Not many start-ups would have the nerve to walk away from two thirds of their customers. But 7shifts founder Jordan Boesch realized the secret to greater success is focusing on who you’re solving a pain point for. We learn how he turned a chaotic restaurant scheduling system of Post-It Notes and white-out into one of the most successful human resources software systems in the world.
Jack of all trades, Master of none
Years after coding a restaurant employee scheduling system for his father’s chain of sandwich stores, 7shifts founder Jordan Boesch had branched out into retail and other scheduling-heavy industries. “They told us it was good. It wasn’t great,” he laments. His solution? Get back to his roots.
Close a door, open a window
After Boesch had closed the door on 2 out of 3 customers to focus just on the restaurant industry, he discovered something interesting: he could focus on opportunities other software companies couldn’t. Focusing on his core competency — and his core customer — gave 7shifts the jet fuel needed to grow.
3,000 kilometres from Silicon Valley North
Boesch was questioned about why he’d build his company in Saskatoon, Saskatchewan. He points to the talent of a city with only a quarter million residents, adding “as a result, we don't have the same level of competition that you might have in bigger metropolitan centers like Toronto or San Francisco, and we can really stay laser focused to deliver a great product and build a massive company.”
Join Jordan Boesch as we wash dishes at a Toronto hotspot with our #CIBCInnovationEconomy series, then listen to Boesch offer his advice on how to pivot your company for greater success the CIBC Innovation Banking Podcast.
CIBC Innovation Banking is a trusted financial partner to entrepreneurs and investors. Get in touch with our team at cibc.com/innovationbanking.
Michael Hainsworth:
This episode was recorded the summer of 2019. Since then, 7shifts raised an additional 7.9-million in funding, partnered with a half-dozen other restaurant technology providers, and added more than 5 thousand new customers. This is the story of how it got to where it is today.
Announcer:
Today on the CIBC Innovation Banking Podcast.
Jordan Boesch:
I was going door to door with these sketches of 7shifts and going page and flipping through and people were interested, but we didn't really close anyone that way. What did work though is after we had that customer through the inbound channels of coming to us is going to visit them after, in-person and talking to them and getting their feedback because they're already using the product. They added a lot of good feedback and I think being highly customer focused and highly customer driven is a really big differentiator in making it as a company and really scaling.
Announcer:
7shifts. Customers told the employee scheduling software giant its product was it was good but it wasn't great. So founder and CEO Jordan Boesch made a hard decision, walk away from two thirds of his customers. On this episode of the CIBC Innovation Banking Podcast. We learn how to pivot for greater success and why one of the best places to build a successful high tech startup is almost 3000 kilometers away from the financial and tech capital of Canada. Here is Michael Hainsworth.
Michael Hainsworth:
The average employee changes jobs about every four years. The average restaurant worker every 57 days. Startup success story, 7shifts aims to change all that by making shift scheduling easier for managers and shifts more enjoyable for workers. The goal: Retention, the Saskatoon based founder Jordan Boesch and I spent the day hopscotching between his Toronto office and a local hotspot to learn this innovation economy company's secrets to access. We began by talking about his strategic decision to let go two thirds of his customers, those in retail and other shift oriented industries to focus exclusively on restaurateurs.
Jordan Boesch:
Yeah, it was extremely scary to know that you're isolating two thirds of your existing customers. But what was even worse was we were billing for all of these types of customers and all these types of industries. And so we were kind of the Jack of all, master of none. And so that was more troubling to me than having to potentially shut out two thirds of our customers. And what it meant was going back to our roots, why do we start the business? Who are we originally solving this pain point for? Was for the restaurant industry. So we made steps to get back there, but it paid off longer term.
Michael Hainsworth:
Did it hurt to call up two thirds of your clients and say we're not interested in you anymore?
Jordan Boesch:
When you visit our website and you weren't a restaurant and you came there, you're probably surprised to see that there's now pictures of chefs and servers on and you might be a retail company. And so yeah, people were kind of confused about the direction and we had some people that left and that was okay though because we now felt like we were building a great product for an industry that so badly needed help.
Michael Hainsworth:
Tell me then, if you could go back in time to that decision, what advice would you give yourself?
Jordan Boesch:
If I go back to the decision. I think the advice I would give myself around that problem we faced was just trying to find who you are and why you exist and who are you ultimately building the solution for? And I think that it's so important to be true and be aware of that. And you know from that you'll make some decisions that you may have not have thought of. But it comes from the very top of really understanding we are ultimately solving these pain points for.
Michael Hainsworth:
Tell me more about that decision because you know, it would have been easy just to keep on doing what you were doing.
Jordan Boesch:
Yeah. It would've been easy to just keep going for sure. But I was never satisfied knowing that our customers weren't over the moon about what we were doing. They thought it was good. Ending was great and if I'm going to devote the amount of time that I devote to this company. I want people to have the sentiment of this is a great product, this is changing how I work, how I live and how I do my day to day. Needs to be a world changing company to me.
Michael Hainsworth:
So what advice would you give to entrepreneurs facing their fork in the road?
Jordan Boesch:
That's going to be tough. I think the best decisions are often the hardest. And so when you kind of get to that point, I think you need to first ask yourself, who are you building this product for? And who you ultimately solving those pain points for? And from that might come some really hard decisions and you might have a fork in the road from going through that thought process.
Jordan Boesch:
Oftentimes the best ones are the hardest decisions. So it's just really important that you don't take the easy way out. Just remember what's right for the business and the customer that you're focusing on.
Michael Hainsworth:
In 2014 zero restaurants. Today, almost 10,000 how did you get there?
Jordan Boesch:
Yeah, the path is really hard from zero to 10,000. You're constantly iterating on product, talking to customers, getting that first bit of traction and then getting them happy and them telling more customers. And it was this kind of flywheel effect that started happening in a really organic fashion. And then we started growing and people started looking for something like labor management for restaurants online. And that's where we show up, primarily. And another big driver for us is the fact that we took this path of going from focusing on everything, every industry to focusing just on the restaurant industry, and then we opened the doors up to partnering with some of the best vendors and distributors in the restaurant space as it relates to either food or technology. So that was a major growth driver for us that we felt was a big contributor to our success.
Michael Hainsworth:
Your 2,700 kilometers away from the software development center of Canada, does that even matter anymore?
Jordan Boesch:
Yes, we are located in Saskatoon, Saskatchewan. I think it's not a place where you think of like a massive technology hub in Canada. However, there's amazingly smart, talented people that are hardworking and willing to do what it takes to build a world class company in a place that most people don't even do that. So I think that what we do have going for us there is, is smart people that are extremely loyal and that want to be part of something bigger.
Jordan Boesch:
And so, as a result, we don't have the same level of competition that you might have in a bigger metropolitan centers like Toronto or San Francisco. And we can really stay laser focused, deliver a great product, and build a massive company.
Michael Hainsworth:
Plus the nightlife.
Jordan Boesch:
Yeah, it's got some great nightlife for sure. Saskatoon's a college town. So there's always something going on. There's always bands passing through. It's a great place to be if you're young, for sure.
Michael Hainsworth:
What kind of advice would you provide an entrepreneur just starting out, looking to raise the money they need just to get things going?
Jordan Boesch:
For folks that are just starting out and trying to raise a bit of money and trying to get to where they're going and hopefully they're raising money to build a really massive company that's going to make a really big difference. You should really look at the type of business you want to build. And I think that's a question that someone asked me early on in my career about is venture capital the right route? Is funding the right route? Is bootstrapping the right route? I think if you have to really understand the landscape and who you're competing with to really understand which mechanism is the right road for you and also your risk tolerance. I think you need to be true to yourself because what you don't want is to tie yourself to a rocket ship and realize kind of like as it's taking off that you don't actually want to be on it, that it's uncomfortable or these things are, that are just out of your risk tolerance. So I think that people need to be really true to themselves about what type of business they want to build for the longterm.
Michael Hainsworth:
And at what point do you choose to use debt financing as opposed to using more of your shares as currency?
Jordan Boesch:
I think when you choose to use debt financing over something like an equity realm is really when you feel like you maybe don't want to take on that extra dilution on if you want to postpone that event, knowing that there's going to be interest high to it, but you're going to make that up with a larger valuation longer term and kind of just putting yourself through that mental exercise. I think it's really healthy for people to do and play out the scenarios. And it's just your responsibility as an owner and an operator to go through that.
Michael Hainsworth:
But you could have used equity in the company to raise additional funds. Why a debt financing at CIBC?
Jordan Boesch:
There's a lot of different ways to capitalize a business when you need it. Obviously capital is instrumental to grow businesses nowadays, especially in tech. So, when choosing the right vehicle, it's important to think, if you want to get, if you want to optimize for valuation on their own, you think you can get a better valuation than you can that day. You may want to kick that can down the road a little bit further and get something like debt financing or a line of credit to kind of offset that knowing and kind of doing the math on that and thinking that you can make up for the difference with equity down the road.
Michael Hainsworth:
Why'd you go with CIBC?
Jordan Boesch:
CIBC has been a great advocate for tech companies and growing businesses like ourselves and they've been extremely supportive throughout our growth and always kind of being on top of what we're up to and making sure they can provide ways to help. So, being in partner with them from a banking perspective has just meant a lot of great hands on work and feeling like we're more of a partner, less of a client.
Michael Hainsworth:
Do you ever think in high school you'd be spending your time talking about money like this?
Jordan Boesch:
No, I did not. I did not think I'd be talking about money like this. I didn't get very good grades in school. I actually, I really like math, but I think I always wanted to do something completely different. I just wanted to build businesses and I wanted people to use products and I got gratification of solving problems for people. And that's why I gravitated to programming and building a tech company. I think that's the most gratifying thing is knowing that you're building something and people are using every day as part of their lives and they see it as a solution to something that they're doing.
Michael Hainsworth:
I'm quickly learning within the entrepreneurial community that mistake is not a bad word, that it's okay to admit you made mistakes.
Jordan Boesch:
Who told you this? It is true. It's very true that you make a ton of mistakes along the way. And what I always refer to this as, how many mistakes can we mitigate from happening? Because you're going to make a ton along the way. And whether that's getting advice, having a strong board or advisors or mentors that you can talk to. You still want to trip several times if you do have the option, I would rather trip once than 10 times. So I think that there's a big desire to learn fast from your mistakes. So it's really important that when you make them, and especially in a high paced environment where venture capital is being poured into companies to move quickly and grow fast, the expectation from the human level, which we are all humans running these companies, is that you can have a high learning velocity to kind of keep the pace with the growth of your business.
Michael Hainsworth:
So in the early days when you had that pad of paper and you were building out what you wanted the software to look like and you were going door to door, what's the biggest mistake you made then that you learned from?
Jordan Boesch:
I would say the biggest mistake from going door to door and trying to sell 7shifts was, I don't know that I was ever really talking to the right person. And I think that getting to the decision maker early on would have been far more beneficial. You know, I may have been talking to the assistant manager or someone that wasn't actually building the schedules. And so, I think that the intentions were good and trying to provide a solution and talk through a solution with these folks, with these sketches and papers that I had. But I think that I was missing really dealing with the decision makers.
Michael Hainsworth:
Was going door to door the right way to approach this?
Jordan Boesch:
Going door to door was not the best way to approach this. So what happened was I was going door to door with these sketches of 7shifts and going page and flipping through and people were interested. But we didn't really close anyone that way, because what happened was 7shifts was always available online and we had people that were coming through and signing up effortlessly. So very quickly, I diverted my attention to these people that were interested, that were aware of our product and had that pain point. So I shifted focus to that. And that's largely how we operate today. We aren't a door to door company, we are an inbound sales company. We work with a lot of partners to kind of have folks that are interested in coming through that funnel and just being able to serve those people when they come through our door and show interest.
Michael Hainsworth:
So the customer acquisition model changed fairly quickly?
Jordan Boesch:
Yes, very quickly. And it's funny, as we saw what what worked, which is the model we have today. Throughout this process I kept thinking well you know what? I'm going to go back and try door to door again and see what happens. And what I realized it just never really worked. What did work though is after we had that customer through the inbound channels of coming to us, is going to visit them after in person and talking to them and getting their feedback because they are already using the product. They had a lot of good feedback. And I think being highly customer focused and highly customer driven is a really big differentiator in making it as a company and really scaling. And as we've grown past a hundred people, that's something that we can't sacrifice. We're all talking to customers every, you better believe every time I eat at a restaurant I'm talking to the servers and the managers and my wife gets annoyed going out to eat with me sometimes. But it's really this loop that needs to always continue.
Michael Hainsworth:
You didn't plan to stay in the family business, you learned to code.
Jordan Boesch:
The whole idea of starting to code. Was trying to solve a pain for my dad and that's really where it came out of. It was can I solve this problem? And oh, this coding thing, it seems interesting. I'm going to try that. And just kind of evolved from there. And then I got jobs in software.
Michael Hainsworth:
So you were trying to help your father solve a pain point within the restaurant industry. What's the big pain point for the industry?
Jordan Boesch:
We don't have enough fingers on hands to count all the problems and the issue. So, everything from food cost and waste and inventory and labor management is a huge problem. And so if you ask a lot of folks who are hiring and retaining staff, it kind of goes hand in hand with that.
Jordan Boesch:
So building something where my dad could manage the schedules and keep staff happy and informed was a big part of retention.
Michael Hainsworth:
What did that scheduling look like before you learned to code and solve that problem for Dad?
Jordan Boesch:
Scheduling was, okay, so I went to my dad's, well he had this office in the back of Quiznos. And there was a computer there and pads of papers and there were all these sticky notes of staff that said I can't work Saturday, going on vacation next week. And it was just this hodgepodge of requests. And so he would sift through those and he would put the sticky notes on his screen, on the side part, and then he would open Excel on his monitor and he would go, okay. So like Tracy can't work. She's okay, that person has dance class, this person has soccer. And he would just manually enter it into this Excel spreadsheet and it would take him hours to do this. And after he finally finished it, he would print it off and he would go put it on the cork board at the back.
Michael Hainsworth:
And then of course employees would come up and go no, I can't work that day. I need to start all over again.
Jordan Boesch:
It's like, oh, I forgot to tell you I couldn't work this day. I'm out of town, or I forgot. And so it just became a lot of chicken scratch on top of the schedule, hands crossing out times. And pretty soon you couldn't actually read the scheduling anymore. And there was a little bottle of white-out that you would take and you would dip in and white out the printed time.
Michael Hainsworth:
That was the high tech part of it, the white-out.
Jordan Boesch:
Exactly, and people would grab pens and they'd write over it. And it was just a nightmare. And it's crazy that that is still something that goes on for the majority of restaurants today.
Michael Hainsworth:
So when you built this software that was version one. Today, you're incorporating machine learning and artificial intelligence?
Jordan Boesch:
Yeah, so I mean we started at a very basic level and we still provide a really great basic streamlined scheduling program for restaurant operators. But as we have been looking at this problem and trying to solve it in a bigger way, we found that a lot of operators, they still spend time building schedules. So we're trying to think in the next several years like what is that going to look like? Are people really going to be spending as much time and do we want them spending as much time managing their labor and staff? When you know some of the scheduling behaviors are predictable, given the right inputs around availability, weather, seasonality trends, all that kind of stuff.
Jordan Boesch:
So if we can get the right inputs, can we programmatically infer the right outputs that match the business needs with say the happiness and flexibility of the staff need and also the productivity of those staff members. So we're trying to really hit on these three points as we've kind of evolved with product.
Michael Hainsworth:
The productivity of the staff members sounds like the most interesting use for AI.
Jordan Boesch:
Yes. I think that there's this notion I think when you tell a restaurant operator, we want to automate your schedule, it's going to be awesome. It schedules these two people together that they never scheduled together. Well, I purposely don't schedule Dan and Jacob together because I know that they just don't get anything done.
Michael Hainsworth:
They're too busy goofing off.
Jordan Boesch:
Yeah. They're too busy goofing off.
Michael Hainsworth:
AI solves that problem.
Jordan Boesch:
And they're on their phone and so I think we've got some work to do definitely in terms of understanding what the productivity match is. But I think really step one is getting the labor needs, right? What do you actually need to hit those labor targets at a given day? If we get that right, then it's like, okay, who we can work those shifts? Who's available and how can we match their preferred weekly hours and availability and all this kind of stuff? And then, once we have those people and we're feeling confident in creating the schedule that looks very similar to how restaurant operators do schedules, but it's maybe a bit better and helps on labor costs. Then the next piece is like, okay, how do we start to make recommendations based on productivity? How they can even boost it even more? So I think it's a three step problem that we're still getting started with, but we have some really good early signs of success.
Michael Hainsworth:
At the end of every shift, the employee gets to be able to rate their shift?
Jordan Boesch:
Yes. We kind of believe in creating the system where you're not just told when you work, there needs to be something that's more encompassing to make sure that you as a staff member have bought into the company, the culture and there's a proper feedback mechanism in place to reflect on your shift. And this might help the manager schedule you for different shifts or find out that maybe these two people might not work well together if the manager didn't know. So what we do is we send a push notification after the shift and say, "Hey, Michael how was your shift today?" Sad face, mean face, smiley face, rates and comments and just to try and help inform the managers and the operators what's happening at the ground level. I think there's a big disconnect, especially as you move up the market into larger chains where there's regional managers, district managers, store managers, assistant. There's just the feedback mechanism at the ground level is just very poor.
Michael Hainsworth:
What's next for 7shift?
Jordan Boesch:
What I'm most excited about is the future of what we're doing. So we obviously have scheduling and labor management is our core function and that's what we built a business on. But really we're interested in attacking and solving problems for all aspects of the employee life cycle. So you think of the moment someone's hired and they're trained and they're scheduled, then they're paid after they work their shifts and then they're retained. So those five elements are what we define as the employee life cycle. So we're going to be building products that solve these pain points from the moment someone steps into your restaurant as an employee that works there to the moment they either leave or are retained. The goal is that we can provide tools to help managers with retention, not just the scheduling piece.
Jordan Boesch:
So longer term, I'm really excited to solve pains across the entire employee lifecycle.
Michael Hainsworth:
Through AI? You're getting into artificial intelligence?
Jordan Boesch:
I don't know how to answer that question because it's not artificial intelligence.
Michael Hainsworth:
Machine learning.
Jordan Boesch:
Yeah, it's machine learning.
Michael Hainsworth:
Which is funny because everybody thinks it's the same thing. Geeks like me just give up and accept that people won't know the difference. You knew the difference.
Jordan Boesch:
Yeah. We are getting into machine learning and it's really interesting because as we built this business on scheduling and helping managers streamline that process, we think about what is that next evolution to that core scheduling component. And we don't think managers should be spending time having to think about that kind of stuff. We would rather them be on the floor with customers or thinking about great campaigns that are going to drive more business and focus on the front of house elements that create a really great dining experience.
Jordan Boesch:
So how can we automate that using key drivers around weather, seasonality, events that are happening nearby, pair up great people that do great work and ultimately give the managers a schedule that makes the most sense for their workforce.
Michael Hainsworth:
What's the one bit of an entrepreneurial advice you would've given yourself if you could rewind the clock to day one?
Jordan Boesch:
If I can rewind the clock to day one and give myself some advice. It would be, I'm going to need to try and remain focused on the core needs of what we're solving for, for the customer. I think it's very easy to get lost in a lot of noise of you should do this. And there's a lot of buzzwords out there of trends and just remaining true to understand that the customers that we are serving, that we build products for are going from something that's paper to something online. And that in itself is a large step. So really just trying to make sure we're late. We remain laser focused on that simple tool that's providing meaningful improvements in efficiencies over time for these operators.
Announcer:
Learn more about the innovation economy, why your business model doesn't have to follow Silicon Valley's rules, how to take your company global and why diversity is key to corporate success. Subscribe to the CIBC Innovation Banking Podcast with Michael Hainsworth at cibc.com/innovationbanking.