How Accucode Built a $300K ARR SaaS Product Inside a 150-Person Hardware Business (Interview with CEO Kevin Price)

Introduction to Kevin Price and Accucode

Nathan Latka

00:00Hey, folks. My guest today is Kevin Price. He's the founder and CEO of Accucode. At 27 years old, it's become a broad technology and services company with over a $100,000,000 in revenue, 150 employees. They've got hardware, scale deployment, service and support, 3D printing, and software development in house. Their latest SaaS offering includes ForWork and Order for Work, which we'll jump into today. He's in the process of launching their new ForWork SaaS division and looking for

00:21senior leadership on the business unit. Kevin, you ready to take us to the top?

Kevin Price

00:26>> Absolutely. Thank you.

Revenue Breakdown: Hardware vs. SaaS

Nathan Latka

00:27You bet. So on the 100,000,000 revenue today, I know a lot what you do is hardware, right? POS systems for restaurants, things like that. What's the revenue breakdown hardware versus SaaS?

Kevin Price

00:36>> Historically, it's been about 70% hardware and the balance in services. The 3D division, the smallest unit today, it's doing less than $1,000,000 a year in revenue, but lots of interesting stuff.

Nathan Latka

00:52So, is, tell me what customers are paying you for, those that are not familiar with Accucode. What are you building?

4WORKS SaaS Suite and $300K ARR

Kevin Price

00:57>> So we also, and we also have our first early customers on 4WORKS. So 4WORKS the latest software service offering. We have two different products in that suite, For Work and Order for Work. And I'm just in the process of setting up that division, but it's got about $300,000 a year in revenue behind it today. It's all monthly subscription based. And Accucode has actually been using the software for the last eight years to run its own internal

01:24>> operation. I call it order to end of life, but it's workflow automation and business process automation for just about any kind of processor technical industry you can think of.

Nathan Latka

01:36And again, a 100,000,000 in revenue, 70% is hardware, the other 30 is services and SaaS. So there's 30,000,000 there of revenue. What what are the other software platforms that you're selling to make up that 30,000,000 in software revenue?

Kevin Price

01:48>> It's it's other people's software, warehouse management systems, industrial, you know, what do they call it, manufacturing

02:00>> automation, that kind of stuff.

Nathan Latka

02:03So you've built these tools and sold them to warehouses?

Kevin Price

02:06>> Yes.

Nathan Latka

02:08Interesting. Okay.

Software Sold to Warehouses and Other Platforms

Kevin Price

02:09>> We're also doing a lot of R and D work around artificial intelligence, particularly natural language chatbots and visual cognition. So the ability to use cameras to collect data, for instance, in your manufacturing or warehousing environment. We've even talked to food processors and others about using it to do quality control and product identification, all just with cameras.

Nathan Latka

02:33Okay. So that that just to be clear, that those tools you've built for warehouses, things like that, that's doing about $30,000,000 a year right now in revenue software.

Kevin Price

02:41>> Yeah. Yep.

Nathan Latka

02:42Okay. And on the and then tell us a little about the hardware space. Is it still mainly POS systems?

Kevin Price

02:49>> It's actually networking infrastructure is our biggest category and has been for a long time. So Cisco, Extreme Networks, Aruba, Nokia are all partners and we've deployed tens of thousands of commercial networks.

Lumen as a Key Customer

Kevin Price

03:07>> Lumen is one of our biggest customers and we do 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 them. And we share real time visibility of all those projects with Lumen through that platform.

Nathan Latka

03:25And on that $70,000,000 of annual hardware sales, I mean, your margins basically zero? Is that a loss leader for your software stuff or

Hardware Margins and Business Model

Kevin Price

03:31>> do you make No, money on not at all. No, the hardware business has always been, I refer to it as a self funding business development activity. The margins are not great, but it's always profitable And you have to know how to run that business and run it profitably to do it. But it's all about scale. I want to sell it to you by the truckloads and ship it to you by the box. Yeah.

03:55Because

03:57>> we're in the distributed device population. That's our core business. And as we see things like IoT and robotics explode because of labor market issues, people have a challenge of how are you gonna acquire, deploy, service and support tens of thousands of devices potentially at hundreds of thousands of locations. And we built software specifically for doing that.

Nathan Latka

04:22Oh, what's going on there YouTube? Good to see you guys. Now imagine this, you love watching these interviews with SaaS founders, but imagine if we took all of the valuation data out from over 2,807 interviews I've done manually, Saves you a lot of time. Well, we've done this. We've built it into the beautiful interface inside of Founderpath. Check this out. I'll show you how you can access this in a second, but you log in, you connect

04:45your Stripe account, you see your valuation real time, you can see what changed over the past eighty eight days and even set goals for valuation this year. Now the secret evaluation is there's many different ways to value a SaaS business. So the reason you're gonna see three or four different valuations inside of your Founderpath dashboard, this is all free by the way, is because depending on who's doing the buying of your SaaS company, you're gonna get

05:09a different valuation. A VC is gonna pay a different valuation, private equity firm is different. If you're gonna do a minority sale, that's different. And if you sell the whole business, that's a different valuation. You can see all those when I hover over here. Right? So the teal is what a VC would pay. Yellow is what private equity and red is if you sold the whole thing outright. Now what's cool about this is this is not

05:31built off random data. Again, you guys hear these interviews on YouTube. All these datas are built from real time valuation data points founder share with us on the show. So traction, 1,200,000 seed round, 3.7 raise. They sold 22% of their business. Go in here and filter by the event. Maybe you only wanna see companies that have sold the whole business. Well, here are a bunch that have been acquired the valuation and the multiple. Maybe you're going

05:57out right now and you're raising your seed round. We'll go in here and look at all this recent seed deals that went down, what they raised, what valuation they raised at, and what percent that they sold. There's never been a larger dataset of SaaS valuations than what you can get now inside of Founderpath. And we're thrilled to bring it to you. Alright. We're gonna go back to the YouTube video here in a second, but if you

Hardware Categories: Networking Infrastructure

Nathan Latka

06:19wanna check this tool out, if you wanna jump in and sign up, you can check it out for free to get your valuation at this link. This link, founderpath.com/products/valuations. Or if you go to founderpath.com and hover over products, click on get your valuation here, and go ahead and sign up to give it a whirl. Again, all that valuation data live right inside the platform. I hope to see you there. Alright. Let's jump back into the interview.

06:46So so just to be clear, that's those pieces of hardware, are you actually building these yourself or you're buying them cheap then marking them up? You know?

Kevin Price

06:56>> We we have our we have a new AI kiosk called our our Edge AI Kiosk that is our own in house design and manufactured device, but all the other hardware we're selling today is made by, you know, one of the market leaders in those categories.

Nathan Latka

07:12Interesting. Okay. And so what markup do you like to make for yourself? Around 5%, 10%, 30%?

Gross and Net Margins on Hardware

Kevin Price

07:18>> Typically, gross margins run between 12% and 20% in the hardware space, and that's gross margin, not net. But, you know, like I said, it's always profitable.

Nathan Latka

07:30Yep. So what is net? Like, 5%, 2%?

Kevin Price

07:34>> Probably more like three or four.

Nathan Latka

07:36Okay. Okay. Interesting. And what got you into this? I mean, were you a, you know, electrical engineer or something in college, or when did you start?

Kevin Price

07:43>> No, no. I bought a Commodore 64 when I was nine years old, back in the 70s and taught myself basic. And I've always been a science and technology nerd. I've studied physics and electrical engineering and chemistry since I was very young. My degree is actually in business and particularly in marketing. But I've never let that stop me. And from a product standpoint, you know, we take on almost anything.

08:13>> We've done all kinds of different technology.

Nathan Latka

08:16Makes sense. Now, what's the team size today? How many full time?

Kevin Price

08:20>> Like I said, about 150 full time employees. And at any given time, several hundred contractors that are out in the field doing this install work.

Nathan Latka

08:30Those in the field folks, they're like installing on prem, like routing software or routing IoT stuff or what?

Kevin Price

08:36>> Yep, exactly. So we're doing, you know, routers, switches, access points, DNS connectivity. So basically we'll go do a physical deployment at like a bank or a restaurant or a factory or a warehouse and we're taking it from the demarc, which is where the telecom provider brings it onto the property all the way through the facilities and designing the network specifically to cover all the operational areas with adequate bandwidth. That's the bulk of what we do out

09:06>> in the field. We also

Nathan Latka

09:09Oh, you're muted, Kevin.

09:14Go ahead. You also what?

Team Size and Field Contractors

Kevin Price

09:16>> I said we also run repair work, and other processes in the field like that as well. And the same software for work is what drives all of those processes for us.

Bootstrap History and Prior Software Exits

Nathan Latka

09:26And have you bootstrapped this or raised capital?

Kevin Price

09:28>> I'm still bootstrapped. So I've sold three different software to service businesses previously. And the biggest one was for $25,000,000 We sold it to Descartes a little over four years ago.

Nathan Latka

09:43Was that all cash upfront or was there stock there too in or Nope.

Kevin Price

09:47>> That was all stock or I mean, cash. Mhmm. Cash deal. There was there was some some payments on it, you know, the second year and the third year out, but the bulk of it was upfront.

Nathan Latka

10:00Mhmm. And what what how much revenue was that company doing when you sold it?

Kevin Price

10:04>> It was doing about 5,500,000 in revenue and delivering 3,500,000 a year in EBITDA on that.

Nathan Latka

10:09Oh, wow. That's a nice nice little multiple there. And you own a 100% of that?

Kevin Price

10:13>> Yep.

Nathan Latka

10:14That's great. So so now you're obviously building Accucode. Why build the software company inside the hardware company? Why not build them as separate companies?

Kevin Price

10:23>> I've really turned Accucode into my platform. Just like Accucode funded and employed the developers that built the product, We're also using it very actively, it runs our whole business. And so it's Accucode'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 25,000,000 is part of what funded the, you know, the

10:57>> acquisition of The 3D Printing Store and what we're doing in our

Nathan Latka

11:01Oh, is that how you got Accucode started? You used money from your last sale to buy a 3D printing store, that was the start?

Kevin Price

11:07>> Well, that wasn't the start. I bootstrapped Accucode myself from 1995 forward, $1,500 on my credit cards and I've done, I've borrowed a lot of money from banks and paid it all back, they loved to loan it to me.

11:26>> But I've had three successful exits of software divisions that were startups inside of Accucode. And basically, it's become my own, you know, platform.

Nathan Latka

11:35Oh, you build a software inside of Accucode and then when you sell it, you spin it out and sell it off to the other provider.

Spinning Up Software Divisions as Standalone LLCs

Kevin Price

11:40>> I set them up as separate LLCs and I run them, you know, from day one as a standalone PL inside of Accucode. 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.

Nathan Latka

12:09Yep. Yep. So for work is a individual P and L, but inside of Accucode?

Kevin Price

12:13>> Correct.

Nathan Latka

12:14I see. I see. Hell of a story here. What about the flip side? Do you have you bought any companies to bring inside of your platform?

Kevin Price

12:22>> The only acquisition I've done was The 3D Printing Store about four years ago.

Nathan Latka

12:26Just tell me about that real quick. I mean, what does The 3D Printing Store make in a year?

Kevin Price

12:31>> Oh, it's tiny. It's doing it's doing like a million dollars a year in revenue.

Nathan Latka

12:36Why buy it?

Kevin Price

12:36>> So

3D Printing Division and Capital Investment

Kevin Price

12:39>> 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, somebody

13:10>> needs to go build a plan tool that makes that a feasible 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 cute that you can do that, but it's not very valuable.

Nathan Latka

13:32So what did you pay for it? A million dollars a year printing store company?

Kevin Price

13:36>> It was more a matter of we made commitments to capital investment. So I put over $2,000,000 into 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 we're we do a lot of business in the aerospace sector and the energy sector, oil rig operators.

Nathan Latka

14:08But you own the majority equity of that 3D printing store because of your $2,000,000 capital injection.

Kevin Price

14:13>> Correct.

Nathan Latka

14:14Is the owner still operational or is he or she exited?

Kevin Price

14:17>> No, Deborah Wilcox is the Founder and she's the operational manager of the business. And she's actually an IP attorney by trade and started this, you know, basically was running this as a personal project and was operating out of a hangar at a local private airport and running a small service bureau. I met her and asked her to come run my 3D business.

Nathan Latka

14:43Interesting. Last question. Are there any tax advantages to having Accucode Holdco and then doing stand up P and Ls for individual software companies underneath in terms of how you treat sort of cash flow?

Tax Advantages of the Holdco Structure

Kevin Price

14:53>> Oh, for sure. It allows me to, you know, the hardware business has allowed me to bootstrap several software as a service businesses and run them with minimal overhead and the tax advantages that Accucode gets to be very flexible with how it chooses to expense or capitalize that R and D investment and the other resources that we put behind those business units. And it makes it, I would say, a lower risk proposition. I think there's also a

15:25>> cost to that because it's not the sole focus and because a lot of the resources are shared, it takes longer to scale it that way.

Nathan Latka

15:33Yeah. Yeah. Kevin, heck of a story here, We're out of time. Let's wrap up with the famous five. Number one, favorite book.

Kevin Price

15:40>> Oh, just recently, The Surrender Experiment.

Nathan Latka

15:44>> Surrender Experiment.

15:45Number two, is there a CEO you're following or studying?

Kevin Price

15:49>> You know, I I love Elon Musk, although I really wish that he would be a lot more quiet on social media.

Famous Five: Books, Tools, and Lessons Learned

Nathan Latka

15:57Number three, what's your favorite online tool for building Accucode?

Kevin Price

16:05>> Probably Google. Yep. Accucode's been running on Google Docs and Google apps now since 2007. And it has just been an amazing tool for collaboration and data visibility.

Nathan Latka

16:17Number four, how many hours of sleep do get every night?

Kevin Price

16:21>> Six to eight.

Nathan Latka

16:22Okay. And situation, married, single, kids?

Kevin Price

16:26>> Single at this point. Twice divorced.

Nathan Latka

16:29Any kiddos?

Kevin Price

16:32>> Three.

Nathan Latka

16:32>> Three kids. Okay. Very cool.

16:34And how old are you?

Kevin Price

16:36>> 53.

Nathan Latka

16:3753. Last question.

Kevin Price

16:38>> Some

16:39>> Started this when I was 26.

Nathan Latka

16:41I love that. I love that.

16:42>> Last question. Something you wish you knew when you were 20.

Kevin Price

16:47>> Oh,

16:51>> think bigger.

Nathan Latka

16:53Guys, Accucode, a platform launched from The US '26, now doing over a $100,000,000 in revenue. 70% of that revenue is from hardware sales. Think routers, on prem installations, things of that nature banks. 30 of those are these little software companies. Not little though, he spins them up inside the business, they collectively do $30,000,000 in revenue, and then he sells them. He sold his last one a couple years ago for $25,000,000 after growing that to 5,000,000 in

17:13revenue, 3,000,000 in EBITDA, healthy multiple. Then he reinvests 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.

Kevin Price

17:25>> Thanks, Nathan.

Nathan Latka

17:27One more thing before you go. We have a brand new show every Thursday at 1PM Central. It's called Shark Tank for SaaS. 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, ARPU, CAC, LTV, you name it, they share it and the buyers try and make a deal live. It is fun to watch every Thursday one

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