Welcome And Surpass Origin

Jared Ward 0:09

Welcome to Office Unfiltered the podcast. Anybody watching who doesn't know this is Chris and Paul from Surpass. We're here with join Lumen. With Surpass. We've been working with Surpass for a long time. I think it's real fast. I don't like to go over founding stories for like 20 minutes.

What EDI Actually Is

Paul Tittel 0:44

Listen, I've been in supply chain my whole career, right? It's it's always kind of fascinated me how you know trucks and trains run. And um, you know, I even did some time like in the public sector on the procurement side. Literally every role I've had has been tangentially somehow related to supply chain, right? Um and I kind of once again, you know, get out. But anyway, um, I always had the entrepreneurial itch, right? And um, you know, it was actually I got started during COVID, right? Where we were all kind of working from home for like 15 months, right? Um, got the house, got the mortgage taken care of, no one cares where your paycheck is coming from anymore. And I'm like, this is the time to do it, right? And I just started doing consulting, right? I wasn't really, you know, a solution in search of a problem. Uh, it was like for problems to solve and just kind of kept executing on that pattern and was lucky enough to, you know, um gain the trust of um, you know, some significant, you know, players in um, you know, food services and CPG and manufacturing and private label. And um again, just kind of like kept solving problems and uh built a great team around um around that process and and surpass was kind of born, you know, through that. So and now we've got an amazing technology platform. Um, and uh was able to hire um bring bring on Chris uh for our go-to-market strategy. And I know that's way more than 60 seconds, but um you know that's that's kind of the story, right? It's a sweet talking. Yeah, that's it.

Jared Ward 2:11

Well okay, I want to dive into on brand founders and operators watch our podcast. Um what what is EDI? So what what is it?

Paul Tittel 2:21

Yeah, so EDI is at its base, EDI is a standard, right? It's a it's a structured protocol for the exchange of vital business documents, right? So purchase orders, shipment notices, invoices, inventory messages. Um that's really what they are. They're messages, right? They're interchange messages that you exchange amongst parties to for the vital exchange of information, right?

Brendon Beebe 2:43

And EDI isn't like how things are transacted, right? It's it's pretty much just like EDI defines an A50 as a sales order.

Paul Tittel 2:49

Yeah, it's a business process more than anything, right?

Jared Ward 2:52

Why do you think people, especially coming from the Shopify ecosystem, have such a hard time understanding? Shopify ShipStation, why does it feel like those are two just totally separate worlds? Like EDI.

Chris Brunell 3:03

Shopify has done an amazing job at lowering the barrier of entry for so many businesses, right? Um, they can, you know, for a very low investment, somebody can get started and and and get up and running. What happens is as they continue to grow, you know, their their vision, you know, their their peripheral vision about what the market looks like and where they want to take their brand really expands. And, you know, they start thinking, you know, if I'm this successful at this, right, maybe this could become a national brand that's sold at retailers. And for many founders, that that becomes a dream, right? Because you're going to go from a seven-figure brand to a nine-figure brand and you know, hopeful exit, right, in a in a very short amount of time. And the most, you know, uh well-worn path to get there is through, you know, retail distribution, retail wholesale distribution. And for that, you need to do EDI, right? It's not, you know, a like, you know, maybe we'll get there. Um, but it is, you know, it's it's new information for many, right? And you know, the people that have a successful business that do the exits, right? Um, you know, if they're that successful, they don't usually do another, right? So they they take that institutional knowledge right to retirement with them. Right. And uh, you know, so a lot of these folks are are learning about it for the first time, you know, as as new businesses, and they're kind of uh, you know, learning about what does that wholesale, you know, what does it take to be successful at the wholesale distribution national brand level? Yeah, right. And of course that is many things.

Paul Tittel 4:32

Yeah, it's a totally different motion.

Brendon Beebe 4:36

I just kind of funny thought is everybody's always like EDI is this old antiquated thing that's been used forever, and they're like, it's gonna go away. But EDI simply defines the documents. The format isn't EDI, the format can be anything, the method by which you transact those files can be anything. Like EDI is simply a sales order, an invoice. Those concepts aren't going anywhere.

Chris Brunell 5:01

Yeah, well, no, you could you know if you look at the actual standard, right? The X12 standard, there's there's a hundred plus fields in each one of those. And then when it comes to the retailers, how would you describe what it what does X12 even mean? X12 is a subcommittee of the American National Standard.

Brendon Beebe 5:18

All right, describe it for like uh Shopify DC person.

Chris Brunell 5:21

Yes, exactly. So American national standards is they figure out you know uh all kinds of different you know standards for the uh industry efficiency, right? If everyone had different rail gauges at one point, you know, they don't right anymore, right? So standards make things run better and they drive efficiency, right? Um, the only challenge with that is is that on top of the standard, you have a layered business process and functional requirement of each retailer. And when that happens, that embeds a certain amount of you know logic into those uh mappings, right? Into the EDI documents themselves. And uh it's a functional translation of a business process, right? Here's what we uh are buying, here's what we expect, here's how we're acknowledging the order, here's how we're changing the order, you know, uh, here's how we're shipping the order.

Brendon Beebe 6:07

So and well, so all those things EDI says a sales order is an 850. X12 defines what should that document look like.

Paul Tittel 6:16

Yeah, and it also defines like every kind of like every segment and every element and what the and what the different codes represent. So one of the things it does really uniquely is that it covers kind of like every variation of why a shipment might be delayed, right? Like literally everything from motor carrier failure to you know labor disruption, right? So that's what we mean by standardization and and and how you know the standard has evolved over time. Um, and that's all baked in, right?

Brendon Beebe 6:44

And so it's standard defined though, because I feel like every EDI doc, like you might have an 850 from a hundred different people and they all use X12.

Chris Brunell 6:50

So it just so we're clear, right? 850 means purchase order, right? In EDI plot lance, right? And uh the reason why it's called 850 is because there's 1,100 different documents, right? And they cover all manner of types of uh, you know, uh ocean carrier unloads, yeah, uh drayage, dunnage, uh, you know, you name it in the supply chain, uh, there's a document that probably explains it. And then there's a directionality, and then there's other, you know, sort of abstractions uh within there, right? So that's why, you know, if you hear terms out there like 850, 855, 856, right? These are the uh, you know, the encoded you know, meanings of those standards, but they all have you know different purposes and meanings.

Paul Tittel 7:32

I would say too, a lot of the reason why the age 50 is different, the 850 purchase order inbound from a retailer is different, is because they have varying requirements on how that order needs to be fulfilled, right? Because not every retailer is the same, right? Their network is totally different, right? Their lineage and how they evolved is different. So they have to signal certain things to you in the order that allow you to fulfill it in such a way that they can receive it and distribute it to their stores, right? So each of the documents is like intrinsically connected um to each other, the inbound order and all the responses, and of course, that's different across your different retail channels, right?

Why Shopify Brands Struggle With EDI

Jared Ward 8:08

I just think of my customers on Shopify and as they they expand the wholesale. It's not antiquated, it's Shopify brand founders and operators, they confuse structured with antiquated, and Shopify just allows you to do anything, you just like I just post an order and you edit it and you 99% of them are dealing with you know a D2C type of situation, right?

Chris Brunell 8:33

When you have an encoded you know, order coming in where there's you're gonna want that if you have certain logic involved and certain quantities and volumes involved, right? So when we talk about the e-commerce marketplace, that's 15%, right? Uh and the other 85% is is transacted over EDI, right? It underpins $64 trillion worth of trade, right? And so it's an amazing amount of volume. And then when you have that encoded, right, you can bring that into an ERP system and say, well, you know, it doesn't fit my pricing rules, my volume rules. Yeah, you know, that doesn't fit, you know, uh, you know, I need to route that to a separate, you know, fulfillment center based on a proximal, you know, uh ship to location. And you know, there's more advanced stuff you can do when you when you're bringing things in in a structured format. But it it is a bit overwhelming at first, right?

Paul Tittel 9:28

It can also be a really valuable key for um, you know, functionally having the ERP behave the way that you want it, right? So we know when a certain value comes in on the 850, oh, I want to trigger this type of fulfillment order. Or we know based on the you know, ship two code that we want it to route to this warehouse based on proximity. So I a lot of times I see it as like that uh 850 or any EDI message being the key and the ERP being the um the lock, right? And the two work together to create um the best possible operational outcome for the for the brand.

Jared Ward 10:03

Yeah. I guess from our side, we see we see so many brands who they try to jerry rig Shopify as a as this wholesale platform, which sometimes it works, but you and what you inevitably run into is they want to keep the unstructured D2C cowboy wild west. Like anybody can write any type of order, yep, and you can edit it whenever you want. Yeah. And we want complex routing and all these rules, but like there's zero structure. It's just it's interesting. I feel like what the reason why people have such a bad taste in their mouth, especially D2C founders with EDI, is because it forces structure, they don't understand it, and they're used to the cowboy wild west, yeah, Shopify.

Chris Brunell 10:43

It frankly, it it also forces you know an investment, traditionally speaking, right? A larger investment, and they might not be prepared to make that investment based on you know the potential payoff for that. And you know, that's a really tough uh, you know, especially in the early days, right? Where you know they it might be, you know, their first retail pilot, and you know, they don't know what to expect. It might be successful, it might lead to you know, um, you know, a thousand stores, or it might, you know, you might fall on your face. So why would you sit there and say, you know, I need to plunk down, you know, 10, 20 K, right, in order to make that happen.

Jared Ward 11:18

What is that's why would you guys, what would you what would you guys say the map is for a brand who's who's just getting into EDI? So they've say they, you know, they just got a pilot with Target or Walmart or something. Yeah. At what point, what, what should they use at the beginning? And then at what point do they start looking into a service like Surpass?

X12 Documents And Retailer Requirements

Chris Brunell 11:36

No, we find that there are two types of entrepreneurs, right? And I hate to simplify it, you know, but I'm just trying to help, you know, the the bifurcation. There are certain entrepreneurs that know what they're doing. And I say that, you know, kind of because they they understand that there are systems like this that exist and they understand some of the reasons for them. Perhaps they were an operator in a prior venture, right? Maybe they worked uh, you know, as a as an individual contributor, right? Uh, or uh, you know, they've got a relative or a friend who's done this before, and they know that it's an inevitability, right? They're they know that they don't want to manage by spreadsheet, right? They know that they don't want to, you know, uh the the costs involved with with with with screwing up, right? So they they kind of get out in front of this and they make the necessary investments. Um, and then there are folks that kind of like, well, I got in and uh uh I don't know what to do. Uh I'm just gonna listen to my retailer. And what is the retailer gonna recommend that I do and how to make it most simple for the retailer just so we keep the retailer happy and we've got to make sure that they're fine, right? And they and then they step in and then they end up with something that actually causes more, you know, manual labor and doesn't scale, and then they end up at an impasse, right? And and figuring out, geez, you know, it really shouldn't be this hard. Why, you know, why am I spending all this labor? And you know, because I'm manually keying stuff in different web forms, right? I'm making errors. That's only natural. It's a non-zero percent of those is going to have an error associated with it. And if that's the case, you know, that's gonna manifest itself in uh an error with your retailer, which is a chargeback or an unpaid invoice or a delayed invoice. And that's how they kind of manifest themselves. And, you know, typically what'll happen then is they start realizing they have a problem, right? And they start looking around. And then, you know, for surpassed, we don't have a web forms, right? Because we believe that sort of, you know, kind of flies in the face of uh of why you would want to do EDI in the first place, right? If you do a web form, uh, that might help the retailer get its data in a in a structured way because that helps their volume, right? But that doesn't do anything to assist, you know, a CPG, you know, uh startup and a you know, early scale up uh figure out, you know, uh their business efficiencies.

Paul Tittel 13:52

Yeah, I actually think that though the the web form approach um can kind of be like a um like a coping mechanism. In other words, like it's just really easy to hammer through those fields, right? And who knows if they're accurate and who knows if what you're gonna fulfill is gonna match it. The other thing I I would say is this it's never been um easier, cheaper, faster to integrate with a system of record like Luminous, right? You talked about that separation between D2C um and and wholesale. Well, I really like the structure that you guys have come up with, right? Where everything is separated into a channel, and then you can, you know, program the behavior and the fulfillment using automation rules um based on um you know the origin, right? And so yeah, it's a different era.

Chris Brunell 14:38

It really, you know, it the web forms is a hallmark of a bygone era, right? If we go back just five, 10 years, these ERP systems were really, really expensive to implement and and to acquire and to integrate. And uh, you know, if that's the barrier of entry, then you've got to do that much more labor, right, until it's actually worth the investment, right? And now, now that that investment has come way down, right? It it you know, it's sort of like, well, how long do you think it's gonna take you to get from here to here in order for the scales to tip in favor of automating it? And and you know, they you know, entrepreneurs have never had more information at their disposal with uh, you know, uh the LLMs and you know, they have like virtual coach co-pilots, right? Not to pick one brand or another, but you know, they ask their LLM, like, well, what is you know the case here? And if an entrepreneur is thinking, like, okay, I'm going to pitch this retailer, that retailer, this is an inevitability. I'm going to, you know, within three years, I'm going to have 10 trading partners, right? Then of course they're going to want to get out in front of that before they, you know, uh, you know, learn the hard way that, you know, copy and paste Olympics, right? That is there's no way to run a business.

Brendon Beebe 15:54

You know, something we run into a lot. Um I'm curious to get your take on why brands end up here. Is uh well, talk to a brand who's into like seven different retailers, but they're paying Commerce Hub some money, they're playing SPS Commerce some money, they're playing Disco some money, and they're like, No, I can't get off these platforms. My retailer required it. Why that's not a true statement, but why does do the brands get to that place?

Paul Tittel 16:24

Um well, I think for you know, a myriad reasons, right? Um I think it's a lot of times it's just the path of least resistance and whatever is is there at the time to you know try to meet the moment. Um but I I think that uh you know I I I I think that um uh there's never been uh I again coming back to your point in terms of access to information, right? Um I think you know EEI is is way less of a black box than it used to be. And that um, you know, there's just um but what happens to the brand?

Structure, Cost, And Early Pain

Chris Brunell 17:01

Like why I who spreads the misinformation? When when when you think about you know those type of charges, right? And how they came to be, you have to what kind of charges? You know, the ones from disco and commerce hub and and and those things, right? You have to really understand the history of how those charges came to be and you know, sort of the pedigree of those businesses, right? In um, you know, mostly you've got sort of team CPG, right, team entrepreneur, and then you've got team retail, right? And one of the things that uh a lot of team retail type of providers have done is they've gone to the retailers and said, you know, you've got IT resources that you know uh you're spending money on that you don't need to be spending money on.

Brendon Beebe 17:47

So companies like SPS Commerce go to a retailer, exactly, right?

Chris Brunell 17:50

They go to a retailer and they have a you know sophisticated, you know, enterprise sales organizations and they they say, look, you know, we can we can handle that for you, and it's not going to cost you anything. We have a system that'll turn you know your expenses right around and uh we'll charge you know your suppliers a nominal fee, right, in order to offset those expenses. And all you have to do is tell them that we're mandatory, right? And um, you know, what what's the complaint about, right? SPS, you know, and the others all get, you know, um, you know, uh a lifetime supply of of fresh leads for their sales team, yeah, right. And uh, you know, and then the supplier uh coming in um usually doesn't know what they don't know about this because they might be dealing with it for the first time. And and uh, you know, next thing you know, they're paying, you know, these you know exorbitant fees and not really uh thinking about you know what they should be, which is what's the best thing for my business might not be the best thing for uh the you know uh the retailer, right? That's best interest. And it's it's a tough position that they've put everyone in.

Brendon Beebe 18:57

So they go to a retailer, the retailers decide to use SPS Commerce, and the retailer tells the brands, hey, here's SPS Commerce. And does the brand have to use SPS Commerce?

Chris Brunell 19:10

It's it's such a narrow yes, right? Because what they actually mean is a uh testing procedure, right? Uh that uh that they do sometimes require, right? SPS Commerce will perform that in order to offset the IT expense of the retailer, right? But um that doesn't necessarily mean that you have to use them as your full-blown provider forever and ever, right? And that's where a lot of folks get caught up, right?

Brendon Beebe 19:40

Meaning you have to pay the one-time fee to get tested, right? But SPS Commerce tricks them to paying a monthly fee, right?

Chris Brunell 19:46

You don't have to necessarily use them as your provider. Now, you know, as right? It I mean, they can be a little economical with the truth, right? They're I mean, they're not in the business of getting a fresh lead in and saying, oh no, they only meant the test. Uh you know, yeah, you know, it doesn't, you don't have to, you know, they're going in there saying, um, they said you have to, and uh, this is our service, right? And not, you know, there's a distinction here. And then there's there's another 20 providers out there, right? Do you really think Procter and Gamble is using SPS? Right? Do you yeah? Do you think that these other you know major providers? No, right? There's there's 20, 30 providers, right? SPS themselves have bought, you know, 25 plus acquisitions over the last, you know, uh uh, you know, many years, and you know, and they many of them were were other providers that that they competed with, right?

Brendon Beebe 20:37

So brand goes to one retailer, the retailer says use SPS. The brand unknowingly signs up for a monthly contract, like yearly. Yearly. They feel like they have to.

Paul Tittel 20:47

Well, listen, it could be 15 months too, right? Uh yeah, yeah.

Brendon Beebe 20:51

And they go to another one and it's going to be Commerce Hub or Commerce Hub.

A Practical EDI Starting Roadmap

Paul Tittel 20:56

Yeah, again, I I think um, you know, Disco and Commerce Hub, they provide a similar service, right? They do they abstract away the testing for the retailer, um, and then they pretty much act as like kind of a pass-through service, right? Uh so even if you need to make real changes to the EDI messages that you're getting through Commerce Hub, you really have to go back to the buyer, right? You really have to go back to the retailer and say, listen, I'm not getting you know my vendor part number and I actually need that, right? Um, so yeah, it's good work if you can get it. Um, but uh as they say, like with you know modern supply chains and you know the workflow execution that is is really enabled by the era that we're building in, there's there's so many different options, right? In terms of so what do you think?

Chris Brunell 21:41

Let me just jump in for a sec, right? It does make sense if you think about it from the retailer's perspective, right? You've got 3,000, you know, 5,000 net new suppliers that come in that add a lot of the you know flavor to your assortment, and uh they're coming at you with all types. Different things, right? Uh, you know, they might be they might have done this a lot before. This might be their first time, right? They're getting people all different manner of sophistication, right? And and so they might know exactly what what they're doing, but you know, there's many that don't. And for those folks that don't and are dealing with it the first time, that adds a lot of friction to the onboarding process, right? And a lot of uh, you know, a lot of QA back and forth, you know, what is EDI? Well, you know, the retailer doesn't necessarily want to provide that education, right? And and that could be, you know, that's that's an expense, right? At the end of the day, and that's how they were able to, you know, arrive at that justification to, you know, just say, hey, maybe we'll just recommend. Now, the other part I mentioned is that it, you know, 10 years ago, uh the retailers would give you a list of a dozen or more uh trading partners, right? In our, you know, my prior EDI company, we were one of them, you know, for Target and for you know Jason Penny and a bunch of others, right? Um, you know, that doesn't, you know, they've reduced that since then. It's difficult.

Paul Tittel 23:04

Yeah. There's been a lot of acquisitions, right? And consolidation, and you know, now we're here to compete, right? And competition makes everybody better and provides more choice and option for brands, right?

Jared Ward 23:17

Well, what advice do you have for a brand navigating that conversation with a retail buyer? The one what advice do you have for a brand who is navigating a conversation with their retailer who's telling them you need to use SPS?

Chris Brunell 23:32

Um I mean, I I hate to use the uh the other cliche of do your research, right? Yeah, but um, you know, there are many different providers out there and there are different ways to run your business, right? Um look toward uh you know people that have been there and done that, right? And and figure out, you know, what are they using, you know, who are the providers? Let's you know conduct an evaluation of of you know the the various ways that I should be running my business, right? You know, if everyone just said use sap, right? Um, you know, it would crush the uh consumer package goods market, right?

Paul Tittel 24:08

If the buyer is quite fit for everyone, if if the buyer really did say that to the supplier, they would definitely, yeah, they would be doing them a disservice. I actually see a lot more sophistication from buyers and conversations that I'm part of these days to find the best solution and option, you know, for their supplier. Um, so I actually think it's it that's more um that messaging is more coming from you know incumbents who have a vested interest in things going a certain way. Um that would be my that's what I see.

Brendon Beebe 24:37

Right. Yeah, it feels like it comes more from like yeah, I've heard that messaging from SPS Commerce. That's true. They push you to SPS Commerce through the testing, and your first call isn't with the testing person, it's with a sales rep. Yeah. And the sales rep is maybe they never say it, but they give that impression of like, oh, here's the contract, you're gonna have to pay it. And they're not saying you actually don't have to sign up for a monthly membership.

Paul Tittel 25:01

No, so they do say that. They do say that you have to use SPS. I mean, I've seen it in black and white. So, um, and I I get the impulse, right? I mean, I get it, but it's it's not true and it and it doesn't often serve either their retailer, which is their real customer, um, or the supplier, right? Um, does it always make sense for two business partners to be on the same side of the desk? No, right? It you know, in a court of law, like you know, an adversarial system, you know, it works, right? You have the tension on both sides from the buyer and from the supplier. Should they be in the same, should they should those two tenants be in the same tenancy?

Brendon Beebe 25:37

And it's kind of like I don't think so. It's kind of like the prosecutor's prosecuting you, but he's also defending you.

Paul Tittel 25:41

It's I can't say it's a conflict of interest, right? You know, so I think there's a lot of value in having that separation, right?

Chris Brunell 25:48

Church and state. Right. And I think that you know, there's a lot of buyers out there, you know. I I'm sorry, there's a lot of suppliers that are out there that understand that uh there's safety in going with the biggest, right? And and there's, you know, uh to the SAP, you know, or the other systems that are out there, right? And you know, I think we all know who we're talking about, but uh the biggest doesn't always necessarily mean the best, right? And it doesn't mean the cheapest, and it doesn't mean you know, the best fit for your particular business, right? Which is really important because we're not a fit for everybody. We know that, right? We talk to enough customers to realize, right, and you guys too, right? Um, you know, there are certain shops where it's like, ah, you know what? I'd we'd we'd love to help you, but you know, might might not.

Paul Tittel 26:36

Well, I would say this too. The biggest, you know, oftentimes implies incumbency, right? Um, and um, you know, they they have you know innovation dilemmas, right? Um, what if we really do, you know, abstract ourselves away or interface ourselves away, right? These are publicly traded companies with vested interests in doing things a certain way. They're resistant to change, right? And so uh again, if you're if you're you know, if your only path is is with uh you know a legacy incumbent, you're not availing yourselves of you know the latest and greatest in technology, right? So we talk a lot about our service, but our technology is leading edge, right? Um you know, our our vintage is now, right? And think about you know the tools that we have access to and you know the architecture that we're putting in place to, you know, to to to to modernize this space, right? It's I mean, it's never been a better time to build. And you know, some of our closest competitors are, you know, even recent entries. I mean, the late, the the the youngest one is 12 years old, right?

Chris Brunell 27:36

Right.

Paul Tittel 27:36

SBS is on 40-year-old architecture. You know, it's very, you know, Brendan, I know you would know. I mean, touching that, we wouldn't want to touch that with a 10-foot pole, right? And you know, so there's a lot of people.

The Truth About Mandatory Platforms

Chris Brunell 27:47

We go the guys that you you know you are normally positioning against or 20 years old, right, or or more. And you know, they have, you know, it's tough to understand at two levels, right? One is, you know, there's for technical companies, there's something called tech debt, right? Where you drag along everything and um, you know, you you try and make it work. Now, from a customer experience perspective, tech debt looks like it takes too long to get this done, right? Why does it take that long? It doesn't make sense. Or uh I've made a small request to change something or customize something or tweak something, and then it's oh boy, you know, that's wow, you know, that's gonna take you know six weeks or more. We're gonna have to bring consultants in and programmers, and you know, and you know, you wonder why, right? And the answer is is usually, you know, architecture, tech debt, and those the other thing, you know, just to understand is is right now we're in this fabulous, like kind of crazy investment cycle where everyone's dumping money into AI, right? And we've seen those cycles before, uh, and it's because the foundational tech, right, the real underlying, you know, new stuff leads to you know greater efficiencies for whatever business processes ride on top of them, right? The venture capitalists know that, right? And that's why they get the lion's share of attention when when new technologies come out, right? Um that's where the advantages are. That's the stuff, right? And and not just the AI stuff, right? But but that's the you know, new stuff that newer companies end up building and architecting their solutions on because they'll realize that there's you know long-term strategic advantages and operational advantages for using that that new stuff that the old guys can't just rip stuff out and throw new stuff in. And um, you know, I think that's part of the reasons why you see, you know, there's obviously, you know, uh some some risk there, but you know, that's kind of helping, you know, non-software people uh, you know, understand how we you know look at stuff that has that, you know, that has those advantages.

Brendon Beebe 29:54

I'm curious. Uh it's like a kind of different topic, but uh when uh when I first got into EDI four or five years ago, I was surprised at the usually when you talk to a sales rep, they're trying to sell you on their services. I want to talk about like the sales tactics you've seen in this space.

Paul Tittel 30:16

Um fear, uncertainty, and doubt. Exactly.

Brendon Beebe 30:21

All three. Like when somebody hops on a UVI call, what is that sales rep doing and what should they really looking out for?

Paul Tittel 30:31

I mean, yeah, you take take the lead on that.

Chris Brunell 30:34

Yeah, you're a sales ninja. Yeah, well, I mean, I've been in you know ADI and in in you know sales capacity roles for you know 25 plus years, right? So um look they have set it up structurally to their advantage, right? They're entering the call expecting uh no resistance, and uh because their biggest customer just told them you have to use them, right? Like there's I mean, what would you say? Like there's the door, beyond it lie millions in treasure, and uh you know, you have to, you know, do this, you know, little dance and a little bit of a requirement with this one vendor before you get through that door. What are you gonna do? Right, right. And and uh so they set that up, and it's you know, commercially, I'm a little envious, right? It's it's brilliant, yeah, you know, uh you know, but but it doesn't really help anybody and it doesn't it doesn't really serve anybody and it it you know especially the retailer. That's the that's the craziest part about it, because you know, if you're using the wrong tool for the job, right, you're creating downstream inefficiencies that will manifest themselves ultimately in the price you pay for those goods, right? So, you know, let's ruin this, you know, get the wrong thing for the right, you know, yeah this job, right? And then see what happens. But you know, the sales reps, um, you know, by and large, you know, follow the script and they train them very well, you know, and you know, they're usually very young, they don't actually have, you know, actual EDI experience, right? Um, they're just well trained, you know, to to you know, work on the fear, uncertainty, and doubt. Yeah, right. And and it works both ways. It works in the traditional way of saying, you know, everyone else uses us. Everyone else, right? I've got 72,000 customers or whatever it is, right? And it, you know, and it's um saying, you know, there's safety. Uh you're not going if this goes bad, right? You're not going to get blamed because there's 72,000 of them, right? They can't all be, you know, running their business into the ground, right? So you made the right decision, right? You you're covered, right? And um, that's you know, that that's a great tactic, you know, for somebody that's trying to avoid risk, right? Somebody who's saying, hey, you know, and what, you know, there's a lot of risk out there. I'm curious.

Paul Tittel 32:59

Yeah, Paul's gonna say what they don't lead with is like service, right? And value and outcome, right? It's basically the pitch is die another day. Sign up today, figure this out now, otherwise this might evaporate on you, right? I'd probably fall for it too.

Brendon Beebe 33:17

What have you heard them say?

Paul Tittel 33:18

Or uh what well I I see in black and white, right? Right. The line that, you know, you you've got to use us to to do business with X, Y, Z. So um and again, like, yeah.

Chris Brunell 33:29

We we see a lot of, you know, um, you know, FUD right fear, uncertainty, and doubt thrown at, you know, if they get a whiff that you're maybe evaluating some other options or thinking about, you know, what might be best for your business, right? What do they do? Would come in heavy, right? And say, oh, those guys, oh yeah.

Paul Tittel 33:45

So I'll give you an example of that. We got an anecdote from uh a mutual customer, right? A brand who um was told by a legacy uh provider that if they shifted all of the training partners off of this platform, which they're in the process of doing, that they won't know when there's an error. They won't get a notification that there's an error. And I'm okay. This is where it leads to, again, that you know, EDI is a standard, and by the way, a portable standard, right? So if they're not getting those error notifications, it's because somebody has said, guess what, we're not gonna send them anymore. Because that should come in the form of a 997 response, right? A positive response or a negative response and the elucidation of the deficiency. So I mean, you know, it's just, you know, again, that's just fear and uncertainty. I think it works, but you know, I think that people also I will say this though, and I and I alluded to it before, is that there's a little bit of a renaissance, right, in EDI. It's less of a black box, again, because of access to information, because of, you know, our AI buddies, right? And um, you know, you can really understand the data that's coming into you, whether it's in a web form or not. Um, and um, you know, we get a lot of leads basically from Chat GPT, right? Um, because we're putting quality information out. And when you are having that immersive kind of discovery process on this thing, you come across providers like Surpass, right?

How To Talk With Retail Buyers

Brendon Beebe 35:06

Yeah, I think my favorite thing. Okay. I have to ask you guys if you guys have ever had that awkward conversation where the sales rep at SPS sets up a meeting with you and the brand. Uh I have yeah, I've been how does that happen?

Jared Ward 35:20

And like one of the I was a part of that one with you. Right.

Chris Brunell 35:26

I you know, I this is a um, you know, this is a tried and true incumbent tactic, right? And it is um, you know, I I'm you know, I'm the biggest provider, I'm the incumbent, I'm the one with all the money, I'm the one with the reputation. Let's invite you on the call. And rather than uh debate the merits and the value of each provider, right, in terms of operational efficiency, cost, return on investment, service level agreements, right? The real important stuff for for driving, you know, your you know, a supplier business. Let's talk about some of the bigger things, right? Like 70,000 plus customers and and all this, you know, 80 years of experience. Yeah. Right, right, right. And you know, uh, you know, a call center, you know, maintained by people with six months EVI experience, right?

Paul Tittel 36:17

And then they roll over in six more months. So they're bump into each other again.

Chris Brunell 36:20

Right. People that have never even, you know, that that learned what an ERP was three months ago in their in onboarding, right? Um, you know, there are, you know, this is the the the challenge that you're up against. And and it's a it's an interesting tactic, right? Because um, you know, it it creates a tension um because the uh they know that they're required, and now they've invited the person that is required or representing the business that's required in on the same call uh with somebody that has to sit there and explain the difference. And it is uh it is so farcical. Uh it it it's um it's so bizarre. It's like two competitors on the call. Now, it in some businesses this works um, you know, by way of RFP, right? And you've got, you know, uh all the everyone joins a call, and and usually what happens is uh the they're only there to respond to questions, right? Yeah and not get up and they're you know in pitch and physician and and all these. Oh that's not what that meeting's for, right? And uh, but it it's it's it's a tactic that uh really drives a level of discomfort on purpose.

Brendon Beebe 37:28

Yeah, when I first got in, we were doing our first EVI doc thing and they're talking with SPS Commerce, who is representing the retailer. And of course, the retailer's like, not the retailer, SPS Commerce saying, Oh, you guys are going with a new provider, let's get on a call so we can discuss things. The brand has no idea. They're actually talking to SPS Commerce's sales rep. And that the brand doesn't know that they're setting up a call with their sales rep and our sales rep and to do something. It is always the most bizarre experience.

Paul Tittel 38:00

Well, I I'll I'll you know what might help is just add one of your AI agents in the window. Hello, everyone. Looks like we got the getting on here.

Speaker 2 38:10

Yeah. It's a great idea. A bunch of 11 labs folks on the I am an AI agent.

Chris Brunell 38:20

Yeah, the EI uh, you know, was a standard, you know, 20 years uh before SPS or really was even started, right? It's a very old tried and true thing. And um, you know, if you you look at all the providers in the space, there are dozens. And uh and for good reason, right? Because there's a lot of people that run different types of businesses in different types of ways. And and then there's the scale issue, right? Where you've got, you know, somebody that's got a $10 million business and someone's got a $200 million business, right? And you know, there's there's there's all kinds of, you know, or somebody that has a huge IT department and and the resources and and willingness to own that. I I will say this.

Sales Tactics And FUD To Avoid

Paul Tittel 39:00

I I also think that there's a lot of players because um, you know, to you know, there's there's a there's a a really significant barrier to entry to do EDI competently. Um, but you can do it in such a way where you kind of end up in a cul-de-sac, right? And your, you know, your um your architecture kind of like, you know, uh reaches its limit, ossifies a little bit, and you can really only scale so far. Um, and so again, we've built, you know, I think an incredible architecture first, you know, commercially scalable and resilient, you know, uh foundation where we're not gonna end up in that in that place. So I think there's a lot of providers that kind of get to a certain place, and that's kind of where they can dwell, right?

Chris Brunell 39:38

Okay. You know, there's uh and especially, you know, if you if you're growing, there's one thing that a lot of entrepreneurs have to understand is that there's 70,000 people on LinkedIn with EVI in their title, right? They, you know, it it is an actual, you know, it's a functional field. People uh, you know, very, very brilliant people spend their we know because you know, we've hired a lot of them, right? And fortunately, right? And some of the best. And yeah, you know, but it's it's it's its own thing. And um, you know, they uh, you know, obviously some of the bigger providers have a you know an interest in, you know, uh, you know, capturing that, right? Um, and and and providing that efficiency. Um you find folks like like SPS Commerce that you know are gonna do everything in their power to convince them that you know you you don't need, you know, that whatever you do on that side, you know, this is it, right? We're we're the only option.

Paul Tittel 40:34

But really what you want to do is you want to set yourself up where the the the first uh you know EDI end-to-end um you know compliance you achieve with a retailer, right, or a trading partner, you can produce again and again and again. And that's how you can scale to get to 30, 50, you know, trading partners, right? And so I think that's what we do really well, right? Is we come up with an integration and a fulfillment pattern that's gonna work for that brand, and then they can just rinse and repeat. Oh, that's awesome.

Jared Ward 41:02

When are you guys gonna announce your hundred million dollar series A? PDI press tour, how we can get the best terms. We're we're well on our way there, right? Well, we got good news for your audience today.

Chris Brunell 41:15

Ready to hit the gong?

Speaker 2 41:16

Yeah, that's it.

Chris Brunell 41:18

Well, you know, I mean, there's um, yeah, what are they? I I think there's there's a definite shift in terms of um, you know, the uh the need for capital in a lot of these things. And you know, when people see these big numbers uh being you know thrown to you know to to new startups that that do this, um, you know, there's a space for that. Um, but there's a lot of companies out there that you know are are leveraging the the tools of today to get a lot farther along before they need to do that, right? And we understand the in and but the perception of that being you know a safer option because they've raised 15 million or 20 million or 100 million, right? Um, you know, that that it's easier, right? It it there's a vested interest on on behalf of whoever's on the other side to make sure that that business is run well, and therefore that's the safer choice for me. I I'd argue the other other side of it, right? There are minimum, you know, ACV values, there are minimum ARRs that are absolutely required that you have to hit in order to keep your new masters happy, right? So there's there's you know, uh there's a balance there. And uh, you know, I think most entrepreneurs uh you know would would understand that.

Speaker 2 42:30

Yeah.

Chris Brunell 42:30

And the tension that creates between uh how much they can pay for staff, uh how you know, uh what they're gonna do in terms of uh how they price their products, regardless of what types of efficiencies they're driving internally with with new types of technologies.

Where To Find Surpass

Paul Tittel 42:46

That's a good point. Yeah. I mean, we can be you know really flexible in terms of our um you know agreements and arrangements with customers in terms of you know pricing, and we don't really have anybody looking over our shoulder telling us what we have to charge and and when we, you know, we've built this business brick by brick, I think, in a very uh resilient way, and we're gonna be here for the long term. And I think um that's the best kind of business for this space, um, because as you know, as we've talked about, EDI isn't going anywhere, right? And so um, you know, I I I think um you know, we've been fortunate to to build the way that we have. Um, and again, it some of it comes from, you know, um, you know, our lineage in terms of you know, uh the you know, consulting business and um, you know, solving problems and getting things right the first time and the trust that we've earned, you know, in in this business. And I think that's gonna serve us really well going forward. Um, and um, yeah, I think um, you know, the team that we built as well. I talk about the repeatable process of, you know, um uh you know, achieving outcomes for customers, that's gonna achieve outcomes for our business, right? So um more come, watch this space. Okay. Very cool.

Jared Ward 43:57

Well, where can where can everybody find you guys?

Paul Tittel 44:00

Visit us, surpass.biz. We're on LinkedIn as well. Um, you know, we're gonna be um continuing the roadshow. So um yeah, feel free to reach out, right? Um uh you might just hear from us. Yeah. Yeah, don't worry about that.

Speaker 2 44:16

We'll see Reddit as well. Yeah, yeah, we're in the All Starting OnlyFans. Yeah, yeah.

Jared Ward 44:23

Well, you know EDI only fans. There's a twist.

Speaker 2 44:27

Yeah, all that. Um, for sure. All right. That might not make the cut. Okay, I'm moving. Keep it in, that's funny. It's good.

Jared Ward 44:40

850 anyway, it's okay.

Chris Brunell 44:46

Yeah, but oh my. There are some jokes. Uh there are a specific class of EDI jokes. Just all right.