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

Josh McCarter

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

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Famous Five:

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

Time Stamped Show Notes:

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

3 Key Points:

  1. It’s important to understand what type of customers you serve best.
  2. Make sure you have the right type of structure when you spin out a business.
  3. Failure rate of the SMB market is quite high.

Resources Mentioned:

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