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Apr 10, 2017 · 25m · top-founders

EP 625: Booker $80M Raised, $3.5B in 2016 Volume, $1.5M+ MRR Helping 10,000 Spas and Salons Manage Business and Transactions with CEO Josh McCarter

Josh McCarter · 12m spoken Nathan Latka · 9m spoken
0:00 / 0:00

gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions

In Episode 625 of The Top, host Nathan Latka interviews Josh McCarter, CEO of Booker Software, exploring how the vertical SaaS platform scaled to 10,000 salon and spa locations, raised $80M in venture funding, generated over $1.5M in MRR, and processed $3.5B in 2016 transaction volume.

How this conversation actually went

Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Nathan holds 43.7% of the talking time here. How this is scored →

Nathan as informed peer 3.9 Guest teaching 1.1 Guest disagreement 0.3 Nathan pushing back 1.0
05100:0010:0020:000:56–5:15 · Nathan as informed peer 4/10 Upcoming Episode Preview: Derek Thompson Nathan introduces Booker and asks Josh to explain the specific vertical focus on health and wellness compared to broad SMB tools. Josh outlines the product features, business model, and subscription pricing without conflict.5:15–8:51 · Nathan as informed peer 5/10 Spinning Out of SpaFinder and Raising Capital Nathan digs into the mechanics of spinning out Booker from SpaFinder and structuring the cap table with Revolution. Josh explains the 6-9 month corporate carve-out and valuation process.8:53–12:49 · Nathan as informed peer 6/10 Customer Metrics, Expansion, and First Data Deal Nathan calculates Booker's monthly revenue run-rate from location count and ARPU, and explores their ISV payments monetization strategy with First Data.12:49–15:34 · Nathan as informed peer 5/10 Transaction Volume, Burn Discipline, and Churn Nathan corners Josh with a false dichotomy asking whether Booker is currently raising or selling. Josh counters that they right-sized expenses to achieve 24 months of runway, while tactfully declining to give exact churn and CAC metrics.15:35–19:04 · Nathan as informed peer 6/10 Frederick Acquisition and Yield Management Josh details the acquisition of Frederick and its yield management technology. Nathan demonstrates industry knowledge by comparing Frederick's customer metrics with Chris Golick's business from a previous episode.19:05–21:41 · Nathan as informed peer 1/10 Mid-Episode Sponsor: Organifi Green Juice Following a mid-roll advertisement, Nathan conducts the standard Famous Five rapid-fire questionnaire with straightforward, agreeable answers from Josh.21:41–22:42 · Nathan as informed peer 0/10 Interview Recap and Financial Summary Solo host recap summarizing Booker's core metrics, funding history, and runway, followed by podcast promotional outro.0:56–5:15 · Guest teaching 1/10 Upcoming Episode Preview: Derek Thompson Nathan introduces Booker and asks Josh to explain the specific vertical focus on health and wellness compared to broad SMB tools. Josh outlines the product features, business model, and subscription pricing without conflict.5:15–8:51 · Guest teaching 2/10 Spinning Out of SpaFinder and Raising Capital Nathan digs into the mechanics of spinning out Booker from SpaFinder and structuring the cap table with Revolution. Josh explains the 6-9 month corporate carve-out and valuation process.8:53–12:49 · Guest teaching 1/10 Customer Metrics, Expansion, and First Data Deal Nathan calculates Booker's monthly revenue run-rate from location count and ARPU, and explores their ISV payments monetization strategy with First Data.12:49–15:34 · Guest teaching 2/10 Transaction Volume, Burn Discipline, and Churn Nathan corners Josh with a false dichotomy asking whether Booker is currently raising or selling. Josh counters that they right-sized expenses to achieve 24 months of runway, while tactfully declining to give exact churn and CAC metrics.15:35–19:04 · Guest teaching 2/10 Frederick Acquisition and Yield Management Josh details the acquisition of Frederick and its yield management technology. Nathan demonstrates industry knowledge by comparing Frederick's customer metrics with Chris Golick's business from a previous episode.19:05–21:41 · Guest teaching 0/10 Mid-Episode Sponsor: Organifi Green Juice Following a mid-roll advertisement, Nathan conducts the standard Famous Five rapid-fire questionnaire with straightforward, agreeable answers from Josh.21:41–22:42 · Guest teaching 0/10 Interview Recap and Financial Summary Solo host recap summarizing Booker's core metrics, funding history, and runway, followed by podcast promotional outro.0:56–5:15 · Guest disagreement 0/10 Upcoming Episode Preview: Derek Thompson Nathan introduces Booker and asks Josh to explain the specific vertical focus on health and wellness compared to broad SMB tools. Josh outlines the product features, business model, and subscription pricing without conflict.5:15–8:51 · Guest disagreement 0/10 Spinning Out of SpaFinder and Raising Capital Nathan digs into the mechanics of spinning out Booker from SpaFinder and structuring the cap table with Revolution. Josh explains the 6-9 month corporate carve-out and valuation process.8:53–12:49 · Guest disagreement 0/10 Customer Metrics, Expansion, and First Data Deal Nathan calculates Booker's monthly revenue run-rate from location count and ARPU, and explores their ISV payments monetization strategy with First Data.12:49–15:34 · Guest disagreement 2/10 Transaction Volume, Burn Discipline, and Churn Nathan corners Josh with a false dichotomy asking whether Booker is currently raising or selling. Josh counters that they right-sized expenses to achieve 24 months of runway, while tactfully declining to give exact churn and CAC metrics.15:35–19:04 · Guest disagreement 0/10 Frederick Acquisition and Yield Management Josh details the acquisition of Frederick and its yield management technology. Nathan demonstrates industry knowledge by comparing Frederick's customer metrics with Chris Golick's business from a previous episode.19:05–21:41 · Guest disagreement 0/10 Mid-Episode Sponsor: Organifi Green Juice Following a mid-roll advertisement, Nathan conducts the standard Famous Five rapid-fire questionnaire with straightforward, agreeable answers from Josh.21:41–22:42 · Guest disagreement 0/10 Interview Recap and Financial Summary Solo host recap summarizing Booker's core metrics, funding history, and runway, followed by podcast promotional outro.0:56–5:15 · Nathan pushing back 0/10 Upcoming Episode Preview: Derek Thompson Nathan introduces Booker and asks Josh to explain the specific vertical focus on health and wellness compared to broad SMB tools. Josh outlines the product features, business model, and subscription pricing without conflict.5:15–8:51 · Nathan pushing back 1/10 Spinning Out of SpaFinder and Raising Capital Nathan digs into the mechanics of spinning out Booker from SpaFinder and structuring the cap table with Revolution. Josh explains the 6-9 month corporate carve-out and valuation process.8:53–12:49 · Nathan pushing back 1/10 Customer Metrics, Expansion, and First Data Deal Nathan calculates Booker's monthly revenue run-rate from location count and ARPU, and explores their ISV payments monetization strategy with First Data.12:49–15:34 · Nathan pushing back 4/10 Transaction Volume, Burn Discipline, and Churn Nathan corners Josh with a false dichotomy asking whether Booker is currently raising or selling. Josh counters that they right-sized expenses to achieve 24 months of runway, while tactfully declining to give exact churn and CAC metrics.15:35–19:04 · Nathan pushing back 1/10 Frederick Acquisition and Yield Management Josh details the acquisition of Frederick and its yield management technology. Nathan demonstrates industry knowledge by comparing Frederick's customer metrics with Chris Golick's business from a previous episode.19:05–21:41 · Nathan pushing back 0/10 Mid-Episode Sponsor: Organifi Green Juice Following a mid-roll advertisement, Nathan conducts the standard Famous Five rapid-fire questionnaire with straightforward, agreeable answers from Josh.21:41–22:42 · Nathan pushing back 0/10 Interview Recap and Financial Summary Solo host recap summarizing Booker's core metrics, funding history, and runway, followed by podcast promotional outro.

speaking balance: gold is Nathan, purple is the guest (3 minute bins)

0:00 · Nathan 64.9% · guest 35.1%0:00 · Nathan 64.9% · guest 35.1%3:00 · Nathan 41.8% · guest 58.2%3:00 · Nathan 41.8% · guest 58.2%6:00 · Nathan 31.7% · guest 68.3%6:00 · Nathan 31.7% · guest 68.3%9:00 · Nathan 25.5% · guest 74.5%9:00 · Nathan 25.5% · guest 74.5%12:00 · Nathan 24.2% · guest 75.8%12:00 · Nathan 24.2% · guest 75.8%15:00 · Nathan 15% · guest 85%15:00 · Nathan 15% · guest 85%18:00 · Nathan 62.9% · guest 37.1%18:00 · Nathan 62.9% · guest 37.1%21:00 · Nathan 86% · guest 14%21:00 · Nathan 86% · guest 14%24:00 · Nathan 0% · guest 0%24:00 · Nathan 0% · guest 0%
Sharpest disagreement ▶ 13:16 Josh rejects forced fundraising choice

When Nathan asserts that Josh must either be raising capital or pursuing an acquisition, Josh firmly corrects him, stating it is neither because they cut burn to secure 24 months of runway.

 Hardest push from Nathan ▶ 13:11 Nathan presses on next capital event

Nathan pushes Josh into a tight corner based on the timing of their 2015 Series C round, insisting he must be in talks to sell or raise.

 Biggest teaching moment ▶ 16:20 Josh breaks down yield management in local services

Josh educates the host on how Frederick brings airline-style calendar occupancy analysis to salons rather than relying on basic recency-based re-marketing.

 Nathan holds their own ▶ 17:35 Nathan compares Booker to a $100M ARR competitor

Nathan demonstrates SaaS sector expertise by directly comparing Booker's customer volume and ARPU against Chris Golick's $100M ARR business.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Upcoming Episode Preview: Derek Thompson 4100 Nathan introduces Booker and asks Josh to explain the specific vertical focus on health and wellness compared to broad SMB tools. Josh outlines the product features, business model, and subscription pricing without conflict.
Spinning Out of SpaFinder and Raising Capital 5201 Nathan digs into the mechanics of spinning out Booker from SpaFinder and structuring the cap table with Revolution. Josh explains the 6-9 month corporate carve-out and valuation process.
Customer Metrics, Expansion, and First Data Deal 6101 Nathan calculates Booker's monthly revenue run-rate from location count and ARPU, and explores their ISV payments monetization strategy with First Data.
Transaction Volume, Burn Discipline, and Churn 5224 Nathan corners Josh with a false dichotomy asking whether Booker is currently raising or selling. Josh counters that they right-sized expenses to achieve 24 months of runway, while tactfully declining to give exact churn and CAC metrics.
Frederick Acquisition and Yield Management 6201 Josh details the acquisition of Frederick and its yield management technology. Nathan demonstrates industry knowledge by comparing Frederick's customer metrics with Chris Golick's business from a previous episode.
Mid-Episode Sponsor: Organifi Green Juice 1000 Following a mid-roll advertisement, Nathan conducts the standard Famous Five rapid-fire questionnaire with straightforward, agreeable answers from Josh.
Interview Recap and Financial Summary 0000 Solo host recap summarizing Booker's core metrics, funding history, and runway, followed by podcast promotional outro.

Statements from this episode (10)

Disclosure
McCarter: Booker charges $100-$250 per month plus merchant processing fees
“We charge anywhere from call it a hundred to 250 bucks a month for the subscription revenue. Then we also make money on merchant processing. We have several integrated merchant processing partners. And then the third piece is we sell a add on product called Fr…”
Josh McCarter Apr 10, 2017 ▶ 2:41
Disclosure
McCarter: Subscriptions account for roughly 70% of Booker's revenue
“Probably 70%.”
Josh McCarter Apr 10, 2017 ▶ 5:03
Assertion Supported
McCarter: Booker raised nearly $80M across three financing rounds
“We're just shy of eighty million at this point. We've done three, three rounds of financing.”
Josh McCarter Apr 10, 2017 ▶ 7:26
Assertion Not checkable as stated
McCarter: Booker generated low single millions in revenue in 2011
“You know, we were in the low single millions.”
Josh McCarter Apr 10, 2017 ▶ 8:30
Assertion Not checkable as stated
McCarter: Booker has 10,000 live locations and 2,000 on Frederick
“So we have about 10,000 locations that are live on the on, on Booker, and about 2000 that are on Frederick.”
Josh McCarter Apr 10, 2017 ▶ 8:58
Assertion Not checkable as stated
McCarter: Booker processed nearly $3.5B across 10,000 locations in 2016
“And we did last year, we did almost three and a half billion dollars of transactions across the 10,000 locations.”
Josh McCarter Apr 10, 2017 ▶ 12:57
Assertion Not checkable as stated
McCarter: Booker has 24 months of cash runway
“And so now we're, you know, it's really about, I got, you know, 24 months of execution in front of me. And . Does that mean 24 months of runway? Yeah, 24 months of runway.”
Josh McCarter Apr 10, 2017 ▶ 13:37
Assertion Not checkable as stated
McCarter: Booker's monthly customer churn is below 2%
“What I can tell you is that typically SMB businesses are, or SMB SaaS businesses churn at a very high rate, you know, north of two percent, some up to five percent. Monthly, right? Yeah, monthly. I can tell you we are below the low end of that.”
Josh McCarter Apr 10, 2017 ▶ 14:09
Assertion Not checkable as stated
McCarter: 50% of Booker's churn is SMBs going out of business
“And I can also tell you that 50% of our churn is actually people going out of business.”
Josh McCarter Apr 10, 2017 ▶ 14:27
Assertion Not checkable as stated
McCarter: Frederick add-on delivers 14x ROI based on monthly bookings
“Super high conversion and retention metrics with existing super high being like, you know, call it 14 times ROI, just based on the bookings that are generated through Frederick on a monthly basis.”
Josh McCarter Apr 10, 2017 ▶ 17:22
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