02 Apr April 2, 2020 – Riches in Niches Tony Minock, OwnTrail Rebekah Bastian and Hispanic SMB John Gomez
One of the things I love about verticals and niches is that is there
is always a convention where you can market and propel yourself
into the industry.
Tony Minock is the CEO of Cellacore, a leading provider of simple and easy-to-use enterprise business applications for the Automotive Industry. Their mission is to help companies improve efficiency in multiple areas of their businesses by solving complex problems with simple technology solutions. Tony is also the founder of the Direct Response Marketing & Sales Strategy Firm, Minock Marketing. He is renowned for his straight talking, no-nonsense approach to marketing and sales which is a breath of fresh air for his private clients and those who have worked with him in the past. Tony is a published author on marketing strategies for software, technology, and IT companies. Through his book, How to Get More Tech Clients, he has helped numerous software and technology companies increase the number of leads they receive from their marketing efforts and obtain larger clients.
Rebekah Bastian – CEO and Co-Founder of OwnTrail
The more we understand what other people are going through, we
more you can feel empathy and compassion for what is really
going on under the surface.
Rebekah Bastian, VP of Community and Culture at Zillow Group, is a writer for Forbes, frequent speaker at conferences and community events, and CEO and Co-Founder of OwnTrail. She is also an advisor to technology startups, a respected thought leader, and community partner. Bastian speaks and writes on the complex life paths of women and creating social impact through technology. She believes that through micro acts of mentorship, women can inspire each other and create solidarity around their shared experiences. Her new book, Blaze Your Own Trail, is the first interactive choose-your-own story for millennial and Gen Z women.
John Gomez – SVP – Small Business Region Executive at Bank of America
John has been with Bank of America for 8 years and has worked on Small Business since 2011. He has held multiple roles on the Small Business team, first as a Small Business Consultant Manager in Southern California, then as a Small Business Banker Manager in Texas, and was the Small Business Performance Manager prior to his current role. Before joining the Small Business team, John was a Consumer Market Leader in South Orange County. Prior to joining Bank of America, John also ran his own Small Business as a managing partner in the restaurant industry. In addition, John is part of the Small Business National Advisory Council and was previously on the Board of Directors for People’s Funds in Austin, Texas.
Highlights from Tony’s Interview
We build product data for aftermarket companies. That means we build the data around auto parts that sit onto a car, and specifically, what we do is we catalog them. So, if you have ever been on a website and done a year make model of what car you drive and found parts that fit, that’s what we do behind the scenes; that data is very complicated. Or if you’ve ever went into an auto parts store and said, I drive this year, this make, this model, and I need a new air filter, the guy behind the counter does a quick look up to find those parts. The data that he does that look up on is the data that we do for different folks within the industry. Then we take the next step further, because we all know eCommerce is growing, so most eCommerce platforms cannot handle that magnitude of data, nor can they handle that year make model lookup with very specific fitment requirements. So what we do is we help ease that pain of developing eCommerce sites for the automotive industry, and we use what’s called an API call, and we access that data in real-time so that it makes it a lot easier and allows some of the best eCommerce platforms out there to perform a little bit better and be top-notch in the automotive industry.
Our solution that we sell is what’s technically called a Product Information Management System. So, from that perspective, we are eCommerce platform agnostic; because of our API and our technology, we can work with any platform. The platforms that are most popular are BigCommerce, which is the one we like the most because of their technology and philosophy, and they’re just a great team to work with. Other popular platforms are Magento, and Shopify, which is a very common platform around SMBs; small businesses. Then obviously, people have always heard of WordPress and a few other sites or technologies like that, but the top three are pretty much BigCommerce, Magento, and then Shopify.
What most eCommerce platforms cannot handle is the complexity of the skew. Let’s take an air filter, for example. An air filter is probably very specific for its length, width, and height that fits in your vehicle; but it might also fit a couple of different vehicles. So, the data behind that is not very complex, it’s made for 20 different vehicles. When you select that, it just has to query through 20 different what we call fitment records. Take a different product, more of what we call a universal product or a product that fits a lot of things. Let’s take an oil: 5W30 oil. You can dump 5W30 mostly in any engine and you’re not going to ruin it, per se. The moral of the story is that it fits a lot of vehicles, so the fitment records gets big. The air filter only maybe fits 20 vehicles, whereas you could maybe put that oil in 5000 different vehicles. So, the magnitude of the data around those 5000 vehicles is a lot larger than if it were just 20 vehicles.
Here’s how I came across this niche. I’ve always been a big fan of verticalization or specializing in the niche. Prior to this, I was partners in a software company and we did a lot of work within the supply chain industry. We wanted to niche it down even more, and this was when craft beer was kind of exploding, so we ended up focusing on the craft beer and liquor niche. That kind of proved out the business philosophy that being a niche player gives you expertise and a lot of other benefits and things like that. So, we knew that a niche worked. When I exited that company, I was doing a few different consulting things and helping different businesses out, and this opportunity stumbled across me from one of my old customers. It was an ex-customer that was about to make an investment in building something custom, and they just couldn’t find what they needed. They just basically came to me and said, can you help me find this, you’ve helped me with software before? They were in the automotive industry, and it was someone that I had worked with before. They knew the industry very well, but had this problem of being able to catalog their parts. So that’s when we took a look at the magnitude of the opportunity.
We researched the industry, there was definitely a problem within the industry, there was a lot of other people that looked like them, and the magnitude of the growth of the automotive aftermarket just made sense. From there, we kind of peeled back the numbers and the size of the opportunity, and then really looked at the customer avatar. We started out doing just product data; so just cataloging for the automotive companies, and then we expanded into eCommerce over the last few years because it’s just a natural progression. So, they came to us with a problem. And we kind of solved it. They thought we were going to solve it as a one-off, but we actually took it to the next level and then started a business around it, and we’ve been successful ever since.
After we found the problem, it was about a three to four months due diligence period, and then that coincided with one of the largest automotive aftermarket trade shows out in Las Vegas, called the SEMA Show. That kind of solidified it. We were able to talk face-to-face, really understand the problem in the industry, and understand some other industry experts; things along those lines. So, we basically came back from the SEMA Show with a business plan written out literally on a bar napkin paper. Then from there, we started developing the software and that took us about 10 months. Obviously, that took us into the summer of the next year, and then we basically used that time to ramp up into the next year’s SEMA Show. Then we basically officially launched and started selling to other customers. About a month before that SEMA Show, we did press releases, a lot of direct mail, and then set appointments at the SEMA Show and just took it from there. One of the things I love about verticals and niches is there’s always usually a convention, a seminar, or something that coincides with it. So, it allows you to market and kind of propel yourself into the industry by planning around those events, and the SEMA show has allowed us to do that. Not to mention, SEMA Organization is just a great organization; they do a lot for the industry, they do a lot for the youth, they do a lot for a lot of things, and it’s just a great organization. For companies like us, coming in and innovating, they’re very welcoming and very helpful.
So, at that point, it was just hiring the right developers and writing out the requirements, and then allowing them to program and then doing the testing back and forth. In our case, we had that one base customer, so we were able to bounce things off of them and ask if this will work or not, and that allowed us to tweak and adjust where it needed. I kind of already knew what type of developer or person we needed to bring on board to be able to write this software, so that was very helpful; having that background and those resources that I could tap into, as well as other people that are within the technology of software development industry that I could lean on for advice. So, I brought on a few developers and that’s what we basically wrote the software with.
We didn’t go to outside investors, we basically self-funded and then pre-sold. In other words, that first customer trusted me enough because I had done business with them before, so they basically prepaid for the software well in advance and the rest of it was self-funded. So, for those first 10 months, really, we just self-funded ourselves as a company, and me personally, and then also the funds from pre-selling. The presale that we did initially funded about 60% of the startup cost, off the first customer, and then we sold two other quick customers right after that, and that funded the rest. So that got us to probably our first 12 to 14 months. I did not want to go the venture capital route because of the niche that we were in and we wanted to prove it out a little bit more, plus, I didn’t want to give up any equity; I wanted to keep that equity for myself. It was a little bit more of a rocky road self-funding because there’s always pitfalls and there’s always things that you don’t account for. So, it always takes a little bit longer, but it’s been worth it. That investment now is paying off handsomely, by not giving away part of the company early on to fund it.
I have a friend who did pre-sale off a Kickstarter, it was a bike company. You would have never thought that a pedal bike company in this day and age could be launched, but he has an extremely successful business and he pre-sold on Kickstarter. So, I think platforms like Kickstarter and Indiegogo have really opened up people’s eyes to what is possible. The other thing is just investing in your story and telling your story. People love a good story; they’ll get behind it; whether it’s in any industry. As long as you know what your customer avatar is and you can talk to them as an expert in the industry or position yourself well, they’ll buy in. You can always pre-sell and it happens all the time in all industries. So, I encourage people to just reach out and try, because it does happen.
We’ve made significant investments back into the company as we’ve learned, because with technology, it’s ever evolving. So, we’re constantly investing back into the technology. This is a long game for us and we’re not flipping it. It’s one of the reasons that we didn’t want to go with a VC company, because we’re very much ingrained with our customers and we want to support this industry long-term. I could probably take more money off the table, but right now, it makes better sense to invest for long haul.
To be honest with you, we’re dedicated to the industry and we really like it. Moving into eCommerce is very exciting, so it’s almost been like entering into a new business or satisfying that itch of trying something new, if you will. Because remember, we started out just doing product data only; we were just cataloging and crunching data, using our technology to do that, and building the catalog of the data for use there. Moving into the eCommerce world has kind of opened things up a little bit more. The eCommerce world takes you into marketing, it takes you from B2B to B2C and back and forth. Every industry has different niches, and definitely within the automotive industry, there’s different niches. So, every time I get a phone call, it’s always something exciting; whether it’s a new retailer starting up, or someone expanding out into a new market, or it’s just someone trying to modernize their business. So, it constantly keeps you on your toes, and it’s really been fun. Plus, the evolution of eCommerce technology coupled with eCommerce marketing technology, when you bring those two kinds of worlds together, it’s really fun and you’re able to apply that to people’s businesses and see growth, and that’s what’s really exciting.
You can find us online at cellacore.com, and then anyone can find me on Instagram, Facebook, LinkedIn, @tonyminock.