Solving the huge pain of haircuts

I am so freaking excited about the problem today’s guest is solving.

Obi Omile is the founder of theCut, a barbershop technology platform that allows users and barbers to schedule and manage appointments.

I want to find out how he grew this app to 7 figures.

The podcast is in all major apps, just search for Mixergy.
You can also use our RSS Feed RSS feed.

Obi Omile

Obi Omile

theCut

Obi Omile is the founder of theCut, a barbershop technology platform that allows users and barbers to schedule and manage appointments.

roll-angle

Full Interview Transcript

Andrew: Freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy, where I interview entrepreneurs about how they built their businesses. I freaking love this idea. Oh, check this out. I buzzed my hair. Right? You want to know something? I started out buzzing my hair cause I thought it just looked so easy.

It felt zen-like get rid of hair. Don’t worry about going to a barber. Nobody liked it. No, my wife doesn’t like it. My friends don’t like it. Nobody thinks I look good that way.

Obi: I mean, what’d your hair look like before? I mean, this isn’t, this is not a bad look. I can see you pulling off this look.

Andrew: Just a little bit of extra hair here. Just a little bit of some style, a little bit buzzed on the side. Right? A little more at

Obi: Okay.

Andrew: know how much of a pain in the butt it is just to get my hair cut.

Obi: I can understand how it can be a struggle for some folks, for sure.

Andrew: it is it’s a hassle to go to the place, but fine. I found a place that’s pretty close to my house. It’s not as, it’s not as good as the place that I like fellow barber on Valencia street. Killer. Good. Right? Okay. But the place that I go, I have to pay them cash, which means I don’t have cash. I got to work out some kind of a

Obi: No one, no one.

Andrew: No, I call her up. I want to make an a it’s people. This is going somewhere. Oh, B found a solution for this. And he’s, he’s got a killer business. I’m not just talking about my hair for the sake of talking about my hair, but I feel like, let me empathize. Let me talk about the problem here. Why this is so critical.

So it’s cash. I haven’t tried to make deals with her, will be. I said, I’m going to give you a year’s worth of money up front. Just leave me out it, right.

Obi: That’s a great deal. They should have, she should have jumped up on this. You not jump up on that

Andrew: She didn’t want to worry about taking on the money and then she couldn’t keep track of it. So we went for three months at a time and then she couldn’t keep track of it on her paper.

Obi: Yeah, I can imagine that’d be an arduous task. Yes.

Andrew: Fellow barber, someone talks about how cool the place is. You don’t know who you’re going to get. Is it going to be a good person or is it going to be the person who is not really made to do my hair? They hate to schedule anything in advance that you slips of paper with your name on it.

That’s supposed to They’re all these problems. So anyway, the reason that I’m bringing this up is partially because I’m frustrated. I would love it. If it was just simpler. I want to book it like an Uber. I want to book it. No booklet, like fricking pizza, make it easy.

Obi: Even better so you can track the process. I totally feel

Andrew: I, you know, there’s some things that I get when I’m interviewing an entrepreneur, I get the business and I’m excited about this.

Some things that I get it as a user, I fricking that’s the problem. I should introduce my guest. His name is Obie Omile. He’s got a solution for this. It’s called the cut. It’s an app where. All I do is I hit, I just started this once I found out about you, I hit the, share my location with you, and then you show me the barbers locally.

I get to see the specific barbers. I get to see the hairstyles. I have one issue with you. I think you could make it easier for me not to have to put my password in and user and all that. I know there’s a skip button, you could still make it a little smoother to get me in. But once I, once I’m in, I could book with the barber right there.

If they allow it, am I right?

Obi: Yup. All of the above.

Andrew: and then go in. Do you guys collect payment too? If I started to use you guys for payment?

Obi: Absolutely. Yeah. Just like you described super simple, super easy. As soon as you sign up, you can then discover all the barbers in your local area. You can search through their profiles, see the quality of their haircuts. See the Barbara who fits your perfect price point. And then in a few tabs, you can book your appointment, schedule your time and pay your barber duty app and tip as well.

Andrew: My first question is going to be one that you told our producer. I’m not going to answer. I actually scribbled out the answer so that I don’t leak it by accident. I’m gonna ask you anyway, let me first say this interview is sponsored by two phenomenal companies. If you like what you’re hearing here and you say, Hey, you know what?

I got an idea, or I think I want to kick around an idea. I need to launch a website, go to hostgator.com/mixergy. And number two, if you already have a site have business and you’re paying people, you need to go to Gusto, gusto.com/mixergy. We’ll talk later about why those are great services. Here’s the question.

Revenue, you told our producer, you’re not going to give it to us. Give me a ballpark. So I know how big the business is. So my audience knows

Obi: Um, we’re definitely a seven figure business.

Andrew: great. That’s all I wanted to know. I wanted to get a sense of the size, the, the, this thing that you built was funded by who.

Obi: So exactly we self-funded my co-founder and I self-funded the book of business with money we’ve saved from working in early enough in the first year in 2016 when we started it. And then after that we raised some money from local angels, like from my Alma mater, James Madison go Dukes. Here in Virginia.

And then after that, we, um, we actually ran a crowdfunding campaign through, um, Republic and a ton of barbers and users actually invested in the company. So that was a great, like sense of social proof, which led us to get into Techstars later on that year in 2018.

Andrew: I wish I’d gotten into that. If that makes, it just makes so much sense. And you came up with the idea because when you were in college, you saw Uber takeoff and you thought what.

Obi: This was around the time where you saw Uber Lyft came a couple years, but like you saw like task rabbit, and there’s so many different, like industries being kind of hollowed out from Craigslist. And there people were creating individual businesses for specific verticals and like mobile technology was at the forefront.

So that’s when I really started thinking through like, Hey, barbershops could definitely use some service like this, but it wasn’t. For like another two years after I graduated and moved to North Carolina, started a new job where I actually went two months off being able to find a barber, which for me is entirely too long that like the idea really started to sit with me and fester and like my like a year later, moving back home and linking up with my co-founder, we bonded over having sort of a haircut experiences.

And here we are four years later.

Andrew: And the, the problem was, was what? Because you can find a Barbara I’ve gone to, I was just in South Africa. Um, well, at this point it’s been over a year ago. Yeah. I needed a barber. I went on Yelp. I found a dude who’s phenomenal. He’s on Instagram. I didn’t even know he was that good, but I found him right in a foreign country.

I needed a haircut. I got it. What’s the problem. You finding a barber in the DC area?

Obi: well, so like I w I had moved to North Carolina, started this new job. And so around that time, Instagram was really starting to take shape, but like, Barbara’s, hadn’t started using it as a business tool to the same level that they are today. Um, but also at the same time, like if you, like, you mentioned Yelp, or you mentioned Google, like you can do a search, but typically what you’re going to find a barber shops.

Right. And as you mentioned earlier, like you can’t see the individual bottle within that shop, so you don’t know what the individual barber’s capable of and you also don’t really have the option. Of deciding what Barbara you want until you pull up at that shop. Right? So that was really kind of the idea.

It was like, there need to be a solution. So individual barbers can brand themselves and you can discover that Barbara and book with them at your own convenience. Right. Um, because not even when you find that Barbara, but then scheduling that appointment with the barber. So when you do show up at the barbershop, you’re not waiting like three hours to get your hair cut because we go on a busy day.

You will spend an entire day in the shop.

Andrew: All right. Yeah, the bookings also painted. But what about this? Once I find the barber? Well, do I even need the app? Can I just say, you know what? We’re now we’re now connected. I’m just going to go and book. No, because I still want to book the time. It’s the problem of the time is the

Obi: Exactly. It’s twofold, that discovery piece, but also that convenience of being able to book appointments. So that’s the reason why. People still use the app is because once you, once you find the bar where you still want to be able to book with them, and also on the barber’s side, once Barbara start using us, they will acquire you the book plumbers, because once they go from managing 300 or so clients 200 clients by hand to now having like their own personal assistant assistant in their pocket, they’re not going to want to go back.

Andrew: Okay. You know, the other thing that I was thinking of Uber started out with black cards, these services, where the driver was associated with the company, I was thinking you guys eventually would be the. Some dude, who’s good at cutting hair. Who, who does it in his place. And I could just go to his place to frankly, under COVID some dude who’s willing to do it in the park or do it outside in his backyard.

And I go get a haircut.

Obi: We’re already kind of there we have, like, in our app to date, you can book a mobile barber. Like actually like last Sunday I had a barber come to my apartment and cut my hair to my apartment. So, yeah, we do offer that solution already today. And we just want to expand on that and build like more of a premium solution around that too.

In the future,

Andrew: That’s what I want. I don’t know that I want them in my, in my office because we got carpet, but in the bathroom, in the office, I don’t know, maybe.

Obi: I might be a whole experience. They might, they might lay out a carpet when they come just to like, they can catch all the hair. Oh no, we will. We’ll definitely think that we’re going to get way too many things, but yeah, it’s sort of, we’ll build a whole experience around it.

Andrew: Plus once you open it up to all of them, let them come up with it. And maybe they come up with something brand new. But I do like the mobile experience. You’re talking about a person who comes in with a van, like a man with a van who I get my hair cut there.

Obi: About. Well, yes, actually there are barbers who do have their own bands and you can not on the cut, but just in the industry, there are barbers who have their own van. Um, but yeah, like basically if you book a mobile Barbara right now, basically what that means is that a Barbara will show up, you provide them with your address or whatever address that you want him to, um, arrive at.

And then he’ll come to that address and it’ll cut your hair and then he’ll leave. Light out the cut your hair. Um, but yeah, I mean, there’s, I mean, I imagined a future that will be like the cut vans where a Barbara can then pull up in a van and that you can go get into the van, get your hair cut into van, then we’ll go right back upstairs to wherever you want.

Andrew: I mean, that’s the exciting thing I think about, about what you’re doing. I feel like the cut could just open this up and I don’t mean to be a press about it, but. I just want to get a haircut. I don’t want to bother with the extra time how many people don’t go to the doctor. Right. Because they’re sick, but they don’t have the patience for that.

And so that dramatic, we don’t make the time for something like a haircut.

Obi: Yes. I got to think about all the times you’ve pushed off a haircut because you didn’t know if the barber is going to be available or you didn’t want to go in there and wait a couple of hours to get your hair cut. So you might wait a week or two, which for the Barbara that hurts their revenue. And then for you guys, the guy just delays that great feeling of gratification you’d get from a fresh haircut.

Right? So really just simplifying that process is really everything that we’ve been drilling for.

Andrew: Okay, so, and the problem you then went and talked to barbers to understand their pain. Why barbers and not customers like you had hair for two or people like me, frankly. What were you thinking of?

Obi: well, so I mean, talking to my friends and talking to other people like you, like we knew the problem existed. Like everyone in the mother has probably had a tablet, had a good experience or a, had a problem trying to find a barber. So like it wasn’t, it wasn’t trying to understand the issue on our side.

The more of the challenge for us is really trying to figure out what barber. Pain points were what opportunity they saw to improve their business and how we could help them get there. Right. And so we spent like weeks months talking to a bunch of barbers in our local area. Like once I, once we decided that there was enough of a problem, like we built up a list of maybe 10,000 barbers that we could reach out to.

So it was really

Andrew: you go to that before you go to that. Cause I, that part, I think is fascinating. What you did on Instagram is fascinating, but the part where you talked to barbers, what did you learn that wasn’t obvious? What did you learn? That seemed like a roadblock.

Obi: Yeah. So it was really two key things. Really. It was just a business management. Um, many of the barbers. Madonna industry. I don’t know if it was an ego, but they thought they could manage the bills themselves. Like they didn’t really necessarily see the need for a service like this off the rip, because they’ve been managing a business by hand for so long.

Right. So that was the big thing is educating them. Like, yo, this can make your business. So much more efficient, but then also around the growing of the business. Right? So like, uh, Barbara has a shop where he’s working in a shop. The most that he’ll get his advertisement from that shop. Right. But not all shops are that sophisticated understanding how to use Facebook ads, Google ads, or even their shop may not be placed in the best location to get that organic foot traffic from walk-ins.

Right. So they just needed another way to grow their business and buy. Putting both sides of the market together. We’re able to drive them to business because we have people looking to discover Barbara’s on a platform.

Andrew: So managing and booking is a customer problem. That’s not what they’re feeling is a big issue. They think they managed it. If I understand you right.

Obi: Yes. So depending on the level of a business of Barbara hat, like Barbara’s, who were managing maybe like a hundred or so clients, they feel like they can manage that a little bit more on their own. But once you start talking to Barbara, because I had 200, 300 clients, you started realizing, Hey, they. Those barbers would realize they have a huge issue because they could spend an entire day managing, trying to manage appointments, like text messages and phone calls from customers.

Whereas now they don’t get that much time to spend with their family, or they don’t really have time off because they’re always doing that. Uh, I guess management side or back inside of it.

Andrew: Okay. And then you w sorry, I just got an alert. Said your internet connection is unstable from zoom. I love that. They, I love that they at least tell me, but, um, that was shocking for me. You can still hear me right.

Obi: Yes, I can.

Andrew: Okay, so you understood, you understood their problem. What’s the next step for, for getting this off the ground? I imagine it’s getting your co-founder right.

Obi: So honestly, I mean, when we did that kind of customer discovery together, so at that point we’d already been like working on the idea together, but the next step was one. Building out like the MVP or the minimum viable product, like the, like basically as much of a app that we could get out the door quickly to show value to barbers.

Right. And so my co-founder with technical wizard, he decided he will, we, this wasn’t really decided clearly he would be the one building this out. And so he started working on building out the MVP on iOS and then. For the next three so much while he was building that out, I spent time on Instagram scaling a bunch of different barbers pages.

So this is in 2016, a bunch of different barber IgE accounts looking for Barbara’s who were accepting appointments via direct messages or DMS. And so I would go to, I had, like I said, like 10,000 barbers who we could then reach out to, um, to try to live to, Hey, look, I see that you’re taking appointments.

Hey, we have a better solution. And so that was what that looked like.

Andrew: Better solution than Instagram. That’s what you are competing with. Not the phone.

Obi: Well, both like they would Barbara would say in their bios, Hey, book an appointment with me, call this number, text this number, shoot me a DM. So they would try to accept appointments via any of those vehicles. And so he said, Hey, I see you accepting appointments in these formats, but check out the cut.

We’re a much better solution. So yeah.

Andrew: So you’re putting that list together and then you started reaching out to them. What are some of the issues that they, that they brought up to you

Obi: With the app or just in general, would the

Andrew: platform? Like here’s another person with another platform? I don’t know. I never heard of it. I don’t, I I’m going to do them a favor. Nat. I don’t have time.

Obi: honestly, There was not much pushback, right. The pushback would be, um, I’m fine. I can manage it myself via their current like status quo. Right? Exactly. Exactly. That was the kind of thing that we would hear. But then for Barbara’s who actually interested. And they downloaded the app and got started there.

They loved it. They loved it from the jump. Like we have so many of those barbers who signed up in 2016 off the initial athletes still using the app today is incredible because like from day one they saw the incredible value, like having their own assistant more or less, who could manage their appointments for them all in one place.

And then also drive the new customers. It was a godsend.

Andrew: So when they were getting orders, would they have to go and list there? They would have to add their, their appointments to

Obi: No. So like, okay, so Barbara would download the app. He would add his photos or they would add their photos. They would add their services, set the prices for their services. And that’s all I needed to do because then on the customer, they would invite their customers to come and book with them or be discovered by new customers.

And then the customer can book the appointment. Book the time available that they want and paid through the app. And then the Barbara could then with one tab, just confirmed the appointment and it would show up on the calendar or Dick is set up auto confirm and then all the appointments show up on their calendar without them having to do anything.

Andrew: I had an appointment from somewhere else, like an ongoing person who they wrote in their book, they would have to go and add that manually to the, to the app. Right.

Obi: Yes. And no, um, they could add the first time, like add that man. They had like scheduled appointments before they downloaded the app. They could manually add those into our app for them, for themselves. But at the same time they would just tell those, like if having a client who booked with me every Tuesday, I would just tell that client, Hey, instead of like sending me a text message, just book your appointment in the app.

And then now you’re set every Tuesday.

Andrew: and now they don’t have to take it. That’s the part that I thought would be a big issue that, and another one that I’ll bring up in a second, but I thought that would be a big issue because now, instead of saying to the client, I’ll take your, I’ll take your time and I’ll put it in my book.

You’re saying, go download the app, then go learn the app and create an account. Then book me through there. And if you see someone else who happens to be a little closer, you might end up going to them. Instead of just having this one easy transaction of booking, the way you’re used to, that seems like a pretty big ask.

Obi: It’s not. Okay. So for those who are less tech savvy, the ask was bigger, but we were a lot of the barbers would, there are a lot of the customers tended to be between 18 to 30 or so. So like they’re already tech friendly and tech savvy. So it wasn’t a big ask to have asked to have them download the app and book with them directly because we would send Barbara’s a custom link.

That they could send to their customers where the client download, like tap on this link. It would go directly to that Barbara’s profile. So Barbara, so that exactly. So clients didn’t necessarily see the other barbers in the area, but then yeah, sure. We did have barbers who had mentioned that I don’t necessarily want to be here because now my customers can see other barbers within that would with the owners within just be on the barber to continue to private.

Such a great experience that your customers will want to leave you because getting a haircut is one piece of it. Right. But if that level of customer service established that you have with a barber that has you staying with the same barber through thick and thin,

Andrew: Issue that I thought they would have. I want to come back and ask about the first. Let me tell you. Everyone about my first sponsor. It’s Gusto. I told you, uh, that gusta was a sponsor and you said we use them and then you got excited. Why, why are you get excited about a payroll system?

Obi: Cause gusta was amazing. Um, it’s so easy to manage your employees to manage benefits. It’s all just a couple of clicks. They filed taxes for you. They file paperwork for you. It’s honestly like if you’re a one-man team or like a super lean team, it’s a whole HR professional in-house and yeah, I feel like if anyone starting to do that, they should definitely look at Gusto for managing it.

Um, for them

Andrew: Did you actually use their HR expert? Did you have to call them ever?

Obi: No, uh, we’ve we very rarely had to call them. It’s honestly just employee. They send the employees, all the onboarding paperwork we have. We just didn’t have to verify it. They pay our employees, they manage, like I said, all the time sponsors on a quarterly basis, annual basis benefit enrollment is honestly gets, it reduces the amount of work you have to do as a CEO, which is incredible because you know, you have so many other things that you need to focus on.

This is just one less thing you have to have on your plate.

Andrew: All right. I’m not gonna say anymore. I’m just gonna say, if you’re listening to me, go to gusto.com/mixergy. When you use that URL, they’re going to give you three months for free. And frankly, you’re also just going to learn about the product and see why so many people that I’ve interviewed have been with Gusto.

I told you I was interviewing the founder of shift. He was with them up until he got so big that he was about to go public. And even the founder of Gusto said, okay, at this point, we’re not focused on publicly traded companies. Switch off, but when he was with Gusto, he loved it and they helped get them there.

If you’re out there, go to gusto.com/mixergy. See why so many business owners, so many people like you are so lit up about Gusto. Alright. The thing is cash. I feel like one of the problems is that they don’t want that. Barbara didn’t want to pay taxes. Is that too wrong for me to say publicly, but I feel it’s true.

Obi: I mean,

Andrew: All right.

Obi: there’s definitely an inclination for barbers to prefer CAS. Um, and it’s more of the immediacy of the casual that they can pay their barber or their shop on a booth rent. Um, but what I will say that the industry has been changing and as part of. It’s really two things really driving. Those changes one consumer, you and I who don’t have cash anymore who prefer digital payments.

And then there’s also as Barbara’s become more sophisticated and they think about like preparing for their financial future, whether that be buying a home, buying a car, they can just always be in cash. They need to have show proof of credit. They need to have more digital payments. And so those two things are really driving more of a change in the industry.

And so, yeah, I will say that in the past, Cassius really was dominated in like dominated like barber shops. But like as of recent years, you really start to see more digital payments. Like honestly, cash app is one of the biggest things in barbershops now. Yeah.

Andrew: They’re using cash app to take, to take payments.

Obi: Yeah. Like their barbers who looks at cash app square payments, regular digital print or regular credit cards via like, you know, um, total processors. But yeah, I mean, card payments are becoming more and more commonplace in barbershops today.

Andrew: I’m loving that stuff. I love that a babysitter will say, can you use Venmo to pay me? Yes. I don’t have to like waste my daytime going and getting your money. Yeah. How much, how much, uh, how many people would you say you added to your spreadsheet for Instagram while your co-founder was coding and you were listing, you were getting a list.

How many barbers would you say you found.

Obi: 10,000. It was like, I remember the number, like very

Andrew: One at a time copy paste.

Obi: Yeah, this is all. Yeah, this is, yeah. I had it. I had it written down in a notebook at one point. Um, cause I, I, because of my job, I had a day job and so basically I had my day job. And I built up this list while at work in my downtime.

I have my note pad and I’ll be writing down their phone that contact me, their phone number, their email, whatever I can get, um, builds up that list, multiple pages. And then I transfer them to a spreadsheet over the course of again, like three months, because that’s how long it took them to build it out.

And my, my goal to leave my day job was once we launched to have X amount of barbers convert. And so we have, I think 2,500 or so from that initial 10,000 lists end up converting. And that’s when I was able to tell my parents, Oh, I’m quitting. I’m going to move back home. And I’m going to build this company.

Andrew: what did it feel like to go back home? Did it feel like, like you’re being a baby again?

Obi: Uh, I mean, definitely, uh, it was, I mean, you know, your parents love you, uh, probably forced it to have parents who were able to take me in and yeah. I mean, they just loved being able to take care of me cause I’ve been off in college and working in a different state. So they wanted to make food, you know, do things like that.

So, I

Andrew: I feel like also your parents must have known, this is who Obi is. I was looking at your childhood. You sold newspapers.

Obi: Yeah. My first ever job was selling newspapers at the train station, near my house. And I was like, Oh, 11 or 12. And so like me and my little brother and sister, which were younger than me, we would go out to the train station at like six o’clock in the morning. And as people were coming out of the Metro, we would be sending those, selling them newspapers for like a quarter of pop, um, which is fun.

Those calls my first day, I was like making my own money. Like I’ve always been the type to want to. Like I create my own destiny. And so that’s kind of what this entrepreneurship journey is. Um, but yeah, that was like

Andrew: by the way, you were selling the Washington times, not the Washington post, the conservative Washington times. And I see your politics now. I think Whoa, there must have been the same politics back then. You weren’t concerned about it. Maybe you didn’t even know the politics of the, of the Washington times,

Obi: Yeah. I would say I was a little bit more naive to the politics of the time versus the post when I was that, when I

Andrew: just a newspaper and an opportunity to sell the newspapers or responsible selling is what do you feel like selling is what you were about at heart?

Obi: Yeah. And I mean, I wouldn’t know, he’s just saying it was selling. Cause it’s not, even to me, even today, it’s not about just like selling to get somebody to purchase something it’s more about like solving people’s needs or solve people’s problems and helping them like, you know, find what they need. So it was like talking to people, understanding what they want to purchase and make a shot and get that in your hands.

Right. So that’s kind of what it’s always been. Like, making sure I can make people’s lives better had been something that’s always been important to me.

Andrew: Genuinely make it. So when you, you talked about working at Coldstone, I love that ice cream place. You must not love it. Did it make you sing every time somebody ordered.

Obi: Yes. It was tragic. Um, cause people were, people were funny because they would, they would try to drop like a quarter or something in them. Like they demand you to sing a song. And like me and my friends behind the counter, our personal rule was like, if it wasn’t green, you won’t hear me sing. So we had a minimum of at least a dollar before we was saying, I mean, like I can be a pretty extroverted guy.

Like I love making people laugh. So like we would just have fun behind the counter, but I mean, it was a great time. Um, That was a great time. I will only rely. That was great. I did hate, I hated ice cream though for like less for like the next three years, but it

Andrew: you walked into it loving ice cream, and then you hated it.

Obi: basically because I just ate so much of it.

Like every day I would go home with so much ice cream. It was a

Andrew: that’s the one thing problem with that. Places that even if you don’t like ice cream, they have like twigs and all this other candy that they will chop into the ice cream. So I can imagine as a snacker, I would just keep snacking on all of it.

Obi: Yup. And then the worst smartly, like where you can bring your own stuff. Cause I used to bring in like honey bonds and other wild things to

Andrew: and just add it into your own ice cream?

Obi: Yeah. So that was a problem. Yeah.

Andrew: I can imagine we were just having a conversation, a few entrepreneurs. I won’t say their names are very well known. We were talking about like edibles versus drinks. Can you imagine if an aide brought edibles in and chop that in, into,

Obi: Oh Jesus. Oh, Jesus.

Andrew: feel like that’s the future.

The founder of leaf link. This dude is killing it with a marketplace for buying and selling cannabis related products. He’s, he’s looking at a world which is soon going to completely embrace cannabis. Can you imagine stone-cold one day offering this.

Obi: I imagine many retailers will like some form or fashion, cause like the number of the amount of the U S population and this global population who has become more receptive to it, like it would just be a mishap on revenue opportunity for them not to

Andrew: It would be like those restaurants who don’t offer liquor when people just want to celebrate with a glass of wine or champagne instead of Apple juice. Yeah, I get ya. Um, By the way are you recording your story? I feel like you should be documenting it in your journal or something. There’s something to what you’ve done.

The story captures my imagination because it’s so clear. It’s not like you’re taking on this huge. Like AI based software, something you’re saying there’s a real clear problem. No, one’s solving it. I’m solving it with, by bringing an idea that’s already existing and I’m applying the same kind of, I don’t know the same kind of entrepreneurial energy that I applied when I was a kid selling newspapers.

Do you feel that at all?

Obi: I do feel that, that like, you know, what we’re doing is pretty, I mean, not basic, but like we’re solving a real problem that exists. It’s not, like you said, we’re doing something. We’re not trying to create a solution to a problem. Exists. We’re actually like helping people with their everyday lives. Um, am I recording it?

I don’t think so. Or at least not doing a great job at it and great job at it. Um, I could probably be allowed better, but yeah, uh,

Andrew: you should. I think that these day-to-day things that you’re experiencing will end up making a good book. Great. Like talk someone, I don’t know. All right, let me continue. Then. What percentage would you say said yes to you and how many barbers did you end up with at the end of this whole Instagram campaign of yours?

Obi: Yeah. So like basically 25, 25, excuse me. 25% of the initial Bobby’s RVs Tautou ended up downloading the app. So we got that. Yeah.

Andrew: Sorry, go

Obi: because like we had, I would say I had that this was this of 10,000 and then like 2,500 immediately had signed up for the app, um, within like the first month of reaching out.

And then I think by the end of that year, we have grown to something like 3000 or so by the end of the first year, 3000 Barbara’s and like 10,000 total users.

Andrew: Okay. So you had supply. How did you get demand? How did you get people to use your app?

Obi: so the first year it was definitely heavily focused on barbers. So like, I guess I got described before, like many barbers kind of had their own book of business. Right. And so really what we were providing them was a tool to manage a business more effectively and efficiently. So those barbers would invite their customers.

Right. And so those barbers and by those customers, straw platform, those customers start using us. And so then if you need a barber and you asked your friend who happens to be booking an appointment for their Barbara under cut, they’d tell you about the cut. Right? And so that word of mouth referral is kind of how we.

That engine got started early in our days. And that’s kind of what that kind of that’s exactly what still fuels our growth today. Organic referrals from both sides, Barbara telling other Barbara’s friends, telling their friends about the app that they’re not using to book with their barber. And then over the last couple of years, we really built a, like a brand on the consumer side.

I’m really trying to encourage people to use us, to discover barbers and to try to like become synonymous with barbers and barbershop culture.

Andrew: So why did you have such a hard time raising money? I feel like there’s, well, maybe we talk about, uh, what you were charging. What was the business model at the time?

Obi: That was reason why we had a toggle raising money. Uh, so at the first, from the outset, we did not charge barbers. We gave them Tober free. So basically barbers could use the app for free to grow the business because for us, it was really about. We didn’t want them to feel like they had to pay for this.

We want you to show you the value that we can provide you, right? Like you will receive incredible amounts of value for this. And after using this for X amount of time, you will get hooked and you will be willing to pay for this in the future. Right. And so that was our main, that was our idea. So we didn’t charge barbers for like, we didn’t charge Barbara’s up until last fall is when we started charging barbers and then we would make money on transactions.

So if you pay for a haircut through the platform, we would make money in that sense.

Andrew: That was in the beginning, it was transaction or not even that.

Obi: Um, so the first year, no transactions

Andrew: No

Obi: in common. Yeah. We didn’t make money until we launched in 2016. We didn’t start making incremental revenue until 2017.

Andrew: And then 2017, the first thing that you charged for was lead taking a percentage of transactions. If a barber wanted to accept payments, you worked, I think you guys were using Stripe. Am I

Obi: Uh, initially we use Braintree for payment processing. Um, that was the first year we, we switched over to square last year, and then now we’re actually getting ready to move over to Stripe.

Andrew: Okay. Why what’s the difference

Obi: Um, so I mean, initially when we started off Braintree wasn’t, as, uh, in the beginning, they were all kind of at the same level. Stripe is just. Evolve their products so much faster than everybody else. Um, the reason we’re moving to them is because they just have a better product to better facilitate payments and transactions.

Andrew: Are you seeing that’s better for them or they, I think they’re making it easier for you to then pass the money on to people on your marketplace. Right?

Obi: Correct faster payout times. Cause like immediacy, immediacy of payments is why like Barbara’s love cash buy. Like I can get my money right now in my pocket. And so through Stripe we’ll be able to offer like instant payouts. It was basically the same thing for mobbers. They can give them money like same day.

And so that would be like a huge motivator and a driver for them to process

Andrew: Right then they might as well use you instead of asking their customers to use, uh, um,

Obi: Stripe or cash app or anything else like that.

Andrew: Okay. So you then went to raise money. They said you’ve got all this action, but we don’t, but we don’t see any money. Why is that a problem? I feel like that’s a lot of consumer products, a lot of money.

And isn’t that? How, what happened with Instagram? A lot of users, not much money, and then we figure it out later.

Obi: Yeah. I think the problem is like with a lot of consumer apps, right. Who kind of like bank on selling ads, they can go that freemium or free product, get a bunch of users and activity, and then you’ll figure out some way to later on ads. Right. So for the cut. Eyeballs are eyeballs, like time on screen is not said that’s important to us because like for our app to truly be as effective barbers, aren’t spending time in the app looking at the app.

Right. Because it’s super simple for them to like to manage their appointments. Same thing for the client side. It’s like, you go through, you discover a Barbara, you book an appointment. There’s not much time for you to kind of be scrolling through the app. And so we didn’t necessarily have the ad play. So Barbara didn’t or so investors were trying to.

We didn’t have the ad plays on investor. Didn’t have faith in that then also in terms of just the market size, maybe investors that we spoke to did not see the opportunity because they didn’t understand the market. They didn’t realize how many, about how much people spent on haircuts, how often they went to go see that barber.

And I just didn’t see the vision. Um, so that was the hardest part is convincing barbers or convincing, convincing investors of the opportunity at hand.

Andrew: The market was big enough.

Obi: Exactly that the market was big enough that Barbara’s would pay for this service and that the industry would not be cash paced forever. Those are the three big things that we had to try to convince investors from the outset.

Andrew: so then your first money, did it come from Republic?

Obi: No. Our first money came from like angel investors from my Alma mater, James Madison. Uh, we went and pitched some invest, uh, investors there, and we were able to raise 40 K from them. In 2017, fall 17. And then at the end of the year, we raised another 40 K from those same investors because they we’ve had some great traction, I just wanted to double up.

Um, so that was what happened 2017. And then in 2018, we ended up running the equity crowd funding campaign through Republic, and that’s where we raised about another a hundred K. And then that following summer, we’ve gotten to the Techstars program.

Andrew: And then how, and then I feel like things must have changed because you know what I’m seeing as I look at this, nobody’s expecting a marketplace to make money from advertising or eyeballs. It’s just that you might’ve been thinking that way because I, I just feels like you are too outside of the, the startup scene.

That if you are a little bit more plugged in, you would understand how to talk their language. And naturally you would have found investors who love marketplaces they’re investors who love it. Right.

Obi: for sure. And we did find those investors over time. Like that, that in itself was a problem that we just didn’t have the network, right. Me, me and my co-founder being in this Dean’s DC area. We didn’t really have that strong network. Right. But even as we start to discover some of these marketplace investors, their main concern was whether or not we would still be able to get transaction volume through the platform.

Right. Cash base, will people be paying for haircut digitally? They, they were weary on that. And so it just took a harder time for us to convince them. And like you said, understand how to talk their language, um, to really get them over that hump.

Andrew: All right. You raised, this seems so small, considering $93,842,000 from Republic. Do you remember when that closed? Are you enthused?

Obi: Absolutely. That was nuts. Cause like I mentioned like a ton of our barbers and then users actually invested in the company. So like I’m that to us, that buy-in was incredible. Like, wow, you guys really believe in what we’re doing. This means that you’re willing to put your own cash up and which also helped is going to Techstars.

But yeah, like that was wild to see that. Cause I was at that time, the largest inflection of cash. Or influx of cash into the business. So every time we still get like the largest sum of cash at one time, we’re all me and my co-founder. We just take a step back cause like, yo, this is wild to think about at times.

Yeah.

Andrew: Okay. All right. I’m going to talk about my second sponsor then I want to know what you did. Uh, what happened when you started bringing in money? My second sponsor is HostGator. Let me ask you this. I asked the same thing of the founder of, um, Uh, Oh, shoot. I asked this of other sponsors. Is there another, I ask this of other guests.

Is there another market place idea that is out there that we’re not noticing, but you are. What else is out there. If you, if someone were to say, you know what, I’m going to go and sign up for a HostGator account and I’m going to create another marketplace leaf link. I asked, uh, Ryan Smith of Lee leaf link.

He said anything that’s B2B. There’s not enough marketplaces for them. And so if you’re thinking about a coffee shop, for example, right. They go directly to the seller of the coffee to buy the beans directly. This, he says, create marketplace for B2B businesses. Do you have any ideas for what other marketplace someone’s listening, inspired by you and says, Andrew’s doing this ad for whole skater.

I’m going to go sign up and run a marketplace. What’s an idea that you think is out there. Yeah.

Obi: I mean, I wouldn’t even, well, one would hit advice around marketplaces and trying to find anyone where there’s a business who has to like source different goods from any providers. That’s an opportunity. Right. But like, I wouldn’t necessarily like salary to just straight Margo places. I would just like, think of any idea where you yourself have had an issue, trying to solve their problem, whether that’s you finding.

X Y and a C good or X, Y, or Z. Good. I couldn’t tell you right now. I’m honestly, I’ve spent so much time in the cut that I haven’t even spent that much time thinking about other opportunities. Well, yeah, I mean, just thinking about like any like provider who has to manage a business by hand, who has a tough time trying to find clients, that’s an opportunity.

Maybe we want to think about finished professionals, right? Like maybe like a marketplace to help you find like a finished trainer or PT. Like there might be opportunities there. So like, yeah, I

Andrew: one. Yes. All right. Whether it’s finding a fitness professional, imagine like the Uber of trainers, they come to your place. They have this whole, now we’ve got all these video training. Well, imagine if a dude is into your house or a woman comes into your house and works. All right. Well, there’s that, or any other idea when you’re ready to start your site, go to hostgator.com/mixergy.

When you use that slash Mixergy at the end, I get credit and you get the lowest price that HostGator has available. And frankly, they just have good service. That’s really low price. It’s not like me saving you. A few pennies is going to make a difference. Here’s what’s going to make a difference. It just works.

You get started and that’s it. hostgator.com/mixergy. Alright. What else? When you started to charge any pushback, any challenges?

Obi: Sure. I mean, so when we launched our subscription model for barbers in the fall of 2019, we saw pushback. We saw Barbara’s who. Said, Oh, you guys were supposed to be free. Um, but like, what we noticed is that the barbers who ended up leaving were barbers, who weren’t booking a solvable appointments. Right.

So they didn’t see the value in appointment booking because they weren’t trying to manage that many, like that many appointments. So like for them going back to pen and paper, or like a manual scheduling process, wasn’t that big of a deal. But for Barbara’s who were actually like managing them. Hundreds of appointments every month.

Those are the ones who we saw stick. And we probably converted like 40% of those barbers who we had initially free paying once we rolled that out.

Andrew: They must’ve also been frustrated because they were using this thing for free and now they have to pay for the same thing.

Obi: Yeah,

Andrew: that you guys started out with free, instead of saying, look, this is free up until some point and then we’ll charge either a point in time or a number of users.

Okay.

Obi: I’d say that was definitely a challenge, but even then like, so we would travel to Barbara and expos around the country. Right. And so when ad these expo, we would talk to Barbara and let them know about our service. And we’d be like, yeah, we’re free. They’d be like, yeah, but for how long, just like many of the barbers were like, they knew like the no free lunch.

Right. Even have to pay for it eventually. So Barbara’s were like, Most barbers knew they would have to pay for this at some point. And they would just like trying to get the most out of it while they could, while it was free.

Andrew: What was the subscription

Obi: A $20 a month will be charged. Barbara’s

Andrew: killer low for B2B, right. For a business tool. Okay. And what is it now?

Obi: like we just wrote them up. Yep.

Andrew: Okay. All right. And as long as they just use you for booking, that’s all they have to pay. And then if their customers pay using your platform, then they pick a percentage percentage.

Obi: charged Barbara like 2.9, 5% on transaction. So like, just like any other payment

Andrew: like credit card processing. You’re not taking 5%, nothing else.

Obi: Absolutely not. Yeah. Just like, so we charged the barbers that fee, and then we charge the customer like a small convenience fee.

Andrew: Oh, okay. What’s a convenience fee for the customer.

Obi: like 95 cents, so

Andrew: Do you guys hate money?

Obi: Did we make money? No, it’s just like, it’s more of, we want to fit in the lifestyle of people in a way that they wouldn’t notice.

Right. And so I we’ve found those numbers to like fit. We actually haven’t, um, algebra continue to grow. Of course we’ll do more testing around payment to see kind of what the plasticity of that is. Um, but yeah, I mean, today, that kind of works for us. Yeah.

Andrew: All right. Here’s the other thing that blew my mind. You got to 10,000 users on iOS. You didn’t explode until Android. Why is Android exploding your user base?

Obi: Two main reasons. So Barbara’s have customers who have both who have like, Both phone types. Like not everybody has iOS, right? Some people have Android, so Barbara’s, wouldn’t use us because they couldn’t serve as both their customers.

Andrew: it. Yeah.

Obi: So once we were able to have Android on the market that exploded our growth because of course now Barbara’s can then serve both of you

Andrew: Gotcha. All right. So that’s one reason. What’s the second reason.

Obi: just Barbara’s who didn’t have iOS phones. Like now we were able to it.

Andrew: Look at, look at me now. Pick of course, right. You know what? I, I understood that part. I, I didn’t realize, of course, if you guys aren’t on Android, I wouldn’t give you the customers just in case they are Android. And I don’t want them to now blow back at me. Like I’m trying to convert them into, into iOS, right? Got it. All right. I see that difference. Um, one of the things that you told our producer was a challenge is hiring it’s higher. It’s a challenge for everybody what’s worked for you. And then let’s talk about w what hasn’t worked.

Obi: What’s worked. So like my co-founder, I saw the company, um, the next two hires we made were people who we also knew from high school. So that was great for the, for, for the small team we had. And now as a team of four that we had up until like this summer, this summer is when we have actually done, like we’ve had six people in the midst of dependent.

I’ve been fortunate enough to be able to grow our team. And what’s worked for us is. We have such a great story. And the business is dope. I will say to myself though, I think we built this pretty dope business and like, it’s we have this great, cool factor. So when we talk to people, like it kind of resonates like everyone’s hat, everyone knows somebody who goes to the barber or it to the barbershop.

And so like, there’s just like this level of comfort that you have with our business. Right. And then, like I said, we have great metrics and we’ve got this super dope opportunity and vision that people kind of buy in. And that’s what worked for us. But we still have to be, it takes so long for us. It’s taken so long for us to hire people, because like I said, we’re here in the DC area.

And like some of the talent that we’re looking for is in New York or California. And they’re not necessarily looking to move, um, just yet. So like that’s something that we’ve been able to, we’ve tried to grapple with, but like now in this pandemic, um, world where everyone’s used to being remote, we’ve become more flexible with the idea of work more mode, which has allowed us to grow our team a little bit faster.

Andrew: You used to want everyone to be in the same office.

Obi: I, I was still love that. Um, but like I’ve had to become more flexible

Andrew: are you in the office now? Are you at home? I’m kind of looking over your shoulder.

Obi: I am at home right now, but I go into our office maybe once or twice a week.

Andrew: The pandemic has that hurt your sales?

Obi: They did in March and April. Uh, we were down like 80, 85% like everybody else. Um, but on.

Andrew: that people were closing down their shops and then pausing the subscription with you?

Obi: So is we’re closing on the shops because they haven’t been ordered. They could not be open. So nobody was looking at appointments, but in response to that, we decided to make it easier for Barbara’s to stay on the platform. So we reduced our subscription fee from $20 to $5, just so that they could still, still use our platform to communicate with the customers.

So that as States are to reopen, as Barbara’s got creative in terms of doing at-home services or whatever, that. Yeah. However, they tried to manage that they were able to communicate with the customers and let them know, um, how to book with them or how to get there.

Andrew: Where is it now compared to where it was last year?

Obi: It’s ahead. So we’ve actually grown. Yeah. Our business has, has been, has, we’ve been forced to, again, to like the COVID is act as more of a tailwind for the industry. So like, as they started to reopen in may. We saw our business triple in terms of the number of new users we were getting, literally it was three times the rate at which pre COVID levels.

And so as they started to be open, but cute few things happened, they required barbers and stylists to wherever they were working in a type of industry to use a plummet looking software. Right. They require them to use this type of software for contact tracing, to mitigate walk-ins. And so that they could try to like manage the number of people in a barbershop at one time.

So those were kind of. Like forcing functions around barbers using a Plymouth booking software. Cause like, like I mentioned before, like the biggest thing was educating them on the value of this type of software. So this kind of help like escalate that to an extent. Um, so that was really what drove our business and not just us, like we’ve seen it as like a rising, um, as a tailwind for the entire industry as a whole.

But yeah, now we’re booking, like I said, we’re booking about a million appointments a month. Now, well, that’s how we ended the year. Um, last year we were booking at the end of last, at the end of 2019, we were booking about 700,000 and then now we’re booking a million a month. So.

Andrew: Wow. And are you seeing them get more and more creative about how, how to handle well, how to handle COVID by inviting people to their home or going to people’s homes. Are you seeing that kind of creativity happen?

Obi: Yeah. I mean, there are a lot more barbers now doing house calls, and even we built out a better way for barbers to book, house, call appointments. So like barbers can now, like we built in the feature. So like, you can actually have a barber come to your house and provide them address. We made it easier for them to do things like that.

Um, we donate a PPP. Or PPE to a ton of our barbers in the midst of the pandemic, so they can have the right tools to stay safe. Um, but yeah, I mean is, have gotten creative, like summer cutting at their home somewhere, even cutting outside in the streets or in their backyard. Um, so yeah, like barbers have definitely tried to like navigate around COVID the best they can.

Andrew: Wow. All right. This is killer stuff, right? Don’t you feel like this is, I feel like maybe I’m a little more excited about your business and you are, I’m kind of watching you.

Obi: No, no, no. It’s I might sometimes I I’m pretty chill guy, so I, sometimes I may not get as excited as I should be, but now I love what we’re doing. It’s super, like every day I get super motivated when we wake up and like a Barbara will text us or send us an email saying how, because of us has been able to stay afloat because during the pandemic, because of us, he’s able to spend more time with his family.

Like, those are the type of things that like get us brought up in super excited to go out and continue to build software for them.

Andrew: I’m excited also about first of all, I feel like there’s huge potential and just doing this. For people like me who still don’t have access to it. Right. I don’t have access to my barber. She doesn’t know my name, my email address. I would contact her and say, look, my wife hates the way I look. I need to look good.

Right? We’re in the house together. Can you just figure something out? She doesn’t have a way to reach me and I don’t have a way to reach her that alone, this like what you’re solving today makes a ton of sense. I’m even curious about what’s going to happen in the future. Will. What’s the future of, of barber shops or barbershop replacements, will somebody come into, into the house?

Does it even have to be the cut? Will there be like a blow out that goes to my wife, said to my wife and, you know, get her hair done. I feel like there’s a huge potential here unlocked by, um, by technology and you’re right at the heart of it.

Obi: For sure. I mean, I think for us, the way we look at it is Barbara stopped will always have a place in society and people’s lives. Like they’ve always been like cultural meeting centers. And communities of color and communities as a whole, like you go to the barbershop to save spent, it’s a safe space. We can have conversations.

Like Barbara is almost like a therapist at times. So I don’t think you’ll ever lose that aspect because people kind of want somewhere to go get their hair cut. Right. But I do think there’s going to be a ton of change within the industry. Like we mentioned before, there will be vans, right? There’ll be more mobile services.

Like Barbara’s, we’ll have vans where they pull up on a location and you can go in and get your hair cut on leave. Right. Um, there may be signal. There may be technology out there where. You may just put something on your head and it cuts your head for you, right?

Andrew: I shouldn’t last. Yes.

Obi: yeah, something like that could happen.

I don’t know. Um, but I think there’s going to be a lot of changes in industry moving forward, but I do think it will always be a place for barbershops and the software to power them. Okay.

Andrew: All right. It’s the cut. You guys have the cutout? No, you have the cut.co. Um, and of course you’re on Instagram where you guys are, are doing really well on Instagram. That’s still sending you customers, right? It’s credibility boost for you.

Obi: Absolutely. It’s how we build our brand. And it’s like a huge driver of growth for us.

Andrew: All right. And OB, at some point we’ll be journaling or maybe, you know, you know what I think you should do. Maybe opening yourself up to do like an interview a month, or maybe have interns that you talk to and have like tell their story, or maybe students know you needs to be you recording the, the junky part of your day.

The things that are frustrating that you think are too frustrating to sit down and journal that five years from now will be moments of inspiration. I just don’t know how you can get to that, but

Obi: Yeah, that’s something I’ve definitely thought about it. And I just need to be better at like, like, I guess not keeping note and track of those moments. Um, but yeah, I definitely feel like those are the things that goes behind the scenes moments of things that really motivate people. And that’s what really needs to be shown.

Andrew: because you know what? Elon Musk became the richest person in the world. Great story. Incredibly inspiring, but also, no one’s going to go, Hey, you know what? I can do it too. Why didn’t I think of a fricking rocket, it makes so much sense. You were sitting here on earth, their place, right.

Obi: That’s a little bit more.

Andrew: Imagine 20 years from now, long as the cut, of course, he saw a problem that he had.

He saw other people who had it, he talked to others. These basics just will always hold true. And that’s, that’s, what’s exciting about your story. All right. Well, we thank you for so much for doing this interview. Let me think the two sponsors so I can get paid for this interview. All right. The first is HostGator.

I’m so glad that they’re back sponsoring 2021. If you need a website hosted, or you have a website hosted and you want a better hosting company, take it to hostgator.com/mixergy. And if you have a team of people do it OB, and so many other people do to pay them, take care of it and just. Be able to move on with their life.

Instead of getting sucked into doing, uh, uh, doing payroll, go to gusto.com/mixergy invested in him. What, what do you think would have NA investing in you probably would have been better because your valuation was, was super low when you were taking money.

Obi: Yes,

Andrew: Yeah. Those people who put up money in Republic, I think are going to be super happy in the future.

All right. Thank you so much, Toby.

Obi: Want to thank you so much, Andrew. It was a pleasure.

Andrew: Bye.

Who should we feature on Mixergy? Let us know who you think would make a great interviewee.

x