← Earn Your Leisure
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- [00:00]
Gustav Magnar Witzøe
This is an iHeart podcast. Guaranteed Human.
- [00:06]
Podcast Sponsor Announcer
This episode is brought to you by PNC Bank. A lot of people think podcasts about work are boring. And sure, they definitely can be. But understanding a professional's routine shows us how they achieve their success little by little, day after day. It's like banking with PNC Bank. It might seem boring to save, plan, and make calculated decisions with your bank, but keeping your money boring is what helps you live a more happily fulfilled life. PNC bank, Brilliantly boring since 1865 Brilliantly boring since 1865 is a service mark of the PNC Financial Service Group, Inc. PNC Bank National Association Member, FDIC When.
- [00:48]
Gustav Magnar Witzøe
I did the podcast with you all.
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Podcast Sponsor Announcer
I was telling you probably the most.
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Podcast Host 1
Impactful interview I've done in my career. I'm heroes now.
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Gustav Magnar Witzøe
Like, real heroes.
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Podcast Host 2
Rashad Detroit. Talk about the tax lift, about finance.
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Podcast Host 1
But we talk in a language that is common to the people.
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Gustav Magnar Witzøe
That's from the community that we grew up in. You all are the bright spot. Thank you. Real estate.
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Podcast Host 2
Thank you.
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Gustav Magnar Witzøe
And entrepreneurship for black Americans.
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Podcast Host 1
This is the knowledge that actually matters. I applaud both of you for this.
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Podcast Host 2
Thank you.
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Podcast Sponsor Announcer
Literacy isn't a country issue.
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Podcast Host 1
It's not an American issue. It's a world issue.
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Podcast Host 2
We came to earn our leisure. All right, guys, welcome back. EYL got special episode, you know, long overdue friends of ours and people that have really built tremendous business and really revolutionized industry that for a long time kind of was in the dark ages when it comes to technology. In. In the barber sh. We think a barber shop industry. So, yeah, we got a song and David from Squire, if you're not familiar with Squire, that's an app that actually allows. Well, I'll let you guys talk about it, but how I know it's an app that allows you to book. Book for appointments for your barber. Right. It allows the barber to manage the schedule to run a barbershop, like an actual operation. Right. What's the other tech that's behind it as well that allows.
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Gustav Magnar Witzøe
Another part that's important is the payments. So we make that, you know, really, really simple and easy. Kind of like that experience when you take an Uber. You just get in, you know, do your ride and then get out. You don't have to worry about tipping and cash and all that. We take that kind of experience, like, to the barbershop as well.
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Yeah. I mean, and when we started this business, like nine years ago, you know, it was nothing. Uber 2015, 2016. Uber was just getting traction. And the experience of Going down to the barbershop, having everything handled, just walking out after. We just wanted that seamless experience. And then we realized once we were in the business, the real opportunity was streamline the entire operations of the business. So that's kind of how Squire was born as a full management system that it is today.
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Podcast Host 2
And the valuation right now is 750 million.
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Gustav Magnar Witzøe
Yes.
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Podcast Host 1
Congrats.
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Podcast Host 2
So congratulations.
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Gustav Magnar Witzøe
Thank you, thank you.
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Thank you.
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Podcast Host 2
First and foremost, thank you guys for joining us, man. Appreciate it.
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Gustav Magnar Witzøe
Thanks for having us.
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Podcast Host 1
We run into y' all a lot. Dave. I feel like we run into each other all the time, so it was good to have you out here, man. And like you said, something that's disruptive but has helped our community for sure. Lots of communities get back time, which is the one asset that you can't replicate, and you guys have done that, so congratulations.
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Gustav Magnar Witzøe
Thank you.
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Thank you.
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Podcast Host 2
All right, so let's get into it. So, okay, you guys start an app, which seems like that somebody should have been did that. Right. It wasn't something that was, like, too far out of the realm of, like, thought process as far as being able to book online, being able to process payments correctly, being able to manage appointments for barbers. Like, it seems like something that, you know, should have been in existence. Right. But it wasn't. So walk us through a. How you guys developed the relationship and the process of actually coming up with the idea and then getting the idea off the ground and to market.
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Gustav Magnar Witzøe
Yeah. So Dave and I, we were friends before actually starting Squire. We both were in New York. I was working at a law firm at the time, and he was, like, in finance, so we had a lot of friends in common going out. You know, we were in our 20s at the time, and after a few years, we were, like, really wanted to work on something that would be more impactful, and we weren't really kind of fulfilled with the corporate trajectory we were on. So we would literally brainstorm ideas on the weekends instead of going out. We used to sneak into Columbia campus because we both lived up uptown in Harlem, and we were literally just whiteboard ideas, like, what could we work on? What could we do that would actually could have a legacy that would have a bigger impact on communities and just be more positive. And through that process, we came up with this experience of the barbershop. Like, both of us have been going to barbers since we were kids. I started going around six or seven of my pops back in the day, and the experience of getting a haircut hadn't changed 20 years later. You go in, you wait. It could be 10 minutes, it could be two hours. You have to pay of cash. You text back and forth with your barber. And it didn't make sense that this one experience of life that was so important and so joyous on the one hand was also so painful. So that's why we came up the idea, like, how can we solve this with technology?
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Everybody got that experience. When you go to a barbershop, there's a big homie comes in and be like, he's next.
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Podcast Host 1
I've been sitting for three hours.
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Gustav Magnar Witzøe
Everybody has that experience. And you know, like, that used to happen to me all the time when I was a little kid because, you know, I grew up, you know, I used to go to barbershop by myself because mom was working or whatever the case may be. But with technology now you can't do that because everything is regimented, everything is on point. And that's a harder, that's a harder pill to swallow for the barbershop owner barbers to like say, nah, somebody else was next.
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Podcast Host 2
And a matter of what happens. We used to happen all the time. You make an appointment at 12 and then even if nobody took your spot, the barber's just running late. So it's taking an hour and a half, 45 minutes. So you don't actually get into the chair until 2:00'. Clock. And it's like you can't really run your day by like kind of hoping and wishing that there's a 90 minute window that you might potentially get. So if you have set slots every hour, right, like that it holds, I think it holds everybody accountable. Accountable.
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Podcast Host 1
I think it's done a job for barbers. It's made them more efficient with their time, but they're able to cut more efficiency knowing like, hey, I got somebody coming out there. Let me be precise with this one. Make sure I can, I can get more people in rather than wasting the time where it's like, yo, I'm waiting for this dude or you're next. Who's that?
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Podcast Sponsor Announcer
I don't know.
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Podcast Host 1
Is they're actually becoming more efficient, which actually means more customers, more clients, more money.
- [07:05]
Gustav Magnar Witzøe
Absolutely, absolutely.
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And now, you know, with the AI and being, being in Squire now and having the AI kind of like focused companies, the tools that we able to leverage now is just incredible. Like we built Operator, which you know, I demoed at LV Barber Expo. It's a way for barbers to never have to answer their phone. You know, people just call the barbershop and this human like Voice picks up and does all the scheduling for you and really is able to, like, do, like, the operations that normally a human would do. So we just. It's just making the Barbers and the Barbershop owners lives more efficient, and efficiency leads to more money. At the end of the day, when.
- [07:56]
Podcast Host 1
Y' all first figure out that you're gonna create a solution for this problem, where's the first shop that you go to to tell them about this technology that you're about to use? Like, do you go back to the same spotlight? Yo, bro, I'm not sitting here for three hours. Here's this product that I. How did that go?
- [08:10]
Gustav Magnar Witzøe
So the thing. The thing with that is, like, what we did was, like, we went out, like, when we first had the idea, then we went out with an iPad and. And just ask questions, like, if we would build this thing, would you use it? Like, ask for feedback, you know, interviews, and, like, it's hard to tell somebody no when you're already been involved in the process all along. So. So what we did early on is we built with the guys or with the. The owners, and we had them a part of the process. And then when it was time to launch, you can't really say you're not doing this because you. You were lockstep the entire process.
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Podcast Host 2
So let me ask you this. As far as the idea, it's a relatively. It's not a complex idea, right? But what does it take to actually get that tech to make it come to life and make it, the application, actually happen? Like, how much money does that cost? And what was the process, as far as on the technical side, to actually make that app get up and running and actually in the App Store.
- [09:18]
Gustav Magnar Witzøe
Yeah. So when we were at that stage, you know, this was like, almost 10 years ago, there was no vive coding at the time. It was a total different world where it was a lot harder to build that first, like, mvp. First version of the product to get in front of the customers. So the approach that we. We took was we wanted to recruit a co founder to be technical. That's, like, part of the team instead of outsourcing and, like, paying. And, you know, some people do it in different ways, but our philosophy was always, like, if you're paying somebody to build your product, you have inverse, like, goals. Like, they want to do it for as fast as possible and make as much money as possible, and you want to get the best quality and pay as little as possible. So you're already kind of set up for failure. So we Were really focused on recruiting somebody to be our CTO and co founder and it took some time and we went through some, you know, a couple iterations where like it didn't work out but eventually we did find that person and that person kind of joined the company at the time and helped us build that first, first version of the product.
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Podcast Host 1
Yes. You guys don't come obviously when law you're in finance. How in depth did you have to get in the technological side? Right. Because you're trying to build an app that is going to, obviously you're going to recruit people to find. But how much did y' all had to get in the weeds inside of tech to realize that? You know, we have to understand this industry just as much as the one that we came from.
- [10:39]
Gustav Magnar Witzøe
It was a learning process. Like we didn't know anything about tech, had never, you know, started a tech company, didn't have any connections in tech at the time. So honestly we didn't know what we were doing. What we did have is pretty good product instincts because we were so close to the customer. So we understood the pain points and kind of like what we were trying to solve for. But in terms of under the hood and act, the actual process of like building something and like actually like building the first version of the app, which was an iOS app, we were, we were completely clueless as to what was actually happening.
- [11:12]
Podcast Host 1
Yeah.
- [11:12]
Gustav Magnar Witzøe
And it's a consumer facing application. So you know, directionally we know what felt right in terms of like what a product actually operates. But in terms of like under the hood, we didn't know anything.
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I mean how would you know? Like you're just starting out, you have an idea and you're like I want to go build this but you don't actually know like what it takes. Now of course we've learned a lot, but that you know, further was like more reason of why we wanted to have somebody on the team who, who was aligned incentives and, and could help help build it out. Because when you're non technical, especially back then, before AI was, was the way it is now, like it's, it's very difficult to like understand from a, from a technical process like what, what is actually required. Like something could take a day and they could say it takes a month, like you have no idea. So you're really at it. There's an asymmetry of like knowledge at that point. So when I talk to early stage founders who want to be, you know, tech founders and want to start companies, I say, you know, either learn to Code. Now, you can learn a lot with AI and you can vibe code your way to. To a lot, but really like you want to be have someone on your team who has a strong technical foundation, if possible.
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Podcast Host 2
So how did. What was the marketing campaign as far as to get Barbers on board? Was it to get barbers on board? Was it to get the clients of Barbers on board? Like, what was the first, you know.
- [12:32]
Gustav Magnar Witzøe
We did under the sun? But it was just so. So what happened in the beginning is we thought that if we built this beautiful application and folks started to use it, everything would run smoothly. The barbers love it. The customers love it. Our early financial models had us get to $10 billion in three years. But. But that's. But that's. Here's me the but. But what was interesting is it didn't work. You know, it didn't work, meaning that when we sent customers, Barbers Use would use it as a client acquisition tool and it would be a janky experience for the user. So folks would come in and a barber would have them pay twice in the app and in the store again, because he didn't trust. He or she didn't trust the application. So there was stuff like that. There was double bookings. So even though we would say, hey, use this for your. Your. All your appointments, he would then. Or she would then just keep on taking appointments, appointments always from existing customers. So we realized that if we didn't have the entire back end that for the entire barbershop, it would. We would still run into these problems over and over again. So we had to make sure all the appointments and the barbershop went through this, you know, system. So that was the first kind of unlock of like, hey, we're not just building an app. We have to build a comprehensive system that manages everything through the barbershop.
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Podcast Host 2
So you, you targeted the barbershops?
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Gustav Magnar Witzøe
Yeah.
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Podcast Host 2
Did you give it out for free at first?
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Gustav Magnar Witzøe
Absolutely.
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So we were literally, he and I walk into every shop we could, like, near our office in New York or near where we live. Like, we were just like walking ourselves. Wait, talk to the owner, try to get them to use the app. Sometimes, you know, they didn't want to hear. Hear from us because they were like, you know, like, what are you selling? Kind of thing, especially in New York. And it. Sometimes we had to actually, like, book a service. Like, what's the cheapest service you got? Or a beard trim. All right, I'll pay you for that time. And then when you're in the chair, you can Talk to them and kind of get their attention. So we, it was really like hand to hand combat.
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Podcast Host 2
How many, how many did you give away for free first before you started?
- [14:44]
Gustav Magnar Witzøe
I mean, we didn't start charging for the software until like 20, 2018.
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Podcast Host 2
So how many years?
- [14:51]
Gustav Magnar Witzøe
Three years. Just. Yeah, just basically here. But we made money on the, like the, the transaction. So it's like, hey, we still have some revenue coming in, but you know, and first you just gotta, when you unproven, when it's a new motion, you got to give it away free to get product market fit.
- [15:12]
Podcast Host 1
So how did it. Most people probably think like, how do you guys make the money? So the transaction fee, there's a percentage that goes from it, then the subscription from the barbershops that use it. That's how you built the business model.
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Gustav Magnar Witzøe
Yeah, yeah, yeah.
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Podcast Host 2
How much is that? How much is the subscription right now? Like today?
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Gustav Magnar Witzøe
So it's A$100 or 250, depending on a month. Yeah, yeah. Depending on what feature set you have.
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It starts at 30 for individual. Starts at 30. Yeah.
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Podcast Host 1
So if he has his own salon, that's just like the. All right, so like now there's the business part of it. Like you're making the money, but you're giving away for free. But you're trying to get it on IO. It's iOS, you said.
- [15:51]
Gustav Magnar Witzøe
Yeah.
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Podcast Host 1
So you know that Apple's got coming for that 30%. How, how, how are you guys envisioning this and you're balancing it to say, all right, we need to make revenue. We're giving the product waiver free. Yes, we're making some from the transactions, but we need to keep the business alive.
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Gustav Magnar Witzøe
Well, you know, that's where, when you're that early, before you're like making meaningful revenue, if you're able to raise money, that kind of, that capital infusion is what, what keeps the lights on. And, and we were fortunate to be able to raise like some angel rounds from, from a network of people who we knew not, not big checks, but you know, from anywhere from like 2030,000 up to 100. So that, that was our first capital that we were able to raise and that sustained us over the first, know, two or three years. Just these, these angel checks that, that we were getting from, from people we knew. And because the revenue wasn't. We were definitely not making enough revenue to like support the business.
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Podcast Host 1
Was that, was that a space that y' all were familiar with? Because angel invest, I mean, it's not common to a lot of people.
- [16:50]
Gustav Magnar Witzøe
In our community, it's, it's a, a network. You know, one of the, the guys that gave us a, a, a big, you know, sign of approval early on was Richard Lo. He invested money when we didn't have anything, because what we had some traction, but not a lot of traction compared to today, but with Venture, you know, and the way we did it, because we didn't have access to these traditional networks, we used to just build something, get a little traction. Look what we built, Give us some, like, go out to our network, get some more traction, go out to the network again. Because, you know, back then it was very, it was very difficult to raise, you know, money. Like for over four years, it was just this piecemeal type of thing. We went through Y Combinator, which is a big inflection point in 2016. So we're able to raise some money out of that. But we were very fortunate because a lot of folks back then didn't, didn't make it. But because of our network, because of our pedigrees, because of the hustle mentality, we were able to kind of just raise some money.
- [17:53]
Podcast Host 2
So at what point do you start, like the pathway that being valued at $750 million. Right. That comes from. You obviously had multiple rounds of being, raising money. Right. And then you have revenue coming in as well. So when does it start becoming, like, profitable as far as. Okay, this is now a real business that we're running full time.
- [18:15]
Gustav Magnar Witzøe
Yeah.
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Say around the time we raised our Series a, which was 2019. That was the first institutional money. So. So meaning like a big, like, firm that, that will give you, you know, one check that would be enough to sustain you to get to the next.
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Podcast Host 2
How much was that?
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Gustav Magnar Witzøe
And that was for 8 million.
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8 million.
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That was the most money we ever had at once. And the first time we ever had enough to not be worried about fundraising.
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Podcast Host 2
When what, so what made them value the company enough to raise to give you a check for $8 million? Yeah, future, future valuations based off of revenue models.
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Gustav Magnar Witzøe
Like, what was the A Series A? You know, typically at that point they want to see signs of like, consistency. So like a consistent go to market motion that you, you're making what's called arpu, like average revenue per user. That is, it was consistent. So they can kind of see a pathway of like, okay, if they can get to this, we can, we can see how they can get to that, you know, a bigger level. Typically back then it was like if you can basically a million dollars in annual recurring revenue Used to be the kind of milestone when you, when you were about ready for Series A. And that's where we were at that time. I think now that Goalpost has moved from what I've heard for early stage founders. But, but back in 2019, that, that was, that was it. So we were doing a million roughly in ARR. We had, you know, a consistent sales process, you know, that you could see how our ARPU would grow over time as the shops were coming on the squire. All of that was evidence for an investor to see, okay, if they can do this, I can see how they could get to, you know, 10 million, 50 million, 100 million. Because they have like a process that's repeatable. That makes sense.
- [19:55]
Podcast Host 1
How was the retention rate for you guys early stage into the series there?
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Gustav Magnar Witzøe
How was our retention then? It's a lot better now.
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Yeah, we love it. Even. So, even, even, even that fundraise was difficult. Like, I just think back, like it was a fundraise from, from hell. Like I think we had about 60 meetings and got like one term sheet, like one offer, you know, and based on the numbers, I mean we should have had at least four or five in my view. So. So it was not an easy process. With all the credentials, with all the backing of Y Combinator, we went through a Y Commodore Series A program and we still, it was still difficult.
- [20:39]
Podcast Host 2
So okay, how did you know the process of actually even going through to try to get venture capital money? Did you have a mentor that was like ushering you through these different meetings or you just cold calling different firms?
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Gustav Magnar Witzøe
Yeah, so as Dave mentioned, we did y Combinator in 2016. So when we did that, we moved to the Bay Area. We moved the entire company kind of there. And we went through that process, did that saying Fast forward to 2019. At the time Y Combinator had a Series A program.
- [21:11]
Podcast Host 2
Can you explain Y Combinator for people that, people that may not be familiar.
- [21:14]
Gustav Magnar Witzøe
Yeah, so it's what I would call like the preeminent accelerator program for early stage startups, you know, based, based in Silicon Valley. Some of the people who are affiliated with theirs are essentially like the highest echelon of tech. For example, like Sam Altman was there when we were there. So you know, we got, we got to know him pretty well. Michael Siebel is a mentor of ours and you know, used to run, run the program one co founders of Twitch, you know, pretty much they, they are like the biggest name in tech for early stage companies. And so when you have that stamp of approval, it's equivalent to, like, going to Harvard or Stanford or something for. In the tech world. So it was a big deal when we did it. And then 2019, at the time, they had a Series A program. So for the companies that went through the core program that they thought were, like, ready for Series A, you could kind of apply and then redo it before Series A. So they would help us, like, set up investor meetings, you know, connect us with the right people, help us with our pitch. So we had about as much help and support as any company could have in raising a Series A. And to Dave's point, you know, we still had, you know, 60 meetings of different VC funds and 59 rejections, and we ended up getting one. And that's what allowed us to get to the next level.
- [22:40]
Right, but all you need is one. That's it. All you need is one.
- [22:44]
Podcast Host 1
What was that process like? We talked to a lot of people who've created businesses and founders. That moment when you take on money, right before, it was just you guys and you got a cto and now you have investors that you have to answer to and, you know, make sure that they're on board with what's going on. What was that process like for y'?
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Gustav Magnar Witzøe
All?
- [23:04]
Podcast Host 1
Was that an adjustment phase?
- [23:06]
Gustav Magnar Witzøe
For sure, for sure. It was the first time. So when. When you get in an institutional fund fund that invests, usually they want a board seat. So that was the first time that we, you know, had an actual investor on our board and had to start being more formal in terms of having, like, board meetings and reporting and all that stuff. So at the time, it was a bit stressful, if I'm honest, and it was a change, but in retrospect, it definitely made us mature as a company and mature as founders. So it was a healthy thing for the company. But it's increased scrutiny. Like, now you're literally accountable, responsible. Every quarter, you have to report how you're doing and someone who's kind of, in a sense, a little bit over you because they, you know, they. They're. The board is like, saying, you know, giving you feedback and. And really pushing you to go further. So, yeah, it was a big change.
- [24:00]
And. And the best board members, you know, I think are super helpful because they can use their experience as an operator and. Or their experience from other boards that they sit on. So. So, you know, sometimes you don't agree with. With what they are saying in the present moment, but, you know, there's been times, like six months, a year later, like, hey, no, maybe it made Sense, but I didn't see it because you haven't experienced that or you haven't lived through that.
- [24:34]
Podcast Host 2
So what, what mistakes did you make or what lessons did you learn as far as in pitching your company to VC firms that if you did it now, you might do differently?
- [24:50]
Gustav Magnar Witzøe
So I think what separated in the early days and we really struggled with getting them excited about the opportunity and later on when we got better at it, is the size of how big it can get. I think particularly a lot of founders from our communities, we tend to be like, very practical and like, we want to paint a vision that we think we can really achieve. But like, the ethos of like, particularly like Silicon Valley is like, you have to go big, you have to have the biggest possible vision imaginable and sell that because that's what gets people excited. You know, they get excited about, you know, how can this company be $1 billion company or $10 billion company or $100 billion company? So in the early days, like it was, it was hard for us to like, make our narrative shape our narrative to fit something so big. Over time, we started getting better at it. And, and over time, the more, you know, data, the more that we learned about our business, we started being able to see a pathway like, okay, this is how we get to 100 million in revenue. This is how we get to, you know, a billion plus valuation. And then if, if you believe it, they can believe it. But if you can't even see it, the investor's never going to see it either.
- [26:00]
Podcast Host 1
Is that the, the goal? Like, did you guys sit down one day, obviously, as the vision becomes clear, and say, yeah, we're going to be a unicorn like this. We have the potential to do it.
- [26:09]
Gustav Magnar Witzøe
Believed it, I mean, but it's communicating it. And Silicon Valley, it overemphasizes the outliers. You know, like the whole business model, the whole VC model is outliers. They want the folks that like the 0.1 of 1% because that can return the fun and you know, if you invest. So the math is the math, they don't. Out of 10 portfolio companies, one they hope one is going to be that 100x return and 100x return will pay out the payback, the fund and make the individual partner very rich. So you have to understand that. So if you don't, if you don't like pitch 100x type of opportunity, then it just doesn't excite them as much.
- [26:54]
Podcast Host 1
How does it look for forward revenue for you guys in terms of valuation? Like, what's that for multiple? Is it like a 4, 5, 10?
- [27:02]
Gustav Magnar Witzøe
It honestly, it varies and there's so many factors, like macroeconomic factors. Yeah, so the last fundraiser that we did was in 2021, and that was a very different climate. Interest rates were super low. It was like what they call, like the, you know, zerp era, where the interest rates were, you know, sent, you know, almost zero. So as a result, like, there's an inverse relation on. On multiples. So multiples were just much higher across the board for all companies. And, you know, that, that gives and takes and that changes the economy. So our focus is always on building a really great business. If you build a great business that fundamentally is strong, has great unit economics and a pathway to, like, being really big regardless of the, of the economic climate, like, you're gonna, you're gonna be successful.
- [27:45]
Podcast Host 1
That was one of those things. And Dave, I'll let you finish. It was like, if you create a business, make sure you have these components, right? So make sure you have the tech component, consumer, like, all those components as you're doing it. Are you checking off the list, like, oh, we have all those things?
- [27:59]
Gustav Magnar Witzøe
Yeah, I mean, yeah, I think so. And I think, you know, the more we learn about our business and, you know, the more mature we get, like, we see, like, okay, this is fundamentally, this is just a really solid, strong business that's going to endure. And the great thing about. About our customers is that, like, people keep getting haircuts. It's very resilient. You know, if there's an economic downturn, actually, people tend to get more haircuts because it's one of those luxuries you can afford even if you're not making as much money. So I think we're really well positioned to continue to thrive, like, kind of regardless of what happens in the economy.
- [28:33]
Yeah, I want to.
- [28:34]
Podcast Host 1
So.
- [28:34]
Gustav Magnar Witzøe
So a couple of things, and we're seeing that I was at a dinner last, last night and a seed early stage, and they're raising 200x revenue, these AI companies. So it's just, it just shifts with the tide, you know, so. So it's still there if you're the hot. The hot company, a hot industry at that time, and it's competition, people pay, whatever, irrational. So. So that, that's one thing. And the second thing I, I want to go back to is like, you know, paying division a lot of folks. You know, because we're two black founders, though, we're just focusing on. On black barbershops. And, you know, we made it really Clear that we were not. In fact, in our early pitch decks, there was no mention of. Everything was like these hipster type barbershops. So people can relate to. Because most of the investors that, that you were, you know, meeting were not of color. So it had, we had to make sure it resonated with them and those little social cues that you pick up on that you need to kind of incorporate this story to make it seem like, hey. And then still some investors said, are you guys still targeting black barbershops? When, like, it just didn't make any sense to me. And you know, I get it, but like, you know, we made it really clear that we were going after the entire market, not just a slither of the market.
- [30:04]
Podcast Host 2
What's the percentage of barbershops that you think you have that are not black?
- [30:09]
Gustav Magnar Witzøe
I mean, I think it, it probably matches the population overall. So. So probably, you know, 80%. Yeah.
- [30:18]
Podcast Host 2
So marketing to barbershops, right? Are you marketing at the beginning? You were the face, you were going in hand in hand. So were you doing that with white barbershops also?
- [30:32]
Gustav Magnar Witzøe
Absolutely.
- [30:34]
Podcast Host 2
How did that work out?
- [30:36]
Gustav Magnar Witzøe
So funny enough, when we were first kind of thinking through how we're going to do this, we had a bias against ourselves. We thought we probably couldn't go in there and like, you know, resonate with these like, non black barbershops. So we ended up hiring a friend of ours who's actually still with the company, who's white, and like his job was going to be kind of biz dev going to the shops. So he was doing that. We were still doing it. And over time, based on experience, we started finding out that like, actually we were better even at the white shops selling them than he was. And some of the bias that we had, you know, the preconceived notion that we had that these shop owners, because we didn't look like them, weren't going to want to hear us out, actually was just totally not true. And then, you know, and it turns out, you know, the white guy who we hired wasn't good at that. He ended up being really good at other things. So he moved into like product on the product side. So you just never, you never know. And sometimes there's a tendency to sell yourself short because, you know, you think somebody's going to think something about you. But if you have a great product and you go there and you meet them eye to eye, you know, we found that for the most part, customers are willing to hear you out, you know, regardless of what you look like.
- [31:48]
Yeah. Are you solving the hair on fire problem? You know, and if you're solving that problem, I don't care. Whatever you are, I think they gotta listen to you because you're addressing a real pain point in their lives.
- [32:00]
Podcast Host 1
All right, correct me if I'm wrong on these numbers. 32,000 barbershops.
- [32:04]
Gustav Magnar Witzøe
32, 32,000 barbershops yet.
- [32:07]
Barbers, barbers, 10 million clients last time I checked. Yeah, somewhere in that range.
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Gustav Magnar Witzøe
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Gustav Magnar Witzøe
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- [36:23]
Podcast Host 1
Like, this is cause. Like you're talking from 2016 to this point. How are we scaling year to year? Like, are you, like, what trends are you watching to say, all right, here's an opportunity, here's an opportunity. This is a demographic. This is. We haven't touched this place. How are y' all going about that? That's a lot Congrats.
- [36:40]
Gustav Magnar Witzøe
Thank you. Thank you, thank you, thank you. It's never enough though, you know, let's get to the next. So what we learned is a super was super important to scale, is that you really have to scale your team. So, you know, in the early stages, you know, it was us and then few other early employees. But as you get bigger, you really have to bring on folks who have the experience of kind of getting to the next level where you're trying to get. And over time, we built up a really incredible kind of bench of our executives. And that, that has helped, you know, helped tremendously. And in the early days, you do, you know, it's called doing things that don't scale. Like walking into the barbershop yourself and pitching them like, that's great, but like, you can't. That's not going to get you to where we are now. So over time you have to figure out how do you build like repeatable motions, repeatable processes, that's like scalable. And, you know, that's essentially, essentially what we've been able to do.
- [37:40]
Podcast Host 2
So as far as this number 750 million dollar valuation, what can you break that down as far as, like, what does that actually mean in layman terms for somebody that just, they hear that.
- [37:52]
Gustav Magnar Witzøe
But it's like that is the enterprise value or the kind of like market cap of your business. So if somebody were to purchase the building business, they would have to pay $750 million for entire business. And if somebody is investing, you know, based on the dollar amount they invest, that's a percentage amount of the 750 million.
- [38:17]
Podcast Host 2
And that 750 million would come from investors valuing the company at that. As far as, okay, I'm gonna put this amount of money in per percentage, and then that equals the 750. Or does that come from revenue that is projected to be like, okay, 10x revenue? Like would it.
- [38:32]
Gustav Magnar Witzøe
I mean, there's some formula that they create, but that's essentially the former is like, hey, look, you know, for 1%, it's 7.5 million. So you times that by 10, if you want 10, you got to put up 75 million. So that's kind of how the math works. And it's just supply and demand. You know, if you have a great product, if you have some proprietary technology that they think might, you know, transform the world, they're going to, they're going to pay whatever they're going to pay for. It's just like, you know, what the company, what people think the company is worth.
- [39:10]
Podcast Host 1
How does the ownership table look? Right, Because a lot of times startups, you know, we don't have money, right. We haven't gotten venture capital. And so a lot of times people will offer equity, right, like as an exchange or collateral to say, hey, I need you, part of the team. How does ownership look then? How does it look now? Obviously you've got a board, you got investors. Are you guys majority owners still? Like, how does this work?
- [39:36]
Gustav Magnar Witzøe
Yeah. So as far as the equity, like all of our employees have some degree of equity. We think that's important. We think it's important one, to align incentives and it's also important as a wealth building mechanism. Our company is, I don't know for sure, but I would say it's probably maybe the most diverse or one of the most diverse of a company, like at our scale in terms of like the breakdown of our employees. So we think it's, you know, it's really important for them to have skin in the game. And like when we do have the big exit, you know, hopefully we'll be creating a lot of millionaires and creating a lot of wealth in the community. So, so, so that, so that's important. The second was the second part of your question.
- [40:13]
Ownership, I think.
- [40:14]
Oh yeah, yeah, the ownership, you get diluted. I mean it's natural. You know, it's the, the piece of, gets, gets bigger. But your, you know, your percentage of the pie goes down over, over time. So, you know, unfortunately, no, I wouldn't say we have, we have majority, but you know, that's just kind of the name of the game.
- [40:32]
Yeah, but you know, control I think is also super important. Like, you know, you know, when you go through this fundraising, take on more, more investors, you know, you lose control. But we still like a board can't get rid of us if they, if they wanted to because of the, the structure we have in place. And that's equally important is control.
- [40:56]
Podcast Host 2
So the decision making process you guys still make are able to make decisions without having to have input or.
- [41:02]
Gustav Magnar Witzøe
No, you get it, you get input and, and you know, you take, you know, the feedback. But, but to Dave's point, as, as you know, founders are raising and bringing on investors, you know, is super important to, to understand like the control provisions and control mechanisms with respect to like majority of equity and, but also board dynamics. So that's a lot of times people aren't thinking about that and they raise money, they get these boards and the next thing you know they have a bad quarter and then the board's like.
- [41:33]
Podcast Host 2
All right, so can you explain that? Is there a set term that has to be in the contract to be like, okay, you know, I'm, even though I'm not a majority shareholder, I still cannot be removed from board.
- [41:43]
Gustav Magnar Witzøe
I think it's pretty much just a couple of way. There's like Mark Zuckerberg has this, we didn't, we don't have this. But he has super majority voting. So essentially one of his shares equal like 10 or whatever shares that he has and ultimately that super rare way he has at a public stage, he can do whatever he wants and they just literally can't get rid of him. And you know, you have to think about like, especially in the public markets, investors are quarter, quarter, very short term. You guys, you guys know this. But you know, as a founder led, you know, you're thinking three, four quarters ahead. So you might, you know, max out capex for a couple of quarters. But your vision is, you know, this will ultimately pan out and if you're looking at it from a quarter over quarter basis, you're not going to make those long term decisions. So, so super majority is one and then the second is board seats. So, so if you have the board, you know, controls the company and if you have, if your investors have more board seats than you have, they can just vote you out, you know, but in our scenario we have the same amount of board seats as investors. So, so in any case it's going to be a kind of like a deadlock situation.
- [43:06]
Podcast Host 1
Okay, so you mentioned the exit and I think a lot of people get this misconstrued, especially if there's no education around it. Talk about the vision for that is, is there a number that we have in mind? And it's like, all right, and then obviously there's a board approval. Explain the process. Because we've seen people sell their businesses and a lot of times they're like, oh, they sold out the business, they sell outs. They don't understand the functionality behind creating a business, getting capital and then saying, all right, we're going to exit potentially to start something new. Doesn't happen too frequently. What, is there a number that we got in mind? Like what's the vision for?
- [43:45]
Gustav Magnar Witzøe
I think, I think we just want to build a great business. I think our metrics is like, hey, the best businesses are bought, not sold. And if you are, you know, continue to add value, continue to build, continue to, you know, drive revenues up until the right, like businesses will, will bigger businesses or you know, public markets will, will come calling. So I guess you know, that's kind of what we're focusing on right now. And you know, when it gets there. But, but like, to answer you, to speak to your first point, Troy, is like, capital has to be returned at some point. You know, like, you can't just do this if you take capital as investors, you got to return the capital some way somehow at some point. So. So you can't have these evergreen situations where you just build and. Because, you know, like, there needs to be exit at some point.
- [44:41]
Podcast Host 1
Gotta pay that.
- [44:44]
Podcast Host 2
So how are you marketing this? Like, I know you did the barbershop Expo with Jay. Shout out to him. That's a way to get barbers on board. I'm assuming you're running ads like, what. What is the main source of actually creating awareness to make sure that the message is being spread to all barbershops in a diverse manner.
- [45:06]
Gustav Magnar Witzøe
Yeah, so those, those are two, two big ways. We're really big on events, so we do a lot of trade shows. We do big trade shows like CT Barber Expo, which, which we, you know, I know you, you attended, which was super dope. But then we do a lot of smaller events also. We do like local community events. So we'll partner with like a, a barbershop that's got like a good reputation in a certain, a certain city or neighborhood and then invite all the other barbershops around and host things like that. And part of it is marketing, but part of it is also just kind of like being there in the community, showing up, you know, where our customers are and meeting them where they are. We do a lot of, you know, advertisements, you know, online, digitally. Our customers are very active on social, particularly on like Instagram and then now like TikTok as well. So, you know, we try to be like, you know, where they are. And then a lot of it is honestly word of mouth. Like Barbara Barbers are naturally very, very communal type of businesses. So like in every neighborhood, each shop knows all the shops around there. It's like hyper local. So we, we try to incentivize, you know, our customers to like share, squire, refer, refer other shops that they know and like, it kind of spreads that way as well.
- [46:21]
And also we have a, a sales team out in Austin, Texas and they, they reach out to shops on a daily basis. They monitor cold call, cold call, but more so like warm, warm leads. Essentially. You know, they know where they are. They might meet them on the show, they might comment on that page. But they also always like sourcing opportunities. But you know, I think the community There in that Austin office is incredible. Everybody sits together. I think there's value now in office environments because I know a lot of people don't like it, but, you know, we see the value of people coming to get. Coming to. To. To work every day, being amongst people. You're saying the same age as you, sharing stories, learning from each other in real time. I, I think is very impactful and we're seeing it with the culture and also like the wins and the, the scale that we are achieving in that in Austin office, you.
- [47:29]
Podcast Host 1
You guys created something when it needed to be created. Right? So I remember having Squire early on and I'm like in a barbershop. My barber didn't have it.
- [47:40]
Gustav Magnar Witzøe
Really?
- [47:40]
Podcast Host 1
Yeah, yeah, yeah. He was in a Bronx Jamaican. You know, we stubborn, but that was a time when you guys were the only person doing it. And now 2025, there are people who have apps that are similar. I wonder at this point, how do you guys look at the landscape from a competitive standpoint? What keeps you ahead? Like, what's the technology that gives you the moat to keep squire at that valuation, to keep growing?
- [48:07]
Gustav Magnar Witzøe
Yeah, no, that's, that's a good point. At the time when we started, there were definitely like fewer. Fewer people trying to go after this market. And then, you know, as we've been more successful people see it, you know, so. So they kind of are trying to get in, but most of the competitive landscape is still software companies that are really focused on salons, spas, yoga studios, everything. And then they also try to do barbers, like on the side, but it's not really their focus. So part of our differentiation is just like, we're so laser focused on building the best products specifically for this, this user base. And that allows us to go deeper and just build things that like a lot of these other companies, many of them are even bigger than us, aren't willing to do. But then now what we're really excited about is just this AI lens and really having like, an AI first approach. What we see in the landscape is that there's a lot of attention and a lot of investment going into building AI solutions for, like, at the enterprise level, for, like, big companies and then at the consumer level, but for the small business level, like, there's really not a lot of focus on bringing this, like, powerful technology, like, to these small business entrepreneurs. And, like, that's where we step in. Like, we think that we're really well positioned to. To do that, and that's what we're doing.
- [49:26]
Podcast Host 2
What was the Most recent raise, it was you. You had a d. Yes.
- [49:29]
Gustav Magnar Witzøe
Yeah, 2021.
- [49:30]
Podcast Host 2
Okay, so that was Tiger Tiger Global. Yeah, so walk us through that. That one. Like, what was the difference between that Series D and the series A? And like, what did you know, how did, how did that look?
- [49:42]
Gustav Magnar Witzøe
So, so we raised our Series a. May of 2019. We raised our B, Series C and D over the next 14 months. So in a year we raised over $100 million. Over a year? Over a year.
- [50:03]
Podcast Host 1
Technology was that right?
- [50:10]
Gustav Magnar Witzøe
So over a year we raised about 100 million. And, and what happened was like we got that first check and we executed, you know, we went, you know, fast. We started gaining a lot of customers. And the folks that, you know, passed on the series A came back and led the B six months later. And then nine months later we raised the C. And that was on the back of COVID So when Covid went, when Covid kind of was like a inflection point for us because we were the first company to, you know, wave subscription fees. So we didn't charge our customers. Then we built things, tools that allowed our barbershops to operate during that time. So virtual waiting room because everybody was trying to do social distances, Covid forms because people need to check they haven't been to area in, in two weeks or whatever the case may be, you know, access to, you know, low access to, you know, the various government programs. So streamlining the operations to get the required documentation to get those, those, those the federal government help. So in a matter of six weeks, we launched like four or five products. And then we, when everything opened back up like we had a boom effect because we were community first. Our message was clear that we're not going to charge you subscriptions. And also we built all this product that made these, the lives of our customers better. So coming out of that best month sales because everybody had to use some form of technology now because of the regulations. And then we raised in September, raised our series c and then 10 months later we raised our series D. And what was coming in is like we weren't pitching. People were just coming to you, coming to us. So it was like a 180 from our series A where we had to go out and do a lot of the pitching to like VCs pitching us now.
- [52:04]
Podcast Host 2
So when you get the infusion of 100 million in a very short period of time, what do you, what'd you do with the hundred million dollars?
- [52:10]
Gustav Magnar Witzøe
We held on to it, you know, like, like, you know, like we always remember like how Difficult. It was so, so I guess, you know, a lot of folks, they go out and they spend, they do all this stuff. I think we were very careful because we were of the, of the school of thought that we didn't want to go out and have to raise again if we wanted on under because we, we've been in both sides of the spectrum where we had to really make it really difficult to us to raise. And then when it became really easy, we said, hey, we just want it easy. You know, like, we just want to save this money, build a business march towards profitability. And if we want to raise, we will.
- [52:53]
Podcast Host 2
But like, what does that look like? All right. For the average person, right? They think you get a hundred million dollars and like it's one thing to get a hundred million dollars, but how do you deploy that properly? Like, because that's deploying $100 million is, is not as easy as somebody would think. Right. So like, how do you know this is how much we're going to save to have reserve? This is how much we're going to put in the market and this is how much we're going to like. Is there a team, is there a board? The people that give you the money have stipulations on what to do with the money. Like kind of walk us through that whole process.
- [53:26]
Gustav Magnar Witzøe
Yeah, so they give you the money. You know, the money is in the bank account of, of the business. So you kind of use it as you see fit. But what they do is they're going to hold you accountable for kind of the growth and the performance, the performance of, of of the business. So that's, you know, what you have to do is like really be measured about how you're spending it and what it allows you to do is take more risks. So you can try to do things like that you couldn't have afforded to do before to fuel, fuel that growth. Some things will work, some things won't work. And that's kind of the nature of an early stage startup. So you know, investors are usually pretty forgiving of that. But ultimately like when you raise a big amount, they're investing that based on where they think you're going to get to. At a certain point that's going to return their money and you're going to be valued at more than when they invested. So if you're not hitting those milestones and you're not kind of growing into that, eventually they will start being like, okay, like what's up? This company's not performing well.
- [54:24]
Podcast Host 1
Is there a time threshold that they put on it. Right. Like if they, if they invest in it, is it have to be?
- [54:29]
Gustav Magnar Witzøe
I mean, I think they want to see a growth rate. A growth rate. And rule of third thumb is for late stage, probably like at least 30% year over year.
- [54:40]
Podcast Host 2
Growth year over year.
- [54:41]
Gustav Magnar Witzøe
Yeah, yeah. As far as revenues, because revenues, you know, and they want to see revenue going up and cash burn going down. So you're growing, if you're growing like 100%, it's a different. But if you're growing like 30%, they want to see you growing 30% but getting more efficient at the same time.
- [55:02]
Podcast Host 1
A thing about y' all and obviously the 32,000 barbers, I wanted to learn about the global expansion. Right. Like we travel a lot.
- [55:11]
Gustav Magnar Witzøe
Yeah.
- [55:11]
Podcast Host 1
We were just in Dubai. I had to figure out to get barbers for the wedding. We're in Africa. How does this work? Are you guys, do you guys have a global imprint and is that on the vision board to expand into the continent and abroad?
- [55:26]
Gustav Magnar Witzøe
Yeah, yeah. So right now we are in other countries. We're in US obviously, uk, Canada, So kind of English speaking for now. I totally agree with you. I think that the global opportunity is crazy because like there's barbers everywhere, people getting haircuts everywhere and the businesses don't vary that much, but there's always like the cultural nuances and things that you need to think about. So long story short, like, I do think eventually there's a place for us to be. You know, I would love to be on the continent. Like, you know, I spent some, some time in Kenya last year and just there were so many barbershops there and like every, every time I'll go in they'd be like, yeah, when are you coming? So, but also, you know, it's, it's, it's not easy. Like it takes, you have to really do it right. And there's, it's. You get easy to kind of mess up in global expansion if you're not thoughtful about it. So it's not going to be in the near term probably. But eventually I see, I see us being like in way more countries than we're in now.
- [56:29]
Yeah. If you need a barber anywhere, just hit me. Like we have some London based barbers, you know, operate in Dubai, but they're from London because we operate in London. So, you know, everybody goes back from London to Dubai. So you ever in a city and don't have a barber just messes me.
- [56:48]
Podcast Host 1
And I'm sure they had Dave.
- [56:49]
Podcast Host 2
Yeah. Now I've been Pretty good at just referrals. That's one thing. Like, I feel like any city. I never had a problem finding a bar because I like the people that I know in the city. I just asked them, yeah, who, who's the best barber? Who do you recommend? And it's, it's never really failed me so far.
- [57:03]
Gustav Magnar Witzøe
Yeah, we're building, we're building something like that to, to help that from a digital perspective. You know, like, hey, we have a, a city pages where you can go in a city and then you can look at all the barbers and then we have the referrals on that. That's a product we launched last year and you can actually, it's a, you can actually connect with video of their work and it, and it's really, really cool to see the videos. And that's like a next level feature.
- [57:28]
Podcast Host 2
Yeah, because that would be good because, like, I mean, fortunately for us, we know a lot of people.
- [57:32]
Gustav Magnar Witzøe
Yeah.
- [57:32]
Podcast Host 2
But sometimes people, they might not know somebody. They might just be in Cleveland, Ohio for work and just randomly, like, they just need a barber. They don't know anybody in Cleveland. So that's like a good, yeah, good tool.
- [57:42]
Podcast Host 1
That's, that's that power of AI. You talked about launching AI in terms of customer service. When I heard you talk about Cash Burn, the first thing when I think AI is efficiency. So how, how else are you guys looking to incorporate it to become more efficient? Obviously, the revenue goes up, cash burn goes down.
- [57:59]
Gustav Magnar Witzøe
Yeah. So, so, so I think we, we launched, you know, a product called Cursa internally over the last 12 months. Our engineering efficiency, amongst other things, we hired, we got a new CPTO, a new VP of Engineering from, from Stripe, but our output is 94% more than last year.
- [58:20]
Damn.
- [58:22]
And, you know, because of that, because of all those that I mentioned, but AI plays a big part in that. In that.
- [58:29]
Podcast Host 2
So from that standpoint, how many employees do you have?
- [58:33]
Gustav Magnar Witzøe
Just a little over 200. Like around 200.
- [58:36]
Podcast Host 2
So do you see AI taking jobs from existing employees that you have to run more efficiently and at a lower cost point?
- [58:44]
Podcast Host 1
So he's tipped us off by his head shake.
- [58:46]
Gustav Magnar Witzøe
Yeah, we see that. We think we'll be able to do kind of more with the existing. So I don't think that we're like, okay, we're going to need to cut x percent, but with the 200 we have, we think we'll be able to actually, like, achieve a lot more. And then we'll, as we grow, we'll be able to probably hire fewer than we would have needed to hire like a couple years ago. Yeah.
- [59:07]
So I think about it like, you know, for 200 engineers, we probably get 300, 300 engineer output with AI, which is meaningful.
- [59:19]
Podcast Host 2
Okay, so any hair salons?
- [59:24]
Gustav Magnar Witzøe
We actually have a few. And they come on square organically and we have a handful in there. We talk to them and kind of learn about how it's working with them. Our focus is barbers. You know, right now like that, that's the focus. But you know, there's a lot of hair salons out there.
- [59:41]
Podcast Host 2
Probably more. More than barbershops?
- [59:43]
Gustav Magnar Witzøe
More than barbershops, yeah.
- [59:44]
Podcast Host 2
10. There's 10 more times 10.
- [59:46]
Gustav Magnar Witzøe
Yeah.
- [59:46]
So.
- [59:46]
Podcast Host 2
And they spend more money.
- [59:48]
Gustav Magnar Witzøe
They spend more money. They don't get the haircut as often, but when they do, they spend more.
- [59:52]
Yeah, yeah, yeah. And if you go like extensions, if you go like, you know, color.
- [59:57]
Yeah, it gets these braiders. Have y' all seen these braiders that have been popping up? They open 24, 7. Yeah, they're all over. I live in Harlem, there's like five on every block.
- [60:05]
Podcast Host 1
My sister in law was at once finished ahead two in the morning, three.
- [60:08]
Gustav Magnar Witzøe
It's an incredible business. I don't fully understand it, but it's amazing.
- [60:11]
Podcast Host 1
It's time consuming.
- [60:12]
Gustav Magnar Witzøe
Yeah, yeah, but I just saw something. They have like a. On like a Harvard robot.
- [60:21]
Podcast Host 1
Yeah, yo, I saw that.
- [60:23]
Gustav Magnar Witzøe
The person just starts it. They just start. Yeah, yeah.
- [60:26]
Podcast Host 1
To cut the time into like out like 20 minutes. Some.
- [60:29]
Podcast Sponsor Announcer
Some crazy.
- [60:30]
Podcast Host 2
Well, I saw the AI bar. You saw the AI thing.
- [60:32]
Gustav Magnar Witzøe
That's not real.
- [60:32]
Podcast Host 2
That's not real.
- [60:33]
Gustav Magnar Witzøe
Put your head in.
- [60:38]
Podcast Host 2
Well, but that. All right, that's not real. But do you think that that's going to come as far as having a AI barber, I mean, or a machine. A machine barber precision cut, maybe like.
- [60:49]
Gustav Magnar Witzøe
20, 25, 30 years maybe. But like the cost doesn't, like the investment is just not worth it at this point to do it. And it's like so nuanced. Like, you know, I think there's better uses of AI, like solving cancer thing that makes sense from a return, expect return process.
- [61:08]
Podcast Host 1
I think I know the answer to this, but I'm just gonna ask anyway. The cost of haircuts beneficial for you?
- [61:15]
Gustav Magnar Witzøe
They've gone up, right?
- [61:16]
Podcast Host 1
They're going up to standard inflation.
- [61:18]
Gustav Magnar Witzøe
You know, I saw something the other day.
- [61:21]
Podcast Host 1
What are your thoughts on it?
- [61:22]
Podcast Host 2
Right.
- [61:23]
Podcast Host 1
Like we come from an era was like it was $10 and if you gave 15, that was a tip. Recently we've seen numbers inflate, like you said but that helps business. No, Right. The higher the price the commission costs on your side.
- [61:36]
Gustav Magnar Witzøe
It helps, it helps our business. It helps the business of the barbers who are able to raise their prices and then keep their, their books full. So what I think of it, I think it's great. I think it's capitalism. It's, it's, it's the market, like for those who over overcharge and their prices go higher than their, the market of their consumers are willing to bear. Like they're going to have fewer bookings and they're going to have to calibrate real quick or they're not going to stay in business. So every, every people, everybody that, that, you know, like that complains about the prices. I'm like, the consumers ultimately have power and people are paying these prices. People are paying 50, 60, 70, $100 a cut. So that means that's, that, that's what the market is saying that the price should be. If it goes too high, maybe it'll come down. I don't know.
- [62:17]
But look, look at nikes. People charge 150 people still paying it. You think if they weren't paying and I would still charge that? No, they would cut their prices. But I think what, what I try to communicate when I'm talking to barbers about the prices in general, I said, hey, it's okay to increase your, your prices, but at the same time, are you increasing the experience? Because the experience should justify the prices. If you haven't, your clients wait, you know, 15, 30 minutes for a haircut and then that's not a good experience. Like why am I paying this? You know, and a lot of, a lot of folks, everybody can get it, do a decent haircut. You know, I've gotten a lot of haircuts all the time. And like a lot of barbers can, can get you there. What, what people understand and the ones that are very successful is the customer service. It's always on time. You get there 11 o', clock, you get in that chair 11 o', clock. And, and I think that is a difference in what people value nowadays, especially if you're charging those high dollar amounts. They just value their time.
- [63:23]
Podcast Host 2
What, how do you like delegate the who, who's making the decision or what area you guys are focusing on, or who, you know, who's where, what needs to be communicated as far as your leadership roles are concerned?
- [63:41]
Gustav Magnar Witzøe
Yeah. So it's funny, so early on when we first started, it was just like everybody's doing whatever, like everybody wears many hats and that works I think as the company gets bigger, more mature, you start bringing on these executives, there starts to be more of a need for, like, clearly, like, defined roles and whatnot. So, I mean, where it is now is that, you know, I'm the CEO, David's the president. You know, I have, like, kind of, like, typical CEO kind of, you know, role that most companies would have in terms of, you know, the C suite reporting and all that stuff. Dave is like, has some really, really dope initiatives that I actually think we should talk about, like the barber school and partnerships and. You want to talk about barber school?
- [64:25]
Yeah. Yeah. So. So. So Barber school is initiative that, you know, we're undertaking where, you know, we want to get. We want to get the. The. The barbers doing the right behaviors early on. So what we launch is Squire for Schools, which is essentially we give the software to barber schools for free, and it gets them indoctrinated in the right way to do business, right way to take appointments, right professionalism. Right. You know, just operational excellence from the beginning. So we partner with like, a hundred. 100. About 100 schools right now. And we see that program being like, you know, how we step into the future a bit.
- [65:09]
Podcast Host 1
We start from law and finance. We become successful entrepreneurs. How are you guys doing outside of business? Right, because we always talk about balance and imbalance, and it's subjective. How have y' all managed to navigate your newfound lives over the past five years? As opposed to where we were prior to this journey?
- [65:31]
Gustav Magnar Witzøe
Yeah, it's been. It's been a journey. It's been honestly the. The best experience that I could have ever wanted. Just going through this and going through the struggles and the triumphs and us being together throughout the whole process as co founders and during this, we both had children. I've had two kids. Dave has a child. I've gotten married. So our personal lives have also. There's been so much change over the last 10 years, and at some point, we were very broke in those early days. And you make a lot of sacrifices, and then when you start to do better, the situation changes and quality of life and lifestyle changes. So I think we. We've. We've really managed. There's really no work life balance when you're a founder. Like, it's just all life. It's all part of the same thing. Like, you're never really turning off, and it goes with you everywhere. And I think, you know, for me, I think it's, you know, it's important to have other outlets and to really be focused on like, you know, wellness, working out, like, trying to keep your energy level high because it's a marathon. This is hard. Like, it will. I've seen a lot of founders, like, crash out, burn out and like, you know, they've had to close their companies down and that's. Mentally, they just haven't been there. So. But I think we're doing, you know, doing well now. Yeah.
- [66:54]
Stress. Yeah. You know, but. But I think outlets, like, my outlet is like, music. You know, I love, I love music. And you know, you know, also, you know, we, we have a lounge in Harlem and, and a lounge in healthcare.
- [67:12]
Podcast Host 2
Talk about, talk about that.
- [67:14]
Gustav Magnar Witzøe
I mean, it's creative. You know, I think, I think the great thing about Saint is like, it's a place where the community could, could like, gather. I think there was a void in the market for, for that, avoid that. You know, folks of color, ages like 25 to 45 could come in Manhattan, feel welcome. You know, we have a great operator, James Jones, who, you know, is a friend of mine for 20, 20, 20 years, and he's been doing this. So. Yeah, I mean, yeah, it just was an opportunity.
- [67:47]
Podcast Host 2
And then, so you guys have mentioned, like, as far as exit. Right? So you're planning for the exit, right? Is that safe to say?
- [67:55]
Gustav Magnar Witzøe
Yeah, I mean, you're always planning. So we're in building the company and trying to get it as big as possible. Like that in a sense is planned for the exit because, you know, that's going to help the ultimate exit. But we're not actively, like, in a process.
- [68:06]
Podcast Host 2
But even that, because it's like, even how a company is built, like, you have to keep in mind to build a company to exit. Right. Like, and that's something that people might not be fully aware of also. So like, talk about that as far as, like, having that end in mind. Even when building a company and having it structured so it's like eventually gets to that point, it's already. You don't have to like, rework things and try to, you know, figure it out on the fly.
- [68:36]
Gustav Magnar Witzøe
Yeah. If you, if you're raising money from professional investors, they're. They're investing with the expectation there's going to be a liquidation, a liquidity event, an exit event at some time. If you have a small business and, and, and it's like a lifestyle business and you haven't taken on, you know, in, in money from professional investors, like, that's different. You could just run that forever. And that's just your lifestyle. It just kicks off cash. It provides income for you and that's cool, but that's a different kind of business. What we have is a venture backed, you know, business upscale. So the expectation is there will be some type of event and that could be an IPO or that could be getting acquired. That's really only two, two ways. And so those are, you know, just like any other company like us, like those would be the two options to get liquidity.
- [69:25]
Podcast Host 1
Yeah, there's, there's not many. I'm glad we spoke about Y Combinator. We had, did an episode a couple years ago to speak about it. But if there's like a young group of guys or girls that are trying to get to Y Combinator, have their startup be, have more eyeballs on it. What are the type of qualities that a founder should have prior to going there?
- [69:48]
Gustav Magnar Witzøe
I mean I think the, the, the, the, the fact, the quality traits are like, I think the number one trait is resilience because it's, it's not going to be easy. Like you don't have to be the smartest, you just have to be the folk that won't like it's a war attrition that won't give up. I think that's the really. There's folks, there's folks that I see and I'm like that person is going to make it because of the tenacity and the, the, the say hey, I'm make it somehow. And also what's really telling if you give somebody advice right. On how to do something and they, they need to do it themselves to find out early on, like later on, like hey, you live, you, you have experts or you have experiences. But early on, like the best entrepreneurs I met, even if you gave them the advice, they have to see it through themselves to understand it from their perspective and you learn a lesson. But I, I think the, the number one quality is the determination and kind of grit.
- [70:53]
Podcast Host 1
Yeah, yeah. When you saw Sam, you saw that Sam Altman.
- [70:58]
Gustav Magnar Witzøe
Oh yeah.
- [70:59]
Oh yeah, yeah, for sure. We didn't know it was going to be at the level just now.
- [71:04]
Yeah. But Sam is a cool dude. Like he gets a lot of, you know, flack sometimes. But you know, he's the same person that he was nine, 10 years ago.
- [71:15]
Podcast Host 1
Very important guy.
- [71:16]
Gustav Magnar Witzøe
He was, he was, he had a Simpsons like he was thinking about universal basic income UBI 10 years ago and AI and I. Yeah.
- [71:28]
Podcast Host 2
So what's next for you guys and where could the people, you know, find you? Like talk about what's next as far as initiatives and then website, social media, and all that stuff.
- [71:37]
Gustav Magnar Witzøe
Yeah, I mean, what's next? Just doubling down on this AI and really trying to incorporate it more in the business as well as, you know, continue to add value for our customers.
- [71:49]
Yeah, you can go to get Squire AI. It's got the latest on that. Yeah.
- [71:54]
Podcast Host 2
And the AI, like you said, is calling. Is it more than that or is that the main focus?
- [72:00]
Gustav Magnar Witzøe
Oh, it's more, yeah, that's just one.
- [72:02]
Podcast Host 2
What's the other feature?
- [72:03]
Gustav Magnar Witzøe
So, so we're, we're essentially we're embedding like this AI layer throughout the entire backend platform. So it's really going to be touch everything and it's designed to make the Barbers lives more efficient, help them make more money. The other way that we already have incorporated is through our marketing feature which is called Engage, which allows the Barbers and the Barbershop owners to send messages to their client base like email, text messages, push notification. So we've supercharged that with AI now. So now they can just type in what they want to achieve. Like I want to get my customers to come in for a holiday cut and it'll literally create the campaign and then tell them who to send it to and then send it out. So it's like their personal like business partner that just like executes on things for them. So we're in the early, early phases. Those are the first two, two things. But we have so much more coming. Yeah.
- [72:57]
Podcast Host 2
Well, appreciate you guys man. Thank you, thank you for your time and yeah man, look forward to it for sure.
- [73:04]
Podcast Host 1
Appreciate y' all man. Thank y' all for being disruptive.
- [73:09]
Podcast Host 2
All right, y', all, thank you for rocking with us. We'll see you next week. Peace earners.
- [73:13]
Podcast Sponsor Announcer
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Podcast Host 1
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Gustav Magnar Witzøe
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Gustav Magnar Witzøe
Every week in the U.S. approximately 200.
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Gustav Magnar Witzøe
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Gustav Magnar Witzøe
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Gustav Magnar Witzøe
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