There’s a significant evolution in consumer behavior and chemical industry priorities being influenced by digital transformation. Digitizing complex chemical data from unstructured documents to provide a more accessible online format raises an intriguing question – how can we leverage technology to reshape customer engagement and the overall landscape of customer interactions within the chemical industry?
Killer Quote: “Digitization in the chemical industry is not just about transforming data; it’s about transforming relationships.” – Ali Amin-Javaheri
- Creating a compelling a customer experience through accelerating digitization
- Biggest barriers to digitization within chemical companies and chemical industry leaders
- Organizing data through AI
- Overcoming the loss of customer intimacy through digitization
- How can digitization support a company’s sustainability journey?
Watch Victoria and Ali discuss Knowde and Digital Transformation:
Listen to the full interview:
Welcome back to The Chemical Show.
This week, I am speaking with Ali Amin Javahari, who is the co founder and CEO of Knowde, an innovator in digitization for chemicals. Prior to Knowde, Ali worked in sales and marketing for , ChemPoint and Ali is a graduate of University of Washington and the Kellogg School of Management, which is by the way, the best business school somebody could attend. We’re going to be discussing digital transformation in chemicals. Ali, welcome to The Chemical Show.
Victoria, thanks for having me. And I do agree that Evanston is quite nice. I did enjoy my couple years there.
Yeah. What’s not to enjoy? You made a good choice.
I think so.
So Ali, what’s your origin story? What got you interested in chemicals and brought you to where you are today.
I got brought up in this industry. My father worked in the space. He’s a chemical engineer went to school at University of Maryland and traveled all around and worked for an iconic American chemical company.
So I learned about it at a pretty young age. I was always super fascinated by it just because it’s this industry that’s hiding in plain sight, but at the same time, it runs the entire world and I just find it to be such a fascinating space. My personal interests are probably closer to tech side, but being able to marry the 2 things together, both tech and chemicals, I think is the perfect sweet spot for me.
So as I was. contemplating what I was going to do after I graduated from University of Washington. I thought, okay, I’d go work for some tech company. Amazon was starting to gain some footing. And obviously there’s Microsoft and others. But one random day I was walking around and I heard of, or I literally saw a sign of this company called ChemPoint.
And I was like, Chem, anything’s interesting. And I remember just going on Google and typing in and seeing what it was, but their website was not very good. So it was hard to tell exactly what it was. And long story short there, I spent 10,12 years at that company.
At the time when I joined, there was really no tech to speak of and not much revenue and not many clients. And, there’s just essentially a startup with big aspirations. And I thought that was just quite fitting for my background. What are the odds of finding anything chemical tech related in Seattle, right?
So I just thought it was, fate to some degree. And then as the company grew bigger and bigger, I think I just wanted to do it all over again. I wanted to start something. And back in 2016, I left ChemPoint and really thought deeply about what I think this industry needs and where it’s going next and decide to become a founder.
I’ve been in this industry now my entire career. I love it. Most people can’t say that. They’ve been in the whole life and they love it. But it’s been a wild ride and, I can’t believe that we’re already, six years into the no journey.
I didn’t fall into the chemical industry, just. It’s been part of our family for a long time, and, the opportunity is so big that, anything else seems small when you put it in comparison.
I like what you said about “it’s this big industry that’s hiding in plain sight”, right? Because people don’t, um, the average person doesn’t recognize. the number of chemicals that they interface with and the benefits of those chemicals. Now we hear a lot of chatter, obviously in the media about some of the downsides and the concerns about sustainability and circularity and other things.
But if we took everything away, we’d be naked and have no place to live. So it’s, we need to keep the chemical industry going strong.
I can’t agree more. Actually, right before this, I was at a coffee shop with a friend and I hadn’t seen him in a really long time. And he asked me what I’m up to now. I said I’m still in the industry and building another tech company and all that. And he’s dude, this whole thing with chemicals, I don’t get it.
Like this little small niche thing called chemicals. Like, why are you doing that? I’m like, you like that concrete countertop? You like the panel on the walls? You like that coffee cup that you’re holding? Yeah, you’re welcome.
But most people, they don’t spend a minute of their lives thinking about like how a product was created.
And it’s nebulous, right? Our industry doesn’t really speak to consumers. There’s no real reason to talk to consumers. Yeah. And anytime you’ve got an industry that is really opaque and hard to wrap your head around, and at the same time. When it shows up in the media, it’s never for good reasons.
It just creates this perception that’s inaccurate and that’s it’s unfortunate.
Yeah. I agree with that.
So let’s talk a little bit about Knowde. What sparked the concept and if you think about where it started six years ago what really sparked that concept and how has it developed over the past five or six years?
So in the industry, I’ve spent the majority of my time on the customer facing side. So I don’t understand like manufacturing and supply chain nearly as well. And so it was very natural for us to think about digital transformation from a customer perspective. And, as the primary mode of engagement between the producer and the customers through field sales and, documentation and stuff like that.
And most industries evolved beyond that, 10, 15 years ago, but this industry still relies on that considerably. So the thought was, how can we accelerate that the path to the way that things are done in other spaces? And as we really thought through the problem statement, the thing that we kept coming back to over and over again is that the product data in this industry.
Sits in documents, right? It sits in PDFs, presentations, brochures, all of that sort of stuff, like all this knowledge on the chemistry and what it does and why it’s used and the features and benefits and, like, all that stuff is stuck in unstructured text, paragraph form, right? With a lot of charts and graphs and words that kind of describe what it is.
And so as we thought about that, we said how could you ever create like a compelling customer experience if all of the stuff that you want to tell the customers about is sitting in a PDF, like that just doesn’t make sense.
Can I pause you on that really quick though? Is that not true of every industry? if we dial this back, and maybe not more in recent times, but if you dial it back 10 or 15 years, the vast majority of product information, regardless of what that product is, whether it be a book, a widget, a washing machine lies in static documentation.
But those other industries evolved. If you want to buy a pair of shoes and you go to adidas. com, they have a picture of the shoe. They have a product description. They tell you why that shoe is amazing. They probably have a video, and all those sort of things. And that’s their version of the product content.
And it’s impossible for adidas to sell more shoes unless they put that product content online, But in our industry, the content is a lot more complex. It’s obviously a lot more technical and that content is really hard to get out of the PDFs and into a webpage. Like a picture is a picture, right?
And so that’s an easy product page to design, but when you’re talking about, I’m just like a bunch of texts and charts and stuff it’s not as easy to translate. And so that’s how Knowde started. We said, look, got to figure out how to digitize all this product content. How do you get it out of PDFs and organize it and structure it and harmonize all this data?
That’s actually how we came up with the name Knowde. people always ask me what the hell is that? And it’s the node that connects knowledge, right? There’s all this knowledge that sits across these organizations and disparate systems and in people’s heads and all of that sort of thing.
And our job is to ingest all that information, organize it, structure it and make it accessible online. And so that’s the primary tech that we’ve built at Knowde which is the system that takes all this messiness of product information and makes it really clean and simple and easy to understand from a customer’s perspective.
Yeah. so I think, that’s clearly one of the opportunities from a digital transformation perspective, as you say the. Um, turning static into a bit more dynamic data and making it more accessible. What do you see is really, and you guys have been at this now for a while, what are the biggest barriers or concerns to digitization that you see within chemical companies and chemical industry leaders?
There’s many one is that there’s no clear roadmap for transformation. And, a lot of times we’ll go out and hire a 3rd party to help them develop that roadmap and those consultants a lot of times don’t have a deep understanding of the domain and the company and thus they get very generic roadmaps, that a lot of times for these chemical companies can be hard to execute on because it’s just, it’s too nebulous.
It’s okay, guys what literally is step 1? What do I do? How do I do it? And so a lot of times when there isn’t a clear roadmap and an understanding of what to do, you end up investing in things that don’t work. The C suite doesn’t want to continue [00:11:00] investing a bunch of money in tech when it’s I gave you 20 million 4 years ago, and that didn’t work, or it didn’t give us the payout that we expected or whatever.
And so the appetite goes down. How many chemical companies can you think of that actually executed customer facing digital really well that everyone looks up to? I still hear people talking about Ziameter. I don’t know if you’re familiar with that brand.
I remember that vaguely. Yeah.
That was the eCommerce platform that Dow Corning created and the fact that we still reference Xiameter as a a lighthouse project is wild. That was 25 years ago.
Yeah. Yeah. I actually started when I worked for Shell. back in the dot com boom and, early two thousands led the implementation of what they called the, we called the customer lounge, which was their customer facing platform. And that was also the time that Shell started investing in it was one of the founding partners of Elemica boy, there was a few others that have come and gone, right?
It’s been hard, but I can look back, I’m like what we were doing 20 years ago is not much different than what many companies are doing today. That they still don’t necessarily have a storefront don’t necessarily have the connections behind the scenes. If you want to connect your SAP systems and your ordering system.
So I think you’re right. There’s not a lot of bright shining stars that we’re pointing to in the chemical industry. there’s Some success, but there’s no slam dunk wins.
Yeah, there’s no same like wins and that’s why we found a notice because like we wanted to create that digital playbook and our belief is that step one is to get your arms around that product data because if you’re going to launch an e commerce system, every product needs to have its own product page.
So how are you going to launch an e commerce system if you don’t have the content to put on those product pages? That’s a problem that has to get solved.
Yeah. So how does Knowde help with that? Are you given the playbook? Are you actually doing the transcription of taking something from, let’s just say from PDF into a digital format?
Yep. So that’s what our tech does. So a company can basically give us access to all of their PDFs. And within a matter of a couple of weeks, we digitize and organize and structure all of them. So we invested a lot of money in being able to build the ingestion engine. I don’t want to get too technical, but I’m trying not to use the term AI because, but there’s a lot of tech that is required in order to be able to do that. And that’s what we focused on building all the tech that’s necessary to structure all that data
In some ways, I guess the transcription tool.
So then how does this play out? I think, you talk about this organization of data and I think that still persists. As we were talking about earlier, The Chemical Summit occurred a couple of weeks ago and one of the big topics was around AI and digitization and clearly the challenge recognized is that we have an infinite amount of data or so it seems, right?
We’re awash in data, but we can’t necessarily access or use it. Are you seeing, or are your customers seeing the benefits of that and how are they seeing the benefits of that?
Yeah, so the benefit is that you’re finally able to enable all those internal systems and external systems. So I’ve used the e commerce analogy a bunch of times, just because that’s the easiest 1 to wrap your head around, I’ve heard of failed project after failed project in this industry over the past 10 years, everyone, wanted to launch a quote unquote customer portal, right?
That term is used a lot. And, they go out and they buy some platform, Salesforce or whatever, and they start building custom tech on top of it. And, they’re about to launch it and they realize, wow. There’s no information in the portal that seems like a problem or they’ll launch it without much information in the portal.
And then they’ll be like, why don’t customers love this? Why are they not coming back? Why do I have to keep investing in this? And it’s just been this cycle of failed customer facing digital projects. And, as we talk to everyone in the industry, like all roads led back to the same problem, which is that the data is messy and it’s not organized. It’s not structured. And so they’re not able to feed their systems in a way in order to make a compelling customer experience.
Yeah. So one of the other, one of the barriers that. In the hurdles, I guess I’ll call it a hurdle that companies face as they try to implement digital platforms is the concern that they’re losing customer intimacy and their customer relationships, right? The chemical industry is one that thrives on personal relationships.
There’s a bit of this macho mojo of sales and the relationships that exist. there. How do you overcome that objection? And what do you see your customers saying about this concern of loss of customer intimacy and how they’re overcoming that?
That topic comes up a lot. When somebody decides to buy a Knowde, they’re going through a three step evaluation process. The 1st step is what’s the the most basic sort of assessment. The next step is what’s the risk? Chemical companies, love to measure risk.
I’ll be measuring risk. It’s everybody should love risk, but yeah, keep going.
And then 3rd is change management. And so now we’re starting to get into that topic, right? And this comes up a lot, which is okay. How did the dynamics of our organization change? How does this shape our field sales team? Does this mean I got to create an inside sales team? What’s this digital sales team that you guys speak of, all those sort of questions come up and then inevitably will customers want this?
I thought our customers want to, shake hands and sit across the table from each other and all that sort of stuff. Generally speaking, I still agree with the field sales teams like they there is a role for personal touch. That will never change. Even our company Knowde, we don’t really sell to companies unless we meet with them face to face.
I value that. Personal touch because otherwise, like you can’t, it’s harder to build trust and credibility and all of those sort of things. So I don’t think that’s going to change, but I do think there’s a role for digital that people are underestimating. I think it’s false to say that you can’t build relationships online.
Like you can’t, it’s just different. One way in building trust with a customer is by being really responsive to their needs. So in today’s world, the customer has a technical question about a product. The sales rep listens to the question, takes a note, goes back to their TSMD team, gets an answer, and then comes back and translates it to the customer and that cycle can take a week.
However, if you do it online, it can take maybe three minutes. And there’s a different type of relationship that gets built online. And I do think as a new kind of generation of folks move into the the customer’s customer, like the supplier’s customer. The expectations are going to change.
They’re not going to have time or as much time to meet in person. They just want to self serve or get a quick response from someone.
Yeah. I think one of the biggest challenges, and I think this is where some of the, my observation is some of the value opportunity it’s harder to translate into an online tool is the nuance and the why behind it, right? So I think we’ve all struggled with, we’re searching online for an answer and it keeps serving up the wrong answer because clearly, number one, I’m not asking the right question.
Number two, you’re not understanding the question I have. And yet. And so maybe I get an answer in three minutes. But it’s not the answer I’m looking for, right? It’s an answer. And I think part of the sophistication of the chemical industry sales is also having those deeper conversations to be able to really understand value and answering the question. That was intended, but not asked figuring out, Hey, I’m looking for product information. I can give you X. Oh, but that’s not really what you want, but you’re really trying to get is why. So is there an opportunity space within digital to resolve some of that? Or is that just the marriage between online and in person?
That’s a great question. Whether chemical companies like it or not, their customers are going to go online, they are online right now. BASF. As far as I can tell, gets the most number of visits to their website than any other chemical company in the world. It goes BASF. and sign a peck. Then you have Dow DuPont and so on. And BASF is somewhere around 1. 1 million visits a month. And out of that, some percentage are investors. Some percentage are. People that randomly dropped into their website. Some percentage are, kids in school, that sort of stuff.
But some percentage is also customers. And I would bet it’s probably around 20 to 30%. And when they come to BASF’s website, they’re only looking to do one thing, to browse the catalog, find products, learn about its value propositions and so on. And so think about that would mean there’s about two to 300,000 customers.
And these aren’t small customers that can be from 3M and P&G and Estee Lauder. Anybody with an internet connection, that’s two to 300 customers. There’s no way that field sales team is touching two to 300,000 customers a month. And so when they come to the website, let them browse. But if they’re hanging out on your website for five, seven minutes, why don’t you start a conversation with them?
Hey, I see that you’re, browsing the catalog. How can I help? Any questions about this product? I can help answer. You’re probably working on application problem. Otherwise you wouldn’t be on my website. So you don’t want to talk about the application problem. And so customer can certainly say, no, I just want to self serve, but, there’s an amazing opportunity right there to talk to a lot more customers and build a relationship.
So just Knowde offer the opportunity to do that. Do you guys have that technique where you’re monitoring traffic time and then surfacing a prompt to a customer service person.
Yeah, we’ve built a lot of tech. I’m purposely trying not to talk too much about Knowde.
That’s okay. I’m curious.
But yeah, we’ve built like this end to end customer portal of sorts that can be embedded into a supplier’s website. And it gives them all like the tooling and the features that they need to be able to serve up the catalog and product pages and be able to have conversations online and all of that sort of stuff.
Yeah. Yeah. And I ask that because I think again I think we’ve all faced the I’ve certainly been on plenty of websites where I’m looking for an answer in within three seconds. It’s how can I help you? And I’m like, okay, chat bot, please go away. I don’t need your help right now. I’m trying to I, if I get a real person that can help me really answer my question that’s very different or just back to your point of there’s this whole element and desire for self discovery before you jump into maybe a person to person discovery as it relates to products and questions and answers. Yeah.
Imagine. Yeah, go ahead.
No, you go imagine what, tell me what I’m imagining.
Those two to 300,000 customers that are visiting basf.com,
If they were to put call it 15 or 20 of their employees behind a computer to start engaging those customers when the customers want to be engaged obviously, don’t be annoying. I genuinely believe they’ll generate a ton of customer leads, and they’ll start to drive real organic growth. That’s where the customers are. Like, imagine how hard it is to get in a car, go visit Estee Lauder and talk to them at that exact moment where they’re thinking about a problem that you could solve That’s a really hard thing to task a field salesperson to do. In the meantime, there’s probably 10 people from Estee Lauder on your website today, signaling that they’ve got a problem that they want you to solve.
And so how I would just think that from a customer’s perspective, it would be really cool if there was a live human on the other side that knew something about that product that could actually help with discovery.
Yeah I agree with you. I agree. I, and I think there’s opportunity and I feel like in maybe in the B2C space or in the B2B services space, there’s some of that actually happens, if you’re a subscriber to, I’ve got some web based tools I use that I can jump on and ask a call and a real person answers or, get on a text box and a real person answers my question and it is valuable because they understand the product better than I do and so they can.
Redirect me pretty quickly and there was a lot of value there. So I think this whole opportunity, I do think there’s this whole reshaping of where value is found and how customer engagement occurs. That’s still, we’re very very early days from the chemical industry.
It’s got some catching up to do.
Yeah, absolutely. So let’s talk a little bit about sustainability because that is the other big trend that we see, right? That if I think about the two big things that cost chemical companies are really focused on today, number one is digitization. Everybody’s trying to figure out what their digitization and digital [00:25:00] transformation path really is. And the second piece is because it’s become. It’s such a critical topic. It’s always been there. It’s probably been called different things at different times, right? Because I’m a full believer that the chemical industry is inherently circular already, right? And we’re circular because of efficiencies and because it’s cost effective and stuff, but sustainability is a real focus. How does digitization tie into that? Where can digitization support a company’s sustainability journey?
Yeah. Their customers are going to demand this information more and more over the coming years. I would imagine the number of customer questionnaires. That a lot of these companies have had to fill out has gone up dramatically over the past 2 years, and it’s only going to accelerate because those companies obviously want to make their own claims and they need the data in order to make those claims.
I don’t know how big a typical chemical companies regulatory team is, but it’s going to get overwhelmed soon with these sort of customer requests for data number 1, as the data starts to surface, right? Because a lot of people are still trying to figure out how to measure like the footprint data.
They’re still trying to figure out, like, how do we ensure that we’re all measuring things on an equal loving level playing field because you can measure things a little bit differently. And but once that does become more consistent and those sort of things, I do think that companies are gonna be forced to start to first privately share this information.
And then over time, it’s going to become. More public information and, companies are going to want the ability to be able to communicate which products in a portfolio do meet certain criteria. And, we’re already seeing that on a lot of chemical company websites, right?
They’ll feature certain products and they’ll tell an amazing sustainability story around it. And so that’s step 1, which is pick those 4 products in your catalog that are really good and really stress those in the market. But then over time, what’s going to happen is that customers are going to expect almost a filtering capability where they can say, this is the criteria that must fill.
And only show me the products that meet this, compliance expectation. And we’re not there yet. A lot of this data still is private. Some companies share with their customers and I would imagine some don’t. and as customers, their demands go higher and literally say, look, if you don’t share this data with me, I’m not going to buy from you.
Once we get to that point. Then, these chemicals are going to have to invest a lot of money in order to be able to go out and really make sure that they’re measuring all this stuff and, communicating it correctly and digital is just going to become a more efficient way of being able to share this data with their customers.
Yeah. That makes sense. And I think your first point about standardization, just the standardization of, recording and reporting, right? So we need to standardize those measurements and there’s a lot of different work going on. And I have friends that work directly in the ESG reporting space and they’re already referencing FASB and some other acronyms that that are really trying to create standards. A standardization of reporting and measurement, et cetera. And then, yeah, the opportunity to surface, information more quickly. I do think this aspect of searchability, of stand, of sustainability metrics and using that for formulation decisions we’re at early days, but clearly it’s going to be happening because just because of the questionnaires that. That customers put in place around their supplier information.
It’s coming. I can tell you without any doubt that it is a topic in the C suite. I’ve had more than my fair share of CEOs say, that this is one of the top two, to three topics.
Yeah. And I know you work globally, do you see this more of an interest in certain regions or do you see this broadly or certain end use markets or more broadly?
I mean, anything that’s closer to consumer typically that’s where the noise starts. Personal care, home care, food, those sort of things. But I don’t know that we have enough data points that would say whether it’s more or less than 1 region. A lot of the chemical companies we work with are global in nature and I would imagine the noise is probably maybe a little bit more in Europe naturally, but I don’t think North America is that far off.
Makes sense. Awesome. This has been great. Ali. What’s next for you and for Knowde, what should we be thinking about in the world of digital in 2024, which is right around the corner
It is crazy how fast this year’s gone by the way.
A very fast year.
About our age. I think they always say that time speeds up the older you get. So don’t tell me how fast it is, but yeah.
There’s a lot of headwinds in the industry right now, right? Like demand has softened pricing has gone down drastically. And so it, when these sorts of things happen, shareholders usually put a lot of pressure on chemicals on a very finite timetable, the next quarter or the next quarter, which kind of pulls focus away from digital a little bit, because if you implement something digitally, like that doesn’t impact next quarter’s financials.
And so right now I would say a lot of people, a lot of companies You know, just trying to do what they have to do to get through, these couple tough periods. But I will say there’s a lot of executives and leaders in this industry that, been around long enough for these sort of event they’re numb to, and, they know that digital is a long game and that they have to invest, they have to make sure that their companies are prepared for the future. And that’s where we spend most of our time, like trying to find those folks that have longer time horizons and think about like where they want to be in five to 10 years and, our whole thing is when we meet down with a chief digital officer, CIO or whatever, and they show us their 6 year customer experience roadmap as to how, a, in 3 years, we’re going to launch our portal. And in year 4, we’re going to do an SAP, there’s all these very long sort of timetables.
The 1st thing I would say to them is that we can take this 5 year roadmap and crush it in the 5 months , and that’s what we’re focused on.
Awesome. That’s great. I can’t wait to see where this goes, I’m a digital fan have been doing this, like I said, for 20 years started, back in the dot com boom. And I think we’re finally really in the dot com boom for chemicals. So I think a lot of growth and opportunity still ahead of us.
Indeed. Indeed. I think we’re finally there. I think we’re finally there.
I think so. I think so. Ali, thank you for joining us today on The Chemical Show.
Thank you. It’s good to see you.
Absolutely. And thank you everyone for joining us today. Keep reading, keep following, keep sharing, and we will talk with you again soon.
About Ali Amin-Javaheri:
Ali Amin-Javaheri has a clear vision for digitally transforming the chemical and ingredient industry. He is a veteran of the space, with a firm grasp on what it take to build a software startup in Silicon Valley. As co-founder and CEO of Knowde, he leads the team that is driving the next wave of innovation in the industry. Knowde instantly transforms how customers discover, engage and transact with suppliers and distributors online. More than 8,000 of the world’s largest suppliers and distributors trust Knowde.
Amin-Javaheri has raised three rounds of investment totaling more that $100 million from Silicon Valley’s top venture capital funds. Knowde’s investors include Sequoia Capital, Coatue, Refactor Capital, Bee Partners, Cantos Ventures, Sound Ventures, TQ Ventures, K5 Global, Mantis VC, Knollwood, 8VC, and FJ Labs and others.
Amin-Javaheri and the founding team launched Knowde in 2017. Prior to that, he was an early employee and an executive at ChemPoint, a startup in the chemical space that grew to over $400m in revenue. He is a graduate of the University of Washington with a BA in Information Systems, and holds and MBA from Northwestern University’s Kellogg School of Management.
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