mulberry seth Cleveland startup aiming to give caddies
When Drew Pierson was in charge of the caddies at a high end private golf club in Florida, he oversaw a box that any given time contained $50,000 to $60,000 in cash.
“As an assistant golf pro, that was more money than I was making in a year,” said Pierson, who is now the director of golf at Shaker Heights Country Club.
The scenario is a common one at country clubs, where caddies most often work as independent contractors and are paid by the members for their services. The catch: The club usually pays the caddies in cash and is reimbursed by the golfer, which can result in a bit of a financial crunch during the busy summer months.
Circuit Technologies, a Cleveland startup that has space in the United Bank and Trust Building in Ohio City, believes it can relieve that cash burden for private golf clubs, and help them with potential scheduling issues.
Circuit, with the help of DXY Solutions, developed an app that is now in place at a couple Northeast Ohio country clubs Shaker and Mayfield Sand Ridge.
The app allows golfers to request caddies for specific tee times. Once a caddie accepts and completes the assignment (a loop, in club parlance), he or she is paid, via a Stripe account, by the member, who gives the go ahead for a credit or debit card payment via the Circuit app.
The idea stemmed from conversations Ryan Bartels had with his uncle, John, during the summer of 2016.
Ryan, who had been caddying since he was 15, was an intern at Ancora Advisors at the time. The 20 year old junior finance major at Indiana University was living with his uncle, who is a board member at Shaker Heights Country Club.
“I came to Cleveland and started caddying on the weekends,” said Ryan, an Illinois native. “I started finding that they were having the same problems in Cleveland that the clubs were having in Chicago. I started thinking, ‘How can we solve this?'”
John Bartels, who founded Independent Advisors in 2000, said he liked his nephew’s idea of paying and scheduling caddies via an app, and he helped Ryan shape it into what he thinks is now a viable business.
John and his brother, Chris (Ryan’s dad, and the owner of an Illinois landscaping company), put in the original seed capital. They raised another $200,000 in the spring, and plan to raise $1 million in growth capital, via convertible note, beginning this fall.
“We’re very excited about where we’re headed,” said John, an Ancora managing director who wanted to make clear that the Cleveland investment firm is not involved in Circuit’s fundraising. “We keep getting excellent feedback from general managers and golf pros.”
Paying now, and later
John Bartels is Circuit’s chairman of the board. His nephew who takes all of his college classes on Mondays and Wednesdays, giving him more days during the week to work on the business is the startup’s founder.
John and Ryan Bartels have brought in a vice president of sales and operations (Dan Hanna, who worked in sales for the Indians for 10 years), a senior VP of business development (Tom Lamb, a former PGA Tour caddie for the likes of Jay Haas, Steve Stricker and Brad Faxon), plus a sales staffer in Florida and a part time chief marketing officer. Soon, Circuit will add a salesperson to cover the Northeast, Hanna said.
Hanna is a former Shaker Heights Country club caddie master who said he used to “get a metal box with $20,000 in cash” to pay the caddies during a busy weekend.
“As we were going through and developing this, we said that’s not a really good business practice,” Hanna said. “We can take that off the club’s list of things they worry about.”
Pierson, whose club was the first to use Circuit’s technology to pay and schedule its caddies, liked the idea so much that he’s an investor and board member.
Shaker’s director of golf said he’s heard stories about club’s dipping into their lines of credit because they were fronting so much cash to pay caddies, and some who had a sizable amount go missing. (Because members are billed by the month, if he or she golfs on the first of the month, the club won’t get reimbursed for the caddie payment until late the following month, when the bill is due.)
“There are times when cash isn’t available,” Pierson said. “You have to send someone to the bank or pay a courier to bring cash to you. The easy loop is when a member pulls cash out of his wallet. But we’re in a cashless society.
“Caddies don’t like it, either,” Pierson said. “It’s a win win for the caddie, a win win for Shaker.”
On deck: Circuit Pro
The Shaker Heights golf pro might be even more pumped about other features of Circuit’s app.
Circuit gives members the chance to tip and rate the caddies, and allows clubs to send a notification to multiple caddies as they try to fill rounds.
“The technology will say I need two caddies,” Pierson said. “The first two to hit accept on a push notification will get the round. It’s two clicks for me. It takes the time down from potentially half an hour of work (after sending out text messages and waiting on responses) to potentially 10 seconds.”
Doing so, Ryan Bartels points out, can “reduce the clutter around the clubhouse,” since caddies don’t necessarily have to sit around and wait to be asked to work a loop.
Circuit charges an annual licensing fee for the service, and it gets $1 for each of the caddie payment transactions.
Hanna said he expects Circuit to have relationships with 30 to 40 clubs by the spring, mostly in Northeast Ohio and suburban Chicago (where Ryan Bartels resides when he’s not in school).
John Bartels thinks Circuit Technologies’ next venture, Circuit Pro, could be even more valuable. When finished, that technology will give golf and tennis pros the ability to show members an inventory of lesson times, and will process the payments in a similar manner as the caddie app.