Episode Transcript
Awesome. We're ready to close. We're ready to
close. We signed the APA.
Nice. I saw that. Thanks Danny and Andrew for handling that.
I missed the, I signed it late though and missed the wire window for today, so we've got to wire
tomorrow. Cool. I just sent a hundred grand because that was my wire limit, so whenever that hits the bank I'll send the next hundred grand immediately following.
That's good. I don't think we'll wire the second part until Friday. Cool,
cool. I'll have a, I don't know if the first hundred grand I'll hit today or first thing tomorrow morning, but either or I'll get the other one right over
after that. Tomorrow, I think it's a 1. 30 cut off west my time. Yeah,
then it'll, it'll probably hit tomorrow morning then.
Yeah. Cool.
Found a cool article on this Japanese kid that is doing almost like an acquire. com thing, but in Japan. And he's he's a Billy. He's obviously taking a cut and doing the transaction for these guys, which, frankly, I think, like, the marketplace idea is very it's very Silicon Valley to approach it in that way, and I'm sure, Gezdek, you'll be very successful in what he's built, but the capturing all the value of all the M& A transactions going through Acquire would obviously be a way higher dollar amount than charging us whatever they charge us a year, right?
Yeah, sorry. What did you say? You said the kid in Japan is what and he's doing
what he's so he sold a company in Japan and was like, Oh, this process sucks. Like everybody that's ever gone through that process
and made you insane and made a bunch of money. You're
saying he made, he made some money on that sale, but his really big win was setting up an M and a advisory firm in Japan.
Yeah. Yeah. Because they have the same thing going on, the sort of, what's it called, the silver tide or something, where all these people are retiring and hitting retirement age, and nobody, you know, how do they unload the laundromat that they own? Yeah, yeah, yeah.
Just like all the mom and pop businesses that are expected to trade over the next 10 years.
Yeah, but he's doing it just in Japan.
Cool. What's the name of the what's the name of that website? Do you know?
I threw the, it's a Forbes article. I threw it in our Slack channel.
Cool. I'll check it out. Yeah. I mean, I always thought, I mean, I remember, I mean, I didn't even know who, I think I've told you this guy before.
I didn't even know who the hell good guys deck he was, but when he launched acquire. I reached out to him like super early on, like literally within a couple of days of it, like hitting the market. It was like, go, can I invest? Then little did I know fucking a hundred million or whatever from selling his company to a private equity firm.
But yeah, I mean, it's a, it's an interesting concept. He seems to have a lot of traction. I wonder like how, like empire flippers and all those other guys that were still online. You know, marketplace brokerage. I wonder if like quiet light and all those folks. I wonder how much they're being impacted by guys decking because it seems to be like, a lot of stuff is starting to funnel into acquire and it's I don't know if it's if it's happening or not.
I mean, I know he is really, he's like focused on getting all the SaaS tools, but I don't know if I've seen like this newsletter Deuce that's like focused on newsletter acquisitions and then you have all like the original ones empires and what's the other one? What's the other one that's relatively big?
Yeah, I think there's a lot of 'em out there. It'll be interesting to see how it all shakes out.
Yeah. Marketplaces, that's one where it feels like it's kind of a winner take all, like I don't wanna. There's really not that much. I mean, I'm sure there's plenty of ways to carve out a small niche in a big market, but I feel like this is gonna just be one king, and it used to be like an Empire Flippers, but that thing sucks.
Yeah.
The other one I was thinking of was flip flop and like, when I feel international, like I feel like that, I feel like as Jackie is slowly, but surely just going to steamroll those guys.
100%.
Yeah. Right. Well, I think there's always going to be some people that want representation of some kind. But he's building
that, he's building that in house now, right? Yeah.
I'd be worried.
Yeah. Did you see where, did you guys see where EnviroFlippers spun out like their investment arm, it's called Webstreet or something, I think.
No. Or they're like yeah, check out webstreet. co.
Pretty interesting. Well, basically
this is something that we could actually look at
too. Basically raising money from like.
Retail investors and and buying businesses and then splitting the cash flows between Webstreet, the platform, the operator and, and the investors, but I've raised like four or five million bucks.
I looked at doing, I looked at doing some of the early on deals and then I just did it because I was like,
And wanted to start doing direct deals with y'all. But there's a lot of, like, interesting ancillary businesses that are building off of these platforms. Yeah, so Empire Flippers, like, rebranded the Web Street, which is, like, now their investment arm, where they're taking in retail. They were just calling it Empire Flippers Capital for
a while.
Outside of all the handoff stuff we did get confirmation tomorrow that we can wire the 300. Mercury gave back to us and said that we could they increased our, our wire limit to that. So it shouldn't be a problem. Nice.
So Danny, the timing next week, I imagine you're going to be just off. Yeah.
Yeah, I'll probably just it'll be like very sporadic most likely.
Like I won't be sitting in front of my desk. So it'll be just kind of off and on, but I mean, I'll have my computer on, but yeah, just, it'll be kind of hit or miss depending.
Do you want, what do you want me to take over?
Yeah. So I think, I mean, to be honest, like as long as we're like, you feel good about having all the tech and the tech is like functional and working.
I have like a checklist In terms of all the things that Mark needs to hand off in terms of like Calendly links. I kind of pinpointed all the places on the website where like his calendar link is located all of the emails and stuff and have some of like the basic stuff we need to do in Stripe.
So like, to be honest, like, I think it should be fairly like on cruise. Like if a meeting pops up, you know, on a calendar, like those are, those kinds of things are fine to take. So I don't suspect. Too many things needed to get need to like get bled over to to to you or even like to mark. I think it should be fine
Yeah, the first week is just going to be us figuring out the lay of the land.
Anyways, I Will have to ping irfan the developer to Change those calendar links and stuff. I'd imagine.
Yeah, do we know where is it is the website custom? Is that why?
Well the app's custom if it's in if there's stuff outside of the landing page then
Well to replace it.
Yeah.
I think that I don't think that the app is custom Maybe it is to meta web development. I don't know. I don't really that wasn't like a concern of mine. I don't really care that much Okay
Yeah I suspect it, it's,
Oh, it's just a WordPress thing.
Okay. Yeah. And this one's to be honest, like the, the, the huge burden that this would have been like is if they were like a non U S based entity, like this one's very easy where we can just put our bank account in there.
And I don't think we need to like set up a new Stripe account or anything if I'm not mistaken. Right.
Yeah. So. Swap the bank accounts and update the, the info, the business info
on that. Yeah. Yeah,
that's a game changer. Not having to do that. It seems like, I
mean, I don't know how we could do that with, or like, it would just be an insane thing with so many,
well, so the risk associated with that, with the much bigger customer bases the
XL cap mercury account? for this one.
ExoCAP ing. I would like to have this, just if nothing else, for liability's sake. This is a sizable enough thing that we should probably have it in its own LLC, and I think we can just use that C Corp for now. I agree. And just put it in there so at least there's a, there's a wall.
Is that the only, will that be the only thing in that C Corp? What do
you want the answer to that question to be? Well,
my only, my only thing is, it's, it's, I think it's going to be relatively profitable if we're not running a lot of cost through it, and make sure we want to avoid double taxation on the C Corp.
If we can get enough cost into it where it's breakeven. Or shift enough cost over, I think it's fine. I just want to be careful like the thing showing, you know, a hundred grand of profit at the end of the year and we're getting taxed, double taxed. Does that make sense?
Yeah, I get the double taxation piece.
The part I don't know about, maybe I'll go up to paying an accountant is if. We are taking a fee for our services as a capital GP. Perfect.
We're good there. So we can just bill whatever the profit is from the, you know, to over to the C
Corp. Yes, it's wholly owned by our LLC. So I think there's Yeah,
so the XO Capital,
GP, and then the C Corp's down here?
Correct. Great, and then at the end of the year, if we have 100, 000 of profit, we can just bill them 100, 000 for our time, and it pays us on time. Yeah, I'm good with that. I think we put it in the C
Corp. I think I have to double check on the C Corp, and it might actually be S personally. It might not be, because we just did Danny, when you did that, it was through FirstBase, yeah.
Yeah. W w what's your question? Is that our LLC XO cap GP LLC? Does it, is that the owner of the C corp or is it us as individuals? I think
it's us as individuals.
Yes. And it's fine. Then we can still bill it, Andrew. I mean, it's just one, one and other, other, it's just the same three individuals. I think it's actually probably cleaner as them to standalone entity that are owned by individuals, maybe.
Except for liability protection purposes, but I think we get the same protection in a C Corp that we get in an LLC probably.
Yeah, that's true. I just, I, I
yeah, maybe it's just worth pinging my accountant just to check and make sure that that's above, above the board, you know what I mean, to, to bill it at the exact amount of the profit. Yeah, I mean,
well, we would come up with some like, whatever, 10 grand a month or 20 grand a month that our time is worth to bill and maybe we show that we really want to show the C Corporate a loss
I think for at least the time being, or, or a break even or a loss, just so it's not
getting double taxed.
Yeah, agreed. Well, Could be fun. We could set up like a payroll could get some cash out of this thing. Yeah,
that or that too. Correct. Yeah. Either way. It doesn't really matter as long as we're not getting doubled. All I'm trying to avoid is some stupid, like us just forgetting about it and some like stupid double taxation thing that just was
but yeah, other than that, I think that we'll just need to, once we take over the assets, put our heads together, Danny, and figure out what we want to attack first. Irfan is 50 an hour, which is a lot, he's in Pakistan, but Mark said he's It's pretty efficient. So he wants to do 10 hour. I should clarify if it's 10 hours a week or 10 hours a month as a minimum.
Wouldn't Mark pay him 4 grand a month if my memory serves me correctly? Kind of like a retainer almost?
Yeah, 3 to 4.
Yeah, I bet he meant a week because that would be 500 bucks a week, which is 2, 000 a month Which is half of the four, but we should ask. That's a good question
Limit to 10 hours per month minimum.
Okay good. I mean he might he might like after this payday He might want to like chill or take a break or something. I don't know you're his interaction with you He didn't seem all too excited about you did not working.
Yeah, I Thought that I'm pretty sure it's just a language barrier Is it worth
talking to him real quick on the phone or not, or on the Google
Meet?
I'm not super worried about it. It's, it's pretty stable. Pablo can get in there and start to learn it too, and he will be, he can be like a second.
Yeah, okay, cool. As long as we think we're covered from, because I know, Danny, you said the tech stack's a little different than our normal
tech stack. Yeah, it's a little older.
I'm not, I'm not really concerned about anything. Finding a PHP developer is, is really easy if worst case scenario. So it's almost like I view it as, as with all of our other acquisitions, there's actually like a huge risk that we like fail to take over the technology successfully. And in this case, we have one developer who knows this, at least the backend language, which is what I'm more worried about.
I can, I can go in and figure it out too. And also in like, we have a bonus in this case where here's a dude that like built most of it, or if not all of it at like, you know, a relatively cheap dollars per hour that can help keep the system up for not that much money per month. It just feels like an extra safety net thing, which is why I'm even less concerned like on a normal acquisition.
Right. Cool. Yeah. It's still, it's still not clear to me whether This thing is going to be like a rewrite or not. I think, you know, we'll get our feet wet and start checking things out. But the market's moving really, really fast. And I think it'll be important to keep up and this tech stack, I don't think is going to take us where we want to get to.
I mean, I guess it, it could, but at a certain point it might be like, okay, well for the next acquirers, right. If we ever do sell this thing, it might be worth it to have like a tech refresh. It's just a nice box to check when somebody is like, Oh, what's the tech stack? And it's all like just super modern stuff.
But timeline wise, like when things, when you say things are moving fast and we kind of need to stay on pace, like this isn't like a three month thing, more like a 10 to 12 month thing to rebuild it, like when, when we need to broach, like reach that conversation
again. I don't have a clear sense of where to take this thing yet.
To be honest, I still want to just kind of get in there, feel it out, make some minor improvements and some minor changes and. We might be able to build a V2 like in parallel while having Irfan just kind of man the helm on the existing one at 500 bucks a month, which is, you know, peanuts while our team is working on V2 and kind of incrementally do it that way.
That might be a, that might be kind of a safe, safe way to do it. And then for a while, just leave it as like, you can, here's the V2. Oh, you don't like it. You know, let us know, like, we want to hear that feedback, but also the v1 is still available.
Yeah, what's like, what's like the material consequence for like, a tech stack being like, behind?
The,
Finding developers there's stuff like security, so like, it won't get as many security updates anymore. There's no like, really, sorry, this, my whole life is just... Killing spiders. So, stuff is not getting updated. So, like There might be new packages, like, open source stuff, new stuff comes out all the time.
You might be in, on, like, such an old version of a thing that, like, I don't know, let's take on the front end, this thing is in Angular. Most of our, all the rest of our stuff is in React. There might be, like, a really cool React package that makes it really easy for us to build that interface to do the drag and drop for the different paragraphs and shit, right?
We wouldn't be able to use that because we're on Angular version, like, 2009, right, and nobody's writing for that stuff anymore. So all the cool advancements are not available to you. So yeah, security, finding developers, people don't want to work on it, that people don't know it. Stuff that's broken is unlikely to get fixed, like a package that has a weird bug is unlikely to get fixed.
It's also harder to, like, for existing people to jump in and learn, like, a... Older way of doing things that also kind of sucks and has like a little bit of a cost to it. But yeah, there's plenty of dead end jobs out there that pay super well to babysit a very, very old system. In fact, our entire banking system is, is that.
It's like literally running on mainframes. They're like, the banking industry is like the number one purchaser of new mainframes today. Yeah, I believe that. They have a shit ton of old code, and it's just a bunch of people that know this particular language that's really old and nobody really uses anymore, and they get paid.
To babysit that system.
Yeah, it's my buddy sells to like commercial banks and he's like, once you're in the software, like add ons are so incredibly sticky.
No,
no, no, no, he sells software to commercial banks, but just. Just in general, I think, like, their. Willingness to change and move at any sort of.
See that it's, you know, somewhat faster than very, very slow is like almost non existent. So like once you have your software placed, it's like incredibly sticky for a very, very long time. Yeah.
Did you Andrew, did you like, do you have any opinion on the Basecamp guys moving to on prem or like getting their own servers instead of on being on the cloud?
I forget what, I forget what his whole thing up in arms thing about it was I think it's just cheaper, like it's a weird, like you don't know how little this stuff actually costs, like the stuff that you might pay Google or Amazon like 25 bucks a month plus like their bandwidth horseshit, is literally like a 12 dollar, like garbage ass thing from China, and, Those if you have the know how for doing on prem stuff, there's, you know, it's great.
You just have to have like, there's a minimum threshold where it makes sense. It's called like a colo, co location. Yeah. So, you just rent like a rack in a data center and there's all different like variants of this. Like, you could go to the data center and say like, you know, I want to purchase like this many like racks and then you buy the hardware and then there's like everything in between from that like just, here's basically like some like the internet plug and like power.
All the way to like AWS and so there's providers everywhere in between that like take away some of the pain of, of doing that. But yeah, like I'm, I'm, I would be super comfortable moving all of our shit onto a colo somewhere. Yeah. Cause we don't really have like, the stuff that would be hard would be screenshot API for instance.
We really make use of that function where it can scale up really, really huge. Like we might have 40 containers, 50 containers when it gets hot and then it goes down to two. At like 1am when nobody's using it, that's hard because on prem like, you just have literal physical limitations of how much compute is available.
Interesting, yeah. They, I think his bill was like three mil for AWS and his like spending on servers now is like 600 K or something. Yeah. But it wasn't like people were talking about it because, because they're bootstrapped, like, you know, people who are, it's, it was just interesting discussion as like a bootstrap business.
To care about this versus somebody who is venture backed and has a lot of somebody else's money, like caring less about this kind of stuff. It was, it was pretty interesting. I guess, in other
words, that's an additional 2 million a year in his pocket or him and his co founders pocket. Yeah.
Yeah. The hardware is pretty commoditized at this point.
There's a lot of great, you know, you just Google what to, what, what to buy. You know, it's not like, it's not a huge deal to figure out something like this. And for them too, they have like a really consistent customer base with a really consistent, I'd imagine, like growth rate. And so it's very easy to predict usage and how many servers and that, that, that, that wouldn't be a huge
function.
Yeah. Yeah. I thought it was interesting. Yeah,
it's very cool. It's very cool. I don't know why more people I think will do it. AWS costs in particular for storage. I think I told you this one weekend I like, you know, fat finger to function on Amazon and like it racked up an 80, 000 bill over the weekend.
And I came in on Monday and I was like what? And we're like, listen, we're like, we're not going to pay that, okay? And then yeah. Anyways. Well,
I mean, it doesn't have, like, isn't like some absurd small amount of Amazon sales from AWS, but 50% of their profit comes from AWS? Yes. I think it's some like crazy stat like that.
So, I mean, I imagine the margin is very good for them.
Extremely good. Yeah. Extremely good. Everybody knows it too, but it's a scale game. Yeah. I don't know, I don't know how you would, you don't want to compete with Google, Azure, AWS, but it is an interesting thing to go after the base camps of the world and say, we'll lower your cloud costs 80% by moving to our, you know.
Our co location, just rent rack space from us.
The comment you said about the 2 to 50, Andrew, is why a lot of people just stick with AWS, or at some point in time, it doesn't make sense for us to do it right now, but at some point in time in the future, it may.
Yeah, I mean, we wouldn't, it doesn't make sense for us now.
I mean, we're starting to spend four grand a month after this one. Growth Bar will be, I don't, I don't think that's that expensive. I can't imagine it's that expensive. I forget what the P& L said, but it didn't jump out at me. Anything else you wanted to go over? Growth Bar? Anything else? You guys feel good about it?
I surprisingly, like, don't feel... I was nervous slash excited when I had to sell the... I just had, like, money in a money market fund. And then, once I wired it over to our bank account, I just, like, I'm not nervous about it. I don't know why.
Yeah, I'm not nervous about me and what's the worst thing that happens is the freaking really it goes belly up and we've.
But we got to try this and this feels like when we've done a lot of diligence on and it feels like a good bet with a diversified customer base in a growing market, we got to do it at some point. So we're going to do it sooner than later. Yeah.
Any other companies you
want to talk about, Danny? We've got a big product launch for analytics tomorrow.
So we'll see kind of where that falls. And yeah, she best kind of ended the month pretty well. Kind of added a few more dollars per day on the ads. We're still like well below 500. I'm just kind of slowly creeping it up just to see if it has like an immaterial material effect on it. Yeah.
And then Siobhan and I have got some things to help our cold DM customers, some ways to like lists of leads off of Twitter, kind of like what you do, what you did, Andrew, on like LinkedIn and stuff, building some little hacks that we can share with the community and basically building cold DM as like a, a nice sender tool.
So just little stuff like that, that will be ramping up. But the end of June, it looks like. All the businesses are sort of on a slight uptick versus kind of early to mid June, it kind of, everything was sort of down except screenshot, which has kind of stayed the same and slowly continue to go up a little.
Yeah, there, there's some interesting growth stuff that we're planning to do across all of the businesses in some form or fashion, whether it's more like kind of event. Based like partnership based things or automating more blog posts. So we got rid of like the blog writing from Lana.
We're doing basically some AI, like editor stuff with Siobhan and Roanne. They're basically finding articles to kind of replicate and then using AI to write it. So we were pumping that out for articles. Per, per month, per per company. We started that a couple weeks ago, so everything's kind of moving, moving along a little bit like that.
And Shavan is owning
that process. Yeah. And he's using Growth Bar to do it?
No, he's just using Chachi pt.
Yeah, but where's the, where's so one, I mean, we're gonna have to dog food that like he, he needs losing growth bar. Sure. I just wanted to say that we should. Make a good college effort to attempt to follow the best practices that are in growth bar and See if that has different results because there's just based on my limited experience with this stuff There is a difference between just getting the output from chat GPT and actually getting good rankings for stuff
Yeah, I think so.
Yeah, I mean he were outside of like the keywords and like all of the Suggestions. Yeah, like we haven't followed that. We've essentially just rewritten ones that have ranked well So basically we're taking like the top ranking articles for specific keywords And then just he's just rewriting them with a different set of like a different tone and things like that So I do think yeah, we'll definitely dog food it and see if it has kind of a material effect on it.
But yeah, back to the SEO stuff. Yeah, I just, I just want to give that a shot because Lana's stuff that she wrote ranks the highest for me. Yeah. On SuperSend, for example, and it's like, okay. Well, I tried plenty of chat GPT generated articles that are not ranking for shit. Yeah. And that was fully the intent.
The, the one thing is that makes. For me, like what made growth part interesting compared to maybe like some of the AI things is you have a lot of SEO agencies using it. I mean, I think Lana in your message, she used right. Sonic, right. Yes. So I mean, right. Sonic is like. They're huge in this space, and so those, like, I think Growth Bar, ClearScope, Brightsonic, they definitely have an edge in the, in specifically, like, understanding kind of the SEO component, and so, yeah, we can, we'll definitely dogfood that.
What are the
tasks we're working on for support guy? Are we doing anything actively for that right now?
Yeah we're doing a couple things. The Slackbot is waiting for submission and exception, accepting, getting accepted into the directory. But like you could test it in, in, in our Slack. It should, it should be live in there.
And then adding the lead fields adding the ability to, like, close and refresh a conversation and then being able to denote which which articles or document uploads have been uploaded. Successfully or unsuccessfully. Those are like the four main tasks that are being worked on right now.
Excellent.
Pablo's on all of that, or
is it? It's well, Enrique was working on half of those, but he's been on pause as he's been doing that queuing thing for, for cold
DM. The queuing thing should be done. I mean, I did the, I did the queuing thing. All he needed to do was have like a little end point. Maybe I'll jump on the stand up tomorrow and just get a pulse on why that's.
That was in my head. That's like a two hour task.
I think he, he should have had it done by today, and then he should be back on the support guy things that are, that are in the queue for him. Yeah.
Do we have the one developer overseeing the other developers now?
No, not necessarily. They're all sort of running.
They're running in their own lanes. The change that we made was one person being like sort of dedicated to helping to support stuff. So all three of them aren't being pulled from one direction or another. As like a non developer, I like, I have zero, like, I mean, I have a rough idea on how long something should take, but I also really, I also really don't.
Yeah. Yeah. Yeah. And
can you? Like when we hire someone, we put them like through a pretty intense, like Excel test and kind of case study test. Does that like exist for a developer when you're hiring? Like, can you put up through some sort of like. Oh, our development test and doesn't even have a cost us a little bit of money.
Does it make sense to try and do that to like, I'm just asking a question. I have no idea. I'm
just, Oh yeah. There's like coding challenges and platforms that provide those types of coding challenges. It's not always like the best indication of performance. Hiring engineers is weird. That's why there's like large tech companies.
literally six interviews. The real issue though, is that like, it's, it takes an X, an insane amount of time to vet these guys. Yeah.
To vet engineers.
Yeah. And then my hit rate on hiring is like maybe 50%. It's like, it's, I don't know, maybe you've had better luck than I have, but it's just really, really difficult.
No, it is incredibly difficult and you, and you, and 50% because of the rate for paying obviously. Right.
I just mean 50% they're, they're a long term fit for, you know,
yeah. Okay.
Average tenure, by the way, at these big like fan companies is sub two years.
Just because they hop from company to company because of like the one because like, what do they call them?
10 X engineers or whatever. Like one, a really good one's more valuable than like 10 or 50 or mediocre ones.
I don't even think it's that. I think it's just people like want fresh new stuff and they get tired and they get better pay again. That might've been a symptom of zero interest rate environment, but.
It's certainly not happening anymore. Yeah, yeah, yeah. I was gonna
say, I have a feeling it's slowed down a little bit. But it makes sense.
I want full time people on our payroll. Yep. He's a full time freelancer. Got it. But possibly, I mean, I don't know what his other skill sets are outside of this tech stack, but I mean, there's not, it is a bigger business, but like you look at this P& L, there's not, there's not a ton of room.
Yeah. I mean, especially after our payment.
I mean, we are in some ways without the, you know, we're going to be pretty limited in how much we use that developer, although they've, the paid marketing and the paid, all that stuff looks like it's kind of stopped. And so it's up to like 15, 000. And you would.
That's kind of where I'll shook out on it. It's like, we're gonna, we're going to have the ability to choose if we spend that marketing or not. But that's, that's really, it's really about 15 grand a month is what we're buying.
Yeah. So after the payment is going to be like three. Yeah. There's
nothing.
Hopefully our multi method payments basically offset the majority of that. I
think they offset 37.
Almost 60 or 70% of it. Right.
Yeah, it should. We have we have 122, 000 left
versus a hundred and versus 200 that we have. Correct. Yeah. 60% 60 ish percent. Yeah.
That's helpful. Yeah. Yeah. I mean, it's, it's the thing that it's, it's, it's hard because yeah, it does take a lot of time to find these people.
And it's hard to find people who are willing, or who are good, that will commit full time. And then, you know, we're trying to find these people in specific regions of the world. I think
for the right person, it's really attractive to be able to, like, switch.
I think so too. Yeah. Yeah, I, the, what, what really I think pissed me off, I think was like we're competing against, and this is like, also for me is like, we have six businesses, generally those six companies or five companies or whatever, they're competing against like small startups, like bootstrapped indie hackers who like their life.
Is built around that product and we're competing against them and we have a fractional person like doing that. I feel like they're just getting, yeah, they're, they're just moving while this thing is kind of sitting, sitting still. And then just like a fickle environment and what, like where these tools play, like you just kind of have to keep providing some ways that keep, keep, keep people around.
So maybe we get rid of that one too. I don't know.
Yeah. I mean, I, I, I mean, that's definitely crossed my mind to just kind of do that, but. I
think that like, let's say the people thing was solved today. There's, we're still gonna have the same constraint of more, more product than people. And my hope was that Inlytics would get on the path of Screenshot and SheetBest.
And maybe it's, maybe it's there now. Maybe we like just crossed that point, like within the past couple of weeks and we can just focus on gross stuff, but. If that's not the case and it continues to need like, a lot of TLC, it just doesn't work as... I... I mean, not that I'm worried about some random mini hacker, but it's like, I...
The broader point of like, a young, agile team who has everything on the line, we, we don't want to be competing head to head with that. And that's my concern with Growth Bar, to be honest, is that... Yeah.
Yeah, I guess like in my head, although like letting it go, like letting something go, I feel like it, it, it doesn't actually solve the root of the problem, I think, like, at least in our stage, when we have more product than people, like, I think that's a problem worth solving for, right.
Like how do, cause we're not gonna, we can't just go out for and look for it. Things that can just sit there and it'll just grow over time. Like those things, you know, sheet, sheet, sheet, best in a screenshot. Like, I think those are few and far between and there's, there's no characteristics we can point to for those guys and be like, let's go find more of those, you know, like, so we kind of just.
I don't think it's, yeah, I think we kind of have to figure it out, and I think one step, or one experiment is solving the people thing,
yeah, but, so my, my comment after that was, if we, let's say we sold coldm in Linux support guy, we just have screenshots, sheetbest, and then growthbar. Growthbar is really at the size that we could stack a full, like, 10, 000 a month worth of salary.
So like one or two people and have that be like a thing. And I was talking with somebody at SureSwift reached out to me, just out of full chat, he's one of the GMs there. And he's like, basically very few people there run multiple businesses. Yeah. So some do, and then even fewer run like, like three. Oh, totally.
So like the, the game, I think maybe just shared services suck. You have to, you have to staff individually and we need to buy. More revenue to be able to support something like that. And if we can recycle capital into another growth bar and we just have to them, but they, they each make 300 grand a year.
That's just a very different model and. Sounds like, like peaceful and lovely, you know, and
I think that's our ultimate goal of where we probably and I think that's the ultimate goal of where we probably want to try and get to, yeah, with my gut, like knowing what we know, knowing what we know over the past, whatever, 24 months.
Yeah, I think we'll keep screen, we might keep screenshot sheet best forever just because they're little gems. And there's just not that much to them. Yes, support guy might have just been like a. A little bit of an angsty by, although who knows, right? It could still, if we really step on the gas, once these features are launched, I do still want to see how that plays out.
Once we put some like effort behind marketing and growth on that thing and just see if it catches a little bit.
Yeah, I mean, it's a function of it all, I think is also, you know, decisions and things that have happened, like outside of a people or product thing, or like product, meaning the software itself, like, you know, cold DM, like, I think it was actually in a pretty decent place and then all this shit happened and like, yeah, that, that, you know, you, we have to fix those things.
And so that's taking up time. And And then like, you know, analytics was also one of those where we decided to do a rewrite. It did what it, you know, it, that took a long time. And so the material effect of that was, you know, was, was unfortunate. So I think like from that. And then support guy. Yeah.
I mean, I think I still think it's a pretty interesting bet. It's just, I think it's, it was a, it's a bigger, it's a bigger thing than just, you know, trying to, it's not one of those that you can just let it sit in. You know, accrue customers
a hundred percent. Yeah, I get that.
So so yeah, I mean, I don't know if we want to, I don't know, time box some of the decisions to like sell, but I do want to see like what comes out of getting cold DM to a place.
Like I don't, I, the, that market is like literally disappearing. Like people on Twitter are literally saying, Their product doesn't function anymore. You know, it's like, so I wonder what that looks like on the other side in the next couple of weeks. You know,
it's a huge opportunity. Yeah. The demand is there.
Yeah. And I don't, I don't think like that one is like, that one isn't, is like a sheet, sheet best screenshot where like, it just needs to do like three things. And if it does those three things well, like people will pay 20 bucks for it or whatever. I don't think that one is going to require a bunch of love continuously.
And analytics, I think is a, maybe it's slightly different. But like, you know, could it get to a place where it does? I mean, you know, maybe. But that one it just seems like there's a lot of stuff coming out more recently as we've tried to track some of this stuff. But, I hear ya, I think eventually, like, we just want to have two big boys that, you know, yeah, it's a little bit more peaceful and not scrambling for, for revenue.
If we can't find more screenshots in SheBests, buying these little things is death by a thousand cuts. And if cold DM in two months doesn't get on that screenshot API or sheet best path where it's no more engineering work stuff Just you know Elon like takes the stick out of his ass and quits fucking around with the Twitter API and that just gets stable and we can You know build around it or whatever if we can't get there in like two or three months then
Okay, I think that's a that's a good timeline
on analytics in the next six months I don't really want to take a hit in this calendar year again for another sale Because we're gonna have to be paying taxes on on these things Yep, if there's
any, yeah, any profit appreciation with our acquisitions though, Andrew.
So I don't know how that's all going to work out or get some of the base that's going to offer some of those taxes on the. On the sales. Yeah. More sophisticated from an accounting perspective. Help us think through that. We should probably start looking at that now versus, you know, January. January, February.
Yeah. Hopefully now that this deal is about to fund.
Yeah, I mean, in Lytx, I just, I would love to start seeing some growth. I mean, the thing is just like, it's not too, too bad. And I can't just tell there's like, it's summer. Nobody's around, you know. I know there's no talk of recession, but there certainly is like tightening of the spending purse Yeah, it seems
like this talk's gone away, but I have a feeling it's coming back.
What the recession talks? Yeah Yeah, I mean you heard pal today Talk about they're not done Yeah,
there seems to be some sort of like New energy that's popped up over the past 30 to 60 days. But yeah, I don't believe it's going to
stay support guy. I feel like it should be on the six month plan. And same with analytics too.
I mean, analytics is on the growth path now, but like still not totally clear to me what that, what that means. In some way, engineering is like pretty linear. It's pretty clear for a lot of these things. It's not like a lot of like, I don't know. We know what we're going to get out of the input. Like, we put in a certain amount of hours to fix certain things.
We kind of know what we're going to get out of it. Marketing is obviously not like that, but It'll, I don't know, an idea that's just coming to me is like Hire a growth person full time, whatever that means to us. Mm hmm. And they're all up on my Twitter doing giveaways and they're, you know, Doing like direct outreach for like analytics or something and just put them on analytics for a while and just see, see what can be done there.
Cause if we push, if we start pushing and nothing's happening, then that to me is like, okay, let's just.
That's our answer.
Yeah. B2.
Yeah,
I agree.
Yeah.
Yeah. More than like, I would actually just want more than a growth person. Just have another engineer because none of these products actually, and this is sort of where I feel. A little worthless is like a lot of these things, like there's a lot of product things that you can do to grow. And those things just move slow.
And that's, I guess, where my frustration was like this weekend. It was like, there's just things that I'd like to see in the product that could like, like the in app messages and things that are like more trigger based and things like it, those are things that are in the backlog in our, for our, on our engineering board and like, it's taking time to get.
To get to that and it's like making me mad that like, I, you know, I can't do it or somebody, we don't have a resource to like do that. I, I, I do, long term though, I do agree, Henry, like, and yeah, these, these small ones just, like, they they're like a, like soul suck.
Yeah, there's a reason that like... Sure, swift and tiny and any terms go after certain size companies, right?
It's like a certain scale
profits that reinvest or distribute. Now, you invest if you can generate higher return than distributing it out, right? And if you can't, you distribute it and do something else with, but this is this is the one we're buying tomorrow is the first kind of bet in that direction, which is a good feeling like Andrew, what both you and Danny are saying about, like, the ones that are.
That are kind of doing this, right? They're not really doing this. They're not just kind of do it. It's like, let's just have an execution strategy on them for an agreed amount of time execution strategy at the end of that time period. And then we either just make it's working, or it even might be working a little bit, but it's not working enough for us.
And we think that capital is more valuable to redeploy and exit. I think I think that's the best decision. I think that's the best path forward in my opinion. Just kind of what's new to you guys. Whatever the time frame is, three, six months, I think, I think within three months we're cold DMing them. And it's great.
Yeah, because if we can scrape together like 200 grand, If we can scrape together like 200 grand from selling, you know, inlytics, I'm just in, this is just in theory, inlytics, cold DM, and support guy. And we could go then buy, with maybe putting in additional capital, like another 10k of MRRs, another single business.
And then we have one doing 25 and one doing 10. I think that's just like a simpler way to live. And then of course, screenshot and cheat fast, cause they're a little gem. It's, it's
definitely easier from an operational perspective. It's gotta be, or I assume it is, you guys tell me, but I would assume it is.
Oh yeah, a thousand percent. I, I think the thing that, like the engineering thing, I think that will figure that out. Trim down. Trim down the surface area, the number of products. Increase the MRI per product that we buy at the onset, maybe pay a little bit more for a higher quality developer, less headaches.
And then eventually have a GM when we can buy a sizable business or they grow up to a certain point. And if we can double, like, you know, if we can, if we can double growth bar, that in my opinion is already at the point where you could get somebody for like, I don't know, 70 grand, 60 grand to come in that's young and hungry and be like kind of the full time GM and one kind of one full time developer.
And then that is, that is a, that's a cool thing. Yeah. We
got to just grow the, the key for us is we gotta be able to grow what we're buying to a certain size, right? If we can get, if we can buy something with enough, you know, but grow it to a size to where you can put a GMN that just changes the game for us.
Well, I think like the right now, cause yeah, I, of course I think it would be great to buy things. That are at the size where we could, because like, you know, if we bought something that was doing a thousand bucks of MRR, like that's a pretty large mountain to climb to get it to a point where we can get a GM there.
Like it would have to be like in a really good product in a very large market like executed very, very well to like climb that mountain. So for us, like buying something that's kind of halfway there is, is what is what growth bar is. But I do think If I'm hearing, like, Andrew's argument correctly with some of these, it's like the, the cost to get them to grow is not is not worth it versus sheep essence screenshot.
We're doing literally nothing and they, or, I mean, we're putting a little bit in and they're still growing or maintaining it's, it's, it's sort of level. And I think I think if we can get there and they're at, you know. Each of them are at like 5k MRR, 5, 6k MRR for SheetBest, Screenshot, and ColdDM, like that would be very great.
And then with Analytics, I think that bar is a little bit higher, but I think if we can get there, or if we see signs of getting there over the next three to six months you know, and they don't need a ton of work, like, I think it'd be cool to keep those, keep those around unless we need the cash.
Including Analytics?
Yeah, I mean, if it's on an upward path, unless we need the cash, right? Unless we need the 200k to go buy something But if we're, if we see it growing, and it's getting, you know, and at the end of the year, if it's at like 7500, Yeah, a whole different story. I think it might be worth just keeping.
But again, unless we just have something we want to go... Buy for a bigger dollar amount. Well,
the, it's the opportunity cost of if it's flat. Which is why it might make sense to just time gate it. Because if it's flat and it's generating like 55 grand a year, that's gonna take us another three years to get our 150 back that we're trying to hit.
Like, that doesn't make sense. I'd rather just sell it for I'd rather just sell it and put that money somewhere else. In something we think we could make more productive use of the cash with. Something that's growing a little bit more. I
think it all depends on the
growth. Well then, wouldn't we want to just do that now then?
For analytics?
No, because I don't think since the V2 we've really given it enough of a push on the marketing front to like, try and grow it.
I agree with what Andrew's saying there. Didn't they, didn't the v2 get done like what, 45 days ago?
Yes maybe I misunderstood what you're saying. But yeah, I mean...
I'm just saying if after six months and Lytx continues to be flat and we've, we've put in the old college try on the marketing front, then I think we should sell it. Right. If it, if it starts to tick upward, right, and it's, it gets on that like 3% month over month on average, great.
It's a totally different, yeah, that's a totally different deal.
I, I, I agree with exactly what you're saying.
Yeah. The original, the original thesis for the small ones is like, where's our alpha going to come from? Like if let's say, I mean, Twitter, Twitter aside, like all that stuff that's going on, cold DM, we bought it at a great price. We like 10 exit very quickly. And that would be, if we could sell it for like, you know, 50 grand or something, or 75 grand, that'd be a great little.
That's a great little nest egg for us to go then, like, redeploy somewhere else if we feel like it's topping out or we've taken it as far as we want to. Yep. That was, that was kind of the idea with the smaller ones, but when they don't hit, that's like, I mean, it's like a founder that has a business idea that doesn't fail immediately or succeed immediately.
It's sort of like in the middle. Yep. And you just spend the next eight years of your life just fucking trying to milk a rock, you know?
I think we were saying the same thing. Yeah. I mean, I was, I think if we can get it to six, 7, 000 and moving upwards for that, I, I feel that would give me good signs that it's doing what we want it to do.
Well, April, April of 2022 is at 5, 000. And that looks to be like, according to Stripe, the highest it's ever been, except for April of 2023, maybe some annual stuff coming in was 5, 061. Yeah, five thousands as big as it's ever been.
We literally bought it and it's, it's like absolute peak,
but we're only at 300 bucks off from that now.
Right. So
we're fine. I mean, like if you help the thing in forever, like And it just stayed at 5, 000. It would be like a pretty good investment. It yields, you know, 30% a year on its on the investment, which is pretty fucking damn good. It's just really small. The dollars are really small.
Well, it's not, it's not good for the record.
Relative to the rest of their portfolio or past performance.
That's right. And when we're looking, we're talking about dollars that are so small, we got to be looking for higher alpha
stuff. Do you guys have any thoughts on next steps after? I know growth bar is going to take most of our headspace as it rightly should for the next little while here, but you guys thought about like, what's, what's next after that?
Does that like? Flip fund idea feel
yeah, and you're getting conversations with investors about that by the way or no
Yeah, a couple people still pinging me from the email newsletter.
How many total people reached out to you just out of curiosity?
Four four. Yeah. Yeah, but that brings our potential investor list to 67 some of these are dead.
Yeah, sure. Some of these are dead
But, I mean, we've never, I've never really beat the drum on that. Yeah, but if you had,
what, eight, ten percent hit rate at fifty grand a clip, it's half a million bucks.
Mark used a broker. He used the acquirer's broker.
Which is great. We have a good rep. They know about us.
Yeah. I actually did an, I actually did an interview or not an interview, a talk with one of their guys letting them know about our experience.
And I, and so I think we have a good rep or Andrew does on the platform. I let them know that we all talk through Andrew. Yeah. I mean,
Andrew has a good rep. It's a good rep for all of us. That's the way I look at it.
Agreed. Not according to LinkedIn, they kick me off of that shit, like, at least once a month.
Oh, I love it.
So, on the, just, you know, maybe we need to talk to a lawyer about this. The, the hard part about when you, when we go to raise this thing is you can't, like, post publicly because it won't be, like, a reg. A or reg c or whatever the fuck the right reg is real However, if we're not raising but talking about raising and there is no fun.
There is no entity There's no dollars being taken in i'm pretty sure I can shout that from the rooftops. There's no active fundraising Yeah,
I mean, I think all you're doing is just creating an SP LLC. It's not a fine. It's like a specific investment that someone's coming into.
But yeah, that doesn't matter.
That's still solicitation. But if that entity doesn't exist and I'm saying, Hey, we're thinking about doing this, can we have a chat and it's, it's like all potential. I don't think that that violates anything because we're not taking in actual dollars. There is no entity that we're raising for meaning I'd like, I need to use my, my social stuff and the email list, of course, but a lot more of the social stuff to get more interest wider than our net on the on this investor list as well as on the blog.
And I don't think we can have an entity while I'm doing
it. You can talk about a flip fund or whatever and people reach out to you and then you could, you know, you're credited. It's like, I, it's like, I, you know, I signed up for something the other day that this girl's doing, it's like SMB deal hunter. And she's like, you know, at the bottom of her thing, it's like reply to me.
Reply LP if you're interested in being an LP, right? And then she, now she has the direct line of communication with that person. Kind of like we have with 67 people that have reached out to us via our, it's like, well, fuck it at that point, we have a direct line of communication. We're not soliciting
or anything.
Right. Well, our whole blog, I think is that right. That, that, that I think our blog is fair game. I'm trying to, I think there's a lot of lurkers. That have been, like, waiting, and they would only find out about it if I start tweeting about it.
Yeah, that makes sense. Also I will, I'll send you this. I liked how she kind of buried it in the bottom of her email, buried it in her email.
I just thought it was pretty interesting because I like, I bet she has a lot of people just responding to her that they are interested. Because there's people out there actively looking for deals. In the bottom of our emails, which she has it buried in the bottom of her
email. Once we're actively raising, for sure.
I'm, I'm not super worried about that part. It's, it's the, it's the getting a bigger list of people interested before we're actively raising and being able to post that on social media. That's what I really need to do. And I'm pretty sure it is free and clear if we do not currently have a fund and we just are talking about potentially doing a thing.
I don't, I don't think that that violates anything.
I don't think it does either. It just states what you're potentially thinking about doing.
That'll be a big deal though. That'll probably be like a hundred student calls for me.
Yeah, I think it will. It'll be a lot of work to get the first one done, for sure.
We'll have to participate on as many of those as possible.
Alright, well let's get Growth Bar under our belt and then we'll give it a month or so just
to... I think the flip flop idea is it's cool. It's an intro it even for somebody like me, who's not like a very finance savvy person makes it makes sense from an investment
perspective, but that's why it's so fucking compelling.
It's like the doggy daycare business. It's so easy to explain. Yeah. What are we going to do with my money? We're going to buy one company. When do I get my money out? 12 to 24 months? Yeah. Like what's your history? We've done 10 of these. It's, it's just a, it feels like very clear. How much are you raising?
Like half a million, nothing crazy. What's the minimum? Like 25 grand. Like. A lot of people can reach that, you know.
God forbid the thing take off and people want to be bought out in 12 or 24 months and we're, you know, are able to buy them out with cash flow and like... The thing is once you have control of something that you have control of the GPN, right? If you have no big LPs, then they can't dictate terms. Like, you basically can...
No one's going to look at the fucking docs. So like a 25, 000 investor isn't going to read, read a LLC agreement. They're just not. Yeah. Right. So you just basically can put in there that you have, you know, control. And if things, and if we deem the thing growing fast enough that we, and we don't want to flip it.
Then we say, you know, we can go to the investors and say, Hey guys, the thing's growing at whatever two X a year. We think it's much more advantageous to continue to hold for another couple of years. And most everybody's going to be like, yeah, I support you or no I don't. And the few that don't, you just try and figure out a way to get them out.
Keep them happy. Yeah. All bills change, right? Or maybe you realize three months in you bought something that's shitty and going to be stable. And you just sell it for what your basis is. And you give them their investors, their money back. And people will appreciate that as well. Yeah. At the end of the day, I think it's what you just said is exactly why I think people find it compelling simplicity.
Yeah.
It's brandable too. I kind of want to cut like copyright it or something. It
is brandable. Did you put the little like trademark or sign beside it,
Andrew? I did, but just as a joke.
I saw that. I thought that was funny. I laughed. It is brandable. Fund or flip fund either
of those websites available?
Domains.
Yeah, domains. The flip fund.
Oh man, I, how did I not look up or buy six domains around this idea? I buy so many dumb ads.
I know you do, that's why I was asking. I was kind of, I was kind of already expecting you to say you owned one.
I buy the dumbest dumb ads.
I did it for a long time and then I realized I was like not doing anything with them, so I was just like, well.
Alright, Flip. Fund is 8, 500.
Jeez. Yeah, it's a great idea.
Flipfund. xyz is 2 bucks.
There you go. That feels like good value.
I'm not gonna buy it. There's plenty of options
available. There's a lot of people getting laid off. Zapier did their first layoff ever today. Oh.
Who works there again? You have somebody that works there, right?
My sister
does. That's right.
Yeah. She
is okay? Yeah, she's okay. She was surprised, but I don't think it's because they, I think they're just cutting some of the fat, not because they're technically doing poorly. I think they, they, they took very little investment after graduating YC. So they don't, I don't think they they have any pressure from anybody, but yeah, a lot of people don't got jobs at the moment.
Wow.
So is it, is it, if you're a one through YC and never took additional. Really additional rounds,
Danny? I don't think
so. It's a
fucking down.
You can, I mean, you look up Zapier fundraising, their first, the first thing that you see is pulled off a one and done approach. CrunchBase
thinks they raised it 1.
4. But that's, that sounds about right. They reached, there were a 5 billion valuation in 2021. Can
you imagine?
Jesus. Total funding amount, 1. 4 million. Now that's awesome.
I just assume that that's just like, I know this thing exists for people, but I just assume I'm not going to be one of those people, you know, that starts a company raises like not that much money.
And then there's just like literally printing.
You know, it's, it's generally the things that other people did once they started the thing off the ground that really, I think, took it, took it forward. What do you mean?
Outside of the founders? Yeah.
What do you mean by
that? Like, the key employees that they hired and the value that they added? Mm hmm.
But that's a skill, man. That's a hard, that's so hard to do. Well,
I think that's why, Like even the really good, smart founders that start something fail because it's like, it's, you can't, like, it's kind of, it's really hard to do that over and over and over again.
Yeah. I bought flip fund XYZ by the way.
Nice. Couldn't help it. It was 2.
That's the Andrew I know.
Irrational and impulsive, that's exactly who you want leading a private equity company.
Oh my god.
Alright friends.
Well, this is as always my favorite meeting of the week. We can always,
we can be as irrational and impulsive as we want to be with our own money, Andrew.
Yeah, I know. I do, I do very much wish we were all in the same city and went into an office together every day. I think quality of life for me would be...
Much, much higher, if that were the case.
Agreed.
Well, we gotta get, I told you, we gotta get baller enough to where Danny can just move to L. A. And, you know, money ain't, ain't no problem.
Yeah. Mikey also wants to move to L. A. too.
Oh, really? Is he in London?
Yeah. He's he's in a random village well outside of London.
Got it, got it. I was gonna say, LA probably ain't that much cheaper than London, honestly.
No, he's not in the city at all. He's out in the... He describes it as the boonies. It's... Yeah, some of those, like, English villages. They're like one pub towns, you know?
Let's close the growth bar. And then, like, what did we say?
Three months for cold DM and six months for,
analytics and support
guy. Like that, end of the year. End of the third quarter and end of the year. And if we feel like we're not getting the traction or something beforehand, and we want to make a decision sooner, then we can.
Yeah. Still though, that, that part of the execution, I'm more worried about than engineering.
I feel like engineering is the thing that we're going to be able to solve, and the growth stuff is still kind of a mystery to me. Yep. Cool. Alrighty. Thanks, gentlemen. Yep.
See you guys. See ya.
