Practical Founders Podcast · 2026-10-30 · 1h 7m
Key moments - from our scoring
Substance score
51 / 100
Five dimensions, 20 points each
Schedulicity created category-defining software for independent service providers - hair salons, fitness centers, massage therapists, dog groomers - tackling the simple but painful problem of scheduling appointments. Nettuno launched the product in 2010 after observing that small business owners were managing customers entirely via phone calls and paper calendars. The company evolved from a consumer-facing tool into a two-sided platform, ultimately serving 40 million end-users and 15,000 - 20,000 small businesses, with $10 - 20 million in revenue at sale. Though bootstrapped initially, Nettuno raised $28 million in angel funding to compete in an increasingly crowded space and capitalize on market timing. The acquisition by Vergara (backed by Bay Area private equity firm FTV) closed in early 2025, capping a 15-year journey. Nettuno's core reflection: raising too much capital inflates growth expectations and the valuation threshold needed at exit - a cautionary tale for founders weighing capital velocity against long-term sustainability.
Hosted by Greg Head. The show scores 77.5/100 on substance across its analysed episodes. See the full show profile.
Schedulicity was scheduling and booking software for small service-based businesses - hair salons, fitness centers, massage therapists, dog groomers, and similar providers - launched in 2010. It evolved into a two-sided platform with 40 million consumer users and 15,000 - 20,000 small business customers, with integrated payments functionality.
Nettuno raised approximately $28 million in angel and private investor funding over the company's lifetime. He bootstrapped initially, then raised capital around the 100 - 500 customer milestone to fuel marketing and product growth.
Schedulicity leveraged Facebook's early profession-targeting capability (targeting female users aged 25 - 40 who listed their job as 'hairdresser' or 'barber') to run ads directly to service providers. This granular targeting was essential because potential customers weren't yet searching for the solution.
When hair salons transitioned from employee models to independent booth rentals, stylists became individual business owners and could sign up for Schedulicity directly. This eliminated the need to negotiate with salon owners and allowed the platform to grow through independent contractors discovering and adopting the product organically.
Vergara, a private equity - backed competitor in the same space, acquired Schedulicity. Vergara itself was 60% backed by FTV, a Bay Area private equity group. The deal closed in early 2025, approximately 15 years after the company's 2010 launch.
Our reviewer’s read on each dimension, with quotes from the episode.
The episode contains genuine insights - the booth-rental model serendipity, the COVID fee-waiver as a retention/growth tactic, and the fundraising dilution math - but they're spread thinly across 67 minutes of personal narrative, Bozeman real-estate chat, and guitar talk. Useful nuggets exist but the signal-to-noise ratio is low.
the more money the raise, it exponentially increases the amount of money that you would have to sell the company for. Right. In order to get the same amount for the founder
there was a very big kind of seismic shift in the hair industry. And all of these salons that were all over the country started moving from a salon based business to a booth rental model
The COVID fee-waiver-as-growth-play is a genuinely interesting tactical case study, and the booth-rental market-shift observation shows real pattern recognition, but the broader advice ('know your market,' 'be able to articulate your vision') is boilerplate founder wisdom with no contrarian edge.
If I don't waive our fees, and I'm going to be charging thousands and thousands of these people to use something that they can't use because they're told they can't, they can't do their job, they're just going to cancel
we realized very quickly that the backbone of these businesses was their calendar. And the company that we were just talking about kind of just added that as an extra thing. We realized it's not the extra thing. It's the heartbeat of the business
Jerry is a legitimate practitioner - built a real two-sided SMB platform to 40M consumers and 15-20K businesses, navigated COVID, executed a PE-backed exit, and co-founded a second company now near $30M ARR. The company was mid-sized and the exit was a soft landing, which limits the depth of rare-level lessons.
we had almost 40 million. Um, and then you had the small businesses... Close to 15, 20,000 small businesses
we should be close to 30 million in ARR this year, um, and growing pretty substantially
Several concrete data points land - $29 starting price, 130K daily appointments, 18-19x revenue multiples floated in 2021, ~$28M raised, 300-400K ER deaths cited - but the final acquisition price is never disclosed, post-COVID team size is vague, and the economics of the fee-waiver period go unquantified.
we were talking about numbers, uh, that were between 18 and 19x revenue. Um, and then now, even though the company had grown, we were looking at multiples, less than half of that
It started around $29
The host occasionally surfaces a sharp clarifying question (e.g., unpacking the fundraising dilution math) but routinely finishes Jerry's sentences, makes statements instead of questions, injects his own narrative, and never pushes back on a single claim - making this closer to a supportive PR chat than a substantive interview.
Just to explain that specifically. So people hear that if you're bootstrapped and then you raise a chunk of money, what goes up there?
I'm old enough to remember that, you know, almost in no place could you go say, I need three senior developers
Computed from the transcript - who did the talking, and the words that came up most.
Jerry Nettuno started Schedulicity in Bozeman, Montana, in 2009 after struggling to book his own haircut as a single father. He recruited his first developers from Denver, paid for the build himself, and launched online scheduling for hairstylists, trainers and other small service businesses at $29 a month, starting with about a hundred customers around Bozeman. To fund a bigger team and faster growth, Nettuno raised millions from angels and one large private investor, never from venture capital. Schedulicity grew to 15,000 to 20,000 small businesses, almost 40 million consumers, $10 to $20 million in revenue and about 100 employees, but growth stalled after COVID. The company raised about $28 million in total private capital. Looking back, Jerry says he would raise less, since every round raises the sale price needed to deliver the same return, and today he could run the same company with a fraction of the people. He sold to Vagaro, closing in early 2025, and now co-founds Pulsara, which expects about $30 million in ARR. Key Takeaways Exit Math - Every round raises the bar: $200 million to match the return a $25 million sale once delivered.
Transcribed and scored by The B2B Podcast Index.
Speaker A: I would have definitely not raised the money that we did when we did because there was only so much I could do on my own. But I think we could have maybe bootstrapped a little bit longer and then not have to raise as much money. But things were so different at that time. It was hard to see very clear looking back, obviously not to mention in today's world, we could have run the same company that we sold with probably a, uh, fraction of the employees. In today's world, the big thing, I think when 70% of founders say that, a lot of it has to do with the fact that, you know, every time you raise money, then the benchmark is raised, right? The more money you raise, it exponentially increases the amount of money that you would have to sell the company for, right, in order to come to get this damn amount. I remember seeing an article at some point early on that talked about that you raised bigger money. Now all of a sudden you have to, you have to sell the company at 200 million to away with the same kind of return as you could have sold it for 25.
Speaker B: Hey everybody. Welcome to the Practical Founders Podcast where every week we hear an amazing story from a serious founder who built a valuable software company and did it without big funding. My guest today is Jerry Netuna, the founder and former CEO of Schedulicity. He did it without institutional funding, bootstrapped for a while, but did raise some sizable funding to take advantage of a really big market opportunity in the small business. Scheduling space for hair salons and fitness centers and so forth. He was there at the beginning in 2009 and 10 for the scheduling app for all of these independent, uh, small business service providers in the United States and North America. That is now how we schedule everything with our dentist and our barbers and so forth. But, uh, he was in the early days of that category creation, bootstrapped and raised funding and raised over 20 million in private, uh, angel, uh, funding to help grow in this very big market. He sold the company two years ago to a larger private equity backed competitor and has a lot of lessons about, uh, the journey, getting through Covid, building a company in a mountain town of Bozeman, Montana. It's a great Practical Founder story with Jerry. Hi Jerry. Welcome to the Practical Founders Podcast.
Speaker A: Thank you very much. I'm honored to be here.
Speaker B: Honored, I say, you know, the founders who've been slaying dragons for all these years, right? They're, you know, pleased to be telling their story, uh, you know, in hindsight, uh, which we know was the game we're playing here. Jerry, where are you this week? I know you move around a little bit.
Speaker A: Um, I do. I'm in Florida now. Uh, as you know, I, who have been in Montana for over 30 years.
Speaker B: Yeah,
Speaker A: I've done most of the founding, uh, that I've done. But after, um, we sold Schedulicity, and right before that, I sold a piece of property that I had for 35 years outside of Bozeman, Montana, which has turned into a, uh, quite a much different place than it was when I found it. And anyway, my wife and I bought a, uh, a place down in Florida, and we decided to see what it would be like to come down in the winter. Okay. Yeah.
Speaker B: Yeah. Okay. Here you go. Right. You're now, uh, moving around a little bit. We'll talk about the Montana story. You know, Bozeman used to be kind, uh, of a mountain hippie town. Right. University town, all of that. And, uh, what's changed, uh, are, uh, the billionaires moved in with their, uh, ranches and their mega.
Speaker A: I would say that it is probably been one of the farthest swings of a pendulum that I've seen. Yes. When I first came. When I first went to Bozeman, it was in the mid-80s. And, um, I was there because my friend that I grew up with was in school at Montana State University. And, um, I don't know, I stepped off the plane and I just literally fell in love with it. I actually grew up in South Florida, but my mother's from out there. But, um, very different.
Speaker B: Yeah.
Speaker A: Definitely was a hippie kind of town for sure. Now it's, um. You're likely, just as likely to run into billionaires from Silicon Valley.
Speaker B: Yeah.
Speaker A: But it has, uh. Just. So much has happened between Covid and that damn M show, Yellowstone.
Speaker B: Yeah.
Speaker A: It has become top of mind, and it's kind of turning into quite a destination place to be.
Speaker B: Yeah. Well, we'll talk about starting and growing a software company in, uh, Bozeman, Montana, a small mountain town in the, you know, uh, the mountain west, uh, in the United States. There, Schedulicity. You grew, built, and sold it. And you're looking back at it now. But what was Schedulicity, you know, in its final form, when you sold it and who was it for?
Speaker A: Schedulicity was basically an idea that I had that sort of came out of selfish needs in the beginning. Um, I was, uh, pretty much a single father. I had two very young daughters at the time. Between taking care of them and working and doing all the Things I found that I'd come home, my girls, through homework and dinner and all the kinds of things. At 8 or 9, 10 o' clock at night, I'd sit down and pour a glass of wine. And that's when I'd think, good Lord, I need a haircut. And, um, it was just a nightmare to schedule things. Um, and this is, you know, 13, 14 years ago,
Speaker B: 2008. Nine. Right. Uh, you
Speaker A: know, mobile phones
Speaker B: are starting. Yeah.
Speaker A: Launched in 2010, in the spring. And, uh, Yeah, I just. It was just very difficult to schedule any kind of an appointment with small service providers. Right. Of any kind. And, um,
Speaker B: so it was scheduling software for these small businesses. Right. To, uh,
Speaker A: you know, put on your
Speaker B: website and get PLANK meetings like we all do these days. But there was a time when nobody did that.
Speaker A: Yeah, kind of started that way. And, um, I thought, there's got to be an easy way, an easier way to do this.
Speaker B: Yeah.
Speaker A: There were already things like Expedia and things of that nature that you could do a lot of stuff on online. And, um. So I thought I had the idea of the century only to find out that most of these small service providers, imagine hairstylists and barbers and, you know, people that do lashes and eyebrows and
Speaker B: massage and everything.
Speaker A: Everything you can imagine. Dog grooming, fitness. Uh, very big in fitness. Yeah, absolutely. But I found out pretty quickly that they didn't realize that they had a problem. And you know how that is. Right.
Speaker B: Yeah. Uh,
Speaker A: so I had to try and you know, our job was to try and convince people that this was going to be a better way. I mean, our. Right now, if you were doing something like that, you're dealing with a lot of competition in technology. At that time, our greatest competition was a paper calendar that sat on the front desk.
Speaker B: Yeah. The phone calls. Yeah. So you did that new category thing. It's an established category, a red ocean. Right. The good news is everybody knows about it. The bad news, everybody already got one and there's a thousand of them. Right. And, um, worse
Speaker A: now
Speaker B: with AI. But in the early days, like I've been doing, uh, several times, you had to convince people that this was a thing that would be useful and
Speaker A: they hadn't heard
Speaker B: about it before. So all that, all the countless demos and all of that. So, uh, it was scheduling software and eventually had payments. Right in the. Yeah.
Speaker A: I mean, it quickly evolved in the sense that, again, this. I was thinking of this from more the consumer side. Right. What I realized was, and this actually was the greatest thing that happened to us Right. I realized very quickly in the beginning, from spending a lot of time around these small SMB service based businesses, what I realized very quickly was their problems were a thousand times worse than my problems. Right. Um, running these businesses on their side was very difficult. Imagine the phone calls and the tag that they're doing on a daily basis. You know, my hair stylist was standing up 10 hours a day doing hair, and then coming home at night, all night long on the phone, scheduling and rescheduling and moving people and this and that and the other thing. And I realized very. And then managing their back office and their marketing and um, and their CRM, um, none of that kind of existed. And so we kind of pivoted very quickly because I realized if I could make their lives better, this could be something really big. And in the beginning, so it was kind of at that time something that nobody wanted to hear. Which was a two sided model. Right. Because you have the consumers.
Speaker B: Uh-huh.
Speaker A: And at the end we had almost 40 million. Um, and then you had the small businesses.
Speaker B: 40 million consumers on the platform
Speaker A: using Schedulicity to schedule myriad of different things,
Speaker B: but let's just go through that. About how many businesses were using.
Speaker A: We had, um, m. Close to 15, 20,000 small businesses.
Speaker B: Okay. Wow. And so can you talk about how much revenues and how many employees when you sold it after all this time?
Speaker A: Yeah, I mean, uh, we were between 10 and 20 million.
Speaker B: Yeah.
Speaker A: In revenue. And. And let's see, up until Covid, we had around 100 employees.
Speaker B: Yeah. Yeah. Okay, great. And so you sold it, I, uh, guess in 2024. Closed in early 2025. Right. So it's been a year and a half at this point, so. And who did you sell the Schedulicity company to?
Speaker A: The company that acquired us technically was Vergara, which was a company that came out after Schedulicity, um, in the Bay Area in the same, you know, kind of category and space. But they sold, uh, 60% of the company to a, ah, fairly large private equity group out of the Bay Area called ftv.
Speaker B: Mhm. So it was a private equity backed competitor, you know, rolling up and doing all of that kind of thing. Did you guys do okay in the acquisition?
Speaker A: Yeah, I mean, it was definitely a learning experience for me. Um, the entire process. Uh, I had done, uh, I'd founded, you know, three companies, but, uh, getting one all the way through to transaction of some kind, I had not experienced. So,
Speaker B: yeah,
Speaker A: had some amazing people around me on my team, my operating head of operations and My, my CFO were instrumental in just incredible at helping us get through. I think even FTV was, ah, pretty impressed with, you know, due diligence and everything that we had to go through, but definitely a learning experience,
Speaker B: an
Speaker A: adventure. So
Speaker B: never not an adventure, right?
Speaker A: That's right. Yeah.
Speaker B: Well, you didn't raise VC funding and you were bootstrapped for a time, but you know, you raised some serious non VC funding. Right. And non private equity funding, angel funding, uh, which I don't know if puts you out of the practical zone there, but about how much did you raise from private investors?
Speaker A: About 28 million.
Speaker B: Yeah. Wow, that's a lot. Yeah,
Speaker A: yeah,
Speaker B: we'll talk about that. And you know, why you did that and what that was, was that all for the business to uh, grow faster and fuel marketing and product and all of that in this big market that was getting competitive and.
Speaker A: Yes,
Speaker B: okay, yeah, great. Okay. What an adventure here. And all of this was based in Bozeman, Montana. Like a few software companies we had rightnow,
Speaker A: which
Speaker B: was a big one that grew there, VC funded, I think, and eventually went public. I don't know where that landed, but that was the only other company I knew in Montana that was a software company. So, uh, was that a pretty quiet place for tech companies?
Speaker A: Um, 1,000%. Um, I was definitely one of the founding tech people. Um, as you said, Right Now Technologies was founded in Bozeman by our now governor, Greg, ah, Gianforte. Um, and he had started Right Now Technologies. I used to see him, uh, for coffee every other month probably in the morning. There was also another company called Zoot, which was an early software company that was building banking technology.
Speaker B: Right.
Speaker A: Uh, so
Speaker B: pretty quiet place to, uh, you know, to create a software company.
Speaker A: Not anymore.
Speaker B: Yeah, not anymore. All the cool kids and all the billionaires funding, you know, local kids out of the university and so forth here. Uh, what an amazing story. And yeah, you didn't raise VC funding, but you raised plenty of funding. Right. And we'll talk about how long you went with bootstrapped and why you chose that. You know, you started the company in 2009 and sold it in 2025, technically. Uh, so, you know, that's just about 15 years. You know, all the generations, right from early market and SaaS and cloud to late market and private equity showed up. In the midst of all of that, Bozeman changed. What a journey that was. So let's go back here. Um, you were not in the software business, but you saw this problem and like a lot of people said uh, there should be a solution. Maybe there's an opportunity here. But, uh, was it as simple as that? You were just a guy saying, maybe we could create some software? And this was a big open market.
Speaker A: I. A thousand percent was, um, that guy. The market still to this day is absolutely massive. And, um. But as I said, I learned pretty quickly it was a little bit more difficult than I anticipated. Number one, at that time, there was no such thing as software developers in Bozeman, Montana. Matter of
Speaker B: fact,
Speaker A: first couple of guys, um, I found in Denver through a headhunter, and I paid to move them, um, to Bozeman so we could get started.
Speaker B: Yeah, that was the old days. I'm familiar with that. In a lot of towns, there weren't software developers to build the modern products. Web or Windows, and back in the day and all of that. And, uh, it is one of the reasons Silicon Valley and Big City started. And that's why Amazon goes there. Right? That's where the developers are. But now there's developers and founders everywhere, of course, so that's great. I mean, what did you do before that? You had this epiphany and said, I'll go do this. Were you entrepreneurial? I guess
Speaker A: I've been entrepreneurial all my life. I, uh, my original career started out in the financial services industry.
Speaker B: Yeah.
Speaker A: Um, and I built a company, uh, with my brothers.
Speaker B: Oh, fun.
Speaker A: I first was, um, I started in the business was a vice president with a company called First Investors Corporation out of Wall Street. And then, um, I, uh, became a vice president with them. And then, um, I left all three of my brothers I hired at that company. And then the four of us started our own company.
Speaker B: Yeah, right. So did you raise funding? You're a money guy, right? You know, uh, did you raise funding to get these developers on, or did you scrap your way into this
Speaker A: in the beginning? In the beginning, it was all bootstrapped.
Speaker B: So you're paying out of your savings to get a developer to go make this, and,
Speaker A: uh,
Speaker B: you're telling them, I think it needs to be this, and you're talking to customers and you're doing all that crazy adventure stuff.
Speaker A: Yes.
Speaker B: All from Bozeman. So I don't know if you drove around town or, you know, called people on the phone or. What did you do back in the day to,
Speaker A: um, get
Speaker B: this thing moving?
Speaker A: I, um, had been in Bozeman for a long time. I knew a lot of people. You know, it was a small town, and I just started talking to people about, you know, kind of the vision and where, where I saw this going and it was really easy. You know, I've been helping a lot of founders in the tech business and an interesting thing we were nominated to be a part of this big was, uh, called, um. It was a big thing in Silicon Valley where they had you submitted and they picked 80 startups.
Speaker B: Mhm.
Speaker A: Out of a thousand entries. And a big thing out in Santa Clara.
Speaker B: Yeah.
Speaker A: And uh, something con, it was called. This was like. And um, so I went to that and we won. Um, and basically you, you walked out on stage and um, you had three minutes to talk about the company and you had to go a couple days early and there was a whole big. You had to go up and do a kind of a dress rehearsal on stage. And 14 cameras unbelievably produced 3,500 people in the audience, including investors. And uh, it was a big deal. I saw people that literally at the last minute chickened out, wouldn't go up on stage. You walked up there and that big screen went 3 minutes and 59 seconds. It just started ticking down. Long story short, something occurred to me very quickly from watching all the people, and that was that a lot of people really struggled with being able to explain very quickly what they did. And I think we had kind of a really interesting kind of leg up. Um, because a lot of the founders that have reached out to me over the years to help them, even them explaining to me what they were trying to do, it took. I didn't really understand it, where with schedule, listen, it was very easy. I would be like, yeah, especially even when I was raising money, I would just do this thing where I'd be, I'd hold my hand and I'd say, I, you know, I'm calling my hair stylist or a massage therapist.
Speaker B: Yeah, yeah,
Speaker A: of course, of course they, it goes to voicemail because, well, they're giving massages or cutting hair and then they call back at night, at 10 o' clock at night. I didn't answer the phone or they called me in and I'm in a meeting. This goes on for a week. And then finally I get somebody on the phone. And now they're on the phone and I'm saying, you know, hello, Addie? She goes, hey, you know, you want to come in for a massage? And I'm like, yeah, I can do, you know, I'm looking at my calendar, I could do Thursday at 4. And she's going, no, can't do Thursday at 4. But I could do
Speaker B: this.
Speaker A: And anyway, it was just kind of A, a mess.
Speaker B: But you
Speaker A: were
Speaker B: able to tell that story pretty quickly and everybody recognized it on both sides
Speaker A: in an instant. And I think, you know, looking back, it was very beneficial for me because it was a very easy, easily understood problem that affected a lot of people.
Speaker B: Those were the days when there were common problems that hadn't been solved yet that were simple to describe and you uh, know, relatively simple to build. I guess it's simpler in AI but you did you build this with a couple developers and get your first product going and sell it for I don't know what, 50 bucks a month or something like that? I don't
Speaker A: know. Um, it started around $29.
Speaker B: Okay. Even that. Okay. So you were instantly in the small, small business game, which is, and I played all the levels of the SMB game. This isn't mid market, this isn't salespeople. It's not even a demo. It is mass marketing and click to try and free trial and start using and. Right. And get thousands and thousands of customers. Uh, not like ten at a time or one at a time.
Speaker A: Yeah. And I knew there was significant value on the consumer side of the model as well. And a kind of a light went off and I, and, and I figured it out because my hairstylist had 200 and something customers.
Speaker B: Right.
Speaker A: So I knew if I made her happy and I was able to solve the, the core problems that she had in running her business, she would bring all the consumers to me, we wouldn't pay a penny. And.
Speaker B: Okay,
Speaker A: and so,
Speaker B: so it's one sided. Right. You solve the one side of getting the business owner and then you'll have all these other. But the users didn't pay to schedul or eventually with payments. There was some throughput in that. But uh, but you got tens of millions of consumers on the platform, this two sided platform. What did it take for you to get your first. I don't know what was measurable back then? A hundred customers? A thousand five hundred customers.
Speaker A: I think 100 customers was our first big kind of m. Where those
Speaker B: are friends in Bozeman, right, Or something like
Speaker A: that. Yeah, most of them, uh, almost all of them were in Bozeman.
Speaker B: Okay. And then what was the next level there that made you do marketing and get uh, the word out. And
Speaker A: once play this game, once we started to see traction between 10 and 500 customers, that's when we needed to grow. I needed to have people. And that's when we understood that having the money to market could vastly grow.
Speaker B: This podcast is sponsored by Fullscale fullscale gives you dedicated senior engineers in the Philippines who are vetted, employed and supported by fullscale. They integrate directly with your team so you can move fast and scale in days, not months. They have over 300 active engineers with a 95% retention rate who are trusted by companies across SAS, FinTech, Healthcare and Enterprise. Fullscale founder Matt Watson joined us twice on this podcast to talk about his previous practical SaaS, founder exits and how AI is changing product development. Right now head to fullscale IO product driven for, uh, a free copy of his bestselling book, Product Driven with practical strategies to stop wasting dev cycles and build products customers actually love. Now back to the show. So you did the math and you said one, uh, thousand times 29 doesn't add up to a huge amount here. And then there's customer acquisition and some people in an early category, they're not googling it, they're not searching for it. They didn't even know this exists yet. So that cheap and easy SEO doesn't really work. How did you get this thing moving? Was, uh, it paid ads or. I don't know. Where did you.
Speaker A: Those days
Speaker B: and thousands. Yes,
Speaker A: it was mostly we used Facebook.
Speaker B: Oh.
Speaker A: In the beginning,
Speaker B: Facebook ads.
Speaker A: Facebook ads. In those days you can't do it anymore on Facebook, but in those days Facebook allowed you to. We could go in and we could say we want female people between this age and this age that are hairstylists.
Speaker B: Yes.
Speaker A: Or whatever, barbers. And that would allow us to buy ads which would pop up for anybody who fell into that category.
Speaker B: Uh,
Speaker A: they don't let you do that anymore. But that's literally how we started the business. There were two things that happened in the beginning. As this was going on. There was a very big kind of seismic shift in the hair industry.
Speaker B: Mhm.
Speaker A: And all of these salons that were all over the country started moving from a salon based business to a booth rental model, if you know what I mean.
Speaker B: Yeah.
Speaker A: So
Speaker B: independent. Yeah.
Speaker A: Right. So you might own a salon, but all of the stylists in the salon are independent. They're renting a booth. And that turned out to be a boon for our business
Speaker B: explosion. Right. Yeah.
Speaker A: Because what happened is instead of having to rely on finding the owner of a salon and having to actually get them, which we found was very difficult. We could have a hairstylist would sign up for Schedulicity. Well, while we were in bed.
Speaker B: Yeah.
Speaker A: They would be on the platform and then once they started to see the value, which, you know, we worked really hard on kind of decreasing that, you know, time to, aha, ah, uh, moment, um, down to, you know, a minute or two. What we found is all of a sudden we'd have some six customers in that one salon because the hairstyle behind
Speaker B: them.
Speaker A: Yeah. And so it worked out very successfully for us to do it that way.
Speaker B: So did you. Obviously there was some economics. You spent this on Facebook and you did some other organic things and you got customers. You had to play the marketing game. There wasn't, you know, you couldn't knock on your doors to scale this thing up. But,
Speaker A: uh,
Speaker B: was the economics okay in the early days of Facebook advertising, you could spend x and get 3x, that kind of thing. Yeah,
Speaker A: yeah,
Speaker B: yeah. So you didn't necessarily need funding even to do the marketing game. And consumer and very small business, you know, is a marketing game and takes more marketing fuel at a lower price point than other kinds, uh, of products than enterprise software. But you were able to bootstrap this for a spell.
Speaker A: Yeah.
Speaker B: How fast did this grow? I mean, was this like, uh, you know, you had your scrappy team and your first customers, but in a few years were you already thousands? Yeah,
Speaker A: I would say that the growth was pretty, um, modest in the first couple of years until we kind of, you know, we were learning, we were understanding the things that we needed, the things that, that our customers needed. And as soon as we started to get that dialed in over the first couple of years, then we realized that, um, if we could kind of fuel things, it would give us an opportunity to grow at a much faster rate.
Speaker B: And you had this vision, I guess, a small team and so forth. But you're saying someday this will be used by tens of thousands of businesses and you know, millions of customers and all of that thing. You had a big vision for this. Yeah,
Speaker A: I mean, if you think about it, I mean, just think about how many small service based businesses, uh, there is in a city called just LA alone. You know, tens and tens and tens of thousands.
Speaker B: Yes.
Speaker A: And um, it grew. We, we grew organically. It was a very significant part of our growth.
Speaker B: Yeah. So eventually people googled this and we realized this is what you do. And people would ask, can I schedule on your website and why can't I schedule at all?
Speaker A: We made it such a easy process for the consumer that what we found is we'd have a new customer that would sign up. We were very proactive in understanding how they stood found us.
Speaker B: Uh,
Speaker A: we found that a lot of them said, oh, well, one of my customers told me about you meaning as an example, my wife might go to a hairstylist, but then she's going somewhere else to do this. And once she had the experience of booking with schedulicity to see their hairstylist, when they went to see somebody to do their nails. Their nails, they were like, what's wrong with you? Don't you know that you can do this?
Speaker B: Customer expectations, you know, uh, expanded quickly, as we all did with mobile phones. Right. Everywhere and that. I remember that whole phase. So. So you were there with 2009, 10, 11, 12, the early SAS game, early small business, you know, Web 2.0 or cloud game and all of that. And, uh, you know, when mobile phones were just becoming common and universal and, uh, even in Bozeman. Right. Everybody, you know, and Facebook was there. So you rode that early wave. When you got up and running, did you need to raise funding to get, you know, the next, uh, surge going or how did you get through your next, uh, phase?
Speaker A: Um, that's when I started to raise money and it was really just to bring in people, a bigger team. We needed more software developers. Um, and then. Ahead
Speaker B: of your revenues, right?
Speaker A: Ah, ahead of the revenues, yeah.
Speaker B: Yeah. So how did you think about that? You were a scrappy bootstrapper. You're there in Bozeman. This isn't a VC funded kind of culture there. Maybe you knocked on the doors of VCs and they said, m not sure about this SMB world and the economics or that. But, uh, did, uh, you could use some m. You could use more people. You could feel that if we only had more people, we could do better and make this whole thing go faster. Did you raise angel funding, like pass the hat and raise a million dollars or that kind of thing or.
Speaker A: Yes, that's how I started, um, through people that I knew. And that got us really started.
Speaker B: Yeah. Uh, started with the business or started, uh, the funding Drugs
Speaker A: started. Kind of both.
Speaker B: Yeah.
Speaker A: Um, and, uh, eventually, um, that initial money, I was kind of raising it as we went. And, um, eventually we got to the point where I realized that if we actually had more money in the bank account, it would allow us to grow quicker.
Speaker B: And what were your growth levers? Just how were you thinking about this? Like, eventually it's people to build product because product was slow back then compared to now. Right, of course. And expensive. And, uh, people.
Speaker A: Customer support's a big one.
Speaker B: Okay, Right. So you get tens. Yeah, right. Thousands of that. And were you thinking about marketing? Like, we need the big marketing push, you know, to get this out or was it pretty frugally oriented? Yeah,
Speaker A: it was frugal for sure in the first couple of years, and then
Speaker B: not
Speaker A: so much frugal. Yeah, we were trying to, um. You know, we were kind of, uh, the pioneers in this space and so. But that didn't last for long. Um, and, um,
Speaker B: yeah, a friend of mine in Phoenix, where I was for 25
Speaker A: years, Bob
Speaker B: Lalogia, you know, was in the appointment scheduling game. I don't know if that was the same level or overlapping, but, uh, similar. Bootstrap company,
Speaker A: of course. And I certainly was not in the hotbed. So other people were getting venture capital because they were geographically in the right spot for that. And I think we. We spoke.
Speaker B: Yeah,
Speaker A: briefly about it. But, you know, I. I kind of went down that road and it didn't work out so good for us. At the time, people were highly skeptical. The fact that I was in Bozeman.
Speaker B: Yeah. So that was enough.
Speaker A: Yeah. And I told you, you know, I tease about it because now practically those guys are in the coffee shop when I go to get a coffee, because they all
Speaker B: have funny
Speaker A: houses up at the Yellowstone Club now.
Speaker B: Right.
Speaker A: But,
Speaker B: uh,
Speaker A: it was a big problem that I was in Bozeman, Montana.
Speaker B: Who is the big name in small business scheduling? Mindbody did it for, you know, massage and spas and things like that and created a whole suite. But, uh, who are some of the big names that people would recognize?
Speaker A: I would say that there isn't any other than mindbody. And they really didn't start that way. They just started as an enterprise solution.
Speaker B: Ah. Ah.
Speaker A: For. Actually, yoga studios is kind of how they started. Um, but yes, there's a lot
Speaker B: of small competitors all taking this very big market, playing this.
Speaker A: They kind of started as an enterprise software, but then they realized that the scheduling. Uh, I realized very quickly that the backbone of these businesses was their calendar.
Speaker B: Yes.
Speaker A: And the company that we were just talking about kind of just added that as an extra thing. We realized it's not the extra thing. It's the heartbeat of the business. And we knew that if that was what we made flawless, we win.
Speaker B: There you go. The specialist wins there. And at this point, you're, uh, building a bigger team. You know, I'm old enough to remember that, you know, almost in no place could you go say, I need three senior developers and a marketer who's done this three times. Like you just had to go make. Create them.
Speaker A: Were
Speaker B: you developing your own talent in Bozeman and moving people there and playing this game? Right. Uh, you Know.
Speaker A: Mhm. In the beginning, as I said, I had to bring them in from other places. Um, once I had a good person in that spot, he was able to start getting more people.
Speaker B: Right.
Speaker A: And at this time, of course, this is all happening at the time that this town was starting to change. And so
Speaker B: that helped you. Bozeman, wasn't this. Where is Bozeman? It's. Oh, that's a cool place. I want to be there. Right?
Speaker A: Yeah.
Speaker B: And more so after Covid. But on the way to Covid, there was a spell. You had, uh, I don't know how much money you had raised, but, uh, you handed the reins over to your operations leader, right. The senior executive, and became the chairman of the company for a couple years. Was that an intentional thing? Did you plan that and say
Speaker A: planet? I just got to a point where, um, had some things going on and I was just, uh, I'd kind of hit a wall.
Speaker B: I
Speaker A: wanted to take a little bit of a break and then I regretted it afterwards, but wasn't very long.
Speaker B: So you handed off the business to somebody, say, take it from here. I need to, I need to, you know, step back for a bit. Um, did it
Speaker A: work, Chairman? Um, no, it didn't.
Speaker B: Okay.
Speaker A: Okay. Um, so I, um, very happily stepped back in as the CEO. Um, and
Speaker B: was that just like what all founders go through? You know, it's very founder dependent in the beginning and at some point, you know, you try to reduce your founder dependency. Was it just about that or you know, you just didn't have a senior enough person with enough founder mentality to take over?
Speaker A: Yes.
Speaker B: Okay. All of that. Okay, great. So you came back here. Had you been raising money and chunks? It was this open angel round that kept going or.
Speaker A: Yeah, uh, pretty much, um, uh, until we finally got serious and then started to raise the bigger money. And I had one very wealthy, high net worth individual that is our largest shareholder.
Speaker B: Yeah.
Speaker A: And he was introduced to me through one of my board members, um, and has invested in, in all of my companies. And that's when, you know, we became kind of a real company in terms of having capital now to deploy and grow.
Speaker B: Okay. So it's a little different today in the AI age. Right. And marketing is a different game. And everybody's,
Speaker A: uh,
Speaker B: softwared up. Right. Every small business has tons of apps and it's getting crowded and so forth. But your thinking was this could be a very big software company. And uh, I'm, um, always behind. Right. You never kind of got put the genie back in the bottle saying we could get profitable and frugal. And, you know, there was always, I don't know, the ROI of spending a little bit more to go faster.
Speaker A: Yeah.
Speaker B: What were you thinking there? I mean, you took a fair bit of capital here and you didn't go back to being break even or something like that. What was your, uh, thinking there? It wasn't venture funding as well. So you, you know, maybe this was more patient. But did you see a big opportunity? And investors are saying, we see it too, and.
Speaker A: Thousand percent.
Speaker B: Yeah. Okay.
Speaker A: Yeah. Uh, again, I think it was very easy to raise money because it was a widely understood problem on the consumer side. Like I said, virtually everybody knows that, um, had experienced this problem. Right. And so, um, between that and an almost unachievable market opportunity,
Speaker B: TAM was huge. Right,
Speaker A: Exactly. Still, to this day, the TAM is. Is absurd. But as you said, just being able to look back and understand that I've lived through, seeing all that change. Right. Because now in the, in this space, you're trying to convince somebody to get off another platform, um, that does the same kind of thing where at that time that didn't exist. Right. So,
Speaker B: yeah, you're just all open field. Yes.
Speaker A: We were like, you know, this scribbly book on your reception counter is ridiculous. We can do this so much easier. Very different now.
Speaker B: Well, we'll talk about the COVID ups and downs. I don't know how that affected you precisely, but looking back, if you could do it differently, would you have raised that much money and kept going? Or would you have, uh, found some other tricks to stay frugal? Did it work out in the end? I mean, you had investors. Eventually you're going to sell the company to pay them back for their investment and serious, uh, investment. But how do you feel about it looking back at the age? It's different time now, but like, at the time, would you have done it any differently looking back?
Speaker A: Absolutely. I would have definitely not raised the money that we did when we did. Probably. Um, so raised
Speaker B: as much or just stayed off
Speaker A: as much.
Speaker B: M. Yeah.
Speaker A: Because there was only so much I could do on my own. But I think we could have maybe bootstrapped a little bit longer and then not have to raise as much money. But things were so different at that time. It was hard to see.
Speaker B: Yeah,
Speaker A: big market and
Speaker B: easy money and. Yeah, that kind of thing. Right.
Speaker A: Very clear. Looking back, obviously, not to mention, in today's world, I could have built the whole company for a tenth of what, um, you know,
Speaker B: all that expensive product development,
Speaker A: the
Speaker B: pain we went through Right. We
Speaker A: could have run the same company that we sold with probably a fraction of the employees. Um, in today's world.
Speaker B: In today's world. But looking back, you know, um, Jason Lemkin, the Saster guy, the big Saster conference in Silicon Valley, um, a big following. He asked founders, okay, VC funded founders. Now, you know that starting your next company or doing it again, would you raise more money? Would you raise the same money? Would you raise less? Would you raise none? 70% of VC funded former founders said, I would raise none. 45%, almost half. And then, you know, the other 30 something percent said, you know, I'd raise a lot less. So it's pretty common, right. You know, we get moving and then you kind of get this thing rolling and uh, you kind of have to keep raising to keep the engine going. And in small business it's different. Like you don't just add salespeople and they can go fund their own, you know, investment, you know, in a year's time and pay, start paying it back.
Speaker A: Sure. You
Speaker B: know, it's a marketing game. Right. A big wide market and then it gets more competitive and then prices for clicks go up and all of that.
Speaker A: And you know, the other thing, and gosh, I know that you could have nine podcasts about this, but you know, the big thing, I think when 70% of founders say that, a lot of it has to do with the fact that, you know, every time you raise money, then the benchmark is raised. Right.
Speaker B: Just to explain that specifically. So people hear that if you're bootstrapped and then you raise a chunk of money, what goes up there?
Speaker A: Well, in other words, the more money the raise, it exponentially increases the amount of money that you would have to sell the company for. Right. In order to
Speaker B: get the
Speaker A: same
Speaker B: amount for the
Speaker A: founder.
Speaker B: Yeah,
Speaker A: yeah. Or the initial, you know, investors. And I, um, remember seeing an article at some point early on that talked about that, because as you know, and then you raised the bigger money. Now all of a sudden you have to, you know, you'd have to sell the company at 200 million to away with the same kind of return as you could have sold it for 25,
Speaker B: right? Yeah,
Speaker A: that's right.
Speaker B: That's
Speaker A: the
Speaker B: founder story right there. Yeah.
Speaker A: Thousand percent.
Speaker B: Yeah. So, uh, what happened during COVID I guess it was shut down and you were in the payments game by that, so scheduling plus payments and take credit cards and things like that. But were you able to. You obviously got through it. But you know, what happened to your industry? Did you have, uh, all go quiet and you just hunkered down and got through it or what happened.
Speaker A: It was the most interesting time in my professional life by far. And. And the reason I say that is in. In addition to the obvious things that affected every single person in our. In our country, just imagine. So what happened was, imagine early 2020 in March, actually.
Speaker B: Right.
Speaker A: Um, you're hearing about this. Nobody knew what was going on. I had actually just come back from la, uh, meeting with some investors in a restaurant there. And, um, and I came back and, um, all of a sudden this was all kind of unfolding very quickly. Um, at that time it was scary. Not so much looking back, but at that time it was a little scary to most people. But little did I know until my daughter had recently completed, um, school. Her dream was to become a clinical esthetician. And she had finished and started working at this big, um, salon, uh, and spa on Main street in Bozeman. And she had just been there for three or four months. And she called me one day, oh
Speaker B: my
Speaker A: gosh, in March, and she was crying. And, um, she's like, dad, um, I had, um, um, whatever I think it was eight or nine clients that day coming in to see her, and all of them canceled but one.
Speaker B: Yeah.
Speaker A: And, um,
Speaker B: you could see that in your numbers too. You could see.
Speaker A: And she said, I don't know what I'm going to do. I don't know how I'm going to pay my rent. And I hung up the phone and I thought that's when it occurred, dawned on me that this very thing that was happening was going to devastate the very people that we built schedulicity for.
Speaker B: It hurt that.
Speaker A: Who were we talking about? Pilates instructors, personal trainers, hairstyle. These are people that make a living from being in very close proximity to other humans. And so it literally, the number of appointments. We were booking almost 130,000 appointments a day every 24 hours. Most of them, by the way, after business hours.
Speaker B: Right.
Speaker A: And that number went down to almost zero in days. And so I was completely. I felt like the world had fallen on top of me.
Speaker B: What a lot
Speaker A: of weight.
Speaker B: The funding and your team and your customers and, uh,
Speaker A: and particularly the. The majority. You know, if you, if you took. We were in every state in Canada, but by far and away, the biggest concentrations of our customers were in California, New York,
Speaker B: big
Speaker A: cities like that. And not just big cities, but the big cities that, um, like California.
Speaker B: Yeah.
Speaker A: Which, I mean, they wouldn't even allow people to do their job for over a Year after that, Montana, where we were, I mean,
Speaker B: five
Speaker A: weeks into Covid, we were in restaurant. Yeah.
Speaker B: Yeah.
Speaker A: But in California, you couldn't do. You couldn't. Couldn't care for a year. How did you get
Speaker B: through that? What happened in your business? You know, did you
Speaker A: raise more money? Luckily, I had just raised some money.
Speaker B: Okay.
Speaker A: Um, and basically, when after I'd spoken to my daughter and I realized what was going to happen, I literally sent an invitation to my leadership team for a meeting the next morning. I brought my leadership team together, and I said, you know, what are we going to do? Here's my idea. And the idea that I had was to waive our fees.
Speaker B: Yeah.
Speaker A: And the reason for that was simple. All of the work that we had done to build the company to that point, and this really, the unfortunate part was the, uh, greatest growth that we had as a company was in the last nine months before COVID And, um, that was the biggest growth that we'd ever seen.
Speaker B: Yeah.
Speaker A: Still. And so it was devastating. But my thought was this. If I don't waive our fees, and I'm going to be charging thousands and thousands of these people to use something that they can't use because they're told they can't,
Speaker B: they
Speaker A: can't do their job, they're just going to cancel. And the number of our paid customers would go like this, and then we'd have to pay to get them all back. And so I told my leadership team, here's what I want to do. I want to waive our fees. And at this time, as you well know, we didn't know if this was going to be a month or four months, or in, like I said in the case of New York and California, a year. Over a year. Right. And so I presented it to my team. I said, if we. If we just waive our fees, I'll go out in front. I was kind of the. Definitely the figurehead for our company. I was very well known across the country, um, especially in the health and beauty industry. And I'll go online, we'll put it out that we're going to waive our fees in order to help people get through. The idea was if we just waived our fees, we would maintain our customer base. So when Covid was over, I could just switch it back on.
Speaker B: So you reduce your churn, but you don't have the new customer acquisition to go get them back, right?
Speaker A: Actually, no, because I waived the fees for everyone,
Speaker B: uh,
Speaker A: because I thought they could sign up, and who knows how many new ones we'll get.
Speaker B: Oh, I see. Okay. There you go. Right,
Speaker A: right. Exactly. And so as soon as I was able to talk.
Speaker B: So you did that almost as a marketing game, like, the world is going to hear this and we're going to get twice as many customers
Speaker A: because
Speaker B: we're the good guys. Right.
Speaker A: It's free and, you know, whatever. And, um, the idea was, however long this dilemma was going to last, when I, whenever I toggled the switch back on. Right. We would still have the same customers because.
Speaker B: And more.
Speaker A: We're not charging them. They're not, they can't do their job. Right. And more. And we grew exponentially. So it worked.
Speaker B: Yeah.
Speaker A: Oh, it worked. Yeah.
Speaker B: And
Speaker A: you
Speaker B: just tighten your belt and everybody got through it. And eventually the water flowed again. Yes. Right.
Speaker A: Thankfully, we'd raised some money right before that because we were growing quickly. And, um, once I talked my CFO from jumping off the building, um, over it, everybody really rallied around it. My whole team came in over the weekend to do what we needed to do behind the curtain. And then, um, I went live on that following Monday and I announced to the world what we were doing. And, um, it turned out to be a pretty interesting thing. I started getting reach outs from CEOs and news stations all over the country.
Speaker B: A little publicity
Speaker A: and, um. Yeah, so that worked out. So
Speaker B: looking back, that worked, you would say
Speaker A: it worked? Absolutely. I wouldn't do it any other way. I'd do it exactly the same way.
Speaker B: Okay, that's,
Speaker A: um, great. I, I would say, you know, if we're going to get down into the, the, the good, bad and the ugly, you know, after Covid, things were never the same.
Speaker B: Okay.
Speaker A: Uh, yeah,
Speaker B: a little different there. And you, you kept going. But let's, let's skip forward to, you know, after Covid 2022, you know, and re, you know, restarting the engine and getting things moving again, and maybe it's more crowded in the market and small, uh, businesses had suffered generally, and we're coming out of it slowly. But, um, in 2020, uh, four, did you get offers to buy your company or did you proactively go to market?
Speaker A: No, absolutely not. We got approached by, um, the founder of the company that acquired us. Ah. About the original call was would you be interested in, you know, some type of a strategic, you know, alliance? You know, what would that look like? Yeah,
Speaker B: the classic
Speaker A: partnership
Speaker B: call that turns into the acquisition call.
Speaker A: Exactly. And we, we had that call. Um, and then that, that was kind of what triggered it. And you know, at that time I was having A lot of concern, uh, if I can be honest. Yeah,
Speaker B: of
Speaker A: course. Because after Covid, even one or two years after Covid, we never saw the growth that we saw before.
Speaker B: Yeah. And so
Speaker A: you've
Speaker B: raised this money with an expectation up here and the growth, you see the dotted line. And so, you know, you like, uh, a lot of software companies, actually most software companies that raise a fair bit of, fair, uh, bit of funding. Right. If the growth doesn't keep up to the chart that you promised, there's. There's a issue. So
Speaker A: it wasn't like I was getting pressured, um, by the board or certainly my largest investor, but it was more. I was kind of looking and I just didn't like the way things felt. As I said, we were. No matter everything that we were doing successfully before was not having the same level of success. There seemed to be. Sometimes it was
Speaker B: harder. Yeah.
Speaker A: Seemed to be some type of a fundamental change in the, in the SMB, um, market that we, you know, kind of demographic that we were operating in. And um, my concern was I would have to raise another big round of money. Um, and
Speaker B: then the bar goes up even further and all
Speaker A: the bar goes up even further. And thank God I didn't do that. Um, you know, again, if we're looking back. Right,
Speaker B: right.
Speaker A: Um,
Speaker B: yeah. So did this conversation continue? And eventually it was turned into an LOI and a due diligence and
Speaker A: a transaction.
Speaker B: You didn't shop it to the wide market and go out.
Speaker A: We did not. That conversation turned into another couple of conversations with he and I and then when it started to become a little more serious, uh, I brought the board in. Right. And talked to the board and uh, I had a pretty darn good board. Um, and then that's when all the.
Speaker B: Yeah. Supportive. They weren't institutional, like with the math of, you know, having raised a whole bunch of money with, you know, professional investors. Right. That are, you know, playing the money game there. But, uh, so. And the board could see, okay, if things are struggling, this is a way to get paid back, you know, get some prize winnings and so forth. So at that point, did they have a number in mind? You guys were talking numbers and ranges or something like that?
Speaker A: Yes. Okay. Mhm.
Speaker B: So that was interesting enough to take back the board and the board. And you said this probably makes sense. Let's.
Speaker A: Yeah, I mean we, we had, we had kind of at that time, all of the. Was like a perfect storm of not positive things going on. Right. Because at the same time that right before this and I think we Talked about this briefly before, uh, right before this, we had been approached by, uh, our payments partner that was aggressively trying to acquire us strategically and, um,
Speaker B: during the COVID boom. So
Speaker A: this was in two inflated
Speaker B: multiples. Yeah,
Speaker A: this was in 21, beginning of 21. And, um, we entered into due diligence with them. They were going to do an ipo. They had already filed. The IPO was planned for December. And then between the time that we started down that road and the end of the year, interest rates started to go up and the capital markets just went.
Speaker B: Yes,
Speaker A: spiraling down. The air
Speaker B: came out of the COVID boom, the tech boom.
Speaker A: So we were talking about numbers, uh, that were between 18 and 19x revenue. Um, and then now, even though the company had grown, we were looking at multiples, less than half of that.
Speaker B: Yeah. Okay.
Speaker A: Um,
Speaker B: and you were able to get reasonable multiples in the modern world and pay back your investors and win some prize for yourself and your employees and find a home for the company. Were there other considerations you were thinking about in this transaction? You know, uh, let's say a soft landing or hard land, whatever you want to say, like, uh, what kind of landing was it?
Speaker A: I would say that that would be a good description. Uh, again, my biggest concern was, you know, it was all just a really bizarre thing. As I said, the greatest growth that we had seen as a company was in that last year before COVID But coming out of COVID
Speaker B: Yeah,
Speaker A: um, it was like everything was in a hangover. And I'm not so sure is completely healed at this point. But again, as I mentioned, all of the, um, fundamental things that we had done so successfully were not working, uh, as well. It's
Speaker B: kind of a Bermuda Triangle. You're in there and what used to turn a knob and the thing would happen and turn another knob, that would happen. And so all of a sudden, things don't work in a mature market. And ad prices go up and competition comes in and the market, you get big enough that you're kind of, uh, going along with the market. You know, the SMB economics. Right. You know, the small business economy.
Speaker A: And, um, the founder of the other company, he was seeing a lot of the same things as well. Um, but of course, he was back a big private equity money, and we were not. And so again, for me, it really came down to, is this the environment to raise another big round of money? And where's that going to put us if things don't go back to, you know, our ability to grow? And that's what kind of you know, weighed in the heaviest is the way.
Speaker B: That's right. And what would you say from their perspective? The Vergara FTV Capital private equity owned, you know, let's say platform company, Were they acquiring customers in here? We'll get another 20,000, 50,000 customers. Yeah. And did they use your platform or did they transition to their core platform? Or
Speaker A: we transfer. We, we moved to their core platform.
Speaker B: Okay.
Speaker A: And that was a year they
Speaker B: paid a fair price like your investors got paid back. And then some prize winnings. And then you won a prize and your employees won some prize winnings here. But not like the vision you were thinking about, I guess.
Speaker A: Yeah. Yes.
Speaker B: Okay. All right, well. And are you still involved with that at all or did you do your transition time and you're done?
Speaker A: I did my transition time. We're actually still in, in the last bits of getting it closed in terms of the earn out and all the other.
Speaker B: Okay, yes. Yeah, yeah. Okay, great. What are you onto now? Did you take a break and hang out on the Florida beach for 20 minutes and then go
Speaker A: say
Speaker B: I gotta go build something else or what?
Speaker A: Uh, kind of. Kind of, yes and no. Um, you know, I co founded another company with a partner of mine who was a, um, very, very, um, fantastically, uh, amazing and intelligent ER doctor.
Speaker B: Oh, wow.
Speaker A: Who approached me, actually one of Schedulicity shareholders, um, who's also an ER doctor. They, he had a big ER group in Texas with 40 ER doctors. And my skit. My shareholder reached out to me and said, hey, I have a doctor in my group that's come up with this idea, um, that could literally save hundreds of thousands of people's lives a year. Uh, but he's a doctor and he doesn't have experience in what you do. And so I ended up co founding, uh, another company in my house in Bozeman with him. That company is growing and is successful, I think we're going to do.
Speaker B: So that's a software company called Pulsara, right?
Speaker A: Pulsara. Mhm.
Speaker B: Yeah. And did you start that since leaving the other, uh, one or was this, um. Okay, this was a project you were working on as well. In simple terms, what does Pulsara do in the emergency management, uh, you know, medical space?
Speaker A: Basically started as a, as a communications platform between first responders and the ER of big hospitals. Because that communication still to this day in most hospitals is archaic.
Speaker B: Meaning the ambulance pulls up and the ER doctor runs out or whatever and there's not much knowledge of what happened. They just take it. And I don't know,
Speaker A: the communication between those two, um, often falls the wrong way through the cracks. 3 or 400,000 people a year die because of it. And um, my partner was living through that and he's like if I could fix this and he, he'd come up with an idea with definitely his idea. I um, had nothing to do with the product. Um, it was his vision. But um, and I told him, you know, we, you know, we're, we're very close obviously. And I said well, you know I, I don't have any experience in healthcare. And he's like well that's even better. And so um, it worked out to be a pretty magic partnership because my experience was exactly what he needed. Um, and I didn't really have to understand healthcare and I learned a lot about it, most of which made me really frightened about healthcare. But um, yeah. So um, that's very exciting. Um, that company's doing really well. We should be close to 30 million in ARR this year, um, and growing pretty substantially.
Speaker B: And is there any outside funding in that game other than a little angel
Speaker A: funding or something? I raised most of the money the same way. So it's all, it's all um, non ah, institutional money with a couple large shareholders and it's pro company's profitable and growing, starting to grow. So
Speaker B: back to the previous conversation. Ah, what would you do differently? Did you raise a lot less? Right. And you're just.
Speaker A: We raised less for sure but we ended up raising a similar amount basically because the healthcare industry is very different. Um, you're selling into hospitals. So if you think getting a hairstylist is complicated, imagine the bureaucracy in getting a hospital um, to buy something. And it was a very eye opening experience for me um, to win.
Speaker B: It's already a sizable company. 30 million in AR is a sizable thing. You're a co founder, advisor, you're not in the day to day of the business there,
Speaker A: not in the day to day and um, it's been really great. And then I'm looking at a couple different things right now that I'm really excited about. Um, I have a friend that I've known for uh, over 35 years that has approached me about being the CEO of a startup called E Resonate, which is a social platform for live music venues and artists. And uh, I spent most a lot of my life touring, um, ah, myself as a musician. He uh, just
Speaker B: showed his guitars on the wall. I've got one on the wall. My Martin.
Speaker A: Wait, wait, what do you have on the wall?
Speaker B: I have a Martin D28. Over here on this side of the wall. There we go. Right.
Speaker A: What year? What is it? How old is it?
Speaker B: Uh, it's 1990.
Speaker A: Fantastic.
Speaker B: Original first 500,000 first, you know, that generation before they started making them over.
Speaker A: So on the far side there, I have a 53D28.
Speaker B: Oh, look at that. Classic.
Speaker A: And that right there, um, is a 61 D18. So, anyway,
Speaker B: yeah, very
Speaker A: nice.
Speaker B: How fun. You know? How fun. So, Jerry, what is it about raising funding but not VC funding, institutional funding that, uh, has you going back. You, uh, have relationships with these wealthy people that want to get involved in the software business, and you go after big markets where fuel is required, but not institutional fuel. What is it that,
Speaker A: you know? Um, I would have to say, if I'm being honest, Craig, you know, it wasn't something that was just this idea that I had when I was starting Schedulicity. When I realized that we were going to need capital, I was working and I had some fantastically, uh, um, amazing people in the software industry in Silicon Valley that I was working with that I had come to know that, um, were very helpful. And I did the whole Sandhill thing. I went to try and do it, and it was not a good experience for me. And that was the reason that I veered towards.
Speaker B: And what was it about the VC funding? I mean, sometimes it's just the math, sometimes it's the control, sometimes it's the expectation.
Speaker A: For me, Bootstrap
Speaker B: founders say link, but, like, was it just a. The, the culture of it or the math?
Speaker A: I didn't like the culture of it. I. I'm trying to figure out how to be politically correct. I struggled a little with the venture industry at that time. They. Most of the people I met with were not very nice. Um, and, um. And again, I mean, I had them openly making fun of me in meetings because. Because I was in Montana. Um.
Speaker B: Yeah.
Speaker A: Which I said. Which is the irony now that they're all in Montana at the Yellowstone
Speaker B: Club.
Speaker A: The other thing is, you know, I struggled to see the value that they brought.
Speaker B: Oh, I see. There you
Speaker A: go. Um,
Speaker B: right.
Speaker A: And I'm not just
Speaker B: money. You could raise other money.
Speaker A: I'm not saying that there aren't companies that brought value. Eventually I met some that I think would have brought great value, but out of need, I had to find another way to do it.
Speaker B: Yeah.
Speaker A: Um,
Speaker B: okay.
Speaker A: And, um, that's really how I started. And
Speaker B: you had a big vision and, you know, that, you know, you were a little impatient. Let's go. Yeah,
Speaker A: I Had a good vision and um, fortunately I've been blessed with being able to explain that vision well to people in a way that people want to be involved.
Speaker B: Okay. Other than VCs. Right.
Speaker A: Yeah. Well, I think they wanted to be involved too. But what they wanted to do, what they wanted to take versus
Speaker B: okay,
Speaker A: the cost
Speaker B: was a little higher. Yeah,
Speaker A: yeah. And when I asked them what I was going to get for that cost, I just was never comfortable with it.
Speaker B: Well, Jerry, thanks for sharing that amazing story. And you're, you know, non, uh, institutional but you know, funded, uh, you know, startups and now you're helping another one and staying involved and got it going. What a journey, uh, that has been. And um, what advice do you have most often for you're at a, you know, you know, a lot of people, not a founders Bozeman elsewhere. What advice do you have for founders these days that say, I see a problem in the world and I think the answer is software and I want to create a software company. You know, uh, everybody's different and every market's different. But what general advice do you give most often to founders?
Speaker A: I think really understanding, um, the space that you're in and really understanding, you know, your market. Right. Understanding who it's for very specifically and how you can help them. Right. And then I would say the biggest thing is being able to articulate,
Speaker B: um,
Speaker A: your solution. Right. That's where I find most founders struggle. It's not that they don't have a good idea, but they don't do the job they need to do. And being able to explain that to someone
Speaker B: and it's meaning to sell it to customers. Right.
Speaker A: To get to customers or investors. Um, and I got to see that personally, um, several times. And that's what I would say when you see that problem, when you, when you, when you feel like you've got a solution to a problem, you know, before you get too far down the road, really, really be able to understand how to really encapsulate that vision into a minute. Right. When you're talking to somebody about it, and to me, a founder, that's the most important thing you can do in the beginning, by far. I don't think there's anything close to that.
Speaker B: Right.
Speaker A: And especially
Speaker B: in your world with SMB marketing oriented for, uh, busy people, you're not going to get an hour with them to have a conversation face to face. You got a headline and a paragraph. Right. Or a homepage to describe it and that's
Speaker A: it. And even today, with all the tools that we have. That you and I have spoken about. I don't think that's changed.
Speaker B: No, of course.
Speaker A: Um,
Speaker B: no.
Speaker A: And so I think that's still, uh, an issue. And I would say I've probably worked with 10 or 15 different founders that have reached out to me, and I would say that's the biggest one that people have, is they have a great idea. Uh, but often after explaining it to me for 15 minutes, I'm still struggling to understand.
Speaker B: I know. That's
Speaker A: the
Speaker B: startup problem, isn't it? Right. Yeah. Yes. Right. If you go to a pitch competition and there's somebody who's just getting started, they got 10 customers, it's five minutes, and you scratch your head. I wonder what it is. And then somebody who's got a thousand customers or 10,000 customers, been doing it for years, you know, in 30 seconds. You're clear.
Speaker A: I told you, at Democon, which we won.
Speaker B: Yes.
Speaker A: I sat out in the audience, and that's what I walked away with. These people would come out on stage, they had a two or three minutes to convey this to a fairly big crowd. And, um, most of the time, I looked at my team that I brought, and I was like, what. What does it do? How does it help? And I think a lot of them could have been very successful.
Speaker B: Yeah,
Speaker A: but they just missed that mark.
Speaker B: Yeah. It's harder than it looks, is what you're saying. I've. I've been a demo God before, Right?
Speaker A: Yeah.
Speaker B: Uh, yeah. Uh, David's, uh, democon conference. So. Great. Really appreciate you sharing your story, Jerry. Best wishes on all your new ventures and adventures. And, uh, thanks for sharing your story of schedulicity on the Practical Founders
Speaker A: Podcast. Honored to be here. I think you do an invaluable thing with your entire platform for founders, and, uh, I'm pretty happy that, uh, Mr. Yuen introduced us.
Speaker B: Yeah. Awesome. Yes, Dave, uh, from, uh, Tidemark Connected Us. So really appreciate that. Shout out to Dave. All right. Thank you, Jerry. Really appreciate it.
Speaker A: Thank you, sir.
Speaker B: Thanks for listening to the Practical Founders Podcast. I hope you found this interview interesting and, well, practical and useful. Please subscribe to the Practical Founders Podcast in your favorite podcast app and, um, on the Practical Founders YouTube channel. Stay tuned to to hear all the amazing stories from successful founders who are winning their big prizes and doing it their way without big funding. You can check out my blog, all the podcast episodes, and information about my Practical Founders CEO peer groups at, uh, practicalfounders.com or connect with me on LinkedIn. See you next week.
