Ep. 017: Kent O’Neil, Encompass Technologies

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Tracy Neal:
What do you want to say to your customers for supporting you and sticking with you and believing in what companies could become?

Kent O'Neil:
Well, of course. Thank you is the first thing.

Tracy Neal:
Okay.

Kent O'Neil:
Thank you for the business and thank you for making us what we are. We couldn't have done this, of course, without the the patience and support and understanding a lot of times of these customers. Then when you when you do what Jonathan's done.

Tracy Neal:
My guests for episode number 17 is Kent O'Neil. Kent is the owner of Encompass Technologies, one of the leading route accounting software providers to the beer, wine and spirits industry. Encompass is celebrating 18 years in business. And they have invited me to Fort Collins, Colorado, where I will interview Kent in front of a live audience at their annual users group meeting. In fact, I'm happy to announce that I sell beer as the first industry vendor to sign up for the Encompass Partner Link program, which will allow our two platforms to communicate and share data, all in the spirit of helping distributors sell more beer. This episode is a bit longer than usual, but that's because Kent is also a distributor owner. He's also a graduate of the Colorado School of Mines and he's also been a wildcatter. Stay tuned to learn what that is. And it's a little bit longer because his CEO and son Jonathan joins us on a third microphone for the last 20 minutes. I hope you enjoy this as much as I did. iSellBeer presents to you, Kent O'Neil.

I am not Mr. Lebowski. You're Mr Lebowski, I'm the dude.

Yeah. Tell you what, you can take a good look at a picture is asked by sticking your head up there. But wouldn't you rather take his word for it?

Film and eat all the freakin chips. Kip.

A point. Don't be jealous that I've been shown online games all day.

We have a pawn in the back of a pool and a pot of tea. Good for you.

Welcome to the iSellBeer podcast with Tracey Neal, a production for sales reps and distributors who are driving around all day selling beer and the official home of the iSellBeer Nation Facebook group. And now your host. The 1989 winner of the John M. Studebaker Wheelbarrow Race in Hangtown, California, Tracy Neal!

Tracy Neal:
All right, Kent. Thank you for being here. And thank you for having me. You're the guest on the podcast, but I'm actually the host here at you, GM 2019. And by the way, I did ask what the top secret words were for you, GM. Because I knew I knew it was complicated and in its users group meeting. Right. Go. Yeah. So thank you for having me here today. Thank you for agreeing to be on the podcast. We got it. We got a beer here. It's 8:00 a.m. in Fort Collins, Colorado. Always time to open up a beer. Yeah. Not just for breakfast anymore. No, no. It's good to have a beer. You've got a great office here, in fact. I mean, I am. If if the listeners have not been to visit your office in Fort Collins, Colorado, they should come.

Kent O'Neil:
I hope they do.

Tracy Neal:
We're we're, what, an eighth of a mile away from New Belgium.

Kent O'Neil:
That's it.

Tracy Neal:
Right? We're on the. Let me say it right. The Poudre?

Kent O'Neil:
The Poudre River.

Tracy Neal:
The Poudre River.

Kent O'Neil:
Cache la Poudre.

Tracy Neal:
And when I say we're on the Poudre River like I could I could probably go trout fishing from the deck. If I had a good enough cast.

Kent O'Neil:
Yeah.

Tracy Neal:
It's right on the river. And you know, this is gonna be a two part podcast. So we're gonna do this. We're doing one day here in your you GM and then we're gonna do another one. So we're going to kind of get into it. You're the owner and partner of Encompass Technologies, right. And that's been one of the top three main route accounting software ERP systems in the in the beer industry. But before that, I kind of want to get to where how your career started and where you started in the beer distributorship. But first, give me a little give me a little blurb on Encompass . What is Encompass ? What does Encompass do? How many employees do you have and how how long have you been around?

Kent O'Neil:
Well, we actually started actively selling the system in 2001.

Tracy Neal:
Okay.

Kent O'Neil:
And about it in July of 2001, we did our first install. And from there, we just. And that was done in Hays, Kansas. And then we just went on the road and I kind of leaned on my friends and in the wholesale business to get the thing installed and tested. And basically, we were beta processors. And so I had a first one to three users. And I see some of my friends down here from my third user group with with great western in Amarillo, Texas. And from there, we just started to develop the system and refine it and became what we are today.

Tracy Neal:
That's awesome. What a great entrepreneurial story. And I'm sure there's there's tons of details between 2001 and 2019 on the entrepreneurial journey that you've been on. So today Encompass how many employees you have?

Kent O'Neil:
Approximately 250.

Tracy Neal:
250 employees. That's that's an operation.

Kent O'Neil:
Yes,.

Tracy Neal:
That's that's a big payroll.

Kent O'Neil:
Yes.

Tracy Neal:
And not only that, but you've created a lot of jobs in this industry. If you think about that, it's you know, there may be a couple of people in there that might be married, but that might be 250 families that you've created jobs and careers and opportunities for in this industry. That's an incredible story.

Kent O'Neil:
Yeah, it's quite a it's been quite a trip. And the development that it's undergone with this thing has been unbelievable, really.

Tracy Neal:
At what point in time between 2001 and 2019 did your brain say, I give up? I can't memorize every page in the system anymore?

Kent O'Neil:
About five years ago. Yeah.

Tracy Neal:
Yeah.

Kent O'Neil:
It's gotten it's gotten way complicated. And we have so many people that handle each and every part of it that it's it's not a one man show anymore.

Tracy Neal:
Yeah. You've got a lot of you've got product owners, you've got project managers, you've got developers, testers, and then your whole support staff here that supports the whole distributor network. Right.

Kent O'Neil:
Correct.

Tracy Neal:
Good. Okay. So prior to 2001, you were a beer distributor,.

Kent O'Neil:
Correct.

Tracy Neal:
Right. And I've got I've got the names of two distributorships here. There's Pioneer and there's Arrowhead. Which one did you first?

Kent O'Neil:
Pioneer, which was first called O'Neil Brothers Distributing Company.

Tracy Neal:
O'Neil Brothers distributing.

Kent O'Neil:
Yeah.

Tracy Neal:
And so I assume you have a brother or your father.

Kent O'Neil:
Yeah, I do have a brother.

Tracy Neal:
Okay. And so how long did that O'Neil brothers operate?

Kent O'Neil:
It operated from 1969 until '85. When I merged with the courier's distributor I was the Schlitz and Miller distributor, believe it or not. I was a Schlitz distributor when I started this business.

Tracy Neal:
A Schlitz distributor. Huh.

Kent O'Neil:
Yes.

Tracy Neal:
And. How were you appointed, this distributorship? Did you just buy it? Did someone approach you? I've heard all kinds of great stories on how the original the original crew of distributor network has.

Kent O'Neil:
Well, in 1969 it was entirely different world. It is today. And we were a rural market out there and I was in school at the University and.

Tracy Neal:
Which University?

Kent O'Neil:
Colorado School of Mines.

Tracy Neal:
School of Mines in Golden.

Kent O'Neil:
Yeah.

Tracy Neal:
Okay.

Kent O'Neil:
And my brother kind of got wind of that. They Schlitz distributorship and Sterling may be for sale.

Tracy Neal:
And Sterling's in the north eastern.

Kent O'Neil:
Part of eastern corner of Colorado in Logan County.

Tracy Neal:
Kind of the middle. With all due respect, kind of middle of nowhere?

Kent O'Neil:
Absolutely. They don't think that out in Sterling.

Tracy Neal:
No, they don't think that in Sterling, right?

Kent O'Neil:
No. But we are. We're a rural farm egg community.

Tracy Neal:
Okay.

Kent O'Neil:
You know, farm and ranch. And then my brother came to me with the idea that the list just distributorship was for sale. And it was tiny, the one truck operation. And I said, well, let's take a run at it. So we got my dad to sign a note for us and we went in the beer business. It was just that easy.

Tracy Neal:
Okay.

Kent O'Neil:
We we bought it in in July of 1969, which will be 50 years this July. 50 years this July.

Tracy Neal:
Wow. And Schlitz had how many SKUs in 1969?

Kent O'Neil:
Well, we had six pack cans, six pack bottles, quarts kegs, probably less than 10.

Tracy Neal:
Yeah. Let's say it. Schlitz is slits as a brand. So this is probably the first beer brand that I was aware of as a child because my dad gave me this yellow Gilligan looking hat that had the slits logos on it. Yeah. And he said it was my fishing hat and I am I'm talking probably nineteen seventy five, seventy six, seventy seven. And I had no idea which slits was and I frankly don't ever recall my dad drinking a slits but I had a Schlitz hat and it was my fishing hat and I actually used to keep it in my tackle box for when I was fishing. So this was the fishing beer in my family back in the day.

Kent O'Neil:
Well we loved this company and we did a lot with it. But it's it was still at the point we finally reached it. Just never, never kept pace out of market.

Tracy Neal:
Okay, so then you merged with the Coors distributor?

Kent O'Neil:
I did in 1985.

Tracy Neal:
Okay. And was that Arrowhead or is this still where O'Neil became Pioneer?

Kent O'Neil:
Oh, that's where O'Neil became Pioneer. I merged with a Coors distributor where there Bob Deborde in in Sterling, Colorado.

Tracy Neal:
Bob Deborde.

Kent O'Neil:
And we did that because we were under such pressure from the AB network that was climbing in sales and just gobbling our market share. Yeah. Annually we would just go down and down and down. So we were forced to combine to stay in business.

Tracy Neal:
Okay., so you merged, became pioneer. What was your. You were owner of the distributorship?

Kent O'Neil:
Yes, I was partner with Bob Deborde. We were 50 50 owners. Did you know anything about running distributorship? Oh, you mean when when we bought O'Neal Brothers or when we bought Pioneer?

Tracy Neal:
Well, Pioneer. I guess you had some.

Kent O'Neil:
Had been in the business quite a while then.

Tracy Neal:
Okay., so you kind of knew what you did, but your brother age five. Yes. Oh, no. Just get on the truck and try and sell some stuff.

Kent O'Neil:
No. I was 21 years old and and dumb and eager. Not with it.

Tracy Neal:
Dumb and eager works. So you're at Colorado school of Mines. Did you go? I mean, I'm sure you didn't go to Colorado school mine and say, I'm going to go here and be a beer distributor when I get out. Would you go to Colorado School of Mines for.

Kent O'Neil:
Mining engineering?

Tracy Neal:
Okay. And and really haven't used that in the last 50 years that I went there for three years and never did.

Kent O'Neil:
Tell me where the gold was. So I just decided I'd go sell beer.

Tracy Neal:
That sounds like it sounds like why I would go to mining school. Right. You got where the gold is.

Kent O'Neil:
Yeah. Right.

Tracy Neal:
Okay. Colorado School of Mines is quite a I. I'm from California. You know, we don't hear about them a lot. They don't have an NCW football team, anything like that. But my perception is it's getting bigger and bigger and more prestigious and really a heck of a program. And I think I think now they actually do have some NC Double-A sports, don't they?

Kent O'Neil:
No, they're still a division to school. Okay. And but academically they are well-respected and. Yeah, at a really good, rigorous engineering school. And so, yeah, School of Mines is a good school.

Tracy Neal:
That's awesome. Okay. So you've got Pioneer distributing now and you're selling. I've got to I've got to cause banquet in my hand here. One of the one of the original ones. Right. So tell me about the story of selling Coors banquet. In what year are we in?

Kent O'Neil:
85 when we Coors banquet was already. In pretty bad decline in eighty five and we were Okay. Our Coors Light was the horsepower then and we were just trying to keep pace with a B network, which was had Bud Light coming on and it was it was just goblin market share.

Tracy Neal:
Was there an AB brewery in Colorado at the time?

Kent O'Neil:
No.

Tracy Neal:
Okay.

Kent O'Neil:
No. No, that just came about in my I hate to say dates, but it came about in the go for six or seven years ago.

Tracy Neal:
Okay. So 2000?

Kent O'Neil:
Yeah.

Tracy Neal:
And did you as a Colorado school mines student, did you experience the brewery tour at Coors or are you familiar with.

Kent O'Neil:
Daley.

Tracy Neal:
Daley.

Kent O'Neil:
We went down. Faculty We did go down there about every afternoon and take advantage of their two free beers of.

Tracy Neal:
The two free beers.

Kent O'Neil:
He loved it. It was it was a great time.

Tracy Neal:
Nice. Excellent. What were some of the challenges in Running Pioneer as a distributorship?

Kent O'Neil:
Well

Tracy Neal:
That's the leading question, by the way, because your answers will route Accounting software. Other than the route can't do that.

Kent O'Neil:
But we didn't install the route accounting in in there until 2001. So from '85 then, we had 16 years of running on. I had a Bob didn't even have a route accounting system.

Tracy Neal:
Okay.

Kent O'Neil:
Ticket book and pencils. So I brought the system I had in, which was a I can't remember the name of it, but it was a simple system. It produced your invoices, produced a pricing and reduced inventory.

Tracy Neal:
Okay.

Kent O'Neil:
And that's all it did. And so in about 90 years or so, we we started shopping for different software. And finally in in ninety eight in March of 98, I came up to the university here and my son was in school here at the time at Colorado State University. And I visited with a number of young engineers about writing some software. And I finally told Jonathan this that I can't find anyone who's who can manage this. And he says, well, he says that I can write that software. And I says, well, have at it. So he wrote it as his senior project at Colorado State University and turned it in. And I and the professor said to him, I'll never forget this. Why would you want to do that? And he was kind of condescending about the rude accounting software in the beer business. But we installed it in my company in March of '98.

Tracy Neal:
Okay.

Kent O'Neil:
We installed a saw today.

Tracy Neal:
So did it. So Jonathan wrote it. Wrote his work. It just worked right off the shelf. First try.

Kent O'Neil:
No.

Tracy Neal:
Okay. We were sleeping a whole bunch of stuff then. Yeah. Nobody ever wrote software that just worked.

Kent O'Neil:
You talk about being nervous. He put two web servers in my warehouse.

Tracy Neal:
Okay.

Kent O'Neil:
And Sterling and we were a web based system from day one. And I had a black computer and a blue computer. I remember that.

Tracy Neal:
Okay.

Kent O'Neil:
And then he jumped on an airplane and went to China. As soon as he installed it, I said, oh, boy, here we go.

Tracy Neal:
And 1998's about the time when they were actually set companies or IPO ing that were holding Web servers and you can rent. I remember it was kind of like a storage unit. You can go and put a couple of servers and put your fence around it or it can on fire. They'd call you. So he was doing that. Had a couple of web servers.

Kent O'Neil:
Yeah. But we didn't have a web forum yet. We didn't have a server.

Tracy Neal:
It was just in the warehouse.

Kent O'Neil:
We just had him in the warehouse and we used to network that way.

Tracy Neal:
And then he said in the first year, he said, I'm going to go to China.

Kent O'Neil:
A week after he put him in.

Tracy Neal:
Well, we. Yeah. Okay.

Kent O'Neil:
And so, you know, that's when I first learned that world is a pretty small place. And he tweaked and adjusted that software from China over the Web and I was an old school guy and I just couldn't imagine how he could do that.

Tracy Neal:
Because part of you thinking this is a bit of a boondoggle, right. I'm going to go to China and get some Chinese New Year. Yeah, he was there for half a year.

Kent O'Neil:
Yeah.

Tracy Neal:
And working remotely, which I I would imagine even I agree with you. I was blown away that somebody could do that because at night, if I think about what I'm doing in 1998, I'm thinking, you got mail, right? Well, yeah. So there is a little bit of Internet connectivity with AOL and you've got mail and stuff like that. But the idea of actually working, you know, I think I even had a CompuServe address that had a bunch of letters and numbers at CompuServe dot com. But the idea of working remotely, especially from another, it was very new. And obviously, I'm guessing that's because of Jonathan's education and focus a little bit passion, little bit of hobby on what he was doing at Colorado State.

Kent O'Neil:
If it it's just. It was the beginning, of Coors, we set there and we we worked with it and told him what we needed to do. And he would write that software and put it on the machines. Sinton and Sir Josh One China.

Tracy Neal:
Wait, what's the name of the city?

Kent O'Neil:
Sir Josh One.

Tracy Neal:
Sir Josh One.

Kent O'Neil:
Yeah,.

Tracy Neal:
Okay. I'm gonna say Sir.

Kent O'Neil:
Right off your tongue. Done.

Tracy Neal:
Well, S-I-R, Sir, Josh, J-O-S-H one, O-N-E. right? Sir Josh One.

Kent O'Neil:
Yeah, Sir Josh One.

Tracy Neal:
Okay, I got it.

Kent O'Neil:
Anyway.

Tracy Neal:
It's like how I spell lawngereh, right? L-A-W-N-G-E-R-E-H.

Kent O'Neil:
Spelling is not my lungs. But yeah, and we were a microcosm of what we are today. Of course it was just we just did route accounting, inventory pricing. Those were the challenges pricing, promotions and the really the the the reason we started Encompass. Was simple. I had accounting that told me what the transactions amounted to at the end of the month. But I never knew how much impact the rebates and Bill backs from the suppliers would affect my PNL until we got those back. So those took time over time. So one of the important things that we did was create a value for those bill backs at the transaction level.

Tracy Neal:
Of a place holder.

Kent O'Neil:
As a place holder, and then you knew you could go into it. After the first of every month or the first of every week, and you can see exactly where you stood financially.

Tracy Neal:
So if I can articulate the problem that you saw, the problem was previous to that you thought you made virus six thousand dollars, you high fived and then 90 days hundredweight a later seven thousand dollars with the bill bags came back it and you lost a grand or. I'm making up numbers, but you know what I mean?

Kent O'Neil:
Sure,.

Tracy Neal:
Your piano was impacted.

Kent O'Neil:
Yeah. So you were always wondering where you stood financially and running a business like we ran. That was so thin on margin and such a small business that we needed to have precise information. And that needed that precise information is why Jonathan worked towards getting us accurate current and. An on site information that was perfect. That's awesome and it worked.

Tracy Neal:
So how long did you guys use this? And did did Jonathan ever. At what point did he say, Dad? I think we could sell this to other distributors or was it always an internal project?

Kent O'Neil:
Well, it was an internal project for four years.

Tracy Neal:
Okay.

Kent O'Neil:
So it didn't come around that quickly.

Tracy Neal:
But mentally, we were you as those four years were on, were you thinking we're going to sell this to other distributorships? Or was it just a four years? Let's let's let's clean it up, John, and let's have a better system. I need better numbers. I need better software.

Kent O'Neil:
It was always in the back of our heads that we would try to market it. And I didn't start to market in about 2000. Yeah. And I was on the road for a year. And knocking on doors and sometimes on bricks,.

Tracy Neal:
Hitting the bricks. Harry Schumacher says he hit the bricks,.

Kent O'Neil:
Hit the bricks and begging.

Tracy Neal:
Yep.

Kent O'Neil:
I wouldn't have any luck. Nobody was gonna take on a brand new system. Yeah. So I found my friend distributors down in Hays, Kansas, Jim. All I'd known a long time. And I you know, I made immediately couldn't refuse.

Tracy Neal:
Okay.

Kent O'Neil:
And he put the software in and we did it there. And we and Jonathan worked it on site and managed the needs they had and was right. And software as we went and we got them established and I got another one established in the mountains. And then I was hunting for another customer. And I happened to be driving down Highway 40 and I got a call. Yeah. No, in Texas.

Tracy Neal:
Texas Highway 40.

Kent O'Neil:
And Chris Reed called me in and he had heard about what we're doing. So I said, I'll be there in three hours. He couldn't believe it. And I zipped right in there. And.

Tracy Neal:
That's in Amarillo.

Kent O'Neil:
That's in Amarillo. And that was my third customer. And they were a big help and in the largest customer we had had to date. And so they were a big help. Some of the needs they had in some of the software we wrote came from what they told us they wanted. And as it did from everyone. But I think Amarillo was probably the first sizable distributor that had the more issues that we needed to solve. And then as we kept going, we we kind of got the stigma of being the small distributor software and we had to overcome that.

Tracy Neal:
Yeah. Tell me about that. I was actually the question I was going to ask at the end. But since you brought it up, there have been times where I've been at a distributorship who has, let's just say, been challenged with a different accounting software. And I've mentioned to them at times that, hey, you should look at Encompass and I've gotten the feedback on a couple of occasions of, well, they specialize in small distributorships. Tell me how true that is or isn't and how you're trying to overcome that, that stereotype that it isn't. We might have been true in 2001, but you've been around.

Kent O'Neil:
Because we were we were solving basic problems. And one of them was cost of these larger systems for a small distributor was prohibitive. And so we naturally ended up with a lot of smaller distributors. But as we developed the software and got to solving the problems of the larger houses, we now have companies selling 25 million cases.

Tracy Neal:
Okay.

Kent O'Neil:
And so we we are really probably. As or more sophisticated than any other rail system in the market today. But we really did start with just the basics.

Tracy Neal:
Okay.

Kent O'Neil:
And so Jonathan has added with his team is added and added in. And the system is, as you know, pretty immense.

Tracy Neal:
Oh, yeah. Well, I think it there's a question here, but I'll make a statement first. I started my first year in 1994 selling Killian's for Coors and we didn't have twelve packs back then in Killian's wasn't a strong enough brand where people would actually take a six pack as a placement. So I lived and died my first six to nine months in this industry, placing that 22 ounce bottle of Killian's. And I always reflect back on that and say how lucky was I to be forced to sell one bottle at a time because it developed an appreciation for what it takes to sell a single bottle placement, something that could never be replaced without that experience. And I rely on that toughness and frankly, a lot of failure today in how I look at the business. How much did being a small distributor help? I mean, at the time you might have I'm guessing you maybe you thought. I wish I were bigger. I wish I were bigger. I wish our bigger. But in hindsight, you look back. I'm guessing that being a small distributorship and developing this helped you see all the little cracks and holes in the detail of what everybody needed to solve. Am I right on that?

Kent O'Neil:
Well, yeah, sort of. But if I hadn't been a small distributor, I probably wouldn't cared about going in the software business.

Tracy Neal:
Okay.

Kent O'Neil:
And if, if Coors, we were always frustrated being a small house and really weren't able to to muster the means or the capital to go out and get into a large house. Had we been able to do that, we probably would've bought some existing software and gone on like everyone else. But being the small distributorship and realizing that that's probably it for us in the wholesale business, because we couldn't fight the fight out there with the big guys. So we went into the software business and it's proven to be pretty good thing. So.

Tracy Neal:
Yeah, software as a very low cogs as compared to like selling a can of beer.

Kent O'Neil:
Oh yeah. Well you know, upfront cost was primarily some wages and not great big wages at that. You know, I mean we I paid Jonathan from starvation wages and he he agreed to it and we went without pay for a long time to kind of get the other thing rolling. But yeah, I think that being a small distributor is probably there's a couple of things that made us start start the business. One was we were small and we weren't going to get any bigger. And we pretty much knew that. The second was we had internal set problems in the company.

Tracy Neal:
Okay.

Kent O'Neil:
So we designed a system to keep extreme track of financials. And I said the Billback and the. We made it so it was almost impossible to cheat the system.

Tracy Neal:
Okay.

Kent O'Neil:
And once we got that established, I think it brought a lot of value because in this in the world of distribution and at that time and still today, there's a lot of cash being handled.

Tracy Neal:
Yeah.

Kent O'Neil:
And a lot of it it's just an imperative that, you know, where it came from, how much it is before it hits anybody's desk.

Tracy Neal:
Yeah.

Kent O'Neil:
And so that was really the emphasis of to plug the holes and be the cop.

Tracy Neal:
Yep. I worked a crew drive in Queens just before Memorial Day with some guys from Manhattan beer. And I was shocked at the thousands and thousands of dollars that were being handed back and forth over the counter, cable hash in cash, not not just for our guys at Manhattan, but the neighboring AB distributor. We ran into him a couple of times, too, and I made a comment to my guys that boy, these guys are carrying on all this cash. What happens if they get robbed? And his comment was, we've been trained very, very rigorously. Put your hands up. Walk away. You know, it's not worth anybody getting hurt. It's just cash. Obviously, we like to keep it. But, you know, that's that's how they handle it. And there's a lot of there's a lot of places in the country where you're still picking up a lot of cash.

Kent O'Neil:
Sure. And so that was that was probably the reason.

Tracy Neal:
Okay. So I'm going to go back to Colorado School of Mines for a minute, because I think you might tell me a little white lie where you said you didn't use your schooling for the last 50 years. But I heard a story about how you were a as a bobcat or a wildcat or some like that. Were you? You meant oil chasing. Right. So what's it called when you go chase oil?

Kent O'Neil:
Wildcatter.

Tracy Neal:
Wildcatter. So you were a wildcatter.

Kent O'Neil:
Yeah.

Tracy Neal:
All right. This is clearly from the school of mines. I don't think you are.

Kent O'Neil:
I don't know. I got an oil well, there's quite a lot. Denver and then digging into mine. But it's.

Tracy Neal:
Not from California. It's not. It's kind of all in the same bracket for me. So, yeah, you went out and you. From what I heard, you went out and you tried to find oil.

Kent O'Neil:
I did.

Tracy Neal:
Okay. Tell me how that worked.

Kent O'Neil:
Well, I'm here. It's not didn't work too well.

Tracy Neal:
Okay. Okay. Tell me the process. Did you have like one of those one of those triangle sticks like Gilligan had?

Kent O'Neil:
No, I had a lot of people use geology. I I concentrated on neurology.

Tracy Neal:
Okay.

Kent O'Neil:
I drilled where there was oil before and I hope to find some more. So, you know, it wasn't sophisticated all that. But I made some oil wells was this.

Tracy Neal:
So this was an actual business and investment.

Kent O'Neil:
You. Well, I bought a drilling rig and started drilling and and promoting oil wells. And so I'm probably I probably produced eight or 10 wells. Okay. Here in Colorado, in Colorado, an eight day basis that brought out oil. Oh, yeah. You made money on. Oh. Good. Yeah. Yeah, I was doing really good. The oil was thirty two dollars and fifty cents a barrel. When we first started.

Tracy Neal:
Okay.

Kent O'Neil:
And then when the oil price crashed, I got the last oil I sold was eleven dollars a barrel.

Tracy Neal:
Wow. You went from $32 about to eleven. Hard to make money there.

Kent O'Neil:
It's hard to make money there. It was actually in those small wells.

Tracy Neal:
Was this before or after or during the beer distributorships?

Kent O'Neil:
During.

Tracy Neal:
Okay.

Kent O'Neil:
It was in the 80s. Late 80s.

Tracy Neal:
Okay. Well, I don't I don't know. But I'm guessing there's other entrepreneurial projects you've done in the last 50. Oh, my goodness sake. That's what I thought. That's what I thought. Right. Because once you get the bug.

Kent O'Neil:
Oh, yeah.

Tracy Neal:
Right. You get the bug. I know. I could tell you're the kind of guy not happy doing the same thing for 50 years, even though from afar. That's what it looks like. You're done. You probably got all kinds of projects, right. Tell me about it.

Kent O'Neil:
Well, I I grew up on the farm. So we we expanded the farm, my brother and I, and we had a weak farm mountain northeast Colorado. And I sold that in eighty five when I merged with Bob.

Tracy Neal:
Okay.

Kent O'Neil:
But yeah, we did a lot of farm in wildcatting and I was always a tinker. I'd like to mess with stuff. But anyway, a lot of that didn't amount to anything.

Tracy Neal:
Tell me tell me about a big failure. How that. They always say entrepreneurs learn and grow by being willing to fail. And I think I saw a thing on TV that night. It was Marcus Lemonis, the prophet, who said the number one skill of an entrepreneur is the willingness to fail. So tell me about what at the time was a huge failure.

Kent O'Neil:
Oh, my goodness sakes, I do.

Tracy Neal:
I need to. Did you want Jonathan to help us out on these? I'm sure he has a couple.

Kent O'Neil:
Get to probably get it.

Tracy Neal:
I see a football being thrown away and.

Kent O'Neil:
I don't want to talk about that.

Tracy Neal:
No, that's what we want to talk about. What you don't want to talk about. What?

Kent O'Neil:
Oh, I thought I was going to invent a toy for the backyard where you could you could take a couple of polls and put a hoop between him and run him back and forth to teach kids how to throw a football through a.

Tracy Neal:
Football player.

Kent O'Neil:
Oh, yeah,.

Tracy Neal:
Okay.

Kent O'Neil:
I was never the quarterback. I was kind of the grunt worker.

Tracy Neal:
Okay. But you invented this toy.

Kent O'Neil:
Yeah.

Tracy Neal:
I got a hold on it and you got a patent on it. Okay. So if anyone out there is trying to copy this, this toy of how to make beware, Ken's got a patent.

Kent O'Neil:
Well, no, they could they could make a deal with me.

Tracy Neal:
Okay. So you're well you're going to make a deal. Yeah. So this helped the kid learn how to throw a football.

Kent O'Neil:
Yes. It was just a moving target. Okay. And so it wasn't all that difficult, but.

Tracy Neal:
Okay. Did you. So you create a prototype on that? Oh, yeah. Did you sell any.

Kent O'Neil:
No. Heavens, no.

Tracy Neal:
Just prototype.

Kent O'Neil:
Prototype.

Tracy Neal:
Okay. I saw a couple other patent plaques in the hallway and I don't wanna talk about the Encompass patents. Those are the technology ones. Those are boring. But what are the patents do you have? Because.

Kent O'Neil:
I didn't have one. The one you saw in the hallway are really due to the automation that Jonathan's acquired.

Tracy Neal:
Okay.

Kent O'Neil:
Yeah. And he's the inventor there.

Tracy Neal:
Gets a little bit from you, though, I think right.

Kent O'Neil:
A little craziness maybe.

Tracy Neal:
Okay. Tell me about another me about another venture that you did.

Kent O'Neil:
Oh, gosh. You know, Tracy, I don't know that I can. That you thought about that I could come up with some. But right now, that's about the only in the oil business. You know, the oil business was a failure, of course, with with the price creation. But we recovered from that. Finally took a while.

Tracy Neal:
Yeah. What about what about an early install? Again, I'm not trying to be negative here, but I think one of the great things would be an entrepreneur is looking when you're in a position of comfort, as you are today with as many employees and customers as you have. It's fun to look back in two thousand, whatever to that one, too. That too little boy. Did we screw that one up. Thank goodness they stood by us. Or boy, I wish they who if they would have real.

Kent O'Neil:
You know, I think that we had some tentative situations early on with the software course. But Jonathan was so tenacious and so quick to correct the software and make it functional that the customer hardly knew it.

Tracy Neal:
Okay.

Kent O'Neil:
But there were there were times when I know he was sweating babies, but it but he'd worked through it and got it done. One of the trickiest times we ever had was that sound beverage out in Everett, Washington.

Tracy Neal:
Yep. Sound beverage AB guys, right?

Kent O'Neil:
No. They were MillerCoors and Gallo.

Tracy Neal:
Okay.

Kent O'Neil:
So that was our first step into the wine business, which was totally new, shocked us because it had a.

Tracy Neal:
Lot of SKUs.

Kent O'Neil:
A lot of SKUs and a lot of single serve and then sold it by the bottle and by the case and by the mix case and by the. And so that was that was a real challenge. So that I know that we were there about a month. And Jonathan was right. New code for that company onsite every day.

Tracy Neal:
Wow.

Kent O'Neil:
And I didn't know if we were gonna get through that one, but we made it. And Elis Toti bless his heart was stood right with us. And and but that was that was a real rodeo. Yeah. We were bucked off a lot of times, but we we made it. And that was because because of the work that Jonathan did. And we didn't have a big staff then.

Tracy Neal:
Okay.

Kent O'Neil:
It was primarily Jonathan. And I think Cheryl was with us and who'd been with me for 40 years or so.

Tracy Neal:
Hello, Cheryl. By the way, this is the first time a couple of first or first time we're gonna do a two-part podcast. I've never done that. But this the first time we're in front of a live audience. I forgot to tell our listeners that. But we've got about 30 people here in the office and in front of a live audience. And if you haven't listened to a live audience podcast, my favorite one is Tim Ferriss interviewing Terry Crews. That is a great podcast. Anyone wants to listen to a great podcast. Tim Ferriss interviewing Terry Crews best live audience podcast ever. Hopefully we're number two.

Kent O'Neil:
Okay.

Tracy Neal:
So tell me about Jonathan's growth as a leader of this company, because I'm I've known you for I'm going to say I've known of you for 20 years, but I've personally known you for, I think about seven or eight years. And I've seen a change in your demeanor on how you've run the company. And I've seen you give the reins and the control to Jonathan. More and more and more to the point now where Jonathan is CEO. You are a huge official title of owner slash partner. Right. And I can see, as I've seen as I've also seen in beer distributorships, this is a compliment by what I can see that you're giving him more and more reins to where he's really running the business day in and day out. But tell me about how that took place over 20 years. Because I'm sure that there was a point in time where he was your son and then he was employed and then he was a significant employee. He's kind of grown. What's that felt like as a father?

Kent O'Neil:
Well. It's the normal course of events. And so, as you know, I'm region an age where I'd like to look at maybe.

Tracy Neal:
Fifty nine.

Kent O'Neil:
Fifty nine. I'm 71.

Tracy Neal:
Seventy one. Okay.

Kent O'Neil:
Yeah. But over the last ten years Jonathan has primarily been always to the head and the lead on the software and my chore was primarily to interface it with the wholesalers. I knew the wholesale business and I was able to convey the attributes of Encompass to the wholesalers in their language.

Tracy Neal:
Okay.

Kent O'Neil:
I've never been a technical man. I couldn't copy a line of code. But Jonathan has gradually taken over most of that effort with with sales force and whatnot.

Tracy Neal:
Okay.

Kent O'Neil:
I am perfectly fine with being a Lester Lester partner as we go along. And hopefully you're doing a great job and.

Tracy Neal:
He's do an excellent job.

Kent O'Neil:
Excellent job. And and.

Tracy Neal:
I can tell you, very proud of him.

Kent O'Neil:
Yeah. I am very proud of him. He's he's got one of those mines. That is just extraordinary.

Tracy Neal:
Yeah, absolutely.

Kent O'Neil:
And you got to appreciate that. I'm only smart enough to employee superior intellects.

Tracy Neal:
Do you have any grandchildren?

Kent O'Neil:
Seven.

Tracy Neal:
Seven of them. That changes. That changes a man a little bit. Right. Yeah. I've been I've been told that I don't have any grandchildren, but I sat down with several folks who were in the 70s and even a couple in their 80s. And they've said, yeah. When I got grandkids, things changed a little bit. How did that change your life?

Kent O'Neil:
Well. I guess probably the the focus on on really not so much on the business, but knowing that these kids are going to be the ones to carry on the family business, hopefully. And looking at it from that point of view, is there not? And you know, after you I tell you some Tracy old guys don't need as much money as young guys.

Tracy Neal:
Yeah. And you accumulate some things and experience.

Kent O'Neil:
You had enough money to do a few things and that's after that. It's not that important. Okay.

Tracy Neal:
But I don't know the background of your family too well. But is there a chance you may have eight or nine or 10 grandchildren or your kids kind of done having kids?

Kent O'Neil:
I think we're done.

Tracy Neal:
Okay. So how old is the youngest one?

Kent O'Neil:
The youngest one is. A year and a half.

Tracy Neal:
Okay, so here's what's really cool about this. Podcasts out of you realize this or not. But another person talking about this is you're one and a half year old. We'll be able to listen to this when they're 20 or 30.

Kent O'Neil:
How about that?

Tracy Neal:
Or 40. So what do you want? What you want to say? You're one and a half year old grandson or granddaughter.

Kent O'Neil:
Oh, my. Probably just the standard things. Do what you do and do it well. And. Be conscientious and stay with it.

Tracy Neal:
Yeah.

Kent O'Neil:
And that's that's all it amounts to getting along and anything.

Tracy Neal:
Yeah.

Kent O'Neil:
It's persistence and you just stay, stay, stay and go.

Tracy Neal:
How old is the oldest grandchild?

Kent O'Neil:
Twelve.

Tracy Neal:
He or she?

Kent O'Neil:
She.

Tracy Neal:
Is she aware of what the biz the family business is.

Kent O'Neil:
What we're worth. Yeah, sure.

Tracy Neal:
Your grandpa built it and.

Kent O'Neil:
She runs around here quite a lot.

Tracy Neal:
Okay.

Kent O'Neil:
Yeah.

Tracy Neal:
Good.

Kent O'Neil:
And I know her. Her dad brings it home every day and so does her mother. They both work here.

Tracy Neal:
Okay.

Kent O'Neil:
So it's not like these.

Tracy Neal:
She may she may know more than she wants to know.

Kent O'Neil:
Yes probably. She's a great kid, though. She's she's sharp. And.

Tracy Neal:
That's awesome.

Kent O'Neil:
They'll do what they want to do, of course. But we don't we don't worry.

Tracy Neal:
Yeah, I have I have four

Kent O'Neil:
Four of them.

Tracy Neal:
We always joke about the different directions they're gonna go.

Kent O'Neil:
Yeah.

Tracy Neal:
We say one will live very far from home and one may never leave home. Yeah. And then week, the week we kind of change which is which and their behavior of the week. Right. What do you want to say to your customers that are out there especially? You know, you talked about Reed. Chris Reed and and some of the early ones was in Hays, Kansas. You've identified those two. But I'm sure you know, now you've got, I think, somewhere between three and four hundred distributors and your customer base. What do you want to say to your customers for supporting you and sticking with you and believing in what the company could become?

Kent O'Neil:
Well, of course. Thank you is the first thing. Thank you for the bidniss and thank you for making us what we are. We couldn't have done this, of course, without the the patience and support and understanding a lot of times these customers. Then when you when you do what Jonathan's done, you have to be able to change. Constantly.

Tracy Neal:
Yep. Always evolving,.

Kent O'Neil:
Always evolving. And I had this conversation with him at one time. And I was frustrated because I was getting the feedback from the wholesalers who said they didn't want to see these changes, and he says Jonathan when are you gonna quit changing this? And he said to me, Dad, what you what? Don't you understand about the software business? Software business evolves. Now it changes and it moves. You don't sell somebody a piece of software and walk off and come back 10 years later and sell him another piece anymore. It doesn't work that way.

Tracy Neal:
I think that's a really key point because as you know, we we also sell software. And if there's anything I want distributors to learn about the software business, whether they purchased my software or not, is to bring them up to speed with the idea that you're not buying windows. Ninety five in a box. No, that is the old way of buying software. In the old days, you bought software. It was in a box and all the features were contained. And you had to go through the growth curve of maximizing and getting the value out of that box. And hopefully you did that within the five year period before the next box came out, correct? Nowadays we have SAS, which is software as a service or software as a subscription, and it's our job to remain competitive and to bring value to our customers to do constant iterations, which means we're doing changes as you guys are sometimes weekly, definitely monthly and always quarterly. And so if I could say anything in this driven network out there, I would say if a software package isn't working for you or you evaluate it and you don't think it's right for you. Be patient. Be patient. Given three months, given six months, given nine months and you'll be blown away on what they're doing a year from now. That didn't work for you today, because I think sometimes we've presented to distributors before and they've said, yeah, maybe that that's not the right thing for us today. And then they kind of seem to write us off. And I want to come back and we're doing this. Now we've gone into our seventh year and we're reuniting with the jurors who have told us no. And they're saying, wow, I can't believe everything you guys have done. And the lesson there is, yeah, we're always doing new iterations in the software.

Kent O'Neil:
The exact same scenario applies to us.

Tracy Neal:
Yeah.

Kent O'Neil:
And as the business evolves and the complications that arrive in a in a beer distributorship today are far different than they were when I bought the distributorship with 10 SKUs.

Tracy Neal:
Yeah.

Kent O'Neil:
And of course, the complication is how do you market? How do you store? How do you deliver? How do you organize around a warehouse that has 2000 items in it?

Tracy Neal:
Yeah.

Kent O'Neil:
And. Not only in sales as which which you help them out with a lot, but in the operations, if if you don't keep pace with that problem and deal with that problem head on. It will bury you. It will absolutely destroy your efficiencies and and bring the house down. Speak. So that is where we try to. Do all we can in anything from the fleet to the warehouse to the whole gamut, the whole gamut of the things that need to be done to accommodate new, really changed world. The wholesaler today has very little resemblance to one of twenty five years ago, almost no resemblance. Because you just you have but.

Tracy Neal:
There are a couple of them operating the same way, same way. Dare I dare I say they say there are a couple of just a couple. Yeah, a lot. But a couple of them.

Kent O'Neil:
And those are the ones that come around to us again once after a while. They they see that they have to change and we might have. I've got customers here that I've called on ten years before they ever make change.

Tracy Neal:
That's a long sales cycle.

Kent O'Neil:
That's a long sales. Right. But we do stay in touch. And. Usually it's not that long, but it's it's a big change for a wholesaler.

Tracy Neal:
Yeah, it's a big change for route accounting software.

Kent O'Neil:
Yeah. Change in the route accounting software, the warehouse management software and even even getting into the automation and what not to handle the complexities. I think those that do it well will probably have a better chance of surviving in the future and being profitable. I know that. But it's it's sometimes a tough job to make that change.

Tracy Neal:
And I know you guys one of things I love about Encompass and I feel like we share in this DNA is not only are we doing the iterations real quickly, but I sat through some of your user group meetings this week and I heard every person in front of the room asked the distributors, what's your feedback? Tell us how we're doing. What do you need? What the what an example. And one gentleman ask a distributor a what feature would you like to see? The distributor answered and the gentleman followed up with three more questions like give me detail on that. Give me a user case. Explain to me how your sales rep uses this in the field. And we used to call that big ears. We actually used to have a big slide on our PowerPoint presentation of like a Chihuahua dog with these big ears and we would tell our distributors we have really big ears because, you know, I feel like my knowledge has run out. You know, I mean, I know a lot about this industry. But now that we have this network, my network knows more than I know, you know, and you guys, I feel like you guys do the same thing. You rely a lot on your distributors for feature enhancements and new ideas. And we're going to take a break in a minute before we come back for the second half. What I'm gonna get into in the second half is what's the difference between route accounting software and ERP and all the other things you guys do? Because from what I've been told to to refer to you as a route accounting software vendor, I'm very much underselling everything that you guys do. And I'm sorry I do that. But I'm I'm the sales guy. I'm a street guy. I don't understand the technology, but I'm anxious to talk about it. When we come back for a break, before we go to break, you wanna give a shout outs to any and you've called out a couple of people already, but any mentors or whether they're in the industry today or not? That really helped you or took you on your whinger, taught you some good lessons. Suppliers, distributors, retailers, anyone you particularly call out and say thank you to?

Kent O'Neil:
You know, I've had some some actually retailers who probably had more influence on me than other wholesalers, retailers, retailers. Yeah. And I had a retailer when I would just. Starting up.

Tracy Neal:
Okay.

Kent O'Neil:
And he had worked in the wholesale business. And his name was Nick Miltenberger and he had a.

Tracy Neal:
Nick Miltenberger.

Kent O'Neil:
Nick Miltenberger in Sterling, Colorado. And he said, you know what you need? He says you need a cheap beer to pay the freight and pay the delivery bills and then you make your money on premium beers here. And, you know, he was absolutely right.

Tracy Neal:
I was gonna say that sounds like the model of today.

Kent O'Neil:
It is the model of today. So you so you have some product in your in your distributorship that may not be a large margin item, but it gives you the volume and the revenue to.

Tracy Neal:
Pay for the truck.

Kent O'Neil:
Pay the trucks pay the base costs so that you can try to make a little money on your premium products and.

Tracy Neal:
Good advice.

Kent O'Neil:
Yeah, I think that was probably as good advice as I had in the business. And we started out selling all Milwaukee then.

Tracy Neal:
Okay.

Kent O'Neil:
And we sold a lot of old Milwaukee beer.

Tracy Neal:
Is Steve still in the business?

Kent O'Neil:
No, he died.

Tracy Neal:
Okay.

Kent O'Neil:
He passed about 10 years ago. But he was a nice little boy.

Tracy Neal:
Anyone else you want to call it?

Kent O'Neil:
Oh, gosh. You know, my son is probably taught me more than anybody else. You know.

Tracy Neal:
I'm going to call for you, your daughter in law.

Kent O'Neil:
Yes.

Tracy Neal:
And she is a rock star.

Kent O'Neil:
Yes.

Tracy Neal:
Has been leading this UGM. She got up on stage the other day. I said I expect her to talk for about two seconds. I thought just was say, welcome, here you go and hand it off. She went on for about an hour and it was an hour of action packed, value filled information to launch this thing with a ton of energy. And I was sitting there going, holy cow, she's not feeling that.

Kent O'Neil:
When she gets back here, we send her out into the field and she takes the arrows when we do the installs right now. A lot of them.

Tracy Neal:
Yeah.

Kent O'Neil:
And she runs the crew. So she's a vital part to the company.

Tracy Neal:
Okay. So I didn't want to interrupt you. You were talking about Jonathan, but I want to give Kim a shoutout. Okay. I'm your rock star. Good job. So keep talked about Jonathan.

Kent O'Neil:
Yeah, they way that you talk about. I was a beer distributor and certainly not a software guy, so I learned about. The software business from Jonathan, of course, and how you got to change your thinking, how you got it. The ability to change and adjust, I think is probably the lesson I get from him.

Tracy Neal:
Okay.

Kent O'Neil:
And I'm pretty flexible guy anyway, and I'm able to change and think about different things. But then he just moved in such a pace that you just got to step back and say, well, where we going next? This could be a wild ride.

Tracy Neal:
It's going to be a wild ride. We're gonna take a break.

Kent O'Neil:
Okay.

Tracy Neal:
It's actually gonna be a 48 hour break and come back on Thursday and record the second half. It'll be a two second break on the podcast. But thank you for the first half. Can't enjoy it. We're going to get more into it. All right, Kent. Well, welcome back for day two and the second half of our recording. It's Friday. Here, the last day of the year. GM, it's been an incredibly successful conference. I think you've had at least three to three hundred people come through over the last couple of days. And I know I've enjoyed myself. I've gotten to know your team. I've really gotten to absorb the Encompass culture, which I've enjoyed and have ultimate respect for. So congratulations on the organization here. And we're gonna get more into the story of how Encompass came to be. But before we do that, it wouldn't be appropriate if we didn't crack a beer at 8:00 a.m. So there we go.

Kent O'Neil:
All right.

Tracy Neal:
All right. So I heard I heard a story last night, something about the Miller Lite phrase and taste great, less filling. And that was your idea or you coined it or something like that. I'm sure I'm off. I'm 10% accurate. Right. Did you invent.

Kent O'Neil:
I don't know who told you that?

Tracy Neal:
Did you invent taste great, less filling?

Kent O'Neil:
You might not believe me at one time or something like that.

Tracy Neal:
Okay. So what happened when you got the light as a brand back in the 80s? There's some story behind that.

Kent O'Neil:
We were I quit driving a truck.

Tracy Neal:
Okay.

Kent O'Neil:
Up to that time we were at one truck operation. I say we I was at one drug operation and I had to drive the truck to make make it work. We were very small.

Tracy Neal:
Yeah.

Kent O'Neil:
And so when Miller Lite came along, it was like grown another arm.

Tracy Neal:
Yeah.

Kent O'Neil:
And we started selling a lot of product and it really made pioneer into into a survivable business. It wasn't great. Any problem? It wasn't a rags to riches story.

Tracy Neal:
Yeah.

Kent O'Neil:
It was a rags to survival story. And so we kept kept going that way. And then. And then the Miller High Life theme came along. Now comes Miller time.

Tracy Neal:
Okay.

Kent O'Neil:
And at that time, there was a power plant being built in brush and all the guys were drinking Miller High Life.

Tracy Neal:
Okay.

Kent O'Neil:
And I hauled that stuff over there. Unbelievable amounts of it to the to the construction.

Tracy Neal:
So you helped put it on the map, basically.

Kent O'Neil:
Yeah. Oh, I doubt that that they would say that about me in the Miller Brewing Company.

Tracy Neal:
Okay, good. So what was it like? That was the high life and selling that. Was that like launching that brand?

Kent O'Neil:
No, it was terrific. I mean, it's terrific to put a product in a retail outlet and have it move out. I mean, there was a lot of things that came along that you put out there and hope and pray that you're going to get some business out.

Tracy Neal:
And I'm curious, how did they describe the woman on the moon as part of the logo and the trademark? When Miller High Life was first introduced, what was because today we take it for granted. She's there. She's an icon. You know, probably one of the biggest beer icons out there on any label, you know, right up there with possibly the Clydesdales and the Coors banquet waterfall. But the woman on the moon, when that was first introduced, what were your thoughts on it or how did they explain it?

Kent O'Neil:
Well, that was introduced far before me. That was that I've heard that logo came from Frederick Miller's nephew or or daughter or something.

Tracy Neal:
Okay.

Kent O'Neil:
That logo. And that was way before. Way before me.

Tracy Neal:
Okay. All right. So did your operation introduce Coors Light in the late 70s?

Kent O'Neil:
No, that was that was introduced by my competitor at that time, which was Debord distributing and stroke. And he had the Coors Light and got that rolling. And so. Yeah. But that was a big pushback for Miller Lite because it was Bud Light.

Tracy Neal:
Okay.

Kent O'Neil:
And those things come and go. But that's where it is.

Tracy Neal:
You know, you talk about being a one truck operation. I know today a truck costs hundreds of thousands of dollars. I don't know what a truck costs when you got started, but I'm sure whatever it was, it was a it was a large investment. It was one of those things where, you know, I don't know if you had to go to the bank and finance it, but I'm sure it's one of those things that, you know, sometimes as entrepreneurs, we have these conversations with our spouses about spending big money to make the business grow. What was it like buying your first or second truck? Because I'm sure those were big investments.

Kent O'Neil:
That my second truck came after Miller Lite got going. My first drug was I bought from the previous owner of the beer distributorship and I paid $10,500 for it.

Tracy Neal:
And you remember exactly what you paid for.

Kent O'Neil:
I do. And it was a pretty new truck.

Tracy Neal:
By the way. I paid $127 for my first BMX bike. I know that because I paid for every dollar of it. Yeah, yeah.

Kent O'Neil:
Those are kind of fun times. You look back and you look at the numbers that existed in the industry. My margin on Schlitz beer when I started was 51 cents a case.

Tracy Neal:
Okay.

Kent O'Neil:
And so there wasn't any room for any wiggle. And we went up 15 cents a case after the first year. And my golly, the brewery. Let me keep it all.

Tracy Neal:
Oh, wow.

Kent O'Neil:
So I was told.

Tracy Neal:
That doesn't happen anymore, right?

Kent O'Neil:
Not anymore. Not yet. Not a chance. But I think they probably felt sorry for me.

Tracy Neal:
Okay. So let's go back to how you started Encompass. Because I know that, you know, one of the other things you told me the other day was that there was a point where I almost didn't get started. Right. You had you had rolled out the software. Jonathan went to China and he was fixing it in real time, as you were trying to go get some customers. As we talked about, you went down to Kansas and a couple other distributors where you had really good friends and kind of, in your words, begged, said, please take this, please support it. So there was kind of like that initial peak where we get a few customers and then there's kind of the back side of the valley, which is can we now sell this again? Can we get repeat customers and can we make it stick? Tell me about that era of the company. I think you said it was around 2000, 2001.

Kent O'Neil:
Yeah. In 2001, we had kind of we had spent four years really in three and a half years anyway with developing the software pioneer. And Jonathan had worked a lot hours on it and I really felt like it would could be a commercial success. And so I spent between 2000 and the spring into 2000 in the spring of 2001. I spent a lot of time on the road trying to get somebody to adopt the software. And it was almost impossible. It was impossible. We couldn't find anybody who would have confidence in an unproven software system. And Jonathan nine percent, an outside little strip mall over here on on the May and Drake. At a bench and I said, Jonathan. He said, Dad, I said, I've got to have some income. And I said, I understand that at the time I was just giving him a little subsistence for the software enough to live on. So he said, I will have to take a job when I'm looking at a professorship. Well, we're here at CSU. And I said to him, how much time do I have? And he said, you have till August. So I called that.

Tracy Neal:
So he went stretch the sweat stretch. So he was in dire need of a job. You weren't you weren't just not paying him to teach him tough love. You were not paying him because the business didn't have fun. The business didn't have it?

Kent O'Neil:
No.

Tracy Neal:
Yeah, the business didn't have it. And the software wasn't doing everything it needed to do. And so he said, I've got to go get a job.

Kent O'Neil:
And these were the lean days.

Tracy Neal:
Okay.

Kent O'Neil:
And we had some. But anyway, he gave me until August. So I leaned on my friends and I'd known Jim Hobel in HAEs for a long time. So I went down to him and I made a deal with him to install that, although I was in a situation where he wants to make a change. He had just taken over the business from his dad and he had a lot of the old school people in there. I wanted to make a difference. So I made a deal with him. I can't really say it was a deal, but it got us exposed to a commercial enterprise. And Jonathan and I. And I think Sheryl were down there installing that thing. And and there was a lot of opposition.

Tracy Neal:
Yeah.

Kent O'Neil:
We walked in the front door and Jim Hobel said good luck and he walked out the back.

Tracy Neal:
He just said, hands off, you guys. You guys figure it out or not overdo it.

Kent O'Neil:
Figured out my killer, my from then on, the dog fight was on. But it was it was quite a time after that. Then I just went to some of the other friends I had in the business and got them to put it in. And of course, as I told you before, we were down at redistributing and Reed was really the catalyst we need. When when you're launching a business like this, it is absolutely essential that you have referral business and you have customers that refer you and brag on you. And that's really the function redistributing did for us. A Vast Reed with well-connected around with Miller with the Coors network. He didn't have Miller, but he gave us recommendations. And from that we would get another interview and another shot. And so we started to congeal into, enough business to survive. We still weren't making money, of course, and we didn't make any money for quite a while. But as we as we got those referrals, my wife Betty and I jumped in the car and we did it all on the road. We saw the entire United States. We we would go to a customer. I would start my my pitch at 9 o'clock and usually be done by 1:00 o'clock. We'd run out of the car. I'd sometimes change my clothes in the parking lot and we'd jump in the car and make another five hundred miles to see the next customer. The next morning did it for almost 10 years.

Tracy Neal:
Wow. Ten, 10 years of hit the bricks around the country by car,.

Kent O'Neil:
Ten years by car. We put a million miles on three different cars over that time.

Tracy Neal:
We'll call it kind of cars where they.

Kent O'Neil:
Lexus.

Tracy Neal:
Lexus.

Kent O'Neil:
I live in it. I'm going to have a nice car. You lived in it and.

Tracy Neal:
You lived in a million miles on three different cars. And what were some of the objections you got back then?

Kent O'Neil:
Well, that's kind of interesting. We would go in and every new customer had his idea how things should work. Yeah. And one of the bones of contention with what we had here was that I would get those requests. And Jonathan says I promised it to him and I should know. But I I thought they were request. He thought I had promised the software. But anyway, I'd bring it back to him, said we can get this customer if we can do this. And he, he would just get really frustrated with me.

Tracy Neal:
I can I can relate. By the way, can you. This is how we started our software. It's just, you know, when it first started, it took a picture of a display. Then I then I'd present to a distributor and they would say, boy, if it only did this.

Kent O'Neil:
Yeah.

Tracy Neal:
And I go, you know what it does in 30 days. If you sign up now, you'll get it. And then I go back to the developers and I'd say I'd say, can we do this? And they would say, well, yeah, maybe. And, you know, we'll think about it. And I'd kind of tiptoe around it and then I'd finally get brave enough. Say, by the way, I just promise this to get an invoice. So I can't I don't want it. Can't we do it? But we have to do this and it needs to be done in 30 days.

Kent O'Neil:
Now, there was times when I felt like the aren't, you know, carrying that as an on beat back into the nest.

Tracy Neal:
Yes. Yeah.

Kent O'Neil:
And so but Jonathan was very good at it and very mindful of how to sort out whether the software request was one that make it look like my own software. So I don't have to make a change or whether it was actually something that was universally usable.

Tracy Neal:
Yeah, this is something that's scalable for the future as opposed to a one off. And I made on my software journey, which is now in your seven. I made many mistakes the first three or four years that I knew were mistakes, but frankly, we needed the money.

Kent O'Neil:
Yeah.

Tracy Neal:
You know, someone asked us for something. I knew it wasn't scalable. I knew it was a specific I knew it wasn't something we're gonna do long term. But if they offered us money to do it, the money money trumped the strategy of what the software looked like in the future because it wasn't a future if there wasn't money.

Kent O'Neil:
Sure. And yeah, you have to do some of those things.

Tracy Neal:
Oh, yeah.

Kent O'Neil:
And it's it's a delicate balance boy.

Tracy Neal:
Yeah.

Kent O'Neil:
And and Jonathan has a good enough head on him to logic through that to be able to sort out the chaff from the wheat. Yeah. If you will. And we did a lot of it. Our problem at. Primarily I think and was until we decided to switch to this this platform type model. Yeah. With an API adaption but the beginning model. Was that everybody got the same software, We only had one version of the software out there and I think it's proven to be. And that was a frustration I had. And I would come back and say, Jonathan, you've got to quit changing businesses. You got to know that we got to keep changing it. And it's always going to change. So I had to shift gears and show the people what you see now is not what you'll have in the future and not what you're going to have after that. And so he engineered and kept correcting it. But the idea that everybody gets everything. Yeah, we kind of outgrew that. Okay. And that's when he's decided oblate here to be a platform for anybody who wanted especially special type of service. Could you put an API together and an access to data?

Tracy Neal:
Yeah.

Kent O'Neil:
Of the main system.

Tracy Neal:
Okay.

Kent O'Neil:
And there's the doctor now.

Tracy Neal:
Jonathan is joining us. Yeah. You need a couple of minutes. You like coffee? All right. Come on. Come on. Up to the hot seat. We'll give the microphone to Jonathan's just joined us. Before we get him into the conversation, I've got one more question for you Kent. Where did the name Encompass come from? And how was it selected?

Kent O'Neil:
I think that came from my other son and Patrick.

Tracy Neal:
Patrick Joseph, yeah.

Kent O'Neil:
And he suggested it. And frankly, Jonathan has never liked it very much.

Tracy Neal:
That's how brothers work. Right. My brother has a ton of lousy ideas. Right. Love him. But my ideas are better.

Kent O'Neil:
Anyway. Yeah. He came up with that. And then I think Darren Spence had some people that worked on the logo. So it was kind of a homegrown.

Tracy Neal:
Okay.

Kent O'Neil:
And we didn't have any real high, high end intellectuals.

Tracy Neal:
It wasn't an agency out of Chicago.

Kent O'Neil:
No, no, we didn't.

Jonathan O'Neil:
I just at one point, we just had to come up with something other than the software.

Tracy Neal:
Yeah. That software.

Jonathan O'Neil:
If you want to buy the software. They're like, what is the software?

Kent O'Neil:
That software. Okay. And then and now the url is Encompass eight. So what's the purpose of the eight at the url?

Jonathan O'Neil:
Encompass.com was squatted on by, you know, early dot com. I apologize for that.

Tracy Neal:
Not supposed to do that. No, it wasn't. It wasn't me.

Jonathan O'Neil:
But yeah. Then I eventually sold and ironically enough, it sold to a software company that makes logistics software.

Tracy Neal:
Oh, Okay.

Jonathan O'Neil:
What's caused this many confusions.

Tracy Neal:
Is the eight in relation to having some developers in China?

Jonathan O'Neil:
No, it's just a favorite number.

Tracy Neal:
Okay.

Jonathan O'Neil:
Yeah. No, really.

Tracy Neal:
You're soccer jersey when you were five years old,.

Kent O'Neil:
Eighty-eight when he was a football player.

Tracy Neal:
Okay.

Jonathan O'Neil:
And no, eight was my favorite birthday.

Tracy Neal:
Okay.

Jonathan O'Neil:
And it's nice and symmetrical.

Tracy Neal:
Eight is a good year.

Jonathan O'Neil:
Yeah. I was really stoked about being eight. Remember that? I was like, I've made it home safe.

Tracy Neal:
You made it? Yeah. Everything else is downhill. All right. It's a job that we just heard a story. And it was very detailed story about a conversation that took place between you and your dad at a park bench or a bench by a strip mall. And it was a conversation of you almost going to become a professor over at CSU because you needed to make some money. Can you tell us that story in your words?

Jonathan O'Neil:
What is it? The story?

Kent O'Neil:
So it was it was about you all when you told me that you could have I could have till August to get the software sold or you were gonna take a job at CSU.

Jonathan O'Neil:
I remember maybe I maybe I said it like I had a plan that was that was a lie.

Kent O'Neil:
All this time.

Jonathan O'Neil:
It was a bluff. It was a bluff.

Tracy Neal:
Good bluff though. He remembers it. Twenty years later. Yeah. So the story was that you were weren't getting paid a whole lot.

Jonathan O'Neil:
Zero.

Tracy Neal:
Slightly. Slightly below or above zero right there. Right. And you need to make some money. And you kind of told your dad, look, I need to start getting paid for this. And he said, how how much time do I have before you're gonna go take this job? And you said you've got until August. And so he hit the bricks and went out on the road and made some deals with some friends and generated a couple of deals where they could get it sold.

Jonathan O'Neil:
Yeah, that's probably accurate.

Tracy Neal:
And then and then you became employee number one of Encompass.

Jonathan O'Neil:
Yeah.

Tracy Neal:
Okay.

Jonathan O'Neil:
And the first customer, Jim Hoble imparted some advice to me. He said he said, oh, congratulations, you got your first customer. You do realize your life is now over.

Tracy Neal:
And you didn't believe him, did you?

Jonathan O'Neil:
I didn't what he meant, but yeah, shortly. Surely.

Tracy Neal:
And now you know what I mean.

Jonathan O'Neil:
Yeah, I know exactly what he means now. Yeah. Yeah.

Tracy Neal:
Is Jim still in the industry?

Kent O'Neil:
Oh, yes.

Tracy Neal:
Okay.

Kent O'Neil:
Yeah. He's still in Kansas.

Tracy Neal:
Okay. You may. He may be a podcast candidate. I may have to go down and talk to Jim and Hayes and get my podcast. So what was it like growing the software product? We've heard the story about how you launched it, Jonathan, and then you and then you went to China right away and we're working on it in real time to make it work. What's your perspective from from doing that? I mean, you were ahead of your time, not only in this idea, but the idea of cloud software, the idea of outsourcing to China at your age coming out of CSU. I think it's pretty safe to say you're you're way ahead of your time doing all this. What made you think that that was possible?

Jonathan O'Neil:
Well, one part is possible and then the other part is there's no other way to do it. Right.

Tracy Neal:
Okay.

Jonathan O'Neil:
So just managing the server, right. So at that point we had a web server sitting in Sterling in dad's office and just maintaining that was pain and suffering. I mean, I'm not in sterling. I'm wherever I need upgrade the server.

Tracy Neal:
Yeah.

Jonathan O'Neil:
I mean, be restarted. So from the very first server, I was like, I'm never doing this again.

Tracy Neal:
Okay.

Jonathan O'Neil:
So.

Tracy Neal:
How far away is Sterling?

Jonathan O'Neil:
Oh, it's nineteen ninety minutes east.

Tracy Neal:
Why couldn't the server be here?

Jonathan O'Neil:
Whereas here working out of my house I mean out of my.

Tracy Neal:
Okay.

Jonathan O'Neil:
Yeah. There was no here.

Tracy Neal:
So it was just that's where servers were in Sterling or that was it.

Jonathan O'Neil:
That was just where the one that my dad was using was the first customer we got. I was like I'm not going to put yet another server. Right. Okay. Well, my pain and suffering. Yeah. So maintaining this one server in Sterling is not fun. Maintaining the second one in Kansas isn't gonna be fine then. Oh my God. What about the third one and the fourth one and the fifth one. So yeah, from the very first I knew that we needed a server. And at that point Rackspace was a kind of a hot name at the time. Start kind of the first colo colo for anyone, kind of because at that point there were companies closing. But it was when you buy a full rack.

Tracy Neal:
Colo being co-location. Right. Your servers and they're in their space and put a fence around it. Yeah. They call you when it's on fire.

Kent O'Neil:
Yeah. Our first caller was in British Columbia. Okay., I'll never forget this. We're driving down a highway in Texas. And the server stops. And Jonathan pulls out his cell phone and does this on the cell phone.

Tracy Neal:
Type some things.

Kent O'Neil:
Type some things in. And boom, he reached to server in Canada. So this is a new world.

Tracy Neal:
Yeah.

Kent O'Neil:
It's absolutely a new world we're in. I mean.

Tracy Neal:
So let me ask you a bit of a personal question. I don't need to know the dollar amount, but have you guys bought Amazon stock? Because, I mean, AWS. You're doing this cloud stuff long before AWS. is even built. Right. So is AWS is coming along. I would think you guys would be two of the guys in the world. You go. Yeah, that's gonna work. We gonna buy some light stock. Is only up like six thousand percent in the last 20 years. Right?

Jonathan O'Neil:
I mean it's suddenly instead of putting every dime I had into Encompass, if only I'd bought Amazon's stock I already be retired.

Tracy Neal:
I guess. I guess.

Jonathan O'Neil:
Thanks. Thanks for pointing that out.

Tracy Neal:
Yeah, I guess that's true. You got to keep putting money back into the company. Back into the company. Back in the company.

Jonathan O'Neil:
But yeah. The AWS with Amazon, I didn't buy the stock either, by the way.

Kent O'Neil:
So it's been nobody never heard of anybody but any.

Tracy Neal:
Somebody did.

Kent O'Neil:
Yeah.

Tracy Neal:
Somebody did. And they're doing quite well. So Jonathan, at what point did this project called the software later to be named Encompass become the side project at the distributorship that was helping a handful of 3-4-5 customers to where you really kind of broke off and you guys decided this is gonna be a company that stands on its own and we may someday have 20 employees.

Jonathan O'Neil:
I think that was the plan from beginning, right? The plan was not to have five customers.

Tracy Neal:
Okay.

Jonathan O'Neil:
And was to get enough customers to be scalable. And because having 5 customers is very painful for. Because not enough scale, not enough revenue to hire anyone. But yet all the responsibility, right. Yeah. You know, answer the phone 24 hours a day. You know, just all the things. Right. So yeah, the goal was to get up to scale as quickly as possible. It wasn't nearly as quick as we had imagined.

Kent O'Neil:
No, it was a lot slower than we thought. But the reason we we were. So small. And there was three of us, I think were working with Jonathan, myself and Cheryl, who often we have at that early date days.

Jonathan O'Neil:
Cheryl's part time show was still working at play and.

Kent O'Neil:
She was still working for me.

Tracy Neal:
Cheryl was the one sitting over here on day to day, right? Yeah.

Kent O'Neil:
But anyway, we would I wouldn't go out and and try to get a customer lined up and I'd get a customer lined up and then we'd all have to go and stall. So I went on the road anymore. So we were sort of part time sales, part time install. And then and then Jonathan did all the development. And so it was sort of a a herky jerky business. We just didn't have the flow of what we needed to do to start rolling.

Tracy Neal:
Yeah. We've only recently graduated to where we are actually good at selling and launching customers at the same time. Yeah. For the first four or five years, you know, our sales cycle looked like a rollercoaster. And it wasn't because it wasn't because the the seasonality of the purchases. It wasn't because we were good than bad than good the bad. It was because we put all our efforts into selling. And then we had to go execute, launch, stabilize, adopt and then come back to sell. And so really you only get four to six months of selling effort. Right. And now we're starting at twelve months of selling effort because we've got a bigger team. So I can absolutely relate to what you guys are talking about.

Kent O'Neil:
I don't think that's a typical I don't I think when you're in a startup business like that, you you better not expect to make any money for a while. And if you're not willing to to hit the brakes and pay the price, you're not gonna make it. Yeah, and that's just the way it is, I think. I don't think we showed a profit for five or six years, did we?

Jonathan O'Neil:
Yeah, I mean, there's probably two thousand eight ish to.

Tracy Neal:
2008?

Jonathan O'Neil:
And 2008. Anywhere in there, I feel like we had some money left over.

Tracy Neal:
Okay. Nice. Jonathan, what did you were computer science in college? Is that right?

Jonathan O'Neil:
Electrical engineering.

Tracy Neal:
Electrical engineering. Okay. And so tell me about your experience in your growth as a company leader. You know, there's a big difference between running a team of 20 people and now how many employees you have today?

Jonathan O'Neil:
Well total 250.

Tracy Neal:
250 employees. Right. They say there's a big jump when you go from 20 to 50 and then 50 to 100 and obviously 100 to 250. You know, you've got a lot of responsibilities, not only the ones that people know about, like making sure the company makes a product, but you've got to set the vision. You've got to have milestones, you've got to set a tone of culture. You've got an H.R. department, you've got to manage capital expenditures, investments, and you've got to think ahead. So tell me what that's been like growing into that role, because today you are CEO. Correct.

Jonathan O'Neil:
Right. Yeah. I mean, the yeah. The most difficult was somewhere in there, right. 20 to 60 employees where it's, you know, too big that can no longer do everything yourself. You know, every crisis that comes up, you can no longer stay ahead of the crisis. Yeah, right. Because there there's too many. And you know, before you've really found the next level of management that you can delegate to. So, I mean, at that point, we had like some just rockstar doers who would just do it. And they were all on the verge of burnout, right? Yeah. Is the, you know, just all of the stuff that was coming in to keep given that task to your same kind of rockstar doers? Yeah. And like, oh, my God, I'm going to kill this kid. So that that was that was a trick. Like, Okay. How do we systematize we know what we need to done, but how do you create the systems and the management positions to do it on a regular basis? That was definitely tricky. And that mostly happened over in the other building. Three, three, twenty four, Jefferson. That's where most of you know, we we started in the front half of that building with ten people. Okay. And then by the time we left, I think we had 60. So most of that, those battles were fought over there.

Kent O'Neil:
About the days before 324 Jefferson before we actually had a building.

Tracy Neal:
Okay. Before the building.

Kent O'Neil:
Operated out of the house that Jonathan owned over on Eastborough.

Tracy Neal:
Okay.

Kent O'Neil:
And we would put out a recruiting method or put some potion jobs and we would have a gal show up to come take the job. Stop. Get out. Start walking. See that there was a house. Turn around and leave. And that was it. There was no interview coming out, which is, you know, understandable. So we decided right then we were gonna have to get a regular business location. But that would we were there for, what, three years? Four years?

Jonathan O'Neil:
Yeah. Yeah.

Tracy Neal:
Three or four years at the house then. Then six. Twenty four. Jefferson,.

Jonathan O'Neil:
3:24. Which point where you have seen on the corner.

Tracy Neal:
Okay. And now we're it. I don't know what the address is here, but we're at HQ one for twenty.

Jonathan O'Neil:
Four twenty Linden.

Tracy Neal:
420 Linden. Right. If any listeners want to send thank you notes, flowers, whatever for 20. Linda in Fort Collins, Colorado. So everyone that's most listeners. We're probably not been here. I'm going to describe it. This is an amazing building. First of all, it's about four stories tall. It's got condos and lofts on it on the top, which are private residence is right. And then the two or three stories below are all offices. And I mean, it it feels like I work at Google here. Right. This is a Google complex in that it's very cool. It's very lean and clean. We're right on the we'll make sure you say it right. The puter.

Kent O'Neil:
Cache la Poudre River.

Tracy Neal:
The Cache la Poudre River. And I say we're right. We could cast a fishing pole into the water. Good. There's a big balcony with a barbecue. There's a great parking lot where you had some parties last night. It's just an awesome office space. And when you walk through the work environments, it also feels like a Google eske environment. Then everybody has open desks. There's a lot of collaboration, but then there's breakout rooms. And again, it just to tip my hat to the culture that you've built here. It feels like everybody knows the most boring thing is that they do their job and they're part of the bigger machine. But there's also this camaraderie of culture, which is we're gonna have fun while we do it and we're going to employ great people and honest people. And everybody's going to be committed to the passion of what the purpose is for Encompass. Am I getting that right?

Jonathan O'Neil:
Pretty much, yeah. I mean, from the from the Purple House days, right. I mean, I'm a very, you know, function over form kind of guy was like all you need is a place like a table and a desk and a computer and an Internet connection. That's all you need.

Tracy Neal:
So who designed this greatness then?

Jonathan O'Neil:
Well. So from that position when you're trying to recruit. Hire people, right, and you're in that kind of environment. I was like, Okay, I'm going to actually get people to come, you know, work for us. Then that's where we went from there to, you know, close to Old Town and the old office and then eventually built. This was just because we realized that to recruit, especially kids right out of school. Yeah. You needed to have that presence. Right. And so, you know, a real a real building with concrete and bricks and stuff like that. Right.

Tracy Neal:
Parking garage, elevators?

Jonathan O'Neil:
Yeah, parking garage? Especially when you're trying to sell software, which is a very intangible thing. Yeah, is is very important. Right. Because, you know, the analogy that I I guess the excuse I made to myself in order to spend all the money on the building was, you know, why do insurance companies and banks have the biggest buildings, right? Yes, because they have the most intangible thing like tangible. What is what is insurance? I don't know. But you only got a skyscraper, Okay.? That's the insurance company, right? Yeah. So I think it's I think it's something similar similar kind of concept, but it's worked well for recruiting new grads. But that's a constantly changing market, right? Yeah. So what what kids out of school are looking for 10 years is not the same thing. They're looking right out of school today. You know, work life balance and all that.

Tracy Neal:
Yeah. What are some of the onboarding steps that a new employee goes through when they joining companies here?

Jonathan O'Neil:
Lucky for me or lucky for them? I have nothing to do with that. What I've heard is, yeah, just lots of training, right? I

Tracy Neal:
t's mainly training. But do you get them? I mean, if you're getting a new grad out of out of college or do you take him out and show them do they do a week or two distributorship? Or do they get on route?

Jonathan O'Neil:
It depends on the install schedule?

Tracy Neal:
Okay.

Jonathan O'Neil:
So we always trying to get the new people, you know, first and training here is not. So they're somewhat useful. So bring them on board a couple weeks of tons of training on just software package. And so they don't sound like idiots. Right. Okay. Go out to customer. Then we send them out on an install. You know, we've got to send them out, you know? No charge, right? Yeah. Yeah. You try to charge for the new guy. No one's happy. And there was a period time where we weren't charging for the new guy, but we also weren't putting on the invoice. And then people were also unhappy because they didn't they didn't see that. A, you sent it back. They kicked out the new. Absolutely nothing. Yeah. So now we actually put it on the invoice. Hey, this was, you know, Joe, the new guy, discounted to zero. So in case you're wondering, did you pay for Joe? No. Yeah. You didn't, huh?

Tracy Neal:
Okay. Nice.

Kent O'Neil:
We also send the kids out if we have time with them up to pioneer so that they get to spend a few days inside a beer business.

Tracy Neal:
Well, yeah. Because you still.

Kent O'Neil:
A lot got no idea what the wholesale beer business is.

Tracy Neal:
And you still own that distribution. Correct. And is it Patrick that runs it?

Kent O'Neil:
Well, Patrick and we have a general manager down there.

Tracy Neal:
Okay.

Kent O'Neil:
Patrick is working primarily with us here now.

Tracy Neal:
Oh, is he Okay?

Kent O'Neil:
Yeah. And so that's kind of the way that is. But we have a manager down there that runs to two locations, one gearing and one in Sterling. Okay. And we've got two guys are pretty good at running.

Tracy Neal:
So, Jonathan, to go back down memory lane and remembering some of your first installs, are there any distributors I know you've mentioned Jim, at Hays, Kansas. Any other your early installs or distributors or distributor leaders that you want to give a shout out to who really helped you through success or failure or mentoring?

Jonathan O'Neil:
Yeah, I mean, the first whatever first handful. Very memorable, right?

Tracy Neal:
Yeah, exactly.

Jonathan O'Neil:
Oh, yeah. Jim Hobel and Tom Schol and Russki. Right. Chris Reed, Vance. Reed, Reed, number four. Boy. Well, then we did Fisher. Right, Steve in Rapid City, an early one was Sound Beverage. I was in that one was a Washington.

Tracy Neal:
Yeah. Tell me more about that when you talked about that one.

Jonathan O'Neil:
Oh, that was fun. Yeah. So they were. Miller and Gallo distributor and the the least exciting part about that install is they just insisted on using this old IBM dot matrix printer when those big, you know, big barrels. Giant ones. But the driver where you're using we're printing from a browser. This thing had like 12k a memory or something. And when it printed, it printed, you know, a line pretty much a line a minute. And they were super excited about that. And it was about to blow up the whole deal because we couldn't make this designer print. So finally, you know, calling, calling, calling, finally got a hold of the IBM guy, got like the two hundred fifty six K memory chip. Right. It was like a two thousand dollar upgrade for this printer. Put the chip in. Okay., we're printing we're printing on the dot matrix. But that was that was education, a lot of education and wine in general, right? Yeah. Which for us was was somewhat new at that point. At that point was our biggest attribute we've done so far. There were about just as shy under 3 million cases. So it was you know, I mean, with each customer that we got along the way, there was a little bit bigger, a little bit bigger, a little broader in scope. Right. It just pushes everything from scalability to get performance of the of the system, just pushes you a little bit more.

Tracy Neal:
Okay., so I mean, it's been the last couple of minutes here asking you a little more specific details about what encompasses today. So not only so I can learn more. But so our listeners can learn more, too, because our number one listener out there is a sales rep like say they're out there driving around selling beer. I'm sure they've enjoyed the story. But the stories that we've told, but they may not know still what encompasses rather than route accounting software. As I said the other day, I'm not doing it justice by calling it radical software because you are now an ERP platform, I think. Is that how you would describe it? Yes. And what is ERP stand for?

Jonathan O'Neil:
Enterprise resource planning? Something fancy and someone made up a long time ago to sell expensive software.

Tracy Neal:
Okay., so so describe to me what is encompassed today in the different facets of the different product. I mean, you have to go product by product. But again, your audience is sales reps driving around all day selling beer right now. What you want to tell them about what Encompass is what it's going to become, what they should think of, whether they use it. I mean, first, we got a lot of listeners using Encompass right now. Right. But even for someone that's not using Encompass and and clearly a sales rep is not necessarily a decision maker that's going to choose to buy you tomorrow. But at least they would know what encompasses. What do you want to tell them?

Jonathan O'Neil:
Well, elevator pitch on on our software would be and always call it business management software, which is a little bit easier to understand than ERP. Okay. So business management software for DSD companies. So really what makes our industry special is really the direct store delivery part of it.

Tracy Neal:
DSD being direct store delivery.

Jonathan O'Neil:
Direct store delivery.

Tracy Neal:
As opposed to sending the opposite of direct store delivery is when you send a bunch of products to like the Safeway Distribution Center, correct. They package it up store by store for it and then the truck goes, Okay.

Jonathan O'Neil:
Correct.

Tracy Neal:
This goes straight from either a manufacturer or in this case, a distributor to the store.

Jonathan O'Neil:
Right. And so if you ask why. Why do we exist? Why does the industry for DSD specialize software exist? It's really because the quantity of transactions and the complications of the transactions of selling directly into a retailer. So we generate you know, I don't even know how many millions of transactions a second writer going through the system because every single time a delivery truck shows up at a retail outlet that generates that many transactions. And to get it right. Right. From the pricing, the quantity handle the returns. Kate. Deposits, all of that is actually very complicated. And so I think you've seen some implementations where people say, hey, we did this Oracle or SIPC implementation and we spent X number of hundred millions of dollars. It's because from the outside, the business looks very similar to every other business, right? Yeah. Receivable. We're gonna sell something. I got a product. I'm going to sell it to these people, collect the money. No big deal. We do that all the time. Okay. Well, do you do it at this frequency? Do you have all of these extra conditions? Do you have all of these requirements that there that the change put on you from authorized products and, you know. Chain, chain pricing, all the requirements that the state puts on you, state taxes, special deposits. You know, this this city implements a sugar tax that that city implements a local liquor tax. So those are the complications that we handle. And so that's what they specialize in, is ERP, which is business management software. Sounds very generic, but how do we do these very, very complicated things and to the end user and make it seem easy, right?

Tracy Neal:
Yeah. Good explanation. All right. So one last question is that the other day when we did session one, I asked your dad what it meant to be able to work with you. And he you know, he got a little bit emotional. We use it. He said he was very proud of you. He said it was a special arrangement and he enjoyed not only working with you, but with your brother and making it a family operation. What does it mean to you to be able to work with your dad all this time? Because, I mean, I love my dad, but I did not grow up thinking I would work with my dad. So, I mean, yes, most yeah, most people most people don't grow up thinking, I'm going to spend my my adult life working with my dad. But in you know, now that you're 20 years in, I'm sure there's some times where you're like, oh, man, this is not going to work. But now, you know, you're a grown adult. You've got a family of your own. Be able to look back and say, what's it like to be able to work with your dad of the last 20 years and to build this company? Where it is today, where, you know, admittedly, he said I never thought it would be this big of a company.

Jonathan O'Neil:
Well, I mean, honestly, I have never really known much else, right. So I never really had a real job. Only other jobs ever had or internships or summer jobs. Yeah. And I had this job. Yeah, I mean, I would say that, you know, the role that my dad played, which was very instrumental, was I was making the software and I probably just kept giving away for free. Right. I was just happy that someone wanted it, like you want to use it. That's great. Because you built it. Yeah. That's awesome. You actually use this stuff. Cool. But that is like now. I think we should charge for it. And so and then the next thing was, yeah, we took a couple of price increases along the way that were what? We haven't done that right. We just went in. How did the revenue to scale to be able to invest more. And then the other thing is when we got to a point where, you know, sales were slow or, you know, we needed something he would like. Okay, I'll take care of it. Jump in the car. We haven't been on the East Coast yet. I was getting a call. Go the East Coast. I'll find some customers.

Tracy Neal:
Okay. Hitting the bricks.

Jonathan O'Neil:
Hitting the bricks. That was that was important. So I think along those ways, probably the confidence boost to say, no, we can't do this. Yeah. Where if, you know, left on my own devices, I probably would've been you know, I don't think we can charge more than, you know, five hundred dollars a customer for the software. And he's like, wow, five hundred dollars. Let's do the math. Yeah, this isn't gonna work. So, yeah, there is definitely some some points along the way and probably getting to some customers. Right. Because when we start with literally these smallest distributors in the country and then scaled our way up. Yeah. So when you walk into a place like, oh my God, you've got a really nice office. These guys are big. Yeah. I think he had the confidence to go in and actually close the deal and tell him, hey, we can actually do this. And as it turns out, you know, they're all pink on the inside, right? I mean, it's the same stuff. But you look at the outsides like this place is covered in marble, like, oh, wow. So that was that was really important.

Kent O'Neil:
They all do the same thing. Pioneer. They just do it many times over the other compartmentalised.

Tracy Neal:
That's a good way to look at it. You know their business, right? Yeah. The same thing Pioneer does. Yeah. Good. Let me make a prediction that this year and this year, GM is a bit of an inflection point for Encompass. I've always had the greatest respect for your organization, and I can't say that about software because I'm not a user. But from what I hear from distributors, they've always raved about the software. And the things that you guys have discussed and launched this week have made me really impressed. And I think I think we're gonna all going to look back at 2019 new GM and say that was an inflection point and the curve is just going to go even steeper and steeper. So I wish you guys the best of luck. You're you're a wonderful family to have in this industry. Only in distributor side. But as a vendor of the software, you've built an incredible team here with a lot of great employees. I mean, I can't tell you how many employees have come up to me and just said they're happy that I'm here. And I don't know why. But, you know, that shows the professionalism, the respect and the culture. And again, I tip my hat to you for the culture here, because it's just a great place to be. I've enjoyed thank you for having me here all week and I'll leave it. Any any closing thoughts?

Kent O'Neil:
No, Tracy, but I think I hope you're right. I hope we have that kind of experience, because Jonathan is has really created a new paradigm. I think in this business in that he is partnering with so many different vendors and making Encompass open up partnership. Yep. Which is which is a different way of looking at things at any ERP or Ran's system has ever done before. So I guess we're at a point where we wonder will that be a good move or not?

Tracy Neal:
So I hope so, because we're your first official contracted partner. It took me two minutes to sign the contract. Jonathan, any last words?

Jonathan O'Neil:
I mean, it's it's fun, right? I mean, we kind of do this because we like to hear it. So I think as long as we enjoy what we're doing, I think we'll be successful. I mean, when you're feeling like coming to work is treasury drudgery, whatever, you don't want to do it. I think you're doing the wrong thing. Right. So it's like how how do we take what we're currently doing and making it fun, exciting, collaborative, creative kind of expense? And then it's like, Okay, I want to go to work tomorrow. Like, Okay, this is the right direction.

Tracy Neal:
I heard a quote the other day and I've really been thinking about it and like unwrapping it because I didn't think it applied to me. And now I really think it doesn't. I think it probably applies to you too. That is, entrepreneurs are driven because they want to build something beautiful. I mean, it's one thing, you know, we're not gonna lie and say we don't like money, right? Everybody likes money. Every in the world likes money. And you like to buy nice things and do go nice places and have a nice lifestyle. But but if you really unwrap it. Entrepreneurs want to build something beautiful. And that's. Why they keep going, they keep going and. They've got that vision of something beautiful, and I think that applies to you and how you've described what you're doing here, why you're here, why you have the passion and with the future that you planned for yourself moving ahead. Awesome. Well, thank you, gentlemen. Appreciate you being here. Thanks for having me. Thank you. Thanks for being on the podcast. Make it a great week. All those sales reps. All right. Good luck on your next next account call.

Kent O'Neil:
All right.

Jonathan O'Neil:
Thanks you.

Tracy Neal:
So what's the best tasting beer in America? Who cares? That's for the consumer to decide. And until they do, you will keep selling them new brands every day as the distributors sales rep. You can become a part of the iSellBeer Nation by subscribing to this podcast and using the #iSellBeer in all your social posts. Also, be sure to join the iSellBeer Nation Facebook Group and visit our website. Our industry is an up and down the street business where local relationships matter. I want to thank you for making me part of your day and wish you good luck on the objectives for your next account call. In fact, I know you're gonna crush it.

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