Luke Hutchison, CEO and Co-Founder of Perfect Venue, explains how Perfect Venue works with hospitality locations to streamline event management

Luke Hutchison of Perfect Venue - Podcast Transcript

Scott:	Welcome to Founders and Friends Podcast. Before we get to our guests, special shout out to Kruze Consulting. We do all your startup accounting, startup taxes, and tons of consulting work, whatever comes up. Like financial models, budget actuals, maybe some state registration, sales tax, VC due diligence support. Whatever comes up for your company, we’re there for you. 750 clients strong now. $10 billion in capital raised by our clients. I can’t believe it. $2 billion this year. It’s been a crazy awesome year. So, check us out at kruzeconsulting.com. Now, onto our guest.
Singer:	So when your troubles are mounting, in tax or accounting, you go to Kruze, Founders and Friends. It’s Kruze Consulting, Founders and Friends with your host, Scotty Orn.
Scott:	Welcome to Founders and Friends podcast, with Scott Orn of Kruze Consulting. My very special guest today is Luke Hutchison from Perfect Venue. Welcome, Luke.
Luke:	Thank you very much for having me on the show, Scott.
Scott:	Oh, my pleasure. I’ve always enjoyed talking to you, I still remember the first time we ever talked on the phone, and I’ll share some of my observations of that real fast and after you go. But maybe tell everyone, it was a pleasure, it was an awesome call, and I was like, “I think that guy’s going to be successful.” I have these little premonitions when I’m talking to new clients. So, maybe you could tell everyone what you’re going to be successful in, which is Perfect Venue, and how you had the idea for it.
Luke:	Yeah. Absolutely. So, Perfect Venue, it’s very similar to Airbnb or Open Table, but for private event spaces at restaurants. So, if you’re looking to book a party, anywhere from 20 to 200 folks, we basically provide that backend tool for the venues to easily manage inquiries, send proposals, get paid, track tasks. It’s basically a very focused CRM, or private events at restaurants. Something we’re really excited about. About $300 billion or so is spent each year at just US restaurants, full service restaurants specifically. About 30% of that is private events, around $80 billion or so. Our tool basically digitizes that whole process. So, the vast majority of that money is handled offline, on spreadsheets and Word documents and things like that. We provide a nice end to end tool to make it really easy.
Scott:	It’s such a smart idea. I was actually thinking, we did one of our portfolio… Our clients, Arc Ventures, which does lending for startups, and Kruze sponsored an event together at a restaurant in… Or it was a club in San Francisco, I’m forgetting the name, but it’s one of the clubs. You’re right. There was a lot going on back and forth, and we were just writing a check and not having to handle all the logistics. But I’m sure having a platform like Perfect Venue, the people who are planning the event maybe don’t even realize that the event space is using Perfect Venue, but I’m sure it makes everyone’s life easier, to get out of those spreadsheets and have everything documented in a workflow, very clear what needs to happen next, and make sure everything gets to where it needs to go.
Luke:	Yeah. No, absolutely. That’s definitely the goal. How Perfect Venue came to be. Prior to starting it, I was actually in the Army for five years, and in between deployments in Afghanistan, we’d have these social events for our unit, for anywhere from 100 all the way up to 800 folks, for the leaders and their spouses and things like that. Then I was also planning a monthly drink and think, where we’d get together 30 folks at a bar and drink and think. It just always-
Scott:	That sounds awesome.
Luke:	… always a nightmare trying to find and book a venue, just like you were talking about. Making all these phone calls, sending all these emails, things would go unanswered. Even if I did know the person there, they may swap out pretty frequently in the hospitality industry, bouncing from place to place. I mean, yeah. Just the whole process was a nightmare. Then I learned that on the venue side and the restaurant side, they were equally frustrated. They’re wasting hours every day doing these tedious, repetitive tasks, and not able to focus on what they do best, which is provide world class hospitality, not do all these tedious admin tasks. So, that’s something that really excites us, and helps both the folks booking the venue and also the businesses themselves. On average, they tell us that they save about 12 hours per week, then also see a revenue increase in more than 40% for their private events business. It’s not magic, it’s just when you have everything in one tool and it’s really easy to follow up and close deals and get more events, it’s just much better than a manual offline process.
Scott:	That’s amazing. Also, I feel like in the restaurant business, because I worked in a restaurant, Vanessa worked in a restaurant, there was a lot of turnover in restaurants too. So, I’m assuming Perfect Venue, it’s a software tool, but it’s got the inherent process mapping-
Luke:	Yes.
Scott:	… inside of the app. So, a new person who joins a restaurant who’s going to be in charge of the event booking and things like that, can use the tool and know exactly how things go at that place, and get them up to speed faster, right?
Luke:	Yeah. No, absolutely. I mean, in a way, it’s like training wheels, where it’s like, by just using the product, we’re going to make you a better sales manager. Often, if you think about it from a restaurant standpoint, it’s quite a bit different than what they normally do. They’re normally used to, people show up, they put in tickets, they order the food, everything is basically same day. It’s very, very quick. Everything is through their point of sales system. But events are a very different workflow, it’s a sales process, right?
Scott:	Yeah.
Luke:	They’re selling their event space, that’s thousands of dollars. The sale process is often over the course of months, there’s a lot of different details, there’s negotiations, it’s pretty complicated. For a lot of restaurants, they just don’t have the bandwidth to really train someone and get them fully up to speed. So, you need a software tool like ours, where you can take somebody that maybe they haven’t really been trained, but they can pretty quickly figure out what to do and it’ll nudge them towards the right behaviors. Then I think to your point as well, with the turnover, it’s like if you’ve been working with an event sales manager at a restaurant and then they leave, and they’ve been working at your event, but your event is that next month, the odds that next person is going to have all the information or that the emails are going to be… Is pretty low. So, a lot of things fall through the cracks, then restaurants have to do refunds because people are upset. Whereas with our system, it’s just a nice system of record, CRM with everything in one spot. So, if somebody leaves, it’s plug and play and you can have that same consistent, amazing guest experience across the board.
Scott:	The system of record is such a great point, because then they’re not digging through email or scratch pads or whatever. The other thing about the event business that’s so different is that there’s all this pre-ordering and pre-tastes, and what the tables are going to look like, or what the decorations are going to look like. Then everything’s delivered on one day. There’re so many more details than just a normal, hey, our family shows up at a restaurant, wants to eat dinner, and we slot into the normal processes. So, it makes so much sense what you’re building. It’s really cool.
Luke:	Thanks, man. Yeah. No, I appreciate it. We’ve come a long way, but still have a long way to go. So, we’re excited to help many more restaurants and venues. We talk a lot about restaurants, they are about 50% of our customers, but the other 50%, I mean breweries, distilleries, wineries, museums, libraries. I mean, antique stores that have a cool back space, maybe if Kruze Consulting, I don’t know, maybe if you guys have got a cool office, we can get you on there. But any place where you can have a group for 20 to 200 folks, they use our software and down the road we plan to make it possible for folks looking to book space from our customers, make it easy for them to find and book a venue. But for right now, we’re laser focused on just helping the venues manage their existing business event.
Scott:	I love it. I was talking about when we first had our first conversation, you were interesting because you didn’t go out and raise a ton of money right away. I forget how much you started, but I think it was like $250,000 or something like that. It was a pretty small amount of angel money, that you used to get the business going. Do you remember that?
Luke:	Yeah. No, absolutely. Yeah, I think that was when we were midway through our pre-seed raise. We ended the raise with 750K. But, yeah. No, it was definitely… We were working. But yeah, still 750K. I mean, I guess pre-seed rounds can sometimes be north of one or two million. But, yeah. Pretty cash efficient and just grinding it out. I mean, Kruze has been such an awesome partner throughout all this, especially for myself, coming from not a business background, it’s been really awesome to have an excellent financial partner to make sure that all of our books are good to go.
Scott:	Thanks, man.
Luke:	And really set us up for… I mean, our seed raise raised that real quick, and I think a lot of that is just because we had… Everything was clean, there was no skeletons in the closet, and you guys did an awesome job taking care of us.
Scott:	Thanks. I really appreciate it. It was super nice. You didn’t have to do a commercial for us. I appreciate it.
Luke:	No. Yeah.
Scott:	But what was interesting about… I think, because we never raise money, and there is a whole thing about staying focused when you don’t have a ton of cash, you can’t afford to be unfocused. You know what I mean? I always thought, I always got that vibe from you. The other thing is, COVID hit, correct me if I’m wrong, but COVID hit pretty quickly after you raised your pre-seed. I feel like it was bang, bang. How much time did you have after you raised your pre-seed before COVID?
Luke:	Yeah. Not a lot. I mean, literally November, December of 2019, that’s when we hit our goal. 500K was the original goal, but then we oversubscribed a round. Then January, February we took in a couple more checks and then COVID hit. I used to joke with our investors is like that, “Hey, if it at least lit their money on fire, it would’ve produced heat,” instead of putting it into Perfect Venue. For all of COVID were just basically coding, improving the product, laying the foundation. So, when we came out of… COVID started to subside, we just came out swinging, and really hit the ground running with a pretty solid product. Had a lot of iteration to do, but it actually… I mean, it ended up working out all right for us, but you’ve just got to figure it out as you go.
Scott:	I don’t think COVID was a blessing for anybody, and a lot of people went through a lot of suffering. But it gave you this window to really focus on what you’re building and not get distracted. You probably would’ve been trying to close clients earlier, or the classic, “Hey, I just talked to this company, they want this feature so we’ve got to add it right now.” Even though that’s a distraction, it turns out. It was actually nice to that it allowed you to focus on building the product you knew the market needed.
Luke:	Yeah. No, definitely some silver linings for sure.
Scott:	Did you also feel, when the restaurant or event space industry came out of COVID, I would think that people had been… Times are tough.
Luke:	Yeah.
Scott:	So, additional revenue streams or that additional booking actually becomes very valuable. Did you find a sense of urgency from your customer base of, “No, no, no. We need Perfect Venue now.”
Luke:	Yeah.
Scott:	Because we cannot mess around for another three months, because we haven’t been generating revenue for a year, or something like that. Did you get that sense of urgency for your customers?
Luke:	Yeah. No, absolutely. I mean, I think for a lot of restaurants, they adopted OpenTable in the late nineties, and then may or may not have built a website in the intervening 20 years. Then with COVID, I think a lot of restaurants really realized, woke up and realized, “Hey. If we want to be a profitable enterprise, and we want to continue forward, we need to get some good systems in place and digitize our operations.” I think you saw that across the board with DoorDash, with Toast. I mean all restaurant technology companies across the board, 7shifts, all had been growing really quickly, because you have just this massive part of the economy that was largely offline and not nearly as digitized as other aspects. Then there was also the staffing shortage that followed COVID, and I would argue that was almost a bigger crisis for restaurants, because at COVID, there was the loans, everybody knew about it. Obviously not great, but the staffing crisis has just been this lingering challenge for a lot of places. So, they’ve been looking to use software, because our tool saves them so much time, now they’re able to have their marketing person do marketing and events, or a general manager can do events. So, they can hold off on hiring that full-time person longer, which allows the business to be more resilient. Then it’s also about 30% of the revenue, but it’s their most profitable revenue stream. So, it may be 30% of the revenue, but 40, 50% plus of their profits. Then it also serves a really nice marketing function. It’s like, if you go to a restaurant, Scott, you have a good time, and then just you about it. But if you bring the whole Kruze team and 100 people have a good time, those people are going to probably come back as walk-in traffic later, or order delivery. So, there’s no better-
Scott:	Word of mouth,
Luke:	… better marketing than that. So, yeah. We have just seen a surge. I mean we didn’t even have a full-time salesperson when we went into our seed rates, because we were just seeing really, really strong demand from the market for what we were building.
Scott:	You made a bunch of really smart points there. But the one that really latched my brain, was letting the manager or letting the marketing person handle the event management bookings. Because I remember, I worked in the… And this is when I was a teenager before college. But the manager did wear a lot of hats. But if Perfect Venue can make them so much more efficient… And oftentimes, at least restaurants, I don’t know about other event spaces, but the restaurant, the managers have real profit participation incentive plans. The guys I used to work for, they really cared about how the restaurant was doing every single night. They had a lot of real time data on what the feedings were, and average ticket size, and things like that. So, I’m betting that you can give them that on their event space business as well, which they probably love.
Luke:	Yeah. No, absolutely. I mean for a lot of them, they’re just flying blind. They’re doing things on spreadsheets and things like that. It’s not their fault, there are other solutions out there in the market, but they’re quite a bit more expensive. They’re quite a bit more complicated. They’re great if you’re a large chain or Ruth’s Chris or something like that. But for the full-service restaurant market, it’s largely independent restaurants and small hospitality groups. So, it makes it a lot easier for them, and then they can grow with it. So, as they get busier and as they add more locations and they do want to hire a full-time sales manager or multiple full-time sales managers, our product makes it very easy to add those locations and then add additional users. So, you can really grow with it. Whether you’re just opening up or you have a dozen locations across several states.
Scott:	Hey, it’s Scott Orn at Kruze Consulting, taking a quick pit stop to give some of the groups at Kruze a big shout out. First up is our tax team, amazing. They can do your federal and state income tax returns, R&D tax credits, sales tax help, anything you need for state registrations, they do it all, and we’re so grateful for all their awesome work. Also, our finance team is doing amazing work now. They build financial models, budget actuals, and help your company navigate the VC due diligence process. I guess our tax team does that too on the tax side. But the finance team is doing great work. Then I think everyone knows our accounting team is pretty awesome, but want to give them a shout out too. Thanks, and back to the guest. You touch on it briefly, but I can totally see a world where, and we’re not breaking any news here or anything like that, but where I love going to a certain restaurant, and I can book through Perfect Venue as well for an event. I could totally see how that would make sense. So, you’re in a great spot, I’m really happy for you. You built something really cool.
Luke:	Thank you.
Scott:	There’s another digression for Perfect Venue, which is, you have a really interesting blog that you do. Do you want to tell the audience about it and what it’s all about?
Luke:	Yeah. No, absolutely. So, yeah, it happened accidentally, I would say. So, one of the things in the military and things like that, a big emphasis on reflection and writing to reflect on different processes to improve them. When I was fundraising the first time, it was really difficult. I was coming out of the military, didn’t really know a whole lot of folks in Silicon Valley, or just tech in general. It was really challenging raising money, and so I just started journaling about the process to reflect each week on what was working and wasn’t. Then I had, as we did start to have success, other founders were reaching out to me, especially folks like myself, who’s dads weren’t a VC or they did work at Uber or something and have that pedigree. Just asked me, “Hey, what worked?” So, I then started taking those notes and put them into something a little bit easier to digest. It was a GoogleDoc, and a Google Doc is just not exactly ideal, so I put it onto a blog. It’s been a lot of fun to try and help other first-time founders try and get that first check, which can be really challenging. But my goal is, I think, you meet so many great founders that have so many great ideas that make the world, cliche but, the world a better place. They make things easier and better. I mean, we’re all trying to do that and I think it’s a really big bummer if people aren’t able to make their products a reality, if it’s just simply a lack of fundraising skills or connections or whatever. So, hopefully this helps some folks learn from my mistakes.
Scott:	I love it. I subscribe to the Substack version of it. What’s it called?
Luke:	Just First-Time Founder. If you Google First-Time Founder and Substack, it should be up there.
Scott:	Yeah. It’s really good. It is awesome that you’re passing it on. I think I told you this last time we talked, but a lot, from my business school days, a lot of the most successful founders were actually military backgrounds.
Luke:	That’s right.
Scott:	Because I think there’s this real sense of… I didn’t serve so I don’t actually know, but a lot of those folks came, and they had seen real stuff in life, and they were extra motivated than maybe just the folks who worked in investment banking or consulting or something like that. They also had a real sense of organization and structure. I was actually, just as you were talking about all the writing you do, I was thinking of one of my favorite entrepreneurs, Mark Frank of SonderMind, who was our Kruze client for a long time and I was fortunate to invest in him. He has built an amazing company at SonderMind. But his investor letters are the best. It’s like Warren Buffet quality stuff.
Luke:	Nice.
Scott:	I didn’t know that the military puts a lot of emphasis on writing and reflection, but it makes sense reading Mark’s stuff and reading your blog, because I’ve subscribed to the Substack for a while. It makes a lot of sense. It’s really cool.
Luke:	Thank you. Yeah. No, I enjoy it a lot. I think you have an unformed idea or uncertainty about something, you just start writing, and by the process of writing and forcing yourself to communicate in a logical and coherent way to another person or group of people, you get that clarity of thought, which I really enjoy. But, yeah. It’s always hit or miss when things get busy and stuff with Perfect Venue, which they always are. Probably not the most consistent Substacker out there. But, yeah. I try and push out some-
Scott:	That’s the beauty of Substack, they just email it to you.
Luke:	Yeah, exactly.
Scott:	You don’t have to check it all the time. They just send you an email. That’s what I love about it.
Luke:	Nice and simple stuff.
Scott:	I think there’s also another piece of your writing, which is cool, in that you have very strong… Who you’re writing for. Yes, first time founders, that kind of stuff. But in my various conversations with you, you’ve always referenced folks that are coming from the military and things like that. So, I feel like you actually, probably as you’re writing it, typing it, you know exactly who you’re talking to.
Luke:	Yeah.
Scott:	Which is also a strength. It comes across.
Luke:	Thank you. Yeah. No, absolutely. Yeah. I just try to think, just all those basics of when I was… All the mistakes I made of talking to a VC or their fund site was way too big. Or talking to the wrong angel or paying to pitch something. All these mistakes, trying to help people, they can read and they can learn from my mistakes, and then they can hopefully raise a lot faster. I mean, our pre-seed round took about seven months to put together 750K, and our seed round we raised 3.6 million. It was literally within the course of several weeks it all came together. So, I’d like to think that we learned something, and we did raise at the beginning of this year when things were still pretty frothy. So, definitely the market conditions, we were very lucky on that as well. So, that helped a lot too.
Scott:	That does help. But, yeah. You are probably so much more organized, you’d done it before. That’s really, really, really helpful. I’m just excited where you’re going. Talk about, another insight from you, even though you raised 3.6 million, the company’s still pretty lean. Talk about how you view headcounts and building. How do you structure the rest of the team? Like engineering, sales, marketing, how are you set up right now?
Luke:	Yeah. Absolutely. So, we have three teams, engineering, sales, and support. I think to me, building a startup was pretty simple at the early days. You’ve just got to focus on coding and closing. So, we focused on shipping great features and listening to our customers and getting those products out there. I really think that world class companies are built on world class products, whether that’s Facebook or Google or Zoom. I mean, there’s DoorDash, they’re all really, I think, centered around great products. So, we hire the best engineers that we can, and really just equip them to do their best work. We try and have a lot of autonomy and flexibility in terms of ownership and understand… In the military they call it disciplined initiative. So, trying to focus more on the goals or the outcome, and then allowing them to develop the best route to get there. Then also helping us shape the outcome and the goals, and see if maybe they don’t make sense. Then on the sales and support side, we hire folks from the restaurant industry so they know the language. We teach them the tech sales piece, which is-
Scott:	That’s really smart.
Luke:	Yeah. It makes a huge difference. Then they teach us. They can help when we get customer feedback, help us organize it and prioritize it, help provide that voice to the customer. We’re hiring folks from the hospitality background. So, they’re awesome. They’re just natural people people, and they really provide that world class hospitality that they’ve provided in-person, and now they just provide it online and they’re just a ton of fun to work with. They all love to cook too, so we have great, very delicious off sites.
Scott:	Maybe my first or second favorite business book, I’m forgetting the name, but it’s written by a restaurateur. It’s like, Setting the Table maybe.
Luke:	Yeah. Danny Meyer.
Scott:	It’s the guy who did Shake Shack. Danny Meyers, yeah. It’s such a good book. You’re right. People have worked in hospitality, they also just understand human beings and they understand the good and the bad with people, and it’s pretty neat. One final question for you before we wrap up. Was there a venue or a restaurant, or someone that they signed up for Perfect Venue, you were like, “I made it. Amazing.” Someone you respected or a place you love to go to eat, or love to travel to, where you’re like, “Oh man, this is the real deal.”
Luke:	Yeah. No, absolutely. So, that venue would probably be Ivywild. It’s a brewery in Colorado Springs, Colorado. That was where I was stationed at the time. Bristol Brewing is a part of them, which most folks in Colorado know of. It’s just absolutely amazing craft beer, you’ve got to go. It’s this old elementary school, it’s very historic, classic, built in the 19 hundreds, that they’ve converted into a community center and a brewery and a restaurant. So, when they signed up, I mean everyone in Colorado Springs knows them. They’ve also just been a phenomenal partner, in terms of customer feedback. I would go and just sit next to the sales manager literally for days, and just watch him use the product and just take notes and notes and notes, and then bring it back to the engineering team.
Scott:	That’s awesome.
Luke:	And just iterate. So, yeah. They were definitely that first big customer. I think for any startup that just makes a huge difference, and that’s the first big milestone, but-
Scott:	You need that, like the customer that makes you feel special, that keeps you going on the startup journal. It’s really, really cool. Well, Luke, thank you so much, man. Really appreciate you coming by. Maybe tell everyone where they can find Perfect Venue, how to reach out if they want to talk about working with the company or maybe working at the company.
Luke:	Yeah. No, absolutely. Yeah. If you know a restaurant or brewery or something like that, that you like, and it was a rough experience booking your holiday party this year, feel free to let them know about Perfect Venue. We make it a lot easier for them. If you’re an investor that’s interested in helping small businesses and restaurants get to the next level, or vertical software, always down to chat. Most importantly, I would say, we’re always looking for team members. So, I know a lot of companies have been laying folks off lately. We are not. We are still growing quickly, we’re trying to keep up with demand. So, we’re looking for really talented software engineers that love to build world class products and world class experiences for customers. Always looking for great folks from the restaurant industry too. We’re starting to build out our sales team with folks that come, maybe not from the restaurant, but from a restaurant tech sort of background. Or just folks that are interested. Feel free to reach out. My email is luke@perfectvenue.com. It’s Luke, L-U-K-E, at perfectvenue.com. Website is perfectvenue.com obviously, if you want to check us out.
Scott:	Love it. Thank you so much. Great advice. Your blog is very generous. I encourage, it’s First-Time Founder, just Google that with Substack, and you’re a pleasure to work with. You’re a super nice person and our team really appreciates you. So, thanks, Luke. Really appreciate it, man.
Luke:	Awesome. Thanks, Scott. We love working with you guys as well.
Scott:	Right, buddy. Take care.
Singer:	So, when your troubles are mounting, in tax or accounting, you go to Kruze, Founders and Friends. It’s Kruze Consulting, Founders and Friends with your host, Scotty Orn.

Luke Hutchison, CEO and Co-Founder of Perfect Venue, explains how Perfect Venue works with hospitality locations to streamline event management

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