Digit Software is transforming how manufacturers and distributors manage their operations through what they call a "system of progress" - an AI-powered alternative to traditional ERP systems. With $3.3 million in funding, Digit targets the 87% of U.S. companies with fewer than 50 employees who have been locked out of expensive legacy ERP systems. In this episode of Category Visionaries, we sat down with Dan Koukol, CEO and Co-founder of Digit, to explore how his decade of consulting experience and hands-on CEO role at a manufacturing company shaped his vision for...
Digit Software is transforming how manufacturers and distributors manage their operations through what they call a "system of progress" - an AI-powered alternative to traditional ERP systems. With $3.3 million in funding, Digit targets the 87% of U.S. companies with fewer than 50 employees who have been locked out of expensive legacy ERP systems. In this episode of Category Visionaries, we sat down with Dan Koukol, CEO and Co-founder of Digit, to explore how his decade of consulting experience and hands-on CEO role at a manufacturing company shaped his vision for modernizing business operations software.
Topics Discussed:
- Why ERP systems have remained frozen in time while other software categories evolved
- Digit's unique "framework-first" approach versus traditional module-based systems
- The company's successful turnaround of Prodigy Disc as proof of concept
- Creating a new category called "systems of progress" instead of competing in ERP
- Leveraging Reddit and AI search for B2B vertical SaaS marketing
- Building a marketing team of two that generates significant leverage through AI tools
- The beachhead strategy focusing on distributors and light manufacturers
GTM Lessons For B2B Founders:
- Turn operational experience into category insight: Dan's decade of consulting for 100+ manufacturers and distributors, plus his hands-on CEO experience at Prodigy Disc, gave him unique insights that pure tech founders lack. He explains, "I can tell you if you're a manufacturer, you probably have a workbench that, you know, you have old inventory shelf and some plywood over it that you know, work on your tooling. Like we've been in the day to day, we've gotten our shoes dirty." B2B founders should deeply embed themselves in their target customers' daily operations to build authentic understanding and credibility.
- Create blue ocean through strategic language positioning: Rather than competing head-to-head in the crowded ERP market, Dan positioned Digit as a "system of progress" - deliberately avoiding ERP terminology with its negative connotations of being "slow, rigid, expensive." He notes, "Digit's not an ERP is kind of the framing. We are a system of progress for a system of action." B2B category creators should identify existing category baggage and create new language that reframes the conversation around their unique value proposition.
- Provide framework before features: Unlike traditional ERPs that "throw a bunch of modules at you and let you fend for yourself," Digit starts with a comprehensive framework showing companies exactly what they should be doing to succeed. Dan describes it as "a 10 by 10 grid like in Excel, where the hundred cells represent everything as a company you need to be doing to be great." B2B founders should lead with strategic guidance and frameworks rather than just feature sets, especially when targeting less sophisticated buyers.
- Leverage emerging channels for B2B vertical SaaS: Dan discovered that Reddit became one of their best lead generation engines, with communities around specific legacy systems where users complain "thread after thread." They use Reddit for both product development insights and lead generation. B2B founders should explore non-traditional channels where their target customers gather to discuss pain points, especially in vertical markets.
- Optimize for AI search alongside traditional SEO: Digit intentionally strategies to get mentioned across AI models like ChatGPT, Grok, and Gemini, using YC company tools to measure AI mention frequency. Dan explains they're "actively doing" this measurement on their internal scorecard. B2B founders should develop parallel strategies for traditional search and AI recommendation engines, as customer discovery patterns evolve.
- Build efficient teams through AI leverage: With just a two-person marketing team, Digit generates significant output using AI tools like Google's VO3 for video production and various automation tools for personalized messaging. Dan emphasizes how "revenue per employee, that metric is going way up" due to AI capabilities. B2B founders should prioritize AI-powered efficiency over headcount growth, especially in go-to-market functions.
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Sponsors:
Front Lines — We help B2B tech companies launch, manage, and grow podcasts that drive demand, awareness, and thought leadership.
www.FrontLines.io
The Global Talent Co. — We help tech startups find, vet, hire, pay, and retain amazing marketing talent that costs 50-70% less than the US & Europe.
www.GlobalTalent.co
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