Technology continues to play an enormous role in the speed of business. Transforming industry and its players is a function of adoption. Adoption, in turn, is highly dependent on resource and capital. Small businesses have been and continue to be the casualties in a dynamic market that tends to favour the larger players with money and influence. Steve Lau and Rameez Ansari, co-CEOs of AutoLeap fully intend to change the game for small business.
In the United States, small business (by definition, 500 employees or under) make up 99.9 % of the business population. In Canada, similar stats show a small business penetration of 99.7%. According to the US Chamber of Commerce, approximately 33% of business will fail after 2 years. The survival rate after 5 years: US: 50% and Canada: 42.9%.
In 2015 Ansari and Lau acquired FieldEdge, a 35 year-old small business in Florida. Since then the business has grown from 25 to 300 employees and provided 7x return on investment to original investors in 3 years. Most importantly, FieldEdge transformed the lives of several thousand small business contractors by equipping them with affordable, easy to use technology solutions that were previously out of reach. It was this experience that affirmed their path forward.
I sat down with Steve and Rameez to document their journey as entrepreneurs, their fight for inclusiveness and their mission to transport small business to the 21st century.
Rameez Ansari was born and raised in an entrepreneurial family from Pakistan. His father started a small business when he was in his 40’s. Rameez saw first-hand the challenges his father faced:
“In the early days, the family business was under served by both capital and technology and it was through sheer entrepreneurial hustle and hard work that my father was able to successfully compete against much larger players who had better systems and deeper pockets. I clearly remember the days when all accounting had to be done manually because the homegrown accounting software had failed. My father would often have to work long-hours and weekends to keep the business running smoothly.”
Steve Lau’s parents grew up in Hong Kong. He speaks about his father, who had to leave home because his family could not afford to take care of him. With only $500 in his pocket, he moved to Vancouver, British Columbia, lived with a distant relative, and through hard-labor jobs to pay for tuition, he eventually earned a Masters in Computer Science through the University of Waterloo.
“My father greatly valued job security because he never experienced the financial safety net nor a family to rely on. He always wanted to become an entrepreneur but pushed his dreams aside for the job security of working steady jobs at large organizations. Like many immigrants, he made a tremendous sacrifice for the benefit of his child. “
Steve almost squandered his opportunity as a high school dropout but eventually got his act together to attend the University of Toronto and complete his MBA at Wharton. Rameez completed his BBA at University of Toronto and completed his MBA at Stanford. While both pursued promising careers in management consulting and investment banking, each felt something was missing.
The notion of philanthropy and doing purposeful work is deeply ingrained in Pakistani culture. Rameez’s work as a management consultant, while intellectually stimulating, was not a life mission that he felt meaningfully impacted people’s lives.
The son of Chinese immigrants, Steve understood the importance of work ethic, modesty, ambition, and pursuing well-paying positions at prestigious institutions. However,
“… The values of modesty and deference to elders can inhibit career growth in corporate America as that made presenting one’s achievements and socializing with senior leaders unnatural for me. I also saw a tiny minority representation in leadership positions and didn’t want to spend my career in a battle with one arm tied behind my back.”
So both explored the unknown and uncertainty of entrepreneurship, which, as Steve noted was driven by results as opposed to what “your supervisors think of you.“
They reconnected since their years together at the University of Toronto and began to form the beginnings of a meaningful business partnership and a friendship. They soon pursued the opportunity of starting a search fund, which has traditionally proven to have a great risk/reward trade-off, and an uncapped upside potential. The objective was to buy a business that already had a working product, a revenue stream and existing employees – a far less risky option compared to a startup. And through a network of accomplished business people including a part owner of the Boston Celtics, the CFO that took Oracle public, several CEO’s of multi-billion dollar organizations, among others, they were able to raise an initial investment and soon found a diamond in the rough, FieldEdge, a software company that enables “mom and pop home service companies” (HVAC, electrical, plumbing, etc.) to more efficiently run their businesses. Steve describes why they decided to hang their hats on this opportunity:
“While FieldEdge was a small, slow moving 35-year-old company with outdated software, we couldn’t help but be excited about the raw potential the business had to transform the home service industry. I thought it was time that the mom-and-pop businesses started having access to cutting edge software that would help these owners better manage, understand and grow their business –the exact type of software that gives larger companies a significant advantage”
For Rameez, his background and culture became influencing factors in his approach to growing FieldEdge.
“The customer base reminded me a lot of what my family business was like in the early days. I could really relate to the challenges my parents had faced and understood the tremendous impact that technology could unlock. I had seen the transformational power of entrepreneurship from my family’s journey and was convinced that an entrepreneurial path would enable Steve and I to write our destiny and also transcend the cultural barriers that sometimes exist in corporate America. Coming from a developing country, both ingenuity and resilience are intrinsic to Pakistani culture where people have become accustomed to doing more with less. This entrepreneurial and scrappy mindset helped us transform the company and grow, from a tiny-boot-strapped company with legacy software to competing among much larger companies that had raised $200M+.”
The excitement that came in scaling a 35-year-old company was not without some challenging encounters. Acquiring this company meant uprooting their families and moving to Fort Myers, FLA, a small suburban community that was largely unfamiliar from their urban roots:
“I faced my most difficult life challenges while at FieldEdge, both personally and professionally. After a year in Fort Myers my wife and one-year old son moved back to Toronto and I flew back weekly to see them. At the same time, my father was diagnosed with and was fighting stage 4 cancer. These events made the struggle balancing work and family even more pronounced.”
Rameez’s time in Florida earmarked a moment during the Trump presidency when the Muslim population had endured political persecution:
“I remember going to visit my family in Pakistan for the first time in many years. While I was midair on flight to Pakistan, Trump announced his ‘Muslim ban’. While Pakistan was not on the initial list of banned countries, our immigration lawyer believed that it would soon be added to the list. I had a choice of jumping immediately back on a return flight home in the hopes that Pakistan didn’t get added to the list before I arrived. If I was banned, my wife and I, and our 2-year-old daughter would have been unable to return to our home in Atlanta”.
Despite the adversity both Steve and Rameez dove into their work, and began to understand the ordeals these mom and pop shops have faced, with no real access to tools and resources that would allow them to grow their businesses in a meaningful way. Rameez recounts the early days of his father’s business where they did not have access to the technology that larger companies had access to. The result was being caught in an endless cycle of having to overcome the technological disadvantage through more manual processes. While the business was able to overcome these challenges and succeed in the long run, many others have not been as fortunate. The journey is symptomatic of the plight of the small business owner: long days running the business and late nights accepting the never-ending administrative toll to keep the business functioning.
Through their solution, they were able to provide their customers a significant ease in their workload. As per Steve,
“The opportunity to lead FieldEdge and truly help the small business owner made it all worthwhile. We were constantly inspired by our customers who showed great resilience running their small businesses with limited resources.”
Within 3 short years, FieldEdge was transforming the lives of thousands of contracting businesses and in 2018, they successfully sold FieldEdge for more than $100M. Was this the right time? Personally, for Steve, this was the right time. He had been away from Toronto and family for over 8 years.
“With two young children under the age of 3, I really wanted them to grow up around their extended family in Toronto. My wife had moved back to Toronto a year earlier and I had been travelling between Toronto and Fort Myers on a weekly basis and it was time for me to come home permanently. We know small business owners make similar sacrifices all the time and many don’t have the same luxury of selling their businesses.
Business-wise, however, FieldEdge was only starting to hit its stride. Nevertheless, we remain active investors and supporters in the business and are happy to see it continue to transform the lives of small home service businesses.”
For Rameez, this experience became a calling card for their next chapter at AutoLeap:
“Building software for small business owners in under served industries has been an incredibly purposeful and fulfilling mission.”
Steve and Rameez see the same small business owner journey playing out similarly in the automotive repair world. The local repair shop has not changed much from 30 years ago: Processing routine car maintenance typically involves call-in schedules, long wait times, fax machines, marketing flyers, and paper invoices. In the meantime, there have been fundamental technological advancements in the automotive industry, much to the expense of the local garage owner.
To steal market share, auto manufacturers have deliberately blocked access to information, parts and tools that auto shops require to perform repairs. Dealerships with deeper pockets also spend hundreds of thousands of dollars on cutting-edge software to improve operational efficiency and enable superior customer experience.
One of the largest service gaps are electric vehicles, where demand has grown considerably, however, virtually no repair shop can fully service this type of car. This paves the way for Tesla, and others, to expand their business to include in-house repair much to the detriment of the aftermarket.
Rameez sees AutoLeap, as the opportunity to transform the auto repair industry:
“During the pandemic, many small businesses are barely surviving and auto repair shops are no different. We founded AutoLeap in the middle of the pandemic to level the playing field. Some people may think founding a startup during the pandemic is extremely risky, and perhaps even reckless. However, from our perspectives, starting AutoLeap when your local garage needs it most is a ‘no brainer’.
AutoLeap is an all-in-one automotive repair software that helps the local garage turbocharge their business with automation and AI, enabling them to better manage, understand and grow their business. With AutoLeap, repair shops will benefit from features such as automated invoices, AI powered customer communication and predictive maintenance.
Now, small auto repair shops using AutoLeap can significantly grow revenue, transform the end to end customer experience, while drastically cutting the administrative time.
This is the exact type of software that I wish my parents business had the benefit of while I was growing up.”
As they transitioned from FieldEdge, a number of their core team members have followed them to AutoLeap looking to make a similar impact for the local aftermarket auto repair shop. A good number of auto repair shops are now running their entire operations with this emerging automotive shop management software. These partnerships are critical to injecting the voice of their customers into product iterations. Their current team is distributed across 3 countries. To date, they have successfully raised $8M from Threshold Ventures, a top tier venture capital firm in Silicon Valley, an ex-CEO of GM and several automotive CEO’s.
As their story continues to unfold, Steve reflects on his challenges and difficult moments as necessary to appreciate their successes thus far:
“It’s not about the money, title or prestige. It’s about changing lives and levelling the playing field. The small business owner whose business we helped grow 50%+ a year and save 5 hours of work a week. He now has more time to spend with family and finally enjoy the benefits of all the hard work. As someone whose has done long distance with my family, I appreciate this impact even more.”
For Rameez, the FieldEdge journey and launching a new flagship cloud product and being witness to the increasing number of customers they were serving proved extremely rewarding.
“We all found great fulfillment in the impact but rapidly growing a software business certainly meant sacrifices on the personal front that were quite stark. I remember being back at the office only a few hours after the birth of my first child and our other team members were certainly in the same boat with the cost to their lives. Looking forward, we all are still trying to drive the same transformative impact for our customers – but striving to do it in a more balanced, sustainable way for the team – so that we can drive success over the long term. It is very much a marathon vs. a sprint mentality now. We’re in this for the long haul.”
For these two young entrepreneurs, they are relentless at keeping true to their mission. Both have gained an appreciation for the luxury of pursuing their true ambitions while experiencing the struggles of those who haven’t been as fortunate.
They’ve also witnessed the endeavours small business have endured in competing with these Goliaths and have developed a deeper gratitude and respect for those small business owners who have kept their businesses alive despite it all. It’s the small business owner’s journey Steve Lau and Rameez Ansari will seek to transform to ease their struggles and catapult them towards greater efficiencies and business success.