0 (3s):
Shake the room, fire nation, J L D here. And welcome to entrepreneurs on fire brought to you by the HubSpot podcast network with great shows like the salesmen podcast today, we'll be focusing on getting acquired, how an entrepreneur built and sold his SAS startup and fire nation to drop these value bombs. I brought Andrew Gazdecki on the mic. He is a four times founder with three exits. He's a former CRO and founder of micro acquire Gazdecki has been featured in the New York times, Forbes wall street journal, Inc magazine, entrepreneur tech crunch in venture beat in today foundation.

0 (44s):
We'll be going through that process of what it takes to build and then sell a startup and specifically a SAS startup software as a service. So we'll be talking about how Andrew started his career, how he started business apps, another company alt coin, and then of course, micro acquire. You're going to just pick up a lot of gems. Invaluable. I was along the way fire nation about how you could potentially come up with the idea and then execute building the business of your dreams. And that dream could be to exit. When we get back from thanking our sponsors from tools that help with automating your emails, increasing sales gamification in more, it's never been easier to create an online course than with the Thinkific app store.

0 (1m 29s):
Learn more and sign up for a free trial of Thinkific at thinkific.com/firefree. That's T H I N K I F I C.com/firefree. The HubSpot podcast network is the audio destination for business professionals who seek the best education and inspiration on how to grow a business. Whether you're looking for marketing sales, service, or operational guidance, the HubSpot podcast network hosts have your back, listen, learn and grow with the HubSpot podcast network at hubspot.com/podcastnetwork. Andrew say what's up to fire nation and share something that you believe about becoming successful. That most people disagree. What's up, John,

1 (2m 9s):
Thanks for having me excited to be here one. Okay. So coming out swinging one thing that I believe that you need to be successful at others. Don't I would say you don't need experience. You don't need, so this, this comes from personal experience. My first company, no experience didn't have any capital didn't have access to investors. So I think, you know, one thing that people need that people would probably disagree with, it's just the ability to work really hard and the ability to learn anything. If you have those two things, I think you can go pretty far, but I think a lot of people would agree with that too.

1 (2m 52s):
So that's our question.

0 (2m 54s):
I only asked hard questions except from this point forward, because now we're gonna be talking about getting acquired. We're going to talk about fire nation, how Andrew built in sold his SAS startup. In fact, wouldn't talk about a couple of these things right now, but I want to start at the beginning. How did you start your career? Where did you start your career? Walk us through that process. Yeah,

1 (3m 17s):
So I, I've kind of been an unsure my whole life. I've been goading businesses since I was like 10. And when I say businesses, I mean, like I had an eBay store. I used to sell like world of Warcraft gold, which is kind of embarrassing. So I've always just kind of had a passion for business. And I guess I really started my entrepreneurial career in college. When I started a job board, it just connected mobile developers with businesses. And this was in like 2009. So this is when iPhone first came out and I basically spent a whole winter vacation from college, just commenting on a bunch of blogs that talked about iPhone apps and long story short people started posting on this job board for mobile app development.

1 (4m 7s):
Again, specifically iPhone Android, wasn't even out at this point. Everyone's so a Blackberry. So that was that so long ago was built that up to a decent scale, sold it for, you know, it felt like $50 trillion in college, which was like 30 or 40 or 50 K I can't remember, but you know, everyone's broken college. So that, that was huge. But yeah, so I sold that job board because I kept seeing people post the same type of job over and over and over specifically like luxury restaurants looking for a way to offer a loyalty programs or send push on vacations or display events.

1 (4m 48s):
And so I thought, and, and people were paying like 40 or $50,000 for these very simplistic iPhone apps. So I sold a job board and I built a template kind of like Wix or Weebly or Squarespace, but for mobile apps. And that was the Genesis of business apps. I ran that company for about nine years. That's where I got started. I hope that's a helpful kind of long-winded answer to the question. Yeah,

0 (5m 17s):
It is helpful because that's what we want to know. We want to know the evolution. We want to know the story and I kind of want to now backtrack a little bit to business apps, like talk to us about how you came up with this idea. Again, kind of walk us through this hero's journey. I mean, you've already kind of dropped those a nine year process, you know, overall, but like, what was that aha moment that gave you the idea to start business apps? How do you actually start getting initial traction, momentum, growing clients, customers, users, et cetera. And then I would love to actually get it at the ends on the actual sale process. I think a lot of people don't really even understand how to exit and how to sell a company. So take us to all of that.

0 (5m 58s):
When I first launched

1 (5m 59s):
Business apps, it was a very, very humble beginnings. It was really, again, I was 21 years old. I was in college. I just didn't want to get a job. So the idea with business apps, when I first launched it was I was going to have like a mobile app development agency. The MVP of the template was so bad. Like only I could use

2 (6m 21s):
It. It

1 (6m 23s):
Literally was like a white page with fields that you'd fill out. It looked like you were filling out a DNB form, but I understood how to use it. So I just swap out images and text and very simple items. And I built these mobile apps and being, I was in a college town. It was kind of the perfect area to launch that business. So a lot of my initial customers were acquired just by walking in the business, speaking with the owner. And again, this is 2010. So a big part of, or a large segment of iPhone users were college students, you know, young individuals. And so bars and restaurants were all looking for ways to connect with, you know, these, you know, young students and draw them into their restaurant or bars for happy hours or discounts or events or, or whatever it might be.

1 (7m 15s):
So, yeah, I ran around my college town and got like 50 paying customers and I thought, okay, this is, I have a business. I don't have to get a job now. And then I pitched our CSU Chico state business plan competition, and I ended up getting first place. And that story is kind of funny. I, the other contestants kind of have like ideas and stuff. And I, bill, I remember building an iPhone app for the competition in front of everybody. And just kind of the looks on their

2 (7m 47s):
Faces were like, well, you built

1 (7m 49s):
This and you know, customers and networks. And I was like, yup. And that led to me meeting an individual named Christian Friedkin and another angel investor named Robert Strauss, Reno. They invested about a hundred thousand dollars into the business. And that's kind of when things got serious, I guess, you know, that's kinda when we grew up a little bit, but it was still very scrappy, got a little office. And then we started cold calling. If you've ever cold called a restaurant, especially it's not easy. So you got to find that owner, if you're selling to small businesses, there's a tip there. So I didn't know that. And we were pitching apps to restaurants.

1 (8m 31s):
So some people would be like, you know, iPhone app, like appetizers, and we realized that wasn't gonna work. And so look, fortunately when we had launched, we had been featured in some really high profile publications like tech crunch covered our seed round. I don't know how or why. And then business insider wrote about us and New York times. So we had, it was just a really good story that we had like college students building mobile apps for small businesses, really easily and affordably. And so we had a lot of inbound traffic as well. And what I'm trying to say here is it's definitely important to listen to customers. So I saw this one user building, these really nice apps for hotels in Switzerland.

1 (9m 16s):
So these like multi-million dollar Ramada hotels. And I thought, okay, cool. There's this like millionaire using my platform to build apps for his home. I assumed he owned the hotels, which he didn't. So I got on the phone with him and I chatted with him a little bit and quickly found out he was building these apps on behalf of his clients because he was doing the marketing for these hotels. And I just asked him one simple question. I'll never forget it. I just asked him, how can I help you? So more of these tabs, this is, you know, incredible. And then that's when we shifted over from selling directly to small businesses. So we stopped cold calling and we shifted over to a white label reseller model, where we partnered with web design agencies all across the world.

1 (9m 58s):
So our first a white label partner was in Switzerland. And so we translated the apps and a bunch of different languages. And then instead of selling one app at a time we'd partner with web design agencies that had, you know, 10 clients or a hundred clients, or sometimes even a thousand clients and they would use our software to build apps for all of these customers. So that was one of the business kind of really took off. So that was our initial kind of go to market long story, short, cold call didn't work, listen to customers. And, you know, they definitely had some good ideas and that kinda really helped change the trajectory of, of business apps.

0 (10m 37s):
I mean, one thing I always talk to you fire nation about is are you solving a real problem for a real individual for a real business? Are you providing an amazing solution, preferably the number one solution to a real problem. And if you can say yes, then guess what, even though it's still tough, you can call these businesses. You can talk to these individuals and say, Hey, I have a real solution to an actual problem that you are experiencing. Would you like to hear more? Or I love exactly what Andrew did and go, Hey, what is your biggest struggle? What is your biggest challenge? What are your obstacles that you have?

0 (11m 18s):
Is there something that I'm hearing back from these individuals and businesses that I want and can create a solution for and to? So of course there's so much more with a biz with a business app story that we can't get into today because I still wanna talk about altcoin and micro acquire and some other questions I have, but just let's skip ahead of all the jazz and get to like the exit. Like what did that look like? I think people are really kind of curious about how exit start and what that looks like, and let's not go into super detail here, but just take us through the process of business apps exiting. Yeah, definitely. So

1 (11m 53s):
We sold to a private equity firm almost three years to the date. I believe we closed May 30th, 2018. So that'd be cool to celebrate when that day comes again. But yeah, it was, it was crazy, you know, cause as an entrepreneur, you work so hard for a decade and then all of a sudden that's kind of your, the culmination of all of your work all at once. So I, I did it all cash deal. I had met the private equity firm years before we actually did the transaction.

1 (12m 33s):
And yeah, I mean, when you sell a business, especially for me with business apps, it was, it was my baby, you know, so, you know, we had spoken with other potential acquirers there's financial acquirers and there's strategic acquirers strategic would be like Google or go daddy or web.com or endurance internet, like big companies, financial or private equity buyers. And they buy businesses for different reasons. So we grew business apps to about 10 million of revenue. And so that was kind of the main focus when we were selling to the private equity firm was our revenue, our churn, our growth, all that fun stuff. And just, I mean, it, it happened pretty quickly.

1 (13m 15s):
So I was getting married and they had reached out like two months before that. And I'd been in the business for like eight, nine years. And you know, I started thinking, you know, maybe this is a good time to move on to something else. Candidly, I was pretty tired. Cause when you run a, a starter for eight years, it's kind of like a hundred years. It's like every year in a startup is like dog years. Yeah. So they approached me and you know, we did some back and forth negotiations. Due diligence was definitely a good amount of work we got through that.

1 (13m 56s):
And then we closed May 30th. It's not that, not that exciting of a story, but definitely was life-changing

0 (14m 4s):
You say life changing, you were willing to share your 30th ish thousand dollar exits from your first exits. What was this one? I've actually never told anybody. Oh, there's always a time to start.

1 (14m 17s):
Right. I, I appreciate you trying to pull it out, but now I will. The one thing I will say is, so you can kind of do the math, like private equity buys from like two to five X, L R R at the time of close, they bought the cash in the business, which was a little below 2 million. We also did a stock purchase, which means the tax implications on the business were far lower than you typically see if you do an asset sale. So it, it, it was definitely a bigger transaction than the job board. And

0 (14m 53s):
I'll just say that. So we're talking probably somewhere around five to 10 million by our nation. We will be right back. When we get back from thanking our sponsors, knowing what factors are driving your business performance and growth is critical to your success until you know, what's working and what's not there isn't much you can do to scale your business or better serve your customers. That's why there's HubSpots with HubSpot. You can align your team with a single source of truth, giving them access to powerful prebuilt dashboards and reporting that helped prove the impact of your campaigns provide intuitive sales and coaching insights and give clear business performance at a glance across marketing sales and service. How do they do it? For starters, HubSpot offers conversational intelligence, ensuring all interactions between your team and your customers are automatically captured, transcribed and analyzed to effortlessly drive productivity, scale best practices and improve win rates.

0 (15m 44s):
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0 (16m 23s):
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0 (17m 6s):
All right, Andrew, I want to talk now a belt alt coin kind of take us through that process as well. Like what even gave you the idea for all coin? How do you start get that initial traction? And then let's talk very briefly again about the exit. Yeah, definitely.

1 (17m 23s):
So all coin was I started that actually, when I was in due diligence with business apps, I knew I was going to be leaving the business. So other things to note on that transaction was I had a 90 day transition period. So immediately, you know, when you go to company and it kind of becomes a part of you, I just wanted to have another company I was running. I, I wish I took a break to be candid, but this is when you know, Bitcoin is doing its first, you know, big Ron and everyone was talking about it and I'd always been a fan of cryptocurrencies. So I fell pretty, pretty hard into the whole, if the, and essentially what we were building was a faster way to transact Ethereum tokens.

1 (18m 12s):
So we were basically trying to speed up, like when you send Bitcoin or Ethereum, it takes like 20, 30 minutes and we're working with a framework that would allow for instant transactions. And so the premise of all coin was basically speeding up transactions on the blockchain. So started that business hired a very, very talented team, but it was hard like building anything in, in blockchain or crypto is very, very challenging. So I can say it wasn't as successful as, as business apps, mostly because of the limitations in user experience.

1 (18m 54s):
And just the, I guess the, the problem we were trying to solve was such a technical problem that we kind of chipped away at it to a point. And when we felt like we had built something of value and I should also add this business was kind of a built to sell business. So when I started the business, I had mapped out who would be potential acquirers because we felt this would be a good piece of IP to sell to a larger business that is in the crypto industry. And that's kind of how the acquisition happened too. So once we started to really have the product at a point when it would be ready to launch, rather than us going and getting regulatory approval, which could cost, you know, $2 million in 18 months, we sold it to a company that had that regulatory compliance.

1 (19m 46s):
So from start to finish, that company was built and then sold within I believe, 14 months. So it was a pretty quick turnaround

0 (19m 55s):
For that one. This is the thing, fire nation. Once you kind of get into the flow and get into the process, you start to understand how these things operate, start to build relationships that are already there and in place. So maybe you can get that initial ball rolling when it comes time to exit early start the conversations. And did that have any aspects or play when you moved into micro, micro acquire? Can you kind of talk about that process? I mean, every

1 (20m 20s):
Time I had sold a business, I had friends reach out like, how did you sell it? Like what did, what do you do? There's people that you can hire, you can hire an investment bank, you can hire a broker to help with the process. But I just saw a big void in the market where exiting a business for an entrepreneur. Even if you go through it twice, you're kind of viewed as an expert, but you're really not like there's so much nuance and so many different types of buyers deal structures. Earn-outs how do you even negotiate with buyers? How do you get on their radar? So I just thought it'd be really interesting. And I, I guess I looked at the industry and I thought it was really interesting that no one was really talking about this. There's so much content on how to raise venture capital, how to grow your startup, how to do basically everything, but so your startup.

1 (21m 7s):
So I thought, you know, I kind of know a little bit about this, not everything. And I just saw it, there needed to be an easier way to sell your business. And that was kind of idea with Mike require. And just for context on what microcar actually is, it's a marketplace where you can buy and sell SAS businesses. So you can go on Mike require right now, go through the listings. There's over 500 startups in the marketplace ranging from, you know, a small pre-revenue application for $5,000 all the way up to something that is making millions in revenue. And I launched that about

0 (21m 43s):
A year and a half. So, I mean, again, fire nation, it's one of these things where once you understand the process, it's not like exactly rinse and repeat cause everything's different things do change all these things, but at least you understand the process. You're building relationships, you're having an acquiring these connections and you're making things happen. So Andrew you've told us three fascinating stories. I mean, business apps, all coin micro acquire. I mean, not even to mention the company that you were rocking when you were in college and making 30,000 plus dollars, you know, when most people, you know, like myself, by the way back in college was literally living on $75 a week. Thanks to my ROTC stipends. So, I mean, just mind blowing stuff across the board.

0 (22m 25s):
What is the one key takeaway that you really want to make sure fire nation gets from everything we talked about here today? Give us any call to action you have about how we can learn more about you, what you have going on, connect with you, and then we'll say goodbye. Yeah,

1 (22m 40s):
Definitely. I would say if you want to just kind of follow my journey, just follow me on Twitter, a Gazdecki or feel free to add me on LinkedIn, Andrew Gazdecki if you can spell that, we're check out. Mike require, if you're interested in learning about how to sell your SAS business and a lot of it applies to generally all startups, but yeah. Also if you're interested in, in potentially looking at buying a business as well, you can do so for, you know, again, 5k to a hundred K to upwards. So feel free to reach out. Andrew Mike require.com is my email. I'd be happy to connect.

0 (23m 16s):
You have to take advantage of these opportunities when there's people who are willing to connect, who have been there, who have done that, who have the experience who have the knowledge and who have the success and are willing to have these conversations with you. So please take action on these things because you know that you're the average of the five people you spend the most time with. You've been hanging out with AIG and J L D today. So keep up that heat. If you head over to EOFire.com and just type Andrew in the search bar, the shirtless page will pop up with everything we talked about here today. Best show notes in the biz links to everything that Andrew just mentioned. Reach out to him via email, check out micro acquire, lot of options for you here. And Andrew, I want to say thank you for sharing your truth, your knowledge, your value with fire nation today.

0 (23m 59s):
For that, we salute you brother and we'll catch you on the flip side. Hey, fire nation today's value bomb content was brought to you by Andrew ans over the last decade fire nation, I've interviewed over 3000 of the world's most successful entrepreneurs, and I've created a revolutionary 17 seven roadmap to your financial freedom in your fulfillments. I put it all into my first traditionally published book. The common path, uncommon success personally endorsed by Erica Mandy, Dorie Clark Neil Patel. The common path on calm success is the step-by-step guidance that you need via our nation to achieve the lifestyle of your dreams. So visit uncommonsuccessbook.com and you can learn more there, order your copy today, and I'll catch you on the flip side pers from tools that help with automating your emails, increasing sales gamification in more, it's never been easier to create an online course than with the Thinkific app store.

0 (24m 55s):
Learn more and sign up for a free trial of Thinkific at thinkific.com/firefree. That's T H I N K I F I C.com/firefree. The HubSpot podcast network is the audio destination for business professionals who seek the best education and inspiration on how to grow a business. Whether you're looking for marketing sales, service, or operational guidance, the HubSpot podcast network hosts have your back, listen, learn and grow with the HubSpot podcast network at hubspot.com/podcastnetwork.