Beef Marketing, Organic Partnerships, and Rewriting the Rules to Startup Exits, with Andrew Gazdecki

Andrew, welcome to the show.

Thanks for having me. Super excited.

I am excited to talk about a wide variety of things on this episode. You've started a few companies, obviously MicroAcquire, the most recent one. Right away I'm thinking, what makes you decide to start a company? So for instance, for MicroAcquire, why start this company in the first place, Andrew?

Yeah, good question. I think, you know, starting a company is one of those things that At least in my opinion, you do for, you know, kind of the love of the game. Just a little background on myself. I grew up and fell in love with business like really early, like 13. Did all the cliché stuff like, you know, eBay store. I had a World of Warcraft like affiliate website. It's really embarrassing to admit, but— I love that. Well, get this. So I used to have a website where you could buy like gold in so you could buy some dumb sword or something like that. And it was super hands-off. And I learned like Google AdWords, I learned like web design. So I've always just loved building stuff. You know, it's definitely not easy. You know, even, you know, this is my, I guess, third quote unquote like official startup with you know, a team. But I mean, it's always, you know, a ton of fun. So I would say that's my answer to just broadly starting a company.

Yeah.

But if we want to go more specific on MicroAcquire, you know, I had the idea for a while and then after going through 2 acquisitions myself and just seeing, you know, just how difficult it was from start to finish, from finding the buyer to understanding, you know, what is due diligence, Who are good M&A attorneys to hire? You know, how do I make sure I maximize this exit opportunity, which for a lot of founders is a life-changing opportunity? And then went through that. And then after I exited my second business, I was actually looking to buy a SaaS business. So I looked all around the market and found a few other marketplaces. And then I came across business brokers, which I thought was fascinating. I didn't know they existed. I thought it was just investment.

And what is this?

Yeah, a business broker, for those that, for people that don't know, they essentially focus on businesses under, let's call it like $20 million enterprise value. And they charge 10 to fucking 15% commission. So I was like, what?

That's a lot.

Yeah, like my first business, I worked with investment bank. Their fees were huge, but Investment banks will take on businesses doing, let's say the sale price is $50 million and above at like a 2-3% commission, which is fair because the deals are way more complex. I mean, I wouldn't say fair because also the minimum fee on the investment bank, I won't name the name, but the minimum fee if the acquisition closed was $800,000. So $800,000 to get a deal done.

Start that business, Andrew.

Yeah, we're moving towards it. So, you know, yeah. When I looked at the market, I felt, you know, it was full of number one scams, just a ton of just scammy stuff that I could spot just in 2 clicks. Yeah. 3, or number 2 is just You know, lack of optionality for founders looking to sell their businesses. So, you know, you're a bootstrap founder, you grew to $5 million. Your only option is, you know, marketplace where, you know, you're going to be dealing with, you know, potential, you know, scam situations or working with a business broker where you're going to be paying an arm and a leg. And I looked at that and I had a thesis of, You know, startups have been democratized. People all over the world are building startups at a rate that we've never seen ever. And I thought to myself, like, where are these startups going to go for an exit? And there's so much education and resources and platforms and tools and everything for marketing, fundraising. I don't know, like everything but hiring.

Yeah.

Yeah. Everything but the most important part of the founder's journey, which is the exit. And so AngelList had already taken investing, Product Hunt had really nailed down discovery, and I wanted to work with entrepreneurs and startup founders. So it was that mix between just seeing a large market, low NPS, people getting scammed, legitimately scammed or scammed by just outrageous fees. And so I thought, why don't we flip this market on its head and try and rewrite the rules. So that's really what I'm trying to do with MicroAcquire is build the startup acquisition marketplace that startup founders deserve, the one that I wish I had when I was selling specifically my first business.

To that point, Andrew, so when you started MicroAcquire, obviously you had a couple exits, as you mentioned, you had some optionality in what you could do, you decided to work on this, this was an idea you had from before. Just take me through what you envisioned for it, In the beginning, in terms of what the launch would look like around what the product would be based on what you had seen and everything, what kind of market needed in terms of the product itself?

Privacy and security. I mean, you know, when you go to sell a business, and this is just from personal experience, when I announced that we were to my whole team and we were about 100 employees, and that was a good amount of were contractors, but in-house about 50. And when I announced that, you know, you get questions ranging from, am I becoming a millionaire or a billionaire or getting fired and everything else in between? So, and then if your customers find out that you're looking to sell your business or your startup, you know, that's going to raise a lot of questions. So privacy was a huge concern. And then also just vetting buyers and sellers, having a curated marketplace where it's not just Craigslist for digital assets. It's a vetted marketplace where you can buy a startup with real product-market fit. It has real revenue, it has real customers. The buyers have IDs that have been verified. They have their LinkedIn account attached. You can do due diligence on the buyers because as a founder when I sold Business Apps, spelled B-I-Z, and I always have to spell it out because a little tangent. The way I got to that name on the first business was the original go-to-market strategy was to be cold calling. So I thought like, oh, it'd be much easier to be like, oh, we're Business Apps. And obviously I couldn't afford the correct spelling domain. And then everyone started calling it Biz Apps, which I eventually had to buy that domain, which is another story for another time.

It worked. It worked out thankfully for you, Andrew. Yeah.

On that one. And shoot, what was my point?

Going the business, what do you need in terms of the product itself? You said security is a big part of it, obviously, with the initial product security.

Yeah. The point I was trying to make was I due diligence the hell out of the buyer of my stuff because the last thing you ever want to do is tell your team and your customers that you're going to be acquired and then The deal falls through, you know, at the last minute or something like that, that can be devastating because then your whole team is like, like, you know, what's going on? What's coming next? Like, what?

Yep.

So I thought that was paramount. And yeah, just having like a higher quality marketplace that's not just, you know, solving simple issues of finding a buyer, but also making things easier, like You know, building a letter of intent, like MicroAcquire has a really slick letter of intent builder. You can build a letter of intent with, you know, 10 clicks, 1 minute. We're working on tooling for, you know, better analysis of a SaaS company's health. So, you know, a lot of SaaS companies don't have like a really clean P&L that accurately portrays their true revenue and their true profit. And so we're building in tools that helps buyers assess the health of the business. And then also just things like, how do you transfer the assets? How do you, if you need help, you know, we have a directory within Microquire where you can hire, you know, attorneys or investment bankers or even, you know, business brokers if you so choose. But within our market, within the directory, within the marketplace, we're able to work with business brokers and investment bankers that don't charge Nearly as huge fees because, fun fact, most business brokers spend, I believe, half their budget on sales and marketing. So just really just kind of piecing everything you need to have a successful acquisition and then innovating on the process and just bringing everybody into one place, everyone from the biggest private equity groups to individual buyers just looking to acquire. Um, you know, uh, a smaller startup.

To that point with the product, that was, you know, kind of what you had envisioned for this. You had the experience of knowing what to build because you basically had inside information like, okay, this is what I went through, it's what people are going to need. Take me through the go-to-market when you actually launch MicroAcquire. We don't always hear about the early days of a company. We hear how successful they are now. I want to know about their early days. How'd you launch it?

Yeah, I launched on Product Hunt January 2020. And we got product of the day, but I mean, that's just like a little spike, then it goes away. And then, but before that, it's a marketplace. So you don't wanna launch a marketplace with nothing in it, 'cause then it's just, you know, it's like walking in a party.

Not a lot of value to that.

Yeah, walk into a party, no one's there, you're gonna leave pretty quick. So I ran a big cold outbound email campaign towards VC funds, seed funds, accelerators, just other startups in the marketplace, and that helped seed the marketplace. And that's still where we get a lot of deal flow is just partnerships with individuals or groups that have large access to startup founders. So a lot of our deal flow comes from referrals or word of mouth. But that was kind of the seed is just, I got on the phone with a lot of people. You know, explain the idea. I manually onboarded them. I made their listing for them. I wrote the newsletter. I did all the customer support, you know, almost to the point where it felt like, I mean, I was probably working 15 hours a day, every day. I'd wake up at 4, probably go to bed at like midnight, just wake up, do it again.

Yeah.

Because I wanted to, I don't recommend that to anybody, but it wasn't work. It was fun 'cause I got to see the coolest startups. I got to talk to cool people. Like, oh, another big thing was I went on a lot of podcasts. Anyone who was willing—

Before you launched or right when you launched?

After I launched. After I launched.

Yeah, right after you launched.

Yeah. But it wasn't, it didn't really feel like work. So, you know, instead of watching like Netflix or playing Madden or something like that, I just was working on my startup.

So to that point, obviously you get the bump from Product Hunt. I've talked to a number of founders who've gone that route. It's like, oh great, Product Hunt success, like number one, you're like, this is amazing. But obviously you have to grow a different strategy to actually grow continually. What's kind of fueled the growth of MicroAcquire from there?

We're kind of all over the place. We invest in SEO, SEM. I'm very active on social media. We still do a lot of different partnerships. We also do product marketing. Like we developed a data-driven valuation tool that basically is like a thing like a chart mogul bare metrics tool, but also gives you a valuation of your startup. And then just, you know, having fun, being funny. Yeah, I don't know if you've ever seen like the Ross Hanneman videos, that sort of stuff.

Oh, I've seen them.

I've seen them, they're great. I'm a big advocate in, You know, with software being so easy to copy these days, really the last thing you have left is your brand. So I put a lot of thought into brand and, you know, how do we want to position ourselves and the story that we want to tell. And, you know, things like boring content marketing, webinars. So we have like a wide array of, you know, marketing campaigns that we run. And marketing is kind of where I like to play the most. So I hope that answers your question. There's no one specific, but it all adds up, you know, everything that you do. But my best advice there for founders listening to this, like, oh, wow, that's like, you know, obviously, you know, I have people helping me with my marketing. But when you find a good channel, you know, just focus on maximizing that before moving into another channel.

Yeah. And I think it's important for people to understand, obviously having sold another company, you could leverage that to get on podcasts, to have that distribution channel. And obviously you had some insights there too, which is helpful. It's also a thing where people like leverage what you have, your strengths already, or what you have kind of an unfair advantage in when you're kind of building your company as well. And from that, you had said, I think on different podcasts around growth, growth, sales, marketing early on, you said, get on every podcast you can and tell your story, submit your startup to directories and build in public. You've done a lot of all of those things, building in public and everything with that as well. From those different things today in the business, you say you launched in January 2020, this is 2022 now. How do you look at marketing today for MicroAcquire and what you focus on, you personally and more broadly for the company?

I always say the best marketing strategy is just being consistent. Marketing compounds. I think of marketing in a weird way and My analogies are terrible, but I'll give you one. We'll go for it anyways. You know, every tweet that you write, every LinkedIn post, every blog post, every guest post, every podcast that you go on, every piece of marketing that you do, you're building a road towards your business. You know, maybe someone on this podcast, maybe it converts like crazy and we see a big uptick. Maybe no one listens to it. Maybe one person listens to it, but even You know, if it's just one person, you know, that all compounds. And so I always think of like, how can we build as many roads to micro-acquire as possible along the buyer's journey? So also understanding, you know, you have awareness, evaluation, decision, and we have, you know, different marketing, you know, messages or, you know, things that we'll do to drive people into those decisions or move people down the funnel towards a decision.

From that too, looking at MicroAcquire, you have some of the, I would say, most notable angel investors as well. Take me through that process of fundraising and deciding who you wanted on board for MicroAcquire. You've gotten, like I said, so many notable people. How are you thinking about that fundraising for MicroAcquire in the first place?

Um, you know, I can't really— I wasn't. Um, so I bootstrapped the company to about, um, $700,000 in recurring revenue or something like that.

Yeah.

And it was just me running the business. And after you have kind of a win under your belt, you know, I think at least for me, my personal ambitions changed and I wanted this again, just thinking about how hard I worked, like I really wanted to attack this problem aggressively to help founders all across the globe.

Yeah.

I think that's why people start startups is they want to eventually sell it for, you know, maybe not billions of dollars, but an amount to make them financially secure. And I felt, you know, entrepreneurs and startups, you know, that's my jam. So it was such a big opportunity for me to help them that, you know, it made sense to raise capital so we can really, you know, aggressively attack Attack sounds kind of a— we're gonna attack this thing. Just basically accelerate everything we wanted to build. And, you know, we still have so much left to build. But yeah, so the first fundraising was with Naval, Jeremy Levine, and Andreas Klinger. That one came together pretty quickly, all exceptional people. Shout out to Jeremy Levine. He's a partner at Bessemer. Just one of the most humble— I mean, shout out to everybody on my cap table.

There's a lot to name. There's a lot to name.

Yeah. But Jeremy, he's just, he's like a startup— what's the word? I don't know. When you're really smart, like genius.

Savant.

Savant. Yeah. He just, he's seen so much and he's helped me. in some really critical situations. So I'm, I'm really grateful for him and obviously everybody, but, um, he was the first to really kind of see what I was building because when I was building it, and this is another thing I'd say to startup founders is you gotta believe in yourself. Like when, you know, you're building, 'cause a lot of people won't believe it until it starts to like, oh yeah, that, that's working now. That's super obvious.

Yeah.

But, but when I launched Microcard, not a single person thought it would work. I literally zero. And it's like, really?

Yeah.

And to make it even like more intense, I believed in it so much. I launched it, like I said, January 2020, like right when the— right before the pandemic started. And, you know, just kept pushing through because I believed in it so much. And then Jeremy saw that vision first and then Yeah, so huge shout out to Jeremy and everyone else at my cap table.

So from that, you mentioned as well expansion and kind of wanting to reach entrepreneurs all over the place. How do you look at expansion into other markets around the world, other companies all around? Because companies everywhere need to get acquired. So how do you look at that expansion for MicroAcquire too?

Yeah, so we've been working on some partnerships. We're actually going to announce one this week. So by the time you probably publish this, it'll be out, but it's with an accelerator in Turkey and we're working on just more relationships with funds or firms or groups or really anyone that has a large pocket of startup founders that may not be looking to build like billion-dollar companies, but are looking to build You know, small but life-changing companies because those are generally the best fit for MicroAcquirers. I got, you know, sub-$10 million profitable SaaS company. So, and then I have, I should note we're already in like 100 different countries. So it's pretty fascinating how fast you can go global these days.

Yeah.

That's a big initiative for us is global expansion because acquisitions are global and so MicroAcquire should be too.

Yeah. I mean, there are so many organizations out there. How do you look at, when you're looking at these different organizations, which ones you partner with, how to decide which ones and how that looks in terms of a partnership? Because there are so many ways you could go about it. And now I know you've announced a ton of partnerships the last number of months. How do you just approach that or view that more broadly?

Yeah. Usually it's got to be mutual. You know, there's obviously some companies I'd love to partner with, but there needs to be like—

Any names?

Any names? I think I partner with them all, but I don't know. Shoot, I'm going to answer that question.

Dream partnerships for MicroAcquire who can maybe make some magic happen. I've got some interesting listeners. You never know.

You know, I think like Y Combinator, would be like an official partnership would be interesting. Um, because they fund so many startups, but a lot of those startups don't reach a billion-dollar valuation and might need a soft landing. I think that could be a good partnership. Um, that's just one off the top of my head. I don't know.

Yeah.

Um, but, um, in terms of like how I think about partnerships, it's really just, you know, excitement on both sides. Like I'm excited about what you're doing. You're excited about what I'm doing. And that usually kind of kicks it off. So it's not really a— my strategy has never been like, hey, I'm going to target this company. I'm going to hound them until they partner with me. It's more organic. Like, hey, I love what you're doing. Like, you want to hop on a call? And then it just kind of organically happens from there. And those are typically the best partnerships too, because there's a little bit of a relationship built in and kind of a plan of What is this going to look like post-launch? Like, are we just going to do like swap blog posts? Are we going to do something a little bit more substantial where we, you know, continue like co-marketing or do we integrate, you know, part of a product into ours and vice versa? And we always want to do the ones where, you know, it's a little bit more integrated and, you know, tighter than just like a, hey, we partnered and we never talk about it again.

Yeah, like longer-term thinking on that with them. Yeah, it makes sense. And I'm curious, I saw obviously a while ago with Bootstrappers in that publication, tell me how that came about. And then I'm curious as the impact that has on MicroAcquire.

Yeah, so that one was, I remember, um, that one kind of came off like off the cuff. Uh, I remember there was a tweet one day, someone was like, Why do venture-funded companies get all the attention and bootstrap companies don't? All I read about on TechCrunch is funded companies. And I was like, TechCrunch, what's up with this? And then some of the writers were like, we write about bootstrap companies too. And then basically kind of had like a food fight with them.

Oh, we know the beef. I feel like people who follow you know the beef.

Yeah, yeah, that was fun. I mean, I asked him, I was just like, hey, like, that's awesome. What percentage of companies have you written about that are bootstrapped compared to venture funded? And that got a nice round of crickets. And then, you know, threw some funny tweets in there and, you know, but that really built momentum around like bootstrappers. So that's another thing I love doing in marketing is, you know, thinking of, You know, branding an enemy or beef marketing, but I definitely don't recommend it for the faint of heart or for yeah, you gotta it's gotta be something you believe in. And I was looking, I used to love reading TechCrunch, and then it just turned into VentureCrunch, and I was like this, I I never read it anymore. It used to like a decade ago, it would be the place you'd go to. You know, Borderline inspired me to be an entrepreneur because you'd read about these startups that. Were just getting off the ground and like you really felt like you had to know the founder and now just like press release rewritten quote from investor quote from founder we're gonna take over the world plus we're just getting started it's all you know there's I don't care um so I just saw this huge gap in media where it was like people really want to hear about these startups that are taking a different, more sustainable, and arguably more realistic path to success. And we wanted to celebrate and bring those stories to light. So, you know, put together a team and Bootstrappers operates within Microquire but separately. So I hired 4 writers and launched it within like 30 days. That was, that was pretty quick. And it's still going strong today. And then in terms of the impact on MicroQuire, yeah, you know, it was really just kind of a labor of love, as cheesy as that sounds. I just felt like, you know, someone's got to show these businesses some love. So, you know, I always think, you know, good marketing is marketing that doesn't feel like marketing. And obviously it's powered by MicroAcquire, like our logo is slapped on there and stuff. But what we're just trying to do is provide goodwill to our target customer. And that's always a good marketing strategy, just adding goodwill. And then over time it just compounds and pays off.

To that point with that, so with bootstrappers and other companies more broadly, how do you think that founders should think about The media arm, media side of business, who is that for? I know you mentioned with software companies, there's not necessarily a ton of differentiators, so the brand helps a lot. How do you think other founders should think about this kind of media arm or building the media as part of their companies as well?

I mean, again, when you think about just like, what is your moat? I mean, brand is everything. And I think a media arm is one of the strongest ways to like really reinforce that. to give you an example, like Stripe owns IndieHackers. HubSpot bought The Hustle.

Yeah.

There's been a number of media companies purchased by other, you know, larger startups. I think it makes complete sense. So, but the one thing is, you know, if you do it, you gotta really commit to it and not just like, Do it for a month and then give up on it. Yeah.

And you also lose a lot of that potential for SEO and long-term benefits if you stop too early, because that takes a while to kick in as well. That's another part of the point of that. I know we're almost out of time here. I'm just curious on what's next for MicroAcquire. I would love to hear more about that.

We're going to rebrand to MacroAcquire due to popular demand. Yeah. No, what's next? Perfect. We got some Pretty big product drops all happening at the same time. So right now, candidly, internally, I'm having a conversation with my VP of product. I'm like, all right, we got this launching, this launching, and this launching all on the same day. How do we space? Should we space these out? Should we? So within the next month, we're gonna have some pretty interesting stuff. But that's about all I can share.

We'll be looking for it. No worries. Where's the best place for people to learn more and connect with you as well, Andrew?

Andrew@microquire or just follow me at Twitter, @agazdecki, or just go to microquire.com and start looking at SaaS e-commerce startups for sale. And then if you're interested in potentially selling your business, you can do it with zero commissions.

Perfect. Thank you so much for the time today. I really appreciate it.

Yeah, thanks for having me.