In this episode of Be EPIC, Matt is joined by Meagan Bowman, founder and CEO of STOPWATCH, a cloud-based ERP software for retailers. A member of the dean’s DREAM board, Meagan also lends her expertise as an advisor to the McMillon Innovation Studio, a member of the Fast Company Executive Board, and a contributor to the Forbes Technology Council.
Listen as Meagan Bowman discusses the inspiring story behind STOPWATCH, why her retail skillset led her to success in the software world, and how organizing the endless complexity of CPG data assists retailers.
0:00:04.4 Matt Waller: Hi, I'm Matt Waller, Dean of the Sam M. Walton College of Business. Welcome to Be EPIC, the podcast where we explore excellence, professionalism, innovation, and collegiality and what those values mean in business, education, and your life today. I have with me today Meagan Bowman. Meagan is on the Fast Company Executive Board and she is a contributor to the Forbes Technology Council. But of course, she is the Founder and CEO of STOPWATCH. She has quite a bit of experience in consulting, CPG, and retail. She lives and works in Bentonville, Arkansas and of course, Northwest Arkansas is one of the main places for innovation, and CPG, and retail. She's also on one of my boards. I have a board called DREAM. It stands for Dean's Roundtable of Entrepreneurs and Market Makers. And they are people I call upon for advice and input on various things as they come up in the college. But Meagan is at that intersection of CPG and data science. Meagan, thank you for taking time to visit with me today.
0:01:26.6 Meagan Bowman: It is my pleasure, Dean Waller.
0:01:29.9 Matt Waller: Meagan, I wanna talk about your past and where you've come from. But I wanna start with STOPWATCH. And how did that come into being and what does STOPWATCH do?
0:01:40.8 Meagan Bowman: STOPWATCH essentially, if you think about Enterprise Resource Planning Systems, ERPs, whether it's Oracle or SAP or Microsoft Dynamics. These big legacy systems that a lot of large companies use to track and manage goods from point A to point B, do their bookkeeping, bill of materials kind of all of the brain of the company oftentimes lives in an Enterprise Resource Planning System. And when e-commerce came along, basically a lot of people created tools and agencies to kind of take things from the Enterprise Resource Planning System, jump over a gap, and then kind of have these separate ways of working in terms of the way that they went to market through the e-commerce ecosystem. And what STOPWATCH is, is essentially an ERP wrapper that sits between the tools and agencies and the Enterprise Resource Planning System itself, in order to conglomerate and bring together all of the data, public, private, historical, present and modeled future, into one cloud-based, easily-accessible, democratised system so that anybody in the company, whether they're on the shipping floor or they're sitting in the C-suite, has the potential to log in and be looking at the exact same data as everybody else in the company.
0:03:16.0 Matt Waller: Well, that's something that clearly is needed in CPG, in particular. Would you talk a little bit about that, about the importance of that kind of capability in CPG?
0:03:29.4 Meagan Bowman: Yes. The fun thing about CPG, as we built, as we architected this, there are certain industries that have various levels of data complexity, right? Medical records have a lot of data complexity. Financial services, gosh, even hospitality, education. There are different pockets of data, complex data areas, and CPG, from our research, was one area that because every single item that gets checked out of a store has a data mark on it, the GS1 UPC, there's a lot of data out there. Whether it's through the credit card transactions. Whether it's through the retailers. Whether it's through EDI transactions. There is a lot of disparate data that's been collected over the years that can unlock a lot of opportunities, both past, present and future in terms of how things actually work.
0:04:31.5 Meagan Bowman: And I think where we got really, really excited and it's really kinda dorky. Where we get excited is, I'll make this up, like I just picked up a Clorox Wipes on my desk, and it has a barcode on it. But I'm pretty sure I bought this at Walmart. So when Clorox receives the data that I bought this, they are going to receive the data that I bought a Walmart item number that is not necessarily consistent with the universal packaging code that's sitting on the product. Similarly, if I buy it next week from Amazon, Clorox will receive a signal that says, she bought Amazon item 1234. And the Walmart item and the Amazon item, even though it seems that it should be very, very simple, do not cross-pollinate within their ERP system. There are actually different levels of data and it's pretty complicated to cross-stream all of those together and say Meagan bought Clorox wipes and she bought them 20 times over these 15 different retailers over this period of time and sometimes she bought two at a time sometimes she bought one, one time she took it back and that was to Kroger, there is a lot of just kinda base, kinda no-duh purchasing behavior that you can track through the life of the product and that's where we get really, really excited about consumer packaged goods because it naturally has a lot of data.
0:06:03.8 Meagan Bowman: And I think a lot of the focus, right, wrong or indifferent, has been around the consumer journey, how do we get more people to buy, to get them to the shelf and purchase things, that's a beautiful science in and of itself. Another really cool science that is completely untapped is looking at the troves and troves and troves of purchase history, and when we can assign a normalised pattern recognition and use that going forward, especially with the advent of e-commerce, there's a lot of, I call it picking up pennies, there's a lot of pennies to be picked up, and that gets us really excited because if we can use data with consumer packaged goods companies, whether they're large or small, pretty much every person in America interacts with them, and if we can help take some cost out of the ecosystem, I'm sure some other place in the vertical will eat it up, but at the same time, we feel like there's a lot of cost looming around bad data that's a little bit tangled up and if we can get that straight for them, they can reallocate those resources and thought leadership into more innovative ways to move forward.
0:07:18.9 Matt Waller: Is your solution software as a service?
0:07:21.9 Meagan Bowman: It is, it is. So essentially, an organization basically buys a number of SKUs, times the number of platforms, and sometimes they'll start out with their entire portfolio through Kroger, Publix, Amazon and Target, they pay for that monthly, and then say they want to add Walmart three months in, then it's like a Netflix subscription, we add Walmart and they're off to the races and running. Similarly, we've got because consumer packaged goods companies have so many different brands and categories, Procter & Gamble, for example, we could just be working with their food division or their cleaning supply division, and be working in three different retailers there, and then an expansion for them would be to move from the food division to the food division plus the cleaning solutions division. And so what's kind of fun about our software for these really large companies is as they're experimenting with the digital transformation, we feel like they need malleability, an opportunity to expand and retract based on what they're finding, and so STOPWATCH is a highly flexible Software as a Service.
0:08:46.5 Meagan Bowman: So to get up and running is less than 10 days. And to begin getting results is less than 20 days. And you can easily turn things on and turn things off, it's very much a, "Hey, what do I need today? What do I need next week? What do I need when I'm planning Prime Day or deals for days or whatever," and so STOPWATCH is designed to really give you everything you need, but nothing you don't.
0:09:11.0 Matt Waller: I don't know how you started your company, I'm curious, but typically, solutions like this come out of a problem that exists, and you've mentioned that already a bit. It's one thing to know a problem exists, it's another to come up with an idea of how to solve it and come up with a minimum viable product. And then to eventually create a product that has customer traction, and then you have to keep iterating with the business model to figure out what the business model is. So how did you create your first prototype?
0:09:46.8 Meagan Bowman: It wasn't pretty. So we say at STOPWATCH, basically, everything starts on a napkin or a whiteboard, so a concept with letters and numbers, "If A plus B equals C, what happens?" A lot of if-then statements, a lot of decision tree, very, very basic, I like to call it machine learning in molasses. Machine Learning is really nothing but a bunch of sequences sped up over time and then potentially spun out to have some predictability, and so I always tell people, forget the machine learning, just time out, go to a napkin and write your base formula. What are your assumptions, what are you trying to solve, what are the three assumptions and play it out five times on the napkin, and do they work or do they not. That's really how STOPWATCH started. And essentially, we went from napkins to Excel, something that could make the math a little bit easier. Excel went into kind of a more advanced Excel, macros-like. Then it went into SQL Server, that's what I could afford.
0:10:53.0 Meagan Bowman: And essentially, when we got to the place where we had completely maxed out all Excel, all SQL Server, we were totally maxed with how much data we were running through, that's when we brought in a full cloud-based database design team that essentially dug out the architecture of what is now STOPWATCH and it was a really painful transition between "my minimum viable product" that I could just push some buttons in SQL and get out, to letting real architects and real developers build something at scale where our first active customer was General Mills. It's very different, Meagan just kinda playing around and the arrogance that I had to say, "Well, gosh, guys, I could do it better, I could do it better and faster," and just jump ahead of them, and they're like, "No, no, we're building this thing for like the next 10 years." And so that was really how we kinda went from, to your point, minimum viable product to full-scale where we're at today.
0:12:04.7 Matt Waller: Coming up with a minimum viable product, I like how you described that, because that is the way software starts. It starts simple, and then it grows. But you eventually had a viable product and...
0:12:18.4 Meagan Bowman: Eventually. It took a while. [laughter]
0:12:20.6 Matt Waller: Yeah, well, I know that's a hard part, that iterating. But there's also the challenge associated with creating the right business model, the pricing and all that. It's never obvious how to do it. You can look at other software companies, but it's still challenging to create the business model and of course, companies are always, they never stop iterating on their business models, but would you mind speaking to that a little bit?
0:12:47.8 Meagan Bowman: It's funny that you should ask. I actually believe in all of our strengths, that the most opportunity we have is in the business model, simply because and we've got a chief growth officer that we just brought on to start playing with those. I'm an old retail person, right? So to me everything is a cost-plus model in a very strict cost accounting mechanism, right? I count ceiling tiles to allocate space to how much I should charge to a head, very, very granular. And the cool thing about software, especially when you're dealing with data, is you can get to those numbers. How many calls are you making? How many of those were successful? How long is the data store? How big is the file? There's a lot of math that can go into that to kinda build this "cost accounting base of how expensive it is to deliver your services."
0:13:47.2 Meagan Bowman: The challenge for us is, and this is where I think the Netflixes of the world and the Amazons, and even Walmart with Walmart Plus, I'm not necessarily super gifted in understanding how to play against the value proposition versus just the cost-plus margin. So being a retailer, you keystone something and put it on the shelf, and you make 50% and you hope you sell eight out of ten, and then your sales is profitable. It's taken me a long time, and I would say it's an area that I'm still maturing in, to be able to kinda crack that paradigm and listen to people like you, or professors at the Walton College help me understand that there's definitely money on the table and value on the table to be extracted, but I'm just, I'm so computational that it's hard for me to get there without some serious creative help.
0:14:45.3 Meagan Bowman: So right now our model is it's subscription, and it's a very simple formula of number of SKUs times number of platforms times recency and frequency of data, and as we've closed our seed round and are heading into series A, we've got a chief growth officer that's kinda like, "Okay, I got it. You're covering your costs, you guys have done a phenomenal job, probably better than any company I've ever worked with to understand how much it costs to actually deliver. Now let's really start looking out on the horizon and say what type of value is this delivering, and how do we close a margin gap, or even exploit a margin gap, if you will to make sure that we're hitting the margins of a true superstar unicorn SaaS."
0:15:32.5 Matt Waller: How many employees do you have now?
0:15:34.6 Meagan Bowman: We've got 20 now.
0:15:36.0 Matt Waller: So you've grown a lot. So that's the next thing I'd like to talk to you about is scaling. Scaling is difficult for so many reasons, but one of the biggest is finding people that can do the work you need done that fits your culture, and then putting the processes and technology in place to make the company work, and then finally the funding for all of that. Those three things are quite challenging. But I would think, I don't know, but I would think of all three of those, the personnel might be the most challenging, especially nowadays. What are your thoughts on that and how have you found these employees?
0:16:14.2 Meagan Bowman: I would say, Matt, that in terms of scale, I am still an immature CEO. People like Bill Waitsman or Ross Collier, Lori Coulter, Mark McCain, I have managers who I've been kinda their scale jockey, like they've been the leader and they've entrusted me, and I've helped them scale. So I've always kinda been on that side of the table kind of the workhorse side of the table. Not that they weren't working, but you get the idea. It's really hard for me to move from the workhorse side of the table to the organise other workhorses together and make sure that they're all working against their strengths and complementing one another, and so just know that I'm humbly young in that. Every so often I just wanna jump in and just do it myself, and then I have to remind myself that is absolutely unscalable, that sort of thing.
0:17:08.0 Meagan Bowman: I would say from a talent perspective, we've been really really lucky insofar as myself and the three founding engineers have been together for four years. And when you've got... And engineers are... Like, when you're software engineers, you kinda move in packs, right? And when you get the reputation of being a good shop, the whole software engineering, I'm convinced that 20 years from now there will be so many case studies written on ways to work with developers and maximise these relationships 'cause I'm convinced we don't do it very well right now. And so having that cred with some really top developers in the space, and having it through thick and thin, I truly attribute to the reason people come to the company. So when you've got... It's one thing to have your CEO and Founder saying, "Yeah, this is a great place," but when you've got three guys behind you that have... We were rubbing pennies together and as they're growing, and they don't have any plan of leaving, I think that's where that magic happens when you see in some really successful SaaS companies is that they usually start with a pretty committed core group of people. And people like to, especially in engineering, people like to work on cool stuff with other cool people.
0:18:28.5 Meagan Bowman: And so because we're an engineering-first firm, really the engineers hire their friends. It's a very, very interesting and fun market. I get emails all the time from head hunters for engineers, and I'm like I'm in a position where we have more people that want to join than we can afford to have, and that's because I fundamentally believe engineers live, breathe, on this earth for different reasons than a lot of times we think they do, and so that's been a blessing to us. Now as we moved over to commercialisation, and have a Chief Operating Officer, a Chief Growth Officer, membership managers, delivery coordinators, those sorts of things, those actually started with a really really good number two. So Greg Yend, I was very very fortunate when Walmart was kinda dissolving Jet about a year-and-a-half ago, I got a note from a gentleman named Greg, and he basically said, "Hey, I've got like 15 people that worked on my team here in the Hoboken office, all Ivy League educations, like lightning in a bottle type of team and we're all being displaced at the same time. Would you have a role on your team for one or two of these people?"
0:19:41.9 Meagan Bowman: And the first thing I thought was, "Well shoot, Greg, I've got a role for you." Like, any leader that's out trying to help his team get jobs, to me it was a no-brainer. So, really, bringing Greg on as the key leader out of the Jet Walmart ecosystem and then him bringing his people on has been the other key for me. I'm not a magical recruiter, I think I'm good at getting good people and then they kinda do the rest.
0:20:12.1 Matt Waller: So Meagan, of course, the other piece of this is the funding. You have a lot of chicken and egg problems when you first start.
0:20:21.5 Meagan Bowman: Yes sir. [laughter]
0:20:24.1 Matt Waller: How did you get funding and I suppose you may have had to get funding more than once I'm not sure, but...
0:20:30.7 Meagan Bowman: Oh yeah. [laughter] Yeah. So the way I liken funding and I love talking to other entrepreneurs and people who have made things work, because I don't think there's any funding story that is exactly the same. Even if there's a path, there's always some quirky side story that you're like, "Wow, that was really strange." For us, our overhead was not huge. So if you've got four developers who are building a product, the most expensive thing is head count. And engineers are expensive. So really, when we were rubbing pennies together, I don't think I slept for a Thursday night every two weeks for about two years, because it was all about making sure that we can make payroll. And well, I was in a situation where I didn't have to make a ton of money, these guys that were working on this team, they needed to make competitive salaries. And so for me, I likened it to oxygen. And it was just like, "We just need oxygen." I believe in this team. I believe that we're gonna break through. We just need to keep them oxygenated.
0:21:40.4 Meagan Bowman: And when you're just grasping for oxygen versus thinking about it like cash, you get really creative about where you can find oxygen if you're suffocating. And so everywhere from, obviously, my personal finances, to connecting with other entrepreneurs locally and taking out loans, applying for everything the government offered. Every little grant, it didn't matter if it was $5000 or $20,000 or $10 million. We applied for every scholarship, every grant and miraculously, I think we'll look back on our books someday and be like, "Wow, I'm really surprised... We were really close to bad things." But when you've got a good team and you're transparent about where things are all the time we were able to make it through. But yeah, funding is... It's exhausting because as a founder and especially a founder that's building something that you thought through in your head, in your mind, it's so clear the value that it delivers.
0:22:40.0 Meagan Bowman: And it's fine when people say no, but it's another level of just disconnect when they're like, "And we think you're gonna go out of business." Like, "And we're not even gonna give you money or... " So it's kind of this double-edged sword of raising money. I don't mind asking people for money. I invite them to invest in what we're building. We're in a much better position today where we get to make choices as to whose money we take. But in the early days, shoot, if you dropped a dollar on the pavement, Matt, I would be at your heels picking it up and asking you for another dollar. And that's just kind of the way it goes.
0:23:24.3 Matt Waller: Meagan, I noticed you were also on the Fast Company Executive Board.
0:23:31.5 Meagan Bowman: Yes sir.
0:23:32.7 Matt Waller: What do you do and how did you get to that position?
0:23:34.5 Meagan Bowman: I honestly don't know how I got to it. One of the editors emailed me and said that they were looking for somebody like me, which was really, really cool because I've never done great in school, and I've never really fit in totally. And so to have somebody reach out and say, "Actually, no, you're a little bit different, so bringing you on would be interesting." Once they reached out to me, basically what... It's really kinda cool. They send me a list of questions every morning and I just answer the questions. They then do the work of curating that across their entire executive board, and they publish out these, "Hey, here's what different types of people are doing to address different types of situations." It's a really cool thing. I'm really blessed to be a part of it. And of course they've got all sorts of meet-ups, some fancy-schmancy things that you can do. And it's been really fun. And as a reader of Fast Company for many many years, it's cool to be on the other side and kinda get to say things that I know younger readers are probably reading and know that I was one of those younger readers at that time.
0:24:38.7 Matt Waller: That's neat. So tell me a little bit about your work history and some things maybe that prepared you for leading a company that is at the intersection of data science and CPG.
0:24:52.2 Meagan Bowman: Yeah, I was actually never really good at math in the way that it was taught growing up. So this was pre-common core. So I never thought that I would be good at data. Similarly, I started programming at a really, really young age only to find out that it wasn't something that a lot of people did back in the '80s and so little kids, especially little girls. So it was kinda like, there were little hints as I was growing up, of things that I'm like, "Okay, that's where that came from." But as you grow, you kinda just become who you are and I would say that the thing that's prepared me the best is, God, I hate to say this, it's just this relentless pursuit. That weird kind of personality that is hard to bear in a lot of different relational situations is the perfect personality for an entrepreneur who's gonna break through. And in my mind, we were never not going to break through because I never let go.
0:25:51.4 Meagan Bowman: The other piece was being coachable. As a difficult person to manage with a lot of energy, what I had to learn really early on was to ask my bosses and my peers and say, "Hey, I've got a ton of energy, I wanna make sure that I'm harnessing it, so that it helps you versus just me." That was a big part of my learning as well. And as an entrepreneur and when you're running a company, it's really not about me every day. It's about everybody but me. So I think those two things. One is just not giving up and this really crazy kinda pursuit. And then secondly, having the wherewithal to have people help me direct that in ways that made it bigger than just me.
0:26:41.1 Matt Waller: Thanks for listening to today's episode of the Be EPIC podcast from the Walton College. You can find us on Google, SoundCloud, iTunes, or look for us wherever you find your podcast. Be sure to subscribe and rate us. You can find current and past episodes by searching BeEPIC podcast, one word, that's B-E-E-P-I-C podcast. And now be epic.