Where Do My Returns Go?: Dennis Hoang Wants to Get Value From the Stuff You Don’t Need With Patturn
Have you ever returned something to Amazon and wondered where it went?
And it doesn’t have to be Amazon. Think of any digital retailer you have used, or physical store you have visited, and imagine a time when you returned something that either didn’t work, broke, or wasn’t to your tastes.
That item doesn’t necessarily go back on the shelf of the store as “Used.” Sometimes it’s sent to a landfill. Sometimes it’s sent to a warehouse, where it sits for years. And all the while it still contains value: each material, each piece, potentially holds the ability to help build something else.
In today’s world, returning items is as easy as ever. For an item from Amazon, all you need is a box and you can place it on your doorstep to be sent back for whatever reason you have: even if you just didn’t like it.
With returns piling up, and all kinds of logistical and financial complications involved, there is a grand unmet need for sophisticated, understandable returns management. Dennis Hoang hopes to provide that with Patturn, a web-based, return management software suite.
His story is a remarkable one filled with passion, innovation, and success. Going into beta later this year, he is still on the journey to fully realizing his vision – but Dennis has come a long way and knows how to get a great idea done.
An excellent overview of the returns industry
Creating a New System
Dennis grew up around the returns industry. His parents started a returns management company that he’s worked at for almost 15 years. During this time, Dennis has not only become much more familiar with how returns work, he’s also learned what is needed in the industry.
“One of the issues that my parents came across was never having access to a system that really helped them with their business,” Dennis said. “[T]hey tried creating one internal system by using like offshore engineers, but it didn't work out as well as they wanted to and from there they tried to switch to web based inventory management systems, but the ones currently available on the market assume an item is new. … We're in the returns industry so that doesn't help them out too much.”
Dennis teamed up with his two brothers, one with engineering background like himself and one a software developer, to create an in-house returns management system for their parents’ company. This laid the groundwork for Patturn. They’ve been beta-testing it amongst themselves and it has worked “tremendously.” Now it’s time to share it with the world.
There isn’t another software product quite like Patturn – at least, not one that reaches the same audience.
“So there's some companies that do basically the same thing like us … but they keep it strictly in house. And those people that keep it strictly in house are … basically very successful companies and they only work with big retailers. For us, we're a little different because we want to work with – we want to make an easy to use system – for more smaller to medium businesses.”
Smaller businesses aren’t as familiar with what’s on the market or how to use an inventory management system, Dennis explained. Many of them use “pen and paper” to run their operation. Dennis and company must demonstrate the value of a system like Patturn to them.
“[I]t’s hard to scale,” Dennis said. “Especially in the reseller industry if you don’t have something to track all this – check your inventory very well.”
Dennis and company are essentially targeting a market with a new system that the market doesn’t know they want. Marketing a new product can be as difficult as creating it.
Selling an Idea
If you’re an entrepreneur, you may have struggled with convincing others that your idea is as valuable as you think it is. The more technical it is, the more difficult the situation becomes. That’s why Dennis thinks the greatest challenge so far – and an unexpected one at that – is trying to explain Patturn.
“I think the most unexpected challenge is trying to explain this in an easy way. … Like trying to explain it in a super non-technical, easy way where people would understand it in the first 30 seconds … I think that's been my biggest headache … The industry we're trying to tackle isn't super technical and they're pretty software adverse.”
If you visit Patturn’s website, it lays out the potential of their application bit by bit as you scroll down. Even still, Dennis and co. are redesigning it: “[H]opefully with the second iteration it will make our message, our marketing message, a little more clear.”
As Dennis explained, an idea – a product or service – isn’t going to make sense to a potential customer if they can’t discern how it’d be valuable to them. “[T]hat’s what we’re trying to fine-tune,” Dennis said.
Communication is key – even with the greatest idea in the world, if you can’t explain it to others, it’s never going to click.
Building on One’s Experiences
No one becomes a returns management expert overnight. In addition to his familial upbringing, Dennis’ studies in Engineering and Finance also prepared him.
As he explained, the returns industry is “a very big numbers game.” This is because of the principle that as soon as someone returns an item, it loses value. A reseller must try to make the item valuable again – or, as valuable as it can be.
“In terms of the Finance experience, this is where I heavily rely on it because there's a lot of cost considerations and there's a lot of kind of like forecasting that we have to do, that has to be built into the system to be able to help us determine … what's the next best route for when a return comes into our operations.
“Because what happens is we get customer returns from different retailers. … And we basically don't know the condition of it. We have to open a box and basically see what we have to do next. It could be new. It can be used. It can be broken in half.”
Dennis used a computer as an example to illustrate this dilemma:
“[A] retailer sends us the computer, but we don't know the condition of it. … It's our job to recapture as much value from it as possible. … There's a lot of interesting assumptions and different metrics you have to measure. … there's a lot of little nitpicky finances that are involved in reselling businesses in order for you to actually make money.”
So reselling involves a lot of very difficult justification. How and why do you value something at a certain price point? And, if you’re given a completely botched piece of merchandise, where do you look for value in it? How do you begin?
As you can understand, there are several challenges in the reselling industry. Dennis and company have been able to overcome them with expertise, dedication, and a certain vision of what they want to create.
Helping Others, Connecting With Others
Innovators have an innate desire to improve things for other people. I have learned from Dennis and other small business owners and entrepreneurs: whatever technical or industry focus they have, their prime motivation is helping others.
“So my biggest passion is: I've always been very keen to helping others,” Dennis said. “Social-related work, anything, like especially trying to join the Fort Worth community and the startup community. It's not super there yet. …It's not super connected. And that's something I would like to see. But I think my biggest passion is, you know, kind of the generic I do want to help others but I want to help others in a different way that people don't typically offer.”
That’s the unique opportunity the entrepreneurial world gives those who want to help others. Come up with a product, come up with a solution, come up with an idea that helps people out in a manner they may not even be aware of.
But the joy of connection in the business world isn’t just found by offering others a product or a service to help them out. It also comes in reaching out to others in the entrepreneurial world.
For an inside look at how the COVID-19 pandemic has affected Dennis’ networking, listen to the accompanying podcast at the top of the story.
“I think the greatest motivation for me so far has been, you know, being able to work with individuals like Walker, Lindsay [Accelerate DFW employees. – ed.], you know, like just honestly soliciting very, very actionable advice. … simply asking for help in the startup community really goes a long way.
“And that's what, that's something I realized like, if you just ask, like, they're a lot of people, especially in the software startup community, [who] really are open to helping you out as long as you ask. And as long as you're engaged and as long as you can kind of reciprocate that help as well.”
It also helps to know where to look for help. Presently Fort Worth may not have a great tech-startup presence, but that isn’t the case in other Texas cities like Dallas or Austin.
“But I think you just have to find the right ones to connect to. … Me simply going on Google and putting ‘startup Dallas’ goes a long way. … It tells you all the resources in Dallas. What accelerators there are … just recently read an article ‘Here are the big 20 startups to look out at in 2020 that come from Texas.’ And then, especially if you go to Austin … there’s so many different little tech startups, big tech companies already are very established over there and having more access to startup communities or even mentors is a lot easier if you go to like Dallas, Houston or Austin.”
So even when Dennis couldn’t find another tech startup in Fort Worth, he looked to other Texas cities for the right resources. Now, he himself is a tech startup in Fort Worth, and future ones can reach out to him.
Learning from Others: Running a Beta
Patturn will enter an invite-only beta later this year. According to Dennis, they’re currently seeking three more beta testers, for a total of five.
“We want to see if our platform works for them. … are the five beta testers that we add on going to see significant difference in some metric that we have? Are they going to see a big difference, a stark difference, a small difference, or does it make it worse for them, or does it work for them?”
Placing one’s idea out in the open for others to use and critique – even for a small, invite-only beta – has to be a very nerve-wracking task. But Dennis is excited.
“ … I want to see if what we're doing is the right way to do it. Honestly, I want to see, like, ideally from our feedback process that we do. I want to see if we could improve the system even further, like, we want to talk, we want to do weekly meetings with our beta testers to see, ‘Hey, what feature would you find useful?’
“In terms of the returns management system that we're building, there's not one like it on the market right now. So we don't have any serious benchmarks, so what we're doing is how we operate business and we want to see how others do it too. So if we can get valuable feedback into seeing how they do business we can kind of create like a big … solution where if it works for these five guys, it might work for these thousand guys, too.”
Patturn has been a project years in the making. Dennis has put his passion into it, from an upbringing in returns management. With this beta, he will experience seeing it used by others for the first time. It’s an important step for any software entrepreneur.
From Family Company to the Business World
Looking back over the years, Dennis understands his biggest accomplishment to be his creation of an internal solution for his parents’ company.
“My parents have always wanted something like that and the fact that we were able to create that just for them is, I think it's a big personal accomplishment for me. And, you know … working with them for a good portion of my life and seeing the system work the way they wanted to, I think, is a very proud accomplishment of mine.”
But that was just the first step. Now Dennis has tailored this system for the world. Whether it works the way thousands of companies across the U.S. want it to is yet to be seen, but soon Dennis could be providing small and medium businesses everywhere the returns management solution they need.
Note: The quotations may have been edited for grammatical purposes and to remove chit-chat phrases ("you know", etc.) or repeated words ("and, and", etc.). The audio in the podcast may have also been edited to remove chit-chat phrases, repeated words or long periods of silence.