– Episode 268Sudheer Koneru

Episode 268: Transcript

GMSB 268

[00:00:00] Antony Whitaker: Hello, and welcome to today’s episode of the Grow My Salon Business podcast. I’m your host, Antony Whitaker, and it’s great to have you here with us today. This is the weekly podcast for ambitious stylists and salon owners. And every week I either bring a guest onto the show, or I’ll dive into a new idea or revisit the foundations of what it takes to succeed in the salon industry.

[00:00:27] Antony Whitaker: We’ll also feature new startups and new ideas and initiatives from established people and brands. We’ll explore how they will reshape clients expectations and how they’ll be central to the future of the salon industry and perhaps even become the new normal. Now, in case you don’t already know, video versions of our podcasts are now also available on our YouTube channel.

[00:00:49] Antony Whitaker: So if you want to put faces to the names, then head on over there and don’t forget to like and subscribe to the channel. Or if you’re listening on your favorite podcasting app, then leave us a review or share the podcast with those that you know will benefit from our message. So with that said, on with today’s show.

[00:01:08] Antony Whitaker: Today’s guest is Sudheer Koneru, Co-founder of Zenoti Salon Software. In 2010, Sudheer was running a successful chain of businesses that were a combination of gyms, spa, yoga studio, and salons in India, but he felt hampered by the inadequate software solutions that were available at the time. So to solve the problem, as he had a background working at Microsoft and in the United States, along with his brother Dheeraj, they set out to create software that would transform the beauty and wellness industry. The result is Zenoti Salon Management Software. Now fast forward to 2024 and today Zenoti is the world’s number one salon software brand operating in over 50 countries in a total of approximately 30, 000 businesses in the beauty and wellness industry.

[00:02:00] Antony Whitaker: In today’s podcast, we’re going to discuss the role of AI in the salon industry today, predictions of the impact that AI will have in the immediate future, and the advantages of having only one piece of software that handles everything from being a point of sale and booking platform to doing all your marketing, management and business analytics, and much more.

[00:02:24] Antony Whitaker: So without further ado welcome to the show Sudheer Koneru CEO and co-founder of Zenoti Salon Software

[00:02:32] Sudheer: Thanks, Antony. Happy to be here.

[00:02:35] Antony Whitaker: Well, it’s great talking to you. I

[00:02:36] Antony Whitaker: I’m curious about something, which I’m sure that a lot of my listeners will be, and that is that before you started Zenoti, you. Worked for Microsoft, which I always imagine, and I’m sure most people do, that Microsoft is a very high tech and sort of low touch industry. And now you’re in the beauty and wellness space, which is traditionally regarded as exactly the opposite.

[00:03:00] Antony Whitaker: The sort of low tech and high touch industry. So I just want to start by asking you, how have you found working in the hair and beauty space? Because that’s quite a big transition from the tech world.

[00:03:15] Sudheer: Yeah, I think it has been very rewarding because I, you know, I think somewhere along the way in my career I got, uh, very passionate about wellness and, uh, you know, even things like empathy and connecting with people. And, uh, I learned a lot about empathy. I actually did some courses and everything and, uh, as you said, went from being high tech to being a much, uh.

[00:03:36] Sudheer: softer person who was more present to, uh, human interactions a lot better than I was, uh, you know, growing up in the tech space where you’re just heads down, uh, you know, building technology. So I’ve found, uh, the industry in general and being able to connect with people and, uh, you know, the fact of this industry literally, touches people in a literal sense, you know, when people allow them to come into their personal space.

[00:04:00] Sudheer: And, uh, you know, just being a big admirer of what the industry achieves, and it’s been very rewarding. It’s a switch, I guess, in my, from a younger age to an older person who’s more empathetic and loves this kind of a space and industry.

[00:04:17] Antony Whitaker: Well, I’m going to look forward to digging into all of that now. Uh, we’ve got a very global audience. A lot of them will be very familiar with Zenoti, but I’m sure there’ll be some people that, uh, don’t know even what Zenoti is. So, for context, can we just do a little bit of background? Did Zenoti first start in India?

[00:04:39] Sudheer: Yes, it started in India for the first three years. I actually happened to be living in India at the time and we started there and then after three years and the initial software was developed and evolved and I moved back to Seattle and that’s how we continued the buildings in Zenoti.

[00:04:56] Antony Whitaker: Right, so head office is now in, uh, in Seattle in the U. S.

[00:05:02] Sudheer: Yes, that’s right. And almost 80 percent and above of our businesses in the U. S. Yeah,

[00:05:08] Antony Whitaker: Right. Okay. Now, I was lucky enough to be at your Energize conference in Las Vegas last month, and I heard you say a comment you sort of just, you know, sort of almost flippantly said, and in the last 12 months alone, we’ve just hired another 150 engineers in Hyderabad. Um, that just sounds like a huge achievement.

[00:05:31] Antony Whitaker: Uh, you know, a huge commitment hiring another 150 people. So, um, talk to us about that.

[00:05:40] Sudheer: yeah, I think the industry, I believe, since the last 12 months is going through a big inflection point with A. I. And it’s going to touch so many industries and so many lives in many different ways. And, uh, you know, I felt now is the time that If there was a time where it is, and what you should be investing even more heavily in terms of, uh, you know, the technology needs kind of for the whole industry.

[00:06:03] Sudheer: And so a lot of the investment is around, uh, AI that we have had to do. And I think, uh, you know, being, uh, one of the leading solutions and, uh, you know, systems that are used by large players, I think our customers will demand that and expect that kind of, uh, you know, support. So we decided, you know, we’ll invest more in that.

[00:06:21] Sudheer: And also traditionally. Zenoti is more of a product and engineering oriented company than like a marketing machine. We hardly spend much money on marketing relative to most of the other people, but we invest all our money into into product and engineering.

[00:06:38] Antony Whitaker: Yeah. Now, one of the other things which I was sort of intrigued about was that Zenoti has really captured the, uh, the end of the market where all the big brands are. The multi salon, multi spa, uh, locations. Why did you, uh, start off with software that was specifically aimed at the multi salon business.

[00:07:03] Sudheer: Yeah, so there were twofold reason. One is my background completely is an enterprise software. Like I worked at Microsoft and then after I quit Microsoft for eight years, I did a startup which was catering to large enterprises. This is we’re talking like the top S and P find it as my customers, uh, very large and organizations.

[00:07:22] Sudheer: And furthermore, prior to starting Zenoti, I actually was running a chain of companies. Uh, you know, it was like integrated studios, which had a gym, spa, salon, everything under one umbrella. And, uh, we had, you know, we started growing and we had about six of these and I was like, Hey, how do I manage this business?

[00:07:40] Sudheer: And I tried to use the existing software systems in the industry and realized. Wait a second. There isn’t any solution which stands out for large businesses. You know, they use the same software that the single store uses. And, uh, given my natural background of knowing how should a enterprise class system look like, uh, you know, I felt, well, that’s the place where I can bring value to the industry because If I was to build just another system for single stores, there were a lot of options, and we wouldn’t have been successful at all as a company.

[00:08:11] Sudheer: So by choosing to just focus on the larger businesses, I think we found an opportunity to serve a segment which was not as well served.

[00:08:19] Antony Whitaker: Yeah, I don’t say this based on any, on any fact, but I’m sort of thinking that probably most people do it the other way around. They start off trying to develop a really simple system for a single salon. And as that gets more and more complex, they end up with something that’s aimed at chains. Would that be a more sort of, you know, have I, have I got that right?

[00:08:41] Antony Whitaker: Is that what most people tend to do?

[00:08:43] Sudheer: Yes, I do think that’s very much true. That’s what people do. And so many people Find us to be a very inverse, invert, uh, inverted process compared to most companies and there are not too many examples of companies which start at the very big and then start working their way down saying, you know, okay, now that we have helped the bigger folks, can we try to come up with some simpler solution, etc.

[00:09:07] Sudheer: So we are exact opposite of 90 percent of the world out there. Yeah.

[00:09:10] Antony Whitaker: Yeah. Okay. And I also heard you say that 20 percent of the industry, uh, ballpark, and it’s always interesting how the 80 20 rule plays out with so many things that 20 percent of the industry is owned. By the large brands, the big franchise groups that are, you know, all over the world. And the other 80 percent is sort of the owner operated segment of the market.

[00:09:32] Antony Whitaker: Yes, absolutely. So it is a tough call for me to choose early days to say we will only focus on 20 percent of the market. So most people, investors and everybody will be like. Hey, why is this interesting? This is such a small market you’re focused on.

[00:09:46] Antony Whitaker: Okay. But it is still just as relevant, isn’t it? Is Zenoti for, uh, for the single salon business. So have you sort of, as you’ve sort of mastered the chain, you know, the big groups of salons and what they need, have you sort of then looked at the single salon business as a separate challenge and adapted it to suit their needs?

[00:10:07] Sudheer: Yeah, we have and now we do cater to some single salons as well. And I would say the way we think about it is salons which are busy, maybe a lot of moving parts within the store. Uh, maybe help for memberships, packages, gift cards, like have more demanding needs, right? They will find Zenoti more relevant.

[00:10:27] Sudheer: Now, if you’re a salon, which is very simple, three, four people working together, uh, you don’t have many other credit instruments and all that. There could be much simpler systems, which will meet their needs still, uh, relative to Zenoti. So I think over time, uh, of course we will continue to look at saying, you know, how do we bring to, uh, bring to the front, like a simpler and simpler product as well down the way.

[00:10:51] Sudheer: Uh, but it’s not just about delivering a simpler product. It’s also about designing our organization such that, you know, our systems and processes work well when it comes to smaller businesses as well, right? So, whereas, uh, we are really designed around businesses which have complexity to them, you know, their richness in terms of all the things they’re trying to do and all the moving parts within the business.

[00:11:14] Antony Whitaker: Yeah, well, I’m going to, I’m going to talk to you more about those, you know, different levels of complexity as we dig into this, but, uh, let me turn that question on its head then and ask another question is what kind of salon businesses are not your customers and why?

[00:11:31] Sudheer: Yeah, I would say, uh, let’s say a simple, small, uh, you know, store, which has only four or five employees, or if you’re doing less than 50, 000 in revenue, it’s unlikely that such stores will have a lot of complexity. What I mean by complexity is Do you have different pricing for different providers? Do you have, uh, you know, uh, services which take different time for different, uh, customers saying, you know, Hey, some people need more time.

[00:11:56] Sudheer: Some people, uh, more such smaller salons are very simple and very basic. Here’s a simple menu. There’s no complexity to my menu. Here’s four of us who work together. Uh, there aren’t too many rules around how to do online booking, et cetera. Uh, so for them, it’s. The needs are very, very simple. So you could find, uh, simpler solutions out there, which, and the companies are also designed well to maybe to work with such customers.

[00:12:23] Antony Whitaker: Yeah. Okay. I still can’t get my head around the fact that, you sort of. early retirement, so to speak, uh, moved back to India, uh, and, uh, then started a chain of salons, slash spas, slashed gyms, et cetera. Um, that’s, you know, I imagine wasn’t something that you. had in mind when you moved back to India, you probably thought you were going to start to lead a quieter life.

[00:12:54] Antony Whitaker: But if anything, you’ve gone very much, you know, in the opposite direction and, and ended up with this, um, this big business.

[00:13:02] Sudheer: so I’m curious, why did you start the wellness business in the first place?

[00:13:08] Sudheer: Yeah, so I actually when I finished my second my startup in the company after Microsoft, I told everyone I’m retired and, you know, took a break. I actually took a couple of years, but I invested a lot in my personal wellness. I used to go to yoga. Then I, you know, went to meditation classes. Then I did all kinds of programs.

[00:13:28] Sudheer: I traveled a bit, uh, and really reconnected with myself and, you know, got into a space and deep appreciation for what wellness means and wellness is. You know, I believe it’s just being in a state of state where you are living life to your full potential. And what does that imply? So I got super passionate and I realized all my life before that 16 years I was heads down working hard, which is typical for anybody in their careers.

[00:13:54] Sudheer: They’re working really hard. And I wanted to say, how do I help people wake up? That wellness is a concept which is important while you’re living your life. It doesn’t need to be delayed. Till you retire, like I had delayed it. So, uh, I wanted to, you know, touch more people’s life. So I started this business and it wasn’t just a regular gym spa salon.

[00:14:14] Sudheer: We did a lot of integrated programs and bringing together breathwork and meditation. And, uh, I really tried to focus on overall wellness of people who walked into our business. And, uh, so I got very passionate around the whole space.

[00:14:28] Antony Whitaker: Right, okay, I know that you always refer to yourself as a co-founder. Uh, I believe it’s with your brother. Uh, so I’m curious, did he already have something in that space that you then got involved with or did you start it from scratch?

[00:14:43] Sudheer: No, he was the one who started the business. He came up with the idea of starting saying, how about this? Because I was into a lot into wellness. And I said, so we both worked on it together in terms of getting that earlier wellness business off the ground. Yes.

[00:14:59] Antony Whitaker: when you started to build and develop that business, I think you ended up saying that there were about six different, salons or studios or whatever it was. Um, You made a very specific point before when you said that your vision for the company was that you wanted Zenoti to be the only software that they needed to grow, thrive, and prosper.

[00:15:23] Antony Whitaker: Yeah, I think I’ve got that right. That’s essentially your mission statement. Um, so what I wanted to ask you about was, was that idea of having, um, only one piece of software. Was that born out of the frustration of you running this business and having to integrate all these different pieces of software together?

[00:15:45] Antony Whitaker: And so you thought this is crazy. We need one application that can do everything instead of having multiple different things that each did part of the puzzle.

[00:15:54] Sudheer: Yes, absolutely. Especially coming from a very, Product and technology background. I could see, like, how can it be that I have to use multiple systems to do something as simple as running this business? And how can I even afford it? Like, you know, if I had to go out and buy that and this and put it together and have somebody oversee all of it, it’s etcetera because, you know, you know, fundamentally for a business is having all the data in one place is a very important thing.

[00:16:19] Sudheer: Because, uh, you know, if you want to do marketing and you want to say, I want to find people who have not visited in X amount of time who spent more than 1000 and gave me bad feedback last time. And that’s the group I want to go after. It is very hard if you don’t have all the data in one place, if your feedback is sitting in some feedback review system, which is separate.

[00:16:40] Sudheer: And, uh, so, uh, for any large business of such nature, bringing all the elements of data together and having an integrated system enables rich scenarios to come to life, which people can’t even imagine before. And, uh, you know, further, even when we started, you know, A lot of people just businesses used to pay three, four dollars for a point of sale software, and then they would pay three, four dollars for a, you know, marketing tool like a MailChimp or a constant contact.

[00:17:06] Sudheer: And then there would be another 100 bucks for a survey monkey or a software, other feedback software. And, you know, we just brought that shrinking down to saying, you know, they, it’s all costs only 400 bucks kind of approach, uh, that you get everything. So it does drive both costs down and, uh, enables.

[00:17:24] Sudheer: Scenarios which one cannot, uh, do without integrated software. So at least I could see that, look, there’s only one way to do this, that it has to be integrated. Otherwise, uh, it’s gonna be such a handicap, uh, because these are not businesses which are uh, can afford to have, uh, so many things And integrated becomes prohibitively expensive when you’re a large enterprise.

[00:17:45] Antony Whitaker: Yeah. Yeah. Do you let other software manufacturers, um, integrate, uh, or is the goal to just make it a single app that covers absolutely everything?

[00:18:01] Sudheer: No, we do have a very rich API infrastructure and we integrate with a lot of different tools, whether we, I, we have integrated with Shopify or with. A lot of accounting software like QuickBooks or Xero and, you know, NetSuite and, uh, integrate with, uh, other, uh, tools, which are outside of traditional marketing as well.

[00:18:19] Sudheer: We have integrated with some tools. So we are open to it wherever the scenarios make sense, uh, which, uh, we don’t support, but, and we won’t do it in the near term. It makes sense. To enable those scenarios for customers.

[00:18:32] Antony Whitaker: Yeah, okay. Now, I know that before Zenoti, you had another software system. I think it was called ManageMySpa  So, Was that just a change of name so that you could, you know, embrace the hair and beauty space as well? Or was it a totally new product that was built from the ground up?

[00:18:54] Sudheer: No, it was more of a change of name in manage my spa is what we called it first, and it was a very deliberate choice on day one, though our intention was I always wanted to sell to make software for gyms and yoga studios, etc. Today, like core power yoga, which is the largest yoga chain is users in Zenoti as well.

[00:19:12] Sudheer: It’s not just salons, but I believe when you start a company, it’s very important to keep the focus as narrow as you can. When you keep it narrow, you know, everybody’s very focused. Employees know, what are we about? We are about managing spa. Customers know, what are you about? We are too much. So, so, so software to manage past.

[00:19:32] Sudheer: So, There’s super clarity on both sides. So the organization tends to move forward faster. And once we reach a certain scale, we’re ready to expand. It obviously was time to change the name. And so we changed it to say, Yeah,

[00:19:46] Antony Whitaker: must congratulate you too on the tagline. Um, because my business is called grow and, uh, your tagline grow a little every day, as soon as I read it, I thought, Ooh, I should have done that. Well, what, what, what, where did that come from? Where did, cause I think it’s a great, you know, it’s a great message.

[00:20:06] Antony Whitaker: Cause that really is what it’s all about. Isn’t it? If you can start to improve 1 percent every day, you know, it doesn’t look like much, but when you look at 10 days or 10 months or a year or whatever, it’s a, It’s a very different place. So how did that come about? Is there a story behind it?

[00:20:22] Sudheer: so the context there is that I at least I’m a firm believer that there is this concept in Hinduism called a word called Dharma. Dharma is what is the what do you owe to this universe to your existence? What? What is my responsibility to this universe, right? That I exist that I happen to be here. I believe that that that is, uh, to live life to my potential, uh, and, uh, to live life to my potential, not just as a business person, as a dad, as a son, as a friend, as a, you know, social, uh, worker in the, in the communities, in every walk of life to live life to your full potential.

[00:21:04] Sudheer: And I think the way you achieve that is not some big magic. It’s, you know, as you said just now, you grow a little every day. And, uh, you know, that’s why I say, when you go in for a haircut, You Walk out with a little bit of a spring in, in your step and you are like, you know, okay, let’s bring it on. Let’s go for that interview.

[00:21:21] Sudheer: Uh, it’s those small things. So, you know, the industry touches so many people’s lives that they are helping everybody grow a little every day. You know, you get a great massage, you go for a yoga exercise, you come out, refresh, saying, bring it on, kinda stuff, right? So, uh, I think that grow a little day, uh, every day is a good, uh, uh, concept even for the industry, not just for Zenoti.

[00:21:43] Antony Whitaker: Yeah, yeah, definitely. Um, over the years, I’ve seen lots of different, uh, salon software. And, uh, when I was in Vegas, I had someone sort of take me through, uh, Zenoti so I could understand it and it didn’t look like what I imagined. Now, what I mean by that is usually. Uh, a company salon software. It’s like, here’s the homepage.

[00:22:08] Antony Whitaker: This is what it looks like. And this is what it does. And correct me if I’ve got this wrong, but it didn’t look like what I imagined because it almost felt like that Zenoti is like a white paper. It’s like, it’s like a, um, a smorgasbord or a buffet of functionality that is totally customizable and then gets branded to integrate with the salon’s own branding.

[00:22:37] Antony Whitaker: And that was very revolutionary. I’d never seen anything like that. Have I, have I done justice to describing what that is?

[00:22:46] Sudheer: Yeah, I thought you did a very good job explaining that better than I can in layman terms, but essentially the technical way I would explain, you’re very spot on technical ways. Like if you buy Salesforce, Salesforce is used by so many different companies. There’s no concept. If you just want to look at Salesforce, it doesn’t make any sense.

[00:23:03] Sudheer: Only when you set it up, configure it the way you know you want to use it, then it comes to life. Uh, and the same thing is with Zenoti that yeah. It’s a blank slate. You tell me, how do you want your membership? What do you want? Everything. And only when you set everything up, it comes to life in terms of saying, aha, now I get it.

[00:23:20] Sudheer: This is how it works for my business.

[00:23:23] Sudheer: Yeah, that’s, that was very interesting take on it because most people don’t, you know, have something designed like that. So I was intrigued by that without a doubt. Um, is there a sort of an app, uh, for the stylist to use with Zenoti? So Zenoti has an app called MyZen and we have been very passionate. I personally, as I mentioned earlier, I’m very passionate, admirer of the providers in the industry. They’re the heart of what happens. So we are it. Very unique in having built a very custom-tailored app for just the provider, and it’s for everything they need to do, whether it’s their earnings, whether it’s they’re doing their job day to day and handling customers, they have a unique app called MyZen.

[00:24:09] Antony Whitaker: Right. And that’s the individual stylist that has that like on their phone, basically, so they can track their own. Yeah. Does that sync with the front desk? That seems so, but they can only see their data on it.

[00:24:20] Antony Whitaker: Okay.

[00:24:23] Sudheer: the main thing. They’re always looking at whatever the front desk is looking at. Only thing is the business gets to choose again. Does this employee get to see only their information or should they be allowed to see somebody else’s information? How much information can they see?

[00:24:38] Sudheer: Or should they see a customer’s phone number or no, those will be kept private. Uh, should this app work? When they’re sitting at home, or should it only work when they walk into the store? I mean, so there’s a lot of configurations around it, but which the business controls, but essentially the data they see is always the real time.

[00:24:55] Sudheer: And, uh, you know, what’s in the system out there?

[00:24:58] Antony Whitaker: Yeah. Okay. Um, and what about for the clients, meaning, you know, the. The client of the salon or the studio or the spa, uh, do they have an app?

[00:25:07] Sudheer: Yes. So they also have the app and it’s branded by, you know, the client doesn’t know it’s as an Zenoti app. The client thinks it’s, uh, you know, whether it’s, uh, you know, it’s an Zenoti  app or not. Toni and Toni and guys app or, you know, whatever the brand is, massage, uh, heights app, etc. It’s not as an Zenoti, but it’s completely branded, tailored to that particular brand.

[00:25:30] Antony Whitaker: Right. Okay. Uh when I saw you doing the presentation Um at uh at the conference i’m glad that you had a slide That was titled. What is Zenoti because I thought it was just me Certainly thinking well, what exactly is this and i’m glad that you had it because You That was exactly what I was thinking, because it, it is very all encompassing, and then I’m not sure if you can remember the slide, but you then had all these little icons on it that, you know, one of them was that, it was a, appointment booking platform.

[00:26:03] Antony Whitaker: Another one was that it was a point of sale. Another one that it was bookings. Payment processing. Another one, it was feedback or reputation management. Then there was a marketing and analytics and an engagement, uh, the MyZen component that you just mentioned. Uh, and then you had growth, you had hyperconnect, you had payroll, you had inventory, you had AI receptionist.

[00:26:26] Antony Whitaker: And it was just, it was overwhelming. It was impressive, but it was overwhelming. So I wanted to ask you that question. The fact that it does so much. Does that make it overwhelming for salons?

[00:26:40] Sudheer: Yeah, it’s interesting. By the way, I’m impressed that you remembered almost every one of the things on that slide. You remembered everything.

[00:26:47] Antony Whitaker: I haven’t remembered anything. It’s all written down in front of me, but I was very impressed

[00:26:54] Sudheer: yeah. Uh, no, but I don’t think it’s overwhelming because it is actually simplifying their life rather than making it overwhelming in the sense if Zenoti were not to, let’s say, do the integrated aspect of whether it’s even recently we’ve done this payroll concept, right? It’s completely integrated.

[00:27:12] Sudheer: So it’s seamless into the system. You if you go use another system. It’s overwhelming because now you have to take data out of Zenoti, go to a payroll system, enter it information there, get the payroll process. Then the employee says, wait a second, did I get my pay right? Did you do the math right? I was trying to run the math against my appointments.

[00:27:29] Sudheer: Maybe you made a mistake to the owner, right? No, I didn’t. So when it’s all integrated, the employee is just looking at my Zen and saying, yeah, I got my payroll. It seems to be tallied exactly. And the employer has a, it’s a click of a few clicks of a button for them to run payroll. So, um, When you integrate all these things, life becomes easier for the store rather than overwhelming.

[00:27:49] Sudheer: If we didn’t do it, it is overwhelming because they still need to do those things. If I, if they don’t do it in Zenoti, they’re doing it somewhere else.

[00:27:55] Antony Whitaker: Yeah, yeah. And that was interesting as I did go through that list is that that is really what you meant by, you know, there are so many different functions that go on in the business. So why can’t we have one piece of software? That can manage all of that so that it’s fully integrated in one part and talk to another part as opposed to it being, you know, separate, uh, software applications.

[00:28:18] Antony Whitaker: I think all of them on that list make sense just by the name of it, except that one of them and that was HyperConnect. What is HyperConnect? What does that mean?

[00:28:27] Sudheer: Yeah, glad you noticed that. HyperConnect is very different in the sense that so, uh, it’s like basically, see, firstly, running a salon is a very complex business because compared to running a restaurant. I mean, if you think of all the moving parts that salons have, that’s why there are so many boxes that you were referring to.

[00:28:45] Sudheer: But HyperConnect takes that to a next level, which is to say. You know, when the phone rings today, you pick up the phone, then the person says, okay, I’m calling for an appointment. And then you’re like, okay, can you give me your name? Can you give me your phone number? And then you have to find that information.

[00:28:58] Sudheer: And then, you know, do all that, uh, with hyperconnect phone rings, Zenoti picks up the phone, you know, and says, and when it, it shows that Antony’s calling. And your last provider was so and so and everything is on my screen, even before I picked up the call. And so it’s instantaneous connection into your background.

[00:29:16] Sudheer: So I can straight away ask, Okay, you’re calling from this massage or, you know, a haircut in color. And I know who was your last therapist and I can. Provide service, which is so personalized, et cetera. So that’s the first thing. So it literally integrates phone with the point of sale. So there’s no separate phone line at all kind of thing, but it goes beyond in the sense that it records every call.

[00:29:38] Sudheer: Transcribes every call. It analyzes every call. So at the end of the day, the manager gets an email that says, Here are three calls. We don’t think that went very well. If a call went really bad, the manager gets alerted immediately and they can instantly log into Zenoti Transcription of the call and see what the issue was.

[00:29:58] Sudheer: And hyper connect is also a way to engage with the customer. That is, you can, uh, you know, anything that your customer does. Uh, see what happens today is in a front desk. You sit in front of an appointment book all day, looking at the appointments, booking appointments, taking money, closing the day. Uh, while you’re doing that, because the world has become very digital.

[00:30:17] Sudheer: So. Your customers are doing a lot of stuff. They’re going online and buying a gift card or trying to find an appointment and they don’t get what they’re looking for. Or, uh, you know, uh, they’re referring a friend or a buddy. Uh, what hyper connect does is it says I will bring everything that your customer does into one timeline.

[00:30:34] Sudheer: So it’s like it’s showing you. Hey, somebody went online, tried to find an appointment, couldn’t find it, and then they’ll put the name of the person who’s doing that. And then somebody just referred a buddy or somebody. Just gave you feedback or left a Google review. It’s all flowing the pulse of the business.

[00:30:48] Sudheer: So people find that pulse to be amazingly beautiful to say, wow, everything that my customer is doing is right in front of me. And to any of those events, you can right click and say, I want to engage. I want to respond to this Google review. I want to respond to this referral and say, Hey, thanks a lot. I noticed that you referred your friend will take care of him kind of thing.

[00:31:08] Sudheer: So it takes customer engagement to the next level. And we hope that it changes how productive the front desk can be and in driving that personalized engagement with customers.

[00:31:21] Antony Whitaker: Right. Okay. What, what is your, uh, personal favorite feature?

[00:31:26] Sudheer: I would say definitely hyper connect is my most favorite feature because I think it’s a fundamental shift. What’s going to happen over time is People are going to forget there is an appointment book and they’re just going to focus on engaging with customers because today in the world, people book their appointments and people can pay for their appointments also online, just like we pay for Uber or whatever.

[00:31:46] Sudheer: We don’t take out our cards to pay the front desk and all that stuff. So that thing will just get transact. Uh, will become in the background noise, uh, so what’s going to more become more interesting about running a salon is how engaged am I with my customer? How do I understand my customer? So, uh, I think from the Zenoti perspective, I would say even I’ve actually been hands on run a business and sat at the front desk.

[00:32:11] Sudheer: For me, the biggest innovation is the hyper connect, which is going to change how you know the industry operates.

[00:32:18] Antony Whitaker: Right. Okay. I, I heard you talking about the role of transformative technology. And, uh, I thought you illustrated it really well when you said, you know, first of all, we had the Internet, uh, and then we had the mobile phone and now we’ve got AI. And you have, you know, had a very light touch on the, the, the, uh, the word AI.

[00:32:42] Antony Whitaker: Um, and, uh, Throughout our conversation so far, but I know that it is an area that you’re very passionate about and within Zenoti, you have, uh, an AI, uh, called Zeenie So, uh, talk to us about Zeenie and the role that Zeenie plays, uh, in Zenoti.

[00:33:02] Sudheer: Yeah, I do think AI is going to be very transformative for the industry. And, uh, I think people in the industry who adopt AI, the salons and brands will, uh, you know, early will have a competitive advantage, but over time that will no longer be a competitive advantage because it will become mainstream in every business.

[00:33:19] Sudheer: I do believe so. Uh, but in that light, I think Zeenie is one of our. It’s an investment within Zenoti wherein we are used to using software. We used to go click on stuff, do things. I want to change my store hours. You have to log in and find the store hours. You want to add an employee, you have to log in, find the place, add an employee, change their schedule, or you want to move all the, uh, uh, Uh, appointments of one employee to another because someone called in sick, right?

[00:33:45] Sudheer: Uh, and you have to do all this manually. And that’s why you have software. You interact with software, but we think you’re going to stop doing that. You won’t interact with software. You’re just going to talk to an AI agent and say, Hey, I want to change my store hours. Can you freeze this person’s membership?

[00:34:00] Sudheer: Can you, uh, you know, uh, whatever you want to do around anything you can just talk to or interact with an AI agent. And that’s what Zeenie is Zeenie is a Uh, what you think of as a co pilot in things like Microsoft tools and other things, it’s your personal assistant within Zenoti, which is true AI. It is not just some help thing.

[00:34:23] Sudheer: It is actually AI behind. Uh, so we have found that Zeni is used by, uh, People for very interesting things in the early days as they are continuing to adopt it, where, you know, even simple things like you do a lot of reporting. You wonder, why do you do reporting? Well, I want to ask a question. I’m trying to figure out some answer.

[00:34:40] Sudheer: And so you people have started asking Zeenie, whatever you want to know, ask Zeenie, like saying, okay, what’s the lifetime value of my customers? Yeah. Zeenie will give you the answer and tell you, hey, X percent of them fall in this bucket. Why is this much? And this is how I see your lifetime value. Okay, how do you think I can improve my lifetime value?

[00:34:57] Sudheer: And then Zeenie will continue the conversation. You’re talking to an AI agent, and AI has already gotten to the point where It probably does a far better job of getting you insights about what’s going on with your business than any standard reporting system can. So that’s, uh, but it’s Zeenie keeps learning and it’s an evolving process, but I think it’ll learn much faster than we imagined.

[00:35:20] Antony Whitaker: Yeah, it’s, it’s incredible. I mean, you know, what I’ve seen is just like been eye opening. Um, do you think there’ll be a pushback? Against AI as people become more reliant on it, and they’ll start to perhaps hunger for more human connection, um, because obviously, you know, AI Zeni or whatever is incredible in terms of how clever it is, but the one thing it lacks is soul.

[00:35:52] Antony Whitaker: Do you think there’ll be a pushback because of that? Because people want that more human connection.

[00:35:57] Sudheer: Good question. So let me walk you through. Whenever we have a problem and we want to call our airline and change our ticket dates or change my hotel stay, or, you know, you want to check on any of your credit card transactions. Do we really ever want to talk to a human being? It’s a nightmare trying to get hold of a human being and talk to them.

[00:36:16] Sudheer: I would rather say, you know what, just give me the app, I’ll figure it out and I’m done. If, if, if it doesn’t get solved in the app, now it’s a pain. You want me to talk to a human now? I have to explain to them what my problem is and then they have to figure it out and go into the system. It’s going to take 10 minutes before we are done.

[00:36:33] Sudheer: Nobody wants to talk to a human today for day to day things. If it can be done by interacting with. Software. Well, what is software? Software is just an agent. It is just doing the work. And I think what you’re going to find, let me give you another example. If you were to call Zenoti, uh, let’s say down the road, whether it’s Zenoti or some other company and wanted to talk to a software, uh, you learn more about us.

[00:36:54] Sudheer: You’re evaluating. Should I look at buying Zenoti or not kind of thing? Uh, you can talk to a human, like one of our salespeople and an SDR, and they can help you out and answer your questions. But if I had an AI agent on the online as well, I’m telling you the world time will come when people will say, I don’t want to talk to a human.

[00:37:15] Sudheer: Can you give me the AI agent? Why? The AI agent will outperform humans because it will always be correct. It’ll give you the right answers. No, none of this. Uh, let me check with my consultant on that. Let me figure out what is the answer to what you’re asking, because not everybody in Zenoti is going to know all the answers to questions that people have.

[00:37:34] Sudheer: Whereas an AI agent, it’ll always know you’re done and out of there, you know, versus wasting your time.

[00:37:40] Antony Whitaker: Mm. Okay. What do you mean by the term AI first? I know you were saying that quite a lot. I mean, I know what you mean by it now, but, uh, I think it’s a, it’s a, it’s a valid part of the conversation.

[00:37:53] Sudheer: Yes. And it actually flows very well to your previous question, which is AI first is just like saying, can I first give AI a shot at solving this problem as a business owner? Also, I would, I would benefit by saying, let’s let AI do this. If AI can’t do it, then a human can step in. You know, there are different examples of that.

[00:38:12] Sudheer: Even just now, the example I said, where if I’m trying to make a booking, Okay. I can talk to an agent and I’m pretty confident the agent is going to find me the right slot, right place because it’s a it’s a it’s not going to miss anything. It’s not going to have a bad day. It’s not forgetting to see on the screen.

[00:38:28] Sudheer: He you can make this appointment fit. You can get Antony this slot that he wants kind of stuff and some receptionist may miss it if you were to call a person, right? So give AI a first shot. But at the same time, yeah. If Antony says, No, I want to talk to a human, the human is always there right behind kind of stuff.

[00:38:44] Sudheer: You can the call gets straight to the person you would have normally done. Same way, even if, you know, is handling a call. And let’s say it wasn’t going very well. You know, it’s interesting, by the way, that another day I will be monitoring this AI and will cut off the call and transfer it off automatically to a front desk person saying, You know what?

[00:39:02] Sudheer: This thing is not doing its job. I’m going to give it to this guy, right? So those kinds of a I first is Let AI lead, but then humans are always there. And that applies to other areas also. Let’s say you’re trying to schedule employees for the next week. And say, who should come? How many days? How many hours do I need?

[00:39:18] Sudheer: Uh, AI can come up with a scheduling algorithm automatically. But you’re still in control to say, Hmm, I think you didn’t get something right next week. I know I want to have one more staff than what AI is recommending. So people are always in control. But you use AI as the first step, you know, give it the first crack at every problem.

[00:39:37] Antony Whitaker: yeah. Got it.

[00:39:38] Sudheer: Okay. Um, the salon software space, is it too crowded? Uh, it’s very difficult to try and get any reliable data as to how many, uh, you know, salon software programs are out there. But do you think it’s too crowded or is it just getting started?

[00:39:56] Sudheer: No, I think the salon software is too crowded. There are just too many people, you know, building too many solutions in the industry relative to most other industries eso it’s good for the industry for the businesses because they have so many options to look at. Definitely. But I think longevity and sustainability of so many players is not practical and not going to happen.

[00:40:19] Sudheer: So you will find that, you know, a lot of the businesses will have to find a way out kind of thing. But because usually what happens, and if you look at any vertical solution, look at restaurants as a thing, you end up with two, three companies at best who are going to cater to the industry. I mean, it’s, you know, Practically not possible to, uh, build a company for a small segment, right?

[00:40:41] Sudheer: I mean, when I say small, I know we all being in the industry, we think we are a big industry, but I want you to know we are from a software and building a business perspective. It’s a smaller market relative to when you’re building a software company. You want a market, which is very big. If you want to build a sustainable, viable, long term company, right?

[00:41:00] Sudheer: I mean, you can be around for a few years, uh, but, uh, yeah, our industry just has way too many, uh, people, uh, thinking they’ll make it, but unfortunately, uh, many of them will not make it.

[00:41:14] Antony Whitaker: Okay, that’s interesting because that sort of leads into what I was going to ask you next, which was, you know, when you look at other tech areas, you’ll see, you know, big names like Meta or Microsoft, and there’s always acquisitions going on in the market. Is that happening behind the scenes in the salon software with bigger companies buying out smaller ones?

[00:41:36] Sudheer: I don’t think it has actively happened much, uh, only Zenoti did acquire a company a while ago called Super Salon, which used to be around, which has been around for a very long time in the industry kind of thing. Uh, but, uh, I do think it will happen more down the road, but it has not happened to the scale and, uh, thing that I would have expected.

[00:41:57] Sudheer: But I think you’ll probably see some acceleration of that. Give it another year or so. And, you know, people are going to have to wake up to a new reality of where do we go from here?

[00:42:08] Antony Whitaker: Yeah. Okay.

[00:42:09] Antony Whitaker: do you see the, the uptake and the utilization of AI? Do you see that it differs a lot from country to country?

[00:42:17] Sudheer: yeah, I do think it differs a lot as of now, but at the same time, I am seeing, by the way, even in places like I was visiting in India. There’s a lot of awareness around AI and impact. Now, the thing is, the cost of, uh, you know, human capital maybe is a little bit less in India, as an example, right? It costs you less to hire a receptionist or hire staff, et cetera.

[00:42:40] Sudheer: Uh, so, uh, some of the impact that AI will have in terms of driving profitability for businesses will be higher on, in the US markets or the UK markets, et cetera. But in other areas, it may take a little longer to develop because. You know, the impact will be less. So businesses may take a little more time before they embrace it.

[00:43:01] Antony Whitaker: Okay.

[00:43:02] Sudheer: the U. S. is undoubtedly the place, I think, where the biggest embracing of AI is going on.

[00:43:07] Antony Whitaker: yeah, definitely. I mean, it’s incredible what’s happened in the last, is it two years since, you know, uh, ChatGPT came out? I’m not even sure if it’s two years or one year, it’s just gone so fast. Um, but it’s, it’s amazing. And yeah. I mean, the whole AI thing literally is changing in front of us every single day of the week.

[00:43:27] Antony Whitaker: You know, you’re seeing new updates about new, uh, new AI and it’s, it’s, it’s incredible. So what I wanted to ask you about was what does the next five years look like? You know, I know five years is a long time, uh, in, in the world of tech, but if you had to make some predictions about AI and the tech side of the industry in five years time, what would you suggest it would look like?

[00:43:51] Sudheer: Yeah, I would say at a macro level, as I’ve already, we have covered some of the elements which says, you know, AI is going to really, you know, help you run your business in so many ways. And we have this AI first philosophy, but if you step back and look at it as a business owner, I would say one is AI is definitely going to help you improve profitability of businesses in a material way, you know, in terms of, uh, uh, you know, making sure costs go down and in different areas of the business.

[00:44:18] Sudheer: And in terms of even things like scheduling or inventory, you’re scheduling the right level of staffing. So you’re not spending too much money on stuff. And. Finding that they’re sitting idle or, you know, inventories being purchased just in time, et cetera. But it will also help with growth in the sense, you know, a I like will help you with things like dynamic pricing and say, Hey, how much should we charge today for a haircut?

[00:44:40] Sudheer: I mean, today we think of it as a fixed price, but the industry. Has to at some point adapt and say, you know, whether it’s hotel rooms or, you know, uh, airline seats, people pay different price. But when it comes to a human resource, I’m a hairstylist and I’m going to cut hair and my time should be very valued, valued by any customer saying, Hey, if I’m busy, People should pay more because I am super busy.

[00:45:03] Sudheer: Everybody wants my time. And, uh, you know, so AI will help in that way of driving more revenue based on such, uh, algorithms, et cetera. But, uh, more importantly, I also think longer term as businesses get more profitable, uh, you know, the, the people who win in this will be the providers because, uh, I think, you know, providers will continue to.

[00:45:25] Sudheer: Expand how much money they make in this industry. You know, it has always been the case in from the history. If you look back, businesses have continued to get more and more efficient over the years and how you run a business. But those efficiencies have also got to translate to providers getting paid more in terms of the compensation they get.

[00:45:42] Sudheer: So I think I is going to help the industry thrive. But also, I am a firm believer that the end winner will be the actual providers who will make more money.

[00:45:52] Antony Whitaker: Meaning the therapist, the hairdresser, the masseur, whatever it

[00:45:56] Sudheer: Yes, the hairdressers and therapists, they will. Yes, they will make more money. And it’s interesting that AI is going to enable the people who actually, because it’s a creative skill, you’re not going to give it away to an AI agent. In my opinion,

[00:46:09] Antony Whitaker: Yeah. And, uh, yeah, one thing that you haven’t said it, we haven’t directly said it in this conversation, but I’ve heard you say in previous conversations, uh, multiple times. And that is that the transformation will be much faster than what you’re imagining. And, uh, with, with my sort of half an eye on AI since chat GPT came out and seeing all the changes in that area.

[00:46:34] Antony Whitaker: I totally agree with you. It’s, it’s that the rate at which it’s changing is phenomenal. And I think it’ll, it’ll catch a lot of people out. Um, a couple of questions to ask you at the end here. First one is, what have you failed at? And what did you learn from it? It can be at any time in your life, any job, any part of your career, or it can be about Zenoti or whatever.

[00:47:00] Antony Whitaker: What have you failed at and what have you learned from it?

[00:47:03] Sudheer: it’s an interesting question. uh, you know, the first time when I started my company, I mean, it was, uh, when I left Microsoft, that is, I was this, uh, You know, eight years being a tech person. I went out and started a company along with a couple of other Microsoft colleagues.

[00:47:18] Sudheer: Uh, the first one year of that starting the company was, I think, a disaster, like, you know, because we were all product guys. And, uh, you know, we didn’t know. What it means to sell software, what it means to work with customers. We knew how to build products and we thought building products was enough that you can build a company around it.

[00:47:37] Sudheer: So that first year was a wake up call to say, you know what, we have no idea of all the other skills that are involved in actually running a successful business. And, uh, I think it was a crash course to rapidly learn, but we did pivot and, uh, managed to, you know, save the company in terms of, uh, we could have very well just shut down after the first year.

[00:47:58] Sudheer: Uh, but, uh, just through that’s why they say, I think entrepreneurship is more about persistence though. Uh, it really would have scared us to back out. We were persistent and, uh, coming back at it.

[00:48:10] Antony Whitaker: And I always think it’s really interesting to find out the lessons that people have, you know, learned along the way, you know, I always say to people that, you know, when you’re going into business, you know, opening a salon, that it will give you a fantastic education. But at the same time, it takes no prisoners, you know, because it is a very real education you get, you know, as a hairdresser or, or, or a beauty therapist, a masseur, whatever it is, that is your skill.

[00:48:34] Antony Whitaker: But then you go and open a business and all of a sudden you’ve got legal responsibilities, you’ve got financial responsibilities, you’ve got marketing, you’ve got HR, you’ve got all these other things that you pretty much just alluded to. Um, so yeah, interesting answer. Thank you. Uh, very last thing I want to ask you is what drives you?

[00:48:53] Sudheer: Yeah, I think what drives me, I have actually introspected on this because, you know, as you get older, I guess you keep introspecting these and getting to the root layer of it really. Honestly, it’s about not letting people down. You know, whatever in my walks of life, because in the context that I am doing Zenoti and I care about the industry and fashion, letting any customer down is, you know, it’s a Yeah.

[00:49:18] Sudheer: Really is not a good thing because you know, I believe, Hey, you bet on me. And, uh, I take it very personally saying, you know, as an organization, if we ever let anyone down, uh, letting any employee down, because everybody who joins our company, uh, is betting their career saying, you know, I’m going to grow and I’m going to do well, and, uh, if we can’t help them grow, uh, I, it really, is, uh, it’s a problem.

[00:49:42] Sudheer: And so what drives me is just being sure. I really help people with whatever their growth goals are, you know, whether it’s employees growing every day, whether it’s businesses growing every day, uh, it is my passion, honestly, that I have been very blessed in my life, uh, to continue to grow since I came out of college or even before college, uh, very well, and I always aspire to say I should be there to help others grow, uh, you know.

[00:50:07] Sudheer: It’s cheesy. Grow a little every day.

[00:50:09] Antony Whitaker: No, no, not at all. No, not at all. No, good answer. Okay. Um, okay. So look, we need to wrap up. Where, whereabouts can people find out more about Zenoti, uh, or connect with the brand on social media or any other channels, where would you like to direct them?

[00:50:27] Sudheer: Yeah. I think the best place is, uh, our website, uh, www. zenoti.com. And then, you know, of course we have our, uh, you know, channels both on LinkedIn, uh, is a good place where we, you know, it’s, uh, we keep tracking and updating our customers there. So both are good places.

[00:50:45] Antony Whitaker: Okay. All right. Well, I’ll put those links, in the show notes for today’s podcast. So if you’re listening to this podcast with Sudheer and have enjoyed it, then do me a favor and share it with people who you know would also enjoy it. And don’t forget to subscribe and leave us a rating and review on the Apple podcast app.

[00:51:02] Antony Whitaker: So to wrap up Sudheer Koneru, thank you for being on this week’s episode of the Grow My Salon Business Podcast.

[00:51:11] Sudheer: Yeah. You’re welcome. And it was my pleasure to be here. Thanks for the invitation.

[00:51:15] Antony Whitaker: Fantastic. Thank you.