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Nov 12, 2022 · 22m · top-founders

How we acquired a competitor for $40,000 (and why we'll never do it again)

Ryan O'Neal · 19m spoken Nathan Latka · 1m spoken Conference MC · 1s spoken
0:00 / 0:00

gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions

At the Founder 500 conference, Curate CEO Ryan O'Neal delivers an authentic case study detailing how he acquired a direct SaaS competitor for $40,000, outlining both the substantial revenue gains and the intense operational friction that dissuades him from repeating 1-to-1 competitor acquisitions.

How this conversation actually went

Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Nathan holds 7.9% of the talking time here. How this is scored →

Nathan as informed peer 0.0 Guest teaching 0.0 Guest disagreement 0.0 Nathan pushing back 0.0
05100:0010:0020:000:00–4:02 · Nathan as informed peer 0/10 Nathan Latka Introduces Founder 500 and GetLatka Platform Nathan Latka delivers an introductory monologue promoting Founder 500 and the GetLatka database before passing to Ryan O'Neal's conference presentation. There is no host-guest interaction or debate.4:02–8:57 · Nathan as informed peer 0/10 Negotiating and Closing the $40,000 Micro-Acquisition Rapidly Ryan presents a solo keynote explaining how he negotiated a $40,000 micro-acquisition under intense personal circumstances. As a monologue without host participation, interaction scores remain zero.9:00–15:17 · Nathan as informed peer 0/10 Nathan Latka Highlights FounderPath Valuation Tool Following an ad read from Latka regarding FounderPath, Ryan outlines lessons in customer communication and simplified pricing during migrations. There is no conversational pushback or confrontation.15:18–20:39 · Nathan as informed peer 0/10 Evaluating Financial Returns, Total Costs, and Acquisition ROI Ryan breaks down the ROI, developer costs, and strategic drawbacks of acquiring a direct competitor. The presentation proceeds without interruptions or friction.20:39–22:52 · Nathan as informed peer 0/10 Live Audience Q&A on Migration, Retention, and Custom Features Audience members ask Ryan questions regarding customer migration, organic retention, and feature parity. The Q&A is collaborative and informative.0:00–4:02 · Guest teaching 0/10 Nathan Latka Introduces Founder 500 and GetLatka Platform Nathan Latka delivers an introductory monologue promoting Founder 500 and the GetLatka database before passing to Ryan O'Neal's conference presentation. There is no host-guest interaction or debate.4:02–8:57 · Guest teaching 0/10 Negotiating and Closing the $40,000 Micro-Acquisition Rapidly Ryan presents a solo keynote explaining how he negotiated a $40,000 micro-acquisition under intense personal circumstances. As a monologue without host participation, interaction scores remain zero.9:00–15:17 · Guest teaching 0/10 Nathan Latka Highlights FounderPath Valuation Tool Following an ad read from Latka regarding FounderPath, Ryan outlines lessons in customer communication and simplified pricing during migrations. There is no conversational pushback or confrontation.15:18–20:39 · Guest teaching 0/10 Evaluating Financial Returns, Total Costs, and Acquisition ROI Ryan breaks down the ROI, developer costs, and strategic drawbacks of acquiring a direct competitor. The presentation proceeds without interruptions or friction.20:39–22:52 · Guest teaching 0/10 Live Audience Q&A on Migration, Retention, and Custom Features Audience members ask Ryan questions regarding customer migration, organic retention, and feature parity. The Q&A is collaborative and informative.0:00–4:02 · Guest disagreement 0/10 Nathan Latka Introduces Founder 500 and GetLatka Platform Nathan Latka delivers an introductory monologue promoting Founder 500 and the GetLatka database before passing to Ryan O'Neal's conference presentation. There is no host-guest interaction or debate.4:02–8:57 · Guest disagreement 0/10 Negotiating and Closing the $40,000 Micro-Acquisition Rapidly Ryan presents a solo keynote explaining how he negotiated a $40,000 micro-acquisition under intense personal circumstances. As a monologue without host participation, interaction scores remain zero.9:00–15:17 · Guest disagreement 0/10 Nathan Latka Highlights FounderPath Valuation Tool Following an ad read from Latka regarding FounderPath, Ryan outlines lessons in customer communication and simplified pricing during migrations. There is no conversational pushback or confrontation.15:18–20:39 · Guest disagreement 0/10 Evaluating Financial Returns, Total Costs, and Acquisition ROI Ryan breaks down the ROI, developer costs, and strategic drawbacks of acquiring a direct competitor. The presentation proceeds without interruptions or friction.20:39–22:52 · Guest disagreement 0/10 Live Audience Q&A on Migration, Retention, and Custom Features Audience members ask Ryan questions regarding customer migration, organic retention, and feature parity. The Q&A is collaborative and informative.0:00–4:02 · Nathan pushing back 0/10 Nathan Latka Introduces Founder 500 and GetLatka Platform Nathan Latka delivers an introductory monologue promoting Founder 500 and the GetLatka database before passing to Ryan O'Neal's conference presentation. There is no host-guest interaction or debate.4:02–8:57 · Nathan pushing back 0/10 Negotiating and Closing the $40,000 Micro-Acquisition Rapidly Ryan presents a solo keynote explaining how he negotiated a $40,000 micro-acquisition under intense personal circumstances. As a monologue without host participation, interaction scores remain zero.9:00–15:17 · Nathan pushing back 0/10 Nathan Latka Highlights FounderPath Valuation Tool Following an ad read from Latka regarding FounderPath, Ryan outlines lessons in customer communication and simplified pricing during migrations. There is no conversational pushback or confrontation.15:18–20:39 · Nathan pushing back 0/10 Evaluating Financial Returns, Total Costs, and Acquisition ROI Ryan breaks down the ROI, developer costs, and strategic drawbacks of acquiring a direct competitor. The presentation proceeds without interruptions or friction.20:39–22:52 · Nathan pushing back 0/10 Live Audience Q&A on Migration, Retention, and Custom Features Audience members ask Ryan questions regarding customer migration, organic retention, and feature parity. The Q&A is collaborative and informative.

speaking balance: gold is Nathan, purple is the guest (3 minute bins)

0:00 · Nathan 32.5% · guest 67.5%0:00 · Nathan 32.5% · guest 67.5%3:00 · Nathan 0% · guest 100%3:00 · Nathan 0% · guest 100%6:00 · Nathan 0% · guest 100%6:00 · Nathan 0% · guest 100%9:00 · Nathan 28.1% · guest 71.9%9:00 · Nathan 28.1% · guest 71.9%12:00 · Nathan 0% · guest 100%12:00 · Nathan 0% · guest 100%15:00 · Nathan 0% · guest 100%15:00 · Nathan 0% · guest 100%18:00 · Nathan 0% · guest 100%18:00 · Nathan 0% · guest 100%21:00 · Nathan 0% · guest 100%21:00 · Nathan 0% · guest 100%
Sharpest disagreement ▶ 17:35 Emphatically rejecting future competitor acquisitions

Ryan delivers a decisive, contrarian verdict on acquisition playbooks, asserting that buying a direct competitor distracted the team and opened room for other market rivals.

 Hardest push from Nathan ▶ 20:44 Audience challenges acquisition necessity

An audience member questions the fundamental rationale of the deal by asking whether the customer base would have migrated to Curate organically if the competitor simply failed.

 Biggest teaching moment ▶ 17:00 Revealing hidden developer and support costs

Ryan educates the room by demonstrating how a seemingly cheap $40,000 purchase actually cost over $265,000 once developer time, legal fees, and customer success hours were factored in.

 Nathan holds their own ▶ 9:00 Latka cites real-time SaaS valuation data

Nathan showcases FounderPath's valuation dataset spanning 253 recent transactions to explain how founders can negotiate higher multiples and avoid dilution.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Nathan Latka Introduces Founder 500 and GetLatka Platform 0000 Nathan Latka delivers an introductory monologue promoting Founder 500 and the GetLatka database before passing to Ryan O'Neal's conference presentation. There is no host-guest interaction or debate.
Negotiating and Closing the $40,000 Micro-Acquisition Rapidly 0000 Ryan presents a solo keynote explaining how he negotiated a $40,000 micro-acquisition under intense personal circumstances. As a monologue without host participation, interaction scores remain zero.
Nathan Latka Highlights FounderPath Valuation Tool 0000 Following an ad read from Latka regarding FounderPath, Ryan outlines lessons in customer communication and simplified pricing during migrations. There is no conversational pushback or confrontation.
Evaluating Financial Returns, Total Costs, and Acquisition ROI 0000 Ryan breaks down the ROI, developer costs, and strategic drawbacks of acquiring a direct competitor. The presentation proceeds without interruptions or friction.
Live Audience Q&A on Migration, Retention, and Custom Features 0000 Audience members ask Ryan questions regarding customer migration, organic retention, and feature parity. The Q&A is collaborative and informative.

Statements from this episode (14)

Assertion Not checkable as stated
Curate spent $40K to add $250K ARR and boost valuation by $2.5M
“I could have said how I spent 40,000 dollars to get 250,000 of ARR and increase my valuation by 2.5 million”
Ryan O'Neal Nov 12, 2022 ▶ 1:08
Assertion Not checkable as stated
Curate grew its catering vertical by 280% over the past year
“We've seen, you know, 280% growth in the catering segment over the last year.”
Ryan O'Neal Nov 12, 2022 ▶ 1:45
Assertion Not checkable as stated
Competitor founder chose a flat $40K payout over a $60K earnout
“We ended up at 40,000. We actually gave them an option. We said, well, 60,000, and we'll do 20,000 up front, and then 40,000 if you if we have XYZ customers who stay on, or you could just do 40,000. And she's just like, I just want 40,000.”
Ryan O'Neal Nov 12, 2022 ▶ 5:27
Assertion Not checkable as stated
Acquired competitor generated $120K in ARR but operated in the red
“They were in the red. They were making a 120,000, which is about a 10th of our size at the time.”
Ryan O'Neal Nov 12, 2022 ▶ 6:46
Assertion Not checkable as stated
Curate closed its micro-acquisition of a competitor in just three weeks
“Our legal said, yeah, we've never seen anybody close like in three weeks before it just takes a long time on this. And, you know, never tell a CEO, like, no one's ever done this before, because that's, like, a personal goal for you. And we did. We closed it in…”
Ryan O'Neal Nov 12, 2022 ▶ 7:56
Insight
Micro-acquisitions should be structured strictly as asset sales to move fast
“At least at this small of a deal, like, make it clean. Don't put in these crazy equity buyouts and all this stuff. Just make it super clean if you want to move fast. Strictly assets sell.”
Ryan O'Neal Nov 12, 2022 ▶ 8:30
Insight
Group webinars beat one-on-one onboarding when migrating low-ACV software acquisitions
“Webinars are better than onboarding. I literally went back to our post notes after the acquisition to prepare for this talk, and that was one thing. They said, just do big webinars. Like, don't go with each and every person and work through it. These are small…”
Ryan O'Neal Nov 12, 2022 ▶ 12:38
Assertion Not checkable as stated
Curate achieved nearly 200% NRR on its acquired competitor customer base
“We saw nearly 200% NRR on these. We had one customer that went from 3000 to 30,000, right? Like, two of our largest customers came from this, and so it was a really cool opportunity for us to be able to grow that customer base”
Ryan O'Neal Nov 12, 2022 ▶ 13:51
What-if
BloomTrack's founders would have accepted just $20,000 for the acquisition
“Honestly, they would have taken 20,000 for the deal.”
Ryan O'Neal Nov 12, 2022 ▶ 16:19
Disclosure
Despite the financial success, Curate will never acquire a direct competitor again
“Was it worth it? Yes. Would we do it again? No, right? Like, not in this particular situation. So a few things for a one-to-one competitor that really make it not something super attractive.”
Ryan O'Neal Nov 12, 2022 ▶ 16:57
Insight
Eliminating a third-place competitor merely opens the door for new entrants
“And the second is getting rid of your third-place competitor. They were, like, our third-place competitor in this And specifically in the floral space opens the door for others in the market. And so all of a sudden we've seen three or four other little compani…”
Ryan O'Neal Nov 12, 2022 ▶ 17:25
Insight
Outbuilding a direct rival is ultimately easier than acquiring them
“And then it's just easier just to build, be the better software, right? It's the last, it's just easier just to build better and build faster, especially when you're in a space that you're going one-to-one with a competitor.”
Ryan O'Neal Nov 12, 2022 ▶ 19:44
Disclosure
Future Curate acquisitions must include a team and a complementary product
“If we were to do another acquisition, we need to have these parts. Number one, we said, come with the team. We aren't just buying a product, right? Like, we now have to make sure it comes with the team. Be very product-driven company, so not, not just a revenu…”
Ryan O'Neal Nov 12, 2022 ▶ 19:56
Assertion Not checkable as stated
Curate fully deprecated the acquired competitor's platform in just four months
“We migrated them, we moved them from their platform onto ours, and we deprecated their platform in four months.”
Ryan O'Neal Nov 12, 2022 ▶ 21:48
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