Overlooked brick-and-mortar startups

Usually I interview software founders but today’s guest created an in-person experience. Erik Anderson is the founder of Scissors and Scotch. It’s basically a 1920s style barbershop, modernized with a cocktail bar in it.

I just discovered it here in Austin and so I invited him here because I’m fascinated by how the business has grown.

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Erik Anderson

Erik Anderson

Scissors and Scotch

Erik Anderson is the co-founder of Scissors and Scotch, a barbershop chain.

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Full Interview Transcript

Andrew: Hey, they’re freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy, where I interview entrepreneurs about how they built their businesses. And joining me is an entrepreneur who created a different kind of startup, a different kind of business than the ones that I’ve, uh, been doing interviews about.

Usually I interview people who’ve created software companies. Everything exists online on a computer somewhere. But today’s guest created an in-person experience. Eric Anderson is the founder of Scissors and Scotch, and it’s basically a 1920 style barbershop modernized with a cocktail bar in it. And it feels good.

It looks right. I just discovered now that it’s here in Austin, I didn’t realize I had a loco location here. I’m, I’m gonna go and get a haircut there cuz it’s, uh, it’s not too far from me. And so I invited him here because, I’m fascinated by how the business has grown and how there’s so many companies that are doing things that I think I’m neglecting to pay attention to because all I’ve been paying attention to is tech.

And I want to hear what’s going on in the physical real world, and we can do it thanks to two phenomenal sponsors. The first, if you’re into, uh, the digital world and need a developer, go check out lemon.io/mixergy. And the second, there’s a new way of organizing people. We had the C corp, the S corp, the L l C and all that, and now there’s a new way for people to get together and organize.

It’s called a dao. I’ve created a podcast with origami on DAOs and I, I’ll tell you about that

later. But first, Eric, Good to have you here, man.

Erik: Good to be here, Andrew. Appreciate you having

me on, man.

Andrew: How many locations do you.

Erik: We are up to 24 locations currently open right now, uh, throughout the country. So we’re in 12 markets and, uh, rocking and rolling towards the end of 2022.

Andrew: Do you own them

all outright or is this a franchise based model?

Erik: Yeah, that’s a good question. So we do not, so, uh, we’re a hybrid of corporately owned stores and franchise. So, um, that was actually an interesting, uh, decision point in our growth, um, as we were, you know, starting to scale. It was, it was a decision of, Hey, are we gonna take on outside money and own all these corporately?

Are we gonna start franchising and kind of grow the, grow the system that way? So, um, yeah, so we have, uh, you know, four locations that we currently own. Uh, the rest are franchise, uh, locations.

Andrew: Okay. And what’s the overall revenue to you from both the fees that you’re collecting from franchises

and the in and the, the corporate company?

The corporate,

uh,

locations.

Erik: Yeah, man. So, um, you know, our four corporate stores will clear over 5 million this year, um, in terms of four barbershops, which is pretty crazy to say. Um, and then, uh, from a franchise system. So I just got our latest KPI report that we are, uh, north of 12 million, uh, north of 24 million this year in total system

wide revenue,

Andrew: And how much of the franchise, that’s really exciting. How much of the

franchise, uh, revenue do you keep?

Erik: Yeah, so it’s a, it’s a,

pretty simple, uh, formula. So we get six and a half percent of the revenue, um, of our franchise system. So, um, you know, it, we wanted to build it to where it was, you know, competitive royalty fee for our franchisees. Um, but also helped us scale the company cuz uh, you know, as a, as a franchise brand, royalties are what pays, pays the bills, right?

Keeps the lights on. So, um, it’s one of those things, if as we wanna grow our team, uh, we turn the, that royalty revenue into new projects, new hires, um, and really scaling the correct way.

Andrew: I am looking at your LinkedIn profile to get a sense of what your background is. I don’t see anything that would’ve led to this. What were you doing

just before?

Erik: Yeah, man, that was, uh, nothing, nothing remotely close to this. So I was actually your, um, you know, your standard, I was a large commercial insurance producer. Uh, we did, uh, businesses, you know, mostly 99% of it was business insurance, farm equipment dealers, contractors, auto dealers, et cetera. Um, and you know, that was one of those things where, you know, I, I like to talk to people.

I’m outgoing. Uh, sales was a, a nice, nice fit for my personality and what I wanted to do, but I knew that I really didn’t want to run that rat race the entire time. Right. I didn’t want to, uh, be the one going out and pounding the pavement, selling insurance or any other type of product software, right.

Software tech is, is a big, uh, got a bunch of buddies who sell software. Uh, it just, I wanted something more, right? And I knew I always wanted to do something for myself, didn’t know what it was gonna be. And it was one of those situations that. You know, this idea just kind of came to me and, um, yeah, we just, we just ran with it, man.

Andrew: You know what, before we get into, into scissors and scotch, I freaking love sales. There’s a part of me that always wanted to do either car sales, even though I hate cars and don’t know jack about them or insurance sales. Because you’re basically just knocking on doors trying to close, not strangers exactly, but sometimes strangers on, on big revenue for you.

So there’s like the excitement of can you close it? But also the, uh, the odds are working against you. What was it like for you? Do you have like a tip from that, from that

world

that you can teach us as a salesperson?

Erik: You know, I, I think my tip would be find out the type of salesperson that you are. Right, because there are different types out there. There are, they’re the people that are going to be diligent about going out, making a hundred calls a day, picking up the phone, doing dials, and they, they’re, they’re not aggressive, but they, they just have the sale in mind, right?

They want to get to the sale, they want to do that. If that’s what you’re about. And you can see, hey, there’s a sale. I’m gonna close it. There’s a sale, I’m gonna close it. What I found for myself is that I am a way more relationship style of sales. Um, and so that really, I would say if that’s sort of your personality and you want to cultivate and build relationships, then that high, you know, um, what’s the word I’m looking for?

That high-paced, high, you know, you have to turn clients, you have to make calls that might not be right for you, right? Uh, but if you get into a longer lead sales cycle that is about building that relationship with the client and then seeing them succeed, uh, that is something that I find very, very, very rewarding.

Um, is. Selling something to

somebody

that

isn’t

necessarily a sale. It be, yeah. Yeah.

Andrew: I get that be, be more specific about how you.

I’m sorry to interrupt, but be more specific about how you do it. So where would you find the people that you’d build relationships with and then what was your process for staying in touch with them without feeling like a pest or some guy who was trying to be, I don’t know, a

pental,

Erik: in, you know, I think I was pretty green early on in my sales career. You know, we started the company when I was 26. I was doing insurance when I was 24, 25, right? And so that was one of those, those things, I had to learn who I was. And part of what I figured out was that, hey, if you’re really, truly showing genuine interest, and if you go make a, a sales call and you set up a meeting with somebody, be present in that meeting, right?

Take notes, understand who they are, ask about their family. And legitimately, even though every touchpoint you have in the back of your head is part of that sales process, don’t make. The only reason you’re reaching out to that person is to f further a sale. You know what I mean? That always has to be part of who you are as a salesperson.

That’s true. And that’s just reality. Um, but if you truly, generally want to just build a connection with somebody, tho those sales will come. Right? It’s gonna take time, and that’s really, really hard to do. Uh, but I’ve found that being patient and understanding and investing in

learning about.

Andrew: Yeah, but what do you do in

between? In between meetings

where, well, actually, yeah, what do you do to stay in

Erik: I, I think it’s as simple as a text here and there, right? It’s a text message. It’s a quick email. It is understanding, Hey, they were just off at Disney World with their kids, right? Shoot ’em a text, ask ’em how that went. Don’t even bring up business, um, you know, make friends with the, uh, with the receptionist.

That’s one of the most cliche cle cliche things in the world. But if you are doing cold sales, then yeah, I mean, make those people be nice to

everyone.

Right? Um, you’re never

Andrew: You know what, dude? I need a better c r m because you are right. Even like I’m now figuring out all this stuff here in Austin, like with our property, I, I, I just planted wild flowers right before that. We planted some, uh, some vegetables and a new garden. Every once in a while I’ll ping a new friend a picture of what we’re up to, and that’s keeps us in touch.

Or I’ll check in with them on where they were for Thanksgiving and that keeps us in touch. But I mostly forget to do it, and so people drop off. I think one of the big takeaways from my conversation with you is I need a better c r m one That will remind me to stay in touch with people and just kind of ping them with what happened last time in, in my, what happened with the question about what happened since the last time I saw them, or a little update on what I’ve been up to.

And that kind of thing I think would help me stay, stay,

organized

Erik: I, I’m with you, man. I, I struggle with that as well. Frankly, I’ll be honest with that. Even now to this day. Um, if you’re really, I, I guess the other big tip I would say is be detailed in your note taking. Right? That is something I, I’m not very great at and I’ll admit that cause I’m not super type A. Um, but if you can at least drop something quick down about that conversation to really remind you and, um, yeah, to your point about a good crm, if you have.

You know, automation’s built out that can remind you, Hey, touch up with, you know, reach out to this person in 10 days. That’s huge. Um, it, it’s, especially in today’s day and age where you can take notes on your phone or, and it automatically gets uploaded. Vias crm, there’s, there’s a lot of good tools out there for salespeople and entrepreneurs to use to, um, you know, stay engaged on that type of stuff, because that’s, to your point, it’s really easy to forget about.

Andrew: All right. So then were you hunting for an idea before you ended up with scissors and

scotch, or did it just

randomly hit you?

Erik: So, I w I really wasn’t hunting actively. Right. You know, I was comfortable, um, having, you know, enjoying my mid twenties. Uh, had a good job, enjoyed what I was doing to a degree, uh, but I always wanted more. Right. And, you know, this, this idea in a sense, it’s not like, This idea wasn’t out there. You know, there was the, there’s barbershops there at the country that, you know, they might give you a drink, a beer, uh, but one of the first things I did when I got moved to Omaha, Nebraska for that sales territory was Google men’s haircuts, Omaha.

And I found your value chains. I found women’s salons, and I found your local barbershops. Right? And that’s really the option that guys had, is that you could go to the value chain, um, clips, clips, drawing, whatever. They do a great job. Like kind of playing Russian roulette with your haircut sometimes. And I just didn’t want to do that.

And uh, the local barbershops are fantastic, but the issue there is they’re quite a bit smaller. Sometimes they’re walking only. I couldn’t make an appointment. Right? It’s, I need to know when I can get and get out and, you know, ultimately I started going to a women’s salon cuz I could book an appointment, I could trust them.

But by nature a salon is for women, right? And so that’s where, uh, I just started stepping back and saying, why isn’t there a place that guys can go to enjoy a haircut experience, you know, most of the time for forever it’s been a, a chore, right? It’s been a checklist item where you’re like, damn, I gotta go get a haircut.

Okay, I guess I’ll go here. Right? Um, so we wanted to flip that and make it something that people were excited about coming to.

Andrew: And I guess in other cities that already existed, was that part of your calculation that if, say San Francisco had a couple of these places Austin did that maybe other cities

could use that

guys 1925.

Erik: You, you nailed it, man. It, it was one of those things where, you know, I started looking around like, okay, there are places that offer this. It’s just not in Omaha, Nebraska. It’s not in the Midwest. Right. And, uh, it was one of those. when you’re thinking through it, it’s like, okay, sure it makes sense. New York, la, San Francisco, Chicago, Texas, the bigger cities, people in the Midwest aren’t any different, man.

You know, it’s one of those things we’re just a little bit slower to get that new concept, get that new deal, uh, or new trend. But, uh, we’re just like everybody else. And so, uh, from a strategic standpoint as well, you know, when we’re looking at this, I was living in Omaha at the time. They had nothing like it.

Pretty easy market to get into in terms of rent rates, uh, labor, et cetera. And we felt if we could make this concept work in Omaha, Nebraska, man, we got, we got a really strong selling point here. You know, no shade in Nebraska. I mean, I went to school there, lived in Omaha for four years. I love that city.

Um, but, you know, it’s a, it’s a small Midwestern town. And so if we can show that, hey, this, this crushes it here, the sky’s the limit for what we can do.

Andrew: So then how do you like to work? I’m looking at you. I kind of expected that you’d be in a bar scene when we talked today. And truthfully, I thought I’d

see your hair, but you’re wearing a beanie and you got a whiteboard

behind you. It almost feels like you’re more, yeah, it feels like you’re more, more business and numbers oriented, uh, than even like obsessed with style.

So my sense with you is that you probably put together a spreadsheet or maybe on, like, on a piece of paper, started sketching out what the, what the cost might be. Um, and, and just doing that kind

of, uh, math.

Is

that the prep that you did?

Erik: you know, this is where

I

talk about my two co-founders, Sean and Tanner, and tell you that without them I might have gotten a single location open right in, in Nebraska. And, but that might’ve been it, right? And, um, there are two of the most brilliant guys I know and, uh, you know, they. You know, I’ll take one step back from how I told ’em about it.

So we were having drinks one night in Kansas City and I told ’em, Hey, I wanna open up a barbershop and call it scissors and Scotch. And they just, they laughed at me, right? They’re like, what are you talking about? We don’t know how to cut hair. This is a barbershop. No. I was like, let me just send you what it, the research I’ve done.

So send ’em that research. About a week later, we are on a, you know, a Google Hangouts call, right? That, that long lasting Google Hangouts and decided to start building the business together. And so, um, you know, we put together everything you would do from a startup phase, right? We put together a business plan, we put together, uh, a pro forma, we put together startup costs.

We, we put all that together, packaged it up, um, and, you know, thought we were off and running, man, keep knocking on bank stores. No, no, no, no, no. Right. Um, probably six or seven banks told us no until we finally found one that was willing to give us $150,000 SBA loan. Um, so it was one of those things that.

you know, it was all three of us coming up with what citizens and scotch would become. Right? What does that look like? How do we treat our people? What are our values? Um, how do we, how do we do this in a way that sets us up for success in the future? Um, because all, you know, Sean was a former attorney. Um, Tanner worked at healthcare sales, and so, you know, all three of us had great jobs.

We weren’t just gonna give those up to open one barber shop in Omaha. Right? Um, so how do we go about building this in a way that can take us to, you know, the next level?

Andrew: What, what did you need from the

two of them? What did they bring to the table?

Erik: you know, frankly, uh, I didn’t know what I didn’t know. Um, Starting a business. Right. And and what I’ll say with them is they were two, my two best friends at the time and still are. So it was one of those things that. You know, I went to my two best friends. I knew they were entrepreneurial focused. Um, again, Sean was a jd, b a, but he was an entrepreneur of my nature and Tanner’s family ran small businesses since he was growing up.

And so, uh, it was just one of those things that I ultimately, honestly just wanted to work with my two closest friends, uh, because I believed in them and I knew what they brought to the table in terms of operations, in terms of legal, in terms of strategy. Uh, I knew I can talk to people, right? I can be personable, I can be the face-to-face, uh, type of deal.

Uh, but what Tanner brings from a software background to how to implement trainings and operations and what Johns brings to the table for finance, accounting, and legal, um, we just made a really good team and, you know, that was sort of fortunate. Um, cuz again, they’re your friends, right? Uh, they’re your two best friends.

We’re all really close. We’d hang out together all the time. And when you’re going into business and you’re looking for co-founders, We didn’t necessarily stack up our strengths and opportunity areas to make sure that it would work, right? Because a lot of times when you have a co-founder or co-founders, you have the same skillset, right?

Um, we really lucked out in that sense that we cover up each other’s weaknesses. And that’s something that we are, we’re fortunate for. Cause we have the, the utmost respect for each other

Andrew: Okay, so then when you’re sketching it out, what do you need to do in order to get the N to get enough information to tell you this is going to

work with multiple locations?

Erik: that, so from concept, right? You know, you just go around and we’re, we’re 26 years old. We, we should really scrape together 110 hundred $20,000 to open this business. So we’re trying to do demographic research through census data. We’re trying to look at, uh, anecdotal evidence when we talk to our friends, talk

to our family.

So we’re really.

Andrew: You mean to know it? To know nationally where

you

should? I see, so

you weren’t

thinking,

yeah, go

Erik: no, no, no. We were not thinking national right away. Right. That we knew that would come, but we knew we had to get this first

one right.

And

Andrew: so, but, so then you were using census data for the first one. You didn’t just say, you know what? I know my town. I’m gonna walk around here. I see there are a few people here who, who have the kind of vibe we’re

going for.

Let’s just plant the store here.

Erik: of did that right in a way.

But as Sean I remember I have, it was so funny cuz right now as, as we grew, we partnered with a software platform that does consumer analytics and psychographics. And I can go to any city in the country and it’s gonna tell me where my customers are. But early on, Sean took census data and heat mapped it, uh, through Excel and the graphs.

And it was just like, yeah, okay, let’s go to West Omaha. That’s what it felt like was the right move. And that’s what the data told us. Um, and so that was one of those things. You know, we knew even though we were a barbershop, right, we are going to put tech at the forefront of what we do. Um, that, that was one of the main reasons, not main reasons, but when you look at the barbershop industry, cosmetology industry, salon industry in general, in the mid 2000 tens, it was the tech was lagging behind.

You know, it was still places didn’t have websites. I couldn’t see who was cutting my hair. I could very rarely book online. It was like, it’s 2015, why can’t I book my haircut online? So, uh, we really wanted to modernize that side of the business as well. Um, and, and you know, we continue to invest in that.

Uh, but yeah, we, we were bootstrapping it man. We use census data and, you know, got lucky on a space. Got lucky on a landlord cuz he was, he is one of the nicest guys probably in the Midwest cuz we could have got raped over the coal’s with that first lease. But, um,

treated us well and, and we were

Andrew: What did the lease cost in the first

Erik: It was $20 a square foot. Um, with, so we were

at about 7,200, uh, dollars a month on our first lease.

Andrew: 72. That’s a pretty big commitment. So

7,200 a month, and how many

barbers.

Erik: So when we first, uh, we opened the shop with nine, uh, chairs, nine stations is what we call ’em. And we started the company with four barbers and stylists. Uh, so it was six employees at the time. Uh, plus Tanner and myself were in the shop every day. Uh, Sean was holding down the fort in Kansas City and, um,

Frankly, should we have started with more people?

Probably. But we, we didn’t know, right? And when you, we really wanted to hone in on the experience with all four of those barbers and stylists that we hired to make sure we’re doing this the right way and giving the client experience that we want.

Andrew: so then how many, how many cuts did you need to give a month for this to

be profitable?

Erik: So I

remember very early on when we were looking at our schedule, right? The first day we were open, we had 48 appointments, which was great. Like we were promoting our grand opening. It was fantastic. But man, the day after the grand opening, we were closed cuz we did a little celebratory party and the very like, so that was Saturday, close Sunday.

Monday we’re open and we have like four appointments for the day, right? Then on Tuesday we have two appointments and it’s one of those things where we needed to do. Roughly 600 to 700 appointments to break even at that first

location

Andrew: Okay.

Erik: with, and that’s without paying ourselves. Right? Um, cause we did go through a period of time of, of not paying ourselves, uh, which every entrepreneur does, right?

You’re investing everything you can into the business and you figure it out from there. Um, and so, you know, by mid-July, uh, we had, we broke even by June. Um, so we opened in March, we’re profitable by July. Um, and then we knew we had something special. We were selling our membership packages on a Word document.

Um, again, pretty funny, right where Tanner, I remember printed off our membership options on our printer. Uh, and that’s how we were, we were selling our memberships at the time. And so, uh, we knew we had something special early on when clients would tell us repeatedly, I can’t wait to come back to get my haircut.

Right. And that, that is the best thing I’ve ever heard when I’m working the bar in there.

Andrew: All right, I get that. How, how do you, well, how were you planning on getting 600 people to book per month?

Was it going to be

ads? Was it going to be something else?

Erik: Yeah. So that was a lot of bootstrapping, hitting the pavement, putting flyers out on people. We were right next to a lifetime Fitness, I don’t know how many times Lifetime had to come over to tell us not to put stuff on people’s cars, but we were gonna do it until we, until they, you know, sent us a cease and desist letter or something.

Um, but yeah, it was, it was, you know, hitting the pavement on that side of it. And then we had a limited budget that we used, uh, to target, you know, on Facebook and Instagram at the time. So, um, and we’re still very heavily digital, but man, that was, I remember building the Facebook ad platform back in 2015 and, and just seeing the journeys of that over time.

But, um, yeah, it was digital ads and then it was, you know, word of mouth really.

Andrew: All right. I should say, since we’re talking about technology and how important that is to a business, if you’re out there listening to me, obviously you know the importance of it, but maybe what you need is now a new developer to work on a project that you have not had resources for, or maybe what you’re looking for is a little flexibility because we’re going into a tough economic time.

Well, that’s where lemon.io comes in. They’ve got phenomenal developers, frankly, in parts of the world where you don’t have to pay developers as much. , you get phenomenal developers for a lower price that way, and Lemon will match you up with the right developer. Listen, I’m not gonna tell you to hire from from Lemon.

In fact, Eric, I’m not even gonna tell you to hire, but I’m gonna tell you this. Next time you are hiring, put them in the list of places that you’re searching. Let them try to win your business because I think that if you call them up and it’s a good fit, you’re gonna know it quickly and it’s gonna be exciting, and you’re not gonna wanna go in a different direction.

If it’s not, there’s nothing. Nothing ventured nothing. No, that’s not the right phrase for it. There’s nothing to lose. All you have to do is go to lemon.io. In fact, if you throw a slash mixer G at the end of that url, you’ll get an even lower price than other people do. So that’s lemon.io/mixer G. And by the way, they’ve got a really nice design, so there’s a payoff even if you don’t work with them, just to see how well they communicate.

Lemon io slash mixer G. All right, so you’re buying ads. How soon after the first store, the first location, do

you decide it’s time for us to get to

the second one?

Erik: I was in about August of 2015. So we’re about, uh, March, April, may, June. We’re about five months in, uh, that we knew, hey, it was time to start looking for a second location. And at that time, you know, we had to decide, are we gonna open a second one in Omaha? Are we gonna go to another market? And we decided to go to another market, um, Ave a sister city, if you will, uh, Des Moines, Iowa.

So we, we felt really comfortable in the fact that, uh, the demographics in terms of West Des Moines, Iowa, fit exactly what Omaha was, and we wanted to go prove this concept out. in a secondary market, in an area where there wasn’t an owner present every day. Right. Um, so that was one of those things that we said, okay, let’s go start looking from real estate in West Des Moines.

And, uh, found a great location out there. And, you know, pre, pre covid back in 2015, we found a location in September of 2015 and we’re open in May of, uh, 2016 with that second location. So, um, we were able to streamline that process in terms of permitting a construction and, uh, we were off and running at that point.

Andrew: how much of allure is the scotch or how much was it

in the beginning? Thanks.

Erik: So this is actually really interesting in terms of a, what is scissors of scotch? Is it a. is it a niche market that attracts people just cuz they have a bar, right? The answer is no to that right now. Was it, is it something that catches people’s attention of, oh wow, I can wait here, have a drink before or after my cut, uh, that’s included in my service.

That’s really nice. You know, that’s, that’s a cool thing to have. It’s just a place to relax, but only 45% of clients take us up on that free drink. And so what that goes to show to us is that we are really a barbershop company that has an amenity of a cocktail lounge, uh, where our clients can go and relax.

And that, uh, is why we’re so bullish on this concept nationwide is cuz it over ha over the majority of clients don’t get a drink. Um, and that goes to show that we really have something special on the haircut side, uh, and give a damn good experience that way.

Andrew: Yeah, I’ve gotta say I was drawn to you because of the scotch part of your name, but I don’t think I’d want a scotch while I was getting a haircut. I just want to get a quick haircut and then go on with my day. But I

want the vibe of it. I

want that

experience.

Erik: Yeah. And that’s, again, it’s a, you know, you know when you survey people and you grab the word cloud from it and you have the, the most used words, we surveyed over 10,000 clients and the two things they said, why they come back to scissor, scotch experience in atmosphere. Right. Haircut was fourth or fifth on the list.

Cuz when I’m asking you to pay $50 for a haircut, great. Haircut’s the expectation. Uh, but the, the reason people come back to your point is cuz they, they like the vibe, they like the way they feel when they walk out the

door.

Andrew: Yeah. How soon

after you launched did the first location turn? Profitable.

Erik: Uh, it was about four months.

Andrew: Wow. That’s super

Erik: Yeah.

Andrew: And that’s

Erik: man. You know, we were ver really lean, right? Um, really lean in terms of the staff. I mean, uh, Sean, uh, again, like I said, was in Kansas City, but Tanner and I would work, you know, I worked the bar, uh, for the first four to six months there, uh, meeting every client that came in, in the door.

Uh, so we were a really lean startup at that point because we had to be. Um, but yeah, I mean, I, the four months thing, it was, uh, again, Omaha, Nebraska, rent was really cheap at the time. Um, so we, we had a number of factors go our way and we had great people. You know, at that point, uh, by July we had hired, uh, three more stylists.

So we were up to seven people at the time. And man, we were 90% booked. And so that was one of the crazy things that we learned early on is that we are to constantly be hiring. Um, because especially in our, in our world, um, you really, if, if we don’t, we could have a shop with 14 shares, right? But if we don’t have stylists to work there, they’re just wasted space at that point.

Andrew: And you pay your people full-time because it seems like a lot of places charge their barbers for,

basically they charge em rent

on the seat, right?

Erik: Yeah, absolutely. Yeah. So there’s two different models you can go, right? There’s, that’s what what you just described is called Booth rental. Uh, and what we do is they’re, they’re true employees, right? We, we want them to be bought into the scissor and scotch team and the scissor and scotch culture. Uh, and that’s really important to us as a whole.

So, uh, they’re W2 employees, they get paid time off, they get, uh, 50% of their health insurance paid for, they get benefits. So that’s one of those we brought that, I, I don’t wanna say we were the first to bring that to the industry, but at scale, I really feel like we, nobody offers the compact package that we do.

Um, it, it’s, it’s really unfortunate how. These barbers and stylists are really talented. You know, I, I equate them to highly trained, uh, tradespeople. You know, like plumbers, contractors, they go to school, they pay tens of thousands of dollars to get their cosmetology and barber license. And the average lifespan in the industry is only two and a half years.

And we ask that question of why is that? Um, it’s cuz they get burnt out. It’s cuz they don’t get sick time. It’s because they, they go places that, um, they leave the industry cuz they can go get benefits and better hours and, and do all that. So we really wanted to put the focus on the people there and provide the right compensation

package.

Andrew: Yeah. and I, I guess also one of the reasons why they charge cash instead of accepting credit cards is because they don’t even want to pay taxes because they don’t earn enough to

where they don’t earn

enough, and every dollar

matters. Am I right?

Erik: Uh, yeah, man, you, you are, and that’s where, you know, that’s a shitty way to be in the industry, you know, to always be scrapping. We, we really believe in, in paying people what they’re worth. Um, and, you know, we have a number of stylists that are gonna make over six figures this year. Um, it within our company as a whole.

And that is really, it’s really cool man. Um, and to be able to see that, um, and to work with people that, um, potentially are single moms or they’re saving for a house, uh, it’s, or pay off debt. It, it’s cool when you see that, and it’s rewarding as an owner of a business to be able to help your people do that.

Andrew: I can see that. All right. You were talking earlier about the significance of going the franchise route. The reason you, you started it off on that path, it seems, is you didn’t wanna raise money to go and

invest in new locations.

Right.

Erik: Yes. Excuse me. Sorry about that. Um, you’re, you’re correct. And so, uh, you know, we went to our bank after our. Uh, we had three locations open at the time. We were getting ready to open our Oklahoma City location, which would’ve been our fourth. Uh, so we did Omaha, Des Moines, Denver, and Oklahoma City. And, you know, we’re doing well, right?

Uh, but we’re 28 years old. We’ve invested every dollar into this business and are putting every dollar back into it. And our bank at the time is looking at us going, yeah, guys, you’re doing well. You know, we’ll lend you a million dollars. You can go to two locations next year. Um, that was not what we wanted to do, right?

That was too slow for our growth and, and how we wanted to scale. Um, and so we, we had two avenues to go. We could raise outside money and own and operate all these corporately and sell off part of the business. We didn’t want to do that, right? Uh, we wanted to keep that between us three, uh, and, and really hold, you know, grow it the way we wanted to grow it without outside influence.

And so that led us to the franchise. . So, um, is, and people, you know, they know franchising, but when people think of franchising, it’s probably like the big players, McDonald’s, sport clips, burger King, everybody knows those restaurants are franchise, but there are so many other franchise businesses out there that you don’t even think of, right.

That are just national at this point and, and our service base. So, uh, we took the path, uh, franchising. Sean had some experience in it, uh, when he was working in, at a, at a law firm. Uh, so he really guided us down that path and, and that’s what we decided to do. Uh, but that was a big transition point for us, Andrew, because we had to.

Build an entirely new company, right? Because we had to transition from owning, operating and running locations to building a franchise company that had, uh, a support program for our franchisees that had a sales funnel for our Fran, or like to, to sell new markets to a marketing plan, to a training plan, to operations, right?

Um, so we really had to build an entirely new company, um, after two years of running and owning location. So that was a really fun and new challenge, um, and something we were excited about.

Andrew: I get it. Yeah, because the sales process for getting somebody to come in to get a haircut is completely different from the one for getting somebody to come and buy a franchise.

What is that sales process? What did it look like in the beginning

and

how did you

develop it?

Erik: Yeah, so the first 18 months of franchises, so we made the leap at about Q3 of 17, q4, uh, somewhere in that point. And we said, we are not gonna do any marketing, right? We are not gonna market to sell franchises. We, what we did was we knew we had to take those first 18 months and build our foundation. And when I say foundation, that’s our training program.

That’s our operations plan, that’s our, uh, internal wiki that’s cloud-based. It’s a resource center for our franchisees, right. Um, so we got, you know, I wouldn’t say lucky, but we had some organic sales early on from people that we knew. Uh, You know, that had been keeping tabs on us for a variety of reasons.

Some of ’em were clients, seeing how we were growing. Um, and then our Kansas City franchisees, uh, they were involved in another system as well, uh, on the franchise side. And one of ’em, ha, one of the partners happened to go to law school with Sean. So had heard about everything that was going on and we sold the Casey market to them.

So we, we took it slow on that side of things, um, and, and didn’t market because we knew, we knew that we would’ve failed our franchisees if we went out and sold five, 10 locations that year cuz we didn’t have the team in place or the processes in place. To set them up for success, right? And so that was really important to us and still is to this day, we have to have the team and the resources to go open 15 to 20 locations in a year, right?

Because the last thing we wanna do is I leave the sales process. Now I don’t wanna sell something to a franchisee in Charlotte, for instance, or New York. And they come back to me and they’re like, Eric, all this stuff you told me about how you support me, uh, from real estate to construction, to opening to training, none of that happened.

Um, that’s my worst nightmare, right? And that’s not going to because of the team we have in place. Uh, but we had to really understand that. And, you know, fortunately Sean Tanner and I are in alignment on doing growth the correct way,

Andrew: So, if I understand you right, what you’re saying is the first franchisees were friends and people who’d already expressed an interest in the business before because they’d seen what you were building up and, and they, they,

were friends who were

willing to go and start a brand new

business.

Erik: Yeah. So, uh, the Kin city

crew, for instance, they were, they had been involved in franchising. Um, they had opened up another concept and that was around, you know, they want to be serial entrepreneurs in a, in franchise systems, right? Um, and so one of those that partner, yeah, so one of those partners went to law school with Sean and reached out and said, Hey, you know, we’re doing this other franchise, we’re looking for another concept.

Uh, we’d love to meet and talk about the Kansas City market, uh, and then our DA. The Dallas group that we sold at a few locations down there to, they were clients at our Omaha location. Um, so it’s, it’s a family group, very, very awesome team. Uh, they had experience in restaurants and, uh, printing and marketing company, uh, but not in barbershops, but they really believed in the concept and what they could do.

So, um, those were our first two people that we brought to the table. Um, and, and they really, you know, they’re a big reason where we are today, right? To have to your early adopters in any business, right, um, are gonna be key to your growth and success. And to have people that believed in the concepts enough and believed in us enough, uh, it was really humbling.

And, you know, it makes me wake up every day and, and get excited.

Andrew: And Eric, it seems like in the beginning you really didn’t have that much to offer them. Yes. You had some experience, but it feels to me like they could have figured it a lot of

that

out on their own. What were they signing up

for?

Erik: they were signing up for?

the potential of what I be could become. Right. Um, and I, and I’ll say that frankly, I mean, to your point, we didn’t have a lot of the resources in place. You know, we had small aspects of it, but our team, our team size was five. We had five people on the corporate team and we were doing, we were running like chickens with our head cut off, right?

Because everybody is doing so many different aspects of the business, but they believed enough in the team that they said, okay, I’m gonna get one-on-one support and then I’m gonna get what I need as these guys grow. Um, and I’m getting in on the ground floor. And that’s, you know, I’ll forever be thankful to those two groups really believing in us.

Um, and they’ve seen the evolution of the brand, right? Because where we were at the fifth location to where we’re at the 24th, I’m hella proud of. Right. Um, and I think we’ve made a ton of progress and, um, I think they see that every day with what we’re offering them.

Andrew: I’m assuming you also gave them some kind of

discount on the royalty

payments since they were first and

experimental,

Erik: Yeah. Yeah. So we have, um, all our franchisees now from the start, so we give them a discounted royalty of six months. Uh, that’s forever. That was what we did early on with those groups and what we do with every shop moving forward. Uh, cuz those first six months are critical to get to profitability. Um, and, and we really, we give every franchise a discount on that because of it.

Andrew: and did

you

give them a bigger

discount or a

Erik: We did not, no man,

we, uh, we, were, we were fortunate, you know, uh, there were definitely some hard conversations in there about what we could do and what we could offer and Sure. You know, there were some things that we probably, um, bend on in terms of upfront payments for franchise fees and deferring, uh, some of those on the back end.

But, um, from a royalty standpoint, it was, you know, this is what we’re gonna do and, and move forward.

Andrew: All right. I should tell you the second sponsor is

Origami, which creates Dows. How

familiar are you with

Dows?

Eric

Erik: Uh, decentralized autonomous organizations.

Andrew: Yeah. That’s.

Erik: be dangerous.

Andrew: That’s basically all I knew about it. It’s a different way of structuring, just like franchising is or was at one point, a new way of organizing with people who you want to do business with. A DAO is the same thing. And I like to give examples of DAOs here and then invite people at the end if they’re interested to go and listen to a podcast I’ve created about DAOs.

And of course, if they’re ready, they can also go to join origami.com and talk to the team there about how to create a dao. But here’s an example, Eric. A lot of people here in my podcast know about Y Combinator. It’s a very famous, uh, it’s the premier accelerator investor in startups. They, uh, brought out Airbnb, Dropbox, tons of others, over 3,500 companies they invested in.

Anyway, the founder, the founders who were backed by org, by, uh, by Y Combinator, decided, you know what, let’s get together. Let’s form a dao, a decentralized, autonomous organization, and we could help make investment decisions in the next round of entrepreneurs. . And if you think about it, you’ve got all these entrepreneurs who are phenomenal, successful, um, well plugged in.

They know a lot of entrepreneurs who need funding, who could do well. They could pick winners and losers, I’d say at least as well as as VCs, if not much better. And they can certainly, if they’re all working together, support those entrepreneurs. There’s gotta be someone within that Y Combinator alumni network who is phenomenal in marketing, who could be tapped, who can make an introduction to a big enterprise company who can help with hiring and all that stuff, right?

So they’ve got a Dow and they’ve got a group of people who can find companies to invest in, and they’ve got a group of people who can go and support those companies with help, introductions and. They formed that Dow, they recently I saw in TechCrunch, uh, announced an over 80 million funding round for the, for the venture fund associated with the dao.

And now they’ve been growing and helping invest in and support entrepreneurs and that’s just one kind of Dow. There are other DAOs that decided, you know, we’re not looking to be investment DAOs. What we want to do is just create better content online and work together. They’re creator Dows where creators say we wanna work together.

And, uh, and just grow as creators and build a business as creators. So for people who are interested in this, not just as some kind of a hobby, or let’s go buy the Constitution, like Constitution Dow did, and do this as a lark, no. But for people who are thinking about it as a real business opportunity, a real way of gathering people together and working together to, to hey, frankly, to generate revenue.

Erik: Sure.

Andrew: what my podcast about Dows is about. If you’re interested at all, I want you to go to join origami.com/podcast. Join origami.com/podcast. I’m highlighting different dows the way that I highlight startups and other entrepreneurs here on Mixer G. So if you’re interested in this new form of organization and growth and care about it from a business perspective, go to join origami.com/mixer G.

All right, why are You studying

dows, Eric?

Erik: You know, I, I like to keep up. The trends, what’s happening? Right. Um, I, I’ll be honest, the, the DAOs, the crypto world web three, I, I like to try to stay up on that as much as I can. I’ll be honest, there’s sometimes where I read something and I have to read it two or three times to understand it. But, um, I, I feel like if you’re not trying to understand the future of work and opportunities, um, you’re doing yourself a disservice.

Right? So always, you know, trying to learn and, and develop that stuff to see what opportunities lie ahead, right.

Andrew: That’s, uh, that’s partially what got me into it, and then I got excited about it. And I’m not crazy for crypto. I, I don’t even own a single Bitcoin. I’m not looking for any of that. I just

feel like, well, if there’s a new way

to,

to grow a business, I

Erik: Correct. Exactly. Right. And I think that’s true in in any facet of business, whether it’s marketing, technology, operations, what you’re doing, um, at a training level, um, you know, constantly asking yourself, Hey, are, is this the best way to do things? Uh, and is there a better way to do it? Right? Um, because if there is, I’m not ashamed to say, Hey, we’ll we’ll start going that path if we need to, you know, um, business is humbling in that way.

Andrew: So I gotta tell you something, since you’re open to that. I hate the booking process on your site. Why is it when I hit the book now button, I have to give you my name, my email address, my phone number, my zip code, create a password, agree to terms of service. Can I just see who’s available and when, hit the book button?

And then frankly, I don’t even wanna give you my name and information, maybe my phone number for text message or something. But let me do Apple Pay. Let me just get in

and

out as fast as

Erik: Yeah, man, I, I appreciate you bringing that up. And that is something we’re looking into is the optimization of the booking flow and you and client experience right from start to finish. Um, in, in deciding what is best part of that reason, Andrew, is for po os purposes, we need to know who’s booking to come in, right?

We have to be able to send you appointment reminders or notify you if your stylist is running late or unfortunately they’re sick and we need to move you around. That’s one of those things that

a POS standpoint,

Andrew: I’m, I’m not saying don’t collect it, I’m saying, I’m saying collect it all you want. I’m just telling you don’t ask me for it and don’t, and definitely don’t ask me for it before I even see if I want a book with your people. Let me just, and I’m saying this because I really want a book, but I feel like that that

process is not

great.

Erik: We’re toying around with flipping the entire thing, to your point of allowing people to see what times are available and selecting their slot, and then creating the account at the end. Um, there are some technological reasons we want to grab people’s information before they book an appointment. Um, I’m sure you know that. So, uh, this is actually an interesting, since this is a tech focused, uh, podcast. We rebuilt our website from the ground up, um, in 2020, um, through the API connection of our POS provider. Um, because before we were using their, their mobile widget just embedded on our site, whatever, but we knew with the pending changes coming from privacy reasons, from Apple, Google, et cetera, uh, we lost all of that data, uh, on our website and who the client was, who they are, how many appointments they have, et cetera.

We lost all that data with the third party widget. And so we said, okay, we’re going to invest in billing this so we can own that data from, from start to finish. And now, Andrew, so like one of the reasons we’re hesitant to flip that is that if you give us your information, get through the booking flow, now we know what area you dropped off or didn’t.

Um, and now we’re able to really, you know, nudge you to getting another appointment or booking your first one. So there’s some marketing

aspects there That

Andrew: That makes sense. That way you see if I’m interested but didn’t book, maybe it’s because my guy wasn’t available, or there’s something, something else that came up, you can come back and say, close it up. I’m not against that. I’m just saying, why do I need to type it in? Isn’t there a

way for me to get that to you without

doing that, and

Erik: Agree. No, and, and I’m with you. I, I do think there

are some friction at the start of the booking process. And that is something that we are, we monitor every step of the way, right? We can know when somebody drops off. Most of our drop-offs happen at the point of picking an appointment. And what that allows us to do is then understand, hey, if we have a shop over here that’s losing 60% of the booking funnel and I go look at their KPIs, I can talk to the support and operations team to show, Hey, we’re losing 60% of clients that wanna book an appointment.

Cause I don’t have enough hours scheduled at this shop. Right? And that’s critical because it in another friction point of the process, frankly. Andrea and you mentioned this earlier, I think off before we were talking, it’s hard to book with us because you have to. , you can’t find the time that works for you.

Right? And that, that helps us understand capacity issues and where we’re short-staffed at, at our location. So, um, we try to use that data to better understand not just client journey, but what’s actually happening inside the shops.

Andrew: Yeah, and I could see too that I’m now going through it and if I put in my, uh, zip code for example, and then I drop off, you might notice that there are a lot of people who live too far from your store, but they’re all congregating around this new area in West Austin, maybe, or east Austin. And you can go and

and and do that

and create an account, create a

Erik: And as you know, uh, speaking of data, that zip code is important to

us.

For scalability and knowing where to put on their location. Right? Uh, because as clients live further away from us, they, they become less valuable. Frankly, the closer you live to the location, the more likely you you are to be a member, the more likely you are to come in and spend more money.

You know, we have actual hard data on that. Uh, but if we see a bunch of people coming from a certain zip code in work capacity at this shop, now we’re like, okay, now I know where to go for my second location, my third location in the market. Um, so we’re really trying to utilize that client data

to help us through that process.

Andrew: I still say it’s a, it’s a lot more friction than it should be. Like right now, I did create an account, my password manager, which is one password, created a password for me, and immediately afterwards, I still can’t see when I can book. I’m kicked into the login screen after I create an account, but for some reason, even though my password manager has the password and email address in it, it’s, I still can’t log in.

And so I’m, I’m just gonna reset my

password

and that’s what I mean. What do you use to do

the booking system?

Erik: Um, so this is all built through our POS provider and, and we really, really like our POS provider. They’re called my time. Um, and so they do, you know, a bunch of different barbershops salons, gyms, um, you know, they’re booking

Andrew: them. I interviewed the founder.

Yeah, they, they do a bunch, right?

Erik: Yeah,

Floyd’s Floyd’s is great. Um, you know, different, uh, different business model than us, but they do a great job over.

Um, and yeah, my time’s been great because we’re able to cut, it’s, it’s almost like a white box solution where we’re able to build on top of their platform. Um, and it’s interesting, I I literally slacked over Lemon io to, we have a, a VP of technology on our team who’s a developer who does all of our marketing tech, and we use Upwork a lot for, for developers.

I was like, Hey, check out this lemon io thing because we’re, we’re actively looking for new developers to help with the consumer site, our data, build out our platforms, et cetera, which is pretty funny.

Andrew: What do you think about subscriptions? I’ve been wanting a subscription for a haircut forever because I forget to do it. It’s not on my calendar. Then I scramble at the last minute. I almost would just love to have it done the first Monday or the first Friday of every month and just set it up like that.

But I, I don’t see a lot of

places do that. Why not?

Erik: That’s a great question. You know, if I, if I ran another company besides Scissor and Scotch, I would be pushing memberships and subscriptions, um, for service based businesses. You know, I think it’s, I don’t think it’s the end all be all, but I think it’s a, a core component of what we do. Um, so anywhere from 30 to 35% of our revenues from memberships, uh, I, I think part of the issue of why other companies don’t do it is they don’t, they don’t have the technology to do it.

They don’t want to take the, the time and effort to learn that and implement it. Uh, maybe they already have too many locations and they feel like that’s going to be a really cumbersome, buildout project. But, but man, if, if I could build a business from the start and have recurring revenue month over month, right?

That’s, that’s what you’re really looking for. Uh, and, and frankly, Andrew, it’s,

you know, we have over 90, like right at 90% usage on our memberships. We love that. Right. You

know, we don’t get a

ton of breakage.

Yes. Yeah, we do have

memberships?

So, um, we do have a subscription model, uh, and it’s, it’s not necessarily fully custom, but it’s to a point where, hey, you pick the level of service you want, and then you pick how often you want to come in every week, two weeks, three weeks, four weeks, five weeks, put your credit card on autopay and, and you’re set.

Um, why our clients and members love that is they get charged once a month. They can set recurring appointments. To your point, you can do a haircut every Monday, every third Monday, whatever you want to do at the same time with the same stylist. And you don’t have to get out your card when you’re at the bar.

Uh, we have your card on file for tipping, and it’s straightforward, man.

Andrew: How much of your business comes from the

subscription verse one off?

Erik: Uh, about 30 to 35% are membership, uh, payments. And then the rest of that is you. Not necessarily, we don’t call ’em walking clients, but repeat clients that aren’t members. Uh, cuz there’s a lot of guys out there that, uh, get their haircut 6, 7, 8, 9 times a year. We just don’t have a membership that fits that.

Uh, and that’s fine. Um, you know, we’re, we have a lot of clients that behave like members and that’s really what we care about.

Andrew: Yeah. I love the idea of a membership. I’m just gonna do that. And I like that you’re right next to Natural Gardener. We got all this land here, and I keep trying to think of what else do I wanna put on it, but I never get to the gardener or the haircut, and

so now I get to combine

the two of them.

All right.

Um, what are you doing now that’s working for promotion

beyond the

Facebook ads, and I’m guessing Instagram?

Erik: Yeah. So, um, we are, we are heavy digital. So what, what we were able to do with this marketing technology that we built is we have a custom CRM that every night goes through our, uh, p os provider and pulls down, uh, over a hundred different data points for our clients. First appointment, last appointment, products, purchase, stylists seen, et cetera.

Uh, so we take that data and now I have, you know, 200 plus thousand clients nightly where I have all this data. And what we do with that is we use it for behavioral-based text and email marketing, along with behavioral-based face targeted Facebook and Instagram ads. Um, so. Let’s say Andrew, you come in for a haircut on, you know, tomorrow, December 1st.

Well, you’re not gonna see a digital ad from us until 14 to 17 days past that window because you just came in, right? But what we are gonna start doing is learning your patterns and how often you get your haircut, and then we’re gonna hit you with those digital ads and you’re gonna be like, that’s a little creepy.

I do need a haircut right now. Or you’re gonna get a text message of Trump from us 20 days after your appointment. Uh, you know, we know that the timeframe that people book is between 48 and 72 hours. So that’s really our timeframe. If somebody’s looking to book an appointment, if they are on our site now, they’re likely booking for today or within three days.

Um, so that is something that we really leverage there. Um, so in terms of tactics, we really are the same in terms of digital, but we’ve added that layer of data and behavioral. Based marketing, um, to, to really drive home and use, use dollars effectively, right?

Andrew: Yeah. All right. Um, I’ve got a couple of follow up questions on the things that we talked about before. Uh, you said that you use a demographics firm right now to understand where your

customers are. What’s

Erik: Yeah. Uh, it’s a company called Buxton. Um, so they are. a very, very large player in the, uh, brick and mortar consumer analytics demographics space. Uh, where we actually gave them our customer data, like our actual clients with, you know, name, you know, again, this is all private and secure, right? But we’re giving them their names and, and they’re matching them up with their, uh, um, Their data and saying, okay, I know Andrew Warner.

This is Andrew Warner. He lives here. Let’s find more Andrew Warners because he comes in, he’s a member, et cetera, right? So I can pull this software up and I can go to any shopping center or city in the country, uh, and do a drive time radius, a mile radius, and it’s gonna tell me how many potential clients and then how many potential members live within that area.

Um, so it helps us make effective real estate decisions, um, because real estate is such a big, big piece of brick and mortar, right? You pick the wrong location, you might be screwed no matter how good of a business or service you offer. Um, so as much as real estate is a science, it’s also an art, right? So we really marry those two together and say, Hey, we have all the data.

This might be an awesome location, but man, you gotta turn left across traffic and nobody’s gonna do that in Austin, right? Or whatever it is. So, uh, we really, really, it’s a powerful tool for our franchisees and they appreciate it, uh, because it helps us make informed decisions.

Andrew: Okay. Um, I’m kind of curious about how you get things done. Do you have any habits

that, help you be at

peak? At peak performance?

Erik: that, uh, this might be a little different in terms of what you’re looking for, but I try to pace myself, right? Um, in terms of what I’m doing on a daily basis, because I fully believe that, uh, you need to, there are days that are long, 10, 12 hour days, whatever, right? But you really have to make sure that you’re getting your rest that you need and taking time for yourself.

And really, as somebody who’s done this, like blood, sweat, and tears for the last seven plus years, it’s important for me to be able to take a step back, relax, not think about the business at night, and just hang out with my wife and my dog, right? Um, so I would say taking time for yourself is, is critical to what I do, uh, in that aspect of it.

And then, From a work productivity and habit standpoint, um, I’m a big believer in project-based scrum work over, you know, basically having a project set out and if you’re gonna get this done, what are the check marks, check marks that need to get done? Um, and then working that way. Um, I, I will add from a strategic level, I, we are very good as a team at working through decision making processes and then looking back and deciding, was that decision, did we get lucky?

Right? Did was it, was it a good decision, a bad decision? If it was a bad decision and it was a res, like you can’t get results based, right? Um, and so that’s one of those things where, uh, Annie Duke has a book called, uh, how to Decide, and it was one of my

favorite books.

Yeah, her other one thinking of Best was

fantastic as well.

Um, but

How

Andrew: I didn’t know about that one.

Erik: how to

decide is fantastic, and it really helps you make decisions faster, but it, it also helps you understand that, hey, even though that decision worked out, it might not have been the right one. Right?

Um, so we, I, I think as a whole,

nobody has egos here, right? Especially Sean Tanner, myself, and our, our upper level VPs.

We just want what’s right for the company and we know that, hey, we make mistakes every day, but it’s about how you go back and fix that and then evaluate that process, uh, to make sure you’re making the most effective decisions moving forward.

Andrew: what’s an example of something that you analyzed that

way and realized

that

you’d eat, that you’d made a

mistake or that you

Erik: Yeah. It was, uh, last year, so we, uh, worked with an outside recruiting firm, and so we brought on a full-time recruiter and we were super, super excited about that potential of what that could do, right? So she worked for us, and they’re a great company. You know, I, I think what they do, it just didn’t work for what we needed.

Um, and so that was one of those things where we invested north of six figures in a recruitment company because our franchisees kept telling us over and over again, Hey, we need people, we need to, we need recruitment, right? Uh, so that was one of those things that we were willing to invest in that, and we vetted it.

But ultimately, when looking back on it, man, that might not have been the right path for us because that our stylists and barbers don’t get recruit, they don’t get recruited, right? It’s not, it’s not a nurse, it’s not a doctor, it’s not a white collar job. We have to find a better way to communicate with these people.

Um, and, and that’s, you know, ultimately it, it, it, we tried it, it didn’t work, and, and we moved on.

Andrew: All right. What’s next?

Erik: What’s

next? Man, that’s, uh, so we actually have some really exciting stuff for 2023. So we’ll, we’ll open 15 to 20 locations next year, and we are currently in the process of integrating a product line, uh, a branded, uh, grooming men’s line to our system, uh, to really complete. Yeah, it’s, and, and frankly, Andrew, we wanna make it cheaper for our franchisees.

We want the better quality. Our vendors right now are great, but we want the same or better quality than that, and we want to fully complete 360 experience, right? Uh, I want, when you’re sitting on your counter at home, you’re looking at your facewash, you’re in the hair doing your sh shampooing your hair.

I want you to be reminded of scissors and scotch, right? I want you to be able to be like, oh, hey, that’s a subtle nudge that I might need. It. It builds brand loyalty. It br build, builds brand equity. Um, and it just really completes that client experience from start to finish.

Andrew: All right. It’s scissors and scotch. I’m going to check to see what time I need to get my wife to the airport this Sunday, and then book a book

my first visit before or after I’m

logged in. I see the

account. I’m ready to go, man.

Erik: Ready to rock. I, I’m glad you got in. I will, I’ll report back to our, uh, marketing and development team that we’re, we’re already looking at, uh, some friction there, so don’t

Andrew: All right. Well, I, I was frustrated by that, but I also was curious about why that was the way it was. And I, and I get it, I think that what’s quick and easy for the customer doesn’t necessarily allow for the better business decision for the business. Right. And what you’re saying is you need to understand where people are dropping off.

And if they’re not finding the right time or the right person, you want to know that and be able to contact them again. And I think that’s a valid, um,

that’s a valid reason. Well, thanks for, thanks

for coming on here and telling your story.

Erik: Andrew, I really appreciate your

time today, man. Thank you for giving me the opportunity and platform to talk about scotch and sort of our growth, so I really appreciate.

Andrew: Right on. You bet. And I wanna thank two sponsors, uh, just like Eric, if you’re looking to hire developers, write down the name of the, of this company. It’s Lemon. And if you go to lemon.io/mixer G, you’re gonna end up getting a great rate from a phenomenal company for developers that are superstars. And second, if you’re at all curious about dow’s, go-to join origami.com/podcast where you’ll hear my interviews with Dow creators, Dow members, and everyone in this whole ecosystem as I try to understand it and grow with it along with you.

Thanks. Bye everyone.

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