Growing Profitability ft. Kyle Hency of GoodDay Software

[00:00:00] Taylor: Welcome back to another episode of the e commerce playbook podcast. Today I am joined with. A man who has become a fast friend of mine. And that happens when you embark on a journey towards victory together, like Kyle and I did out in Arizona, where we were connected at Nick Shackleford's e commerce golf tournament, where we ascended to the highest of heights of human achievement, which is.

Winning a golf tournament against eight other bozos in the middle of the desert for absolutely meaninglessness and nothing, but it was fun. But more importantly than that, Kyle is actually the co-founder, former co-founder and CEO of Chubby's, an amazing brand that's one of the best in the e-commerce era and has so many wi, so much wisdom to share from it.

But it's also now today the co-founder and CEO of Good Day Software. We're gonna talk about both of those things, but Kyle, man, good to have you on the pod bud. Oh, 

[00:00:51] Kyle Hency: thanks, man. And I

appreciate you sharing that win with me. I'm not sure. I'm not sure your memory of the past is perfect, but, but I appreciate it.

[00:00:59] Taylor: think I might've tried to love you. Oh, my bad. Let me correct that. Actually. I was on the winning team and Kyle was on the losing team. That's right. I tried to include you in that, but turns out, no, it was just me that won. So thank you. Thank you 

[00:01:13] Kyle Hency: classic, classic walked into that. That was nice. I appreciate you for that.

[00:01:17] Taylor: I wrote that set up last night. Thanks. I 

[00:01:19] Kyle Hency: That was really good.

[00:01:20] Taylor: Dude, I, I'm stoked to have you because we have so much random shared history in this world from solo brand to rocket code to chat. Like there's just so much that we're going to cover today. And, and also it's such a great follow on from last week's episode with Steven, where we were talking about the challenges of apparel businesses and inventory and all those things.

So we're going to cover a lot of ground today, but for those of you that don't know your storied past, give us a little bit about your history. And how you have ended up where you're at today.

[00:01:47] Kyle Hency: yeah, absolutely. So Kyle Hency former co co founder and former CEO at Chavez. You know, we, I started Chubbies with three of my closest friends, Taylor, I think, you know, all of them really, really good dudes, amazingly talented folks and, and still really close friends spent a decade building Chubbies. We sold it in 2021 to Solo who you mentioned there, Taylor. And, and along the way, we also built Looper Turns, which was born mostly out of a real. Operational problem we were experiencing at Chubbies. The returns and exchange process was like totally broken So we worked with Poma And his team to build a real solution for us that became loop returns today, you know I think they're creeping up on 4 000 brands in shopify using loop so just doing a really great job bring a real innovation to the space And then more recently, over the last year, I've been working on Good Day Software.

And this is a lightweight ERP built to be an alternative to NetSuite and Shopify's ecosystem. So, kind of gone, in our opinion, gone are the days of the multi year implementation cycles, huge upfront fees To get software that doesn't work we're going to make it simple. We're going to make it out of the box.

We're going to get you set up on some modern operating tools. And, and, you know, I think Taylor, a huge thank you to you for beating the drum on getting these brands thinking about profits. You know, I would make the argument that one of the big opportunities we see in like, well, why are you coming off the sidelines to come get really active here?

I mean, it's really, it's really easy. These brands don't have these tools. If they want to manage the profits, they have a lot of work to do. And so we're here chipping in doing our best to support them.

[00:03:23] Taylor: Yeah, that's awesome, man. I appreciate that setup. And what you're, you're noticing one, I want to just say like, I, this is not a pitch, I'm not an investor in good day software, Kyle and I are friends, and that is the extent of our business relationship at this point. Like, but if you've been following me, even this week on Twitter, I was sort of pontificating on the idea that.

I believe the biggest gap that exists in e commerce right now is the underlying data infrastructure to really help brands make good decisions around the core problem, which is buying a unit and then selling it for more money and having clarity of what both of those things are. And so I've loved what he's doing.

So we're going to, we're going to go through the whole story here today. And I want to start at chubbies because there's this narrative that the last era. Was all high growth revenue, no profit, blah, blah, blah. Right? But that's not true. There were cases where brands figured out how to go build and manage to a profitable P and L.

And Chubbies is one of those cases. You guys were a profitable business that did a great job in the last era. So take me, but I know that like you guys went through, at least according to Preston on LinkedIn, at least a lot of different phases of the journey, but.

[00:04:25] Kyle Hency: man. Yeah. There are elements of that story that are not great to relearn. I've kind of blocked them out of my mind, but thank you to Preston for, for reminding me. Yeah, certainly. I, you know, I, I often tell folks the entrepreneurial journey at Chubby's was rewarding in that nothing about it was linear and up and to the right. But the whole time we, the, the team works so hard to learn, iterate, get better, refactor and move through whatever was in front of us. So like, yeah, if you like really zoom out, it looks like a, it looks like a straight line up into the right. But man, it didn't feel like that when we were in the business. But that was like a part of what. We were doing, you know, just to get back to kind of where you started the conversation about Chubbies, like it was quite contrarian for me, my co founders to go to our board in 2015, 2016 and say, Hey, despite there being a lot of easy money around, like we want to build this business the right way.

We think this can be a 20 percent plus EBITDA margin business over time. We want to start going down that trajectory now. And if you want to, you want to talk about like decisions in the

10 plus year arc of a brand.

[00:05:38] Taylor: why, why did you actually have that intuition? I know previously to that you were in banking or finance of some sort, right? So you had some 

more classical training probably than most founders in the space, but what, 

why was that intuitive to you or what led you guys to that kind of direct business strategy?

[00:05:54] Kyle Hency: Yeah. I think two things. One is rooted in what you just said, which is I came from a growth equity investment background. Tom came from a venture capital background. We, we know the amazing upside and the amazing downside of that. Of that endeavor. I would also say we were coming off of a year where we, we took a bunch of outside capital and we invested it in internalizing U.

1. manufacturing and built what I would only characterize as the Tesla factory of swimwear in South San Francisco, which was obviously the worst idea ever. Now that I look back on it, right? So we're coming off of this year being like, man, we're, we're learning some, we're learning some wild stuff. And that was a really bad idea and a bad investment. Learned a ton, learned a ton, but we said, Hey, let's get back to the fundamentals, what are the things we're great at, right? We're great at building men's casual shorts. We're great at. Building men's swimwear increasingly. We could be great at building men's athletic shorts. Can we get into Hawaiian shirts and other fun weekend oriented tops? Big TBD, right? But we need to get back to the core of what we're doing and get great at that. And so we definitely had a little bit of a coming to Jesus moment, born out of failure. Like you tried this, it was an interesting idea. Very poor X, you know, in the end didn't work and, and, and wasn't the right thing for us to be doing.

So, so yeah, we look back on that and that's what I was saying up front where it's like, those are just real entrepreneurial moments. Like we learned something new and we needed to change course. So I think the combination of some of those factors kind of led us down that, that road. I think there's also just like a reality to what we were building, which is we wanted to do it our way. And that's when you build a brand, it's fun. It's creative. It's in our case, very wild day to day. And we liked the idea of controlling our own destiny. And so we set down a course that took over two years to get there to turn this business to the right place. Now. I'll give you another anecdote that didn't happen without peril. We managed the business week to week at negative multimillion dollar cash levels for six to 12 months at a time, multiple times. So like, yeah, it wasn't linear and up into the right. Part of it was out of necessity, but part of it was out of like, let's we see a future where we're doing this for a long time.

[00:08:19] Taylor: That's so interesting. I feel like that era, and I don't know if this, like these overlap directly, but I feel like there was that big thing where Harry's tried to build all their own custom manufacturing. And it was just like, there was something in that moment where it was just like, yeah, we're going to become, I don't know, there was, there was in some ways, some exciting ambition around it all, but also, like you said, some ignorance to the complexity of some of these things relative to what businesses are capable of, but it's, it's fun to reflect back on it in some ways.

[00:08:43] Kyle Hency: Yeah. But I'll, I'll dive in on that. I actually think that that was probably a good decision for Harry's. And I think one of the big things that I learned over time, and kudos to Rainer and Tom to my co founders for pressing me on this. You learn things from other brands and you think, Oh, that must apply to us. Oh man. Is that the wrong way to think about that? Both of those guys are naturally skeptical they see that

and they're like, oh That would that would never apply to us And i'm the opposite and so they did a really good job of being like, hey, no that that might work for them. That's just not our path

[00:09:16] Taylor: Super interesting. So another fun thing, and this is, I think is a good set up to how I'm curious if this is how your brain works all the time, but one of the early interactions and overlaps that I had with you guys was we had a shared software developer, like you mentioned in rocket code, and we were looking for a solution at Kalo.

We had this thing where like, it was actually more expensive for us to. Ask, send a customer a billing label and ship back the product and ship them a new one, then for them to just keep it. And so we were trying to figure out the system for managing returns and they came to us and said, Hey, we're building this custom RMA for this company called chubbies.

We could build it for you guys too. And I'm curious. That is the company that ended up turning into loop eventually down the road, but this idea of identifying a novel problem that is clearly operational that you think might apply to other places and then solving it in some unique way that becomes a bigger business opportunity.

Is that like just your, the way your brain works? Cause this is clearly a pattern or was it just so obvious that this was a broad scale problem that you felt like it had to exist?

[00:10:19] Kyle Hency: Great question. I can't take credit for this. My co founder at good day, actually Dave Wardell was standing over his younger brother's shoulder who was doing customer support for us. And at the time he was kind of serving as a COO for us. And he was like, man, this can't be right. I mean, he's literally just responding 70 percent of his day. I want a refund. I want an exchange. I want a refund. I want an exchange. And so the whole idea for a loop in the RMA, the custom RMA project was born out of him sitting there being like, that doesn't seem right. And then we had a bunch of internal discussion around, okay, well, if we wanted to fix this systematically, what would that look like? That quickly that we're going to have to build some custom software. Cause there's nothing in the market for this. Quickly beyond that, it was like, I bet customers would just come back. If, if, if they gave us their order number and email, we could tell how much money. We owe them and I bet they would just shop on the site and tell us what they want.

So we can just let the customer do this for themselves. And remember this was like, man, this makes me feel old. This was like Zen desk CX days where we were just starting to talk about like letting the customers go search FAQs for themselves. Right. So this was kind of spun up and all of that. It was like, yeah, the customers just want, our young customer wants to be self service.

They don't want to talk to us. Service person. So we're looking at that. We used it ourselves just to get back to your main question. It's like, this was a real problem, right? We went out, we solved it for ourselves. We were able to repurpose four or five employees to other higher leverage things in our business from this one rote task, which was incredibly powerful for us.

And our initial inclination was like, Hmm. Like, I think this is a software business and I think we need to go talk to some of our brand friends to see if they're experiencing this as well. I bet they are. And so those brands were Allbirds and Codapaxi who were immediately interested. So out of that, right, we created a joint venture with the Rocket Code team and, and the rest is history.

You know, Poma's done an excellent job, you know, building now, you know, they just announced last week that they're live on Salesforce Commerce Cloud. That means they were building the Shopify ecosystem for eight years. Just going deep,

building real innovation in there.

Yeah, 

[00:12:31] Taylor: is fun. Like sometimes I like that somebody is going to write the book of like the history of our industry when I think about DDC, but that whole thing of like. Rocket code is a shop or a dev agency that builds an RMA for chubbies. I think we were like the second or third at Kalo that they built it for.

They get acquired by BVXL. BVXL ends up like merging them in Pomo leaves and starts loop. It's just like, it's a fascinating, but all along the way, what it, what it is to me is, People having a lived experience of the things that are actually a giant pain in the ass in their business and going, I can't be the only one experiencing this having dialogue with their peers and going, Oh, you suffer from that too.

Here's a solution. And that tends to be the snowball that rolls great products down the hill. Right. It's just like, it's rooted in. Intimately in a deep customer problem that's experienced. And so that's a good setup for thinking about the second big customer problem that I think you're after now. And maybe you can talk a little bit about how big of a problem it was and what the pain was that you felt as it relates to managing inventory inside of an apparel business, like chubbies.

[00:13:35] Kyle Hency: Yeah. You know, I would, so as we think about good day and how we got to building this, it's obviously complex and rot with execution risk. Like the thing that we're pursuing is incredibly, I would say audacious and very complex to execute. It's born out of both a customer pain point at Chubby's where we spent over a million dollars across outsourced developers are having to hire multiple internal team members to keep NetSuite alive, the software subscriptions, the hundreds of thousands of dollars of implementation and maintenance fees along the way. We took 18 months to have like a workable product. That was flowing inventory through it the way you imagine on the way in and really three years to get it, like feeling great. And I share that whole journey because we also felt the opposite side of The strength of these types of systems when COVID hit and you needed to pull a lot of levers really fast, our team didn't hesitate at all.

We had been operating like that for years. We had plans in place to execute. It was one of the best things that could have ever happened to our business because we were really mature operationally relative to our competition. So

if you think. 

[00:14:57] Taylor: right there because I think this 

[00:14:58] Kyle Hency: Go ahead. 

[00:14:58] Taylor: that people miss. And I'm glad you said this is that when people get to the ERP, Thing, they immediately start with the negative, the implications of the complexity of implementation. And those things are all very real, but I think the reason they're willing to endure the pain is because it's such a critical component of success when it's right.

And I think that's the part that often gets neglected in that narrative is that this is a critical part of business function.

[00:15:24] Kyle Hency: 100%. And this goes back to your, your initial point around products and definitely what our friend from cuts pulled out of his, you know, learned experience. It's very much like mine is we can we can do all this amazing content. We can do all sorts of amazing marketing stuff. At the end of the day, you better show up with differentiated product. You better bring it to market in a really cool, interesting way that your, your fans love. You better have the right amount of it and you better have a system against which to invest, or you're going to end up not being able to invest in the things you want over time. And so to me, as I think about like, are you, are you like treating the symptom? Or are you treating the whole like ERP is very much like look at the whole thing. You have to get this big, really the largest investment you make as a brand is in your inventory. You have to get the largest investment, right? If you get that right, then you have a fighting chance for email and marketing and YouTube and all the creative things you have planned working. So that's why when you look at the event diagram of like, why is Kyle working on, on good day one. The current market leader is brutally painful and, and not taking care of merchants, period. That's obvious to everybody who's involved. But two, the, the, the tooling is really powerful when it's done right. And so we, we also think about this along the line of if you just rewind five or 10 years ago, when Shopify is not so dominant in this whole space, it's even harder to execute this idea. One of the big things that we have in our favor is we're building as closely as possible to Shopify. So they're pulling us in to a lot of really great conversations where we can together be really helpful. And so I think if you look at that as two or three things kind of overlapping, that's what we saw a year ago when we started good day. And man, I, I couldn't be happier with with the team we've built and, and, and how we're going about it thus

far. 

[00:17:27] Taylor: I want to come back to the Shopify part, cause I think it's an important part of this narrative, but I want to go back to this idea of inventory and sort of what it represents at the core of a business. And it's funny because when you think about Chubbies, I feel like an outsider might, the first thing that they might think about the brand is probably on the marketing and sort of the outrageous presentation and kind of, you guys were known for sort of pushing boundaries and novelty in that way, in a way that was really exciting.

But the truth of the matter is, especially in an apparel business, if you can't get it right across the right SKUs and the right size allocations across the right inventory, like you will waste so much money. And the amount of apparel businesses I've seen where the founders, even in successful cases can create no liquidity for themselves because their entire individual net worth is tied up on the balance sheet because they've just ordered too many of this leggings and that like is just.

Crazy. It's so hard to understand just how much the actual purchase decision matters in your ability to create cash, actual money in your bank account, not just P and L level revenue, but actual liquid money in your bank account. And I think that that, like the idea of really honing in on. Can, can you share some of the nightmares, maybe the mistakes that you made that led to inventory problems inside of your business or, or maybe things that you got really right that changed it?

[00:18:45] Kyle Hency: Well, I guess two, two ways I would frame this question. One, Tom, my co founder who led all digital, this is about digital experiences and marketing. If you asked him, what is the one thing you got to get right to get all of marketing humming? He would tell you show up with great product and wouldn't hesitate.

And frankly, for years and years and years, that was just beating that drum. And I think it was really good forcing function for our business. We happen to have an excellent product. Yeah. Team. And so we put a lot of pressure on that team to deliver and they did a great job. You know, I would call out I would call out experiences over time where we were either introducing new product categories we didn't understand, or we're we were trying to sell to a new user as the primary arenas where we made large inventory gas. Right? Why is that? You know, that's because when you're going into a new product category, you don't actually fully understand how it impacts new and repeat purchasers. You don't quite understand how it impacts your CPAs. There's a lot of learning that needs to happen. When you're, and that's the same user, different item.

When Chevy started selling women's boy, it was at a different user. Different return profile, different purchasing cadence, different fashion cadence. It's an entirely different business. When I explain this to young brands that are growing up now, I always say, Think of every one of these things as their own business models.

And I know you talked about this with Steven. And it's just like, you got to be thinking of like so many different business models that are sitting around when you start to layer these things on. And if you think like that. They feel more risky because they are more risky when you're taking these big, these big swings, but those were usually the Genesis was that last thought on this, the number one thing you can do as a brand is build an investment system. And you've alluded to this in several different ways and different podcasts. If it's new stuff for us, we plan to four weeks of supply and what we were hunting for in there is things that worked for new and work for repeat. And if that happened, we would chase into those things and we would put them on a 13 weeks of supply cycle. And so Rainer my co founder who led product and who's leading Chubbies today, like just unbelievable scale, like a beyond all of our wildest dreams, you know, he put that system in place. He learned that that's a, that's a. Age old merchandising system that he learned at the gap and Levi's. And so all of these young brands, I think just are going to have to learn some of those hard lessons earlier in their life cycle than, than we had to, frankly.

[00:21:24] Taylor: Well, I think one of the things that's happening is the tooling is going to help them to do it. So one of the things I use as a metaphor, sometimes when I talk about this with people is. I, I grew up in the poker era. Okay. So in when party poker and Chris moneymaker one, and there was the November nine where they like in the peak, the peak of that, I was 21 years old and thought I was going to be a poker player forever.

And if you've watched what's happened in that space, as an example, you've gone from the sport being dominated by personality and sort of like the The characters like the Phil Hellmuth of the world to now the entire sport is all GTO, Game Theory Optimization, where people are repeatedly making the right decision based on the odds and calculation over and over and over again, based on the likelihood of the marginal outcome, generating a return on the premise of the decision.

This is what our industry is going through. It's a maturity where

every purchase of inventory is a It's a bet informed by some amount of data. And the question is, how much data do we have access to, to inform that decision, to increase the likelihood of being right? You're never going to be right 100 percent of the time, just like in poker, but you can consistently increase the odds with better information.

And I feel like we are becoming as an industry game theory optimized. We are optimizing this really problematic, probabilistic decision with better and better information. And something like good day to me is the underlying data rails that allows for better decision making and information.

[00:22:46] Kyle Hency-1: Yeah, I completely agree. I mean, as we think about why good day and what is the purpose of good day? It's giving these brands a centralized home to get accurate inventory and financial financial data in a simple format. Right? Like that is easy to say and really, really hard to execute. Frankly, Shopify hasn't gotten there yet, right? And they're world class. So we're going after something that is really, really challenging, really, really hard. But if, and when we execute, it will have a lot of positive ramifications for these brands that are trying to grow up. I would say if you think about Inventory investments, doing that off of accurate data versus inaccurate or incomplete information is a big step, right? And so that's what we think about good day relative to Shopify, right? Shopify is never going to be 100 percent accurate. It's just by nature, not it's never going to be 100 percent comprehensive once you grow and scale your brand to wholesale and Amazon and all these different demand channels. So, so you, you have to have a home that you can go to and say, okay, this is the information. This is what I think we're going to do as a business. For all of these reasons, born out of data, this is what the supply side of that equation needs to look like. So our near term mission is just fix that supply side. We get a lot of questions like, aren't you going to build all sorts of AI demand planning, dah, dah, dah, dah, dah. And my answer is always absolutely not. We are going to put accurate information into those tools for the first time in a long time. And hopefully we get accurate information out. If we don't, we will absolutely build in that direction.

[00:24:25] Taylor: And it's funny talking to you and Leo. So Leo is the founder of final loop. And when I talked to him, I sort of pestered him with the same amount, same kind of information first. Where's the AI forecasting, dah, dah, dah, dah. And he goes, no, no, no. Until I have a real time view of every piece of financial data, nothing else matters until I have been able to categorically build a chart of accounts for every transaction.

You could possibly make across all of the possible end node variations. Nothing else matters. And so both of you, like, it's, it's changed my mind about, oh, okay. The key here is. Is the integrity of the underlying data infrastructure first, before we get to anything else, that's what's broken is that people have a bad root source data set and on top of that, a bunch of bad decisions get made.

And so it's been like a light bulb to realize what you both understand, which is that before all of that can happen before insight generation or decision making first data integrity. And that's like the key to the whole thing.

[00:25:27] Kyle Hency-1: Can I add one layer of thought process to that? I completely agree with that. The second layer of that, that we envision is that current ERP systems are built off of a per user seat. License basis. As such, brands limit the number of people who have the information. We've built GoodDay into Shopify so that anybody who has access to Shopify has access to all this information.

It's playing forward another very common thing, which is all of your employees, it might not be that they don't want to know this information. How about do they have access to this important information? And so we're gonna, we're, we're already busting that up. If you ask, I did this recently as we were getting ready for this serious seed announcement that went out last week. I asked our existing brands that are already adopted. I said, what, what is it about good day that just totally open ended? What is it about good day that, that gets you really excited? Core theme. With no prompting that came through, all of our operators can work off of the same data and we can trust that data and power to do whatever we're doing throughout our business. That's very different than this data being siloed in the production and sourcing team or the inventory planning team or the merchandising team, et cetera. So we're like, There is, I think tools like final loop and in in good day, of course, like we're starting to break that stuff down and get this information into more hands, which I think

[00:26:48] Taylor: Well, I, I think you've even gone further than what final loop is doing because there's still an externality. There's still a place I have to go visit that's separate to the place I'm already in every day. And so I love this. What you just said is so important. It's the, it's not even just the data integrity, it's the dissemination of the information so that these things just become a part of the culture of data and information that exists inside of the organization.

And so that's, that's so huge. So, so let's talk about that. So why build. Inside of Shopify, instead of I go to a separate software location and I log in, why was it important for you to be native in the dashboard so that it feels like almost like it's a part of Shopify already.

[00:27:26] Kyle Hency-1: Yeah, absolutely. I mean, it is explicitly designed to feel like Shopify using Polaris design frameworks that Shopify created. So, I think we're pretty close to the mark. Yeah, absolutely. Some of the core limitations to ERP are that they're brutal to set up, the user interfaces are so tough that you can't, you begin to not trust the data, right? If you're not a really Deep operator in the information and data operating it all day, every day. It's almost impossible to get value out of these legacy ERP systems. And so our instinct was the user interfaces and, and experiences generally are so bad in this arena that if we just show up on par with Shopify, we're light years ahead. And the underpinning of that is we're driving home familiarity. I mean, literally, if your operators are already in Shopify, this will feel just like it. If your operators already have access to Shopify, they will have access to this application. And so it simplifies what I would argue is one of the three pain points of ERPs.

So to me, incredibly important. Now, does it, does it come with peril building this closely to Shopify? Sure. do I feel comfortable with that? Given my history with chubbies and loop, et cetera, you know, it's pretty obvious to me that Shopify has been pretty amazing partners for the ecosystem. So to me, I'm building as closely as possible with the team over there.

[00:29:01] Taylor: There's so many things there that I think are so important. One, one, I'll just say this as like an external partner. Right now we as a marketing agency want access and information related to inventory positions to make decisions about what we should sell, when and why. Right. To get that information now is a nightmare.

It exists in very fragmented infrastructures or tooling that we don't have API integrations into. We have an API integration into Shopify and most people do when that data exists and is pushed from you guys into that place where now inventory is a part of the data architecture of Shopify. That is like hugely, hugely valuable.

Right. Because it actually makes, just like when you talk about having an employee, they only need access to Shopify and now they get visibility in an inventory. Just removing the duplicitous of versus like, now we have to give them access to this other thing. And this other thing, and who has access to this?

You just don't have two browsers open all that. Like there's literally just a consolidation of access. And the same is true on an underlying data architecture from an API standpoint, as it is from user roles. All of that is why, like, I think that so much of this is about housing that information. In fewer places, it may not all end up in one that might be a little bit romantic, but fewer is certainly helpful.

[00:30:17] Kyle Hency-1: It's undeniable if you've been paying attention, I mean, think about our SAS pricing discussion that got real hot and heated a couple of weeks ago, it's undeniable that. The vendor consolidation is happening in brands are forcing technology partners like good day to show up with more value. do I think that's a bad thing? Absolutely not. I think that's exactly the right thing. And the question is which of the technology vendors are going to show up and deliver on value. And, and we've architected good day from day one saying we're going to have a massive gap between us and anybody in ERP land around value. I didn't make that up Shopify did that 10 years ago and they came in and disrupted demand where, right? We're following a playbook that's tried and true. That's paired really well with today's merchants. And so, and so look, we're going in there. We're going to be really disruptive in the way that we take care of merchants.

We're going to be really disruptive on total cost of ownership. We're going to be really disruptive on ease of use. We're going to make these otherwise pretty intimidating tools. Far less intimidating but, but attempt to keep the power. This is, again, I'll go back to the beginning there. We, we have a lot of execution risk in what we're doing and a lot of work to do, but, but I really like what we've done here in the first 12 months and what we have right in front of us.

[00:31:42] Taylor: So we've kind of gone about this conversation backwards where we're providing so much of the context for the problem where you've come from to get to it. If you were to describe in the simplest form, the primary problem and value that good day is after in terms of what is someone doing with it mechanically on a day in and day out basis, give us that pitch.

What is the actual practical application that I'm using on a day in and day out basis?

[00:32:05] Kyle Hency-1: Yeah. it's incredibly human to imagine you put good day in place and it does this one thing for you and it makes everything better. If I had to boil it down to one thing, I would say good day will help you make better inventory investment decisions, and that will make a lot of things across your business better for you. The ones that I feel like are most important. Obvious having built one of these businesses for over a decade. If you have the right inventory at the right margins, you can open up more sales channels now wholesale is possible, right? Especially if you have something like a day in place. If you have a tool like good day in place, you can manage your balance sheet better. You can tighten up your weeks of supply from 10 to nine. A 10 percent improvement in weeks of supply really, if you want to get down to like what's driving the cash cycle that's a great one. You can limit your excess and obsolete inventory, right? So you can do all of these things. If you centralize the system and you get rid of people doing manual entry all over your business that's not connected, you literally save hours and hours of junior people.

Doing things that are going to have an end result of inaccuracy, likely, which has its own set of issues. So there's just straight up days saved. The last one that I usually think about is if you get really dialed on this sort of inventory part of the house, you can build way better relationships with your vendors over longer periods of time. And if you have great relationships with your vendors over a long period of time, you can work with them to get your costs down. It 5 percent cost reductions. Feel great to everybody as you scale the business. So like, it, it really is a myriad of things that get better. And we haven't even gotten to like, yeah, of course your CPAs get better and your conversion rate gets better and all those things, if you have the right inventory, but like, that's how I think about the operational side of like, why does good day matter?

[00:34:03] Taylor: One of the things I think it's not intuitive to people And you, you were walking me through sort of the setup, placing POs, who's the vendors, this error, is it coming on, is that oftentimes like the actual unit cost of a set of inventory, even on the same queue is like wildly variable, right? Like if you bought a set of things and maybe the underlying unit costs that you pay the manufacturers the same, but one showed up by plane and one showed up by boat, like the actual landed cost of the individual units is variable.

So like you have a bunch of inventory, but they didn't all cost the same thing. Right. And so how you think about then the actual blended cost and margin, it kind of gets like people's brains can kind of get fried in trying to do this manual calculation about which unit are we, where are we in that supply?

Like it becomes very difficult to actually answer the question of what are my costs, right? Like that's hard.

[00:34:51] Kyle Hency-1: Yeah. I mean, I would argue manually trying to do that is actually impossible real time. You can do it at the end of the month when you get all your bills and you can, like, tidy it up. But you cannot do it live. We can do it live through Estimated Atlantic Costs and in Estimated Times of Arrival in our system. But yeah, I, I completely agree. And I think, getting dialed, getting, I think about these sorts of tools as getting you from 70 percent accuracy on estimated landed costs to 95,

[00:35:24] Taylor: That's 

[00:35:24] Kyle Hency-1: you're not yet to a hundred, but if you get to 95, like you've really closed the gap and if that's happening in an automated way and you're making decisions off of 95 percent COGS accuracy, you're making. Materially better decisions than 70s

[00:35:38] Taylor: That's right. And it's funny cause there's, there's this you, you run into these underlying narratives about e com. Like right now it's like, we're back to Omnichannel is the future of growth, right? Like we've sort of moved in this space and we think about the actions associated with these kinds of things and in so many ways, The mechanism to get to all of these opportunities is what we're talking about.

It's like you, how can you actually get to managing inventory across multiple points of distribution if this is all happening in a really dispersed, fragmented way? So you have these like four value propositions that I love. It's like increase in revenue by making the pro the possibility of opening new sense sales channels possible and easier to do.

The cash conversion cycle where now that I actually have visibility to my supply, I can get closer to that sort of like, real or real time inventory where like, you know, sorry, just in time inventory, that's the phrase I'm looking for. Right. So I can actually manage to that more predictably. So shortening the ballot, the balance sheet, the cost savings, and then just time for your people.

Like all of those things 

are imperative. Yeah.

[00:36:39] Kyle Hency-1: I mean, not stated happiness. Who wants to be entering this information over and over and over again, all across your business. It's like clearly not a fun way to operate. So like there's a bunch of, bunch of ancillary benefits. The way you feel when you're operating a business and it's right is you just feel like everything starts working like, wow, we really nailed that.

Oh man, we really, oh, that product launch went way better than I thought. Right? That's the way it will feel in the business because you're all moving in lockstep. Right? It, it, all of this to say to the last day of my inside of Chubbies, we were still making all sorts of operational mistakes all over the place. And so that, that learning exercise of like identifying opportunities, sometimes getting it right, sometimes not, and turning that into future opportunities. Like it has to be a core of how you operate these brands. In my opinion.

[00:37:30] Taylor: Well, man, one of the things, the reasons I do this podcast, and I think people sometimes think my content's a little weird because I'm a marketer, but I talk a lot about finance and operations. And it's because I've watched people like you who were the CEOs of successful e commerce businesses. And what I try and tune into is what do they talk about?

What do they care about? What are the problems that actually plagued their life? And then having been on the brand operation side, it's like, what, what occupied my mind share. And what I'm hoping to do is marketers listening. If you want to impact your organization, you want to know how to become more valuable, the information insight where the actual organizational value is being created, lives in these spaces.

And so there's such an opportunity for us to invite, like you said, We're opening up access to the kinds of information that give people the opportunity to create value. And man I think you're a model for people watching to understand where is Kyle going and why is he going there because he understands how to create value.

So man any, any last thoughts that you would leave people with under that vein of like, if you're a marketer, how could they think about your world?

[00:38:28] Kyle Hency-1: Yeah. You know, I think, I think it's the right drum to be beating at this moment in time. You got to remember that in this world, things just got a lot tighter for the marketers, for the operators, et cetera. There will be a moment in the future where we need to loosen up and run. And it's on, the onus is on the operators and the marketers and the product orgs to identify that and run. As a former brand operator. Is that today? No, it's not. Not given the signals that I'm seeing. And so, so I often tell brand folks that I, If I'm planning this year, I'm going to be pretty conservative. I'm going to buy my time to the year where I have a little bit more wind in my back and I can run. And so I, I would think about it as a pendulum and I think we just happen to be at like a very operational moment in time. We hope that Good Day can help kind of bolster, the needs and support these brands in a time where they really, really need better tools. And then the inverse will also be true when times get good. We want to help them run fast. I want that 10 percent more revenue to be a hundred percent more in the future. So I would think about it along both vectors.

[00:39:41] Taylor: Awesome. Well, man, I know because your SEO is currently a nightmare because you chose the most generic name in the history of software ever, and finding you is very difficult, give people the location where they can actually go find you directly,

[00:39:54] Kyle Hency-1: I love this. Go to gooddaysoftware. com. You can also find us on Twitter at gooddaysoftware.

[00:40:03] Taylor: Are you, you're, you're kind of a lurker on Twitter, aren't you?

[00:40:06] Kyle Hency-1: Yeah, I'm, I'm more of a lurker. I'm not like a proactive poster, but I, I do like to troll a little bit, especially when you're dropping some hot heat. I sent out some buy signals yesterday on shopify so yeah, i'm a little bit harder to find but but come find us at good day software We're gonna keep it really fresh. I I will just drop one other thing that I think is really exciting in this erp world We have such a fun opportunity to build a fun brand And so we are freaking going for it. So I would invite anybody who wants to yeah follow along a fun b2b software brand getting

wild 

[00:40:42] Taylor: Well, and given your reputation at Chubbies, I think that you have the credibility to make that claim. We look forward to seeing what you come up with, man. And I would just encourage all you listeners, like Kyle referenced Rainer, who's still at Chubbies and Tom who's got his own secret software project coming out here soon.

Go follow all of these guys and. The last generation of the people who built in this space are signals to you about what is going to matter in the future. These guys get it. They understand and they've lived it. And so follow along because I think they will, they're a great source of insight into where our industry is headed.

So dude, I appreciate you coming on. Thanks for the time, man. And we'll talk soon.

[00:41:17] Kyle Hency-1: All right. Thanks, Taylor.