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In 2011, this guy created booking software for boat tours.
In 2018, he sold it for $300 million.
He kept all the money because he never raised a dollar.
The story of an amazing software business you've never heard of 🧵
In 2018, he sold it for $300 million.
He kept all the money because he never raised a dollar.
The story of an amazing software business you've never heard of 🧵
Meet FareHarbor.
Booking software that 20,000 tourism operators run on.
While other competitors raised $20-30 million rounds, they bootstrapped and doubled revenue every year.
They took a clever approach.
Let's dive in:
Booking software that 20,000 tourism operators run on.
While other competitors raised $20-30 million rounds, they bootstrapped and doubled revenue every year.
They took a clever approach.
Let's dive in:
Problem
Brothers Lawrence and Zach Hester grew up in chilly Minnesota.
When Lawrence visited Zach at school in Hawaii, he tried to reserve a surfboard and kayak online.
He found there wasn't a simple way for these tourism businesses to accept online sales.
So they built it.
Brothers Lawrence and Zach Hester grew up in chilly Minnesota.
When Lawrence visited Zach at school in Hawaii, he tried to reserve a surfboard and kayak online.
He found there wasn't a simple way for these tourism businesses to accept online sales.
So they built it.
First Customers
They sold their first customer without a product.
Over 12 months, They got to 25 Hawaii-based clients including parasailing, snorkeling, and horseback-riding companies.
They met with all prospects in person, even if it meant hopping on a plane.
It worked.
They sold their first customer without a product.
Over 12 months, They got to 25 Hawaii-based clients including parasailing, snorkeling, and horseback-riding companies.
They met with all prospects in person, even if it meant hopping on a plane.
It worked.
Pricing Innovation
They realized tourism was transactional. These weren't repeat end-consumers.
Instead of charging for the software, they gave it away for free. They charged end-consumers a 6% transaction fee.
FareHarbor made $100s to $1,000s per month from each operator.
They realized tourism was transactional. These weren't repeat end-consumers.
Instead of charging for the software, they gave it away for free. They charged end-consumers a 6% transaction fee.
FareHarbor made $100s to $1,000s per month from each operator.
Done-For-You
Instead of saying hey you need a website to these busy tourism operators.
They would build a website and get it all set up to take orders for them.
"In the early days, it was about building a business. It’s about having revenue. It’s not about playing startup.”
Instead of saying hey you need a website to these busy tourism operators.
They would build a website and get it all set up to take orders for them.
"In the early days, it was about building a business. It’s about having revenue. It’s not about playing startup.”
Go-To-Market
They hired young salespeople right out of college and paid them a tiny base salary but half the first-year bookings for the operators they signed. It was great money.
One slept in a van and drove around Hawaii until he booked every single operator in the area.
They hired young salespeople right out of college and paid them a tiny base salary but half the first-year bookings for the operators they signed. It was great money.
One slept in a van and drove around Hawaii until he booked every single operator in the area.
All Hands On Deck
When a VC-backed competitor went under they swooped in.
90% of the team came to the office through the July 4 weekend.
20 air mattresses were brought in.
But they needed more time.
When a VC-backed competitor went under they swooped in.
90% of the team came to the office through the July 4 weekend.
20 air mattresses were brought in.
But they needed more time.
Get Creative
Other competitors tried to buy the failing company. They got turned down.
Instead, FareHarbor offered $100k just to keep the lights on for 7 days. They agreed.
In the end, FareHarbor snapped up 340 of Zerve's 549 clients and 90% of all its transaction volume.
Other competitors tried to buy the failing company. They got turned down.
Instead, FareHarbor offered $100k just to keep the lights on for 7 days. They agreed.
In the end, FareHarbor snapped up 340 of Zerve's 549 clients and 90% of all its transaction volume.
Outcome
FareHarbor scaled to $50 million in revenue while doubling every year.
They went on to sell to Booking. com for $300 million.
Since the brothers never raised money, they got to keep almost all of it.
FareHarbor scaled to $50 million in revenue while doubling every year.
They went on to sell to Booking. com for $300 million.
Since the brothers never raised money, they got to keep almost all of it.
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