Straight Facts with the Founder of MicroAcquire
Every Tuesday, the Latka SaaS Hackers Community hosts an AMA. Top CEOs, Founders, the operators share their knowledge with everyone for thirty minutes.
It’s a massive opportunity for other Founders and CEOs to learn quickly and efficiently from the best.
Andrew Gazdecki came on recently and shared his wisdom. No filter; straight facts.
If you don’t know, Andrew is a serial entrepreneur with multiple exits and founder of MicroAcquire. He’s most known for bootstrapping Bizness Apps from zero to tens of millions in revenue and being awarded to Inc Magazine’s Fastest-Growing Companies (#58 in 2014 and #91 in 2015) which was acquired by a private equity firm in 2018.
In his spare time, Andrew enjoys mentoring other entrepreneurs and surfing in the cold water of Half Moon Bay.
Here’s a transcript of that AMA.
Andrew Gazdecki AMA Transcript:
Opening Remarks:
Hey everyone… so excited and humbled to be invited to this AMA in 10-minutes. Thank you for the invite, Nathan Latka you’re the man!
Here’s a few bits of knowledge to kick things off… happy to elaborate on any of these
Competition – focus more on being the best versions of yourself rather than being a better version of XYZ company
Culture – teams that laugh together stay together
Customers – they’re the ones that pay the bills. talk to them often & put their success above everything
Sales – sell solutions to problems, not software
Marketing – focus on brand & tell an amazing story that has no ending
Decision Making – a good decision today is better than a perfect one tomorrow
Milestones – celebrate your wins often because if you don’t celebrate your wins, it will make the losses harder
Team – hire for motivation, attitude, and skill set in that order
Scaling – distribution trumps great products, so focus on building an innovative distribution strategy
Perspective – never lose perspective of how much amazing progress you’ve made and will continue to make
Mindset – enjoying the journey, not getting to your destination
Product – great design & user experience is a huge competitive advantage
Raising Capital – ask for investment you’ll get advice, ask for advice you’ll get investment
Getting Acquired – contrary to popular belief, more startups are sold than bought, so have a plan
Here are a couple free resources I made for 500 Startups mentorships (feel free to make a copy)…
- Brand positioning framework: https://docs.google.com/document/d/1cQxOOOGpbfJwq5J_URYgHcVO3jkxYrPoyVn5tLAv89U/edit
- Enterprise sales mutal action plan template: https://docs.google.com/spreadsheets/d/1YweU2OJy0d2k8EWbH1hPoI89QYxQsjw2g6Ebmj3zKrI/edit#gid=285978682
So, what’s everyone working on and how can I help? Fire away!
Q:
On retention: do you know any best practices to keep people in a community, product, or newsletter happy and engaged? Where to start? Thanks man!
A:
I know this answer is really simple but talk to customers/users as much as possible… and test multiple ideas fast to see what works. Gather data and make decisions from that.
Q:
What was your journey from 0 to 1 customer?
A:
Ah, my first customer was my college’s gym… I remember it like it was yesterday, the app barely worked, it they pressed anything it would crash, but it ended up working out really well
Q:
I’m curious why you decided it was time to sell. It sounds like you had it all! Team, no investors, growing company $10m+ in revenues. You were like 30 ish right? Why was it the right time to sell?
A:
Really great question, yeah I was 29 when I sold. To be honest, I just wanted to move onto other things. Start another company, help other entrepreneurs, apply what I had learned during my time at Bizness Apps elsewhere. I had a complete blast being CEO for 8-ish years, but it was time to move on. Plus, I got an offer I couldn’t refuse & saw an opportunity to never worry about money ever again (even though I’m really not too financially motivated).
Q:
We’re launching a product to give restaurants digital menus through QR codes – built by our established agency.
Any advice on balancing being scrappy without hurting the “image” of the existing agency?
A:
I’d say focus on your customers’ success more than your own, and you’ll be in really good shape. We used to always say “our customer success is our success”… because they pay the bills.
Q:
Hi Andrew – What was one thing you wish you had or knew while you were scaling?
A:
Great question… I would focus HEAVILY on understanding your customer payback period
At Bizness Apps, we would bring on customers with a ~30 customer payback period which meant we could almost IMMEDIATELY reinvest this back into the company to grow
Another thing I’d mention is the POWER of distribution, we scaled Bizness Apps entirely through a reseller model, where we had literally 5000+ white label partners selling our product & paying us to do so all over the globe, in like 70+ countries
So net net… focus on distribution and less the product
Q:
interesting, how did you decide to go the reseller route? And do you think the quality of your product had an impact on the success of going that route?
Were affiliates and resellers a part of your plan from the beginning?
A:
Honestly no, we really stumbled onto the business model after I saw an agency in literally Switzerland making a bunch of mobile apps for these giant Ramada hotels so I reached out to him… so the lesson there is talk to customers as MUCH as possible
Q:
what would your ideal demo look like?
A:
Ideal demo good question… it really depends on the customer and starts with understanding your ICP tight. Who are they? What are common pains? Why is this a problem worth solving today? What other ways have they tried solving the problem? What is the cost of not solving the XYZ problem today? And then always always always booking a meeting from a meeting & getting next steps… this is a big topic but hope this helps
Q:
When you acquire a company with a new product is it better to keep the brands separate or merge products under one brand?
A:
This really depends on how much value there is in the brand that you’re acquiring, without knowing much, I would personally probably merge the brands or at least have “Powered by MAIN COMPANY”
Q:
What was one thing you did well early that you wished you’d have focused on even more? As an individual or business
A:
Ah hiring people smarter than me… so Bizness Apps was weird, I was like 22 when I started it, we were doing millions in revenue, and for a period it kinda got to my head… for example “What, this VP Marketing wants $150k/year? That’s insane?!” … but remember I’m straight out of college while being broke poor my whole life
So to answer your question, I wish I hired top talent sooner, I eventually got this right after joining 10xceo.com and getting a CEO coach, but it wasn’t until I hired a strong bench I really began to scale & removed myself as a bottleneck as CEO
Q:
Andrew Gazdecki what made you decide to get a coach? How did you find 10xceo?
A:
Ah 10xceo.com is invite-only, got invited my mentor Christian Friedland who was in there
Q:
What was the best part of the program and of having a coach?
A:
Having someone keep you accountable and help you understand your strengths as a CEO/leader
Q:
Hi Andrew Gazdecki will you be building another company and do you think that’s your niche? ie build to a size that gives you the buzz then go do it again and will you bootstrap it as well or go fundraising to go faster?
A:
Yeah absolutely! I recently launched https://microacquire.com/
I’ve been helping entrepreneurs buy/sell startups entirely free but my goal here is to acquire a couple SaaS companies myself… so in a way, I’ve learned what I’m good at which is scaling/operating and looking to acquire to help take a company to the next level
Bootstrap 100% or raise debt, I can’t even tell you how much fun it was running a company without having a single person telling me what to do
Q:
Is there a common theme in start-up acquisitions you have found? (besides cash needs!)
A:
It really depends, profitability is a big one, 3-years of operating history is nice, also growing, I wrote a piece on how to prepare for an acquisition here if you want to check it out: https://resources.microacquire.com/how-to-prepare-your-startup-for-acquisition/
Q:
When did you start getting ready to sell your company? You said you got an offer you couldn’t refuse. I’m wondering if you went out and looked to sell or did you plan it and prep the company for sale.
A:
Funny part is I actually hired an investment bank in 2016… turned down the offers because the investment bank had like an $800k minimum fee, which was ridiculous (I was also young – 26 at the time) so wanted to keep going. Then 2-years later a PE Firm reached out to me cold, we were prepared to sell though since we went to market 2-years ago but went back to focusing on the business
Q:
What were your biggest acquisition channels and how did you scale on them?
A:
Our white label reseller channel accounting for the majority of our revenue at Bizness Apps… without that distribution model, Bizness Apps would have been maybe 1/10th of the size
Fun fact: Bizness Apps created more mobile apps than any other company in the world. At one point we were developing 5% of all the apps that entered the iTunes App Store
Q:
Q on this: “scaling – distribution trumps great products, so focus on building an innovative distribution strategy” – thoughts on some good distribution channels right now?
A:
- partner channels
- referral networks
- white label models
- communities
- building an audience
- brand building
- strategic partnerships
- integrations
- content (guest post EVERYWHERE)
- SEO (it’s boring but it works)
Q:
Did you utilize any growth hacks, and if so, what were they?
A:
Ah depends on what you mean by growth hacks, I really don’t think there are any silver bullets in marketing… just being consistent is probably the best marketing strategy I’ve seen
For example…
- 2 blog post a week
- 1 newsletter blast
- 1 webinar
Just be consistent and keep your customers engaged. Also make sure your product team is working closely with your marketing team, because that’s the stuff which creates PR opportunities
Q:
What’s something you thought you knew when you started, but it turns out you had no idea?
A:
I used to think I could do it all on my own. I can’t and you probably can’t either. A company’s biggest asset is the people who work for it. To build something great, you need great people. It’s that simple.
Q:
Challenges of cross-border acquisition?
A:
There are some but I’ve seen it work out, just need to focus on building a great relationship with the buyer
Q:
Like the mindset on teams + hiring — did you ever have an executive coach? Did your leadership team ever have a coach other than you?
A:
I did and I couldn’t recommend it enough… Tim Porthouse
And yes I brought in multiple advisors for my COO, VP Product, CRO, anyone who was willing to help we brought into the fold.
Q:
You mentioned you scaled Bizness Apps entirely through a reseller model, can you tell a little more on how was that structured? Did you pay your partners per each customer they brought or…?
A:
Customers paid us to resell our product… for example, we would enable partners to resell a mobile app to say a restaurant and charge $100/month + $1000 set up fee, and we’d charge a per-app fee of say $20-40/month based on volume… some of our biggest resellers sold 1000s of mobile apps and literally built 6-figure businesses for themselves which was awesome
Q:
Here’s a more sober question – when you were young and maybe really didn’t know how to do the “basics” (creating a plan, communicating it regularly, getting the “foundations” in place to actually grow/act), how did you resolve that? Saw you mention 10xceo – alternatives?
A:
I had an amazing mentor – Christian Friedland, we’d chat every day and I consider him almost a father figure. He built a company called build.com into a billion-dollar e-commerce company and sold it. Find someone who has gone through what you’re trying to do and do whatever it takes to bring them along. Christian’s advice to me was worth 1000x his small $50k investment.
Q:
Hi @Andrew Gazdecki. What do you think about optimizing for single vs multiple ideal customer profiles before 25m$ ARR
A:
I LOVE HIGH LTVs… you’ll grow a lot faster if you’re willing to pick up the phone, run a demo, and close a larger account
But obviously both models work. It just depends on what you’re good at. If it’s self serve: do that, if it’s large sales go that route instead.
Understanding and playing to your strengths is how you win as an entrepreneur
Q:
Re: distribution and reseller partners – When did you start to build out the channel team to manage these partners ie how many partners before you decided to get a full-time person? Also, did you automate the enablement of the partners through an in house platform or buy a platform to do this?
Another thing I’d mention is the POWER of distribution, we scaled Bizness Apps entirely through a reseller model, where we had literally 5000+ white label partners selling our product & paying us to do so all over the globe, in like 70+ countries
A:
It actually started from a customer request, he had built 4-5 apps and asked if we could white label the software, so we did!
Q:
Best acquisition research tools?
A:
Selfishly – https://microacquire.com/ … this is a new marketplace I’ve been building if you’re interested in acquisitions… or @Nathan Latka‘s deal or bust show 🙂
Q:
What size business is MicroAcquire targeted at?
A:
Most of the companies listed on MicroAcquire are between $10k/ARR – $2m/ARR… and bootstrapped
Q:
What’s next for Apps creation tools? What pain point and opportunities to solve for the next years.Great journey and thanks a lot @Andrew Gazdecki to share it!
A:
Wrote an article on this: https://www.forbes.com/sites/forbestechcouncil/2018/03/09/why-progressive-web-apps-will-replace-native-mobile-apps/#17f4ee9f2112
Closing Comments:
AMAs bring instant answers to lingering questions, quickly, and with no fluff. The Latka SaaS Hackers Community hosts a new AMA every Tuesday.
Interested? Join the community.
Thanks for reading.