How Accucode CEO Kevin Price grew to $100M revenue and 1K customers in 2022.

hey folks my guest today is Kevin price he's the founder and CEO of Accu code at 27 years old he's become a broad technology uh and services company with over 100 million bucks in Revenue 150 employees they've got Hardware scale deployment service and support 3D printing and software development in-house their latest SAS offering includes four work in order for work which we'll jump into today he's in the process of launching their new forward SAS Division and looking for senior leadership on the business unit Kevin you ready to take us to the top absolutely thank you he bets on the 100 million Revenue today I know a lot of what you do is Hardware right POS systems for restaurants things like that what's the revenue breakdown Hardware versus SAS uh historically it's been about 70 percent hardware and uh the ballot and services the uh the 3D division the small unit today it's doing less than a million dollars here in Revenue but lots of interesting stuff so what what is tell me what customers are paying you for those that are not familiar with Accu code what are what are you building so we also we and we also have our first early customers on uh for work so four works the latest software service offering uh we have two different products in that Suite for work in order for work and I'm just in the process of setting up that division but it's got about three hundred thousand dollars a year in Revenue behind it today it's all monthly subscription based and Accu code's actually been using the software for the last eight years to run its own internal operations I call it uh order to end of life but it's workflow Automation and business process automation for just about any kind of process or technical industry you can think of and again 100 million in Revenue 70 is Hardware the other 30 is services in SAS so there's 30 million there of Revenue what are the other software platforms that you're selling to make up that 30 million in software Revenue um it's it's other people's software warehouse management systems um industrial uh you know uh what do they call it uh um manufacturing automation uh that kind of stuff so you've built these tools and sold them to warehouses yes interesting okay we're also doing a lot of r d work around artificial intelligence particularly natural language chat Bots and uh visual cognition so the ability to use cameras to collect data for instance in your manufacturing or warehousing environment we've even talked to you know food processors and other others about using it to do quality control and product identification all just with cameras okay so that that just declared that those tools you've built for warehouses things like that that's doing about 30 million dollars a year right now in Revenue software okay and on the and then tell us about the hardware space is it still mainly POS systems uh it's actually networking infrastructure is our biggest category and has been for a long time uh so Cisco extreme networks uh Aruba um Nokia are all partners and uh we you know we've deployed tens of thousands of commercial networks um uh do Lumen is one of our biggest customers and we do uh all of their B2B Network deployment work for their mid-market customers and for work that piece of software is what runs that whole Field Services operation for aluminum and we share real-time visibility of all those projects with Lumen through that platform and on that 70 million dollars of annual Hardware Sales I mean are your margins basically zero is that a loss leader for your software stuff or do you make money no the hardware business has always been uh I refer to it as a self-funding business development activity um it's it's the margins are are not great but it's always profitable and uh you have to know how to run that business and run across if we can do it but uh it's all about scale I want to sell it to you by the truckloads and ship it to you by the Box yeah because it it we're in we're we're in the distributed device population that's our Core Business and as we see things like iot and Robotics uh explode because of Labor Market issues um people have a challenge of how are you going to acquire deployed service and support tens of thousands of devices potentially at hundreds of thousands of locations and and we've built software specifically for doing that oh what's going on there YouTube good to see you guys now imagine this you love watching these interviews with SAS Founders but imagine if we took all of the valuation data out from over 2807 interviews I've done manually saves you a lot of time well we've done this we've built the into the beautiful interface inside of founder path check this out I'll show you how you can access this in a second but you log in you connect your stripe account you see your valuation real time you can see what it changed over the past 88 days and even set goals for evaluation this year now the secret evaluation is there's many different ways to 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the interview so just to be clear uh that's those pieces of Hardware are you actually building these yourself or you're buying them cheap and marking them up you know we we have our we have a new AI kiosk um called our our Edge AI kiak that is our own in-house design and manufactured device but all the other Hardware we're selling today uh is made by you know one of the market leaders in those categories interesting okay and so what markup do you like to make for yourself we're doing five percent ten percent thirty percent technically gross margins run between 12 and 20 in the hardware space and that's grossmarginine.net but um you know like I said it's always profitable yep so what is net like five percent two percent uh probably more like three or four okay okay interesting and what got you into this I mean were you uh you know electrical engineer or something in college or when did you start no no I bought a commodore score when I was nine years old back in the 70s and taught myself basic and I've always been a science and technology nerd and I have I've studied physics and electrical engineering and chemistry since I was very young my degree is actually in business and particularly in marketing um but I I've never let that stop me and uh from a from a product standpoint you know we'll we take on almost anything we've done all kinds of different Technologies makes sense now what's a team size today how many full-time uh like I said about 150 full-time employees and given time several hundred contracts that are out in the field doing this install work what those those in the field folks they're like installing on-prem like routing software or routing iot stuff or what yep exactly so we're doing you know routers switches access points uh dnf connectivity so basically we'll take we'll go do a physical deployment at like a bank or a restaurant or a factory or a warehouse and not and we're taking it from the dmarc which is where the Telecom provider brings it onto the property all the way through the facilities and designing the network specifically to cover you know all the operational areas with adequate bandwidth um that's that's the bulk of what we do out in the field we also oh you're muted Kevin go ahead you also what I said we also run repair work uh like that as well and the same same software for work is what drives all of those processes for all and have you bootstrapped this or raised capital um I'm still bootstrapped so I've sold three different software to service businesses previously and uh the biggest one was for 25 million dollars we sold it to Descartes uh a little over four years ago was that all cash up front or was there stock there too and earn out no that was all stock or I mean all cash um cash deal there was there was some some payments uh on it you know the second year and the third year out but uh the bulk of it was up front and what how much revenue was that company doing when you sold it I was doing about five and a half million in revenue and delivering three and a half and a half oh wow that's a nice nice little multiple there and you had 100 of that yep that's great so so now you're obviously building Accu code why build the software company inside the hardware company why not build them a separate companies um I've really turned Accu code into my platform um you know just like Accu code funded and and you know employed the developers that built the product we were also using it uh you know very actively it runs our whole business um and so it's actually code's intellectual property effectively and I also my marketing department my accounting department my HR department all support all of these different business units and you know capital from the sale of that velocity mail software that 25 million is part of what funded the you know the acquisition of the 3D printing store and and what we're doing and oh is that how you got accu-code starter do you use money from your last sale to buy a 3D printing store that was a start well that wasn't the start I I bootstrapped acne code myself from 1995 forward uh 1500 bucks on my credit cards and and I've done I've borrowed a lot of money from Banks and paid it all back they love to go loan it to me and um the but I've had three successful exits of of software divisions that were startups inside of acco and basically it's become my own you know platform oh you build a software inside of Accu code and then when you sell it you spin it out and sell it off to the other provider I I run them I run them as separate LLCs and I run them you know from day one as a Standalone PL inside of Accu code uh and and then and and that makes it it actually makes it easier to exit because they only have to take the operational staff tied to that particular product they don't have to take my marketing and my sales and my accounting because typically in an acquisition situation they would have to they would lay all those people off anyway yep yep so for work is a individual p l but inside of accutode correct I see I see hell of a story here what about the flip side do you have you bought any companies to bring inside to of your platform uh the only only acquisition I've done was that the 3D printing store about four years ago just tell me about that real quick I mean what is the 3D printing store make in a year so it's another distributed device population where additive manufacturing is going to be the future of how we make a lot of things and today there is a complete lack of you know a thoughtful organized approach for how you're going to acquire deploy service support operate that kind of technology and there's not nearly enough qualified Engineers mechanical engineers on the planet to do the install the operation the service and support if you're going to go scale this you need somebody needs to go build a plan tools that makes that a feasible you know concept and the printer manufacturers focus on look what I can print but typically they can only print it successfully once and it often takes two or three attempts to get the one right and as I say that's that's cute that you can do that but it's not very valuable so what did you pay for it a million dollars a year printing printing store company to new equipment and facilities and staff and we now have the ability to print hard metal Parts high temperature polymers fiber reinforced Plastics all kinds of different materials and multiple we've got a facility in Dallas and another one here in Denver and where we do a lot of business and they the Aerospace sector and the energy sector oil rig operators but you own the majority Equity of that 3D printing store because your two million dollar Capital injection correct is the owner still operational or is he or she exited no Deborah Deborah Wilcox is the founder and she uh she's the operational manager of the business and she's actually an IP attorney by by trade and uh started this you know basically was running this as a a personal project and was operating out of a hangar it's a local private airport and running a small service bureau and I met her and asked her to come run my 3DS of it interesting last question are there any tax advantages to having Accu code hold code and then doing stand-up P L's for individual software companies underneath in terms of how you treat sort of cash flow oh for sure it it allows me to you know the bar business has allowed me to bootstrap several software service businesses and and run them you know with minimal overhead and the tax advantages that Accu code gets to be very flexible with how it chooses to expense or capitalize that r d investment and the other resources that we put behind those business units and you know it makes it makes it I would say a lower risk proposition um I think there's also a cost to that because it's not the sole focus and because a lot of the resources are shared um it takes longer to scale it that way yeah yeah Kevin heck of a story here man we're out of time to Let's wrap up with the famous five number one favorite book oh just recently the surrender experiment surrender experiment number two is there a CEO you're following or studying um you know I I love Elon Musk although I really wish that you would be a lot more quiet on social media number three what's your favorite online tool for building accu-code probably uh Google has been running on Google Docs and Google apps now since 2007 and it has just been an amazing tool for collaboration and data disability number four how many hours of sleep do you get every night okay and situation married single kids um single at this point twice divorced any kiddos three three kids okay very cool and how old are you 53 53 last question some started this when I was 26. I love that I love that last question something you wish you knew when you were 20. guys I could go to platform launching that's 26 now doing over 100 million dollars in Revenue seventy percent of that revenue is from Hardware Sales think routers on-prem installations things of that nature at Banks 30 of those these little software companies not little though he spins them up inside the business they collectively do 30 million bucks in revenue and then he sells them he sold his last one a couple years ago for 25 million dollars after growing that to 5 million bucks in Revenue 3 million on ebit to healthy multiple and then he reinvest that all back into the company 150 folks full-time today as he focuses and doubles down on his new software products called for work Kevin thanks for taking us to the top thanks Nathan one more thing before you go we have a brand new show every Thursday at 1pm Central it's called Shark Tank for SAS we call it deal or bust one founder comes on three hungry buyers they try and do a deal live and the founder shares back-end dashboards their expenses their revenue our poo CAC LTV you name it they share it and the buyers try and make a deal live it is fun to watch every Thursday 1 p.m Central additionally remember these recorded founder interviews go live we release them here on YouTube every day at 2PM Central to make sure you don't miss any of that make sure you click the Subscribe button below here on YouTube their big red button and then click the little bell notification to make sure you get notifications when we do go live I wouldn't want you to miss breaking news in the SAS World whether it's an acquisition a big fundraise a big sale a big profitability statement or something else I don't want you to miss it additionally if you want to take this conversation deeper and further we have by far the largest private slack Community for B2B SAS Founders you want to get in there we've probably talked about your tool if you're running a company or your firm if you're investing you can go in there and quickly search and see what people are saying sign up for that at nathanlacka.com forward slash slack in the meantime I'm hanging out with you here on YouTube I'll be in the comments for the next 30 minutes feel free to let me know what you thought about this episode and if you enjoyed it click the thumbs up we get a lot of haters that are mad at how aggressive I am on these shows but I do it so that we can all learn we have to counter those people we got to push them away click the thumbs up below to counter them and know that I appreciate your guys's support all right I'll be in the comments see ya

hello everyone my guest today is kevin price he's a unique character in oklahoma farm boy that bought a commodore 64 when he was nine and taught himself basic he's been immersed in technology and the sciences that underlie it since really his entire life electrical engineering chemistry physics and material science is now building accu code where he's helping simple scalable and repeatable business solutions get launched at scale kevin you're ready to take us to the top i am all right so talk to me uh when did you first when you launched the company how's the company 24 years ago this month wow okay so 19 was that 95 yep 1995. that is pretty incredible okay so you launched in 95 and what was the company back then i assume it's pivoted since uh we originally started out as a value-added reseller of barcode scanning equipment and mobile and wireless technology back when they were all very new barcode scanners were two thousand bucks a piece okay and then so fast forward to today are you more of a pure play sas company no um we've got three software as a service products today uh we're also one of the according to computer reseller news one of the largest uh resellers and managed service providers of i.t infrastructure in north america what is that what's it infrastructure um network infrastructure mobile computing barcode scanning at this point self-proliferating across most businesses and um help me understand today how many i mean how do you how do you measure the businesses right do you separate them all out or do you get kind of weighted averages across the entire business there are eight separate lines of business inside of the platform that is the original parent company now um they are all separate llc's they're all set up with the intention of you know being able to take on investment of ultimately building up and exiting and they're run from the beginning with audited financials and all of the things that are necessary in order to be ready to go sell a business when when the right buyer shows up are you bootstrapped today or did you choose to raise capital we're still bootstrapped i love the company i love that i love my you're my kind of founder man that's good stuff all right what does growth look like so uh inc reported in 2017 total revenue was about 63.3 million what'd you finish 2018 at uh actually we were pretty flat last year we finished right at 63 million but we're on track this year it looks like we're gonna have our first hundred million dollar a year why were you flat um there was a lot of you know from an industry standpoint the uh the tariffs and some of the other things caused a lot of capital purchasing and big enterprises uh they were waiting to see what was going to happen and uh to some degree we're still dealing with some of that but pent-up demand is you know can only wait so long yeah i couldn't make the argue the opposite point which is people you know if you saw trump and said this is going to be very all over the place we're going to pre-buy a bunch in 2018 so you should have seen a huge spike in 2018. i'm sure i'm sure there was some of that we didn't see that interesting okay so you think this year will be your first hundred million dollar a year we got six months left in the year what are you at today uh we're sitting at a little over 50 already okay good so i mean you're it's not like a unrealistic goal that feels pretty accurate yeah and where's most of so kind of break down let's just use 100 million that's easy so break down 100 million you think you'll do this year what percent of that will be sas um not enough so the two the two software the service products the enterprise offerings we've got out today one we've got rapid inventory which is a cloud-based warehouse management system for quickbooks users so if you're on quickbooks pro premier enterprise you can go license that product for 60 bucks a month per concurrent user that product's been running uninterrupted since 2007. it originally was launched uh as intuit warehouse management uh they branded it as their own product and took it out to market for the first three years okay and what will that do this year it's still the only multi-tenant cloud-based solution in that market well what do you think that'll do this year yeah so that's gonna do about a half a million dollars this year um it's been running for a long time but uh that quickbooks market is shrinking yeah they've shifted most of their customers that online quickbooks online and uh other competitors like zebra we're starting to take a lot more customers to the cloud yep um we've got jellyfish which is a brand new product just launched in january this year we've got our first commercial customers on that it's going to do less than a million dollars this year but it is a unified order management platform that can really be applied to any wholesale buying sector we originally targeted for the food and beverage industry we had a product called ao bar that we put out in the android and ios markets about uh five years ago that was free software that basically allowed you to order beer wine and liquor from all of your different your distributor beers as a restaurant and you do all your inventory for your bar there's the oklahoma boy yep so the point we learned a lot from that piece of free software and the several thousand bars that use it to order from their suppliers and we built that base jellyfish on the as a next generation version of that and it really in you can use it to order from any wholesale market or supplier a single screen allows you to scan barcodes and quantities in order from all your different suppliers and then the system breaks it up into electronic orders and transmits it to all of the different vendors kevin it sounds like your software revenue this year might be something like one or two million bucks right yeah okay so you have as well we stole the software as a service company last year called velocity mail that was doing about 5.5 million and that was we sold it to descartes which is a publicly traded uh company out of canada um that was it was a 26 million dollar cash exit and my first is accu code i helped an employee start a business and we exited that several years ago that was another software as a service startup that we did internally okay so you sell velocity mail last year you bring it that brings in uh it was doing 5.5 in terms of annual revenue you sold it for 5x 26 million all cash uh you you pile that back into accu code how as a founder do you make the decision between using that capital to keep building the company versus taking out and paying like a dividend to yourself and maybe you know you know some employees as a bonus um we pulled out between the team that that went with that business and what management took out we took out about five million okay in cash and then the rest is staying in the company and sitting on my balance sheet right now i bought some land in colorado springs we've got six and a half acres we're about to build a new uh start building our first facilities down there um why do you need facilities do you actually take hold of things you're reselling you need inventory space out of our logistics facility in louisville kentucky we shipped over 300 000 shipments last year wow why do you actually i mean why do you actually take control of the inventory why can't you just be a reseller right in the middle um part of my one of the things that makes accu code unique in the enterprise id space is that we are one of the only literally only guys in the distributed device population space that can take ownership of daily operational service and support for tens of thousands of devices at thousands of locations and make sure they keep showing up every day and work and we've got customers like kroger and discount tire and uh lots of grocery and retail type businesses and manufacturing companies that we are basically their i.t support and service every day we're the guys who answer the phone we we do the updates we run the spare pool and we make sure that they have equipment that works yeah now if you're putting uh products is what allows us to do that we have a product called for work that's another software as a service platform we're launching this year that has been our own internal project management workflow automation platform for four or five years now and now we're launching it out as a gig economy platform for running these same kind of projects at other companies so kevin if you take so again two or three million bucks it sounds like in software revenue this year you've had some success with software in the past as you just articulated with velocity mail you've got the distribution centers that you're opening up of the call at 98 million that is essentially coming that you're reselling right through your platform obviously you have a significant other that is cost of goods sold you have to buy the product and then you mark it up when you sell it to somebody average gross margins on that stuff is you know we'll call it 10 to 20 points okay got it so you're well not basis points hopefully percentage points right gross gross margin yeah but i'm saying i sold it for a thousand dollars i'm making a hundred and two hundred bucks you got it i'm just saying 10 points in finance terms is 0.1 percent 10 points in terms of if you're talking percentages is 10 it's very different things very different things yeah yeah so on 100 million going through your platform you might again you know margin gross margin would be something like you know 10 million through the platform yes okay very cool um talk to me about your team today how many people a little over 130 right now between the different locations and where are the different locations uh denver louisville kentucky dallas and limerick ireland okay now are you burning cash right now are you casual positive uh i i'm always cash for posi i got two years out of 24 that i was not profitable mm-hmm well i mean by the way i'm being unprofitable if you since a big opportunity might not be a bad thing right so it's just that from a discipline standpoint being a bootstrapper i'm i'm used to running you know i've used a business that was very very uh bootstrappable being a bar that had relatively low barriers to entry and i've used technology to scale that business in a way that allows me to take profits off of that and the opportunities that it presents because it puts me into the customer supply chain all of these software products are a result of customers on my i.t side that came to us asked us to solve business process automation problems and we ended up building a product out of them usually i have a customer before i build it yeah no that's good now now when you say profitable you talking 10 i'm up to the bottom line 20 what's that look like on software as a service you're on the var business no no you're totally your car business it's not our business it's more like four okay so if a thousand if you sell 100 million right you're taking 10 to 10 million and then four percent of the 10 million hits the bottom line yep so about 400 grand no 4 million okay well so that that would be 40 percent no you're not no i'm taking i'm talking no no we're talking about different things i'm not yeah i'm not talking basis points i'm talking i'm talking percentages so i'm netting out on a we'll call it a 100 million dollars worth of hardware business uh about four months yeah which is four percent yes four percent correct what i was saying that's what i thought it's what i said yeah kevin we're talking past each other if you give me a second to explain you will be on the same page what i'm saying is you told me you take 10 of the 100 million right that's your gross margin that's 10 million what you're then saying is of the 10 million you're taking 40 percent not more yes to ask well i know it's because my net profits my my net profits are around four percent correct which again would be about it sounds like four four million it's actually more imp in my opinion you should say that the other way it's way more impressive right of the 10 million after cost of goods sold you're taking 40 percent of the bottom line 4 million yes um so very good so you list that sit on the balance sheet i mean that's not a great use of capital what what do you do with it you just let it sit there well i've got right now i'm funding uh jellyfish for work i've got a 3d division that this year is going to be its first cash flow positive year that's a four year i've got a couple million bucks invested into cutting edge 3d technology and and being a market developer in that space um i just did my first acquisition in that sector i just bought a company called 3d print store for how much accucode 3d um and i've got an ai r d project going on in ireland where we're developing some some really cutting edge ip on using neural networks and we've got some grant money from the irish government and the university of limerick to build that kevin we're running out of time here last few questions over the past 12 months how many customers have you essentially resold at least one product to resold one product too correct repeat that yeah so i'm curious basically how many customers you're working with over the past 12 months oh an average customer this year we're doing with over a thousand companies a year okay and those are companies that you're buying a product from and then marking it up and selling it to somebody else right oh you're talking on the vendor side that's why i'm asking yeah the suppliers side uh probably less than 20. okay okay then you have over a thousand buyers thousand buyers thousand corporate customers yes okay great so again supply side there's less than 20 folks companies supplying the products that you are then selling to across a thousand different corporate uh companies and most of those are come from vendors like zebra and honeywell cisco uh panasonic relatively large names in our sector yep no that's great so you can just be clear do you consider your customer the 20 or the thousand uh the thousand okay the thousand the the vendors are you know that's my tool set the technologies that i can you know bring to bear on anybody's process yep very good all right let's wrap up here with the famous five number one what's your favorite business book my favorite business book uh built to last number two is there a ceo you're following or studying uh no number three what's your favorite online tool for building your company besides any of your own my favorite what online tool um probably google docs number four how many hours collaboration tool how many hours of sleep to get every night oh i probably get over eight and which situation married single kids twice divorced uh three kids 19 25 26 okay and um okay and how old are you 50. last question what do you wish your 20 year old self knew oh patience seems like you have that you're 25 years in the making uh yeah but i didn't start out that way uh i i acquired it along the path i started out pretty angry i was really good at bludgeoning my moment into submission guys accu code launched 25 years ago they'll break 100 million dollars in terms of products sold resold through their platform this year of which they take on average call it 10 percent of that so 10 million bucks and then it's super casual positive 4 million to the bottom line each year now inside of this they are building many many sas products software products having a lot of success they built one called velocity male up to five million dollars in revenue sold it last year for 26 million dollars to descartes which is obviously a public company there so a lot of success there is these scales and invest in new r d new software products new ai stuff around the globe kevin thank you for taking us to the top thank you