[00:00:00] Adii Pienaar: This is not just for DTC brands or retail brands, right? Like this is for most businesses, the challenge is not the data anymore. The data is there. The challenge is still how do I contextualize data and take the right action? Ego is that thing that ultimately pulls us forward and like makes us do harder things than we ideally would like to do, right?

[00:00:18] Adii Pienaar: The crucial thing for me as founder is just being aware of when the ego shows up has been critical for me to better manage it. Basically.

[00:00:36] Jason Wong: Hello everyone. Welcome back to another episode of the Building Blocks podcast. Today's I'm joined by Adii Pienaar, who is the founder and CEO of Cogsy. I’ve been a big fan of this app. Um, finally got you on the show. Um, Cogsy, if you guys aren't familiar, is an app that allows you to do inventory planning, inventory forecasting, and just overall a such a great tool to be a part of your operation [00:01:00] app stack.

[00:01:01] Jason Wong: Um, previously Adii was a co-founder of WooCommerce, sorry. Um, which was acquired. Congratulations. And he also worked on another platform called Conversio, which is also acquired. So this is your third company now, right?

[00:01:17] Adii Pienaar: Well, yes. The third one is still alive. I mean, there's, there's a few, um, you know, skeletons in the closet along the way or, um, you know, kind of zombies that didn't make it.

[00:01:26] Adii Pienaar: Um, but yes, like those three you mentioned there is the, the more prominent ones. And I see, I do see Cogsy as the kind of the third rodeo.

[00:01:34] Jason Wong: I mean, three is still like three big ones that you can write about is really good. Cuz everyone has a lot of giants in their closet. I have maybe 20 . Yeah. So having three big ones, it’s a feat.

[00:01:48] Adii Pienaar: Well, I mean, yes. I feel very fortunate. Right. I think, um, you know, there's s always part of me that's, um, like it feels, I mean like post Conversio by the way, like post Conversio [00:02:00] getting acquired, I really considered a loads of different options of things that I could do, right? So like everything from like, could I just become like a full-time investor?

[00:02:09] Adii Pienaar: Could I go into consulting, could I do some coaching? Like I, all those things I enjoy doing. Um, and I ultimately gravitated back to building another product. Cuz as a founder, I think, um, the two things I most love about the kind of the journey is the product part. That's the hat that I wear kind of most naturally.

[00:02:27] Adii Pienaar: And then I truly, truly, truly love the team building aspect. Like, I love the idea of like, you know, finding amazing human beings, um, and then kind you crafting a culture. Um, and then working like figuring out, like my latest thing is like truly figuring out like how, like what needs to be true. For me to empower all those unique individuals to, you know, just be their A.) their best selves, but like B.) do kind of incredible work.

[00:02:51] Adii Pienaar: Um, so truly passionate about the, hence like, hence here I am like third time. Um, got lucky. Raised some money just at the right time. Um, and [00:03:00] trying to, to build something that's interesting in an interesting space.

[00:03:03] Jason Wong: I love that. What's something recent that you accomplished that you're very proud?

[00:03:08] Adii Pienaar: Yeah. Um, I mean like probably in that same line, Jason, I think, uh, when I look at Cogsy today, um, the, what's so, kind of a little bit backstory. So my co-founder, Stefano, was my first, um, my first hire, um, at Conversio. So he and I worked together for about seven years and it was during the time at, uh, Conversio, at least, that, um, my team and I stumbled onto this idea.

[00:03:32] Adii Pienaar: of putting life and family first. Um, and that was  kind of the way we structured the team there was the kind of the precursor of the, the book that I ultimately wrote, which, uh, is titled Life Profitability. And I wouldn't make this about the book, but, um, what's different, and I did when we started working on Cogsy was we

[00:03:48] Adii Pienaar: were really intentional about what we wanted our values, um, to be and what that kind of meant for our culture in terms of how we work together. So, um, I'm really proud when I kind of, you know, look at the, at least a [00:04:00] digital room. Like we've not had the team together, um, in the same room just yet. Um, that should happen in August when we meet up for a team offsite. But we're looking around the room.

[00:04:09] Adii Pienaar: It's a diverse room, um, full of really amazing human beings. Um, and we've kind of crafted the culture. And before, just before you hit the recording, I told you that, um, you know, I recently welcomed a new baby, um, to the family and like I managed to take time off because the team is in such a good place.

[00:04:27] Adii Pienaar: Um, and there's such clarity and alignment around, um, kind of everything from how we work to what we work on that I like. It was pretty fine for me to not be around full time for, you know, two, three weeks. Um, and like that’s, as a leader and a company builder, um, that's something I'm incredibly proud of.

[00:04:45] Jason Wong: And it truly is, you know, not a lot of people give credit to the people. Um, the people is truly the one’s that built the company. Yes. Um, and so if you built a really good team, you've built a really good company. Subsequently, um, congrats on the new [00:05:00] human. Um, but more amazing at the fact that you're able to take time off.

[00:05:04] Jason Wong: Um, you know, like we don't get parental leave usually. Um, like usually we don't get anything at all as founders. Um, and so our, our form of paternity leave is before the baby comes. Build a really kick ass team that we can step away from and maybe have to work 50% less. That's our parental leave. So I love that for you.

[00:05:24] Adii Pienaar: Exactly right. And I think just a kind of, um, big for me, like incidentally, what happened for the Cogsy team there was I was the first member of the team that would welcome a new family member. Right? So like, it was very tricky. Um, like how do we create a framework through paternal leave, right?

[00:05:42] Adii Pienaar: Both paternity and maternity and like how we structure it because. But the kind of, especially in the states, like statutory core requirements for kind of new, new moms, like it's, it's insane how little support they kind of, most companies give their teams. Right. Um, so it was really a case for me to, like, [00:06:00] whatever I did, like I told team as well, should not become the precedent for what we'd eventually do.

[00:06:05] Adii Pienaar: But you wanna kind of wanna lead with by example to some extent, at least. Right? Um, which I, which I managed to at least partially do.

[00:06:14] Jason Wong: I love that. I love that. And so, you know, after so many skeletons in the closet and so many major milestones under your belt, there's definitely a lot of things that turned on in your brain during this process.

[00:06:26] Jason Wong: You know, that thing, that click, that really changed the way that you work. Um, and, and I'm very curious to hear that cuz I asked the same question to a lot of founders. First time founders, second time, third time, some who have exited for a lot of money. There's usually that one thing that clicked. What is it for you?

[00:06:43] Adii Pienaar: Yeah. Um, well, and what I can tell you is there's probably been multiple things that clicked right, like different seasons in one's life. Um, Okay. I really like the kind of the Buddhist mindset of like, when the student is ready, the master appears. So like I know that at various stages of my life, [00:07:00] um, like that, that new thing clicked into place and that kind of set up the new season.

[00:07:05] Adii Pienaar: And I think, you know, one of the most recent things, um, Jason was, uh, kind of during the parts, um, of Conversio, I was, I was really, so I, I've always had like an insane like thirst for learning. I'm a super curious person and I can like read like loads of different things. Um, and I was doing like years where I was like reading a hundred books a year, like fiction, nonfiction, like not just business kind of stuff.

[00:07:30] Adii Pienaar: Oh. Um, and I was really reading a lot. and I stumbled onto this kind of, um, and like at the same time was I also started my own, um, kind of mindfulness journey. And, uh, a friend pointed and said, Adii just remember that the pursuit of no ego is also still ego. Right. And like the, the realization for me there was the learning was that with all this learning, I was trying to

[00:07:55] Adii Pienaar: kind of run my life and kind run my business in a very, [00:08:00] very, very formulaic way. Right. Based on all this learnings, cuz like, these are learnings, like it resonates. And what it actually did for me was, especially with Conversio being a second kind of business, um, I was hypervigilant about everything that could go wrong.

[00:08:14] Adii Pienaar: And I think, like, once I had that realization, I actually stepped back a little. And, you know, these days, I mean, I still, I'm very, very keen to learn. Like, I mean, Cogsy plays into that in a way which I'm not necessarily an expert expert, Like I've never been an operator at a retail brand or been responsible for operations and retail brands myself.

[00:08:33] Adii Pienaar: Um, so I've got loads of learning to do, but it's different. Like I think these days it's more about, um, you know, in some seasons for me to relax a little bit and just be in the flows. So there's still, you're still showing up, you're still doing the work, you're still learning. But without that kind of rigid pursuit of, hey, I need to kind of be learning for the sake of learning, if that makes sense.

[00:08:52] Jason Wong: I love that I, I recently came in contact with the whole concept of mindfulness [00:09:00] and, um, I went on a little bit of a spiritual journey, um, started meditating as well. Met some incredible people who said this is what changed their life. And, um, I totally understand that. I started seeing how so many decisions and thought process I had

[00:09:15] Jason Wong: was coming from ego and, and it's not in the traditional sense of what people think having a big ego meant. It's like everyone has ego to an extent. Yes. Um, and oftentimes we let that guide us and make decisions that we think it’s good because we thought we thought we want that, but in fact it's not the right choice for the company, or it's just not the right energy to be moving towards.

[00:09:36] Jason Wong: And then I started learning about energy. You know, like people really do have different energy and like what kind of energy you wanna bring to your life. And, you know, I, I love that the conversation here, or at least the answer here, isn't going towards here's like a tactic or hack that I did, but more so.

[00:09:50] Jason Wong: mind. Like your, your mind is so important as a founder and having the right mindset changes the entire trajectory.

[00:09:58] Adii Pienaar: Totally. Right. And I, there's so many there. [00:10:00] Like, you and I can, um, you know, take this, it sounds like you and I can take this conversation and we very, what many people would consider a very woo woo kind of, you know, um, you know, area.

[00:10:10] Adii Pienaar: Like, I think to your point about ego, Jason, I think, um, I don't think anything worthwhile in the world has ever been done without any ego. Right. And what I mean of that is like, like ego is that thing that ultimately pulls us forward and like makes us do harder things than what we ideally would like to do.

[00:10:28] Adii Pienaar: Right? But we do it because there's ego there. I think the crucial thing for me as founder is just be aware of to what extent ego is present in any action decision so that ego doesn't rule and dictate that kind of almost zombie-like state where I'm just like, you know, kind of, um, so narrow minded in terms of how I'm doing things.

[00:10:49] Adii Pienaar: Cause like that's, that's tough, right? Like I think, um, just being aware of when the ego shows up has been critical for me to, to better manage it, basically.

[00:10:59] Jason Wong: I love [00:11:00] that. I love that. Getting a little bit into the more tactical side of the show. Um, Uh, you know, on the concept of building blocks, I made the show because I was having so many conversations with my friends like you, and I'm like, Man, I'm asking some questions that I feel like will help a lot of other people.

[00:11:17] Jason Wong: Um, and I know I sometimes call on you for help for inventory. You've been there. You you went through my Excel sheet and said, Nope, don't do that. Let's use my stuff. And so I want to move this conversation to the rest of my viewers cuz I know inventory is such a big topic, right? Inventory has been, hasn't been this annoying ever, um, because supply chain times are longer, so people need to plan better.

[00:11:42] Jason Wong: Um, people's money are dried up, so they need to spend their money on the right amount of inventory at the right time. Um, for the right products. Um, and so like this is one of those topics where I felt like if we don't do this early enough, some people will really, really get hurt before Black Friday.

[00:11:58] Jason Wong: And that's why I place you at this [00:12:00] exact same moment. Like, this is very strategic. I reached out to you cuz I'm like, let's get this out in June and let's make sure that people can, can really plan ahead. So tell me a little bit more about, you know, inventory as a process. In the e-commerce space, Like what is it something that people need to be more cognizant of in order to be a better planner?

[00:12:23] Adii Pienaar: Yeah, so I think there's a There's, there's probably loads of mantras, like anyone that's followed, either myself, um, or your content on any of our social media channels will see that there's, there's a few kind of your things that, um, like we've been very loud about or very kind of you very specific about.

[00:12:40] Adii Pienaar: I think the key things when I think about inventory and how that relates to operations, Jason is. And again, like I, my first perspective here is Istudied accounting and I was gonna become anaccountant before, um, before founding Woo. And I think my first perspective is always like, [00:13:00] what needs to be true for a brand to optimize?

[00:13:03] Adii Pienaar: The kind of to optimize the amount of working capital they have, right? To get the appropriate ROI. Right? Like I think, um, again, like I understand venture capital is prevalent in most industries to some extent today. Um, but way back when we started working on Woo, we were completely bootstrapped. So, um, and where that mentality comes in is you take a single input and you try and get as

[00:13:24] Adii Pienaar: as much out of that input as you can. Right. But there's always a constraint. And I think, you know, to your point, like supply chain issues, with lead times shifting, um, your capital or financing being kind of limited, there's a constraint here, which means the focus should always be on how do I make most of what I have, Right?

[00:13:43] Adii Pienaar: So like you mentioned a couple things there, right? So kind of right amount of product at the right time, et cetera. Right product at the right time. Um, so I think that's the first perspective there. And then I think, broadly speaking, I think I really think brands have enough data and too many [00:14:00] reporting tools across different things, like the challenge and, and not just, This is not just for DTC brands or retail brands, right?

[00:14:05] Adii Pienaar: Like this is for most businesses. Um, the challenge is not the data anymore. The data is there, it can be re reported on. The challenge is still how do I kind of, how do I contextualize data and take the right action? And for us at least, the way we're thinking about inventory is that, Yes, like we can't speed up, um, a factory line, right?

[00:14:25] Adii Pienaar: Like that's very hard to do. Like the only the factory kind of view can do that and the people that run that. But what we could probably do is kind of based on what is happening in your business, we can allow you as the owner or operator of the business to take action kind of sooner, more proactively, Right?

[00:14:42] Adii Pienaar: And then doing so in a smarter way. So like much other thinking, like when we talk about Cogsy, like we'll always talk about Cogsy being an action taking platform, right? Like it is really meant to, at least the bigger vision thereof is meant to drive specific actions, um, in your business that ultimately comes back to you, as I said, like [00:15:00] optimizing that working capital that you have deployed in the business.

[00:15:03] Jason Wong: I love that. I love that. Um, you, you've been in this space for, at least for inventory, at least for, is it, has it been a year yet?

[00:15:11] Adii Pienaar: Uh, a little bit over a year. Like year and four months.

[00:15:14] Jason Wong: So you’ve obviously seen a lot of people, a lot of merchants, a lot of data. I want to hear a little bit more. What are some ways that they messed up?

[00:15:22] Jason Wong: We messed up. Um, I, I know, I when you talked to me, you're like, uh, I, I bet you're shaking your head when you're talking to me of like how I planned my inventory. I had an Excel sheet. Was that, was that probably the first mistake?

[00:15:36] Adii Pienaar: So, So yes. I think, um, Let's say this about spreadsheets, right? Like a spreadsheet is a very, very flexible kind of, you know, user interface to do many, many things.

[00:15:47] Adii Pienaar: Um, and many, like, I have spreadsheets in my business, right? Like, I think like the Cogsy’s purpose here is not to remove all spreadsheets from, um, from the operations for [00:16:00] brands, the challenge with spreadsheet is it normally is a very static document until it gets updated, right? Which means that kind of the, this kind of, that feedback loop that you get is only as strong as the discipline you apply to it, which often means like if, if you don't update it kind of often enough.

[00:16:17] Adii Pienaar: You're not getting those kind of leading indicators that something has changed, right? Like you suddenly had sales velocity that just crept up by just enough and you're just like, Well, we had a couple of, you know, good days of revenue there. But you don't realize that what this actually means is you're gonna run outta stock four or five days.

[00:16:34] Adii Pienaar: Consumers now, right. Um, So like, that's the limit of a spreadsheet. So I think that's, yes. Like many brands that have switched to Cogsy like we are switching them away from spreadsheets and like the, our big pitch there is like, we can do the same math that you can do in a spreadsheet, but we're always on, um, and like, and we don't make mistakes, right?

[00:16:53] Adii Pienaar: So I think that's the first part. Um, but when you ask me like Adii, like what's the biggest challenge like for [00:17:00] brands? Um, I’d like to start thinking about, you know, forecasting for the inventory, um, planning for the industry. It really is about the underlying data. Jason, like I think, um, like, and this is not just a systems issue cause we integrated with loads of different systems.

[00:17:15] Adii Pienaar: Everything from IMS, Erps, 3PL solutions, Ecommerce platforms like Shopify. Um, so it's not a systems issue that's at fault here. But for many of these brands, um, again, they've not, they've not had the discipline to maintain that underlying data. Um, which means like, again, like I think historical data is only one part, at least of how to plan for future inventory at least.

[00:17:41] Adii Pienaar: And yes, like Cogsy does that. We ingest all of your historic data and like that's how we build a baseline forecast. Um, we've also just built other tools, that again, like not just considers those lagging indicators that sits in the historic data, but build kind of leading indicators, um, into it to help you be more proactive.

[00:17:59] Adii Pienaar: But [00:18:00] again, like without that data being in a good shape, like when you're changing kind of your SKUs for example, um, like those things like mess up the data and we've had to built a lot of, um, additional tooling just to help brands kind of unscrew their data to get some signal or some insight, um, out of the data that they really have.

[00:18:21] Jason Wong: I  love that. I love that. Um, I, I know placing the first PO is always going to be the most nerve wracking thing. Um, I get asked that a lot cuz you know, I teach a class on supply chain. And truthfully, it's one of those questions that I never have the full confidence to answer because it's so, it's so context dependent.

[00:18:41] Jason Wong: It's dependent on your budget. It's dependent on like your products, depending on your marketing plan, you know, what's your sell rate or expect a sell through rate. There's so many things that could go wrong if, if one of those is wrong. Um, so I'm quite curious to hear your take if someone comes to you and be like, How do I place my.

[00:18:59] Jason Wong: [00:19:00] Uh, PO what would you say?

[00:19:02] Adii Pienaar: Yeah, So, um, and I'm assuming like the context and the example there is this is a new brand they're starting to sell, um, come from scratch, right? Yeah. Yeah. So, um, I think first thing first, I'm a software guy, right? And I like where software is kind of an easier business to run, is like you, the commitments you need to make, you can pretty much undo loads of them, right?

[00:19:26] Adii Pienaar: In a very kind of quick and efficient, um, you know, manner. Um, whereas with that first purchase order, that's probably not it. So, um, what I would actually do is I would be very conservative on a first PO. Like I would rather under commit. Um, and I would sell out sooner and I would play it out as more of a kind of a, almost a, a product drop, right?

[00:19:49] Adii Pienaar: Um, first, and then figure out kind of the demand. So that's the one way, like you could probably do some pre-orders beforehand to get some sense of your own kind [00:20:00] of acquisition channels and the kind of the appetite for the market and your ability to convert those into sales. Like knowing that a pre-order won't convert as well as an actual product that's on sale right now, but that's signal as well.

[00:20:11] Adii Pienaar: But even then, like I would be more kind of you cautious, I think, um, where I saw this play out best, and I don't think this is necessarily what they did, but, um, for one of the Kardashians had a, um, I was, I think it was one of the makeup brands anyway, and my wife wanted, um, to buy some every single time.

[00:20:31] Adii Pienaar: So we're in Cape Town, South Africa. Time zone difference was always a challenge, but they would always sell out within the first hour, right, of them kind of launching these things and, but then a week later they had stock again. Right. So I think it was a kind of artificial scare to see cuz like we were just speaking about lead times, it's unlikely that their manufacturer kind of would've been able to top them up with new stock within a week.

[00:20:55] Adii Pienaar: Right. But I actually think, like, going back to my suggestion of, um, [00:21:00] being cautious in that first PO, like there is a way to play it. Um, where, and message it that, hey, this drop sold out and the next drop only kind of happens kind of the next time. Cause nobody, the market does not know that you only had 500 units.

[00:21:15] Adii Pienaar: The market might think like, geez, like they like just launch and they sold out 10,000 units, for example. Right. So like, you can, you can probably play that to your advantage if you’re smart, um, and crucially the reason why I, you predict part your downside, right? Like you're not gonna be overstocked on a product that you might not be able to sell as quickly, um, as you thought.

[00:21:35] Adii Pienaar: So like you have some cash on hand to try and do other things.

[00:21:40] Jason Wong: Absolutely. I think tying your cash into inventory is probably the, the biggest killer to a business cuz you're. Your conversion rate for, or conversion cycle for that cash is gotta be months down the line. Yes. Much rather put that towards hiring or, or marketing.

[00:21:55] Jason Wong: Uh, one of my businesses, I actually sold the products before I even had any [00:22:00] products made. I had a Photoshop picture of the product and I started selling that. But the only reason why I was able to do that is because I knew exactly what the lead time was for it, and the lead time was 10. So I just started selling it and I knew that if I put an expected date on my product page saying, Hey, this product's on preset, but if you order today, it'll get shipped out on a date 10 days from now.

[00:22:23] Jason Wong: Um, and so if you're able to manage expectations there, Perfectly fine. If you're gonna be six months down the line from delivering that product, do not do that cuz your payment will get held up. You'll get a lot of complaints. And it's a bad start and I love the whole, um, artificial scarcity, uh, concept because people to an extent want to buy things that other people want to get.

[00:22:45] Jason Wong: Yeah. You know, when you think about the buying intent on a website, there are some people who buy it and they're like, I don't care. I will buy it right now. Cuz I generally. There's, and then there's a subset of people, it's like, I heard about this and then I kind of want it. And then there's a group of people who [00:23:00] literally only buy things that other people want.

[00:23:02] Jason Wong: And we're talking about like the street where it's the high products, like the products who you saw on TikTok. You don't know if it's good, but you know that everyone's getting it and you should get it. Um, and those let people, that you want to capture their emails, You wanna make sure that they're on your next wait list.

[00:23:17] Jason Wong: Um, and those are the people that are, I  would say are perfectly fine with waiting. We would give them like a little token for saying, Hey, you're now next in line too.

[00:23:25] Adii Pienaar: Totally. And I think, um, you know, on that point, Jason night, we, um, one of our first customers Caraway cookware, right? They, we pioneered the functionality and we now call it, um, customer-centric back orders.

[00:23:38] Adii Pienaar: But the idea there is very, very similar to what you said there, which is like when Caraway is out of stock for their primary SKUs, um, and when they know that they've got a near term kind of shipment of stock coming in, they keep on selling to the customer. So they're never out of stock and they just tell the customer, using Cogsy kind of in a dynamic automated fashion that, Hey, the next available shipping date for [00:24:00] this product is

[00:24:02] Adii Pienaar: 14 June. Right. So, and again, like they can do it cuz it's a specific kind of product, right? Um, like it's probably more of a kind of your premium good. Um, but that converts significant higher than, for example, being, um, on a wait list because the purchasing intent at that moment that I'm on the website is very, very high.

[00:24:19] Adii Pienaar: Whereas if you send me an email in two or three weeks time and you say, Hey, Adii like this product is now back in stock. I'm like, Well, yeah guys, I actually already found another frying pan that I like. Right. Um, cause I, cause I needed it. Um, but yes, like, and that comes down to, that’s the reason we call it customer centric is it's just about managing expectations.

[00:24:37] Adii Pienaar: And that won't appeal to every buyer. And I don't think it works for every single product. But generally, if kind of, your customers tend to wait for or are willing to wait for some purchases, but you need to manage the expectations.

[00:24:50] Jason Wong: Absolutely. Absolutely. Well, a thank you so, so much. This is honestly one of the more important topics beyond marketing or beyond like all, all [00:25:00] these other topics that I usually speak about.

[00:25:01] Jason Wong:  I'm a big, I'm a big operations guy. I'm an operator. Uh, and so I'm always tell people you need a measure inventory properly. Um, so thank you so much for calling me out when you talk to me and say you need, you need me. Uh, great decision I made, and thanks for coming onto the show.

[00:25:18] Adii Pienaar: You're most welcome.

[00:25:19] Adii Pienaar: Thanks for having me. Jason.

[00:25:21] Jason Wong: You just heard an episode of the Building Blocks Podcast. If you like what you heard, subscribe below to keep hearing conversations that I have with brilliant marketers. Founders and innovators on how they built their best ideas. Now, if you wanna learn how you can turn your best ideas and build something massive out of it, visit my website, bbclass.co or follow my twitter @eggroli

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