The Exchanges

Q Yeah, that's great. That's great. So, um, so now that we know, 600 customers, nine million of revenue, have you bootstrapped this from scratch, or did you raise a bunch of capital?

A Tried to, almost went broke doing it. Um, ultimately, 2015 to 2019, um, friends and family covered it myself, um, and we got to a certain, a certain level where we needed, you know, more significant investment to handle the opportunity, and so, Um, we signed a 50 course, multi-course operator. Um, then they were called Brown Golf. Now they've merged and they've become Great Life Golf. And we, we didn't have the infrastructure that, you know, go across the country and implement all of these over a week or two. And they needed custom development that exceeded, you know, then a fairly small dev team. And so, um, had raised and gotten committed, I think it was like 300,000 short of my Series A. Um, it started off with a 600,000 dollar seed round that I funded a good portion of, then went to, um, raise a two and a half million dollar Series A, raised about 2.2, um, and an organization called Constellation Software out of Canada, um, you know, approached us about an acquisition and, you know, happy to tell that story, but ended up selling Club Caddy to Constellation in 2020. Um, they hired me and I worked for them today.

AI assessment note: “Tried to, almost went broke doing it. Um, ultimately, 2015 to 2019”

Q I'm raising capital. But what a lot of folks don't realize is if you're going to do a data room and do all the work already, you might as well talk to buyers and equity investors and put them against each other to get what you want as the founder. Is that what happened here? And if not, tell us what did happen with CSI. Why'd you sell to them?

A So CSI is the, for especially people who may not have the background, is the largest acquirer of vertical market software companies in the world. Uh, they own 2000 other brands and labels, uh, like Club Caddy, um, that are all, you know, either top or, you know, one or two in, in the specific vertical, um, that they service. So hospitals, legal, hotels, you know, yacht clubs, every vertical needs software. Um, Constellation software is the market leader in private club software globally. They have 55% market share, and they had one of those legacy solutions that, um, you know, I had mentioned there were mature server-based solutions. There were immature cloud-based solutions, and we were the first full club-based management software that was cloud-based, and so there were really good synergies for together one plus one could equal three. Because we had the next generation product, and they had the majority of the market share, and so, um, you know, it, because the deal was structured right, we set it up so that we both won off of that opportunity of, um, it just made more sense, and there, there was the possibility, at least, for more upside, um, you know, by selling to CSI.

AI assessment note: “we had the next generation product, and they had the majority of the market share”

Q billion dollars of free cash flow last year, so it is, again, it's a massive, massive holding company of thousands of software companies. Jason, let's shift the focus here to the growth story post-close, because going from half a million of revenue to nine million in revenue in five years is pretty darn impressive in a niche. What have been the top like one or two growth channels for you?

A Uh, look, we only have two, we service golf courses, and it's very clear who our buyers are. Um, I can tell you at every golf course who runs that golf course, who the golf professional is, what software they're using, when their contract's up, and so when you have a very small niche, it's all about data, um, and it's all about knowing how to action the data, and so, you know, we're very intentional about approaching golf courses that have high signals that they're going to be, uh, making a transition. Um, same with Multi-course operators has been another fuel of our growth is that there's been a lot of consolidation where we can win one deal and win a hundred accounts where in the past, you know, you haven't been able to do that. Um, you're, you know, one, one multi-course operator represents 100 golf courses. Um, so we've won a couple of those and then, you know, we've just gotten better at selling. Um, but the other element is a big part of it is just investment in product. I mean, there's significant investment into product that's enabled us to build a superior solution and When you have, you know, when you have likely the best technology for the customer in the vertical, um, you know, you kind of get out of your own way and just let the technology work.

AI assessment note: “approaching golf courses that have high signals that they're going to be, uh, making a transition”

Q can pay to play there. Some of your competitors with like light speed, they actually own and they're ranking like they're as a direct source, a source of truth in the AM. And then I don't know what zealous is, but what's, how do you think about building your own and operated sort of source of truth for an AU optimization perspective versus the pay to play models like Capterra?

A I mean, I think you have to do both. Um, it's just like trying to rely on a single channel and hoping that it's going to be effective. The most effective will be the combination of all of those. I think we also get a little bit more intentional. And so we're going to say like, you know, search semi-private golf course software or something that's, you know, where we're trying to understand ourselves. And those are the keywords that we focus on. So it's not just like, let's go at the top of the funnel on keywords. It's trying to be strategic of what are the keywords that my ICP is searching for and Making sure that I'm number one there and not just everywhere.

AI assessment note: “I mean, I think you have to do both.”

Q Was there early on in those initial years in the 2017, 28 time frame, was there a lot of other competition or, I mean, it sounds like you used some of the competitors. There were things you didn't like, so you built your own. What were some of the things you didn't like?

A Yeah, look, when we went into it, uh, there's a lot of competition. People want to build golf software. Um, and so when we went into it, there were mature solutions for full clubs, not just like a golf course with a point of sale and a Tea sheet, but needing, you know, events and weddings and restaurants and dining reservations and all kinds of other, other apps as well. Uh, there were mature solutions that were server based. There were the first wave of cloud solutions that were not yet mature in their depth. And that was our vision was we need to stand out. We've got to be different than everybody else. And so we need to build the first mature cloud solution that services a full club. And so, you know, it, Because there was competition, we couldn't just jump in and, and, you know, really distinguish ourselves just by building where our competitors were. So we carved out our niche, figured out where we thought the market was underserved and focused on that.

AI assessment note: “there were mature solutions that were server based. There were the first wave of cloud solutions”

Q on the series, a 2.1 and committed checks. You ultimately took a deal, which look, I don't know what it was, but you know, CSI rarely pays above one, two X on a deal. Maybe obviously if you stay for 10 years, you can get extra juice, but it wasn't a flashy multiple that you sold for. So why exit? Why not stay, stay yourself and, you know, keep building.

A Um, I was tired, and what I mean by tired is not like I wanted to, I didn't want to grind for the company. Um, I wasn't sleeping because I had staff to pay, um, I was running around spending time with investors and not in the operations of my business, and the business was doing well, and I didn't think we had good processes, and I wasn't involved in the, you know, in solving those problems because I was more worried about going to beg people for checks and, you know, playing that game, and I'd played it for 15 months, and I wanted, and I built this business to operate, to grow the business, to work in my vertical, to work with the golf course operators and solve their problems. That wasn't what I was doing at all. And so ultimately, you know, including the VCs, the, um, early VCs that did put in some money, um, it participated in our angel round, which we're really lucky, another story to participate in. Um, but anyways, like we looked at what the possibility of the earn out was, and it was It is very significant, and ultimately, you know, the numbers made sense to us, and you know, we just thought this was the best path.

AI assessment note: “I was tired, and what I mean by tired is not like I wanted to”

Q Per year. And which of these, I've got your screen, your website shared right now. I have your products all listed here. Which one's your best seller?

A Uh, well, you can't just use one without the other, right? And so each of these products exist into a single app. Um, and so it's one app with all of these that we just turn on in the back end, uh, for them to work together. And so if you're going to book a golf outing at a golf course, that's going to include food and beverage elements, scheduling out rooms so that, you know, that room's not double book. It's going to include Accounting GL codes that have to be hit, and so the complexity of a golf course is that it's many small businesses and one that all have to operate and communicate together under a single customer profile.

AI assessment note: “you can't just use one without the other, right? And so each of these”

Q And, and take me back to the year you launched the business and how you got your first couple of customers. Obviously you are your first customer, but besides you, how would you get your second and third?

A Yeah. Um, when you build vertical market software, it helps when you are already connected to that industry, right? So I owned a golf course. I had other golf course owners and operators who were within my network and, you know, we bounce and trade ideas and I would talk to them about their pain points and their, you know, their difficulties. I ended up a couple of general managers that were early users of my software, eventually became the early employees of Club Caddy. Um, and so, you know, it started off through conversations and really understanding what the pain points were that other golf courses that we wanted to service were going through. And then once we had a pretty good understanding of our own pain points and also having validation and learning other ones that other golf courses were going through, it gave us, you know, endless opportunity to build product to solve it.

AI assessment note: “I had other golf course owners and operators who were within my network”