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Overcoming Limited Thinking to Build a $750 Million Company · Earn Your Leisure

• 0:01
  Speaker 1: This episode is brought to you by P and C Bank.
• 0:03
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  Speaker 2: So marketing to barbershops, right are you marketing? At the
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  Speaker 2: beginning you were to face you were going in hand
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  Speaker 2: in hand, So were you doing that?
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  Speaker 3: What white barbershops? Also? Absolutely?
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  Speaker 2: Well, how did that work out?
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  Speaker 4: So funny enough, when we were first kind of thinking
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  Speaker 4: through how we're gonna do this, we had a bias
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  Speaker 4: against ourselves.
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  Speaker 3: We thought we probably couldn't.
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  Speaker 4: Go in there and like you know, resonate with with
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  Speaker 4: with with these like non black barber shops. So we
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  Speaker 4: ended up hiring a friend of ours who's actually still
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  Speaker 4: the company, who who's white, and and like his job
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  Speaker 4: was going to be kind of biz dev like going
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  Speaker 4: to the shops, so he was doing that, we were
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  Speaker 4: still doing it. And over time this on experience, we
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  Speaker 4: started finding out that like, actually we were better even
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  Speaker 4: at the white shops selling them than he was. And
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  Speaker 4: some of the bias that we had, you know, the
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  Speaker 4: preconceived notion that we had these shop owners because we
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  Speaker 4: didn't look like them, weren't going to want to hear
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  Speaker 4: us out. Actually it was just totally not true. And
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  Speaker 4: and then you know, and it turns out, you know,
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  Speaker 4: the white guy who we hied wasn't good at that,
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  Speaker 4: He ended up being really good at other things, so
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  Speaker 4: he moved into like product on the product side. So
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  Speaker 4: you just never you never know. And sometimes there's a
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  Speaker 4: tendency to sell yourself short because you know, you think
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  Speaker 4: somebody's going to think something about you. But if you
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  Speaker 4: have a great product and you go there and you
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  Speaker 4: meet them, I I. You know, we found that for
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  Speaker 4: the most part, customers are willing to hear you out,
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  Speaker 4: you know, regardless of what you look like.
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  Speaker 5: Yeah, are you solving the hair on fire problem, you know,
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  Speaker 5: and if you're solving that problem, I don't care whatever
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  Speaker 5: you are. I think they're gonna listen to you because
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  Speaker 5: it's you're addressing a real pain point in their lives.
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  Speaker 1: All right, correct me if I'm wrong in these numbers.
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  Speaker 1: Thirty two thousand barbershops, thirty two thousand barber shops.
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  Speaker 4: Yet barber's barbers ten million clients last time I checked
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  Speaker 4: that somewhere in that right?
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  Speaker 3: How are we like?
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  Speaker 1: This is because like you're talking from twenty sixteen to
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  Speaker 1: this point, how are we scaling year to year?
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  Speaker 3: Like? Are you like what trends are you watching? To say?
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  Speaker 1: All right, here's an opportunity, his opportunity. This is a
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  Speaker 1: potemographic this is we haven't touched this place. How are
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  Speaker 1: y'all going about that? That's a lot. Congrats, Thank you,
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  Speaker 1: thank you, thank you. It's never enough, though, you lord
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  Speaker 1: it to the next.
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  Speaker 4: So what we learned is a super what's super important
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  Speaker 4: to scales that you really have to scale your team.
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  Speaker 4: So you know, in the early stages, you know it
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  Speaker 4: us and then a few other early employees, but as
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  Speaker 4: you get bigger, you really have to bring on folks
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  Speaker 4: who have the experience of kind of getting to the
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  Speaker 4: next level where you're trying to get. And over time,
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  Speaker 4: we've built up a really incredible kind of bench of
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  Speaker 4: our executives, uh and that that has helped, you know,
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  Speaker 4: helped tremendously. And in the early days, you do you know,
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  Speaker 4: it's called doing things that don't scale, like walking into
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  Speaker 4: the barbershop yourself and pitching them like that's great, but
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  Speaker 4: like you can't that's not going to get you to
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  Speaker 4: where we are now. So over time you have to
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  Speaker 4: figure out how do you build like repeatable motions, repeatable
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  Speaker 4: processes that's like scalable and you know, that's essentially essentially
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  Speaker 4: what we've been able to do.
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  Speaker 2: So so as far as this number of seven hundred
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  Speaker 2: fifty million dollar evaluation, what can you break that down
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  Speaker 2: as far as like what does that actually mean in
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  Speaker 2: layman terms for somebody that just they hear that.
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  Speaker 5: But it's like that is the enterprise value or the
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  Speaker 5: kind of like market cap of your business. So if
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  Speaker 5: somebody were to purchase the building business, they would have
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  Speaker 5: to pay seven hundred and fifty million dollars for entire business.
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  Speaker 5: And if somebody is investing, you know, based on a
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  Speaker 5: dollar a mount they invests. That's percentage amount of the
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  Speaker 5: seven hundred and fifty million, and.
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  Speaker 2: That seven hundred and fifty million would come from investors
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  Speaker 2: valuing the company at that as far as Okay, I'm
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  Speaker 2: gonna point this amount of money in per percentage and
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  Speaker 2: then that equals to seven fifty or does that come
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  Speaker 2: from revenue that is projected to be like okay, ten
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  Speaker 2: ex revenue?
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  Speaker 3: Like what it?
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  Speaker 5: I mean, there's some formula that they create, but that's
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  Speaker 5: essentially the former is like, hey, look, you know, for
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  Speaker 5: one percent, it's seven point five million, so the times
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  Speaker 5: that by ten. If you want ten percent, you got
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  Speaker 5: to put up seventy five million. So that's kind of
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  Speaker 5: how the math works. And it's just supply and demand. Uh,
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  Speaker 5: you know, if you have a great product, if you
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  Speaker 5: have some proprietary technology that they think might you know,
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  Speaker 5: transform the world, they're gonna they're gonna pay whatever they're.
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  Speaker 3: Gonna pay for.
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  Speaker 5: It's just like, you know, what the company, what people
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  Speaker 5: think the company is worth.
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  Speaker 3: How does the ownership table look right?
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  Speaker 1: Because a lot of times startups, you know, we don't
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  Speaker 1: have money, right, we haven't goten venture capitals, and so
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  Speaker 1: a lot of times people will offer equity right like
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  Speaker 1: as an exchange or collateral to say hey, I need
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  Speaker 1: you a part of the team.
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  Speaker 3: How does ownership look then? How does it.
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  Speaker 1: Look now obviously you've got a board, you've got investors,
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  Speaker 1: are you.
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  Speaker 3: Guys majority owners? Still? Like, how does this work? Yeah?
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  Speaker 4: So as far as the equity, like all of our
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  Speaker 4: employees have some degree of equity.
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  Speaker 3: We think that's important.
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  Speaker 4: We think it's important want to align incentives, and it's
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  Speaker 4: also important as a wealth building mechanism. Our company is
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  Speaker 4: I don't know for sure, but I would say it's
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  Speaker 4: probably maybe the most diverse and one of the most
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  Speaker 4: diverse of a company like at our scale in terms
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  Speaker 4: of like the breakground of our employees. So we think
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  Speaker 4: it's you know, it's really important for them to have
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  Speaker 4: skin in the game. And like when we do have
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  Speaker 4: the big exit, you know, hopefully we'll be creating a
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  Speaker 4: lot of millionaires and creating a lot of wealth in
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  Speaker 4: the community. So so that so that's important. The second
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  Speaker 4: was the second part of the question ownership. I think, oh, yeah, yeah,
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  Speaker 4: you get diluted. I mean it's natural, you know, it's
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  Speaker 4: the pie gets gets bigger. But you're you know, year
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  Speaker 4: a percentage of the pie goes down over over time.
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  Speaker 4: So you know, unfortunately I wouldn't say we have we
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  Speaker 4: have majority, but you know that's just kind of the
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  Speaker 4: name of the game.
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  Speaker 5: Yeah, but you know, control, I think is also super important.
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  Speaker 5: Like you know, you know, when you go through this fundraising,
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  Speaker 5: take on more more investors, you know, you lose control.
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  Speaker 5: But we still, like a board can't get rid of
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  Speaker 5: us if they if they wanted to, because of the
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  Speaker 5: structure we have in place, and that's equally important control earners.
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  Speaker 3: What's up?
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