Chew On This: How to SAVE MONEY and STREAMLINE Warehouse Management!

Transcript:

Transcript 

[00:00:00] Jared Ward: I was a CEO of a 20 million a year e commerce company. If anybody's ever been in my shoes, between like five, 20 million is kind of that sweet spot. You get to a certain point where your brand, it just feels like from an operations perspective, you're hitting a ceiling, like you can't forecast things correctly.

 

[00:00:19] Ash Melwani: Welcome back to another episode of chew on this today. Uh, we're going to be talking about something that isn't really talked about much. Um, when, you know, it's kind of on the unsexy side of things when it comes to running business. But, uh, my man, Jared Ward over here, uh, founder of luminous has created.

 

[00:00:37] Uh, something sexy for the unsexy, um, an ERP system. And, um, I definitely want to get into it. Uh, so Jared, thank you for being here. Um, for those of, uh, out there who don't know who you are, um, and what you've built, um, let's get into it. What, uh, let's, let's, uh, talk background. Let's talk Luminous. Let's, let's get into it.

 

[00:00:58] Jared Ward: Thank you for calling us sexy. [00:01:00] Inventory is very unsexy. It's very boring. And Luminous is trying to run a campaign to. Make inventory sexy again. I'm not sure if it was ever sexy, but

 

[00:01:10] Ash Melwani: it's one of those things. I mean, like even coming from the marketing side, right. It's, it's one of those things where inventory is.

 

[00:01:17] I just, I just always assume it's going to be there when I need it. And, um, uh, you never really understand what goes into like forecasting and actually planning these things. And I think you guys have hit a pain point that really needs to be solved.

 

[00:01:30] Jared Ward: Yeah. Supply chain management is sort of this. Dark room, this eerie spot that nobody ever wants to deal with.

 

[00:01:37] Um, and yes, luminous is actually touching the dark, eerie room. We're brightening it up. Um, no pun intended. Um, but yeah, so my name is Jared. I'm the founder and CEO of luminous. Luminous is we're like NetSuite, but for mid market e commerce, basically, if you're a brand between like 3 million and a hundred million, um, it will feel like, man, [00:02:00] supply chain management.

 

[00:02:00] There's only one path. It's go to a big ERP and we're on a campaign to let people know. No, that's, that's actually not the case. So luminous is the first all in one platform for mid market e commerce companies.

 

[00:02:15] Ash Melwani: So for those who are maybe on the smaller end, mid sized, right. Um, talk a little bit about. I guess the pain point that we're kind of out there and what Luminous is doing to solve that.

 

[00:02:29] Jared Ward: First off, my background is in supply chain e commerce. Supply chain, my background's in, I used to live in China, I speak Cantonese and Mandarin. Wow. Um, so that took me down this path of, you know, production management for e commerce companies. I ran a sourcing division. Where I got a lot of experience like forecasting and running the purchasing and supply chain management for brands.

 

[00:02:51] Um, eventually I, my experience segued into, um, running an actual e commerce company. So I was, I was the CEO of a 20 million a [00:03:00] year e commerce company. Wow. Um, it was called Qualtree. So if anybody's ever been in my shoes. So CEO or operator of that size of a brand, I'd say between like five, 20 million is kind of that sweet spot.

 

[00:03:13] You get to a certain point where your brand, it just feels like from an operations perspective, you're just, you're hitting a ceiling, like. You can't forecast things correctly. Um, there's like this, if you branch out to wholesale, for example, like there's this wholesale arm of your business, that's just totally separate and doesn't fit in to your current systems, um, you're trying to, You know, you're expanding your products.

 

[00:03:40] You're doing more kits, more bundles. You're just expanding your number of SKUs. So all of those things for modern e commerce companies, when you're around that size, it gets to a point where you're just like, okay, I have to have a system. I have to tame this, this madness. Um, and anybody, any founder who's actually been to that level, then you [00:04:00] understand the, how maddening it is looking for tech to service you.

 

[00:04:07] So when you're hitting that critical mass, like. Okay. We need to organize this in order to hit our, to hit our, uh, to, to blow past the ceiling, to reach our whole, uh, full potential as a, um, as an e commerce company, that's where luminous comes in. If anybody searched for tech out there, it's either big ERPs.

 

[00:04:28] Or small point solutions that do like a little bit of what you need. Or

 

[00:04:34] Ash Melwani: Google Sheets.

 

[00:04:35] Jared Ward: Yeah, they don't really like, yeah, exactly. Honestly, the most common, there's two most common tech stacks that we run into for e commerce companies. It's either they're on NetSuite and we're getting them off of NetSuite for a fraction of the cost and our flows are better.

 

[00:04:47] Or they're on Google Sheets, ShipStation, QuickBooks. Yeah.

 

[00:04:51] Ash Melwani: I think, um, I think there's two stages in e commerce brands life where something like this is like super important. Right. So I'll [00:05:00] give you an example from Avi where one, we. For those of you who know we we entered Walmart last year, right? in September of last year and the Inventory planning that's required for that is something I've never seen before right Walmart is constantly sending you purchase orders week after week They'll obviously they'll give you the initial PO and then depending on velocity, they'll send, you know Purchase orders POs after POs, week after week after week.

 

[00:05:29] So you have to forecast that out right now. On top of that, you got to layer in DTC and what's happening there. So there's so many details that can be overlooked and honestly, like very overwhelming so that having a tool in place, honestly, kind of removes that. Entirely from, from, from the brand. And, and like I said, we were on, like, I remember back in 2020, I created our inventory tracker on Google sheets.

 

[00:05:55] And so to see us grow from that to something like this is, I mean, it's [00:06:00] a, it's an unlock for most brands.

 

[00:06:01] Jared Ward: Absolutely. So this is stuff that I talk about all the time, but, um, This, the evolution of a modern e commerce company is, it's relatively new. So there's two specific parts that break tech. You were alluding to one of them.

 

[00:06:14] So number one, This, this idea of being omni channel that's totally changed since the 2010s. And so what I mean by that, well, I meet so many brands who they saw on Etsy, Shopify, Amazon FBA, they they're getting into big box retail accounts. They do specialty wholesale all before a million dollars in revenue.

 

[00:06:35] It's never been easier as a brand. To go omni channel and it truly means something totally different nowadays And that has repercussions to your back end system, right? So a lot of times people are wondering like why is my inventory and purchasing so hard? Well, it's because you're selling across seven different channels and you know selling wholesales a totally different type of forecast forecasting replenishment sales The second thing that e commerce [00:07:00] How e commerce companies have evolved is using multiple distribution points early So what do I mean by that?

 

[00:07:07] most Does, does Obvi use a 3PL? We do. Yeah. Do you guys sell on FBA? Yep. Okay. So for most e commerce companies back in the day, I mean, it was, I say back in the day, think back to just like 2010 or something, normally you just have your warehouse for a 20 million brand. And that's it. Like everything, everything goes out of that.

 

[00:07:29] Nowadays it introduces a added layer of complexity when you have to forecast and replenish. Two distribution points totally different and the type of tech that you need is totally different. So, um, yeah Those are two big evolutions that have happened with e commerce companies in it and it makes It makes this need for a system of record early.

 

[00:07:50] And no wonder so many brands feel forced to go to

 

[00:07:54] Ash Melwani: NetSuite. Yeah, no, I agree. I think, um, even on some of my own, like mentor [00:08:00] pass slash like consulting calls, the, the biggest question I have for brands is, you know, when they come to me and they say, you know what, I'm, I'm doing really well when I'm spending, you know, a hundred thousand dollars a month on, on Meta, right.

 

[00:08:12] And my, my, my first question is why can't you get to 200? Right. And nine times out of 10, that answer is because of inventory, because they can't forecast and I'm just like, I can't help you forecast. There's tools out there that can help you forecast like luminous, but there's, there's a, there's a level of, um, operations in like just a layer of the knowledge that needs to come in to actually like provide runway for the business is.

 

[00:08:39] Honestly, like, you should be leveraging tech. You should be leveraging tools to really understand, um, what's happening on a day to day basis in terms of sales, velocities, et cetera, et cetera. So, I mean, I don't, I don't think a lot of brand owners really think that through. They're always, they're always thinking about the sexy side of things, which is, you know, new creatives, new landing pages, new this, [00:09:00] new that.

 

[00:09:00] And it's like, you, none of that matters until you actually have inventory in the warehouse.

 

[00:09:03] Jared Ward: Yeah. And it starts mattering. At scale and that scale for e commerce is is normally around that like five Three to 20 ish million. That's when you start feeling real consequences. When you go to stock, like it hurts when you're ripping on this new skew and it's like, Oh shit, we went off stock.

 

[00:09:22] Ash Melwani: Yeah, no, we're feeling it right now. We're literally feeling it right now. Um, we had, we had a pretty strong key one, right? Um, I spent a good amount on meta, the finance team and Ron are freaking out because we keep running out of inventory. Um, and um, honestly like having something like Luminous would solve a lot of the pain points, you know?

 

[00:09:42] Jared Ward: I think this will highlight the gap in the market that Luminous is filling a little bit. Question for you guys at all. Yeah. Um, why, why have you not looked into like NetSuite?

 

[00:09:54] Ash Melwani: Yeah, no, it's a great question. And they keep reaching out, right? I keep getting the, the, the free water bottles in the [00:10:00] mail, you know, just trying to get on a call with them.

 

[00:10:01] And

 

[00:10:01] Jared Ward: the, the, the LinkedIn in mail, like, Hey man, following up on my last message. Do you see that? No, a hundred percent. Me and the four other reps in the inbox. It's

 

[00:10:09] Ash Melwani: honestly the NetSuites of the world, they feel dated and they don't feel like it's right for our business. Right. When you think NetSuite, you think like.

 

[00:10:17] The top brands, right? When we're thinking about, you know, um, inventory planning for us, we've been fine with a Google sheet for, for the longest time. Right. Cause why do you, like, why do you think that is? I, cause I, I agree with you. Like I, I just didn't, everything that was out there didn't feel like it was the right fit for us.

 

[00:10:35] Right. It was like, it would always feel a little outdated or just not for Our business

 

[00:10:40] Jared Ward: and Google sheets is working for you right now, the way

 

[00:10:44] Ash Melwani: it's working. It breaks. It's not, it's not cute. It's not great. And so that's why it's like, when you look at something like this, right. And when we do have other founders that come on the podcast that are building other tools, right.

 

[00:10:57] The one thing that I truly [00:11:00] enjoy seeing is the founder has some background in. ecommerce that dealt with an issue created a solution to that problem and now is working on that so like you're you're the founder that I Trust to put out a solution to fix a problem that I may have because you had the same problem

 

[00:11:19] Jared Ward: the the issue with NetSuite NetSuite is actually a fine product Um, if you're a really big company, the problem with NetSuite going down market to mid market eCommerce, to the obvious of the world, to, um, to other similar sized brands is can NetSuite service you guys?

 

[00:11:37] Yeah, they, they, they could for a million dollars of customization and Minimum 200, 000 implementation fee and 7, 000 monthly cost that's going to get raised next year. Like they're not built by somebody who understood e commerce and they're not monetized. They don't monetize. Yeah to brands like you guys, right?

 

[00:11:57] Ash Melwani: No, I agree. I agree. They're trying they're definitely [00:12:00] trying. Yeah, so take us a little under the hood, right? Um, when did you guys start building this out? What did that what did that look like? Um, what goes into building a platform like this?

 

[00:12:10] Jared Ward: Yeah, great question. So I I started luminous in My, my early days of, uh, Qualtree.

 

[00:12:17] So, um, I was CEO of a company called Qualtree. We were a personalization and manufacturing direct to consumer company. So, um, like a couple of our brands, uh, like roomshop. com, a gift personalized. Um, we, we sold direct to consumer wholesale. We did manufacturing in house, in house fulfillment, very complicated company.

 

[00:12:34] Um, thousands and thousands of SKUs. I went to Qualtree. To start building Luminous. Um, I went there because I had already had a lot of experience with my own e commerce companies or sourcing for other e commerce companies. And I had already identified a gap in the market. Like, okay, there's a gap here, like mid market.

 

[00:12:53] There's not a platform or a system for backend supply chain that's servicing these companies. Like nobody's adopt, there's no [00:13:00] one go to. So I went to Qualtree to start building that. And that's, that's where it started. So I picked a really complex company. That I thought would be a great benchmark where, okay, if we can build a system flexible enough to service this company, we could actually probably service a lot of other e commerce companies.

 

[00:13:19] So Qualtree, we, we did wholesale, specialty wholesale, direct consumer, FBA, Amazon, we did in house fulfillment and light manufacturing. Which is very, like, that's about as complex as you're going to get. So yeah, we started building a purchase order management and RFQ management, and eventually we branched off into like, eventually went to inventory management.

 

[00:13:43] Then we went to wholesale, like a B2B portal to run specialty, wholesale, embedded EDI. So like embedding the EDI process workflows into the actual system. Eventually we got to forecasting replenishment for multiple warehouses. But yeah, it

 

[00:13:57] Ash Melwani: all grew out of Qualtree. For something like this, right, there's [00:14:00] a lot of moving parts that go into something, you know, as complex as this, right?

 

[00:14:05] And then coming off of building your own e commerce brand, um, I'm sure funding becomes a question here when you want to build something like this out, right? Um, I know a lot of founders out there, whether it be like e com or even SaaS, right? Just to get to that, that starting point or even to that next level, funding is always on everybody's mind.

 

[00:14:24] So did you guys end up running, uh, raising funds for, for this? We did.

 

[00:14:29] Jared Ward: Yeah. Um, so fundraising happens. I had built a beta product. I sold about five clients. Um, they were kind of our five foundational clients that got us to about 150, 000 in ARR. So I took that traction and I went and fundraised with, with my partners at the time, we went and fundraised from a couple of different people.

 

[00:14:50] So Serena Ventures is our, is our number one, uh, VC partner. So that's Serena Williams Venture Fund. She was [00:15:00] a, she's an awesome strategic investor. Cause she has. She's one of the biggest e commerce investors, D2C investors. I had no idea. So that's, yeah, it's, it's been amazing. Um, then Startup Ignition. It's a local Utah firm.

 

[00:15:13] Pellion and like a couple others. Um, overall we've raised about 3. 7 million dollars. Um, and cross our fingers, we're probably about like five, six months out from, from profitability. Amazing. Um, which, you SaaS company as young as us, that's, that's amazing. It's, it's really amazing. Um, but yeah, you have to fundraise like to, to build a company like this, to build Luminous where you need such a broad feature set.

 

[00:15:39] To be competing with the likes of NetSuite in an RFP with like with Auvie. Um, so yeah. Yeah, you have to have a broad feature set. So definitely had to fundraise. Luckily, we've been really, really wise with our funds. Um, and we're a very healthy and almost profitable company.

 

[00:15:57] Ash Melwani: One thing that you mentioned was, is that you, you [00:16:00] actually built it out for five clients first.

 

[00:16:03] Um, how, how does that conversation even go? Where it's like, Hey, we're building something out. We haven't tried it for anybody. Um, this is your most like valuable part of the business. Take a chance on us. How do you do that?

 

[00:16:17] Jared Ward: Okay. So I don't know if you guys follow Y Combinator. They, they do such amazing content.

 

[00:16:23] So Michael Siebel talks about this. He talks about your early days of a SaaS startup. At the beginning, you're looking for early adopters. Who are early adopters? Well, it's people who have a fire so bad and they've tried everything out there that they'll take a brick to put out their fire. Right. You know, in the early days.

 

[00:16:43] Your product is a brick. It's, it'll put out the fire. But, um, yeah, make no mistake. It's still a brick. So, it was, it was customers who had been through the ringer. Right. So, they've, they've, they've tried the [00:17:00] SYN7s and failed. They tried Fishbowl and failed. They implemented NetSuite. Total flop. Wastes 100, 000.

 

[00:17:07] So, it was the customers who like, we've tried everything. Like, hands in the air. Jared, this is working for Qualtree. Like. Let's do it. Let's, let's give this a shot. Um, yeah, those, those were the types of customers that we attract in most, frankly, most startup companies. That's, those are going to be your early adopters.

 

[00:17:25] Now, luckily we're, we're out of that stage now. We're in a very different stage, but no, that, I mean, early days of Luminous, I was literally like sleeping at My client's warehouses. I was like literally all of their fractional COO's Those are some wild days. Yeah.

 

[00:17:43] Ash Melwani: Yeah. Um, I guess at the at the end of the day, right?

 

[00:17:47] It's you you kind of built a concept for yourself proved it out after you kind of proved it out Started, you know, you know, raising money and started really building out the platform to to be scalable, right? Now, who are the [00:18:00] types of clients that you went after after you had a finished product? And I guess who's a good fit for, you know, Luminous?

 

[00:18:08] Jared Ward: Yeah, great question. So that one of the biggest mistakes that that tech providers make nowadays for e commerce companies they still think of people in terms of rigid categories. So for example, Oh, you get their supplement brand like, Oh, they're an apparel brand. They're a health and wellness brand. What we found in luminous is you don't, you don't identify somebody by a category.

 

[00:18:36] We identify them by operational attributes. So we have operational archetypes that are, so the reason why I say that is in my time with luminous, I've implemented two supplement companies that are, uh, Totally different, have totally different tech needs. You could have a supply company that get everything from a co packer co packer fills, it's more like a 4PL.

 

[00:18:57] So operationally, like what you [00:19:00] need for a system is totally different than somebody who buys all the raw ingredients, sends it to a co packer, they send it to a 3PL. Like those are the attributes that we care about. Cause that will tell us if you're a good fit for Luminous. So what are the attributes of a brand that make them a good fit for Luminous?

 

[00:19:19] Well, here's some, um, first off revenue wise, you have to have problems at volume. So number one is revenue needs to be from, uh, between like two and 50 million. That's a good starting point. We service brands bigger.

 

[00:19:33] Ash Melwani: Annual revenue or just

 

[00:19:34] Jared Ward: annual? Yeah. We service brands bigger, but that's like, that's a good starting point.

 

[00:19:38] Right. Um, next is, do you do some sort of wholesale? Typically what I mean by that is specialty wholesale. Like, are you writing invoices on QuickBooks and then making an, an order and sending it to the three pale for them to fill another one is, is big box retail. So EDI, like if, if you're doing either an EDI, a drop ship flow, like say with Walmart or [00:20:00] target, um, a bunch of those different ones, um, Next would be purchasing.

 

[00:20:04] How do you purchase? Are you, are you just purchasing, are you, are you just purchasing finished, finished goods and you send them to a

 

[00:20:12] Ash Melwani: 3PL?

 

[00:20:13] Jared Ward: Or do you have a little bit more complex purchasing where like you're consuming finished goods that you need to break out into bill of materials, more of like an MRP process.

 

[00:20:24] Those attributes right there. If you have all of them. Or if you have some of them, you're a great fit for luminous, most likely.

 

[00:20:32] Ash Melwani: Right. So as you guys grow and acquire more and more clients, right? Um, as you said, the needs of each business become, are, are, are different from each other, a little bit more complex, right?

 

[00:20:46] Um, does this affect the, the roadmap for luminous? Like, are you. accounting for everybody's different needs and tailoring solutions to them? Or is it like, all right, no, like here's our roadmap. It [00:21:00] has to be like a one size fit all type of approach. Like, what does that look like for you guys?

 

[00:21:03] Jared Ward: That's, that's a great question.

 

[00:21:04] Cause here's, here's the thing, most brands that I talked to who have, who have flopped in implementation, this is their experience, they onboarded sin seven, which is like a self onboarding platform, right? And what it feels like is. They just like, great, you're signing up. Awesome. They fling you this jigsaw puzzle and splat right on, right in front of you, all mixed up all over the place.

 

[00:21:30] And they're like, figure it out. And maybe if you're a savvy operator, you can figure out 30, 40, if you're lucky, like 50 percent of this. So after six months, you're sitting there on a sin seven contract, um, with 50 percent of the system kind of working, but like, it's, it's good enough. So a big difference with luminous, how we approach first off feedback in the product and also implementation is, um, we believe in getting people to a hundred percent, [00:22:00] right?

 

[00:22:00] It's so common that people on board sin seven, or they pay NetSuite a million dollars. And they're just sitting there at 70 percent completion. So with luminous, how we take feedback is. Our goal always is to get you to 100 percent and you don't, you don't pay extra for that. So how we take feedback for the product.

 

[00:22:21] Luckily, I have a, an amazing co founder and CTO. His name is Brendan, Brendan Beebe. He had exited. An ERP that he built for the golf space from start to finish. So he, he's been through all of this, like he's built so many different billing platforms, inventory points of sale. Like, so he, he totally understands how to craft a roadmap that.

 

[00:22:45] Can take into account all of the needs of, of our, our different clients. So we take feedback as we're going through implementation. If we can't get you to a hundred percent, we see that as like, okay, what is, what is wrong with [00:23:00] either implementation process or our product that you can't get to a hundred percent and we're constantly iterating every single one of the flows.

 

[00:23:08] Um, and I'm happy to say that. A lot of our clients, they're, they're at a hundred percent now. And it's through that constant iteration. And, you know, there's a lot of clients who sit at like 92%, but you best believe we're taking the feedback to get that, that last 8%, if they're not getting full usage,

 

[00:23:25] Ash Melwani: so I really great points that you made there.

 

[00:23:27] So the one, uh, one that I really want to touch on is I guess, figuring, figuring out the gaps within. The product, uh, customer by customer basis, um, and then figuring out the gaps between you and what's on the market. Right. Us at like obvi for the way that we kind of identify these things is we have a, we have a Facebook community, right?

 

[00:23:53] We have, we have like 80, 000 people in there. Um, they're telling us, you know, like what is, you know, are [00:24:00] there certain flavors that they really want to see? Are there certain products that they want to see? And, and for us, it's literally the biggest cheat code because we don't have to do too much to figure it out.

 

[00:24:11] They're literally coming and telling you. Right. Um, so I think there's, there's that element of. Filling in the gaps, right? Somebody customer telling you exactly what they want done on the other side of it now, right? Is. You want to obviously tailor to your customers, but you also want to, you do want to take market share from the others.

 

[00:24:31] Right. Um, so how do you guys go about figuring that side of the market out? Like, are you, I mean, I don't, I don't know if we can, we can say this, but like, do you, do you guys, Have accounts with like a since have internet suite to see what's going on. Like, I don't know, like, like when we do competitor research, we buy other colleges and we test it out, you know?

 

[00:24:52] So I'm curious if it's the same thing for a SAS platform. Here's

 

[00:24:55] Jared Ward: the thing, like with ERPs, these modules have built, [00:25:00] been built a hundred times, a hundred different ways. We're constantly referencing, okay, how does Dynamics 365 do this? How does NetSuite do this? How does, how does this point solution right here do this?

 

[00:25:10] How's the Shopify app do it? Oh, that's, we're, we're doing true market research there. And we're, you know, we're, we're trying to come up with the best solution. We're really curious with what could be the best flow, but luckily for us, I mean, this, this shit has been built hundreds of times, a hundred different ways, so yes, we absolutely.

 

[00:25:32] Look at our competitors. So for Luminous's forecasting flows, um Uh, this is kind of how we approached it. So I I've already, I have experience in the space, so I kind of knew which ones were good for what. So give me an example. So stocked, so stocked is a great forecasting replenishment tool for FBA brands, the way that you can configure and change some of the assumptions for, you know, okay.

 

[00:25:54] Is this based off of seven day sales velocity, 14 days, I need a 10 day buffer, blah, blah, blah, all of these [00:26:00] boring things. I love the way. So stock does that, but it's super limited in scope. It's really kind of only for FBA brands who replenished Amazon, but I really like how you can edit a lot of the assumptions then there's, for example, Cogsy Cogsy is a, they're a self onboarding platform that helps with replenishment for Shopify and FBA brands love their UI.

 

[00:26:19] I love how they show data visualization. Then, um, There's another founder in the space. His name is Fabricio. Fliber, the way you can configure settings for forecasting and Fliber. So how luminous will approach forecasting, for example, is like, we're going to take the best of all of those worlds and we're going to put it in there and we're going to run it against all of our, our customers and the users and see.

 

[00:26:44] Okay, what's what's the best way to put all this together? Right? So absolutely We take feedback from from the market Yeah, we're downloading tools. We're we're seeing what's what's done really well What's not

 

[00:26:55] Ash Melwani: and to to ship all this? I mean you need to have um, a [00:27:00] really solid team to do this, right? Um, I know you you mentioned your your co founder.

 

[00:27:04] Um, who's the cto as well. I think having the right Um, is super important for business, right? Um, for those who don't know our story at Avi is, you know, it's myself, Ron and Ankit. Um, we, we worked on an agency before starting Avi and, um, I think the reason it works so well is because, you know, I handle a lot of the, the paid marketing, right?

 

[00:27:29] Ankit handles branding and design and then you have Ron who handles finance and ops. And so between the three of us, you really can cover a lot of ground and you're never going to step on each other's toes because you're doing all different things, right? So i'm curious how You guys kind of came together.

 

[00:27:48] Is it something similar? Um, tell us the story behind, you know, how you guys got together to start working

 

[00:27:54] Jared Ward: on this. Yeah. So, oh man. So, so many lessons learned, um, again, I wish we would [00:28:00] have just listened to Y Combinator content earlier. Totally agree with what you just said. Whenever there's redundancy in partnership, um, issues will happen or you know when Somebody's not bringing Everything they should be to the table like that's that's when issues happen.

 

[00:28:18] So I had to learn the hard way What I really needed in a co founder. So, uh, luminous was, it was my brain child. I, I started from the very beginning. Um, eventually, so I, I actually brought on two co founders at the beginning. And long story short, I, I, I ended up finding out that. A lot of their skill sets were totally redundant with mine.

 

[00:28:44] And really what I needed was a co, a technical co founder. And this was all, this all happened like the early days. Um, but the dust settled and it kind of, we kind of figured out like, okay, [00:29:00] really this team is, is Jared and Brendan. Brendan is the technical co founder. I never knew that I needed. He came in, stepped up, took over, um, transformed the way we do business.

 

[00:29:11] And. Um, the other two original co founders ended up not working out, but, um, yeah, the, the biggest lesson there was what Luminous really needed to survive was they needed somebody who had strong background in e commerce operations could fundraise. I can actually do all those things. And then I needed somebody.

 

[00:29:32] Who was really good technically minded, a really good product manager, CTO who had built an ERP from the ground up. And that's what we ended up getting. So to all you tech founders or founders out there, just like he said, redundancy is not good. It's not like, Oh yeah, let's, uh, let's get a guy that has does this and this and I do the same things.

 

[00:29:51] Oh, it's going to be awesome. No, it's not. I

 

[00:29:53] Ash Melwani: think that's where the most problems happen. Right? It's like I've, I've had, um, [00:30:00] friends who've gone into business and you know, you kind of do the same thing and you're going to have. Different ways to do one thing and and that's where I guess, you know people get into trouble So, um, I think the the hardest part about this is actually finding each other, right?

 

[00:30:17] Um, I mean I when I look back at our story, I feel like things it was like the perfect storm that had happened right, um You know, like I grew up with, with Ron's wife. Um, and so it was just like, Hey, like, uh, you know, at the time they were dating, it's like, Oh, let me introduce you to my, my new boyfriend.

 

[00:30:32] Right. So met him introduced to Ankit. Um, and we kind of just all hit it off, you know, and we all had that same, you know, entrepreneurial spirit. We all wanted to do the same thing, had the same goals. Um, I guess we kind of just found each other, but how did you and, uh, your, your partner find each other?

 

[00:30:51] Yeah.

 

[00:30:52] Jared Ward: First off on Tinder, on Tinder, right?

 

[00:30:54] Ash Melwani: Imagine

 

[00:30:55] Jared Ward: there

 

[00:30:55] Ash Melwani: is an app where you can find co founders. That's actually kind of,

 

[00:30:58] Jared Ward: ah, that's actually, well,

 

[00:30:59] Ash Melwani: [00:31:00] we'll, uh, we'll, we'll talk with him after, uh, build something out.

 

[00:31:03] Jared Ward: So, um, Brendan came on right after we fund, actually it was right as we were fundraising. Yep.

 

[00:31:09] So right with, with that first money in,

 

[00:31:11] Ash Melwani: you guys built a product before he even joined.

 

[00:31:14] Jared Ward: Yeah. So that in the early days it was, it was just me and an outsource team. And that was it. I got to beta and then I sold five, five customers. And when I was fundraising, I brought on, um, two co founders. Brendan came on because you know, one of our early advisors, um, his name is John Richards.

 

[00:31:31] He, he was like, Hey, Jared, he, he flagged some things, which Like in hindsight, it's like, that's the wisdom that we needed. And that's why it's so important to have advisors around you to call out some of the bullshit that's happening. Um, He was just like, Hey, you, uh, you have to have a technical co founder.

 

[00:31:50] Um, you, otherwise this product, it's not going to go anywhere. Right. So he actually introduced us to Brendan and Brendan had just come fresh off the exit [00:32:00] from an ERP that he built in the golf space. And he was looking to make an even bigger impact. He totally understood everything we were doing at Luminous.

 

[00:32:07] Our investors also called out some of the redundancies between like me and some of the other investors. It's, it's amazing, like how, how things end up working out and you can, you can totally see how companies. Or they, they spiral and just like go out of business. So much of it, if you don't nail these things early, it's going to become a massive issue for the business.

 

[00:32:30] Yeah,

 

[00:32:30] Ash Melwani: no, I agree. Um, speaking of issues, uh, when it, when it comes to, to the business, um, I know you mentioned, um, before, um, or maybe we, we talked about this before the pod, but, um, a lot of these ERP, uh, tools or platforms, um, whether it's like you're kind of self onboarding yourself or you have somebody implemented for you, but it costs a ton.

 

[00:32:55] Um, how do you guys do it and what makes you guys more successful [00:33:00] at it than, than others?

 

[00:33:01] Jared Ward: Yeah. So a couple of things, number one, the way we monetize is so crucial. Um, So most ERPs, what they'll do, and there's a reason for this, by the way, when a, when a tech company is implementing you as an e commerce company, uh, they're taking a big risk on you.

 

[00:33:19] So that's why they charge implementation fees because a lot of times they're going to be spending a lot of time and resources onboarding you. So, um, NetSuites, for example, have like a minimum onboarding fee of like 50, 000. Even SYN7 will charge like five, 10, 000. No wonder they're just

 

[00:33:34] Ash Melwani: sending water bottles.

 

[00:33:36] Jared Ward: Yeah. And it's, and then, you know, on top of that, it'll be like a yearly fee of 80, 000. It's a year long commitment. So here's the difference with Luminous. Cause e commerce companies, first off, that's, that's a big chunk of change to commit to could literally spiral you out of business if this is not done correctly and what e [00:34:00] commerce companies are looking for, this is something I know as, as a founder and somebody who operated an e commerce company, They're looking for somebody who's equally as scrappy.

 

[00:34:08] Who's like, here, like, let me prove to you that this is going to work. So Luminous monetizes with free implementation. As long as you do a year long commitment, we do free implementation. And that implementation normally includes. An onsite visit, crazy support. So like the type of support that you'd have to pay like 500, 000 from NetSuite to get.

 

[00:34:31] Um, we give you for free because we think that's, that's part of our business model. We get to prove to these brands that we're putting, we're putting our necks on the line here too. You guys need to get implemented within the next couple of months for this to be profitable for us. Right, right. And we, we kind of put ourselves in the same situation that our customer is.

 

[00:34:51] So we're so aligned. Um, and. Yeah, I'd say the support that we give during implementation is second to none. [00:35:00] Um, like I said, with a sin seven, they're flinging you a jigsaw puzzle, splat, and you get to try to figure it out. And when you ask for help. You got to pay for the help, or if somebody is helping you, it's, he's telling you how to solve a jigsaw puzzle, but he's never done it himself.

 

[00:35:17] It's like just a customer support rep. So Illuminus, you actually have former operators that people have done really challenging implementations. They know how to solve the jigsaw puzzle and we're going to be sitting right beside you. That's all included in the price. Yeah.

 

[00:35:29] Ash Melwani: So I'm curious, I mean, white glove service is amazing.

 

[00:35:32] The fact that you guys are going out of your way to do that. Right. And it proves that you're, you're putting your money where your mouth is. Do you have. I guess in your mind, a way to scale that, because as you get bigger, like how many, how many people are you guys going to, you know, like you said, you visit them and this and that, like, is, is that whole thing scalable?

 

[00:35:50] Do you have a plan for that? Absolutely. So,

 

[00:35:52] Jared Ward: uh, first off scalable, scalable is all relative relative to what? Well, I mean Luminous can sustain [00:36:00] 2x, 3x growth every single year with the current rate that we're doing and it's because we're, so we're not, we don't price match for SYN 7. Pricing wise we're gonna be between like a SYN 7 and NetSuite.

 

[00:36:13] So we're gonna be right in the middle and it's all in pricing. So we're getting some decent sized contracts and we're crushing the experience for all of them. But no, we're not trying to buy That's where like, unapologetically, and I tell this to our VCs, like, I'm not trying to go to a hundred million dollars in revenue this year, like, No, we're, we're not trying to blow up.

 

[00:36:36] We're, we're bringing on really good foundational clients who we know get tons of value out of luminous. And yes, it is scalable through slowly scaling our team. Like we have to really slowly and meaningfully higher. good operators, former operators of e commerce companies that can take on, take on those clients.

 

[00:36:58] But it's, [00:37:00] yeah, it's scalable. Like we can keep two X and three X in growth every single year with our current team and we can slowly hire more and more. Um, but we're not, the answer is we're not trying to 10 X, a hundred X. We like the pace that we're growing at and we're going to keep going.

 

[00:37:15] Ash Melwani: Oh, makes sense.

 

[00:37:15] I mean, I mean, take the time, build out the product the way that you guys want it to, to be, and obviously make it perfect. Cause I've seen companies that try to do too much too quickly and then fail, right? Their main proposition ends up being. Completely if it completely misses the mark of, you know, just cause everybody's trying to do everything.

 

[00:37:34] They want to have a feature that everybody else has. And it kind of, it ruins the, the experience and it, it doesn't really solve the pain point that you were there to solve in the beginning.

 

[00:37:44] Jared Ward: And we're, we're totally different business model than like, I keep saying since seven, but I mean, it's, it's, we run to them all the time.

 

[00:37:51] We're, we're totally different business model than since seven. We're since seven, you know, Heavy spending on PPC and advertising and they're trying to get self onboarded [00:38:00] users You know, they might onboard a thousand users in a month But you know, they expect 70 percent of those to churn and then 30 percent will stick around but they'll only use like 50 percent of platform No, I would rather Just crush the experience, get a hundred percent implementation on a meaningful number of clients every single month.

 

[00:38:19] So it's totally different approach. And this is, it's much more sustainable revenue. Our LTV is higher. Um, yeah, it's, I love the way we're doing it and it's definitely

 

[00:38:29] Ash Melwani: sustainable. I mean, I, the fact that they have a 70 percent turn rate is crazy. Well, I don't know for sure. Speculation. Yeah, right. Um, let's talk, um, let's talk future of, of Luminous, right?

 

[00:38:43] Um, I know we, we talked a little bit about current feature sets, but anything that you're looking forward to this year and, and beyond? Yeah,

 

[00:38:51] Jared Ward: so we're making a big push to get e commerce companies, um, off of NetSuite. So we're on a campaign of [00:39:00] We've already gotten our first company off of NetSuite successfully.

 

[00:39:04] This year, and especially in the next five years, Luminous will be the number one back end system of record for e commerce. Um, you don't believe us? Just watch us in the next five years. Um, So this is, it's kind of like a call to, to everybody. If you're looking at NetSuite, if you're on NetSuite and if they're, if they're raising prices this year, like they are with so many other companies that they're not the only option out there, we can service you.

 

[00:39:31] Let us take a look under the hood.

 

[00:39:33] Ash Melwani: Towards the, towards the end of every episode, we like to do what's called a chew, right? So if there's one thing that you want viewers and listeners to kind of take back and implement in their business today, What would it be? Besides Luminous, of course.

 

[00:39:50] Jared Ward: Make sure your processes, the software that you're using, is right sized for your company.

 

[00:39:55] Luminous, a lot of times, is coming in and fixing an [00:40:00] implementation that it was, it was doomed to fail. It was doomed from the start. It was a square peg into a round hole. Really make sure this solution, it's great for a hundred million dollar company or a billion dollar company. That doesn't mean it's good for a 40 million e commerce company.

 

[00:40:16] I like what you were alluding to before. It's okay that like a Google sheet works for you. Like there's, there's nothing wrong with that. Just as so long as you have clear SOPs and procedures and you have a right size tech stack, don't jump onto something that's too big.

 

[00:40:31] Ash Melwani: Love that. If you want more from us, follow us on Twitter, follow us on Instagram, follow us on Tik Tok, and check out the website, chewonthis.io