Oct 29, 2021

AARON KOTOWSKI FOR FORBES Songe LaRon and Dave Salvant left their desks behind to create booking software for the nation’s 109,000 barbershops. Today, their fast-growing startup, Squire Technologies, is valued at some 60 times this year’s estimated sales and is featured on this year’s Forbes Next Billion-Dollar Startups. W hen Songe LaRon and Dave Salvant started Squire Technologies in 2015, they paid a graffiti artist a few hundred bucks to scrawl “Download Squire” on the streets of Manhattan. It was a low-cost bit of guerilla marketing for their struggling barber shop booking app. They’d signed up around 50 barbers at eight or nine shops by going store-to-store talking with owners, but with so few customers downloading the app it was largely useless. Existing clientele continued to make appointments by phone, sometimes causing double-booking. Worse, the barbers complained that Squire’s app wasn’t helping them run their stores. Neither LaRon, a 37-year-old corporate lawyer, nor Salvant, who is 36 and worked in finance, had worked in a barbershop before — or run a small business of any sort. So, in 2016, they made a gutsy move: They spent $20,000 of the $60,000 of cash they had on hand to buy out the lease on an ailing barbershop in Manhattan’s Chelsea Market. “That gave us a test kitchen to develop the software,” recalls Salvant, the company’s president. “This was a huge gamble.” They didn’t cut hair (which requires a license in New York State), but they did pretty much everything else: Ran the front desk, swept hair off the floor, ordered supplies, talked to customers. It was a crash course in how barbershops really operate. From the outside, a barbershop looks simple: Book an appointment, get a cut, pay with cash or a credit card. But behind the scenes are the complexities of a business in which barbers may rent chairs from the shop or receive different cuts of revenue, tips may be in cash or credit, and each barber may set their own schedule and their own prices. LaRon and Salvant realized they had to rework Squire from a glorified appointment app to something that could handle all the nitty-gritty headaches of running a very particular type of small business. “Being an entrepreneur and being an artist is similar. You are creating something that doesn’t exist and bringing it into the world.” Today, New York City-based Squire sells its software and services to more than 2,800 barbershops in the United States, Canada and the U.K. Each pay a monthly subscription (ranging from $100 to $250 per month per location), plus additional transaction fees. Squire’s software (which shops typically rebrand with their own logo) offers not only basic booking and payment services, but it can help divvy up the receipts among a shop’s many barbers. It can automatically manage the payouts of tips, as well as handle payments for chair rentals. The startup is now exploring expanding into financial services, offering debit cards (in partnership with startup Bond Financial Technologies), and testing distribution of supplies like razor blades and ammonia bottles. The firm brought in some $4 million in revenue last year despite waiving subscription fees during the pandemic when nearly all barbershops were shuttered. It’s on track to triple that figure, to more than $12 million. In July, Squire raised $60 million at a $750 million valuation, in a round led by Tiger Global. The company, which has raised a total of $143 million in equity, made the cut for this year’s Next Billion-Dollar Startups, our annual look at 25 fast-growing, venture-backed companies we think likely to reach a $1 billion valuation. “A lot of us realized that, wait, a barbershop is very different from all these other industries and there are these different needs for different software,” says Yoonkee Sull, a partner at San Francisco-based Iconiq Capital, which invested in Squire. “One of the knocks against vertical software companies is, ‘really, how big can these businesses become?’ We think, really big.” Just a few years ago investors were skeptical about developing technology for small businesses and blue-collar workers. But thanks to the success of companies like Carpinteria, California-based Procore (software for construction sites, now publicly traded at a $13.8 billion market cap) and Los Angeles-based ServiceTitan (which makes apps for plumbers and other tradespeople, valued at $9.5 billion), the idea is now mainstream. “If you can do it for plumbing, you can do it for barbers,” LaRon, the company’s CEO, says. An added twist: The founders of both Procore and ServiceTitan are Squire investors. Squire isn’t the only company to see a big market in the country’s barbershops, of which there are 109,000, according to data from IBISWorld. Competitors include other venture-backed companies, like Los Angeles-based Boulevard and San Francisco-based Booksy, as well as Booker, now owned by Mindbody, the yoga and spa booking platform that was purchased by private-equity firm Vista Equity Partners for $1.9 billion in 2019. But Squire’s intense focus on analytics and economics is helping build loyalty. “Barbershops lose money on product, staff steals from them, they have people cancel appointments and not pay for them – and I don’t have any of those problems,” says Peter Gosling, owner of Glassbox Barbershop, a Toronto mini-chain with five locations the largest of which does $1 million in sales. Since signing on with Squire four years ago, Gosling has relied on its software to help analyze his business operations, including identifying high-performing barbers and determining which shampoos and hair gels sell well. “Those guys did their research, “ he says. “They understood there’s a gap in the market, they looked at their competitors and said, ‘We can do this more efficiently and more successfully.’” LaRon grew up in an artistic family in New York and Los Angeles. His father was an actor, while his mom was an artist (“She knew Basquiat, that kind of crowd,” he recalls. “She used to run in those circles, but she wasn’t an artist enough to make a career of it.”) who became a personal trainer and opened her own studio. “I was never exposed to the tech world, or finance for that matter,” he says. “I knew I wanted to be successfully financially, and not have the struggles my parents had financially.’”  He went to Yale for law school after getting his undergraduate degree at UCLA and got a job in mergers and acquisitions at white-shoe law firm Skadden Arps. But he soon found himself wanting more. “Being an entrepreneur and being an artist is similar. You are creating something that doesn’t exist and bringing it into the world,” he says. Salvant, meanwhile, grew up in Coney Island and Rockland County in suburban New York. He received a bachelor’s degree in political science from SUNY’s University at Albany, and an MBA at University of Wisconsin-Madison. He worked for a few years as a private banker at J.P. Morgan and as a sales associate at AXA. “Barbershops lose money on product, staff steals from them, they have people cancel appointments and not pay for them. [Because of Squire] I don’t have any of those problems." By 2010, Salvant was living in Harlem and throwing parties popular with young Black professionals. At one of those gatherings, he met LaRon. “We were in our mid-20s, and making money for the first time,” LaRon says. “He became one of my best friends,” adds Salvant. LaRon soon suggested starting their own business. As Black men, the culture of barbershops was important to them, and with online restaurant booking systems taking off, they saw opportunity. In 2015, they ditched the corporate world to formally start Squire Technologies, naming it for the squires in Game of Thrones, which they had watched together every Sunday. Just as the squires serve their knights in the show, Salvant and LaRon figured Squire could serve barbershops. “It had nothing to do with barbershops, but it sounds aspirational and masculine,” LaRon says. Neither LaRon or Salvant had a coding background, so they brought on a young software engineer, Yas Tabasam, who they met at a New York tech meetup, to help them build an app; he became the company’s third cofounder and first chief technology officer but left after two years. In March 2017, Troy Payne, a former software engineer at Gilt.com and TripAdvisor, became head of engineering, and today the tech team totals 60 people, including 36 engineers. Taking over the Chelsea barbershop was not only critical to learning the business, but it also proved be helpful in unexpected ways. One Saturday, Salvant was filling in on the front desk and saw that someone with a Facebook email was on the schedule to get a haircut: Blake Chandlee, then vice president of global partnerships at Facebook and now head of global business solutions at TikTok. Salvant asked him what he thought about the software; Chandlee said he liked it. Then Chandlee, who is based in Austin, asked if they planned to be at the South by Southwest conference the following week. Salvant fibbed and said yes, then immediately booked tickets. They ultimately joined the VIP party that Chandlee hosts at his house and gained him as an early investor. “They are two of the hardest working people I’ve ever met,” Chandlee says. “They are the definition of grit. That is something I admire of people in general and certainly of founders.” But getting into an accelerator was tougher. They first applied to Y Combinator in the summer of 2015 and got rejected and applied again a few months later and got rejected again. They tried other accelerators in New York, racking up more rejections. Eventually they got accepted into Y Combinator’s fellowship program – a sort of Y Combinator Lite — and then to the regular program on the third try in summer 2016. “To this day I think we have a little chip on our shoulder from all the rejections and all the nos,” LaRon says. Venture capitalists questioned the size of the market and stumbled on their own stereotypes. “It was hard to get past people’s biases, and they would think it was only for African-American barbers because of who we are,” LaRon says. To combat the stereotypes, their early sales material featured a hipster barber shop with a photo of a white guy with a beard. “I think about it, and it’s pretty crazy,” Salvant says. After a year or so, they ditched the white hipster marketing – in part because of feedback from non-white customers that they didn’t feel represented. Now the Squire app doesn’t have pictures of anyone. The pandemic was tough on barbershops, with mandated store closures. Squire was lucky that it had closed a $34 million funding round on March 7, 2020, just days before the country locked down. As shops bled cash and borrowed from the government’s Paycheck Protection Program to survive, Squire waived its subscription fees. They wrote code to help barbershops reopen safely with contactless payment options and by creating a virtual waiting room so customers could wait outside. Philip Skinner, general manager of Persons of Interest, a Brooklyn barbershop with three locations and 23 barbers, ditched his previous software from Booker, which he found clunky and expensive at a cost of roughly $800 a month, for Squire in March 2020. As he scrambled to keep the business afloat, he was grateful for Squire’s decision to waive its fees. “That kindness goes a long way,” he says. It not only saved him hundreds of dollars a month in fees, he says, but also let him ditch the end-of-day reconciling of spreadsheets to account for all the credit card and cash sales that had driven him and his front desk staff crazy. “It has saved us hours and hours and hours,” he says. Last summer, Squire hit that $750 million breakout valuation, a multiple of some 60 times this year’s expected revenue. To justify that rich valuation and keep their investors happy, LaRon and Salvant need to keep their feet firmly on the accelerator, adding more barbershops and more services. “It’s growing so fast that I don’t think revenue across the year is the point that they value the most,” LaRon says. “The name of the game is more growth.” Related Articles