Profitable Founder
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Profitable Founder
$10M/Year Founder Shares His Exact Playbook (He Did It Twice)
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By 21, I felt financially secure. I paid myself a pretty high salary. When I sold the business, we had over two million in cash inside the company. This is Andrew.
SPEAKER_02He built business apps to ten million dollar a year, then X it for eight figure. After that, he built acquire.com, the leading marketplace for startup acquisition under $50 million, where it's closed over $1 billion in. I invited him today to understand how to build a $10 million startup.
SPEAKER_01He looks at all these different stats and companies and asks the question why did they succeed? And comes up as like the biggest factor.
SPEAKER_02In this episode, you will discover how to replicate his exact playbook from ID to exit, what to build in 2026 based on real data from acquire.com, and why most funders are wasting their time working on the wrong ID.
SPEAKER_01I've seen SaaS businesses sell for 0.5x multiple. You know, if I post that on Twitter, people will be like, oh, that's too long.
SPEAKER_02So Andrew. A few days ago you shared this tweet where you said funders are getting acquired for 10 million in cash on acquired.com with this video of uh Ryan Gosling who is enjoying his life. And I was like, I need you on this podcast to tell us how to build this company for 10 million to get acquired on acquired.com. So my first question is what is the difference between funder who actually build a 10 million dollar company and exit, and the other funder who never do that?
SPEAKER_01I mean, there's there's a lot of ways to get uh to 10 million in terms of what the business looks like, like B2B, B2C, uh Bootstrap, Venture backed. But the main thing that I always see is the traction on the business. So if you're gonna sell for 10 million, you're usually gonna be at three, four million in recurring revenue and profitable. So I think the big difference there is clear product market fit, tons of users, tons of customers, uh, well-run operations, uh efficient as well. Uh and then in terms of the exit, ideally the founder has stepped back a little bit or at least hired a team to do a lot of the work for them. So they're delegating, they're not the single point of failure. Uh, and then, you know, going to market and and running uh a good acquisition process, um, putting time into the preparation, have good bookkeeping, uh, clean numbers, clean metrics, um, all that stuff adds up.
SPEAKER_02And do you see a difference like you know, with the funder who actually achieved that? Are they smarter? Are they different? Do you see like a really big difference because between these funders and other would never do that?
SPEAKER_01Uh you know, uh founders come in in many different shapes and sizes, you know, some are insanely ambitious, some are you know, quite lazy that just stumbled into a really unique uh opportunity. Uh I'd say the the separator though is just biased fraction. Um, you know, one way or another they were able to execute on division that they had and really bring it to life. And I think also sticking with it for a long period of time. Uh building a startup that sells for you know north of 10 million, it's gonna take years to build. And I think a lot of founders might be uh inclined to give up maybe earlier than these founders did that successfully exit it. So buys for action, sticking with it long time is probably the the top two.
SPEAKER_02Yeah, because that's usually the dream of like I want to exceed for 10 million, and you'll probably think about this overnight success. Like I build for six months and I sell to a big company. But what is the reality of that? Like, do you see like a pattern in between like when they funded the company and when they sell for this kind of amount?
SPEAKER_01It's definitely years. I don't really see too many acquisitions where the business is super uh young, meaning like less than a year. And if I do, it's gonna be a a smaller acquisition, call it uh uh five, six figures. And the reason for that is a lot of buyers are gonna look at short timelines in businesses and see it as additional risk, meaning will the business continue to perform based on what they've seen in the last six months? Uh so I would say if I had to give an average, I think it's probably three, four years to get to 10 million. But we also help businesses sell that have been around for sometimes literally as many as 20 years. Crazy. Which is like a thousand years in the software world.
SPEAKER_02Yeah, it's funny because if you think about like old school company, 20 years is normal, but nowadays 20 years is like a lifetime for an entrepreneur, so yeah.
SPEAKER_01Oh, 100%. I mean, 20 years you've gone through the dot-com bubble, uh, all these different, you know, changes in how we build software. Uh so I mean, if you're a software company, you've been around for 20 years, that's extremely impressive.
SPEAKER_02Yeah, and I think nowadays it's pretty hard because there's a lot of FOMO as the information goes really fast through social media, you really want to start new things. But I still think, like, tell me if I'm wrong, that if you stick to one ID and you adapt with time, it usually works better.
SPEAKER_01Yeah, 100%. And and and what time does as well is it really lets things compound. For example, if you're growing at you know 20, 30, 40, 50 percent, you do that for five years, you're gonna have a pretty big business on your hands. So, you know, it really takes, in my experience from what I've seen, is you know, two, three years for things to really get going, where you have the product, you have customers, you have the brand that's starting to pick up, then you have the team that you're starting to build out to uh give you leverage as a founder, and then you're four and five is is where you know things can really pick up. So, yeah, you just gotta stick with it.
SPEAKER_02Interesting. Um, so I want to split that in two parts. Like, first, I want to go back to how you did that because you did it yourself before funded uh acquire.com, and then what you will do actually to just like if you had to start over. So the first part is you built um business apps to 10 million RR, then you exit, then you build, tell me if I'm wrong, alcon.io, but this time you um build it with VC, at least you raise money, and then you exit again. So you did it two times in two different ways. So just explain me like the whole process, the two time of like building a $10 million company for you, for your perspective.
SPEAKER_01So, one one thing up front, altcoin was was kind of a disaster. Uh, it was like a cryptocurrency exchange that I I tried starting after Business Apps. I'll tell you the whole story, but definitely didn't get that one to 10 million. But business apps was a drag and drop mobile app builder right when the iPhone came out. Um, so I think the the big lesson for me there was just the importance of timing with certain businesses. Uh like when I launched that business, like it just exploded. It was the right place, right time. And what we focused on doing was we built tools for small businesses to go to mobile apps. I think restaurants with mobile food ordering or a hair salon with reservations. Uh simple features like push notifications were you know kind of like magic. It was like, how'd you do this? Uh so it's it was pretty simple, but the timing with the phones that just came out uh was fantastic. Um, so timing is a big one, and the second one was just um a huge emphasis on distribution and sales. Um, if you've ever sold to small businesses before directly, it's a pretty brutal sales process. You go into a restaurant, try to track down the owner and say, hey, I have something I want to sell you. Generally doesn't work. Uh so what we learned early is we could partner with digital agencies like web design companies uh all across the world, and we let them use our software with their branding to sell mobile apps to their clients, and that allowed us to sell uh tens of thousands of mobile apps um all across the world. Uh so that business was definitely fun to build, and then right after it was acquired, uh start all coin. Uh the idea there was to build essentially like a decentralized Coinbase. Uh timing was good on that one. Uh, because Bitcoin at the time was like a thousand bucks or something like that, super, super early. Uh, but we ran into some regulatory SEC um framework issues where if you have a decentralized coinbase, you're essentially an unregulated securities exchange. And so we uh decided we we're gonna move forward with that one. So we sold it to um the company BNK to the future, just uh uh IP with no users.
SPEAKER_02So for you, like timing is one of the biggest things because you add that for both, and it actually helps you get started. For example, if we can compare business apps to today's, it will be like building a wrapper of Chat GPT, like a bit better, but like just use a new technology that arrive and jump on it and build on it.
SPEAKER_01Yeah, 100%. Like, if you think of some of the biggest businesses today, I think they were all part of a big uh shift in either technology or just how we view things in the world, like Uber. Uh the mobile phone came down and gave the ability to book a phone or an Uber taxi from your phone that wasn't possible before the iPhone. Uh Airbnb um was going through a shift where uh the 2008 crash just happened. So people were a little short on cash and they were more uh willing or open to uh rent rooms in their home uh for some extra money. Uh like Yahoo is part of you know the internet starting. There's a really good TED talk on it uh by this guy, Bill Gross. He talks about the number one factor for startups to succeed. And he says that timing is the reason. He looks at all these different stats and companies and asks the question, why did they succeed? And timing comes up as like the biggest factor.
SPEAKER_02Well, I will watch that for sure, but I totally agree. I feel like if you have the skills, like you still need the good timing and being at the good place at the good time to succeed, usually. Some people are just pushing, pushing until it works. But I feel like a lot of time is like being at the good place at the good time.
SPEAKER_01Yeah, and you know, I I think we're going through a great time uh to think of you know very similar businesses rebuilt or reimagined. Uh for example, you can look at, you know, maybe every large software company from you know Salesforce to Workday to uh you know, name a big company and you know, how could this be rebuilt or reimagined in today's AI world? Uh so I think there's a lot of opportunities with that type of thinking where you know these were businesses built in, let's call it Web 2.0, and as we enter, you know, it's Web 3.0 where new possibilities are are available because of AI. Uh I I think that could be really interesting.
SPEAKER_02So you got the idea you build it. Uh when was the time that you actually understood, like let's say with business apps, that you had to continue building it? Like you were thinking, okay, this one is the good one, I will continue building it until I reach this kind of crazy amount of money.
SPEAKER_01Um, you know, I think after I got a few customers for sure. The original idea, I just thought it was gonna be like a fun side project. The idea I had for it, because I was in college at the time, and so I was thinking, I don't want to get a job, I want to keep running a business. Uh, how do I keep doing that if I'm not making any money? So my goal with business apps was just to make like two, three thousand a month or something, just pay for my rent so I could keep working on uh different ideas. Um, but it just became really obvious um based on the the sales that we were making so quickly. Because without business apps, the only way to develop a mobile app was hiring a uh custom developer, and that would cost like $50,000 in a small business, does not have $50,000 to spend on uh mobile marketing. And so we just you know we're really hitting on a pain point and we could kind of feel it with the businesses that were signing up and paying. Um so I'd say like right away, I'd say probably within like first 30 days.
SPEAKER_02How many um employee like in your team did you have before actually achieving uh 10 million error?
SPEAKER_01Uh uh at its peak, I I believe we had you know about 75 employees all across the world. Um, a lot of them were based in other countries. We had a full engineering team in uh China, of all places. Kind of a funny story how that happened. I hired one engineer off Upwork, somehow technical, and I ended up just hiring all his friends, and they had like a software house in China. Uh, then we had a team in uh Ukraine, we had um support person in uh France, we had people in South America, uh, we had designers in the Philippines where if small businesses wanted to pay us to just set everything up and design the application, we had a whole team that would do that. Uh, and then we had an in-person team here in the States, um, in San Francisco and San Diego.
SPEAKER_02So I've been uh you know there like building something and then scaling it. And I think that uh the hardest for me was like to go from a builder, solopreneur, um kind of state to actually hire people and become a manager and manage the team and make them build something even bigger. How did you learn that phase to actually do the switch between building business apps at the beginning to actually make it a big company with 75 employees?
SPEAKER_01Yeah, I got really lucky. I um I had this mentor, his name was Christian Friedland. He started a company called Build.com. He also went to uh Chico, where I went to college, Chico State. I met him there and he took me under his wing and taught me everything that he knew building that company. Uh for context, build.com is basically like Home Depot online. They I believe they do like a billion in sales a year or something like that. But he sold the company when he was 35 for I believe 50 million. Uh, and then so Christian Freeland was a huge help. I would email him all the time with questions. You know, what do I do next? How should I be thinking about things? Uh, he's like a business just uh maverick. Like he's one of the smartest people I've ever met. Cool guy, too. Uh so just a lot of mentorship through him. And then I also was a part of this um CEO peer group called 10x CEO. It's like an invite-only CEO college type thing. You get together, like six of you every quarter, and write down your top priorities, and they have like frameworks for how you should operate as a CEO because I wanted to get better. I wanted to, you know, really because with business apps, I knew I I was I was 21 when I, you know, build the business. We had product market fit really, really fast. We were growing into millions in revenue, and I knew this was probably like the best opportunity I'll probably ever have. So I really wanted to maximize it. Um, so just learning and then reading a lot of books. Um yeah, just mentorship, CEO group, reading a lot of books.
SPEAKER_02The I think the mentorship part is something funny in a way because you say that you had a really great mentor. And for me, like I see a lot of people talking about I got this mentor or this mentor, and it helped me a lot. But for someone who is watching this video and have no idea how to get a mentor, how do you get one? You know, how do you find someone who's actually smarter than you, yeah, further than you business wise? Like, what would you suggest?
SPEAKER_01Do something cool. Do something cool and interesting. Uh, like with business apps, you know, I I built like an MVP, I got like a couple clients, uh, and then I entered this um entrepreneurship contest at Chico State, and that's how I met Christian Friedman. He was a part of that. Um, but if I just went up to him and was like, hey, I want you to mentor me, I have some like ideas and stuff. Um, he would have said, like, hey, you know, get lost again. Like, um, you know, you want to have something interesting going on, and it naturally uh will attract people that could mentor you a lot better than just going around and asking for a mentor. So I think my best advice there would be to do something interesting and uh share what you're doing with as many people. And you know, you can share, you know, this initial MVP as an example and you know, ask questions based on that. Say, hey, I have this business I'm trying to start. I already have like five customers, I'm trying to get to 100. Uh, what would you do in this scenario? I think that's so much more interesting than you know, hey, I want to start a business and I need a mentor before I start anything. So start your business and then go find a mentor.
SPEAKER_02Okay, I see. And the second thing was kind of a mastermind, right? Where you meet every year, you bring your pro your own problem and you try to solve it with everyone.
SPEAKER_01Yeah, so that um Christian Friedland was actually in that CEO group as well. So he recommended that I join that. So that was, I guess, part mentorship by him. But yeah, it was a uh invite CEO thing where it was like a CEO school, like 10 other CEOs are in each like group. You meet up every quarter, and before you meet up, you write down all your numbers, you write down your top three priorities. Uh, you rate every single member on your team, how they did the past quarter. Uh, you rate yourself, how you did, um, how you executed against your top priorities. So, kind of like a CEO boot camp school thing. And then there was like a moderator, and he was a total badass. He built some big company, and he would just you know give us his framework and how to think about things. So, just you know, constantly learning from other CEOs. Did you pay for it? Yeah, it was expensive. I think it was like 12,000 a year or something like that, more than my college.
SPEAKER_02Yeah, I asked that because I feel like a lot of people are afraid to invest in skis or like investor events like that. And I never did your numbers, you know. I'm far from that. But the only time I invested like five figures in a kind of a mastermind, that's where I really like stepped up. And I think like sometimes investing this kind of crazy amount for you like are the good thing.
SPEAKER_01Yeah, I mean, I think it's important to realize like great CEOs and great founders, like they weren't born like knowing everything. They made a you know a concerted effort to go out and learn everything that they would need to know to do their job. Like the CEO role is really a job, it's a job that um can be done correctly, uh better than other people if you just think of it in a in a different way. And um, the best way to do that is to you know make investments towards that learning and have an openness to learning and a desire to learn. And yeah, sometimes it's gonna cost you know some money to get there, but you know, if you spend, let's say, a hundred thousand on something like this and it grows your business by 10%, uh, that could be potentially millions of dollars, or you sell it for 20% more or something like that. Um you know, I think it's easily justifiable.
SPEAKER_02Should you plan your success or should you just take it day per day? Like what did you do? Like, did you build business apps acquired.com day by day, or did you plant it?
SPEAKER_01No, every I think everything in my career has been kind of like just me being curious about certain businesses or where it could go, and then when it takes off, I kind of follow with it. I had no idea business apps was gonna take off like it did. Um, again, my original goal was to you know pay my rent after college so I didn't have to get a job. Uh, and then with Acquire, um I actually keep this like business journal um where I just kind of update it once a month so I can look back and I want to like turn it into a book um at some point. But I have this um journal entry before I launched. Um it was microquire at the time, where I just say, hey, like I don't know if this is gonna work. It's kind of a silly idea. It's like a marketplace where you can buy and sell startups, but the design looks really cool. So if it fails, at least it looks good. Uh so I legitimately didn't think it was gonna work initially, or I wasn't aware it would work.
SPEAKER_02I like the journalist thing. Like, can you just tell us how you do that? Like, do you stead yourself I will write it every day, or like is this like something you keep on the sides, and whenever you have to say something, you say something?
SPEAKER_01Yeah, just once a month. Just once a month, and I just write like an update of like how things are going. Just it takes like 60 seconds, like this happened, this happened, this happened, this happened. Uh, and the reason I started doing it, I can't remember who gave me the recommendation. Um, but at the bottom, I'll put like top things I'm worried about or something like that. And then below that, so I'll write like, oh, someone left the company, big client cancels. Problems were like in the moment, I'm like, oh, this is terrible. Like, Whole business is burned down. Like, how are we going to do this? Uh, and then I'll write um three things I'm grateful for below that. So, like, you know, my family, my friends, uh, stuff like that. Um, what's really powerful is when you go and you write uh the next journal entry. So next month, you'll look at a recap of what was going on and what you were worried about. And so you'll look at like, oh, that person I left. Oh man, we replaced them, it sucked, but it was, you know, we got through it. Uh customer canceled. Well, you know, we figured that out too. So it helps when you get into those situations where something bad happens in your business because bad stuff is constantly happening, and it reframes your mind to look at it more like, you know, this is just something that needs to be fixed, but it will get fixed because you go through the drone and you're like, oh, I was really worried about that at the time, but now I'm not anymore. Now I have these new problems, and that got fixed too. Uh so it just helps with the mentor aspect.
SPEAKER_02It's kind of a proof stacking that everything will always be right.
SPEAKER_01Exactly. Yeah.
SPEAKER_02I like it.
SPEAKER_01It works. I swear it works.
SPEAKER_02I will do that. I I always told myself I will do it. Sometimes I start and then I I stop. I think my journal is like probably X. You know, I post a lot, but I feel like you do it in a more personal way. We talk about your family things as well, you know. Like I can't do that on X, so yeah, I should do that privately.
SPEAKER_03Yeah.
SPEAKER_02Um, you reached that level of Ryan Gosling in the boat, touching the water. You were happy, you did a huge exit. What did change in your life after you made like your first big exit?
SPEAKER_01Uh I mean, I didn't I didn't really do too much. I bought a house. Um, I bought a house in cash. Uh, I thought that was kind of cool because I didn't grow up, uh my parents were homeowners. Um, and just you know, for security, knowing like your house is always yours, you don't have a mortgage, you don't have to worry about losing it, stuff like that. Um, when we bought it, I told my wife it's kind of like taking a bunch of money and burying it like in the backyard, like so it's secure forever. Uh so tons tons of bad stuff can happen. You still have your house. Uh, and then I just put the rest of the money in the SP, SP 500. I I have um a wealth manager that I work with, doesn't do anything special, he just you know keeps me on track and uh put the money in the SP and then I start another company. I think a lot of people maybe like overemphasize of like how awesome it is. Like, don't get me wrong, I think you know I'm extremely blessed and uh I'm grateful for everything and my life is is awesome. Um but it's not like we were popping champagne, this is the best thing ever. You kind of just move on, like you just you get like a house with an extra bedroom or two, and you get right back to doing what you like to do.
SPEAKER_02But if you were reading right now um Andrew's little notebook before you exit, like maybe two years before the exit, when you were focusing on building, and then two months after the exit, what would be the problem that Andrew had before that you will lose about after?
SPEAKER_01Honestly, it was uh I mean, because I started um that cryptocurrency exchange right after I sold. I literally started that business while I was in due diligence. Um I just didn't want to be bored. I I was 29 when I sold the business, so I was pretty young and had a ton of gas in the tank. Uh so if I was writing in a journal and I have that entry fight, I could literally pull it up. But I'm sure it said something like, Oh, I got these headaches with these other engineers. And as I'm reflecting now, I mean that's the stuff that I think really makes me happy is you know, working on these, you know, hard-to-solve problems and working with cool people and building cool stuff. I think that's what it's all about.
SPEAKER_02I think so. I did my exit not long ago, not the same level again, but like I had exactly the same thing I started even before selling it. I started a new business because that's what makes me happy. And I think when you are into that and you love it, like you just have to continue actually. But you were saying that you were trying with business apps to do like two to three thousand a month and you would be happy with that. You say that your parents were not homeowners, so you didn't come from a crazy rich family. Did it change like your relationship with money after you got it? Like, you know, not thinking about we'll have money next month, uh, this stress that some people can have when you're not born with it.
SPEAKER_01Yeah. I mean, the thing with business apps is you know, it was a very profitable business. So by 21, I I felt financially secure. I paid myself a pretty high salary. Uh, since I bootstrapped the business as well, the business was all cash flow in the business was essentially mined. When I sold the business, we had over 2 million in cash inside the company. So it wasn't like I went from like complete zero to like, oh my gosh, I have a lot of money now. Um, so I think I had a lot of time to to kind of digest um, you know, my relationship with money, I guess you could say. Um, but I guess what I've learned over the years is it's not like a huge motivator for me. I I definitely think it's nice. Money stress. Money stresses suck. I've seen them personally in my family. Um, nothing crazy, just enough to kind of, you know, wish they weren't there. Uh, but I've learned a lot about investing, interest rates, stuff like that. Um, I still think it's all boring. Um so I I think more than anything, just uh haven't really had to worry about money. I think it's been great and has allowed me to focus on um things I like to do, which is building.
SPEAKER_02Amazing. And one last question about your story is what is the biggest lie about entrepreneurship that you figured out after all this time?
SPEAKER_01Uh, you know, I think a lot of people think they have to raise a bunch of money to be successful as an entrepreneur. Um, I I think that couldn't be further from the truth. I'd actually argue that you'll make more money as an entrepreneur, bootstrapping your business or focusing on the cash flow of the business. Um so I'd say either that or um people not understanding that most of the game, in my opinion, is uh sales and marketing. I think that's probably a widely accepted one now. But um at business apps, you know, we built and sold software. I but I would still tell the company internally, I'd I'd tell everybody that we were a distribution company, even though we sold software. Our main focus is distribution.
SPEAKER_02I see that a lot right now. Let's say like Gen Eye or Cluli, for example, like you know, a lot of people talk about them that they are more a marketing company than actually a software company, but that's exactly what you're talking about right now.
SPEAKER_01Yeah, I think you need to toe the line a little bit. Like you you need to still have a good product and a marketing strategy that that makes sense. Um like I think Cluli is an interesting um example of of this um recently with kind of the viral marketing that doesn't necessarily attach to the product. I think that's TBD to to know how effective that is. Um but yeah, business apps, like our main focus was establishing distribution partnerships with every agency on on the planet that we possibly could. We translated our applications in you know 30 plus different languages. Uh, and to to execute a company like that, you would need a ton of venture capital if you were going direct to small businesses. Um, so I think the distribution angle that we took at that business gave us such a huge competitive advantage. And if we didn't focus on uh the reseller partner um angle for sales, I don't think the company would have succeeded at all. And I think you could say the same for a lot of companies today, where you know, if they don't have that competitive edge and how they acquire customers, it's it's gonna be really challenging. I think as it becomes more and more easy to develop products for the companies that don't have a competitive distribution or customer acquisition advantage, it's gonna be really hard to succeed.
SPEAKER_02Well, that sounds like that's not no no no no big big thought. No, no, I just I just really love that because uh I agree in a way. Like I feel like uh building a product became easier doesn't mean that building a good product is easier, but building a product, and I I totally agree with the distribution part. I mean, we see that every day, so yeah.
SPEAKER_01Yeah, I think uh one other thought, just as I'm thinking of it, um, you know, I think the biggest thing for founders to think about today is you know, how can they acquire customers in a really clever way that isn't necessarily obvious? Um, that could be, you know, I I really like the social uh like what do they call avatars, but like uh meme accounts. Like there's there's this company that makes like compliance easy for enterprises, and there's this European compliance VC on Twitter, who's absolutely hilarious. I haven't seen um marketing like that. Um I can't think of too many examples off the top of my head besides that one, but unique ways to attract customers uh to your business. Like that should be like the main thing. I don't think you know, just doing a bunch of paid ads or generic social marketing or coding mailing a bunch of people, I don't I don't think that necessarily works as well as it used to in the past.
SPEAKER_02So mainstream distribution channels should be avoided for someone who starts. For example, if I listen um follow what you say is that Jenny AI was one of the first ones doing UGC. So that's why they are so so much like advanced compared to other. But now UGC, for example, start to be a little bit too crowded, so you should find another path if you start.
SPEAKER_01Yeah, I think I guess what I'm saying is you need to find a distribution strategy for your company that everyone isn't doing because when everyone is doing it, it's not as effective. There's a saying uh where marketers ruin everything. So, you know, paid ad campaigns, uh, cold email, I think those channels are pretty saturated and they're just too expensive if you're you know just starting out. Um, other interesting strategies I've seen, um, you know, I I think the TikTok strategy is really interesting where companies are partnering with influencers to get really specific and almost scientific about what goes viral for their product. Like I use this um tool called Whisperflow, and I was reading this post where they have this huge influencer uh campaign, and when a post about Whisperflow goes viral, uh they'll tell all their other influencers to make similar content, they'll pay based on that. I think that's really interesting. I've never heard of a company doing that. It seems to be really effective for them. Um but that's what I mean, like innovating on distribution as much as you innovate on the product. Amazing.
SPEAKER_02Now I want to switch to something else because it seems like you stop building, but you keep building, you know, like acquire.com is still a huge company. Um, you have, I think, more than $500 million in closed deals. Tell me if I'm wrong, maybe more now.
SPEAKER_01We have over a billion. Over a billion now. What's my guy?
SPEAKER_02Yeah, yeah, no, which is insane. And you're basically like the leading marketplace for startup acquisition below 50 million.
unknownYep.
SPEAKER_02Did you build acquisition.com the same way that you build the two companies before, maybe not icon, but business app. Did you use the same playbook or was it different?
SPEAKER_01Uh yeah, you know, one thing that I've always done um at all my companies is I try to tell a story that really resonates and kind of goes beyond what we do and what we sell. Uh, like as an example of business apps, we had a very heavy press um focus strategy. Uh, so we were in TechCrunch a ton. I was a guest author there, Venture Beat, New York Times, Wall Street Journal, that sort of stuff. Because Twitter and LinkedIn wasn't like a great place to share your story. Like it had to be through the press. Um, there used to be a term called TechCrunch back in the day. I feel so old now. Uh but anytime we had news, anytime, like we have a partnership or a product update or literally anything. Like we released an Android app, we do an exclusive with TechCrunch, we pitch them the story, the writer says I'm busy, we'd pitch them a month later, we'd give them some time. Um, we were maniacal about press because that was like the best way to get um in in the ears of of potential customers. Um, and then fast forward to altcoin. So business house, we're we were riding the shift with mobile uh and small businesses. We were helping small businesses compete for their customers against these mega brands who could uh afford a custom mobile application. That was kind of the story that we told. Um at Altcoin, you know, we also got a lot of press for that company, even though it wasn't successful. Um, and what we were doing is we were championed for people to trade cryptocurrencies securely and safely. We would talk a lot about how other exchanges had been hacked in the past. Um, and then at Acquire, you know, originally the kind of the story that I tried to really tell was, you know, the story of what I went through and achieved that business apps worked, you know, didn't raise a bunch of entry capital, uh, sold the business. It was a life-changing outcome. Um, almost like championing, you know, small businesses, and you don't have to build a billion-dollar company to be successful. Um, so what I'm trying to say is across all the companies, you know, there's usually a brand message or a brand story that kind of resonates with people and people could champion behind and essentially root for your company, regardless of if they're gonna be a customer or not.
SPEAKER_02Did you learn that yourself? Because I read the book, for example, Build a Story Brand a long time ago. Like it is something you went through, like learning how to be a good storyteller for your company, your brand.
SPEAKER_01Uh, not necessarily, no. Um, honestly, I just read TechCrunch a lot. Uh, and college that was like my favorite publication. Uh, they aren't the best now. I'm not not a fan at all now. Um, but I just always wanted to get a company in TechCrunch. So I kind of learned how the pitches work and types of articles they write about. And um, I really liked um, you know, a few other companies like marketing at steel inspiration. Because what we did is we brought uh we made it easy to develop um mobile marketing tools for small businesses, apps, websites, etc. And so I'd look at like Weebly and like Wix, and there was this other website builder, YOLA, how they positioned with small businesses and they were championing small businesses, and I'd kind of you know piece from what I saw already working. Uh, but I've read Story Brian, great book. Yeah, I don't I don't recall reading it um when I was running that company.
SPEAKER_02Yeah, I think for me it was a long time ago, but I just like the concept is exactly what you're talking about, actually. So for you, you have to build a pitch even if you don't raise money. Like your pitch will be your daily marketing kind of strategy for your own company.
SPEAKER_01Yeah, I mean you're you're pitching, you don't have to pitch investors, like, but you still got to pitch, you know, customers, employees, uh, just the market as a whole, press, um, you know, going on podcasts like this, what do you do? Uh, you know, you're always kind of pitching what you do. And I think, you know, when you're able to share a lot about um your company in a way that uh goes beyond just the product, it it just it's easier to remember. That's how we're wired as humans. You know, we remember stories, we don't remember stats.
SPEAKER_02There's one question I forgot to ask you, and I think it's really interesting because we all have our own process. So before you build um business apps, before you build Archon.io, before you build acquire.com, and you're probably building some little stuff on the side sometimes. What is the process to find this ID? Like, do you just browse, like you say, TechCrunch? Do you just browse like TechCrunch back in the day? You just browse Twitter today. Like, what is your specific thing to find IDs?
SPEAKER_01Yeah, I think the number one thing I looked for is you know, shifts, behavior shifts, technology shifts, things that are are becoming possible that weren't necessarily possible a few years ago. Um, one thing I did for business apps was I had this job board before that business, and it was a job board that connected mobile developers with businesses. And the idea behind that was to just get myself like involved in mobile. I didn't know what I wanted to do, but um I knew mobile was gonna be big and there's gonna be a lot of you know businesses made for mobile. Um, so it was like an idea petrich dish where like I felt I could attract ideas to it. And sure enough, uh, I saw people posting the same job post uh a bunch on the job board. They would say, Hey, I own a hotel and I want to have a reservation system and a uh teacher to order food, I'll pay $100,000 to build this. And I thought, oh wow, like people are paying that much money. Like, what if there's a template and you can customize it? Um, so an idea to get ideas could be to figure out a way to get yourself in an industry, like a newsletter is probably a great idea. Uh, podcasts where you interview people that are building startups and something may naturally come to you. Um, or just looking at you know your day-to-day if you're at a company and you're using certain tools and everyone's complaining about it.
SPEAKER_02Um so okay, well, I think that's a good playbook for everyone. And I'm I can agree with that because with the podcast right now, it's like it helps me so much for finding ideas. Like, you know, I'm talking to amazing people like you every single day, and uh yeah, it gives me a lot of ideas for sure.
SPEAKER_01Yeah, because you fire it up too, and you you know hear their view on planning ideas, like just do something that gets you involved in whatever industry you're trying to break into, I think is the best thing you do.
SPEAKER_02Let's deep dive now in the data because you say that you reach one billion dollars in closed deals, which is insane. So, you probably saw a lot of company getting acquired. So, I would like to know the data of like behind building a $10 million company or reaching a $10 million exit. What is the data behind? So, first question would be B2B versus B2C. What do you see that sell the most or the easiest to build, or whatever could help someone looking at this podcast?
SPEAKER_01B2B by far. Uh B2 B2C can definitely work. Uh, but what I've seen in B2C is churn is typically brutal. And so you're gonna need you know a very, very high number of users and paying users. Um, I ideally ones that aren't churning very high, but from B2C apps I've seen, churn can be as high as you know, seven, eight, nine, ten percent per month, uh, which just really slows down the growth and slows down your valuation as well. So 100% P2P.
SPEAKER_02Fundo-wise, is it solo deal, a huge team? Like, what is the um button behind?
SPEAKER_01I'd say it doesn't matter. I would say uh, you know, whatever whatever gets you there. I've seen solo founders absolutely crush it. I've seen you know the typical co-founder duo do extremely well. Um, I haven't necessarily seen the large team uh do too well. Um usually the businesses that that we sell are gonna be you know highly efficient, capital efficient. Um so small teams is generally what I see. I've I've seen a few large teams like 50 plus, stuff like that. Um but usually smaller, like lean means uh just the the bare minimum uh number people require.
SPEAKER_02Is there a field where there is way more company getting acquired than other?
SPEAKER_01Um, you know, it depends on the month. We see months where e-commerce takes a lead and SaaS. Uh but generally SaaS, those are the majority of the acquisitions that we do. Uh about 70% of the acquisitions that we do are are SaaS software. But in terms of like specific industry, it's it's all over the place. It's everything from you know a hosting company to you know real estate specific SaaS to marketing focused or a mobile app or something like that. Um it's all over the place. But there's nothing that says like this is the niche that you should focus on.
SPEAKER_02VC alboistwept.
SPEAKER_01I we've only helped a couple venture back businesses sell, and and when we do, it's generally not the the happiest story to uh share. And what I mean is You know, usually the the founders kind of burnt out. Uh the first people that are gonna see money when the company sells is the investors. Um and the founders and walk away with generating that much. Um but ninety-five percent of the business we sell are bootstrap. I'd say I'd say bootstrap.
SPEAKER_02Interesting. What is the the data that actually impressed you the most or like surprised you the most based on like everything you saw so far?
SPEAKER_01Um surprising. Just how important competition is in the acquisition process. I've seen SaaS businesses sell for a 0.5x multiple. Um, you know, if I post that on Twitter, people will be like, oh, that's too low. Like, how could you sell a company that's so low? And I just say, look, like we just match buyers and sellers. Uh like if you want to pay more, feel free. But when there's no other buyer competing for the business, and that's the only option the founder has, I'm that's better than not selling at all. Um, so I I'd and then you might ask, you know, well, how do you get a higher multiple? Um, generally, it's always competition, having multiple buyers in the process, multiple offers, um, being uh competitive with the process, meaning you receive one offer, uh, you let other buyers know, uh, you negotiate the price upwards and close based on uh many interested parties. There's a saying if you have one buyer, you have no buyers. Um what I used to think is you know, a buyer comes up to you and they're like, I want to pay 10 times revenue for this business. And you're like, oh, amazing. Uh, but it's much more tactical than that.
SPEAKER_02So if I listen to you right now, it's like I should build a B2B SaaS in whatever field, have a lean team. And uh, what's the difference? Yeah, bootstrapped, and what you just said, actually, which I totally forgot.
SPEAKER_01Uh it was on uh surprising status, just the importance of having multiple buyers competing uh in tech with in the competitor market.
SPEAKER_02So B2B competitor market, lean team with a SaaS has way better chances to get acquired for big multiples and big amount than other things.
SPEAKER_01100%.
SPEAKER_02Okay. And what is the red flags that like uh actually people who want to acquire see in a company and are like I would never buy it?
SPEAKER_01Uh you know, red flags and acquisition process could be, you know, numbers that don't make sense. Uh messy financials, I I can't tell you how many times I've given that advice out because it's so true. It seems so basic. Uh, but with a lot of buyers, there's just uh a bare minimum, no exceptions made, expectation of what they expect to see when they first start speaking with you. So they sign the NDA, and then there's no PL, there's no uh, you know, financials broken down for them to seed. It's really hard for them to uh take the acquisition seriously based on that. Um, so I think not being prepared is is a big red flag, uh, because no one wants to waste their time. Um, and you know, high churn is another one. Uh you know, Batterby's online. Uh you know, surprises. Surprises are are terrible for acquisitions.
SPEAKER_02And if I listen to you right now, I'm building the next $10 million startup. What should I start tracking or documenting to be ready for whenever it's time to sell?
SPEAKER_01Everything, literally everything. You don't necessarily have to, but if you want to like have the the bow on on everything, like like I was talking to his founder um who had probably one of the best acquisition processes I've ever seen with us, and he did something super interesting. He anytime an employee would have a uh question, he would record a loom uh and send it over to them just in case anyone else ever had the question. And so we had this data room just full of all this information on every single aspect of a company, how a brand, uh, who does what and when. Uh, it wasn't an overly complicated business, but he just essentially documented like everything and like a clear operating manual. So that's like the overboard option, but you know, the more you have, all the better. Um, but if you're just thinking like I want to be reasonable here, like I don't want to document literally everything from day one. I would recommend uh having a good bookkeeper when you start making, you know, a few thousand a month. Like, you know, if you're getting into like hundreds of thousands, definitely have a good um bookkeeper, have a PL, stuff like that ready. Uh and then just documenting, you know, from a high level how things operate within the company, like, you know, who does marketing, what are your top channels, uh, how to support work? You can do just simple like 10-minute looms with those or five-minute looms. Uh, so it doesn't have it to be anything overly complicated, but financials is a big one.
SPEAKER_02Is it a red flag for a company to not be uh US LLC or US based? Because there's a lot of people like me, you know. I live in Indonesia, I have uh this kind of company, and like often your country try to scare you about the fact that it will not take be taken seriously to have a company uh in another country. So is that a big red flag for you?
SPEAKER_01Uh no, no, because generally all acquisitions under $10 million are going to be asset sales, meaning the actual business entity is not being purchased. They'll be left behind with you and they're just acquiring the customers and the product and the IP and all that fun stuff. So it actually doesn't typically matter um at all. That's good to know. Yeah. When is the good time to sell? I mean, when the business is absolutely crushing it and you feel like it can keep going, that's usually a really good time, but it's very hard. Um, I can't tell you the amount of founders I I've spoken to that uh regret not selling at one point. You know, you hear a lot of from founders like, oh well, like I regret selling, that sort of stuff. I I know very few of those founders, surprisingly. Um, but the amount of founders that I know that regret not selling when times were going really, really well is pretty high. Uh so when things feel like you know you can't get any better, uh, that could be a good time, or just when you're burnt out. Uh when you want to move on to something else, you want to cash on your chips. Uh that's why I sold. That's why I sold business apps. I just ran the business for eight years. I was tired. I wanted to uh do something else, and it was you know the end of the road for me at that company. Not necessarily the best time to sell, um, but I think that's when it makes a lot of sense.
SPEAKER_02Yeah, I'm in the same boat. I sold it a little bit too late, lost like probably half of the price, but I just wanted to scope, so you know I'm happy about it at the end.
SPEAKER_01Dude, at at business apps, if I had sold that business like four years earlier, so I would have had four years of extra free time, I think I would have sold it for two, three times more. Yeah. You don't you don't know in the moment.
SPEAKER_02No, you never know. But it's always a good thing. I mean, like I don't regret it because I still sold it because I had a reason behind it. Wasn't just the money, it was to, you know, go to the next chapter, and I think it was probably the same for you, so it's fine that way. Now I have to pick up your brain for a last exercise that I like to ask everyone is if you had to start over in 2026, what would you do from ID validation, distribution, and building the product, of course.
SPEAKER_01I got to answer that whole thing, or could I just give like an idea?
SPEAKER_02You can give it an idea, whatever you want.
SPEAKER_01If I was starting over, I'd probably do exactly what I told you. I'd probably start a newsletter at start interviewing a bunch of AI experts. Uh, I'd narrow in on the industry. Off the top of my head, I would look at something like workday, uh big clunky HR system. And is there a boring B2B app in there that I could uh build to be more usable, uh less friction with AI, uh have a blog about some boring HR thing. Uh and this could be applied to, you know, maybe it's Salesforce. Like maybe you're making like the new CRM, or maybe you're uh rethinking how you know small businesses market with their customers. Um I've I think the business house model, like you can just take out the mobile app builder and put something else in there. What tools are small businesses using today? Um, I'm sure it's something with reviews or communicating to their customers through text, email. Uh is there an opportunity to do that for a very specific industry? I think that was my biggest mistake at Business Apps is we went super broad. Could we go very specific? I mean like only serving pizza shops that have a bunch of items and wild ordering. Uh something like that. But I'd start with a newsletter, interview operators in that market, uh, learn their pain points and then and use AI to build something.
SPEAKER_02And then anyway, you have all the playbook to build a 10 million startup before because you already gave all the source.
SPEAKER_00But you gotta get lucky. You gotta get lucky, you gotta get the time right.
SPEAKER_02Is there anything else that like someone watching this podcast wants to build like this kind of big company and this kind of big exit uh is still missing after everything we talked about?
SPEAKER_01I'm I'm positive they are. It's it's there's a lot to it. And uh I I unfortunately don't know if you think. Oh so I I hope I've been helpful. But if if I could give any other advice, I'd I'd say just continue to learn. Like the game has completely changed in the last you know two, three years alone. Um, so just figure out ways to just always be learning and you know, always have your hands in something where if a good opportunity comes, you're able to, you know, spot that opportunity and you're also in a position to um act on the opportunity.
SPEAKER_02Well, Andrew, thanks a lot for your time. I'm sure this one will help a lot of people, at least it helped me. So thank you for your time. And yeah, I wish to have you soon again.
SPEAKER_01Yeah, thanks so much for having me, Flynn. I appreciate it.