Subscribe
Share
Share
Embed
Welcome to the Kodaris Community Show with your hosts, Tony and Margaret, and the occasional friends stopping by.
This is the podcast where we explore how innovation and technology is reshaping distribution and the supply chain as a whole. Discover how technology is making companies more efficient and profitable, making customers happier, and is paving the way for the future.
Join us for insights from industry experts, interviews with innovators and actionable ideas to stay ahead in our rapidly evolving world.
Margaret (00:08)
Welcome to the Kodaris Community Show with your hosts, Tony and Margaret and the occasional friends stopping by. This is the podcast where we explore how innovation and technology is reshaping distribution and the supply chain as a whole. Discover how technology is making companies more efficient and profitable, making their customers happier, and is paving the way for our future. Join us for insights from industry experts, interviews with innovators, and actionable ideas to stay ahead In our rapidly evolving world.
Margaret (00:42)
So Tony, this is our first episode of our new podcast. and I figured we should probably introduce Kodaris. you've obviously been here the longest and built the company. So I'll give you the, the honor
Tony Zakula (00:57)
So, Kodaris is a supply chain platform. We've been in business as of this recording nearly 11 years. We started in the distribution space. We started building with a large customer, but we'll talk about the origin story. But essentially, we're a platform custom built from the ground up to be customizable per customer while maintaining everything we do in the cloud. So, we're a SaaS application.
But every customer gets what they need and can use the platform how they need it. Unlike traditional SaaS companies that have a hard time customizing per customer, I as a software engineer for 25 years, that was my vision, a engineering problem to solve. And so we currently are in distribution manufacturing, growing rapidly and excited about the future and all the changes in technology.
Margaret (01:58)
And so you're hinting at it, it's not, Kodaris as a whole is not just a SaaS platform, correct?
Tony Zakula (02:05)
That's correct. We have ongoing engagements with our customers. A large portion of our business is services, so we do meet and develop with our customers for their specific businesses or their specific industries. We are profit driven, so we're not a VC-backed company. Nothing against VCs, but we started Bootstrapped and we work with our customers and we're
more profitable business. And that allows us flexibility to actually build features that our customers need without worrying about the long-term return on investment, as long as we're mutually working with customers and paying for the engagements.
Margaret (02:51)
And that's been a little bit of the secret sauce of how Kodaris turned from just technical applications to a full platform. Is that right?
Tony Zakula (03:02)
That's correct. We began with our largest customer with a, you know, finance companies two ways, either investor backed or backed by a large corporate going back 10, 11 years. That's how startups were doing it. I was fortunate enough to find a great partner in a corporation who needed technology. And my deal with them was they would pay for professional services for development.
And I would keep the intellectual property. And that continues to this day. And we'll talk a little more about that in a few minutes. But that's really how we built and paid for. And we continue to build and pay for product development and R &D.
Margaret (03:47)
And so our customers, what is usually their tech stack look like internally?
Tony Zakula (03:54)
So they usually have ERP that they're running their business on. Could be a mid-market accounting system, but traditionally they're running ERP. And on top of that ERP is usually many different point solutions to service different parts of their business. CRM, logistics, AR automation, AP automation.
could be anywhere from five to 15 different applications integrated with the ERP and running off of the ERP. And that really is the traditional. When SAS started 15, 18 years ago now, it was all about specialization. And as the SAS movement grew, it grew into
Thousands of splinters right everybody specialized in certain things customer side was great. They got very specific features And now the industry is trending a little bit the other way starting to realize Integrations have cost maintenance has cost But traditionally SAS has done a SAS companies have done a very good job of solving specific problems
With those point solutions, that's one area customers solve the... One benefit that customers see in Kodaris is they can start to consolidate all those specialized applications. It doesn't mean they're losing specialized functionality. In fact, they're gaining more specialized functionality.
So, Kodaris's vision for the future and how we're building out with our customers and how our largest initial customer has been investing over the last 10 years, as well with us, and we have a group of customers investing now, is I want to run one ERP, one customer success system. I talk about customer success because Kodaris is very customer-facing, employee-facing. ERP is great at high transactional volumes, accounting, all those things that are very critical to business operations. They weren't built 20 years ago, 15 years ago, focused on customer experience. So we're seeing trends from very large companies in different industries to consolidate down. And they're actually building a lot themselves, the very large companies that can fund it. One unique thing about us is we're doing the same thing, but with a group of customers and expanding, continuously expanding group of customers, almost like a technology association, because we also do roll features back to every customer free of charge. So it's almost like you're investing in your own company, but your department's getting larger and larger from IT infrastructure, which is pretty neat. It's working really well for us. But what customers do see is a lot of savings as they can.
Combine down SaaS applications and look, SaaS applications with investors, they have to return money to their investors. So they're always looking at charging more, how can we make more, normal business, every one of our customers wants to make more. But what, because we're offering this one consolidated platform with these unique applications built on top of it, we can supply the needs of what maybe three, four, five other applications are doing for one price, one cost, one integration. And so there's a tremendous cost savings, not only the cost of those applications, but maintaining those integrations, maintaining upgrades. So it becomes a real game changer and you're on one unified platform, which is going to be important in the future with AI and conglomerating your data and making sure you're restricting that data, you're understanding what's happening with your data.
The tech world is changing fast as we all know.
Margaret (07:58)
Yeah, absolutely. And so when we were starting to think about this podcast, what was the main driving force behind what we're going to do here over the next couple seasons of this podcast?
Tony Zakula (08:14)
So one of the things I really enjoy doing is talking with customers, the community, talking about their tech challenges. As a software engineer, I love to solve problems or hear about problems and theorize about how they could be solved. We're building a lot of technology in a lot of areas. We meet with customers either weekly or bi-weekly. We talk to them about their business, what they're working in. I talk with executives about industry challenges, about...
Where could we be in a year? What's huge problems we might be solving? hey, look, sometimes we're building features that aren't going to be delivered for three years and we're exploring, we're iterating, we're talking to people, we're showing them prototypes. So I just felt it was this podcast could fulfill a need where other people want to hear, they want to listen, they want to understand and learn from their peers, from us potentially.
They also want to think about or contribute to conversations. It's extremely difficult to do that by email or one-off meetings or even in-person meetings. Sometimes we'll go on site for two days, visit with our customers, talk to their departments, learn about their operations. So how do we do that scale? How do we bring the community together as, again, almost an association of like customers and really allow others to learn or contribute at scale and I just, we felt the podcast was a great way to do that. Bringing the community in, it's not necessarily about Kodaris, it's about how we're solving business challenges together or what business challenges we're facing or dreaming about the future. What could we build that would be amazing that eventually we could bring to market or solve really big challenges in the industry.
Margaret (10:02)
And as we bring on folks, I'm sure that they'll have their own point of view on topics that they want to talk about, which is really exciting to have that kind community-driven approach. But you specifically, what are you seeing happening right now in distribution and the supply chain that you're excited to unpack this season?
Tony Zakula (10:22)
So everybody talks about the benefits of AI and the go-forward path. But I think if we step back and we take the shiny off AI to us, AI has to deliver real business value. So it's not just about AI. It's about analyzing operations, analyzing different things we're doing. Because those are hard things. They have to be integrated. It has to be turnkey. It has to show value.
Those are our markers. But the world's also becoming much more interconnected. Finally, a lot of the industries are maturing. APIs are coming out. There's ways to interconnect quite easily. We have more automation capabilities. So even if you're not touching AI, processing documents with AI and processing different things is becoming faster and much lower cost. So how do we actually… automate more where maybe the user doesn't even know the system's using AI. It's embedded, it's happening. But how do we automate more operations, more decision making, surface better data, and use AI to augment? It's not about replacing humans, it's about augmenting their ability, making them more productive, making the business more productive, which I view as a way for our customers who in distribution you touch everything, deliver more efficiently, drive or let them optimize their company and their pricing and maybe deliver lower costs to every consumer out there because the supply chain can get better. And so I see a lot of opportunities. It's going to be a multi-year thing, but talking about inefficiencies where they're at, where the data is at, how do we solve them?
All that has to be done before you even think about AI, because AI is still just data. It's automated processing of data. So we're finally getting to dig deep in operations and invent new ways to operate companies, to interact with our customers, to interact with deliveries, and automate those workflows to make employees' lives better, customers' lives better, and also the end users' lives better.
Margaret (12:46)
Yeah, it seems like over the last 15, 20 years we've had such an ability to build technology to automate, but it kind of got to a certain point of like the bigger hairier problems either took too much bandwidth to automate or too much data processing. And it feels really like we are on the cusp of this new world or this breakthrough that we can start to look at different business challenges because we have this kind of accelerated tool that we can use.
Tony Zakula (13:19)
Yes, and I think the acceleration, it's driving the large tech companies who are working on all the AI to change, to offer automation and things at a lower lower price. It used to be there were only a few companies who did AI well, but with open source and with the democratization of AI, it's bringing in the IT costs at a lower and lower rate, which allows more people to take advantage of it. The tooling is getting better.
And now it's almost like a space race for the industry against other countries. So we're all going to benefit. So Kodaris, we leverage AI and then we build some of our AI on top of that to enhance it for our industry. But that's being done at a faster and much lower cost rate than we could have done it five years ago. So the doors are open, but now the challenge is defining it, defining the data, defining the process.
There will be a lot of big losers in AI. It's kind of like cryptocurrency has been out there a long time now and there was a ton of losers and some people are making it, right? And I view that the same thing as AI. There's a huge rush to win big with it. We're a little bit more deliberate and how is this, if we invest in this, how is this going to deliver value? How do we engineer value for our customers while leveraging it?
And so we're not an AI company, but we are going to leverage AI extensively. And so the whole industry, I refer to it sometimes as the Windows 95 moment. All of a sudden PCs came out and a Windows 95 operating system and people could use them and the personal computer space exploded. I think we're at that moment with AI about a year ago. It's going to be 15 years of change.
I mean, look at how far laptops have come. We won't know where everything is going, but a constant, deliberate approach will be able to optimize your operations and your business around that.
Margaret (15:24)
Yeah, awesome. And let's chat a little bit about your goals for this podcast. It sounds like we have a lot of conversations. I could dive into that AI conversation right now, but this is just the beginning of the season. When you're thinking about what this podcast could do, what are the goals in your head around what this could accomplish?
Tony Zakula (15:55)
So I think this could help facilitate, transform the industry. This is not about us. I'm a big believer in. And I forget there's, I don't know if it was Google or somebody years ago said, technology can float all boats and we're okay with that. Right? I look at it as, obviously as a company, we sell product, we sell services, we engage with customers, but also we're happy to help contribute to the community. If we're not a good fit, that's fine. We're not going to be a fit for everyone. We're not going to have the tool set for absolutely everyone. Although I think we can get there. as we go along, I hope this podcast will contribute knowledge, ideas. Even people take back to their business and say, I never thought about that, but we can do that differently, or we use this tool set. I can apply that concept.
And also just give people open forum to think big because we love innovation. We're constantly innovating, obviously. And too many times folks are in their business every day. They're working, they're trying to deliver service to their customers, stepping out a little bit and thinking about big picture ideas, how to optimize or improve. Sometimes a little external
social, thinking through things, listening. We all do it, podcasts are growing, but instead of a TED Talk or other things that motivate people which have their place, my goal is the community comes together, our customers come together, our industry experts come together, contribute back to the community. Because if the community grows, if the entire community gets more efficient, it helps all of us.
Again going back to the goals of helping our customers helping their customers and their businesses and look there's a lot of family businesses out there That are still multi-generational that that are going to have to upgrade their tech to compete so why let Nothing against private equity investors, but there's a lot of companies just shuddering or getting purchased and rolled up
because they don't have the technology skills to compete. And so there's a big shift here, but together as a community, I think those multi-generational family business can continue and thrive, but the world's changing and they're going to have to change with it.
Margaret (18:31)
I like that. think that having a space or a place to go to take a brain break from the minutia of the day to day operations and jump up to a higher level is really important. But where can you find time or place or even the right conversation to do that? So I think that's a great goal.
Tony Zakula (18:50)
And your peers, right? In your industry. I think there's opportunity there and I would find it interesting. I guess that's part of why this podcast is there as well. Yeah. Right.
Margaret (18:52)
Yeah. Yep.
build what you want to see in the world, right? If you want to listen to it, then that'll be a benefit. Awesome.
So I've heard the story of the origin of Kodairis a couple of times, and I think it's fascinating, right? It's completely different from my background in VC-backed tech startups of how the idea started and what kind of took place. So can you walk us through 11 years ago,
what Kodaris was, was there the vision back then and how it came to be the company it is today.
Tony Zakula (19:43)
Sure. when I look back 11 years, I had just left a company in Silicon Valley. I had about $20,000 in my pocket, six kids, a family, and decided, I'm going to start a company, I asked my wife, and she said, do it now, because you'll be too old in a few years. So I decided to do it. I was familiar with how Silicon Valley worked. I had lots of friends that were VCs.
My first idea was around financial services. The engineering problem I knew, right? It has to be customizable for big enterprise, global rollouts, all these different things. The space, the market fit, I didn't have yet. So I took a few months and I pitched ideas to different folks. I had some big banks in Asia I was pitching to. Didn't really get traction. I was doing part-time consulting.
before I between jobs before I started in Silicon Valley a few years before that three four years before that and I went back to He's actually one of our co-founders now and said hey, do you have any part-time consulting? He says I do have this company in Atlanta you can have they need ten hours a month or 20 hours a month I forget what it was and we he said you can work with them because I'm busy on big projects, so I worked with them a few months and then I was there talking to one of the founders one day and on site and his name was Dick and I said, and it was amazing to me because they were a billion dollars in revenue. They brands all over the country. They're in the construction distribution industry and really they had no customer facing technology at that time. And coming out of Silicon Valley, I was like,
Holy cow, like this is a new revelation to me. And I was had the idea about I needed a big corporate partner with a big corporate would be a great way to do this. I, I looked at him, said, Dick, Silicon Valley companies build a little piece of technology and try to scale that into a billion dollar company and take all these rounds of investments. You have all this infrastructure, all these people, all these business processes, you're generating all this revenue and have no tech. that's a cheap piece. Like, let me, you're probably.
Leaving a billion dollars on table, can I build some tech for you? So he looked at me and he said, God bless you, Tony. Let's do something, right? So we defined a pilot kind of around their website, e-commerce, things like that. Start small. We drew up a contract and I came in to the boardroom to talk about signing the contract and the CEO at that time.
Alan was there and he looked at me and I still remember to this day everybody's around the table and he said, Tony, how are you going to make money?
And I said, well, I said, I'm going to build you a product. You're going to pay me professional development services and I'm going to keep the IP. And he said, so you're going to sell to all of our competitors? said, I don't think so. Alan, the market's very big. I want to go places.
He said, OK, so we started the project.
Of course, we delivered it. They wanted to see the next phase. And as we grew the technology, then they allowed me to, after we had something that their companies could use, said, OK, now you need to go out and see if anybody will use it, which was a great.
Margaret (23:41)
Hmm.
Kick in the pants.
Tony Zakula (23:45)
Well, at the time it
was a great motivator, right? Because my whole project was based on adoption then. So really they wanted to stay invested, but they want to see if this was actually something people would use. I said, so you're going to pay me to travel the country, visit your yards, visit your customers. And I said, yeah, go see if anybody use it. We'll see how it goes. So I was, I was fortunate enough to travel the country and they, and they, paid for it, but I, I created.
I was able to get a great market education and distribution. I visited tons of people, I visited their customers, and I did get people on the system. I learned about the product. I was able to sit, watch people use the system live. So everything you say a good tech company needs to do, I was able to do. They were funding it. And of course, as we had adoption come and customers were on it, they were getting return on investment from very early on. So they could see that.
And so we kept doing that. In the meantime, they were also growing. They were purchased by private equity. Eventually they went public and they grew 500%, 600 % over the next eight years. So we were absorbing that growth because they were putting those new companies on Kodaris.
But once we had some one module like commerce, we talked about they had to make the decision where they're going to, how are they going to collect payments for invoices? So they looked at the market applications and they said, Tony, can you build this?
Margaret (25:20)
Mm.
Tony Zakula (25:27)
So being in front of financial service, said, sure, I think I can build that. And so they had me build that for the next year. Then they were looking at a contract quoting system and upgrading what they had. And they came to me and said, Tony, can you build this? We want you to build this. I didn't really want to build it at the time, but because I just felt it wasn't our product wheelhouse.
Margaret (25:50)
Mm.
Tony Zakula (25:52)
but they're my largest customers and still my only customer. So I said, sure, we'll work on that. Because every company you're taught to stay, keep your focus on your product, your product, your product, right? Don't expand out.
So that happened probably six, seven, eight times. And I kept doing it. And about six, seven years in, we finally were able to absorb their growth, maintain their roadmaps with them. And we started exploring, selling to other customers, because we felt we had the bandwidth now. And so it took a year or two to really productize the product more.
fit some other industries. And we had a difficult time the first year or two trying to sell. But as we did that and as we started scaling our customer account, the interesting thing happened was all these products became an asset. So actually what I felt was working against us became, and is today, an incredible opportunity for us.
Margaret (26:52)
Mm.
Tony Zakula (27:03)
to help people consolidate those applications, help people save money. And that model of them asking us to build something, it's an interesting thing because they were, as an investment, they were investing in the future, which is CapEx instead of OpEx. And so every new application we built became something that they would pay for over time. But I also used to tell them, look, I don't...
I don't need any more money. I'm not trying to charge you more as we built more. They invested more, right? Cause they saw the return coming as a one-time cost and they were getting that back.
And for us I was said hey make a billion dollars off me I don't care at this point because I'm still building out my product and figure out my business and I Wasn't having to go out raise money, right? So it was a win-win all the way around There's still our largest customer today They they have very long-term contracts with us, but that concept of building as We close new customers. I started saying well, that's working pretty well, right?
let's just the next customer had features that they don't want because they were different industry. So we built them and we partially had no pay walls or anything. So I was like, everybody can use them, I guess, because I don't have the time to engineer pay walls or charge for them.
Margaret (28:28)
No feature flags or anything, so
everyone gets it.
Tony Zakula (28:32)
And that went on maybe two, three years. But then pretty soon, my original customers started understanding and seeing, oh, we're getting features for free. That's cool. And then every customer that joined started saying, well, what do you have built in for this? And I oh, we got this thing over here. It kind of fits what you're looking for. And they're like, well, what if we paid for something to polish that a little more for our use case?
So that's how we got to this growing community, this very wide platform with all these different applications on it. It was actually funded by our customers. We bootstrap, we're committed to our customers. And I think that as we grow, I'm realizing and as I look out to the future, I'm loyal to my customers there who got me here. So even as we talk about the future, for me it's about
ensuring their future together because if we service them, service them well, they'll keep coming back to optimize, build more because tech never stops. But also, I would want to ensure their future no matter what happens to Kinaris because they're the ones investing in this. I look at our customers as investors. Every single customer who's investing, they're investing in the product. And we want to give them a return on that investment.
And that's just the way I've always looked at it. So that goes back to our original model, right? So it's almost like every time we do development for a customer on a feature that will go into the core product, which not all things do, we have investors that are contributing to the products and other people are getting those returns. So it makes economic sense. It makes business sense. And it's just a great win-win that
I can't claim that I had this planned. It came about by accident, but it's working really well not only for us, but for our customers as well.
Margaret (30:37)
And I think that those investors, their incentives are aligned perfectly because they are the customer base itself, right? So it's not investors looking into, we should develop this feature and move off into this other direction. It's distributor saying, hey, we need this to better our businesses. And so I think about that in terms of aligned incentives where
everything's aligned to actually build a platform that's functional and useful for the customer base itself.
Tony Zakula (31:13)
That's correct. And going back to the original question of why this podcast? So the question is, how do we accelerate that? How do we go faster, build faster, have more people invest in every, in our futures together? And I hope this does that. Obviously, Quateras wants to grow. We want, but we also want to give more back to our customers and this whole model of community involvement. I'm until
A year ago, the funny fact was that we had no salespeople. We had no business people except for myself who did every, our customers sent us every single customer we had. We didn't reach out. didn't, besides one trade show, we didn't really do anything. Our customers were our salespeople talking about us, talking about what we do. All of our other employees were in engineering or in the engineering process or working with customers.
We've obviously hired a few folks this year, but we're still 90%, 95 % engineering focused. And we don't plan to change that because it is a partnership. Our investors go sell us because it's good for them and it's good for us. And that's part of this podcast is how do we accelerate that, but in a fun way, in an easy way, how do we expand our community and get more thought leaders involved with us for the benefit of everyone?
Margaret (32:42)
Yeah, and let everyone listen in to the conversation. to your point of even, it's a similar model of the software development, which is everyone gets the features when they roll out. And so this is a similar thing where we can have the conversations, but everyone gets the benefit of the fact that we get to have these conversations.
Margaret (33:04)
Thank you for joining us this week on the Kodaris Community Show.
We'll see you back next time.