Andrew Wicklander's priorities for his software, called Tula, sound almost old-fashioned: It should be simple, clean, and easy to use. And it should do one thing exceptionally well.
The area in which Wicklander and Tula aim to excel is in helping owners of yoga studios run their businesses. Wicklander, who owns a software development company called Ideal Software, first became interested in this problem when his wife, Maile, opened a yoga studio in Chicago's Logan Square neighborhood. She needed a better way to track class enrollments, schedules, and purchases than a pencil and paper, which Wicklander says many studios still use. But she found the interface for the leading software in the space, called MindBody Online, to be difficult.
(Georgia Suter, a spokesperson for MindBody, which is used by a wide variety of businesses, from hair salons to tae kwon do and yoga studios, says her company's software "is designed to be able to scale and evolve with your business. You can choose which features you'd like to use and which ones you'd like to turn off, but they'll be there if you need them.")
Maile also found that with MindBody, if her students wanted to buy anything from her online, they would be brought to another website.
"More than anything, that was what caused us to build our own software," Wicklander says. "You should be able to sell things directly in your website." He didn't think students should have to create an account to do so, even though allowing people to buy without an account would make it harder for Tula to tout how many active users it had.
Why Bootstrapping Works
Wicklander put Ideal to work on Tula in July 2011; Maile used the software to help with her studio's launch that October. Wicklander won't give revenue numbers or say how many customers he has, but Tula has been growing nicely--about 300 percent a year, according to Wicklander--and processing about $500,000 in payments each month. Wicklander is proud of the fact that he employs no salespeople or dedicated customer support staffers. When a studio owner has an issue, he and his team get alerts on their phones.
Studios pay $59 to $99 a month for Tula, depending on how many of their employees use the software. Wicklander estimates there are 30,000 to 35,000 yoga studios in the U.S.; in five years, he thinks, 10,000 of them could be Tula clients. Yoga and Pilates together grew at a 7.7 percent annual rate from 2007 to 2012, according to researcher IbisWorld, and are now a $7 billion market. In 2012, Yoga Journal's Yoga in America study found that 20.4 million Americans practice yoga, compared with 15.8 million in 2008.
Tula has so far been self-funded, with Wicklander investing about $100,000. He hasn't taken outside funding and doesn't plan to, although he says he frequently gets calls from would-be investors.
To him, venture investment would be the wrong path. Tula is profitable, supporting the team of six that works on it. Wicklander has every interest in expanding, but not in the way he believes investors would require. He wants to add more studios to his customer list, and wants to figure out new features that would be helpful to studio owners. That's not what he thinks investors are after. "None of my competitors think the yoga industry in and of itself is large enough to serve with a piece of software," he says. "They all need to get on a path that will tell their investors how they will get 100x return on their money, and go worldwide and take over all these industries." Wicklander thinks Tula can be successful and profitable by concentrating only on yoga, and prefers manageable, steady growth to the "hockey stick" demanded by investors. He calls the pressure to expand into multiple industries "ridiculous."
Ridiculous it may be, but his largest competitor just might pull it off. MindBody has raised $108 million in venture capital, with its most recent raise sporting a $450 million valuation. Some 40,000 small businesses use the software; MindBody is in 92 countries and plans to tackle the corporate wellness market next. The company's revenue was reportedly about $50 million last year, and it has reportedly chosen the banks that will lead its IPO.
Wicklander prefers to stay focused on yoga studio owners. He's trying to make it less expensive for them to sell classes and gear through their websites, for example. Many of his competitors include payments systems within their platforms, and then charge clients a small percentage when students make purchases online. Tula works differently. First, Wicklander recommends clients simply use Stripe as their transaction engine. Then, he negotiates with payments processors on his clients' behalf. His clients used to pay the industry standard of 2.9 percent plus 30 cents per transaction on each credit card purchase, but as Tula has grown, it's received more favorable rates. Its customers currently pay 2.5 percent plus 30 cents per transaction, and Wicklander is hopeful it'll come down a few more tenths of a percentage point soon.
Wicklander also built a "find a sub" feature into the software, realizing that one of his wife's instructors is also a doula and is sometimes unable to teach a class at the last minute. The instructor logs in, clicks a button for the class for which a substitute is needed, and all the other instructors affiliated with the studio get a text message asking if they want to pick up the class. The person who replies first gets the class. Now Wicklander has to make sure Tula itself stays similarly nimble.