Analytics are vital in all verticals – even emerging ones such as the cannabis industry. When Jenna Greenfield founded Sagely, a finance and accounting platform for cannabis entrepreneurs, she learned firsthand the challenges that come with building out an analytics platform from scratch.
Recently, Ryan MacCarrigan, lean startup coach and Founding Principal at LeanStudio, spoke with Jenna to learn more about how Sagely came about. Read their conversations to see how analytics can make a crucial difference in the future of small businesses and how making the wrong choice can result in slower timeframes and added stress.
Ryan MacCarrigan: With your background as a CPA in California, how did you get into the cannabis industry?
Jenna Greenfield: During some time off, I realized I was very passionate about the cannabis industry and wanted to get involved once it was legalized in California in 2016. I realized that there was a major need for finance and technology professionals to help steer this industry in the right direction as it became a more mature, regulated industry. I started off by doing accounting services for the cannabis industry primarily in California, and later went full time and started Sagely.
RM: How did Sagely become a reality? Tell me more about Sagely, what its known for, and how it delivers value to its clients.
JG: I started off on my own doing finance and accounting for a variety of cannabis startups, and quickly realized the need was steadily growing so I hired a team. I wanted to try and automate things as much as possible to make it easier and less scary for small business owners who don’t necessarily have the finance expertise and are used to keeping track in a notebook. I kicked off production on a technology platform that I had an idea of in my head, without giving too much thought to how I was going to accomplish it.
Over the course of about three years, we built out a very early-stage product that some of my clients were using to automate their cash accounting. They could simply just take pictures of receipts or cash expenditures, and it would feed into their accounting system to have a clearer trail of all these transactions and help with their taxes. By building out a dashboard with KPIs and reports feeding from their accounting system, we could help with the craziness of how fast the regulations in the cannabis industry were changing.
RM: So, you chose to build the analytics for your platform. What made you decide to build something so industry-specific from scratch rather than working with the many other tools that were already on the marketing?
JG: It’s a question I continue to ask myself. I did not put enough thought into looking at the options that were potentially out there. I was familiar with accounting software, and got very excited about having a dev shop at my fingertips. Looking back now, I realize that I should have put better due diligence into making that decision. I ended up having a lot of back and forth and issues with the dev shop that added up over time. It probably would have been a lot less stressful, faster, and more seamless to go with a company that already has that technology built out.
RM: It sounds like a lot of things got lost in translation. If you could go back, would you make a different decision?
JG: I wish I had known that there were out-of-the-box solutions available to build into my platform to reduce the number engineering hours need. I did not realize how time intensive it would be. I could only allocate a small portion of my day to working with the dev shop to build out the dashboard which slowed us down. I didn’t realize I could have worked with a vendor, so I didn’t look into my options. It would have saved time on my end working with the engineers.
RM: What role does analytics play in your own business, for you internally and also from the client perspective? Were there processes that you tried to leverage the analytics?
JG: Internally, the whole goal was to use analytics to make informed business decisions. Because we were moving so quickly, we were relying on gut feelings rather than using proper analytics to make these decisions – and the same goes for most of our clients. Now that regulations, at least in California, have leveled out, businesses are better able to manage everything and use their analytics to make these informed decisions to generate growth. Using analytics to build out dashboards across different companies allowed us to have a standardized metric like price per pound. Being able to track this in real time, we could make sure no one was charging too much or to little, which was important because it was the driving force behind everyone’s profitability. The transferability enables the industry to scale through technology in real time.
RM: The type of meta analysis you were able to do once everything was standardized is interesting as it allowed you to give recommendations to your clients. Analytics allow for both making informed decisions internally, but also the importance of dashboard design on how your clients use the analytics. What were the biggest factors in the decision for your approach to analytics?
JG: Our approach to analytics was to capture as much of a niche market share as we could, while also being able to serve them effectively. By getting a large enough sample size of companies of each type within the supply chain, I can also compile enough data on the scope of the industry. So not only can we help businesses with their accounting but add value by sharing our overall findings back to the companies who want insight into the industry.
RM: And that’s really important for an industry that’s more of an uncharted territory like yours. Analytics helps with that uncertainty because you really are paving the way. What’s next for you Jenna?
JG: It’s time to get back to the grind. I love pioneering new industries and using my expertise on high-growth, rapidly-changing industries. I’m currently looking into blockchain companies because I see a need similar to cannabis. It’s in its earlier stages and has similar regulatory issues. In thinking about Sagely, knowing what I know now I can approach a new industry differently to make a more global impact in the blockchain industry.
If Jenna’s story inspired you, read more here to learn about the hidden costs of building versus buying analytics. For more from Ryan MacCarrigan, read his take on dashboards and informed data-driven decision making.