"Stop building. Start buying." Andrew Pierno on building over 40 products.

Andrew Pierno has built over 40 products. Two were successful and one of them got acquired. He also built a productized service company and an operating company that has purchased eleven products and sold five. Oh, and he has a full-time job too. 🤯

I caught up with him to understand his unique views that come from sitting on both sides of the acquisition table. 👇

Buying vs building

James: You've built products and you've bought products. What do you prefer?

Andrew: I had a lot of ego about starting from scratch when I was younger. Now, though, the money is all green to me.

Buying is a great path to entrepreneurship, who cares if your skill isn’t going from zero to one?

James: So it depends on a person's skill set?

Andrew: Yes, starting vs growing requires distinct skills.

Starting a business involves development, marketing, and a bit of luck. It's about creating a product and attracting the first hundred customers.

Growing is about enhancing systems and processes to acquire the next hundred customers.

Not everyone excels in both building and growing.

James: So who should buy instead of build?

Andrew: Ideal candidates for buying a small SaaS company usually:

• Have a stable job with disposable income
• Possess tech industry experience (for tech businesses)
• Are skilled in project or product management

James: Sounds like a lot of indie hackers would be ideal candidates.

Andrew: I see plenty of indie hackers bashing their heads against the wall trying to go from zero to one, or they quit their jobs when their product starts making $1k MRR and then get stuck. It's rough.

So yeah, I think more indie hackers should consider buying a business instead of building one from scratch. There's no need to prove your ability to start from scratch.

If you're proficient at scaling, focus on acquiring and growing an existing business. After all, the end goal is profitability.

James: Would you say it increases risk?

Andrew: Actually, in the current economic climate, I believe reinvesting my gains into buying new businesses with XO (my operating company) is the best capital allocation. To date, we've acquired 11 companies and successfully sold 5.

In fact, I think in 2024, we will see a lot more businesses have to fold because they didn’t reach venture scale in time, and I want to have cash ready to be able to capitalize on that.

James: So indie hackers should squirrel away some money now. You've built a few businesses from scratch, though, right?

Andrew: It took me over 40 SaaS products and 10 years to make even $1 online. I can’t overstate how much I sucked at this even a year ago. So my hit rate is basically zero on my own stuff

Starting from scratch is either just an absolute grind or like trying to catch lightning in a bottle. And getting traction is a bear. But I eventually built Cold Email Studio ($18k MRR), Super Send ($6k MRR), and also started XO.

James: Did those successes make you feel confident buying products?

Andrew: Really, I wasn’t that confident, which is why we started with such small acquisitions.

The first business we ever bought was doing about $550 MRR for $23.5k split between 3 people so just over $7k each. Then, we very linearly increased the size of the businesses we bought.

I'll never forget getting the first stripe notifications about new customers the day after we bought it. That was addictive, given how long I'd struggled to get even a single customer of my own.

Become competitive by stacking experience

James: You mentioned where indie hackers need to excel in order to buy. Where do you excel?

Andrew: I'm a software developer and have been doing computer vision and machine learning related products for 7 or 8 years now. So writing code is my core competency.

More specifically, I'm good at turning "lab" grade research projects into products.

I enjoy building and, unexpectedly, selling too. Marketing still presents a learning curve for me.

James: Solid skillset.

Andrew: A lot of people can do that. Fewer can communicate technical things effectively to non-technical people. Soft skills have been a big help in my career so far.

Niching down even more, there are even fewer product people who are technical experts who also have done over 10 M&A (merger and acquisition) transactions end to end. And even fewer who have an exit under their belt as an entrepreneur.

The point is, I've simply kept stacking experience until the application of that experience has a really, really small number of people that I actually compete with on an individual level.

James: Are you talking about competition as a founder or as an employee?

Andrew: Everything is a competition. Being an employee is no different. You are an asset to a company with a unique set of skills. The more unique and specialized, generally, the better. Startups typically hire generalists, but larger companies typically pay more for experts.

And in my businesses, we’re always competing on deals, trying to convince investors, trying to convince customers. It’s all a battle!

Reinvest everything (and keep your day job)

James: Speaking of which, being an employee when your businesses are doing so well is an interesting choice.

Andrew: All my side hustles together should hit 7 figures in revenue (total, not profit) next year, but I’ve actively chosen to hire people and pay them a salary over taking the salary myself.

James: I imagine that's why your portfolio is skyrocketing.

Andrew: Yeah. But I think I would have made just as much money going to work for a big tech company and saved myself a lot of sleepless nights, worry, and stress.

James: Why not do that then?

Andrew: Mostly because I think my life is more interesting doing what I’m doing. The road is still pretty long and there’s plenty of time to have more outsized returns than I would at Google, for example.

I’m in a place now where I love the teams, companies, and work that I do. I feel fulfilled. At some point, you just have to pick a lane and stick with it.

Become a savage multi-tasker

James: That "lane" includes getting your MBA too.

Andrew: Obviously, I personally ignore the "do one thing" type of advice. I do multiple things.

James: How do you do it all?

Andrew: I’m not sure.

I have to start by saying I love this stuff. Like, I obsessively love building stuff, reading about businesses, finding new businesses, trying new tools, learning, growing, etc. So it’s not work for me, it’s often play.

That being said, I work 12ish hours per day, usually, and do a ton of shit on the weekends. I get up at 5-6 AM every day and grind for 3 ish hours before the day job starts. School is Tuesday and Thursday nights. I play a lot of pickleball most other nights and weekends.

James: Sounds like a skillset in itself.

Andrew: I’m a savage multi-tasker.

James: So it's easy for you?

Andrew: It’s definitely a lot of balls in the air. I drop things. I don’t respond to things. I miss things. I say no to 99% of “can we chat” messages (some of which I’m sure would be with awesome people). I don’t read more than 2 sentences of an email. I’m not advocating for this kind of schedule but I’ve been doing it for years and am kind of in the groove with it.

And I don’t run 3 businesses, the CEOs do — I’ve chosen to start things, find awesome co-founders, and then they run the business. And I trust them 100%.

James: How did you find cofounders that you trust so much?

Andrew: Henry and I met in a random slack group. Danny and I met on Indie Hackers about a year before he joined XO and we just hit it off and stayed in touch. I found Mikey through Indie Hackers too.

James: Easy as that?

Andrew: I actually had a really hard time letting Mikey take over CES in the beginning. I was stepping on his toes and getting in the way. So it was a rough first few months for sure (my fault), but we hung in there together and have been great partners ever since.

I learned how to get the hell out of the way, and just let my CEOs run the companies how they wanted to.

Validate your ideas

James: You seem to be an idea person. How do you decide what to work on?

Andrew: I have an experiment table in Notion that I use to keep track of conversion rates when launching a new product.

I don’t necessarily believe that the highest conversion rate is always a winner. Sometimes a market segment is really open to trying new tools but they don’t pay. Other times a market hates trying new things but when they do, they stay for a long time.

James: Do you run experiments often?

I’m running experiments all the time. Here’s 10 just from 2023 that I built myself. These are built-from-scratch experiments). Super Send started in 2022. That one took me ~7 months to build before it was actually usable. Really only Super Send worked. Everything else was a flop.

After a month or two of pushing, doing a Product Hunt launch, hustling on Twitter, if I can’t get traction (i.e. paying customers), I kill the project.

11 successful acquisitions; 0 duds

James: All of XO's projects have been successful — not a single dud?

Andrew: Not yet! We will have some though. We're going to do a bad deal and lose money. We just need to make sure that any individual failure doesn't put the whole business in danger.

James: That's pretty incredible.

Andrew: We do make mistakes. We have failed ad campaigns, failed marketing experiments. In fact, most growth experiments fail. Many absolutely, irredeemably fail. We sometimes don't even learn anything because it was conducted so poorly.

And remember, it took me over 40 SaaS products and 10 years to make $1 online.

James: How have the acquisitions all been so successful?

Andrew: I think we've gotten lucky so far.

That being said, we've bought stuff that already had a growth rate and just kept at it for years.

James: Makes sense. So what was "luck"?

Andrew: Before 2022/2023 we were in the zero interest rate environment that bred laziness. Business was hands down easier back then. The next few years will be harder to continue posting great numbers like we have been.

James: So what will you do?

Andrew: The more we can buy mission-critical products, the better our odds are of thriving in a downturn. People churn out of unnecessary software when the economy goes south.

Distribution and mission-critical products

James: What are the criteria for "mission critical" products?

Andrew: This question: Would the business cease to operate and/or be materially hindered if the product was offline?

James: So it's about the idea?

Andrew: Sort of. It's certainly about the expression of the idea in product form. When we buy something, we know the special combination of timing, message, and market is working.

James: Anything else?

Andrew: The longer we play this game, the more I realize just how important distribution is. I spend a lot of time at the moment thinking about distribution and what are some assets we could acquire or create to get better distribution.

What I'm aiming for is some totally unique advantage such that any acquisition XO makes is inherently more valuable just because we bought it. I don't know exactly what that looks like yet but I think we can get close to a good answer if we keep going for the next 20-30 years.

James: What else have you learned about distribution?

Andrew: I'm a firm believer that you can take a single channel and, with the right strategy, use it to generate 7 figures in revenue for a product.

We're big on testing each channel thoroughly. It’s a bit challenging to do and we have plenty of room to improve, but it's about finding what works best for each product and then doubling down.

James: Doubling down on one channel?

Andrew: It's not about spreading ourselves thin over multiple channels; it's about mastering one. Whether it's content marketing, paid ads, or partnerships, we test, analyze the data, then go all-in where we see the most traction, and stick to it for 100 days

How to get acquired

James: You've been on both sides of the table with acquisitions. Any tips for indie hackers looking to get acquired?

Andrew: I don’t think building to get acquired is that helpful to think about. It’s mostly about building the best business you can. When you’re tired or want to move on or want a change of pace, list it on acquire.com and see what happens.

But generally, we don’t like lifetime deals. Those customers are liabilities for us.

Lots of indie hackers think they can just build a crap product, do an App Sumo launch, and then sell the project for like $100k. That might be possible but isn’t advisable.

James: Do you need a certain level of traction?

Andrew: It’s much easier to get acquired these days. Some groups will buy finished products with no customers for ~$10k. Maybe that’s your niche.

Some groups will buy products doing like $1k of MRR or even below (like we used to). Maybe that’s your niche.

James: What do you look for with XO?

Andrew: These are our current deal parameters:

• $10k to $40k MRR
• B2B SaaS
• 80%+ Gross Margins
• 50+ customers
• Product Led Growth (i.e. freemium, free trials)
• Limited platform risk

James: Where can people find you?

Andrew: I document everything I’ve been learning on the XO blog and there are basically play-by-plays of the past 3 years, starting with a crappy mission statement in March of 2021!

You can also find me on Linkedin and X.

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