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 vertical SaaS arena. This week, Songe LaRon, Co-Founder and CEO of Squire, answers some of our questions.
Just to situate the readers, can you tell us a bit about Squire and its mission to transform the barbershop industry?
Squire is the only online business management platform specifically for barbershops; you can think of us as the operating system for these small business owners. We handle everything barbershops need to manage their day-to-day including booking, scheduling, point of sale, CRM, payroll, and more. We are the only software company I know that goes this deep on the barbershop vertical.
What inspired you to create Squire in the first place? I saw you had a legal background and was curious how you made the switch to building a barbershop OS.
The idea actually came from my co-founder & I - we were looking for ideas we could work on together and we came across this concept of the barbershop experience and how it was a kind of magical space that we had been going to since we were kids. I started going to the barber when I was six or seven with my dad and it is almost like a ritual - it represented so much more than just a haircut, but at that same time, we realized that in some ways it was super inefficient and antiquated. The more we thought about it, and as we started looking into just how many barbershops there were, we realized this was a big opportunity.
Initially, we were going to tackle the consumer angle, but the further we got into it, we realized there was even more opportunity on the business side. In the interim, we actually briefly ran a small barbershop in Chelsea Market which was really cool and helped put ourselves in the shoes of barbershop owners and validated our belief in the opportunity in this vertical. This experience also made us even more passionate about what we were building and helped us better understand how we could really be empowering small business owners through our software.
In the pre-Squire world, how would barbershops deal with managing their day-to-day operations and what were the big challenges that they were facing that you guys tried to come in and solve for?
Before Squire, there were usually two different approaches these barbershops had. Either it was the Stone Age - just pen and paper, cash, and whatever was living in the barber’s head. Or, if they were more tech-forward, they probably accepted credit cards and maybe they were trying to cobble together a few different systems. This would lead to really inefficient and cumbersome situations where these barbers use one piece of software for scheduling appointments, a separate point-of-sale solution, and a third system for paying the barbers. That is generally how things were operating before Squire.
What were some of the early strategies that you used to drive adoption of Squire? What was that initial go-to-market like when targeting these small, largely offline businesses and trying to convince them to move their stores onto a whole new set of systems?
Our earliest attempts were me and my co-founder walking into random barbershops in New York and trying to get them to sign up for our mobile app, which was the first version of the product and we learned a lot through that experience. From those conversations, we learned that what the market was looking for did not yet exist, which was an all-in-one system to run their business. At the time, we only had a mobile app which handled payments and booking for an individual barber but did not handle operations for the entire shop. That was when we realized these shops needed something that can do everything in one platform so they would not need to rely on Square plus two or three other systems to manage things. That is what led our product to evolve into the barbershop operating system and with that we were able to get some traction and ramp up GTM.
One unique thing about selling into barbershops is that 9 times out of 10, the decision maker is in the shop so you can easily find them and get in front of them. We would try to go at slow times - like a Tuesday afternoon when they might not be so busy. In the early days, when we were desperate sometimes we would actually pay for a trim and that is a good way to get their attention for 20 or 30 minutes and they kind of have to talk once you are in the seat.
How has Squire evolved since its launch, and what are your plans for future development and growth?
Our first version was the mobile app, and we pivoted to more of a B2B operating system approach and since then that has been our focus. The problem we are solving has remained the same, but we have been steadily expanding the services that we can layer over our core offering. Our initial wedge was booking and handling card-not-present payments, and then we expanded into the physical point-of-sale terminal which was a key turning point and the POS was fully integrated with the booking and the back-end system. Next, we built out internal marketing tools for barbers to reach out to their clients and send customized SMS and email messages to drive client engagement and retention. We have also rolled out a white-labeled version of the platform with custom branding so barbershops that are brand-conscious can keep their name front and center when a customer is using Squire to book.
Over time, we have layered on more and more additive features onto the core product and the result is a full end-to-end system. I do not think there is anything barbershops need to run their business that Squire does not offer.
Can you tell us a bit about Squire’s monetization model?
Essentially, we charge a SaaS fee for the platform and then generate payments-derived revenue when the barbershops book customers. We have also begun to monetize through financial services revenue driven by a lending product we offer. Squire’s lending product is based on the cash-flow and transaction information we have on a given barbershop which allows us to advance them funds based on historical performance. These loans have also been used to help barbershops finance expansion efforts as they launch additional storefronts.
How have customers informed your product development and what are some of the GTM challenges you have faced?
We have always been really customer focused. Most of our ideas, especially the good ones, come from our customers and our product roadmap has been informed by situations where we are hearing a common problem over and over from our customers and then we try to come up with an innovative way to solve it. The feedback from our early customers was instrumental in building out the early version of the platform. But in selling software into an underserved category, there are always challenges. Some of the early challenges that we had involved barbershops that were stuck in the old ways and did not want to change behavior. Guys would be like, ‘we are cash only and we only want to use Squire for booking but not for payment;’ sometimes, you just have to say ‘No.’ There are situations where a customer is not a good fit, or we may not be the right fit for that particular shop. But over time, we have seen a healthy percentage who are sticking with the platform and are embracing card payment.
As a successful entrepreneur in the vertical SaaS industry, what advice would you give to someone who wanted to start an industry focused software business?
I think this applies broadly across software but even more so in vertical SaaS. It is important as a founder to really know your customer and stay close to them. If it is possible, you should put yourself in their shoes the same way we did with the barbershop we ran, but that is not always an option. As close as you can get to their experience, the better. As you grow, you also need to maintain that understanding. My co-founder and I are constantly taking calls from current customers, prospective customers, and even customers who have left the platform - we really try to stay close and listen to the community.
As a thought exercise, if you were to create a vertical SaaS business in a totally different vertical, what industry and why?
Specifically, it is hard to say. At a high-level, it would be an outdated industry with very little technology; but it would also need to be an industry like barbershops, where it is ubiquitous and a big market but one that no one had really targeted yet. There are so many verticals out there but it is getting harder to find those opportunities where nobody has thought of it before.
Special thanks to Aryan Patel for his help on this one. If you liked “Vertical Visionaries: Songe LaRon (Squire)” and want to read more content from the Bowery Capital Team, check out other relevant posts from the Bowery Capital Blog.