How I bootstrapped MicroAcquire from $0-630k to ARR within 12-months. AMA.
Hey everyone!
This is a follow up from my last AMA, company has grown over 400% since my last AMA.
I’m Andrew Gazdecki and I’ve been an entrepreneur for longer than I can remember. I like to build stuff, mostly companies, and try to tell a story that goes beyond what the company does to how it’s changing markets. Really like to talk about all things SaaS, specifically growth strategy.
What am I working on?
A startup acquisition marketplace called MicroAcquire helping bootstrapped entrepreneurs meet potential buyers without any commissions or fees.
Our purpose is to help entrepreneurs succeed. Our mission is to build the world’s most founder-friendly startup acquisition marketplace. Our vision is to bring the entire startup acquisition market together with trust, transparency, innovation, efficiency, simplicity, and ease of use.
MicroAcquire today is currently...
- $630,000 in ARR
- Growing 20% MoM,
- 300+ successful acquisitions
- 1000+ startups listed (mainly SaaS and eCommerce)
- $100,000,000+ in closed deal volume
- $350,000,000+ total combined revenue of startups listed
- 70,000 registered users
- Average deal size is ~$500,000
- Recent press
- Recent podcast where I discuss the future of MicroAcquire
- Free startup acquisition course
Also, recently $2.8m in venture capital from Jeremy Levine at Bessemer Venture Partners, Naval Ravikant, and Andreas Klinger. Happy to talk through that decision and why I decided not to continue bootstrapping.
Before MicroAcquire, I bootstrapped another SaaS startup called Bizness Apps to over $10 million in ARR and exited to a private equity firm in 2018.
Hoping to help fellow bootstrappers with any questions about building and scaling SaaS startups on a budget... marketing, sales, branding, positioning, pricing, hiring, etc throw it at me!
I'll either have a good answer or a mistake I've made for you to avoid. :)
AMA!
After 19,314 lines of code, i'm shutting down my project
Need feedback for my product.
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@MicroAcquire, I'm interested in how much of an impact platforms like ProductHunt and Betalist have had on MicroAcquire early on? I see your promoted post on ProductHunt from time to time :D
Good question. At first the ad placements were great but overtime the performance goes down due to audience saturation.
Thanks for the insight!
How are you planning to tackle the problem of sellers over-valuing their projects?
We're building a few data driven valuation tools to help, one specifically will give a valuation range based on your revenue metrics. For example you connect Stripe, enter expenses, and we give a valuation range based on growth / churn / revenue etc compared to other startups that have sold on the marketplace.
We've also released a lot of material educating founders on how to properly value their startup. See here for example: https://www.youtube.com/watch?v=3rzHHBwB_wU&list=PLO30Q8WzVLKNAtUHELW4mVikad_K7UF4G&index=2
Love that. Another idea would be to allow buyers to leave feedback on the listing.
So if xx% of people who check the listing say that valuation is crazy high then Micro Acquire sends the seller a notification that they should adjust their pricing.
Not sure how hard this would be to implement but this will be a win-win-win situation for all parties involved.
That's such great feedback, thank you! We're actually working on a rating and feedback system now for both buyers & sellers. Stay tuned! We're thinking big!
How much $ did you spend to achieve $630,000 in ARR?
And how is it split between paying developers and marketing?
Good question. I'd say probably $500,000 but most of that was from customer revenue. My initial investment to start MicroAcquire was probably ~$100,000.
Wow. $500k is quite an investment (obviously it was a good one). Salaries mainly?
Mainly development and spread over a year.
Ok, I'll bite. What made you to decide to stop bootsrapping and take funding ?
My personal ambition and the opportunity to help 1000s of entrepreneurs. I've already sold a couple companies so looking to swing bigger this time.
can you please help us by diving a bit deep into why you stooped bootstrapping. I am asking this because I want to understand your thought process behind this.
Just following my plan...
First company - start something to pay your bills, like a cash flowing agency (done)
Second company - build a company you can sell to make you financially secure, like a profitable SaaS company (done)
Third company - swing for the fences & disrupt a market, like Microsoft or
MicroAcquire (current)
Hey @MicroAcquire thanks for the post!
Question 1: How did you solve the supply-demand problem of the marketplaces? Did you start building the supply first (startups to be sold) before bring in buyers?
Question 2: What is your ideal customer profile?
Cold calling and cold emailing
Bootstrapped startups
Hey Andrew👋
Big fan🤓
Silly question but I was wondering how and where did you get your first few users?
Direct outreach - cold calling & cold emailing.
and they say cold emailing is dead!
Is there market for selling a “built app” that you’ve not actually done anything with but could easily form the basis of a business if someone wanted?
I specifically have an app that I’ll never release as I’m just not interested in the market anymore and its not a business model I want to run.
It’s literally an app review and release away from being in people’s hands I just don’t want to be the one to do it - I’ve sunk about 300 hours into it and would love to see someone make a go of it.
Sounds like a good fit for Flippa.
MicroAcquire focuses mainly on revenue generating SaaS & eCommerce.
Good shout, I’d forgotten about flippa
My pleasure!
Hey Andrew! My questions are:
Your numbers are impressive. Thanks for your help and keep on crushing it!
Very specific - startups, specifically bootstrapped ones. The more specific you can be with your customers in the early days the better.
Content, lots of it.
Write down your goals and review them monthly.
What about the mistakes you learned the most from?
Hire help on customer support sooner.
How did you get press articles? More specifically, how was the most recent one achieved?
Pretty simple, reached out with a good story. Read this book here, it's my favorite book on PR strategy written by a former TC writer: https://www.amazon.com/Burned-Out-Bloggers-Guide-PR-ebook/dp/B00NFAT238
Hi Andrew,
Could you please let me know how the buying and selling actually happens? Like do the buyers just discover a company on your platform and reach out to them on their email or does it all happens on the platform itself?
I know this AMA is no longer active but I'd really appreciate your response to this question.
Thanks
Hammad Nasir
Sure thing! Check out this tutorial video here to learn how MicroAcquire works for both buyers and sellers: https://youtu.be/NJWtUr7fqr0
Thanks a lot for answering that, Andrew! So the actual transaction happens outside of the platform, right?
Also, how do you handle any disputes which might happen once the deal is done on your platform?
Thanks again for your time!
My pleasure!
Yes all transactions take place outside of the platform.
MicroAcquire simply connects buyers & sellers together but we do our best to review every listing to ensure our marketplace is of high quality. When a dispute arises we are here to help but proper due diligence and closing the acquisition is the responsibility of the buyer & seller.
Got it. Thanks again for taking time to answer!
Hey @MicroAcquire, with Flippa and other established players in the space, how did you convince yourself that there was still room for a new product? Elsewhere you've said that existing stuff lacked innovation, but I'd love for you to elaborate. Like, what specifically did you see as the competitive wedges into the market that MicroAcquire could implement to gain traction?
I looked at the market and just thought... a global M&A marketplace needs to exist for entrepreneurs and we're building it. Zillow for acquisitions coming up!
Great success!
Promoting on betalist ("be featured") is interesting (in terms of ROI), or it's more for the branding ?
Candidly, I just really love Marc and Betalist so am a huge supporter. Big fan of anything that helps startups get discovered.
@MicroAcquire what was your second best (in terms of ROI) early acquistion channel after cold calling / emailing?
I'd say partnerships - lots of referrals.
Hi, sorry if it's asked already (big comment thread now), how did you land on your current business model vs the typical commission based model? Was there specific reasoning behind it?
I actually just made it up one day because sellers were get 100s of requests from buyers. So the idea was to help reduce those down to more serious buyers and generate some "seed capital" in a sense, and it worked.
Ok smart. The yearly fee is like...$200 if I recall?
I like it and think you should retain it, but have you considered that for those targeting the lower share of your market (e.g. <£10k ARR businesses) $200+ is a moderately significant amount if you're not sure you'll find a suitable transaction? It's a non-consideration to the people trying to build Tiny Capital copycats though.
There's also something psychologically frustrating about paying for "1 years access" if you only intend to close 1 deal, even if $200 is a reasonable price for that 😅 feels like buying unlimited refills when you only want a can of coke.
The addition of a system like 'pay to contact seller, only charged if the seller provides a response' could be a nice addition to cater to this, whilst semi-verifying serious buys and can generate a little extra revenue!
Suppose you probably also wanna come up with systems to get more from the small-cap PE people who are undoubtedly getting MUCH more than $200 in benefit!
What a coincidence! Just listened to your podcast on Owned & Operated 10 hours ago & now I see this. Pod answered lots of questions so I just have 1 about numbers. Since you are open about your numbers, I'll ask sold startups number.
What's the lowest & highest startup sold on MicroAcquire? Real numbers, not 6-figure, 7-figure exit, after all this is an AMA ;)
Great questions. To my knowledge the smallest was $5k and the largest was $5,000,000 with 80% upfront 20% earn out.
Thank you. I bet we will see $100m exit by the next year. Tbh didn't think this was a unicorn in the making but now I can certainly see it :)
Thanks man I really appreciate your support! :)
Did you build the site from scratch or did you hire a dev team? and if it was a dev team where'd you find them lol Site looks clean.
Thanks! I hired a development team I had previously worked with
Glad to see here ppl I'm following on Twitter 🧡 Love the story so far, can't wait to be there for the rest of the journey - congrats Andrew
Q1: Did you expect MicroAcquire to be here in the 1st year?
Q2: What's been the best acquisition channel for u guys?
Thanks so much! Appreciate your support!
Candidly no, most startups fail and I knew that going into MicroAcquire but I still felt compelled to build something I felt needed to exist.
Referrals
Major congrats Andrew! Great to see you posting on here :)
Thanks Joel! Appreciate you!
I wonder: does it make any sense to try and sell a product that is not yet on the market but for which the concept has been validated and ~90% matching market demand?
Absolutely! Talk to customers about the problem you're looking to solve and see if they'd pay in advance. I love that strategy.
Thanks @MicroAcquire.
Long story short, my co-founders and I worked relentlessly throughout Covid, but had to stop because we were too slow (made mistakes along the way), and ended up running out of cash to keep going.
Ah that's rough. Sorry to hear that.
Check this out: https://www.ted.com/talks/bill_gross_the_single_biggest_reason_why_start_ups_succeed?language=en
"The single biggest reason why start-ups succeed is market timing."
Thanks!
Let's say that I've learned quite a few things about myself and about what to avoid in the future ;-)
Glad to hear it! :)
Hey Andrew, big fan of your Linkedin posts. They're concise, deliver value and not like the other posts which are 200 lines, spaced out like mad.
There's no lack of evidence on the growing number of indie founders who find your journey to be insightful and your advice actually actionable. As I have your email address, could I send you an email asking you a specific question about this space?
Thanks so much for the kind words!
Yes, feel free! Happy to help!
You're very kind, @MicroAcquire.
I'll email you tonight, cheers.
Andrew, you're an inspiration! What distribution tactics worked out very well for you in MicroAcquire's early stage (from 0 users to first 1000 users)
Cold calling and cold emailing. :)
One more wow. What was your rough conversion rate?
I didn't track it but it was high.
Hey Andrew, congratulations. How can I achieve offering free service to get the numbers and how do I transition to paid service without increasing churn rate?
Patience and focus.
Really appreciate you doing this, I have so! many questions, but let's keep it easy :)
When did you know that MicroAcquire would stick? Did it take some trial&error between your last exit and now where you tried out different ideas, or was this something you knew had potential from the start?
Compared to your competitors, you are doing an awesome job keeping MicroAcquire ever-present. It's not 'just' an acquisition marketplace. What's your secret? :P
Which side of the marketplace do you focus more on? Why?
Honestly I didn't think it would work, but I believed it should exist for startups & entrepreneurs should I made it. Other options to get acquired lacked innovation.
Being passionate about the problem I'm solving. I truly truly enjoy running MicroAcquire more than I can put into words.
Both sides are important but we're building MicroAcquire for startups, not buyers. Every decision we make is in favor of helping entrepreneurs exit successfully.
This is so cool, thanks! I've heard about you through the my first million podcast. I have a paid community for women building cpg/ecomm brands (we're mostly known for my popular podcast Female Startup Club that ranks as a top 100 for Entrepreneurship). What were you doing to drive subscribers at scale in the very early days?
And can I ask a question not related to your growth? Would anyone in your team be open to sharing some insights and learnings to keep in mind when selling a small business? (paid of course).
Many thanks,
Doone
Sure ask away! This is an AMA! As for how to drive subscriptions, I actually ran MicroAcquire for about a year entirely free so when it came time to release a premium plan there were customers waiting.
Nice. I've done the same (we just launched our paid network after a year of building community to an audience who told us what they wanted / were ready to sign up). What worked well when you started widening the net outside your community? We've never run paid ads and grown totally organically / launched the paid network to that audience but now I'm looking the next best steps/blueprint.
This was the second question: Would anyone in your team be open to sharing some insights and learnings to keep in mind when selling a small business? (paid of course).
My best advice is TALK to customers. In the early days you don't want to focus on paid ads in my opinion.
You want to hear first hand from potential customers for feedback. See here: https://www.saastr.com/planning-to-do-a-saas-start-up-dont-forget-the-20-interview-rule/
As for how to sell a business, we have a ton of free resources available. Check out our free acquisition course here: https://www.youtube.com/watch?v=V-EoHQHit-k&list=PLO30Q8WzVLKNAtUHELW4mVikad_K7UF4G
Then we also have a collection of free SaaS acquisition eBooks available to download as well: https://microacquire.gumroad.com/l/SaaS-acquisition-eBooks
This got me! So, should I say that was intentional to get deep usage into the platform that charging a premium easy selling?
Am building a talent recruitment platform that runs on subscription model, how can I achieve offering free service to get the numbers and how do I transition to paid service without increasing churn rate?
Talk to your customers, they'd know more than me. It's easy to get advice from other entrepreneurs but your customers are the ones to ask.
Have you ever helped a two-sided market get acquired?
Sure have! :)
What are your most effective strategies for acquiring customer?
With this app you really have two types of customers. People looking to sell and people looking to buy. How did you plan on finding people for both?
Hustle - there's no silver bullet answer. Put in the work.
Hi Andrew! Been recently following your interviews with founders and they are quite insightful. At the end of every interview, you ask them to suggest their best read book. Could you suggest a few of the best books you have read on your journey so far from the start?
Hey Andrew, what differences in outcomes have you seen on average for solopreneurs (no team) vs teams?
I always loved this quote...
"If you want to go fast, go alone; if you want to go far, go together"
With a team you can execute so much faster. There's no comparison.
Doesnt your claim contradict your quote?
Sorta. I went solo to start, went fast. Now I want to go far, so I'm going together with an talented team.
Hey Andrew, congrats and thanks for the offer to share some wisdom.
Q1: did you always go big even in your earlier businesses or did you start out small to build confidence/skills?
Q2: which components of the biz did you contract out for MicroAquire (if any)?
Q3: with other similar biz existing prior to MicroAquire, was it a simple belief/knowledge that you could do better so you went for it?
-thanks!
Sure did! I always set big goals for myself and I think others should too.
Mostly development, rest was mainly me.
I'd say my tolerance for risk, uncertainty, and work ethic are my biggest strengths. These are key ingredients for successful startups.
Hey Andrew! Much love for you and MicroAcquire, as usual :) I solve my own SaaS on the platform in earlier days (back in September/October I think).
I have a question more about what you've seen on the platform than one about how you grew the business...
Is it more beneficial to list with a specific price? Or better to do an "open to offers?" I'd assume a specific price is easier to deal with for buyers, as long as it isn't ludicrous. But wanted to hear more!
Also, do you have any content based on your data you've collected? As in... What price point sells fastest? Average time to acquisition on the platform? And other data comps like MRR <> offer price, etc?
Love it all, Andrew! Looking forward to more from MA! 🤏🚀🤘
It really depends on the startup but I made an entire course here that goes over questions like this: https://www.youtube.com/playlist?list=PLO30Q8WzVLKNAtUHELW4mVikad_K7UF4G
Feedback from buyers though is most skip over "open to offers" because they're unsure if your valuation is fair or just way too high. I recommend stating an asking price if possible.
Hey Andrew. Love Microacquire, hope someday I'll do a big acquisition or sale on it!
I read in the IH newsletter that you were planning some new stuff in terms of features for the next few months. Could you be a give a couple examples or is it too soon?
Absolutely! So we're going to be laying on a lot of 3rd party services to help entrepreneurs get acquired such as...
We have some big plans but our goals it to build the Zillow of M&A.
That's great! Aside from hiring councel and extra help, will the rest still be only financed by buyer subscriptions? Or are you planning on releasing a "premium" version for sellers?
So the 3rd party services will be free to start but overtime we'll roll out a paid version once we really nail it.
We're planning to nail it then scale it. :)
Also, it will ALWAYS be free to sell your startup on MicroAcquire.
Hi Andrew, congrats on everything and best of luck for the future! Here's my question:
How did you tackle the chicken and egg problem for such a marketplace in the early days?
Thanks!
Short answer, tons of hustle. Lots of phone calls, lots of emails. It's so important in the early days to SPEAK to customers, listen to them, and implement their feedback.
Congrats on your success! And thanks for doing this.
Mu question would be: what acquisition channels and scaling strategies would you recommend to an early-stage bootstrapped B2B SaaS (a tool for B2C businesses)? The monthly price isn’t high, and we are trying to figure out what our main channels will be.
Thanks!
This comment was deleted 3 years ago.
It really really depends on the quality of the company but we try to only list ones where we can see a large group of buyers being interested. Here's some things startups can do to increase their chances of finding a buyer and attracting more offers: https://www.youtube.com/watch?v=h99qVmZhFJ8&list=PLO30Q8WzVLKNAtUHELW4mVikad_K7UF4G&index=7