Episode 14: Spiffy CEO Scot Wingo

For our 14th episode of Full Throttle, we are joined by Spiffy CEO Scot Wingo. Topics of discussion range from the rise of digital services, the importance of convenience, and how Scot transitioned from e-commerce to the consumer convenience space in automotive. 

0:00 Intro 
3:30 Scot's Background 
9:54 From a Carwash to a Different Type of Idea 
14:24 Meeting the Customer Where they Are 
18:55 Spiffy's Growth 
21:10 Creating New Ideas of Ownership 

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Transcript

This is Full Throttle the Presidio group's automotive industry podcast. I'm your host, Jason Stein, Managing Director of Presidio and host of Sirius XM's Cars and culture on business channel 132. On a monthly basis Full Throttle serves as the industry's meeting point for great conversations with leaders across the automotive world.

I'm also kind of a hobby economist. And if you look at GDP, 5 trillion of GDP is consumer products. So consumer goods, which is where Ecommerce has kind of created an analog to digital wave. 10 trillion, so twice the size of E commerce is consumer services. A lot of them are home based services, car based services, transportation is in there that's kind of Uber lives. And even restaurants are kind of in their grocery isn't good and restaurant as a service. But that's why it's a huge category. And I was thinking, Alright, services are going to digital, because it's just the, that's the big thesis of like most VCs is software's eating the world. And when it happens, this model of me being able to get services from my phone is so much better for convenience than anything that exists out there. It will get a rapid adoption.

Every entrepreneur has a story, but few have the kind of ingenuity and unique qualities is Scot Wingo's tale. Of course, he's always been on the bleeding edge of something interesting, just not primarily automotive, a four time serial entrepreneur from the Research Triangle Park region in North Carolina. Scot's been an industry leader in E commerce, e service and the future of mobility. His latest adventure goes into the consumer convenience space in automotive, serving the latest golden rule of meeting the consumer exactly where they are. In this case it's Spiffy, the tool that allows consumers to schedule, track, and pay for mobile car washing and detailing, as well as disinfection, oil changes and other maintenance services at a time and location that fits the consumer's schedule. It's the perfect combination of technology and customer experience, often in your own driveway. So what is Scot's view on the future of automotive and technology? And how far can the industry go to raise its game in meeting the consumer exactly where they are? He's the perfect guest to ask. Oh, and he's also a podcaster. Scot is co-host of the Jason and Scott Show podcast and regularly speaks about e commerce and E service across the country. Today it's a different Jason and Scot on Full Throttle. 

Hi, I'm Scot Wingo, CEO of Spiffy. And this is Presidio is Full Throttle Podcast. 

What a pleasure to have my guest in this week, we have spent a couple of times together and every time that I'm with him, there's an iteration of Spiffy that I don't know about, and he's innovating, and he's moving faster, and he's meeting the consumer where they are, and all the things that we're going to talk about. But let me first welcome you in. 

Thanks Jason. 

Yeah, longtime listener, first time on the bottom. I'm excited to be on I've really enjoyed what you guys have done and you know, I'm kind of the outsider in the auto world, and I found your podcast a great way to help me get up to speed and learn learn the lay of the land. 

Let's talk about you being an outsider. Give me a little bit, give the listeners a bit of your background just so they they see well, where did he come from? 

Yeah, so I'm talking to you live from Raleigh, North Carolina. We're based here in the Research Triangle Park area, which is a Innovation Hub, if you will. And I come from I'm a serial entrepreneur so I'm on my fourth company spiffy is number four. I'm a true glutton for punishment of doing this entrepreneurial thing. It's a bit addictive, once you've built something and seeing the fruits of your labor the most germane to what we do at spiffy is my last company had a very long run. So started that in 2001 and it was called ChannelAdvisor. And what ChannelAdvisor was was cloud based software. We were really early on the cloud. So I used to have to explain what that meant. Thankfully, people kind of get what that means now. And yeah, the what we did is we helped retailers out there. And brands sell on E-commerce marketplaces. Early on, they were caught called auction sites. And then as they moved more into the fixed price realm we called them marketplaces. So these are the old familiar names like eBay. eBay is obviously like one of the the OGS of online marketplaces. And then Amazon. It's a well known fact that half the sales on Amazon are from third parties. And that's a marketplace. So when you go to any Amazon item, sometimes Amazon's selling it and sometimes a third party behind the scenes, my company channel visor was doing a lot of the plumbing behind that helping helping those sellers list their products on multiple places and coalescing the orders back in one place. So started that in 2001, raised 90 million in venture capital and achieved kind of the brass ring of startups and was able to take that public in 2013, which was definitely a, you know, a very big bucket list item for me, and then started spiffy in 2014. So I was kind of doing the Elon Musk thing and doing two companies at once. And I realized that is, I don't know how he does six, I am not cut from that cloth and kicked myself upstairs at ChannelAdvisor and became exec chair, and full time at spiffy in 2015. And then ChannelAdvisor was actually just sold last year to a private equity firm. So I'm off, that one is a fully out of the nest and living its best life with someone else responsibility. So 100% Spiffy, and that's how I came to it through the E commerce space. 

Why automotive?

So I like cars, I like driving cars, I'm not a get in and tinker with the engine guy. And in 2003 as a diversification thing, I've figured alright, I do stuff way on this risky side of startups, and usually software and high tech that don't have any assets to them at all. They're just kind of like ideas in the cloud, if you will, I would really like something on the other side. And then most startups lose money for a long time until they get to this orbit where they can make a lot of money and ChannelAdvisor got to 100 million and then started to really print a lot of cash. But you know, that's why we raised 90 million to get to that trajectory to be able to raise a lot to generate a lot of cash at a high orbit. So I figured I want something on the other side of the world and bought a carwash. So in '03 bought a carwash, it's what we would call in the carwash biz a full serve, and then built an express carwash in 2005. So I've had kind of a foot and I was the silent partner in that and my co founder of spiffy Carl Murphy, he was the day to day operator. So I had one foot in the car world to begin with and the genesis of the Spiffy idea was, in the E commerce world, we spent a lot of time marinating in consumer behavior data. And there's all like really rich sets of consumer behavior data. And I actually do a podcast and we spend a lot of time talking about this. It's kind of like not to get geeky with Elon Musk, but he always talks about core principles. Well, one of the and he goes to physics like if you're gonna send a rocket to the moon, there's like some physics you have to figure out the physics of what we do in the retail and I would argue the Auto World is consumer behavior and how do people act?

The first thing we learned in E commerce is we used to have this mindset of consumer and b2b. Well, it turns out those people that are consumers, they work in those b2bs and they bring those behaviors there. So there's you know, when I say consumer, this encompasses businesses and individuals at home, they all act kind of the same. They like the same things, if you will. And then the second thing we learned is around the recession of '08 and '09, the Great Recession, as it were, the US population split pretty evenly into a value oriented consumer and a convenience oriented consumer. And it's really fascinating because retail didn't see this coming, and even now they're you're seeing the world adjust to this. And what that means in the retail world is over on the value side, all your growth from '08 to '09 has been in dollar stores. Yeah, I love a good dollar store. It's kind of fun, used to go in and joke and ask the price. Now nothing's $1. And the irony of inflation is nothing is no longer $1 in the Dollar Store, it's kind of sad. But yeah, the dollars store, I guess we should call them, and then wholesale clubs, outlets, and then you have this Death Valley in retail, and I'll come back to that. And then over on the convenience side, you obviously have a trillion dollar Amazon that's been created by being the king of convenience with E commerce. But Nordstrom has done really well. Instacart is actually in the you know, they filed their S1 and going public and they've got like a $4 billion revenue. So that's a real business with real profits. And you know, what, what happened is the retailers that didn't see this, this very dramatic split in the consumer behavior. They are, you know, they're basically the roadkill of retail. So Sears is in that bucket, JC Penney, these mall based retailers used to be really convenient, because you could go to one store and get everything. Well, now, they're not convenient compared to the product coming to where you are. That's kind of a pain, right? 

And then also, they're not a value play. So people will spend time if they're getting a value, but they won't spend time if it's not a value. So if it's not convenient, they won't go there. So you know, that's where we've seen in Macy's, there's going to be a long list of these kind of old school mall based retailers that are either struggling or failed because they didn't adapt to this. So So any questions on that before I finish? 

No, no, I and then and then it goes from, it goes from a carwash to a different type of idea, which was primarily born digital. And mobile. Right, Scot? 

Yeah. Yeah, another big trend in the E commerce world is what we call digitally native vertical brands. They call them DMVB's. Some of the early ones you probably know so Casper mattresses, Bonobos, these these brands that basically said, you know, we don't have to go through a retailer to the consumer, we can just go direct, Warby Parker, the glass company. So there's like a good there's like hundreds of them now, Quip etc. And so then the so all that was swirling around in my head, and then I had my first Uber experience, and, you know, that was a big game changer for me, because I the dots, I quickly connected were this company is going to do really well, because they are the ultimate convenience compared to the old, you know, my first experience was in Manhattan, and it was like, it was like, 30 times better than than hailing a cab. And, you know, they drive by you, they're like, where you going and you're like the airport, no, like, no way and they like drive off. And you know, all the all the bad, you know, we've all lived all those stories. And I don't carry a lot of cash. So like, none of them take credit cards, there's like a whole nightmare. So I was like, Alright, this is gonna be big, this is gonna change everything. And then I'm also kind of a hobby economist. And if you look at GDP, 5 trillion of GDP is consumer products. So consumer goods, which is where Ecommerce has kind of created an analog to digital wave. 10 trillion, so twice the size of E commerce is consumer services, a lot of them are home based services, car based services, transportation is in there that's kind of where Uber lives. And even restaurants are kind of in there, grocery is in goods and restaurant is a service. But that's why it's a huge category. And I was thinking, alright, services are gonna go digital, because it's just the, that's the big thesis of, you know, like most VCs is software's eating the world.

And when it happens, this model of me being able to get services from my phone is so much better for convenience than anything that exists out there. It will get a rapid adoption, and that's going to happen faster than the E commerce because in E commerce, you know, Amazon went public in 97. So, you know, 26 years ago, and they were started in '94 '95. So they've had 30 years of laying all this groundwork of they had to go from dial up to broadband, online payment, all the all the railroad tracks that they have laid for digital, now digital servicing will just ride on those, those that that infrastructure, so then I was thinking, well, you know, what's an area, how can I as an entrepreneur, take advantage of what I think is a big opportunity that maybe a lot of people aren't seeing? And I kept coming back to car care and as I did more research, you know, consumers and as you know, this is kinda like the number one thing that I've really learned about Spiffy is, those convenience oriented consumers, they they kind of like triple hate the existing car care experience. It's what they have. And it's they tolerate it, but you give them another offering and you know, one of our secret sauces at Spiffy is we do very little marketing because people just are craving the convenient solution alternative to what's out there. So, so that was that was kind of like a no, the number one question I get is all right, you are an E commerce software guy. And now you're you're, you're washing cars and selling tires and changing brakes, help me get wrapped my head around that, that that was the primary basic thesis. And the other thing I've learned as being an entrepreneur is I've kind of walked up this ladder of trying to do bigger and bigger things is, if you can bet on these trends that are going to last decades, then you don't have to pivot around and change what you're doing. You can't get kind of like wrapped up in like this like, like exciting technology, which as a technologist, I have to fight that every day, you know, like it's like, ooh, crypto, that's kind of cool. What's that all about blockchain? Or like right now AI, everyone's like all about AI. And those are good, but those are not decade long trends. They're just kind of new technology. You know, the things that inventions that may have somewhere to go. 

But consumer behavior things that drives decade long changes. 

It's Malcolm Gladwell is tipping point, isn't it? When when things don't go back? Yeah. So washing, detailing, oil change, tires, light repair, you're doing all those things, on the customer's schedule, at the customer's home. 

Yes. 

And in the case of washing and detailing. You you have the technology, that there's not a drop of water that hits the ground, so I have that right?

That's right. So when we started, we started with wash with consumers. And we're thinking it would be mostly residential kind of a model. And what we discovered pretty quickly is when you give people the power of being able to schedule things on their phone, they, they like their car washed at work. So that was a big surprise. And the other one is the the carwash industry is very much a weekend game. So if you own a physical carwash, and it rains on Saturday and Sunday, you've lost like maybe 20% of your revenue for the month. So so something like 70 or 80% of your revenue at a car wash is on weekends, it's very much a weekend warrior thing.

And so when we started Spiffy, we're like, alright, that's what we'll see we'll Spiffy, let's staff up for the weekends. So we put our app out there. And we discovered people want their car washed at work on Thursday. So that was my co-founder who is ex army, he he's the operations guy. So I was excited and I'll explain why. But he was like, cussing up a storm, because we had staffed for weekends. So we we quickly adjusted that. And I was excited because it proved to me that consumers wanted something that they weren't being given by the brick and mortar analog solution, they wanted the car wash to come to them at work on Thursdays, not them having to burn weekend time to go do it. And so, so, so I was excited by that.

And, you know, then what we discovered is office parks. You know, our first vans were white, and now they're blue. And the reason we change that is we discovered there's a real negative connotation around traditional mobile detailers. There are, you know, mobile detailing has been around for a long time. But we're different because they're not app based and digital like we are. So you know, as Bonobos is to Izod pants, we are to mobile detailing.

And the you know, and what we found is office parks wouldn't allow us to go there. So they would say we don't allow detailers because they have these sketchy vehicles, they don't have insurance and most worryingly is they leave a chemical spill on our parking lot. And we have all these EPA regulations. And we're ENERGY STAR certified and LEED certified, the the office park world got sustainable way before the rest of the world, like decades, decades ago, it's pretty interesting. And so we said, that's a problem. So we changed our van to not look like the traditional ones. We, we make sure we don't have vans that look like traditional detail vans, they use that Scooby Doo kind of looking. It's a GMC, right? We don't, we don't use those. And then we went and got a huge insurance policy. And then we had to solve the environmental thing. And what we do is we use very little water, we like water because it has the best efficacy of the vehicle of activating soap to get dirt off. And it can get we can get all the things on your car off without damaging the car. There are waterless solutions. But if you hit tar, or bugs or anything like that, you kind of have to make a choice of leaving it on there or damaging the car. Neither of those is good for the customer. You can imagine that that. Hey, hey, hey, I'm about to wash your car. Should I leave these bugs on or you want me to risk damaging your pain? 

Right. A lose lose.

No no. Anyway, so what we ended up doing is that a physical carwash, you have this reclamation system that takes the water that runs through the tunnel, runs it all through one channel, and then the system that separates the dirt, grease and all the all the bad stuff out and then it puts clean water back into the system through filtration. So we basically put that on the van. And we, so we put it into our warehouse, and then at the van, we bring our water with us. So also, you know, everything we do is about not having friction. So, you know, we don't want to show up your house and say like, is there a hose connection?

Can I borrow your garden hose? Right? 

Yeah, that's weird. And then so we bring all the water with us, it's not a lot. So people envision the vans being full of water when they're not. And then we wash, we invented a reclamation mat. So we put the car on a mat and it's got, it's very wide, so it sticks out a fair edge behind into the sides of the vehicle. It's like a little bath tub your car, it has a lip. So the water accumulates there, we suck it up out of their backup onto the van into a separate greywater vessel where we then at the end of the day, reclaim it all 

Amazing. Wow. You've had a pretty big year already. And the growth curve here is is all around, of course, raising more interest and fueling your private label hardware and software as a service business and as an offering for automotive dealers. But let's go back to February's news where you raised $30 million in a round, in a Series C financing round, the Presidio Group acted as and exclusive advisor to Spiffuy on that round, how important was that for you?

So you know, when you get on this treadmill of venture capital, you, you want to kind of you want to get to the highest possible orbit. And you know, this is more jet fuel. So it's super important. And Presidio is very strategic in, you know, as you mentioned, we want to, we're seeing this trend where dealers are coming to us, dealership groups and saying, alright, we're starting to get pretty serious about mobile service. Some of them have maybe tried it on their own and hit some roadblocks. It's not easy. I can kind of been at it for nine years. And we've been grinding at it and have hit every possible pothole and gotten through them. So folks are coming to us and saying, Hey, could you help us build this mobile thing? So we started licensing our software. And we've invested a ton in the hardware for the van that I mentioned, just one little feature, there's like 1000 features, we could do a 2 hour pod on just that.

So our van platforms, so we have vans for doing all the different services you discussed. And then our know how. So basically saying, here's the roadmap for how to do this at your your multi roof dealership. We call that digital servicing, which is kind of a tongue in cheek, everyone's spent a lot of time on digital retailing, which is making the you know the buying experience more E ecommerce-ee. You can do that on the service side too. Because if you just take one part of the customer journey and make it digital then the other ones feel that much more old school if you will. So Presidio we said to them, we said alright, we want to work with you guys. and we'll give you a challenge of bringing in some some some really good brand name auto dealers, and they said challenge accepted, and they more than delivered on that it has been been a great relationship. 

Bowers Automotive Group, Valley Auto Group, the Sewell family, among others that have invested. You have a theory that OEs and other innovators are really creating new models of ownership that're going to stretch the idea of the customer and their needs even further than where we are today. Right. Scot? Can you expand on that? 

Yeah, everyone talks about, you know, all these things that are changing in the car. And this is another thing that excites me about our industry is I feel like we're going through two simultaneous disruptive waves. There's the the analog to digital wave we've spent most of the time talking about, but then at the same time, and you talk a lot about on the pod, you know, you've got electrification, autonomy, and I kind of put connected car in there. Once you have a Tesla, you kind of understand like, being able to control your phone, your your car from your phone, like for real, not just kind of a read only way is super powerful and helpful. And then the last one is changing ownership models. And we're seeing a lot of innovation. One of our big customers is Turo. And you know, they're they're a really fascinating company. There's, with Instacart opening the IPO window, there's a lot of talk of Turo has been in the wings and if you they've updated their S1s out there on a regular basis. And that is a real business. And you know, it's going to be really interesting to see if they go public. And you know, that's like Airbnb for cars, which is one model and there's Get Around in that category as well. But But I think a lot of us agree we disagree on EVs and autonomous on when it's going to happen, you know, or a lot of times with autonomous if it will, and I'm kind of in the camp, it's going to take a lot longer than people think too, but then I think the one that kind of gets missed is these changing ownership models, I do think there will be a day where if you're a city dweller, you just kind of open up an app and piece together whatever transportation you need. 

And you know, we've worked with companies like Free To Move in Europe this is very popular. If you went to Berlin, there's so many of these Zipcar, zip next generation Zipcar, like car sharing things and the next generation part is, Zipcar started before the iPhone, so it didn't really anticipate people having a computer in their hand. So So you know, the ability to open up your phone. And then the other thing is Zipcar is what we would call gated car sharing, like the there's like two designated spots. And Murphy's laws are always like, pretty far away from you. And it kind of stinks.

A lot of these companies now are going ungated. So they'll go to a city and they'll say, hey, you know, hey, hip city, we want to put, you know, 200 Jeeps around town that people can use to run their errands and do stuff, give us an all city access. And we can park anywhere. And they'll be like, Sure. So you know, what's nice is then you can use data science to put the vehicles kind of near where the demand is. So you go to Europe, and like you go to Berlin, there's like six of these companies in Berlin. And there's actually apps that sit on top of it to kind of say, you know, which ones which one of these six car sharing services have a, it's kind of like the scooters, right, where now you see these, these, there's these apps that kind of show you they sit on top of all the scooter companies to show you, which ones are close to you, what's the best price right now and this kind of thing. And I think that's coming to the US. So that's going to be a lot of, you know, city dwellers using that. And I do think a lot of people have kind of tried this subscription type model. 

And, you know, they've, I think we will crack the nut on that eventually. And there'll be a lot of people that just subscribe to transportation. 

Right? We weren't quite ready for it. Were we, five to 10 years ago? 

Yeah. And I think a lot of people were like, let's go to Porsche owners that are already spending 1000 a month and try to him to spend two and you're kind of like, yeah, that's that's a big ask. And I think there's a customer in there that, that will like the flexibility and model and we just kind of have to figure out the economics of it. 

He is the co host of the Jason and Scott Show Podcast. But we just did the Jason and Scott show. So if your other co host can't make it one day, I'll step in for him. All right?

Deal. Yeah, he travels a lot. So it is a more challenging scheduling for him.

Thank you for being on the program. Thanks for explaining to us what we're seeing today, but more importantly, what's around the corner, Scott.

Thanks for having me, Jason. I really appreciate it. And if anyone wants I'm active on LinkedIn and share a lot of thoughts there and on Twitter, the social media formerly known as Twitter, now known as X. I am @scottwingo. The only trick is I have Scot with one T. So 

That's right. 

Yeah, don't forget I'm a one T Scot. 

Scot with one T. Thanks for being on the program. 

Thanks, Jason.

Thanks again to my guest, Scot Wingo, and thanks for listening to Full Throttle. Come back to this later in the month for our next interview on this platform. And with suggestions you can email me at jstein@thePresidiogroup.com and to learn more about the Presidio group, go to thePresidiogroup.com, or follow us on LinkedIn. And don't forget the Auto Tech Summit November 15. In Denver, go to thePresidiogroup.com To find out more about more than 20 speakers in an innovative one day format, November 15, in Denver, thanks again for listening.