The Exchanges

Q guess my last question would be, um, you know, with all your knowledge, um, with, you know, e-commerce and Shopify and just, you know, your, your experience, um, if someone wanted to, like, are there any books or podcasts that you would recommend for, you know, maybe a person looking to get into, um, you know, the Shopify ecosystem or anything that, you know, you check on a regular basis?

A Yeah, yeah, that's a great, uh, great prompt. Okay, what would I recommend? Well, if you are trying to learn Shopify, open a store, try to put it together, um, and learn the basics there. Shopify help is always going to that website. Really wonderful info to learn about that, but if you're trying to learn about the ecosystem and apps and all that, um, Shopify partner Slack, Is great. There's so many people from developers, um, at Shopify and folks working on their app. It's very collaborative. People help each other out. Um, if you're a plus user, I love the Shopify plus community. Um, and then if you're trying to learn the marketing of it all, go to a geek out conference. They're expensive and worth every penny. I think they're having one in Miami this coming weekend. You could probably get a virtual ticket. That's, The best, the best way to figure out how to unlock marketing. Um, I think those are, that's a good handful.

AI assessment note: “Shopify partner Slack, Is great. There's so many people from developers”

Q So how did you get involved in, um, operating, um, an acquired business?

A Yeah, well, I was at a, in New York City, I was at, at Betaworks, um, which is kind of a, uh, startup studio model. One of the, the, the first companies that have kind of done that build and, and scale, uh, within, uh, the company type models. So I was at Betaworks for a number of years. And, uh, one of the companies that they started was a company called Bitly, which I'm sure most people are, are familiar with. And Bitly was interesting because it was a venture-funded company that, um, kind of blew through a lot of the venture capital, um, needed to become a sustainable, scalable business, and I hopped over from Betaworks to Bitly, and I saw a lot of that, not necessarily post-acquisition, but that transition from venture scale to, um, sustainable, profitable business, and I really love that process. Uh, of taking it from, you know, where it was that was not sustainable to sustainable. And it's, some people kind of see that more boring than the rocket ship venture stuff, but I, I really loved it. Uh, and I love that operator's mentality within that. So that's kind of what got my mind on this direction. And then once I was done at, at Bitly, I, um, a buddy of mine, Andrew Wilkinson from tiny, you know, was kind of had been acquiring businesses for quite a while. And he had two companies that, you know, he needed an operator to come in and jump in on, and I started taking on tho…

AI assessment note: “Andrew Wilkinson from tiny... needed an operator to come in and jump in”

Q Nice. How did, so how did you get into this? So, you know, there's a lot of people buying, um, you know, SaaS businesses today, but you're kind of like one of the OGs that was, that was doing this before. I think everyone else jumped in. Um, uh, how did you get started? And if possible, maybe what was the first acquisition and how did it go?

A Yeah, sure. So a lot of people may know me from my blog called WPBeginner, where we create helpful WordPress tutorials to help, you know, non-techie people make their websites, and that's how we got started. We saw, and we were working with so many different plugins and SaaS companies, um, and we always had unique insights to share with those software developers and founders, and then, um, one day decided that I think we can do a better job at that with the insights that we had. Um, first acquisition, uh, was a slider and photography solution, Soliloquy and Envira Gallery, um, and they focused primarily on the WordPress market. Um, I founded, uh, through basically the co-founder or founder of that company ended up becoming my co-founder in OptedMonster. Um, his name is Thomas Griffin, and, um, he He approached me at a word camp, which is like, you know, WordPress specific conferences. Um, I believe it was in Atlanta. And he said, I see that you promote competitor X. I am building a killer of that product. And I said, okay, well, whenever you're done and ready, come, come talk to me, uh, and we'll help you promote it. And, um, and then he disappeared. He launched the product. And then, you know, I mean, I never, I forgot. And then we later reconnected and Um, ended up, uh, rolling that business, and that, that kind of gave it a start, and then since then, um, we've been doing qu…

AI assessment note: “first acquisition, uh, was a slider and photography solution, Soliloquy and Envira Gallery”

Q also I'm, you know, assuming you've worked with a lot of founders that, you know, you kind of have to, you know, explain how the acquisition process goes. So, um, I'm just curious, what's your, like, favorite acquisition? Because you've created, you know, life-changing outcomes for some entrepreneurs. Is there one that, like, kind of sticks out that, uh, you know, you, just your favorite acquisition? That's really broad, but.

A Yeah, that's, that's a tough one. You know, we've been doing acquisitions for quite some time now, um, and we've had, Just about every single one have turned out quite well. Um, I would say the one, one of the ones that we recently did about beginning of 2020 was called All-in-One SEO. Um, and I was, I'm, I'm still very, very excited about that, um, because we use that tool internally on all of our businesses. Um, just the innovation that the team has been able to do since the acquisition is quite exciting. Um, and what's coming next is very, very exciting as well. So I wouldn't say it's my, like, you know, favorite is tough, but I would say this is the one I'm super excited about, uh, that we've done in maybe in the last two years or so.

AI assessment note: “one of the ones that we recently did about beginning of 2020 was called All-in-One SEO”

Q could come to you and, um, Do, say, um, you know, a majority purchase, and they keep a part of the equity, and they can potentially benefit, you know, a second bite of the apple, as you call it, um, as you guys, you know, build out the go-to-market strategy, and, you know, scale the company much farther than they could have on their own. Is that kind of accurate?

A Yeah, that's, that's pretty much it. I'll add a little bit more to that. So we are open to full buyouts. We're open to partial buyouts. Our core structure though, um, is typically keeping the founder in place. And we are typically partnering with technical founders, uh, who don't have the go to market expertise or who just don't want to sell or, or go to market is what's keeping the company from taking that next step in their, uh, growth trajectory. And so what we've done and what we, our typical structure is we'll do cash, let's say for 25% of the business, and then we've earned another 25% of the company through, uh, getting to a certain revenue milestone. So I'm joining the team in sales, so is Matt, Alex is operations and finance and marketing, or earlier is marketing. Um, and we're really partnering with the founders every day to grow their businesses and grow the company to, uh, an agreed upon Milestone.

AI assessment note: “Yeah, that's, that's pretty much it. I'll add a little bit more to that.”

Q a lot of founders, they don't, You know, know too much about acquisitions or how to properly, you know, position their company, um, for SuccessFlex. If you had to give like, maybe just based on all the founders that you talk to, um, what's like two pieces of advice you'd give for founders that are, you know, maybe looking to sell it at open store or just their general business?

A Yeah, for sure. Um, I think the first is, in our case, um, the, the way your valuation would increase is not necessarily just by, um, you know, improving your financials as reported by your P&L. Of course, that's important, but we, we acknowledge that the P&L doesn't tell the whole story. Um, what we value especially are, you know, returning customer rates, um, average order value trends, and, uh, marketing return on ad spend. And all those, to me, roll up into a high level view that says, basically, you've got to create a product that is sticky and, and essentially generates a movement amongst your customers to continue coming back to your store and, and buying more and, and stocking up, right? So my advice there would be, you know, focus on pleasing the customers, um, you've already acquired, um, And making them come back to your store. Of course, new customer acquisition is important, but that repeat purchase behavior is something that we see is very, very attractive. Um, and then secondly, I would say that the, um, a big piece of advice would be, um, you know, to the extent that you can formalize, uh, all of the nuts and bolts of your business, supplier relationships, employee contracts, um, you know, SOPs for handling returns, et cetera, et cetera. If that's all formalized and, you Presented up front that makes our diligence face so much faster and makes it so much easier …

AI assessment note: “I think the first is... and then secondly, I would say... formalize”

Q It's a very, it's a very helpful intro. I guess the question I have is, um, how many acquisitions has, you know, made in total?

A So we've done 49. Transactions with founders since 2010. So around 12 years old, around 50 transactions. That gives you a bit of a feel for our, our cadence. Um, and I think that if you're talking about micro private equity, then Xenon might actually be one of the first companies on the scene doing this, this sort of thing. And, um, and it started with Jonathan doing an actually a transaction with one of his friends. A friend who had a main company, and then a side company that he was working on, and the side project started to pick up steam, and so he was like, what do I do with this, this, this main thing that, that I have, and that was a company called Exceptional, and this side project was a company called Intercom, And I'm sure yourself and most people on the call know what intercom.io or .com is today.

AI assessment note: “So we've done 49. Transactions with founders since 2010.”

Q I prepare for in advance? Um, if you had to give maybe like just two or three tips, uh, to startup founders listening, looking to sell their businesses, um, what would it be? Like prepare in advance? Um, yeah. Yeah. Just, just the, the, the top two or top two or top three, because I'm sure you have 50, but I want to hear the top two or top three.

A Yeah, so, so first, I would say, before you go down that path, have a real think about, like, if you have a significant other, talk to them, uh, and come to an agreement on what you would accept. To, to hand over your business. I think that's really important. Um, and it's really important to get that done and out of the way and clear because that, that point alone, especially if you have a significant other could, could cause you some strife down the line. And I think you need to, to have that, that, that number or those terms in mind to be able to, to talk with, um, potential buyers in good faith and, and with full representation and intention of transacting. Second of all, I would say, um, know some basic numbers and they don't have to be exact because, oh my God, like getting a, getting a firm MRR number, that can be a struggle. Like we know this, we, we bought their metrics. Um, so like we, we know the struggle, but like if I'm super honest, their metrics has two competitors as well, ProfitWell and ChartMogul. Um, there's probably some, some emerging companies as well. I think a great thing to do, if you're using Stripe, or Recurly, or Braintree, or, um, in, in Bear Metrics's case, Shopify as well, um, if you connect to one of these service providers, one of these, these, um, SAS Metrics data aggregators, It'll load all of your data, and there'll be like a little bit of pr…

AI assessment note: “first, I would say... talk to them, uh, and come to an agreement”

Q Nice. And I guess, um, you know, how did you get into all this? Like, what made you wake, um, did you just wake up one day and say, hey, I want to acquire 50 plus companies? Like, how did, how did this happen?

A I wish I was that insightful. Um, no, I, I had spent 15 years in corporate America at a company called Cerner, which is a software company, but Gigantic. Um, when I started, it was 3000 people and three hundred million in revenue. So already quite big. And then 15 years later, when I left, it was 20,000 people and I think five billion in annual revenue. So night and day different from what I'm doing now, but I, I share that with you to give some context to like, all I know about business is the software industry. And I got to do sales and And leadership and management, and run development teams, and customer success teams, and all, got to do just about everything in a software company, except for write code, because I'm not a, I'm not a developer. Um, and that was a great long run of a career. I was super happy as a great company to work for, and I was just ready to do something else. Um, along the way, I went and got an MBA, and realized that entrepreneurs You know, yourself excluded are not necessarily like geniuses or, you know, the hardest working people in the world or like have some heroic talent. They just like maybe see the world a little differently than other people, a little bit higher risk tolerance, a little bit harder worker. And yeah, I just realized like I could do that. And so I had always dreamed of owning my own business, but never had, um, the right idea. An…

AI assessment note: “I had spent 15 years in corporate America at a company called Cerner”

Q a, Like a perfect startup that you would want to acquire or like what sort of criteria do you look at? Is it B to B only? Is it SAS only? Are you, is it tech tech sack? Um, can you just give details on like, if you get an email or you come across something I might require that has like this, this, this, you're like, I'm on it.

A Yeah, so I'd say our core focus, we only buy companies that are B to B SaaS. That's like the only thing we do, and I, I don't, I, I didn't have an exclusion list. We don't really sell, we don't really buy companies that sell to e-commerce owners. Um, nothing against that. It's just, we have carved what we are, what we know we're good at, and we, we stick to that. And then, then our sub requirement is really, so Ideally, in a perfect world, we're looking at one to two, one to five million dollar AR companies, um, that are in B to B SaaS. Everything else, we'll kind of look at the details unless they sell to e-commerce. Uh, so no Shopify and no WordPress for the most part. Um, and, and again, like those businesses have a slightly different Economics and business models and valuations. And we just, we don't really play with that space. The other exception is unless they're strategic to any of our four properties and we've bought, you know, we've bought probably one or two companies at each of those, uh, each of our, our properties. Um, we typically do that, you know, we're looking at one right now. I'll actually just sign an LOI. So, you know, we're, we're, we're doing those small tuck-in acquisitions all the time. Where like revenue is not the most important factor. It might be a strategic feature or functionality.

AI assessment note: “Ideally, in a perfect world, we're looking at one to two, one to five million dollar AR”

Q Quick question. What is, um, for people who don't know, what is, um, Norbert do?

A I should probably say that, yeah. Wall on Norbert is an email finding tool and email verification, so if you've got someone's name and company, you can find an email address, or if you've got email addresses, or let's say you have a marketing, an email marketing newsletter or anything like that, you can run your emails through there to make sure that they're still valid. You know, get rid of the, like, the people who signed up on your fake email or, like, the people who have switched jobs and the email no longer exists. Um, that can affect deliverability. Most commonly used by sales and recruiting firms, right? So you're headhunting. You've got the people you want to go after. You're just looking for the email address. Uh, that's kind of the most common use case. Um, but yeah, it was a fun, it was a fun, um, it was a fun project. In hindsight, right?

AI assessment note: “Wall on Norbert is an email finding tool and email verification”

Q Um, so I guess my next question would be, you know, you locate the business, everything looks great. What, uh, tell me more about, um, what the buyer did that, you know, made you really comfortable. Like, what could other buyer, or excuse me, seller, um, what could other sellers do to, you know, position themselves or increase their chances of being micro-wired, if, uh, you got any advice there?

A I'll start with the practical info I have with the fact, and then I'll give my opinion, which might or might not be too valuable because I've never sold anything. So don't listen to me from that regard. What the seller did was immediately, I, so I asked for a bit of info and they've given me access to Google analytics, to chart mogul, to stripe. So I could instantly see through, through their guts, so to speak. I saw every transaction. Okay. They didn't give me bank account details in the first, uh, sorry, a bank statement in the first, Conversation. They did that later, by the way, but they just, uh, looked like they had nothing to hide. Um, what told me what the message that came with this was, okay, they're transparent. It comes from a place of probably confidence. I tried to supplicate on the other side by saying, look, um, I'm offering this price, but here's the big, but I'm promising a hassle-free As little headache as possible, uh, acquisition if this goes through. So unless I find something fishy, I want to make it simple. So to get to your questions answer, what sellers can do from my experience as a buyer is be transparent, but be careful. I, I guess it has, it matters which mindset, which headspace it comes from, because I've seen some other buyers having their, their shield really high saying, why would I share all this stuff? Why you can't, you can just go and Repl…

AI assessment note: “what sellers can do from my experience as a buyer is be transparent”

Q Yeah. Yeah. Yeah. I assume you talked to, you know, multiple buyers. Um, okay. You found, you found the one. Okay. The one, the one that, you know, uh, maybe you're at LOI. How long did it take you to, um, get to that point?

A Yeah. So I think the timeline was, we listed, uh, Uh, and then got a couple of, uh, responses right away, and then I think you sent out, like, the email newsletter, uh, two days later, and we got probably 15 buyers within the first three days that had messaged me and were interested, um, and then over the course of the next week, I think we ended up having another, um, 20 or 30, so I ended up with, like, 40 people who reached out, um, it's been about a year now, um, and then Uh, I had probably, and they asked for like, you know, let me, can I see some more financials? We had a, you know, a deck that we put together. Um, so I gave that to them. And then of those probably 40 total, um, I had like a zoom call with probably about 10 of them. Uh, within, and I, and I was trying to move fast because I was like, we either need to figure out if we're going to sell this or, or keep running it. I, and I want to move on quickly. Um, and so we had zoom calls with about 10 within the week. Um, all of those happen within a week of us listing. And then, um, of those about three of them, uh, four actually, um, gave some sort of like verbal offer or like, like, Hey, I'd be interested in this. I would like to figure out a way to make you an offer. Um, or at least, you know, put some sort of, um, LOI in place, and, um, so I ran a pretty tight process there, and, uh, within, um, a week and a half,…

AI assessment note: “within a week and a half, we had an LOI in hand”

Q like, those little nuances, you know, if you get those right for a specific customer segment, it makes sense. Like that's like a 10 X feature. Yeah, arguably. Um, so that's awesome. Okay, so you found the business, um, you and the founder, um, begin chatting. How did you, how did you get to terms and, um, what did, what did the acquisition kind of play by play look like?

A Yeah. Yeah. So we had a pretty unique deal structure. I would say compared to, I think kind of the standard acquisition that goes on in this, uh, call it like tier or size, whatever. Uh, so originally I think it was listed at 350,000 asking the price. And when I first stepped in, I was hoping to get to that price. I think the numbers just didn't end up working with the multiple on the, on the revenue that we were looking at. Um, and I backpedaled a little bit and then basically brought to David, the original founder, Kind of slightly modified plan of a partial cash, partial equity package. Um, because we have a product that we're bringing to market and we sort of have this longer term vision of providing like the, uh, hiring stack, so to speak to, to companies. I think David bought into that vision and really saw the upside and taking on equity as a, as a component of that acquisition deal.

AI assessment note: “basically brought to David, the original founder, Kind of slightly modified plan”

Q Yeah, I think definitely moving quickly and having cash offers is definitely a huge benefit and a way to stand out as a potential buyer. What did you do for due diligence? Like, what's, what are, like, maybe your top three tips or Things that you kind of, like, things that you look for when you do due diligence on something?

A So, the first thing is, like, how true is the revenue? Because, like, reporting revenue is one thing, um, but actually being, being able to look at the historical, like, how much they actually build. You know, it's one thing to report a run rate, it's another to report what you actually build. Um, and, like, once you do that, you tend to find patterns. Like, for instance, I'm looking at a deal right now that, uh, On, like, on those fundamentals looks really good, but then when you chart the revenues, you can clearly see that the revenue capped out, and then that was a pattern I, I identified, and it made me ask, like, wait, what's the churn rate on this? And then when I looked at it, the churn rate was so extreme that the revenue could no longer go any further because of that, and so I withdrew because of that, but, like, that's the thing. It's just, like, get a visual representation of the revenue so that you can pattern find is the first thing. Um, the second thing is, like, same thing with, with costs. Like, you know, like, everybody wants to report a high profit, but then everybody, like, reports on their costs differently. At the end of the day, like, you want to get an idea of what you need to spend to maintain what you have, like, and get a clear picture on the profit, and then at the same time, you want to base your offer on that profit number. Like, I don't really make…

AI assessment note: “So, the first thing is, like, how true is the revenue?”

Q Okay, so you found a buyer. Um, I assume you guys are on good terms in terms of, like, same page. Um, what, what did due diligence look like? What was, like, the next step after, you know, you come to terms? What, what did you guys do next?

A Yeah, I think a big part of it is trust. Like, how do you build trust so that the numbers that I'm showing are accurate? Right? And how do I understand that, like, he will post funds and all that kind of stuff? So on my part, um, I was very eager to chat with him through a Google video call. Um, so we did that. Um, I got to learn more about him, his point of view, the fact that he also, like, he's a human being and is not, you know, is not a representative of a giant conglomerate or didn't seem sketchy was really helpful. And then while we were doing that video chat, I was very public, and so I presented my screen. I showed him the Shopify portal, You could see all the numbers, you could see all the customers, you can see, um, uh, how much revenue the product was generating to date, and so I think that helped him trust me. And then, um, we ended up building a, like, uh, terms of sale document that was like a contract that outlined what he would be buying, um, what, how would we transfer the assets, how, what would customer support look like, uh, for me once he acquired the assets, um, all that kind of stuff. And I think what was really important that I would recommend to anyone who goes through a process like this is we did a Google video call Where we record, we both mutually recorded the, the call, and then transferred everything on the call, and so as the call was happening,…

AI assessment note: “I presented my screen. I showed him the Shopify portal, You could see all the numbers”

Q that's not easy to do, but you can still sell the business to someone that is okay with, you know, quote unquote lifestyle business or profitable business. So it's like a win-win. Uh, sale, partnership, exit. Um, love that. Tell me about your, your first week on acquire.com. You list, you go live, did it meet your expectations? Did a lot of buyers sign NDAs? What did that look like?

A Yeah, so we were pretty nervous going in, um, to how it would work, what it would be like. I think I was a little bit skeptical as well. Um, we had a call with one of your specialists, which was pretty good. She, she gave us the advice of just list a little bit low, almost like real estate, like list a little bit low, you'll get offers, and you, if While the listing's fresh and everyone sees it. So it's like, okay, we, we listed a little bit below the recommended amount, uh, and we wound up just getting inundated with buyers. And so we got a number of term sheets within the first week sight unseen people without even talking to us and put ourselves in a good competitive process where we ultimately close for a lot more than we listed for just because of how the competitive dynamics worked.

AI assessment note: “we wound up just getting inundated with buyers. And so we got a number”

Q you can't get customers initially because you had to build some credibility. So you go out and, Work for them for free and create the case studies. I think that's such a good strategy. Um, what made you decide to ultimately sell the business? Cause you had a ton of happy paying customers. You had a repeatable engine for getting new customers. Uh, what ultimately made you decide to sell?

A Yeah. Yeah. Uh, it's a fantastic question. Uh, ultimately I, uh, was excited about building something else. And so, uh, you know, that's something else, uh, now being materialized a couple months after, uh, Uh, acquisition was something that I had really wanted to get into for quite some time. I'd also looked at myself, uh, you know, just genuinely, honestly, uh, and introspectively in terms of what my own capabilities were in terms of running and growing the business. And so, uh, in the five years of us or me, uh, running the business, uh, I was able to grow the business, uh, about a 118% year over year. So almost doubling that. And so, Uh, doubling becomes much harder, you know, every consequent doubling, right? It's easy to do doubling the first year, you know, that much harder the second, so on and so forth. And so, um, just looking at myself saying, hey, can I continue to, for example, double this business? Or does, uh, maybe someone else that, you know, has a little bit more experience, has, you know, the, uh, expertise to, to, you know, grow something into, you know, eight, nine, 10 figures, uh, so on and so forth. Um, be the better fit for, for running and also owning this business. And so there's a little bit of a blend of the two. Hey, I think it's the right time to hand this off to, um, the next air of, uh, StratDev. And then secondarily, you know, uh, while I go do …

AI assessment note: “ultimately I, uh, was excited about building something else.”

Q do you keep, like, all the businesses, they seem so different from, you know, packaged goods, to sales tech, to, you know, a Whoop competitor platform. Like, how do you get, how do you think through ideas? Do you have, like, a framework or things you look for? I noticed a few times you, you know, had experienced a problem at previous companies. Is that a way you get ideas?

A Yeah, that's usually how it goes in building one company. And, and a lot of the builders watching this will resonate. You see a lot of problems and you come across a lot of things that are tricky and difficult, and you are willing to pay money for, you know, a solution. And there wasn't one. That's usually how I go about it. As of recent, you know, I don't have any grandiose ideas. Um, but, uh, yeah, I mean, starting my, you know, agency came as a result of what we did to make that Kickstarter campaign. And then after that, the media company came as a result of all the influencer we work with at, at, at, uh, my marketing agency. Then after that, I had built a platform for those creators.

AI assessment note: “Yeah, that's usually how it goes in building one company.”

Q Nice. That's really interesting about the industries. I didn't know that. Uh, how did you get your first customers? What was the sales or marketing strategy initially?

A Yeah. So I didn't know a lot of people to be honest. So we became cold outreach ninjas. And, uh, yeah, like I remember, I mean, like my first customer was through just like posting my network. And then I think someone reached out needing help with website and SEO. And I was like, okay, there could be something here. Uh, but I quickly exhausted my network. And then from there I was like, okay, I need to find more people. And the timing kind of worked out well with COVID because I think people were open to like doing business online and, you know, doing business through like video calls. So we started by like, Like I remember I would be like cold calling like landscaping companies and I would be like, uh, sending Instagram DMS to e-commerce brands to, to see if we could help them with, with SEO. Cause, uh, paid ads was becoming pretty expensive by then as well. So, uh, you know, e-commerce brands and other areas were looking to other options. And, uh, we started by doing some Instagram outreach, a bit of LinkedIn outreach as well. Um, and then what really helped the business to take off was actually cold email. So we got really, really good at cold email. Um, and, um, yeah, like we've, we've done everything from kind of like personalized emails to volume based emails. Nice. And, um, I think it was really interesting too. Cause like, I think, yeah, like after we had our first, lik…

AI assessment note: “my first customer was through just like posting my network”

Q Tell me more about the cold email strategy. Like another founder is listening to this. Are there any tips you could give on cold email or like Things that totally don't work, or like a subject line that worked really well for you guys?

A Yeah, so I think one rule of thumb is, like, um, so one is you want to get high open rates, so you want to aim for, like, above 50%, because if they don't even open an email, it doesn't matter what you put in it, first of all. So subject line, we did a lot of subject line testing. Um, I was surprised, like, even some simple ones, like question and stuff, like, still work Pretty well, even though it's kind of generic, but you know, we played around a couple of different like subject lines. Um, and then in the body of the email, like, I think first of all, like adding links to your calendar does not work. Um, saying we do SEO does not work. Like, I think people care less about what you do, but more about the outcome and what you can do for them. So we focus more like, Hey, you know, we helped, you know, this other company. Uh, to get X results looks like there could be an opportunity to help you as well. Like, are you open to learning a bit more? And then once they reply, then we have like a whole followup sequence and email tree. Um, so basically like depending on what response they gave, we would send them a response. My virtual assistant would then keep on following up with them until we get them onto a call. So, um, so like, yeah, followups was really key. Like some of the calls and clients would close. You know, maybe it came from like the fifth or sixth, like follow up afte…

AI assessment note: “adding links to your calendar does not work. Um, saying we do SEO does not work.”

Q So you had a great business. You were, you know, profitable, you were growing, you had tons of happy customers. What made you ultimately decide to sell a business?

A I think what I realized is like, I've been running the SEO agency for a couple of years and I, I felt the issue to build something new. And, um, actually like for some time, I actually tried to build Like two businesses at once. I kind of built another business alongside that business. And what I realized is one of them ultimately ends up suffering because like I would, you know, basically pause like acquisition and growth for one business and then work on another business. But then, you know, if you don't work on a business, it's kind of starts to turn on down. And then I, then I switched back and forth quite a bit. So then what I realized is like, okay, like it's better to just like fully pass it on. I want to make sure that it was in good hands, you know, The SEO business, I've been doing it for like six years. So it's kind of like my baby. And so I want to make sure someone takes care of, takes good care of the business and has the desire to grow it. And then that allows me to then fully focus on, uh, you know, new, new businesses and projects that I want to work on.

AI assessment note: “allows me to then fully focus on, uh, you know, new, new businesses”

Q our red flags with buyers, which ultimately helps you get, uh, successfully acquired, which is by far the most important part. Um, right. Tell me about the winning buyer. Uh, what stood out about them? Was it, uh, their expertise in your industry? Was it the overall offer? Was it the terms? Did you guys just get along really well? What made you decide to move forward with this buyer?

A Add a couple of criterias that came to it because I didn't want just like any buyer that offered, you know, the best offer kind of thing. Um, so we actually ended up getting three offers. Um, and then I, I moved forward with one of them. Um, I think for me, like I wanted someone that I knew would be able to continue growing the business and like, you know, take care of the team and clients. So, you know, for me, like, you know, some of my team members have been working for like five plus years. And I didn't want someone to come in and fire all of them. So, uh, so I want someone that will like, you know, keep on the team and also like get along well with the team. And, um, one thing, one thing that Kai taught me a lot too, was like, you know, it has to be someone that you also personally get along with because, you know, after starting the business, there is like a transition period and you were spending a lot of time with the buyers. So, you know, it's, it's best that it's someone that you also get along with, um, as well. Um, and then, yeah, like, Obviously having the right deal structure, you know, the right mix of upfront, uh, versus, you know, solid finance, um, like that also was taken into your consideration as well. So, so ultimately I chose, um, the best offer, um, based on those criterias in mind.

AI assessment note: “I wanted someone that I knew would be able to continue growing the business”

Q Uh, now that you've been through an acquisition yourself, have you had a friend or another founder come to you for advice? What's a couple of pieces of advice you'd give them if they were looking to sell their business?

A I had a couple of friends that sort of asked me because I have a lot of friends who also run marketing agencies and they're like, wait, you can sell a marketing agency? I didn't even know that was a thing, right? Because again, like most of us think we can only sell like SaaS businesses. Um, And I'll say some lessons are that, um, yeah, like number one is like keep clean books. Like, you know, we, we had our bookkeeping done pretty well. Um, so like, you know, the first thing that people ask for is going to be your, your P and L and your financials. So it was helpful to have that all organized. Um, number two is that you don't have to have all your ducks in a row. So even if it's like, you know, maybe even if like some numbers are like a bit down or like maybe you don't have like a, Yeah. Um, like you can still sell the business. Like it just, it's just a business that needs a bit of renovation, but actually the right buyer sees that as an opportunity. Um, so, so yeah, that's, that's totally fine there as well. Um, one thing I learned from speaking with different potential buyers is like buyers really like recurring revenue and stability. So I think one thing I wish I knew in hindsight, if I were to kind of do this again, um, is like, I wish I would have signed My clients onto like longer agreements instead of just like month to month, because like we did have recurring revenue…

AI assessment note: “number one is like keep clean books... number two is that you don't have”

Q That makes sense. My next question is, is why did you decide to sell a business, but it sounds like, uh, you were just getting tired of the, the grind with Amazon and all the operational needs. Is that right?

A In a way, yes. And also thinking like, is this, uh, really what I wanted? Is this really something that I was initially building? And the answer was not. And of course it was not an easy decision to be really honest. Once you create something as your baby and you put so much heart and blood and, and, uh, stress and, Everything into this. It's very hard to say goodbye. And, uh, of course, when I will start to be exhausted with, uh, with this operation, I was thinking about different strategy, uh, scaling this up, scaling it down, extending the, um, like getting out of the platform and extending the footprint of, uh, of my brand or exit strategy. And, uh, what helped me really a lot is, uh, really Tone down my emotions. Switch on my strategic brain. Think about the other possibilities that I have outside of this, uh, uh, business model. And, uh, at the end, the idea of, um, selling the business was, uh, feeling like it's the right way to do this.

AI assessment note: “In a way, yes. And also thinking like, is this, uh, really what I wanted?”

Q I think that makes a ton of sense. Um, how was the first couple of weeks on Acquire? How'd you hear about the platform? What was your expectations and how did it go?

A Uh, so first of all, the story about how I get to know this, um, I mean, AI is now dominating our life everywhere. And of course I'm using sometimes ChatGPT as my consultant to check the logic and so on. Like thinking about, uh, the options, uh, discussing the, it was, uh, was my Personal assistant, ChatGPT, uh, it came up with an idea that, hey, if you want to escape, there are other platforms how you can do this. That's the first time how I learned about Acquire, and, um, it was not the only platform where I started, uh, but honestly, I must admit that, uh, my experience of Acquire was exceeding my expectations, um, and, uh, what struck me the most was how founder-centric their experience was. After the years of operating in the, um, in the platform where I as the founder can feel myself as exchangeable and not so important, here I felt like I'm in the, in the, in the core of everything. I feel the genuine interest towards me from, uh, from the people, especially Rosa, who was my, um, counterpart and, uh, and acquire and, uh, who was assisting me throughout the whole, this process of acquisition. That was really revealing, and it felt very safe, secure, and of course, you know how, you definitely know from the other, uh, founders, like how emotional it can be, how insecure a founder can feel, and, um, what you guys created was really taking out a lot of this stress from me.

AI assessment note: “my experience of Acquire was exceeding my expectations”

Q That is, that is incredible. Uh, did you ever have any issues with the production version of this? Did you kind of crack open, say, the lovable version at one point, and move it over to, uh, one of the more, like, custom tools, or did you just completely vibe-code this and release it?

A Yeah, so this was completely vibe-coded, um, never made its way out of lovable, which, like, I think looking back on it, um, now since the platform's been, been acquired and sold, they've moved it to, I think it's like Vercel, um, like a platform that's actually more customizable. Um, but yeah, it lived solely in lovable and, um, you know, at production, there was definitely some things that, uh, you know, I would say needed tweaking. Um, and you're kind of working from behind trying to get those tweets as you're hearing from customers. Um, and, you know, seeing some of the bugs that are taking place, you can't check for everything. You know, we wanted to get it out there as soon as possible to at least get that feedback, offer discounts if people are having issues, things like that. Um, but, but yeah, I think at full production, lovable's capable. Um, I think scaling it and taking it beyond that, um, you know, you probably want to look, you know, maybe somewhere else.

AI assessment note: “this was completely vibe-coded, um, never made its way out of lovable”

Q Uh, tell me about why you decided to sell. You kind of touched on it where it was taking up a lot of your time. Uh, was that the sole reason?

A Yeah, I think it was, it was kind of two pieces. So, definitely, like, a lot of time. I, I'm a perfectionist, so, like, when it comes to, like, building something like this, there's no ceiling. Like, you can just keep adding things. You can keep making tweaks. Um, and I find out, you know, I have a lot of, like, pleasure in doing that. A lot of, a lot of fun in building. Um, and it did. It got to the point where it was, like, I was spending half of my day Doing that for, for pretty, I mean, you know, not to, uh, like belittle, I guess, like, you know, the success or like, you know, to build a recurring revenue like that, but, you know, compared to other things that, that I was working on or, you know, businesses I own, it was just a lot of time for, you know, not the same amount of reward. And, you know, then I started thinking like, man, this is something that there's good value here. I would love to have You know, give somebody else the opportunity to take this and really scale it and be able to kind of sit back almost as like a consultant in some regard. Um, you know, answer questions, help post sale and just kind of watch somebody else, you know, take this, especially somebody maybe more technical. Right. Um, I felt pretty capped out with like moving it to another platform and like furthering, um, the functionality. I felt like I, I was capped, um, and wasn't at the point w…

AI assessment note: “Yeah, I think it was, it was kind of two pieces.”

Q That's amazing. Did any of the use cases surprise you? Like when you first started the business, I'm sure you had a few in mind. Did you have any users doing things that surprised you?

A Actually, the surprise came less from use cases because when we were building utilize dot app, we saw a lot of use cases. And we saw similar kind of use cases here in Notion apps as well. Um, but the surprise came, uh, both for Samir and I, it came from the fact that people would create like for T screens. So for T, for T screens to manage their business in one app. So imagine like in WhatsApp, imagine if you had 40 tabs and each tab is doing its own workflow. And, um, they just found a way to like weave every aspect of their business under one app. So that is what we found like the most interesting and exciting and surprising that we, with the sample apps we put on the websites, they are like website, they're like relatively simple. And then you look at some of the customer apps and they're like, okay, holy shit, this is, this is quite a lot.

AI assessment note: “the surprise came less from use cases... it came from the fact that people would create”

Q and it's kind of a turnoff for me. Uh, and then in terms of acquisitions, I think what you're doing is, is super, super smart, building out the business through acquisition rather than building out each, uh, part of the business. Um, what made you decide that this was a path for you rather than building out, say your own design service? Uh, why was acquisition the way to go?

A Yeah, I'm extremely risk averse, like just as that's always been my identity. Uh, I always wanted to do every move should be profitable and should have limited downside, but I kind of saw the light in the last several months that I think a lot of people need to dispel what M&A is and who it's for. I think most people feel like, well, that's reserved for like big, you know, cash rich agencies that are giants that are publicly traded. You need ten million dollars in the bank to even consider an acquisition. And, you know, working, like, learning, learning about the process, even through, like, acquire and through M&A advisors that I work with, guys like Peter Lang, who are in the agency acquisition space, shout out to him. Um, he kind of dispels that. Like, you don't, you don't need to be, um, this giant to actually grow through acquisition. You kind of think of it as, like, corporate business development. You know, organic growth is linear. You know, you're, you're pitching one client at a time, which, Is what I've always done and will continue doing, um, for love of the game, I suppose, but you can actually have the geometric growth, uh, that you want where you adopt systems, clients, staff in one go. So it's kind of like a, I would say it's a cheat code, but it's not really a cheat code because there's an incredible amount of like work and effort and stress that goes into it. …

AI assessment note: “you can actually have the geometric growth... adopt systems, clients, staff in one go”