After a stint in equity research on Wall Street, Brian Nichols started and sold his first company, Hade Technology, in 2017.
But following that exit from the analytics firm, he retained his employees and decided to jump right back into building another startup.
"I wanted to go after a larger market and solve what I thought was a bigger problem," he said. "There's nothing larger than payments and it's a very fragmented space."
Nichols founded Sky Systemz, a software-as-a-service company that's developed an all-in-one cloud platform for small to medium-sized businesses. It's had rapid growth in recent years, scaling to more than 60 employees and $9 million in revenue.
The company built out a platform that offered businesses everything from point-of-sale, to inventory management, to invoicing, to e-commerce, to enterprise resource planning. As it did that it began to understand what makes it different as well as its value proposition — helping businesses eliminate chargeback risks, Nichols said.
A chargeback is a charge that is returned to a payment card after a customer successfully disputes an item on their account statement or transactions report, according to Investopedia. Chargebacks are most often associated with stolen credit cards, but Nichols explained that a lot of the times, it's people who weren't satisfied with the goods or service the business provided — or want those goods or services for free.
Nichols said to some businesses, like quick-service restaurants, chargebacks aren't a big deal. But to others, such as moving or heating and cooling companies, a chargeback could result in thousands of dollars lost.
Those chargebacks that lack validity — roughly 81% of all claims — cost U.S. businesses $225 billion annually, according to data from Juniper Research.
Sky Systemz has been able to reduce chargeback claims by 500% and it wins 89% of chargeback claims that do occur, compared to a 32% industry average.
"Solving that problem, along with having an operating and payments platform, is really what's fueled our growth," he said.
That growth has been significant, as Sky Systemz had just eight employees in its early days. It had about 20 by June 2021, and has since tripled that workforce in a little over a year.
Over the next year, Nichols expects the company to add between 70 and 80 employees.
Some of those employees are working out of the company's new, 14,000-square-foot offices at the Vine Center in Lexington, Kentucky. It moved from Harrodsburg, Kentucky, in July, to accommodate all the growth.
Nichols said moving forward, he anticipates about 70% of new hires will be local as well.
"We might very well open up a Louisville office, or one in Cincinnati and Nashville [Tennessee]," he said. "I know a lot of people have trouble hiring but we've really found that hiring has been easy for us because there aren't a lot of companies like us in, especially in Kentucky. In Silicon Valley, we're a dime-a-dozen, but in Kentucky, your choices are insurance, health care or tech company and that gives us a really big advantage."
Sky Systemz revenue has kept pace with hiring. Its revenue was $200,000 in 2019, $1 million in 2020 and $3 million in 2021. Nichols ambitions for growth aren't stopping with the company's $9 million in revenue this year.
The company has been bootstrapped thus far, but it is currently raising a $20 million round of venture capital to aid in future growth.
"We don't want to be a $10 million business. We want to grow this into an organization with hundreds of millions of dollars in revenue and billions of dollars in value," Nichols said. "We feel like we have a good opportunity to do that with a very clear demand and solving a very obvious problem."
