💈 The $750m haircut app

The Hustle

One issue with VR headsets is that when wearing them, you can’t see the physical space around you (look up “VR fails” on YouTube). To solve that, Meta, formerly Facebook, is introducing Space Sense — a feature that’ll help prevent folks from accidentally punching children while playing Beat Saber.

Today’s rundown:

  • Squire: The $750m haircut booking app making barbers bank.
  • Adobe’s next chapter: The design behemoth is all-in on AI and NFTs.
  • Failing Exquisitely: When your business explodes (kinda literally).
  • Around the web: Postcards from Timbuktu, “the Ikea effect,” and more.

Let’s do it.

The big idea
hair gif

Squire, a barbershop booking app, is proving barbershops are big business

Named as an homage to “Game of Thrones,” Squire began with the mission of serving barbers the same way the TV show’s squires served their knights.

So far, it’s working: The company raised $60m in July at a $750m valuation, and is on track to 3x revenue from $4m in 2020 to $12m+ this year.

But it hasn’t all been as smooth as aftershave

Launched in 2015 by co-founders Songe LaRon and Dave Salvant, Squire initially struggled to gain traction with users and barbers. The app was rejected 2x by Y Combinator before being accepted on its 3rd try.

It wasn’t until LaRon and Salvant spent ⅓ of their cash on hand to buy out the lease on a Chelsea Market barbershop that business started to pick up. The firsthand experience helped the duo understand challenges specific to barbers, including:

  • Splitting receipts across multiple barbers
  • Handling payment for chair rentals (many barbers rent chairs from shops)

Squire also came in clutch for its customers during the early days of the pandemic. Along with waiving fees, it added features to help shops reopen safely and created a virtual waiting room so customers could wait outside.

If you thought the barbershop biz…

… was just a cute little niche, think again. There are 109k barbershops in the United States, and so far, Squire counts 2.8k+ of them as customers.

Squire isn’t the only company angling for the barbershop iron throne.

Competitors include Boulevard, Booksy, and Booker (owned by Mindbody). To differentiate further, Squire has started offering debit cards and is experimenting with physical products like razor blades and ammonia bottles.

Side note: If you’ve ever wanted to bottle up your favorite barbershop scents, check out GQ’s list of the best colognes with barbershop vibes.

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SNIPPETS

Mobile QVC: Pinterest announced plans to launch its own live shopping channel called Pinterest TV, which will air M-F at 6pm ET on iOS and Android. #ecommerce-retail

Next Tesla? Rivian, the Amazon-backed EV startup, is seeking a $60B valuation as it prepares to IPO next week. #clean-energy

Zuck’s timepiece: Leaked papers showed Facebook is planning a competitor to the Apple Watch. #emerging-tech

One bug to rule them all: Researchers found a bug in Unicode, which allows computer-to-computer information exchange regardless of coding language. The vulnerability could affect all computer code. #privacy

Santa goes digital: Adobe’s holiday shopping forecast reported an estimated $207B in ecommerce — which would be the 1st time the number exceeds $200B. #fintech-crypto

iSafety first: Apple announced plans for new iPhone safety features in 2022, including the ability to auto-dial 911 and detect car crashes. #big-tech

Adobe Updates
Adobe graphic

Adobe’s next act: Web-based, AI, and NFT products

In 2012, Adobe made a huge pivot.

The owner of creative tools like Illustrator, Premiere, and — every memer’s favorite verb — Photoshop went from selling single software licences to a cloud-based subscription offering called Creative Cloud.

While the cloud business model is familiar to many of us now, it was a huge change at the time.

Adobe’s value has exploded to $300B+…

… roughly a 20x gain since moving to the cloud.

Last week, the company held its creative conference (MAX 2021) and rolled out tools capitalizing on new industry shifts:

  • Web-based: Facing significant pressure from $10B startup Figma, Adobe launched web-based versions of Illustrator and Photoshop that will allow for more real-time collaboration (a related mood board feature is called Canvas)
  • AI: Adobe’s Sensei platform uses powerful AI to help creators with tasks like masking, color transfer and object positioning (a wild tool lets you take a photo of someone and digitally change their pose)
  • NFT: Photoshop now has a feature that links to crypto wallets and verifies a creator as the original artist behind a non-fungible token (NFT)

It’s not clear if these changes will be as significant as Adobe’s shift to the cloud, but we’re pretty sure meme artists will be able to put them to good use.

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Sinking Ship Analysis

When your business (literally) explodes

In 2018, Scott Whitley decided to pursue entrepreneurship outside of his 80-hour work week in corporate law. He built LAB Water Kefir, inspired by a fermented drink he discovered in Australia with his co-founder, Martin.

The duo wanted to bring the product to North America, thinking it would take off.

Spoiler: it didn’t. But it did explode.

Bootstrapped with the founders’ 6-figure law salaries, the company sold its 1st batches at farmers markets, eventually landing in 70 storefronts and in the fridges at a TED conference.

At the conference, fridges were stocked with thousands of free LAB Water Kefir bottles. But there was a problem: In fermented drinks, bacteria eats sugar and releases carbon dioxide.

Whitley recalls seeing a stodgy looking older guy take a bottle. “He shook it, opened it, and it exploded like a geyser,” he told The Hustle. “He screamed, cursed, and threw it across the room. It was horrifying.”

But even bigger problems were brewing.

One bottle cost $5.50 in the grocery store, retailers bought it for ~$3.30, and food and bev distributors paid ~$2.60. That left the founders with $1.10 in revenue per unit.

They were spending ~$6.5k/mo., but bringing in low thousands. Failure seemed inevitable.

The journey wasn’t without lessons

Whitley had quit his full-time job in September 2019 to run the startup, but he and Martin felt increasingly burnt out. “Neither of us wanted to disappoint the other,” Whitley remembers. In January 2020, they shuttered the company.

Whitley says he learned more through failing at entrepreneurship than he did in any academic pursuit:

  1. Be mindful of time spent on low-leverage activities
  2. Consider how much you’ll need to educate the market about your product
  3. Don’t let the fear of disappointment stop you from making tough decisions

To read the full version of Whitley’s story — along with 4 additional lessons — click here.

If you’d like to be featured in a future story like this, tell us about your failed venture here.

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Podcast

The 30-year-old infomercial model to millions

Episode No. 221 is all about trust. From many different angles:

  • Trust-based business models are too hard to find. Sam sees a lack of access to unbiased and factual information services (like Examine.com), and spots the open opportunities in health care.
  • Corny infomercial-type marketing gets a really bad rap, but also works wonders in some industries (e.g., Proactiv, Beachbody, Tony Robbins, Golden Hippo). The boys just call it like they see it.
  • The first 5 investors Shaan would call.

Watch the podcast on YouTube.

Start from the top →
AROUND THE WEB

🤘 On this day: In 1964, a teenage Rolling Stones fan fell off a balcony during a concert, sustaining minor injuries. Mayor Ralph Locher attempted — unsuccessfully — to ban rock performances, saying, “Such groups do not add to the community’s culture or entertainment.”

🎧 How to: For proper hygiene and good audio, it’s important to regularly clean your earbuds and headphones. Here’s how.

📭 That’s cool: Postcards from Timbuktu mails custom postcards from Timbuktu, Mali, to anyone you like, in any language. Each 1 is handwritten by an unemployed tour guide — an industry greatly reduced by political instability.

🎒 Useful: Class Central is a search engine for finding free online courses.

🛋️ That’s interesting: The Ikea Effect” refers to the way we value objects more when we’ve assembled them ourselves.

🦦 Aww: And now, Bonnie, an otter that just wants cuddles.

Meme of the day
Photoshop meme

Source: Reddit

The Hustle Recommends

Watch: All About Semiconductors

Semiconductors aren’t well understood. This video contains one of the deeper and more useful explanations of the semiconductor situation worldwide, detailing why it’s unlike other industries and why you can’t just throw money at it.

– Steph

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