From Minecraft Programs to a Startup Exit

All right, I'm here with Mike Blackwell, the founder of Code Knights, who recently got acquired. Mike, how you doing today?

Hey, I'm doing great, Andrew. How about you? What's good for you?

Doing great. Thanks so much for coming on the podcast. I'm excited to hear your story. Before we dive into that, you want to just give a brief introduction of yourself for people that may not know you?

Yeah, I'd be happy to, Andrew. So I've been in education for a number of years, Originally from the West Coast, live with my family, my wife and 2 kids in Texas now, which has been a great move for us, just really powerful. And taking that education background and putting it into a business was a lot of fun. So I'm glad to chat with you about it.

Yeah, likewise. Tell me about Code Nights. What problem did it solve? What did it do?

Yeah, yeah. So for Code Nights, I originally relocated to Texas A&M University, worked on a PhD program there for a semester, And that was really, you know, it was really exciting. But I thought to myself, I can either study entrepreneurship or I can be an entrepreneur. And I had done some things in the past entrepreneurial. And so I said, hey, thanks guys. God bless. After the end of the first semester at Texas A&M and my wife, the kids, we loved being here in Texas, being in College Station, really happening place right now. And looked around, I thought, well, I've got this education background. I've got some technology background too. So edtech. Yeah. And what can I do that would be really helpful to kids and fun? So I launched Code Nights.

Nice. And tell me about Code Nights. What, what was the product? Describe it briefly if you can.

Yeah. So originally we started off as a coding platform for kids for K-12 level, and we ran coding classes and that was good. We kept seeking to optimize and expand our reach. And so we started doing with local libraries Minecraft STEM events for science, technology, engineering, mathematics. The STEM events then as a leader to bring kids into coding. We found, Andrew, though, that people were so excited, the kids were so excited about the Minecraft and the Minecraft STEM concept, we said, well, we'll just start doing this all the time.

Nice. I love that because I was telling you before we started recording, my son loves Minecraft. I'd love to get him into development as he grows up. What can you develop in Minecraft? Is it like the little add-ons?

The worlds, Andrew, are amazing. So I worked with a developer, and we worked together on it. And it just is really incredible. What we were able to put together was some base worlds that people gave us permission to be able to use and built out. Like, we have a King Arthur's Castle adventure that we created. And we made these mini castles around the big castle. And the kids could play on that. Like, our program's an hour and a half in length. But they would— we had 3 different sections. That was just the first part. They could have done that for an hour and a half easy right there.

That's amazing.

Yeah. Yeah. It was really great. And so we developed all kinds of other worlds too. Greek ancient city-state world, ancient Egypt with pyramids, lost city of Atlantis, pirate's treasure island. Like, it was so fun making these.

I love it. My son would've absolutely loved this for sure. Tell me about the business model. Would you charge the children to join the class or would you charge libraries? Like, how did the business pricing work?

Yeah, Andrew. So what we did is we decided on is charging the libraries and on a per-program basis then. And that worked out really well. A lot of the librarians out there, we found, they know that Minecraft is really popular. And for over 20 years, it's continued to be very popular with kids. And so especially the elementary age and a little bit into the middle school level too. But they have apprehension about Minecraft, running it themselves. So we could bring the technical expertise into play, say, hey, we'll handle all that for you, all the technical side. We'll have all the Minecraft accounts. We have a safe and secure server. Mm-hmm. So only our kids, only your kids, part of the program, can be on there, and nobody else can be on there. And I'm an educator by background, so I've got all the curriculum laid out. And they said, hey, this is, this is fantastic.

That is amazing. And it was just a one-time class. It's not a, a full semester course or anything like that. Kids just attend once, they learn some Minecraft development, and then just go on from there.

Yes. And we developed out though, so a lot of library programs are singletons. Then, or we might be multiple times. We got into over 46 library branches in Texas, Oregon, and Washington, which is just really thrilled about.

Wow.

And started getting into summer school, and so summer programs and after school, through the school year programs too. And those then were sequenced. A kid could be— if they missed a day, that'd be fine. But one of the programs we worked with for summer, originally we were going to be once a week. They saw, Andrew, how popular it was. They said immediately, we want to make this twice a week instead.

Wow. That is incredible. How was it selling to librarians? Was it difficult? Would you cold call librarians? How'd you get the first customers?

Oh yeah, I was completely a hunter role. Like this is started totally from scratch. And so I thought about the ICP and then I built out, in my case using HubSpot, cold email, cold call to prospects, get 'em on the phone just for a couple of minutes, show 'em our website. 'Cause we, we, got a website that was really nice, that was really well put together, including video content of what it looked like for the kids to play. And then they'd start hearing about our successes and they got really intrigued by that.

I love that, man. What a great, what a, just a great business and it's doing good as well, helping kids, you know, learn technology, doing something they love.

Mm-hmm.

It sounds like you had strong product market fit. You had a ton of happy customers, ton of kids going through the courses and learning a lot. What made you ultimately decide to sell the business?

Well, I was really enjoying it and still very fun to run the programs. I, I'm working on some other business ventures too in some other, uh, spaces. And so to be able to balance those out, then I really needed to be able to, to think about where I was gonna deploy my time, uh, too. And so basically I had to decide, well, which one? And to take Code Knights to the next level, I thought, well, if someone made an acquisition of Code Knights, we'd let them take it to the next level cuz we got this fantastic product that kids— it's amazing. Uh, to Andrew, the librarians, they'll post up the material that we would give them for advertising, and in 3 days they'd max out the 20 spots.

Wow.

And they'd have a waitlist of like 10 kids deep. We'd have kids show up to programs standing at the ready in case somebody didn't show up to one of the computers.

Incredible.

Yeah.

Wow. I think that makes a ton of sense. It's super hard running one business as it is when you have multiple businesses. I think it's it's just too difficult. And if you're able to sell the business to someone who's just as excited as you are to run it and can take it further, I think that's amazing. How did the first week on Acquire look? What was your expectations? How many buyers did you speak to? Let's start there.

Yeah, so Andrew, it was fantastic on Acquire. Just, I was going to say platform, but you have like this ecosystem really that is there that just, you know, kudos on that. That's just fantastic. And when I was on Acquire going through the process, never having sold a business before, to be on there and to be able to, to upload all the information, I thought it was very straightforward. It was, worked incredibly well. And we started getting interest right away. Uh, some different people chatting to us, talking to us, and kept it on there a little while and, uh, made a few adjustments then in how we were presenting ourselves to, uh, the audience of potential buyers. And got a buyer and I, I couldn't be more happy with the buyer. They are really great. Like they're just good people implementing it already into, into the education space to be able to have the kids get up and ready and have fun with the Minecraft.

Incredible. What would you say the hardest part of the acquisition process was? Was it initially finding the buyer? Was it going through due diligence? Was it preparing the business to be reviewed by buyers? What was like, What was the most difficult part of the whole journey?

Yeah, I think, you know, it took, took a little bit of time, not too bad at all though, to, to go through. Like we have, uh, trademarked the name CodeKnight, uh, for USPTO, uh, as well as the other assets like the server, all our curriculum, and of course all the clients that we already have too. So that, that we got all packaged and ready to go, that I got ready to go. I think that basically is, is getting the buyer intrigued was the biggest one because this isn't like, It's not like an HVAC company where everyone says, oh, I know what that's going on. Minecraft STEM, what's that about?

Right.

Right. So, so getting them interested enough to see, oh yeah, this is a valid business. As a matter of fact, we've already got the initial lift off the ground. This is perfect. So that really, but then again, the buyer that we have, uh, the purchase is, did just a really smooth transaction. I just kudos to that.

That was amazing. If you were talking to another founder that was looking to potentially sell their business, what's 3 pieces of advice you think you'd give them?

Yeah, I would say if you're gonna sell your business, that definitely can work. And that number one is, yeah, finding financially, right? A benefit that's worthwhile that's there because you've put in that time, energy, effort to build it up. Number two though, is to find a buyer like the buyer we have for Code Knights is to find a buyer that really professionally is gonna take it to the next level. And also though, has that care, like in this case, especially to me, especially when you're working with kids and you're working with librarians and you're working with afterschool programs to have that care that's there. So, so being able to find a buyer like that is really fantastic too. And I think third is, is to be able to, to trust the process that you guys set up. Having people check in with me was really helpful too in that, and the process that Acquire has really made it a smooth process.

I love the point that you just said about finding just a great buyer to work with. I think that's so important and it makes the whole transaction easier too when you feel like you're on the same page, you both have the same vision for where the business can go post-transaction. I think it makes all the difference.

Yeah, where you can go post-transaction too. Yeah, we had a good, really good discussion together about the current customers and how they were planning to follow up. And I'm even consulting with them a little bit too in the transition as well about being able to make certain that those programs are there for the kids and a really smooth transition.

Amazing. Did you do anything to celebrate? Did you go out to a nice dinner when the acquisition closed? We did.

I, I took, uh, my wife and the kids out and we went out to a restaurant nearby that we really enjoy. And so that was, that was great. So we, we celebrated that. Love it.

Well, what, what's next for you? What are you building next?

Well, the other area is gonna sound like a departure from the education technology area, but I'm taking technology and real estate and fortunately it's been going really well so far. And so I'm really focusing a lot more attention on it. I was featured recently in the Morning Brew on their platform for real estate called The Playbook about my approach to it. So we're building out. So that was fun. It was fun getting interviewed by those guys and it's fun. Real estate's always an area I wanted to be in. And with some technology tools we have now, really, really beneficial. Still interested though in the education space. Right on.

Well, Mike, huge congrats on the acquisition. I appreciate you coming on the podcast and sharing your story. Wishing you all the success with your next venture. And if people want to follow you more online, where can they find you?

Oh yeah, I'd be happy to. michaeldblackwell.com, or you can also go to my LinkedIn profile as well for Mike Blackwell, and you can take a look and I'd be happy to chat. Right on.

Well, Mike, congrats again on the acquisition and thanks again for coming on.

Hey, thank you, Andrew. It's been a real pleasure. I appreciate it.

Cheers.

Cheers.