Slow Decisions Are Killing Your eCommerce Business - Alex Pospekhov

Speaker A: I think the missing layer is a system of records that uh, survives this multi channel complexity. So without the unified record, without unified data layer, the brand is reconciling three sources of trust, let's say like the Shopify, the retailer portal spreadsheet and some updates on Friday. So that's the thing we want to replace. So we want to put like all the inventory, all the fees, all the compliance, customer state in all one operation layer that can act on top of that record.

Speaker B: Hello and welcome to the E Commerce podcast. I believe that there is more than enough content focused on e commerce marketing and not enough content celebrating the real heroes of E commerce, those running the operation. Each week we find and interview an e commerce operations expert to share the secrets behind how some of this industry's most exciting businesses are run. I'm your host, Norbert Strapler, the CEO of Syncspyder.

Speaker C: Uh, hello and welcome to another episode of the E Commops podcast. And today's guest didn't come into E commerce from marketing or retail. He came from frontier tech, from space systems and from defense AI. Wow, powerful. Alex is the co founder of Hyper Focus, an autonomous operations platform for brands that's selling on TikTok, Amazon, Shopify and wholesale. And um, instead of running ads, he mapped over 40,000 operations per month per brand across 465,000 plus stores to understand what actually breaks the brand scale. His observation? Spreadsheets don't scale, manual ops don't scale, and hiring your way out of chaos doesn't scale either. So this conversation is about what really breaks when brands add a second or third distribution channel and what a uh, system designed alternative could look like. Welcome to the show, Alex.

Speaker A: Good morning, Norbert, nice to hear you.

Speaker C: Yeah, great to have you here. Before we dive in, Alex, who are you and what made you shift from frontier tech and defense AI into E commerce operations?

Speaker A: Yeah, totally. So I can call myself serial, uh, tech entrepreneur. Last six years I was building space tech company. We were involved in uh, forecasting of the solar storms, developing satellites, do a lot of the data fusion, providing lots of the models for the forecasting of very complicated and sophisticated scientific data. And my task was to explain in simple words to people who have zero understanding of what it is, why it's very important and why do they need to buy it.

Speaker C: Okay, very interesting and I think a hard job to do that, right?

Speaker A: Absolutely. But as one man said, it's very important to have CEO of the space tech company who came not from the tech world because he must be a rock Star he must tell investors to put the money to the thing they're not very well under can understand. And the same goes to all of the other applications in the space domain because we had two different customers not only in the space tech but also uh, in more normal world, let's say like the airlines or the people who do like the risk aware job every day.

Speaker C: Got it. So after you've been mapping 14,000 plus operations per month per brand, what pattern shocked you the most?

Speaker A: The most it was not the volume of operations. What shocked me the most was the logic behind decision in the people lives. Because companies that don't document how decisions get made, which creator gets sample went to the flag anomaly, what should we put to inventory? So it becomes like internal lore like the tribal knowledge, it's nowhere written down. So the moment that employee quits the company loses the playbook. People just don't know what to do. This was like the most shocking part because in our frontier tech industry everything was very well written 10 times repeated. And uh, for me it was very interesting decision. Yeah.

Speaker C: Ah, well it's very interesting that you say that because if I think about my customer base and even my own company, I can completely confirm that this is the case. There is no one really trains you on how to build a system.

Speaker A: Yeah, exactly. Exactly.

Speaker C: When you start getting an entrepreneur, uh building up a store, you do it because you like to do that. You, you want to do that and there is no training. You just start off and do it. It's and then on the road or down the road, you simply don't think about how should I document that, how should I write that down? What is if someone comes in and should do the next thing?

Speaker A: Exactly. That's what we put in our manifesto. Because uh, the most thing I want to bring back is I want to bring back joy to the people who started their own e commerce business. Because you tell, you told about it. It's like this real, you feel that the first day and now you just can comprehend it. You can imagine if somebody told you like five years ago how it's going to happen, probably you would be saying no.

Speaker C: Perfect. Well, we will talk a bit later about how you solve the problem. But first let me ask you what breaks first when a brand adds a second distribution channel on top of a uh, spreadsheet driven setup.

Speaker A: With one channel the founder makes the call under an hour. With two every decision is like the cross channel contact and then spreadsheet can give you that in the real time. So decision then splits like from hours, days. By the time you decide, the moment is totally gone. So you don't lose money on bad decisions, you lose it like on the slow ones. And uh, if you're scaling your company and uh, if you have like your weekly routines, the information you have on Monday is already made last week and probably it was collected like couple days ago. And it's like the big problem that you as entrepreneur must decide on the data which like already outdated and you don't have the opportunity to challenge it. You don't have the opportunity to scale it. So I'm thinking it's like the biggest, it's the thing that breaks first.

Speaker C: Yeah. So spreadsheets work maybe at a 20k per month revenue, but uh, at a full part of 200k or 2 million. It's not the right tool. Right.

Speaker A: I'd like to say that spreadsheets at 20k cap you at 20k because uh, most of the operation decisions they live inside one person head. So you don't have uh, no, you have no system, no logic written down. Okay, maybe it's like the worst case scenario, but like on the sum levels of your decision, it really look like this. And like at 200k, it falls apart faster than people can expect it. Because now you have multiple people making decisions. They don't understand how the original decisions were made. So someone reorders inventory without knowing the ad team. The ad team don't understand like what people from the finance want from. From this. And I'm not touching the market at all.

Speaker C: You know how hard it is the marketers are anyway. Completely weird.

Speaker A: Absolutely.

Speaker C: If spreadsheets disappear tomorrow is a bit of a fun question. How many brands would actually survive that?

Speaker A: Yeah, you know, I like to say that the ones who survive are the ones who already read spreadsheets. A scratch paper, not as a system of record. A healthy company use spreadsheets to think like model scenario, run a quick calculation, sketch the forecast. So. But you open, you close it, you throw it. The actual state of business lives somewhere else in your erp, in database, in ledger. I don't think spreadsheets gonna disappear. Probably only in the case when somebody will give you the tool. But I think we just so far away from it. And people will never Excel, never leave their Excel spreadsheet.

Speaker C: Yeah, hopefully we need it each and every day. Well, you documented a fee leakage of 11 to 16%. Why do founders usually not see this until it's too late?

Speaker A: Because nobody reconciles the number that looks roughly right. Founders see the deposit hit the bank and they just move on. Nobody want to re reconcile, nobody want to calculate it because the fee is buried across like dozen line items like referral, fulfillment, ad attribution returns a fixed adjustment and it's no single line is big enough to trigger the alarm. So we called it like a death by a thousand small fees and it's still very very time consuming job.

Speaker C: Yep. To analyze that and to get that fixed.

Speaker A: Yeah.

Speaker C: Uh, when a brand goes viral on TikTok or an Amazon or what actually breaks behind the scenes first it's not

Speaker A: a thing, it's a chain. First inventory, then customer service. Like you have 10, 10 times more ticket like overnight then your team is staffed, you have a lot of issues at ah fulfillment then reviews the platform M penalties, you have late shipment rate trigger, seller health warning. So by day number 10 the brand is fighting on five front at once. And the viral video that started is like already cold and it's like already dead. So it's a big problem and people from the outside this world think that oh viral video, it's like it's a holy grail. No, no, it's very heavy. It's very heavy test for the team and for the operations themselves.

Speaker C: I can fully agree to that. But when you talk with founders and most founders actually really think adding Amazon or wholesale is just another channel.

Speaker A: Why isn't I think every channel has its own velocity, its own uh return policy like the fee structure compliance regime and the customer customer expectation. TikTok shop is a uh, let's say content channel with 30 day return and creator driven attribution.

Speaker C: Yeah makes sense. But nowadays I see this more and More that typically D2C brands start releasing a wholesale channel. I've seen that also very often with our customers and uh, that they actually started in D2C and then they, they started to also do wholesale because the products get got some tractions, they fund resellers. What operational layer is usually missing?

Speaker A: I think the missing layer is a system of records that survives this multi channel complexity. So without the unified record, without unified data layer, the brand is reconciling three sources of trust. Let's say like the shopify, the retailer portal spreadsheet and some updates on Friday. So that's the thing we want to replace. So we want to put like all the inventory, all the fees, all the compliance, customer state in all one operation layer that can act, that can act on top of that record. Mhm.

Speaker C: Okay. And if a brand plans to add wholesale distribution this year, what infrastructure must be in first place?

Speaker A: Something is like five things. So first you need to have a unified inventory ledger across all of your channels. You need to have batch traceability for the recalls. Certainly need to have compliance rules engine because they're all different on the platform. And the more complicated brands you have, the more complicated this compliant thing is. You need to have channel specific demand forecasting because again like with the viral video you can have Spike on the TikTok but if you share the one layer with your Shopify store and system is not updated like very often or you just didn't test it properly, you can have a lot of the issues. And you need to have a separate margin model for, for wholesale because of course it's like behaves totally differently from the D2C. Something uh, without these wholesales like growth looks like a gross and the operations like a leak. Yeah.

Speaker C: Ah, got it, got it. Well, with hyper focus tech you developed actually help for the customers. What problems do you solve and how is it really helpful for customers?

Speaker A: So the thing with the thing we solve at the first place that we can give small teams, we can give the teams five times more efficiency so they can manage five times more operations, they can increase the attributed margin. And second thing that finally you can do all of the operations needed because usually you simply don't have uh, you simply don't have the people who should fulfill the whole to do list you need to do. And it's always okay, we have five people in our team, we have 10 people of our team, but we have 20 times more jobs and tasks that should be done. And you always try to, always try to find the balance. So we bring, we bring the joy to the small teams that they now can manage much more bigger iterations. I bring this tech which is usually open only to 1% of the top ecom brands, to everybody. This is let's say my m, my main mission as a human being here.

Speaker C: That's great. And how does this look like? What can I expect when I go into the solution?

Speaker A: So we have five different operation layers. So we have shop, we have your life for the live streams. We have created relationships so we have the content and the finance itself. Then you simply put the tasks the same as you put the task to your uh, to your team. So you can put some routine tasks, for example monitor the compliance rules, monitor the shop health. You can ask the system to do some search for example bring me the, bring me the creators with different, with different filters or otherwise you can ask the system if you have a lot of inbounds from your creators. Just show me, show me the guys who already like passed this filter. You can also put this thing on the autopilot and just see how everything executed. So it's mainly the same as your normal project management tool. But the difference that ah, there are agents behind it who really execute this job and they also can ask you to do the work for example if you need to approve something or if you have the alert or if you need to do something manually. So technically it looks the same as normal project management software except these are like virtual agents that already do the job for you.

Speaker C: Yeah, and that's good. I mean AI is so much of a uh, helper especially in E commerce and automation. Absolutely. This is really something that would not have worked five years ago, but now it's a complete different story in a complete different world.

Speaker A: Even, even six months ago it was like nearly impossible.

Speaker C: After you've analyzed so many thousands of stores, do you think most founders truly understand the operational margin?

Speaker A: I think like 50% yes. The problem that usually you don't have so much to do with your operational margin and the only thing you want to do is as written like in many playbooks that you need to increase your sales because channels are growing, TikTok shop is growing, everything is growing. So when everything grows very well then probably like the better solution to spend your time on growth and sell more. But on the other hand you still, you uh, still have a lot of to do like the manual work, how to cut this, how to cut that. This is like where AI can help you because I can imagine it's like, it's very like it's very noisy. You know, it's very like sad job of trying to optimize like couple couple percent point. But this is a place where AI can really help you a lot.

Speaker C: Awesome. Very, very interesting. And guys, if you want to check it out, just hop over to hyperfocus.de and check it out yourself. Alex, typically we have the wrap up here where we ask you the question from our previous guest. This was Chan Millard, the CEO and co founder of Main Love. They sell water. This is also really great. They sell water. I love that idea actually and the concept, it's really great. And she has a super duper question, namely mine. I always ask that as well but it's a great one. Who shaped your thinking throughout your career? A uh bit in other words than my who has told you most about e commerce thingy. But I love that as well. So who shaped your thinking throughout your career?

Speaker A: It's elon but not in a way like everybody talks about him. He started his space venture maybe like year 2000 and he spent eight years developing everything from scratch with zero results. And I still remember I have this picture in my office when he sits on the pile of trash from the latest rocket launch with a uh, very, with very, very sad face. And nobody knows why because the reason that they only have left money at the bank account for only one lunch more. And it's like if next launch will fail, there will be no SpaceX, there will be uh, no space venture. And like in the hard times and you always ask yourself what this man is made of that he can spend eight years without having any results at all, without putting all of his money, all of his effort to the idea that probably will never work. And it can apply like to the any, to the any industry, especially like in our very complicated time.

Speaker C: And this is uh, very motivational sentences that you just said. And I really love that and I love the idea because eight years is really a long time, really a massive long m time where things change and happen. But what it shows us is stick to that, what you love and it will work at some point. Uh, and that's very motivational and I love that. Now it's your turn. Alex, what's the question you'd like to ask our next guest?

Speaker A: As I've said earlier in my personal mission here is like empower founders in the e commerce with the stack tools which only now only huge corporations can have. The question here is if nearly anyone will have access to the same tool, stack, to the same technology, to the same providers, so how the sales will be different, what will separate the good brand from the bad brand and what a founder of the future should focus on.

Speaker C: Great. Okay, thank you. We will ask that and give you an update about the answer. Alex, uh, this was one of those conversations that makes you realize that scaling is more about surviving more complexity than just selling more. It's really more. It's. Everything is. It's a complete different world if you start scaling in different channels. So spreadsheets feel productive, hiring feels like progress, but neither fixes the broken system. This is what I understood.

Speaker A: Yeah.

Speaker C: So for everyone listening who's layering TikTok, Amazon, DTC and wholesale on top of each other, the real question isn't how do we manage this? It's how do we was this system designed to handle this in the first place? And I think this is where we need to go to to get a system when we scale and implement that always and ever.

Speaker B: That's it.

Speaker C: Thank you so much. We see you in the next episode of the ecomops. Bye Bye.

Speaker B: And that's it for this episode of the EcomOps podcast. If you enjoyed listening and would like us find and interview more E Commerce operations experts, Please search for EcoMouse podcast in your favorite podcast listening app and then subscribe, rate and review. Until next time.