How I Built This with Guy Raz - How I Built Resilience: Songe LaRon of Squire

Episode Date: July 23, 2020

When Songe LaRon founded Squire in 2016, his mission was to use modern technology to help run barbershops, which are using his app in the U.S., U.K., and Canada. With a recent funding round of $34 million, Songe is hopeful about expanding Squire's reach, but first, he wants to help barbershops survive the COVID-19 pandemic. These conversations are excerpts from our How I Built Resilience series, where Guy talks online with founders and entrepreneurs about how they're navigating turbulent times.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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made it feel less like a visit and more like we were actually living there. Plus, taking a trip is the perfect time to host your space on Airbnb. Your place with all of its personal touches and its amazing location could make someone else's vacation even better. Your home might be worth more than you think. Find out how much at Airbnb.ca.ca. Hey, everyone, and welcome to how I built this resilience edition. On these episodes, we're talking with entrepreneurs and other business leaders about how they're thinking creatively during this very disruptive moment. And today, my conversation with Song LaRan, the co-founder of Squire. Squire is an app that connects barbershops with clients. Song founded Squire in 2016 with his best friend, Dave Salvin, to modernize the barbershop experience.

And nowadays, their app is not only booking appointments, but also helping barbershop stay open, if they're allowed to. I spoke a song a few days ago about Squire and the barbershop industry, but first, song let me know that he actually wasn't at home i should mention that you are actually in an office of a barbershop right now in connecticut um which you can you can hear a little bit of it behind you can you hear it um no that's fine that's fine um so so first of all are barbershops in connecticut open yes yes they are um they are open i think connecticut is probably phase three or or whatever, the phases where barbershops and other service-based businesses are open.

So, yeah, they're open for business. And what's the protocol in there? Are the barbers wearing masks and the customers wearing masks? Yeah, barbers wear masks, customers wear masks. There's no waiting in the barbershop anymore. Customers will have to wait outside or in their car until their appointment time is ready. And there's also, you know, social distancing between shares.

They spread out the shares so that they're, you know, They're servicing less, you know, fewer customers as a result. I always say that barbers are probably one of the few types of professionals that are very well equipped in this new environment because they actually go to school for this. In order to get a barber license, you have to study, you know, disinfecting and taking different precautions. So, you know, unlike, you know, maybe waiters or other types of people who are providing services, I think barbers are one of the few that actually already had to be. to get licensed and go through education, you know, to be prepared for this environment. So I'm a big proponent of a barbershop to be opening. Yeah.

I'm in California and now barbershops are closed. And I have to be honest, like I'm a little, I'm still nervous about, I would still be nervous about going. You know, I've given myself two very bad haircuts over the last six months with clippers and my kids too. But what, I mean, when you go now to a barbershop, what are they doing? Everyone's wearing a mask, but are they disinfecting the seats between customers and, you know? Yeah, they're disinfecting.

I mean, they already have to disinfect tools between every cut that should be doing that. But now they're also disinfecting the seating area. Many of them are using disposable barber capes or they're using just one per customer so they'll have a supply ready so they're not reusing the capes. A lot of them are not doing certain services. They won't do beard work or they won't do shaves, anything that would require the client to remove their mask. You know, I think that there hasn't been a lot of evidence of barberschards being one of the high transmission services. Yeah.

With anything, there's risks. There's just risks, you know, walk out outside any day and there's going to be some risk involved. And it's just a matter of, you know, the balance of how much you want that service. So it makes sense, you know, if you don't feel comfortable getting a haircut. Yeah. There was this article you probably saw it a couple days ago of a hair salon where, you know, where two of the stylists had tested positive for COVID, but none of the more than 130 customers that went in,

you know, over the course of the few days, tested positive. Everybody was wearing masks, and it sort of suggests that masks really do work. Masks really do work, yeah. If there was one thing I wish everyone could kind of agree on, I think that, you know, we get mass work. Yeah, can we just say that right now? All of those people who are on the hike that I went on over the weekend,

who were not wearing masks when you passed by me on the trail, that was this wide. Please wear a mask. Please. All right, let's talk brass tacks here, Song. So I mentioned a little bit about Squire. For people who don't know the app, tell us more about it. Yeah, so Squire is a business management and point of sale software focusing on barbershops. So we do essentially everything that a barbershop needs to run their business,

from handling the booking interface to the back end inventory. It's really customized specifically for their barbershop industry. And then on the consumer side, as a client, you can actually find a barbershop, book, pay, and tip all in the app or on the website. And what's the business model? How do you guys make money through the business? The main ways from handling the payment processing. So that's really core to our business. There's a subscription component.

So the shops that use our platform will pay $100 to $250 a month. And then there's a customer booking fee. So if you book and pay on Squire, you'll pay about a dollar extra, and that revenue goes to Squire. I mean, most people don't know this, but a lot of barbers are independent contractors. You may go to a barbershop and they may have a chair there, but they actually are their own business, right? Yeah. So there's two central models for barbershop business models. One is what you mentioned, which we call kind of a booth rental model, where each barber is essentially an independent contractor.

they run their own business, they manage their own schedule, they go and come as they please, and then they pay rent to the owner, usually on a weekly basis. And then the other model is what we call a commission model, where those barbers are treated a little bit more like employees. They have certain hours that they come, and in that case, they split the percentage of the transaction with the shop. Usually it'll be 6040 or 50-50, and the owner will get a piece of every, of every transaction.

You co-founded this with your friend Dave Salvant. Tell me how you guys had the idea. I know, I mean, you studied philosophy as an undergraduate, and then you went and got a law degree, and Dave was an old friend, I guess. How did you guys come up with this idea? Yeah, so I actually, prior to Founder Squire, I was at a corporate law firm,

and Dave was actually in business school, and both of us wanted to do something more entrepreneurial, didn't want to go to corporate route. So we would just brainstorm my ideas on the weekend. And we eventually stumbled on the idea of barbershops. And the idea came out of our own experience. I haven't gone to barbershops for decades. Like most people I started going to my dad as a kid, around six or seven.

And the experience of going to the barbershop hadn't changed. Very antiquated, low-tech industry, cash-based, need to call to make an appointment, long wait times. So all of those pain points that we had experienced formed the basis of why we came up with the idea of this is something that we wanted to work on. Yeah. My barbershop, they don't take appointments. You have to get there when the doors open at 8.30 and they have a chalkboard. And there's usually a line and it's cash only. It's 35 bucks.

And you can get there at 8.30 and you might only get an appointment at like 1145. And some days I'll ride my bike down there at 830. And then they only have an appointment at a time where I have a live interview. you and I can't get an appointment. I can't get a haircut. But basically, that's been the model for forever and ever for most barbershops. Yeah. And that's what we're solving because that's not really an ideal experience for you as a customer. And it's not a good experience for the barbers either in terms of efficiently running their business. But getting a haircut is such a great experience and it's such an important part of your life that you're willing to go through

you know, that poor our customer experience to get the service. But we think that we can make it better than that. How have you, like, how do you approach barbershops? I mean, I have to imagine, like, there are a lot of barbershops that are like, I don't want to give up my cash or I don't want to give up, you know, a percentage of my business or a percentage of my income. I mean, it's presumably you get some pushback from potential customers. So how do you make the case for people to sign up?

Yeah, I mean, we sell to them is that this is going to make their lives. easier. This is going to save them time, and this is actually going to enable them to be better business owners and make more money. And we can show them that that's what the software actually does. Early on, we did get more pushback from cash-only shops. So our focus was more on shops that are already taking cards, but that's really the trend just in the world generally. Consumers are used to paying for services with cards. So the shops that are cash-only, There will be some segment that just doesn't want to pay taxes, quite frankly. But, you know, we're seeing more and more, particularly, you know, the newer shops that are opening,

they understand that if they want to meet their consumers and provide a really great experience to their clients, that they have to kind of accept cars. And it enables them to charge more. You know, we know that it says people will pay more on card versus cash. And if you want to charge $30 a haircut, $40 a haircut, as is the case in many, you know, many cities. It just makes sense. have to imagine that bookings are significantly down because there's so many states you can't go to a barbershop. Yeah, so bookings definitely took a dip when the shutdown started. March, April,

our revenue essentially went to zero. And we also decided to waive all of our subscription charges to current and new customers until October because we knew that their revenue was also going to go to zero. We didn't want them to have that overhead. So as a result, you know, we expected the Squire essentially wouldn't be making any money, but we were okay with that because this is just such a difficult time. What we have seen, though, is that shops, as our customers are reopening, they are getting booked out. They're getting booked out relatively fast, and then their bookings are continuing to stay consistent. You know, that just kind of speaks to how much of a need there was, like a pent-of-demand from their clients to get haircuts. And I think that there's

something about just the barbershop experience and the community element of it that people, you know, men in particular really look forward to that normalcy and to being able to get a haircut and feel great about themselves and feel the way things were they were before COVID. So we're actually seeing it for the shops that are reopening higher than usual bookings. And, you know, we'll see how that trend continues in the months to come. So far, that's what we're saying. There's something I read that you had said about barbershoping. shops. You call them a fail-proof service, which I think is right. You know, I think you said,

look, they bring in roughly half the population that needs grooming. But this pandemic, which nobody predicted and nobody anticipated, has shown that nothing is fail-proof. Everything can fail, even the most resilient ideas. So how have the past few months kind of made you rethink your business model? It's made me understand that you can never predict the future. There's always going to be an unknown, unknown. We always thought that a recession was coming at some point. Right. You know, the gravy train can't go on forever. I always thought that our business was, would fare relatively well in a downturn because, you know, people will continue to get haircuts. And we've seen this, you know, in the past that these type of services, you know,

tend to remain consistent in downturns. I mean, this is a total black swan event. I didn't, I just, I never would have predicted a pandemic at the scale. But if anything, this has made me believe that our business is even more resilient than I thought before, just seeing how we've been able to kind of adapt to the reality and make changes on the fly, push features that we know our customers need during this time. And as a result, what we've seen in the last two months, actually more inbound and more customers signing up than we ever have in the life of the company. When we come back in just a moment, we'll hear from Song about running a business during a global

economic crisis and his plans for getting Squire through the pandemic. Stay with us. I'm Guy Raz, and you're listening to How I Built This Resilience Edition from NPR. Hey, welcome back to how I built this Resilience Edition. Last month, Song LaRan was able to raise some pretty significant venture capital, but he's taking extra precautions to make sure that this influx of cash will last squire for the next few months. Song, I know you guys did a round that you raised more than $30 million during this crisis, but I have to imagine that you're trying to keep your cash balance sheet relatively strong and probably are cutting costs and trying to be fairly careful about how you spend cash

in case this lasts a long time, right? You need that cash to last to last to get you through this economy. crisis. Yes, yes, absolutely. You know, when we started seeing states reopening, it was a positive sign because our revenue started rebounding relatively quickly. In fact, it may and June exceeded pre-COVID numbers just because of all the new business that we're bringing on. So that kind of showed, okay, things are trending toward best case. And then now we're seeing states closing again, which we didn't really expect like California is reclosed. So it just goes to show you can never really know. But, um,

It's always safe to assume the worst case and be prepared for the worst case, which we were prepared to go to zero revenue for over 12 months. Wow. I thought that that was in the realm of possibility. We're getting a bunch of questions on Facebook from our audience. I want to ask you a question from Dante Richardson. What are some principles that you've discovered and executed over the course of your entrepreneurial journey that have contributed to your success? One of the principles is, I believe, in bringing the best people into your team and really looking for people that can complement your skill set and are better than you or what they do. And if you're an employee at a big company, a big corporation, you want to be the smartest guy or girl in the room.

You want to excel over other employees so that you can kind of move up the ranks. And, you know, that's how you'll be successful. As a founder, you do not want to be the smartest person in the room. Right. You want people in the room who are way better than you at what they do so that collectively you can make the company Excel and that will, you know, in turn, make you successful as a founder. So kind of like a successful founder is only as successful as the people that they bring in. And also, I don't believe in micromanaging.

I believe in bringing people in and giving them room, you know, to make mistakes to excel. to learn from those mistakes. If you have to micromanage people that you hire, you probably hire the wrong person. And yeah, so those are just two things off the top that I think are worthwhile. I'm going to go to another question from our audiences from Claire Murashima. Hello.

Claire. Claire asks, how have you kept your professional relationships during this time? I mean, with your team, with your co-founder, who's like one of your best friends, who's like across the country in L.A., have you been doing that and making sure that you keep morale up?

Yeah, that's a great question. It's been a challenge to keep those relationships remotely. I mean, we had had a little bit of an advantage because we were already somewhat distributed. So, you know, we had an office in Buffalo, New York City. Our engineering team was all spread out. Our sales team was all spread out. So we were already used to collaborating on Zoom, you know, and communicating on Slack. But this took it to a whole new level. because there's no physical presence anymore. So, you know, we'll do like a virtual happy hour and not even talk about business. Things like that help. It's never a replacement for the physical, you know, one-to-one interaction. But it does help. I want to ask you about, and you've written about this

and tweeted about this, black entrepreneurship in America has declined over the last 30 years. Also entrepreneurship full stop has. I mean, there were more black-owned banks in the 80s and insurance companies in the 80s than there are today. If you were talking to like a young college graduate black man or woman and they were like, hey, should I become an entrepreneur today, would you say now is a good time to start a business in this uncertain economic environment? That's a tough question. That's a good question. I do think that the tides are changing, especially recently, with increased attention to the plight of black founders and black people.

in general. So I think that now is probably a better time than ever to be an entrepreneur, a black entrepreneur. That being said, it's still, you know, going to be challenging to be an entrepreneur, period, let alone a black entrepreneur. You know, the odds are kind of against you, you know, to be, to be frank. So I would encourage them that if entrepreneurship is their dream and if that's kind of what they see themselves doing, then they have to pursue it. I always encourage people to take risk but measured risks. So if you're out a big company and you're, you know, making a decent salary, save as much personal runway as you can before making the leave. Understand that you may go six months to 12 months with little to no income and just know what you're getting yourself into.

But I do believe that entrepreneurship, particularly in tech, provides an opportunity for wealth creation that is in a short period of time that is really unparalleled. most other industries. I mean, I believe in it. I believe in entrepreneurship. You know, clearly that's what I've committed my life to. So I would never tell somebody to not pursue it, but it is risky, particularly now, particularly now. You and Dave really launched your company after, or sort of before, but really were able to launch it with a grant that you received after entering into an entrepreneurship contest in Buffalo, New York. Has it been difficult over the years for the two of you to raise money? It's been difficult. So that company is called 43 North. And it actually wasn't a grant. It was an investment. It was an investment. It was an investment. It was an investment. We won the competition. So that's an equity investment in your company.

It was an equity. Yeah. Yeah. It was structured as a warrant that converted to equity when we raised a price ground. But prior to that, yeah, raising money is not easy, particularly at first as a first time. entrepreneur as somebody who doesn't have a track record in tech and didn't have the network at that point. It was challenging. We were fortunate, both my co-founder and I, to have a pretty decent network of professionals in New York City from law, finance, and other kind of like high-paying industries. And we actually were able to get, and many of them are African-American, we're able to get some of our early, like, friends, no family, just friends around. her friends and, you know, slash Angel that helped us, you know, get to the next level. But for us, fundraising, until we raised the Series A and Series B, it was always a real kind of like just a grind, you know, get one check. It'll take us a couple months and then go out and try to get a note.

We never really stopped fundraising. It was a constant thing that we were doing to keep the business to float. And quite a few times, I mean, we came close to, you know, one month of runway. Wow. So, yeah. You're running a business. you know, you've got a staff of 60, you've got to show up and inspire people and be their leader. But also, like, you are a human and you were in New York in the midst of mass demonstrations against racial injustice,

which I can't imagine couldn't, was not, you know, was an incredibly emotional time for you. And probably some people on your team. How did you guys navigate that and cope with that? Did you talk about it openly with each other? and were there days where you just didn't, you just didn't want to get on that Zoom call? Yeah, yeah, I mean, one of the things that kind of unfortunately you have to learn to do as an entrepreneur is compartmentalized. If something can be weighing on you that's outside of your business, you kind of have to learn how to put it in one place in your mind and focus on things you have to focus and then kind of give it attention when the time is right. aside from everything that's going on the road, just in life, that's that's kind of a skill

set that many founders and entrepreneurs have learned that they have to develop. So, you know, that was kind of my approach to it. It's like, if I, unfortunately, if I were to stop working every time a black person was killed by the police, you know, it would just be such a distraction. I would never be able to be successful. That's kind of like personally on a personal level, what I've had to do. But as far as the company goes, yeah, we try to be very sensitive to our employees and what they're going through. You know, we communicated to them that, you know, as a company, we stand on the side of Black Lives Matter.

Of Black Lives Mattering shouldn't even be a controversial statement. And that we really want to give our employee space to process. And we told everyone they could take time off if they needed to. If they wanted to just, you know, be with their emotions or if they wanted to be. go protest or if they wanted to do whatever they wanted to do. We also made kind of made a statement as a company saying, you know, our position and, you know, we made some public donations to some nonprofits. So, you know, as a company, those are things that we felt is the right thing to do. And, you know, on an individual basis, as a black man, yeah, it is, it's very difficult.

On one side, you want to help, you want to do what you can to just kind of support the movement. but on the other hand, you know that one of the most beneficial things you can do is create a successful company and be an example of what's possible and hopefully make it easier for black founders in the future to follow your footsteps. So that's really, you know, that's what I'm focused on. Yeah. What do you want to take away with you from this moment? You know, in five years' time, when you're running this company, which will be much bigger, and you look back at this moment, you say, I learned that then, and I'm so glad that we've carried it into what we do to do. day? What would that thing be? I think that I'm glad that we've remained one focused on this space barbershops and putting our customers first. That's one of our core values. Customers are

our life blood. And I think that when this happened, nobody expected it. Nobody expected, you know, pretty much all of our customers to be shut down and not operating. We had to make some decisions about what to do. And we optimized for doing what would provide the most value to them. So, you know, we immediately switched focus to, you know, how can we help these people during this time when they're not making money? How can we help them keep the doors open so that when the shutdown is over, they can reopen their doors. And I think that so far, it looks like those decisions were the right decisions just because of the way, you know, our customers in the market and the industry has reacted. And also, we're seeing.

the features that we rolled out actually really, you know, helping them reopen successfully. So hopefully we'll look back and we'll say, you know what, we made the right decision. And Lord knows what crises await us in the future. But, you know, we're going to have the same approach. You know, that that will enable us squire to be successful. If we can make our customer successful, we'll be successful. Yeah. Song, thank you so much for joining us.

Thank you. This has been a pleasure. That's an excerpt for my conversation with Song LaRan, the co-founder of Squire. To see our full interview, you can go to facebook.com slash how I built this. Just click on videos. And if you want to see all our past live interviews, you can also find them there or at YouTube.com slash NPR. If you want to find out more about the How I Built This Resilience series or other virtual

NPR events, you can go to nprpresents.org. This episode was produced by Candice, Lim with help from Ali Prescott, El Manion, Gianna Capadona, John Isabella, Julia Carney, Neva Grant, and Jeff Rogers. Thanks for listening. Stay safe, and I'll see you back here in a few days. I'm Guy Raz, and you've been listening to How I Built This from NPR.