FormPiper Revenue & Valuation (2024)

[00:00] Hey, folks. My guest today is Brad Parker. He helps retailers automate their financing via his company formpiper.com. He's a twenty year veteran in the pet retail space. Now again, helping those retailers identify the proper SaaS products to grow their business. Brad, you ready to take us to the top? [00:14] >> Let's do it. [00:15] So just to be clear, this could be like someone in Kentucky that runs a little miniature shop that sells fish, for example. And you're gonna what do you mean when you say help them find the right software to automate their business? [00:28] >> Well, we start with the financing aspect of formpiper. So if you're a retailer selling high ticket items, typically you'll have more than one finance option you use to present options to your customers. So we streamline that application process. And since we've last talked, we've kind of turned it into a retail management software where they're going to be able to aggregate their data and look to see which lenders are providing them with the most revenue, which employees [00:52] >> are running the most apps, who has the best approval rate, who has the best close ratio. So you can actually turn the financing aspect of your business into a division of your business. [01:01] And to just to be clear, what you did here, I believe, was you acquired a company, a financing company that did about $120,000 per month because they took a one to 2% back end fee on financing to pet retailers. Is that accurate? [01:14] >> That was actually our own company. So it was where I actually started And in the then as we grew, we saw that there was an issue. We would, we would sell somebody financing and they would never use it. So we would call them, why aren't you using it? Well, I can't teach my team how to do it. Now I have four lenders, it's too many applications. So what we did is we built a solution to aggregate [01:33] >> that all of those lenders into one app to really streamline the process. So now as we sell financing to our retailers, you see them immediately using the product because it just goes right into their ecosystem. [01:45] And selling finance to your retailers might be if someone walks into a pet shop and wants to buy a $4,000 tank for their fish, you could say the rep at that store could say, hey, you know, and it's powered by formpiper. Hey. Why don't you make 40 payments of a $100 a pop over the next forty months and we can finance this for you? [02:01] >> Yep. That's a good example. Yep. [02:03] And so if you add up all of the loans you approved in the past thirty days, the equivalent of the $4,000 that I just described for the water tank, how much GMV is going through your platform monthly? [02:14] >> Monthly, [02:16] >> I'd say right now about probably 15,000,000 that we track that we actually represent. And then in my system, if you're a retailer and you're using lenders already, you can plug your own lenders into my system and still use And the we don't actually track that revenue or get paid for that revenue. So the last time we had talked, we were doing about 100,000,000 in revenue that we represented. So I was kind of playing with those numbers. [02:43] >> Now we're close to about 150,000,000 in revenue through the lenders we represent, but we're probably running about 300 to $350,000,000 in transactions through formpiper for our retail. [02:54] So you sit on data that's worth $350,000,000 of loans done. Of the ones that you are directly attributable to and you're powering, it's about half that, a 150,000,000 annualized. [03:05] >> That's correct. [03:06] Are you still taking about 1% of that? That's how you make money? [03:09] >> Yeah. It's on average about one and a half percent. Yep. [03:12] Okay. One and a half. So, yeah, one and a half of I got obviously a hundred hundred and, what, 15,000,000 a month. That's what? $220,000 a month in revenue there? [03:21] >> It's close to that. Yeah. [03:23] And so is that your only model right now? Are you selling the SaaS stuff now too? [03:27] >> No. We still sell the SaaS products. So our initial plan when we work with the retailer is to educate them on our SaaS product, and that's gonna range anywhere from 1,500 to 3,000 a year. Right now, average customer is paying us about $225 a month for the software. So once they have our software, we plug all of their lenders into the platform and what we do is we identify their lender lineup and look for gaps. So [03:48] >> if they don't have a near prime option or if they don't have a good subprime option, we'll introduce them to the people that we use and then we'll add a lender to their portfolio of lenders. [03:57] Oh, 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 [04:21] your Stripe account, you see your valuation real time. You can see what it 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 [04:45] get a 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 [05:07] not built off random data. Again, you guys hear these interviews on YouTube. All these datas are built from real time valuation data points founders 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 [05:33] going out 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. All We're right, gonna go back to the YouTube video here in a second, but [05:55] if you wanna 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 [06:21] the interview. See so is that is that flat fee on top of the 1% you take? [06:26] >> That's correct. [06:28] I see. And last time I chatted, you had about 90 customers. How many today? [06:32] >> So today, we are up to a 150 customers, but 250 actual locations. [06:38] Got it. So average of 1.6 locations per per per brand? [06:44] >> Yeah. I'd say most of them are still single operators, and about 60 of our customers are multi store. And then we have several that are gonna be that have 10 or 15 chain. We are finding the data that we track is more important to the multi store operators, so they've scaled to a point where they're driving huge success. They have 10 locations. So being able to see an aggregated approval percentage for their entire, like their whole [07:09] >> book of business has been really huge. So the smarter the operator, the easier it is for them to purchase our product. [07:16] And 150 customers or brands paying 200, what, $225 a month. That's like, what, another $34,000 of MRR? [07:25] >> MRR is up to 45. [07:27] 45. Oh, 45 just on SaaS? [07:29] >> Just on SaaS. Yeah. So last time we talked, we were at 18. And so now we're at 45. So we're up about 150% since we got That's incredible. [07:39] So that must is that your fastest growing revenue stream, then faster than the percent of GMV model or no? [07:44] >> Yeah. The the financing, it's a much slower roll, you know, because obviously the number is much bigger, but we have grown that about 10 to 20% since we last spoke. [07:52] Okay. So just to be clear, when you add both revenue streams together on a monthly basis, you're doing about what? $250,000 a month in revenue? [07:58] >> That's correct. Yep. [07:59] That's incredible. And still boot well, no. No. Wait. Did you raise a pre seed round or not? [08:04] >> Nope. We're still bootstrapped. [08:05] That's weird. Why do I have a note that you raised a pre seed round? Did you do a secondary early on at a 4,800,000 post money valuation in 2021? Nope. Weird. I wonder why I have that. Okay. So great. Still bootstrapped. And founding story here, sole founder, or what what do your co founders look like? [08:22] >> My co founder is Ryan Munson. So we started the financing company together seven years ago, a marketing company, and then we merged it and created formpiper about three years ago now. [08:33] I love this. You're like you guys are the kind of founders that, like, we should be celebrating on, like, newspaper headlines and stuff. It's like a niche category. You're eating your own dog food. It's what I call SaaS plus or SaaS plus GMV from the financing business. You're building a beautiful moat here. How many how many pet retailers are there in The US? [08:51] >> Well, that's that's the tricky thing there. I wish there was a lot more. So you really only have about 200 pet retailers that our product would fit for in the market and we have about 60% of them. And then, so what we've been doing is focusing in the furniture space. In the furniture space, you have about 40,000 retailers that fit our model. So, you know, our goal is to bring value to that space, continue to learn [09:13] >> it, and really kind of scale up. And our goal is to get to a thousand furniture retailers over the next couple of years. [09:19] A lot of people, when they talk about buy now, pay later, they think of like Klarna. They've probably seen online. Right? They're buying a thousand dollar whatever stereo on Amazon, and Amazon says pay with Klarna and payments. Klarna, I imagine also will do like furniture and stuff, but I think you're a unique example where a very niche player can beat a multi billion dollar valuation company because you're niche. So if I'm a furniture store, why would [09:41] I choose to be powered by formpiper versus Klarna on my lending options? [09:46] >> The issues with things like Klarna is it's the four payments, right? So they're approving everybody, they divide it up into four payments. So if you've financed something that was $50, you might still not be able to afford the $12.50 payment, right? So in a furniture business, we're typically able to offer customers a sixty month payment plan. So now all of a sudden their payments under a $100. A $100 is very manageable over a period of time [10:07] >> where $12.50 is not, you know. So the furniture store is going to spread their financing options amongst the prime option, near prime and a couple subprime options. So they have different approval and different products for the type of customer that's walking through the door. So with formpiper, they're able to diversify their financing options for their customers, where if you were just using Klarna, you'd get a lot of approvals, but you wouldn't have a lot of transactional, [10:32] >> you know, things happening because it's just too expensive. [10:35] And and payback period wise, you just said you can have our sixty month option. Is Klarna always twelve months? [10:40] >> I think it's just four four payments, you know, so I don't even think it's twelve What period? [10:44] Period, though? [10:45] >> I think it's really short. I think it's, like, sixty days or, like, ninety days. It's Oh. It's a it's a really yeah. Easy [10:53] You have a massive cash flow advantage in terms of what you can offer the consumer. It's way cheaper monthly cash flow wise. [10:58] >> And that's just how consumers shop. Right? They're shopping based on the monthly payment that they can add to their budget, you know? So you need to be able to have products that can get that payment as low as possible. [11:07] So when I ask myself how you, a much smaller player with less resources than Klarna, can build a sort of moat like this or an advantage to sort of stick it to the man and start selling their market share. I would argue this advantage of your ability to do sixty month paybacks comes from you very smartly negotiated your credit facility with whoever your banking partner is to allow them for you to have a blended sort of [11:26] warehouse facility where your blended loan could be and have a payback up to sixty months. Is that accurate? [11:33] >> So like the unique thing about my product is we can work with any lender. So they're not my lenders, right? So I represent 10 lenders and we'll market them. [11:42] Oh, it's not your capital. [11:44] >> Not my capital, not my money, know. I see. So I can sign up a retailer and they could already have five lenders and then they could just use my platform to aggregate it. So that's why we charge for the platform because [11:54] >> I'm not always making money, right? [11:56] >> So yeah, I don't wanna be in banking business loaning out, you know, hundreds of millions of dollars. I'd rather somebody else do that and just give me a piece. [12:03] I guess so actually, why is that? I mean, why not go raise a $200,000,000 for some answer we're doing at Founderpath, right? We could either be a marketplace or we could actually raise the money ourselves and do it. Why not go rate? You have the the hardest part about this is the deal flow. You have all the deal flow. [12:17] >> That's true, but I also have very strategic partners in the spaces that I work. So if I came in and competed with them, then they would say, well, Brad, why are we paying you to come in and compete? So I would have to choose, do I want to represent companies or do I want to be the company? And then if I put my own financing product into my SaaS product, now I'm competing with all of the [12:36] >> 60 lenders that I have in the platform. So for me, it just feels like a conflict of interest. Could be wrong. [12:42] That's fair. That's fair. I think [12:44] >> that's something to do in the future, but yeah, it's not on the [12:46] Let's say when a let's say you were you want a furniture company that pays for your software $200 a month. You show them six of your friends who are lenders as options, and you drive one of your friends a financing on a thousand dollar couch. Your friend is gonna bill the customer over sixty months, whatever, $1,500. So they're gonna make a $500 spread over sixty months. You can calculate an IRR on that. It's way higher than [13:10] the 1% you're making. Right? So at some point isn't the margin, like the ability for you to go capture that margin just too irresistible? [13:20] >> I mean, can be, but, you know, [13:23] >> financing is a challenging business, right? So got a lot of people who default, everybody's not going to pay you, right? So you have to know which bucket of people to approve, what are the merchant rates you're going to charge the retailer in order to execute and get that done. Then you have to have a whole ecosystem of collections and just, I mean, it's just a whole another business, you know? Yeah. And it's, I really like working [13:45] >> with retailers and helping retailers drive success. If I was in the finance business, now I'm working with consumers, I'm working with the end product. And I did that for twenty years in retail and loved it and it was great, you know, but since we last spoke, I actually sold my four retail businesses. So I'm just focusing on SaaS, working with retailers and it's just a much easier place to live. [14:07] I love that. Of the 40,000 furniture retailers in The US, what's the total purchase volume annually across all 40,000? [14:15] >> Oh, god. There's no telling. I have no idea, to be honest with you. It's I'm sure [14:18] it's in a billion. It's in the tens of billions, I'm sure. [14:21] >> Yeah. I mean, it's massive. Yeah. That's wanna figure out [14:24] what I wanna figure out what 1.5% of that is. That's your opportunity. Right? [14:28] >> What's what's the potential grab out there, you know? [14:31] That's right. That's right. Okay. This is very cool. And so give me an update on the team. How many folks full time today? [14:38] >> Right now, we've got nine. We've got Nine. The two two founders. We've got six salespeople brought in a head of CSM. So that's the internal team. And then we're still outsourcing our dev team to the same same company we were working with last time. [14:54] Yeah. Which you've done very nicely here. It's called Maker Software. Always look for good dev shops. You're happy with them still? [15:00] >> Oh, yeah. It's fantastic. Just 24/7 service. I can get them on the phone anytime, talk about BrainStorm. Everything they put together for me is fantastic. [15:08] And how do you interface? Like, do they talk to your furniture owner companies, put together specs, actually deliver the UI, UX, and the code to you? [15:17] >> They wouldn't actually talk to the customers. So we do all the talk to the customers. We have all kinds of outlines. We work on twelve week sprints. So we have a laundry list of things that we're working on to improve our systems and processes. And we're just always itemizing it and continuing to evolve it. Know I the last time we talked, I told you we were about to launch our third iteration and that we were going [15:34] >> to go into just chill mode. That was not correct. Like now we're going for our fourth iteration. We're developing more than we've ever developed. And the cool thing about that is, you know, we're just getting feedback from our customers. What are they looking for? How would they like it? Our relationships with our lenders are getting stronger, so we're doing more API connections. And so when we launch the next version, it's gonna be really, really sweet and [15:54] >> just be a real turnkey system to help retailers just crush it. [15:58] Yeah. This makes so much sense. Makes so much sense. How are you getting furniture retailers to return your phone call? [16:04] >> Well, the good news is is they're retail businesses, so they're open, and so they have to answer their phone during hours of operation. So Yeah. We're just I mean, we're just always on the phones. You know? I've got the SDR team. They're all making a 100 calls each a day calling into retail businesses, just trying to get on the phone with them. [16:22] That's the number. It's a 100 calls per day. Yep. How many SDRs again? [16:26] >> Three. [16:27] So you're doing 300 calls per day. And how do they how do they find the 300 phone numbers, like people to call? [16:32] >> You know, we were using a company called Task Minions to scrape the Internet for us and find leads. And then what we've done recently is we contracted with Seamless AI so we could enrich those lists and then also build lists inside of their system in order to give my guys the best chance to get in touch with the right people. [16:50] And is that system working now? [16:53] >> We just launched with it. [16:54] So Okay. So it's task minions to get the list, then it's Seamless AI to enrich the list. And then your SDRs, three of them daily, will use that enrich list to call people and try and close deals. That's it. That's great. How many furniture brands did you add new customers last month? [17:09] >> Last month, I think about 12. [17:12] Okay, interesting. So your folks are making 300 calls a day, right? Times call it twenty business days a month. They're making 6,000 calls and closing about 12 per month? [17:22] >> So my goals are so the goals are for them to book 30 demos and that's what they do on average. So 30 demos a month, we see 50% of those demos show. So 15 demos per SDR is showing and we're closing 35% of those. So on average, what we're doing is bringing on about 15 new clients a month from That cold [17:40] makes a ton of sense. Yeah. So 15 new clients at $200 $225 ARPUs. I mean, that's 3,300 of new MRR, which obviously compounds over time. You can obviously that feels like the economics on that make a lot of sense. [17:53] >> Most of our contracts are being done annually now. I'd say probably 90%. And we're closing those in the furniture space around fifteen hundred to two thousand dollars depending on how many locations they have. [18:02] Yeah. Yeah. That makes a lot of sense. Mean, that's $40,000 of cash flow monthly. Right? If you're closing 15 at 2 grand a year a pop. [18:09] >> That's that's exactly what our goal is. Yep. [18:11] Yeah. Yeah. That makes a ton of sense. So what's I mean, what right now, is there anything keeping I mean, it seems seems to give your ducks in a row here. Is there anything keeping you up at night? [18:21] >> No. Nope. Sleep like a baby. You know? [18:23] Who else is doing this? Is there anyone else doing this? [18:26] >> We we definitely have some competition in the space. You know, I feel like when they built their technology, they were finance companies, thinking about it from a finance perspective. So they do a great job working with finance companies, but I'm a retailer and so I understand what the business needs. And so my system is built to be agnostic from a lender perspective. So the retailer can choose what lenders they want to use, run them in the [18:51] >> order they want to use them. But most importantly, it goes back to that data I was talking about, right? Like if you wanna move the dial in retail, you have to know which salespeople are not performing well. So if you have somebody who's getting approvals and they're not closing those approvals, you have to train that person on how to sell, right? And so my system will tell you the close ratio of every single sales associate that [19:10] >> you have. So when I come in, I can look at my scorecard and say, all right, I need to work with Jim and Todd today and teach them how to close the sale because they're not converting. So from a retail perspective, I believe that our software just helps the business owner, the sales manager, the sales team just really drive success. [19:26] And you're still pretty profitable. You told me last time $60,000 a month in profit on a 140,000 a month top line. [19:33] >> Yeah. So I pulled those numbers up. So right now, last year we ran 18% profit across the board with 34% growth. And then this year, we're at 20% profit with 37% growth. And that doesn't include adding back, you know, mine and Ryan's salaries. That's awesome. [19:50] That's freaking awesome, man. This what what it's just like, I just wanna like make a newspaper and put you on the cover just to say, you know, sell to millions of people. This is the kind of stuff we should celebrate. So congrats on congrats on what you built. [20:01] >> Technically, you have a newspaper. It's in the form So of a you feel free to put me on that cover anytime. [20:07] I know we've got we've got we've we've we've got these bad boys coming out. We would love to actually where are you based? [20:13] >> I'm in just North of Atlanta. [20:15] Interesting. Yeah. We've got a big event September 1 down here in Austin, Texas. We're just featuring bootstrapped SaaS founders who are killing it. I don't know if I can convince you to come down, but I'll definitely put you on stage if I can get you here. [20:24] >> I would come, but I I I fly out to Italy that day. [20:27] Ah, what about what about March 16 next year? We'll have to follow-up. That's our next big conference. I'll definitely put you on stage. [20:34] >> I'll make it happen. I'll make it happen. [20:36] I love that. Yeah. It's in New York, March 16. Just stick a soft hold on your calendar because this is just a fantastic story, and I can't wait to see where you're gonna be in six, twelve months. [20:44] >> Yeah. That's great. That sounds great. Be right after [20:46] It's my gonna be This is amazing. Alright. Let's wrap up here quickly with the famous five. Number one, favorite book. [20:52] >> Right now, it's the twelve week year. [20:55] Twelve week year. [20:56] Number two, is there a CEO you're following or studying? [20:59] >> I think he's the CEO of his own business. So Chris Smith, he's dropped the conversion code. I'm just all I'm focusing on right now is trying to figure out how to get people to call me as opposed to me calling a 100 people a day. [21:10] And number three, what's your favorite online tool for building formpiper? [21:15] >> My favorite tech right now is superhuman. I don't know if you've heard of that, but that email plug in is just unbelievable. It's changed my life with email. [21:23] Number number four, how many hours of sleep do get every night? [21:26] >> Eight. [21:27] And situation, married, single, kids? [21:29] >> Married, no kids. [21:30] No kids. And I think you maybe had a birth date. 41 now? Or sorry. 42? [21:34] >> 43. 43. [21:36] 43. Okay. Two birthdays. Very cool. Last question. Something you wish you knew when you were 20. [21:41] >> I would tell myself just to be a little bit more patient. All comes hard work. [21:47] More patience. Formpiper, hell of a story here, launched back in 2019, basically helping pet stores, retailer brands, help them give their consumers options to buy the $4,000 fish tank. They now go, oh, there's but not a lot of those locations in the world. Let's go into furniture stores to do the same thing. How can we help furniture stores look at all the different lending options they can give their consumers so they can sell more thousand dollar [22:07] leather couches? And so that's what he's doing. They're processing over $350,000,000 of GMV annually right now across, again, pet retailers furniture brands, of which a 150,000,000 they directly attribute to their formpiper brand, which they take one to 2% of. That's a basically a $200,000 a month revenue line right there. And smartly, he's now getting into SaaS. He's building software tools to build the operating system for furniture brands, for retailers, for pet retailers. That's doing about $50,000 [22:32] a month, up from $14,000, $15,000 just a year ago. So really healthy growth, all bootstrapped and profitable, which we love. Brad, thanks for taking us to the top. [22:39] >> Alright. It's a pleasure. [22:42] One 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 1PM [23:07] 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, the 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 SaaS world, whether it's an acquisition, a big [23:29] 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 SaaS 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 [23:51] up for that at nathanlatka.com/slack. In the meantime, I'm hanging out with you here on YouTube. I'll be in the comments for the next thirty 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. [24:10] We got to push them away. Click the thumbs up below to counter them and know that I appreciate your guys'support. Alright. I'll be in the comments. See you.

Introduction hello everyone my guest today is Brad Parker he's a 20-year veteran in the pet retail space and a Serial entrepreneur he owns four retail pet locations a marketing company called social network MD a finance company called financing your way and a SAS business called form Piper he thrives on identifying the problem and solving it and helping retailers Drive success in a business Brad you ready to take the stop I am let's go all right so what is form Piper and is it a pure play SAS business yeah form Piper is um software designed to help retailers automate their consumer Finance process and and give me maybe an example retailer that uses you uh take a furniture store you go in to make a purchase uh you want to use their same as cash offerings they might use four or five different uh finance options so we really streamline the process for the customer to make that easy for them to get that approval and are they always brick and mortar locations or do this online digital brand as well right now we focus on brick and mortar retail brick and mortar retail okay and and give me a sense of how you're helping these guys if I go into a brick and water spot I buy a mattress and then they're using you on the back end to help me Finance the mattress purchase how's that all work we really streamline the process and make it quick for the consumer so the consumer only has to fill out one application um if you're not using form Piper or some form of portal system you might have to fill out multiple applications to get that approval or the sales associate might have to fill out multiple forms so the time can really add up uh when you're sitting there waiting for an approval uh you don't want to wait for 30 minutes you want to know that you're approved within a few minutes so you can continue on with your purchase um and have a good experience now when did you launch this business about 18 months ago oh well congrats so just getting in the market here and help me understand a little bit about how you found these brick and mortar retail locations like you know the local mattress store to use you well it really started off with my retail locations uh so I was able to identify a problem in my own business uh we use five to six different lending options and so it would take us about 25 to 30 minutes to get the approval that we needed if we needed to use all of the options uh so we knew we had to have a solution so I was able to bring my my pet team together with my finance company my marketing team uh whiteboard it out and for Piper was born so we've taken that 25 minute process down to a couple minutes so it's been fantastic and how Currently serving 90 customers many customers are you serving today currently 90 90 folks now do you do you Bill based off like number of locations or is it just 90 no matter if you have one location or 100 locations basically we build per location so you can have our software on as many devices as you would like in your location but if you're a multistore operator you would have a license per location okay so 90 is like the number of Brands they could have 180 locations under the 90 Brands no technically right now we have 90 retail businesses using the platform yeah what I'm trying to differentiate between is the number of retail businesses using you and then how many locations they have where they've installed you yeah I mean it's really close to I mean we have a few multi-store operators you know one has 10 um a couple have five so you're probably looking 60 different business owners with 90 90 licenses being used I see I see okay and what do you charge on average for these licenses on average right now our our license fee is about $200 a month it can be anywhere from $150 to $300 a month depending on how many applications you're running okay so this SAS part of your business then what it's doing about 18 Grand a month in Revenue you got it yep and where was it ex I know you launched 19 months ago so if we go in I guess when you were six months old so 12 months ago what was it doing do you remember uh yeah it 12 months we it took us about 3 to four months to get the MVP built and we launched with about 40 uh people to to test then we moved to our second iteration um and then that's where we've jumped up to where we are now uh timeline wise uh what do you remember like end of December 2019 so about a year ago a year and two months ago probably about half about 8,000 9,000 a month okay interesting now how did you you eat your own dog food you had your own problem you built it tell me about the story on the first customer you got that was not your own your own location uh it was it was similar business models to mine I'm in a franchise so I was able to go out to my network of friends that are in the same space I knew that they had the same problem uh so when I was able to show them what I had created um it was a no-brainer for everybody in the industry um we all suffer from the same issue um so uh it was just a real simple transition popped it in and everybody's extremely happy with the with the product so far what's the pet franchise Line Pet Land Pet Land interesting and what is a product that a consumer would come in and buy try and use the old financing and you'd have to wait 30 minutes to do it I mean imagine they're not financing like a dog bowl right no it would be a pet and then the supplies that go with it so it could be a puppy kitten bird it could be fish fish tanks uh even small animals the whole goal in the pet land model is to identify the right pet for the customer and then meet the needs of both so typically a consumer is going to purchase a lot of supplies to go with that pet uh so sometimes breaking it up over 12 months or 24 months can make that process a lot easier got it so these were $1 th2000 $3,000 purchases you got it yep I see very interesting okay so scale with the franchise model you're not doing $18,000 a month in Revenue have you bootstrapped yes all bootstrapped love Bootstrapped that man yes very how many how many VCS have you turned out uh we haven't had any reach out you know we kind of been over in our little corner of the world just building it so you know we'll see what happens but uh we've bootstrapped all of our companies and like being in control and so we just continue to continue to scale um we recently acquired the finance company and for Piper merged together uh so it's going to take our monthly revenues up to six figures so we're going to be able to continue to pour money into marketing and our team and grow it you know on our own own path tell me what that means what's it mean to acquire the financing company what what is the financing company's Revenue uh that Revenue right now is about $1 to $120,000 a month just depending on the month uh so what we do is we help retailers identify the right financing companies to use for their customers and then we're going to receive uh basis points on the back end there so we actually how many on usually on average basis points that can be anywhere from one to two I sorry 100 to 200 one to two% yeah yeah so what form Piper does is it actually makes it easier for the business to use multiple forms of financing so what we see is the financing Revenue also increases so we've seen huge spikes so we just decided that you know now that the software is proven and tested uh we're going to move that into all of our retailers through financing your way uh and so it only made sense for it just to be one company so we could really scale yeah and the name of the name of the company is financing your way so how much gmv like how many loan how how much went through their platform last year total about100 million 100 million wow interesting so how do you you just bought this company how do you value a business like this where they're doing 100 million in gmv they're making about uh it sounds like about uh 1.5 million based off their 1 2% fees you came in and buy it what do you buy it for and how do you value it uh well I own the company so I didn't really it's not really technically a buy we just kind of merged them together oh I see you own 100% of that business that's correct me and my business partner yeah got it well hell that's an impressive story when did you launch that company seven years ago oh interesting so those are really your roots now did you did you launch this at the same time you opened your retail stores with Petland so that you could do better financing so retail I've been doing that for 20 years so basically 20 years in the pet space uh seven years in the finance space realizing that financing was important to the business model and then now 18 months in the software business to help catapult and make the systems and processes easier uh you know what it really does uh you know form Piper is designed to shrink the time that it takes to run applications but what it actually does for the retail business is it allows your key employees to be out on the floor helping customers as opposed to running applications and doing data entry so it's had a lot of benefits that we weren't really planning on you know so um it's been it's been a great marriage between between the companies so the combined entity will do Monthly recurring revenue what in monthly occurring Revenue uh last month uh we did $138,000 between the two this is interesting and over the next year which do you anticipate will grow faster the pure software player the financing percent gmv model it's going to be interesting to find out you know because we you know just got the software to where we can scale it um I think from a percentage of growth the software will grow faster um but we're very very excited about the uh the financing your way Revenue trailing it and is are they Profits both profitable uh the finance company is extremely profitable form Piper is not currently just due to development uh we're putting into our third iteration um that will launch at the end of March and the great news is once that's done we're going to be able to move to more of a just a a maintenance mode for both of our development teams how many folks are on the team total so we have me and my business partner Ryan so two uh Founders two salespeople and then uh we started with our social network MD team we had our developer on staff uh so we were able to build that mvp product very very economically and since then that developer um has gone out started his own company and so now we have four outsourced developers on that team that we're able to use so we can scale the product faster so eight total four full-time four part-time those four parttime are Engineers you've outsourced that's correct that's where did you where where you outsourced to at curiosity um maker software is the name of their company oh it's like an agency I'd say you know he was our employee and and he had friends that were developers and he was looking at an opportunity outside of ours as well so he said you know I'm going to start my own company and wanted to know if we'd become a client we saw the benefits of having him and the additional team members and so uh we were proud to be his first client and hope his company grows and succeeds from there so yep you s like a pretty sharp business guy I'm curious you're not looking to sell the company correct no not right now no yeah so cool so removing that from the equation when you put your rational sort of hat on what would you sort of rationally value this business at today uh well when looking at the p&l you know it drops about 50 to 60% profit you know to the bottom line uh so it it definitely provides a very nice lifestyle um for the team um just looking at what other people do you know a six times multiplier so would it be I don't know about 4 $4.8 million on IA yeah yep yep super interesting what do you choose to do I mean a lot of Founders you know you're unique and I I like this aspect of what you're doing you know a lot of Founders think they have to burn Capital never make money you're making money it's like a real business which we love but how do you choose how to sort of make Capital allocation decisions so if you and your partner are splitting 50 $60,000 in free cash flow per month from profits what do you choose to do with it don't you say well wait I probably just put this back in the business because the business is my best ATM right now yeah we we battle with that you know we like to have the money coming out for lifestyle reasons but we're definitely at the point where we're investing a lot of money back into the business now um you know when we were just running the finance company uh our margins uh our return on investment for marketing was not there uh because it really took a lot of time to build that customer up to actually see the the return with the software you know when you close the deal you close the check right so you're you're increasing that Revenue so now we've got models for scaling marketing we're working with some great companies we we're launching with web profits next month uh so yeah we're ready to just really throw some fuel on the fire now that we have the software product to help us speaking of that fuel I mean Customer acquisition cost what's your fully wayed CA to get into $200 a month customer um I'll be honest I haven't I haven't put those numbers together yet you just know you're making money and and whatever else happens happens right exactly we're going to allocate a certain percent to marketing and we're just going to start running see where we're winning see where we're losing and then we'll just you know shift when we need to right on that note let's wrap up with the famous five number one favorite Business book uh I find the my favorite book is usually the last one I read Because I can apply you know to it so the Happiness Advantage no number two is there a CEO you're following or studying right now because I'm in the SAS and trying to learn it it's new for me so I'm really following a lot of Dan Martell's content really appreciate his content he's great we love Dan Martell number three what's your favorite online tool for building the business for me it's the the Google Suite uh for my team it's HubSpot number four how many hours of sleep you get every night eight every night eight love that and number four sorry what's your situation married single kids uh married no kids no kids okay how old are you 41 41 last question what's something you wishing knew when you were 20 get into the SAS business guys there you have it form piper.com helping retail locations like Petland locations Finance customers when they come in and purchase for you know 3,000 bucks they have a software business they sell to Petland directly so that the retailer pays a fee to use the product and they also have financing product which processed over two hundred million do in loans or gmv last year they take one to two% cut of that it's doing 120 130 Grand a month in Revenue uh with really healthy margins the combined entity doing 50 to 60% profit margins totally bootstrapped they look to continue to scale with some paid spend this year Brad thanks for taking us to to the top all right we appreciate it it's nice joining you one more thing before you go we have a brand new show every Thursday at 1M 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 backend 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 1 p.m. central additionally remember these recorded founder interviews go live we release them here on YouTube every day at 2 p.m. central to make sure you don't miss any of that make sure you click the Subscribe button below here on YouTube the 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 fund raise 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 Nathan la.com 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 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