Spiffy Revenue & Funding (2024)

[00:00] Hey, folks. My guest today is Scot Wingo. He's a four time entrepreneur, number three. He's channel adviser, which was a public SaaS company greater than $150,000,000 in ARR. He's now building getspiffy.com, which is on demand car care with an interesting SaaS plus marketplace angle. Scot, ready to take us to the top? [00:15] >> I am. [00:16] Alright. So really enjoyed having you on last time, and and and you really are a sort of a blended model, I would [00:21] say, between almost marketplace fintech and SaaS. Help people understand what you do. [00:26] >> Yes. So I I have an ecommerce background and had my first Uber experience around 2013. And the moment for me was, could we apply all those interesting things we learned in ecommerce SaaS to car care? And, you know, so the way it should work is you should have people come to you to take care of your car, versus you going to them. So ecommerce and SaaS, mindset applied to car care, and there's three dimensions we grow [00:51] >> in Spiffy, which is kind of fun. Having done a a large SaaS business, you get to the one dimension is just pulling the lever on on QBSRs, and marketing spend. I know you talk a lot about that. And, so we we have that as well, but we also have different geographies. So there's geography component to this, and then different types of services we provide and then different types of customers. So I'm sure we'll get into that, [01:15] >> but that's that's what's fun. If we can turn all three of those dials, we can grow, you know, really, really quickly. [01:20] Yeah. Let's start with the customer. So when you were on back in August '20 around August 2020, you said you had about 900 customers. But for those that are just listening now, what is a customer for you? Can you can you can you name one or two of them? [01:33] >> Yeah. So we have we have a b two b component of our business and a consumer. We're 85% b to b, which is fleet in my world of car care, and then, 15% consumer. Consumers would be like you in Austin. You need your car, your oil change, or something like that. And then on the fleet, that's, so the consumer part of our business is very, not super recurring, etcetera. But then our fleet business is more SaaS. [01:57] >> So these fleets have x number of vehicles. They need services at a certain pace. The vehicles are driven driven at a certain mileage. So like a SaaS business, it has a predictable recurring, you know, not committed. There is some commitment there, but but a a very measurable, predictable kind of component to it. Within that bucket, the our largest customers are rental car company companies. So we have all the large rental car companies are our customers, Enterprise, [02:23] >> Hertz, Avis Budget, Sixt, etcetera. Then we have a bunch of vehicle two point o companies. So these are next generation car sharing networks, autonomous networks, EV car sharing companies. And then the third bucket is logistics. So we work a lot with Amazon DSPs. So it's kind of fun to get back to my ecommerce roots on that. And then we we have four other buckets of fleets, but those those give you an idea of some of the [02:47] >> customers that we have. [02:48] If I'm Hertz, right, in Raleigh at the airport, I've got a 100 cars at that location, and I need you to clean them or oil change or whatever vacuum them once every week. What am I gonna pay you? [03:00] >> Yeah. We'd like to bundle it. We call it, you know, like this fleet management as a service. So f m a a s. So so what we wanna do is really enter into one of our and, again, this is kinda like taking our SaaS knowledge and applying it to this. So so it's land and expand. So you you know that really well. So we go in. Usually, our customer has an acute need like an oil change [03:19] >> problem. And we go in with that, and then we wanna take care of not only oil change, but wash, tires, windshields. We wanna take over the whole vehicle. And then we typically start with preventive maintenance, and there's another wedge, which is in in fleeting and then removing vehicles from the whole cycle. So so what we try to do is get in there and do everything. But, you know, of that fleet business, about a third is oil [03:42] >> change, a third is wash, and a third is other, which includes tires, brakes, light repair, windshield, odor elimination. We're doing a lot of that. Shout out to the cannabis industry. There, we're Hey. Freakonomics, that's that's hugely benefiting us because as people smoke cannabis in cars, it creates a lot of odors, which is good for me. [04:01] 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 [04:24] 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 [04:48] 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 [05:10] not built 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 [05:36] 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 right, we're gonna go back to the YouTube video here in a second, but [05:58] 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 [06:24] the interview. And so what what would that charge be like if I'm having you do oil changes on a 100 cars per week? [06:30] >> Yeah. So it scales with volume. So a consumer oil change is about a $100. And then with some of our fleet partners, you know, just the oil change, we can get into the $40, $50 zone. Per car. You'll like this, yeah, per per vehicle. But but there'll be a a commitment of volume there. So Yep. [06:44] Yeah. And what is that commitment usually? I mean, we're talking a 100 cars or a thousand cars. [06:48] >> It's thousands. Mhmm. [06:50] Yeah. If I remember this correctly, you you actually invented or you have your own sort of, like, mini little oil change trucks, which you bought. They sit on your balance sheet. Right? And that's how you do these quickly and efficiently? [07:01] >> Yeah. We we we lease them, so they're not on our balance sheet, technically. But yeah. So we we, you know, we wanna be a premium offering. And because of that, we have our own technicians, they are w two, and our own vans that we lease. And they have a lot of equipment to go out there and deliver the service. So so there is a delivery component to this, which is really interesting, and and kind of uniquely [07:23] >> There there's pros and cons to it. We like it because we can control the customer experience. At the end of the day, what I learned from twenty years of ecommerce is the companies that do best control the customer experience from soup to nuts, like Tesla versus, like, a traditional auto manufacturer. If you can control that whole customer experience, that's the place to be. So we've built it that way. [07:42] Well, how many of those leased vehicles, right, that you use to service all your customer contracts are do you have today? [07:48] >> Nathan, are you sitting down? I thought I would never say this, but we have about 280 vans zipping around The United States, every day. [07:55] So how do you from a resource allocation perspective, what do you do? You look at, like, headcount per per per capita and make sure you've got one car with an x amount above million, or how do you measure that? [08:05] >> It's an excellent question. Because once you have these assets, it becomes a optimization problem. And the way we think about it is that the simplest metric is average day average daily revenue per truck, ADRT, is a metric we've come up with, and we're constantly optimizing that. And, you know, so so what you wanna do is have the most number of it's kinda like a Tetris game. It's kind of a fun simplification of it. So so so [08:28] >> the board is the availability of the van with the technician, and then we're constantly trying to fill that board and and put business in there. So some some because we have multiple different types of customers, it makes it easier. So so a technician in Austin may spend the morning at a fleet customer out at the airport and then go pick up two or three services nearby. And that juices that average daily revenue per truck by having [08:50] >> the mix of consumer and the fleet business. Or maybe they go to AutoZone and do a vehicle. They do a rental car company, and then they pick up a, there's a there's a car sharing network in Austin called Free to Move. So we work with them. So we may do some services for them as well. So the more customers we have in a geo and be they b to b or b to c, the more opportunity [09:09] >> we have to optimize what that truck does every day. So we we don't wanna get any of software too. [09:15] >> Well, you know, there's this kind of you know? So so there's twenty four hours a day. So, you know, basically, that's kinda basically it is how do how do we fill up every truck twenty four hours a day. Mhmm. [09:26] What would that be if it was a perfectly efficient truck? How much could it make in a day? [09:30] >> It ends up being about $2,000. [09:32] 2 k a day. And how close are you to that? Are you, like, 50% capacity or 75? Or [09:37] >> Yeah. Across our whole network, we're at 800. So we have cities that are getting there, but we're you know, that that is a theoretical you know, we we've we've gotten there and, you know, like like, every day we have five trucks that get there, but that's like that's that's a stretch goal, let's say. [09:53] Every day you have five trucks that hit two k? [09:55] >> Yeah. Yeah. [09:56] >> But on average, it's 800. [09:57] Yeah. Yeah. Interesting. [09:59] I mean, well, so two eighty trucks times $800 a day, what is that? [10:04] $230,000 a day in total revenue, top line? [10:07] >> Potential. [10:08] Yeah. Potential revenue. Interesting. Yeah. The other there's humans involved here too. These aren't robots yet. So so and and these are the person in Austin, for example, you said these are full time folks. Right? You're not there's not a contractor network here. [10:20] >> That's correct. Now we we do build a contractor network because when we do this fleet management as a service, frequently, these fleets, like free to move in your city there, they'll say, want you to take care of everything. Well, we don't do bodywork. We don't do, you know, other other elements, heavy repair. So that's where we're building marketplace of third parties that we could pull in into the the account and have them fix the windshields like [10:43] >> Safelite as a partner there and then other services around the vehicle. But we'll do we're we're we'll do the kind of the the core of those services and be the Mhmm. The primary coordinator of those services. [10:54] I mean, this also must fuel your m and a strategy. Right? If you wanna vertically integrate, you just talked about Tesla versus the other manufacturers. You wanna own that windshield repair company eventually. Right? Have you made acquisitions to date? [11:05] >> We have. We've done about four acquisitions in in And am I [11:08] bang on there, or am I am I Yeah. [11:09] >> So there's a geography component. So we acquired a company last year called Pit Crew that got us into Tennessee. So Nashville, as I'm sure you're aware, is like Austin is in the Raleigh Durham I'm in. It's like one of these areas that has this huge net influx of people. So we wanted to be there. So that got us a geographic expansion. We have done acquisitions that have given us more vertical expansion as well into other other [11:29] >> services. [11:30] Really interesting. Now you have decided to, to raise I think last we spoke, you had gone through a 10,000,000 series c. Was that right? [11:39] >> Yeah. That was a tap up to a b. So we added we did a 20,000,000 series b, and we added a 10,000,000. We had kind of an inbound, opportunity there and added to that, and that was, you know, earlier this year we announced that. [11:52] So okay, sir. Sorry. Say that again. So back in 2019, you did a 20,000,000 you did a 10,000,000 series b or 20,000,000? [11:57] >> Okay. So we did, 30,000,000 series b that we had some chunks in it, but the last chunk was 10,000,000, and that was earlier this year. [12:06] I see. I see. I see. Got it. Got it. Got it. What can you was that just like a strategic partner? [12:10] >> It it was a larger firm that wanna do a large round, but we weren't quite ready for it. So we'd kinda split the baby as it were, and we were able to get them to put a little bit into that. And then hopefully, they'll lead our next round. [12:22] Are you able to convince them to allow you to create a bunch of secondary opportunity for your early employees since you didn't need the money? [12:30] >> Yeah. We'll see. You know, right, we're actually pretty young in our you know, because we've been growing so fast, most of our employees are pretty young in their vesting cycle. [12:40] Mhmm. [12:40] >> I'm in a position this is my fourth company where I don't really wanna do secondary. I'm I'm kinda doing the opposite. I'm investing into into things. Yep. So secondary hasn't been a huge consideration for us. [12:51] Yeah. Interesting. What is the team size today? [12:53] >> So we have about 60 people in headquarters. So so in this model, we wanna keep our headquarters as kind of light as possible, because it's really overhead for the operations that go on. And out in the field, we have over, you know, hope you hope you're sitting down. We have over 500 technicians, that are, you know, running around doing those services. Yeah. It seems scary, but, you know, ChannelAdvisor got to be a thousand people at a [13:16] >> 100,000,000 SaaS. So so it's just a different model, and you build systems and processes the same engines we would build for QBSRs, STRs, and all those BDRs and things that you, you know, we talk about in SaaS. We've just built those for how do you recruit, retain this this level of an employee and make them effective, but then use software to automate it all. [13:36] Yep. These tech and these technicians are full time. Right? [13:39] >> They are. They're w two. So they you know, the w two worker is an hourly employee. They are an employee, but they don't all get forty hours. So so let's say it starts raining buckets in Austin. We we basically send them home, and if they wanna get their hours, they'll have to work, you know you know, whatever state laws are or on the weekend or whatever like that. Yeah. And they're used to that. The hourly worker [14:00] >> is used to that model. [14:01] Yeah. Now I believe last time we spoke, I asked you what the average revenue was for, you know, the Hertz. Right? The the the b two b part of your business. And I think you said something like $12,000 a year or 1,800 a month. Is that still about right? [14:15] >> Yeah. So those have grown so just to give you an idea, you know, our we just crossed 50,000,000 ARR. [14:20] So that's exciting. So That's very exciting, Scot. Congrats. [14:23] >> The 4,166,000 is a you know, as people that have MRR, ARR, these numbers stick in your head, so we we crossed over that one. So 4,166,000, we crossed over that. So that's exciting to to do that. [14:36] That's just you guys. That's that's that's in monthly recurring revenue is what he's referring to. [14:39] >> Yeah. So so your question was these fleets, if you kinda took the revenue for fleets and divided it in, I think it's gone up considerably because some of them have gotten really, really big. So I would say it's more like a 120 k. So [14:54] Yeah. A 120 k. Yeah. Interesting. So 120 k divided by the 50,000,000. Yeah. So so how many fleet how many total fleets are you working with right now? [15:01] >> So you have to take the, you know, fifteen percent's consumer, so you have to 85% the 50 and then divide by that to get to the number. [15:11] Yeah. Yeah. Yeah. Your my math my math tells me you're around 410 fleet customers, somewhere around there. [15:17] >> That's right. [15:18] Yeah. Yeah. Really compelling. How much of the market do you already own in The US? Like, are there more than 410 you can go get? [15:26] >> There's a lot more. Yeah. So so the rental car, we're we're you know, the, if you just think about the companies, we're we're fully penetrated. But, you know, there's a land and expand inside of there. So there's services and then different geographies. So so just rental car could be 10 x of what it is today. That being said, we wanna diversify. So, you know, as we look at corporate fleets, think about how many companies have their [15:50] >> own fleets. We work with AutoZone, Verizon, and Wegmans there. The Amazon DSP opportunity alone is probably a $200,000,000 opportunity, for the last mile stuff. Yeah. So it's it's a little the TAM here is, like, so honking big. It's it's yeah. We don't really it can be distracting to think about it. It's so big. It's kinda, like, overwhelming. So we just try to, every day, come into work and make customers happy and and poke into other areas [16:14] >> that we wanna get into. [16:16] Hey. This is I can tell you're having fun doing this. What when you're not when you're not building a Wingo or when you're not building this Spiffy, what are you doing? Is this Star Wars fan in the background? Is that what I'm seeing? [16:23] >> It is. Yes. So I have three kids. So that's primary where I spend my time. But then my hobbies, I collect Star Wars stuff. And then, yeah, I'm a super geek. So then, you you're familiar with comic books. Well, there's original art behind comic books, so I collect, original art of comic books. That's a fun hobby of mine. [16:39] Can you name one of the original art pieces you own? [16:41] >> Yeah. So my favorite artist is this guy, Todd McFarlane. He came in and revitalized Spider Man, and then he left and started his own company. He was an entrepreneur, which is kind of interesting. So he started Image Comics and is the CEO of that. So I have a lot of the comic book art that that he did for both on Spider Man and in this this series called Spawn. [16:58] Very cool. Well, Scot, this is a heck of a story. It's fun. I mean, you also have so many you didn't even talk about this, but, I mean, you sit on so much, like, transaction data here too. I mean, you could eventually get into sort of that model as well, and it's a percent of GMV. Right? [17:12] >> Yeah. Where where I think this goes, and I'm a big study of Amazon, is we're developing this software stack that's pretty it's an ERP for running a mobile first like, you know, we think mobile first, meaning phone. I mean, like, mobile, like, stuff services come to you, digital services. I think where we go next is we're starting to license out our software. So Yeah. So so the stack we have built, we could not have built unless [17:34] >> we had built the company. So that's that's where I get really excited is we're essentially a software company that that looks like a service business and has SaaS attributes to it. I think we've become a SaaS business. [17:47] Yeah. Yeah. Yeah. [17:48] >> So there's no reason your local plumber wouldn't use this software. We could be Shopify for digital services is where we're going. [17:53] Totally. You can help them with the whole I mean, your franchise. Right? So the question like your Wendy's, right, you're giving them the software to run their own Wendy's. The only question then is how do they get the traffic to it, which maybe you're thinking about how to solve that as well? How to get the customers in? [18:04] >> Yeah. The the thing about this is, this will make my SaaS friends very jealous is we we actually hardly do any marketing or sales. We have, like, a a five person sales team. Wild. Yeah. It's wild. So there's the there's a lot huge demand for what we're doing, and we spend more time matching our our capabilities and and capacity to that demand. So so we would give them those tools, and we have those tools, but it's [18:28] >> actually they're they're such you know, the con the convenience oriented customer, be they b to b or consumer, is is so in demand for what we're doing that that we don't spend a ton of time on that side of it. [18:39] Mhmm. Mhmm. Yeah. Interesting. Last question is is valuation related. So you just did this extra 10 millions or a top up. It sounds like you have a leverage here. I mean, are you guys gotta be flirting with a $400, $500, $600,000,000 valuation at this point. Right? [18:51] >> Yeah. Yeah. Again, this is my fourth company, and, I try not to get too far ahead of my skis. So so where we have argued is we're we're we're SaaS like, but we should you know, we don't we don't earn SaaS multiples. [19:04] Yeah. [19:05] >> So so we've been getting, you know, kinda like around a little around half to 60% of SaaS multiples, which I'm okay with because I've been in the other situation where, you know, you have this valuation that's really hard to grow with. [19:20] So, [19:21] >> that's that's cataclysmic, and I try to avoid them. [19:23] Yeah. Well, 50% of a 40 x multiple, which was common, you know, six months ago, very different than a SaaS multi 50% of a SaaS multiple you're seeing today. So, obviously, valuations change, but we'll see. Yeah. Love what you're building. Let's wrap up here with the famous five. Number one, favorite book. [19:39] >> Hard thing about hard things. I said this last time though, so I'm gonna [19:42] >> No. [19:42] You did good to great last time. [19:43] >> Okay. Yeah. [19:45] Yeah. I know you have variety here. [19:46] This is good. Number two, is there a CEO you're following or studying? [19:50] >> Elon's the easy answer. [19:54] >> I really like Balaji and his kind of head exploding, thinking around, like, crypto nations and stuff like that. It's fun to think through through the the next ten years and what that looks like. [20:03] Yeah. He's an interesting thinker there. [20:04] Number I just think you just put out a a new book, network network something or other. [20:09] >> Network state. [20:09] >> Yeah. Network state. Yeah. [20:10] Number three, what's your favorite online tool for building, for building Wingo or Spiffy? Sorry. [20:17] >> I've been playing with Notion. Think that's kind of, you know, really exciting and kind of next generation way of doing things. [20:22] I keep mixing up your last name with the company. You know, Wingo would be a great company name. I'm surprised you didn't just name it GetWingo. [20:28] >> Yeah. There's an ego thing there. I'm not [20:31] Fair. Fair. Fair. Yeah. You don't wanna see don't wanna build your cell, you have to sell your last name, you know. Number number four, how many hours of sleep do get every night? [20:38] >> About six. [20:39] Okay. And situation you mentioned, married, I think, three kids? [20:42] >> Yep. Married, three kids. [20:43] Married, three kids. Very cool. And, let's see. I guess I'm gonna guess you're 54 now. Right? Two birthdays? 53. Yep. You have a birthday coming up then. Ah, there we go. Very cool. 53. And, last question, something you wish you knew when you were 20. [21:02] >> Buy Bitcoin. [21:03] That's a good answer. Guys, SaaS executive, been there, done that, also loves collecting original comic book art, but now he's really helping and empowering and trying to build a software stack that will enable anyone that wants to deliver services to cars to start as the wedge anywhere in the world really do that with their software stack. He's built a company to build out that stack, really understand it, doing $50,000,000 in revenue across about four ten fleets. [21:23] This is the Hertz of the world. He goes and, you know, replaces the oil change and does oil change at the Hertz fleets at the at the airport or does the windshield repair or windshield wipers. He currently owns at the company about 280 leased vehicles that he does around The US to do these this servicing. One third of his business is, again, through the fleet. You've got another part of the business, which are which are the [21:41] Amazon DSP space, but, again, 85% of the total revenue b two b. If you wanna be a consumer and use them, you're gonna pay about a $100 for an oil change. So, Scot, thanks for taking us to the top. [21:49] >> Thanks, Nathan. I need to bring you to all my pitches. You summarize faster than I do. [21:54] Thanks, man. [21:56] 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 [22:21] 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 [22:44] 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 [23:05] 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. 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Introduction hello everyone my guest today is scott wingo he's a four-time entrepreneur based out of the research triangle park region in the north carolina south carolina sort of area before spiffy he started channel advisor in 2001 and took it public in 2013. now he's exploring the intersection of digital services and car care scott you're ready to take us to the top i am how are you i am doing well how are you doing i'm doing great still in the research triangle park area i am yeah we just dodged a hurricane as of recording here so uh always always fun in this area so uh we we had a narrow miss so it was good to see that go by us and not hit us that's good yeah we're recording here on august 5th so if people missed our first interview we did together which was back on april 30th in 2017 given a refresher what's spiffy doing yeah so so i started uh as you mentioned channel advisor in the e-commerce world so i love e-commerce and love this intersection of digital digital things going digital or as andreessen horowitz says soccer eating the world had my first uber experience in 2011 and as an e-commerce guy what it meant to me was we're going to see services go digital like we've seen products go digital if you look at i'm also a hobby economist and if you look at the gdp of the united states consumer services are twice the size as consumer goods so as an entrepreneur i said that's going to be big so something twice the size of e-commerce is pretty large and i think it's going to happen faster because it's taken a long time for e-commerce to get to where it is because we had to get digital payments and the phones and all this stuff broadband all this jazz all that's in place now so um started spiffy as a way to explore this area i previously owned uh some car washes so this kind of intersection of digital services and taking care of your car was really interesting to me uh yeah that's decided to start spiffy in 2014 so i've been at it about six years now and when you came out in 2017 Raised i think you said you'd raise about seven million bucks still seven million raised or did you raise additional capital uh uh you know fortunately knock on wood have been uh fortunate enough to raise more so i've raised a little north of 30 million okay and when did you do that was that in response to covet or pre-covet pre-covered yeah so in that in those three years from you know our two years from 17 to 19 we raised about 30 million uh 20 20 additional from kind of like when you and i last talked yep and if people are listening to this and they want to follow along as we capture more your story here they go to get spiffy.com what will they see what can they pay you for yes so we have a variety of different types of customers for for the individual it's on demand car care so you either use our website or download an app and we will come to you and take care of your car we started in wash and detail we've added oil change and we're actually experimenting with tires so we have a uh you know unlike uber where it's a 1099 marketplace uh our we decided early on to take a page from amazon's playbook and these are our employees so we figured if someone's going to be touching your car which for many people is one of their top assets we want them to be uniformed trained and using all of our equipment so that there's they're doing the best job possible so a so through our our app which is the highest fidelity experience you can manage everything around your car so we come to you either at work or at home take care of your vehicle and take that off your to-do list so busy entrepreneurs like your listeners should be right in their wheelhouse so to say my check engine light on my 2009 great prius parked outside has been on for about six months for two reasons number one i don't believe it i think it's an upsell strategy by the manufacturer uh and number two i'm lazy and i don't have time to go stop by to get my oil changed and sit there in the car shop this is what you build spiffy for yeah it's kind of what part of the convenience economy um that i learned a lot about the ecommerce world uh the ultimate convenience is amazon prime right where people raise their hand and say i'll pay a hundred dollars to get my stuff faster and shipped to my house so that that is our customer on the consumer side is the busy uh person like you um or uh we have a lot of busy moms that use our service and yeah so you know no one ever woke up and said wow i'm really looking forward to uh spending an hour in this quick loop place uh with my great prius um or you know or the toyota dealer um covets amplified a lot of that kind of stuff as you could imagine so not only was it not fun before kohu but now you know um you know none of these lobbies are essentially clean and there's you know the uh the use of ppe is kind of scattered across these kind of folks and so so it's even like rest of of e-commerce we're seeing a pretty big lift on our consumer business from covet yeah so something i'm looking at your pricing now and comparing it to my notes from 2017. for some reason in my 2017 notes i have our rpoo down as a thousand dollars but now when i go to your site there are options where i can pay you 59 bucks to get the spiffy car wash for example did you move from enterprise to direct to consumer or something yeah what that is is um so uh prior to covid uh office parks are the number one channel for consumers and on average we make a thousand dollars a month at an office park so that's right yeah yeah our average selling price is like 65 um uh so definitely not a thousand dollars to take care of your car but yeah office parks we make a thousand dollar at the office park we get this kind of recurring revenue very sas like kind of a business model at office parks and then uh we're also since you and i talked we've really expanded our fleet operation um and also since you and i last talked we're now in 17 markets and i think when we talked we were probably in five 17 markets so what does that mean major cities yeah yeah so raleigh charlotte uh denver phoenix las vegas la san francisco new york washington dc uh orlando tampa miami to just kind of dallas if i didn't say that all domestic for now though right yeah yeah so what it let's talk real quick about the office park model because again when you came on i think you said you had about 170 office parks average was a grand per month so we kind of backed into a run right there of like a two million run rate from office parks no one today is going into office parks has that revenue completely lost at all basically to covid it has yeah we're actually starting to see it here in north carolina i forget where you're located but uh it's texas it's austin yeah yeah yeah i'm sure in austin uh we're seeing dallas as well um it's it's coming back um so as as we're in like phase four here in the north in the carolinas and people are starting to go back to their offices i do think it's going to be a year before it gets to some normalcy so was it before Monthly recurring revenue yeah uh so for us uh so from that we we were pre pandemic we're at about a 20 million run rate and office parks were about 4 million of that so we've grown it to 4 million arr yeah that's that's fascinating yeah so so for when the pandemic hit part of our pandemic remediation was to really swing hard over to the residential side so we replaced a lot of that with residential services um they're both proper for us but if we if we had our choice we would do office park but obviously we didn't have a choice with a pandemic so help let's let's understand that for a second so in let's just use july for example how many unique sort of consumers paid you at least a dollar for one of your services um that's a good question so every day we do a thousand services i would say um 150 a day are consumers okay so times 30 so 4 500. yep four kids custom okay so hold on so 150 are direct to consumer the other 850 are what fleet oh yeah so that's when you said fleet so that's like what is that like ub uber cars or yes so we've partnered we work with uber lyft turo our biggest fleet customers are rental car companies um so the big guys enterprise hurts avis advantage etc you know what's been really interesting with the pandemic is they got hit very hard early on like the rest of the travel industry but they've come back very rapidly because what's happening is let's say you're in austin and you want to go to you want to come visit me in raleigh you're probably not going to fly most people's confidence in the airlines are are very low they have the highest coveted concerns with being on an airplane so people are driving a lot more so if you were gonna drive from austin to raleigh that's like a 18-hour trip i would estimate um you're probably not going to want to put that on your 2009 gray prius that has a check engine light so you're probably gonna you know it's a very good economical decision my mom's gonna love you by the way we're going to we're going to take care of that uh the uh if i have to send someone from dallas yeah so so it's a very good economic decision for you to rent a car versus putting those miles on so what the rental car industry is seeing is they're almost back to 85 90 percent of pre-covered levels even though air travels still at like you know 10 percent yep and so just drawing the math if you've got sort of a 20 million run rate today which you mean about 1.6 million a month in revenue across the 1 000 a day starting those kind of services so 30 000 services sort of rendered that's like a average price of 53 bucks per service something like that 55 yeah on a blended basis so consumers kind of are on the higher end and then with our fleet customers we're literally going to locations and doing 60 services all lined up so our economics get better so we can offer a lower asp for for those kind of wholesale experiences for those 30 000 sort of services done obviously that's those 60 services are going to all belong to one hertz one customer versus 60 individual consumers Currently serving 900 customers we're going to their home as 60 individual customers how many total customers would you have again counting hertz just as one where you do 60 services uh we probably have 20 to 30 largely clients yeah okay and so there's like 800 or 900 then cut consumer customers every month yep interesting do you see recurring patterns here do they get their car serviced once a month we do it's kind of addictive um so and in the you know uh it's kind of like you know you most people don't drink starbucks every day and it's kind of a treat right so um getting your cars to feeds a treat we do skew uh you know higher on the female side versus the average internet uh you know yeah so uh so there's a lot of moms and they're like you know right now everyone feels like your life's chaotic this pandemic has kind of created things we can't control so having your car clean is one of those things that's kind of very um you know for a lot of people it's very pleasing so so to put some math on it i know you're a math guy uh over 60 of our revenue each month is from existing customers on the consumer side like it's like 95 on the fleet side so there's a high recurrence on the fleet side obviously you know once you're in with like enterprise and that 17 locations you're going to do a lot of business with them we also work with like u-haul and carvana and all those guys we mentioned so so yeah so there's um there's a high recurrence on a monthly basis um and then most of our customers the average consumer washes their car every six months we've got monthly washers quarterly washers six months on annual so you know there's a variety of use cases we see and of your you said of your 20 million run rate four million of that is the herzes the u-hauls the the fleet services or backwards backwards 16 million people yeah interesting what did hertz do before you do they have their own full-time employees doing this this is a fun story and this is kind of part of the interesting things about startups you know i liken it to you you're pulling a string on a sweater and you never know like what's gonna are you gonna unravel the string or is it just gonna pop out there right so we we introduced oil change right after you and i talked i think we were probably in pilot mode with it because it was the number one requested things consumers wanted they wanted us to come and do an oil change so we had to innovate and create a truck that could do wash and oil and we did all this stuff and then serendipity happened one day we were literally doing a wash at a rental car partner and the the oil truck had oil branding on it spiffy oil change and the the guy literally said oh my god you do oil changes we said yeah we're working on piloting it for consumers he said look at those 60 cars over there they're waiting on an oil change and we ask the same question but you have mechanics on staff why aren't they doing it the way the math works is they pay these ase certified mechanics 30 to 50 an hour and when you pay someone that much their triage list is you know engine problems brakes batteries anything else but oil change so they really don't want them working on oil change because an oil change has a prestige value of 40 dollars and you just don't want to spend more labor on it than it's worth so what they do is they let them accumulate and then they valet them to a quick loop place so so our our value prop is we say all right that's great but look those cars are sitting there for five days on average losing 50 a day in rental opportunity we're gonna give you a button on your phone you press that button say we've got 60 cars we'll be there in less than 24 hours usually you know for 60 cars we could probably be there in like 30 minutes and we're going to knock those out for you you don't have to valet them we'll do them in place you don't have to move them and you can get those cars back out rented instantaneously so that's that's once we discovered that um then we said well is this an anomaly so we started selling against that and we just found it's the case everywhere and no one had thought to solve this because it's just one of those things that you know they had a solution today that was good enough but we came in with a 20 times better solution that that they had never kind of thought of needing i'm curious what capex and your human labor looks like on this so how many of these trucks or these fleet these vehicles do you hold on your balance sheet depreciating assets yeah i'm a software guy so i'm glad you're sitting down so uh we wait we have 210 trucks across the united states oh my goodness and you've obviously you've purchased all them now you probably can't get them without putting all cash up right you can probably get loans on them yeah what's really interesting is there's a whole leasing infrastructure we've discovered around um this world so we lease uh 95 of it and you can even we put a lot of equipment in the trucks we lease that as well so so it really is converts it from a capex to an opex which is really nice what was the last city you opened in uh the last city we opened in probably let's say phoenix ignoring humans when you add up all your leasing and all your equipment rental and all that just to get the thing in place to then put a human in to be able to service the trucks and go to locations what does it cost you to open a new city um so ignoring humans yeah yeah so so just just the equipment is sub 20k oh oh wow okay that includes the truck and so what's the minimum you require first a place like phoenix is it one truck two trucks five yeah so we like to start a truck like that at like four trucks um okay and then a city like phoenix we start at four we start with a fleet client um it's kind of an anchor because that that lets us get the revenue up to kind of a million run rate and then we can layer in residential services um another this is actually a good time to bring this up another thing we're doing due to the pandemic is the number one inbound request we get is from people that want to franchise what we do at smithy um and we've been reluctant to do that because we wanted to really kind of get the playbook so that we could make it so that anyone could be successful with this also as a you know there's a lot of negativity around franchising um you know i've discovered there's a lot of snake oil and that kind of stuff so so during the pandemic we started looking at this and you're very data driven and so am i one of the things that drives me crazy is there are people like let's pick on austin there's people in austin that download our app and request a service every day and it kills me as an entrepreneur to have that just kind of fall on the floor so so we have way more demand than we can handle and some of it's out of our service area and when we do an analysis on that a very rich area um where we get a lot of demand is what i would call tier two cities so uh san antonio to kind of give you an example of a texas city that you'd be familiar with we'll never go to san antonio but it's a great city has population 500k i guess maybe approaching a million kind of a larger metro area that's a great space place for a spiffy location but we've decided we would like to franchise those kind of cities in this 500 800 000. so we've opened up franchising so what we what we tell franchisees which is true for ourselves as well is uh you know the the get started cash outlay is pretty small but then all in you know you start and you're you're losing money like any startup and then you kind of get to profitability um you know all in to get a city profitable for us is somewhere around 100 to 200k and a lot of it depends on how big we start so if we start with four trucks that's gonna be like the 150 we could start with two or three trucks and get it down to sub 100k okay interesting so you say you will never go into city like san antonio because you're saying you know what there's no way we get to like a max run right here of a million and we certainly can't scale it past that it's better to have a franchise model and let someone go make 700 grand a year yeah it's really an opportunity cost question so so we're going after the 50 largest metros owned and operated um and i come up with that metric because when amazon rolled out prime now they amazon's available everywhere right they have 250 fulfillment centers but they stopped at city 50 for prime now which is their same day delivery and when i asked the lady that runs that why'd you stop at 50 cities the answer is we can get to 85 of prime households by just being in 50 markets in the united states as a software guy never having done this geographical kind of board game thing that we do at spiffy i was under the impression we'd have to open up 300 markets to kind of cover what we want to cover but but amazon kind of you know i figured their data is pretty good yeah they basically kind of said no you can your roadmap's really 50 cities so that's what we're really focused on and we're in 17 of those 50 and those are the ones we've reserved for ourselves and so then we'll never have the the you know it's going to take us another five years to get those knocked out so we'll never have the opportunity to go to san antonio we would probably move to international at that point and go into canada or london or something like that um so so it creates this this nice kind of layer where we think franchising makes sense because you can build a very profitable business in san antonio that's a great business and just not on you know not a priority for us 210 trucks 95 percent leased along with all the equipment so you avoid capex it's more opex humans obviously are critical here someone has to drive the truck someone has to be a trained mechanic to service and do the oil change how many full-time employees do you have on your team today yeah right now we're at about 150 um and that's lower than the number of trucks and that's because of the pandemic so so at our peak we had about 300 technicians of the 150 today how many are technicians that they're that's our technician count we have about 40 people in headquarters 150 technicians so about 200 total people oh i see i see okay so 150 technicians interesting and so um what happens to the are you able to cancel the leases on the trucks you're not currently using or do you just have to eat that as op-ex yeah during these pandemic times we've been able to work out with our partners both for leasing uh you know facilities as well as leasing vans to to get some accommodations there to help during the pandemic this is interesting okay cool well listen we've got a lot of more questions here we got a lot of sort of growth strategy i mean a question i have for you is you say you're in 17 markets now yo stops for about 50 or 50 is what you want to get to in the states to get 85 coverage i imagine if i was the vc writing the last check they're going wait scott you're in almost half right now doing a 20 million run rate so are you saying like the max opportunity here is a 40 million dollar run rate obviously your answer is no so how do you generate more revenue per city over time yes so there's the maturity of the city so in most of those cities we're just doing fleet right so we haven't turned on consumer um uh and then uh you know one of the metrics i will use is if you look at our raleigh market which is one of our our biggest ones it's our home market we're getting um you know three dollars for every million people in our per capita so so so that's kind of the ceiling that i'm aware of right now that we can get to when i apply that to our 17 markets we're in it's already like 80 million um so then you know so so there's there's uh penetration in each city and then the other growth drivers we have are more services so i mentioned we're experimenting with tires so rolling out tires everywhere and then lines of business so we're really only consumer in five of our markets we we turned on a little bit of it for for a pandemic in 17 but we pulled back on that because fleets come back so um and then you know there's we're always looking at new kinds of lines of business or channels so another one we're experimenting with is our our b2b customers ask us if we could work on larger trucks and things like that 18 wheelers and box trucks um part of the the you know the supply chain for e-commerce is running so hard the trucks have no time to stop so they have the check engine light like you do and so so we've rolled out in eight of our markets a ability to do higher you know larger trucks as well so so you know at some point i could see we could help dealers um and then you know the other area that's kind of very green for us is autonomous fleets there's a lot of innovation going on around the vehicle we keep track of and we have a lot of ideas of things we could do there as well so all those are growth factors that we haven't even really tapped into yet but but in your most mature market it's three dollars per capita top line revenue yeah it's an interesting way to think about the p l if we continue that down so can what can you hit net on three dollars per capita uh net 20 now and i think we can get to 25. okay so that's 70 cents 60 cents per capita in terms of net interesting and in terms of again the costs uh obviously that that that eat up two dollars and 30 cents the biggest i imagine is the people is the technician right yeah yeah and then um it's kind of interesting coming from the software as a service world you know i love 85 gross margins or whatever those sas companies have really high gross margins and i love that but you you end up spending it on sales and marketing um you know one of the really fascinating things about spiffy that that keeps me highly engaged having you know spent 30 years battling for every lead and working them through a funnel we have business that just shows up at our door that we turn away um so there's you know when you create a better mousetrap and you're in the right kind of mega trends that are happening uh you don't have to spend much on sales and marketing so our sales and marketing as a percent of revenue has gone down and it's sub 20 um and i can see it getting to sub 10 so so what we burn up in labor and in cogs we more than make up for compared to a traditional like software recurring revenue business in very low sales and marketing very low r d those 17 cities are on one software platform and it could support 500 cities because it's in the cloud right so so where we lack leverage and cogs we gain it underneath the the rest of the expenses scott this is good stuff let's wrap up i could by the way i could see you eventually i mean if you end up building like you know amazon one's last mile delivery they have a fleet of drivers but if you end up building like last mile services right where it's like now uh i'm gonna make this up uh directv is licensing your fleet to do installs of their routers when people buy new i mean you can sell that space for all kinds of stuff i imagine right absolutely yeah yeah we want to kind of start up the car and then provide more services we don't have to be anchored to the car um we could move into some home things but even even better um and you'll get this so i'm a obviously an amazon nerd um you know the genius of amazon is there a software company that that kind of built the software by building a retailer that has super low margins uh and then you know they they ultimately licensed that software out and that became aws as we know it today so i think we're building the operating system for a digital services company so even better i want to go to your electrician your hvac guy and say look nathan needs a digital experience he's you're going to have to have an app to work with nathan in three years because that's just going to be table stakes there's no way you know the austin electrician is going to go build an app um so so we can provide them that that really kind of high-end front-end experience and then also the back-end piece to go make that happen and deliver to you a much better digital experience smart mousetrap today with oil changes big tam in the future for being that platform i'm excited to watch it grow scott let's wrap up here with the famous five number one favorite business book uh it's a tough one i'm gonna go good to great number two is there a ceo you're following or studying um elon you gotta do it spaceships and electric cars doesn't get better doesn't get better than that number three what's your favorite online tool for building spiffy favorite online tool um i just found this really cool uh demographic tool for you know you can go into any area like i could go in austin and draw a circle within 10 miles of the airport and know the demographics of that city it's called spotlight so it's it's been super interesting for another again a software guy that's never done this geographic thing number four how many hours of sleep to get every night six and situation married single kids uh married three kids married and three kids good and how old are you i am 52 52 last question what do you wish your 20 year old self knew i would say buy as much amazon apple facebook netflix stock as you can that's different last time you said trust your instincts [Laughter] i love that guys there you have it get spiffy right now doing a 20 million dollar run rate servicing several thousand or a thousand a day basically car oil changes car cleanings etc a lot of their market 16 million of their run rate is servicing fleets like u-haul fleets or car rental fleets things like that but they also turn on obviously the consumer piece on that and each of these cities they're expanding to once they hit a million dollar run right they're in 17 markets right now looking to expand to the 50 top markets in the states which give them 85 percent coverage ultimately scott looking to build really the platform to do this sort of thing for anything services to a consumer's home or to a fleet's work spot spot scott thanks for taking us to the top that was a perfect summary i need you to go on vc pitches with me i'll have my people call your people all right scott one more thing before you go we have a brand new show every thursday at 1 pm central it's called shark tank for sas we call it deal or bust one founder comes on three hungry buyers they try and do a deal live and the founder shares back end dashboards their expenses their revenue 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 pm central additionally remember these recorded founder interviews go live we release them here on youtube every day 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