ConnXus Share Your Story Series
I’m Nancy Kam, an artisan sauce manufacturer for Kam’s Kettle Cooked that launched back in early 2014. Shortly after I incorporated, I joined the Specialty Food Association and rolled out at the Fancy Food Show in San Francisco. Meanwhile, we had already received our WBENC Certification as a Women’s Business Enterprise, which I knew may come in handy when trying to get the attention of buyers.
Entering into the grocery game is not an easy thing, especially for a small company such as Kam’s with limited financial resources. Most everyone in the industry warned us that it could take years to gain shelf space in a major grocer, and the best thing was to stick with small local specialty food retailers. Well, that’s not actually how it went, and as for me, I don’t ever do anything half rate, I like to shoot straight for the top, avoiding the path of least resistance and blaze my own trail.
After considerable sales efforts, trade shows and banging on doors of major grocery chains, we got a break, a buyer at The Kroger Co. had received some product information about Kam’s from the Kroger Diversity Division. And, that little push from diversity, in combination with our all-natural product attributes, gave us the boost we needed to get further reviewed by the buyers. Actually, in 2015 we ended up going on the shelves of over 1,425 Kroger Stores nationally, and in total are now in over 1,700 retailers including Safeway.
Recently, we have been looking to expand our products into the food service channel. Of course, being who I am, I had to contact one of the largest restaurant chains in the nation and who did I ask for? The Supplier Diversity Division, and after talking at length with the rep, got a promise for an appointment at corporate headquarters with a buyer. I did get that meeting, and they loved our sauces, as a matter of fact they now want us to return and present to their chefs in product development!
Many of the larger companies these days have committed to continually increasing their diversified vendor base, after all, in our case, we have a higher quality, healthier product, at a competitive price and everything is made in America. In addition, Kam’s is sustainable for the local economy where we buy our produce and are packed. So, every time I attempt a sales call, I ask for Supplier Diversity…I’m proud to have come from such humble beginnings and have the opportunities afforded us. Kam’s Chili Sauce is a comfort food that brings me back to my childhood… harvest season, the aroma of tomatoes and chili’s cooking in a stove-top kettle.
Old fashioned, home-cooked foods tell a story about people and their families, and our products do just that. Kam’s “Authentic American” Chili Sauce started out exactly where it all began at home, in my great grandmother’s kitchen in Buffalo, NY. Now, 100 years later, our recipe is exactly the same with the taste of home-style goodness!
“I think it’s a perfect storm.”
by Safon Floyd Posted: June 3, 2016
The supplier diversity terrain comes with its own set of problems; from deciding which suppliers are acknowledged as diverse, to tracking the use of diverse suppliers, to successfully fulfilling corporate and government mandates—and the list could really go on.
The problems are apparent and looming, hence the perfectly timed, well-rounded, and recently funded solution: ConnXus.
Founded by CEO, Rod Robinson, ConnXus introduces a cloud-based supplier relationship management platform that streamlines the administration of corporate supplier diversity initiatives. This streamlining allows for small women, minority, and veteran-owned businesses to ease into connecting with Fortune 2000 corporate buyers.
The necessity of ConnXus does not go unnoticed, which is why the company just received $5M in series A funding to accelerate the company’s long-term impact on generating sustainable and diverse supply chains.
BlackEnterprise.com caught up with Robinson along with COO of ConnXus, Daryl Hammet, to talk next steps.
BlackEnterprise:com: You recently received $5M series A funding for ConnXus led by Techstars Ventures, Serious Change L.P., Impact America Fund, and The Social Entrepreneurs Fund. Why do you think you received such an unprecedented investment?
Robinson: I think it’s a perfect storm. I’ve been around the supplier diversity space for 20 years, and I’ve seen solutions dab in this space, but no one ever made a significant investment in it.
There was no single, full-cycle solution that was of significant quality. I think getting out in the market and demonstrating that there is demand for this, then attracting the global customers that we attracted—it just helped build momentum.
How will this funding be used to push your company’s agenda?
We’re going to be adding to our sales and marketing efforts. We’ve had limited resources, so we weren’t able to grow at the pace that we set out to. Now, with the funding, we’ll be able to also add to our software engineering team, and we’re going to be able to pursue the global strategic partnerships that we’ve had on the agenda for the last couple years. We really look at this funding as adding fuel to the rocket ship.
What advice would you have for a novice entrepreneur looking to do what you successfully pulled off—starting a business, gaining capital, and watching that business flourish?
- Surround yourself with a great team of advisors to help you that compliment your skill-set, because you can’t do it alone.
- Use those advisors to help you find potential investors.
- Once you’ve proven to be product-market fit, it’s all about building a team and the core of what will be your culture.
Hammet: Know thyself. Understand what your strengths and opportunities are before you even open your mouth to an advisor, because an advisor is going to ask,“What do you need?”
Know your strengths financially, know your strengths as a leader, and know your strengths as a manager/administrator. So, as you build your team of advisors, you can be very transparent: “I’m not good at this, so I need to leverage your skill-set.” All advisors are not good advisors, based on your needs and what stage you’re in. There are people that you don’t need at the early start up that are good advisors after you build an infrastructure. Hire people that are completely opposite of what your strengths are.
Read Part One: Rod Robinson Solves Supplier Diversity Disconnect
We’ve all heard the expression “doing well by doing good.” There’s a growing consensus – and a large body of supporting data – that, more often than not, doing the socially responsible thing is also the wisest decision from a long-term business perspective.
In our first three blog posts, we focused on some concrete business reasons why supplier diversity has become an increasingly important component of the mainstream business agenda. As we discussed, world-class procurement programs need to create a diverse supplier base if they want to be perceived as innovative, responsive, and cost-effective.
STRENGTH THROUGH DIVERSITY
Here’s one more reason to add to the list: By including a wider range of supplier types in your supply chain, you can create a more innovative, forward-thinking and resilient supplier mix.
Consider these statistics:
- A whopping 99.9% of all U.S. firms are in the small business category.
- Women- and minority-owned companies represent more than 50% of the total small business population.
- More than half of the American workforce of about 142 million people is employed by small businesses.
- Small businesses have generated more than 65% of new jobs over the past 20 years.
- The number of minority-owned businesses grew nearly 50% between 2002 and 2007 – almost three times the rate of all firms in the U.S.
More companies than ever before are seeking out competitive, top-quality diverse suppliers they can plug into their supply chains to meet their goals. To find the best mix of minority-owned businesses that meet your supplier diversity needs as well as your product and service requirements, you’ll need to perform due diligence up front.
It bears repeating that supplier diversity should never mean sacrificing quality. Rather, the minority-owned status of any business in your supply chain should be considered just an added benefit to its unique value proposition.
THIS CHART SAYS IT ALL
The chart above tells the real story of why supplier diversity matters. Nearly 60% of the more than $30 trillion in annual revenue generated by U.S. firms is produced by a small group that represents less than one-tenth of 1% of the national business population. Although minority and female-owned firms represent more than 50% of today’s total U.S. business population, they generate just over 6% of total revenue.
As one of the fastest-growing sectors of the small business sector, minority-owned businesses in particular demand our attention. Together, they generate over $500 billion in sales each year, comprise 21.3% of all non-farm businesses in the country, and provide 5% of total employment.
Opening up your procurement process to include more minority- and women-owned businesses is more than just the right thing to do. It’s also a savvy and far-sighted business move that will help position your organization for long-term success by strengthening your supply chain.
STAY TUNED! In the next post, we’ll talk about how to avoid missing the unique opportunities provided by a diverse supplier base.
By: Safon Lloyd, Black Enterprise Author
It is no secret that the supplier diversity landscape could use a little tweaking. There is a very obvious disconnect in the ease and access of corporations utilizing minority and female-owned businesses. This has been a continuous problem that has finally found a solution: ConnXus.
ConnXus offers a cloud-based supplier relationship management platform that streamlines the administration of corporate supplier diversity initiatives, helping grow small woman, minority, and veteran-owned businesses by connecting them to Fortune 2000 corporate buyers.
BlackEnterprise.com caught up with ConnXus founder, president, and CEO, Rod Robinson, and COO Daryl Hammet to find out how they created the platform that may single-handedly solve most (if not all) supplier diversity problems.
BlackEnterprise:com: What was the inspiration behind ConnXus?
Robinson: I was chief procurement officer at Cincinnati Bell, which is one of the regional bell operating companies based in Cincinnati. We were doing a couple billion dollars in revenue. I was responsible for all of the corporate procurement, and supplier diversity was one of the areas that reported to me. We had a responsibility to our customers relative to corporate and government mandates to report our results as it related to spending with suppliers/companies owned by women, minorities, veterans, and so forth. I found it costly to pay for access to multiple databases to find suppliers and to track and report the spend with those suppliers—sometimes on a monthly and oftentimes a quarterly basis.
It was frustrating to have my staff complain about having to spend so much time chasing numbers from prime suppliers, that we were required to report to fulfill contracts. I just felt like there had to be an easier way. I saw an opportunity to make that process a lot easier leveraging technology. With technology being leveraged in so many other areas, why hasn’t someone made the investment that is so important, it can actually help to drive the growth of minority and women-owned businesses which make up so much of the market in the U.S.
How have you seen ConnXus actively benefit diverse suppliers thus far since inception in 2010?
Hammett: I believe that we have created an awareness with corporations that did not necessarily have vehicles to get or engage minority suppliers, because they didn’t have a database and they weren’t posting requests for proposals (RFP’s) or requests for information (RFI’s) outside of their organization. We’ve created a lot of opportunity around giving corporations access to suppliers they never would’ve had access to.
Also, by bringing on suppliers to our platform, we’ve created millions of dollars in opportunities for suppliers to engage corporations that they never would’ve had access to. What we provide with this cloud-based platform lets companies connect, engage, and search for companies that have the capabilities, the size, the regional access, and the discipline to be able to engage at a higher level. What we do is provide the buyers the opportunity to post, vet, and have access. At the same time, we give suppliers the visibility that they need, because they can’t run around the country all the time and try to engage a McDonald’s or a Coca Cola.
This is where ConnXus, Connect U.S. has come in and linked these two together; it saves money, time, and allows for the connection to flourish through engagement.
Where do you see ConnXus in the next five years?
Robinson: Right now, we have a database of 1.7 million diverse suppliers. There are 14 million diverse suppliers in the U.S. representing over half of all businesses. However, that over 50% only accounts for six percent of the 30 trillion in revenue that’s generated.
How we plan to impact diverse suppliers over the next five years is to significantly increase that equation that’s currently out of balance. We’d like to see that number move from six percent to more like 30%.
By engaging suppliers and aggregating valuable opportunities, we are becoming the go-to place for major corporations to find posted opportunities and continue to make the market more efficient in helping major corporations find minority and women-owned businesses. We want ConnXus to become ubiquitous with that.
Check back for Part 2 of this enlightening conversation. For more information visit ConnXus.com.
This month, we’re shining the spotlight on ConnXus’ Senior Manager of Technology Solutions, Tyler Johnson. Tyler joined the company in September of 2014 and currently leads the ConnXus IT Development team.
What motivates you to jump out of bed in the morning?
TJ: Jump is far too strong a word to describe my motion out of bed in the morning. However, it’s easier to go to sleep after having accomplished something during the day—at ConnXus, I always feel as if I’ve accomplished more than I set out for each day. Staying in bed longer just gives you less time to achieve your goals.
What are your top three responsibilities as Sr. Manager of Technology Solutions?
TJ: My largest responsibility is 1) ensuring a constant secure access to our software services is available, 2) providing and maintaining quality solutions that have passed rigorous testing requirements, and 3) producing innovative enhancements and features so that our services literally meet our motto: “Supplier Diversity Made Simple.”
How is your role pertinent to a fairly young software company?
TJ: We are in a stage where we have proven our model and have created a solid technology platform. Our next hurdles will be scaling to meet ever-increasing demands and usages of services while continuing to innovate. We have been preparing for this progression for years. My role is important in keeping us on track to have the technology, services, and processes of the company that we want to be not the company that we are now.
What song best represents your company and why?
TJ: Movin’ Out by Billy Joel—time after time ConnXus has shown that we won’t accept what the majority receives as “good enough” for a supplier diversity program. The largest sum spent with diverse suppliers does not always equate to the greatest economic impact. The materialism in “Movin’ Out” represents this outdated outlook on the supplier diversity industry as just another corporate checkbox.
When you’re not working, where in Cincinnati do you like to spend your time?
TJ: In my free time I most enjoy spending time at home with my family, single-track mountain biking around Cincinnati, Indiana and Kentucky, and attending my daughter’s sporting events.
What attracted you to work at ConnXus?
TJ: I knew that I had a purpose at ConnXus. I believed that our founder and CEO, Rod Robinson, was more than confident in his vision for ConnXus, and I saw a strong demand for advances in the under-served levels and quality of technology solutions in the supplier diversity space at that point in time. I had worked for similar small companies and larger companies and believed I could drive ConnXus’ growth in regards to development, infrastructure, and processes.
Select for more news on ConnXus Staff Members.
PR Newswire, Mason, Ohio – May 11, 2016
“This round of funding will significantly accelerate ConnXus’ long-term impact on generating sustainable and diverse supply chains,” said Rod Robinson, CEO and founder of ConnXus. “To date we’ve raised $10 million in investments, including participation from Techstars Ventures, CincyTech, Serious Change L.P., Impact America Fund, and several private angel investors.”
ConnXus’ cloud-based, supplier diversity sustainability dashboards open the door for procurement, supplier diversity, and supply chain professionals to access a wealth of global supply chain analytics. Robinson believes Techstars and the other investors are the right investors for the company to disrupt and add imperative value to the $10-billion supply chain and procurement software market.
Robinson founded ConnXus in 2010 as a result of his personal experience and frustration with the complexities associated with locating qualified diverse suppliers, tracking spending, maintaining diversity certifications, and reporting reliable results in accordance with corporate and government mandates. ConnXus now solves this problem with a user-friendly and cloud-based technology platform. “During my tenure as a procurement executive with responsibility for supplier diversity,” he said, “I thought it was expensive and inefficient to pay for access to separate databases to search for minority-, women- , veteran-, and other classifications of diverse-owned businesses. ConnXus now makes it simple, with a single database of 1.7 million+ suppliers that combines all diversity classifications. Bid opportunities disseminated through the ConnXus platform have led to millions of dollars spent with diverse suppliers.”
While minority- and woman-owned businesses represent more than 50 percent of all U.S. businesses, they only account for 6 percent of the $30 trillion in total annual revenue generated. Because small businesses provide 65 percent of net new jobs, it is imperative to foster an economic environment that supports the growth of small and diverse businesses. ConnXus is proud that 29 percent of its own employees are minority and 38 percent are women. This includes the hiring of COO and early investor Daryl Hammett, previously the highest-ranking African-American executive at the global retail giant Luxottica Retail, where he was a senior vice president & general manager running a $900-million brand. In support of young business leaders, Hammett has been a member of the prestigious, Young Presidents’ Organization (YPO) international Cincinnati Chapter since 2012.
“Not only does ConnXus align with our initiatives to serve high-performing, emerging technology companies, but they have created innovative software that directly improves diversity in the supply chain for startups and corporations,” said David Cohen, Techstars’ co-founder and managing partner. “Our investment in ConnXus is the latest investment from Techstars Ventures, our third fund, which is focused on seed and Series ‘A’ investments.”
This investment by Techstars also comes on the heels of its commitment to the White House to increase diversity in tech entrepreneurship, as well as the Techstars Foundation’s inaugural grants. Robinson is a founding member of the TechStars Foundation advisory board.
“Unprecedented in the supplier diversity space, this $5-million investment will redefine supplier diversity and inclusive procurement with a technology solution that is innovating economic inclusion analytics,” said Hammett, investor and chief operations officer of ConnXus. “We will now be enabled to ramp up marketing and sales, augment our software engineering team, pursue global strategic partnerships, and add to our management team.”
ConnXus is a supplier diversity technology platform and certified minority-owned business (MBE) headquartered in Mason, Ohio. The cloud-based company helps small and diverse businesses, including woman- and minority-owned companies, grow by connecting them to Fortune 2,000 corporations.
About Techstars Ventures
Techstars Ventures is the venture capital arm of Techstars. Techstars Ventures has $265 million under management and they are currently investing out of their third fund totaling $150 million which is focused on Seed and Series A investments. They primarily co-invest alongside venture capital and angel communities in Techstars accelerator program graduates, new companies started by Techstars alumni, and companies formed by Techstars mentors.
Publishing Note: We’re pleased to introduce an 8-part small business financing blog series in partnership with The Business Backer. This blog series will clear the financial fog, providing you with the tools necessary to make the best financing decision for your diverse or woman-owned small business.
Each blog will address a key question you should ask potential funders before accepting a deal. Making an informed financing decision can help you avoid the traps and find the right partner for your business.
Since 2007, The Business Backer, a Greater Cincinnati-based company, has helped thousands of small businesses across the country secure the financing they need to thrive. Their area of expertise includes factoring B2B invoices into cash, purchase and specialty financing, equipment leasing and help accessing traditional loans and lines of credit.
The 8 Questions Small Business Owners Should Ask When Seeking Capital
Just like we need water, oxygen, Netflix, and other basic human necessities to survive and thrive, you need capital for your business. From covering payroll during a lull in business to capitalizing on an opportunity to expand, working capital is essential to your livelihood. While the importance of working capital has remained the same for decades, accessing it through traditional means has changed dramatically.
It wasn’t more than ten years ago that you could pop in to your local bank, talk to your banker and access the capital you needed in a few weeks. Unfortunately, times have changed. The economic collapse of 2008 resulted in a regulatory environment with an even more conservative approach to commercial lending, and the sector that has taken the brunt of this conservatism is small business. While market conditions are slowly improving for small business, it is still an uphill battle.
Read more here.