This is a YouTube video titled "Startups Worth Acquiring - Acquire.com - Startup Acquisition Marketplace" containing a monologue or presentation from January 8, 2022, discussing key indicators for acquiring SaaS businesses, including customer churn, code quality, and customer feedback. The speaker provides insights on evaluating and improving SaaS companies for acquisition purposes.
There's so much you can learn from just talking to customers. When I hear issues from sellers, I think of opportunities. Three signs a SaaS business is worth acquiring. Churn Code and customer Churn. This is basically a measuring stick of how happy are your customers? Are they resubscribing to your service every single month? Are they canceling at a very high rate? Because there's also things I can do to fix Churn. Maybe support is lacking, which is a potential opportunity for you to point out to a buyer because you don't have the resources or any interest in doubling down on customer support. Code. Who wrote it, who owns it, and is it any good? When you're acquiring a SaaS company, this is software where it could be in a language you're not familiar with. You might not be technical. So what I recommend for this is hire someone. Hire someone for technical due diligence or hire an agency that can go through the code and really just understand, understand it. So when you want to go and add new features or fix potential bugs, you're not just left alone without the previous owner. That is absolutely massive. Are there any bugs? Are there any common complaints from customers? Whatever it may be, those are things that you want to point out in a very honest and transparent manner to buyers. Maybe, you know, you just built this and you know, customers love it, but it has some issues from, you know, marketing conversion rates to. To I hear bugs within a piece of software that I could fix those and then potentially, you know, re engage those customers and bring them back into the business if they've already canceled customers. When you think about all the services that you use, from restaurants to hotels to software, you typically type in company name plus reviews. First thing that I'm doing when I'm looking to do due diligence on a business is I'm researching customers. I really want to know what are customers saying? Like what do they say about the product? Are they happy? Are they thrilled with the support? They have the most truthful answers. Not saying that as a founder you don't want to be extremely truthful, but customers really are your harshest critic. So I'm looking for bad feedback too. I'm looking for ways to improve this business. How can I accelerate growth or how can I fix some outstanding issues and really grow this business after I acquire.
