specific niche that you know because you're in that niche and you know exactly the pain points the client needs? where somebody from another platform wouldn't really necessarily know, Kyle Hency (17:21.585) I would answer that in two ways. So the first one is we have real like battle scars here. So our passion is high. Like we have a lot of motivation in the day to day to go solve these problems and we understand them deeply. Secondarily, the way we're building this is different. All of our first 25 customers that we're working with, we don't call them customers, we call them co-design partners. That's because internally we've built the system to get their live feedback. into our product strategy as fast as possible and ship it as fast as possible. That is a completely different way of operating. And to me, that system's really important for us to keep up with the times. I've been out of operating Chubbies for two years. Parts of my perspective are dated already. So the idea that a system from 25 years ago is not dated is pretty wild to me. And so we're building both a system that is informed by experience, but it's going to continue to be informed by these operators. And I think that that's just a different way of operating. And candidly, as a former brand operator, I spent a lot of time with our technology partners helping inform the roadmap and trying to get them to see the pain points. And it was really hard to get them to listen. And so we're just the opposite. By default, we're listening. And there's a different set of risks for us in that. But we're going to go explore how hard we can push in that arena as a starting point. Brent Peterson (18:52.01) We talked a little bit about how the platforms, you know, our legacy, how about the point of view from a client, how has that changed in the last 10 years? Kyle Hency (19:04.773) Yeah, well, I think I say this often, rightfully so, the expectations of software and technology are way higher. So if you're building a technology business today to support brands, you should assume you're gonna need to drive 10 times more value than the same company five years before. Not 50 % more. That's just not what's happening. And I think where sometimes my peers in the technology world get caught up is they're imagining kind of incremental gains and they're losing track of the reality, which is you're there to support the merchants. The merchants businesses have needs and you need to blow their expectations out of the water. You can't kind of barely get there. Cause if you do, somebody else is gonna pass you. And it's a really, really competitive environment. mean, it's fascinating the differences between technology and brand building. Definitely a lot more sides, side swipe fast risk in the technology landscape. Really small team can build something really special in a really small amount of time. And so, you know, I think, I think we're doing the right things. We're on the right side of that today. But as I think about building the business over the next 10 years, we have to continue to be fast moving and very merchant oriented. think that it's simple, but it is what's missing on the technology side, in my opinion. Brent Peterson (20:38.366) Would you say that whatever was true two to three years ago for a merchant isn't true today? And some of those things you just outlined are probably part of that. Is there anything you can really point to that really puts a big gap in that? What's true now wasn't even close to being true three years ago? Kyle Hency (20:56.325) Yeah Well, now there's just, mean, I would say actually put me in the camp of like skeptics related to a lot of the AI stuff and how like real it is today. But I would also say as we're having really detailed conversations with users, they're starting to use the core, you know, open AI and Chad GBT technology enough that their use cases and requests are starting to shift into a conversational mindset. So the idea 10 years ago that you would have asked an obscure question into a system that goes and reviews all the data and gives you any sort of legitimate answer was not anywhere in anyone's mind. And now it is. Do I think it's like here and pervasive? No, not at all. At least my N of 1 experience would suggest it's not. But it does kind of feel like where we're going. And then specific to just like the brand building side of the house, right? The brands have to get their house in order and there's no one coming to support them from the outside. I was fortunate, straight up lucky timing when we were building Chubbies. There was a lot of innovation and lending for early stage brands and there was a lot of venture capital that was flooding in to disrupt incumbent retail brands. Both of those things are gone. So like the... the money to build your business is gonna come from revenue and managing your business well to move your business forward. And so I think the way that manifests itself inside of these businesses, when we were building Chubbies, we didn't even think about offline until we were 10, 20 million in sales. Today, when I'm talking to brands, they're thinking about when they're one and two. That's because there's demand there and there's dollars that they can use to fund their business. And there's parts of that experience that Kyle Hency (22:56.483) are really high leverage for them, but what's still missing is the tooling to actually accomplish that stuff. And that's a big piece of why we're excited about GoodDay. Brent Peterson (23:06.533) If you look at what's going to happen or what the trends coming into fourth quarter into Black Friday Cyber Monday, what do you think it's going to what does this year look like? Kyle Hency (23:18.435) I would say dating all the way back to when I was still at sell low brands in the first half of 2022, when the consumer got pretty skittish on the heels of the Russia Ukraine war and just people got worried about inflation kind of all at the same time. It has been a real every almost every brand has been swimming upstream the whole time. And the idea that that would have continued for over two years for two and a half years. we haven't seen in the last 15 years of me building in the space. So this is the longest sustained period of swimming upstream for these brands. And I would say over the last 30 to 60 days is the first time I'm hearing and feeling like a broad opening starting to happen on the consumer side. And yeah. You could argue it's a sentiment shift. You could argue interest rates starting to normalize. There's a lot of things you can argue, but it's the first time in two and a half years the majority of the brands I'm talking to are seeing green shoots. They're going into this holiday pretty excited about a healthy year of growth. And so, man, that has been a long time coming for all of my brand friends. And I'm really, really hopeful that that continues through the holiday and holds. But yeah, the last two months have been really, really nice for our brands. Brent Peterson (24:43.278) Do you think that, I mean, the downstream, the platforms that operationally support the brands, are they the last ones to see the upswing in the economy? Or do you think they're ahead of it? Kyle Hency (24:57.625) It's undeniable to think that these things are not connected. The consumer softened. The brand's results softened. The technology provider supporting the brand's business is softened a year later. The VCs who are investing in the technology provider supporting the brands are going through their own. kind of reckoning at the moment. So just think all of these things are connected and they take different amounts of time to hit each layer. But I think losing track of that when you're not directly impacted is a little silly. It doesn't matter what's happening inside of my business. If my merchants are struggling for whatever reason, I am hyper focused and urgent. to help them with that. And I do think, like, I think it's pretty undeniable that these things are interlinked, personally. Brent Peterson (26:04.623) I want to ask about Austin, Texas, because I love coming to Austin, Texas. And right now you're a mere 15 hours on 35 south of me. Is there something special about Austin that sets it apart from other cities that are growing and maybe innovating more than other places, especially in the tech community? Kyle Hency (26:29.893) Yeah, absolutely. We were in San Francisco for over 10 years prior to this. moved to Austin in 2019. And I would say there's a couple elements that really stick out to me. One, when you arrive, the cost of living is just so transformative for your day to day that it genuinely makes you happier and everyone around you happier. So if you're just in an environment where the stress is lower and the happiness is higher, it does have a compounding effect to everyone around you. Secondarily, I don't think people talk about this enough. Austin is like a really, really outdoor oriented city. People are in the water. This is October 10th. People are in them. We're going boating this weekend. Like people are outside on the trails, in the water, in the parks for huge, huge parts of the year. The spring and the fall are just like completely magical here. And then lastly, I think is just the broader thing, which is it's really, really friendly to innovation. It's just not gonna get in the way of you building something special for the world. Like the infrastructure, the laws, the way people work are all set up for you to be successful. And so I do think it makes a lot of sense that there's a really nice growing entrepreneurial scene here. I think what's been fascinating and a little bit unexpected is how heavy it's been on the brand side. When you zero in on like emerging, awesome high performing brands and CPG brands and apparel brands and all these, a lot of them are in Austin. It's becoming like a really big nucleus. And so getting these groups of folks together in person to talk about how we're going to innovate is quite easy. And I think there's also a compounding impact of that as well. Brent Peterson (28:18.339) Is there the opposite effect? For you, does weather play into it? Because I've been in Austin in July when it's 101 degrees. I suppose anybody in the South is going to experience that. And if you're in the North, you have the opposite of that in the wintertime. Kyle Hency (28:29.809) course. Don't. Kyle Hency (28:38.319) Yeah, and it's definitely, that is how people operate in Austin. They kind of escape in the summer and go to wherever they're going. So it does feel a little dead in the dead of summer when it's really hot. But yeah, like, don't get me wrong, there are sustained periods of 30 days at a time where it's so hot, you like think twice before you walk out the front door. Like, do I really have to do this today? Is like a real thought. But like, look, I mean, I think it's a part of why we're everybody's in the pools and the water and living life. I did feel a real mix of work only to work and life being much more harmonious moving from San Francisco to Austin personally. Brent Peterson (29:22.348) Yeah, I had the pleasure of doing a fractional role in a PE company as a CTO and the work-life balance, I mean, not to put down PEs, but work-life balance was absolutely not there. There was no work-life balance. So we have a few minutes left. I want to give you a chance to kind of talk about GoodDay. us your, maybe give us your ICP and tell us why people should look at it. Kyle Hency (29:47.483) Yeah. Yeah, so the whole mission with Good Day is we're building a really simple, elegant, next-gen ERP as an alternative to NetSuite. That's a retail operating system and a financial platform all married into one system. We're working really hard to bring that to life as quickly as possible for our brands. We generally are targeting brands anywhere from 1 million in sales to 100 million in sales. Today, we're only on Shopify. In the future, we will be on all of the platforms, but we've kind of started with a focused approach. Think of the tools as centering around inventory management, order management, getting wholesale orders into your system in a world where the e-commerce platform can't do that. And then think of our future as we're actually building contextual systems to reach into every part of our system and say, hey, this is true over here and this is true over here. You should go check this out. And so you are starting to see some of these conversational interfaces creep into our product. And so I do think that when I zoom out and say, what is the next layer of ERP look like? It's a system that does a lot more for you and requires a lot less work. And so we're building in that direction. Keying back to something you said earlier about the EOS framework, I do think it's a good corollary for people to think through where if you're operating with no framework, it's hard. to imagine how to get to the other side sometimes. In the case of ERP, when you're running so hard as a brand and you have this problem and that problem and this problem and that problem, you think quickly about putting Band-Aids on a lot of things. And you can do that and you can kind of survive to the other side. But when you get to the other side, you're gonna have to ask yourself, what is the holistic solution so that I don't keep getting hit with this? And that's the moment that you have to be thinking about an ERP. And this action is not, Kyle Hency (31:46.659) it doesn't have to be a heavy system. think that's an idea of the past, right? These are really lightweight tooling. It's as lightweight as Shopify or Magento, right? So it's not gonna take a year to implement. This takes about four weeks to implement and get you up to speed in getting value from the system. And so we work really hard to make sure all these touch points are great. But ultimately, we should be consolidating down the number of technology providers. We should be... centralizing and simplifying a lot of your operations, not adding to the mess. And so it is a big moment of investment for you as a young brand who's growing up. But look, we're in it with our brands and we're doing everything we can. Brent Peterson (32:32.62) Yeah, that's awesome. And I think that it's refreshing to see, you you mentioned one million and above in my past years, especially in Magento. Most people would try to do everything within their e-commerce platform, PIM, CRM, ERP, everything. know, especially, I mean, Magento now is 15 years old. That is just not... done well, it doesn't do inventory, it doesn't do all these things very well, and there's so many better tools that you need, especially for financial reporting that are outside of that. And having that, I think that niche too that you're working in is very important and I appreciate that. Thank you. Kyle Hency (33:19.377) Appreciate you. Brent Peterson (33:20.654) Kyle Hensey is the CEO of Goodday. make sure, yeah, I forgot, how do people get a hold of you? Kyle Hency (33:28.955) yeah, you can just go on gooddaysoftware.com. If you want to get your eyes on the product, just book a demo. It'll be me giving you the demo. We're a young lean team. spending all of our dollars on engineering resources. And so yeah, I'll hop in, show you around, give you a sense of what we're doing, share directly if we're not a good fit, get you set up where you should be set up, and of course, try to get you into our system if we can be helpful for you. Brent Peterson (33:56.482) That's great. I need to give one plug because we have a partner called Endir and they are a CRM for Shopify and somebody that has retail locations. And they also play well in the space you're in. there's a good opportunity, I think, for people to find great solutions outside of the huge legacy platforms. And I think niching down a little bit helps those people to be more successful in their businesses. Kyle. Kyle Hency (34:24.177) Absolutely. Brent Peterson (34:24.846) Kyle Hency, it's been such a great conversation. Thank you so much for being here today. Kyle Hency (34:29.435) All right, great to spend time,