It Started at a Shoeshine with Ryan Osten

September 9, 2022
Without Ryan Osten, there might not be an Automotive State of the Union. That’s right. Paul and Kyle were introduced in a marketing room hosted by Gubagoo’s former marketing director, hired by none other than Ryan Osten. Ryan shares the unique ways that Gubagoo is solving problems, and reflects on how chance encounters really can change the trajectory.
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What we talk about in this episode:
0:00
Intro with Michael Cirillo, Paul J Daly and Kyle Mountsier.

4:56 Gubagoo is all about building inclusion and community. Ryan shares how in 2020, they created a virtual escape room for all of their customers where the goal was to escape the year 2020.

8:00 Seemingly chance events can have massive impacts on your life. Ryan tells the story of Gubagoo and how it started with his father at a shoeshine in the ‘70’s.

12:16 Ryan talks about the evolution of dealership website chat tools and the 3 big leaps he’s seen happen over time.

22:39 Some problems require solutions across the entire stack. Ryan and Gubagoo are trying to bring full solutions to those problems.

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Michael Cirillo: 0:00So is it Gubagoo or Gubagoo? Again?Kyle Mountsier: 0:02

It yeah

Unknown: 0:09

this is Auto Collabs.

Paul Daly: 0:11

That's the best podcast start we've ever had. We're gonna roll with that. First of all, it's Gubagoo. I call it F Yes. Brian Pasch says Gubagoo. I don't know if he's ever been corrected. Or if he just has, like I said, How I want to say it. But the way I remember you

Michael Cirillo: 0:25

asked Brian, I think it's G about goo.

Kyle Mountsier: 0:29

Goo.

Paul Daly: 0:32

Here's how you remember it.

Kyle Mountsier: 0:33

Ready? You go Guba who? Gubagoo. There it is. Cool.

Paul Daly: 0:40

Go. It's good. But good. Pronunciation of Gubagoo who is Gubagoo. This is really starting off on.

Kyle Mountsier: 0:51

You know, what's really fun about about Gubagoo is not just their name, but the very first thing I ever remember about Gubagoo is getting socks in the mail from them. I don't know how I got them why I got them or who I got them from. But they showed up in a like a yellow folder, whatever, the Manila thing. And they were just socks. No, no, no, nothing else. I was like, that's pretty cool. And I think my wife still has him to this day, because I don't wear long socks. Well,

Paul Daly: 1:19

the little known fact is that the likelihood that you and I like everything in life happens in a certain order. And when it happens, right that affects every other thing that happens after right? And there's movies about what if we change just one little thing, right? Well, Kyle and I met on a closed zoom marketing room put on by Drew Delaware, who was at the time the marketing director of Gubagoo. And had he not put that together, we would have not met in the way we met. And probably wouldn't be sitting here right now recording this podcast.

Michael Cirillo: 1:53

That's just and you know, the thing that I've always appreciated about Ryan is, you could bump into him like back to back bump into him in a crowded room. And the minute he sees you, you're the only person that exists is like I really get that sense of like he's just locked in on you. And that is something that is that is so hard to come by. And so you know, excited to sit down and learn from him and see what he's up to on this episode of Auto Collabs. We hope you guys enjoy it.

Paul Daly: 2:26

Ryan, it has been a while since we have a time to actually sit and have a conversation. So thank you so much for spending some time with us today.

Ryan Osten: 2:34

Yeah, thanks, Paul Kyle, and I'm super excited to sit with you guys and talk about what's happening in the industry. And thanks for having me

Paul Daly: 2:42

on. There's a there's a little known fact that Kyle and I met for the first time in a marketing room that was hosted by at the time marketing director Drew Delaware. So Google has a special place in the history and legacy of ASOTU. So we're gonna thank you for that and let everybody else know like, that's where Kyle and I first laid eyes on each other and said, You'd look just like me.

Ryan Osten: 3:09

Yeah, that's awesome, man. It's super gratifying thing to hear that even though I had nothing to do with that I was probably just like nodding my head, hey, let's run the coffee talks.

Kyle Mountsier: 3:21

Well, here's, here's here's, I'm gonna I'm actually I'm gonna go ahead and throw this out there is as a leader of a company. I think you had a lot to do with it. One you hired Drew Delaware to you created a culture where things like drawing people together and industry where natural. And three, I've seen that execute across a lot of things in your company, both in interactions that I had on the dealer side, and interactions with just like the people on the industry partner side, like things like creating a I was a couple years ago again, Drew was still there, but I think I can't remember whether it was it was Halloween or something. Yeah, were they escape room?

Ryan Osten: 4:03

Escape Room for escaping 2020, the COVID year? It was really? Yeah, it was awful.

Paul Daly: 4:10

Was that explain what that was? I know, that was back then. But like, let's introduce, let's introduce everyone to the personality of Gubagoo for a second.

Ryan Osten: 4:17

Yeah, absolutely. So first of all, thanks, Kyle, for saying that about the culture. I mean, it's been, you know, important to me and to the leadership of the company to create that kind of that kind of culture where we can give people creative room to, you know, to, to do interesting things and so forth. So, what we had done here is we really wanted to be different in our marketing, right? And it's not all about selling your products or saying why you're the biggest the bet you guys are in marketing, right? Everyone says they're the biggest, the best, the fastest, the most highest converting and all that right the best way it's about right. Yeah, exactly right. But how do you create that feeling of Have inclusion and community that these are people that I identify with, and I believe what they believe in, and you know, all everything that Apple's done really well over the years and all the great brands. So we want to really do something fun and different to showcase that in our brand. In 2020, which was a really hard year, obviously, because that was the year that we got the COVID came and so forth. So we, our marketing team had this great idea for a New Year's gift to our customers, we're always trying to do a gift to our customers for the holidays. And you know, people do donations and, and the holiday cards, and we've done all that. But this year, we wanted to do something fun, something they could do with their team or their family. And so what we did was we built a virtual escape room. That was interfaith that was activated through chat. So through our product, yes, so So creative genius. It was unbelievable. Yeah. And so the premise was, you had to escape 2020. If you didn't escape the game, you would be stuck in 2020. Forever. And you would go to a URL, right?

Paul Daly: 6:14

Penalty. Great. They're stuck in 2020.

Unknown: 6:17

Yeah. And so you go to URL, you know, it'd be like Gubagoo slash escape 2020, our chat would pop up, and you'd be launched into the game. So yeah, it's funny, you mentioned that because it came up actually a week ago, internally also, and we're looking for it.

Kyle Mountsier: 6:33

Yeah. What I love is like, there was the you know, from just like, you kind of set it all, but just this idea of like, okay, there's culture, that culture meets the reality of the time and being honest with like, the way that broader culture is recognizing the time, and then going, Hey, look, we've got this platform that we're telling everybody interacts with people in a conversational way. Let's execute, let's allow the platform to live and breathe and be a part of our part of our ecosystem. It was like this massive kind of brand play, and even better, was for the best part about it for me, and you said, like, hey, this could be with your team or with your family, I actually went home. And because my team all did it when I was at lunch one day, they did it. And I was like, I want to participate. So I went home. And at that point, had a four and six year old kid in the house, and they were all about it. It was unbelievable. For me, it was like my team got to do something, my family got to do something. It was really cool. So I appreciate that. And I just want to I want to say that but I guess you know, so take us back because you you are off camera, we were just kind of talking about little bit about like the unique circumstances that kind of created Gubagoo that that was like the circumstances that you walked into that maybe wouldn't have been expected otherwise. Can you take us back through that kind of like that timeline?

Unknown: 7:59

Sure. Yeah. And we were talking about how these, these happens, that stance events, these coincidences that happen through your life can have these huge impacts for many years. And and just the power of that. So to take it way back. My father had been in software since the 1970s. So he was an OG of software. This is when you know, obviously before for software, right? Yeah, late 70s. It was it was hard to raise money for software even because people didn't understand what it was. And so he met a gentleman named Brad Title, who was the founder of Gubagoo. He met him in a shoe shine in a Texas airport. I believe it was Dallas, but it might have been Houston. And Brad had a CRM for automotive at the time. He was, you know, automotive his whole career. And he was it was his first company. And my father ended up becoming going to business with Brad, for that CRM company, which eventually sold to Cobalt, which became CDK, and yeah, and so forth. And then in around 2010 or so, Brad called my father up and said, Hey, I've got this idea for this behavioral engagement and scoring and messaging chat, product for automotive, I really think there's a need for it. And they got together and Brad started building it, and my father got involved and that's how I got involved. And so that one event at that shoeshine affected a decade of my life working and building Gubagoo. So So yeah, it was quite remarkable and it really was, was born out of this notion that there were some messaging was taking off as a a primary communication tool on dealership websites, as well as for lead conversion, which was obviously huge thing at that time in 2010. How do I am driving traffic to my websites? How do I convert them better, right? And Brad had this insight of scoring traffic that had landed on the website and engaging it based on their behavior on the site, and changing the greetings and changing the frequency of the greetings. And we developed this algorithm called the beast scoring algorithm.

Kyle Mountsier: 10:34

And is that still in play? I'm sorry, I don't mean it is

Ryan Osten: 10:38

it's still in play. I think it's, it's, we're we're actually working on developing a new generation of it. But it is still in play. So

Kyle Mountsier: 10:50

if he's someone has been to Kings Island, and they're gonna call it the son of the beast, and then hopefully, worn down. Yeah.

Ryan Osten: 10:58

So so right now what we do is we'll if a customer is on a VDP, our greeter is engaging them based on that specific VDP with a message of, you know, referencing the vehicle you're interested in, right? When a customer has been back to the website multiple times, we're showing a more aggressive greeting, things like that right now, but we're going to take it to the next level over the next while.

Kyle Mountsier: 11:23

Well, so I'd like to kind of think, okay, so Gubagoo 2010. It sounds like Right. There were a couple other chat companies that were like that, 07 08 range really got started. And then, you know, a couple more a few years after, and then there's been a there was a gap until like the 2020 2021, where I saw a couple more chat companies come up. But there's been an obvious evolution over the time. Can you speak to kind of the evolution in the in the way that dealers have approached chat solutions? And the way the chat, you know, ecosystem has approached the conversation, like what's been a couple of the major inflection points that you've seen in the change and how this industry is approaching chat?

Unknown: 12:06

Yeah, for sure. So it definitely first started off with managed chat, that was what everyone wanted, they wanted someone to handle my customers. For me, I don't want to talk to my customers as a dealership, you or I'm not capable of I don't believe that I'm capable of doing so. So these companies, in the early days, it was us, contact at once. And ActivEngage were really the primary players there. And it was, listen, we're going to drive traffic, they're going to drive traffic to the website, you guys engage the customers and convert it, send me the lead to my CRM, and then my team will handle it like a traditional internet lead. Right? So that was really gen one I think of, of messaging, then the there were two other inflection points in the evolution one was when we brought out we brought out the ability for the dealership to get involved in the conversations while we're chatting with the customer. So we would be the frontline for messaging with the customer and handling those initial inquiries, then the idea was for those high value qualified customers that are going deeper in the conversation, your team can jump in, and take it from there and go deep with the customer. Right? Yeah. And so we would sort of act as a filter, I mean, we would convert leads still very at a high clip, but we would act as that filter. So if it was a tire kicker, who was going to message and drop off, your team doesn't have to worry about that you can watch the conversations jump in when the customer wants to talk pricing, or they're asking deep questions about vehicles. So that was really the second evolution. Then the third one I would say is when digital retailing, virtual retailing really came. And there was this insight that messaging is a core component of buying a car. There's e commerce now coming out on is now being a core component of automotive dealership websites. Let's bring those two things together and build a digital retailing platform that has deep messaging, integration and deep messaging capabilities. And that's really the third evolution. I think that's where we are today.

Kyle Mountsier: 14:28

So it seems like proximity to the customer has kind of been like it's it's the it's dealers realizing that their proximity to the customer can be drawn closer and closer to the user on the other side of the screen, essentially right is is kind of what I'm hearing. Do you think that there's like another evolution is like on the horizon? Is it a step even closer? Or is there actually kind of a pulling back at this point, which which way is at least the dealer user heading? Are you in the inner N? is the customer also taking steps to get closer? Or are they continuing to pull back to where we have to take steps forward? Like, what's that interaction look like for you on the horizon? For us as an industry,

Ryan Osten: 15:14

I think that we definitely want to bring the customer closer directly to the dealership. Early, I think that we've we've realized a lot of the early gains, the low hanging fruit of bringing the customer and the dealer together to the point where there's a certain number of dealerships that will utilize this this model, this hybrid model, or the model of talking to their customers directly and not leaving it to the Manage chat company 100%, there is a number there of dealers that are going to do that. And we've seen very little movement in that number over the last while, right. So all the dealers that are progressive, that actually give a damn to talk to their customers have are doing it now. It's now the laggards the ones who say, I don't have the process, my BDC isn't set up, I don't trust my team, or I just don't care and just feed me leads and do your job. Those are the ones that we're trying now to bring along into that. But I think that the human element of the dealership, helping in a consultative way with customers, will will not go away. And we're very much pushing toward that. And we want to support whether a customer wants to buy fully online with no help at all, or they want to buy online with guided assistance by talking to someone in the dealership, or they want to purchase, they want to build their deal online and come into the store. We want to support all of that. And I think one of the really important things is that the experience that they have online is the same that they have in the store. So the interface that they're experiencing online matches and is cohesive with that experience in the store. Also,

Paul Daly: 17:14

what other industries, do you see, like when you're looking for indicators? And when you kind of look for, like the the optimal customer experience? Is there anything that you kind of as your personal go to that you keep an eye on say, Oh, let me pull little from this little from that?

Ryan Osten: 17:31

Hmm, that's a good question. I think that I think pulling a little from this, and a little from that, summarizes it well describes it well. So there's not one industry that we're trying to emulate in its entirety. But we look great. Yeah, we look for great online experiences when we're building. So we're like, Well, this is this is how you check out when you're buying an iPhone. Right? So we're looking at the Apple ecommerce experience and the apple in store experience, or we're looking at, we're also looking at other ways that people are doing it and automotive, of course, right, a Carvana. And sometimes we don't like what we see there. And sometimes we do, yeah, but that's our job is to look at all of these different.

Paul Daly: 18:23

I mean, they like transactional experience, the Carvana is, for instance, you know, a lot of people will look at them and talk about the advantage they have, because they can custom build from the ground up. And I've looked at it and kind of talked about this, the the smart vendors and industry partners, we have looking at a much broader base of behaviors and transactions. We think that it's an advantage to have other companies building something that, you know, is applicable in a lot of different use cases. Right? Because like Carvana, we feel like Carvana is actually they're living in their own box. Right. And although there are some advantages to it, we we tend to believe like, you know, folks like yourself, that are there looking at all these other areas happens to be an advantage because dealers are so different.

Ryan Osten: 19:20

Yeah, it's it's a it's a tricky thing to unpack. You know, I think that there are advantages that that Carvana owns sort of their entire stack, sure, and gets to do the financing. And yeah, gets to do the financing and the f&i and they don't have the OEMs to, to, you know, that complexity to deal with, but at the same time, they only have used vehicles, they don't have new vehicles. And they have a lot of problems also. Right So this stuff is hard. You're

Kyle Mountsier: 19:51

like Carvana doesn't have to worry about CAP cost reduction, though. Yeah. In 50 Different states, right. because they're all different.

Unknown: 20:01

Yeah, yeah. So yeah, it's tough. I think that the the dealer groups, I've seen doing it really well are able to do that, because in some cases, they they have their own financing, or they have their own f&i company that they, you know, that they own, for example, Asbury now owns, owns their own f&i company. So they're able to create these experiences across the entire stack. And ultimately, big problems often require, often require control across your entire stack, right? Because you need to put these all these pieces together, integrate things, here and there. So. So yeah, I think the franchise dealers are really well positioned for it, though.

Kyle Mountsier: 20:56

Yeah. So I, whenever I hear that I'm like, man, but I started thinking through the other day, I was like, oh, man, there's a lot of consolidation. There's a lot of big groups. And if you look back around, it was still only, like, 9% of our industry is actually consolidated from what I understand. And they and there's projections for for where it's like 15%, by, you know, at some let like over 10 rooftop groups or something like that. It could be 15% by 2025, right? So like, the rest of the 85% are dealing with, like, not consolidated resources, not having more than I that's just sounds, if that's the reason sounds low, but think about it so much. You haven't you think about a Lithia? They like, what they just crossed 300? I mean, right? out of 17,000? That's not a lot, you know, so like, it's big, but it's not, it's not like a consolidated marketplace. So you think about that, and, like, what, what are you having to tackle as a company? And what are the things that are that you found as barriers in the way to supporting some of these, like single rooftop, or, you know, one or two or three rooftop dealer or dealer groups, where they don't get the benefit of consolidation, or owning the full tech stack or having the leverage to tell CDK to, you know, to get their data out? Or they're gonna leave them? And you know, they don't really care? Like, what are you having to do as a as a tech partner for some of those dealers and dealer groups that are more progressive that are thinking like at like in Asbury, they just don't have the resources to do that? What does it take for a tech company like yourself in our industry, to make things happen for them that they need to have happen?

Ryan Osten: 22:38

Yeah, absolutely. So like talking about these really hard problems requiring solutions across the entire stack. The beauty of where we're at right now is that we have those that ecosystem within Reynolds of that entire stack, right, we have a CRM, we have a DMS, we have messaging, we have digital retailing, we have fixed ops, we really have almost everything. And so by having that we're now able to create experiences for dealership users as well as consumers that are limitless, right? We're not bound or constrained by an API of some company, that of another company that you know, that it's hard to get in, it's hard to get things done with because they have their own priorities. And, and they're not our company, right? But now because we have a CRM, we can say, You know what, when a customer comes in to chat, why don't when we get an identifier for them, like a phone number, and email, why don't we go look them up in CRM, and surface all of the data that we find in CRM, like what vehicles they own, and how much trade equity is on their vehicles? Why don't we show that to the dealership user in the chat? Why don't we, you know, use that to create an experience for the customer that we wouldn't be able to do with anybody else? Right. So I think that the and you look outside the like we're talking about other industries, I'm looking at zoom right now. And they've really gone to a lot of the companies full solutions, right used to start with like, we're trying to solve a specific problem. In the case of zoom. It was VA online Meetings Suck, right? And they're not reliable. So let's fix that. Now. They're like, how do we bring chat into the game? How do we bring webinars into the game? How do we make like a full solution, one stop shop for our set target customer, and that's really where we're going is to bring that full solution so that dealers don't have that friction across across their stack.

Kyle Mountsier: 24:42

Wow. I mean, I love what you're doing. And I think that it is progressive and innovative. And I it's it sounds like a lot of work. Like I think everyone kind of had that when you when the acquisition happened, what a little over a year ago. Now. It's like, all right, what are they going to do? Are they gonna figure it out and it sounds like you're well on your way, and I'm still there still, I'm sure there's still kinks and things you're working to fix and appreciate that you have the energy and the intensity and that you built this culture that says, hey, look, we're always going to have that that type of fun. I'm really, really appreciate you being on with us today. Can't wait to see you in Philly. And thanks for everything that you do, in and through our industry from a tech perspective. So thanks for the conversation. Great. Thanks,

Ryan Osten: 25:26

Kyle. And thanks, Paul, it's always a pleasure, thanks for having me on. And I'm looking forward to the conference and having that that energy in person there, so it's gonna be great.

Kyle Mountsier: 25:39

I cannot imagine being in a being a technology partner in automotive and going through years and years and years of trying to pull down all these API's and all the integrations and then moving into being purchased by a company like Reynolds and then having the access to all of this data and all of the integrations that now you can tie together and give access to for dealer partners, but still have to like maintain relationships among other industry partners. And I appreciate that, like it's not just the culture that they created, but the technology platform that they've created that is trying to push the boundaries and attempting to move forward with this connected data services in order to create a great customer experience I'm impressed by both ends of the spectrum that he talked about in the in that conversation.

Paul Daly: 26:29

You know, not everybody can pull that off you think about like every every company that has a lot of clients legacy companies there there are a whole lot of opinions about them out there and to be I think absorbed into one of them and then still need to maintain the identity that made you great in the first place is not an easy thing to accomplish. And so this is the first conversation you know, I've had with I've had with Ryan, since that has happened and it was kind of encouraging to see like the spirit is alive you know, that's for me that that that really hit home.

Michael Cirillo: 27:04

But that's the piece that is so difficult to pull off to your point like we've seen so many companies rise from like kind of humble beginnings and then the minute they get it they get a taste of the glory they they lose their identity. And by the way Yeah, their little Nacho Libre you can't see it but there's a there's some Nacho Libre art on the wall back here fan art,

Paul Daly: 27:28

by the way. So we're a little actually the poster. It's it's brilliant, by the way.

Michael Cirillo: 27:33

this thing, right? That's why I kind of joked in our intro of like, is it Gubagoo or Gubagoo or topical? And what is it because like, at that time, it was like, No, guys, it's Gubagoo, You know what I mean? Like they were very early, educating, educating the market and so it's inspiring to see that rise and you know, just I feel, I feel glad for them, you know, like that they've been able to kind of ring the bell on that sense. So, we hope that you enjoyed this conversation with Ryan Osten, at Gubagoo on behalf of Paul J Daly Kyle Mountsier, myself, Michael Cirillo, thanks for joining us here on Auto Collabs.

Unknown: 28:18

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