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Learn how Natasha Irizarry risked it all to ditch the rat race and move to Colorado for her cannabis accessory subscription business StashBox.
Learn more at:
[0:56] – What is Stash Box
[1:12] – Natasha’s background
[11:40] – How big is Stash Box
[12:49] – Natasha talks about transferring her corporate skills to Stash Box
[14:05] – How do you choose who to market to
[16:29] – What are the most popular products
[19:39] – Natasha talks about keep customers engaged and excited about Stash Box
[24:07] – Natasha’s advice on raising capital
[29:34] – Natasha talks about what she would do differently if given the chance
[32:06] – Natasha answers some personal development questions
[36:51] – Contact details for Stash Box
What are the five trends disrupting the cannabis industry right now?Find out with your free cheat sheet at https://www.cannainsider.com/trends
Today we’re going to hear from an entrepreneur that builds her cannabis related business despite many obstacles and challenges and successfully transferred her skills from the non-cannabis world to the cannabis world. I’m pleased to welcome Natasha Irizarry, Co-founder and CEO of Stash Box to the show today. Natasha, welcome to CannaInsider.
Natasha: Hey Matt. Thanks for having me.
Matthew: Give us a sense of geography. Where are you in the world today?
Natasha: Today I’m in Denver.
Matthew: Okay, but that might change at any moment.
Matthew: What is Stash Box? Give us a very high level summary of what Stash Box is.
Natasha: Stash Box is a monthly subscription box that matches cannabis consumers with products and brands that they’ll love.
Matthew: What were you doing before Stash Box and what made you start this company?
Natasha: Man, I guess before Stash Box I don’t know. The last thing I really remember is high school, which is crazy. So, high school happened, and then I had to grow up quick. I had five little sisters. I was the oldest girl. I wanted to rebel. So, around the time I was 22 I got pregnant, had my first kid, and said to myself, can’t be a bartender forever. I was doing some graphic design stuff on the side, and decided to go for a more corporate role in financial services as a designer.
I got to jump into my web design and user experience career, which is what I did before this, at a senior level and I was very fortunate to be able to work my way up through some different financial services companies with some of the best user experience teams in the country. After that, I had a couple more kids. I went and worked at O.K. Cupid in New York City as a product designer around monetization and data. Then my mom got sick. Well, my mom had been sick so I left O.K. Cupid, went back to Charlotte eventually. And all while I was doing that, I was starting this little side hustle with my ex-boyfriend D.J., who’s my co-founder.
That’s how Stash Box was born. We were kind of lonely. We didn’t have very many friends, but we had a lot of knowledge about weed products for some reason, probably because we smoked weed. Then we were just thinking why don’t we use what we know in user experience and design and product development and bring that to the cannabis industry. So, Stash Box was born. In May 2015 we shipped out our first boxes. I moved back to Charlotte in July of that year.
Then the cannabis startup world is the only thing on my mind. I’m following every. I read Steve DeAngelo’s book. I’m reading everyone’s blogs. I completely immerse myself into the cannabis industry. At the time I was a writer on Fivver. So I would spend my time writing $5 articles. It took forever. Keep in mind this is completely (4.08 unclear). It took forever, but what it did is it allowed me to learn about the industry as fast as I could because I was doing all of this cannabis writing for all these ramp companies. Then I applied to Canopy Boulder.
I was hesitant because in the cohort right before me. There was another subscription box, Ganja Boxes. I don’t know if they ever had a box, but they were in the cohort right before me. I was gonna apply. I was gonna apply to that cohort, but I didn’t because I wanted to move home to be closer to my mom and my family. So, I wait, and I’m like, you know what? I’m just going to try to build my company up to be the best that it can be, to make it so that Canopy really can’t say no to me. I want them to want me to be a part of their portfolio because I know that I’m gonna figure this out, so I applied.
I was like, I don’t care if the competitor was in the thing before. I don’t care. I love my competitors. Let’s merge. So, I apply and I’m waiting and I’m waiting and Christmas passes and the cohorts start at the end of February and I’m freaking out. I’m like, oh my god. What the hell’s gonna happen. I’m packing all these boxes. I’m in my apartment packing up all these boxes with D.J. They’re Christmas boxes and D.J. forgets to put the inserts in the box and we had gift wrapped them. So, we had to unwrap them all and rewrap them, which is fine. Lesson learned.
I’m like damn, I really want to focus on building the business part of this. I really hope Canopy gets a hold of me. Then Christmas passes, then New Year’s passes, then I’m like you know what? I’m just gonna email them. So, I started emailing and poking at them and checking the platform for Canopy. I’m checking every hour. Come on you guys, you’re killing me. I have three kids. I have to move my whole life and time’s a ticking. But at the same time I’m working for Allstate leading a redesign. This $8 million project redesign. I’m working full time on top of Stash Box and my kids.
So, we’re in January and it’s like mid-January and I’m hanging out with D.J. one night and my dad calls me and he’s like, hey your mom just died. I’m like, fuck. I’m sorry, can you believe that?
Matthew: That’s okay we’ll leave it on there. It’s real.
Natasha: I’m like oh my god. So it’s [9:30] at night. My dealer had just come by and got me my weed, and I had rolled two joints and I was about to take a bubble because it was a really hard day. I think I had my head shots or something that day and it’s always stressful. That shit’s always stressful. I’m like, oh my god. So, I leave D.J. at our apartment with my kids and I go to my parents’ house and it’s night. It was awful. It’s awful. Just letting you know, it’s two years ago to the day almost. January 12th was her deathaversary, as I call it.
Matthew: I’m sorry to hear that.
Natasha: This is something that has changed me so much and I think for the better. So, I get to my mom’s house, and keep in mind I have all these sisters. I have five little sisters. My mom died of an accidental opioid overdose. It’s a real thing. It’s a real problem. And she also had interim COPD and emphysema, but a couple days before that my grandma had died, her mom, so, it was like a double whammy to our family. I’m basically emotionally crippled. I can’t do anything. I can’t get out of bed. I come from a really close family. Anyone that knows me knows. I brought my whole family into this industry.
My dad is the head of distribution here (8.44 unclear). I bought 14 people to Denver. It was a big thing. So, I’m like, I looked at D.J. and we have got to find out about Canopy. I emailed Canopy a pretty firm email. I was like, D.J. we can’t tell them my mom just died. We can’t tell them. That’s a risk. We cannot tell them. A couple days later we find out that we made it in, and I’m pretty sure I had video. I recorded some videos of this. We got in and I just remember looking at D.J. and being like, I don’t know how I’m going to do this because my mom just died, I’m the oldest girl. I have to move away from my whole family and everything I know to come to Boulder in winter.
We do it. Three weeks, I tell my dad, I’ve got to move to Colorado. I need your help. I tell my children’s fathers, I need your help and all of my extended family, I really need your help. They have all been the best support I’ve ever had. I’m so lucky, because of them I was able to move across the country and go to Canopy and go through Canopy. In Canopy I was working full time. I can’t tell Canopy that I’m working full time for Allstate leading redesign, and I can’t tell Canopy that my mom just died.
Pitch practices for Canopy were on Tuesdays night and my mom died on a Tuesdays night. Every Tuesday I was just fucked. The whole cohort will laugh after they hear this. They would laugh because I’m talking I would in full on dramatic tears, and they had no idea because I didn’t want to risk it. We started getting really close with Mason at Canopy. He was in our cohort with We Grow and we were there all day and all night. We had so much fun. We were building our companies, hustling, being entrepreneurs. It was fantastic. Because of that, you know the Canopy story, you build relationships. You get funding and then you go. Long story short.
Matthew: Let’s get a sense of how big Stash Box is now. How many employees you have, how many customers you serve and things like that.
Natasha: We have five employees now. Six if you count part-time. I’ve actually learned a ton in the last two and a half years, which is because mostly Canopy and my hustle. So, we have five employees at Stash Box. And we have thousands of customers. We are partnering with brands as well as consumers. So, we are now able to take what we’ve learned, data-wise, in our company and we’re able to provide brand solutions based on that data.
Matthew: You mentioned working at O.K. Cupid, which is a dating site right? Okay, you have O.K. Cupid. You’re pretty involved in UX design. How do translate those skills over to Stash Box for optimal effect?
Natasha: It’s all the same. It’s the same in cannabis and Stash Box as it is at O.K. Cupid, as it is at any of the financial services places I worked, the same as AllState. It’s about people. When you think about cannabis consumers, try to think about the demographic of a cannabis consumer. I think that that is becoming a real problem for startups and other businesses in this industry is that if the demographic for cannabis consumers, everybody, then how do we find and penetrate the right target market?
Matthew: That’s a tricky thing. How do you figure out who… do you have an idea who your customers are and then sometimes they’re different than you thought or there’s more than one group and how do you speak to them each individually? How do you go about doing that? How do you go about creating an experience with the box that you feel like delights each of these demographics or the primary demographic?
Natasha: We ask them questions. So, we ask our customers, so our Stash Box subscribers, questions about their lifestyle. Now, depending upon how they answer these questions, they’re matched up with products and brands. So, if we learn that there is a 28 year old woman who consumes daily, and let’s say she’s fairly active on social. We’re gonna send her feminist related products like there’s these vagina rolling papers that are coming out. That would be perfect. We would send her a black bath bomb that has CBD in it. It’s endless the things that we would be able to send her based on this lifestyle data that we get.
Because of how she’s answering these questions, we can go to brands in any industry, not just cannabis, and say, we have this person who would be perfect for your product and she’s active on social. She talks about the substance she gets in her box. She comes back and she rates and reviews. So, because of all this, this is all data, I just know how to take that data and keep applying it to my product because that’s my background. That’s what I did at O.K. Cupid. That’s what I did basically everywhere I worked is analyze data, look for the outliers. Whoa, that’s interesting, that’s an interesting fact. And test it. If it’s a web app, build interfaces. If it’s a retail location, move your store around. There’s a lot of different things that you can do to test based on the data that we have.
Matthew: Is there any products that seem to be consistently popular across the board?
Natasha: We recently changed how our subscribers build their box. Before the box was $30 a month. They paid $30. They got a variety of stuff that we picked for them. Now subscribers can subscribe for as low as $1 per month. They build their box based on different price points of a box. So, they can choose from a few dollar items. Each price set has a mystery item. We’re able to do all these tests. Funny enough the things that are performing the best are hot sauce.
We’re the only people who sell this hot sauce called Pot Sauce. It’s not medicated. It isn’t just delicious. A detox company makes it. I think it’s great. Our subscribers love it. We actually have a subscriber that got pregnant that comes back to buy this from us. She emailed us and she was like, I have to unsubscribe to your box, but… I’m like you know what? Absolutely. Here’s a discount. Yeah, so we’re able to find these things, like a hot sauce. So, what we’re learning, people who smoke weed like to eat and they like to cook. They go hand in hand.
So, we’re able to go back to brands like the Pot Sauce and any food brand and say, we have these people who are really active on the munchies. The (Scrup) Waffle was another big hit. It’s like this little waffle, wafer, sweet treat. It’s so good. I think you can get them at Whole Foods. The brand that we had is Belgium Boys. I know that on some maybe United Flights or something you’ll get a (Scrup) Waffle. Belgium Boys is the brand that we had, and they are so good. They are so good. I am guilty. I probably ate a whole box of them.
Matthew: I got to find these now. Sounds like a good little munchies.
Natasha: The munchies are our popular items.
Matthew: This is an interesting business you’re in. I mean, there’s a lot of businesses or business owners listening they’re like gosh, I wish I had a subscription box. It’s the best business to be in. When it’s going well I’m sure it is, and then other times there’s attrition and you’re losing people and you’re like, gosh how do I keep people engaged and how do I have retention. How do you create that surprise and delight and what are you trying to do to keep retention and keep people engage? That surprise item sounds like a good way to do things. Is there anything else that you do?
Natasha: We kind of theme each box each month. I have a designer on staff. Her name is Jamie. Known her for ten years, plus. She designs each box every month. Every month we sit down and we’re like, how would this feel? How do we want people to feel when they open the Stash Box? We start there. For person, you know, you can’t make everyone happy and we don’t. We don’t make everyone happy. But we eventually do, because if someone were to reach out to use and say, I’m unsatisfied with your product, then we’re going to go through the steps that it takes to figure out… we want to learn how we can make them satisfied with our product. A few times we’ve run into fulfillment issues because we did fulfillment in house. So, to resolve that we’re outsourcing fulfillment and it’s so good.
Matthew: Is there companies that do that? Just pack and ship type… pick, pack and ship. Is that what it’s called?
Natasha: They do fulfillment for Walmart. They were like we’re looking at cannabis companies. And I get a lot of calls like that. We’re looking at cannabis companies and we want to test the waters with yours. Because we’re not a cannabis company. We don’t ship cannabis. We ship ancillary products, accessories, gifts, gift items, munchies. Nothing with cannabis in it. So, we’re like a safe spot for these brands. I’ve read a lot about a few distributors getting raided because of paraphanalia. So, it’s actually kind of comforting that these bigger companies that work with companies like Walmart are willing to work with companies like mine because it kind of broadens my dream for my exit.
Matthew: Where are you in the investing process or the capital raising process? Do you have multiple investors or bootstrap? How does that work?
Natasha: I got our initial investment through Canopy Boulder. So they invested $20,000. And then we went through Canopy Boulder. I met privately an investor who fulfilled our pre-seed round of $150,000. Then that same investor fulfilled our seed round in November of that year with a million dollars. Now we are still using that million dollars to keep our company going. So, I would say that we’re bootstrapping, but it’s not technically bootstrapping.
Matthew: You don’t think you’re bootstrapping.
Matthew: So, you say you had one investor that like what he or she saw and then just continued to invest more. So, that’s a good sign.
Natasha: He’s fantastic. He’s invested in a few more ancillary brands. We were looking at raising a Series A. I’m thinking maybe this time next year. I have a lot of things I need to polish up. The process of grief in my mom has really taken a toll on me as an entrepreneur. I didn’t have the ability to focus. Now time has passed and therapy has passed so the ability to focus is there now so that’s good.
Matthew: Is there any advice entrepreneurs or would be entrepreneurs listening that are saying hey I’d like to raise capital? What kind of questions do investors ask, and how should I be prepared?
Natasha: Investors ask… you can’t really predict it.
Matthew: Yeah, they’re probably all different.
Natasha: There’s a lot of different kinds of investors. There’s the investors that want to know the return. There’s the investors that want to know your financials. There’s the investors that are going to go through every little piece in your history. And then there’s the investors that are going to meet you and say, I can tell just by meeting you that you’re somebody that’s worth investing in, and you’re going to get it done. I think it’s worth waiting for the right investor for you.
I was never comfortable with the financials. I needed to go and get outside help with financials and that’s fine. I know product is not in development like really really well. So, probably just as good as somebody who knows financials though. So, being able to hang on and keep moving forward through the hard parts, because it’s gonna get hard. You’re going to run out of money. Your employees are going to quit. Crazy things are going to happen. Just be ready to expect them because what investors are looking for is someone who can take whatever and make it more. So, just keep taking shitty things that happen to you and make them more.
It takes a lot of discipline. I was reading something the other day. This company did a survey of 1,000 entrepreneurs about what makes them successful. In it, it said that entrepreneurs spend 25 percent of the their time by themselves and that’s a lot of time. I feel like when I first really dove into startup and Canopy and stuff like that the feeling that I felt more than anything, especially without my mom, was loneliness. Many things stem from loneliness, addiction especially, alcoholisms. These things stem from loneliness and as entrepreneurs if we can kind of hack ourselves, that 25 percent of time that we have alone is so precious. It’s our solitude. That’s our 25 percent to make whatever magic we can in our company magic. So, we should take that 25 percent and not feel guilty about spending it on work. I guess that’s what I would have to say. This shit’s hard, it’s hard, but it’s fun. It’s going to be okay if you just stick with it and you stay true to yourself.
Matthew: Yeah, and there’s really no rules. That’s kind of hard for people that are like I need a direction. I need someone to provide me direction. There’s some from a mentor or something like that, but mostly it’s on your own just trying to make things work, finding ways that’s going down path that aren’t well paved and just figuring it out. You have a high McGyver, as I call it, which is just kind of putting it together with duct tape and a fishing line and dental floss and a piece of gum. Let’s try this, now let’s try this, now let’s try this.
Natasha: It’s funny that you say that because it takes a certain kind of person. I think anyone can do it. Honestly I think anybody can do this. But I’m going to have to disagree with you. I think that there are rules and it’s the hardest rules. As an entrepreneur, as somebody especially in the cannabis industry, you have to always do what’s right, and sometimes doing what’s right is the hardest thing in the world. That builds your character. I feel like in the cannabis industry especially, what makes it different from the tech industry that I was in before is that everyone has had to deal with the black market. So, everyone’s had to build these relationships and kind of prove themselves to be a decent human. I just think that if you’re good and you do good and if you fuck up, you own up to it. You just do what’s right then you’ll be fine.
Matthew: Now if you could wave a magic and start your business all over again, what would you do differently and what would you still do the same?
Natasha: I think that I would do fulfillment way sooner. I would outsource it way sooner for sure, hands down. It’s so funny because Mark (Nautally), who’s a partner at Canopy Boulder, he would always just hound me about logistics. He’s one of my mentors. I talk to him weekly. He was like, how are you going to handle this. I’m like, I just am. I was so naïve. He was laughing at me basically. He was like, Natasha, no. So, lesson learned, lesson learned, Mark Nautally and he knows he was right. I would have definitely have done it sooner. The same, I think that I would… there’s so many things that I would do the same, but what do I want to say? I would definitely say that I would have raised the same way.
Matthew: Would you name your company the same? Would you keep it in the same location?
Natasha: Yeah, Denver is cold. It’s freezing outside right now. It’s colder than Charlotte. I really like the industry here in Colorado and I think that Denver’s great. Yeah, I’d keep that stuff the same. I’d keep a lot of it the same. I’ve learned so much so fast. I can’t complain.
Matthew: Natasha, I’d like to ask a couple personal development questions to help listeners get a sense of who you are personally, although you’ve shared quite a bit about who you are personally. So, that’s good to get that color and context around that because a lot of times there’s just this kind of gloss over and then my business was successful. It’s like, what was that blah, blah, blah part and you gave us a lot of color around that and I appreciate that honesty. Is there a book that has had a big impact on your life or way of thinking that you’d like to share?
Natasha: I read four books a week. I would say the one that has stuck out to me the most, gosh, I’m going to go with some nonfiction here. Originals is a really good book. Originals is really good.
Matthew: Yes, I’ve heard of that. What did you like about that?
Natasha: It just tells you the no bullshit way of all the things, all the disciplines that you have to have and how other people in history have had those same things and how the feelings that you feel, you’re not alone. So, that’s a really good book. Actually Mason still has that book of mine. Yeah.
Matthew: Mason Levy if you’re listening can you get that book back to Natasha please.
Natasha: He knows. I would say another, and this is a really good way, if you’re like oh my god I have no idea what the hell I’m doing with my company, this is a good way to figure it out. It’s a book called Traction. And old employee of mine told me about this book and it changed who I was as a manager and as a leader in my company because that transition of funding and hiring people, it’s hard to have employees. It’s so hard. This book really helps you. It’s like a no bullshit easy read. It’s good.
Matthew: Is there a tool, web-based or otherwise, that you consider vital to your productivity?
Natasha: I would say my planner and my schedule is vital to my productivity. I would also say that my self care is vital to my productivity. So, if I don’t workout and I don’t write, if I don’t do those things with that, 25 percent of my time is spent alone. If I don’t take that time doing something that keeps my mind completely busy, then I don’t feel like I’m very productive.
Matthew: Is there any tools that you use to kind of digest the data that you’re acquiring about customers or demographics or any tools you use for quick mockups or user interface design and things like that?
Natasha: For the data stuff I use Excel. I’ve been messing with some Google stuff a little more. I’m having some fun with Google Sheets, but if you really want to have some fun, go play with Google Data Studio. It’s super easy. You can sync up your Google Analytics to it and you can just mess with and see what kind of data you can pull out. It’s really fun. Another app I use for data is (35.22 unclear). It’s a lot of manual work still. So, there’s a lot of MySQL commands and some code that goes into it. One the UI/development side, I would say for design I use a mixture of Adobe Creative Suite and an app called Sketch. Sketch is a math-based app that is pretty cheap, and I say it’s for UI based things. So, if you an entrepreneur and you want to do quick mockups, I would get Sketch, if you have a Mac.
And there’s a web-based tool called Invision. That is great for showing off prototypes. So, if you do your mockups in Sketch, you can automatically sync it with Invision and you can create tapable and interactive mockups. So, if you’re building an app and you don’t want to code it but you have some mockups done, you can make it easy to demo that way. So, there’s a few tools.
Matthew: Okay. Well, Natasha as we close, how can listeners learn more about Stash Box and find you online?
Natasha: Well, we’re all over social. Instagram is @getstashbox and our url is www.getstashbox.com. I try to tell people to not forget the get because if they go to www.stashbox.com they’re going to meet Stash Box the band, which I love.
Matthew: Wait a second, I know I know one of their songs. I’m thinking of Matchbox. I ruined it. What does Stash Box the band sing? Any songs we recognize?
Natasha: They’re a small band from Florida. So, no.
Matthew: Well, Natasha thanks so much for coming on the show today and good luck with everything you’re working on in 2018. We wish you the best.
Peter Saavedra from Soil Balance Pro educates us on the incredible impact bacteria have on your cannabis plants.
Did you know that terpenes are created from the feces of bacteria? Learn more in this fascinating episode.
Learn more at
[1:08] – Peter talks about his businesses
[1:57] – Peter’s background
[2:49] – The underappreciated microorganism
[5:18] – Setting up bacteria processes
[7:34] – Peter talks about Compost T
[10:45] – Peter talks about how bacteria affects terpenes
[17:26] – Getting the right combination of bacteria
[20:53] – How humidity affects different bacteria
[23:16] – What are microbes
[27:12] – Top reasons people use Soil Balance Pro
[30:28] – Peter answers some personal development questions
[33:46] – Contact details for Soil Balance Pro
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In everyday life we often place the most importance on things we can see, feel and touch, but what if one of the most important factors to creating healthy cannabis plants is something we can’t see. That is why I’ve asked Peter Saavedra on the show today to discuss bacteria and microorganisms and how they impact cannabis. Peter, welcome to CannaInsider.
Peter: Matt thank you so much. I’m grateful to be here.
Matthew: Give us a sense of geography. Where are you in the world today?
Peter: Today we… our company kind of roots is in Phoenix, Arizona. So we’re in the southwest. We’re not getting hit by the cold too much.
Matthew: Yeah, gosh it’s brutal out there. Tell me more about your business Soil Balance Pro, Kind Roots and whatever else you have going on.
Peter: Well the product itself, Soil Balance, is a wetable powder and it contains over 60 proprietary strains of Rhizobacteria or actinomycetes. So, we’ve collected all these different microorganism strains from around the world. The product also contains strains of commonly found microorganisms like bacillus subtilis, trichoderma and we have 12 species of VAM and ectomycorrhizal symbionts.
Matthew: Wow that’s a lot of science there that you threw out. We’re going to have to unpack that in a second, but tell us a little bit about your background first and what made you start Soil Balance Pro and go down this road of micronutrients?
Peter: Thank you for that questions. I’m a sustainable agriculture consultant. I consider myself a soil specialist. I’ve been studying soil microbiology, soil physics, soil chemistry for the last 20 years with some of the most renowned organic cultivators in the world. I’ve been working for a long time to help make USDA organic what it is today and get that traction and help these guys really be able to cultivate with nature. That’s a little bit about me.
Matthew: Let’s kind of set the stage and frame your knowledge here. What are most cultivators and cannabis enthusiast not fully appreciating about bacteria, microorganisms and how that affects their plants?
Peter: That’s a really good question. To break it down, to actually give people some insight as to microorganisms and what maybe some cannabis cultivators are undervaluing about what these guys can do for their systems is to really look at the microorganisms themselves as givers and takers. So, if we can isolate the microbial world into that fashion it will help us really understand how important these guys are. Let’s take a look at the takers.
People call then pathogens. The takers, what those guys do, is they actually will just take from the plant so that their needs are met, so that they’re fed and they have no repercussions of the health of the plant. They’re just simply this organism that’s there that is constantly trying to feed themselves and their offspring so that they’re sustained and that they’re healthy. They have no repercussions, again, for the total system so the plants begins to die because those organisms are starting to take so much just for themselves so that they’re alive.
The givers, adversely, they understand that their long term survival and that of their species is contingent on what they can give, what they can create for not only themselves but to keep that plant healthy because they understand the longer that plant’s alive, the longer that they’re going to survive. So they understand that the more they give, the more they’re taking care of their future species and those yet to come. I think the biggest thing that cannabis cultivators can decipher in that message is that if we’re able to utilize what’s naturally within us as humans to give to the plant and give them the correct life and give them the correct biology, that’s going to ensure a healthier, a more productive, nutrient dense commodity and medicine that they’re giving to the community.
Matthew: A cultivator they are saying wow this is important. I need bacteria, the right kind of bacteria for my plants, but how do I get it? How do I go about setting a processes to make sure that I’m getting the proper bacteria in the proper amounts in the proper spectrums? How does that occur?
Peter: That’s been the challenge for most cannabis cultivators and just growers period throughout history. The advancement of bioproducts in this industry has been in a holding pattern for so long because of the proven efficacy of their chemical counterparts. We’ve got the advancement of all these MPK and nutrient products and those are great, but to actually quantify the correct strains that are necessary, the correct strains that have co-evolved with this plant in nature to keep that system healthy has not necessarily been quantified as of yet by modern day science.
So, growers are now realizing if I grow organically, I’m going to get a much denser smell because my bacteria is at higher levels. So, that’s kind of what we’ve done with Soil Balance. We’ve tried to take guesswork out of which strains that this particular plant necessitates. Because all plants have co-evolved with microorganisms in their natural habitat. Just like humans have co-evolved with our microorganisms in our digestive system. When we take that plant out of its indigenous soil or its indigenous environment recreating that biology has been a big challenge for cultivators or growers around the world. So, people have tried to do it with Compost T and different microbial inoculants, but again the advancement within the industry has been a little bit behind.
So, what we’ve done is we’ve started to look at microbial combinations. I think that’s where the industry needs to begin, to be honest, is not looking at what a microorganism can do on its own, but what they produce in combination that will make them effective.
Matthew: I’m somewhat familiar with Compost T. That’s where you take different kinds of soil and organic materials, put it in a bucket of water and then add oxygen bubbles to it. Is that correct? Can you describe what the benefits of that is and if you think that’s a good idea.
Peter: There’s pros and cons to that. Obviously I’m a big fan of compost. That’s what I’ve been doing for a lot of years and making a quality humus compost is important, an aerobically produced compost. But as in all natural mediums one of the disadvantages to compost is that… I wouldn’t say it’s a disadvantage but it’s a part of the natural system. You have givers and takers in those mediums. So, sometimes if a compost is not completely decomposed, and I’m a compost master and I can’t get compost to be completely decomposed, so you’re going to have pockets within the soil aggregates of anaerobic or pathogenic organisms.
So, sometimes when you brew that you could be incorporating strains of powdery and downy mildew, bultritus, (8.25 unclear), pithium, all the bad organisms that are in that natural soil system and you could by putting sugars and stuff in it, you could be increasing a cold. So that’s how some people by trying to do the right thing and put good organisms in there could actually be hurting their crop unbeknownst to them. And sometimes not, depending on how that person creates their Compost T which can take a lot of work to do it correctly with the proper aeration, with the proper food sources and most importantly the proper materials. It can be a huge advantage to the crop.
So, you really have to educate yourself on the proper way to inoculate. So, what we’ve kind of done with Soil Balance is take out all those pathogens and just isolate all the beneficial so that that scenario is eliminated from the cultivation practice. And that’s what a lot of these microbial companies have done. They’re just taking the good ones so that way people aren’t unpurposefully infecting their crop.
Matthew: Right, so if done wrong, you could be multiplying the thing you don’t want so you got to make sure you do this in the right way. But you can’t ever entirely eliminate pathogens can you? You can just minimize them to the smallest effect possible. Is that right?
Peter: Yeah that’s exactly right. Scientifically speaking the pathogens are a natural part of nature. There’s just gonna be pathogens in all natural mediums. So, what the idea is is to get those colonies to subclinical levels. So, what that means is getting those pathogens to a point where they can’t really gain traction or they can’t really gain competency. And how you do that is by over populating them with the good guys.
Matthew: Okay that makes sense. There’s a lot of talk about terpenes and everybody wants to understand terpenes better and terpene development. First can you remind listeners what terpenes are and then second how bacteria affect terpene development?
Peter: Terpenes are a compound that is found inside to the trichome, which is the frost. For those who don’t know what a trichome is it’s kind of like the white frost that develops on the outside of the flower. The terpenes are actually responsible for the plant smell, the plant’s flavor. In some ways I think that they are… there’s the terpenes. There’s phenyl and flavonoids production that’s in that compound. Terpenes are also what gives the plant its efficacy in helping people as well. They’re a pretty unique compound.
The soil balance probiotics, the organisms that are unique to our product they produce a plethora of metabolites. So these organisms that I’m talking about they produce a bunch of what are called secondary metabolites. I think I should explain that first before I go any deeper. So a secondary metabolite from an microorganism is kind of like an earthwork casting. So a microorganism will eat something and then its waste gets turned into what’s called a humus and it can be all kinds of different things. So different microorganisms can create different types of water secondary metabolites.
Some people call it waste. Some people call it micro pee or poo. It could be thought of it in that way, right. So it’s that little single celled organism’s waste. So what our organisms do, the combination of them, they produce a variation of these metabolites. Not only in the soil but on the root surface or what’s called the rhizosphere. This is how we create terpenes. So, among all the compounds we produce three plant hormones and those are called indoleacetic acid, nafolinic acid and gibberellic acid. So these are hormones, right. And these plant hormones are then taken up by the plant root and transferred throughout the root, the stem, the leaves and the flowers.
The probiotic microbes found in Soil Balance produce compounds that stimulate the natural production of plant protective phytoalexins or terpenes. So, to make that really simple, that was pretty heavy technical stuff. So, what this means for example on cannabis sativa, the probiotic microbes push the plant to produce homes and secondary metabolites that stimulate and increase the THC synthase enzyme and CBD synthase enzyme. These are the natural enzymes found in all cannabis plants that produce the oils and the terpenes. So essentially your CBD and your THC are being produced by the plant and inside that those secondary metabolites, which that plant is producing, is from your terpenes.
To kind of go off on a little bit about what the Soil Balance is doing. In our extensive field data from this 2017 season we unequivocally established that the addition of bacteria or soil balance increased and stimulated all of these biochemical pathways and the hormonal effect grew the Soil Balance plants by 40 percent larger than the non-treated plants. So the flowering heads actually contained more oil bearing trichomes. And so not only will microorganisms increase the plant’s defense mechanism, but the correct biology can do what fertilizer is doing too. It can help the plant grow much larger.
Matthew: That’s fascinating. So, getting these microorganisms and bacteria in the right proportions, the right amount is essentially like giving the proper environment and fuel for the plant to get as full as possible expression.
Peter: Yeah that’s absolutely on point. And with genetic expression, that’s an interesting statement that you made. Because, for instance, a hemp plant. A hemp plant is genetically predisposed to produce low THC and high CBD output, versus a female plant which could be genetically predisposed to produce higher THC than CBD content. So, what microorganisms are proving is that again the one specific to Soil Balance that we’ve isolated, they are reducing THC in hemp plants and increasing CBD oil exponentially by over 40 percent, we’ve found.
Then in the female plants we’re seeing THC levels of 30 percent. Much higher than the average THC level that you’d find in maybe a 20 percent plant. But we’re also seeing a much higher terpene percentage in the female plants than some of the male plants as well. So, it’s just a unique thing that yeah the microorganisms allow that plant to really hit its full genetic potential.
Matthew: So, let’s say I’m a cultivation company, maybe a business owner actually a cultivator or both listening to this. What are the first steps they should take to ensure they get a broad spectrum of bacteria that’s going to help their plants?
Peter: Again, yeah, that’s a good question. I would say bacterial combinations, I don’t want to say that we’re the only company right out right now that’s looking at different microbial combinations, but one of the things that I think is there’s so many different ideas and concepts around how to properly get the correct biology. First off, if you’re growing medium doesn’t have the right strains, adding the right food or molasses or this or that is never going to inoculate or increase strains that were never there in the first place. So, you really have to find products or different microbial inoculants, amendments at have a diversity of different strains.
Again adding in compost, if you’re very careful, can be a good thing. Adding strains from crop residue, which microbial strains that live on the leaves or animal feces, microbial strains that live in an animal’s intestines are not going to be as conducive to your root development as maybe strains that you can get from natural soil. So, I hope that what people begin to do is where we started 20 years ago and start isolating strains of microorganisms that live on the roots of plants. That’s a whole technique in and of itself to be able to take these isolates and them play together nicely and put them into a stable form. That’s what we have done with Soil Balance. There’s a lot of good microbial inoculants out there.
You want find those products that are regenerative on the rhizosphere and that’s been one of the caveats with microbial inoculation to this point and why a lot of growers say that they don’t see any efficacy with these types of products is because a lot of the strains that they’re putting in, like from and animal intestine, are not going to survive in that harsh environment so they need to keep continually reinnoculate. Whereas a Soil Balance product, type of product, you’re going to actually have regenerative microbes that will reproduce on the root because that’s what they were born to do. They live and sustain their community on that rhizosphere.
So for somebody to do it on their own they’re going to have to really set up the right laboratories to isolate these strains or they can get some soil balance. There’s some other really good products out there that are kind of cutting edge. So, I would say combining those and really seeing how that effects your total system is going to be appropriate at this stage to enhance the quality. As we’ve now found quality, smell and whatnot in the cannabis plant is indicative to the diversity of your biology. So, it’s an important part of the system if you want to redefine your industry with quality.
Matthew: What about a grower, let’s say in Washington State, versus a grower in Nevada? One is a very dry climate and one is a very humid climate. Do they have to look at different strains of bacteria to deliver to their plants or is it roughly the same independent of the humidity of the environment.
Peter: That’s a really good question. That will kind of take you into the land race conversation. If you look at native plants in Africa or different areas of the world. The organisms that they have naturally co-evolved with proliferate and regenerate at certain timeframes. So, let’s say if you take that same strain and you plant it in… you take it from Africa and you plant it in Washington, the strains in that particular soil are going to be different than it’s naturally used to to produce the same type of terpenes that it needs.
So, to quantify that at this time with the advancement of our capabilities and technologies right now, there’s a lot of people out there that are kind of diving into this, but it’s still so underdeveloped to be able to again quantify the actual strains necessary for that particular plant strain in that agro ecosystem. Because some of the strains that it necessitates to produce limiting a certain terpene that that strain needs might not be there in the soil and that’s really how it’s going to produce a high amount of lemmining. Now the seed itself will contain a lot of the biology that particular plant needs in it as it grows, which is how those terpenes are created in the first place, but again having the correct strains in the soil to kind of signal that plant hormonally to create the correct terpenes is something that we’ve had a breakthrough on and we hope that others will follow that suit and really try and find the correct microbial combinations to get the best cannabis plants for our patients.
Matthew: Now we’ve discussed bacteria in depth here and I feel like we probably want to just take a step back and just discuss what microbes are exactly, because most people listen, like myself I feel like I’ve memorized this term in high school chemistry or biology, but I just don’t exactly remember exactly what microbes mean and why they’re important. Can you rewind there and tell us what microbes are?
Peter: Yeah, and it’s funny that you say that. The connotation that most people get when they hear about biology or microbiology they’re like, oh man I got a C in that in high school and it sucked and I don’t want to go back to it. I don’t even want to know about that stuff. So, it has this real bad connotation to it from our youth being forced to sit at a desk and learn biology that we had no idea what the hell they were talking about with all these different terminologies and stuff, but to kind of take you on a journey with that microorganisms are just this whole unseen world that encumber almost everything that we touch that we are.
If you think about life force, the vital life force that has created us and created so much of our world on this planet that we’re on, a lot of it is due to microorganisms which are a single celled living organism with a consciousness and the ability to do things on their own. Just like we have the ability as humans to tune into the energies of this world and all the different frequencies that come through us, so too do these living organisms that we can’t see. And because we can’t see them, we think that they’re not there. It’s interesting, even 100 years ago doctors didn’t believe that bacteria could transfer from one human to another. I mean, that’s how recent this whole idea of biology is to our world, but microorganism live on our skin. They live in our mouth. They live on us. We are filled with, I think, seven pounds of bacteria.
A lot of our bacteria is very similar, believe it or not, to the soil. So the soil has so many different types of strains and that’s where we found all of our strains is from naturally occurring soils in different parts of the world. So if you think about it, human beings and soil have very very similar bacterias. So, if we continually decide to kill that bacteria within ourselves, within our soil, that these microorganisms that are so important that are creating all these, what I talked about earlier, the secondary metabolites, which is what a microorganism does. That’s why they’re there. They’re there to take care of us. They’re there for our immunity. They’re there to give us a lot of our brain function, our enzymes, all these things that make us us. When we think about boring biology think about that trip.
How important a microorganism is as this tiny little creature that we can’t see that has this intelligence to do all these beautiful things for our plants, for us. I mean the microorganisms create terpenes. Think about that gift that these guys are giving us. If you want to know what a microbe is, a microbe is creating a terpene. A microbe is actually eating something and its waste becomes a terpene and that terpene goes to children with seizures. So, that’s what a microbe is. That’s what a microorganism is, to get down to it.
Matthew: That is really interesting. I never would have thought about that. Microorganisms poo and then creating the terpenes that stop seizures. That’s a great connection. If you had to boil down the top one or two reasons that cultivators are coming to you and looking at Soil Balance Pro, what would you say the top one or two reasons or they’re situations they’re trying to fix or make better?
Peter: What we’re doing with Soil Balance is we’re giving top growers an edge on their quality. So, one of our growers Poo-e-labs, they just won the 2017 Emerald Cup for highest terpene concentrate in a vape pen. That was a big deal for us because we definitively proved that bacteria does enhance the amounts and the profile of terpenes. So, what Jeff over at Poo-e-labs said, he said, listen your product, the bacteria, that’s why we won the Emerald Cup, period, hands down. We could not have won it without you guys and we’re so grateful and we want to shout it from the rooftops that your product did this for us because we would have never had this type of quality.
So, again, once people start to realize that bacteria creates smell, that’s just what they do. When we as humans, when we work out and we sweat we create a smell. And so too is the case for plants. So, I guess growers are now coming to us because they’re seeing more frost. That’s the basic thing. They’re like, wow we’ve never seen our plants look like they just got snowed on like that, and we’ve been growing this strain for 30 years. So, what we’re doing is we’re taking the best growers and we’re giving them that extra edge to take it to the next level.
We had guys that were at 20 percent THC. Now they’re at 28, 26 percent THC and they’re like, it’s because of the addition of the bacteria. So, organic cultivators have known this for a long time that bacteria is conducive to a high quality, stinky, beautiful, nutrient dense bud. You get that biology you get a lot of health in there. So, people are coming to Soil Balance and buying our product now because they want to redefine their own… the market is becoming so saturated with commodity and all these different products and so many people getting in. So those in the know understand that microbiology is such an important aspect to cultivating a very very high quality, potent strain. That’s where Soil Balance is giving them that edge.
Matthew: Gosh, this industry is evolving so fast. It’s amazing. I was so grateful for the ditch weed I got in high school and now it’s like this is some really next level Elon Musk cultivation topics we’re talking about here.
Peter: Yeah, well it’s the future. It really is. I mean, the future of this industry is actually working with nature. We’re cultivating a natural plant. Yeah this is pretty heavy stuff. I like the conversation.
Matthew: Peter, I want to pivot to some personal development questions to help listeners get a better sense of who you are personally. With that, is there a book that has had a big impact on your life or way of thinking that you’d like to share?
Peter: Yeah so, when I was younger I would just tear through books, as a lot of people in their 20s do, but probably the biggest book that I could say shaped me in a lot of ways that helped me remain humble and try to help me be a better person was The Book of Dal. I don’t know if I would consider myself a Dalist, but it’s a philosophy and it’s basically centered around balance and having compassion towards a beautiful and perfect system. In place of taking from that system, really understanding the balance of it, being a part of it and giving what we can with all the gifts that we have as human beings to have this consciousness, to have this ability to love, to be loved, to have our intelligence and utilize that to improve. Not improve a sacred system but be a part and give in a balanced way to a sacred system.
Matthew: That’s interesting. I had an audio book, a Wayne Dyer reading the Dal to Chang. He did a different reading every day for a year. I thought that was such a fascinating concept and way of looking at the world, particularly the passages about water and water is this humble force that always seeks the lowest level, yet it’s so powerful in its humility. It was just the continuing references to trees and water and stuff. I thought that’s pretty interesting stuff.
Matthew: Is there a tool, web-based or otherwise, that you consider important to your productivity?
Peter: Well I mean the greatest tool, honestly, the greatest tool that I think we as humans can learn from and understand and utilize, the most advanced technology on this earth I believe is nature. I truly and firmly believe that. If we can actually get to a point of consciousness within ourselves to understand that nature is Earth’s most advanced technology, I think we’ll all be in a much better place.
Matthew: Yeah, good points. I was listening to a gentle speak and he was talking about why we should get rid of the idea of sustainable and move to regenerative because sustainable just keeps you where you’re at and regenerative is to get us back to where we were in more of a natural system. I thought that was an interesting concept. Like sustainable is not an option.
Peter: Sustainability is a beautiful mindset and it is a mindset. It’s not really a product or a way. It’s a mindset, sustainability. And regenerative is working with nature and giving to it.
Matthew: Peter, this has been really educational. Before we close, can you let listeners know how to find you, find Soil Balance Pro and connect with you were you are?
Peter: Sure. Our website is www.soilbalancepro.com. You can purchase our product there. If you use a code COMPASSION right now we’re really trying to have people get the feeling that it’s time for balance. It’s time for balance in our environment. It’s time for us to become much more interconnected. That’s one thing I’m loving about the cannabis industry is that the cultivators that I’m meeting they’re so tuned into their plants, they’re so tuned into the energy and the frequencies and the vital life force that their plant gives out. So, they’re a beautiful example that our company wants to support and just be of service to. Because these guys are tuning into the right things. So, yeah, you can kind of get a feel for that and what we’re doing with these microorganisms, these givers at www.soilbalancepro.com.
Matthew: Thanks for coming on. I’m definitely going to be thinking about bacteria for the rest of the day and their impact on the world around me that I see. So, thanks for educating us and I encourage listeners to reach out to Peter if they’re interested in this topic and to learn more. So, thanks again Peter and have a great 2018.
Peter: Thank you Matt
Vincent Harkiewicz is the co-founder and COO of Grownetics a company building the cannabis grow rooms of tomorrow. Vincent shares why if you are not investing your time, money and energy into a perfectly automated and intelligent grow you are missing out on priceless data about your plants and what they need to thrive.
Learn more at
[0:55] – What is Grownetics
[1:10] – Vincent’s background
[2:59] – Vincent compares and contrasts a typical grow to an optimized grow
[6:11] – Vincent explains how Grownetic sensors work
[8:57] – How much does temperature and humidity affect plants
[9:48] – What are Quantum and Par Sensors
[11:24] – Vincent’s lighting recommendations
[13:40] – What growers like about Grownetics
[15:31] – What do business owners like about Grownetics
[16:36] – Collecting data at a plant level
[17:20] – Is data shared with other Grownetics customers
[17:42] – How does Grownetics help with pests
[19:50] – How does Grownetics help with energy conservation
[21:16] – How is Grownetics unique
[22:29] – Vincent talks about the cost of Grownetics
[27:54] – Vincent answers some personal development questions
[33:42] – Contact details for Grownetics
What are the 5 trends disrupting the cannabis industry?
Find out with this free cheat sheet https://www.cannainsider.com/trends
The cannabis cultivators of 2018 and beyond that embrace emerging technologies to optimize their harvest will be the winners, both in profitability and delighting their customers. Here to tell us all about the latest in grow room technology is Vincent Harkiewcz, Co-Founder of Grownetics. Vincent, welcome to CannaInsider.
Vincent: Hey Matt, thanks for having me.
Matthew: Give us a sense of geography. Where are you in the world today?
Vincent: I am talking you from the sunny Boulder, Colorado.
Matthew: Okay, and what is Grownetics at a very high level for people that haven’t heard of it?
Vincent: Essentially it’s the operating system for indoor farmers and greenhouses. What we’ve built is a way to learn how to grow every plant better.
Matthew: What were you doing before Grownetics? What inspired you to start this business with Eli?
Vincent: So, before Grownetics I was actually living in Shanghi, China. I had a design and sourcing business out there where I was doing manufacturing and industrial design, and quickly realized that most of the way that we build things today is very polluting. A lot of the products I was designing ended up, you know, designed to be for designed obsolescence. Ending up in landfills and whatnot. So, I quickly decided to get out of there plus there was a ton of air pollution, food pollution, water pollution and kind of a sign of things to come. So, I started focusing on sustainable development techniques. Looking at how we could take advanced manufacturing practices from companies like Toyota and applying it to sustainable development.
When I came to Boulder to start a new venture I met Eli, and the two of basically hit it off with his commercial cultivation experience in cannabis and my experience in production and operating systems. Yeah, we decided to build a system that actually learns how to grow ever plant better, and that’s what we’ve done.
Matthew: That’s awesome. So, you and Eli partnered and how long ago was that, when you created Grownetics?
Vincent: We met about two and a half, a little over two and a half years ago now, and the company has been running now for about two years.
Matthew: I think a good way to set the stage here is walk through how a traditional grow that’s not optimized for technology or controls looks and then contrast that to one that would a typical or expected grow room with the latest technology including Grownetics. Would you mind doing that for us?
Vincent: Yeah absolutely. We see a lot of grows, and typically a standard grow without technology is the majority of grows unfortunately. Typically you’d be having typical HPS lights, street lights, inside their growing plants, and you would have everything manually done, hand watered, typically pots on the ground, soil pots on the ground in a warehouse. Basically like you just threw up a warehouse and threw some pots in there and called it a day.
You can still grow very high quality product out of a grow like that, especially with a skilled cultivator with is finger on the pulse of all those plants, but it’s going to be incredibly incredibly inefficient. Essentially that way of cultivating is just not going to last. We’ve already seen it with the price crunch here in Colorado.
Matthew: Tell us about that price crunch a little bit. When did that start, and what’s happening with it?
Vincent: So, I’d say it’s been really going on a little over a year now, maybe a year and a half. The market here is very mature, and that’s one of the things that makes cannabis businesses so successful in Colorado is good regulations and the maturity in the marketplace. What that also brings is competition. We’ve seen a lot of struggle with regulations as they come out. People taking their early investments and investing in essentially what they thought was going to be a cash cow and not planning enough on thinking about operational efficiency. So, not being able to meet that demand and meet that price drop that we’re seeing from a lot of these larger wholesalers and a lot of these larger growers.
Matthew: Yes, it’s something I’ve been talking about for a couple of years now that this is another commodity in a sense. Some people are kind of craft, small batch and they have a narrative or fans around their particular style of growing, but most people don’t fall into that bucket, and they want just cheap, good, high quality buds. So, there’s going to be a problem for people that don’t have a unique selling proposition or have really invested in the technology. Some people say, everybody will invest in the technology and it won’t be in an advantage, but in my experience most people don’t. They’re always lagging. If you just make the commitment of saying, I want to be in the top 10 percent or 20 percent of people that are investing in technology and my operations and controls, you’ll be in good shape, because most people don’t have that level of commitment.
Vincent: Hundred percent, hundred percent. It takes that operational mindset and the idea of where do you want to be in three years or five years. Are you still going to be growing in your 10,000 square foot or are you going to have a whole plan to have an R&D facility in that 10,000 square foot and then scale this thing up to multiple facilities, highly efficiently.
Matthew: I want to talk a little bit about sensors, because Grownetics is largely about data and using data, but how do you accumulate that data? It’s through sensors and different means. Where are the sensors placed in a grow, and what should we know about those?
Vincent: Essentially what we built to gather that data, you know, data is the most important thing for us. High quality, qualified data, and that’s why we focus on the enterprise and not consumers to begin with is that we could be providing real recommendations based on the highest quality data, but what we found was that it was prohibitive before we started. It as prohibitive to get high quality data because the sensors that people were deploying were just too expensive to really deploy at scale.
So, what we did was we started by building an open sensor platform. What that means is we can integrate any number of sensors that are on the market. This comes from my experience in China where essentially sensors are an off-the-shelf commodity. It’s all the middle men that jack up the price. We decided to create an open sensor platform and then quickly realized there was not a temperature, humidity and CO2 sensor or an atmospheric chemistry sensor that was cheap enough that we could really deploy at scale. So, what we built was our own high resolution sensor array. This is the key to the base sensor platform for a Grownetics enabled facility. That’s our 3-D Microclimate Sensors.
Essentially what it is is a five sensor array, and we have one combo temperature/humidity sensor that goes at the soil level. Then we have a combo temperature/humidity and CO2 sensor that goes at the mid to top of canopy level. These are typically mounted on the vertical stanchions on the rolling benches. They can also be suspended from the lighting supports. We can mount them any number of ways. Essentially that gives us a real good idea of what the 3-D Microclimates are in these cultivations room, so we can give you essentially an indoor weather map of your grow. Then with all that ocean of data, it’s not valuable unless it’s actually correlated to batches and plants and that’s the magic of the Grownetics system is we actually automatically correlate every single microclimate to the individual plants that are in that microclimate.
Matthew: The microclimates you’re mentioning are kind of stratifications, I guess, you’re looking at vertically of different temperatures. If you’re not aware of how much the temperature and humidity can stratify, how big a difference are we talking about here and how much does that affect plants?
Vincent: So, for a typical grow, not a vertical grow it can be dramatic. Essentially what you’d be finding is any issues with your airflow in the room. So, when you have a stratified room essentially what you have is pockets of really high heat air right between the light and the plants, and this could be due to light level. It could be to the position of the oscillating fans. It can be due to the position of the HVAC system, the inlets and outlets. So, there’s any number of reasons why you could have issues with the microclimates in your room and airflow. So, this really allows us to give you an x-ray vision to see what’s actually going on in a three dimensional fashion in that room.
Matthew: Give us a little background. What is Quantum and PAR sensors? What are those two terms and why are they important?
Vincent: Essentially a PAR sensor, PAR stands for Photosynthetic Active Radiation. So, essentially what photons, what kind of energy level the plants are actually receiving to do their photo synthesis. Quantum sensor is another name for a PAR sensor. Essentially it’s giving us the amount of particles and waves that are hitting a particular point from the sun. So, we use PAR sensors to really get a sense of are our lights functioning optimally in an indoor environment? Are we getting that even amount of micromoles hitting the surface of the plants? Then when we’re doing any kind of supplemental lighting or dimming or spectral control we always want to be using PAR sensors to be giving us that baseline to make sure we’re hitting the numbers were expecting. We’re actually seeing the way the plant sees, because our human vision only sees a very narrow band of visible light, where the plant actually sees a very wide spectrum of light. We want to make sure we’re capturing all of that that the human eye cannot see.
Especially this is important for greenhouses where we’re doing supplemental lighting and special control with either dimming or with LED lights so that we can say, okay you’re plants are getting this consistent level of PAR throughout the day, throughout their lifecycle.
Matthew: So many people are curious about lights. How do you evaluate lights and what are your favorite kinds now? What do you advise clients in terms of lights?
Vincent: So, double-ended is the norm and very efficient innovation on the traditional HPS bulbs, and very cost effective. So, for production facilities HPS double-ended is really a great solution. Just make sure you’re dimming those based on any incoming sunlight. You have a really efficient lighting system there. Now it is going to be pretty hot. The future is really going to be LEDs. The research being done, besides the medical research being done in the industry, is lighting research. A lot of discoveries are coming out almost, it seems like, monthly on different lighting wavelengths and how they affect resin production or the cannabinoid production in the plant.
So, one of the things that we discovered through our lighting studies was that if you use the far red LED on, let’s say, heliospectra light, two weeks into the flower cycle you can actually shorten that flower cycle. You don’t need to have that LED on for the entire lifecycle of the plant, therefore saving energy. You turn that sucker on two weeks into flower and all of a sudden you get heightened resin production. It kind of tricks the plant into thinking it’s Fall. You get a lot higher quality product, and that’s only the beginning. There’s a lot more room in lighting research to be done. When it comes to that point LED will start to become the norm in these grows, because we can do spectral control of LEDs, and we can also do… it’s much more efficient. We’re just waiting for that price drop to come.
Matthew: Yeah, a lot of promise there with the LEDs. I’ll be curious to see what happens over the next year or two. Let’s look at two different roles here; the business owner and the grower. A lot of times that’s the same person, but let’s just assume it’s two different roles. What does the grower like best about Grownetics? Where does it help them the most? What’s their feedback in terms of Grownetics really helps me with X the most? Where do they really light up when you provide them with information or what it does for their business?
Vincent: So, I’d say for the grower it would absolutely be the peace of mind for the alerting system, because essentially we can monitor everything in a facility, and monitor all the circuits related to all the major cultivation systems. If your chiller goes out, you get a phone call and a text message and an email. So, it will actually wake you up in the middle of the night instead of just a text message, which you might ignore. That would be number one for sure is peace of mind through our open controls and sensing platform.
Number two would be it’s kind of like x-ray vision for growers. Instead of needing to run around and basically deal with looking at all these little thermometers all around that they’ve hung up, essentially it lets them monitor a much larger square footage or amount of plants in a very intuitive and easy way. So, they can see what exactly is actually going on in the room. Whereas previously you basically would take a thermostat , and if you’re lucky a smart temperature sensor and basically over the course of a few days move it to different parts of the room to try to get a sense of what’s actually going on. Of course it’s a very poor way to get a sense of all those changes going on in there throughout the day. Our sensor system allows you log every ten seconds. So, it allows you to even see if someone opened a door.
Matthew: Okay, so it’s the peace of mind. Obviously getting rid of the things or mitigating the things that could destroy your whole business first. Got that taken care of. Let’s dial in all the other benefits. That makes sense. What about the business owner? What does he or she get the most out of Grownetics when they look at it for the first time or looking at the dashboard? What would you say their top one or two benefits are?
Vincent: Well I’d say for the business owner, with that operational mindset, it’s going to be for the first time you actually have a tool to run your whole cultivation business. It’s finally I have a tool to bring together all the different aspects of growing into one interface where I can start to create reports based on what’s actually working across batches, looking at my batch archives. Also it helps them actually get the grower’s notes out of their notebook and into a centralized system that can be used across multiple facilities. So, the owners really like this because they can say, okay if one grower cracks the code in this facility for a particular variety or strain, I can now just push that recipe over to this other facility and give it to this other grower, and we can continually optimize not only one site, but multiple sites.
Matthew: Very interesting. Can you collect data on a plant level? We talked about microclimates and zones and so forth, but is it possible to get to that level of granularity?
Vincent: We already do. All data goes down to every individual plant in the facility. Now the way that we do that, you’re right, it’s a little challenging to say, we’re going to stick a sensor in every plant. We do that for research customer, but it’s not practical for a production facility. So, what we do is for production facilities we say okay, let’s say what microclimate is this plant in, and then we say, what sensors are in that locale and then let’s link that sensor data to that individual plant. That’s where individual plant tracking enables us to do.
Matthew: Now, is the data shared with other Grownetics customers? Is anatomized and shared or how does that work?
Vincent: Absolutely not. All the data is private, very highly secured and kept to each individual customer. We absolutely never share cultivation data across customers whatsoever and that’s part of our service agreement.
Matthew: How about pests? We talked about things that can destroy your business. How about pests? How does Grownetics help with those?
Vincent: So, that’s one of the biggest challenges. In pest management you have integrated pest management. IPM as it’s known. In its most simplest way, the way it was described to me is you can think of IPM as a triangle. In order for a pest to be in a grow room, it’s going to need one of three things. It’s going to need either the food that it eats. It’s going to need a conducive environment to exist and reproduce, and it’s going to need the pest itself. So, the pest has to actually get there. Of those three things what we can already do is say, is the environment conducive to these pests and start to give alerts based on microclimates that do become conducive to harboring these pests.
So, that’s one way we can already do pest mitigation in a preventative kind of fashion. So, you can make sure your environments are constantly dialed in to prevent that from even occurring. Now once it has occurred, then what you’re going to want to do is do your traditional IPM measures, and then continue to monitor during that time. If that environment goes back into being conducive for that pest. As a tool it’s just a much higher resolution way of seeing what’s going on in all your plants.
Matthew: What pests do you see the most? What was the most common environment that’s being created for a pest?
Vincent: Well, thankfully a lot of the grows we go into our customers don’t have too much of an issue with that. They have good IPM protocols and Grownetics. So, not too many pests that I see, but when I do I’d say it would be spider mites and powdery mildew would be the most common.
Matthew: Now we talked a little bit about energy with LEDs and so forth, but how does Grownetics help in monitoring or understanding energy use, because obviously that’s a huge input cost that weighs on a business’s profitability. How does Grownetics help with that?
Vincent: Right, so, from day one we’re trying to make facilities more efficient, and in order to do that it’s important that we not only spec in the most efficient equipment and systems, but also monitor to see that they’re actually meeting those expectations. And so, we install CT sensors, which are essentially, you know, every circuit that’s related to cultivating we’ll put these CT sensors on, and we can start to do things. Not only efficiency metrics but also do predictive maintenance. So, we can say is this piece of equipment acting like it was when it was new, or is it all of a sudden drawing and abnormal amount of power. You need to get eyes on it before it fails.
So, that’s one element of the energy monitoring besides just the efficiency gains and efficiency modeling. Essentially at the end of the year you want to know how your facility did, and we’re involved the Resource Innovation Institute as well to help to create an efficiency model for cultivators. For them to not only understand what are the most impactful parts of their business and operations, but how they compare against other cultivators across the country.
Matthew: How would you say Grownetics compares with some other solutions out there? Say Smart Bee or any others.
Vincent: Smart Bee is essentially smart sensing and thermostats with some logging. There’s LaCrosse is a famous one as well where you can get basically an app for a thermometer. Essentially Grownetics is dramatically different. So, on the sensor side we do have our own sensors, but we also integrate third party sensors. Essentially the difference here is that Grownetics actually correlates data to every individual plant for you, thus helping you take your data and actually make it valuable. Beyond all the other things we spoke about in terms of control systems, in terms of efficiency management, in terms of operational management, workflow management, task management, any number of other things related to operating a cultivation facility.
Matthew: Let’s try to understand cost here, for people that are listening. Like, oh great I like Grownetics, but what’s it going to cost me. Will I be able to afford it. So, let’s talk about the cost and maybe savings, or how it can help optimize looking at say a 10,000 square foot grow and a 50,000 square foot grow. How much would you say… what are the different options in terms of price packages to get into Grownetics?
Vincent: So, for 10,000 square feet it would be anywhere from $30k to $50k, depending on how many sensors you wanted to deploy. Obviously an R&D facility is going to deploy a lot more sensors than a production facility. Now I do want to talk a little bit about how quickly this is changing though. Facility design as we know it today is changing very quickly. The research that we’ve done over the past few years has shown us that the current cultivation models are incredibly inefficient compared to what’s actually possible with other technologies that’s already existing. So, when I say that that’s based on, those pricing models are based on deploying sensors and control systems.
We’re starting to see a demand for whole facility design. So, that’s something we’re already participating in a well is helping to spec out really what the grow facility of future is going to look like, with Grownetics as essentially the nervous system for that.
Matthew: Yeah, I mean, I could see it seems like more states are becoming open to greenhouse growing. At first they want to lock it down in an underground bunker like it’s plutonium, but then it’s like, hey maybe it’s not the best use of our electricity resources to be doing that. Are you thinking it’s going to be more natural-like coming into grows?
Vincent: Yeah, whether it’s natural light in a greenhouse or bringing in supplemental sunlight into an indoor grow, there’s any number of ways that we can already dramatically reduce energy usage. I mean, the research we’ve done has shown that we can reduce energy usage over 90 percent compared to a traditional inefficient, indoor grow just by using existing technology off the shelf. That is incredibly dramatic and people are still unaware and uninformed about this stuff. So, that’s what we’re going to be trying to do is help to inform people there’s much more efficient ways to be growing the highest quality cannabis, and we have the systems and technology to do it.
In terms of greenhouse, I do understand the concerns, the smell concerns some municipalities might have. So, the direction we really want to take with greenhouses is towards the hybrid greenhouse model. The reason I say this, even for areas where you can grow with traditional greenhouses is something I learned from my time in China. I did a lot of study into air pollution and air quality. I did a lot of sourcing in filtration, air filtration and any number of filtration systems. Now, even if you have a beautiful organic crop in a greenhouse, if it’s next to a highway, you’re going to have heavy metals in that crop. This is something that people don’t really talk about or acknowledge. It turns out a lot of the beautiful organic produce that we consume is contaminated with heavy metals from exhaust fumes.
You can look at another example with northern California with the wildfires. Greenhouse cultivators up north, if they didn’t have a sealed environment, are dealing with massive pollution, smoke pollution of their crops. So, this is why I think moving forward really the norm should be a hybrid style greenhouses with air filtration in a controlled environment.
Matthew: Yeah, that was quite a situation with the fires up there. Oh my gosh. That’s crazy.
Vincent: It was so devastating and then Los Angeles as well. California’s been really in a bad place this year from the natural environment side of things.
Matthew: I think it’s important to not only talk about what’s possible now, but even to just have mental exercises about what’s possible in terms of just daydreaming. What would an ideal grow look like? If you could wave a magic wand and create a technology that doesn’t yet exist for the grow room, what technology would you create?
Vincent: So, I will tell you that we are already creating those technologies and I can’t really talk about them. I will tell you it has to do with the greenhouse space.
Matthew: Okay. Once that gets created, you’ll have to come back on and tell us what it is. You gave us the promise then ripped it away.
Vincent: Well expect it in the next few months here.
Matthew: Does it involve unicorns. Don’t answer that. Where are you in the capital raising process now? I mean, where were you and where are you now?
Vincent: Well, I can’t really speak to that either. I can say that we are talking to some very prominent groups, and that we’re getting ready to meet a lot of demand and to meet that demand we need to scale. If you’d like to get in touch with us and get more information about that, you can definitely reach out to us at our founder’s email, which is firstname.lastname@example.org and we’ll get that spelt at the end of the show.
Matthew: Let’s pivot to a few personal development questions to help listeners get a sense of who you are as a person outside a business. Is there a book that has had a big impact on your life or way of thinking that you’d like to share with listeners? It doesn’t need to be about cannabis at all.
Vincent: If I could, there’s two I’d like to share.
Matthew: Yeah, two, give them.
Vincent: All right, so, the first one is The Toyota Way by Jeffrey Liker. I forget what his last name is, but The Toyota Way really changed how I thought about production and large-scale production. It’s also a very famous book and kind of describes how Toyota really came be producing the highest quality, cheapest cars. Then the second book is a book called Cradle to Cradle by Michael Braungart.
Matthew: I’ve read that. It’s great.
Vincent: Yeah, it really helped me understand how to think in a new way to understand systems design and product development in a non-traditional sense.
Matthew: That is an excellent book, and even the book itself is not even on paper. It’s made of a recyclable plastic. It has a tactile sensation that is pleasing to hold, even though it’s not paper, but it can be repurposed into something else after you read it.
Vincent: And it’s waterproof. You can read it in the tub. You don’t have to worry about ruining your book. It’s written by an architect and I think also a chemical engineer. It was just a brilliant book and really inspired a lot of my thinking when I switched to sustainable development.
Matthew: That is such a great book. I’m glad you brought that one up. It’s one of the few books that I think about often, even though I read it years ago. I think gosh I would like to read that again because the way he frames it is that most problems we experience in our day-to-day life is a design probably that only needs to be reimagined and then redesigned. He goes through examples after examples. For example, when a dye facility or a textile facility has an output of dirty water that’s a design problem and it just needs to be fixed and reimagined. He talks about how he went, I think it’s a dye facility or a fabric facility, in Switzerland that had pollutant waters coming out and how he re-engineered the whole thing that by the end of it you could drink the water that was coming out of the facility. Examples like that, but he just does it in such a creative way that it can re-engineer our mind. Definitely I think Shanghai could implement some of those solutions.
Shanghai, you mentioned some of the problems there, but in some other ways it’s kind of like the Emerald City from the Wizard of Oz and that they’re way ahead technologically. I mean, were you there when everybody is using the 10 cent pay app or the Ollie Pay? Was that going on when you were there, or was that not yet implemented?
Vincent: No, that was definitely going on. They’ve absolutely had the… I guess it would be the luck of developing after a lot of these new technologies have become the norm in some Western countries. So, they really did get to leapfrog in a lot of ways. Now it’s just unfortunate that every country that industrializes goes through the same hurdles and the same challenges. Once they ramp up industrialization, there’s a lot of pollution, and I would have hoped that they would have learned from England when the Industrial Revolution began in the United States with LA in the 70s, 60s. All of these countries that have already gone through these problems, but thankfully now they’ve really woken up to the issues and they’re throwing a lot of money at solving these problems.
Matthew: Yeah, I’ve seen pictures on high pollution days. It looks like people are on a moon of Saturn or something where they’re covering their mouth and their face and you can’t see the sun. It’s unbelievable, but I think that’s going to go away soon. I know it’s a big priority to get fixed.
Vincent: Exactly right.
Matthew: I mean, since China’s somewhat like a technocracy or dictatorship in some ways, they don’t have to wait for a congress to approve things. They just do it.
Vincent: That’s one of the most impressive things is how quickly they can move. I mean, they’re a systems culture and they really can move quick.
Matthew: Is there a tool, web-based or otherwise, that you consider vital to your productivity?
Vincent: Yeah. I have two things on that, maybe a couple of things for that. So, I’m totally a productivity nerd so I’m obsessed with this stuff. So, I’d say number one would be my smart notebook. It’s made by a company called Live Scribe, and essentially it’s pen that digitizes everything I write in my notebook. So that would be number one, so I can check my notes even if I don’t have my notebook. I can just pull up Ever Note and get all my written notes OCR’ed in there. Then for our company it would be Git Lab, which is an open source development tool that allows us to actually do collaborative development and remote development from anywhere in the world. Lastly, for my personal organization I’ve been using this new tool, which is actually built by my partner and our CTO Nick Busey, which is called Bullet Notes. Essentially it’s a super simple list and organizing tool, and I’ve been testing that out for my own productivity.
Matthew: Cool. Those are some good ones. It sounds like you’re a productivity nerd. I love it. In closing Vince, tell us how people can learn more about Grownetics, how to connect with you. You already mentioned how investors, who are probably only accredited investors can reach out to you, but how can people that are interested in becoming clients or learning to see if Grownetics is a fit for their grow reach out to you?
Vincent: So, we’ve got two ways. If you’re ready to go and you want to get an idea of what Grownetics would look like for your facility, you can go to our website and apply for a consultation. That form will actually pull up any number of things like your square footage, your licensed plant count and those things to help us get started with that. You can also email us directly at email@example.com . I would also subscribe to our newsletter because we’re going to be releasing a couple new webinars on the latest greenhouse technologies and it’s where we do our big product announcements. That’s all on our website at www.grownetics.co.
Matthew: Okay now can you say, she sells seashells on the seashore three times really fast.
Vincent: Oh, that’s going to be a tough one.
Matthew: Well, Vince, thanks so much for coming on the show today and educating us. We really appreciate it and here’s to a prosperous 2018 for you.
Vincent: Thanks so much Matt and I really really enjoy these podcasts that you’re doing and keep up the good work getting the good message out.
How can dispensary owners delight customers to make them repeat customers?
Jeff Harris of SpringBig shares how smart dispensaries are crafting offers via text message to drive business.
[0:57] – What is Spring Big
[1:21] – How did Spring Big come about
[3:00] – Jeff talks about the tools Spring Big offers
[4:23] – Biggest benefit of Spring Big
[5:45] – What are triggers
[7:49] – Jeff talks about the most effective campaigns
[9:53] – How often should you send out an SMS
[11:46] – How do dispensaries measure customer loyalty
[13:14] – Jeff talks about Spring Big analytics
[14:28] – How does Spring Big differ from its competitors
[15:49] – Jeff talks about Spring Big’s pricing structure
[16:45] – Spring Big’s fundraising efforts
[17:29] – Jeff answers some personal development questions
[21:23] – Contact details for Spring Big
Learn more at:
What are the five trends disrupting the cannabis industry?
Find out with your free report at https://www.cannainsider.com/trends
Dispensaries are feeling the competitive pinch and are looking for ways to forge a closer relationship with customers so their eyes don’t wander to competitors. Here to tell us how dispensaries are leveraging technology is Jeff Harris from Spring Big. Jeff, welcome to CannaInsider.
Jeff: Thank you. I’m excited to be here.
Matthew: Give us a sense of geography. Tell us where you are in the world today.
Jeff: I am actually here in rainy Boca Raton, Florida today. So, that’s where our headquarters is located, and I just got back from an end of year break and excited to get started in ’18.
Matthew: Great. What is Spring Big at a high level?
Jeff: Spring Big, we created a loyalty and digital communications platform for cannabis retailers to be able to create and manage their own loyalty programs, as well as to leverage the database that they can build through that program to communicate with customers in a very easy but effective manner.
Matthew: What sparked the idea to start Spring Big? What were you doing before and what led up to it?
Jeff: So, I actually had started a loyalty marketing company by the name of (1.26 unclear), which services large retail chains in the non-cannabis space for loyalty and data driven marketing programs. A couple of years ago we had the idea of creating a platform for smaller businesses to leverage a lot of the technology that we created in (1.44 unclear) and from there we created Spring Big. About a year ago we pivoted into the cannabis space because we saw a big need for our services and our product, as well as a big opportunity in the space.
Matthew: It’s a pretty rich, entrepreneurial environment there in Boca Raton I’d say. I mean, I hear a lot about investors and different businesses being started there. Can you tell us what it’s like there?
Jeff: Yeah, so I think it’s been moving along on that path for a couple of years. I think there’s an excitement around tech startups here. I think it started more in Miami and Ft. Lauderdale, and it’s moving a little bit north to Boca Raton, Florida. There’s another big cannabis technology company in the area, Bio Track THC. It’s located in Ft. Lauderdale as well. And with Florida legalizing medical marijuana about a year ago, I think you’re going to see more and more companies, in this space in particular, both obviously in the growing and retail side but also on the technology side, being here to not only support Florida but support all of the retailers across the country.
Matthew: Well, let’s dig in a little here. Let’s say a dispensary owner decides to integrate Spring Big into their dispensary. What tools do they have in their tool belt now that they’ve integrated it.
Jeff: So, there’s two different ways that they could integrate it. Depending on the point of sale system that you’re using, we can actually allow them to leverage Spring Big right through their point of sale. We’re already integrated with Green Bits and with MJ Freeway and we’re shortly going to be integrated with Flow Hub and Cova and we’re hoping to integrate with Bio Track as well. So, therefore if they’re integrated, they can actually leverage their POS to transfer data into the Spring Big platform, and then they have access to the Spring Big dashboard to do all the things that they would need to do to help them manage their loyalty program, as well as to communicate with their customers through SMS. We offer email as well, but the primary communications tool is SMS.
If they don’t want to leverage the POS integrated solution, we actually have the ability for them to leverage a tablet solution. So, they can either use their tablets or our tablets. Either the customer or the bud tender can enter in the information that is necessary to keep track of the customer’s performance or purchases in the program. And then from there, it works the exact same way. The platform does all the calculations. It keeps track of points. It builds their database and obviously allows them to leverage the dashboard on our platform to communicate with customers.
Matthew: What are the dispensary owners telling you is the biggest benefit?
Jeff: I think, two things. One, let’s focus on the integrative solution first. They love the integrate solution, and we’re actually the only company in the industry that provides that kind of integration that allows us to pull transaction information from the point of sale. So, the biggest benefit I think that they’re seeing is obviously the less clutter on the counter the better. So, they prefer not to have an extra device an extra tablet on the counter. So, using our integrated solution, they can eliminate the need for an extra tablet, which is huge because then they just have their POS system there but they don’t need a second tablet. Again, as I mentioned, we’re the only company in the industry that offers that solution to them, but if they don’t have an integrated solution, having the tablet works just as well. It just provides a little bit more clutter on the counter.
In terms of the biggest benefit, I think our communications platform is probably where are dispensaries are telling us they’re getting the biggest benefit. We have a very easy to use but robust communications platform that really does help them drive business into the store. It really allows them to stay in touch with their customers, allows them to communicate with them whenever they want. It allows them to segment those customers in different ways. So therefore it’s a major benefit for them to be able to very easily but effectively communicate with customers.
Matthew: Okay, tell us about how they can communicate. Can you tell us a little bit about what triggers are and what’s important to know there?
Jeff: Sure. So, triggers are behavior based communications that are triggered when that behavior happens. For example, let’s leverage win back or inactivity. So, a customer has come into the store, but yet they haven’t seen that customer again in a matter of time. Let’s assume it’s two weeks, four weeks, six weeks. They have the ability to create a behavior based trigger that says if I haven’t seen Jeff Harris in X amount of days, send them this message. If I haven’t seen Jeff Harris in Y amount of days, send him this message. Those messages are created one time and then it automatically triggers that communication when the number of days have elapsed where they haven’t seen that customer. So, it’s not like they have to go into the system and do this time and time again. They can go into the system, create it once and then it will run as long as they want it to run until they stop it.
Matthew: Does it get granular? For example, let’s say I know Jeff Harris wants to buy or he typically buys an eighth of an ounce of Blue Dream. Could I say, hey offer a pre-roll if you buy an eighth in the next 48 hours or something like that? Can you get to that level of granularity?
Jeff: You can get to that level, yes you can. You can do that, but in order for us to really know that Jeff Harris bought that eighth, we need to be integrated with the point of sale system, and once we’re integrated with the point of sale system, not only are we pulling in how much the customer spent, but we’re also pulling in what they bought. As long as we have the ability to know what they spent, how much they spent and what they purchased, yes you have the ability to be able to get very granular in your communication.
I think you’re going to see a lot more of an opportunity in that are probably within the next 6 to 12 months as the integrations that we have with POS get a little bit more sophisticated and we have the ability to pull in that information. It’s coming.
Matthew: What are the most effective campaigns in terms of ROI, I mean, anecdotally what do hear dispensary owners saying? Is it the SMS or email triggers? What is it?
Jeff: SMS for sure. Just some general statistics, the open rate for an email on average is somewhere between 15 to 25 percent. So, if you send out 100 emails, 15-25 people are going to open it and then of that, a certain percentage, probably about 10 percent are going to act on it, as compared to SMS where the open rate is about 99 percent. The actual acting on that SMS is probably about 10 times higher in scale than in email. So, there’s no doubt that SMS is a much more effective communication tool. Also it’s faster.
An email normally gets opened up on average within about a two day period of time. An SMS gets opened up on average within four minutes. So, therefore, a lot of our dispensaries use this to drive business that day. So, if they see that they want to drive additional traffic that afternoon, if they send a text message out 11, 12, 1 o’clock in the afternoon, they’ll see actual business coming in from that text message that day. As compared to email where it’s going to be… you have to be thinking about it a lot more in advance because it probably takes a few days for them to open it and until they act on it. So, SMS is for sure provides much higher ROI than email at this point.
Matthew: And then the SMS message you can opt out of each one that goes out so customers don’t get frustrated or anything if they don’t want to receive them?
Jeff: Yeah, absolutely. So, they can definitely opt out if they don’t want to see them. The opt out rates are much lower in this industry than in other industries and I think primarily that’s because they do want to know. Normally when dispensaries sending out or a retailer sending out an SMS message there’s a deal attached to that message, and customers want to know about those deals. So, we actually see a very low opt out rate. Lower than in other industries because of that phenomena.
Matthew: Every day is too much, but is there a sweet spot in terms of how often would be a good rule of thumb in terms of sending SMS out there so you get a good amount of engagement but you’re not frustrating customers with a deluge of too many text messages?
Jeff: Yeah, I think that’s a fair point. I think probably about three times a week is probably a good sweet spot for dispensaries. You do have some dispensaries that are sending out, they have daily deals. If you think about a restaurant or a lunch spot that sends out their daily specials, you actually have some dispensaries that use our daily deals trigger in a similar way where they have a deal that goes out. They don’t necessarily use it for every day of the week, but there are certain days of the week that they automatically set up a daily deal. I would say probably three to four times a week is enough to get, to catch people when you want to catch them, but on the other hand it’s not over bearing in terms of too many text messages.
Matthew: That makes sense. Can you add a picture in an SMS message to show what you’re trying to promote or not yet?
Jeff: No, so actually there’s a couple of ways. We actually are adding on MMS in the next month or two. But in the meantime yes you can definitely send a picture because what you can do is you can attach a link to your message, so therefore the message could have an embedded link and you can just click on that link and then anything that you want to display through that link you can. So, retailers have the ability to send pictures and send YouTube videos, direct them to websites. Any place they want to go they can do that through what they call a mini url or it’s a smaller version of a link that allows you to send it within an SMS message that allows people to take advantage of all those opportunities.
Matthew: That’s good to know. Now this begs a broader question. How does a dispensary owner know if they have loyal customers? They might say well that marketing campaign was great or this one wasn’t so great, but how do they actually know that they have an engaged customer that has a loyalty to that particular dispensary?
Jeff: Yeah, that’s good questions. So, I think from a data driven standpoint the way you’re going to know is by creating a test and control group. So, therefore anecdotally now they kind of have an idea because they can see when they send out messages what the responses versus days that they don’t send out messages. So, there’s a lot of anecdotal evidence, but if you really want hard evidence, the only way to do that is to create a test and control group. Let’s assume you have 2,000 customers in your database. They may send out 1,800 customers the message, but they may hold 200 back. And then they can actually measure the performance of the 1,800 versus the 200. Then they can actually see in very specific terms what the life was by sending out that message and by having them in the loyalty program.
From a loyalty program standpoint, because it’s a self-select process, meaning Jeff Harris walks into the store and I select to join that loyalty program, you can definitely see the difference between loyalty members and non-loyalty members, but the most effective way to do it is with the ongoing communications that they send out to have a test and control group that they can actually measure their performance differences.
Matthew: Looking at Spring Big analytics, what’s the biggest insight your clients get? Particularly when they first are up and running. Is there an aha moment or anything where that you hear the most from them saying, hey this is really helpful?
Jeff: Yeah, you know, in broad terms I think the biggest Aha they get is wow this really really works. I think people kind of believe that if I message my customers it’s going to work, but you really don’t believe it until you see it. When they start building their database and start sending out messages that makes sense for the customer, again that’s a big deal. You need to be thinking about the type of message that you’re sending and what call to action that you’re asking the customer to act upon. As long as they’re being smart about how those messages go out, they see an immediate lift of traffic and immediate lift in sales. We have a retailer in Nevada that tested it out and he tested it on one particular product and he literally sold out of that product in two days. He thought he had a lot more inventory than he needed for two days. He actually felt that wow this thing really drove business, brought people into the store and they bought the product that he was promoting in the message. I think the biggest aha I think they get is wow this thing really really works and they definitely have an engaged customer base that takes advantage of these offers.
Matthew: There’s some other tools out there like Baker which just raised a lot of money. How would you say you differ from a tool like Baker or overlap?
Jeff: I think that’s a fair question. I think Baker does two main things. They have a loyalty and digital communications package and they have an ecommerce platform. I think from our understanding a big focus of Baker’s on their ecommerce platform more so than their loyalty and communications platform. So, they’re providing a wider set of services, but I think by providing a wider set of services they’re not going as deep as they can on the loyalty communication side.
Spring Big on the other hand only provides loyalty and digital communication and we partner with ecommerce companies to provide the ecommerce support when needed. We’re also partnering with POS companies. So, I feel like there is definitely some overlap with Baker. I think probably the big differences are the depth of our product offering as compared to Baker’s are the loyalty communications. And the second is our experience in loyalty. As I mentioned before, I’ve spent 20 years in the loyalty business, so therefore our understanding of loyalty and how it works and how to design the right kind of program to drive the right results are probably unparallel to this industry at this point in time.
Matthew: How does pricing work for clients? What can they expect to pay? A lot of people in this industry have a fixed budget for marketing and software and they kind of want to have a predicable expense. So, what can you tell us about pricing?
Jeff: Our approach to pricing is a bit different. We actually do not charge a monthly platform fee. We give them the ability to leverage the software at no charge, and then we charge them for the messages that they send out. So therefore, depending on the number of messages they send out in a month, that’s what they pay. So therefore, for retailers that are on a fixed budget, they know how many messages they need to send out each month to hit that budget. We can help them do that. For those retailers that are not necessarily focused on okay I have $500 a month to spend for this activity, but they want to leverage it to drive the ROI that they’re looking for, they have a little bit more freedom to send out more messages or send out messages more frequently. Our pricing approach is a bit different. We only charge for the messages that go out. We don’t charge for the software.
Matthew: That’s cool. Where are you in the fundraising process? I know you’ve been out there raising some funds. Can you tell us a little bit about that?
Jeff: Yeah, we just closed our $3.2 million round a couple week ago. So, that round was fully funded around the middle of December so we’re in a good position financially from a capital standpoint to do the things that we need to do this year to continue to move business forward and compete effectively in the marketplace.
Matthew: Are you still looking for investors, or is that chapter closed for now?
Jeff: That chapter’s closed for now.
Matthew: Okay. Let’s pivot to some personal development questions to help listeners get a sense of who you are personally, Jeff. Is there a book that has had a big impact on your life or way of thinking that you’d like to share with listeners?
Jeff: You know, there isn’t a particular book. I do a lot of reading just in terms of general business. So, I spend a lot of time trying to understand what’s happening in the marketplace, in the overall business marketplace. So, spending time with Business Week and Forbes and Fortune, as well as a particular industry publications within the cannabis space probably have more effect on me than a particular book. I’ve been doing this now for about 30 years. Actually my dad was my… I used to work for him when I just got out of college, and I learned a lot of how I behave from a business standpoint by observing him and watching him and working with him. I feel that I continue to try to develop my skills. We always got to continue to develop our skills, but I try to do that by understanding what’s happening in the business marketplace overall and how does that affect me and how do I take advantage of what I’m understanding and what I’m learning.
Matthew: Is there a tool, web-based or otherwise, besides Spring Big that you feel has a great impact on your day-to-day productivity?
Jeff: Yeah, actually it’s a tool that I started using a little while ago. It’s called Mix Max. It’s a tool that connects with Gmail that really allows me… it’s not an email tool, but it really is a tool that allows me to manage my activities and my schedule so I get the most out of every day. I’m a big believer in working hard but working smart. So, it allows me to work a lot smarter, and ever since I used it it’s making a big difference in just how I manage my schedule and how I’m being able to be a lot more productive every day.
Matthew: One other question. Every day I have lots of people email me but I’ve noticed there’s a ton of people in the Millennial category that are really anxious to get into the industry, and they say how do I get in, how do I get in. I always say proactively help a prospective employer get more customers or reduce some expense is always a great way. Is there any helpful hints you would have for people particularly in that age demographic that want to get in but perhaps don’t have a lot of experience that might be helpful to them?
Jeff: Yeah sure, I think there are probably three main areas. I think obviously on the sales front there’s just so many new entrants into this marketplace. There’s so many opportunities for aggressive, smart, young people who want to go out there and help companies build their business. From a sales perspective to get in, I think that’s probably what I’ll call the straightest shot to get into this industry. For example, we’re looking to hire probably six or seven salespeople across different parts of the country right now, whether it be on the West Coast in Southern California or in the Mid Atlantic region. From a sales perspective, that’s a great way to do it.
The other two ways I think from an engineering, from a computer programming standpoint there’s such a high need for computer programmers and so many of those computer programmers are millennial in nature just because of the skills that they have. There’s so much opportunity there, as well as in the analytics front too. There’s a lot of people coming out of school with analytics backgrounds and analytics training, and there’s going to be such a huge need for analytics in this marketplace. So, I think millennials that either have skills in analytics or programming or people that are just smart go getters that are interested in taking advantage and getting into the marketplace, I think sales would be a great opportunity.
Matthew: Thanks for that, Jeff. I just want to let everybody know that isn’t just for millennials. It’s just I’ve gotten a lot of inquiries recently about that. So, I just wanted to make it specific for them, but it is also general. Well, Jeff as we close, how can listeners learn more about Spring Big and also for potential clients or dispensary owners, how can they learn more?
Jeff: Obviously they can go to our website www.springbig.com. They can learn a lot about us there, but obviously when they go to the website we would love to hear from people. We get inquiries on the web all the time and we’re a very high service, high touch organization. We want to connect and help dispensary owners and retailers leverage our toolset to make them better at what they’re doing on the retail side. So, obviously we’d love to hear from them and talk with them and see if what we’re doing here can help them.
Matthew: Well, Jeff Happy New Year to you. I wish you all the best in 2018 and keep us updated on how things go.
Jeff: Thanks Matt, really appreciate and thank you and have a great 2018 as well.