How Phorest CEO Ronan Perceval grew Phorest to $50M revenue and 10 customers in 2024.

hello everyone my guest today is ronan percival he's the co-founder of demon ware which is a matchmaking service used in call of duty that was acquired in 2007. he then founded forest on evergreen principles which are building a company to last for generations over 70 of the 150 employees are ordinary shareholders not options forest is now serving over 5 000 salons and is the leading salon software company in europe ronan are you ready to take us to the top yeah all right all right so you go from a matchmaking service used in call of duty to salons how the hell does that happen uh yeah good question um we actually didn't initially plan on getting into salons but i ended up getting a job in a salon as a as someone working the front desk and just as a part-time job while i was in between gigs and that's how i got interested in the industry so it was a it was something very unexpected that's pretty funny okay so tell us what the company does for salons so we're um booking pos um sas platform for salons so we do all their you know everything that they they do in the cell from booking appointments managing their client records managing their stock control doing their staff reporting payroll basically any admin task that the salon does um we try to automate in some way through the system freeing up their time and giving them more time to work with their clients you mentioned transactions and sas true or false your main revenue stream is sas and then you take some very small cut after transactions uh i would say about 65 is sas 35 is transactional in some way oh well okay that's actually that's actually pretty high um so let me just let me just ask about the sas side of things for a second so if we have solano owners listening right now the average salon owner that's paying you what are they going to pay you per month just on this just to use the software not the transaction fees um just to use the software anywhere from a hundred dollars a month to two hundred dollars more okay got it so you're very much oh that's annual monthly oh monthly okay but you're still very much in the smb space then huh yeah we're 95 percent of salons are our independent operators right so they're like one location so let me ask you a question they go out of business a lot which means churn on your end can be frustrating at times what's your churn rate today and how do you keep it low so we've pretty good trend rate for this industry of six percent logo chair per annum per year per year wow that's extremely low for this this space why is it so low what have you done um well just we provide a huge amount of value for salons and also we help them grow their business so so they have 12 percent of salons go out of business every year so that's the actual churn rate for the industry and we're half that mainly because if you're using our product you're going to be doing better than the competition generally so they're more likely to stay in business i'd say that's probably the main reasons that's amazing how many how many swans have you scaled to today five thousand five thousand and those are not those are actual paid salons not like free salons for users yeah that's five thousand paying customers do you implement a freemium model to get these customers how do you get so many no um we experimented with freemium but it didn't work a lot of free users and very little number of those converting to paid so we moved to a paid only model for the last five years and um that's worked phenomenally well for us it's better because people the salons that sign up with us uh are serious about using the product and getting value from it so they tend to to be easier to onboard if that makes sense easier to get them using all the value in the product because people pay attention to stuff they pay for yeah like we're not the cheapest provider in the market we're probably one of the more expensive um for what we're doing um but that works well for us so we tend to attract the sort of mid to high end independent salons so a salon that would have like more than five people working there yep yeah and what's your kind of top growth channel that's not a really obvious one like not google ads or facebook ads but is there something you're doing kind of in the trenches that's really working nicely to find these kinds of lawns yeah well like just give you an example like in the last 12 months and we've probably onboarded 1600 salons something like that and half of those come from content so i've come from our own content channel so we'd have a quite a big podcast for sale owners a blog events things like that interesting that's something that might be not expected which well a lot of people say content marketing which isn't valuable and actionable because that can mean so many things can you name a specific piece of content on your blog that has performed the best in terms of helping you onboard 1600 new new salons um yeah there's a couple of articles that are like evergreen that are always in the top two or three red articles and they've been around for a couple of years and i don't have it to hand but i'll yeah i can do you know the search term off the top of your hand that you rank really high for yeah um yes we rank number one for 700 different items around salons so things like um uh yeah we really quickly uh top salon signs i think is an example of one interesting and how did you did you create all this with humans or did you do something kind of automated where you you knew what the top search terms were for salons you then pumped out a bunch of these articles like created from from like a piece of code or is it all humans it's uh oh it's all it's all humans but it's it's using data i mean like things like um we're testing a lot of different content so we probably put out you know a different piece of content every day and so people we're tracking you know how those picked up and and things get a lot of traction that might develop into a much larger piece of content i see we have an seo team then with particular bits of content to make sure or come back with feedback on search work keywords that we might might lead to a bit of content around that if that makes sense so you put out you put out kind of little acorns and then if they show any sign of life your seo team will go in and then optimize optimize optimize and you'll make it maybe longer more keywords more value or even develop it into an ebook you know you know etc etc so and then that ebook might get to number one for something that gets a decent amount of search volume i mean some of these terms when we're saying 700 terms some of those are better you know they might only have five people a week looking at yeah yeah per month yeah exactly that's great um and the so so let me understand your team breakdown how many people are on the team today and how many focused on content or events or things like that so we have 170 in the team i would say a uh [Music] we've got i think we've got about six full time on content wow and then another another four you know around that between seo and data and uh events and things like that that i kind of backed off some of that content in terms of in terms of the blog is that on top of wordpress yes uh the blogs on wordpress yeah i see and the 170 or is everyone based in dublin no we've about 110 in dublin and the rest around the world so we'd have 25 in the uk about 12 in the us and then the rest are just three or four in germany in australia you know and then sporadically remote workers wherever they want to be dublin and remote and ron put this on a timeline for me when did you launch the company what year so and so we've had like kind of a longest journey we started in 2005 when i left demon where and that was the salon you worked at yeah so i was working the salon between 2004 and 2005 and we've we were bootstrapped pretty much all the way until um until 2011 when we did a seed round so the company had about 15 people in 2011. um and and then you know it started to grow properly from around then i would say you know if that makes sense um and uh how much raised today so we we raised a million in 2011. and then we didn't raise again until this year when we did 20 million oh god that's so very patient and effective with capital i like that why not so there's a couple of firms right now like wistia and things that have raised like a million they've gotten kind of good scale and instead of going out and raising the 20 million like you just did they said you know what it's really nice to be in full control and they go buy out the early investors did you that ever cross your mind or no yeah absolutely so one of the things what we've done is we've the majority of the company is still owned by myself and the employees so we've kind of made a pledge to each other that we will always maintain full ownership and full control because sometimes you can own the majority of the shares but an investor will have rights in their voting rights yep the ability to force a sale or something like that you know they're not used that often but they have that so we don't have that in our agreement so that the firm that we took in this year...