This will SOLVE Backend Commerce Chaos

Transcript

Jared Ward: 0:06

Welcome, guys, to another episode of OPS Unfiltered. Today we have some actually longtime partners in the studio with us at the Luminous HQ in Utah. What's up, guys? It's.

Daniel Langer: 0:17

Trackstar. It's great to be here. I'm Daniel, one of the co-founders of Trackstar.

Jeremy Schneck: 0:21

And Jeremy. The other co-founder, the non-technical one, daniel, does all the cool stuff with actually building our product and API.

Jared Ward: 0:28

Okay, so what is TrackStar?

Daniel Langer: 0:29

So, TrackStar is a universal API for 3PLs and warehouse management systems and, as you all know very, very well, there's hundreds, thousands of different 3PLs and warehouse systems that shippers, merchants, brands you name it are using to power the warehouses that are holding all their goods, and we make it really easy to integrate into all of them. So, instead of folks like you having to go build hundreds of one-off integrations into all of them, you can just hit us once and have all these integrations magically.

Jared Ward: 0:58

Why did you guys start TrackStar? Because of you.

Daniel Langer: 1:05

So how did we meet? We met through a mutual friend. You know classic we were actually in the middle of Y Combinator. I think you guys were in the middle of that, we were in the middle or towards the end we knew we weren't going to build our original product.

Jeremy Schneck: 1:14

It wasn't a hair on fire big enough pain for companies and we just heard this recurring theme. It's, if you're a software company trying to build operational or supply chain tech, super hard to build WMS integrations and connectivity, which prevents people from building really cool technology in the space.

Jared Ward: 1:30

Is that just like word on the street? Or like how did you? How did you? Because, yes, a hundred percent. It's a pain point there.

Jeremy Schneck: 1:36

Well, the origin story is Daniel was an early product manager at Datadog and the two of us came together and had this insight there should be a Datadog for e-commerce. There should be technology that helps brand operators catch issues across their stack. We were very front-end focused Think broken checkout flows, leaked discount codes, site speed problems but what ended up happening is all of our customers, who were brands at the time, said, hey, my front-end actually works pretty well. Shopify is a great tool. Where I really struggle is monitoring my operations. Where I really struggle is monitoring my operations and we're like okay, what do you want us to do?

Jeremy Schneck: 2:05

And we worked with a few dozen customers and they're like can you go integrate with our WMS and catch issues across our supply chain? We went to the first customer what WMS are you on? We heard system A. Next customer system B, system C, system D I think we asked like 30 something people and heard 25 unique systems and we're like we're not going to go build 25 integrations to support each one of you. We'll never be able to get this off the ground. Daniel looked, he googled is there a universal API for WMS? Nothing existed and he actually joked like someone should build this product, huge pain point, really hard problem to solve. It won't be us Fast forward. We're going through iCombinator and we realized we should be running towards hard problems. The monitoring product wasn't. It wasn't, like I said, a hair on fire problem. Pivoted, built a universal API for WMS.

Jared Ward: 2:49

You're one of our first if not our first customer actually and the rest is history.

Daniel Langer: 2:57

Yeah, I mean from.

Jared Ward: 2:57

I'll give you my perspective yeah, your side, my perspective of a track star is this Luminous, we're an operating system for brands, so we're the backend-end system of record. So I think, purchasing, inventory, all that boring stuff, okay. So modern brands 70% of them outsource their fulfillment to a 3PL. So what that turned into is okay, we say we service modern brands, but we're not going to build a WMS integration for a similar problem. We're not going to build a WMS integration for every single new brand that signs up. That's ridiculous. So it basically closed off this entire market for us. Through our friend, he told me he's like oh, there's these guys. They're going to build a one-to-many WMS, like an one-size-fits-all API into WMSs. And I was like, oh my God, that will open up, like this massive market for us. And it's one of those few cases where it actually worked out. Yeah, like nine times out of 10, this stuff doesn't work.

Brendon Beebe: 3:51

Yeah, it was a scary decision Because I remember it was that December before. How many deals did we turn away Because they're like, hey, I need an integration to extensive, I need integration to X.

Brendon Beebe: 4:01

My custom WMS and my take has always been like we're not an integration company, we're not going to spend time doing that. Yeah, Because there's always a one-to-many somebody that does it. There's an IPath somewhere that you can pay. And so we just said no, no, no, no. And then you guys came around and it was such, it was expensive. You guys charged us so much.

Daniel Langer: 4:20

We had to. We had to prove that someone was willing to pay money. That's YC's fault. Blame YC.

Brendon Beebe: 4:26

Internally we had so many discussions around like this is going to pivot our company completely. Our product's not built around this idea that there exists a one-to-many, so we have to pivot how we are selling what we're building and it was so scary at the time.

Daniel Langer: 4:41

I don't think we would have pivoted if it weren't for you guys that's my opinion I I don't think like I remember getting off the call and you were so excited. Jared was like oh my god, I can't like he's like I feel like I'm dreaming like I. And after that call jeremy and I looked at each other. We're like all right, like we have.

Brendon Beebe: 5:02

We have our customer like that.

Jeremy Schneck: 5:03

That's how I feel Like one of the analogies we give is we always say we're building the plaid for supply chain data, but the thing we always talked about is plaid had this amazing early customer in Venmo. Like they built together and grew together and became two powerhouse companies together and like, in many respects, you are our Venmo right, like we want you guys to be this huge, amazing company and you're doing it. Like we love growing together, like we it's funny we call you our partner right, like you are truly we're partners and we're gonna build amazing companies together.

Brendon Beebe: 5:30

but it's it's awesome to have found our Venmo oh, and at the ground level, I'm we had like. What four customers at the time? Yeah probably in our first year we onboarded like five people onto trackster. I feel like we were so slow.

Jared Ward: 5:43

I know I mean, but the go-to-market it took like we went from. When I first talked to you guys it was like but we had between like five and ten customers, yeah, we had just started go-to-market and that now we've grown to over 100 customers, gonna get to hundreds this year. But yeah, that's that's. Yeah, that's, that's the origin.

Jared Ward: 6:00

I mean a big part of it, though, was you guys it was like we think that there's a segment of the market that is unlocked when wms, and it's not even a thing like we know we can integrate into all these wmss.

Brendon Beebe: 6:10

It just opens up this massive market yeah, I think we onboard people right now. They'll have like five wmss internal fulfillment and they're connected into everything and data syncing like at 24 hours. Like it's mind-blowing right now that's awesome, it's the dream.

Daniel Langer: 6:25

That's what we want to hear right, like we want it to be simple, but not simplistic Like that's our product. It appears very simple behind the scenes. It's not simple at all Behind the scenes.

Jared Ward: 6:37

we've talked a little about the type of companies that we are, and I like to think of ourselves as we're more like frugal, realistic, vc funded companies. Can you speak to that a little bit? 2021, 2020 companies like that frothy time versus modern VC backed companies what do you think is the main difference?

Jeremy Schneck: 6:57

We talked about it earlier where we want to build a long-term, sustainable business, and there's two ways to go about it. Right, you can raise we've both raised capital. You can raise a lot of capital, make a moonshot bet and need to be a billion dollar company in X number of years or you don't exist. Or you can raise more modest amounts of capital, build really long-term, sustainable businesses and make sure your company is enduring and last forever. And both of us fall into that ladder bucket where we want to make sure for you guys you support your brands and merchants in perpetuity and they know you're going to be around forever. And for us, as a core infrastructure product, we can't just go away tomorrow and we want to make sure that we build a prudent, profitable, sound business. Like Daniel and I will have, tracks are only profitable this calendar year and it just makes us confident we could support you guys forever I think that's the biggest commentary.

Jared Ward: 7:46

Like we're both similar size companies, we've both said the same thing. Like we're both gearing towards profitability. That's the key. Right there I feel like I feel like three to five years ago, like nobody would be going for profit wasn't cool like that's not cool but what's also exciting is I think people view this trade.

Jeremy Schneck: 8:03

People view it as a trade you're going to be profitable. It means you won't grow as fast and, yeah, the more money you spend, you should theoretically be growing faster. But you guys are a great testament and we feel the same way is you're growing incredibly fast. You planted more than double this year is my understanding Right While also driving towards profitability.

Jared Ward: 8:20

Yeah, it'll be interesting, we'll see.

Daniel Langer: 8:23

Do you have customers that not necessarily want you to be profitable, but are more? Do they ask you about your business and runway, or do you have customers that ask about that?

Jared Ward: 8:36

Oh, absolutely. The more we go up market, we have people asking for a P&L. Because the biggest concern for them is like'm sure I don't care that you can do everything we need to do.

Brendon Beebe: 8:46

It's like are you going to go out of business and three trips well, I think even the more common risk and what we see in e-commerce a lot is a lot of companies start up, they get to about five to ten million dollars in revenue and they sell two quick books or they sell off to zero. So there's just not a. There's a story of companies selling way too early and I think that's why there's not a great solution in place, because the founders are just eager to exit, get their money and leave and there's just lots of.

Jared Ward: 9:11

There's a huge graveyard of companies that's why we're so aligned with you guys, because we we say this all the time we just, we just want to build a great company for the next 10, 20 years because, like we can list off probably like five people who have started, got to five to 20 million. They are just, they get acquired like there's bright pearl trade echo locate scubana 3pl central.

Jared Ward: 9:34

So many extent. There's so many different ones. It's the same story. But the one who's going to take over the market from net suite, the one who's going to kick net suite in the balls, is the one who's just willing to build for 20 years and just say I don't care we don't want to get acquired.

Jeremy Schneck: 9:49

I'm curious what makes you guys want to build with such a long-term view? I think, like in my mindset and Daniel's, I had this realization If TrackStar wasn't going to succeed and luckily enough, we've actually crossed that like binary threshold where we're going to succeed or if trackstar was a billion dollar company. In either scenario, the next thing I would do is start another company and if, like that's my goal, where I'm just going to keep starting companies, it means I love the journey and I should just focus on building the company I love building today with cool customers like you guys. But what motivates you all to want to build this long-term 10, 15 year business in the erp space?

Jared Ward: 10:22

well'll go first, but a couple things. First off, nowadays that itch to like start a new company. If you're going to be around for 20 years, you're going to be a multi-skew product. You're going to build another skew that you'll sell and like that should I don't know that'll satisfy that itch. This is my end goal. I want a merchant. When they're crushing it, when they're going from 10 to 100 million it's just the way we exist in the market is, oh, you're going to 100 million, you need to use Luminous. It's like, oh, what's Luminous? Oh, it just takes care of all of your backend operations. I just want that.

Brendon Beebe: 10:59

That's what I want. Yeah, for me it's the same. Even coming from my last company, getting to the end was so unfulfilling. At the end of the day you would look back after that acquisition and you'd be like those years were incredible. That journey, the struggle, it sucks at times, it's miserable at times, but it's fulfilling, like and it's enjoyable, and being able to stick at something for the next 10 to 20 years and build a company that is known by everybody and it's hey, you use Luminous when you get to a certain stage. That sounds amazing. Like who cares about the money, like building something that everybody knows I think is way more fulfilling.

Jared Ward: 11:36

Think about what Shopify has been able to do with the front end of commerce Totally transformed, like. It's honestly like sensational. Nobody's honestly sensational. Nobody's really done Oracle NetSuite they did do that in the back end, but nobody's really done an updated version of that. 30 years later, 20 years later. I'm really excited to. I want to do that to the back end of commerce.

Jeremy Schneck: 12:00

Yeah, it's super exciting. Are you guys publicly talking about the NetSuite migration? Oh yeah, we can talk about it a little exciting. Are you guys publicly talking about?

Jared Ward: 12:06

the NetSuite migration. Oh yeah, yeah, we talked about it a little bit.

Jeremy Schneck: 12:07

Yeah, I'm curious like what's it like getting that first customer off NetSuite?

Jared Ward: 12:12

Again as we slowly start going upmarket. The more migrations that we get under our belt, the more confident we are. So, for example, fathead is a customer that we're getting off from NetSuite right now. It's really caused a paradigm shift in the organization how well some of these upmarket customers have been going. I mean, we're talking the difference between like a $6,000 contract and then call it I don't know like a 50K yearly contract.

Jared Ward: 12:37

That's a six times multiple on the down market deal versus the more up market deals. But the customer who's paying us $50,000 a year is just the pain that we solve. They immediately recognize what we're doing. They're so much happier. They have way less requests. We're just excited to document it and put it everywhere and get more customers like that.

Brendon Beebe: 12:58

And a side topic. Unlike NetSuite, netsuite is so broad and does so much To say. It's like a platform for e-commerce or retail companies is like a little not true, it's more like a base platform that you can hire a six-figure engineer to then build integrations for, and so everybody uses NetSuite very differently, and so you'll go into three different customers. One's using the CRM one's using Acquity and one's using, you know, Purchasing, and so every NetSuite customers tends to be very different between each other, but very doable.

Daniel Langer: 13:30

One thing I want to talk about is focus, like product focus, because we've been crazy focused, like all we've done up until very, very recently are wms and 3pl integrations, like that's it. We spent two years basically just doing that and I think we probably have the largest library on the planet. But confidently, we've said no to like a million other little things that could have distracted us and we could have started, and we've only just started to branch out into a new thing that we could talk about. But, like, we've stayed so focused and I'm curious for you how you've stayed focused in an area where it can get so broad, so quickly.

Jared Ward: 14:16

Brendan's the king of saying no. That's what we said no to.

Jared Ward: 14:20

We had like very specific temptations to build specific tools I can't think of specifics right now An OMS. So we started in the warehouse. We started with brands that they did their own fulfillment, they owned their own warehouse. So a big temptation early on was do we rebuild ChipStation? And no, it was the same thing, like we had to identify early on what, what is, where is the gap actually? Is it? And when we ask those hard questions, it wasn't the question of where's the money, it was where's the gap in, you know, between quickbooks and netsuite and that's in tech. It's so the money isn't necessarily going to be there. So we ignored an OMS. I mean, we've thought about building a general ledger.

Brendon Beebe: 15:06

Deeper in the WMS yeah, go really deep in WMS. General ledger is a big one. We just said no, we're not going that direction.

Jared Ward: 15:12

Brendan. He always goes the route of like, okay, where can we just plug into somebody so we don't have to build that entire ecosystem.

Brendon Beebe: 15:22

I think maybe something we have in common is when you don't raise a lot of money, it forces you to really focus on something. I think the problem a lot of companies do is they go raise $20 million and it's like we can kind of do everything.

Jared Ward: 15:35

We can do an EDI division and we can do an OMS division.

Daniel Langer: 15:38

And then we can have this division, we can hire integration engineers.

Brendon Beebe: 15:41

Oh, yeah, you do too many things where, when you only have a fixed income, it feels dumb because you're like we can go so much faster, we could build so much quicker, but what I feel ends up happening is you go way quicker into the wrong direction yeah and so when you're finite, when you have to really choose what's the number one priority, you focus and you spend time on it. Yeah, I'm curious. What do you guys said no to.

Daniel Langer: 16:04

Well, I think really quick that goes along with why I see his advice was actually raise less money. Take the lower dollar amount at the lower valuation and it forces you to stay focused.

Jared Ward: 16:18

There's something to be said about like just incrementally raising little bits as a time as the company evolves. You have to give the company and all of your departments space to actually grow into something new. Yeah, when you just jam $30 million into it, it's just like complete chaos.

Jeremy Schneck: 16:36

Yeah, if we, if we had raised too much capital, we would have 10 WMS integrations, 10 OMS, 10 TMS and then TMS itself as its own crazy world with broker, shipper, carrier, freight forwarder TMS. But that's to answer your question. Like that's somewhere where we've said nowhere. I actually would have a harder time saying no. I'm like if someone's willing to pay us a bunch of money, we should say yes. But Daniel, with his product manager background and Datadog experience, he's like no, we have to stay focused and it's a great skill set I've learned as well.

Jeremy Schneck: 17:02

But we've had so many customers in the early days be like you're solving a burning problem for WMS. But my integration pain point is actually shipper TMS. Can you go build this? And I think it's part of the long-term story where we're going to expand and build universal APIs for the entire supply chain eventually. But you need to do that at the right moment. You have to sequence that without dilute Cause, when you guys are growing incredibly quickly. I feel like every what's cool is why I feel like every day you're adding a connection, but also every week you're asking for a new WMS integration and the thing we want to avoid is you say, hey, can you build us this WMS integration so we can onboard this customer and we tell you no, because we're building a TMS integration. That's very counter to the ethos that we want to make sure we're super disciplined and we can support you. And it's weird to say we are the best at WMS integrations in the world or the engineering Daniel and the engineering team are the best at it.

Brendon Beebe: 17:50

I have two stories real quick One, heidi, one of our customer support reps. She messaged in there. She's like hey, when's this going to be done? I'm like it's their partner. We can't really ask them that. But you guys responded and you're like it should be two weeks. I'm like what no?

Daniel Langer: 18:05

you could always ask, I know, I know, that's so funny.

Brendon Beebe: 18:08

It's just this weird thing where it's a brand new WMS connection where I expect it to take six to eight weeks would be probably acceptable. Oh yeah, two weeks easy.

Jeremy Schneck: 18:18

It's. We find like seeing is believing, with people using our API and you guys know, and we have high trust that we're going to build things quickly with some larger software companies. Sometimes they'll be like what's your roadmap? Are these four systems on it? And I'll respond with our roadmap is when you're a customer. We will prioritize and build it. And they're like yeah, but what will that take you Six months? And we're like no, this hasn't been done this way before, partially because no one specialized in this. They think it's going to be six months and we have to really explain like no, I promise. Then they work with us. And they're like light bulb clicks and they're like oh, my god, you guys are incredible. You know what you're doing and it's it's specialization and focus is what it comes down to there's.

Jared Ward: 18:55

There's a specific story I have. Actually, it was right around the time we started really blowing up with with connections with you guys. We had a choice. So brendan and I were. We were thinking like, do we build something with shipping, do we build an oms? Basically. And we had a partner in new york actually that we were in deep negotiations with where they were going to pay us like 25 000 a month to build an oms and they were going to pay us like $25,000 a month to build an OMS and they were going to onboard all of their customers. I am so glad we didn't do that, because we would have oh, we would still be rebuilding ShipStation right now and, like sure, we'd have shipping revenue, but we wouldn't be solving the needs of modern commerce.

Brendon Beebe: 19:34

At least I don't think so. I've always been impressed with how focused you are. Sometimes I'll get into the channel and like this is totally a WMS guys.

Jeremy Schneck: 19:44

I've said no to you plenty of times the funniest part, though, is I'll be like I'm more like yeah, you know, I can kind of see the argument, and Daniel's like it's not a WMS we built a couple for you that I'm like.

Daniel Langer: 19:56

These are not quite it.

Jared Ward: 19:59

I'm like you know there's a couple. I'm like you know are not quite it.

Daniel Langer: 20:00

I'm like you know, like there's a couple of Mike, you know what. It's close enough, Like they're great. It actually doesn't seem like it's that big of a pain.

Jeremy Schneck: 20:06

Let's just add it. Part of that's the like we it's fun Like this. This conversation alone was like chopping it up with friends, which is really nice, but part of it's you're such a good partner for us that when there's an off request and we're we can build it quickly. We're going to. We want to help you, guys. Like our goal is to see you grow and within reason, right. Like we want to see you grow no matter what. But if something's simple for us to do, we always want to make sure we can support you all, especially if there's an argument to be made that it close enough to a WMS Inventory.

Brendon Beebe: 20:34

It has inventory. That's the key line it has inventory. Yeah Well, just because I feel like your focus has forced you to, you'll do a really hard integration. That's like SFTP and some nasty daily sync, but you'll do that over an easy like OMS, because you're focused and we are doing WMS.

Daniel Langer: 20:54

We don't like the hard ones. Bring it on Right. That only accentuates our value. Prop Right, right. Because you see this, you're like thank God we're not doing that right. And then we have it and we add it to our library and it's done. And once it's done, hey now anyone can use it.

Jared Ward: 21:09

What are signs that you guys are seeing right now where you think you're ready to expand your offering?

Jeremy Schneck: 21:15

It's with 70 systems, I would say we have healthy coverage, right. But there's hundreds of WMS out there and the stat I like to give and I might be butchering it a little bit is like the Shapiro CEO publicly says Shapiro is like 4% of Shopify's revenue. Shopify, sorry fulfillment volume around Black Friday. He does this every year and if Shapiro is 4% of Shopify and Shopify is some subset of the market because it's not just e-commerce, there's B2B also. We're talking that systems have less than 1% market share on average. We're talking like fractions of percents. But now that we have 70 systems, when you onboard a new customer, the odds of that connection is actually just fully plug and play. Where they go into, luminous and Press Connect is really high. Where our connection count. Our new build has stayed relatively static or slightly decreasing where we feel that we have a little bit of room to expand into a new vertical. So it's as you get your library deep enough, it gives us the ability to add a little bit of flex engineering to start expanding.

Jared Ward: 22:09

What's next for Trexar?

Jeremy Schneck: 22:11

Right now it's WMS, which is the system of record for inventory. The next one is order data. A lot of our existing customers have said there's a lot of sprawl on the order side, whether it's oms or shopping carts or commerce platforms or marketplaces and candidly we used to point to other tools on the market and say, like, go use this tool like we're. We're so focused we're, we do wms. There's other solutions, you should go use them. And then people kept saying I've tried that tool doesn't work. I've tried that tool, it doesn't work. They don't support read and write full with two way syncs. They don't do this, they don't do this. And at some point Daniel and I heard this enough, I think he looked at me. He's like we're hearing a real problem Like this isn't. We've been pushing it off to stay focused and we're getting people begging us to build this and you have opens up new markets and there's that we're ready in. We're in the early stages of getting people live on our new order source API.

Brendon Beebe: 23:05

Can I ask a technical question?

Jeremy Schneck: 23:07

Please.

Brendon Beebe: 23:08

I think you guys are crushing it for the early technical decisions you made For your order sync. What are you doing differently so that you don't run into the problem? Every other one-to-many pushing orders pulling orders has run into Our whole other one-to-many pushing orders pulling orders is run into.

Daniel Langer: 23:21

Our whole goal is to abstract everything away from you, and what I mean by that is you don't have to think about Shopify rate limits or Shapiro rate limits or pagination things or having to refresh tokens and things like that or syntax things. We abstract all of that. And so when you call our API, we're not just like a simple pass-through, like when you call hey, track star, get inventory. We're not just like going and hitting the end WMS and getting that inventory. We are constantly syncing and storing data so that when you call track star, get inventory, you're hitting our backend, which is much more resilient and has way better limits than a lot of these systems, and so you're not having to write manual code that says oh, for this integration, I have to do this, try, catch and wait and sleep and try 30 seconds later because of rate limits, it's all the same for, and we go figure out all those rate limits and we're just constantly syncing data. That just works. Why don't other iPaaS tools do that? So the reason is we're not iPaaS Like it's a broad term, like you know, integration platform, blah, blah, blah.

Daniel Langer: 24:35

But a lot of these iPaaS are kind of these, like one. They set up these A to B connections, where they sell to a merchant and they say, hey, merchant, go use this iPads and you can connect these two tools, but the merchant has to buy it, they have to go set up this mapping, whereas we are designed for software companies like you. Right Like we are, you are our customer. Your merchants barely know we exist, right like maybe they've seen that you know. When they go to the little modal, they may see a little track star thing, but that's it, so your merchants don't even know we exist. We're doing all this behind the scenes and we are design. We're a developer product like that's the. That's the main difference is we're not a tool that merchants go in and configure integrations. We're an API developer product for Brendan and his team, and so we have a developer mindset, and so we've built a product that developers love so that they can add integrations embedded in their product, and that's the main difference between us and traditional iPads.

Jared Ward: 25:38

What's been the main difference between selling to Brendan's versus selling to like brand?

Jeremy Schneck: 25:44

Oh, I don't.

Daniel Langer: 25:48

Willingness to pay.

Jeremy Schneck: 25:50

Willingness to pay, oh man, I'm curious how you guys handle this. When we were selling to brands at the time, it was like called one to eight $75 million brands Once you get to like we felt like 50, 75 million it truly was run as a business. But I was selling to 10,. When we were selling to $10 million brands, they looked at us and they're like you are impacting me as a founder's bottom line and they weren't like I'm a business operator. They viewed it almost as like a. It almost felt like a B to C sale, like individual who treated their business as a human versus a business with a budget. Right, that was what was really challenging. And then the truth of the matter is what we were originally building wasn't solving a real problem. Right, like when you're trying to sell a monitoring product that people don't really need, it's a lot harder than when you sell a core infrastructure that people are really stoked to use. Finding product market fit has made our life a lot easier.

Jared Ward: 26:35

We didn't have it.

Jeremy Schneck: 26:37

Hard to tell what was like. We had a product that didn't make sense versus now we do, daniel and I with all that knowledge, we still say we like selling to software companies more. You get it right and you know software's fluid and growing and evolving and it's really exciting working with people who love our. Daniel always says this we want to build the API we always wanted to use.

Daniel Langer: 27:01

And we hope you guys feel that way. But that's the gist. Willingness to pay is a big one. Selling to other software companies versus merchants, and then I think it's a very different sell, right Like we are selling to engineers versus ops. People at brands of very different needs, wants personalities. What is important to them is so, so different, and so it's just an entirely different beast. What is the?

Jared Ward: 27:25

future of TrackStar. What's your long-term vision at TrackStar?

Jeremy Schneck: 27:30

We're building the universal API for WMS. There's hundreds of WMS. No one has significant market share, high fragmentation, hard to connect with. That same dynamic exists across the order sources and TMS and yard management systems and freight forwarders, and there's this wealth of data with the movement of goods across the global supply chain. That is truly locked away and we want to build universal APIs for all these different pockets. So we set the lines like we want to be the digital backbone of global supply chain to help you guys and other companies build really cool tech in the space.

Jared Ward: 28:00

that has been really hard to do without this infrastructure layer brendan and I talk about this all the time I feel like the the gap and I see the gap in the market.

Jared Ward: 28:09

It's like everybody talks all vcs and founder bros talk about, like there's this visibility problem in the supply chain and it's all pointing to like different things, but the way I would break it down is like you have a system of record problem, which that's what loomis is trying to solve, super fragmented piece of tech, then anyways, uh, and then you have like this, like connector problem, and there's been so many, there's been so many tools that have raised money, died trying to solve both of those. I feel like they're interconnected, like, yeah, but Luminous won't be able to grow as well without a tool like TrackStar, like these connectors and these new era systems of record. They go hand in hand, like we won't be able to grow without you guys.

Daniel Langer: 28:55

I mean, could you imagine the fintech space existing without Plaid? Like, how could Robinhood or Betterment or any of these companies have existed without the ability to connect to?

Jared Ward: 29:06

any bank. In a lot of ways, I think that's probably one of the reasons why nobody's been able to take out NetSuite, a mind-bogglingly massive list of integrations that you have to build it's impossible when you guys look at how did Plaid monitor?

Brendon Beebe: 29:19

Because I feel like, is Plaid freemium, it's per API call If a developer wants to just like spin up a new app?

Daniel Langer: 29:25

Yeah, I think they have some freemium model. Is there a subset of?

Brendon Beebe: 29:29

like how many thousands of apps need to exist in this space, but they haven't, because they're spending a lot of time building integrations.

Jeremy Schneck: 29:36

That's a great question. What's really cool is we see new companies getting built on the back of TrackStar because we make this data accessible. Like you said, jared, integrations in general are a necessary evil. They aren't your core product. We get to make it, so you get to focus on building your core cool functionality while we just focus on integrations. We're seeing a lot of new companies build really cool technology in the space, whether it's selling to warehouses or selling to brands, or you guys are a great example of that. Like you're building an ERP to take on NetSuite and we're a small piece in making your life a little bit easier.

Brendon Beebe: 30:02

You guys ever done like a hackathon? I feel like I was in college and I was like here's this brand new thing. It's what Plaid used to be and it's like just build the coolest app you can.

Daniel Langer: 30:13

It's like a call for startups.

Jeremy Schneck: 30:15

Yeah, we want to do it. Like YC is always like calling for startups. We think there, yeah, there's, we've had ideas. Daniel and I have had this habit of we don't want to be prescriptive with our customers, telling them what to build. We don't want to tell software companies you should build X, y, z functionality in the space. Like you do it to our business, your product, you should do it.

Jeremy Schneck: 30:35

And we've started to notice people occasionally lean on us, Like we were talking to someone who was building something similar to TrackStar V1. And Daniel, like we know this isn't going to work, like this monitoring thing won't work. But we're like we know operations is a big pain and they've ended up building that newer product and they're growing like a weed and it's really cool to see. And we were a little more prescriptive and we're starting to become more prescriptive with customers within reason, because it's actually one of our YC group partners gave us this advice when Daniel and I were hesitant. He's like you guys are experts and I think it's taken me a while to realize and now I say it confidently we're experts at WMS data. We're the best in the world at these integrations. Everyone should be using us. That's the reality. But it comes with like spending time in the territory and feeling really comfortable, knowing this space better than anyone else.

Daniel Langer: 31:15

Yeah, be prescriptive to us. Yeah, this is a call for a start. Are you a startup out there?

Brendon Beebe: 31:20

This is a call. This is Plaid. Plaid before Plaid was big.

Jeremy Schneck: 31:23

I think being prescriptive to you guys is tough because, brendan, you had this post on LinkedIn where you're talking about getting to the root of customers' problems, where it's customers asking for X. You're like, why are you asking for X? And then you actually understand it. That's a skill that you all have had and honed and it's why you've been able to grow so fast and build so effectively is you're listening to your customers, you're asking them, you've expanded your feature set and to based purely on what customers want. It's. There's no real reason to be prescriptive to you guys.

Daniel Langer: 31:49

Yeah you know what you're doing you know it's.

Jeremy Schneck: 31:52

That's the truth. We see like you guys are a great operator and we see it every day when we see connections come in and how fast or how active our slack channel is you were saying this earlier.

Brendon Beebe: 32:00

how many connections do we have across? How many wMSs Active connections?

Daniel Langer: 32:05

For the unique number of distinct systems. I think you have 50 plus distinct systems. I don't know the total number. I don't want to make that up.

Jared Ward: 32:17

When we first started we only had two. I was like I promise guys Pushing the go-to-market. There was never a doubt. I think our first ever connection.

Daniel Langer: 32:25

Our first ever connection, our first ever prod connection to trackstar was you and I'm pretty sure it was an extensive connection. Like I look at our our first dot in june of 2023, on our graph that has since gone like this this is you were the first dot and it was like slow, slow, slow and now it's just but yeah, you were the first, the first dot.

Brendon Beebe: 32:49

I have to get this claim of fame in public. When we went live with them, they only had a React component.

Daniel Langer: 32:56

So their Angular component my first.

Brendon Beebe: 32:58

The first commit is Brendan.

Daniel Langer: 33:01

It is, and I was like, oh man, yeah, we can do an Angular component Like I already got it.

Jared Ward: 33:06

I already made it how many active connections do you guys have right now? You said over 170. What was it so we have?

Daniel Langer: 33:14

70 plus integrations in our library. We're approaching like 1,000 plus active connections through our platform. So you know, a connection is when a merchant or a warehouse connects their system. That's a connection.

Jeremy Schneck: 33:33

We've been meaning to do this exercise, but there's billions of dollars worth of data flowing through TrackStar. The amount of scale is really cool to see. The graph is going like this, which is really nice, but there's tons of data flowing through those thousand connections.

Brendon Beebe: 33:47

That is so sick actually, and is this like long future?

Daniel Langer: 33:56

You will have the entire e-commerce ecosystem flowing through your. We do have a lot of information and we're not doing anything with it besides serving it to you when you ask for it. But we do have a lot of order inventory returns in about, you know, asn warehouse level data that we are just you know providing when you ask for it from our api.

Jeremy Schneck: 34:13

But yeah, we have a lot of interesting info no, I can't really know active thoughts on, like what we would do with that data in an anonymized, aggregated way, right, but we're also we're open to like insights around it. But for now, it's just again focus like people ask, like ask. It's classic. We'll talk with VCs who are like you have this data, you've got to do something with it. Why don't you just focus on that? And we're like well, if we asked all of our core customers what they want us to do, that wouldn't be it. So we just kind of put it to the side. Rout had that same thought and they built this data.

Jared Ward: 34:43

it's like a shipment tracking app. Anyways, it's really difficult to find the use case it goes back to focus.

Brendon Beebe: 34:52

If you guys had infinite money, if you raised too much, you would have probably gone this route.

Jeremy Schneck: 34:56

Probably would have tried something You'd have some team spinning up trying to figure out how to use data with data scientists, which isn't. It's not inherently a bad thing, but it's not making you a better company, exactly.

Jared Ward: 35:05

Is there any point in trackstar's history that you guys had an aha moment?

Daniel Langer: 35:11

I mean, I think it's the last couple months I don't know, I think it's.

Daniel Langer: 35:15

It's just been a slow burn, like the way yc describes product market fit is it kind of goes from for so long. You're pushing a boulder uphill like as founders. You're pushing a boulder uphill like as founders. You're pushing a boulder trying to get things to work and at some point you go from pushing the boulder to chasing the boulder downhill and like I think we're just starting to like chase the boulder and I don't know when it happened. I don't think there was. I mean, maybe you have a moment to me. There wasn't a specific moment, but that's how it's starting to feel, of like hey, we figured something, there's something working here. Doesn't feel like we're pushing this boulder uphill as much as like we're now trying to cut.

Jeremy Schneck: 35:55

You know, stay up, you know with the boulder and I think the one learning is when we built this monitoring product, we didn't have product market fit and customers didn't love it, and one of the questions we asked when we were pivoting is would you care if we disappeared? And people were like, eh, not really. And what's been really reaffirming throughout this whole process of building TrackStar, the universal API, is we get really nice messages from customers in our Slack channel who, like, appreciate and love what we're doing. And it's you guys and other companies where we had one company who were like, oh, maybe we'll build in-house. And it's it's you guys and other companies where we had one company who were they're like, oh, we, maybe we'll build in house. And then they started using us in two months later. They're like the best decision we ever made was using track star. We love you guys. How can we help you? The amount of customers who go like, how can we help you? And we're like, no, like we, the boulder's starting to spin the other way.

Daniel Langer: 36:38

That's right, I'm sure, as founders, you, I mean, you know that feeling of like you're trying to get the thing to work.

Brendon Beebe: 36:56

And it's months and months and at some point you're like, oh no, this, I think this is working you know, and it is so much of, it feels like you put out a fire every day.

Jeremy Schneck: 37:06

Yeah, and it doesn't feel like anything is going anywhere.

Brendon Beebe: 37:10

Yeah, but then you've just done that for so long. Yeah, everything kind of stacks on top of each other and it just works and things are running and it's bricklaying. Customers are live and you're like holy crap, I didn't know they were live.

Jeremy Schneck: 37:22

Yeah, it's day by day One. One funny thing is the benefit of selling to software companies. They understand software, whereas I feel like brands want 100% perfection from day one and like giant enterprise companies like the amount of times that HBO Max breaks on me is crazy. You guys understand that software is iterative and it's a growing process, which that's one benefit to selling to software.

Brendon Beebe: 37:47

You're one connection removed from the person being affected.

Daniel Langer: 37:48

Exactly, yeah, we get the brunt of it. This amazon order is not showing up well, a big part of our product is our customer service and our support that is the best I will get up.

Brendon Beebe: 37:55

There will be a. I know with any integration there's gonna be bugs and it's like we understand that and it's like, hey, this is not in there. Sales orders is slightly off, something's being missed and within hours you guys have it figured out, you've resynced it and they're live. Yeah, like having even thinking about having to do that internally would have been impossible my wife knows you as you haven't done this in a while.

Daniel Langer: 38:18

But she knows you as the 5 pm on friday slack message, because there were like a few times it'd be like friday at five and you're like, hey, like, because I think that's maybe when you're looking. You're like for a time that's when you were like digging into traffic, star stuff. You're like, hey, this is wrong. And I'm like friday 5 pm, brendan coming right up and it was all. It was very funny, but yeah but keep doing it.

Jeremy Schneck: 38:39

Yeah, I know this is not.

Daniel Langer: 38:40

This is not a call to stop, but it's more um but again, like we know, we're core infrastructure and so it's, you know, part of our product is responding quickly, at least saying hey, we hear you, we're looking into it.

Brendon Beebe: 38:52

So much of it now is just it just works. Like the number of issues even across 70 connections. Yeah, things are just working smoothly, yeah, it's.

Jeremy Schneck: 39:01

The benefit of it's kind of the vision is you build a scalable infrastructure layer and the keyword is scalable the number of software companies we spoke with. A lot of people were believers. Some were like hopeful optimists. They'd say I don't think you can normalize the data across WMS, but if you can, I'll be a buyer. But it's nice. We've done it Like we feel, like we've been able to normalize this data across these systems that everyone said was customized to hell but is actually normalizable because it's inventory in a warehouse. That we see that scalable nature where you're adding connections and there are no problems. One of my favorite things is we have a little growth channel where we see when new connections get established and our engineering team will even be like those luminous guys just keep adding connections and we love it.

Jeremy Schneck: 39:44

I think you guys added TikTok F, fba and walmart today yeah, so you must say on our uber ride to get right here, to get to meet you guys in person for the first time. Those three came in back to back and we're like this is incredible.

Daniel Langer: 39:59

We love that yeah, you must have, just someone just onboarded a customer, someone closed something yeah, these have been our busiest two months.

Jared Ward: 40:05

I think we've onboarded oh yeah, 15 we've had a record with. So we we had.

Brendon Beebe: 40:10

We had our record sales november, december and then record onboarding record onboarding and every, and they're big customers, so they usually have like four or five connections. We can tell.

Jeremy Schneck: 40:21

Really cool that you guys had record on record sales in november, december. Was it hard to close deals year-end when brands are like it's Black Friday, it's holidays, it?

Jared Ward: 40:29

was actually October, november, december. It definitely slows down, I don't know, for some reason, q1 for us, when we sell to brands, it slows down a ton. But I don't know what it is, but it's something in Q3, in the first month of Q4.

Brendon Beebe: 40:48

It's like Septemberember, october november, those those months, they're just massive for us.

Jared Ward: 40:50

I don't know why they're just feeling the pain more I, I guess, so um high stress I mean, there were so many customers that came in wanting to switch and wanting to switch before their big q4 rush. Yeah, we ended up saying no to a lot of them, but even then, like we'll sell them and then we'll onboard them next year, makes sense, yeah, yeah.

Daniel Langer: 41:13

One thing Jeremy was talking about was early on we had a lot of haters, like people that are like you're not going to be able to do this, like you can't normalize all these systems. Too many custom things Like too hard, hard, blah, blah, blah. We love you know kind of prove. We prove them wrong. Do you like did slash? Do you have people that tell you you're not going to be able to like dethrone that suite? Like is that? Do you get that? You're tackling something bigger than you can chew I.

Jared Ward: 41:41

I actually get that feeling from vcs, all the vcs, don't? I can just tell like I can just tell by just by looking at them.

Daniel Langer: 41:51

Yeah, no, we got it from a lot of vcs too. What?

Jeremy Schneck: 41:55

what's so funny about that is isn't like traditional vc wisdom is find an old, outdated incumbent who likes business model actually isn't great, and then it's a big market and you should bite off like try to tackle that problem right, isn't that inherent? That's what they're supposed to be selling.

Jared Ward: 42:07

I could just tell when I I don't know when, when I pitched them, I tell them like yeah, we're going to. I can just tell they don't. They're like yeah, but will you really.

Brendon Beebe: 42:16

That's like it's a graveyard, though, like how many. You can just look and there's hundreds of companies going slightly that route and I think internally we had to ask ourselves like what are we doing? Differently our eyes are open. We're looking around. There's a hundred other companies trying to do something similar. What did they do wrong was something we had to ask ourselves a lot, because it's well I doubt him.

Jared Ward: 42:37

No, brendan probably the biggest doubter brendan asked he asked the hardest question at the beginning, which I think really shaped our curiosity of the market and like how it grew, which is in this we were sitting with like a couple million in the bank and like taking burn down to nothing. And Brendan's just like but why, why don't we just resell Dynamics 365, jared, or like why don't we just resell NetSuite? Like why aren't we just doing that? Basically, like are we just rebuilding netsuite in the cloud? Like, no different? And I I found being super critical of your idea. It really it just pushed us to understand the market and all of our competitors, everything that's happened, like the positive acquisitions, the bad acquisitions, the dead bodies, like I feel like we know so much about the space and we know where we're, we have the best chance of succeeding it's like whenever I talk to vcs or anyone it's like brutally honest about all the strengths and weaknesses of our business and they're kind of the same thing.

Jeremy Schneck: 43:38

Our business is hard to build right like it's the hard thing to do. But I find being really critical of your own business and understanding all the levers you can pull or levers that can make you fail makes you a better operator when push comes to shove, because you know what you need to do to grow.

Brendon Beebe: 43:50

Yeah, something interesting. I feel like when you're pitching VCs, they actually I suck at pitching VCs because I'm too honest and I'm like I'm very critical, just naturally, and they want to be hear that optimistic, like story but then so you have to be that optimistic person when you go to pitch it that sell that vision. But then internally, if you're that ignorant, happy vision, you're just gonna execute poorly you have to be like super critical internally well that's.

Jared Ward: 44:17

That's why companies die is because they buy into their own vc hype, like they buy into their fundraising hype, which isn't real hype it's a good idea.

Jeremy Schneck: 44:26

It's a hard line to balance. When we were originally fundraising, we had some VCs who were like we think you're sort of onto something, but you should build X in the integration space. And we're like okay, we want to listen and digest all the info. And they're like okay, what do you envision for X? Talk us through it. They're like well, we talked to these large enterprises who want this iPaaS. We ended up talking to those enterprises and we asked the question that YC taught us yeah well, if we built this for you, how much would you pay us? And all of them were like yeah, you know, it's not a big enough problem for me to pay for. And we're like this is a crazy feedback loop.

Daniel Langer: 44:58

It's almost like VCs aren't founders.

Jeremy Schneck: 45:01

Almost no, but yeah. But it's all about finding the right partner. Like Daniel and I say this all the time and it's not to shout them out, but to shout them out our lead investor and our seed around is this supply chain focused fund called TMV Incredible partner. Like we couldn't have asked for someone who was more aligned on the way we want to grow, our long-term mission and our vision and it makes it like we get to our board meetings and our biweekly catch-ups and it's truly a joy to catch up with them when it's not an adversarial relationship, it's truly one of mutual benefit and they've helped us grow. There is a time and place for venture capital and when done well, it fuels really incredible companies building really incredible things. But Daniel and I easily could have picked the wrong partner and we'd be having a different story with a much more anxiety-inducing experience. But we found TMV and we couldn't be happier.

Jared Ward: 45:47

Are you guys going to raise a Series A round or are you just trying to get profitable?

Jeremy Schneck: 45:52

We'll eventually raise a Series A. For us it's at profitability. It's the classic dynamic when you don't need their money, all VCs want to give you money. But at profitability we'll be able to just pick our own destiny and make sure the terms are reasonable and we're not creating a zombie company and all these great things. And I think Daniel and I are starting to get more and more pull from existing customers around order sources and TMS and these other verticals in a really real way. We're like we're getting messaging from people saying can you build this? I really need this. So we're more confident in that digital backbone for supply chain. I think that's what the Series A would drive. So the sequencing is get to profitability, to control around destiny and then do a deeper market mapping of what the opportunity in those other verticals can look like. Because if we raise X money, we want to know here's where it's going to drive growth. Not to your guy's point oh, you have capital, let's just go spend it. So that's how we think about it, but it'll happen.

Brendon Beebe: 46:44

With you two, who tends to be do you have somebody that's more critical and somebody that's, like, the optimist?

Daniel Langer: 46:50

He's the optimist. Yeah, he's the eternal optimist, but I'm an engineer.

Jeremy Schneck: 47:01

Like you know it's the same thing of like I see the sausage, yeah, yeah, Part of it is, and we talked about it. Like founders need to be the right balance of optimistic, like we're all doing this because we think our companies are going to succeed even though statistically speaking they won't. But at the same time, if you have enough doubts, you're willing to be self-critical and, like identify the weaknesses in your business so you can make sure you do grow successfully. It our legal counsel once, who's a who's a friend, and he was saying he's like you guys are very thoughtful and methodical and you want to build like a sustainable company. It's not always the the founder template he sees, but you know, I think we're all cut from the same cloth to some extent well, awesome.

Jared Ward: 47:39

You said you guys are going to start content pretty soon. Where can people find you?

Daniel Langer: 47:42

are you guys going to start a podcast or just educational videos, or just I don't know if we're going to start a podcast, but we've done no. Marketing, like our entire customer base, has pretty much come from word of mouth, I mean yeah, I think entirely word of mouth.

Daniel Langer: 47:57

I'm trying to think so, we've been pretty under the radar. People in the industry know of us, but it's all again through word of mouth, and so we're going to start propelling that word of mouth by creating some of that word of mouth ourselves. So we're going to start posting on LinkedIn, we're going to spin up our blog, start doing case studies, go on to podcasts like this, where applicable, but just kind of create some of this content engine and so more people know about us and know they can build on us.

Jeremy Schneck: 48:23

Good plug, for we should all do a case study.

Daniel Langer: 48:25

Yeah, we have another case study.

Jeremy Schneck: 48:26

But to answer, people can find us at trackstarhqcom and then also we're always available. I think it's part of the support is. Anyone can ping us anytime, schedule a meeting and we'll tell them the benefits of universal APIs.

Jared Ward: 48:39

Yes, I'll link your socials.

Daniel Langer: 48:44

It's great to see truly longtime friends in person. It's been two years.

Jeremy Schneck: 48:47

It makes it more fun when you're building with people you like building with. It's been a joy to work with you guys.

Jared Ward: 48:51

Awesome. Thanks guys, Thank you.

Jeremy Schneck: 48:53

Awesome.