Acquisition #11 - (aka Don't Stop Believing)

Acquisition #11 - (aka Don't Stop Believing)
XO Capital Acquires

Spotify Amazon Apple

Lots of journey puns so sorry in advance.

A little over a year ago I tried to raise a discretionary capital fund by putting all our assets into 1 company and selling shares of that company ... nobody wanted in

Failure To Raise
At the beginning of the month we decided to go out and try to raise $1M in equity into XO Capital. We failed. I’m being a little flippant. I pulled our fundraise. The truth is I just didn’t get the terms I expected, and we made a conscious decision to

Which is really too bad because we 10x-ed 1 and 8x-ed another company. Would have been a good investment!

Then a few months ago we decided on a different model I called the Flip Fund:

Flip Fund® Logs Pt 1
💡This post is not a solicitation for investment, but a documentation of our journey raising a fund. Not enough content is out there around tactically how to do this. Hopefully I can change that just a little. Watch: Listen: Spotify Amazon Apple Because I’m a glutton for punishment, about a

The idea is simple:

  • buy a biz
  • try to double it
  • sell in 12-24 months

Investors really liked the idea of a 12-24 month "fund" horizon. (I know it's not a fund, it's more like a fundless sponsor, we stole this concept from real estate folks).

In about 3 weeks we soft circled $650k mostly from the lovely folks that read this. And shortly there after we actually closed a little over $500k from 11 people and put in $50k ish ourselves for a total of $550k. Awesome! For those of you wondering like i did how tf you raise $ in a few weeks ... well the answer for me was write a blog for 3 years weekly, sharing in public, and have a great track record. That would not have been the answer i wanted to hear either 3 years ago but proud we've carried on this long!

It took us about 2 months to find the right deal for the fund. I absolutely did not want to buy something just to buy it. We were looking at a deal that I didn't really want to do. Financially I think it would be okay but it just didn't fit the story we're trying to tell nor did it operationally feel like a good fit ... That's right when journey .io showed up at our doorstep! (YC W21)

Journey's site describes itself as a storytelling product. That might be true but really it's a sales tool. I don't think that demeans it in any way. So yes, our first growth opportunity is tackling a potential positioning problem ... I haven't met a sales person that goes around and says they're not a salesperson but a "storyteller" (and I live in LA where everyone is a storyteller lol).

So it's a sales tool that let's you create a one-pager for a customer. You can embed tons of stuff like a notion page, or todo lists to help coordinate a deal. It's a different kind of personalization at scale.

/0:07 sales personalization at scale

There are a couple of features about this business I love:

  • It's f*#$%ing beautiful. Founding team spent $1.5M getting Journey where it is today and it shows.
  • Customers LOVE it.
  • Retention is damn good.
  • Organic growth is okay
  • Almost no push made so far to monetize

There are a few other features I like about this space:

  • While PLG is taking over, at a certain point larger customers with multiple stakeholders need hand holding to close a deal. I don't care if you're PLG, if you get a big prospect, you treat them like royalty and Journey is a great way to make sure a customer feels taken care of and more importantly you can provide a resource to help them go sell the tool internally.
  • Yes people more and more want self service, however larger deals are always going to require some human touch, that's just how larger ticket items are still sold. I don't think that changes anytime soon. Are there exceptions? Of course, but journey is selling to the middle of the bell curve.

The business is currently doing about $18k of MRR and we see a path to doubling it in the next 22 months. It's going to be a grind. I doubt in this environment we will see any easy wins but we're going to use our playbook and start experimenting as soon as possible.

Looking forward to Journey's journey!