Latest / Unstuck Pod / Turning Franchise Data Into Profit (Joe Barbano and Jamie Schneiderman)
Transcript
- Jamie: Joe, welcome. Thanks so much for joining us today. Really appreciate it. So ⁓ just jump right in, which is ⁓ where I want to go here. So for people who don't know you ⁓ don't know ⁓ who do you serve? What problem are you solving right now? Help everyone you and where working. Joe Barbano: Yeah, certainly. So Joe Barbano, ⁓ I work at Qvinci Software in Austin, Texas as the Senior Vice President of Sales. Been here about two years now. what Qvinci does, the problem it solves is essentially, as boil it down, it's a business intelligence platform specifically built for multi-entity organizations. Easy example, franchising. That's a really good operating model for us to serve to. ⁓ You think a franchise, it's hundreds of small businesses. What Qvinci does is, grabs all the profitability, the performance data of each individual location automatically. then, and this is where our 13 patents come in that we've been awarded, it maps the data to a brand standard, which is really important. I won't get into the details, but that's what allows us to produce lots of things like alerts on, know, risky territory, profitability, benchmarking, ranking, reporting, scorecards, just a platform that allows these franchisors. to coach their franchisees into the best possible profitability performance, which benefits the brand in general. Jamie: Cool. And you sell to the franchisor or to the individual franchisees? ⁓ Joe Barbano: Franchisor, right? They're gonna be purchasing the software, franchisees or stakeholders and benefit from it for sure. But that's just one example, right? We work with accounting firms as well, representing multiple business entities, really any multi-entity organization, nonprofits, they're multi-entity in nature. So we paint kind of a wide brush stroke, but franchising is probably our most, our biggest focus area right now. Jamie: Very cool. How'd you get there? Like what got you there? Joe Barbano: ⁓ Kovinci, I was at a company called Bright Pearl, which was, ⁓ still is, essentially an ERP platform specifically catering to e-commerce and multi-channel ⁓ businesses, which I was at for about seven years. I joined in the sales side and worked my way up to become the vice president of sales at that organization. But we went through an exit. company called Sage purchased us in 2022, which was great. That was a fun process, but you know, after a little bit, I quickly realized I missed the, the startup world, the hustle and all the grind associated with that. someone actually formerly worked at Sage connected me with the Qvinci CEO, who he was consulting with at the time. ⁓ And was immediate, good match, exactly the type of business I was looking for. and came here to, to build another company and, you know, do something great again. Jamie: Okay, great. So, okay, help me or help us. How would you describe sort of the stage size of the company right now, you know, with whatever you're comfortable sharing, but I'm trying to like get a sense for where are you at and, you know, how does it look right now? Joe Barbano: Mm. Yeah, good question. So, you know, when I think about stages of a company, I think about product market fit to go to market fit to scale to maturity. We're probably in between that go to market fit and scale period. And what I mean by that is, you know, we're relatively small, about 35, 40 employees, but we've got a really strong product market fit. We know our product is suited for the folks that we work with. We've got over 600 brands, customers that use Qvinci represents over 35, 40,000 individual business units that report their data with Cavinci. What I was brought in to do is primarily get the business ready for scale, right? And ensure that the sales motions and the partnership motions and our revenue operations were fit to get to a scalable place. So about two years in, we have probably achieved that goal. There's still some pieces that I'd like to continue to improve upon to get comfortable with true scale. But we're kind of making that transition into high scale, high growth again, after investing a lot in infrastructure, such as myself, the sales team that we've hired technologies that help us get there all those things. Jamie: no, no, listen, what I'm trying to do is, again, there's a difference between a company that's like, hey, we've got five customers or 10 customers and we're getting going and we've got some, some stuff you talked about product market fit. Like early, when I say early days, it's, it's a different animal than where you're at. And I think you described, I thought it was a very interesting and helpful description between like, Joe Barbano: Yeah. Jamie: you know, the growth stage and scale stage, right? And sort of in between the two, because I, know, everyone wants it to be like, I got product market fit, now I'm going to scale. And like, you're like, nah, it's a lot more that there's a lot more to it than that. Joe Barbano: Thanks There is, there is, you gotta get the right unit economics, the right SaaS metrics, right? So those are things that I would say we're like, you know, I would rate our health as 75 to 85 % of the way there of having true, really attractive SaaS metrics and unit economics that would tell us the business to invest a whole lot more money and really pump this thing full of dollars. I think we're right on the cusp of being able to do that. But yeah, that's kind of where we're at right now. Jamie: So, okay, so pushing further on that, then you're, because I'd like to actually talk through what those stages are a little bit more and what it means from a sales or sales and marketing go to market perspective. And what I find interesting is, you you're talking about ⁓ unit economics. So unit economics to me suggests that you've... Joe Barbano: Mm-hmm. Jamie: least as clearly as possible define some of your, ⁓ you know, the go-to-market motions, right? So what are the channels you're using to go to market? How are you getting so that you can say, we're doing it, we're doing it consistently, and ⁓ is what we're getting when we do that. Is that a fair assessment of where you're at? Joe Barbano: ⁓ huh. Very fair. And I can take you through kind of where we're at right now. So what I inherited at Qvinci was a purely inbound marketing driven sales motion, meaning we did a lot of marketing events, trade shows, webinars, you know, we had digital marketing through media, email, et cetera. And sales team that I inherited was receiving leads, working the leads to closure. Well, Jamie: Interesting. Joe Barbano: To me, that's okay, we've activated one out of three primary selling channels. me, it's inbound, outbound and partnerships. right? So first thing I did was activate the outbound channel, got technology to do that, LinkedIn sales nav, zoom info, outreach.io, basic technologies that you know, an outbound driven sales team can do. And was an initial really good bump because there was just all this market that wasn't engaging with our marketing content, that we were able to go out and start to win. So that instantly produced a lot of pipeline for us. So that is an absolute check mark of kind of where we're at. But that next phase, if you want to get your customer acquisition costs down, which that's a really key SaaS metric that indicates, are you ready for scale, is what's your CAC and what's your CAC payback period, is getting distribution channels out there. ⁓ don't want it to be just my sales team, that is selling Qvinci, but I want referral partners out there that service the same ideal customer profile that we do that can send us warm leads that they're recommending. I want reseller partners out there that are able to fully be a reseller of Qvinci and seller technology. And then furthermore, you I want other products that can enhance our own value proposition. You can always build by your partner when it comes to expanding your digital footprint as a technology. lot of partners that we've been able to find, we resell their platform and enhance the services, ⁓ enhance total digital footprint of us. So ⁓ interestingly I would say we've turned on that channel of ⁓ partnerships, but got a head of partnerships starting on Monday. to take what I'm probably spending 60 or 70 % of my day on and give it to that person to really launch that distribution channel and launch our partnership program. Jamie: So, okay. So when I look at companies, always like for me, what's been interesting when I've looked at stuff is there's two different, lot of companies will jump to the executional pieces. You just described a lot of key executional pieces in terms of go to market, go to channels approach. thought that was, I was well, well laid out in terms of where you're at. it, when I always look at things, I'm usually looking at guys and saying, the thing that's usually holding you back first. is that you've not clear enough about exactly the problem you're solving, exactly who you're solving it for and exactly how your product does that. can we talk, what I want to know in there is, you you're serving a while, you're still serving a range of customers, even though the multi-unit and the business intelligence, I get it, but it's, but I feel like there's a lot of pieces. How have you, Joe Barbano: Mm-hmm. Jamie: narrowed that first part to make it so clear and so obvious that everyone knows, know what you are, I know what you do, I know why you, so that the rest of it becomes easier. Joe Barbano: Well, that is a very foundational element that unlocks your ability to do all those other things that I talked about. And I was lucky enough that, you know, specifically with Kvinci, would say I walked into a very, very good situation with regards to that. This is a company who had already done market surveys based on what are those key value propositions that Cavinci solves for? What are the exact pain points? And then organizing them based on, you know, how we communicate the value of our product across three pillars, called the three pillars of, value. So, ⁓ know, we, we had already had 500 ish customers I had joined, ⁓ we pulled those customers, we had done the work to identify what were the key pain points, what are the things that we're solving. bucket that across the verticals that we sell and have on top of content to be able to deliver, as as ⁓ all content surfacing into my sales playbooks ⁓ of identifying challenges and knowing the value proposition. ⁓ then furthermore surfacing into my onboarding program for new hires, because we got a sale I've had to hire. eight or nine people since I've been here, you've got to make sure all that thread pulls through. So I was very fortunate to inherit all that. I just needed to distill it into my sales playbooks and my onboarding program. Jamie: Okay. No, no, it's great. And listen, it makes it a lot easier when you can jump into those pieces and go. So I actually want to talk. So you've, you talked about, you know, layering to new, basically two completely new channels, one that you've obviously fully implemented in the second one that is starting to go. Let's talk through what were the biggest challenges in getting there. Joe Barbano: Mm-hmm. Jamie: Like, right? So, and I imagine that even though there was an inbound channel that you were converting, or sending leads to sales, I'm sure that there were many things that you were working on to make that a better place from a sales perspective. So let's talk about the challenges that you faced as you were working through going from where the company was, 500 customers, to where you are now in terms of growth going forward. Joe Barbano: That's right. That's a good point. So I guess I'll start with the inbound because that was something that was established but still needed to be optimized. No doubt about it, right? You can always improve the processes even if you're already working through a channel. You know, with inbound, the thing that was missing that I saw when I joined that needed to be done was the feedback loop between sales and marketing. Right. If you're a company that has separate departments, ⁓ that does sales, one that does marketing, the team's best ability to improve their performance marketing ⁓ is feedback from sales. Now you want to log in the CRM, right? You want to have reason codes for why did we lose an opportunity at the MQL stage? Why did we lose ⁓ a opportunity beyond the MQL stage, which actually reaches an opportunity? So. That was something that I think the company had not really gotten right until I had gotten here. But overnight, you start to speak across the departments. You start to give feedback to the marketing program. You start to improve your MQL conversion rates because we're warming those up. We're delivering the right content. We're using our marketing materials to screen out the wrong type of folks that we don't need to be wasting time on. So that was really key for the inbound side. For outbound, that honestly worked really quickly with Kevinchi. And I've been in organizations where it doesn't, and it takes a long time to get the outbound channel working. Cause you think cold calling, cold emailing from sales reps, you're unlikely. on mass to just lock into, we've got an evaluation for just this sort of technology. Let me bring you on into the evaluation, right? It's more so you're getting the awareness out. You're getting the, you know, some interest that people can say, oh, we might look at this a year from now, whatever. And you build that momentum and all of a sudden you've got more and more people to call on and it's a flywheel, right? Fortunately with Qvinci, since outbound selling had never been done, we were entering a market very fresh with a technology that no one was doing. It's not like we're supplanting a technology typically. usually going from, ⁓ have anything that does what Qvinci does. ⁓ didn't even know this was a possibility. This is really interesting. And that created a lot of immediate opportunity out of the gate for us. So the only really from the outbound motion was finding the right contacts, finding the right people. ⁓ Fortunately, I've got a long history of doing that through the use of technology services that I was able to purchase quickly and get done with that channel. On the partner side, a little bit more difficult because we'd also never really invested in speaking partnerships. ⁓ We to get the ⁓ legal ready, right? You need partnership agreements that incentivize your in the right way, but also protect your brand and things like that. We needed to start those conversations with people. ⁓ ⁓ we didn't have any content to share initially, so we had to learn kind of a slide deck do I need to have on a initial partner recruitment call? ⁓ sort of one page or do I need to send out afterwards? How does the CRM aligned to all this brand new motion? You need to treat the CRM processes very differently because you got to report on what partners are sending you referrals or, you know, actually achieving scale with the reseller program, which ones aren't. So there's a. a lot, lot of effort and it takes a long time to deploy that partner program, at least at, at Kvinci. Jamie: Well, no, and in my experience, partner programs are one of the hardest thing because it's how do you find the win-win and there's a lot of moving pieces. It's it's way harder. And by the way, a lot of the partnerships you think or hope are going to be the good ones don't end up being the good ones. And then it's the other ones that turn into the, anyway, you know, when you're living it and you've experienced it. So a couple, Joe Barbano: Definitely. And you have to have the right sales motions first before you turn on the partner channel, right? Cause all you're doing is you're duplicating your existing sales motion ideally through partnerships. And if you don't have that. Jamie: Yeah. Joe Barbano: working correctly, sets the economics work, your conversion rates are good, your basic metrics are right, and that it's all in a playbook, something that can be distributed to a partner channel. You're not going to get that partnership model that right. So we needed to make sure all those things were set before we went out and said, let's turn on and unlock that partnership channel. Jamie: No, no, it makes total sense. OK, so I've got a couple of questions. There's so many questions for you. But one of the things that I keep wondering about is you're doing this, right? So you're moving into a world where, or we've moved into a world very rapidly where it's AI, AI, AI. And you have a product that pre-existed. Joe Barbano: Thank Jamie: call it AI for argument's sake. I'm sure there's some people who may have referred to it that way, but when you're going out and you're selling and you're doing things today with a found, you have established base, people know who you are. They know what you do. You're How are you overcoming the natural questions that are going to come around? Like, but you guys have AI? What is it? How, like, what is this? I'm just trying to, I'm trying to understand that. Cause I think a lot of people run into those problems. Joe Barbano: Yes. Jamie: when they, you know, they've got something in their life, but are you this or this? Joe Barbano: It's a good point. And I look at AI ⁓ real, for most software companies, you got to think about it as both a threat and an opportunity. And what I mean by that is you know, if you look at any market survey or studies, a lot of businesses that you know, you may service as a software provider are looking to inject AI to achieve some efficiencies in some way or form. So if you're not being AI forward, you're probably at least in this moment in time, leaving some money on the table by not leaning into that a little bit. ⁓ at least, what we've done is you know, we've what patented, what we have protected as part of our software, when I talk about with a mapping process, which I won't get into the details but it's tricky. really difficult to do. And didn't take us much to lean into that from an AI perspective to allow my salespeople, our marketing people to say, we leverage artificial intelligence to conduct that process. And we're able to create a patent really quickly that protects us from exactly that thing. ⁓ So. Jamie: This is the benchmarking piece that you were sort of referring to is when you sit between talk about mapping, is that a fair thing or my own understanding? Yeah. Joe Barbano: That's right. And I'll give you an example. ⁓ We're, you talk about profitability ⁓ multi entities, you're really talking about the accounting, right? ⁓ is what determines profitability. ⁓ we need to collect accounting data. The problem is for these multi entity companies, typically ⁓ they have any ownership over how each individual entity organizes their chart of accounts. They're using different nomenclature, different buckets, different ways they do it. And Jamie: Got it. Joe Barbano: You know, on average, there's between 100 and 200 individual accounts at any small business. That's a nightmare when you talk about having to say, well, how am going to assess this company's labor costs as percentage of income versus this company's labor costs as a percentage of income? If that's a key performance indicator to profitability, and I need to know that as a franchise or, and they call it two different things. And that goes across every single individual metric. How do you look at your rent costs as percentage of income, what your costs could sold across product category across each individual product. You don't have a way to have an apples to apples comparison and for an intelligent software to say, this person called a number, street name, then rent in their chart of accounts. And this other individual business entity calls it lease. You need a mapping process to say those two things aligned to one another. can now benchmark. If corporate, we call it rent costs, percentage of income. ⁓ now benchmark that ⁓ identify when people are getting into risky territory, this one location, their ⁓ costs are going up so much that we've got to think about moving location or something like that. So it's already going on a side like that, but I didn't even fully grasp the insane importance of that concept. until I got to Kovinci and realized just how much of a mess and how few franchisors even have an understanding of the profitability health of each individual business entity that they service. Jamie: Well, and by the way, like I actually think it's a great example because again, here you are, you know, we try, we talk about growth, growth, growth, grow, grow, grow, grow, grow. And everyone wants you to sell. It's like, well, hold on a second. Like we can sell, but here's look at, look at the complexity and the problems and other issues that are coming that happened before that. Like this isn't a square peg, square hole kind of sell like, right. This is not, you know, I'm not, these aren't widgets. Like it's much more complex than that. Joe Barbano: V Jamie: It can get to that place and technology obviously helps. Okay. This has been great. This is great. other question. So, so look, you, you jumped into this, you've been working on it for a while. You've, know, you've moved it from when you got in the door to where you are right now between whether it's Qvinci or in pass. I'd to know if there are times, if there's stuff that you look back at, you know, whether it's in the last 24 months or it's before that, where you go. Yeah. I wish I could go back and do something different when I was looking at growth and I wish I had, know, these are some things that, you know, we were stuck or we couldn't get past a certain point. And I wish I hadn't, you know, I out these things out of my toolkit, but I wish I had done some other stuff. Any thoughts? Joe Barbano: So many, there's always going to be mistakes that you run into along the way. You know, I would say, especially at Qvinci, I'll give you kind of a direct Qvinci is unique in that we are a bootstrapped company. that was one the reasons I joined Qvinci is because I've been a part of Jamie: Yeah. Joe Barbano: you know, private equity backed organizations and venture capitalists backed organizations. And those are, those can be really fun. And I'm used to that world. I joined Qvinci because it was bootstrapped and I thought there might be a little bit more of a, um, um, what's word I'm looking for? A grounded sense of growth, uh, you know, a realistic sense of growth. And I've just historically been at companies where as a sales leader, you provide. new data driven feedback to your product team and say, here's the deals that we lost because of this reason code. And here's the amount of money that we left on the table that we could have captured had we had a feature or a piece of functionality and consistently having that govern the product roadmap. And when you're at a bootstrap company, you don't have as much firepower. And raw materials with engineering, you know, just horsepower that you do at a company who just landed a $30 million round of investments is we're going to go capture more market share. We're going to hire some engineers. going to build the product out and all that feedback coming to the product team from sales, marketing, et cetera. We're going to realize that into new features. Well, because this is a new process, pace at which you move with that thing is a little bit slower. You'd be much more deliberate, be a little bit more choosy about, ⁓ are the. ⁓ elements of the software that we want to build out more, right? Cause you're, you're, you're a little bit more limited. So I wish that I had been more forward through partnerships and seeking ways that we could enhance our technology footprint by seeing, by finding partners that did something adjacent to what Qvinci does, but enhance our overall value proposition. I give you a couple of examples of this, you know, Qvinci, we, ⁓ because collect all this data, we talk about compliance. So compliance is a really big thing with franchising, especially. The whole concept is you want to grow, but you need to make sure the brand stays uniform across the entities. We need to make sure people are compliant. So royalty automation and royalty calculation is a big element of that. That's the franchise where it's primary business model. They've got to collect royalty fees from the ecosystem. That's how they make money. Well, ⁓ you'd be at how few Jamie: Yeah. Joe Barbano: companies actually have an automated process to do this. It's very manual. It's very arduous. sometimes they're collecting royalties based off of the franchisee self reporting what that was and kind of a good faith. Hey, let's make sure this is accurate without any auditing or compliance standards. ⁓ So that was something that Qvinci had kind of an adjacent workflow to, but we didn't fully automate the process. We didn't do the payment processing. We couldn't, we didn't have a mechanism to collect. payment from franchisee to franchise or how great would it be if we could do that? Well, we could build it, but that would take a lot of time and resources. Eventually, this is something that I wanted in my technology stacks to do. We're just going to go out and partner with somebody and resell ⁓ element of that technology to expand the footprint. So we'd asked about it a lot. You know, there are other organizations out there that do what we do. Why not bring that into our technology stack and it produce, you know, kind of a single vendor approach. So. Jamie: Yeah, it's just me. Yeah. Joe Barbano: I waited way too long to do that and for that to click. And I wish I had done other things like that more because sometimes you are constrained as to how much funding you have, how many engineers are there, and you may have bigger picture things that you want to do as a business, especially and go to market that to exist. ⁓ You got to go out and find it through partnerships. Sometimes. Jamie: I love that. actually think that's a fantastic example. and you know, I would say that ⁓ would argue that a lot of companies, the mistake they make is they try to build everything into their product. And that's a mistake too, cause that's, you're not going to be great at everything you do. The idea is focus, focus, focus, focus. And so to me, I love your, your that says, well, we want to add the capability. Someone wants it. We're already in the door partner with somebody else to get it. think that anyway. Joe Barbano: Okay. Mm-hmm. Yes. Jamie: I think that's great. That was a really, that's a fantastic example. So, so that's great. so, so ⁓ you've been great and great with your time. So thank you. can tell the audience where they can find you and like how they can follow you and follow the things that you're doing? Joe Barbano: Certainly, LinkedIn is probably the best way. Truth be told, I'm very, very bad at social media. I don't have a Facebook. I don't have an Instagram. I like to spend my time doing other things and being on those platforms. However, I am active on LinkedIn. I post a lot about what we're doing at Qvinci. We're hiring frequently. So if people want to follow me on some sort of platform like that, that's the place to do it. Jamie: Right. And, you know, if there's any advice you could give to people who are out there who are building a business, one way or another that, you know, are stuck there trying to grow pasta point, well, you know, like they can't, they're sort of feeling like they've hit a plateau. Any, Any suggestions you'd make, any advice you'd give them when they're thinking about it. Joe Barbano: Yeah, I mean, I would seek outside assistance. And what I mean by outside assistance is when you're so stuck in the weeds in a business, you can get you know, kind a tunnel vision, can kind of tunnel thinking, ⁓ but a lot, ⁓ there's much resourcing out there and consultants people who have done this time and time again that you know, in all likelihood, plateaus are something that chances are someone's seen it before. ⁓ and has a good set of tools in a tool belt to deploy to fix that problem. So having someone come in, help you assess where you're strong, where you're weak, and then where you are weak, what's the appropriate tool to deploy. That's how I look at business in general is always have your metrics, know what your North Star is, what you're trying to achieve from a data and objective standpoint. Where are you strong, where are you weak. That where you're weak. You really should know what are the tools in the toolbox to be able to address that. And those can be far more complex than meets the eye sometimes. So having someone who's been there done that and that can offer some advice is incredibly powerful. Things that I've had throughout my career that I'm eternally grateful for. Jamie: That was great. That was really, really great advice. And you know it's something that I would agree with completely. yeah, no, I think that's true. But anyway, I'm going to add, I will add links ⁓ the description when we go live with it. And thank you very much. Guys, thanks for watching. ⁓ And ⁓ see you on the next episode. Joe Barbano: I'm Yep, thanks Jamie.