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Kush Patel (00:00):
It's just a big time suck. You're in there, you're anxious, you don't know when you're going to get seen. You don't know when you're going to get out and you don't want to go to another barber who might have an empty chair because you don't know the type of cut you're going to get.
Dan Blumberg (00:11):
That's Kush Patel, CTO of theCut, a barber booking app he co-founded with Obi Omile. TheCut helps clients find a barber and then book and pay for their cut, and it helps barbers attract and manage their clients. Kush got the idea for theCut after having a terrible experience with a random new barber.
Kush Patel (00:29):
I did jump into an empty chair one time and I ended up coming out bald.
Dan Blumberg (00:32):
And he realized there was a huge opportunity to digitize the decidedly old school barbershop.
Kush Patel (00:37):
Barbershops have historically been a very cash heavy, cash dominated business and kind of shaking that mentality and kind of bringing them into the digital payments world is probably the biggest challenge.
Dan Blumberg (00:50):
On this episode. Kush tells us about designing an app that could speak to an iconic but analog industry.
Kush Patel (00:56):
What do you think about barbershops like? It is a big part of the culture and we wanted this app to also be a part of that culture.
Dan Blumberg (01:04):
The challenges of getting investors to see the potential.
Kush Patel (01:07):
They just didn't understand how important it was to this demographic, this untapped demographic that was being underserved and how massive that demographic actually is.
Dan Blumberg (01:15):
And how theCut can help barbers do more than just cut hair. Welcome to Crafted a show about great products and the people who make them. I'm your host, Dan Blumberg. I'm a product and engagement leader at Artium where my colleagues and I help companies build incredible products, recruit high performing teams, and help you achieve the culture of craft you need to build great software long after we're gone. Very self-conscious that I have not had a haircut in too long for this particular conversation.
Kush Patel (01:46):
All good. We can help you out with that.
Dan Blumberg (01:48):
Yeah, I know you could. I'd love now if you could paint a picture for us of what does an incredible experience at the barbershop look like and then what is the reverse of that? What's a terrible experience? Because I believe a bad experience is part of what led you to found theCut.
Kush Patel (02:05):
Part of going to a barbershop is the goal is to go in there and come out looking your best and feeling your best. So I would say an ideal experience, you walk into a barbershop and immediately you're seated into the chair, the barber of your preference. You might be handed a drink and glass of champagne, whatever you fancy, but you get the perfect fade. Maybe you're getting relaxed, massage, manicure, pedicure, just full grooming experience. Maybe you could walk in there, check out some shoes, some sneakers, walk out with a new fresh fit and it's complete head to toe transformation. And to me, that's what the perfect barbershop experience looks like, in a seamless way. You know, walk in and there's no waiting. You walk in and you walk right back out with everything you need. The flip side of that is going in there on a busy Saturday afternoon because that's the day you have off and you have time to go get a haircut.
(02:51):
You walk in and you see a line out the door three hours and you're sitting there and you're waiting and the barber says, who's next? And before you say, "next", the person next to you just jumps in front of you and you're just like, ah, maybe I'll just wait till the next. And it's a intimidating environment sometimes, and this is something that's happening once a week, once every two weeks, and it's just a big time suck. You're in there, you're anxious, you don't know when you're going to get seen, you don't know when you're going to get out and you don't want to go to another barber who might have an empty chair because you don't know the type of cut you're going to get. And probably the horrible express I've had is I did jump into an empty chair one time and I ended up coming out bald. That's probably the bottom of the barrel, right?
Dan Blumberg (03:30):
Kush's road to re-imagining the barber experience started the University of Virginia. He went there to study mechanical engineering, but quickly became more interested in computer science and fell in love with programming.
Kush Patel (03:42):
The thing that really was exciting was the fact that I could take my laptop and build something and that's all I needed. It just felt like software was a much more easier way for me to build something and get it out into the world.
Dan Blumberg (03:56):
What was the kind of stuff that you were playing with back then? Do you remember some of the early things that your first programs or the stuff you were kind of drawn to?
Kush Patel (04:02):
I went to University of Virginia and back then we didn't have any sort of dining app around campus. So one of the first things I built was an app where students could go online, see what's open on campus and see what they're serving. And it was kind of an unofficial application. And then the cafeteria group reached out to me and they kind of make it official and all that stuff. A lot of students started using it and that's where the first time I realized, hey, I can actually just do something was just for me, it was a learning project, but I found that I could add value to people's lives just with my laptop. And that's what really felt great. After that, I got connected with a group of friends and they were in the startup world and that's kind of where I experienced what it's like to build a business around a software product. And that's when things got really exciting.
Dan Blumberg (04:45):
Kush's friends asked him to be an engineer at Latch, a startup that built and managed fleets of smart locks for large apartment complexes.
Kush Patel (04:53):
Very exciting story. They were very early on and I think just two years ago they went public through ASPAX. So just to see the impact early on and what it led to was really like eye-opening, right?
Dan Blumberg (05:05):
And with a bit of a taste for startup life, Kush set off for New York after graduation.
Kush Patel (05:10):
I went to work at Yahoo on their mobile team and I lived in New York for a year and I really felt like there was a lot more I could be doing. I wasn't getting the satisfaction or the growth that I was looking for. And at the same time, Obi was also kind of in a similar boat, also had that hunger and just wanting to do more. And so we kind of looked at what are some problems that are within our means to solve? And this is something that me and him have had dealt with. It's something anybody has gone to a barbershop has thought of, right? Everything else is digitized. You can book a reservation on at a restaurant online, you can book a ride online, why can't you book your haircut appointment online? There was a need there, as well as something we could solve within our skill sets, and that's kind of where it all started.
Dan Blumberg (05:55):
And so what did that first version of the product look like?
Kush Patel (05:59):
Very basic. So we joke about it right now because the design is so bad. They call it the Excel version of our app because it probably just looked terrible. It was just like blue and red app and we really focused on the client side because that's who we were. That's the problem we identified with. And the one we knew better.
Dan Blumberg (06:15):
That early version had a simple book and pay system for clients and the barber side had a scheduling system and a place to show off a portfolio of their work.
Kush Patel (06:23):
I spent about three months building the MVP and I was just heads down during that time, Obi was out going to local barber expos, going door to door, looking online, just outreach. We made sure everything was good and then we just kind of blasted a few of those initial leads off and that's when we started to see the downloads uptick. It was cool. We were adding maybe like 2, 3, 5, 10 new barbers a day and every day we'd kind of send out a bigger and bigger and bigger chunk of that list. And we always hoped that we could fuel our growth through the barbers. So we invite the barber and we wanted them to go tell their clients to sign up and book with them because that's how the barber was going to see value. So I think on day two or day three, that's when we actually saw that happen. That's when we started to see 10, 20, 30, 40 signups in one day and we're like, Hey, what's causing this jump? And it was actually a bunch of clients signing up and booking with barbers that were already on there.
Dan Blumberg (07:17):
Paying on theCut is similar to Uber. Clients book pay and walk out. No pulling out cash, no awkward tipping moments. Barbers can enable an automatic no-show fee and the whole system shoots out an IRS friendly income report.
Kush Patel (07:30):
Barbershops have historically been a very cash heavy, cash dominated business or industry and kind of shaking that mentality and bringing them into the digital payments world is probably the biggest challenge. And I think that as the up and coming barbers, the younger barbers are getting into the industry, you're starting to see that shift happen, but it's happening slowly, right? Because they're the ones that grew up sending Cash app or Venmo to their friends. They're used to paying with card everywhere. They've seen themselves as a customer at other businesses that this is a necessity. So they understand that I have to provide the same convenience to my customers and my clients. So you're starting to see that trend shift. You're also starting to see some of the more established barbers also make that shift as well. It's just kind of a slow game, a long game, and that's probably the main challenge challenge we've had with it is kind of just changing user behavior in how they view commerce in general.
Dan Blumberg (08:23):
Sounds like it's been cash based for a long time and a lot of barbers like it that way. As their clientele changes and they simply just don't have cash in their pockets, the customers don't have cash to provide a tip because people don't carry cash anymore, I imagine. That helps change some hearts and minds.
Kush Patel (08:37):
Yeah, I mean I think one of the biggest things we hear from clients is, the only reason I carry cash is to pay my barber. It's the only thing they have cash for is if their, that's what their barber accepts.
Dan Blumberg (08:48):
Are there other areas where there's been resistance, apart from payments, to using an app like theCut?
Kush Patel (08:52):
The first friction point we see is changing a barber's mentality from being a walk-in barber, just accepting walk-ins, to becoming an appointment based barber. I think there's a little bit of hesitancy there, where there's some stigma that like, Hey, this is how barbershops should be, this is how they've always been, things like that. So I think that's a little bit of the first challenge we've seen, but I think the benefits of being an appointment-based barber start to really outweigh it once they experience it themselves. They find themselves being able to predict and budget their finances a little bit better. You're able to optimize your schedule. You're left with less empty chairs and just unutilized time, even before we had payments as part of the kind of big focus of our app, that was probably the first challenge we experienced was converting the mindset from being a walk-in business to a appointment based business.
Dan Blumberg (09:43):
And how do you mitigate that with either in the app or just in conversations with barbers?
Kush Patel (09:48):
One of the things we've seen, and it hasn't been like, it's not something we drove but we saw organically happen was one barber in a shop will download theCut or they'll start accepting appointments and you see their business, their chair is always full, you know what I mean? And other barbers are just sitting around, they're like, what is this guy doing? Why is this business booming? Right?
Dan Blumberg (10:07):
What's the secret?
Kush Patel (10:08):
Yeah, what's the secret? A lot of it is organic. The second part of it is around education. We've tried to do our part in educating the industry and most recently we launched a series called theCut University where the goal is for us to just put out content that from our learnings and being in the industry for so many years, just how can you as a barber build a better business? How can you set up your services? How should you set up your availability? How should you communicate with clients? How should you manage your finances, things like that. So I think part of that education is something we've been pushing as well.
Dan Blumberg (10:41):
Initially, Obi and Kush saw theCut as solving a problem for clients rather than being focused on the barbers themselves, but they quickly realized how much opportunity there was to help these small business owners grow.
Kush Patel (10:54):
I think every barber, I mean they look at themselves as an artist, they perform an art. And cutting hair really is very technical and specific, especially to each client. Barbers want to create an experience for their customers and their clients that keeps them coming back and keeps them loyal. The second thing is I think they would love to focus on cutting hair. There's a lot of stuff around building a business themselves that they have to worry about. And I think where their passion lies is in the barbershop, cutting hair, servicing clients. And I think the ideal scenario is, hey, they can focus on that and all of the rest of it is automated. And I think the third ideal experience for a barber is being able to diversify their income, adding additional streams of revenue that amplifies their business. And also, again, it creates a great experience for your clients.
(11:40):
I think Barbers overall can start to transform it to being a full stylist who we just launched maybe two, three weeks ago. We call it premium service hours. What that means is when a barber sets up their service, that haircut is typically bookable within their normal hours of availability. But let's say their day off is on Sunday, like most barbers are, and they would be willing to provide a service if the value of it was worth it for them, if they were getting paid enough. So let's say, "Hey, if you want to get a cut on my day off, it's going to cost you $150 emergency service." So we allowed them a way to take a service and time box it to a specific time and price it differently. The way we identified it, definitely through customer feedback. Definitely the primary channel is talking to barbers and we learned that this was a need and we saw within the maybe first week, we saw a thousand barbers enable it, and we're seeing thousands of bookings of those services already.
Dan Blumberg (12:38):
How do you decide to prioritize that versus the many other requests I'm sure you're getting?
Kush Patel (12:42):
Probably one of the most obvious things, and the highest priority is what makes the business more money. So revenue driving features are kind of one pillar of product build out. The second pillar we look at when we're looking to build is like, does this feature drive growth? And then the third one is user experience. And typically we like to find those features that fall under two or more of those pillars. And I think this one was definitely a user experience that was the obvious pillar it fell under. And then when we thought about it a little bit deeper, if we are able to create more availability for barbers, it means that they're going to be able to process more clients, which ultimately does drive revenue for us. So it kind of fell under the two pillars, and that was one of the main reasons we were able to prioritize it over some of the other features.
Dan Blumberg (13:28):
Why do barbers need an app like theCut? There are a lot of other apps that allow you to book different services. What does theCut do for them that these other apps can't do or won't do?
Kush Patel (13:38):
Yeah, I think one of the things that we do so well is driving new business to barbers. There's a plethora of booking applications out there. I think what really sets us apart and what sets other leaders in the industry apart is we're all very good at driving new business to these barbers. I ultimately think that whoever is the best at that is going to win this race. It's really that we have started to become a destination for clients looking for a new barber. A lot of word of mouth, organic growth there. And we're seeing that 40% of new bookings coming from the app are from clients looking for a new barber. We part anecdotally from barbers, on average, we're bringing them three, four new clients a week, which starts to build up pretty significantly, especially as they retain those clients long term. So that's just one of the things that I think we continue to push on and we continue to want to do better because I think that's ultimately going to drive the success of our business.
Dan Blumberg (14:36):
Maybe you could just tell me a little bit more about how you're building community, who the power users are of theCut.
Kush Patel (14:42):
Really when we think about just barbershops in general and the community around that, the barbershop is almost like a cultural center, especially in black and brown demographics. It's like the center of culture. It's a place where you meet up, you hang out, and we've really kind of leaned into that as who we wanted to target first, this underserved demographic, and not only are they underserved, but they're also the ones that are under banked. And bringing them into the digital world is kind of giving them the financial freedom that they may not have had previously. So a big focus has been on bringing the black and brown community into the digital world.
(15:19):
And what do you think about barbershops? It's so ingrained into pop culture, you know, you see, and now there's a show with LeBron on HBO, in a barbershop, there's obviously barbershop movies. It is a big part of the culture, and we wanted this app to also be a part of that culture, and the community kind of followed that. They saw that, hey, this is something that is built for us. It's something that's close to us, it's built with us in mind. So not only that, our team also embodies the same demographic that we're servicing. We're majority minority. We want to make sure that we are reflecting the same demographic that we are also servicing.
Dan Blumberg (16:06):
Can you tell us more about when you chose to seek venture funding, what that decision process was like and where you are now in terms of what you're thinking ahead to?
Kush Patel (16:14):
We definitely wanted to raise earlier than we did. We wanted to build that first product and then go take the early successes and go raise that pre-seed or seed round. Typically how it's done, you kind of have an idea and some initial proof and then you can kind of go raise that round and go prove that out. So we failed at that. We didn't find any investors that were interested in the space. They thought it was too small, too niche, and it didn't excite them. So we were forced to get really scrappy, continue to grow and just grind for maybe a year and a half, two years. That kind of carried us pretty far. And we went through Techstars as well without raising any institutional capital. We graduated Techstars, we're having conversations with investors and we didn't end up raising our first institutional venture capital round until probably a year later.
(17:02):
We call it now our pre-seed round. But it sounds kind of silly to say we did a pre-seed when we're making 2 million a year. We did that and then I think a year later we did another, or maybe two years later we did another round for four and a half million. So that was our most recent round. We call that our seed round. And then later this year we're looking to go back out into the market and raise our series A. To me it feels like we've been kind of lagging one round behind where you would see most kind of startups raise their rounds. But I think it's also due to the fact that we've had to get scrappy. We bootstrapped and we've had to become very capital efficient and the fact that we just haven't needed the money, so we're able to just raise it when we need it on our own terms.
Dan Blumberg (17:40):
That's a great place to be.
Kush Patel (17:41):
Yeah.
Dan Blumberg (17:42):
That's great. I mean, do you look back actually at that being forced to be scrappy thing? Was that a good thing in some ways or would it have really helped to just get that capital up front?
Kush Patel (17:51):
I think it was a blessing. I think it was a great thing. I think it really forced us to get creative with what we had and really do the things that mattered and focused on the things that mattered. And I think we even saw that when we raised this larger round of four and a half million. There was a time we had a little bit of a lull when we were trying to figure out what do we do? We have all this money, how do we use it? How do we deploy it? Yeah, I think for a while it was kind of a crutch because we were spending money and maybe potentially not optimizing the most output from it.
(18:19):
And when you don't have resources, every little thing you do has got to matter. My advice to founders when I speak to them is don't raise until you have to. Right? Until you have something that is truly valuable. As soon as you raise that money, you are no longer a successful business. You now have a new target and you have to then become successful again to then raise again. And you're constantly in that cycle.
Dan Blumberg (18:40):
In a previous episode of Crafted that we spoke to someone who is running a venture studio, helping founders from non-traditional backgrounds create that company, raise money, and we talked a lot about the different obstacles that founders who are not rich white men face. And I don't know if that was the case for you all in any way. Do you think that it was hard for some of the investors who you spoke to, to understand the market that you're trying to serve and the opportunity here?
Kush Patel (19:03):
Yeah, I think that was probably the number one thing is they didn't understand the market really. Potentially, they had never been to a barbershop and they just didn't understand how important it was to this demographic, this untapped demographic that was being underserved and how massive that demographic actually is. I think that was really hard for them to see, especially when we only had early traction and the numbers didn't really back it up. One of the things that was always so challenging is, you know, look at these other companies that are going out and raising these massive rounds and you come to find out they have a PowerPoint deck or a slide deck and they're raising a 10 billion round off of not even having a product.
(19:39):
And how it was so difficult for us to even go out and raise a half a million dollar round when we're making over a million in revenue. I don't know what that was attributed to. Maybe it was us not doing a good enough job telling the stories and conveying the problem and the solution to the investors, them not understanding it. I'm not really sure. Potentially part of that is we don't come from traditional backgrounds and maybe that was something that was working against us, but at the end of the day we kept pushing and we didn't let that stop us.
Dan Blumberg (20:06):
What is the next big milestone that you're looking for from theCut and what would that money help fuel?
Kush Patel (20:12):
So I think the next big thing we're looking to do is take what we've done here in the United States and start to replicate that in other global markets. So we've identified a couple of similar markets around the globe and we want to take this money to prove that we can go replicate this elsewhere. There's going to be a lot of learnings there. We've never built an international business. There's a lot of different rules and regulations around not only just barbering, but also just payments and payment processing. So a lot of learning there. How do we build an international team? Learning about how do we scale globally is the first big thing we want to do. And I think the second thing is we've always serviced the individual barber and help the individual barber run their business, but they're a part of a larger shop and somebody owns that shop. So the next phase of this is to build and roll out a product that can service the whole shop and the shop owner themselves and help them efficiently manage their operations.
Dan Blumberg (21:03):
Are there apps that you look to that you see as really first class for having that incredible user experience that when you're building out a new feature at theCut you reference?
Kush Patel (21:12):
Absolutely. I think what really changed the game to me was Uber and Lyft and just how they completely transformed an entire industry that was very similar to ours, very old fashioned, the taxi cab industry. Also, very heavy cash, very stuck in their ways and they were able to come in and revolutionize it. And the second one, this one kind of hits home to me is so my family has a background in managing and owning hotels. So my dad owned and operated a hotel for his entire career and Airbnb came in and completely turned that around.
(21:43):
And for somebody that has hotels and so close to me and seeing my dad grind every day and then to see, love technology and love innovation, and seeing somebody come in and turn that on upon his head, my dad, I can hear my dad still complaining about Airbnb and me playing devil's advocate, but it might be a good thing. So I think what they have been able to do to take something that's felt so uncomfortable 10 years ago about going and staying in a stranger's house and making that an experience that people would choose before they even look at hotels is very, very impressive to me.
Dan Blumberg (22:15):
God, I didn't realize you come from a hospitality background. So between the app you built at University of Virginia between theCut, this is, there's a through line here.
Kush Patel (22:24):
Yeah.
Dan Blumberg (22:25):
Awesome. Kush, thank you so much. This has been an awesome conversation.
Kush Patel (22:29):
Awesome. Yeah, I appreciate it. Likewise.
Dan Blumberg (22:35):
That's Kush Patel and this is Crafted from Artium. At Artium, we love helping builders reimagine how things are done. If you've got an industry disrupting idea, let's talk. We can help you build great software, recruit high performing teams, and achieve the culture of craft you need to build great software long after we're gone. You can learn more about us at thisisartium.com and start a conversation by emailing hello@thisisartium.com. If you like today's episode, please subscribe and spread the word because Crafted can fix what ails you.
Kush Patel (23:08):
It's complete head to toe transformation. You walk in and you walk right back out with everything you need.