We continue to write about the SaaS companies that are pursuing a vertical strategy for product development and marketing. We recently covered the impressive metrics coming out of restaurant SaaS player Toast’s S-1. And last month we wrote about Squire, a company addressing the haircutting and barber space.
We learned last week that another startup in the hair space caught the attention of some prominent VCs. This time it is theCut, a SaaS solution designed to handle operations of barbers and haircutters. The five-year-old company has now raised $5.35 million, with this latest round of $4 million closing recently.
The Cut helps operators handle both sides of the operating equation. The mobile app offers up information and reviews for barbers and manages appointments, mobile payments, and orders for barbers.
How to Find a Great Barber
We’d guess about 90% of haircuts happen within five miles of the customer’s home. So this space is as local as it gets. And like so many start-ups, theCut co-founders Obi Omile Jr. and Kush Patel launched the company because they were frustrated with their customer experience in the barber space.
Here’s what Obi Omile Jr, had to say. “Kush and I both had terrible experiences with haircuts, and decided to build an app to help find good barbers, we found there were great barbers, but no way to discover them. You can do a Google search, but it doesn’t list the individual barber. With theCut, you can discover an individual barber and discover if they are a great fit for you and won’t screw up your hair.”
And we know a screwed-up haircut can be a traumatizing experience. At least until it grows out.
More important than finding a barber is having the barber remember how we like our haircuts. In this way, The Cut is onto something very important. By keeping tabs on their customer’s preferences, The Cut helps barbers remember haircuts and keep notes for each of their customers. Enabling the barber to search quickly for a phone or some notes about a customer should improve the overall customer experience immeasurably.
A Huge TAM
According to the company, there are some 400,000 to 600,000 barbers in the U.S. That amounts to about 500 customers per barber. Keeping track of 500 customers is a difficult proposition without technology. That’s a ton of barbers for the company to market to in order to achieve the scale necessary for any lucrative exit. So the company will take some of that money and put it to use in bringing onboard new barbers throughout the country.
The company won’t rest on just getting more customers. Omile said they want to build out additional features such as a digital store, a payment solution, and other ways to acquire loyal rather than just transactional customers.
VC partner Ali Rosental said this. “They had done so much with so little by the time we met them, they are creating a passionate community and set of modern, tech-driven features that are tailored to the needs of their customers.”
The company faces competition for others building for the vertical as well as the most challenging competitor of all. Inertia. If that can solve for the latter, competing with others in the space might seem like a cakewalk.