Jeremy Weisz
presented to you the SureSwift option I’ve seen is like an outlier. The other ones seem kind of like it see that, but why SureSwift that
Kevin McArdle
that it wasn’t, it wasn’t that different than the doctor who had it, who was an entrepreneur, and he was running a successful pharmaceutical company at the time, and he had this idea, and he knew this is a really good business idea, but he didn’t have the time to run it. So you know, I don’t know if he was talking to other people besides me, but it was like, okay, you know, Kevin has abilities, I have an idea, you know, let’s team up and go do this thing. The sSureSwift was the same thing. You know, the guy who’s my co founder, had the idea, but didn’t have the time to go do it. And, you know, I I’d actually asked him for advice about this medical device thing. And, you know, within that context context of that conversation, he’s like, Well, you know, I actually have an idea, too, that’s a little bit less risky than the medical device thing. Maybe you should consider that. So at the time, it did feel like an outlier. But I could see where it does. It’s not a natural. Nothing that’s happened in the last six years feels that all linear to me, even if I explain it to people. So the other the other big thing that sort of cemented it for me was, and I, by the way, I love my career at Cerner. And I’m still friends with a lot of the people there, like it’s a great company. So there was nothing negative going on. But I was invited to a client event where there were maybe 200 people total, and maybe, you know, three quarters or more clients and a quarter were my teammates, server associates. And it was generally people above me on the org chart. And so people that I’ve worked with for a long time, they had bigger jobs, they were somewhere between me and the CEO, and people I respected. And I was looking around at cocktail hour at all these people, and I’m like, Okay, I know what her job is. And I don’t want that job. And I know what that guy’s job is. And I don’t want that job. And this other guy definitely don’t want his job. And so I kind of got myself thinking like, Okay, well, you know, and they were all like, in line ahead of me to like the biggest jobs at Cerner. And so we just got even a little if I’m, kind of, it felt like I kind of run its course, where it was becoming less and less interesting to move up the corporate ladder in that space. And what was becoming more and more interesting was like stepping off that, that ladder, the corporate treadmill, and really taking a chance on something else. And so in talking about it at length with my wife, and other mentors, and friends, just describing the different opportunities, I could feel myself getting really excited about doing something new and different in my own business. And when I described either continuing at Cerner or going to a competitor, I just didn’t, my heart didn’t, you know, get beating as fast. And so, over that long period of time of thinking and talking about it, and you know, going like really trying to explore the different opportunities, it just became clear that, you know, now’s the time to step off that treadmill and do something. You know, we’re
Jeremy Weisz
talking before we hit record about really, you want to highlight entrepreneurship, you know, and I’m curious, so what did life look like at that time? Married kids? Because, you know, I want to know that decision making process because it would have been easy easier, probably just to stay and do what your do what you’ve done for the past 10 years. So what did life look like at that time when you’re making that decision?
Kevin McArdle
It was it was scary in a lot of ways and safe and some others so it was scary like any entrepreneur knows it’s scary because like, you don’t know if it’s gonna work out. I told some friends and family I was gonna start my own thing and some of them looked at me like I was crazy and that never feels good when people you like and respect that you’re crazy. I we really trimmed back our expenses. Like I sold my car and you know, was mainly a bicycle commuter for two years. I you know, had four kids and a mortgage and you know, didn’t come back those expenses, but
Jeremy Weisz
that’s a tough one.
Kevin McArdle
So So those things were all scary. There were times where like things were going great. There were times where it wasn’t going great. And if I was wondering, like, Am I am I going to have to, you know, go back to my corporate job with my tail between my legs and admit that I did. And there were some ways that it was safe. You know, my wife and I have always lived below our means. And we had, you know, saved up a pretty nice nest egg. I happened to be living in Canada at the time, where I was able to take advantage of the public health care system, which was an expense that I know for a lot of opera entrepreneurs, that is a meaningful blocker in the US for people taking the leap and trying something new. Because, you know, if you’re not employed, you know, health care can be pretty expensive here. And that’s something that I hope I change in my lifetime. In some way. I don’t have the answer. But you know, it’s a shame that, you know, that real expense can keep people from pursuing the dream of starting a company. But, you know, basically, my wife and I talked about it at length did the math and had the spreadsheet and was like, Okay, we got two years of runway, and that’s enough time to figure out, you know, a do I love it as much as I think I’m going to be, is it going to provide for a family the same or better than the corporate career, we want to see is the idea of going to work like you had to be able to figure all those things out. Fortunately, you know, pretty early on, we started checking off with boxes. And
Jeremy Weisz
I guess, worst case scenario, you go back to the gym, if they’ll have you back you back to the position, right?
Kevin McArdle
Yeah. And I did make that sound like it would be embarrassing, sad thing, but I also know, yeah, that would have been terrible, you know, I was leaving a place that I liked working. And I was being recruited by other people that I liked and respected to work at another really great company. those options weren’t gonna evaporate. After two years. And in my opinion, I noticed a shared by other people in corporate America, I probably would have been a more valuable team member, going back to that company, having been an entrepreneur, you know, because you learn different skills, you flex different muscles, he, you know, challenge yourself in different ways. And so, you know, while I wouldn’t have been excited to do that, I knew, you know, if we hit the end of that two year runway, and it didn’t work out, it wasn’t like I was going to be without options for employer.
Jeremy Weisz
So what are your favorite bootstrap companies? And why? What are your favorites?
Kevin McArdle
So I’ll tell you two that come to mind. And I’m not going to list off a bunch because there there are some sort of bootstrap has become a little bit controversial. There are some people that are like, if you ever take money from anybody, you can’t call yourself a bootstrapper. I do not subscribe to that. But there are some very large, you know, relatively well known companies that are, you know, kind of put forward as bootstrap, but they actually did take money in the past. That’s just they don’t highlight that. But to two of my favorites that your listeners may not know of, but they should. The first one is a software company called Wildbit. They’re based in Philadelphia, founded by a husband and wife team, Chris and Natalie a gal, they just celebrated 20 years in business, which just seems like an eternity. For a lot of bootstraps you there’s a relatively small, you know, I want to say they have less than 30 team members, but have created three amazing products. And, you know, have had, I really respected the way that they have built their business which they they’re proudly say his people first, you know, they’ve made a bunch of money for themselves and for their team, but they’ve always focused on their people first. So while this is a good one to check out, and another one I don’t know, the founder as well, but I do know him a little bit, the company is called a Balsamiq. And if any of your listeners are in the tech industry, they are more likely to hurt for about Balsamiq. It’s like a wireframe software like so if you’re designing something, it helps you to kind of sketch it out and envision it really quick and easily, and then use that to kind of evolve your designs. And the founder of that company is a guy named Peldi who lives in Italy. He built his company remote first long before anybody believed that that was possible or a good idea. I want to say he’s been in business now for 12 years and you know, all bootstrapped his own, you know, funded on the revenue from customers. And, you know, just seems universally respected in the circles that I run in and software, CEOs and other tech folks. So those two companies are ones that I just really respect the founders and the way that they’ve built their businesses and might be a little bit below the radar from typical hitless than you
Jeremy Weisz
might think I want to highlight some of the ones in your portfolio also. But um, I also want to mention one of my other favorite interviews with Rob Walling, who runs Micro Conf. And he, you’ve probably I imagine, probably been to his conference. I mean, that’s when I think of who’s bringing these people together as a leader in the space. I immediately think of Rob Walling
Kevin McArdle
for sure. I think he’s one of the and his co-founder of Microconf is a guy named Mike and who’s a little less in the in the public sphere than Rob. But yeah, Rob and I become friends because yes, it’s ended microcosm of shared a lot of common ground, we now live in the same city and our kids actually went to school in the same place for over a year or two. And he definitely is, was one of the earliest people that I stumbled upon. You know, when started SureSwift it was, as you can imagine, like breaking into a whole new industry. I didn’t know anything about anything. So I just started trying to learn and Rob and his podcast and Microconf are some of the early ones that kind of strike a chord like, oh, there’s this whole community of people that are doing things a very different way than what you you read about it in TechCrunch, or The Wall Street Journal.
Jeremy Weisz
At what point do you decide bootstrapped SaaS
Kevin McArdle
isn’t so much a decision as it was a trend? You know, we started acquiring businesses, and the ones that looked the best to us. And from the beginning, the thesis of SureSwift was, let’s acquire profitable, internet based businesses. We’ll stop, there wasn’t like, okay, we’re going to go into FinTech or education or SMB, you know, SAS. But as we started looking at opportunities and making acquisitions, we kept getting drawn to these companies that started to look very similar. And it turned out they were, what what we what we were drawn to is the profitability, and the way that they were built on sustainable methods, not buying traffic, not paying a super expensive sales team that has to close every deal. So it was more it was it was more just like recognizing a pattern. And then going after that pattern a little bit. One dress
Jeremy Weisz
I love that is you look like, you know, because usually patterns emerge, we’re not paying attention to them. So I like how you went back, all of us should be doing that with all of our customers or clients or whatever, and saying, what is the pattern? Who we like working with the most that are the most successful, the most profitable, all those things? And you saw that pattern in that. So what are the criteria? What are you looking for? When you’re so if you’re a SaaS company out there, you’re like, this sounds awesome. I need to check out SureSwift Capital I want to sell, or you know, of someone who has a SaaS company. I’m gonna let Kevin lay out what they’re looking for. So you can see if you kind of fit this criteria,
Kevin McArdle
yeah, to very simply I’ll give you some guardrails. But if somebody you know, is interested, I’m happy to connect, even if they feel like they’re outside the guardrails. So like we say bootstraps, but that’s not a hard, like, if you’ve taken a little bit of money, that’s fine. But again, before we were talking like you taking a bunch of venture capital money, your investors expectation of return is not going to match for we’re going to pay for business, because I, you know, it may have gotten to the realm of unrealistic. So yeah, generally bootstrap. Generally, if you’re making 20 k a month in MRR and off with, you know, no real hop limit, we’re interested, you have to be profitable. But you know, if you’re 20% profits, you know, I’m listening, if you’re 50%, or more, like I’m getting really interested. And beyond that, like Software as a Service, it’s a it’s a big wide net, we purposely don’t hone in on on a single industry, we our tech stack agnostic. So regardless of what code language or what hosting platform you’ve built on, like, you can accept, you know, just about anything. And yeah, in another, you know, I’m happy to hear from people who think they might want to sell or they have a friend who might be willing to sell. But I’m also happy to hear from people that are just like, I’m an entrepreneur, I’m trying to figure stuff out. Can you help? Can you give advice, you know, we have purposely put out a lot of content and marketing materials that are just sort of like, we’ve learned a lot of stuff, let’s try to share some of that knowledge with the world and help other entrepreneurs. But assuming that 99.9% of them will never sell to us, but if it helps them create a better business, then that’s it’s still a good outcome.
Jeremy Weisz
What about what are you looking for in the team?
Kevin McArdle
Well, we talk about founder fit a lot on our team, which seems not intuitive, because the typical structure is we do 100% buyout. So the founder has decided he or she is ready to sell now’s the right time. And we asked them to help us transition the business so we don’t lose any ground, but then they, you know, sell 100% of the company and right off into the sunset or go move on to their next project. So even though we don’t aren’t going to have a formal working relationship, they’re not going to be employed by Sure. So I have learned the hard way that business his take on the personality of their founder, for better and for worse. And so that then the next level down from that, that I learned the hard way is if there’s something about the founder that I don’t like, or the team doesn’t like, or they just seem non trustworthy, we hit the brakes and the deal is off. Because without knowing if I get the sense that somebody is not trustworthy, there’s something wrong with their business, and I just haven’t found it yet. And they’re probably actively trying to hide it from me. So founder fit is important. And it’s sort of this subjective thing. We want to do business with people that we know that we like, and that we feel like we can trust. Because even though there won’t be a formal working relationship, you know, anybody who follows me on twitter knows that I love to celebrate the people that have sold businesses to us long after, you know, the formal contractual, you know, relationship has ended. Beyond that, like an ideal scenario, the founder has added a team, which isn’t always the case we bought from solo founders before. I don’t recommend that for anybody, I think, you know, once you’ve gotten to a certain scale, you should absolutely try to hire to replace the tasks that are less strategic. But not everybody likes that some people just like working alone and being in charge of everything they do. But we really love when a founder has hired a team to sort of replace themselves in the day to day. And we almost always bring that team along, if they’re willing to come with with the business. So we all almost always offer people a job at SureSwift that’s equivalent to or better than the job that they had with the founder. And but you know, we don’t, we don’t need a huge team size. Again, following patterns. Almost every business we bought has been remote, which fits our culture as an organization, because we’ve been remote first from the beginning. But if somebody has an office, like I, especially in the current state, I scratched my head at that a little bit, but it’s not a deal breaker. Um, so yeah, that’s that’s sort of what we look for in a team.
Jeremy Weisz
I mean, Kevin, when I was when I was watching some, you, you speak before you, you talked about different reasons people sell. And it was interesting, because you said, you know, some of these people, they, like you mentioned, they may be solo, or they may have several team members. And you talked about how a developer went in because they liked what they’re doing. They thought it was a cool product. But when you start building the team, you you have a different job. And that’s not what they started the business to do. So I imagine people are growing the team, maybe stop, maybe? I don’t know, do you find that they start enjoying what they’re doing less? Because now they’re doing more management than what they originally started doing? Or is that not a big reason? Why people sell?
Kevin McArdle
Well, I think it’s a factor, I don’t think I don’t think anybody is going to go sell a business because they don’t like managing people. Because if you’ve got a big successful business, you know, profits solve a lot of frustrations, right. And, you know, you can, you can do things to make that easier on yourself, hire people that don’t need a lot of day to day management. You know, that’s a simple one. But so, so there are, you know, looking at trends in our, in our portfolio, there are a lot of founders who have shared, like, they got into the often a side project, they wrote the code, because they, it was a side project, they want to make a little extra cash, and fast forward three, four, or five, seven years, all of a sudden, they’re managing a small team of people, they’re not writing code anymore. They’re dealing with customers, they’re doing partnerships, and it’s just not their ideal thing. That said, I don’t I don’t think that’s necessarily the top reason why people sell but it’s a factor for a lot of people. Because having successful business gives you optionality, you have the option to keep growing that business, you have the option to hire a CEO to replace yourself, and you still own it, but you don’t have to do the work, you have the option to sell the business. And so, you know, depending on the person where they are in their stage of life, what else they’ve got going on, whether they’ve got the next idea, often people have the next business idea that they would rather go work on, or they may be started the next side project that needs their attention. So, you know, if every business is tied to an individual or a couple of individuals who are the founders, like no two people are the same. And so no two stories are the same. But that is a trend that we see a lot like people can grow a business to some level, and they either hit a ceiling to where if you need a different skill set to continue to grow it or in you know, some people can evolve and grow into that skill set. I’ve certainly grown into being a different type of CEO today than it was four or five years ago. Some people aren’t interested in that, you know that a lot of people that we buy from they called they consider themselves makers for creators. And if they’re not creating something new, they feel like they’re not, you know, kind of exercising their their best self. And so, you know, all these things go into sort of the decision process to to sell a business. And you know, but by my point in talking to all that is like, if you’ve never gone through the process, you might think it’s all it’s just about the money, but just about the how big of a check Can I get? And I just like to sort of caution people or remind people that you know, the difference of, you know, 10, or 20% on a check, make like, feel good. But there’s a whole bunch of other factors that go into selling the business, you got to decide, is that the right time for you? What are you going to do next, who is going to take over your, your business or your baby and like, do something great with it and make you proud that you sold to that group? Or that individual? And so, you know, it’s just, it’s not just about like, I want money. So I’m going to sell.
Jeremy Weisz
Kevin, when you look at the next year, do you have a goal as a company, we want to acquire X number of businesses this next year? or What was your focus? Because I mean, you could, you know, focus in and you have a number of amazing portfolio companies. And then you mean, but it is what you do acquiring? What do you what are your thoughts around that growth versus growth outside versus growth inside?
Kevin McArdle
growth, we’re, I like to think we’re a pretty disciplined organization. And some have asked for my server career, like, measure everything, monitor everything, if a metric is not aligned with digging and find out why. And sure you got the right people working on the right things. But this is just the way I was brought up in business. And that applies to SureSwift. So growing, the existing portfolio is absolutely a top priority. acquiring new businesses is absolutely also a top priority. But that is a hard goal to set and to measure against. And I’ll explain why. If we say we want to acquire, you know, $50 million of companies over the next two years, then you can do the math and kind of chop that up into quarters, and you know, what your, your goal for the quarter. And you can know if you’re ahead or behind schedule. And then you can get a little complicated because, okay, you could do two deals for 25 million each, and then you hit 50 million. But you know, those, those are pretty risky. Or you could do five deals for 10 million each, or, you know, 25 deals for two minutes. So, you know, you kind of do that math, but you’re also at the mercy of the market to some degree, right. So like rust acquire business, we have to find a seller who’s willing to sell and for it to be a fit, we’re a fit for them and their business a fit for us. And so it happens where a quarter goes by, and we don’t do any deals, and you have to be okay with that. Because if you’re not okay with that, then you start making mistakes, and you start getting a little too anxious, and you start overlooking problems in a business that you would otherwise just to meet a goal because you made it a somewhat arbitrary goal. And so it’s frustrating to me, because I love setting goals. And I love spreadsheets. And I love seeing the little data points on that spreadsheet lining up with, you know, forecasts meets actual right. But when it comes to acquisitions, you know, I’ve just learned I have to accept that. There may be slow periods where we don’t find a fit, and you have to be okay with that. But then there are also times where like, I think there was a two month period where we were leaving five businesses in two months, which isn’t ideal, but they were all great companies that fit what we were looking for. And so we made it work. And so yeah, we do have internal goals that we talked about with acquisitions, because if we’re not acquiring, we’re not really fulfilling, you know, what we’ve set out to do. But we also have to kind of be okay with things going faster or slower than we expect.
Jeremy Weisz
were some of the mistakes early on, I’m sure I’m sure. Like if anyone goes to your website and go to SureSwiftCapital.com, and there’s a great page that is, you know, lays out the founder journey, right, and you can see, seller does this, we do this seller does this, we do this, I’m sure when you first started, you didn’t have this laid out pretty like this. And also, the entire process takes three to eight weeks, four to six, typical I mean, it’s very, you know, it’s broken down by system. Yeah. Talk about in the beginning. What got you to this, some of the mistakes maybe you may have made,
Kevin McArdle
there was no system that has a lot of trial and error, meaning it was just me trying to figure this stuff out. So I hope through as many prospectuses and deal memos that I could see from brokers, I tried to look for the right patterns and things I like and things I didn’t just try to learn. I tried to talk to as many people as I could, who were in a similar business, I tried to learn from podcasts and other people’s content who were, you know, a few steps ahead of me. The the biggest the biggest lesson learned and all this Jeremy and it’s one that like, I shouldn’t have had to learn it a second time, because I learned this over and over earlier in my career, but people make all the difference. And the reason that there is this very disciplined process, and we’ve gotten very good at finding the right businesses, and very good at making it a good experience for the seller, and making it efficient, but not too fast. And being able to process literally hundreds of opportunities. In any given month or quarter. It’s all because I’ve been able to build a team of amazing people that understand every aspect of the business. You know, we have a team of people that just focuses on acquisitions all the time, got a finance and accounting people who can pour over every detail for technical folks who can bet the tech stack and look for any any risks, or marketing and growth teams can look for risks and opportunities. And I fortunately, this may sounds weird for me to say, but the more removed I am from the details of that process, the better the processes become. Because I’ve got people who are experts in every one of those functions doing better than me looking at that function than I could have possibly done when I was the only person looking at it. So somewhat some of the growth of that team, you require some some profits and some revenue to hire all these senior people. But in terms of like mistakes made, I wish I had invested more in people to help me with acquisitions a lot earlier,
Jeremy Weisz
talking about the evolution of the team. So because it goes from you, and then who are the key hires that you had to bring in first, second third, to actually put these pieces in place.
Kevin McArdle
Yeah, so I mentioned early days, we said we’re going to go acquire profitable internet based businesses. Software wasn’t a requirement at the early days, so and what what I found was there a lot of content websites, you know, websites, they make money through advertising of one form or another, that you’re super profitable, didn’t require a whole lot of time to run them. So when acquired, several of those may say, half a dozen. And whenever the I think I mentioned earlier, when there is a team involved, our default is let’s hire the team assume that they are smart, and talented and hard working until they prove otherwise. But it’s easier to just transition somebody you know who’s paying them, than to find new team members to replace them, if that makes sense. So we’ll make some acquisitions, and then they’re mostly content. So we’ve got all of a sudden, a bunch of team members, contractors, mostly who are writing the content, there are people who are sort of SEO experts, there are people who are sort of design expert experts. So the first person I hired into shirts with that wasn’t tied to a portfolio company was a woman to manage that, that group of people manage the content manage the schedule, so that I didn’t have to think about that so much. As we evolved, then, you know, there’s some other other people along the way, as far as key hires, or as a worker, we’re managing a portfolio, you know, Flash forward a little bit, you know, now we’ve got a dozen separate individual businesses that all have their own hosting needs, and everything’s got, you know, dozens of other technical components, making them work with content or software. And I hired somebody to be vice president of technology, to just manage all of that, because that’s the part of this business that is the biggest black hole for me, I’m not a technical person. Fortunately, I found somebody who’s amazing and he just came in and organized everything for as far as hosting, making sure everything was often live and running optimally. At that point.
Jeremy Weisz
Kevin, were you looking at hitting a revenue number or number of company number before bringing on a senior personally that probably cost more I mean, in general, right.
Kevin McArdle
Um, to be honest, Jeremy, it was more about like, looking at the pains in the business, like both me personally where I was losing sleep, or where I felt like I was failing, and then trying to solve for that pain. And then thinking about like, okay, what’s the right level of expertise and salary that we can afford? But I didn’t, I wasn’t sitting there looking at a spreadsheet saying, okay, as soon as we get to x revenue, then we can hire the person. And so it was more just like constantly evaluating the business and picking where do we need to upgrade the team? Where do we go As a whole, and we’ve gotten a lot more disciplined that that, but any entrepreneur probably tell you like, it’s a mess, especially at the early days, you’re just trying to survive and keep moving forward and keep doing more good things and bad things. And so I would be lying to you, if I told you there was a really like, hot, full scientific process of like how and when to hire people or when to let people go pick when you’re
Jeremy Weisz
losing sleep that night, you should be hiring. So
Kevin McArdle
write that down, make some phone calls, and if
Jeremy Weisz
your stomach is hurting really bad, because you just have this pain. Okay, saying you should hire. It’s time. Yeah. So VP of tech, what was the next key?
Kevin McArdle
Then I started bringing in. So by this time, we’ve acquired a couple of software businesses, and I was, I did not have the time to really manage the day to day of the people running the businesses or the strategy. And so we started hiring, this is a key, you know, sort of evolution of Sure. So it’s having like, proper business people to manage every single comment. And, you know, a lot of especially in the early days, the businesses that we acquired didn’t, didn’t need a GM or a CEO to run them. Certainly, some of our businesses now are big enough that yet we need a proper CEO and management team and manage the p&l and all those things. But earlier, earlier days, we could hire somebody as a product manager, or a general manager that could look after two or three different businesses at once. And as we started adding those people, we saw better results from the portfolio companies, we were able to more smoothly transition them in. And then we just continued to build out all roles really. But as far as like, roles that didn’t come from an acquisition, is those business people managing every single portfolio company and thinking about every day, freed my time up to work on sure swift itself continue to work on acquisitions. And know and trust that somebody really smart, intelligent, and better than I could ever be at running a software company was thinking about each portfolio company every day.
Jeremy Weisz
I’m wondering, Kevin, you know, you mentioned, you know, we all stand on the shoulders of giants people before us and advice you got from a similar type of company, but maybe in a different industry. And you mentioned someone who I think I was listening, it was a pool company or something like that. But does somebody similar to you, but they’re in a different industry? Can you talk about the advice they gave you, and then any other people that have given you advice that do something similar in a different industry?
Kevin McArdle
Yeah, one on one simple piece of advice that I think about almost every week was one of my mentors when I was leaving Cerner. And I explained to him what I was going to do, and he could see like, he and I’d worked together, and now he’s like, I’m convinced this will be successful, I don’t know what’s gonna look like. But you may be doing this if it’s successful the rest of your life. So make sure you are building the company that you want to work at, you know, because we can all look at our past employers and be like, well, this sucked. And I didn’t like this part of the culture. And they should have done this. He’s like, you’re the boss. So if anything sucks, it’s your fault. And you should be thinking about that right now. What is the company that you want to work for in five years and 10 years, and that has really stuck with me. And I’m really thankful that he did give me that advice. I think the person you’re referring to I know, the procedure, frankly, is a guy named Brent Beshore. And he has a similar business to mine, because it’s a portfolio of businesses that he has acquired, is are all in the offline space for a company Glass Company, recruiting firms on nothing to do with technology. So any is just a wonderful person. And he and I hit it off, because we could sort of swap ideas without the risk of it like giving away any sort of secret sauce to a competitor like that. we later found out we did compete on one specific deal, but it was a really weird circumstance, it was after the fact. And the great. So there are a lot of things that I’ve learned from Brent, he’s very generous. As a human. He also puts out just tons of content in terms of podcasts and newsletters and publicize his annual letter to shareholders or to investors. He’s been gracious to give me lots of different pieces of advice along the way, and he’s always like, five years ahead of where I am, so I get to learn from his successes and mistakes.
Jeremy Weisz
Who else in the industry? Kevin, do you follow or have you know really, is a colleague been you know, brainstorming maybe similar. Same thing with Brent like similar their portfolio companies but maybe a different industry than then bootstrap SaaS.
Kevin McArdle
Other than bread like people there are a lot of people that either have portfolio company is a software based businesses and the conversations just don’t go as well, because there’s always this like, you don’t want to share too much. And I don’t expect them to share too much. But another another person who’s become a really great relationship is actually a guy who sold me a business. He’s named Tyler Tringas. And he built a company called Storemapper, built with a remote team removed himself from the day to day and you know, a lot of the patterns that we see of things we like, he fits a lot of those patterns. He’s just like, founder fit, he’s a really good human treats people really well. And I was very transparent and open and honest about his business, like the good things and the flaws. And that’s really, you know, nice when you’re looking to acquire something. And so he sold us a business, we continue to remain friends and talk. He went did a couple other things that didn’t work out. And now he has launched his own fun, where he the tech is called earnest capital to give him and artists to shout out, the tagline is funding for bootstrappers, which is sort of an intentional oxymoron to like, break the notion to be a bootstrapper doesn’t mean you can’t ever take any money. The thesis that Tyler had, which I think was really insightful based on his own experience, and a ton of people that he knew that were bootstrapping, and part of that microcopy community that you mentioned, for a lot of people, it’s a side hustle, or they’re doing consulting work, because the software business that they really love and are passionate about, isn’t paying the bills. And he thought back to his own experience at others. He’s like, well, what if? What if I could just wish I could have just raised $100,000? And I think his or his experience was he put like 50 grand in credit card debt, you know, personally into his own business, which is super scary, and nobody should ever do that. But he thought like, what if I could just get a little bit of money, and then build a profitable business? And so he’s built the whole thesis around earnest capital for that. And it’s been incredibly successful. Yeah, you know, so he and I sort of brainstorm, I asked his advice on what we’re doing at SureSwift my advice, early days before Earnest Capital even had a name or, you know, working documents, shirts with became the first anchor investor in Earnest Capital, because I believed in it, I wanted it to succeed, and I believed in him. And so we talked very frequently, we were just on slack yesterday, kind of, again, catching up, and, you know, helping one another, we’ve since co created a community called Founder Summit, that is a way for to bring people together in a low ego environment to share ideas and help entrepreneurs build better businesses. And so that’s a relationship that never never imagined it would evolve to that space. But just because we get along and, you know, personally, and share a lot of common beliefs about life and business, it’s been a really, you know, outstanding relationship, you know, it’s going on five years. Now,
Jeremy Weisz
that was a great partnership, too. It’s like you, the SaaS companies, he helps them, then they sell to you. It’s it’s a perfect ecosystem.
Kevin McArdle
There you go. It hasn’t happened yet. Or no obligation to sell. But I think I hope it’s a matter of time, you know, he funds a company, it goes really well, the founder has all those options that we talked about, and they they opt to sell t shirts with that would be a huge homerun. Is that when we got into it together, but, um, but yeah, that that would be sort of a dream come true. And
Jeremy Weisz
it’s a natural progression. One of them. So I want you to walk through a little bit in in the last few minutes, we have about one an example from your discussion to actually, you know, buying the company to afterwards and we were talking before about Mailparser
Kevin McArdle
Yeah, that’s good.
Jeremy Weisz
How did you first discover Mailparser
Kevin McArdle
Mailparser I first discovered yo broker, which is rarely the case anymore, because we have more of a brand new people know where to find us if you’re thinking of selling a business, but Mailparser came through a broker, a broker that I’ve worked with before, and it built up some trust with and we, you know, first year just looking at a 20 page document and digging into details. And there were certain things that popped like it was super profitable, had a team in place, you know, low churn, it’s a type of business that it’s for their customers, if everything goes according to plan, you sort of set it and forget it and there’s no reason for the customer to ever think about changing or removing the software. And then you know, I we got I got on the phone with Moritz das injure who’s the gentleman who built the company and just had a great conversation. You know, I I asked him some things about the business and some things about the you know, Do you have the idea in the beginning of typical conversation, just try and learn about the business learn about him. And you know, he’s just a remarkable guy that I really enjoyed talking with. The business was growing really fast. And so what, you know, what we had to figure out was like, what’s the right valuation is part of any, any conversation, but so, you know, fast forward, we agree upon a price. I asked Moritz to help us transition the business, one of the reasons he was selling was, you know, if you look at our portfolio pages, you’ve seen Jeremy, there’s another one that’s called Docparser. And it’s not a coincidence that those have similar names and similar logos, because Moritz built both of them. And so Mailparser was doing really well. And Docparser was like a new idea that wasn’t making as much money, but he wanted to dedicate all this time to that. And so I tried to talk him into selling the both businesses at once. And he said, No, no, no, Kevin McArdle Docparser is going to be worth more someday. And he was right. So anyway, fast forward to the end, we we bought Mailparser. Going back to the team, this is I love this story. Moritz had hired two people to sort of replace him. There was a guy named Joshua, who was doing customer support for him. And there was a guy named Tom who was doing marketing like half time for him, and Moritz was still writing most of the code. So that business I think we bought almost five years ago, I’m an advocate a little bit off. Joshua is still with us today and has grown into an even more senior role as a customer happiness specialist, we use the term customer happiness, because I feel like it sets a higher bar than customer support. And Tom proved to be a very talented guy in terms of growth and marketing and business and being a leader of people. And he’s now on our about page. He’s our Vice President of Product. So he went from the when Moritz sold me to business Tom got a little spooked. So he started getting other clients. And he’s like, Kevin, I’ll work for you like 10 hours a week. And let’s just see how it goes. And now you know, five years later, he’s you know, very trusted member of my leadership team is managing all of the people that manage the portfolio. So that’s that was sort of a dream come true. For me, it was a great result for Moritz otherwise, he wouldn’t have sold the Docparser two years later. And you know, he and I remain friends to this day, is it one of my favorite humans? And
Jeremy Weisz
I’m sure all the process takes a little bit different time, what was the time average time for those two, from when you first discussed, to actually acquiring?
Kevin McArdle
I think the time period for Mailparser was probably from the first time I heard about it. So we had a letter of intent signed, where we knew we had acquired a business that was probably two to three months. Docparser was two years, you know, because I knew he was building the business. He when he when we were chatting about like continued transition of Mailparser. And I would ask his advice, or he, if he saw a competitor, do something he’d be like, hey, look out for this, or, you know, what I’ve just, we built a very great working relationship that went beyond his contractual obligations. And I think we went above and beyond our contractual obligations to every once in a while a checkin and just be like, how’s duck parser going, you know, hey, you know, what do you think you think about selling and, you know, so it was over a long period, and never any pressure, of course, to seek and sell it to anybody who wanted to. But, um, so we talked about it for a while, and because we had a really good experience with Mailparser. But there were some things where he’s like, you know, it might make sense to think a little bit differently for Docparser. And because I knew he wasn’t in a hurry, I was in a hurry, we just let that sort of negotiation process take as long as it needed until we had a deal structure that made sense. And he was ready. So yeah, kind of kind of a weird two months for the first one in two years for the second year. Oh, great results.
Jeremy Weisz
Kevin, first of all, I want to be the first one to thank you. Everyone should check out SureSwiftCapital.com check out SureSwiftCapital.com/portfolio you can see the amazing businesses they have their Docparser Mailparser paid dirt. You know, we didn’t get to talk about Back in Stock, which is a Shopify app that notify user when a product is back in stock e commerce is is hot right now. It probably will be for the foreseeable future. FlyerHeroes, there’s a bunch of other ones Workbase. Check it out. And I want to be the first one to thank you, Kevin. And check out other episodes, check out their website, check out Rise25 and thanks, everyone.
Kevin McArdle
Thanks, Jeremy.
