This Week in Startups - E1131 Bringing barbershops into the digital age with Squire CEO Songe LaRon | Rising Stars of SaaS 3

Episode Date: October 29, 2020

Check out Squire: https://getsquire.com FOLLOW Songe: https://twitter.com/songelaron FOLLOW Jason: https://linktr.ee/calacanis

Rising Stars of SaaS is brought to you by O-DU is a fully customizable and fully integrated suite of software that lets you build and scale your stack as you build and scale your business. Your first app is free forever, and right now O-DU is offering $1,000 off your first implementation pack at O-D-com slash twist. that's O-D-O-O-O-com slash twist. LinkedIn Sales Navigator. With face-to-face meetings now a thing of the past, you'll need to quickly adapt your sales strategy to stay ahead.

LinkedIn Sales Navigator is the tool designed to help you master digital selling. Go to LinkedIn.com slash SaaS to start your 60-day free trial. That's LinkedIn.com slash S-A-A-S-A-S. and Pipe. SaaS companies, this is for you. Pipe helps you unlock your recurring revenue as upfront capital. No debt, no loans, no dilution. Sign up in minutes and start trading on Pipe free for 12 months at pipe.com slash twist.

Hey, everybody, welcome to this weekend. Startup, super excited to continue our rising stars of SaaS. That's software as a service, aka cloud computing. a.k.a. Software in your browser, aka pay a monthly fee for software, not $400 to get a package. And we are cooking with oil in this series. We had Steve from Rapid Deploy on as our first guest,

and he was working on helping 911 operators and first responders to lower the call time, right? Through software, through cloud, SaaS, through a cloud and SaaS solution rapid deploy. Then we had Ben from Transcendon. He is making it easy for users to protect their privacy with online services and allowing those online services to be compliant with GDPR and CCAP and all this privacy regulation that's coming.

So we're starting to see how software can take away friction and make the world more delightful through enterprise SaaS solutions. Today will be no different song. LeRond is the co-founder and CEO of Squire, which is get squire.com. Welcome to the program. Thank you. Thank you for having you. So Squire allows you.

I guess you guys were like the Uber of barbershops in the beginning, but I think you quickly evolved into providing a full POS point of sale, scheduling, and app. development platform for all barbershops, correct? Exactly. Yep. So explain how many barbershops are using the software right now and what you enable them to do? Yeah, we've got a little over a thousand barbershops using the full system.

And what we do is we essentially handle everything that a barbershop basically run their business from their booking to the online payment, to the point of sale payment in the shop. And then all the back end stuff, paying out the barbers, CRM marketing. It's really a full end-to-end system, focused specifically on the vertical of barbershops. We like to think of ourselves providing everything that they need to run their business. So they don't have to look outside of Squire for anything. How much do you charge them for this? How do you charge them for this?

And how did you come to that? Yeah. So these are small business owners. And we felt early on that small business. owners were pretty sensitive to their overhead and there's a limit on how much you can charge them. So we charge a SaaS fee starting at 100 a month going up to 250 a month. And that's really the upper limit of what we charge the shops directly. So they can easily afford to pay that hundred because you're going to get them an incremental customer to a month and then they break even.

Is that about right? Is that how they look at the decision? Yeah, we don't really lean with lead with, we're going to send you new customers, although we do send some new customers. We really focus more on we're going to make your life easier and running your shop easier. We're going to streamline all of your operations. We're going to take things that used to take you four or five hours a week. And now it's just literally slipping a button, turning on one feature and it handles it all for you. Barbershops are actually collections of a bunch of little businesses, I believe, in most cases, like hair salons, where each of the barbers is running their own little 1099 business, correct?

So if I own a barbers shop and I have four or five people cutting or four or five chairs, they each are basically, I'm either renting those chairs out or revenue sharing. Is that correct? Yeah, exactly. Usually you see they're renting, which we call the booth rental model, or it is a revenue share, which is called the commission model in the industry. So it's usually one of those or a hybrid of the two. And you're right, the overwhelming majority of barbers are 1099s, even though if they're on the commission model, they're treated more similarly to employees in sense that they have a schedule.

And they have to kind of do what the owner says. And if they're booth rental, then it's really they just do their own thing. They come and go as they please. When are they charged for a booth rental, you know, a barbershop in a major city, L.A., Atlanta, New York. Yeah. A two, three hundred, two to three hundred a week usually. Okay. So they pay $1,000 a month, $50 a day, but they get 100% of the revenue that comes in then.

Exactly. Yeah. So if you had five, if you had six chairs in your barbershop and you had them fully rented, barbershots making $6,000 on the chairs, they're paying $2,000 or $3,000 to keep the store up and running. They make the other $3,000 clear. Yeah. is the basic concept for running it like a co-working space. This has got to be extremely complicated then in terms of billing and separating it.

So that's what your software does is you say, hey, these three chairs are being rented. And then I'm assuming some people do a hybrid, right? They rent three chairs and then three chairs are doing it on commission. Yeah, it gets surprisingly complicated really quickly more so than most people would think. But yeah, you're right. depending on how the shop is set up. The owner has to, if it's a booth rental, he's got to be on top, he or she has to be on top of collecting his money,

you know, every week. So that in itself, you know, is a task. And then a lot of shops want to have a centralized point of sale system. So now, you know, how do you divvy that up? You know, how do you make sure that each barber gets paid with their old and the shop gets with their old? And then you have to think about routing tips. it can get very, very complicated.

And that's what we saw for all of those pain points with software. Do you do the full POS and then they don't have to have square or something like that? Or do you work with the other POS systems? No. We're very, very selfish about our customers. We don't want to work with anyone if we can avoid it. So we try to replace everything and do everything. And so the POS just is like an iPad with a standard cash straw or something you attach to it?

Yeah. Yeah. We provide the cash drawer, the hardware, the iPad software, and then the actual physical card readers as well. Are the folks running these businesses tech savvy and sophisticated in general, or are they laggards like most people would suspect that they're the last people and they're just doing cash-based accounting out of a draw? Where do they stand? And then how do you convince them to make this giant leap to not only add, you know, a deal? digital point of sale, but then to add scheduling and payments and all this stuff, what's it like in terms of running a SaaS business like that?

Yeah, it's a pretty big spectrum. So you have on the high end, the more high end shops that charge at a higher price point are actually fairly tech savvy relative to other small business owners. And usually they're using some kind of software already. Often they're actually using two or three systems to run their business. And then the sell there is that, hey, we're streamlining everything, bringing it all into one and making it super easy to use. And we're the only software that's specifically tailored for your business and your industry. And then on the other side of the spectrum,

yeah, you have pen and paper, you know, people who don't even want to take appointments, they want to do walking only and they want to, you know, be cash only. That side of the spectrum, obviously, has been the most impacted by COVID. And you're seeing that they're being forced to really adopt software and technology because of the circumstances. And what is that circumstance, they need to have appointments and they can't do walk-ins anymore because of social distancing, I would assume. Exactly. They can't do walk-ins. They can't have people waiting in the shop, you know, to your point, you probably hate that when you need to get a haircut. Now, a lot of states are requiring that barbershops be appointment-based and encouraging them to use

software. And then also cash, you know, there's been a shift to being less cash base and, you know, people don't want to be exchanging money and you want contactless payment. These are all things that we've been preaching. And now, you know, it's kind of a reckoning within the industry that the shops that were really lacking behind are now being forced to catch up if they want to stay in business. Yeah, the pandemic is certainly an accelerator. And I'm curious when we get back from this quick break, what are you seeing change? We're taping this in October of 2020 month, arguably seven of this pandemic, right?

March, April, May, June, July, August, September. October, maybe month eight. So when we get back, I want to know what month eight of the pandemic is looking like versus months four and months one and two. We'll make it back on this week in startups. One of the toughest parts of building a company is choosing which tools and providers to use. You know this.

You want to pick the best solution for each department to help your employees succeed. Because they deserve the best. We all know that. But there are so many functions in a startup. And each one has an endless list of potential vendors. They're sales tools. There's email marketing, accounting, HR payroll, project management, customer support, point of sale, e-commerce, you know, it goes on and on and on. Well, eventually, you will wind up with a frankenstack of tools that cost a lot and that don't integrate

properly. Well, Odo is here to change that. Odo is a fully customizable and fully integrated suite of software products that let you build and scale your stack as you build and scale your business. It's simple, it's modular, so you use what you need and all their apps integrate perfectly with each other. How amazing does that sound? Plus, it's all open source so you can spend that freshly raised capital on talent instead of expensive software. Your first app is free forever. And right now, O-Doo is offering, wait for it, a thousand dollar credit on your first implementation pack. So go to O-D-O-O-D-O-com slash twist to check it out. That's O-D-O-O-O-com slash twist to get the $1,000 in credit.

Who knows how long that will last. So go now. O-D-D-com slash twist. Okay, let's get back to this amazing episode. Welcome back to this weekend startups. I'm your host, Jason Gallaghanis. You can follow me on the Twitter at Jason. I'm an angel investor here in Silicon Valley.

We do this podcast two or three days a week, and we're really excited to have today's guest, Song Loran on. He is Song Loran. on the Twitter, S-O-N-G-E-L-A-R-O-N. And he co-founded Squire in 2015. They've been at it for about five years. And they are helping barbershops with their scheduling and all their back-end,

back office, as it were. What was the change like for barbershops in the early stages of the pandemic, the first couple of months, versus now where people are reopening and they're allowed to have people into their barbershops, but still people are cautious. Yeah, first few months were frightening for everyone, particularly our customers. They were pretty abruptly forced to shut down in most states. And, you know, they're not like a lot of white-collar workers that could just work from home and have that luxury.

They need to be in the shop cutting in order to provide for their families. So it was very, very difficult and challenging March, April. we saw almost all of our shops shut down completely during that time. What's that like for you? Do you then give them a pause on charging them for software or a discount or something? How do you handle that for yourself? Yeah, great, great question. So we, early on, we made some really strategic decisions and we held it up with our leadership

team. And we decided that we were going to waive all subscription trees across the board for current and new customers. We decided at the time to waive it until September, and then we actually decided to extend it until 2021. Wow. Yeah. So no revenue for you during the 2020 pandemic year. No subscription revenue.

So we didn't really get into our revenue model, but we actually make revenue from payment processing and from some other streams as well. But subscription revenue, we decided. And that is the most direct, you know, source of revenue that's felt. by the shop owners. Got it. Yeah. So if they're, where do they pay

5% or 10% to pay for fees associated with the credit card? No, they pay standard, you know, 2.9 plus 30, give or take,

you know, that you would find with other, similar companies. And then we have a, we have a portion of our revenue that is the booking fee

that the actual client, the person getting the haircut, pays. Ah. Yeah. Yeah. So they pay a dollar or two bucks to book the,

Exactly. When they book and pay. So if you opt into booking and paying, kind of like that Uber experience, or you just in and out, don't have to worry about cash, then you'll pay a slight premium for it. And then if you decide to book without paying, in that case, you wouldn't, you wouldn't pay anything extra. And do you build individual apps for each barbershop or do you have like a central barbershop app for people to use to aggregate demand? So we have both. We have a what we call a Squire flagship app, which has all the barbershops that are on Squire on it.

And then we also do custom branded apps. And in that case, it's the basic functionality is the same, but we customize it to have the look and feel of the shop. So it feels like an extension of their brand, and it doesn't say Squire anywhere on there. Of the thousand people using the platform, how many are back to work in October of 2020?

Fortunately, overwhelming majority are open back up. And not many have, shut down for good, which is really good because that's what we're concerned about, that some shops just wouldn't be able to sustain themselves. But, you know, barbershops are very, very resilient businesses, and they typically do very well in an economic downturns. Nobody thought about a pandemic happening.

That's probably the only circumstance that caused them to close the doors. But fortunately, we're seeing them reopening, bouncing back now that revenue is starting to normalize on a per shop basis. So, you know, it's not quite where it was pre-COVID, but their clients are still coming in. In aggregate, 60, 70, 80%, 90%, what's the average barbershop doing now compared to what they did last year without COVID? Yeah, I would say on average, probably around 85 to 90%. That's amazing. There's some outliers.

California, for example, will shut down much longer. And so they're just recently reopened. but you know some states not for Nancy Pelosi she got to go she had might have been a setup but who knows I wasn't a barbershop so I'll stay away from now and I don't know what I think about that

when you look at the precautions that are I mean the other thing that's nice about barbershots I suppose is they are asset light marketplaces in other words they don't have they're not employees the barbers who are there so they don't they're not having to pay them if the if their hair's not if hairs are not getting cut

And if a lot of hair is getting cut, those independent contractors, freelancers get to benefit because they get to make more money and they get to pick their hours. Exactly. Is that right in general? Yeah, exactly. It's very little overhead. The main overhead is the rent, which some landlords were forgiven during that time and worked with them. But that's the main thing. And once the door's open, they can get right back to business.

Do these, you probably have seen, we have Prop 22, which hopefully people vote for. and Uber and lift drivers and DoorDash drivers and all those ride-sharing drivers should get to have flexibility and pick their hours, I believe that. Left out of that were barbershops and hair salons, correct? Yeah, I don't believe that they're part of that. They're not part of that.

So how do you look at that and the issue around should those freelancers or contractors in your mind be forced to be employees, or should they get to choose to be 1099? or employees. How do you think about that? I'm curious. I mean, I tend to lean on the side of giving optionality because a lot of barbers really do like the freedom. And many of them are, you know, they're artists, you know, as well as, you know, service providers. And they really do like to be able to come and go as they please. You know, that being said, there's also, you know,

a need for, you know, many of them don't have health insurance and, you know, don't have, you know, access to, you know, financial products and it's hard for them to get loans and et cetera. So I think that, and that's kind of part of where, you know, Squire, see, we see ourselves coming and playing in the long term is eventually, you know, trying to provide some of those services that they typically don't have access to. Oh, really? So you're thinking about for your barbers and for hair cutters to allow them, since you have their information, maybe withholds, some of their earnings, their 1099 earnings and use it for health care or something? I mean, we're looking at all these options like that. Yeah. So we're looking to fill all the gaps

that currently aren't being filled for these customers. And they're very underserved. They're underserved when it comes to banking, financial services, insurance, and you name it. And ultimately, we're just trying to think of where are the areas we can provide the most value, really provide the full suite of offerings that they need. and what's what's on the top of that list of things you could offer to them uh financial services is really interesting just having a bank account yeah bank account uh debit cards you know potentially loan products i mean this you know it's all there's nothing coming out right now but these are things we're looking at um you know it's they're they're a demographic that we think has

been very underserved yeah it makes sense i mean if they're if you have their information, you got the payments coming in, why not just give them each an account and a bank account with one of these pop-up services or a debit card they could spend it from, or you could advance them a week or two of their pay if they need it for a fee? Yeah, I mean, because we touch the entire flow of money from their booking all the way to paying the shop, to paying out the barber, it gives us insight and insights. And there's a lot of interesting things that we can do that hopefully provide some value. When they're 1099 employees, they might have one day, 10 haircuts, another day two.

So on a day, if they were in the barbershop for 10 hours, and they only had two haircuts for 30 bucks each, they made 60, they're at $6 an hour. On the day they did 10 at $30 each, you did $300, they made $30 an hour. That's part of the process of being a freelancer is you only get paid for when you're working, correct? Not when you have downtime. Yeah, that's the model and the overwhelming majority of barbershot. And so this seems fair or unfair to you that a individual gets to pick what they, how they work in this regard.

I'm curious how you look at it. I think it's, so you're saying as opposed to... Well, I mean, you could take the two, in this scenario, you can take those two days, put them together. And they did 20 hours of work and 12 haircuts for 360. And you could just divide it and give them $16 an hour, $15 an hour, and make them instead of entrepreneurial and 1099 and getting to take their expenses out. And, you know, have that downtime, but they could read a book or do some self-improvement,

listen to an audio book, whatever it is, Netflix, binge watch a show. It seems to me there's this very, like, interesting moment in time we're living in where what used to be considered like little entrepreneurial businesses that people could grow up on, they're not, we're having unions and other folks say, hey, you're not allowed to work that way. So I'm curious how you think about that. And we'll answer that question when we get back from this quick right. Right now, everything is changing so rapidly, including the sales industry. With face-to-face meetings now a thing of the past, you'll need to quickly adapt your sales strategy

if you want to stay ahead. LinkedIn Sales Navigator is the tool that is designed to, help you master digital selling. You all know that. With real-time updates, alerts, and thoughtful insights, you'll find new ways to connect with your buyers at a distance. You can tap into that amazing 700 million member network and use LinkedIn Sales Navigator to get those 20 monthly in-mail messages, lead recommendations, and unlimited surges. So you get right to the front of people's inboxes, actionable insights, and access to free courses on LinkedIn learning. you get everything. And you can target the right prospects and decision makers, which can unlock

18% more pipeline from properly sourced opportunities. You get a 7% lift and win rate and 33% larger deal sizes. As the world adapts to a new working habit sellers must also shift tactics to stay ahead. And LinkedIn sales navigator is that secret weapon that's going to help your sales team do just that. Our sales guy Matt here at this week in startups loves LinkedIn Sales Navigator, and he uses it just to precisely target the right people and find the contacts he needs. So we can keep this week and startups sold out. And that's how we got from one episode a week to two to three. And then sometimes we throw in that emergency podcast for you. We got a special offer here, a 60 day free trial of Sales Navigator. In order to unlock that, all you have to do

is go to LinkedIn.com slash SaaS. S-A-A-S. That's right. Go to LinkedIn.com slash S-A-A-S to start your free 60-day trial of LinkedIn Sales Navigator. Get your whole sales team in there and start seeing the register ring.

Thanks again, LinkedIn Sales Navigator, for joining the This Week in Startups family. Hey, we're back on this week in Startups talking with Song Laurent from Squire. You can go check out GetSquire.com. And you can download the Squire app, I suppose. in book right now and find a barber. Absolutely.

We were sort of talking about this sort of mini entrepreneurial nature of it of, you know, hair cutters, barbers, hairstylists, etc. They all have their own little businesses. They do,

they are an entrepreneurial bunch where they move from one salon to another. They might change and say, I got a better deal here or they might then start their own barbershop. You do see that path, right, or these freelancers who then become owners of businesses? All the time. That's kind of the natural trajectory for a successful career in this industry,

is that eventually many of them, they want to open a shop. That's the main way that they can build more wealth and make more money outside of just the number of hair crusts they're providing each day. So absolutely we see that. And so if they were not 1099 employees, they wouldn't be as portable or flexible. They wouldn't be able to leave and go to work for another one to start their own, they would just be hourly workers who had to work specific shifts and that

would be less, they would give them less mobility. It would give them probably less mobility. And also it would, I think that's a type of model that could work for some barbershops that have the resources. But, you know, like we said before, a barbershop is a pretty easy business to start. Yeah. to, you know, and the overhead and the amount of assets required is really low. And that's part of the one of the appealing reasons of why there's so many shops and why it's interesting for these business owners. If we were required, all the barbers of employees, it'd be a really heavy lift, I think,

to starting a barber shop and getting it off the ground. So, you know, we see that model more like in the franchises that have, you know, 30, 40, 50, oh, the super cuts of the world. They pay people an hourly wage. Yeah, they pay people hourly. But for the long-off mom and time. So you have to be a shift worker. You got to work eight-hour shifts when they tell you.

Yeah. And you got to do X number of hours per week and you're not allowed to work at another salon. Yeah. Yeah. They basically dictate your entire work. Yeah. Typically, yeah. See, I think this is the important discussion that people don't understand is that once you add all these regulations,

it becomes impossible for somebody if they had to hire everybody full-time and take on that risk to pop up a barbershop, right? Yeah, I mean, I think it would be. I mean, we can think of, I'm sure there's room to think of how it can be improved and how we can provide some more safeguards for barbers outside of the current situation. But I definitely think it would be heavy-handed to require all barbers and the employees. We would see a lot of stuff shutting down, most likely. Yeah. This is the thing I think there's good intention, I think, when people think they're trying to protect workers.

but I don't think that this class of worker wants to be forced to be an hourly worker. They, what do you see amongst that group in terms of do they want to be hourly workers or do they just want to be freelancers the way they are? If you were to ask 10 of them, how many would say I want the current system, how many would say they want to just make the same amount of money but be hourly? To be fair, I haven't polled this, so I don't know for sure. But anecdotally, I would guess that they like the current system. They want to be able to charge as much as possible, make as much as possible for the services they're providing and have the kind of flexibility. And they also like to build their own book of business, many barbers. So they like to think that these are their customers that they've been building.

So when they do go to another shop, they can bring those customers. How do you do that with the software? I'm curious. How do you manage that with people booking? Do they split the ownership of that lead? Does the individual barber get a copy of the contact information and the store? Or does the individual person have to like build it up and build up their own phone book on their iPhone? A various case by case. And it depends on who, how the shop is set up. So if they're, if they're a booth rental and each barber is really just an independent business owner doing, doing their own thing, generally they'll have access to. to the customer data and they can take it with them. When it's a commission shop and the relationship is with the owner of the shop and Squire,

then in that case, we kind of default to the owner and like how they want to run it. A lot of times the owners invest a lot of money in marketing and branding into acquiring these customers. So it's not really fair to them to then have the barbers, you know, take all that information. Take the book of business and leave with then start a competitor. Yeah, across the street, which we've seen a lot of times actually. Oh, really? Yeah, there's a little competition going there. Talk to me about the culture of barbershops and what they represent sort of in society

and then how you think about that in terms of building the software for these barbershops. Obviously, building a dedicated app is part of that, right? People want to have the look and feel. Talk to me a little bit about that culture and what they represent in terms of community building. and then what do these barbershops make in terms of what's their tam for all the barbershops or individual barbershops? What can they expect to make? Yeah. So in terms of the culture, it's a subculture, really. And the people in this industry are some of the most passionate people I've ever worked with. They don't look at being a barber as like a job or even a profession. Most of them, they look at it as their life calling.

And, you know, they'll tell you, you know, being a barber saved my life. You know, I was doing this before. I was doing that before. And this is the one thing that really has given them meaning. So it's really inspiring to be working with them. And they're also very proud, very proud of what they do. That's like the fact that we are so specialized and so focused on this vertical really gives us an advantage relative to competitors who are trying to go horizontally

after a lot of different verticals. They know that Squire is frankly, it's the only. company that is dedicated exclusively to them and to solving their needs and to providing value. So that's something that we're really proud of as well. What does a barbershop make? The average barbershop in your system, you know, you've got a thousand of them, so you probably have some aggregate data. What does an average barbershop generate in terms of revenue if they had six chairs,

12 chairs? I guess the average is six chairs. Average is about five or six chairs. on average they make about 150, $160,000 a year card processed and then layer cash on top of that. So you double it? I would say not quite double because you're seeing more card uses actually. Oh, 50% maybe then. Yeah, about 50% yeah.

So quarter million a year for a barbershop. Yeah, some expense. 50% margin, 35%. percent margin they run it? About 50 percent. It depends on the commission breakdown with the barbers, but it's usually, you know, somewhere around 50 percent. Yeah.

See, the problem I have right now is having moved to the Bay area from New York, I used to go to Astro Place, boom, quick, I got my person, get my haircut. The problem is I moved to San Francisco. You know the history of Astro Place Barbership, right? What's that? Do you know, do you know, like, kind of the story about Astroplace? like who owns it and the only thing I knew about

Esther Place was when I was a kid in the 80s we would go to the city and it was 12 bucks and we'd give the you know the lady who did it for us you know like a 20 and we were all stars

we got to the front of the list and we would just all go get our hair cut you know like every two months or whatever take the art train there but I don't know the backs are on Astro Place

it's a famous barbershop in New York anybody you know downtown area has heard of it great shop old school in and out you know, like you said,

no must, no fuss. No must, no fuss. But just put it this way, it's not the kind of shop where you'd ever want to think about, you know, not paying or walking out or doing anything like that. The guys who ran that shop... Oh, it was legit. Some Italian guys maybe? Yeah, yeah, yeah, yeah.

I have a feeling, I know what you're talking about. Yeah, so I'm a little bit of that. You probably do want to pay. What was great about Astro Place, I have to say, back in the day, was it was such a mecca of many different cultures because they cut white guy's hair, they got black guys hair.

It was a bit of a crossover, right? So there were in the 90s when I would go, when I was in school of Fordham, we go down there, you know, you would have working class people, you'd have hip-hop people, you'd have NYU students,

you have gay people, straight people. It was really like a cross-section of New York. You'd have bankers going, you know, all the way down to students, to grandpas. everybody would just go in there and get a quick cut, boom, you're done, right? Or 12 bucks, 15 bucks.

But the average cut now is 30. What's the average cut now in the United States for men's haircut, buzz cut? Yeah. On our system, this is about 40, but average across the U.S., probably about 30, 24, 30 including tip. It's getting crazy expensive. And then the problem I have with everything is it's the hipsters took over. And they're making barbershops,

hipster barbershops, like public works and all these, you know, places. It's, they're kind of making them cookie cutter, hipster. I don't like this hipster trend. Yeah, I mean, nobody likes, nobody likes, nobody self-identifies or likes hipsters. For some reason, it's like a term they're like,

we all know they exist. Everybody hates hipsters. Hipsters are annoying. But nobody claims to be one. but I know the type of shops you're talking about. You know, I personally, those shops are great for our business. You know, they charge high price points. That's the problem.

They want to charge $60 for a quick buzz cut. And I'm like, but they, you know why? Because they're focused on providing an experience, you know. That's not the experience I'm looking for. They're also offering you. I want the Astroplace experience. Get an out. I love Astroplace too, you know.

And we try to work with all types of shops. But I think there is room. I think there is room in the market for what they're offering, which is clear because there's been so many of them that, you know, There's not a lot of places guys can go to kind of be pampered in a masculine way and still feel, you know, masculine about it. And that's what they're provided, you know, when they're for whiskey. Because they give you the neck massage and everything. Yeah. Yeah. Yeah. So you get to like still be like a tough guy, but you got your neck massaged. Exactly. I got you. All right. When we get back from this,

I want to understand why, how people are doing this all safely in COVID and what the best practices and when we should all think about the risk of going back because that is something I've been thinking about. I got one cut during COVID famously by my celebrity hairstylist from mangroomer down when I was in Malibu for a couple weeks at the beach house. But now I got to get back into my regular and I want to know what the precautions are when we get back on the Swedish startups. SaaS companies with reoccurring revenue used to have basically two ways to get

cash and to grow. One is you sell equity. That works. Sure. Why not? Or you can get debt. Okay, that's a little scary. It's a loan. Well, now there's a brand new third way to grow without debt or dilution, and that's pipe. P-I-P-E.com. It's a two-sided marketplace, like a marketplace, like Airbnb or eBay, you know what a marketplace is. And what they do there is they connect SaaS companies who have monthly or quarterly reoccurring revenue with institutions. investors who will bid in order to purchase that revenue on an annual upfront basis. So you're charging monthly, quarterly, and these investors come and they say, we'll give you that money now so you can deploy it, and we'll bid. We'll give you 93 cents, 94 cents. It's a pretty interesting,

clever idea, right? They get a little bit of the spread and you get that cash up front to deploy to build your company. Pretty, pretty slick, right? Well, Pipe is. is the smarter way to grow your business. It's super founder friendly, and it's a great way for you to grow without debt, loans, or dilution. Pipe is also frictionless and completely transparent. It only takes a couple of minutes to sign up, and you'll have the cash in your bank within 24 hours. Pipe is so confident you'll love trading your SaaS subscription that if you sign up by the end of November, they'll eliminate all your trading fees for one full year. This could save you tens of thousands of dollars depending on the size of your business and the volume you trade.

So happy piping. Sign up today at pipe.com slash twist. P-I-P-E.com slash twist. Pipe.com slash twist. Welcome back. Song Loran is here from Squire. All right. What is the best practice now?

I know there's been a couple of outbreaks at hair salons, but the customers didn't get like a couple people working in the hair salon got it. That was the only, I heard that like one anecdotal story a couple of months. months ago, but everybody seems to be going back and getting haircuts. What's the best practice now and what's the safety track record like? Yeah, so as a state should reopen, pretty much every state imposed guidelines for salons and barbershops to reopen safely. And, you know, there's some variance, but across the board, masks should be required from the barber as well as the client. There should be no walk-ins. There should be appointments only. So people are showing up

at the time of their appointment and they're waiting outside of the shop. So there's no more waiting inside the shop. There should be disinfecting of the barber chair, all of the supplies, all of the tools. A lot of states are requiring disposable capes. So you're not, you're not using an old cape that somebody wore this before you. That's smart. Yeah. Yeah. I like the disposable cape. just for cleanliness in general. Yeah, absolutely. Just make it out of paper. Toss it afterwards.

Yeah, just toss it. Are people reconfiguring these and put in plastic between the stations, or is that like overkill? I've seen that. I've seen that. It's not like across the board, but I've seen some shots experimenting with that, which the plastic buffer is always,

because like the germs can go over the plastic. Yeah, that one doesn't make sense to me. Like, if you're, in a confined space, it really is the density of the space and then the mask wearing. So people just need to be vigilant about on both sides wearing masks. And then the face shield is like an extra protection for dentists and people who have to do this 10 times a day. Yeah. And that seems to work, right? That's that that that works. I mean, first of all, barbers are probably one of the only types of professionals who are actually trained on this

prior to COVID. They, they, to get their license, they have to, study how to disinfect materials, how to not spread disease. Like, that's all part of their education anyway. Now you add this COVID situation and like they're one of the best prepared types of professionals in my opinion to handle this versus like, you know, a waiter who just could be anybody. So barbers have to be licensed according to state law. And in terms of like what we're seeing, like you said, there has been reports of, um, spread, you know, insult, I think it was a salon, actually. But interestingly, in that salon, they all wore masks and no clients were infected.

So, I mean, it goes to, and there were like hundreds of cuss per form. So it goes to show you like the power of actually where, if everybody wears a mask and if the procedures are followed. That's a very interesting point. If people just were, if we just studied barbershops, which have, you know, five chairs and 10 customers for each chair. You got 50 people coming in and out a day with five barbers and, you know,

probably a reception area. So you're talking about, you know, six stationary people and 50 people coming out. You could just use that as you're testing and tracing. And then eventually people could test when they get to the barbershop. I don't know if you've seen that starting yet, but I predict that's going to become the big win

is just come to the barbershop and get tested and we'll throw in the $15 test. Yeah. government should really be working with barbershops because they're really, you know, there's hubs of the community and people are going to continue getting haircuts, you know, as long as as as long as they can. And had barbershops been a vector of spread, like they'd be shut down immediately. Like we would have heard about it.

And so we know that that's not happening. It's definitely not a major spreader because, like you said, you're going to have 100% compliance in there because if you were using razor, and doing shaves and you're using clippers, you already know to disinfect that stuff. These people are hyper-vigilant. They keep every piece of equipment cleaned and wiped down. They do it in front of you as part of the show.

It's part of the show. It's part of the show. And a lot of that practice really became really prevalent during the HIV epidemic. People didn't know if you could get HIV from a haircut. So they really had to hone in on how to disinfect and how to, you know, make sure people are safe. And now in this environment, you know, I think that they're, they're some of the best trained people and they're the most ready to handle it. Yeah, that is amazing. Thinking back on it, there was that moment in time where people

during HIV, people were like, oh my God, Magic Johnson can't play basketball because you know, sweat on somebody, they're going to transfer HIV or what if somebody gets a nick while they're getting at the barbershop? Everybody in the barbershop's going to get AIDS. And it was like, that's not how it works. We know a little bit more than that. Yeah. But yeah, so how did you wind up getting into all of this? I know you were, I think you were a lawyer before this doing M&A, right? Yeah, I was an M&A lawyer at a big firm in New York.

And where, Scaton, Arp, Shermastirling. Scaton, Scatting, good guess. You're at Scaton? Yeah, yeah. Where did you go, Columbia, NYU? For law? I went to Yale. I was about to say, I was triangulating.

You did not get into Scadden Arps unless you were Ivy League. Yeah. Where did you go undergrad? UCLA. Yeah. So UCLA, then you went to Yale Law. You were at Scadden up on,

what was that, Lex and 55th? No, it's the Condy Nassville. Well, they used to be in the Connie Nesville. I don't know if they're still there. Oh, the kind of... Time Square.

Time Square. Oh, that I know. Oh, that's right. That's, I was thinking Sherman Sterling's over on Lex and 55th. Yeah. Skadden was in the... Oh, yeah, I remember that because, anyway, I had a friend

and who worked at... Scadden, and he would like, right, you were at Scadden. Mm-hmm, mm-hmm. They would be like, yeah, the Vogue elevator. It was like all these stories about like the Vogue elevator bank was, and the Scadden lawyers, Vogue elevator bank, there was some collisions occurring, maybe some of them intentional back in the day. I'm sure more intentional on the Scaton side.

On the Scaton side, I think it was more intentional to try to meet, yeah, the folks working at So you quit that to go start a company? That's a big job. Yeah. How did that go down? So I always wanted to do something entrepreneurial, didn't know what. You know, I had started in between, I took one year off in between undergrad and law school or actually started a company, not a tech company because I didn't know about tech at that point.

It was like a tutoring company. So always kind of in my mind that I wanted to do something. And then my co-founder and I, we were just brainstorm ideas and we came across the idea of like, wow, the barbershop experience can really be improved. And the more research we did, the more we saw that this was a real opportunity. And so, you know, decided to just jump into it head first. Is there, gave up the 150 from Skadden? Oh, it was more than that. Yeah, I was just thinking starting.

I was just starting like 150, 175? I think it was like 160 when I was there. So by now it's probably way more. I don't know what it is now. There's too many lawyers now, right? That's hard. I mean, you have to be elite to get to Scadden. But they're not throwing those 175 out of school gigs to everybody anymore.

Yeah, no. It's not that many of them. It's competitive. It's very competitive. Yeah. What is the outcome here in terms of scaling? Because there's a limited number of barbershops. Are you thinking?

about salons or massage places or other things, or is there enough barbershops for you to keep going here? How many barbershops are there in the United States? Yeah, there's surprisingly a lot more barbershops than most people would think. And there's actually not a lot of great data on the number of barbershops, so you kind of have to do some work to get to a number. You know, our research puts a number anywhere between 250,000 and 400,000 in the U.S. If you include like unisex barbershops or salons, which we do include in our market size, but just pure barbershops, we think there's at least 250,000. So you're not even 1%.

Yeah, we're barely scratching the surface. So, you know, we know that we can build a really big successful company just on barbershops. You know, that being said, if, you know, five years from now, we see that, you know, we're tapping out on that. There's other verticals we could explore it because the software. where it could work for a lot of other verticals, but I think that there's a real power in being focused and being targeted. So we've got a lot of room to grow in this space. Awesome. Well, listen, continued success. What about my need? Let's talk about my need, which is, I need to be able to book an hour and just pop in and get it done for 20 minutes,

because they always make me wait that I'm late, then they put three people in front of me. I can't take it. Is that available where I could just VIP and take an hour slot and just pop in anytime I want? So the system could work for that. Like you can totally do that on Squire. The problem is these guys come up with solutions for like, you know, the 99% of their customers. Like people like you are like, that is. We need a big fish VIP experience. We need a bottle service experience. I want to be able to go and have a bottle, pop a bottle, and have a bottle. And how. have an hour window. I think I could get that done for you.

I think that they should really think about the VIP economy situation where you're willing to pay. They'll do it. Yeah. No, I literally had my assistant do that because I was getting admonished by the barbershop receptionist. And she's like, listen, you know, you're late every time. I was like, listen, I give 100% tip.

You're charging me $45. I give you $100 every time. Just book two appointments and give me the whole. window. My boss doesn't let me do that. Yeah. We'll talk offline. I think it makes a recommendation.

What about the at home kind of market? Has that ever, you know, or is it just people want to go and have the experience and that just adds too much cost to it? Yeah. We looked at that early on and there were some companies trying to do it and I don't think panned out so well. It's just not, it's the subset of customers who are willing to pay the premium that it takes to make that a feasible business model.

It's just you can't build a whole business around. You have to charge three times, right? Yeah, you have to charge three times. You have to pay for travel costs and the time that it takes to get from point A to point B. And then the experience is just kind of not great. You got hair all over. And people prefer to just go into the shop. Yeah.

I wish I could go into the shop if they just didn't ding me for being late all the time. I need a little more flexibility on that. Listen, continued success with it. And I'm sorry we couldn't do this in person, but pandemic, so everything's virtual. Where are you guys based? We're New York, but we're distributors. We've got people all over. Yeah, that's the way to do it now.

All right. Well, listen, stay safe and thanks for doing it. Thank you. Thank goodness that these small businesses are back up and running. This really makes me feel good that they're at 85% now or more, and that we're going to save these businesses. So if you are listening, you know, and you do book an appointment, do me a favor. If you have the means, just give that big, huge tip if you can, right?

And if you're listening to this podcast, there's no reason you can't give a 50% or 100% tip on your, at your barbershop. And this is the year to do it. Just give that 100% tip. So they charge you 40, just give them 80. That's it. They need the money right now. Help bridge that extra 15%.

And maybe they are in arrears on some of their bills. So it helps. Give a huge tip if you can, people. We'll see you all next time on this week's service. Bye-bye.