After three years, the Saskatchewan startup is being released from the incubator into the prairie tech ecosystem to continue growing.
Countless people dream of taking their brilliant idea and turning it into a successful business with over $1 million in annual recurring revenue (ARR) but fail to do so. In fact, it is estimated that only 0.1 per cent of startups survive their first year of operations and only 1 per cent of those ever hit the $1 million milestone.
Despite these odds, SalonScale Technology Inc. (SalonScale), which provides digital tools to help hair salons reduce waste and increase revenue, reached the milestone of $1 million in ARR while becoming the first company to progress through all levels of the Saskatchewan tech incubator, Co.Labs’ programming.
Alicia Soulier founded SalonScale in 2018, the same year as Co.Labs inception, and the tech startup won the first Co.Launch Finale obtaining an initial $15,000 in prize money. Although Soulier remembers thinking SalonScale would hit the $1 million milestone in its first year, she says finally getting there “was definitely a memory I will never forget.”
“There’s one point when we were at like $999,999, and so we basically played a game of Telemiracle that night calling anyone in our hot leads … we did everything we could because we just needed one person to roll over,” Soulier says.
Because of the churn rate and a few cancellations they didn’t hit it that night, but by the end of the week Kim Badiuk, co-founder and chief operating officer, let Soulier know they reached the milestone but says their reaction was delayed.
“I think we were just running on pure adrenaline getting to it, then we hit it, and we just needed a little bit of time,” Badiuk says, “then two weeks later we were like ‘oh my gosh, we did this.’”
In addition to Co.Learn summits designed to be a starting point for those interested in tech, Co.Labs offers three other programs to take startups from idea to $1 million in annual revenue.
So after SalonScale won their Co.Launch cohort, they moved on to Co.Link at Innovation Place to network and receive mentorship from other founders before entering Co.Labs finale scale-up program called Co.Lead, which culminates in graduation once companies reach $1 million in ARR.
Matt Stefan, executive director at Co.Labs says this “program funnel” moves tech startups sequentially through different levels of direct education and SalonScale’s success is exciting for the organization because it means they can repeat this cycle with other companies.
“It’s a lot of validation for Co.Labs, in that we’ve spent the last three and a half years growing alongside SalonScale, developing our program to suit their needs, and trying to figure this out together as we’ve sort of tried to build the Saskatchewan technology ecosystem,” Stefan says.
Having come from the “world of hairdressing,” both Soulier and Badiuk say this incubator and ecosystem’s support helped them overcome the hurdles of launching a tech startup.
“Co.Labs gave me so much more than just the knowledge of building a tech company,” Soulier says, “it gave me a knowledge of economics and finance, and the world of things that I was so extremely intimidated by, I got exposed to it completely and it gave me confidence.”
“Co.Labs contributes to so much more than just what you’re building, but who you’re going to be at the end.”
She says that accelerating through the programming means finding a balance between “vulnerability and healthy competition,” and Badiuk believes having a community of people going through the same things as them was an important support from a “mental health perspective.”
“Just having that group of like-minded people that have no judgment and no agenda, and are just genuinely there doing it with you,” Badiuk says, “I think that’s the best part of the relationship component I had with the other [startups].”
Besides the education Co.Labs offered, it also facilitated support for SalonScale through government funding from Innovation Saskatchewan and Prairies Economic Development Canada. Additionally, in 2019, SalonScale closed over $1 million in seed funding through the Conexus Venture Capital Fund, Broad Street Bulls, and others.
“There’s not a single dollar that has come into our company that hasn’t been touched or tied back to Co.Labs, every single investor has something to do with that ecosystem … together we raised $3 million in three years, which is another amazing thing especially from two female founders,” Soulier says.
“This is the mark that we want to make and say that it is possible to go through this stuff and have the competence to do it.”