SaaS Interviews with CEOs, Startups, Founders
$225k in MRR with $50k/mo in profits. How this non-tech founder built a bootstrapped SaaS selling to furniture stores.
12 Aug 2022
Chapter 1: How did the founder achieve $225k in MRR?
MRR is up to 45.
45 just on SaaS.
Just on SaaS. Yeah. So last time we were at 18. And so now we're at 45. So we're up about 150%.
You are listening to Conversations with Nathan Latka, where I sit down and interview the top SaaS founders, like Eric Wan from Zoom. If you'd like to subscribe, go to getlatka.com.
We've published thousands of these interviews, and if you want to sort through them quickly by revenue or churn, CAC, valuation, or other metrics, the easiest way to do that is to go to getlatka.com and use our filtering tool. It's like a big Excel sheet for all of these podcast interviews. Check it out right now at getlatka.com. Hey folks, my guest today is Brad Parker.
He helps retailers automate their financing via his company FormPiper.com. He's your 20-year veteran in the pet retail space. Now, again, helping those retailers identify the proper SaaS products to grow their business. Brad, you ready to take us to the top? Let's do it. So just to be clear, this could be like someone in Kentucky that runs a little miniature shop that sells fish, for example.
And what do you mean when you say help them find the right software to automate their business?
Yeah.
Well, we start with the financing aspect of FormPiper. So if you're a retailer selling high ticket items, typically you'll have more than one finance option you use to present options to your customers. So we streamline that application process. And since we've last talked, we've kind of turned it into a retail management software where they're going to be able to
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Chapter 2: What challenges do furniture retailers face with financing?
And we don't actually track that revenue or get paid for that revenue. So the last time we had talked, we were doing about $100 million in revenue that we represented. So I was kind of playing with those numbers.
Now we're close to about $150 million in revenue through the lenders we represent, but we're probably running about $300 to $350 million in transactions through FormPiper or our retailers.
So you sit on data that's worth $350 million of loans done. Of the ones that you are directly attributable to and you're powering, it's about half that, $150 million annualized. That's correct. Are you still taking about 1% of that? That's how you make money?
Yeah, it's on average about 1.5%. Okay, 1.5%.
So yeah, 1.5, obviously $115 million a month. That's what, $220,000 a month in revenue there?
It's close to that, yeah.
And so is that your only model right now? Are you selling the SaaS stuff now too?
No, we still sell the SaaS products. So our initial plan when we work with the retailer is to educate them on our SaaS product. And that's going to range anywhere from $1,500 to $3,000 a year. Right now, our average customer is paying us about $225 a month for the software. So once they have our software, we plug all of their lenders into the platform.
And what we do is we identify their lender lineup and look for gaps. So if they don't have a near prime option or if they don't have a good subprime option, we'll introduce them to the people that we use. And then we'll add a lender to their portfolio of lenders.
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Chapter 3: How does FormPiper streamline the financing process for retailers?
And last time I chatted, you had about 90 customers. How many today?
So today we are up to 150 customers, but 250 actual locations.
Got it. So average of 1.6 locations per brand.
Okay.
Yeah, I'd say most of them are still single operators and about 60 of our customers are multi-store. And then we have several that are going to be, that have 10 or 15 chain. We are finding that the data that we track is more important to the multi-store operators, you know, so they've scaled to a point where they're driving huge success. They have 10 locations.
Being able to see an aggregated approval percentage for their whole book of business has been really huge. The smarter the operator, the easier it is for them to purchase our product.
150 customers or brands paying $225 a month, that's another $34,000 of MRR?
MRR is up to $45,000.
Oh, 45 just on SaaS.
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Chapter 4: What metrics does FormPiper use to track retailer performance?
Well, no, no. Wait, did you raise a pre-seed round or not?
Nope. We're still bootstrapped.
That's weird. Why do I have a note that you raised a pre-seed round? Did you do a secondary early on at a 4.8 million post-money valuation in 2021? Nope. Weird, I wonder why I have that. Okay, so great, still bootstrapped. And founding story here, sole founder or what do your co-founders look like?
My co-founder is Ryan Munson. So we started the financing company together seven years ago, a marketing company, and then we merged it and created FormPiper about three years ago now.
I love this. You guys are the kind of founders that we should be celebrating on newspaper headlines and stuff. It's like a niche category. You're eating your own dog food. It's what I call SaaS plus or SaaS plus GMV from the financing business. You're building a beautiful moat here. How many pet retailers are there in the US?
Well, that's the tricky thing there. I wish there was a lot more. So you really only have about 200 pet retailers that our product would fit for in the market. And we have about 60% of them. And then so what we've been doing is focusing in the furniture space. In the furniture space, you have about 40,000 retailers that fit our model.
So our goal is to bring value to that space, continue to learn it, and really kind of scale up. And our goal is to get to 1,000 furniture retailers over the next couple of years.
A lot of people, when they talk about buy now, pay later, they think of like Klarna. They've probably seen online, right? They're buying a thousand dollar, whatever, stereo on Amazon and Amazon says pay with Klarna and payments.
Klarna, I imagine also will do like furniture and stuff, but I think you're a unique example where a very niche player can beat a multi-billion dollar valuation company because you're niche. So if I'm a furniture store, why would I choose to be powered by Formpiper versus Klarna on my lending options?
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Chapter 5: How does FormPiper's revenue model work?
This is very cool. And so give me an update on the team. How many folks full time today?
Right now we've got nine. So we've got two founders. We've got six salespeople brought in ahead of CSM. So that's the internal team. And then we're still outsourcing our dev team to the same company we were working with last time.
Yeah, which you've done very nicely here. It's called Maker Software. I always look for good dev shops. You're happy with them still?
Oh, yeah, it's fantastic. Just 24-7 service. I can get them on the phone anytime, talk about Brainstorm. Everything they put together for me is fantastic.
And how do you interface? Like, do they talk to your furniture owner companies, put together specs and actually deliver the UI UX and the code to you?
Um, they wouldn't actually talk to the customers. So we do all the talk to the customers. We have all kinds of outlines. We work on 12 week sprints. So we have a laundry list of things that we're working on to improve our systems and processes. And we're just always itemizing it and continuing to evolve it.
I know the last time we talked, I told you we were about to launch our third iteration and that we were going to go into just chill mode. That was not correct. Like now we're going for our fourth generation. We're developing more than we've ever developed. And the cool thing about that is we're just getting feedback from our customers. What are they looking for? How would they like it?
Our relationships with our lenders are getting stronger. So we're doing more API connections. And so when we launch the next version, it's going to be really, really sweet and just be a real turnkey system to help retailers just crush it.
Yeah, this makes so much sense. How are you getting furniture retailers to return your phone call?
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