How Shedwool CEO Cory Warfield grew to $24K revenue and 50 customers in 2018.

hello everyone my guest today is corey warfield after 20 years working in restaurants he started his company shed wool to solve the pain point of scheduling making every day working in restaurants suck he's focused again on making that much easier with his smart shift scheduling software corey are you ready to take us to the top 100 all right tell us about this tool how does it work and how do you make money absolutely so we're a sas based company we have our our web mobile responsive uh suite of software's number on the ios and uh and the android google play store and so i created the company about three years ago out of need i spent decades in the restaurant industry where every day is a problem scheduling from management to you know servers and bartenders and if there's too many people you don't make enough money if there's not enough people you work way harder and somehow still don't make enough money and so uh basically we've been using some softwares for some years it really did help kind of solve for the on call during when you worked and getting your optimal schedule and that was taken away due to price so i did a little poking around saw that there wasn't really anything available on the market that was affordable and robust and over the years of using some of the other tools we would always say like i wish it did this or i wish it did this or if it did this that would be so much better so i put together a team and i created the tool that i wished i would have had at my disposal for about 20 years in the industry and it's kind of taken its own life we're now live in hospitals fire departments police departments we have a handful of hotel chains restaurants uh universities sports teams using the application so we really feel as we've kind of cracked the code on how to schedule shifts you know as they pertain to different industries anything kind of from athletics to the medical and health industries yeah very interesting and we say shifts is this typically a manager putting a shift like planner together it's the actual employees like they use it to check in and check out and things like that absolutely so we're almost live with our geofence we'll actually be able to clock in and out through the app as well right now we track all their time and it's really it's a connectivity and communication platform so employees can go and see when they're working request time off swap shifts with one another management has that oversight and insight into who's working to make sure that they're properly staffed and we're leveraging several partnerships to actually let managers hire both full-time and temporary qualified workers through the platform so we're getting into the payroll space we're getting into the the hiring space and then we find that kind of time management and shift scheduling is the linchpin that all of these things uh kind of revolve around so that's really what we're solving from the ground up okay so without going down every kind of customer cohort on average what's the customer pay per month for this right so we're our price point currently is 39 per month per location so if you're a mom and pop store you're paying 39 a month we also offer 30 390 a year pricing uh so you kind of get two months free when you pay up front uh that said we're moving more into a licensing model in q1 of next year where it'll be 29 per manager that needs access to the tool and it's always going to be free for the employees we've seen some of our competitors charge the employees for the download of the app and usage and we don't think that's right yep so just to be clear though if you look at your base today is it fair to say you know the average is paying 39 bucks a month yep okay very good so most of them are kind of one one location mom-and-pop shops no so actually our average user has about 10 locations so they're paying closer to 400 a month okay yeah so then 39 a month is not your average 400 a month is your average yeah i see i see okay good um i want to learn more about the sales cycle and how your lending is it sounds like you came from this industry but tell us kind of how successful you've been landing these customers what are you at today in terms of total customers uh so we have about 50 paying customers on the platform uh we're really trying to grow out of a freemium model so we've had dozen dozens and dozens of companies using us for free that's kind of coming out of an open beta where we really wanted user feedback and we're really just looking to get more eyeballs on the platform uh so we just started charging uh the middle of this year and so we've grown to about 50 paying customers that said i brought on a sales team my director sales is phenomenal he spent almost 10 years at linkedin before joining our team and so he's kind of got a set up in hubspot with the crm he's he's talking kind of to some of the higher level people and we have three international companies one's a fortune 50 company that's reached out they want to figure out not only how to get us live on their uh b2b sas platform but also to use us company-wide uh they'd be our first seven-figure client okay so just be clear though today 50 customers 400 bucks a month what you're doing about 20 grand a month right now no so and that that that multi-unit concept is not every user uh we definitely do have users that only have one location well that's why i asked an average uh-huh um i mean i really i'd have to i'd have to get with my team uh we've been growing this last couple weeks in both revenues and sales so i i guess i mean really that just corey just give me a better idea today of like what are you in terms of total monthly revenue yeah or like 2k mrr okay two okay okay yeah that's very different right so 2k and mrr right so all you have to do is take 2k divided by 50 customers to get an average of what is that about 40 bucks a month okay yep makes sense yes i mean that ties back to what you said earlier which is usually it's a one person mom and pop shop paying about 39 bucks a month yeah and you know it's somewhat diluted we're still so early stage that we do have quite a few companies using us at a discount uh we do have companies that have prepaid for a year so that doesn't come in of that mrr so there are a couple variables but i think yeah you hit it on the head sure okay and you launched it three years ago i mean how are you funding this thing obviously 2k month is not enough to pay a team and pay you and everyone else have you raised capital no so i bootstrapped the company and i started the company three years ago but we've been live for about a year charging for about six months so the first the first almost two years was you know strictly out of my savings out of what i was able to put together uh you know it did a very small kind of friends and family it was non-dilutive no equity how much um so all in about 45k okay and that was like you and your friends and family are just friends and family myself and the friends and family okay and so can i ask you this look a lot of founders like their work you know they're out of college they're 28 29 no responsibilities they kind of have a safe job you it sounds like built up a little nest not huge but like some nest and then maybe got out and kind of did your own thing where were you getting capital to like that allowed you kind of build that little nest and how did you have the confidence to say okay i'm jumping and i'm going full time in this thing yeah so i'm fortunate i was able to make about six figures for years as a server before i started the company so i did have a little savings and my wife's a massage therapist so she's been able to kind of keep our head almost all the way above ground and other than that i mean we've had we've had months where we were scared the car get taken away we weren't able to make our house payment i mean there there there have been months that were very rough but i i think i figured out uh within the first three months of uh kind of putting the company together that i needed to not only be full-time but i needed to be all in fully committed so uh you know thankfully i do have people that retain me for uh consulting i do have a couple of kind of side hustles that maybe you know five to ten hours a week that have been able to you know keep a little bit of money coming in and you know thankfully we we did just uh we're through diligence through terms uh with a small gap round so that's kind of our first investment is coming this week uh you know that the check should hit the bank and so that'll how much is it for 50k okay good and are you doing that is that debt like in convertible note or actual pure equity uh convertible note okay that's wonderful and did you do that like from local investors or did you have to kind of fly around and take a bunch of meetings well so i i've flown around the country from cali to new to new york i spent about a year on that everyone kind of said that our revenue is too low and come back when we were doing that kind of 50k a month revenue when we won't need them anymore so i spent my my wheels for about a year refining pitch decks pitching i i went through both an accelerator and a post accelerator that was about eight months all in and uh i was up there in chicago no so my my uh my accelerator was in colorado and then my post accelerator was in las vegas i was the global accelerator network's first ever post accelerator which was a lot of fun no no no investment at all you know no no capital other than putting us up in vegas on and off for four months but it was really cool i got to meet some some international you know thought leaders some founders that have built 100 million dollar companies and now have direct access to a lot of them so it's been fun this uh the small bridge round that we're taking right now is that evaluation that we passed on a buyout offer recently for so five million dollars kind of right there in that sweet spot where our revenue doesn't quite justify it but our traction and our pipeline really that's the valuation you're getting right now is 5 million bucks on 50 raised yeah and you had a buyout offer for 5 million and you didn't take it yeah no offense but why on earth would you not take that deal when you look at you're doing two grand a month or down revenue or 24 grand a year i mean that's like a massive multiple uh so we have companies in our pipeline right now that'll be ten million dollar a year clients um you know what about cory come on that takes like you that takes time to close those things i mean that's 5 million today versus the risk of building a business the risk of closing those clients oh it was it was a no-brainer i found out that company was authorized to go up to 10 and i still wouldn't have taken it no way in the world i've spent three years in my savings to get here this isn't a quick payout for me yeah that's interesting i mean i i'm curious what listeners right now are thinking because i believe most of them are going this guy is absolutely insane momentum is king take a 10 million dollar check when you're only doing 2k a month in revenue and then reinvest that in your next new big idea i'm sure you have many yeah we're working on a few but you didn't take the check no no way in the world yeah i don't unders why i mean people would say maybe that's irrational all right so earlier this year a very close competitor of ours was bought by intuit for 346 million dollars this space is just heating up and we have some opportunities yeah but he was listen t sheets was doing 35 million bucks a year in ar we had him on the show and it took him 10 years to get there right i bet you if you gave him in year one or six months in if you gave matt 10 million bucks he would have taken it immediately and started a brand new company with that win yeah i mean i i for me it wasn't even i didn't even think about that offer i literally countered with 100 million we know where we're taking this my original co-founder raised 20 million for his company brought their valuation about 150 million dollars um and that was kind of a sad story where they keep taking down round after down round so they're yeah because you take evaluation that's irrealistic that's not realistic and everyone brags about valuation when you raise capital it's just it's baloney i mean any good negotiator can get a high valuation it's just it's just a question of like how charming are you right and how do you point to like a little bit of business success to grow the valuation but yeah vcs know they're going to backfill terms and you're going to have down rounds if you things up yeah i think that's why we've been super calculated not to take any kind of dumb money we've had a couple investment offers that we've passed on as well i think we're really trying to build something of value and we're really taking the time to do that right so i now have 14 employees uh my director sales came from linkedin he was doing a 2 million dollar a year quota but how are you paying if you're bootstrapping 14 employees and you're doing two grand a month how are you paying them yeah i mean like i said i've just been kind of trailing with what i've had in savings putting what i can into the company uh you know we have a couple uh right now a lot of my team members uh some of them are getting paid some of them are commission only a lot of them are filling their pipeline our hubspot's gotten pretty robust so i mean we really feel as though we're on the on the brink of mrr that it's going to justify a much bigger valuation yeah next year look i like the confidence you should come back on in a year and to say nathan look i told you man i mean i made i made your arguments look weak look where we're at now i would love that that would make me feel very good yeah i had uh who was that um oh he started uh app sumo noah kagan noah kagan was kind of telling me the same thing about a year ago telling me how this idea had no legs and we had a hundred com competitors and no by the way i didn't say that i didn't even have legs but if you had a real an actual reel if you actually believe that that five or ten million dollar offer was real and it was gonna be money in your bank i would i mean i would have quick i don't care how good of an idea i thought i had if there was only a 2k a month in revenue i would have sold instantly because i know i could take that money and go put in the next big idea we were under one 1k a month in mrr when that offer was made about three months ago yes that just underscores my point i mean you're saying like you're proud of it like you're bragging about it i'm saying i think it's even crazier no i mean it's i i think i i more so bring that up to say that that's the potential that other people in our space have seen in the product as well we have a much more current tech stack than a lot of people in our space we have a lot you know we just launched with the first amazon integration in our space we have a google calendar integration drag and drop media upload a lot of things we've taken time to build are going to at least have our competitors looking at their model and their product and we're we're really just getting started i mean i just brought on the chief strategist that's had some huge successes in his life we've got a team of people that really believe in this yeah look that's fine the belief is good the team is good all that just like well revenue has to start showing some of this right otherwise it's like okay well what's going on and by the way like matt got to what he got to 30 million bucks in arr by only focusing on ranking number one in the intuit app exchange that was the only thing he focused on no no other distractions none other like you know whatever that he just went all in on that and it took him a decade but look he got a great result from it so maybe we'll see if you find an integration like that you can do the same thing corey let's wrap up here with the famous five number one what's your favorite business book uh lean startup by far okay good and uh number two is there a ceo you're following or studying right now um you know there there are quite a few i'm really bullish on the mobile fund and and they have a they just launched that fund with a ceo that i think is doing some really cool things other than that i'm always watching elon musk although uh more and more you know i don't agree with some of the things he does but i've got a lot of respect for him number three besides your own what's your favorite online tool for building a business um online tool for building a business yeah like the tool you use the most a hub spot okay good number four how many hours of sleep to get every night about four four hour what's your situation married single kids married two big dogs too big okay no kids yet okay well so four hours of sleep that feels super unhealthy to me why so little yeah that's been for for three years since i started the company i haven't taken one day off um you know it's just i've got we're talking to different people in different time zones i've definitely i've been working on some of the preparations and uh proposals for some of the fortune 100 companies we're talking to i've been in the board rooms with the c-suite of one of our biggest prospects that want to move forward with us by the end of this year so there's just no time you know i think sleep would be at the detriment of progress and luckily at a young 40 i don't need much more than i'm getting yeah interesting i think a lot of people argue with you on that but fair enough it works for you it works and uh you said you're you're 40 years old today uh yep 40 and a half okay last question what do you wish your 20 year old self knew uh just to take more risks not not to spend so much time just kind of you know sitting on the couch laughing getting to know people but out there trying to make things happen i think i spent a lot of time kind of getting to know know my earlier self and and if i know that that self would have changed so much i wouldn't have spent so much time getting to know him guys take more risks great advice there from corey founded shedwool.com 50 customers now paying about 40 bucks a month they're doing two grand a month right now in revenue raised 40 grand 45 grand from friends and family about to raise another 50 grand right right now it's a convertible note i think he said a 5 million dollar cap on that they've got a team of 12 people again founded back in 2015 corey thanks for taking us to the top oh it's a pleasure thanks for having me