I Built My Dream Business—Then I Let It Go: Rob Walling (@RobWalling)

Rob Walling.

Rob Walling. Rob Walling. Rob Walling. A pioneer in the SaaS universe. Rob is a serial entrepreneur, the founder of Drip, co founder of microconf, and.

The host of Startups for the Rest of Us, one of the most popular startup podcasts in the world.

He's bootstrapped, sold and scaled multiple companies.

He helps small business founders build real companies their own way. It took me 11 years from the time I started doing side projects until I had my life changing. Exit. Steve Jobs talks about these three things that he did as he was growing up. He's like, that's why Apple is so different. I don't care about money for what money buys. I care about money for the freedom it buys. I was always like, I want to make enough money, then I never have to work again. And I built that. The problem was.

Today on the podcast, I sit down with a well known founder and investor, Rob Walling. Rob Walling is the founder of Drip, which is one of the most popular email marketing softwares out there. He sold that business and then started one of the most successful, successful incubator accelerator programs, Tiny Seed, that invests in over 200 companies. He's also the founder of one of the best SaaS conferences I've ever seen in my life. I've attended twice. It's called microconf. I highly recommend it. He's got a highly successful podcast called Startup for the Rest of Us, as well as a growing YouTube channel. I'm so excited to sit down with Rob and discuss all things of business, but in particular building a business to sell. One day to Exit. I reached out to Rob because I wanted to sit down and talk about this topic because he just recently released a new book, one of many books that he's ran. But this is his latest book, Exit Strategy, co written with his wife, Dr. Cheryl Walling, which is really cool. And she is a psychologist. She specializes in helping founders not only in the exit phase of their business, but to just going through the struggles of being an entrepreneur and a founder. Now, if you're not thinking even about selling your business, maybe you haven't started yet. You're in the right place because we're going to be talking a lot of things that you should keep in mind, even if you think you'll never sell your business. Because it's good to have options. It's good to know what is possible, what's not possible. Every time I talk to Rob, whether it's at a conference in person or online on X, I get something out of it. I. I think he's one of the smartest, most humblest people I know in the industry. He's been around the block. He not only has been successful in SaaS, but he's had freelance jobs. He's worked manual labor as an electrician. He sold info products, he's marketed. He knows his way around business and hard work. So I'm so excited to sit down with him and talk about this topic of what to expect in terms of the journey, the emotional journey, the mental journey of preparing for an exit, exiting your business, and then life after exit. What is it like when you have to redefine yourself, reinvent yourself in a lot of ways? And it's a little bit meta because as many of you know, I sold my software company, Webinar Ninja, after 10 years of growing it recently. And I share some stories. I share what I went through and hear what he had to go through as well when he sold his company, Drip. So, without further ado, we're going to jump into that chat with Rob Walling. Do it, Rob. So happy to have you on this call. We've known each other for years. I love doing interviews with people that I have known and had interesting conversations with before because it's just a comfortable conversation. So thanks for being here, man.

Absolutely. Thanks for having me.

I just want to just say at the top of this conversation, for those who are listening, if you are thinking about building a business, you're in the trenches right now. You're growing a business and you're like, I'm not sure if I'm ever going to sell. I don't know if my business is even sellable. I need you just to suspend disbelief for a moment, for at least the first 15 minutes, because trust me, you're going to get a lot out of this episode, out of this conversation, just because I know Rob so well. I know his history, I know his background very similar to mine, you know, just grinded it out for years before he created a SaaS, before he created Tiny Seed, his venture capital fund and accelerator and all that kind of stuff. So, you know, freelance developer, agency owner, created content, just did everything to make it happen. And actually, I love that history because it probably makes you Even a Better SaaS founder and a better business owner in general. Would you agree with that, Rob?

I would. It's kind of like I wished it had gone smoother faster and that I had to learn fewer skills to get there because I had this talk I did called 11 years to overnight success because it took me, 11 years from the time I started doing side projects until I had my life changing exit, you know, where I could retire. And I don't know if 11 of the year sounds long or short to some people. To me it sounds long compared to a lot of folks who raise venture capital and are suddenly rich. But yeah, I, I agree with you that now that I'm here though, and I have the skills that I've built, I still pull stuff from my info product days, from my e commerce website days, from my agency days, all of that into what I'm doing today.

Yeah, and I think it's your history and your scrappiness and your like, I would say variety of experience has helped even now when you're advising and helping startups through Tiny Seed, which is a great accelerator that helps people that are bootstrapped and they need a little bit of funding to kind of get to the next level. But I think a lot of those SaaS businesses I found, at least in the, in the SaaS community, lack the experience of like selling their product, selling their idea, marketing, understanding that, you know, it's hard to do this without an audience. If you're invisible, you don't exist, all that kind of stuff. So I think your, your history has served you in that way. It's funny how that works, you know, because for me my history was, I was a teacher for 10 years and that has helped me big time when I, when it comes to sales and marketing.

Yeah. And if you've ever seen there's a Steve Jobs graduation commencement, I think it's Stanford. And he talks about these three things that he did as he was growing up and it was like learning typography in junior college. And I don't remember the answer, but it's random things. And then he ties them all together and he's like, and that's why the Macintosh was so different and that's why Apple is so different. Because I developed this taste over years. I feel the same way when I talk to, you know, I'm in SaaS. That's my, my thing today, software as a service. But I can still do a landing page teardown. I can still like look at someone's copy and say, that's not good enough. Why? Because I did info marketing because I was an agency owner and I had to write a bunch of copy to sell. You know what I mean? And I had to learn to sell. And so it to your point, learning these skills, it's just oftentimes we're like, what do I need Next to do the next thing and that. And that's true. And we're all in a hurry. But also a lot of this stuff, five, 10, 20 years later, it stuff sticks with you.

Yeah. I want to get into this concept of why you should practically think about building a business that is worth selling. And the reason why I want to get into that is because I was a die hard. You know, I'm never going to sell. I'm going to be, you know, the base camp of the world and I'm going to just build a business that's going to fund my lifestyle and it's going to be my identity and all that kind of stuff. And obviously that didn't happen. I did sell and Webinar Ninja got acquired with our software company. But I think what changed my mind, and maybe you can talk to this, but what changed my mind is I realized that it's going to be very hard for, for me to be able to build wealth that will be able to sustain my lifestyle and be able to sustain my ability to continue to work. I started to realize I don't have the ability to take so many blows as I got older to continue to do this in my 50s, 60s, 70s. I need to figure out a way to make sure that I don't starve for the rest of my life just in case if I can't work so hard. And that's when the idea of like, maybe I should think about, you know, building a business or crafting or changing my business with sellable so that one day I don't have to worry about that so much. So I want to get your thoughts on this because I was definitely one of those guys where it's just like, you know, I'm gonna, I'm gonna build a business that's gonna fund my lifestyle. But then I changed my tune when, when I just had a few heartbreaks and a few challenges, which is like, okay, I need a, I need a revamp my thinking.

Yeah. And the thing is, is when you are in the early days and you and I have both been there where it's like maybe you're working a day job and you're doing a side hustle, you do have to just be scrappy and do whatever it takes to get that side business off, off the ground and to make a thousand a month, 5,000, 10,000, to the point where you can quit the day job. So at that point I wouldn't be thinking, how can I make this business sellable? Because that is like the 10th thing on the list. Right. The first five things are like selling more fulfilling, get some money in the bank, you know, getting some, some margin so to speak in your life. But at a certain point if you've quit that day job, you can fall into the trap of well, what got me here, which is being super scrappy and doing everything myself and making as profitable as I can. It's not going to get you to the point of even making a maybe let's say half million dollar a year business or you know, a million dollar a year business like you, you it's so, so rare. You'll hear these exceptions and the reason they're they're on X Twitter or they're on whatever social media is, they really, really are very rare. Of like I'm a one person business doing a million or two million a year. It happens, don't count on it.

And yeah, the right market, right person, right everything, you know, everything in their favor.

Yep. It's just every. The Venn diagram totally hit and you kind of. There was hard work, there's luck, but there's a lot hard work and skill, but there's a lot of luck in that. The idea behind building a sellable business is a keep your options open. Because nobody works on the same business for 20, 30 years. Almost no one. Especially in this day and age of Internet businesses. You know, again, whether it's an agency, consultancy, a e comm, SaaS, whatever, the world changes, you change and you want to be prepared for that. But the other thing is it's unlikely that you, as a motivated, interesting entrepreneur who wants to learn new stuff all the time is gonna want to grind on that same business for, for five, 10, 20 years. Like can we think of any aside from Basecamp who has done that because even look like Larry and Sergey, they started Google for crying out loud, right. They're not even barely working in the business anymore. You know, I mean these, these really big startup founders have created these incredible things. You, you just want to move on. You have like self expression and self development that you want to do and eventually you do kind of get tired of the same thing. So building a business you can sell a lot of it is just having it not rely so much on you, on you to sell on you to market and you to fulfill right to fulfill the, you know, again if it's a consultancy, you're doing the work. If it's SaaS, maybe it's you know, being building the features or whatever and the more you can separate yourself from that over 6 months, 12 months 24 months, the more sellable that business becomes. And if you never decide to sell it, what an incredible asset. You know, you've, you've. Right, you've moved yourself to working on the business, not in the business, which is really where all of us want to go. And that is something that's, it's not obvious. Usually if you just started a business, it's not obvious that's where you want to get there. But I actually think that should probably be the goal for everyone, is to not have to work in the business. And then you, if you want to work more in the business and do it.

Yeah. And I think it's just this concept of understanding that you cannot be the single point of failure in your business like you, you have to have, by setting up to be ready for sale, to be. To have your SOPs in order to have procedures in place, you can theoretically leave your business for a few months and somebody fulfill those SOPs, fulfill those, you know, and follow the playbook. So it's not just getting ready for sale for a buyer, but also like, what are you going to do if you fall ill? What are you going to do if you have a family emergency that becomes, you know, one week, one month, two months situation where you just can't put it in what you used to put in. And the issue is, is that when, when you're in the grind, you never think these things are going to happen. You never think. And the problem is, is that a lot of us who actually get to the point where they build a business of credibility, they're in their 40s or they have aging parents, they have things happening, their health is starting to deteriorate because of what they're putting into the business. So when you sold Drip, was that a consideration? Were there lifestyle reasons why you wanted to sell or was it purely, I'm done with working on this project.

For me, it was. I had never had an exit that would set me up for life. It had been a goal of mine probably since I was in my late teens or maybe early twenties of at some point I want to be, I want to have freedom. I don't care about money for what money buys. I care about money for the freedom it buys. You know what I mean? I don't, I know I don't need the luxuries. And so I was always like, I want to make enough money that I never have to work again. And I thought that that was like I could build a business that just throws off quarter million dollars a year, net profit That I barely have to work on and that'll be great. And I built that eventually. It was before drip and I had about, about 250, $300,000 I was clearing. I was working 10, 12 hours a week. Not, I mean, it was kind of the four hour work week, right? It was not the worst. And I had two young kids at the time. It was great. I hung out with them. The problem was is it's the Internet and all of that is fleeting. Like a lot of it relied on SEO and ads. I had three or four different products and then a competitor would come swipe one, and then an API stopped working on another, and then Google smacked another one. And suddenly I was like, this won't last. Like I had two years, three years of that and I sat and watched it and like, I don't feel I have freedom for now, but like, what, what about next year? What about, I think I live in the Future, what about five years? What about 10 years? None of these businesses I thought were 10 year businesses that I could sit. And so me, two young kids, a wife, a house, I was like, what is true safety, like financial freedom? I do think I need to bank enough money that I can feel safe for at least five or ten years and hopefully the rest of my life. And that was, that was part of it. And the other answer is like SaaS. If you build a SaaS company up to a couple million bucks, million or 2 million, it's just, it's worth a lot of money. Like they do revenue multiples at that point. And so you're doing, let's just say 2 million bucks a year and you're making 3 or 400 grand a year, hey, that's great. And someone comes and offers you $10 million in cash, long term capital gains on that. It's hard to say no to. No matter how much you love that business, no matter how much that's part of you, it's like, wait, let me get this straight. I could bank this and do whatever I want for the rest of my life. Like that is a whole, it's a click. I was not intending to sell. I wasn't a never seller because I had sold some businesses before, but I definitely was not out to like, I'm gonna build it and flip it. It was not that. But you see a number on a piece of paper in front of you, you're like, is that real? Because that's absolutely life changing coming from, you know, a working class background.

Not only that, but this idea, at least my Experience when I was considering selling Webinar Ninja was I realized that a lot of founders felt this way at the moment. At the time, I didn't. I thought I was alone, but I felt like, how long can I keep this up? Like, I can say no to this deal and not take the money and say, I'm growing, I'm going to. But how long can I keep these plates spinning? I can risk screwing it up, you know, like. And sometimes, like, one of the things that I've picked up after my exit was a new hobby, which is poker. And what poker teaches you is you can make all the right decisions and still lose. And that. That's. That's the lesson of business. You can have the best business in the world, that you're making all the right decisions, all the right hires, but the market shifts. Covid happens, you know, the interest in this area. I mean, how many things have we seen that just, you know, was hot and then flopped? What was that again?

That.

That app, that was like a audio. Live audio clubhouse, right? That thing was valuated over a billion dollars, and then all of a sudden, it just flopped out. So it's like, some things are completely outta your control. You're implementing perfectly. And that was, in my consideration. It was just like, okay, when Nicole and I sat down and talked, it was like, we can. We can bet on ourselves again, which we've been doing for 10 years, or we can say, I've taken it to where I can go, and right now it's time to materialize those gains. And it's really hard to speak this way on a public forum like my podcast, because it's a very vulnerable situation, because you're basically saying, like, I don't think I'm able to be good enough to keep going. And that's just the honest conversation I had with myself. Do you find that as well, in your experience, or do you see that with other founders that you work with?

I do. I mean, there's. I tell you, I want to say one thing. Anyone who says that they'll never sell or you should never sell or one should never sell has never been offered millions of dollars for their business or they already have millions of dollars in the bank. If I already have 10 million in the bank and I someone offers me 40 or 50, it's strange, but that doesn't actually change my life that much. And so there are some entrepreneurs out there who you and I could name who say, we'll never sell. We'll never sell. And it's like, Y' all got 10, 20, 30 million in the bank, so.

Why would you sell, right?

But when you've scraped by most of your life and this is by far the biggest asset you've ever built, it's a different perspective, right? So you've either never been offered that or you already have enough money that, that you don't need to. But, but back to your question. Yes, there is this concept of writing it over, writing any business over the top. As any business is growing, it's worth a lot. As any business plateaus and or declines. I'll give you a numerical example. Where I had a SaaS company before drip, where I got, I think it was a five or six times annual revenue offer for it and it was growing and I was like, no, I'm still doing this, I'm making great money. It was super. It was 90% net margin into my bank account. It was great. I wrote it over the top, I focused on Drip, it went down. I later sold it for 2.7, I think X, which is still fine. It was like hundreds of thousands of dollars. It was a good exit for. It was the most money I'd ever had in the bank account for sure. It was life changing at the time. It wasn't never have to work again, but it totally gave me this huge cushion. But talk about the difference in multiples, you know, and I've seen folks go from an 8x multiple down to a 1 or 2 if they plateau. And so that's the thing is like timing. Your business is tough and, and I don't think it's a sign of weakness at all to think about. I love the question you asked. How much longer can I do this? Will my life be so stable? Will it be. Is everything going to just be everything's sunshine and roses today? Maybe it'll be in six months. With the advent of AI, with the way Google is changing, with whatever else is going on in the social, political sphere of today, potential reset, you know, I mean, whatever's happening, how long does that last? And I don't know, I don't like making decisions out of fear, but I also like being pragmatic about them. Especially if, as you said, you're in it, you're 10 years in. You got to start thinking, being realistic about this.

Yeah, totally. And just to circle back on what you said before about, you know, when you're growing a business and you know, you're making, let's say 50 to 100k a year, you know, you can grind out to 100k a year, you can do everything yourself. I find that somewhere around the 200, 300k in revenue annually, it's very hard to do the same thing and continue to grow. Obviously, every market's different, Every, every product is different. But that's just my own experience. And one of the things I absolutely cherish from my journey of webinar ninja was how many times I had to reinvent myself, how many times I had to look myself in the mirror and say, who I am right now is not going to take me where I need to go. I need to change. If I want to become the, you know, the reality is that if you want a million dollar revenue business so that you can have that exit and you don't have a million dollar business, it's because you are not who you need to be. Like you would have it already if you were. Which is really hard because I had to say, I'm not good enough. What are the things I need to get better at? What are the habits that I have? Whether it's me thinking I could do everything better than everybody else? Is it me not hiring the right talent? Maybe I have bad recruitment skills? Is it me where I'm kind of burying my head in the sand when it comes to tech debt, whatever it is. Right. And in order, I feel like in order for you to break through revenue ceilings, you need to go on and look inwards, get real, get some help, whether it's a coach or somebody along the line or a mentor, and then break through. And the thing is that when you do that, I realized in that moment, oh, I'm gonna have to do this again at some point. This is still not good enough. You advise a lot of companies through Tiny seed. You've gone through this journey a bunch of times. What is the number one thing that people need to change in order for them to scale to that next level?

Yeah, I'm invested in 212 SaaS companies. So I interact with 320Founder. Like it's a lot. I don't know how many people in the world are invested in that many SaaS companies? Not many. It's a couple dozen, if that. I like to think about it. I say this all the time, where first you're building a product and that can be a SaaS product, but that can be a consulting offering, that can be an E commerce whatever. Right. It's a product of some kind that you're selling. Next step is you're building a business. And the third phase is you're building a company. And so that product is scrappy as hell. That's you, as you said, scraping to 50k or 100k. And you're doing everything yourself and you're just figuring it out and trying to get people to buy and trying to find a market and the product and the fit between all those things. Building a business is once you have enough revenue coming in that you're like, well, now I kind of. I need some expenses and I need to spend those and not go under because I'm probably mostly bootstrapped if I'm listening to this. And, you know, I'm getting to 10,000amonth, 20,000, 30,000, and I may be hiring some freelancers or maybe a few full timers. But like, is not a company. It's a bit. It's a business now. It's more than a product, but it's like, it's not a company. Companies when it's like I have seven direct reports, whether they're freelancers or not, that I'm overwhelmed, everything's imploding on me. And now I have to start thinking about orders, structure and like, how do I actually, like, build something that is, as you said, has SOPs and is not me working in the business all the time to where you can kind of layer yourself up and be working on it. So I think aside from, I mean, there's a fundamental thing with entrepreneurs and just the ones who I see succeed, they do a lot of things very quickly and they're right enough of the time. Not 90%, it's like 60%, but they're right and they do a lot of things quickly. Like, that's the fundamental. Just to get there. But the mindset shift, which is the thing you asked about, is like to go from product to business to company. And even, let's be honest, company is. That's like 3, 4, 5, you know, depending on how if you're at 2 million, 5 million, 10 million, those are all completely different companies. Once you're managing managers who manage manager or whatever, you know what I mean? It's like, it's a big thing. So that is, that's something that especially going from 0 to 10 million, 0 to 50 million in annual revenue, it's night and day. It's a completely different business. And so learning that skill set is exactly. I think that's what you're referring to of like, how do I. And am I, am I the right. At a certain point, is this fun for me anymore? You know, I can do it, but is this burnout?

Right? And that was ultimately the decision Nikolai made with whether or not it's like, I think that this is as far as I could take it. And that's a really hard thing to admit to yourself. It's like, I think that this is as far as I could take it. I need to find somebody else who has different skill sets, different resources, a different set of tools that I don't have or I'm not willing to kind of acquire. Because to be honest with you, when I got to that point where I came to that realization, it was a little bit sad because I knew that it's over. I knew that my journey with Weapon Rangers is going to be over soon. But at the same time, I started to feel liberated. I felt like, okay, I don't need to be this person anymore. I could be something new. I can change my trajectory. And that's kind of where I want to move into in this conversation. Because when we were in the process of considering selling, selling, like, you know, people think that selling happens, you know, fairly quickly for us. From the idea of maybe we should sell this company to signing on the dotted line. It was close to two and a half years, you know, so it's a long process. Even if you have all your ducks in a row and due diligence is seamless and all that kind of stuff. It's a long process because one, you need to come to terms, you need to sell the idea to yourself, right? And then. And then you need to sell your company. But one of the things that we did is we read a lot of books on this topic about selling your company, the art of selling your business, and before the exit, and we read all the articles, you know, I chatted with a bunch of friends that just sold their company via WhatsApp and whatever, and just like, what am I supposed to do here? And one of the things that I love about your latest book, Exit Strategy, co authored by your wife, Cheryl Walling, is it touches on all the areas that get ignored in this process. Because most people talk about this process as a transactional, very logical kind of thing. And it's actually quite emotional. It's quite. It's quite a strange situation to be in because I say strange because not a lot of people sell their business, right? If you look at the population of the world, most people will build a business at some point and maybe, you know, do well and they kind of like pass it on to their family, whether it's a brick and mortar business or whatever. But to build the business that's good enough to be acquired is quite rare. So you don't have a lot of people to talk to about. And one of the things I love about this book, it talks about like going through that journey of one detaching yourself from the business from an emotional point of view. But also what do you do after that? Like, what do you do after it's all done and dusted? And now you need to look at yourself and like, who am I? Right? What am I going to do now? So tell me a little bit about why you wanted to write this book and why do you want to take this angle.

Yeah, it's a bit of what you said is I also, as I was selling Drip, which is back in 2016, is when we closed took 18 months from the time that I started thinking about it, 13 months from the initial outreach, someone cold outreached me. Clay Collins, founder of lead, co founder of LeadPages reached out and 13 months from that day we closed the deal. So it, it doesn't happen quick. I read all the books to every book you've named, you know, plus the other five you read that you know, we haven't named here. And I was always like, oh, the mechanics. I'm a very mechanical. I was a software developer. I'm left brain. Mechanics, mechanics, mechanics. I was so ill prepared for the catastrophic finance, not financial. The psychological toll that it took on me, that it took on my relationship with my wife, that it took on my relationship with my friends. I was just imploding the whole time thinking, I don't know who to talk to about this and this is way harder than anyone has ever told me. And so as I got space from that because I left that in 2018 and I worked for the company for a couple years and then my wife, who I co wrote this, Sherry, Dr. Sherry Walling is a clinical psychologist, but also a founder, an executive coach. And she has coached dozens, if not 50, 60, 70 people through exits, through IPOs, through thinking about exits and not exiting, through, you know, whatever. She started saying to me the same things over and over, like, people are not equipped for the mental strain that is coming and it is harder than they think. And I kept saying, yeah, I have tiny seed founders who are exiting and they're feeling the same thing. And so where. What book should we. It was always what book do you recommend? And it's like, well, obviously John Warlow's books. I love his books. And they're. And before the Exit is great by Dan Andrews. But we found that there was a lot of thinking that we had that just wasn't out there. And we don't just want to say be scared, it's hard. Good luck. Right? We want to say be scared, it's hard. Here's everything we can tell you to try to backstop yourself with friends, family, co founders, masterminds and also just learnings ways to think about it. Exercises in the book of like how to ground yourself, what to do when this happens. We try to put as many quotes in. You know, there's the whole chapter of like the 3am what ifs and it's like, what if my team gets screwed? What if this falls through? What if I'm selling and it's going to 10x from here? Right? Everything.

Yeah.

These are real quotes that we've heard from real entrepreneurs and we want to level set that. It is hard, but it's probably still worth doing.

I want to just frame it a little bit because for those who are listening, who've never been through an exit, people don't realize why you're like, why is this so emotional? What are you talking about? Well, I'll just share a little bit of my story. Well, when you're selling a business one, you can't talk about this with a lot of people because of non confidentiality. You can't talk about it with your team, you can't talk about it with people outside the company. It's even kind of risky talking to your spouse about it. You just kind of, you're, you're conscious of the fact that, you know, it doesn't take much for a deal to fall through. Okay. The other thing is, is that you have like for me, I'm. I built a team that I work with. Some of the people that were on my team were there for eight years plus. You know, I know that there's a good chance that their, their future is going to look different very soon. And I can't say anything, I can't talk to them about it. You're feeling like all of a sudden you're not on the same team anymore. You're now actually on the team of the acquirer. Which reminds me of my teaching days when I went from being a teacher to becoming head of department. My colleagues were not the teachers anymore. My colleagues now were the principal and the vice principal and management. Which was all of a sudden I gotta change how I feel around them, which is really weird. It's a really strange situation when you guys been to war together, right? And then on top of all that you have the accountants and the lawyers Going through all the finances, trying to figure out how to, you know, make sure that you don't screw things up. Things are written properly, so protect you in the future, whether it's IP or until, you know, your likeness is another thing. Like for me, I was part of the brand. You know, a lot of the videos had my face on it so that that whole rigmarole was needed to be sorted out. And then also like, you're about to get a lot of cash all of a sudden. Right. What are you going to do with that? A lot of people don't think about the fact that I was one of those people. I didn't grow up with a lot of money. My parents were immigrants from Egypt. They came over, they struggled with finances all their life. They worked really hard, but they never got ahead of, you know, they never actually were wealthy. I would say we made enough money to live in a. I was the only brown kid in my high school. Right. That was just the pinnacle of their wealth. Right.

But.

I say that because if you've never had money before, you don't know how to manage it. You can screw it up very easily. We hear all the stories of the lottery, so I just wanted to paint that picture for a moment because a.

Lot of people don't understand.

There's a lot of pressure, a lot of things happening. All of a sudden it's just easier for you to be like, oh, I'd rather just continue to go through the grind and just work and hopefully everything works out. So you're actually transforming into something new. And it's something that don't. People don't talk about. And I'd love to hear your thoughts on that.

Yeah. So, you know, if you think about non entrepreneurs, what are the biggest financial transactions in their life? Usually it's buying a car, selling a car, buying a house, selling a house. That's probably about it. Those are extremely standardized, especially in the us I can't speak to every country, but there are just standard contracts for doing that. And obviously there's a, oh, should it be 2% or 3%? But it's like fill in the blank NAR National association of Realtors and it's that's it businesses. No, everyone is like this custom, this agonizing custom negotiation and you just don't know what the terms are. And you need, usually you need an advisor on your side to kind of help you. Otherwise I know you can either get taken advantage of because you're like, I'll trust the other side or you're like me and you're super skeptical of everything. And then you nitpick everything on the other side, which was like six months of hell for me. Because I was like, I don't trust anything they say, oh, that bullet, I'm gonna, I'm gonna. And they're like, rob, seriously, on these calls, you have to stop questioning stuff. Because I was like, for me as well, this is the, probably the biggest financial transaction of my life, certainly up till that point. And I grew up solidly working class. My parents never had, you know, money more than just the, you know, the next month of living or whatever. And so for me, I was like, no, this is the. I've spent my entire adult career basically culminating to this point. So there's a tremendous amount of pressure. It's easy to screw it up. It's easy to screw it up. And that is where it can get scary. And the life changing nature of it. You know, I've seen, between Sherry and I, we've seen entrepreneurs get a huge bucket of money in and they either, there's a spectrum. They either are, they've been cheap their whole life. That was me. And they're still cheap. And it's like, bro, you have insert million, $10 million in your bank account now. You need to just relax and get the guacamole on your burrito at Chipot Chipotle. You really need to just do that. Like buy the shirt that you do. You know, it's like, well, I've never bought a shirt. Yeah, like do something right? Like something you may, you don't need to buy a Porsche tomorrow, but like ease up because you have earned this and over time, like you need to enjoy it a bit. And then on the other side, unfortunately we have seen folks similar. It's like $10 million in the bank. Three, four years later, they have like $2 million in the bank. And they, they thought that 10 million was infinity million. And neither of those is the case. It's trying to. How do you kind of have a sense of money? Because like you said, people who win the lottery wind up usually being less happy. They don't know how to deal with that money. A lot of entrepreneurs don't either. And so we do talk about it in the book, but obviously there's financial planners and you know, there's, there's other things out there, but you don't want to work 5, 10, 15 years for something and then basically piss it away. But either be unhappy for one reason or another, be unhappy because you don't want to spend any of it or be unhappy because you spend too much of it.

So I go to a lot of conferences. I like being part of masterminds, things like that. And sometimes in my circle are people that don't. They're not SaaS founders, they have a business that they're coaches, they're course creators, they write books, they basically sell their knowledge for pretty good profit. Like they're, their profit margins are huge. And the more I have conversations with them, the more I hear the same thing where I asked them, so what's the end goal here? And they're just like, oh, I'm just going to earn X amount of money and then I'm going to shut it down. I'm going to shut it down and just go on retirement and travel the world. And I'm like, why would you shut that down? Why wouldn't you sell it? Why wouldn't you license it? Why wouldn't you do. There's all these other options I'm thinking of because I've been in the SaaS world and understand that that's the reason why most people start SaaS businesses is to create an asset that they can sell and they weren't exposed to that kind of methodology or thinking and they just can't think of a way of packaging this into a sellable asset. What advice would you give somebody who's thinking about just literally burning their business down to the ground before it's done and dusted?

Yeah, I mean, most businesses are worth something. That's the thing that I don't think most people realize is even like an agency, a consulting firm, or even my brother. So my brother runs a electrical construction, like a contractor out in the Bay Area. And even that is worth. I forget what he told me what it's worth, but it's like it's a very straightforward formula and it's like one times their backlog for the next 12 months. Which backlog, right, is how many deals you've signed or whatever, how many is coming. And so it's not, this is not SaaS. This is not 5x your trailing error. But, but it's worth something because the backlog, maybe the backlog on a $10 million business, construction firm is a million or 2 million. Like there's something there, you know, so that's the thing I'd say is like, let's level set that businesses are worth something because they have, there's, as you said, there's intellectual property, there is client and customer trust, there's a brand, there's something Strategic partnerships. Yeah, all of that right now, again, it may not be worth 5 or 10x blah. But it's like, it's usually worth something. The other thing to think about is as, as we talked about earlier, like kind of everyone, everyone sells eventually. It, it is what happens. And everyone leaves their business eventually. How about that? You know, you can sell or you can shut it down, but if you've developed any type of, especially if you're a coach or an author, someone who's creating courses, like there is intellectual property there, even if you're at the forefront of it and your name is on it, there is still some value to be created there. So if you have frameworks or other things that you are literally going to just bail on there probably or something to someone, you know, someone who has a course business. And so it's going to depend on a lot of things. But I, I hate to see someone walk away from an asset that is potentially worth fifty thousand or a hundred thousand or a million dollars.

Yeah, totally. And the way I kind of look at it is that you have competitors, right? We all have competitors. And a lot of sales are just strategic sales or the competitor would love to absorb your customers, sell them their own products, sell them their own service. Like, I mean the cost to acquire customer now even in the course world is $25 plus $30 plus $100 plus, you know, so like if they can just acquire your list of 100,000 people, that's at least worth a quarter million bucks or something. Just acquiring the database where we don't realize you actually poured a lot of money into acquiring these leads. So that kind of first thing came to mind when I was having these conversations. The other thing that comes to mind is wouldn't you want your legacy to continue, your work to continue.