Startup Acquisition Stories Ep. 112 | Making $250,000 on His Second Sale on Acquire.com

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I'm here with Nico, who recently got acquired for about a quarter million dollars. Nico, how you doing today?

Hey. I'm doing good, thanks.

Awesome. Well, thanks so much for joining me. For those that are listening that may not know you, do you want to give a brief introduction of yourself?

Yeah, just. Sorry to interrupt, but I think you said $4 million.

No, I said quarter million.

Oh, okay.

Okay. So to clarify there. To clarify, Nico had a company acquired for $200,000, not $4 million. Just to put an asterisk on that one.

Okay, Sorry, my bad. Yeah. So I'm Nico. I make online apps. I never know what to say when I introduce myself. So I guess it's just, I'm Nico. I make apps, and I sold one for 200,000 a couple weeks ago.

I know that can be tricky because you're always building stuff. This is your second acquisition, isn't it?

Yeah. Yeah, that's correct.

What was the first acquisition again?

It was Makelogo AI for 65,000. So I think that was, like, a bit over a year ago. So, like, one year and a few months ago, it's like AI logo stuff. So. So yeah, that was my first exit.

That I. I remember. I loved hearing about that story because I think you told me the amount that you exited for was 10 years living in Bali or something like that. Is that true?

Yeah, maybe not ten years, but I mean, yeah, yeah, some five years easily. Ten years might be a bit of a stretch, but five years easily. Yeah.

Awesome. All right, let's dive into talk notes. I remember the last time we talked. I don't know if you remember this, but it was at night or something like this, and you needed help, some advice or something like that, and we hopped on a Zoom call, and you were on a beach in Bali or something like that.

Yeah, I remember.

Okay, great. All right, Talk notes. Tell me about. Why did you build it? What does it do? Let's start there.

Yeah, so there isn't, like, a big story with the idea. It's just I was looking for, like, ideas I could grow with paid advertising, because that's a channel I. I know. I, like, I have experience with. And just one day I. I was trying to transcribe something with, like, Google Docs. They have, like, a transcription button. But it was, like, really bad. And I was like, oh, oh, maybe I can just make an app from that, because I'm pretty sure I'm not the. The one who is the only one who is lazy about, you know, writing stuff. So I know there was some API to do that, you know, with AI and stuff like that. So I was like, okay, I will just make a prototype and see how it goes.

Nice. So you built the application and you release it. How did you get the initial customers for Doc Notes?

So I spent like a few hours like listing the app on directories. So, you know, there's all those directories where you can add new startups and stuff like that. So individually they don't bring like lots of traffic, but if you have lots of them, then you start to get like a little bit of traffic going. I posted on Twitter, but I think from what I remember, most of the traffic was coming from those directories. Plus some newsletter that like they saw the. They probably do like top 10 tools of the week or something like that from those directories and you know, it kind of like catch up with that. And I got listed in some newsletter and yeah, so it was a mix of directories, some newsletters, a little bit of Twitter, but that wasn't the main thing. And I think I made like $700 in a few days. So it's like, you know, it's not much, but it's just, I was just starting out so like, okay, that's probably like, you know, it's like it smells good. Like it's worth investigating a bit further.

You got validation quickly.

Yeah, yeah.

Is there anything that you do. So this is I'm guessing like your fourth or fifth product that you built.

Oh no, that's. That was I think the.

Let's seventeenth, which. How many have you actually gotten customers for? Four or five?

Six? Yeah. Okay, good customers for that would be. Yeah, probably something like that. I don't have the exact number, but yep, around that.

Is there anything that you've learned at this point? So when you release something new, like mistakes that you avoid in the past or shortcuts that you take or you know what I'm saying, Like okay, you list on a directory, it's really smart to get initial users feedback quickly on the product. Is there anything that you look at from the marketing side or how you get ideas or what have you like narrowed down that really seems to work for you?

So that's hard because it really depends on the project. I think for some project directories would not work, but I would say like to validate at least. I'm looking for quick traction. Like if, if there is no feedback, like if I get at least a little bit of traffic and I get no feedback, then this is feedback by itself. It's like People are not that interested. So I would say I'm looking for a reaction, like from people saying, I don't know, saying something. They like it, they try it. They, you know, they. If there is like a demo or something, they play with the demo. I like for directories, at least when I started I was. I had like a free version. So what I was looking for is, sure, sales, but first, like, okay, do people actually use the app? Because if they don't use the app, then it's pointless to try to optimize for like sales and stuff like that to make a nice funnel if. If they just don't even use the free app. So I would say there's minimum viable, like feedback, sort of, or like anything that say, okay, people are at least somewhat interested by that. But again, it's not an exact science. It really depends on the project. So it's hard to really nail it down and have a process for that. And I think that's why lots of people have trouble when they start, don't know what to do because it's just about trying lots of things. Maybe try called outreach. I have some project who got some answers with cold outreach, but other not. So, yeah, it's hard to really nail it down.

Yeah, I would agree with that. When you're going from like nothing to getting those initial customers, it's kind of like an experiment. Like, there's no exact playbook on what's going to work. And so depending on the customer, you got to try a bunch of different things for one customer, you know, cold email might work or even cold calling. And then if it's a different type of customer, maybe directories work or something like that. So I agree with you there. Okay, next question. So you've created 17 different projects. Is there any, like, big learnings there for the things that didn't work?

I would say most of the one that didn't work are what I thought would be a good idea. But I didn't base my intuition into like actual. Either I have the problem myself or I saw other people having the problem. Like, it's really, oh, I have this idea, I'm going to do that. I think all the project I've made using this concept failed in a way or another. Um, like for this one, I had the problem myself. I was like, okay, I tried to transcribe this and it didn't work well. So there is like, I had the need already, but for others it's just, oh, that's a cool idea. And I didn't actually Experience the problem myself. So I would say this would be the main thing. If I didn't like, if I don't either see people complaining about that or experience a problem myself, it's probably not a good sign.

Yeah, I think there's a good quote there. Fall in love with the problem, not the solution. Which is kind of like you're solving a problem for customers but how you do it. Don't fall in love with that part. I think a lot of entrepreneurs get stuck there where they have an idea on how to solve a problem, they build it a certain way and they just can't get away from that. So that makes a lot of sense. Okay, let's get back to. Thanks for answering all those and congrats on building so many successful projects. Okay, we got, we got talk notes. You launched it, you started to find customers, people are paying for it. What made you decide to sell the product?

So I decided to sell because I got like somewhat of a burnout I think. So I'm not a great developer so I just shipped straight to production. Like I don't test my code, I don't do, you know, I have like fancy pipelines. So it's just okay, yolo. I'm just going to first to product and you know, it works like it's. I got lots of like speed sort of. But there is this one time where it was not a good idea and I shipped a bug to production. So I went to bed and I did it before going to bed. So I went to bed and the next morning I wake up, I have like 50 emails in my inbox. I see the sales down 70%. I'm like, oh, oh damn, what happened? And so I fix the bug like but it took me like two days like doing that non stop people complaining and I, I really hate doing customer support, like especially when people complain. So I was like completely chao after that and actually I had a hard time coming back to work so I was like, okay, I like I know I need to take a break, but like a long one. And I actually don't know if I will be ever able to work on this app again. So either I hire someone or I sell. And hiring would be like another headache, like you know, finding the right person, just a bunch of complicated stuff. So I just didn't want it to deal with that. So selling was only the like real option. And you know, I got, I knew I could get probably between 200,000 to 300,000, something like that considering the recurring revenue and the sales. So that okay. That would set me, like, I don't know exactly how to, how to say that, but that would put me in a really good position. Like, I don't really have to worry about running out of money again, at least for a few years, like, more than what I already had. So I was like, okay, I'm just going to list it and see how it goes. And, yeah, that's how I listed it on Acquire.

Nice. Well, I like, you know, I think every entrepreneur goes through a little bit of burnout. I've had it. All my friends have had it. It's kind of just expected. I think you should, when you're building a company or a product, big or small, I think you should just anticipate it coming and learn the signs of when it's happening. And I, I think it's, it's great that you recognized it and you did something about it. You didn't just keep building and then burn the thing to the ground or something bad like that, you know? I'm glad to hear that. Tell me about. Yeah, go ahead.

Oh, yeah, I was just saying I think if I continue, like, if I, like, okay, no, I'm just going to take a break and try to shift. But I would have shipped new features and stuff much slower. Like, probably not just maintenance. But the thing is, since it's AI, AI moves super fast. So within a few months you get new competitors and stuff like that. So it's not possible to just do nothing when you have something in AI, in my opinion, just too much stress. And so that's one of the major reasons that I wanted to. To exit, because I couldn't afford to. Like, if I waited one or two months, I basically could be left with nothing. So I was like, okay, I would rather not take the bet.

It's true. It's definitely true. That market is moving crazy fast.

Yeah.

And I think if, also if you're just not enjoying it, you know, like, if, if you build something and when you first build something, it's always exciting, it's going really well. It, you know, you're getting new customers, and then it comes to a point where you're just kind of, you know, you got to service your existing customers, you gotta maintain the business just to keep it going. And that can be somewhat of a grind. And if you're not enjoying it, you know, I think there's something to be said about, you know, there's. There's a quote I always like, which is, in startups, you're gonna be beat by someone where it feels like fun to them. But work for you where if you're kind of sucking it out and you're competing at someone where they're always having fun and not necessarily viewing it as work, they might end up passing you. So I. I get what you did there, and I. I respect that. Okay, so how did. Tell me how. How did my team help you in terms of listing the business, helping you with an acquisition strategy? How did that go? Because I think that was different from before. The last time you listed a business with us.

Yeah, so I think the last time I listed. I'm not sure if it was there yet, but it was like, just do my thing, you know, I just list it and that's it. I, like, no interversion, no help, no tips, etc. It's just I list and then I handle everything. But this time, so I was with Ebony. So she. We got on, like, we got on a call and she gave me, like, advice first regarding the strategy, because for me, what was important was getting full cash and, like, selling it fast, like in a few weeks. So we talk about that. She, like, she told me, like, the best way basically would be to maybe, like, lower the price. Because realistically selling for, like, you know, 300,000, 400,000, like full cash, like, which means, like, no equity or pay over time, really just cash. And in the next few weeks, that's going to be really hard because it's a good amount for buyers. So not everyone can afford that and especially cash. So I decided to lower the price to 200,000 and to accept bids from buyer. That way I can gradually increase the price. And so that was a strategy to lower the price, get bids and stuff like that and see where, like, how far I could push it potentially and, you know, getting different kind of offer, because even if I maybe I could have, like, cash offers with some, like, overtime, etc. So it's just better to get more buyers and make them compete with each other versus putting a high price and getting no interest at all.

Yeah, that's absolutely correct. It's kind of a misconception too, is, you know, price high, and that's how you're going to get the highest final price for your business. Because what you want to do is you want to draw in as many buyers as possible with a fair price. And what that does is that eventually leads to ideally, more offers. And then when you have more offers, you can negotiate on valuation or terms like what you did, which is all cash on closing, which is probably the best terms you get. So good job there. How many. Tell me how many NDAs were signed or how many final offers did you get?

So, in terms of, like, letter of intent, I think I got two. But I got, like, lots of, like, informal offers just by message. So I think, like, if we count the informal, I probably got like, four, four, five. Maybe, like, people being interested, say, okay, I can give you that much, etc. But actual letter of intent, I only got two because I didn't want it to wait more. So I was like, okay, this day, I will accept the best letter of intent. And some buyers were a bit late, and they send me a message after, hey, is it still. Is it sold? Can I still buy it? Or something? Like, sorry, that's. That's. So I would. Yeah, it's. It's just I don't, like, I don't want to risk losing a decent offer because of the, like, potentially, I could get a better one, potentially. So I would rather get 200,000 today than 300. Like, 300,000 in six months or something.

Yeah, that's a risky game that I see a lot of entrepreneurs playing is you get an offer in hand and then you take it and you shop it to all the other buyers and you wait a.