The Many Pivots of Squire Technologies

Hey everyone,

Case studies are one of my favorite tools when teaching entrepreneurship.

There is no “one way” to build a great startup, but there are patterns in successful ventures vs. unsuccessful ones.

That is why case studies are so effective: They help you improve your pattern-matching skills, giving you the best chance to build a thriving business.

As I write my next book, The Experimentation Machine, I am going to use this newsletter to share case studies and lessons from from founders, some wildly successful and others still searching for that breakthrough.

The first case study is one of my favorites: This is the story of two founders who saw a need in their community and attacked it with gusto.

They battled everything from low product-market fit to a global pandemic… and still ended up succeeding.

This is the story of Squire.

The Many Pivots of Squire Technologies

Today, Squire Technologies boasts over 3,000 barbershops across three countries on its platform and has processed over $1 billion in payments.

How did they get there? Their path to success was far from obvious...

Squire was founded a decade ago with big dreams of revolutionizing how barbershops conduct their business. Cofounders Dave Salvant and Songe LaRon wanted to build a digital platform that simplified the clunky process of booking and paying for a haircut.

Like many startups, Squire was born out of frustration.

Salvant grew up on public assistance between Brooklyn and Rockland County, New York. Determined to build a better quality of life for himself and his family, he pursued a career in the financial industry after graduating from SUNY, including a stint at JPMorgan Chase.

LaRon came from a family of artists and grew up in New York City before moving to Los Angeles. “We didn’t have any professionals in my family,” says LaRon. “The options I knew to be successful were to become either a doctor or a lawyer.” He chose law and earned his way into Yale Law School, eventually leading to a job with the prestigious multinational law firm Skadden in New York City.  

The pair met in the early 2010s in Harlem at a house party that Salvant threw for Black professionals. They quickly formed a close bond and soon discovered they both felt unfulfilled by their corporate jobs. The two friends wanted to build something that would bring value to others and give them greater financial upside.

Soon, they had a business idea:

Initial Concept: Build the OpenTable for haircuts

The idea seemed simple enough, and Salvant and LaRon knew from experience there was a major need for such a platform.

“Every time you needed to get a haircut, it was unpleasant,” Salvant said. “You either had to plan ahead and call to make an appointment, or you had to show up in the shop and wait for sometimes an hour or more; you never knew how long it would be. You needed to get cash because most barbers were cash only. You walk out feeling great, but it was painful to get there.” 

But obstacles formed immediately.

First, the cofounders had no funding, no entrepreneurial experience, no startup connections, and no technical expertise.

When they set out to build their first prototype, they were nearly conned out of $5,000 from a scammer posing as an engineer.

But Salvant and LaRon had perseverance, ingenuity, and hustle. More than that, they approached their startup like a pair of scientists – carefully and strategically crafting well-defined experiments every step of the way.

Eventually, the team had a prototype and started charging barbershops $99/month to use it. Salvant and LaRon continued to hustle and iterate, even setting up barber chairs inside co-working spaces and learning to cut hair.

“We would set up a temporary barbershop in a conference room, bring in a barber, and have people use the app to book a time and pay,” said Salvant. “We got a lot of feedback on the app, which showed us that there could be demand for our product.” 

But despite receiving largely positive feedback from barbershop customers, they struggled to persuade many shop owners to sign on. Why? Because most barbers were already booked solid… they did not need an easier way to book clients.

The problem Squire’s app solved was a customer issue, not a barbershop issue. Their initial product-market fit hypothesis was wrong.

The First Pivot: The Quickbooks for Barbershops

Feedback from barber shops convinced Salvant and LaRon to change course and focus on building a comprehensive shop management solution.

Their business model changed from being “OpenTable” for barbershops to being Quickbooks: vertically-integrated small business software for the barber industry. The founders believed they could offer a suite of services worth more than $1000/month… but it would take time to build.

To accelerate their learning, the team purchased an existing barbershop inside Manhattan’s Chelsea Market for around $20,000. That shop became Squire’s “test kitchen” as they build their platform for other barbers.

“Running that shop was a major learning experience. We really built the product based on what we learned there,” said LaRon.

As the buzz surrounding Squire grew, so did their user base and revenue. Salvant and LaRon made money from subscription fees from barbershop owners and transaction fees from the shop’s customers.

Bit by bit, they began to attract more seed funding from angel investors, secured a spot in the prestigious Y Combinator accelerator in San Francisco, and expanded Squire’s footprint to additional cities. 

By January 2020, things were looking up. Squire had raised $8 million in Series A funding, followed by a $27 million Series B round in March 2020.

For the first time, Salvant and LaRon had the financial runway to scale their business sustainably.

The Second Pivot: Surviving Covid

You can probably guess what came next: A few days after raising their Series B, before they could use that money to grow their company, the COVID-19 pandemic struck, grounding barbershop businesses (Squire’s sole revenue source) to a halt.

This crisis forced Salvant and LaRon to answer some hard questions:

Did their product solve a real need?

Were they targeting and reaching the right customers?

Did they choose the right revenue model? 

Against their investors’ advice, Salvant and LaRon temporarily eliminated the barbershop subscription fee, maintained their staff levels, and doubled down on product development. It was a gutsy move.

But the strategy worked.

As shops reopened, more of them adopted booking apps to manage customer flow during social distancing. Squire’s sales surged.

Today, over 3,000 barbershops across the US, Canada, and the UK use their all-in-one business management platform. 

It took Squire two years for their founding to hit their first $1 million in transactions.

By 2021, the company had a $750 million valuation. By 2023, Squire had processed over $1 billion in payments.

Squire’s success is a testament to the Salvant and LaRon’s grit and ingenuity. But also, their willingness to test and pivot – and to turn Squire into a potent experimentation machine.

Requests for Readers

A key part of case studies is the discussion, so I would love to hear from you:

• What stood out about Squire’s story?

• What about the design of their experiments allowed them to test key hypotheses?

• How do you know when to pivot versus persist? What has been your own experience?

This newsletter will be released every few weeks. Writing a book is not always linear, so I will only share when I have new stories to tell!

Thank you again for being part of this journey. See you on the other side!

Alpha Reader Update

We had our first Alpha Reader review last week and the feedback was invaluable. Thank you to everyone who took the time to read the introduction.

We are accepting new Alpha Readers every few weeks. If you are interested, apply here:

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Best,

Jeff

Note: Some of the material from this newsletter are drawn from the HBS Case: "A Close Shave at Squire." Authors:  Bussgang, Jeffrey J., Zoë B. Cullen, William R. Kerr, Benjamin N. Roth, and Michael Norris. Harvard Business School Case 821-073, July 2021.