EP 625: Booker $80M Raised, $3.5B in 2016 Volume, $1.5M+ MRR Helping 10,000 Spas and Salons Manage Business and Transactions with CEO Josh McCarter

In Episode #625, Nathan interviews Josh McCarter. He's the co-founder and CEO of Booker Software, a leading business management and marketing solution serving over 10,000 health and beauty businesses. Josh has served in a variety of senior executive board roles at various technology companies including Arbitech, Spafinder and Autobytel.

Famous Five:

• Favorite Book? – Make Big Happen
• What CEO do you follow? – Steve Case, author of The Third Wave
• Favorite online tool? — OpenTable
• Do you get 8 hours of sleep?— No
• If you could let your 20-year old self, know one thing, what would it be? – "Startups are a blast, but they are not easy"

Time Stamped Show Notes:

• 01:23 – Nathan introduces Josh to the show
• 01:59 – Booker is a business management and marketing solution for health and wellness businesses
• • 02:08 – Booker is like OpenTable
  • 02:16 – Booker does everything for a business to run
• 02:31 – Booker gains revenue from their subscriptions averaging $150-250 monthly
• • 02:48 – Booker also has merchant processing
  • 02:53 – Booker also sells its add-on product, Frederick
• 03:50 – Josh started to focus on the spa industry because of the technology from his previous company
• 04:25 – "It's important to understand what type of customers you serve best"
• 05:31 – Josh shares how he spun out of business in his previous company
• • 06:00 – Make sure you have the right type of structure when you spin out a business
  • 06:10 – Give preferences to the shareholders
  • 06:18 – It took Josh 6-9 months to get all the right structures and licensing in place
• 06:30 – Josh had a series A for $150K in 2011
• 06:42 – Spafinder had put in the initial capital for Booker
• 07:17 – Booker's current team size is around 200
• 07:26 – Booker has raised a total of a million
• 07:47 – You have to do a proper valuation for a spin out
• 08:30 – First year revenue
• 09:00 – Booker is currently at 10K locations
• • 09:20 – There is a fee per location
  • 09:34 – A company who has more locations pays more
• 10:05 – Average MRR
• 10:25 – Booker does a lot of upselling and retention
• • 10:41 – Booker makes sure that they keep their existing customers happy
  • 10:50 – "You've got to focus on upsell opportunities"
  • 11:20 – Booker's merchant processing
  • 11:37 – Online booking for spas is more common
• 11:58 – First Data is Booker's newest investor
• 12:54 – Average total transactions
• 13:15 – Josh is currently not in any acquisition talks and isn't raising a round
• • 13:23 –"We've got some good runway"
• 14:05 – Gross customer churn
• • 14:30 – "50% of our churn is the people who ran out of business"
  • 14:39 – Failure rate of the SMB market is quite high
• 15:00 – CAC
• • 15:05 – Most SMBs in SaaS and marketing business spend $1500-3500 to acquire new customers
• 15:40 – Frederick came to Booker for partnership
• • 16:10 – Frederick was able to look at how SMBs are retaining their customers
  • 17:22 – Frederick was able to get high conversion and retention metrics
  • 18:14 – Frederick is integrated heavily into Booker
• 18:38 – Team location
• 20:16 – The Famous Five

3 Key Points:

• It's important to understand what type of customers you serve best.
• Make sure you have the right type of structure in place when you spin out a business.
• Startups are a blast, but they're definitely not easy—be willing to put in the work.

Resources Mentioned:

• The Top Inbox – The site Nathan uses to schedule emails to be sent later, set reminders in inbox, track opens, and follow-up with email sequences
• Organifi – The juice was Nathan's life saver during his trip in Southeast Asia
• Klipfolio – Track your business performance across all departments for FREE
• Acuity Scheduling – Nathan uses Acuity to schedule his podcast interviews and appointments
• Host Gator – The site Nathan uses to buy his domain names and hosting for the cheapest price possible
• Audible – Nathan uses Audible when he's driving from Austin to San Antonio (1.5-hour drive) to listen to audio books
• Freshbooks – Nathan doesn't waste time so he uses Freshbooks to send out invoices and collect his money. Get your free month NOW
• Show Notes provided by Mallard Creatives