How Small Businesses Can Leverage the Power of Data Analytics – David Hailey | Countifi

Transcription:

Mark Collier :
Welcome to The Playbook, David.

David Hailey:
Thanks Mark, man. Thanks for having me. I really appreciate it.

Mark Collier :
All right, man.

David Hailey:
Especially calling me a seasoned businessman. I’ve never been called that before, so that’s good.

Mark Collier :
There you go, man. That’s put a little pressure on you, huh?

David Hailey:
Exactly. Put me on the spotlight, so it’s good.

Mark Collier :
Well, good deal. So let’s talk about your business, Countifi. Talk to me about its mission and its vision, and who’s your core customers?

David Hailey:
Right. So I started Countifi. I’m an accountant by trade truthfully, right? So I spent a lot of time taking inventory, physical inventory. And getting an understanding of county inventory is not fun, right? And so I spent some time at E&Y as an accountant, spent some time at Delta Airlines as well in the accounting side. And thought about how can I address the problem of county inventory? It’s a big deal.

Mark Collier :
It is.

David Hailey:
And any company who has inventory has an inventory problem. And so we started Countifi really to address that. And with the emergence of artificial intelligence, computer vision, it made sense to say, how can we use this emerging technology to address this age old problem? And so in a sense, our mission it’s really to how can we add ease, transparency and accountability to the inventory process? And overall, our vision is to, how can we be one of the best inventory-management platforms out there?

Mark Collier :
Okay. Well, that speaks to a, as you said, an age old problem. Any business that has inventory, they’ve got to figure out how to count it. And the old-fashioned way, sometimes you ask them, “Well, how many units of this do you have?” “Well, hang on while I go out to the warehouse and count them.” So that’s not the way businesses want to operate.

David Hailey:
Exactly.

Mark Collier :
So as you said, AI, data analytics, that is the wave of the future. So for those folks out there who don’t know, let’s roll back a little bit. What is artificial intelligence and what place do data and AI have in modern supply chain and logistics operations?

David Hailey:
Yeah, so artificial intelligence is really a way to, and it sounds a lot more complicated than it is at the surface level, truthfully. So it’s really just a way to, how can I make the computer act like a person?

Mark Collier :
I love it, man. I love it.

David Hailey:
It’s very simple, right? A lot of times you have all these stop by people think about AI and think about I, Robot, or something like that. Robots are coming to attack us. And that’s not really… Well, I guess that could be the case, but that’s not the case in this company. And so yeah, artificial intelligence, how can I replicate what a human does with a computer to make things more efficient? And you think about, AI’s already used in our everyday life already. Think about you turn on your phone and you use Google Maps. Google Maps will tell you directions of where to go. You might go to a grocery store.

David Hailey:
And so that information follows like, hey, I know that Mark goes to a grocery store every Friday night. Publix, or Kroger, or a grocery store might purchase that information to say how I see that 40% of the people in this radius go to the grocery store Friday night at 6:00. How can I adjust my inventory amounts if I know that there’s a going to be a mass of people that are going to be here at this time? How did that affect my supply chain to make sure I have the inventory, the groceries here when they need it? So it sounds complicated, but in a sense, it’s already a part of our daily lives, whether we like it or not. If want to use our phone, if we want to use our smart speaker at our house, then we’re already using AI.

Mark Collier :
Makes perfect sense. So let’s talk about your clients. What type of clients come to you for this type of assistance? Who are they, and what value do you deliver to them?

David Hailey:
All right. So we started, as I said, my background is in the airline industry, so we actually started the company to address the specific airline problem. So I’m actually headed to Dubai tomorrow. We have Emirates airlines as one of our clients, we’re doing a big deal with them to understand-

Mark Collier :
That’s a high-end airline, man.

David Hailey:
It is. Yeah, you got to work hard to get them, right? So really understand consumption. Understand what passengers want, and consume while they’re on the plane. And so an example of that would be thinking about beer, like a particular type of beer. If I see that 75% of the Budweiser in coming back after the flight, then maybe I should decrease the amount of Budweiser I put on the plane. But if I see only 10% of the Bud Light is coming back, then I can adjust those numbers as well. And so it makes me smarter about what I put on the plane.

David Hailey:
We’re also in the healthcare space. So Duke hospital is one of our clients as well, where we put cameras in their store rooms. So put cameras in the store room, and instead of someone manually counting the inventory that’s in that store room, we’ll take pictures several times a day. And it allows us to understand the movement of the inventory in that room. And so for example, a particular device will say that if you already have 10 of those in that store room, but over time we take multiple pictures over months. And if we see you only using two of those per month, there’s no need for you to have 10 in that store room. So how can you reduce your inventory, get smarter about what you do and also save money? So I’ve reduced my inventory. I only need two a month. I don’t need that other six, for example. So I can reduce my inventory amount and reduce my expenses by that amount.

Mark Collier :
Got it. Got it So let’s talk a little bit just for a minute about the challenges you’ve faced. Because obviously, most entrepreneurs, when they get into business, I mean it’s not an easy road. And this is a very highly specialized technological field. So any obstacles that you’ve faced in your journey through this business?

David Hailey:
We can talk about obstacles all day long. I mean, anybody who leaves corporate America and tries to start a business will see all types of obstacles, truthfully, especially ones that are going after high-level enterprise clients. The sales cycle is long. It might take a long time, 12 to 18 months to land a large enterprise client. But the main thing is awareness. How can we make people aware of what we do? How can we say, if you understand this problem, we understand the problem that you have? How can we let you know that Countifi is out there? We have a company that can help solve your problem. Awareness is probably the biggest thing.

David Hailey:
Two, as I said, I’m an accountant. I’m not a computer developer. I’m not an engineer. So I understood the problem, but phase two was how can I build a team to address that problem and of the platform? So that was a huge issue as well. Luckily, we have Georgia Tech here, in the Atlanta area. There’s a lot of engineers and computer scientists. Our lead engineer has a PhD in computer science from Georgia Tech. There’s not a whole lot of them in the world. So luckily, we were here to that and have that resource here. And then truthfully money is a problem, right?

Mark Collier :
Oh, yeah.

David Hailey:
That long sale cycle is long, building this type of talent. How do you pay for that?

Mark Collier :
Yeah. Access to capital, man.

David Hailey:
Access to capital is-

Mark Collier :
Is the number one challenge of all small businesses.

David Hailey:
Exactly.

Mark Collier :
So I’m glad you touched on that.

David Hailey:
Yeah. It’s a real problem.

Mark Collier :
Absolutely it is.

David Hailey:
And one of the things I think, starting this business, I totally underestimated the type of people I would need, the amount of capital I would need, and then the time it would take to get our first client. So those three things in a sense could… A lot of people would turn around and go running back to corporate, right? So it is not an easy journey. I think I’ve had a very good resource base. My family, my mentors. You have to have a very strong network I think if you want to be successful. You can’t do it by yourself.

Mark Collier :
So let’s talk about some opportunities. What opportunities are out there for improved efficiencies along that supply chain for your clients?

David Hailey:
Yeah. I mean, I think it’s really just getting a better understanding of your inventory. So any company, whether big or small, is going to have one, understand their balance sheet. Understand their P&L. That inventory can be one of the biggest lines on your balance sheet, and so understanding the movement of that. And in any business, cash is king, right?

Mark Collier :
Oh, absolutely.

David Hailey:
If you have inventory on your shelves, that is cash. So our goal is how can we give you more information about that inventory, more information about those trends, and also move the human element out of it, so the humans can pay more attention to the actual business and be more strategic? But the counting aspect of it, the manual counting aspect, how can we automate that? And the part of the business that you don’t enjoy as much, let us handle it.

Mark Collier :
There you go. There you go.

David Hailey:
And make it a lot easier for you, and a lot more accurate as well.

Mark Collier :
Got it. Got it. You mentioned important point, cash is king-

David Hailey:
Cash is king.

Mark Collier :
… because that inventory sitting there is cash, but cash flow, that flow part is the queen.

David Hailey:
Right, exactly.

Mark Collier :
Because if that cash isn’t flowing, man, you’re going to have an ongoing problem.

David Hailey:
Exactly. The house does not run appropriate if the queen is not happy, right?

Mark Collier :
That’s right. There you go.

David Hailey:
The queen has to be happy.

Mark Collier :
There you go. So AI inventory management, can that be applied to other industry? And if so, how?

David Hailey:
It can. So, as I said, we’re currently focused a lot on airlines, a lot on hospitals right now, but we’re growing. Actually, when I first started, one of our first clients was a lumber yard. And so you think about warehousing, having lumbers in bins.

Mark Collier :
A lot of inventory in a lumber-

David Hailey:
A ton.

Mark Collier :
Yeah

David Hailey:
A ton. You think here in Atlanta, Home Depot, you go to any Home Depot, you’ll see lumber or bins.

Mark Collier :
Floor to ceiling.

David Hailey:
Floor to ceiling, right? And so what we did is we have a mobile app that allowed this lumber yard that were in Miami, or are in Miami, to take pictures of the lumber, and we would count it automatically. And so it did several things. One, they closed down their shop every year for three to four days to take a full physical inventory. With our platform, they no longer had to do that, because they’re taking inventory ongoing. Ongoing cycle counts and ongoing full physicals. They also had one person that they paid 35 to $45,000 a year, that her job was to count inventory all day. That’s all they did. And so with our mobile app, she can go around and take a picture of that. And so instead of counting a bin that might have 45, two by four by 16s, she can use our… And it might take her five minutes to count that. She can go and take a picture with our mobile app, takes three seconds.

Mark Collier :
Makes sense.

David Hailey:
And she keeps going.

Mark Collier :
Makes sense.

David Hailey:
And at the end of her count, she gets a report that says, “Here’s all the items that are counted.”

Mark Collier :
That makes a much better efficient use of her time.

David Hailey:
Exactly. Exactly. It makes it a whole lot easier. And the company saves money. Now, she can do other things that are more accretive to the company. But that’s just one example. But like I said, anytime you have inventory that you have manual counting, whether it’s manual counting, whether you’re using barcodes, whether you’re using RFID tags, those things are good, and I think that’s how the industry itself is progressing, but taking a picture makes things a whole lot easier, and a whole lot simpler, and a whole lot faster.

Mark Collier :
Hey, what’s the old adage? KISS, keep it simple.

David Hailey:
Keep it simple, stupid.

Mark Collier :
I’ll let you say that last word.

David Hailey:
Keep it simple, stupid. My dad used to tell me that all the time. And he emphasized the last S as well.

Mark Collier :
There you go. All right. I’m a small business owner, I come to you. Walk me through the process, succinctly, for how you’re going to deliver some value to my inventory-management issue.

David Hailey:
Right. The first thing we do is we get an understanding of your current inventory process. What are you currently doing to count your inventory, to manage your inventory? Then it’s like, what do you want to count? What’s important to count? What we usually do, from a very quick standpoint, is start with your high-dollar items. We don’t try to implement, let’s count everything day one. Let’s start with your high-dollar items. Let’s do a test run. Let’s do a test run for a couple weeks to a month. And then, we will come in from a computer vision standpoint, those items you want to count, we take pictures of them automatically.

David Hailey:
So we take pictures of those items. We train our computer vision model on that specific item. Say, for example, you want to count this mug, we’ll take several hundred pictures of this mug. So when you are actually doing your inventory, you take a picture with our mobile app or with an installed camera, that does it automatically. And it goes back to our server, say, “Yes, I recognize that is a ASBN mug.” And it’ll return the details back to you. At 4:05, Mark counted 45 ASBN mugs. And you’ll have a detail of that and a dashboard as well, that’ll show you the trends.

Mark Collier :
I love it. Very sequential, very ordered, man. I like it.

David Hailey:
Very easy, man. We keep it simple.

Mark Collier :
All right. All right. So what closing insights would you like to share for business owners out there, and how can we get in touch with you?

David Hailey:
Yeah. So again, my name is David Hailey with Countifi. I would say any business owners that have inventory, and are tired of that inventory process, are tied of manually counting, give us a call. You can find us on LinkedIn. You can also just email us, our website, countifi.com. C-O-U-N-T-I-F-i.com. Or reach out to me directly. David@countifi.com is how you can reach us.

Mark Collier :
All right. David Hailey, CEO, and founder of Countifi, an image analysis and data analytics company. I want to thank you for taking the time out of your busy day to come in, share your story, share the great services that you offer and how you can help companies increase their efficiencies.

David Hailey:
Thank you very much. Thanks for having me.