David Champion, Co-founder at Baker Technologies

Thinking Outside The Bud - 019 - David Champion

David Champion, Co-founder at Baker Technologies

David Champion is Co-founder and CPO at Baker - the leading CRM for the cannabis industry, helping dispensaries generate more revenue and build relationships with their customers in one easy-to-use platform.

Brought up in Papua New Guinea, Portugal and Scotland, Champion most recently lived in Kenya, where he founded an educational non-profit in response to policies that unfairly exclude children from primary schooling. He graduated with 1st Class Honors in Architecture at Cambridge University, shortly before moving to New York City to work with Daniel Libeskind on the Ground Zero masterplan.

His first venture, UnitedInsight, orchestrated industry-leading events bridging behavioral economics research and business leadership, helping form organizational strategy at large and small companies that included Walmart, JPMorgan, Pepsi and others.



[00:00:01] You're listening to Thinking Outside the Bud where we speak with entrepreneurs investors thought leaders researchers advocates and policymakers who are finding new and exciting ways for cannabis to positively impact business society and culture. And now here is your host Business Coach Bruce Eckfeldt

[00:00:30] Welcome everyone. This is thinking outside Abud on Saqqaf. I'm your host and today we're here with David Champion. David welcome to the program. Thank you Bruce great to be on Havaner and CTO at paper technologies are there and I'd love to talk a little bit about that. But before we talk about the business I would love to get a sense of just your professional background.

[00:00:49] How did you get into the cannabis space. Just so we have a little bit of context and sense of who you are and what the history was like.

[00:00:57] Absolutely. I entered the Kennedy Space about four years ago 2014. My cofounders and I had Joel and Roger were in New York and we'd be working on previous technology startups. Joel and I had been doing some consulting with technology startups and founders and when we heard about the options in Colorado at the time dispensaries starting to do huge business but really having no technology systems available to them to operate in the same way that other retailers are used to be able to operate in this day and age. We saw an opportunity we saw the opportunity to build something that could allow customers to order online and dispensaries to display their products online and really was more of a reserve ahead product so we wanted to bring that convenience and ease to the market which was the the sort of stigmatized way of nurses cannabis that was not helpful for the legalization and and and reform.

[00:01:51] I know you have a background and development and I'm really looking at sort of what does that experience look like for the users. Where did you see. I guess what we need to see is kind of the challenges when approaching the canonizations or what. What drove you to looking specifically at cannabis and that you know given all the different things that you can develop products for or develop experiences for why this race into an Sveto backtrack a little further for 2014.

[00:02:18] So I was trained as an architect and worked briefly in New York as architect with Daniel Lipscomb and the training that I received was quite different and I think the way that a lot of architecture schools offer young budding architects had their perspective of that field. I was trained to look at a building and think of a building as a space that I think moves people into a new emotional state alters the way people physically move through the building alters the conversations they have and even the style of conversations and that training for example in an architecture space would be using materiality and physical form and height and dimension as well as the have the lighting and acoustic qualities. I was very interested by how that same philosophy can be transferred into the space of the digital now so on the screen just in the same way you ex and you designers are building an experience for people it's not just about how nice something looks it's about how does it make them respond to information. How does it make them communicate with their friends. How does it inform your productive helpful ways of being in the world and the cannabis industry. The sphere. And I realized that the stigma around purchasing a product that's ultimately a naturally derived plant that can offer significant benefits to human beings that was being undermined by the general sense of this sort of underground the hangover from prohibition. Since that buying cannabis was taboo at a mother of young children was to be seen by medicine from a dispensary by her neighbors. That would be frowned upon and the inconvenience of waiting in long lines to receive the right the bailable education around what to buy. I wanted to bring the opportunities of of software of screen technology to really help create more transparency and also to the branding itself and how that transferred into the UI make us feel like product that's been purchased aboveboard safe. It's identifiable it's not no longer sort of the real text on black background Web sites that we used to see.

[00:04:17] There's no such thing.

[00:04:20] Has the professionalism of the modern UI standards and user experience expectations.

[00:04:26] Yeah and so this was three or four years ago now. I want to get that right. Yes we're still pretty tech enemy the cannabis fleeing background Web sites and things like that.

[00:04:35] I mean it was pretty pretty rudimentary.

[00:04:38] Brandon tell me a little bit about how the business sort of started like what was the first move of the business. Did you focus on the technology and your focus on guns and customers like how how did that and really kind of kickstart in terms of the business itself.

[00:04:51] We were very lucky to have failed several times. Joel and I have been working on multiple startups since we were we were quite young and had at that time about six years of experience in making all the mistakes and also consulting with startup founders and I think when you remove Jannot in the business you're able to observe it as an outsider. You can spot those kind of challenge and mistakes and perhaps approaches that a lot of founders feel like we should. We should approach business with that are not really the most helpful. So one clear example is the model of the NDP minimum viable product. And with that and with that knowledge we teamed up with Roger who also had a yes 20 years experience in technology and he had one of his own startups before. So as the three of us Joe was handling the business communications and sales side intelligence back and back and software data and I was handling the front and end product and the branding side. So Roger and I got together to discuss what this first version of our online ordering online product should be. And in five weeks we had minimum viable products available. We released it to two dispensaries in Denver and we had alternative concepts they liked it. There were even more orders. We were getting feedback from customers that this was an experience that was better than what we're used to. And so you saw that as our as our products that we were on to something Karaganda from there. And then I also should say that pace isn't always the goal right when you're getting out of the gate. You want to save resources save money save time learn what works and what doesn't as quickly and cheaply as possible. But once we learn some of those indicators we also took time about a six month period into 2015 where we really thought carefully through how this technology was solving the problem. And then it wasn't about rapid development. It was about iteration and observation and learning from our process.

[00:06:43] I think you bring up two good points. I think a lot of people look at successful companies people that have built successful companies and I think they kind of woke up one morning for an idea of a company and by the afternoon they had no revenues coming in and I think the fact that you know you've gone through several different startups some of which didn't weren't as successful.

[00:07:02] Is good to kind of recognize and go for people to know is that it oftentimes you that the success that you see in a later stage company is because of the failures of previous companies earlier Saito's. I'd love the idea of being generative around as you know coming out of the agile world myself I think it's applying that kind of philosophy of iterating getting feedback developing insight. Trial and error experimenting in kind of smart way is around you know increasing your learning velocity about the stuff is key. What I guess what were the big questions for you in these early stages so you found two dispensaries to use your MVP early version product. What were the things that you were uncertain about that you learned quickly once you had people kind of using the product and interacting with it from interface point of view.

[00:07:45] One big one was this paradigm of B2C versus B to B. We were looking at case studies and references in the form of Yelp to an open table and Grubhub and Seamless and we were seeing similarities in our mission. Those companies are very easy to see focused as an end consumer. You receive a lot of marketing you receive a lot of cash from those companies to engage with their software and that was actually how we started out of the gates.

[00:08:11] We wanted to create this system that are cannabis consumer cannabis patient Anderson I would wonder engage with so that they could take advantage of that more community experience and essentially become a marketplace that would allow consumers to find the right dispensaries find the products they desired and education across to dispensaries and then we learned that doesn't work in this particular industry. And it is interesting because it works in other industries very well and it was a big lesson for us in 2015 to recognize that dispensaries are very very proud of their individual product. You could say the same about restaurants but I would argue that to a greater degree dispensaries believe that their strain of certain product is the best and rightly so. There are a lot of work into the growing and sourcing it now making sure that a are selling the highest quality candidates they can and so that idea of being in a marketplace where a customer could shotput even more easily move to a competitor was not something that was attractive and it wasn't helping us gain sales and grow as a company and offer this product to the market. Now what we did in 2015 was to switch that paradigm and we became Solier to be company and we decided that we would act as the best friend to the dispensary the sort of back of house all the systems and software that they would need to get the customer may not even know existed to allow the dispensary to succeed as a business to grow and to and to sort of join the rest of the world in the larger industry spaces as an official legitimate retail operation and that in fact happened since then. A great tool.

[00:09:41] Yeah I think it's an important lesson to learn are going to realize that oftentimes when you first approach the market you've got a particular business model or different with a particular positioning relative to the market that once you get in there. The reality of the situation tells you that it's not necessarily the best idea and the faster you can kind of move and pivot around that you know is really where the innovation comes.

[00:10:02] So once you had the you know your initial product you had some traction you had some customers going. Tell me about the growth process like what were the kind of the challenges that you started to run into as you had sort of product success what what kind of things happened from the business either in terms of you know technology people kind of curious how you've managed to navigate some of the legislation nuances and details as things have happened in the various states.

[00:10:27] I'm not sure of those problems for you or not. But I'm curious to get some of the Insight legislations legislation is definitely important.

[00:10:33] I wouldn't say we've faced two major challenges with legislation we haven't hit any major roadblocks that we had to enjoy that very responsibly because ultimately the dispensaries were relying on us to make sure that their customers were in reserve product illegally or exceeding for example the ordering limits on us on a specific purchase or ordering the product that they don't have access to in medical markets for example. And so there was a lot of responsibility for us to build our technology not only to cater to Colorado where we initially started but also to prepare ourselves for expansion to many states. We're in 24 or so states now. And we're also operate in Canada. We also have discussions with other countries Puerto Rico and Jamaica specifically about using our software in those countries.

[00:11:22] And one of the ways we were able to scale quickly despite the very very different regulatory demands and different territories was by building a business rules engines is an idea. Rogers originally we built the business rules engine that allowed us to plug in all of those major attributes per state. And when we grew to new states we could just plug in those numbers in one sort of sheet one place within the code base and not spend months having to iterate our platform to make it ready for new territory. So that was a challenge but one I'm proud to say that we're approaching now pertinaciously and I think for the bigger challenge for businesses starting in 2014 2015 was also funny. It definitely wasn't easy event and it's still much more limited in scope for investor and other capital availability than most other industries. That has to do with multiple factors including the limited partnership agreements that a lot of 200 are contained by and we had some struggles with fundraising in that it just took longer than we were used to my previous businesses that we got there in the end and one huge huge benefit to us who is joining 500 startup to the accelerator program in San Francisco. And that happened at just such a new time and we were about to hit this inflection point or the business that we needed the extra guidance the extra support to and of the financing as well. And there was just this wonderful sweet spot that we entered that four month program. And when we came out we were much much better off as a business.

[00:12:48] Yeah sometimes being wonkiest as the Muslim commander made the difference from week to land can be dramatically different outcome.

[00:12:58] I guess as you've kind of been in this industry and you've kind of developed this technology worked with the dispensaries what do you think now learn about the business or learned about the cannabis industry in terms of the dynamics in terms of how how is it similar or different than than other industries that you worked in before. What are some of the insights you can give us as a overall market.

[00:13:17] I'm happy to say that it's becoming more and more similar in all the ways that we were hoping for several years ago. The intelligence of the operators who now want to use data to inform their marketing and they want to use intelligent dashboard systems to make sure that they're offering the best quality provoked and also giving their customers and patients the best possible experience. We're seeing a lot of clean up in the gray areas of the market where whereas before as you know especially in California there were for 10 or 15 years operators selling cannabis in the gray market and in a way that paved the path for this to happen. What's happening today with much more globally accepted deregulation or reregulation I think are the major shifts in business Sabinus and in software platforms available as well as logistics platforms available to the industry are all positive shifts in general the the way that consumers are responding to the product is also with a greater expectation of education more and more consumers and patients are aware that there is still poor quality tenebrous on the market. Black market and white market that they should be more diligent about making sure that the products the strains that they're purchasing were not grown in environments where they might have been mold or other toxicity and all of that is positive because the fewer incidents of negative are less than positive or even just substandard experiences that people are getting from this medicine are going to sort of again lead the way towards the industry legitimizing and becoming globally expanded.

[00:14:48] Yeah I certainly had many conversations about how this market is going to change pretty dramatically once we move from the kind of you know traditional cannabis users that are made just kind of going from the black and grey market to white market you know activities or purchases today starting to open up to the general population. I mean there's there's a whole whole huge world out there are people that you know have not used animals that are now potential markets. And I think you know approaching them and helping them understand the products educating them understanding uses finding not only the facts but how does it fit into different types of lifestyles and stuff. I mean I've seen people doing no coconut water or you know all sorts of new products where they're taking you know the raw cannabis and finding just different uses for it. That is not just kind of continuation of the historic out of us but just Brendin uses. What what do you think are some of the challenges that companies are going to go through as as that happens like as you've seen this market kind of opening up to new segments. What do you think people need to be aware of or the challenges they're going to face.

[00:15:49] Well one aspect is that we're starting to see this year pharmaceutical companies anggia the industry and I believe the first pharmaceuticals CBD product was released just recently this month. And that's interesting because it obviously brings some legitimacy to cannabis into CBD specifically. It's also something that maybe we have larger operators in the industry that will be less sense of control or sense sort of feedback loops into the quality of education. It's coming with who's receiving those products. And so I think it's the responsibility of the operators in the cannabis industry specifically to maintain that expectation that standard to let the audience the customers and patients know that that information can be available and that they should be demanding before they choose any product that isn't well branded with that information. And and transparency available. That's one aspect. And it's interesting seeing the new technology advancements coming out. There's a group called molecular testing labs in Oregon that is providing a saliva test swab kit that allows any consumer to take a personal home home saliva test sending it back in a prepackaged envelope and receive a full report on their specific endocannabinoid system and how their bodies metabolizes the products and so that can help consumers learn what the what products they should be shopping for. If they are looking for certain that that's like better sleep or reduced anxiety pain management that kind of thing and the list of those types of benefits is just going to continue growing as the science becomes more and more well-established.

[00:17:28] Yeah I think that whole idea of a customized medicine customized kind of us you know this this well everyone's profiles different you're going to you're going to metabolize it differently and therefore if you tend toward certain types of products or certain types of strains or certain types of applications there's a fascinating one.

[00:17:42] So I think that's a lot of what I mean I just I think a lot a lot of people struggle with is the purchase process the actual product kind of interaction process is as challenging right now you know going into a dispensary and figuring out okay well I don't even know what to ask for. I don't know what to tell. I'm not sure exactly what I should be how I should be navigating these things is probably one of the hardest parts of this industry and as as that matures I think you'll see more sophisticated versions of that. And even just whole segments I mean I think we know from a branding point of view. There's I think there's great opportunities for just developing brands around these different segments that are saying look we're just focused on this type of person looking for those kind of this kind of day with the product.

[00:18:23] Yes. Just to respond to your earlier question about what's what's changing or how does this industry seem to be set apart from many other industries.

[00:18:32] Also the fact that there isn't as much a legacy of the infrastructure. And I would say the inertia of other industries it's old brand new fresh faced and really being created as we speak. That gives an opportunity for as innovators in the industry to develop new systems in a way that they should be developed as opposed to based on sort of responses to what the market has become accustomed to over the last 100 years. You look at the alcohol industry. The consumer is very very entrenched in how you purchase alcohol the way you get marketed about it. The choices that you make where you make them online ordering for alcohol still has never really taken out even though there are some great technologies for doing that. Now people still expect that they're going to walk into the local liquor store one store and make those decisions. They expect that they're going to have a certain type of conversation with their friends or with even the experts about that. And I think because there isn't that preset paradigm from most consumers in this industry. Bearing in mind that the people that are purchasing cannabis legally now many of them are coming to cannabis near their newly educated about the benefits cannabis can offer. And so we have a responsibility again as well as an opportunity to create a new paradigm for the systems in place. And like I say it is a fresh canvas we can we can build how good we think is best for the market.

[00:19:49] Yeah as I was handling security keyboard problem right there. We're still typing on these ancient keyboards because you know of an old issue that we have long since all but yet we can't get out of it because of our standards. We don't want that issue aren't out as we can really we can stand around.

[00:20:04] The other thing I find that's interesting. I don't know if you noticed this but just because of the regulation side of it and the whole kind of non-human with the state versus federal is that it means that a lot of players that otherwise might be very quick to go in and establish themselves in the space are not doing it because they don't you know they don't want to touch it for various you know they don't want to taint other business business lines or other businesses out there which creates an interesting space for being able to really innovate in these areas that are are are kind of it's open season.

[00:20:32] It's open it's an open field and I've seen a lot of companies come in and really create interesting solutions for the kind of space because other companies don't want to come that have potentially existing products or extensible products and they haven't done that. And that's an interesting one that I've seen and it's in its currency with coming into that market and take advantage of that.

[00:20:49] I don't know if you've noticed Cumming's doing that but it's it's one that I picked up deafeningly I would say we're in that boat and in many of the cities you've created are very very innovative. I would say there they are specific to the industry. There are so many specificities to how cannabis is sold the pricing models for it. The regulatory restrictions per state and even county many of the other aspects to how consumer interacts with this marketplace. So I wouldn't say that any other say e-commerce or loyalty or marketing messaging company could have just landed in the cannabis industry. The same goes for Point of sale system specifically. But that said I think many of them would have made those amendments to their to technology and moved into the industry much sooner than they had been able to. And the fact that they haven't been able to has allowed for many other entrepreneurs and innovators to come into this industry with a head start and that will shortchange in the next. Now you can guess how many years it will change but it's very very interesting that again going back to the idea of not having inertia or preset expectations being behind the innovation in this industry. Most companies that would have been and are already operating in other industries and there are large would have moved into the cannabis industry would have had a preset precognition about what plans to be offered to this market and because we as entrepreneurs have come in without that that pre configuration and say we we've been able to very much cater to exactly how the operators in cannabis want to want to deal with their technology.

[00:22:19] So it's a great situation to be in as an entrepreneur and having that blank slate or at least a clear field to start developing and playing and so on and talk a little bit about where you see the market going and I know that you've got an announcement for Baker or someone with when we talk a little bit about that in the context of how you've seen kind of business playing out.

[00:22:39] I think we are in a we're at least in the beginnings of kind of I think the next phase of the industry we've got a lot of different players on there in different areas that are developing great product that as the market expands you know those things are going to have to kind of get put together in different ways. Tell us what's going on with Baker and and I know you can talk about some of it not about others but but let's do it in a sense of you know where some of these companies I think are kind of going and what kind of business activity I think we're going to see in the coming years and the kind of a.

[00:23:07] So I'm excited that we've recently announced a merger between Baker and three other companies. We have I think made a really really powerful combination of businesses that allows us to broaden our scope beyond the retail space and through the entire industry ecosystem. We now have access to the data as well as to the just the operational expertise and the capital that comes along with it. Now building our business through the cultivation processing and producing and retail spaces as well as again technology bringing the types of insights into typo's understanding of what's working and what's not working that can make for a really powerful combination and ultimately bring bigger insights more helpful insights to the industry. So as Baker we continue to build the best quality product S.A.G. that we can per our dispensary clients and by being more aware of what's working and what's really making an impact for the industry. We can do a much better job much more educated job and building those products for the industry.

[00:24:11] Yeah I think that sort of vertical integration makes a lot of sense especially at this point on the market where there's so much advantage to having insight and communication from you know from from seed all the way to use that. That being able to really know what's happening at each stage and be able to develop insight and strategy around that I think is no reason to move so I'll be curious to see how things play out for you and I guess what what do you anticipate in terms of jobs where are you seeing that market don't you would you expect that more companies look at this kind of partnership integration consolidation there are you know across geographic or from a production point of view what do you see as being kind of the likely dynamics in the industry.

[00:24:57] I do see consolidation coming in I think a large component of that is that much larger funds and financing are entering the industry now that legitimisation has been established. The the opportunity for both large and small companies to essentially just do a better job of what they are offering is now available with that capitalization and with the types of consolidation that I think accelerate the movement of the different operators in different parts of the ecosystem to spread more quickly throughout the states and even globally we're seeing obviously very interesting shifts and movements happening in Canada. And this is creating a big tie between Canada and America given them both superpowers for Canada as it stands. And so we're going to see a lot of capital entering from both abroad as well as between these two countries that will help the consolidation essentially bring different components of its innovation forward the way cannabis has grown the way it's tested the way that it's processed and produced into various milk products.

[00:25:59] And on the retail level as well as green grass if you're going out and starting a new business.

[00:26:06] If you're a entrepreneur kind of you know getting into the space and areas that you would focus on either kind of specific problems or domains that you think you know still have some and have the potential and the kind of space I would say that any type of business that you have that your audience has seen in any other industry that offers value of some sort can offer value in the cannabis industry. And while many many technology companies have spawned in the last four or five years there are still so many opportunities in this industry that it's hard to pinpoint one because I think some of the more popular ones are the more obvious shots like mass marketing which we're obviously emboldened like. Point of sale systems wholesale platforms inventory tracking security and delivery is the big one. There's a fair amount of competition in those different aspects. But it's interesting when you see the components in the market the corners that maybe don't have the spotlight on them that people have not necessarily assumed would be devalued at cannabis. We have a great relationship with the company work Wu arcade and they've built a char and personnel management system for the cameras and stream it really sort of sits in that corner of the unsexy businesses that actually provide a lot of a lot of value and are needed in cannabis. So I encourage anyone who is interested in entering the industry to not think about the obvious one of the things that we have seen on tech crunch to restaurants whatever but to look at where their expertise may bring value to the Kennedy Space and to go through. There's plenty more options. It's one of these areas like cryptocurrency I think which the market believes is late in the game and actually we're going to find that we're all still very very early space.

[00:27:47] Yeah yeah I think a similar to my answer. It would just typically probably look less sexy so unsexy business is I think a lot of it and it's more about what what are your passionate after and like eat breathe and live for a full year 24/7.

[00:28:03] That's probably more important than the biggest market opportunity because he can invest everything and make it work.

[00:28:09] None of this matters. If people want to find out more about Baker find out more about you what's the best way to get a hold of you and get more information.

[00:28:15] Our company is made here technologies Our website is try Baker adopt Hummel's. Right. BAIER And my personal LinkedIn handle Shiti. Twitter handle it is s underscore champion.

[00:28:30] Great almonds from both of those and are showing us that people can get those Devar there's a pleasure thank you so much. We will keep in touch and I'll be curious to do another episode on a couple of months post merger here and we can see how things are going but I'm excited for you.

[00:28:44] It sounds like you're doing some great work and you've got some new exciting opportunities coming up.

[00:28:47] Thank you Bruce. The options

[00:28:50] You've been listening to Thinking Outside the Bud with Business Coach Bruce Eckfeldt to find a full list of podcast episodes. Download the tools and worksheets and access other great content. Visit the Web site at thinkingoutsidethebud.com. And don't forget to sign up for the free newsletter at thinkingoutsidethebud.com/newsletter.