The Bowery Capital team is kicking off a new blog series covering Vertical SaaS. We are doing deep dives on various companies, interviewing founders and investors, and learning what it takes to build success in the B2B Marketplace arena. This week, Ali Javid, Co-Founder and CEO of Wrapbook, answers some of our questions.
For the readers, can you describe Wrapbook’s mission and what inspired you to start the company?
Wrapbook is a vertical SaaS solution for the project economy, starting in entertainment. Our mission statement is to increase the prosperity of the project economy through better financial services. And when we think about prosperity, sometimes it is economic value, sometimes it is knowing how much you are going to get paid, and sometimes it is about getting rid of processes that encumber a business from achieving their goals. In entertainment, production companies put on film shoots, TV shows, commercials and their entire business is about spinning up and spinning down projects. One of the things that makes entertainment really unique is that everyone on set is a unionized employee. So, for a three-day commercial shoot, everyone on that set is your employee for those three days. Wrapbook acts as an employer of record and provides software that makes it really simple to onboard, pay, and insure employees on set. Reciprocally, workers receive a profile on Wrapbook that is portable between employers which alleviates their pain of re-onboarding for every single job, and allows them to track payments across the different companies they have worked for.
What was the inspiration for going into this vertical? Did you have an entertainment industry background or did you just think it was an appealing opportunity?
I fell into it - the last company I was at was called Body Labs and it was a transformative experience in my life. It was cutting-edge machine learning technology spun out from a German research institute, was the best AI for understanding human shape and motion, and our customers were Fortune 50 companies. We struggled to commercialize the technology though because our product usage & distribution were not repeatable. Amazon bought it and it was a great exit for all involved but it did not transform an industry.
When I was figuring out what was next, I reflected on what I enjoyed the most. It came down to three things: Who am I working with? Are we a fire extinguisher? Do we people repeatedly want it and want to pay for it? I was really open to problem sets and I met up with some friends. I learned about entertainment payroll from them. I was shocked to see stacks of paper time cards with SSNs laying around the office, how everyone described the same problems, and the same solutions. I found the people to build with, a need for a fire extinguisher, and something people repeatedly needed & paid for. I jumped headfirst in, focused on learning, and have never slowed down.
Can you give us a little more color on how industry participants and entertainment would run their day-to-day workflow prior to Wrapbook? What were the accepted practices you were trying to replace?
Even today, the accepted practice is paper. And that sounds insane, but the union rules to pay an individual are so complex that you often still have a person review each and every time card and manually calculate wages. As a result, you start with paper - everyone on set gets a paper W-4, a paper I-9, a paper time card, and you scan that and send it to the payroll company. The payroll company assigns an accountant to manually calculate this out and puts it into software which sends you a PDF invoice, you wire the invoice amount and then the direct deposits and checks go flying. Workers kind of wait to receive their money not knowing how much it will be. The other side of that is as a producer, I might be paying hundreds of thousands or millions of dollars on the shoot but it is really hard to figure out if you are on budget or not when everything is on paper. So then you have accountants manually keying in POs, manually keying in invoices, trying to actualize their budget. The accounting side is as painful as the production side and that today is still the status quo.
In terms of the benefits of using Wrapbook, what are some features or tools that have gotten users excited and driven folks in the industry to adopt the product?
I think there are first order and second order impacts - the first order impact is people use it and they think ‘Wow, this is so much more efficient.’ The second order impact for workers is they do not have to re-onboard for each job and can have better visibility to track their payments across different projects. The second order impact for companies is they realize that because Wrapbook is real time and digital, their compliance increases because now they can know things like whether everyone that was on set today had an I-9 - before, this was not as easy a question to answer because it was all just paper floating around the set. Actualizing their budgets, having insights into how much they are spending - these secondary impacts are not immediately recognizable when thinking about moving from paper to software, but then that is where the big value really comes in.
What was a go-to-market lever that you were able to pull that helped drive Wrapbook’s early adoption?
We really struggled at first because payroll is not something you can easily stand up, and calculating union wages is also not something you can easily stand up, so the problems we were building for were challenging. For us, it was really hard to get started and we took anything we could get. And whatever we got, we tried to do the best job we could and make that user feel like they were our most important customer. We just kept pushing on quality and kept pushing on making sure we had a reputation that would precede itself. We did things that were incredibly manual at the start in order to support features we did not yet have the funding to build software for. We just kept pushing up and up the curve until inertia took hold. It took three plus years for us to get to that point when we really had inertia - and what interia feels like is 90% of sales leads being inbound, being driven by SEO and word of mouth. And yes - it took three years to get to that point - but we got there.
Since Wrapbook launched, how has it improved and evolved and what are your future plans for its growth and development?
It has grown in so many different ways - the compliance angle is one example. In the beginning, we were really trying to get a handle on industry laws and norms. Now, Wrapbook is in a spot where we provide customers a product that keeps them more compliant than what they otherwise would be and are starting to help set industry norms.
Our future plans are to focus on what got us here which is delivering high quality experiences and having our reputation positively precede ourselves. We then focus on winning in segments of the industry to get to a critical mass of companies using us, workers with profiles, and industry experts who know how to use our product.
What were some of the biggest challenges that Wrapbook faced in its development and how did you overcome them?
The first two years we got rejected by most Seed funds. I could have done a better job of fundraising. We were also up against investors not knowing entertainment, doubting our solution was needed, and very skeptical that we could become a meaningfully large company within a vertical. That was really hard. I would have given up if it was not for my amazing co-founders. Together, we persevered, did whatever it took, and it paid off.
Were there any partnerships or collaborations that really helped Wrapbook expand its overall reach?
When you think of entertainment, you think of a movie and it might have the most cutting-edge visual effects in the world but behind the scenes things are often still stuck in the ‘90s. What we did was we were able to find people within the industry who had wanted to innovate but had not had the tools to actually push the industry forward - we incrementally found these people, and convinced them to get on Wrapbook. These innovators then referred other customers. This is especially true for crew who now had a profile portable between employers who generated momentum for companies to give us a try.
What would you say sets Wrapbook apart from its competitors, and what is your plan to sustain that competitive advantage?
It may sound simple, but it is actually really hard - it is all about focusing on customers. We release product daily and we have 150 people in engineering, product & design. Outside of sales and marketing, we have another 100 people just serving clients and that is an insane amount of focus on high quality products and high quality expertise to support those products. We were four people for two years, and then we were seven people, and then 20, and now we are up to 250 but our success has been due to customer focus and really investing ahead of our existing client needs.
Based on your experience co-founding Wrapbook and working in the vertical SaaS space, what advice would you give to entrepreneurs trying to build a vertical SaaS business?
To win in a vertical, you have to be more similar to an operating system than in a horizontal play and you really need to own a significant share of the customers’ wallet in order to scale revenue. Find the crux of the problem, start there and gradually overlay functionality.
If you liked “Vertical Visionaries: Ali Javid (Wrapbook)” and want to read more content from the Bowery Capital Team, check out other relevant posts from the Bowery Capital Blog. Look out for more content on Vertical SaaS from us in the coming weeks.
