Indie Founder #320 - Mastering the Art of Selling Startups: Insights from Andrew Gazdecki
Have you ever wondered about the process of selling startups? In this podcast episode I had the pleasure of interviewing Andrew Gazdecki, the founder of Acquired.com.
We dive into his experience of scaling his company and the significance of having a distribution mindset and a strong team. Join us as we explore the importance of delegation, hiring the right people, and understanding the buyer's perspective when selling a business.
Plus, Andrew shares some fantastic marketing strategies and emphasizes the importance of creativity and uniqueness.
Links
Timestamps
The world of selling startups (00:01:20)
Discussion about the nuances and misconceptions of selling startups, including the common belief of multiplying revenue by ten as the selling price.
Branding and marketing techniques (00:02:29)
Exploration of the importance of brand awareness and marketing techniques that may not bring immediate customers, and how to measure their effectiveness.
Entrepreneurial background and early businesses (00:04:46)
Andrew's upbringing in a beach town, his curiosity about wealth, and his early experiences starting businesses as a means to acquire money and the things he desired.
Financial Literacy and Parental Money Management (00:10:40)
Discussion on the lack of financial literacy and the challenges faced by parents in managing money.
Possibility of Wealth for Individuals from Poor Backgrounds (00:11:54)
Exploration of whether it is possible for anyone from a poor family to become wealthy, highlighting the importance of taking action and not making excuses.
Mental Resilience and Problem-solving in Entrepreneurship (00:13:33)
The impact of overcoming hardships on building mental resilience and problem-solving skills in entrepreneurship, emphasizing the ability to love and work through challenging situations.
The shift to white labeling and distribution strategy (00:20:16)
The speaker discusses how they partnered with an agency in Switzerland to white label their software, leading to a boom in sales and a shift in target customers.
Transition from selling to small businesses to selling to agencies (00:21:25)
After the partnership with the agency, the speaker's company started selling packages of mobile apps to agencies, resulting in a significant increase in sales and a shift in the sales process.
Importance of distribution mindset and building a team (00:26:26)
The speaker emphasizes the shift from product development to distribution mindset and the importance of building a team to handle various aspects of the business, such as marketing, sales, customer support, and product development.
The importance of realistic entrepreneurship portrayal (00:31:06)
Discussion on the shift in entrepreneurship coverage and the need for a more realistic view.
Selling a goal, lifestyle, and viewpoint (00:33:05)
Exploration of the power of selling beyond the product, using Nike as an example.
Defining success and the role of teams (00:36:34)
Reflection on the different paths to success and the choice to work alone or with a team.
The topic of delegating tasks (00:41:22)
Discusses the importance of delegating tasks that hold you back and that you dislike, in order to focus on high-impact activities within the business.
The topic of hiring engineers (00:42:15)
Shares a personal experience of hiring engineers through a job board and Upwork, emphasizing the importance of trust and recommendations when evaluating talent.
The topic of valuing and selling a business (00:44:14)
Explores the possibility of selling a business, evaluating its worth based on what someone is willing to pay and considering the buyer's perspective. Discusses the complexities of valuations, financial buyers, and the importance of running a competitive process to maximize valuation.
The terms of selling a business (00:51:18)
Discussion on the terms of selling a business, including the desire for a clean break, all cash on close, and quick due diligence.
The process of selling a business (00:53:56)
Exploration of the process of selling a business, including lowballing the initial valuation, attracting buyers, and creating urgency through a deal schedule.
Benefits of buying bootstrap businesses (00:56:50)
Explanation of why buyers are interested in acquiring bootstrap businesses, such as cleaner cap tables, niche products, profitability, and capital efficiency.
Financial Buyers (01:01:35)
Financial buyers are interested in profitable businesses with low churn and reliable recurring revenue.
Strategic Buyers (01:01:37)
Strategic buyers look for products that can help them enter new markets or add to their product suite for cross-selling.
Private Equity Firms (01:02:45)
Private equity firms, like the one mentioned, acquire startups every week and may cross-sell products or hold profitable businesses.
Valuing a business based on profitability (01:11:53)
Discussion on how buyers value a business based on profitability rather than revenue.
Measuring the impact of branding (01:15:11)
Discussion on measuring the impact of branding, including tracking Google searches and the importance of word of mouth marketing.