The Exchanges

Q So was I right or wrong? Did you overpay?

A You were right. Yes. And at that time, if anybody looked at it, they would say I overpaid, but that would be true of every deal I've done. There's no deal that you would look at that. I didn't sell for profit that in the beginning, you just said you, you got a good deal, right? But I buy these assets, not just on what they might be worth or valid at that time, but on what I believe I can grow them into, which Really allows me to take pole position with the seller as, as this market heats up, as you've seen, it's getting harder and harder to close deals. So the seller is going to work with someone who's got cash, wants to put up mostly cash, who's easy to work with, knows how to transfer the assets smoothly and elegantly, isn't going to hold any holdback or seller financing hostage on the deal, so on and so forth. Now, in hindsight, because I was able to exit at, Something north of what I paid, you might say, okay, yes, I overpaid initially, but it worked out.

AI assessment note: “You were right. Yes. And at that time, if anybody looked at it”

Q sure they run it where it doesn't go right into the ground. Like there's an engineer, a critical engineer that left and you can't log into the AWS console, for example. So walk me through those two hurdles. How did you find the business in the first place? Did you use a broker or platform? And then two, what were the first three moves you did after you acquired it?

A So the discovery process for me is multi-pronged. One, I do scan the broker websites. My favorite two are without a doubt Flippa and Andrew's new play. Um, so that is, the discovery process is easy at this point because they come to me, but this particular deal I found in a slightly unique way, which was Um, before Josh sold bare metrics and they probably still have, they have this open page, right? And on that page, they display, uh, SAS businesses and their revenue. And I just started contacting the ones that I felt were interesting. And Ninja outreach was one of them after back and forth, I was able to acquire it. Uh, now, mind you, it took me two trips to London. And lots of calls to get them to sell this asset. It wasn't easy.

AI assessment note: “this particular deal I found in a slightly unique way”

Q 40,000 dollars a month in revenue after you say, hey, we're not doing any more of the SEO stuff. Now, there's a lot of people listening right now again that want to do the same thing. They want to buy a company. Can you let us in a little bit under the hood here? How did you value the business and what did the deal look like back in 2018?

A So I, I perhaps value things slightly differently than most people. I asked myself, is this the highest and best use of my capital? Right. And I don't only look at other digital assets. I might compare it to traditional real estate investing and say, if I put the same amount of capital over in this other alternative asset class, what would I gain? Right. What is the timeline? How quickly are the underlying assets growing in valuation terms? And then I ask how easy is it? The obvious stuff that most people know, is it easy to run? Right. What's the overhead like? Is it a growth industry? Is there any customer concentration risk, right? And so I don't like any, any, any customer who accounts for more than two to five percent of revenue. Before I bought Ninja Outreach, I had a juggernaut of a lead generation company in the assisted living industry, and I had two clients, and one of them was 80% of revenue. Talk about precarious, right? And so Ninja Outreach, um, was somewhat easy to run. It had three developers when I acquired it. It turned out it only actually needed one. And so two of them left on their own accord. Um, I would say a year too late, you know, I didn't need them from day one. And that was fortuitous that they did go and saved a lot of overhead. And what was the other question?

AI assessment note: “I asked myself, is this the highest and best use of my capital?”

Q A lot of people, they finally get the deal done and then they run the business into the ground on accident. So you let some engineers go you, it sounds like increased profits. What else did you do to drive growth and cut costs?

A So when we let go of the SEO clients, we let go of the SEO management team. I actually wanted to keep them, but because of the transition, here's a fun fact. The, the sellers understandably didn't inform the team that the company had been sold. And the team that was doing SEO was on a vacation together in Italy. And then one day they're on vacation and they find out they have a new boss and they felt that they, they were surprised. Now I completely empathize with both sides here. I understand why the seller would try and, you know, keep things under tight lipped until it's done. It's absolutely the right thing to do. And I also understand the team's, you know, surprise and decision to go on their own Way. I guess they felt they knew how to do SEO and they could just start their own agency and they quit. Um, funny thing is, had they asked me if they could keep all the customers or, and get any new leads, I would have said yes. And, but they, they just quit and decided they were going to do their own thing. And I would have actually given them that 20,000 in revenue if they'd have been cool and just ask. And I, I didn't want it. Um, so how do we keep it from falling apart? Well, when you buy a company like I do, that's at least three years old. It's one of my prerequisites. You really don't have to do much to just keep it running, right? As long as you don't make a giant faux pas…

AI assessment note: “So when we let go of the SEO clients, we let go of the”