The Young Mavericks Disrupting the Cannabis Tracking Software Space

Flowhub

Kyle Sherman and Chase Wiseman are poised to disrupt the cannabis seed-to-sale tracking software space with their software company called FlowHub.

Important: What are the five trends that will disrupt the cannabis industry in the next five years?  Find out with your free report at: http://www.cannainsider.com/trends

Key Takeaways From This Interview:
[2:09] –  Kyle talks about how FlowHub was born
[5:05] –  The software development process
[10:00] – Kyle talks about the importance of FlowHub’s customer service
[11:58] – Is FlowHub hosted or installed on a local server?
[13:48] – Chase talks about FlowHub’s research
[15:57] – Kyle talks about the iPhone function for FlowHub
[18:25] – Frustrations in the market with the existing software
[21:28] – Other uses for the software besides the Nug
[23:09] – Kyle explains the process in migrating to FlowHub
[23:54] – FlowHub’s price point
[24:55] – Where is FlowHub available
[27:17] – Contact details for FlowHub

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Read Full Transcript

Matthew: Hi I’m Matthew Kind. Every Monday look for a fresh new episode where I will take you behind the scenes and interview the insiders that are shaping the rapidly evolving cannabis industry. Learn more at www.cannainsider.com. That’s www.cannainsider.com. Are you an accredited investor looking to get access to the best cannabis investing opportunities? Join me at the next ArcView Group event. The ArcView Group is the premier angel investor network focused exclusively on the cannabis industry. There is simply no other place where you can find this quality and diversity of cannabis industry investment opportunities months or even years before the general public. If that’s not enough, you will also be networking with the top investors, entrepreneurs and thought leaders in the cannabis space. I have personally made many of my best connections and lifelong friendships at ArcView events. If you are an accredited investor and would like to join me as an ArcView member, please email me at feedback at cannainsider.com to get started. Now here’s your program.

As the legal cannabis business grows in the billions the market for software that can help cannabis cultivators and retailers grows with it. Up until recently there have only been a small amount of companies in the seed to sale software needed to run day-to-day operations in the cannabis space. However, there are new entrants doing very exciting things. One of those new entrants is FlowHub. I am pleased to have the co-founders of FlowHub, Kyle Sherman and Chase Wiseman with us today. Chase and Kyle, welcome to CannaInsider.

Kyle: Thanks for having us Matt. It’s awesome to be here.

Chase: Definitely.

Matthew: Now to give us a sense of geography, can you tell us where you are in the world today?

Kyle: Sure yeah, so actually I was in L.A. for almost ten years. Saw the industry there and then about a year and a half ago my wife and I we located to Denver. So now FlowHub is Denver based from the get go.

Matthew: Great. Kyle tell us a little bit about how you got into the industry and how you connected with Chase and how FlowHub was born.

Kyle: Sure so yeah you know about a year and a half ago my wife and I moved from Los Angeles to Denver. We just kind of wanted a change of pace. You know we were in the entertainment business out there, saw the industry really grow out there, and I just… man there was kind of this thing about Denver that was just really appealing. So we, you know, we saw Weed by Sanjay Gupta. That was like one of the last things we did in L.A. We also got married, you know before we left and we just kind of were like okay cool this is the next chapter you know. So we saw the Sanjay Gupta special. It was like you know oh my gosh I want to be a part of this movement. I really want to be a part of legalization.

So let’s go to Denver. Let’s figure it out, and so when we got out here you know because of my entertainment background I was quickly able to get involved with Dixie Elixirs, help them with some of their marketing stuff, did some videos for them. I helped Weed Maps out with some stuff and just kind of got connected in the industry. And at that point I had met someone who was putting together his vertical supply chain. Literally he had a marijuana infused products facility. It had a store. It had a retail location and had a grow facility. So really I saw that whole thing come together and while working at this grow facility, you know we were doing stuff on a clipboard and piece of paper because there was no great software platform out there that could actually do the things we needed to get done. No one was doing it.

And so I spent all this time there trying to figure out how could we manage our plant easier? How can we manage our compliance easier? There was nothing there. And so I was like man we have an opportunity to create something. And so I reached back out to Chase. We grew up together and we actually, it’s funny. Chase and I we went to elementary school and we were, gosh Chase we were like 11 years old when were like penny trading stocks.

Chase: Yeah not very successful, but yeah we were penny trading stocks.

Kyle: I mean we were just such a mess, but we’re trying to figure out you know how to do business together back then. And so it was funny because we kind of split off. You know I was in L.A. Chase was doing some entrepreneurial stuff, and we were just kind of doing our own things. Learning you know like building up this kind of like I don’t know just inventory of awesome stuff, all these experiences. And so we came together. I reached out to Chase and I said look dude there’s an incredible opportunity and you know Chase was, yeah, he had been looking at cannabis as well. And so it was just great timing. And yeah I mean the rest is history right. We started this company and now you know Chase was in Chicago at the time. He’s now moved out here with his wife and kids. That’s just kind of how we are now in the industry. This is probably it right Chase.

Chase: Yeah that’s pretty much it. That’s pretty much the creation of the beginning of FlowHub yeah.

Matthew: So Kyle you had this frustration first hand where you’re seeing hey there’s no great way to manage the plants that I can see. I’m doing it pen and paper. This could be the 1800s you know. We got to bring this up to speed from a technology point of view. So how did you make that leap from frustration to actually giving birth to a product that’s going to solve problems?

Kyle: Sure, wow, that’s a deep question, but I like it. So you know it’s funny because you know I think being there I started prototyping out kind of things that I thought would be really useful tools to have in a system you know. So while I was kind of simultaneously looking for a platform to fill this issue, I thought there was one out there honestly. I really thought I would find one. So in just playing around and developing stuff I think I started to really see that there was an opportunity here to scale this to be like I could help all these people. You know my thought was I mean gosh if we can help you know 10 growers you know help them get 2 more harvest out of the year, we could lower the price of cannabis in our state which means patients could be getting cheaper medicine, which means people who want to come out here as tourists and you know come try recreational cannabis for the first time, they can do that cheaper.

I mean it’s just so cool to be able to affect these things. So I saw the big picture of where you would go with it and really how much impact we could have if we did it right. So I think in that very beginning part it was just prototyping and figuring out where we could go with it with that bigger picture thing. And then in terms of like how we actually executed that, I think it was I mean a lot of I mean gosh we’ve talked to well over 100 different business owners at this point especially very early on especially. We spent a lot of time you know researching and talking to people in different states and what their needs were and what they were facing. You know and just realize there’s all these parallels across the board, and so with all this research I mean really FlowHub was born in talking to people and our customers. You know this is not stuff we just made up. I mean this is all really built from the ground specifically for regulated cannabis. And it’s built really by growers and people who’ve worked in this industry now and who’ve pioneered the industry. So it’s really incredible what we’ve built. I mean it truly is an incredible product and you know we have gone from zero to sixty very quickly.

Matthew: So there is a few other software companies out there that help the seed to sale tracking that we’ll say they’re more the incumbents there early on. The industry has changed a lot since they started their companies. You’re coming in now. Do you feel like you’re somewhat leap frogging where they started and going right to the second generation?

Kyle: You know look man, here’s the thing. These guys, these previous players that are out there already we’ve needed them. They’ve been fantastic. They filled the void. They’ve brought our industry where it is today. You know and I think what’s really important now is we’ve had that experience. We’ve been able to build this regulated market. We figured things out and they’ve pioneered that. I mean this was stuff that they did early on. You know these are the players. And I think, you know, we can’t forget about that. They really helped us get to where we are today, but I think looking ahead we’re looking at a really big industry.

We’re looking at an industry that’s going to scale very quickly. I mean there needs to be tools that are written really well from scratch for this business because if you don’t have tools built from scratch, you will never be able to scale them and optimize them the way that you could you know if you do it right from the get go. And so I think you know with that opportunity in mind you know Flow Hubs come along and it’s taking these great you know sensibilities that these other players have come in and said hey you know we need to track these products from seed to sale. We’ve taken that to the next level right. FlowHub says now we’re going to track these products from seed to sale and we’re going to do it so well and it’s going to be so ridiculously easy that someone can come and start working at a dispensary and within hours know exactly how to use our software. It’s incredibly simple.

And so I think you know when you compare us to kind of these players that have been around for a minute you know you’re looking at a company that’s using the latest, greatest technologies and bringing that into a package that’s just ridiculously easy to use. So we’re empowering these small business owners. I mean to run at extremely efficiency. I mean this kind of efficiency you wouldn’t typically get as a small business. You may get it at an enterprise level, but we’re giving these tools down to the smallest of growers and I think that’s really exciting. We’re going to be optimizing small businesses at incredible amounts. And so you know again it’s just like about using you know using this modern technology and kind of bringing it into the hands of these people who just want to grow weed. These guys love cannabis. That’s why they’re in this industry. They don’t love compliance, are you kidding me. You know let us take care of that. That’s what we’re here for. I mean we’re technologists. We love building this stuff. We’re also activists. We love the plant, but let us take care of all this really annoying computery stuff because we’ll do it. That’s what we love doing, and you guys love growing weed. So it’s like this kind of cool like thing right that we come together on. I think all of our clients really feel so taken care of because of that kind of thing. So I hope that answers your questions.

Matthew: It does.

Kyle: Chase do you think there’s anything we should add to that?

Chase: No I think it was perfect.

Matthew: I love the enthusiasm here guys. Now let’s dig into the nitty gritty a little bit.

Kyle: You know what, can I add one more thing? I’m so sorry to interrupt.

Matthew: Sure.

Kyle: One thing that’s so important to us at FlowHub, I don’t want to let people down something by not being able to hear this but it’s like one of the key factors that I found was customer service is number one in this business right. If you don’t have great customer service, you’re going to fail. Our industry right now, I mean, other entrepreneurs that are out there building businesses, customer service 150%. To us at FlowHub it is almost more important than our product, but our customer service is just so vital to us. I just want to make sure that everyone out there who is you know listening to this understands that how important customer service is and especially to us at FlowHub. It’s vital. So you know really whenever anyone is using our platform and they want to get a hold of us they can, and that has really been the key thing we found. You know there’s very few cannabis companies out there with fantastic customer support. You know one that comes to mind is Pax. You know they make the little Pax vaporizer. They have an incredible customer service department and I just wanted to add that.

Matthew: Yeah Pax is awesome but it’s officially just for tobacco. It’s not for anything else right?

Kyle: I know that’s what they say. It’s ridiculous you know, but I mean their customer service Matt is incredible because my Pax broke down gosh a year into using it, and they replaced it within like four days. I mean it was like I sent mine back. They overnighted me one. It was awesome. This was while I was in California and I mean that kind of customer service I mean the trust is great right. I’ve sold my friends on gosh I’ve probably sold ten of those just because of that instance of having this incredible experience with their product. So for us it’s the same way we want to offer our customers the best service possible. And it’s really just as important as your product experience.

Matthew: Now is FlowHub a hosted solution? How does it work? So just for people that don’t know hosted would mean that it would be, the application would be on FlowHub’s server versus a local client. Can you walk us through is Flowhub hosted, how does that work?

Kyle: Sure. This is a really funny conversation right because we’re kind of now coming up into a point technologically as a society where it just doesn’t make sense to house your own infrastructure. Why? Well because people put billions of dollars in infrastructure now, and then share that technology with smaller businesses and subsidize that cost across all these small businesses right. So instead of spending millions of dollars on infrastructure and building this crazy data center with our redundance we can provide incredible redundancy across the United States and across the world using a Cloud based host right. So for example we’re built on Amazon’s AWS, Twitter is built on AWs, Netflix is built on AWS. You have world class applications built on Amazon’s AWS servers. Look if Amazon goes down, the internet goes down. The internet is done right. There’s so many websites and web applications hosted on Amazon’s AWS Cloud services.

So for us it’s really important to provide super redundant servers and we keep it all in the Cloud because that ‘s where data is safest. You know people will try to tout you know hey we work off the cloud. We work on independent little servers. You know what, what is this, 1995 right. That’s not how things work anymore. It’s 2015, and we’re able to provide a way lower cost application with way more security and way more redundancy being in the Cloud. And so we’re very very proud to be a part of Amazon’s family in AWS Cloud for sure.

Matthew: Chase, the story of Intuit and the gentleman that started that he sat with his customers as they use the software for the first time to understand how they use it an how they want to use it. What kind of research is FlowHub doing to ensure that you really understand the problems and opportunities on a granular level?

Chase: Yeah definitely so the whole thing with this is like our initial customers have told us time and time again that it’s very hard to get problems they come across you know in their current systems that they’re using resolved. And many times they don’t even get, you know, any replies for weeks or maybe even months at a time. Our whole philosophy is, Kyle kind of went on earlier was you know when starting it we have to have the best customer service, the best customers overall experience and you know it’s a prime motivator for us. It’s you know parallel to as he was saying you know our end product. But you know the whole thing with us is we rarely ask ourselves what feature we believe we need to help the end user. You know our attitude has always been to work alongside a diverse clientele to ensure that the daily frustrations that everyone, you know, up the levels of a small grow to a large grow are met first before we start putting in the bells and whistles. You know this obviously kept our feature below really low, and you know we never have a confused user because it will increase productivity on the day-to-day operations ten-fold if not more and that’s more important than having a special tracker that no one’s going to use.

Matthew: Kyle and Chase you had me into the office in Denver a few months back and what you did left a lasting impression on me because I think about something called the Cone of Learning. And if you can visualize a cone at the top of it people learn in different ways but when someone tells you something you can kind of learn it. When they show you, you learn it deeper and when you’re involved in the process you learn it the deepest. And when I came into your office one of the first things you did was hand me an iPhone I believe with an exoskeleton on it and said Matt, move this plant from here to here and you didn’t give me any instruction. You just said do it and I did. I walked through doing it using a handheld device exactly as it was designed to do. What did you have me do there? How can you explain it to people that are just listening? You know they can’t see this. So tell them what we did there.

Kyle: Sure so you know it’s funny working in a grow facility and dealing with compliance and moving hundreds of plants around in a day and having to report that back to state and then report it into internal systems. You know we really early on I found there’s this huge headache and disconnect between really what tools were available and what you actually had to do right. I mean it’s pretty labor intensive tracking thousands of plants around a facility every day. I mean it really becomes you know quite the headache. And right now you know you have people because they can’t rely on their current software solutions, you know, you have people writing things down with a pen and paper and you know wheeling around desktops on carts that are plugged in with extension cables trying to figure out ways to you know log all this stuff with laser scanners.

And so we early on said you know let’s throw all that away. We need to deliver something that just makes these operations so much easier. So easy that someone like you Matt could come in right and start doing thing right away. No reading a manual or having to take webinars. We want to get rid of all that. It’s 2015. You know it’s incredible the things you can do with computers now. And so what we did is we created the Nug, and the Nug is a really cool handheld scanning device that lets you scan in you metric tags here in Colorado. So what you can do for example is in bulk say you have a room full of 500 plants that you need to move from veg to flower in a single day. You could go scan 500 tags and press move on the device and it’s going to log that move, time stamped with the particular user with their badge number that moved it.

So it’s incredible. Our transparency and the level of detail that our software goes into is incredible. And it’s just so, I mean, it is so easy anyone can do it. And we always say it’s always fun is like you know even the most medicated individuals can use our software and it’s true. We designed it for growers and cannabis users and people who are just obsessed with cannabis across the board. Everyone can use the Nug and can use FlowHub. So we’ve just made it very easy to do some of these simple tasks that use to take forever.

Matthew: It was very simple. Extremely simple. Now what’s the number one complaint you hear from perspective customers about their existing software where you’re like hey this obviously, I mean, we touched on customer service, but is there any feature or is it moving plants? Like what are the things you hear the most where it’s just like goddamn we’ve got to fix this.

Chase: Yeah so that’s a pretty easy one, but I mean the most obvious problems I mean every grower knows about it’s the loss of inventory, sometimes even gaining inventory at random. I don’t know how that really works. Consistent server crashes leaving the customers to resort to pen and paper, you know, sometimes for days losing thousands of dollars. Overall confusion you know really just navigating through the process to stay compliant I mean you know sometimes you’re going through these programs and there’s dropdowns and you can do five to ten different you know workflows or five to ten different ways that you would have never you know no one knows which one you know the right one to do so they just kind of start clicking around and hope they stay compliant.

You know look we’re over a decade into the 21st Century they shouldn’t be worried about monotonous tasks and data verification. I mean give us the computers, you know, people shouldn’t be (19.13 unclear) anymore. I mean as I said it’s a decade into the 21st Century. You know we like to think of our product acting like Siri. It’s intuitive enough to recognize what our customer is trying to do and it has rails like a railway of saying hey just go down this path. You’ll get there. You’ll stay compliant and you know you’re not going to get fined. And that’s kind of like you know our whole philosophy and we get rid of that, all those complaints pretty much right away.

Kyle: Yeah I think Chase hit it on the head. I think like the biggest complaint is like easy to use and trustworthy right. I mean like when you’re using a piece of software you want to trust that it’s working. Right now you’re recording this conversation we’re having and you’re just hoping right that your software is recording the conversation. I mean imagine doing these podcast recordings and then only maybe 80% of the time it’s actually you’re getting a full recording and the other 20% you’re just unsure. And so that’s kind of where the state right now, right, where people are not even encouraged to use their current software, even encouraged to try to take time to learn how to use it because it doesn’t even work that well anyway.

And so I think it’s all about really addressing the usability of software in general right. Chase said we’re a decade into the 21st Century here. I mean software should be dead easy to use right. I mean a grandmother can use an iPhone now. it’s incredible right. I mean Joe Schmo should be able to use a Nug and should use our web app without much training. So really it’s about making things so easy to use and the user interface is just so simple and intuitive, and it’s about creating the backend codes so that it’s guaranteed to work every time. You know our software is trustworthy. You know that it’s going to have the same output every time no matter what you throw at it right. I mean our software works and that’s what we set out to do early on is we spend that extra time developing rock solid software where a lot of other players just try to scale fast, but our platform when you use it and you seen it. It’s solid as heck. I mean it’s like, and that’s really what it’s all about for us and we’re going to evolve from here. It’s really, I’m excited about our future.

Matthew: And how do you use it besides the Nug, I mean, is it tablet, desktop? I mean how do all the people in a grow or a dispensary, how do you envision them using it apart from the Nug.

Chase: Yeah so I will kind of break it down real quick. So currently we have the IOS app which we call the Nug and really that’s just the employees that are in the garden kind of walking around. They’re not really at a computer most of the day. Then we also have the web app, and this is for inventory and compliance employees, administrators, owners, pretty much anyone that’s going to be at the desk most of the time or outside the grow. And we also actually have a view app that we’ve been creating that can be downloaded on any smartphone and the business owner or administrator can use it and just get quick stats on their grow, you know, how many more plants they can have on a license or you know how many plants are in their grow, how many are in veg, how many in flower. I mean just quick things that they can just get you know right in the palm of their hand. So that’s kind of how our system works.

Kyle: I just want to add to that just to kind of clarify for some of the listeners here, you know, you don’t have to provide your own IOS device. You know what we do with Flub is really unique, and we actually give you guys that device. So essentially what you’re getting is a Nug with an IOS device built into it. You don’t have to worry about sourcing that. We literally give that you so that headache is not yours to deal with. Again it’s all about making things dead easy. So we have the web app, our Nug which is a standalone hardware device. Again that’s one unit that we give away and then we have a review app by Flub like Chase mentioned. It’s a really powerful offering.

Matthew: So if I’m an existing cannabis cultivator and I’m like hey this FlowHub software sounds great I want to move over or migrate to it, what is integration or migration to FlowHub look like?

Kyle: You know it’s really cool. Right now we can actually sync our grower’s account with metric which the government system here in the States. So literally the onboarding process is wildly fast. Oftentimes on average we find that we’re able to set up a grow and have them off and running using our platform within three hours. People knowing exactly what to do and how to use it. It’s incredibly fast and simple to use. I mean for people that haven’t seen it yet I encourage you to reach out to us and we will absolutely give you a little demo because I’m just so excited to be able to help so many people at such a kind of a large scale.

Matthew: What about price point? Is it variant on the size of a grow or number of users? How does that work?

Chase: Yeah so we’re finalizing our exact price point now to stay competitive with our competition, but our goal from the beginning, you know, we don’t want anything to be confusing. You know the price point’s really simple. You know we try to make it as simple as possible. There’s no contracts. There’s no setup fees or necessary hardware you need to buy for it to work. You know it’s pretty much we just give you one of the Nugs and you have full access in the web app, unlimited computers, a small monthly subscription. And you know if you want another Nug, which a lot of customers will. For every thousand plants you should probably have one Nug. You can add it on for an additional monthly fee. So it’s just really simple.

Matthew: And when will FlowHub be available?

Chase: So FlowHub’s compliance and workflow accelerator, so for their grow is available now actually. You know we just released it a couple of weeks ago and our POS system will be available towards the end of the year.

Matthew: Okay. And what about geography. I imagine Colorado is ground zero and then you go out from there or how does it work?

Kyle: So you know look right now we are so focused on providing the best products for our Colorado customers. We are talking to people all over the country. I mean it’s amazing how many people have reached out to us too. They want to try our stuff, but right now we are very focused on Colorado and we are going to make everyone’s life easier here first. When we do that we can talk about moving on, but really it’s all about addressing the needs right here right now because there are a lot of them. And that’s what we’re about to do and we’re in the process of doing. So you know it’s just we’ll deal with Colorado first and we’ll go from there.

Matthew: Good plan. Now in closing how can listeners reach out to you or I should ask are you still looking for investors for FlowHub?

Kyle: To date we’re fully funded, but we’ll possibly raise capital in 2016. We’re just not 100% sure yet.

Matthew: Okay and….

Kyle: We’re getting real nosy there Matt.

Matthew: Well I got to give you guys a complement. You’re really energetic. You’ve got a lot of enthusiasm. I can tell everybody over in your office is borderline obsessed with making this successful and that’s really the place you want to be.

Kyle: I mean Matt our team is incredible. I mean we have, and one of our guys was at NASA for eight years. You know we have another that was with the Department of Defense doing software in surveillance aircrafts. I mean we have a diverse group of guys. One of our guys dropped out of a PhD economics program. I mean these guys are brilliant people and they’re also activists and people who believe that we need to make some social change happen here really as soon as possible, and they want to be part of the movement. So I mean this software is written with love. It’s written with passion. It’s written by guys who want to see change and it’s written by guys who are going to be around a long time to see this through, and it’s just… waking up in the morning Matt and coming in here and working with this incredible team is a dream come true. I mean we are doing some of the coolest stuff right now and it is an incredible experience. This is a dream come true for our entire team.

Matthew: I think you just came up with your tagline there, you know software infused with love.

Kyle: Software infused with love products, yeah, that’s it.

Matthew: Yeah love infused.

Kyle: Love infused, I love it.

Matthew: So guys please let the listeners know how they find FlowHub online.

Kyle: Surely yes. You can find us at www.flowhub.co we’re not .com. We’re .co so we’re www.flowhub.co. You can also find us on www.instagram/flowhubco, www.twitter.com/flowhubco and by the way we have some great pics of Nugs we put up there. We put pics of shatter up there. I mean we get all sorts of cool goodies from our customers. So we love posting pictures on Mass Roots. You can find us on there. We’re at FlowHub on Mass Roots. You know gosh join us on our social media it’s fun. We have a good time on there.

Matthew: One just side not there. Now I remember reading a press release or something. You have a relationship with Mass Roots. Is that something you can talk about?

Kyle: Sure I will go into it real briefly. So we’re doing some really exciting stuff with Mass Roots. Our visions are very much aligned. We both see the same things in the future. I think Mass roots has some really incredible things in the pipeline. I mean you know they are organizing a very large group of cannabis consumer. And from that there’s some pretty incredible metrics you can get and gather. And we can deliver some really incredible metrics back to business owners. What we’re developing with them is going to be really exciting. I cannot wait to show you what we do with them. We will have more on that in the coming months, but it’s going to be really exciting and retailers and grow owners are going to be very excited about some of the stuff we have to offer them here in the near future.

Matthew: Awesome. Kyle and Chase thanks for being on CannaInsider today. Again everybody that’s www.flowhub.co you can find them at and you can hear the energy and enthusiasm over there. It’s a crazy party and I wish you guys all the success in the world. Thanks for coming on.

Chase: Thanks so much Matt.

Kyle: Thank you so much Matt this has been a pleasure. Really appreciate it.

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