Beau Hale is an innovative entrepreneur who specializes in turning self-funded startups into multi-million dollar brands. He prides himself on staying one step ahead of ever-changing industry shifts and creating products before the need for them is even known.
After graduating from the University of Southern California with a Bachelor’s degree in Business Administration with a focus on Entrepreneurial studies, Hale went on to co-found Adboom Group. In 2015, Adboom Group achieved #3 of 100 on Forbes’ List of America’s Most Promising Companies after increasing revenue 10x in a single year and generating more than $105 million in sales.
After helping hundreds of other companies achieve eCommerce success, Hale and his partners decided to launch their own brands. It was then that Hale was confronted with a new and unexpected challenge: chargebacks. A solution was needed before chargebacks crippled their thriving business, however, there weren’t any available service providers that could achieve the desired results.
Hale and his partners decided to build a solution themselves. The result was Midigator, the world’s first SaaS platform to fight and defend against chargebacks.
In 2013, Midigator was ready for internal use, and in 2015, it was introduced to the market. Since it was the first technology of its kind, Midigator was a success from the start. It was the first product to introduce real-time account monitoring while also fighting chargebacks to win back lost revenue for merchants.
Hale serves as a board member, helping guide Midigator’s strategic initiatives and business development.
How did you get started in this business? What inspired you to start this business?
Midigator actually came to fruition because it was a solution to a problem we were experiencing personally.
Like most eCommerce merchants, we had a chargeback problem that was getting worse as time went on. Chargebacks were originally created for customer protection but have since turned into an easy form of fraud–what industry members call “friendly fraud.”
We had a successful eCommerce business that was doing $100 million in sales each year. But as sales increased, our chargebacks increased too. Not only were we losing money to chargebacks, we were suddenly in danger of losing merchant accounts too. We knew we needed help getting our chargebacks under control.
We tried to outsource our chargeback management to a “pro,” but the situation actually got worse instead of better. Data wasn’t reported in real time–reports would be emailed to us weeks later. It was hard to figure out what was really happening. Oftentimes, small issues would become major problems before we even knew about the risk. Plus, the service provider was fighting chargebacks after they had expired! We were paying for cases that had no chance of winning!
Since the only service providers available at the time were costing us money and not at all helping with our problem, we decided to bring our chargeback management in-house once again. This time, we built technology that could help us be more efficient and accurate.
After we got the technology running and refined, we started telling our friends about it. Word spread throughout the industry that we had created some really useful technology for chargeback management. Merchants asked us to share the technology, even offering to be our first customers.
Since the demand for our technology was so great, we decided that we should make it public.
We never thought that this would end up being such a core component of our careers. The technology was created because we saw a void that needed to be filled and we set out to fill it.
How do you make money?
Midigator helps remove the complexities of payment disputes. We want to remove the burden of chargeback management so businesses can get back to business.
We serve two client bases: merchants and industry partners.
For merchants, we prevent and fight chargebacks.
Our technology provides a multi-layer strategy to prevent chargebacks, reduce the risk of threshold breaches, and stop unnecessary revenue loss. Merchants can identify the reason why customers are charging back so they can solve problems at their source. Midigator also includes tools that resolve disputes in real time to stop chargebacks before they happen.
When chargebacks do happen, Midigator responds and recovers lost revenue. The process is entirely automated so merchants have the best chance of winning with an ROI-optimized approach.
On the partner side, we help industry members manager their merchants’ risk more efficiently and keep their clients processing longer.
How long did it take for you to become profitable?
We became profitable in our first year. Our immediate success was due to two things. We have always run our business focused and lean, plus we had a ton of clients join right out of the gate. We had our first 50 clients within a few months–with no sales or marketing.
When you were starting out, was there ever a time you doubted it would work? If so, how did you handle that?
Initially, we had a hard time finding the staff that we needed. We were afraid that we would fall behind and not be able to keep up with market demand because we did not have enough people that could do the job.
Even though we were only running at one-tenth the speed we could have been, we were doing great. There was so much more we wanted to accomplish though.
Ultimately, what drew employees to Midigator was the fact that we were building really cool technology–and people wanted to be a part of that. Our company culture was another enticing factor. The things we value really make Midigator one-of-a-kind.
How did you get your first customer?
Our CEO was sitting in his office with a friend and fellow eCommerce merchant, just talking about work, struggles, and new projects. He mentioned a new software tool he had been developing to help monitor and analyze chargeback data in real-time.
When the friend saw all of the ins and outs of the technology, he thought it was amazing and instantly asked for a copy for his own business. Our friend was the first Midigator beta tester and client.
What is one marketing strategy (other than referrals) that you’re using that works really well to generate new business?
One of the biggest areas of opportunity for us has been going to different trade shows. It is nice to be able to meet people one-on-one and really learn about their struggles. You can’t get to know someone and hear their stories nearly as well by phone or email.
I am super passionate about this product because I know what it has done for our business and so many others that I love being able to share that with new people. Getting to sit down and talk to other business owners about what they’re facing is the best way for me to able to show them how much they could benefit from Midigator and our technology.
What is the toughest decision you’ve had to make in the last few months?
The one struggle that seems to be ongoing is the fact that our technology is dynamic. There are always new integrations, features, and functionality to be added in order to keep up with industry changes. The toughest decisions that our team has to make relates to priorities.
We have to look at everything we want to accomplish and decide which goals are our top priorities and which ones can wait a little bit. We have to strategize which features will best serve our clients right now and which integrations will connect us with the merchants who need us most.
What do you think it is that makes you successful?
I think the biggest thing that has made me successful is my ability to be flexible and constantly open to new opportunities.
I pride myself on being able to anticipate trends and stay one step ahead of the industry, providing something before anyone else has the chance to think about it. Being able to anticipate the next big thing is what landed Adboom at #3 of Forbes’ fastest growing companies list because we were able to get a product to market before consumers even knew they wanted it. Now, I am bringing that skill with me to chargeback management.
Nothing in eCommerce remains consistent, so being able to grow and adapt is definitely key to being successful long term. It is easy to stay in your little box, but being able to step out and change is what will keep you relevant.
The other big component to my success is that we were former merchants ourselves. This means that we really understand what our clients are dealing with and going through because we were in their shoes. This also makes it easier for us to understand what would serve them best and what technologies we should build to make the process more streamlined and user-friendly. After all, we built this for ourselves and never actually intended for others to us it.
What has been your most satisfying moment in business?
One of my most satisfying moments was back when we were working as Adboom Group in San Diego.
We created this amazing work environment that really made everyone want to come to work and give their best ideas. It was definitely not your traditional office but that is what made it so great. Our team would tell us that they loved it so much that they would have worked for free if it was financially feasible.
That really tells you something about the company and people. There is a sense of pride that comes along with this company that is unparalleled.
What does the future hold for your business? What are you most excited about?
I am always excited about the future. With how fast everything changes, there is really no telling where this company will be in a couple years. We might be offering completely different services by then!
I am always open to new ideas and opportunities–anything that will help create a better future for myself, my team, and our clients.
I would love to be able to get Midigator into more markets though. Since the technology is so dynamic, there really aren’t any limits to who we can help. Ultimately, we aim to become the global leader in payment risk management and simplify the dispute process for the entire payment ecosystem.
What business books have inspired you?
I am a really big fan of never-ending education, so much so that it is actually one of our company values.
I read a lot and have been inspired by many insightful books. The one that has impacted me the most recently is Start with Why by Simon Sinek. It’s a great reminder that we are not driven by what we do or how we do it–what matters most is why our business exists.
The principle of Start with Why was especially helped after LLR Partners made a $30 million investment in Midigator. When Midigator was first launched, there was such a high demand for our product that we had to sidestep some of the groundwork that new businesses need to lay. We are now, with help from LLR’s experience, insight, and expertise, going back and really formalizing our mission, values, and vision. This is helping us get a plan in place to take our business to the next level. Our WHY is the core of our thinking while doing all of this. It is shaping how we think about the company and where we want to take it.
What is a recent purchase you have made that has helped with your business?
When we first created Midigator technology we were really focused on simplicity and efficiency. We have since integrated that mindset into everything we do. Creating products that simplify the complex while increasing efficiency has become the ethos of our entire company.
The problem we found was that, while our technology fulfilled that ideal, some of the other tools we used didn’t. This was especially noticeable in the sales department. So, it was really exciting when we found a great tool that would help our sales team stay organized and focused. We want our own internal operations and workflows to be just as efficient as the technology we create. I think that we’re finally heading in that direction, which is great.
What is one thing you want merchants to know about chargeback management?
The biggest thing that merchants need to know about chargeback management is that you can and definitely should automate more!
Automation achieves the best ROI and is able to recover more revenue with fewer costs. This also means less headaches for you–which is always a plus. True automation, like Midigator, can handle so much more than you probably know.
The more manual processes you have, the more chances there are for errors to occur. People make mistakes, that is part of being human. With automation though, you reduce human involvement.
Retain more revenue by using technology specifically created to help improve your bottom line.