Helping wineries run better businesses w/ Ashley Leonard, InnoVint

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Today, we're going to be going beyond spreadsheets and talking about a winery operating system with Ashley Lennard, the founder and CEO of Innovant. Ashley, welcome to the show. Can you please give me and Peter a brief overview of your background? Absolutely. So my background, I'm a bear kid. San Francisco bear, a born, raised, and landed myself after high school at UC Davis, which is one of the best schools in the world for viticulture and genealogy. So I became a wine maker from there and since I've spent about two decades in the wine industry with a stint in the middle there in Silicon Valley technology. My interest in wine really stemmed from my science background. I was always very intrigued by the technical aspect of the career. And so I started my career in wine making. I spent a couple harvest lugging hoses around sellers and then got into general management of small boutique wineries. I worked for one reason, I've all sizes before that. And really discovered that the business aspect of making wine was really interesting to me. So I did that for about eight, nine years total and then decided to pivot and make a left turn and try out high tech in Silicon Valley. It's where I'm from. I had a lot of friends working there and I said, maybe there's something here for me where I can apply the experience and the exposure and technology back to my wine experience. So I worked in IT infrastructure consulting for a couple years, again, total tangent. But interestingly, I feel like fate aligned for me and in studying enterprise technology trends in 2009, 2010, I found myself interested in the mobile driven solutions that were enabling enterprise technologists to work from anywhere using their mobile devices. So I had a subpophony moment saying, wouldn't it be great if someone with Silicon Valley software development chops combined that with their wine making experience and build a platform like Invent. That's a mobile driven solution where wineries can work from anywhere at any time. So that was the impdissive Invent that's my background. - So for Invent, we've talked with a bunch of people and most of our audience is either in the trade or what I like to call prosumers, like really nerdy out on stuff. So for people who don't know what Invent is, can you give us a little bit of a brief overview of what it does and why you found it? - Yeah, sure. So Invent is a technology company that helps wineries track and manage all their production operations and automate compliance reporting. That's the foundation of our operating platform. So the reality is that wineries are alcohol producers and as such, the TTP requires reporting on every drop produced in a very specific way. So if you produce over 500 cases, I believe a year, you're required to report all your winemaking activity to the TTP. So that's why I found it. There is this great need to build better software that catered to this very unique situation. This very unique industry. That said, Invent goes far beyond just checking the compliance box, our software starts in the vineyard. We carry through harvest, aging into the bottle for case goods management. And then we tie things up with the financial portion where we track all the costs associated with producing the wines as well. - So when you talk about the vineyard part, what's part of that? Are you talking about farming and vineyard management or what's included in that part of vineyard management software? - Yeah, so we bundle up our offering into four products. I think it helps to frame what we do in a more specific way. So the four products are grow, make, finance, and supply. So on the grow side, we're a vineyard tracking platform. And we designed and built this after we built the core engine that runs all the activity in the seller. So the lens is through the winery's lens and the winemaker's lens in the vineyard. What is the winery and the winemaker need to make the best business decisions possible in the vineyard? So we track the major phenology dates. We track yield estimations. We track applications when they happened and why they happened to certain blocks of different times. And then we track up to harvest scheduling fruit and forecasting fruit. We also have great user interfaces where we show historical trends over time. So you can see what a specific block and a specific vineyard, how it performed year over year. And when you can approximate harvest to happen or when you conceive a raise in things like that, that again, help the winemaker make better decisions and plan effectively for that coming season. Is that vine by vine or is that blocked by block? It sounds like. It is not vine by vine. It is blocked by block. And you can separate them out into subblocks. But there are other technologies out there. I know that you spoke to Sean D. Martino about Sentinel, that's a fascinating complement and a valuable complement to what an event does because he tracks on the vine by vine level. So that's the vineyard. Then you said there's three other things. The winery, I guess, would be next. Correct, yes. So the winery operational model is called make. And that runs all the activity from the moment the fruits received all the way through to the bottle. And this is all the daily activity that happens in a cellar. So it's the processing of fruit. It's the sangyees, the drain impresses, the racking, the topping, all the additions that take place and tracking that inventory and the associated costs effectively. It's all the packaging materials for bottling and tracking that effectively. So it's really a work enablement platform that manages all that activity in the cellar through digital work orders. And was make the first one you started with? Like I'm assuming these modules you made-- now at the same time, you made one first and then kind of expanded. Is that the crux of the heart of the businesses that first make model? Correct. That is the foundation, yes. So make is the foundation we added grow after that. And then we've added finance after that too, which I sort of envisioned sitting on top of the grow in the make products, which tracks all of the costs associated with producing the wine to report on a final COGS per product. So if you look at the inputs, direct inputs are fruit cost. That's an easy one that actually ties to the growing module because we track grower contracts. So you can know exactly how much it'll cost you per ton, per acre, per block. And when the fruits received an in- event, we transfer those dollars to the make platform that then follows that through all the blending permutations and the splitting of wine all the way through to that final skew. So that's the finance platform. It's super powerful for winery accounting teams and other teams that are relying on the specific cost to make each wine. So for finance, do you have to take in other inputs that aren't from the why-making team, like things like building depreciation, utilities, expenses, things that the why-maker never really touches, that the accounting and finance team touches, you have to integrate then into their accounting platform or something to take that or as I have to be manually input. Exactly, yeah, those are great questions. So one of the most exciting things about introducing make and finance together is empowering those two teams to work effectively around the financial piece because the why-maker needs that insight, but you're right, the accounting team or the finance professional, whether internal at a winery or external is the one that's applying those overheads that you just mentioned, Peter. So the building depreciation and the utility costs and the labor costs that you need to allocate across your inventory. So we have a standard operating procedure that we give to all of our wineries in terms of how you get that information in and how easy it is to reconcile it on a frequent basis. So it's in tune with the accounting software. - And then there was one, what was the fourth piece again? - The fourth piece is called Supply. So that's coming out this year. It's the last evolution of, I shouldn't say last, it's the most exciting next evolution of an events platform which is case goods management. So for most wineries that do not use an ERP which is 98% of them, they're probably on a solution like QuickBooks. QuickBooks is notorious for having poor inventory management. So most wineries track their case goods inventory across their locations through spreadsheets. So it's an opportunity for us to take the bottled wine from an event make and transfer that into an inventory management solution. So it traps all their in bond and tax paid wine across all their storage locations and we integrate downstream from the market. there with the DTC providers and ultimately the distributors as well. So they know at the end of the day how much it's cost in them to make each wine where it's being allocated to when it finally sells what the revenue is per product and then having the profitability per skew. That's the holy grail for us and our wineries is enabling them to understand their profit in a more granular, accurate way. So I've definitely run into the problem with the case goods management inventory in many of the wineries that I've worked at. Is it just inventory, like tracking inventory or is it, do you also have like planning tools to see which channels is it going in and then how do I move things between channels and things like that. Like, you know, I have a hundred cases going to, you know, California and 100 going to, Canada or used to be Canada, I guess. And then, you know, samples and DTC and library and all that sort of stuff. Like, does it have planning tools for that as well or is it just, oh, I used a bottle and then like it deletes from inventory. Yeah, we will be doing allocations. So we call those allocations where you can set aside, okay, X amount of this product that we just bottled last month is going to the tasting room and X percentage of that is going to wine club. That's that set aside for wine club. Now on the three tier side, you know, distributor A, East Coast distributor, we're allocating X amount of inventory to them, even before it sells, right? It's those initial allocations and then tracking the depletions accordingly too. And those will change in real time. You know, maybe they transfer 10 cases of wine from from distributor A to distributor B. Of course, the system handles that well. So it is, you could call it a planning tool, but it is an allocation tool based on the final destination of those, those case goods. This is all software. Are there any hardware components to your system? We're strictly a software company. We've always kind of stood on that ground. There are many amazing hardware providers and IoT sensors in the vineyard. There's just a lot of really compelling tech both in the vineyard and the seller that we integrate with or desire to, but we're a strictly SaaS product. And with the grow and make or the vineyard and winery, you have software that tracks and monitors things. Is there any control element to it too that connects to a hardware system that, you know, turns on and off irrigation switches or winery tanks or whatever? Correct. Yeah. So we integrate with TAKENAT. We integrate with VinWizard. Those are two partners of ours. And those are the main control automation and control systems that we see in the winery setting. Okay. So then you put the work order in and it can go to that system and actually execute that control. It's a question. The specificity of the send and receive back, I think we might just be receiving the information back. So like TAKENAT as an example is taking many, many readings a day during the firm ends on bricks and tent. So I think our system is just receiving the activity from TAKENAT as those readings take place. And if there's like an automated punch down or help over, we'll also bring those into an event. But we have that specific integration handoff dialed in. So I'm curious in terms of like do you have like an API's that other software or hardware providers could integrate if you're truly becoming the operating system of wineries, it's probably in your best interest to have some kind of connectivity with those other services if they want to kind of get in there especially for winery customer already has some existing systems. Absolutely. Yeah. So we have now been in business for 11 years. We've always taken the stance of having open APIs and it's something that we were lucky enough to be enabled to do from day one because it was this point in software development where it was really accessible to build from scratch that way. And it's what sets us apart from our competitors to and what enables us to integrate so seamlessly with anyone else that also has APIs. Our as is 100% rest API based and we just activate the public API when it's appropriate and we integrate with all those partners that way. Correct. For a new customer like what are the core benefits of the event solution and do people and I'm curious and do people usually start with one of the modules or do they usually go all in? Yeah. So I'll take your second question first. We see a variety. We actually see recently where they will adopt make and finance up front. Those are probably the two most compelling packages up front that we see most wineries adopting. If the Grow Relations team or the Vineyard team is involved will implement grow to up front. And then from a benefit standpoint, there's a couple direct benefits that we've been measuring and heard from our customer base. And there's also indirect benefits as well. So the direct benefits are efficiency basically do more with less with the or with the same resources. It's so important today for wineries to focus on efficiency probably more so than ever because of the headwinds in the climate right now for the wine industry. The second piece is just working smarter. So better decision making with the information at their fingertips at any time. Again, previously this information has been on paper or trapped in spreadsheets. And then the profitability piece is the direct benefit as well. So it's easier to know your revenue per product. It's harder to know your true cogs per product. And I would argue it's almost impossible to do that if you don't have production software that accurately flows the costs through the wine making process as the liquid moves between different tax classes and other permutations throughout wine making. So in terms of cost reduction, I'm assuming that you can set up different, you're setting up different skews in the system so that you can see if I apply this barrel to this or I stage this wine for this long, I can see the impact on a pure skew basis about what the cost profile looks like prior to in a vent. What were the ways that wineries can really assess that? Is that really just them doing their own backend calculations in a spreadsheet or is there something else that they were using? Because it seems like a really enlightening tool to reduce costs on a pure skew basis. Absolutely. I would say that wineries today that are not using production software with a costing piece are doing an Excel and are doing it on an annual basis from a peanut butter spread perspective. So they'll say at the end of the year, okay, what do we make this year? Let's take all of our labor and peanut butter it out across all of our lots. Let's take our grape costs and I've seen a lot of inaccuracies here too. Let's just peanut butter them off. So it's highly inaccurate and they only do it once a year. So from a decision making standpoint to your point, you can't have, you don't have the visibility into how much it's costing you in real time to make those informed decisions. And actually you have a quote here from Gloria for as wine maker who implemented an event about a year ago and he said making informed decisions about blends in pricing is the reason we got an event. Now I can explain why we can't target a certain price point. The cost of fruit alone has made that decision for us. So those types of insights from the wine maker to be able to educate finance and marketing and sales to say you're asking for a certain price point, we can't do that guys. Look at our margins on this is really powerful. So it's almost like the value, one of the main values you're providing is transparency to the actual person who makes the decision of what other components are as opposed to a finance person in a cubicle somewhere who's analyzing this once a year that the person day to day who's making those purchasing choices can have that transparency and visibility that they didn't have before. Absolutely. And I also would add to that and say that a lot of the accounting professionals that work with wineries are not savvy in wine making. So they don't understand what these costs inputs mean and how to effectively capitalize costs across inventory because they don't understand again, it's a very nuanced industry, very specific workflows. I mean, the amount of time I've seen wineries waste just trying to communicate information back and forth between wine making and accounting is like weeks or lost at the end of the year when they're trying to do these things. And do you have any examples of where wineries have used the solution to improve the quality of the end product? I mean, it sounds like there's a lot of quality improvement in the overall processes, but in terms of like, hey, we want to make this skew better winery and they were able to use the technology to identify opportunities to make that better. Yeah. So I would say we integrate with a lot of quality control labs. So ETS is one where we have a direct integration with. They get real time notifications of ETS results coming into an event so they can take action very, very quickly on quality control issues. We have also custom reporting that allows wineries to be able to run a report and say, show me all of my lots of have the VA over 1 grams per liter in the last two weeks. I mean, being able to see that instantly and take action on that is super, super valuable. So we have a lot of case studies and a lot of testimonials that just give the winemaking team that much more accountability and transparency and visibility into making those calls to prevent mistakes. Because again, it's if you're working with amazing fruit, your job is really to just see that through the winemaking process without a lot of errors, right? So we're helping them prevent mistakes and catch issues as fast as they can. And what about environmental impacts or just about being good citizens of the land that you have in terms of like whether it's water usage or even the weight of the glass. that you're shipping in, are those things that your software can illuminate for the decision makers at the winery? I know the winery is used in event to track their carbon footprints for a lot of the sustainability programs that are out there. They can track water usage, they can track yet the weight of glass, and they can report on what glass they're using on a per-product basis, which is really valuable. I would just say that we're the system of record for that, and we enable them to get those reports out more effectively. In terms of, obviously, labor is a big hot topic in the wine industry. What does an event do around forecasting labor or predicting labor or making choices around labor for wineries? We do track on an action basis how long it takes for each employee to perform an action from start to finish. That's a very power user level of an event that not a lot of wineries are embracing, and you can probably understand why. Yeah, it's a velocity check. That's a velocity check. But larger customers that we work with are asking us to do specific labor efficiency reporting for them. For example, a large sparkling producer in California had us create a special report that showed the labor efficiency on a per-employee basis of certain treatments that they were doing to their wines, because they found that they were having bottlenecks and it was making them less efficient. So they can get reporting out of an event that reports on that and can help them better allocate labor. I would say there's a question that you had around add like additions of labor impacts. Something would be going wrong if they implemented an event and they had to add labor to support that. That was the problem prior with legacy systems. Now they should be much more effective, especially running lean operations these days where you can't just add people. And just be adding people. You should be making your operations and your people as efficient and effective as possible. Yeah, I was just more thinking about workers that you don't need all the time and you need them in certain areas and understanding where will those bottlenecks be. And making sure I have the right people in the right place during the right roles. That's something that seems like you have to predict that in advance based on what you see from your growing conditions and things that they may need. If there's a drought when you're a fire when you're something like that, understanding how to adapt that and what does that do to your numbers. I just curious if an event tracks can help identify those problems. Interesting. I haven't heard a use case about that specifically, but I wouldn't put it past this that it hasn't been done by a customer. And you mentioned that compliance was a big part of why you started an event and all that. Does it automate compliance reporting kind of like a ship compliant does on the DTC side? Exactly. Yes, it automates the 5120 or the old 702 reports we've been around for a couple decades and it significantly reduces the time to produce that. I have a couple use cases in case it is around that. So again, Gloria Ferrer said that that specific report would take three people two days. And now it takes one account in 15 minutes. Well, Terris has said that the TTP reporting used to take weeks and now they pull it two seconds and move on. So it's just taking all those inputs again across all the wine making activity all that nuanced workflow that happens in a winery and plugging it into this two page report that's probably a hundred cells across different tax classes. And this is very, very complex and we automate that in three clicks into that include any like export reporting and compliance. So you have to do labs for export and whatnot and submit forms for that as well. That's a separate report, but yes, we have an export report that that allows them to generate that those exports as well. And are there any good specific case studies for our listeners who are especially the master wine students and whatnot who are very interested in specific case studies of people implementing in event and the types of benefits and savings they've gotten. Yeah, there's a couple worth mentioning. So the larger the winery and say the more tangible the ROI from a dollar perspective, the larger the ROI. So if we take chandon for example, they're on record with us saving $75,000 annually by taking their workflow paperless again, they're very lean operation, like I said in these these times so important if not absolutely necessary for wineries to be focused on efficiency. So that's that's a case and point there hats and haul is another one that moved from a legacy system to innovate about a year ago and they've saved 40 hours a month after switching to an event purely just from efficiency gains and labor reductions. And I mentioned a couple of others about the compliance piece just saving the time there and then reducing risk of audit is one as well. So back to that, like what is the absolute necessity of a system like an event, it's really the compliance piece where if they get audited, they have that DNA trail of every wine to be able to say here's exactly what we added to it. Here's you know all the the loss that went into it and the final composition that's essential to breeze through those those types of audits and you mentioned that an event was founded 11 years ago. How many wineries have adopted the solution so far and geographically how broad is your reach. So we have over 600 wineries using an event today and that's those are subscribers. So we have from a brand perspective, you may have a parent company that has multiple brands under that one one customer. I would say probably about 90 90% 92% of our customer base by customer count is in North America. So about 8% of those those customers are international all by way of just organic word of mouth growth, which is our number one way of acquiring new customers is just hearing about it from their their friend been respected peers about the value that it's bringing them. So for example, working with two of the largest wineries Australia Australia vintage limited and Hillsmith family estates they've been using an event for their multi million case productions for a long time and I think we have the largest winery agrees using an event and so working across across the world, but I think like I said earlier, probably 80% of wineries are still using Excel domestically here. So it's still our core market in terms of say I'm a new winery and I and I sign up with an event. What's the lead time to like get everything set up. It sounds like there be a large lift to get everything into the solution. So on average, how long does it take a customer to kind of like plug in all the data needed to make an event work. Yeah, so we have two different onboarding options one is a self onboarding option where it's basically five steps for any small and mid size winery that wants to onboard themselves. You get your vineyard sources in you get your lots in you add your volume you get your vessels in and your current inventory up to snuff and then you're moving forward that can happen in a couple days honestly if it's a small position operation that has their cell files ready to go or for importing from from another solution we can offer that as well. And then for large wineries that need more handholding and want that white glove service, we have a premium onboarding package that includes team trainings, a full data migration of that history to make sure that they're up and running effectively from day one and that's that can take anywhere from two weeks to eight weeks depending on the size of the organization great that's and I was assuming it was something around that there was options because the wineries run of so many different scales. So in terms of the pricing for the solution obviously there's a subscription component. Is there initial setup component it sounds like can you maybe break down like how pricing works on for a small beam large winery and understand like what are the variables that were you know that are there sure yeah. So we're a SaaS solution software is a service solution so a subscription service that's the core of the pricing just like your your Netflix account. And that scales in terms of the size and the complexity of the winery it's not a user based system and it's not a usage based pricing model either it is purely based on the annual production and the complexity and the number of locations of each each winery. So it there is an upfront implementation fee which is nominal it's depending on what implementation package they sign up for it's a thousand dollars or a couple thousand dollars for a small and size winery and then the subscription starts at about 24 hundred a year for a antique winery and scales from there so that's if they buy the core make module. They are on finance that they are on grow there's additional pricing from that but that is the the starting price for small winery so like as a large winery that would plug in there there's one payment or they are they do get per brand because you said it's my allocation it gets so if you're like a galo and you adopt this like. Like that I mean I'm assuming that is they're you're going to get one bill from death from you guys for galo but like how are they breaking up for their products are I mean are you you're not charging it by brand you're kind of doing it across enterprise level yeah and. I'll give an example of that because we really do try to tie price to value and once you get to the large the galo parent companies there's a large. Differentiation of how they would use in event so for example doich family is a long time customer of ours and they make Josh sellers as an example they have probably 25 30 brands and they. are a pure custom crush player. So they're not actually using an event for daily why making workflows. They're using it for inventory management across all the sites in which they make wine. So we've priced at that accordingly versus someone that's making wine at let's say 25 locations and managing that staff managing the daily workflows. It's just a different they're getting a different kind of value on it in event than an organization that would be using it differently. That makes sense. Yeah, so in terms of like the the ROI that a customer is seeking if you're like a small player having it sounds like it's more of efficiency of all my dad is in one spot and I know all the things but if you're when you're the larger organization you would said you know they're gonna see a lot more scale in terms of like this cost savings there. Is that how they would think about it is that like for smaller players that cost savings isn't really the main thing as much as the big players or as everybody's seeing cost savings across the board. I mean I think everyone can absolutely tie the ROI to an event to justify the price event absolutely whether you're you're tiny and just saving your time as an owner winemaker and in generating that that TTV report that used to take you two weeks now it's taking you two seconds to the large large large scale wineries that yes the ROI is different that scale a lot of it is financial so being able to make strong financial decisions to save save costs at the highest level having access to the the real-time value of inventory in your cellard any point in time and coming up with blends that match the portfolio that you're seeking that's the value at the top and then everything in between. And when you when you when you talk to a small winery I'm curious to you or a large one it do you have like examples that you provide them because I can't or listeners love examples. I'm saying like hey this small boutique winery making less than you know 10,000 cases did this or 10,000 bottles made this and this is what the impact was you have like great case studies that you liked reference when you're talking to new clients. Yeah we have some on our website if you go to maker stories on there there are a couple listed and yeah they all you know streamlining operations not having to hire that additional person that they used to have to hire being able to have access as an owner to inventory from anywhere a lot of owners of small brands are not on site all the time and I think a huge value as we see a lot of brands moving to the virtual models being able to have access to your inventory from anywhere even if you're not making it yourself. So there's there's a lot of value there for like winemaker owners again to just have everything streamlined not having to track it in paper and excel and being able to have it digitally. So in general like is there like an average ROI that someone could see from an event that is like they're gonna save x percent. Again it really just depends on the winery and what their own success criteria is I don't think that we can tie a dollar amount to you know exactly what each each winery is spending it's not that simple. So how do most wineries hear about you? Most winners hear about us from a lot of different angles and perspectives so something that we've been tackling the last 18 months or so is really trying to be a strong educational resource for this industry. So we're doing a lot of speaking engagements and webinars about how to run a healthy winery in this climate. We have actually the tenants of a healthy winery that we have developed an opinionated stance on to help help wineries understand the importance of being profitable, operationally excellent, relying on data to run your business and how important that is these days and then the kind of softer benefits of just having a positive work culture you know you need to retain your best labor these days. This is actually a shortage I think of winemakers for the first time ever. I read about these winemaking programs that are sort of struggling a bit to attract folks to the wine industry so I think it's really important to know when you have someone great and make sure you retain them and then just being like community centric. So we're out there preaching helping wineries understand how to do these things and how to embrace these things. We also have a digital community that is free it's it's accessible to everyone called the punchdown.punchdown.innovate.us is the URL to go find it and anyone can join it and it's a peer-to-peer exchange. So it actually isn't really talking about an event much although an event users are on there asking each other best practice questions but that is a way in which wineries hear about us as well because we're the facilitator of that digital community and then back to just how we continue to grow our customer base in the most effective way it's referrals. It's having happy customers that are getting a lot of value sharing that information with their friends. Yeah and you mentioned that you know you talk about the health of the wine business and you actually put out a report last year I guess 2024 state of the wine business health report what drove you to actually do that. There's a lot of negative sentiment in the media about the health of wineries the health of the industry how much are wineries actually struggling and we wanted to kind of come over the top and take that narrative under our umbrella and really find out. So with our 600 customer base we said I think they'd be interested in contributing to this thought knowledge and so we conducted a survey and we got over 500 participants in that a lot of them across winery leadership and it really shed light on how the negative sentiment in the media may not be entirely accurate and representative of this industry. There was a lot of like positive results from that around how healthy wineries actually are if they're practicing healthy financial operational and cultural aspects of their business. And you see it sounds like you've done a lot of different things to sort of market yourself creating communities that you know don't necessarily tie back to the core product and you know the state of the business health report and all that. What have been your most effective marketing techniques? Well that's a great question I have a great head of marketing now who does really really great work and we've we've tried them all I mean I I would say a lot of the industry doesn't participate in the trade shows the conferences they're not reading all the blogs every day and so for us you know we've we've kind of hit the state of maturity where we've sort of saturated those audiences and it's like now how do you get to everyone else and I think everyone that's in whine tech is sort of struggling with that too of like how do you help wineries out where you know they need your help but they're not that digitally accessible or they're not going on site to the unifies in the other events like that so for us you know we're being strategic as much as we can on LinkedIn and social and also just like partnering with other thought leaders in our space other whine tech companies we do co-marketing pieces again education is huge we've done some really good financial webinars that have attracted like over 500 registrants to one last year around how to effectively run a financially sound winery with an M&A advisor and a cost accountant so I really think it just comes down to knowing how to add value to your end user and for us again it's not just reaching in events product but it's truly helping wineries right now where there's a lot of uncertainty and helping them maintain the stable ground that they're on and did you ever try things like paid advertising does that work for whine tech companies we've tried we've tried yes I would say it works sometimes there's an ROI there on that for us to continue it to some some degree and I think it's actually improving over time as our industry going online more and doing more like research themselves but it hasn't been a top lead generator for us historically and you mentioned that you have competitors how does your product compare to other solutions on the market so I'd say before we even talk about the product I'd say the mission and the vision of the company is fundamentally different than the other companies out there when I started an event there are actually many more providers and many more options they were mostly tiny some on-premise solutions very few SaaS solutions but they were out there and they had you know a handful or two customers and those have been consolidated since so I'd say today you know there continues to be consolidation whine tech is quite fragmented still you'll have a lot of providers on the ag side a few of us on the like the makeside the production side and then a lot on the front of house side and for us it's really about us serving wineries of all sizes I think there are some of our competitors that are that are marching to a different beat now you know under under private equity and venture capital funded it's just a different it's a different perspective on how to go to market and for us it really always comes back to our mission which is helping wineries run better businesses from a product perspective I will say that I've heard from our our customers and those that have used competitive solutions that the costing component is is the strongest and at the end of the day if you can add financial value that's huge so we stand on that a lot of the time and then just having the most intuitive solution for all the end users that use in event from hardest interns to seller masters to directors of whine making to to growers to accountants to owners that need to get into an event and run you know a report for an owner it's just them it's custom built and curated for this industry and and that's something that when you're into the product to compare it to others it's pretty obvious pretty early on when you talk with potential customers what are the main barriers that you hear from them that prevent them from adopting your solution I will say the single thing that we here most often. And I would bet if you pulled like competitors, they would say the same, which is just resistance to change. So they will go through the Sleeve Invent, they think it's great, they get pricing and they're ready to buy and then they say, "Oh, maybe next year." So it's that resistance to change, it's like having the growth mindset of, we understand the value to this business enough to go advocate for this business case to the owner. Like we still see a lot of wineries struggle with that if we don't have kind of the executive leadership on board. But that is the answer. It is at all size and scale to wineries, it's just resistance to change. And I will say too that just in the last few years that's improved for the better, because like I said earlier, the win industry isn't a tough spot right now and having operational software in place to help with cost control and efficiencies is a smart play and a smart investment for a winery today. So again, we're seeing it change, but that's been the biggest impediment to adoption. What do you do on a regular basis to help mitigate that barrier of resistance to change? That seems like a really hard, squishy one to attack. Honestly, the best thing that we can do is bring them case studies and say, you know, like for example, Domain Carderos adopted an event about six months ago and it was a tough sales process because they were on a legacy system. It was working the way they've had it working for 20 years and we came to them and said, look what Shandone's doing. They're right down the street. Here's the gains they're seeing, they're saving $75,000 a year and here's where they've seen those savings and here's how they articulate those savings. And that is that aha moment where then they feel empowered. Okay, if others are doing this, making the same type of wine, the same scale of wine that I am, then it makes more sense. So again, peer reference case studies is so, so important to kind of justify that ROI. My guess is that most of your clients probably have some solutions in some of the areas that you're that you're dabbling in in terms of different across those four modules. Are there high switching costs for a winery to switch over to an event? Is it like, is shifting gears difficult for them or is it costly for them when you're looking at new clients? The only cost is just manpower and brainpower to learn a new way of doing something. It's not a financial burden. It is a mental burden and a mental hurdle for them to recognize and adjust to overcoming. You mentioned, you know, how cogs and that sort of financial tracking is one of your core elements and differentiators. And that had me brainstorming a little bit here, like just thinking, do you ever then sort of like benchmark your clients cogs across the system and identify opportunities for them to improve? Oh, Peter, we have been working on this. That exact, that exact question for at least 12 months, trying to benchmark who's using cogs effectively, who's following best practice? How do we define best practice? And then how do we cycle that information back to our user base? There's a lot on our product roadmap that ties to a lot of value like that. I think benchmarking and anonymizing data is huge for this industry again because they want to know what their neighbors doing. They want to know how they compare. I mean, community benchmark is a good example of that. That's tasting fees, right? Like, I want to know how I compare to the neighbors around me that are selling the same caliber one I am. So there's a lot that we're doing there to help our wineries benchmark against. And I think we have enough critical mass now where we can be really effective at doing that in the future. So looking forward with an event, what is on the upcoming product roadmap that you plan to be rolling out the next like 12, 18 months? So I can't share too much publicly, but I will share kind of our thought process around it and how we prioritize our product roadmap. So again, we are mission is to help wineries run better businesses. If we look out one, two, three, four years, how do we help them do that? And we tie it back to the benefits that we need to provide them. They need to continue to be more efficient, smarter, and more profitable. So we're releasing supply this year. That's our short-term product roadmap that's that is actually releasing to the John public this quarter. And then we're working on a lot of novel AI applications that will help them move forward, augment human capabilities and end of it. So if you think about the repetitive tasks that happen in the seller, how can we make that more effective? How can we use AI to help them perform tasks and make decisions? And then we have some like expert AI applications that would truly change the game that we're exploring. How do we get those on our roadmap to? That's that's not too intimidating to wineries because again, like if you look at our audience, you have to make it accessible. You always have to make these, you know, busy concepts accessible. So those are the types of things that we're working on right now. In addition to continuing to listen to our customers as well and understand what they're expecting from us and what they need to make sure that we put those on our roadmap as well. So the difficult things for a winery that AI, that would be something like a YMAKER, has an issue, a stock ferment or something, and they put it in and say, what can I do for this? And it says, well, at Easter, or Yan or whatever. Sure. There's a lot of steps that you could take there around that in terms of, hey, we've seen you having stuck fermentations over the last five years with your Pinot Noir lots and it looks like you're now trending again to hit these metrics that tell the system that you will also have it stuck. Do you want to look up how to treat a stuck fermentation? You can use, you know, white labeled chat GPT to do that. So we're experimenting with a lot of embedded tools that just enable things and decisions to happen, happen faster. And again, for the quality control component too, right? Like we want to be a quality control system that enables them to stay within an event and make those decisions. And you probably see in your role a lot of other vineyard and winery innovations from other companies. Are there any that are exciting to you right now? Yeah, I'll mention a couple. I have seen Sentinel and I'll say from just a software standpoint, it is super impressive what he's done from a functional standpoint and just from a design standpoint. I mean, it's beautiful software. He's done a really nice job with that. I'll say that what Tastery is trying to do for the wine industry is also impressive. They're using AI algorithms, trying to find that sweet spot that'll scale for them. That's that's also interesting. And then on the front of house side, I think just with the advent of AI and data reporting data aggregation, making smarter decisions on the sales side, Steven Moch is a gentleman out of Seattle that is new to our industry. He has a company called New Vintage Labs and just having a couple initial conversations with him and what he's trying to do for business intelligence reporting on a low lift effort basis and a low cost basis for wineries is very intriguing. And I'm rooting for him on the sides as well as we go into this new era of, again, better reporting, smarter decisions across the whole stack from Ag to making to selling wine. Awesome. Actually, we like to wrap up each episode on a personal note. And so we are curious about what is the most cherished bottle of wine in your personal seller and when do you plan on drinking it? Well, I have wine from my wedding that is very, very special to me. That is my most cherished. And it was made by a friend that lives in Napa. It's not even publicly available. So it's probably not worth mentioning, but I will offer a unique answer to that in terms of what is accessible now and what I'm excited about in my seller. Beckham estate vineyards in Oregon is owned by a gentleman, Andrew Beckham, who was a ceramics instructor for years, for like decades at the high school here. And his winery ferments and ages in Amphoris, which he hand makes from the ceramics that he has made his whole whole career. So his wines are just fascinating and interesting and super unique and very compelling like different unique for idols and just it's unlike what else you can find a market right now. So that's what excites me most right now is drinking his wine in my seller. Awesome. Well, thank you for sharing and your personal seller picks as well as all the information about an event. We were greatly appreciated. Absolutely. My pleasure. Hey listeners, if you love the show, support it by buying a show notes book. They not only compile two years of episodes, but also organizes them into themes for better learning. They can be an inspiration to listen to or relisten to an episode or provide a quick reference of the key learnings from a show. Go to xchatow.com and click on the store page for easy links to buy. Thanks for listening. Thanks for joining us. If you loved this episode of xchatow, we'd love for you to subscribe, rate and give a review on iTunes or wherever you get your podcast. Until next time, cheers.