Episode 15: AI Predictions and Trends for 2023: The Spiro Co-Founder’s Episode
Adam Honig: Hello and welcome to Make it. Move it. Sell it. On this podcast, I usually talk with company leaders about how they’re modernizing the business of making, moving, and selling products, and of course, having fun along the way. I’m your host, Adam Honig, the CEO of S Spiro.ai. We make amazing AI software for companies in the supply chain. And you know what, usually we wouldn’t be talking about Spiro, but we are today because today I’m happy to welcome my friend and co-founder, Justin Kao, Spiro.ai’s Chief Operating Officer, who’s also one of our supply chain experts onto the podcast to help me kick off our second season. Welcome to the show Justin!
Justin Kao: I am so excited to be here, big fan. First time, long time you know, big fan of yours, so I’m honored that you invited me to join you.
Adam Honig: Of course. So just for our listeners out there, Justin, maybe just give us a little bit about your background.
Justin Kao: Sure, so besides Spiro, which we started about eight years ago, I’ve almost worked for Adam my entire career. Before starting Spiro, I actually used to be a CRM implementation consultant, so I would go around to generally bigger enterprise companies, and that kind of led to us learning a lot about CRM, learning a lot about different companies, and different processes and that eventually led to us starting Spiro.
Adam Honig: Right, and what did you find when you were doing all of these CRM projects? I mean, what was that like?
Justin Kao: I mean salespeople love CRM. I’m sure you talk about that all the time on these podcasts, so it was interesting. I feel like when we were doing a lot of implementation projects, it was kind of one of those things where it’d be great to build something, and it would be great to deliver what your customers are asking for. But it’s one of those things where when you’re working with the actual people who end up using that software, they always hated it, you know? So it was kind of fulfilling if you could finish a project, but then at the same time, we had a bunch of customers when we were doing CRM implementation that would always have issues adopting. Or they would always come back a year later and be like hey, what’s going on with this or we need you to fix that. And it became like a long thing where we’d always be going on and on and going back and forth and fixing. And obviously you know, but for the folks who are listening, that’s one of the main reasons why we started Spiro, it’s because that experience in general is just terrible for folks.
Adam Honig: I know. I think that you worked on a large project for an insurance company, right? After we finished the project, I remember having a meeting with their sales team and talking with them about how much they loved CRM and some guy threw something at me. That’s how much they really liked it, it was terrible.
Justin Kao: How many times have you told that joke on this podcast, by the way?
Adam Honig: I don’t think I’ve ever told that joke.
Justin Kao: Oh okay, all right. So once you get to know Adam, he’s got like five jokes that he likes to go through, so I’m shocked that you haven’t already dropped that one.
Adam Honig: Well it hasn’t come up, but I’m glad that we had an opportunity to bring it into the conversation. But I remember being at this client and after somebody threw something at me, of course, and trying to really understand what was happening. And it’s just the typical experience for salespeople with CRM is that they feel like it turns them into data entry clerks, and people really hate that. And so yes, you’re right, that’s a major motivator for us to want to start Spiro. The other motivator which I’d like you to just shed a little light on, is why we chose to focus on companies in the supply chain. Why manufacturers, wholesale distribution companies need this really different type of technology.
Justin Kao: Yeah, it’s interesting. We’re supply chain experts by accident, I would say, right? Like coming into Spiro, we’ve done customer implementations in the manufacturing space, but these were one of many projects. And then before starting Spiro, I would consider myself more of a generalist. I kind of know a little bit about a lot of different types of processes and a lot of different types of companies, but not really specifically about supply chain and manufacturing. But we just kind of saw an interesting trend within our customers as we were starting Spiro. Obviously we didn’t start Spiro just to target the manufacturing industry but what we saw a lot of was that our customers in the manufacturing space didn’t churn as much. They grew and they were really good customers and they needed a lot of help specifically. And they were looking for companies who they could partner with, who would provide them that help, provide them that support, provide them that level of service. And once we did that, and they were fully bought into being Spiro, being their partner, we saw them really flourish.
When was it, like 2019/20 20 when we made that switch, when we decided hey listen, we are seeing this kind of trend with customers. You know, we don’t see it as much with the software companies, we don’t see it as much with the insurance companies, but we’re really noticing an uptick, and there’s really something out there. And when we looked at the competition, there wasn’t really much out there for specifically manufacturing-focused sales software. Traditionally, I would say an overlooked industry. And so kind of taking all the parts that we were really good at, which was the service, the implementation, the product itself, it was just a natural fit, and we kind of went all in the beginning of 2020.
Adam Honig: Yeah, and my role at Spiro is to be very focused on the product. And I feel like the fact that there’s a lot of artificial intelligence being used in the product to make things easier for people is much more important for companies in the supply chain than other industries. You know, the supply chain companies typically have a less tech-savvy sales team, and they just need the software to do things for them instead of waiting around to log in at an internet location and take care of business.
Justin Kao: Yeah, you say that it’s like, it’s kind of weird to think about a low-tech adopting group of folks like manufacturing and say they need AI in their sales process, because it’s like, what is AI to these folks. But you’re totally right because the AI aspect of it is what makes it necessary for that group. Like these guys need something that will go in the background and automatically log data for them. They need little points of recommendations or proactive push notifications to figure out what’s going on. They need AI to look at trends in their data and push them along the right path. And that’s really where we’ve seen that fit there so well. It’s that these companies need that help, and they’re not getting that kind of help from any other sales-supporting software.
Adam Honig: No, I remember a big light bulb went off for me. I remember we visited a customer who’s in the electrical conduit business, and these guys were telling us that they had tens of thousands of customers placing orders every month, every quarter. And it was physically impossible for them to see the trends in all of this, to notice when somebody didn’t order without the AI solution kind of pointing it out.
Justin Kao: Yeah, that’s exactly it. When I think about the sales process of our customers, it’s actually not a sales process, it’s really customer care that is the biggest focus. And this has kind of got emphasized post-COVID, I would say, but the most important thing for our customers is not necessarily building a pipeline anymore. It’s gathering all of the data, whether it’s from your ERP or from your marketing, and having it all in one spot. And then how do I take this profile of my customer and make sure I can service them in the best way possible? I feel like when we see the way Amazon impacts customer service and Amazon impacts the way that people expect you to interact with yourself or with your returns or kind of order service, they expect that level of service and you can’t get that level of service if your information isn’t right. And so I think one of the biggest things that I’ve seen, especially after COVID, is that people have made this huge digitization push, right? And they really want to focus on how do I get all this information into one cohesive customer profile. And that’s really, I would say, when I think about our customers, all of their goals are the same. It’s how do we serve our customers better and leveraging Spiro, leveraging tools like that, and getting information all integrated is a big part of that.
Adam Honig: Right, I know we have a customer who’s in the beer truck creation business. Which is a great business to be in getting to deal with Budweiser and all kinds of other breweries all around the country. But I remember I was talking with them recently and they were saying how just being able to provide very accurate updates to their customers about what’s going on. Separated them from all of their competition, and it really built a loyal customer base, even at a time where they were delivering their products months late due to supply chain issues.
Justin Kao: Right. I think what’s happening with supply chain issues is people expect product to be held up. So it’s not even necessarily about execution, it’s like kind of going back to the customer care thing, it’s really about the relationship that you can build. We’ve got a lot of customers who kind of shifted their approach of Spiro to be pipeline-focused, to be activity-focused in a sense that it’s really around how am I making sure that I’m building a relationship with my customers. Am I making sure I’m taking these people out to lunch, or am I making sure that I am saying hello when it’s their birthday or sending them a gift, something like that. So it’s using Spiro to generate these opportunities for interaction, but also leveraging the data from their financials from their ERP to understand hey, maybe I should reach out since they haven’t ordered in a while, or I should see what’s going on. So it’s really important for folks to just have all that information in one spot.
Adam Honig: It’s interesting because I feel like from visiting so many factories of our customers, I feel like I’ve learned so much about the production side of things and how much technology investment. We went to one customer who had done 3D printing of dental inserts and all this kind of crazy stuff.
Justin Kao: Yeah. I went to the dentist the other day, and they’re like hey, do you guys want a retainer? And I’m like wow, I know how those are made. Which is interesting because we got to see them actually 3D print retainers from customer images, which is insane.
Adam Honig: Yeah, it’s fabulous. So I guess my point was that people are investing all of this technology on the floor in production to make products better. For some reason, it’s been a little bit of a struggle to get them to do the same thing in the front office, but I definitely see the tide turning on that now.
Justin Kao: Totally. I think people are realizing with a lot of the folks being more remote and it’s almost like a data supply chain that’s happening inside organizations, right? You have the supply chain of getting your product in front of a customer. You gotta go build it, you gotta distribute it, you gotta sell it somehow. But there’s like an internal data supply chain, right? So at some point you’re generating data when you are building a product, you know what you’re building. You’re generating data when you send someone an invoice for an order. You’re generating data when you send them a quote. And there hasn’t been much of a focus internally to really bridge that together. When you think about the supply chain and how it’s really intricate and there’s a lot of steps involved and moving a piece from here to here. And making sure this gets distributed and implemented the right way, that same attention hasn’t been turned internally. And I think Spiro is a big part of that. And kind of what we’ve learned a lot about our customers is how do we bridge that gap to make that kind of connected internal data supply chain.
Adam Honig: Definitely. You know, when I think about data supply chain when you mentioned, the first thing that also came to my mind is artificial intelligence. Which of course, in order to be successful with AI, you need to have large amounts of data. And I think we’re starting to see with our customers that they’re really ever able to leverage that AI approach successfully.
Justin Kao: Yeah. I’m curious, what are your thoughts on how manufacturers are supposed to be leveraging AI and kind of going into 2023 and beyond?
Adam Honig: So I think 2023 is gonna be a year of explosion of AI technology. I feel like we’re right at the beginning of wide-scale adoption of this type of approach. And so I’m looking for improvements kind of across the board in things that Spiro deals with and in things Spiro doesn’t deal with. We were talking on the podcast recently with a manufacturer who’s using machine vision to make their products better. We’ve been talking with companies that have products that are on the shop floor to do a quality assurance analysis of products coming down the line based on AI technology as well. So I’m very optimistic that we’re just at the point of commercializing a lot of these technologies. For me, I very excited about what’s called generative AI which is the ability to make very good-sounding text generated from small amounts of data. And so the ability for our customers to be using that in terms of communicating with their customers to making sure that product descriptions are super accurate to automating. We released a great feature that what it does, is it drafts an email for a salesperson based upon a conversation that they had. And just the number of applications of this type of technology is truly limitless. I’m super excited about it.
Justin Kao: Oh yeah, I showed that to someone recently, well I showed them that, and I also showed them we have a feature where we transcribe every phone call made through Spiro and we write a summary of that phone call that you’ve had through Spiro.
Adam Honig: And it’s not Justin and I writing it, it’s the AI writing it, just to be clear.
Justin Kao: Maybe eight years ago it was us writing it in the background, but now we’ve got the technology behind the scenes to actually do it for us. But they were blown away because we do demos at Spiro and usually we set up a fake demo phone call to ring out to, and it’s usually Adam on our pre-recorded line saying, Hey, how’s it going? I’d love to order more. Someone changed the phone number of our test contact and I actually called someone and I think the conversation went like, oh crap, this is a real person, sorry about that and I hung up. But then what had happened in real time actually was that the phone call got transcribed very accurately. Because I guess when I was going off on this tangent, I spoke very clearly, which is not common for me and we actually summarized it and it said, Justin called by mistake and he didn’t mean to, something to that effect. And they were going crazy over that. And it’s come a long way. I don’t know, were you ever on AIM instant messenger, Adam? I don’t know if that was your time.
Adam Honig: The AOL Instant Messenger? Yeah.
Justin Kao: AOL Instant Messenger, yeah. I remember when I was in high school, this might date me a little bit, but I was IMing something called Smarter Child. You ever interacted with SmarterChild?
Adam Honig: I don’t think I know that one.
Justin Kao: That was like the bot at the time. It was a bot and it was really just a database of like 10 responses that you would just type at. Me and my friends would just chat at Smarter Child all the time and we would say dumb things, but it would always respond in some canned response. But that was artificial intelligence at the time. It was like a few canned responses and that was really it. But now we’ve got artificial intelligence able to really intelligently articulate what you’re trying to say, give a next step and suggest the future’s next steps, right? So it’s amazing how far it’s come.
Adam Honig: For sure. I mean I don’t think it’s impossible to imagine sometime in the next, you know, three, five years if you are a salesperson and you’re on vacation, instead of having an out-of-office reply, have an AI out-of-office reply. Where if a customer emails you and says hey, what about this order, the AI can be like well, I’m just an AI, but I looked it up and here’s what I think is going on with it. That is not at all crazy from where we are today. Already, if you are using Spiro, you can just email what we call the Spiro assistant and say hey, what’s going on with this company? And we’ll give you the update, right? And since we are often very hooked into order information, we have that data. So I think that might be the kind of thing that people start seeing over time and it’s gonna just be like small little improvements, but they’ll just start showing up in everybody’s workflow.
Justin Kao: You know, sometimes I talk to prospects who are scared of AI, scared of automation, scared of all these little things that seem a little bit big brothery, a little bit terminatory because I think that’s how it starts in Terminator with the AI rising up. But the exact use case that you talked about right there, that’s exactly what it’s gonna be used for, right? It’s how do I take the stuff that I might have missed or stuff that I’m not available to attend to, and how do I automate that? And so I think that’s a perfect example of where this is going and kind of the future I also see for it and it’s really exciting.
Adam Honig: And a lot of the AI work that we’ve been doing to date has been really predictive analysis, right? Based upon certain ordering patterns, here’s what we’re seeing or based upon a gap in an order history. Hey, how can we get the right person to follow up to make sure that there isn’t something going on? But I think the generative content takes it up to the next level where Spiro or other platforms can send you an email and instead of just saying hey, here’s company, here’s the low order alert. It can actually write the narrative about it that’ll make it easier for you to take action on that. So I think there’s a lot of good stuff coming.
Justin Kao: You can tell that narrative, do I wanna write it in a positive spin or a negative spin? You can get really granular with it.
Adam Honig: Hopefully nobody will want a haiku written out of it because the AI is just not that great at poems, I have to say. So if there’s any listener out there who’s really wanting to test something to see whether it’s an AI or real person, try to get them to write a poem for you. AI is terrible at poems.
Justin Kao: Yeah, it’s developing, I would say, it’s learning. So I feel like maybe in a year or two, you’ll be blown away by the haiku it’s writing.
Adam Honig: So let’s shift topics for a minute. Justin, you’ve been traveling and meeting with a lot of customers and seeing everything in their operations, what do you feel like you’ve seen as sort of a trend from visiting all of these manufacturing, wholesale distribution customers that we have?
Justin Kao: So I kind of talked about this a little bit before, but the trend I’m seeing the most is a shift from pipeline to customer focus. And so really, people obviously care about tracking their sales and their potential sales in Spiro, but the problem that people are coming to me the most with, the thing that they wanna make sure they address is how do we serve our customers the best? And like I mentioned before, it starts with getting all the information in one spot. So I’m seeing a bigger trend of folks who want to make sure that their team, or anyone who’s customer-facing has all their data in one application. So traditionally in the past you’ve had your ERP, which is where your financials, maybe your manufacturing backend, you’ve had marketing, maybe your quoting tool that you’re using to send out quotes to customers. But really, they want everything in one spot so that when you look at a customer record, you can make a pinpoint decision on what you should be doing, and you have full visibility, full history, the full story.
So it’s really a shift to getting data optimized and how do I act in a way that’s the best for my customer? Because a lot of our customers, they’re so busy, right? They don’t really necessarily care as much about closing new business. They are so backed up for the next year, two years that it’s really about how do I serve the best customers? How do I know who my best customers are and how do I make sure that they have a certain level of service that they continue to be my best customers? And that’s the thing I’m seeing, it’s really a shift away from pipeline management to customer care.
Adam Honig: I totally agree with you. Everybody is of course interested in developing new customers, but it’s everybody’s first goal to maintain and strengthen the relationship with their existing customers. And I think that’s something that’s very different in the supply chain today than it was like three, four years ago. Everybody knows that the economy can be good, it can be bad, but if you love your customers, you’re always gonna do well.
Justin Kao: Exactly.
Adam Honig: Cool. Well Justin, I really appreciate you coming on the podcast. I hope this isn’t the first podcast you’ve been on.
Justin Kao: No, I’ve been on a couple others, but this is the first one I’m being video recorded, so I actually wore a shirt today. So hopefully people will appreciate that. And I took a shower which is not always a guarantee in a post-COVID world every morning.
Adam Honig: Well, I really appreciate you coming on. I think we talked about some really important things. I mean, obviously AI is a big topic that people are gonna be hearing a lot about. But how it applies specifically to companies in the supply chain is super important. And then this trend that, you know, I know we’ve talked about, with other guests as well about how strengthening and deepening customer relationships is really the big thing that companies are focusing on and really should focus on today. So I appreciate you coming on and spending a little bit of time with us. I also just really appreciate your starting Spiro with me. So I wanna say it’s been a great partnership, so I really, really appreciate that.
Justin Kao: Yeah, I can’t wait for the next one.
Adam Honig: As a reminder to our subscribers, you can find every episode of the Make it. Move it. Sell it podcast at spiro.ai/podcast. I don’t know, Justin, do you think people should subscribe or maybe give us a good rating or what do you think?
Justin Kao: Yeah, I think they should subscribe. Give us five stars, unsubscribe, subscribe again, give us five stars again and do that as many times as you want. I don’t know if that’s how the rating system works, but I feel like it should.
Adam Honig: Well thanks everybody for tuning in. We wish you the best in 2023 and we’re looking forward to speaking to you at the next episode.