An exclusive Tech Tribune Q&A with David Tashjian (co-founder, CEO, and president) of Tippy, which was honored in our:
- 2021 Best Tech Startups in Fort Lauderdale
- 2020 Best Tech Startups in Fort Lauderdale
- 2019 Best Tech Startups in Fort Lauderdale
Tell us the origin story of Tippy – what problem were you trying to solve and why?
My brother-in-law, Terry McKim, was part of a PA based salon chain. Terry was first to recognize an issue at this salon that existed in salons nationwide. With the migration from cash to plastic, customers now wanted to tip on their credit cards. This presented two problems: expensive processing fees now imposed on the salon owner, and stylists now having to wait two weeks to receive their tips through payroll. Terry saw a solution, but needed assistance with payments architecture and corporate structure. That’s where I got lucky – he called me, and together, Tippy was founded. It’s been a great partnership from day one, as we balance each other in so many ways. We’ve attracted some great partners, including L’oreal, who we’ve rolled out with nationwide. Tippy is in 46 states and already processing nearly $100 million of tips annually. In summary, Tippy was built in-industry for the industry.
What was the biggest hurdle you encountered in your journey?
Our three biggest hurdles were “The Three C’s” – Capital, Change, and COVID:
Capital: It took us over a year to find our initial round. That required patience and discipline. We turned down two significant opportunities due to both cost and culture. It’s hard to say no when someone is waving a million dollar check at you. But looking back, these were two very good decisions!
Change: While Terry’s idea was a great one, it required salons to change. The salon and spa industries, like many others, are set in their ways. Change comes slowly, even if you’re giving something away. There are multiple tiers of decision makers and influencers, and It took persistence and many trials to find the sweet spot on how and who to appeal to.
COVID: Need I expand on this?! Rather than wallowing in pity, and with the help of our investors, we pivoted our software to assist stylists sitting at home trying to figure out how to pay their rent. We spent two weeks of sleepless nights. That whole story is for another time. But when our grandchildren ask us what we did during this hopefully only a once in a lifetime event, we can hold our heads high and say we made a difference.
What does the future hold for Tippy?
That’s the best part of startups – the future! Many have written about the various stages of growing a startup. It’s universal that the initial stage these days is all about gaining customers at all costs, and that is exactly what we did. We lived in “The Present” for the first 18 months, moving only in one direction. Our goal was gaining traction. We are successfully at breakeven now, and that opens up our stage two – “The Future”. We now have the world ahead of us, with several directions to take. This is the exciting part – where we have time to organize, analyze, and discuss the appropriate paths forward. We are considering new partners and new directions. We are stepping outside of the salon and spa spaces, and entering the restaurant, hotel, and potentially the gig-worker spaces. All exciting moves for Tippy.
What are your thoughts on the local tech startup scene in Fort Lauderdale?
It’s growing and the wind is definitely at its back. There are multiple driving factors. COVID has had a significant and permanent change on corporations’ views of remote work, and the technology space has landed front and center. Companies like Square and Twitter are great examples, as they announced the permanent option to work remotely. Ft. Lauderdale is definitely a benefactor of this movement. It is a less expensive alternative with great housing options that have expanded by multiples over the last couple of years, and has a wonderful infrastructure and a beautiful ocean.
What’s your best advice for aspiring entrepreneurs?
- Invest early in corporate documentation as if your startup is going to depend on it. Don’t be shocked when your lawyer presents you with a 50 page operating agreement and a hefty bill. It is worth every penny, and will save you a lot of trouble down the road. It’s the old adage – good fences make good neighbors.
- Choose your investor rather than the opposite. Be patient. It’s like choosing a spouse. Just because someone has money to throw at you doesn’t mean they are the right partner.
- Learn to accept the word “pivot”. It doesn’t mean your idea was bad…it means you are smart!
- You don’t have to have the best idea all the time to succeed, but you definitely have to have the hardest work ethic.
- Be as lucky as I was to have such a great brother-in-law!