How VizyPay CEO Austin Mac Nab grew to $21.5M revenue and 13K customers in 2023.

guys viip pay.com is the POS system that rural small businesses are using uh they are powered by Clover he just spent a million bucks buying additional Clover Hardware to get installed he's got over 13,000 signed customers tens of thousand installed POS systems they did 1.85 billion in transaction Volume last year representing 35 million transactions they did about call it 22 23 million bucks of toal sorry 22 yeah about 22 million bucks of total revenue hoping to hit call it 25 million this year he's got 95 full-time folks on the team and his go to market is very unique combination of 1099 contractors that can keep and build 50% residual revenue streams for selling the vi product in their local communities and also he's now the big bet they're making is how can they get W2 full-time employees performing in a unit economic positive way he uses local bank to fund $1.5 billion of debt to keep growing the business because he has bootstrapped the entire thing imagine owning 100% or close to 100% of a 25 million business Austin has done it he's staying patient building it the right way hey folks it's if we haven't met yet my name is Nathan Latka I launched and sold my first software company back in 2015 and went on to write a book about it which you guys made a Wall Street Journal bestseller purchasing over 30,000 copies thank you so much for that after the book I launched this show and went went on to create founder path.com I raised a large fund to do non-dilutive deals with B2B software Founders so far we've invested in over 400 software Founders totaling $150 million here in 2024 we're doing three to four New Deals per week so if you're looking for Capital and don't want to give up Equity go sign up at founder path.com for free to get your offer all right let's jump into the interview hey folks my guest today is Austin McNab he's a CEO and founder of viip pay uh they're prominent provider of payment Technology Solutions for Rural small businesses all across the US he's got over 19 years of experience doing this and he's an expert in the payment processing bank card and Retail Industries in 2017 he launched the company with the goal of disrupting the start status quo of the payment space to help small businesses level up their operations and save money on processing fees Austin you ready to take us to the top yeah absolutely roll your team went out of their way in your bio to specifically say quote rural small businesses uh why is that is this a key differentiator between you and stripe say or or Square sorry yeah I mean yeah that's been kind of our differentiator since we started and that's I helped us Excel to the next level being bootstrapped from the beginning till today is we are focused strictly on you know rural American communities which we believe technology is passing them by specifically in the payment space you know big companies you can probably name them you know a couple of them that are on the stock market or not that their focus has to be in bigger cities where there's more transactions bigger population more Payment Processing because they actually have people to answer to to a certain extent right well that also leaves a lot of Ral American businesses behind technology when it comes down to making their business more efficient that's fair priced that is not that is simplistic not complicated um and that allows them to kind of go from that I always say go from that flip phone stage back in the good old days to let's get into a smartphone right um but within the payment space kind of concept so we really go into smaller communities and and that's why we have a lot of our boots on the ground across the United States so guys as you know what I love featuring on this show are founders that are quietly crushing it especially when they have big VC backed funded competitors and what I love about Austin just to summarize when he came on in February of 2023 we're recording this episode Wednesday March 13th 2024 but he launched the business in 2017 did about 100,000 bucks of Revenue that year by 2021 12 million 2022 18 million so about flat not not flat sorry 6 million in extra Revenue there and then 2023 uh I can't remember Austin if this is what you told me you were going to do over it's what you closed with but you said I think 25 to 27 is that sort of where you came in last year uh we so from 2022 to 2023 our growth is about 19% so we went from 18 million to about 21.5 million in Revenue yeah uh this year we're anticipating uh to do around 26 and a half is kind of our our Revenue projections and goals another about 23% increase we're looking to do um but you know we did jump from you know uh that 19% from 22 to 23 and which of the big big deal for us just because we don't have that BC backing we don't have that P backing and and instead of declining we actually increase by a good amount so yeah yeah well look I always appreciate how transparent and vulnerable you are so I want to dig into this because a lot of Founders in your position go through this I do remember you said last year in February when we interviewed your target for 2023 was 27 million you still grew which is fantastic especially considering your capital structure your bootstrap but you only grew to 21.5 million instead of 27 million look in my head who cares you still grew and your economics are still good but how do you manage sort of that with your team at the end of the year hey guys we wanted to do 27 good job we got to 21.5 here's what we want to do next year how do you sort of manage that Gap um that's a great question um and that's a question you know we've talked about a million times over uh just because naturally you're like well well shoot we we we fell short right now I think the biggest thing about you know starting a startup and and building it the way we've built it through bootstrap is you know we got to find a lot of positive and sometimes negative situations and one would say that hey gosh we missed the mark by a huge amount man you all suck we all suck man we let's let's close the business down right it's not going to work out we got to fire everyone right but that wasn't the case the case was we grew by 19% we went from 18 to 21 and a half and all we had to do is say all right why why was there a Gap where where did we fail but not really fail but we can learn from so we can make 2024 a better year to get closer to the goals we want to reach right um so we had to look back and we had to look back at the mistakes we made because were not perfect um I think when you're starting a company from scratch no matter which way you look at it you don't have a bunch of big wigs that can call you up and get advice from you got to figure out yourself you know um and with our company you know one of the biggest things we've done to kind of um you know start our organizations I started I have you know almost 20 years of experience now um but the nearest person next to me at an organization is at seven years which is as long as we've been around because we hired about 95% of our staff that have no industry experience whatsoever out out of almost 100 employees so naturally the creative ideas sometimes don't work you know they going to fail fa quick we're going to have to Pivot and last year we we learned a lot about you know that we launched the W2 model uh over the last 24 months um you know 22 23 we learn our gaps we learn where we made mistakes when we need to double down on you know what we need not to do which maybe we don't need to hire as many people but we need to double down on the very people we have today incentivize them get them to the next level instead of worrying about bodies and we're worrying about the bodies that are currently here and leveling them up and I that was part of the reason why we probably didn't hit our Revenue numbers is because we were getting our face slapped without knowing it until we looked at the numbers at the end of the year because you know we were still growing so it's like hey High fiving still right but nowhere near where we wanted to be and I think we just had to learn from the mistakes and some of the failures and I think that's what we did and that's why 2024 is exciting so those of you listening now a couple minutes into this interview going wait what is viip I don't know what it is yet because maybe you missed the first interview his first customer was an auto repair shop uh today he's serving folks like restaurants rural coffee shops rural mom and pop businesses he he's not it's not just software right he's got to deal with The Upfront cost of the actual Hardware of which he's got 10,000 clients that keep two to three posos sort of per client location so that's tens of thousands of pieces of Hardware there and in addition Austin then makes money after that on a on a per transaction model is processing at least about a year go over a million transactions per month and then takes 1.8 to 2.5% uh of interchange there as well as the revenue model so when you go back and look Austin and please correct me if anyone that wrong after I asked this question when you go back and look at what assumption sales you put in your in your forecast model the beginning of last year which assumptions were wrong was it really really just People based like you just said or were you projecting 50,000 installed POS and you only hit 10,000 um I think it was a mixture of both right um and you know every year that's gone by we've been able to be more and more granular with our projections right um and what I mean by that is I think that sometimes you get you look at a kind of a high level broad number like let's say Hey you know number of you know what's what's Revenue divided by number of accounts that's that's kind of what it is but in reality that's not what it is when it comes down to what we make right so what we had to look back at and say well we missed it by the mark of assuming how many sales we're going to get and when it comes down a number of bodies we have and we overextended and this is something that hey I'm not afraid to admit it we overextended the number of bodies we should have hired which ate right into not only you know our our our our you know losses um but it also took a lot of time and and and and and like really good time of our people here to get the people that were really doing well and doubling down and get them to you know double their sales right um and that's what is that can Austin can you Quant I mean every founder goes through this right it's like okay we're bringing on a new AE what should their quota Target be that's number one number two is how long does it take them to ramp and sometimes most Founders are too aggressive with those they think it's going to ramp is going to take six months it actually takes 12 they think one sales rep can hit a million doar quot they can only hit 500K right were there like what were the bottlenecks for you where the the the Excel model didn't pan out how you thought it would um it it came down to like how we look so we have a couple different ways of actually getting sales right so we have inside sales which is in-house that focuses on you know marketing efforts to get people to call us throughout these communities and we have a 1099 channel that are boots on the ground that are independent contractors that can work anywhere and then we have a W2 model right and the W2 model is what we invested in for the last couple years 202 2 2023 and how we look at that is the W2 model is more of a controllable thing because there's a lot of great individuals that don't want to be an independent contractor and and be that Entre you say W model you're talking about you're hiring full-time employees they're not contractors yeah full-time employee salary the whole works $199 is no salary it's just purely commission right um so how we how we looked at those individuals is we have to look about what Revenue are they bringing in um and giving them time to ramp up right because if they're new in the business takes about 60 days we give we give almost like two free months right of ramp up and as long as we're doing basic actions that we need to see to you know you know number of leads hit and proposals and stuff like that we kind of know and then that we start looking at well how much revenue are they bringing in per month comparative to their salary and are they able to pay themselves off what we found out was it takes about six to eight months for an Roi on a W2 employee to make the money back when it comes down to what we're paying them salary-wise plus you know commissions whatever that's kind of separate ated um but what we weren't doing was we were giving too much time to people at one point in time and we weren't putting enough time in the people that actually were hitting stride right um so then we realized well we need to I hate to say it cut quicker and double down more on the people that are seeing traction because this is a new business uh for a lot of people that are coming into it right um so when we fell short on some of those goals last year it was because I think we overlooked the fact of the matter you know we thought more bodies equ more sales well that's not true EXC that's not true right so and and we realize that that we can't think that way anymore so this year what we've done this year is a night and day difference is we said we're not going to go on a hiring spree we're not going to go try to hire 30 people what fulltime today how many people full-time uh fulltime we have uh right now 95 total okay and how many do you think you'll hire fulltime by the end of the year like how conservative is your estimate there uh this year our goal is to hire no more than like two people like our goal is not to hire a bunch of people this year um this is actually going to be the first year we're trying to actually go in the positive not stay in the negative right you know we're trying to kind of focus and leverage ourselves to be in a better position going into 2020 um you know five positive negative in terms of cash flow or eita cash flow you um you know positive Revenue not loss in the p&l right um but you're bootstrap though Austin right how do how do you fund losses if you're bootstrapped uh how we so how we fund you know losses throughout the year is either we put more money in you know that we may' had from my PR you personally will you put money in yourself you you could or believe it or not there's ways out there to leverage your current company's um you know uh you know valuation or your cash flow your growth trajectory and you could partner like we we partner with a local bank that is a Community Bank and we showcase to them hey what instead of taking PE money and getting and losing Equity let's go in debt instead a little bit right so we took a little debt to actually allow us to fund some of that those gaps which has helped us out substantially and when I say debt I don't mean let's go out and let's get $100 million in debt that's not what I'm talking about yeah I'm talking about getting enough money to bridge gaps that we knew that were going to happen which we did have to have happen um and then this year so how much was that you're talking like a million from the bank or 500k or something uh last year was 1.5 million that we worked with the bank on um and we we worked with them based on our projections and based on our current Revenue growth Etc um and they they bought into you know our vision right Austin how how do you do that I talked to so many Founders at our software that they are so fed up trying to do anything with their local bank because the local bank won't loan against a software company did you have to use the hardware P systems as collateral to put up against that $ 1.5 million loan to get the bank to understand how to underwrite you well I I it's it's it's suck to be honest with you because there's a lot of Education part right we went to a Comm like literally it's a community bank right have no what we're doing right so we had to sit down with them and with their board the whole works and say hey this is who we are as an organization this is what we're doing this is what we're focused on this is where we gain our Revenue through residual base through Hardware through you know long-term relationships with clients in these communities and this is our you know I I think Pro in the pudding is important like we knew the year one and year two year three like there's no way a bank would even look at us twice right but when you're talking about bigger Revenue numbers of 10 million 15 million well they tend to look at you because there there's two hopes right they're going to make money on the interest and and high five if you make it they're going to want you to be one of their clients right um so we had to basically showcase the bank that you know our residual growth based on processing volume is increasing not decreasing and this is what we get from it and they eventually understood it and then once they did that they they got an appetite and and don't get me wrong they didn't write a fat check for 1.5 million say go get them tiger right they said well what are you going to spend it on and then they released it slowly based on need um and throughout the year right because they're G very they're very very conservative naturally did you have to sign a personal guarantee AB absolutely okay so you personally did got it that's what makes them comfortable right is you personally guaranteed it they're looking at your own personal finances and plus they love the business structure able and and Bank debt by the way I mean you know you know obviously I'm in this space right most people can't do what you've done because they're not at 20 million of Revenue and they're maybe personally not wealthy but if you can do this you're getting this debt probably at like prime or sof for plus like two or three it's very cheap money it's relatively cheap money oh yeah yeah and that's better than giving up Equity right so um so we did that and we have a x amount of year payback and and we're very comfortable with the pay plan and we knew that we could turn that money into a lot more and we did you know in my mind we turned 1.5 million into I mean much more than 1.5 million over the next three years because Austin just run the numbers you grow from 18 to 21.5 right so you're adding 3 million bucks of AR if you one day sell for 10x AR you added $30 million of equity value for you know what I mean it's like this is pure Arbitrage yeah no no no no no brainer in my opinion if you can get to that point and doing it and don't get me wrong it wasn't like the First Bank we talked to said hey let's do it right I mean it took some time and effort to play the numbers game you know what I mean um and then we finally found a bank that you know believed in us and believed in you have to move all your deposits your your business operating account to the bank that eventually did the loan yeah I mean that's one of the biggest things they want is to see those deposits flowing in because that's how the bank is you know you know they they consider themselves successful I mean the very person that helped us is now our CFO it's kind of crazy how that works oh wow um so small world right so um now the very person that understood everything about us is now currently today our CFO so now the you know he understands everything in and out and it made a lot easier and guess what I didn't have to do I didn't have to hire someone from our payment space and again the reason why I never did that because I've been around so long that just is a lot of bad habits and I didn't want people not saying that we would never hire experienced people just imagine having 95 experienced people at 20 years plus we all have the we might have the same mindset and stuff like that we wanted to avoid that so I'm glad we got it yeah has anything changed moving for moving forward about your Revenue model do you still charge about 58 cents per transaction H yeah I mean nothing's changed about a revenue model compared to last year um it's just now it comes down to what we're focused on and I think we briefly talked about it last year um is we're focused on putting so there's two type of terminals out there there is the small one we call them Standalone terminals you walk into a store they have a little machine you swipe through that's Standalone to systems like a clover you probably heard of clover um is the white system it's like a p system so going into this year you know we basically put almost a million dollars into equipment because we saw it work last year on Clover or Standalone on on clover um and we I mean literally I moved out of my office I wish you could see it I'm not sure if you've seen online but I moved out of my office um because we had to use that as a storage room for that million dollars worth of equipment and was all Clover Clover POS systems just stacked up there right now St stacked up there I'll send you a picture later it's hilarious you know we did that you know late last year and what our goal was we realized that people that have POS systems that are is easy to use simplistic and they have more options tend to stay around longer and they do more volume even in Rural America you know believe it or not there's people that do good volume in Ral America and they stay around longer because they able to run their business in a different way than they ever have so they're stickier and also they do a little bit more volume which helps our cause of you know we make money on the processing volume you last year we did 1.85 billion 35 billion transactions this year you know our goals based on projections around 2.25 billion and over 30 million you know well over 30 u a million dollar increase per month and and that's what we're looking to do this year and we only can do that if we're setting oursel up for that which is why we invested into more Hardware P systems for these do you think this year you you finished last year with 1.5 billion of total transactions flowing through viip pay powered POS systems whether Standalone or through a partner uh terminal like Clover and that equated to 38 million total transactions is that right uh 1.85 billion last year 2023 and 35 million trans action I see so this year we're trying to get up to you know 2.25 billion which adds roughly around $30 million per month in processing volume and in in our business I think that's unheard of being where we started to where we're at today with no outside money you know well yeah I mean that that also you told me last time that the average credit card swipe at the auto shop that your Clover system is installed in is the average swipe is 25 to 30 bucks right so if you're trying to add that much processing valume you're trying to get about a million more credit card swipes across all of your installed customer base per month I mean that's a lot of growth yeah and I think right now based on you know right now we have seen since November of last year we've seen our sales steadily go up um even through the holidays naturally the first month the first couple months of any year for us personally in the payment space is slower because wintertime and you know summertime stuff is you know basically slowed down during those winter times across the United States especially in the midwest where a lot of our business is but now we're seeing a huge pickup which we always every single year which is during spring summer when marinas are opening up and all these You Know Places spring break all these things starts increasing so what what happens every single year in our business is we'll have a low point which is usually around January February we'll Peak around August we'll maintain that Peak even if summer businesses closed because we've added so many new businesses deals in and we'll maintain that through the next Peak the following year and that's been that way since the dawn of time I see that's what I feel like even with my last company yeah all right hey as we wrap up let me just make sure I got this breakdown right you've got 95 full-time employees how many 1099 today uh 1099s we have over 125 active 1099s across United States and we have probably close to 500 in training that's a continual number meaning they've never got their first deal but they're giving an opportunity to us to teach them the products and services to sell to their communities um and and we try to get them to you know obviously buy into that too what's the kickback on that is it 10% of first year revenue or how do you structure that incentive well 1099s are different than W2s right so you know 1099s when they first get into business we usually share 50% um you know of uh of a break even Market that we set with them so they can build a residual base for them per month or per year or ongoing forever for for for every account and we do what we call Lifetime residuals too so as long as those accounts are active with us we are able to continue paying them residual so you could actually sign up three Deals a day I don't know make $500 a month and we'll pay you that even if you don't get another one again I see um profit so we actually split that to get independent contractors not they buying in for the residual portion long term not just The Upfront money we're giving them does that um how much money are you paying each month in the 50% commissions out to the 125 active 1099s uh when when it comes down to like what we're residual based what we're paying out to those guys exactly per month based off all the deals they brought you um well well last last month alone we paid w close to a million dollars of residuals out to W2s and 1099s yeah you know so we're paying a a good chunk of money to individuals out there because you know hey look when we first started 1099 contractors were the easiest because if they fail or didn't want to go work or didn't do anything we had to spend no money right these are 1099 contractors now obviously that catches up to you when they actually start hitting stride and they start building residual base W2 is opposite we have to frontload all the money yeah in hopes they make it so but we also know that that's a better opportunity for us long term because you know those are individuals that we can keep more profit long term as well yeah it's the in and the Yang I mean if you're doing about a 24 million run rate to say 2 million a month and your cost structure is sending a million out to the 1099 in W2s a portion of which is fixed a portion of which is variable Which is less risk it still means though your cost are good sold right your margin here is you know 50% in in the best case scenario right now monthly so I guess do you see any I guess are you just sort of okay with that you have to make the business work with 50% margins or do you see a way to buy back some of that margin over time by buying out like the per perpetuity you know payment stream on some of the 1099s or something yeah so the current marker for US Revenue stream out in in total when it comes out a net is about 43% by the way just to say so it's about 43 because when you incorporate everything there's deduction callbacks because you know accounts cancel whatever maybe it's about 43% that way that has been lowered from 52% three years ago down to 43% okay um so just to be clear 43% cost structure 43% is cost or 57% is your gross margin so 50% is our our end you know we 57% is what you keep gross profit yeah correct yeah and we' down we we push that number down we PID basically about 43% out in residuals based on what we get paid through that Revenue scream and and our goal is to lower that number to 40% or less over time and you can do that in a lot of different ways W2's help with that cause right you can also do it by buying out independent contractors book of business for some X multiples would go buy houses what would that be it depends on well it depends on situation right it depends on how healthy their book is I've seen as high as 25 multiple and I've seen as low as seven multiple think about it a monthly residuals so you know I've seen a little I've seen literally the highest I've seen in my career is about 35 and the lowest I've seen in my career is five depending on how healthy their book is um and that's how we look at those independent contractors so they basically are building their own their own credit line for long term so yes you could buy it yeah so that that's something that we could do and that also puts that money right back in our pocket I was GNA say Austin that's saying if you prepare yourself to go into an m&a process which you know I I have no inside information but if you did and you want to increase your margins what you could say is we're paying a million out per month right now to these contractors let's go offer them all 7x of that see if see how many will take it so you're you need to raise 7 million bucks to go buy back 43% to your margin basically and that margin Improvement you're going to get more Equity gains probably than the 7 million cost to buy that back anyway so that's an arbit you know that's a play you could make down the road potentially is that right 100% And that's and this business is known to do that a lot you know of the time and we know that that is a line item that we can utilize if we ever want to go down that bridge and make that a focus and we could do that hopefully maybe by ourselves without doing that down the road who knows yeah yeah yep well if you need seven million bucks we would love to fund that one day at found um all right awesome this is good stuff let's wrap up here with the thing actually before we wrap up I didn't give you any time to really talk about future prodcts is there any future prodct releases that you're really excited about you want to make sure you get some exposure here on the show um you know there's a couple things we're doing so you know Clover is something we decided to partner with instead of spending the millions upon millions that they have spent over the years to become the dominant you know soft where they are we decided to partner with them because we're with fiser fiser happens to own Clover and we are building out applications kind think about your iPhone you can download apps you pay money for us whole works well clover does the same thing so we are building out applications on the Clover device that not only can be used if you process with us but could be also be used if you don't process with us for the programs that we focus on which is Cash discount and dual pricing and and you know Inventory...

Introduction guys visypay.com is doing 1.5 million a month right now or 18 million on average this is talking last year's numbers he's thinking they'll do about 27 million this year he helps over 10 000 local bars restaurants auto repair shops in Rural America process credit cards faster it gives away a two thousand dollar POS system if they ask for it they then run their math he's taking on average 58 cents per transaction in almost 60 million transactions last month and the best part about this he's done all of this completely bootstrapped with this team of 130 folks out there in Iowa hey folks my guest today is Austin mcnabbies the CEO co-founder executive leader of visipayo West Des Moines iowa-based provider of payment Technology Solutions for businesses all across the U.S he's been in this world since April 2017 when he co-founded the company Austin you ready to take us to the top absolutely let's roll all right so what kind it's rare you hear about a fintech company in Iowa usually it's like New York Miami San Francisco how did you get into this space well you know Iowa we do have airports and you know paved roads so uh we actually we're a real deal um I actually got into space about uh gosh 18 19 years ago um I've been in this space since my whole adult life I'm 38 now so I've been doing it for a while uh that's probably one of the best places to be in and probably the most initially people didn't know a lot about about the industry itself payments fintech and obviously he's becoming more dominant now as you see the bigger companies arise well so Austin give me an example of a company that's using you and how they use you uh well we focus on Rural America so we don't focus on Big Towns like Chicago San Francisco Dallas all these other areas we focus on Mom paw shops um in Rural America so you know take Johnny's Auto Repair in Atlantic Iowa just as a is that a real one place uh probably not I'm just using a default name I I don't want to use client stains about them uh you know let me know but let's say Johnny's Auto Repair Shop in Atlantic Iowa you know that individual um you know believe it or not we could put people on the moon today but these individuals have dial-up internet still in some of these rural areas throughout the United States was sometimes depressing to see so that's why we're kind of really focused on Rural America because we believe technology is passing them by um and they're passing them by these big companies that have to answer the stockholders Etc they want to be in the big town where there's more processing volume there's more transactions and more population while these smaller rural towns in America are being underserved um so technology is passing them by and then when they want to level up the technology is way too robust and way too costly with too many long-term contracts therefore they resist uh so they're always stuck kind of in that middle right so how do we level them up and get them to the playing field with you know simplistic technology that gets them to the next step uh you know Evolution wise when it comes down to cashless Society may not be in our lifetime but eventually could be how do we get to the next step so they're not left behind Austin let's use a real example here proletariat which you talk about on your website so I know we can talk about them as a local bar in Perry Iowa they're one of your guys's customers right so are you replacing toast and square you're doing a hardware play also or is it just the fin the behind the scenes how to process the restaurant the new bar order things like that um it's a little bit of both um so since you mentioned that you know place I know exactly that place um yeah I've been there um but uh we place a POF system in there to help their business run more efficient you know within the organization um and without the you know High Cost of you know other competitors that are out there that you mentioned what does that cost proletariat for just did they have to buy the POS or do you subsidize that if they use your software on the back end well in our situation we have an equipment placement program So based on volume Etc that we would place it there at no cost to them so we're contributing two three thousand dollars worth of equipment you know to their doorstep and we give them options to basically eliminate what they pay for you know accepting credit cards and give them options to do that uh through the technology and through the POS as the place at that location oh what's going on there YouTube good to see you guys now imagine this you love watching these interviews with SAS Founders but imagine if we took all of the valuation data out from over 2807 interviews I've done manually saves you a lot of time well we've done this we've built the into the beautiful interface inside of founder path check this out I'll show you how you can access this in a second but you log in you connect your stripe account you see your 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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 all right let's jump back into the interview wow anyone want to get into this space it's hard to pay two to three k to install the Poss for free so how did you how did you get to the point where you could do that did you raise a bunch of equity dollars to subsidize that or how did you do that on day one well we've been around six years coming Bootstrapped up in April uh we bootstrapped this whole company from the ground up you know I was door-to-door six years ago and here I am today we have 130 employees um and we have you're still bootstrapped agents that sell for us and we're still boosted out not one dollar from outside money that's awesome and you know so our place slower because the markets were in you know so we grow slower so it took a while before we could offer things like that but doesn't mean we didn't utilize all the technologies that were out there to help them level up and um give them options to eliminate what they paid for processing Etc but now we're kind of in a position that we can help more and why not when you know someone that might not have 2K laying around we can work with them to get that in their location make them more efficient save them the processing fees and and lead them in the right direction where they need to be instead of you know be stuck with us and here's a bunch of money to spend and by the way if we do give it to you for free you're stuck in a four-year term and it's twenty thousand dollars to cancel it's a it's a nightmare for these guys and they're scared and they should what is your contract they don't know what is your contract you can't give away a 2 000 piece of equipment without locking them for some period of time right so we have three options if you buy the piece of equipment everything's month to month here um if you decide to uh buy it up front it's month to month um if you decide to do a payment plan because we do interest-free payment plans for our clients if they want to buy that that's also month to month but if they want us to contribute to three four thousand dollars to the location we do ask for a 36 month term but the kicker to it is is all we're asking for in return is equipment back and half the retail cost that we contributed and done while most companies will say hey by the way you're you're going to owe us 15 20 25 000 to cancel because that's the profit we would have made on your account therefore you're gonna pay us what we're gonna lose if you leave early and that's probably the bigger names you just mentioned so yep yep yep that's great I can see why proletari would love a model like that way more flexibility I clearly see the focus obviously on Rural America I guess before we move on from the hardware thing uh help me understand how like the operation size on this I mean do you have you know a thousand Poss out there today or ten thousand or a million how many pieces of Hardware do you have out in the world today uh we have a little bit over 10 000 clients across the United States but that doesn't count maybe like the hardware because some locations have two or three pieces at their location right um so if you just did a baseline of 10 000 cool but you could probably add 10 15 more to that for additional piece of companies this is always not just those POS systems with like a smart screen sometimes it's a basic smart terminal because they don't need something maybe even that robust so yeah that's a big expense I mean so let's say 10 000 clients they have two pos's per location like in the location right so that's that's 20 000 POS is that two grand to pop I mean that's 40 million dollars of Hardware expense right there how did you come up with 40 million are you really profitable where do you get 40 million bucks bootstrapped um well remember there's two types right there's there's a POS systems that cost two to three thousand right and then there's basic smart terminals that are a couple hundred bucks you know about 90 a little bit about 90 of our clientele don't need a POS system that's two or three thousand it's mainly for restaurants and bars and retail locations I have a lot out of inventory but a lot of them are this it is a basic terminals that you know level them up from the good old days of you know the 2000 you know six or four when I when I came in the industry we're trying to get them to the smart terminal actually smart terminal screen kind of like an Apple phone Etc but that's substantially less money yeah so this is this is like this like packs technology the Pax a80 the deja vu those kinds of devices which you don't manufacture and charge 2K for those are third-party providers you've partnered with yep and then we also offer those for usually we offer those at no cost as well um um no don't get me wrong that has added up over the years to be a lot of money and and so millions of dollars but that is based on you know us slowly but surely kind of you know ramping up over the last six years so yeah yeah okay this is really interesting now you've mentioned no fees and stuff you've mentioned you give away their hardware for free if they send it for 36 month turn but Austin how the heck do you make money what's the revenue model well it's easy so you know uh owners aren't accountants right uh most of the ones we deal with are they're not Rural America they're Rural America they don't have big CFOs they don't have people looking over their shoulder every five minutes to tell them where you know rates and fees can be so it's unpredictable um so what we did was we found a way that's not unpredictable that allows them to get ahead of the game instead of stay behind the game and it actually includes processing fees into their pricing um instead of uh you know instead of like for example think about like cell phone bill light bill labor that's all in their pricing of costs right they don't put that they don't sell it to you and I for cost they sell it to you and I where they profit on top of right so for many many years most places don't include the processing fees into the pricing and then we they leverage the technology that we have to basically isolate that and remove it every single you know transaction um but we make sure that it's uh high enough for these individuals that they don't ever have to come back to the you know we don't have to come back to the well again and say hey by the way we have to raise rates we have to do this now let's just make it so like everyone listening can can understand this let's say they buy a five dollar beer at proletariat right what what does busy pay make on a five dollar beer sold at proletariat so we well I can just tell you the number I mean we make about 58 cents per transaction across the United States so on average uh we make about 50 cents per transaction um and depending on program these are also programs that they don't want to eliminate their fees and they want to pay it they want to be like the good old school way and that's less profitable for us and less savings for them but that is an option that they decided to use some time is over uh including into their pricing because they don't know rev share then it's just a flat 58 Cent fee for the five dollar beer yeah so yeah we're gonna do any reps here with a small business owner I'm just telling you on our end on our profit that's about 58 to 60 cents per transaction we make you know out of the millions of transactions we do a month across the United States um and that's there's more to that obviously and the but we don't have enough time to probably go through the details of how that works but but it's not a percent you Pro a tear when they're signing up for this they're not saying I'm agreeing to 36 month thing where every dollar we process through through your thing you get to keep a five percent cut there's not a REV show that's a flat 58 Cent fee on average well it's not oh so we're not charging that 58 cents on average we're making that across the board uh because everything's based on like high tickets and interchange costs interchange costs is something that everyone pays including big guys like Walmart you know guys like you know small business owner Rural America is the cost of carbs of acceptance that's a baseline so that's sometimes between anywhere between 1.8 to 2.5 percent so we're basically we're profiting on top of that number so for example let's say a card comes in and it's the cost was 2.9 let's say round up to three percent it's an American Express card but we're including the process of fees and the pricing at four percent you know so therefore we're making that difference right that's how our company makes money so you'll charge on on a dollar let's make it easy math on a dollar beer right you know interchange or Amex might take uh three cents you're gonna charge proletariat whoever it is four cents so you make a cent on that transaction for a dollar yeah so if you the reason you're able to give me the 58 Cent number is because you're taking the average transaction value across all of your clients per month and millions of transactions and it comes out so comes out to like an average what is that what's the average ticket that's gonna be like 35 bucks 40 50 bucks something like that what about 20 above 25 35 across the board um and that's remember that's taking all our programs and compassing so that's the program that I just mentioned to you is our cash discount 2.0 we have surcharging as well that's legal in most States now that you know cost of the credit card when you walk in they up charge at the register and then you have regular basic interchange Plus cost which is Cost Plus our pricing that's our markup so on interchange Plus pricing we make substantially less you know cash discount we make substantially more but they save more and in the middle surcharging we make in the middle of those two so that's why it's an average across because some places a lot more and some places we make substantially less depending on the programs that they choose but we give them the options to make the best decisions for their organization not ours um they might say we don't accept this we don't accept Amex for example yeah yeah we don't say MFS and you know what I don't want to go raise 2 000 of my SKU items and include the pro you know the processes of my pricing and use your technology to isolate it uh screw that I'm going to make I'm gonna do something different it's easier for us and then they'll choose another program and that's on their choice not ours and it shouldn't be our choice yep yeah that's very cool okay I want to put this on a timeline real quick so you launched you said six years ago I think so I mean 2017 you got going in April 2020 uh April 2017 correct that's amazing okay do you do you remember the first restaurant or the first row like business you signed up how did you get that first customer yeah actually I do I'm the one that signed them up um I actually went door-to-door like any sales individual would to sign deals up because that's we at that point we had I mean we basically had nothing um and it was actually an auto repair shop on 2nd Avenue in Des Moines Iowa and I walked in and you know I've been teaching sales reps to do this business for years in my previous company so I just used tactics that I've known and I've learned I've done myself went in and did a proposal for that auto repair shop I mean I remember at first he he acted like an employee the whole time not the owner of course until I started talking and talking and eventually he said okay I'm the owner he opened the door talked to me about it I did a proposal for him showcased to him where we could be different than what his other provider is he signed up and as of today um you know he is still a client of ours on Second Avenue so that's amazing okay so that's your first customer I guess fast forward to today What's the total transaction volume you processed over the past 30 days um uh well this year so it's Unique because it's changes that but depending on you know whether like winter time slower marinas aren't open Etc we have a lot of deals throughout the Midwest um but you know this year we should process well over two billion dollars of processing volume um so it's hard to use this last month because we just came out of a holiday but you know it's it's crazy because the first four years that we we started we didn't even do 2 billion collectively until the fourth year you know this year alone which is going into the sixth year uh we'll do well over two billion in this one year um which is exciting for us to see because it took us that long to get there now we can do those things in one year and actually more than that so and what was total last year processing volume uh Prosecuting Volume last year was close to 1.7 1.8 billion that we processed so this year we'll do well over 2 billion um so I would say closer to three or more but I'm just again projections as of this point that's wild so 1.7 billion in volume at 30 bucks a pop that means you processed almost like 57 million credit card swipes across 10 000 installed customers is that about right 57 000 million customer swipes oh wait what you're probably you're probably very close closer to 60 I think it was but wow um it's crazy because when we first started in 2000 you know 17 is crazy we our Revenue that year was Monthly recurring revenue ninety six thousand dollars you know in 2021 it was 12.7 Million this last past year was close to 18 million and this year we're projected to do close to 30 million and growing and that's all bootstrap now uh you know I think we've we've shown the process works and we've shown what we've done is worse and we're building out technology today with our fintech team uh so we're doing unique things we just happen to be growing slower because we're not focused on big markets where their average transaction in a month volume wise is almost twice is what we get in Rural America because we're in a non-aggressively popular areas that like big big dogs are like toast and all those guys no it's incredible so just repeat those numbers back to you last you did 18 million right the year before that you did 12.7 million and what did you do in 2020 uh 26 2017 with the 97 uh thousands obviously back when we first started I'll just kind of give you kind of a I think a little bit for you but I see yeah I mean so the first year we thought 97 000 was dope so yeah and what do you think you'll do this year 30 I think we'll be close to 27 to 30 depending on the Salesforce goes with our our hiring list we just had so that's awesome okay what a great story let's I guess how did you go from that auto repair shop to 10 000 customers is it still do you require reps to go door knocking how are you growing today yeah we have three pillars and um so kind of break it down real quick for a high level uh we have our account manager Channel which is our W-2 Salesforce that is focused on Rural America and we have our 1099 independent contractor sales force that they don't work for us they're non-exclusive like a work-funding company in the United States and our goal is to teach them the space and work for us and they focus again on Rural America um and those guys are boots on the ground face to face which I think Rural America lacked um and then we obviously have the channel we have a lot of marketing we're very big in social media marketing we have an inside sales channel uh that we work with clients Across America to help them out just because maybe we can't have a boots on the ground because we don't have obviously a body in every small city in the world and then the United States excuse me so we have to be able to help them out as well through our inside sales channel so we have three separate channels um and including the uh kind of a silent Channel which is our fintech which we're building out technologies that will eventually have sassies attached to them based on what the client needs kind of a la carte which we're launching in the next couple months so is fascinating so Austin talk about how much how powerful you feel because you don't have a board and you can make quick decisions and you haven't raised 100 million bucks in VC what does that allow you to do um you know it's crazy that you mentioned that because I watched that happen in my career with organizations I was part of and I just remember that feeling of culture uh diminishing very quickly um and then basically you can almost feel like power being taken away from the people and even the leaders and I didn't want that feeling so I said proof of Concepts where we're gonna have to start so if we ever look at that it's our way it's not someone else's way and that's if we ever look at it down the road and do I feel powerful I mean we're in a big space you know excuse my language but I think you know we're [ __ ] compared to these big dogs right you know they got a lot more money and a lot more manpower and a lot more you know people but what we do have is we're like a speedboat you know we could pivot at any moment um these guys are like the Titanic man they're pivoting they gotta watch out for icebergs and they can't go quick enough um so ours is the janitor the CEO thought process of what we focus on which is culture first you know transparency and being the voice for small business owners and believe it or not we have a mindset that's different than probably what the stockholders would want if they did have we did have Peabody which is our clients aren't number one believe it or not they're not number one and by the way they're not always right either our number one person that we focus on is company culture the people that were in our organization so we have 63 minorities 27 women and over 95 of our staff come from outside the payment space and I did that on purpose knowing that it takes six to nine months to train them but at least they could do it the right way our industry is full of it's just a [ __ ] nightmare our industry in general all taking advantage of people and I just don't want to be a part of that anymore I was part of the problem for a lot of my career being naive not knowing and I learned it and I wanted to get out of it and now I want to do it differently and and that allows us to have that power effect if you'd like to mention now do I feel powerful compared to the big dogs that can crush us financially and body wise well no we're we're babies do I feel powerful on the vision and you know what we could put first and how we want to roll with our company when it comes on our group buying into what we are what we stand for absolutely I feel powerful that's awesome well Austin before we wrap up obviously you're in a very good position especially in a recession your VC back competitors are reeling right now trying doing layoffs losing customers like crazy do you take advantage of this anyway do you go buy a bunch of your BC back competitors how do you take advantage of a recession because you've done such a good job being healthy in terms of unit economics uh well the crazy thing is you know with this industry if it's a recession or good or not a recession everyone uses a credit card so today if people don't have money they're using a credit card or they're going in debt unfortunately but they're still using it to survive and if they have a lot of money and they don't have debt they're using credit cards for their points so either way we're always going to see you know credit cards being used and as they're doing these layoffs Etc we're actually moving people to Iowa you know I just moved you know I've moved people from Florida from you know California I move people from Mexico before I move people from you know other parts of the state to Waukee Iowa you know and and I think and people are buying into that and they're okay with the cost of living is you know fair you don't have to go to Silicon Valley we're cost to live in Skyrocket we don't have to have as much money as them either because the price of cost of living here substantially cheaper so allowed us to bootstrap this and do in Iowa and it probably saved us um you know a lot of money and time because we were in Iowa doing that no it makes tons of sense listen it's a heck of a story we're out of time today let's wrap up with the Famous Five number one what's your favorite book uh everyone asks me that question uh I don't have a favorite book my favorite book is the one I'm writing every day number two is their CEO you're following or studying uh um I think I saw a lot of individuals out there that you know uh I look at I wouldn't say there's one specific that stands out but I usually follow a lot within our industry or you know outside but there's not one favorite number three what's your favorite online tool for building busy pay uh LinkedIn believe it or not the most underused tool in the world I think and we use it to the to the Tilt number four how many hours of sleep do you get every night sauce that's a great question to seven hours I wake up at six every morning I usually get to bed yeah plus seven and I saw a wedding ring on so I'm gonna assume Mary but married single kids what's your situation uh married to my wife for almost 20 years uh three kids 17 uh 14 and 12. wow and how old are you I am 38 38. all right last question something you wish you knew when you were 20. um I wish I understood what empathy really meant when I was 20. guys we learned a lot more now growing this organization guys visypay.com is doing 1.5 million a month right now or 18 million on average this is talking last year's numbers he's thinking they'll do about 27 million this year he helps over 10 000 local bars restaurants auto repair shops in Rural America process credit cards faster it gives away a two thousand dollar POS system if they ask for it they then run their math he's taking on average 58 cents per transaction in almost 60 million transactions last month and the best part about this he's done all of this completely bootstrapped with this team of 130 folks out there in Iowa Austin thank you for taking us to the top all right thanks buddy I appreciate it one more thing before you go we have a brand new show every Thursday at 1pm 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 our poo 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 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