SaaS Interviews with CEOs, Startups, Founders
SnapBar Looses $3m Photobooth Revenue COVID, Pivots in 8 Days, Makes $500k on New Idea, How?
16 Aug 2020
Chapter 1: What immediate challenges did SnapBar face due to COVID-19?
CES just announced three minutes ago that they're canceling for 2021, right? I mean, you don't want to be liable, but you also don't want to be irresponsible in spreading this thing. And while there's so many things that are unknown and there are ways to put on safe events, and I'm a huge proponent of that because I'd love for my industry to come back, I don't want the virus to spread.
So it's a hard position to be in.
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My guest today is Sam Eitzen. He's the co-founder and CEO of Snapbar, an Inc. 500 company that uses photo and video experiences to help planners, producers, and marketers create better engagement at events. He also co-founded Keep Your City Smiling, a gifting company that supports small businesses struggling as a result of the pandemic. Sam, you ready to take us to the top? Yeah. Obvious question.
Pandemic means no events. No events means no photo booths. What are you spending your time on today?
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Chapter 2: How did SnapBar pivot its business model in response to the pandemic?
Well, what do you think that, what do you think? So you've talked to like traditional reporters and all that. What do you think all of them have missed about the story?
I think it takes someone who understands business and entrepreneurship to realize just how drastic the switch was. So pivots are a very sexy thing, right? But pivots are often, here's what I used to do in-person events and I've pivoted to virtual events. But our pivot was really more of like, I don't know. I mean, I don't even know if it's considered a pivot necessarily.
We had to create a new business and we did it in about eight days.
Yeah. I mean, I'm looking at you going like, I don't care what you do the rest of your life. If there's any opportunity for me to like give you money, I want you to have my money because you've built a team and you executed literally launching essentially a new business overnight.
Yeah, yeah. It was about eight days from concept to when we launched the first website. And then we basically took pre-orders for two weeks to buy us extra time as we sourced small vendors from our first box, which was Seattle. And we sold, in the first three months, we did 500,000 in sales. with no marketing spend other than like amateur PR.
March, April, May are the first three months?
Yeah. We launched the website on March 19th. So it was from March 19th to May 19th through, yeah.
And before we go back and just talk about, again, South by canceling and the financial impact that had on you, on 500K in sales on the new business model, what's your margin on that? Obviously you have to pay for the actual products. Your cost of goods sold is probably way higher than the photo booths, right?
Way higher. So our gross product margin is about 40%. Net business margin is maybe 5% because we're very new at this. And I'm sure we're relatively inefficient in some ways. Whereas when we were running a photo booth company, our product margins were 300%, maybe more.
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Chapter 3: What was the revenue impact of the pandemic on SnapBar?
Just like, let's act like we're taking a snapshot of business. How much cash was in the bank? About $700,000. And what was team size? 18 people or 17 people full time. Okay, 17 people. And what was at that point your run rate? How much revenue were you doing per month?
I mean, it varied about between 200 and 400,000 a month.
Okay, and profit margin on that, I imagine, was way higher than 5%.
Yeah, like I said, very, very high. I mean, product margin was like 300%. Net business, I think we were at basically 33% to 40% net business margin.
Yeah. So on 400 grand, let's just use 200 to make it easy. On 200 grand in top line sales in a month, I mean, you're pulling down 75 grand in profits as a bootstrap entrepreneur. Amazing. Okay. So this is February. I'm living in Austin. So I was watching the South by thing going, oh my gosh, we're going to be like a virus hotspot if this thing happens. They have to cancel.
I mean, would you agree it was the right thing to do? I think so.
Yeah. CES just announced three minutes ago that they're canceling for 2021. Right. I mean, you don't want to be liable, but you also don't want to be irresponsible in spreading this thing. And while there's so many things that are unknown and there are ways to put on safe events, and I'm a huge proponent of that because I'd love for my industry to come back. I don't want the virus to spread.
So it's a hard position to be in.
So Adam, you said hundreds of thousands. Do you know the exact amount? You had 700 grand cash in the bank. You had already accepted pre-orders for future events that canceled and asked for refunds. How much do you have to refund back out?
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Chapter 4: How did SnapBar's new venture, 'Keep Your City Smiling', come about?
It's not a piece of SAS, uh, yet. So yeah, we, uh,
There's no reason for you to pay for it right now after the event's done. You could invent some reasons like store the UGC content, you know, reporting, et cetera.
But yeah. Yeah, we're going to move that direction. Right now we have one developer. One guy on our team has built all of this in the past four months.
Sam, what a freaking story, man. Holy cow. This is incredible, man. Okay, very cool. Well, we're out of time here. I learned a ton listening to this. What a story. I can't wait to sort of follow you and see what you guys kind of pivot and iterate to. But let's wrap up for now. What's your number one favorite business book?
Ooh, Good to Great by Jim Collins.
Number two, is there a CEO you're following or studying?
I study the Satya Nadella quite a bit from Microsoft.
Number two, is there a, sorry, number three, what's your favorite online tool for building the company? It'd have to be Basecamp. Number four, how many hours of sleep are you getting every night? About seven. Seven, and situation, married, single kids? Married with three kids. You are a busy man. Yeah. Holy mackerel. Okay, and how old are you? I'm 32.
Last question, what do you wish your 20-year-old self knew?
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Chapter 5: What innovative solutions did SnapBar develop for virtual events?
South By gets canceled, which is one of their biggest contracts. They have to put out a bunch of refunds. They have basically $600,000, $500,000 in cash in the bank. to completely reinvent the business in seven days or less. They've launched a photo booth solution, a virtual photo booth solution for events, and also a way for enterprises to support their local mom and pop shops.
Keep your city smiling. Check it out, thesnapbar.com. Sam, thanks for taking us to the top. Thanks, Nathan.