After spending 20 years in the pet retailer space, industry veteran Brad Parker co-founded FormPiper to help retailers automate consumer financing options. Co-founder Parker recently sat down with the GetLatka team to discuss how a non-tech founder could build a bootstrapped SaaS. Parker shared what compelled FormPiper to expand from retail pet stores to furniture stores, why he’s not interested in being a financing company today, and how his niche business is succeeding against industry giants like Klarna.
- 150 customers with 250 retail locations
- Team of 9: 2 founders, 6 salespeople, 1 CSM
- $250,000 revenue from combined MRR and GMV processing
Launched as a back-end financing option for pet stores, taking 1-2% of GMV processing
Initially, Parker started by providing pet retailers with better options for financing. “When you have high ticket items, typically you have more than one finance option for customers. We streamline that application process,” explains the co-founder. Parker added that they began by selling back-end financing to pet retailers, taking 1-2% in the process.
$120,000 per month in GMV processing fees
With his background in pet retail, Parker could easily convince customers to sign up for financing. But then they ran into a problem that changed the trajectory of the business. “We would sell someone financing, and they’d never use it. We’d ask why they didn’t use it, and they’d say I can’t teach my team how to do it, or I have 4 different lenders, or too many different apps,” explained the co-founder. At that point, Parker had an aha moment and decided to build a solution to streamline those processes. The app they built, FormPiper, aggregates all lenders, so Parker can now immediately see who is using the product.
Pivoting to a SaaS + GMV model, $250,000 total revenue per month
Since his last interview with Latka, Parker has turned his product into more of a retail management software where retailers can aggregate data. This data allows retail customers to see which lenders provide the most revenue and gain insight into which employees are performing best. The data shows who runs the most applications and has the best approval and close rate. In the end, retailers can turn the financing portion of their business into their own division.
Processing $350m through the app, roughly half from own lending partners
Parker’s strategy has been to educate and sell retailers on the SaaS product, allowing them to plug in their existing lenders. Parker’s team then reviews each retailer’s lending lineup, looking for gaps. “So if they don’t have, for instance, a near-prime or subprime option, we add a lender or two to their portfolio,” the co-founder explains. Of last year’s $350m in GMV processed, $150m came from Parker’s lending partners, on which he earned a 1.5% processing fee.
SaaS fees average $225 MRR for 150 customers
Each retail consumer pays an average of $225 per month to access the SaaS product. When Parker last met with Latka, FormPiper was serving 90 customers. In describing the breakdown, Parker calculated that most are single operators. About 60 are multi-store, and several are chains of 10-15 locations. “Data is more important to the multi-store,” explained Parker. He added, “the smarter the operator, the easier it is to buy our product.”
Launched FormPiper in 2019 after starting financing company 7 years ago
The bootstrapped co-founder explained that he launched his financing company 7 years ago, along with a marketing company with co-founder Ryan Munson. They merged and created FormPiper three years ago. Since his last chat with Latka, Parker’s MRR has grown from $18,000 to $45,000 MRR on the SaaS product, while financing has grown 120%.
Expanding from 200 pet retailers to 40,000 furniture stores
FormPiper is expanding its retail business to now serve furniture retailers as well as pet stores. Why? Because as the co-founder explains, FormPiper has about 200 pet retailer prospects in total, and they have close to 60% of the market. Furniture has 40,000 retailer prospects. “Our goal is to close 1,000 furniture retailers,” explained Parker.
How FormPiper competes with Klarna
Latka queried Parker on why someone would choose FormPiper over a financing category giant, Klarna. The co-founder explained that Klarna divides everything into 4 payments over a short period of time. “Not everyone can afford ¼ of a $5,000 total like that. We can offer a 60-month plan, so a consumer only pays, say, $100 per month,” explains Parker. He added that consumers shop based on monthly payments. “We can offer many other diverse options, like prime, near prime, and subprime. The FormPiper advantage is that we can work with any lender. I represent 10 lenders and can use the platform to aggregate and fill gaps for the retailer,” he reiterated.
Retailer perspective helps slay competition
Parker shared that FormPiper is running into some competition, but he believes they are winning the battle because of his background. “Finance companies are building products from a finance perspective. I’m a retailer. I understand their business needs, so my system is built from a retailer perspective and is agnostic from a lender perspective. With FormPiper, retailers can choose their own lenders and prioritize the order or presentation,” Parker explained.
Profit increased from 18% to 20%, growth up from 34% to 37%
Finally, the co-founder shared that his YOY profitability grew from 18% to 20%, while growth jumped from 34% to 37%. Parker reiterated the benefit of his retail understanding as a key to their ongoing success: “The most important part of the system is the data. To move the needle at retail, you need to know which salespeople are not performing well. If people are getting application approvals but not closing sales, you need to train that person to sell. My system will tell you the close ratio of every sales associate every day, so you can see who’s converting. That information helps the business owner, the sales manager, and the sales team drive success.”
Why not be the lender and get more than 1.5%?
Co-founder Parker defended his position against Latka, who pressed him on the irresistible revenue potential of being the lender. “I want to be the strategic partner in the spaces. I want to represent lending companies, not be the lender,” Parker noted. He added that “Financing is a challenging business. As a lender, you deal with defaults, adjusting merchant rates, creating an ecosystem of collections, and more.” Parker further defended his decision by sharing, “I like working with retailers and helping them drive success. I worked with customers for 20 years, and that was great, but now I’m focused on my SaaS product and working with retailers. It’s a much easier space to live.” Parker noted that this model allows him to sleep like a baby.
Working on the 4th product iteration with a team of 9
As the co-founder shared in his last Latka interview, FormPiper still outsources its dev to the Maker Software team. “They’re fantastic. They’re available 24/7 to brainstorm or do whatever we need,” gushed Parker. He shared that FormPiper is currently working on its 4th iteration after getting customer feedback. “Our lender relationships are stronger than ever. We have more API connections. And a really sweet turnkey system to help retailers crush it,” espoused the co-founder.
SDR team of 3 making 100 calls per day, targeting $40,000 per month revenue
When Parker shared that his SDR team of 3 each makes 100 calls per day, Latka asked how they get people to answer the calls. “They’re all retailers, so they answer their phone,” he quipped. The co-founder added that they use Task Minions to scrape for the contact information, and they recently added Seamless AI to enhance the list. According to Parker, they target 30 demos per month. 50% show up, and they close 35% of those demos. He shared that FormPiper added 12 new retailers last month and that most contracts are now annual, at a price of $2000-3000.
Famous 5 with Brad Parker
FormPiper co-founder Brad Parker identified The 12 Week Year by Brian P. Moran as his favorite current business book. The bootstrapped co-founder named Chris Smith, author of The Conversion Code as the CEO he’s following. Brad’s favorite online tool to build FormPiper is Superhuman, the email plugin, as his favorite too. “It changed my life with email,” Brad shared. Brad sleeps a full 8 hours per night. He is 43, married with no children. At 20, he wished he had known to be more patient. “It all comes eventually with hard work,” Brad noted.