Sramana Mitra: What year does this bring us up to?
Josh McCarter: Around 2001.
Sramana Mitra: What happened then?
Josh McCarter: The company’s IPO was successful. After six years, I was looking to do something new. I went and joined a company called Spafinder. It was a travel-based magazine and was call center-oriented. We were trying to turn it into an online travel content company. We ended up joining with that team and worked on that business for a couple of years.
I ended up on the Board and decided to look up a few other business models. I connected with some friends in business school at USC. One of them had an idea to start a company called Arbitech, which is a technology trading company. He ended up starting the business. I joined when they had done about $11 million or $12 million in revenue. I came in as VP of Bus Dev and became President quickly thereafter. Within three to four years, we were doing close to $200 million in revenue. It was a hyper-growth company.
Sramana Mitra: What was the business?
Josh McCarter: It was a technology trading company. We would buy data center equipment from around the world, and then sell it back to end users, retailers, or distributors. We found a way to do it, so we had very good margins. Because of the nature of discontinued pricing, we were able to deliver a solid and profitable business around that.
Sramana Mitra: What year are we at now?
Josh McCarter: I did that until 2010. In 2010, I was asked by the Board of Spafinder to take a look at a product that they had started developing which was called Spabooker. It was targeted at hotel spas. If you were on a trip and you wanted to book with Hilton or Hyatt, they had a very good product that enabled online scheduling for those properties.
They believed that there was a bigger opportunity. However, it was difficult for them to invest the amount of capital that’s needed to build a SaaS company. As I sold out of my last business, I was asked to come in and look at the product and come up with a proposal on what the company should do. That led to a proposal of spinning the software out, setting up a separate company, and either selling that company or raising capital.
At that time, I/d just sold out of my last company. I said, “I’ll take it on as a project for a bit.” As we started positioning the company and talking with different investors, we saw that there was a lot of interest in the space. The same type of dynamics that had happened in the mid-90s with e-commerce was starting to happen with service-based businesses. Everything was going online. Customers want to buy and book things online. There really wasn’t a good platform for service-based businesses to plug in where they had the ability to manage everything that goes into driving, appointment availability, and selling bookings online.
We set up a big concept around taking the product and expanding it from an online booking tool to being much more of what we call today a service commerce platform and position it to raise capital. That was summer of 2010 through mid 2011. We ended up having our first capital raise for our Series A funding in November of 2011. That was led by Revolution Ventures and Consortium out of DC. Then we were off to the races in 2012.