The Time-to-Sale Problem Dealers Are Dying to Fix (and Who's Figured it out) | Pre-NADA AI Spotlight #2 | Sanjay Varnwal, Co-Founder & CEO at Spyne.ai
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You will see the voice quality improving, like, exponentially in the next three to six to nine to twelve months from here.
But it is not about the quality, right? It is about the entire integration of the workflow that you can do.
And integrate the context about the vehicle, about the customer, to create this intelligent response and the conversation that can lead to the appointment setting.
Today, I'm joined by Sanjay Varnwal, co-founder and CEO at Spine.ai for the second episode of the pre-NADA AI Spotlight Series.
Dealership tech is moving fast and AI is shifting from experiments to real operating leverage across sales, merchandising and customer engagement.
Sanjay breaks down where AI is actually improving speed and conversions, how dealers should think about workflow end-to-end, and why partnerships and data security matter.
If you're trying to separate real AI leverage from hype, this conversation delivers.
A big thank you to our sponsors for making this episode possible.
Merchant advocate, lotlinks, and of course, spine.ai. And now, let's get into the show.
Sanjay Varnwal on the CDG podcast. Sanjay, welcome.
Thank you, Naseer, for having me here. Thank you. Excited to be coming on with you. Yeah, likewise.
I was just starting to tell you the story before we press record, but like four or five years ago, I was at this Goldman Sachs conference.
Very interesting event. Lots of investors and tech entrepreneurs, and I was observing, just meeting some people, and there was this guy on stage that was captivating the room.
It was like a crazy keynote speech, and so I asked someone to say, who is this guy? And they told me he's the fastest growing hospitality brand in the world.
His name is Ritesh, and the company is called Oyo. And to come to find out that when I'm doing some research on you prior to the podcast, I see you work at Oyo, and I'm like, okay, this guy, you know, this guy's got some experience under his belt.
You've done quite a few things on the technology side, so this will be fun, man. Welcome to the pod.
Yeah, absolutely. I mean, the kind of company he has built in India for the globe, right? And at the age that he is in, you know, how old is he? 32 years?
He's young. He's younger than, yeah. How old is he? 32?
I think he would be right now, 31, 32. When he started the company, it was like he was 19. 18 or 19.
So this was like one of the fastest growing companies that came from India.
It's been truly incredible. Yeah, global hospitality company. People at the time, you know, they knew I was an automotive. They were comparing it to like, you know, the Karvanov hospitality, like just as an analogy, it's obviously very different, but super, super interesting.
So welcome to the pod, man. So this is going to be, this is part of our pre-NADA AI spotlight series.
If you look at, if you look at the last year, we've seen adoption rise amongst dealers using AI tools. There's still lots of questions.
There's a lot of tools that have let down dealers and just have not delivered. Certain dealers have felt like, you know, certain vendors were are, you know, leveraging them as their testing grounds.
Others have done very well as well. One of the coolest things I did prior to this podcast is actually went in circles and I wrote spine and instantly got a download of the pulse of what people think about spine.
And not because you're on a podcast right now, but genuinely, and anyone can do this is in circles. The sentiment has been very positive. And so I want to ask you about that because this again, this is like, I'll tell you exactly how it is.
I even went into circles right now. And I wrote in our technology group, I said, Hey, what questions do you have for Sanjay? If any, everything is fair game because I'll be on. So, and people did have some questions.
But I want to start out just at a very high level. Like, how have you broken through the noise in this crowded space where dealer, you know, dealers are looking for ways to become more efficient, adopt better tools, right?
Tell us a little bit about your story and entering the space coming from your hospitality background or I would say tech background within hospitality into, into automotive.
Yeah, actually, I come from a deep technology and product background. So worked almost 12 to 15 years across very fast growing startups, OEO few sometime in Amazon and many other startups in India, which have global presence.
So built things at a very, very high scale. So one of the core problems that we started working was that, I mean, this entire internet is booming and the merchants who are looking to sell their products online, be it car dealers or real estate agents or merchants like e-commerce merchants or restaurants, anyone, and one of the key bottlenecks that all of these companies have had was like high quality merchandising.
Right. So, I mean, if you are a dominoes, you'll be able to hire a agency or a photographer to do your photo shoots. But if you're a small outlet, you likely would not be able to spend that kind of money.
Right. So the idea was, can we build a camera app, which, which mimics the style of the photographer and shoot the object just like the photographer, like the angles, styling, everything will be done.
If you're shooting a car, it will shoot like a professional photographer will shoot the car. Similarly, real estate, similarly, various other categories. And then edit those images automatically using AI and publish it all across the marketplaces and online channels.
That's how we started this company. And we got into like a early success, many big companies, because it was one of the first kind of ideas that we launched in the industry about five years back.
So it picked up very well in India. But gradually we, we discovered that every category has extremely deep problems, like the way you handle a photo shoot of a model will be different than a way you will handle a real estate shoot with the way you will handle a automotive shoot.
Right. So we, we thought that we will go very deep into one category and solve it deeply. That's where we picked up automotive as a core category because we had all these unicorns in India as our, as our merchandising clients.
Right. So we have cost 24 spinny, some of these like Karwana's equivalent of India, not not penny, but many other companies were using us for piloting with us. Right. So, and that gave us confidence. Right.
So let me answer this guy. So you started on the merchandising side, which is definitely something that dealers need. But it's, I wouldn't call it today in about to be 26, like the cutting edge tool that dealers are looking into.
And, and by the way, when I say that, like, not everything needs to be cutting edge to add value. I'm not, I don't want to imply that. Yeah. What, so talk to me about your evolution. Like what, what are you trying to solve today?
What's the core problem you're working on to help dealers solve today?
So the way we started looking at this particular problem is we got into dealers life cycle and then started understanding how the dealers business function. Right.
So the dealers business, essentially, if you see it, it starts from sourcing the right car at the right price, and then then getting the car at the lot, then shooting it right, getting it published on all those online channels, then then generating leads, serving, serving, serving those leads.
I'm calling the customer for the appointments at the store and then selling it eventually before servicing it. Right. So this entire funnel is what makes very interesting to study.
Because the dealers business revolves around how fast they can move their cars and that the fundamental matrix that the dealers look at turn over time. Right.
So merchandising was one of the stages where we got in to generate more engagement for the dealers. But we started looking at, okay, dealers are generating a lot of engagement on their VDPs and on marketplaces using our content.
But what next? What can we do next? Right. So we saw the web pages and the web pages had those old school, I mean, form widgets where you the customers will fill up their forms and next day or next to next day, someone would reach out to them.
And the customers would be filling those forms to 10 different places as well for the same car. Right.
So the idea was key. Can we convert that particular engagement real time into a conversation that can convert into a real appointment for the dealers? And that's where we launched.
Now, is that service or sales appointment? What are we talking about?
It was we started with sales appointment. So we launched this 24 by seven active voice chat and email bots that sits at the VDP of the dealers and and and when you when you're engaging it, it basically pops out.
Hey, I see you are you are interacting with it. Who do you want to talk and no more details about this car?
Now, before before we dig deeper here, can you tell? Can you give us context? How many rooftops are you working with? What dealer groups like whatever you can share?
I actually encourage name dropping because I think it's important, right? We are social animals, social creature. We want to know who's who's already using this.
So what can you tell us about your current penetration within the US?
Yeah, we work close to like 1500 plus rooftops in the US right now on merchandising as a product where I mean as buddy as a whole group is using us about like 50 plus rooftops greenway Bergstrom.
A lot of like big, big groups are using us right now and Paragon from from New York is using us for real quite a lot of time.
And Vinny, which which is the conversational bot ecosystem, which is chat, email and voice all three combined in one.
We launched about like four, five months back and we are looking at like a big traction there because because we are not only launching voice as a solution, but we are connecting this entire communication as a as a common ecosystem for the dealer.
Right. So and then context is carried forward everywhere. Yeah.
Sanjay, a question from within circles that I'm reading right now and I think is a good one, but someone a dealer is asking, what do you think tech first dealerships actually want from AI for their stores?
He's saying like, I mean, I consider myself a tech first dealership.
Yeah.
What do you as the CEO of an auto tech, you know, AI platform, what do you think I want? What do you think is the problem that I'm looking to solve?
I think for most of the dealers, lead is not a problem. You, you don't have the lead problem. You have this engagement problem, right?
So tons of lead sitting in your business right now. And a lot of these leads are looking for for for those cars that you are not engaging because the business is is so vast and so disorganized.
I mean, we also run our business right now and we see that what kind of funnels we run like so to engage.
There's a sequence of messages that you need to drive sequence of calls that you need to do every sequence of messages need to talk about something which is which provides like additional value.
Right. So it's very hard to drive all these things at a scale and and get get to that last point of business outcome that that that is sitting at your CRM right now service scheduler systems right now.
Right. So what we are doing right now is all these leads that you're generating for which you are paying dollars to all these platforms are coming to you anyways.
Are you utilizing it to the fullest right so the agents which are very spot which have this built in mechanism for boring follow ups right and which can get you to some outcomes is what we are optimizing for right.
So, so, so that the precise problem that we are solving that sales in the form of inbound and outbound at the times when you're not up or at the times in the lead you think are dead.
Right. These all are the opportunities that can give you like additional car sales or additional service opportunities. So this episode is brought to you by merchant advocate you negotiate to give buyers the best deals.
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So you're making me more efficient. Part of that is I would say speed to lead based on what I'm understanding. And another part of that is just nurturing older leads better or leads that I may have not gotten to.
And would you say is that is that 80% plus of the value proposition the dealers today are taking advantage of your platform.
Yeah, I mean, first problem that we solve for is the moment you have acquired the car.
You don't right away go live because you don't have the right kind of visuals available for that car. Right. So we get at that particular stage and get you live like immediately.
We provide you almost nearly realistic photos for that particular win that can help you go live. They are not stock images. They are nearly realistic photos that that matches that model trim like the entire variant of that particular car, which can go live.
And then once the car is is inspected and refurb, you can do the actual shoot. So the speed to go live is one of the major that we control right now.
And then once we get the car live, then we I mean, speed to response like so once the car is live.
If the customer is engaging with you on the VDP or on text messages or on the calls, can you immediately respond with with the with the context with the details about the car.
Sandra, sorry to call you but like everyone says that right.
Yeah, and I'm not discrediting you but I'm calling out I'm calling out the elephant everyone says that.
And even literally even now I'm looking at a conversation here right on my screen where it's one person says when will voice AI be intelligent enough to actually satisfy my customers and another person right after them says it's already there.
And so what is it like why is one dealer saying it's not another dealer saying it is like voice AI being able to work directly with my customer and to complete attack like why is there a disconnect there.
Yeah, I mean, there are all types of companies in the market right now right so at different levels of evolution and all of them are targeting dealers which are which are maybe so many of dealers right so you need to understand whether how much of focus a company is doing on a specific problem.
Right so and then also if you see the this entire voice is evolution has been so rapid in the past six to eight months that just about a year back if you would have heard the voice AI it would have sounded robotic right so you don't I mean I was also amazed to see that how fast this entire technology has progressed in the last like six to nine months time.
You will see the voice quality improving like exponentially in the next three to six to nine to 12 months from here.
But it is not about the quality right it is about the entire integration of the workflow that you can do and and integrate the context about the vehicle about the customer to create this intelligent response and the conversation that can lead to the appointment setting.
So that's what we are specializing and very much focused on because we are very high end 8090 members engineering and research and technology team.
So my next question to that is let's say you are right now one of the market leaders and voice a eyes right let's just let's put that stake in the ground for a second.
Sure as a dealer.
I think two questions run through my mind number one why right like why is your technology superior and actually delivering whereas some others are not some others are but let's just say you are for a second.
So number one why my follow up to this is going to be like how defensible is that if I as a dealer on board with you today to solve this problem right with.
Handling in bound calls handling outbound is that is your position in the market going to change within two months based on the development of AI.
Let's start with the first one though right yeah how are you building superior voice AI technology today and that is totally based on private conversation and feedback I've gotten.
If it was any different I would tell you right now I would say you know this is what I'm seeing but that's legitimately what I'm seeing and I'm sure others who are in circles are seeing this as well so how are you doing that.
No it is not about the technology right so there are two model like two different types of companies that are getting formed globally one way which are building base models.
Which are open AI or all these companies which are building base models on which most of the vertical SaaS companies are getting built right which are building applications application but that too also has a extremely good workflow stitching right so understanding of because
the conversations in dealerships if you see this could have like thousands of chains and every chain has to handle every chain of message have to be handled very precisely because you are risking right now.
A conversation that could have converted into a real sale right so dealers are very very very very very cost so dealers are extremely sensitive about AI's ability to handle a call which could have been handled better by a human right so.
It's super scary yeah.
Although in many cases I could argue that the alternative is not even picking up the phone or not even reaching out to the customer.
Absolutely those are misleads misleads or holidays or offline arts or something right so but what what I'm trying to say is that building systems which which understand the workflows.
It is not the technology it is the people right so people high quality people who are building those solutions by understanding the dealers workflows in depth and also are extremely capable technically like superior understands how to make the technology work for certain ecosystems is what doing that is what is doing the track.
So we we we are roughly about 80 to 90 engineers I myself have done about like 1215 years in engineering and product in some of the top notch companies globally.
Our CTO comes from like eight years in prime video computer vision then then four years in and then Instacart handing all these extremely scale conversation stacks right so some of these are like advantages that we are bringing into the table right now and.
Okay yeah so that's helpful and by the way I like that answer you're saying it's not the tech it's just that we get your problem better than others amazing okay so my next question is how do you.
How are you able to intimately understand the dealers workflow arguably better than some other players in the market how are you able to do that what are you doing are you.
Do you have steak and it's some dealers that are showing you under you know get like showing you the sneak peek of everything like what's your what's your secret sauce when it comes to figuring out the optimal workflow for dealers.
We work with some of the extremely close partners right now both in terms of technology and technology companies.
Of your work which are working deeply in the dealership space as well as as well as some very premium big dealers with whom we are closely working and then making this technology just work exceptionally for their dealerships right now.
Right so we are not hurrying we're not just deploying it to every every single other dealer in the space right now but but just ensuring are we are we able to in fact we want to build technology that.
You want to claim if you are able to create ROI for you then only we will charge you like so we will charge a percentage of the ROI that will bring for you like to not not charge you.
Let's fix subscription that most of the companies DVS that you call it are charging right now right so that's the model we want to build going forward that.
As you want to create a monetization model where you take up like a legitimate percentage of the ROI.
Yeah I think every dealer would agree that's fair as long as long as you can properly prove that activity and exactly and quantify the ROI you're driving I don't see why anyone would have any issue.
Absolutely some you know fair percentage of that.
Absolutely yeah.
So OK so then again the next question as I mentioned is like OK so if I'm a dealer who's convinced or has already heard about you and wants to use Spine or at least try Spine.
How confident are you that you're able to maintain a certain level of technical superiority workflow superior whatever you want to call it for the foreseeable future at the pace that things are evolving.
Right.
I spend time to onboard into a certain platform.
There is clearly some you know non zero chance that within a certain amount of time that is maybe not the superior platform.
And by the way this is a real reason why I know dealers who have been on the sidelines and I don't blame them.
They're saying well I want to wait a little bit more time till I can you know really figure out what is the you know who's a clear winner in the market before I go through all the onboarding.
So how do you respond to that.
What would you do if you are a dealer.
I think there's no perfect time.
Right.
So there's there can never be a perfect time when you will tell you OK this this technology is not ready to be used.
And there has to be a company which is evolving with time.
So we have shown that evolution in the past like two three years working in this dealership industry where we got very deep into merchandising and build one of the solutions that that were seen as a clear clear.
Superior offering in the industry.
So so from there we picked up this voice stack and conversational stack about like maybe a few quarters back and have been building on top of it and constantly improving it.
So and and and the answer lied in the previous question itself that we are we are primarily in research and development company.
We are not a sales and marketing company.
We are a company which is driven by product and engineering with with about like 70 percent of the people in the company belonging in product and engineering department right now.
One of the things that I would rather want to bring up is the place is this entire ecosystem.
Right.
So where you are connecting with the dealers and on behalf of the dealers you are connecting with the customers.
So you're also looking at some very sensitive data of the customers right now.
Right.
So from the behalf of the dealers.
So are you secure enough like most of the companies that are in the ecosystem have to be extremely sensitive to that part of the ecosystem as well.
So we built compliance and security as a as a as a system within the product as well.
It is not a checklist for us.
It is it is very closely linked with we are GDPR we are SOCTO compliant we are ISO compliant.
We are we are disaster recovery like well set across the globe.
So there is no no way that your data can be compromised or can be lost when you are using spine.
All these are built because because we are hardcore engineering driven company.
Right.
So we know what is what will work at extremely high scale.
We're not building for the current we are building for like three years down the line future.
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I understand.
Well look you come from a you come from a big company background too.
So I can only imagine that you you've worked on this historically.
This is a new to you in the sense of compliance.
It's you've worked on that so that makes sense.
Um Sanjay if if there was if there was you know one takeaway that you would like to leave off dealers after listening to this conversation.
What would it be.
What do you think is the core takeaway regarding spine what you're building the future of the dealership.
What is that takeaway.
We are obsessed with optimizing this entire funnel of car purchase to car sales journey.
Right.
So building agents that will optimize your sourcing pricing merchandising syndication connecting and then then basically appointment generation eventually converting to the sales.
Right.
So we'll be building agents that will that will plug in like all these moving systems for you in partnership with the companies or or building ourselves as well.
So that's how we will be looked at in the future.
And and you see like we have we have started building some very deeper partnerships with the ecosystem companies.
So as such as like Vinq we have recently launched a common solution where where this entire trade cycle intelligence we we have launched a bot which is called Benjamin within the ecosystem.
And which is a sourcing platform like sourcing agent for them acquisition agent for them.
So we are we are working in some of the deeper use cases which touches every part of the vehicle journey of a dealer.
Right.
So that's where you will see us transitioning as well in the future.
Right.
So you spoke about that on our platform like when you we had a panel with you Vinq team velocity.
Yeah.
What's up.
Yeah.
You're you know integrating deeply with you know these really dominant companies in industry.
Like how did that come to me.
I mean so of course so like most of these companies which are operating of course understand the value of technology.
Right.
And they have they work with or have seen like most other companies working this ecosystem.
Right.
So they know which which technology or the other technology teams are are capable to handle their use cases of the scale.
So when we when we connected we gel in very well.
Right.
We understood the use cases we got like some of the successes done in no time.
Right.
Maybe in two three months we were able to spawn the use case that that's all the use cases.
This entire product that they were building.
Right.
So and we hit hit together really well and that that got us like long this entire trade cycle intelligence product with with Vinq.
Of course this is just a start we are we are we are joining hands to launch many other products in future together as well.
So you'll be seeing a lot of solutions coming together from our umbrella in future as well.
Yeah.
Good.
And we're going to we'll we'll we'll talk about them through CDG.
So we'll highlight that.
So so Sanjay before we wrap up what's next for spine is a are we just going to continue improving the current
workflows and tech of already existing product.
Are you are you looking at newer product or you know solving new challenges for dealerships.
Like what is the what's next for you.
As I said right so we want to optimize this entire funnel of sourcing to selling and then after selling the servicing as well.
So you'll be seeing us launching newer agents which will specialize in one of these workflows like gradually.
So from merchandising which is leading to higher engagement you're converting those engagement into real leads and those leads followed up well to convert into apartments.
Right.
And apartment sure it increasing is is what we are doing right now which is which is further getting toward like a service appointment scheduling as well.
So we are we are looking at this entire funnel which we are optimizing through high end AI which is available across voice chat text emails and and and and and
across like multiple channels as well.
So this is what we are looking to build continue building in time as well.
And Sanjay are you seeing more dealers eliminating roles within a dealership using spine or you see more dealers supplementing with spine and then capturing more sales a combination of the two like objectively speaking.
What are you seeing.
I'm not trying to lead you down like oh we're not here to eliminate you know job roles because I just think that's yeah you know the reality is like
I've literally talked to dealers who are not hiring roles because of AI.
So I just like put that like we know that's happening.
But what are you seeing more.
What are you seeing more of.
That's my question.
And future hiding of course is not not not the way the dealers used to hire earlier.
Of course this is going to go down and they'll be like holding back on the top top performers who will negotiate on deals.
Build this human connections.
Right.
So build trust with the real deals.
The way the AI will come into the picture is all these speed execution consistency.
Some of these are the problems that AI is best at solving.
Right.
So so which is where they will keep on optimizing the technology for for for making their workflows better and better and more efficient.
Right.
So wherever human touches needed you need like people.
There's no no shying away from that.
Right.
So.
Yeah.
Right.
The robots cannot sell a car to me or you.
Like you need people to to to do the conversation to build a rapport and then eventually convert that deal.
Sanjay what what have I not asked you that I should have asked you.
I think I think I think why the dealers are using us and despite having like 20 different solutions.
In the market.
So yeah.
Why why are they leaning into you versus you know other players.
Yeah.
It's a good question.
The desktop technology and find it like superior.
Working well on the ground.
Right.
So.
Got it.
They do the pilot.
Impressed by performance.
Absolutely.
No.
Not the numbers.
Basically we when we pilot also we we prove that pilot is successful to a lot of lot of dealers that they initially use.
Use as a as a first set of dealers.
Right.
So.
So we prove it that it is working and then then we establish like the next steps.
Rather than.
Yeah.
Going with the with the with all these hype and hoopla that is that is happening all
across the.
Industry right now.
Amazing.
Well Sanjay.
I appreciate you coming on again.
I said this is part of our pre NADA AI spotlight series which is the whole point of it is
that there's been all this just new addition of products and capabilities and dealers are
you know what is good for me.
They're asking and so that's the whole point of the series to also call out what's not
working and highlight what is working.
And so I appreciate you coming on and also engaging with our CDG circles members who
had specific questions.
So that was fun too.
And with that said Sanjay Varnwall spine AI.
So you do some great things.
Keep up the great work.
I'm excited to follow your journey.
Thank you for having me here.
And then we would love to have dealers visit our booth at NAD as well.
Please.
And we'll put that in the show notes as well.
Of course.
So you know down below.
We'll put your website.
We'll put booth details spine AI and I'm sure they'll be able to see you
in the booth as well.
So if they want to meet you, you'll be there.
Absolutely.
Thank you.
All right.
Hope you enjoyed that episode.
Please give the podcast a rating.
Consider subscribing to the show and check the show notes for links to what
we talked about.
Thanks for tuning in.
I'll see you guys next time.
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