Discover how to turn your side hustle into a lucrative business with insights from serial entrepreneur Andrew Gazdecki.
A very warm welcome back folks 🌻
Today I’m talking to Andrew Gazdecki. He’s a serial entrepreneur who has sold multiple startups for millions of dollars. He established his first startup at 21, hiring and then leading over 100 employees.He sold it to a private equity firm before the age of 30. Andrew is now the CEO of Acquire.com, a platform to buy and sell startups.
Gazdecki shares how dedication, creativity, and customer focus paved the way for the meteoric rise of Acquire.com.
Andrew was kind enough to be interviewed on my lovely little youtube channel.You’ll find the full video of his insights here ⬇️
<iframe width="560" height="315" src="https://www.youtube.com/embed/kp2-yxzXFlY" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen></iframe>How did you acquire your first 100 customers?
That is a great question, actually. So I launched business apps in college and I basically just ran around my college town.
So it was like a perfect incubator for mobile apps because all the students had iPhones and I sold mostly to bars and restaurants and some of the attorneys. Basically, every small business wanted a mobile app at that time.
So first hundred just walked into businesses. Cold called them, built their app. When I first built business apps, it was basically a tool that only I could use. So I’d walk in with a pre designed app and I’d kind of say, like, hey, this could be a great way to attract more customers.
You can send push notifications, loyalty program. I had to walk everybody through. And then we eventually scaled the company through white label reseller partnerships where we would kind of have that same approach, but by working with web design agencies and eventually even public companies.
But the first customer I will say was the local gym at my college. Another great question. Well, let me back up about how we got to the reseller program. So we were struggling to sell to small businesses, because small businesses, the saying is they usually lack time, aptitude and money, which basically means they have low budget, they don’t have time to learn a new solution, and they don’t want to.
So it’s like the perfect and this is in 2010 when we would cold call businesses and we’d say, hey, what’s your mobile app strategy? And restaurants would be like, Appetizers? What are you talking about?
This is before Android and everything. So there was a moment where I noticed there was an individual who made four apps for these really beautiful Ramada hotels in Switzerland. And I reached out to him, and I’m 21 at the time, and I’m just like, I’d love to talk to a guy who owns four hotels in Switzerland. Cool. The number one question I had for him was like, how can we help you build more applications? And I assumed he owned the hotels. He did not. And this was where the reseller program came about was he explained to me that he owned a marketing agency and he did social media marketing, he did website management, basically was the marketing agency behind these hotels.
Adding mobile app development as a product to their existing product suite for their existing customers made a ton of sense. And so he told me if we could remove business apps as branding, they’d be able to charge a higher price point and sell the solution as kind of like a semi custom mobile app.
Like, we build it for you, we manage it for you. We’re your dedicated support account manager, if you will. I remember I had to Wikipedia white label because I had no idea what it meant. And on the spot I was like, yeah, we’d love to do that, but we need you to commit to selling 50 apps upfront and pay for that in advance.
And then we’ll develop the functionality. And as I’m saying that, I’m like, he’s for sure going to say no. And he said he was like, yeah, absolutely, 100%. And that kind of took business apps trajectory from kind of like a slow growth and then we never looked back from there.
Do you recommend reseller partner programs?
On the reseller model, I mean, it can be extremely powerful because it allows you to tap into existing networks and customer bases. With the reseller model in place, we were able to scale business apps quickly, as our partners saw value in adding mobile app development to their existing offerings. It made our solution more appealing to a wider range of clients, and allowed us to leverage the expertise and connections of our partners.
So, as we continued to grow, we focused on improving our white label solution, providing better tools and resources for our resellers to help them succeed. This also allowed us to expand our reach internationally, as our resellers were able to adapt our platform to their specific markets and industries.
Over time, we were able to establish strong relationships with our resellers and continuously refine our platform based on their feedback and needs. This collaborative approach to growth ultimately led to the success of Business Apps and set the stage for my journey with Acquire.com.
At Acquire.com, we took the lessons learned from our experience with Business Apps and applied them to create a platform that connects buyers and sellers of startups. By leveraging our expertise in scaling businesses and working with partners, Acquire.com aims to revolutionize the way startups are bought and sold, making the process more transparent, efficient, and accessible for all parties involved.
Do you have some words of warning regarding reseller partner programs?
On the reseller model, I mean, it can be like, HubSpot has one that works phenomenally well. I studied that one, like, to a T. So I would look at other successful reseller models and see if it kind of fits your business. And the reason the reseller model was so successful with business apps, I think kind of had to do with timing. So it’s a great model, but it has downsides, such as you don’t truly own the customer relationship.
So what I mean by that is when we would release new products or new features, we wouldn’t be able to go and say, because we created over were five, about a half a million apps at one point. We were the number one producer. Sort of mobile apps in the world. So one in every 20 apps submitted to the Itunes App Store was created on the business apps platform. So they knew it. Apple knew us very well. Basically, the reviewer’s job was like every ten minutes was like, oh, that’s business apps. But my point was we came in at a time when web design agencies wanted to get into mobile app development, but they didn’t know what features, what designs, or they didn’t know how to hire a mobile developer because it was such a nascent early market.
So we came with them with kind of a perfect offering, like, hey, you don’t have to hire a developer. We figured out basically best practices in terms of getting apps approved, and functionality that really works to help grow small businesses, and we can deliver this to you in a week. Are you interested? So it’s a very powerful strategy if it works. But I’ve also seen it go the other direction when if you don’t know how to sell the product yourself. Because a big part of having a reseller program is really activating the channel. What I mean by that is teaching them how to sell, and giving them resources, because as a reseller, you have usually another business. An example I’ll quickly give is a web design agency. They know how to sell websites. They know how to sell their other products and other services. And so we had to invest a lot of time and resources into taking what we had learned and creating materials to just make it so easy, where they can just send a flyer to their customers, or like a one pager with just the benefits. Or we even set up a program where we would develop the apps on business apps for them for a small fee. So I always recommend having it do it for me. Service if you can, just because it removes the friction.
We talk to an agency, they’re like, how does this all work? And we’re like, well, here it is. And that helped conversion rates a lot. So there are definitely pros and cons, but it’s a really good channel I think, for every company to explore. If there are customers selling to your ideal customer.
How would you craft an effective exit strategy?
That’s a great question. Again, well, first you got to start with what are your goals? I think a lot of entrepreneurs think a billion dollar exit is kind of the goal.
So I would just kind of like, maybe before even starting a company, think about where do you want the startup to go? And then maybe it’s a six-figure exit, maybe it’s a five or seven or eight, and then you can kind of reverse engineer that if you’ve done all that correctly.
When it comes time to plan an exit strategy, I’ll just speak to what I did personally. I created a huge list of potential buyers, everyone from GoDaddy to J two Global to Endurance International to Deluxe to Web. Anyone that sold the small businesses was a target, so I would update them every month. And I created relationships with everyone on the corp dev teams, also private equity groups as well.
And then I would just update them every month as if they were an investor. But obviously, excluding just a short like, hey, this is how we’re doing. What that does is that really builds up the relationship.
And if it’s an acquisition that’s going to be sizable. By sizable, I mean say over eight figures, which is a lot of money. That trust factor is really big. And so as they kind of see you progress over a period of a year or two, that’s how you can really maximize an exit.
But there are simple things like just understanding the legal process and due diligence, but the main piece is really finding that perfect buyer, which Acquire.com helps with. If it was me today, I would make sure I had all my financials in order.
I had all the information that a potential buyer needs. And if you need more information on that, there’s a ton on Acquire.com and then I’d list on Acquire.com. I kind of built the whole marketplace with the thought in mind of I was going to sell a company like business apps, what would I need?
So sorry Shameless Plug, but that’s what I would do now all the time. We have a really cool P&L builder coming out that allows you to basically give buyers a really accurate financial view of the health of your business.
So that’s going to be exciting to announce. And then we got a few other secrets in the pipeline, but that one, we’re most excited about that one because I think that will really help buyers. The first thing I said was to get your financials in order. But a lot of smaller startups don’t have a controller or VP of Finance or CFO, so being able to show real-time metrics, I think will help a lot of startups get acquired and start acquisition conversations on the right foot.
What advice would you offer to founders on selling their SaaS business?
For a SaaS business, I would probably just throw in really understanding your metrics around monthly recurring revenue. Annual recurring revenue churn. Do you have any high customer concentration? What I mean by that is, do you have, like, one customer that’s supporting 50% of the revenue and just building a company that’s not worth selling?
That’s usually the best way to find a buyer, is when you build a good business, people will want to buy it, and there’s no tricks beyond that. So that’s probably my best advice.
When you set up Acquire.com and you were raising funds, could you just give us some insight into fundraising? Because with my own startup and lots of people out there that I’ve been speaking to, they don’t feel comfortable with raising investment. So I just wondered if you had some great advice.
Yeah, I would recommend not raising venture capital.
Even though Acquire.com has raised venture capital, I bootstrapped business apps and had a wonderful outcome. And what that does is it allows me now to take these high-risk bets. Like, for example, I understand with Acquire.com I have a 1% chance of seeing a large outcome. I can afford to go a decade without potentially not succeeding with Acquire.com .
So the first thing I would say is, number one, really ask yourself, what do you want out of the startup? And I talk to founders all day long, and sometimes we get to it. And it just comes down to most founders just wanting to be financially secure. They don’t need a private jet and like, a yacht or whatever, you know. So if you go down the venture route, that’s kind of the expectation is you’re going to build a really big company, but if that’s what you want to do and you feel the opportunity is there. I always say bootstrap if you want to create wealth and then raise venture capital if you want to disrupt or change or really shift the way a market is working. So, advice for raising from investors?
I always say just traction over everything. That’s just the number one. Show initiative, show growth, show that you’re really on to something because that is the number one thing that I look for. And then also just, why you?
Why are you the person that’s going to make this work? Nice. That’s great advice. Thank you. My next question, which just literally popped into my head, is, so…
You must see so many startups on Acquire.com, do you see a particular niche or field that buyers are really interested in at the moment?
Definitely profitable. SaaS and probably Shopify apps are probably the two biggest categories, but we see everything from newsletters to communities to lots of e-commerce sites.
But there’s been a new emergence of Shopify SaaS apps that I think has been pretty cool. But we’ve helped crypto companies sell, we’ve helped agencies sell, so there’s a big gamut of startups, but I would say just really anything profitable, just it gets a lot of attention.
What advice would you give to budding entrepreneurs out there?
I would say again, figure out a way to optimize around happiness in terms of what you’re building because to build something really meaningful takes so much time, it takes years.
And so the first thing I would do, and this is what I did for Microquire was I wrote down a customer I wanted to serve. I wanted to do fun podcasts like this with you and with other entrepreneurs. I wanted to help startups get acquired without the headaches that currently are in the market today.
I wanted to really serve a customer that I understood and solve a problem that I really like. So I would say really focus on starting with the customer. Start with the customer that you’re going to serve because this is something I say often, but if you make the best CRM for dentists, but you hate dentists, it’s going to be a long, rough road because you have to talk to these customers all day.
So you have to truly love your customers. And when you do, you end up building a better product 🎁
Thank you so much to Andrew Gazdecki for taking the time out to talk to me and share his genius 🧠
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