I'm going to break down how we more than 10x-ed ScreenshotAPI and why this acquisition worked when others didn't. Not everything here is generalizable, but I'll pull out what worked well from our first interactions with the seller to the deal closing a few weeks ago. Sticky Product: Developer tools
Before we jump in, I was on a pod talking through content, acquisitions, etc: This exit is bitter sweet. Screenshot was our first ever acquisition. We 10x-ed it, and it is really the reason XO exists today. If this first acquisition hadn't gone well, I think I would have given
We've been a little quiet over here as we start rolling out XO 2.0, using outside capital instead of our own cash to acquire larger businesses. It's taken a bit of time from deal #11 to #12. We didn't buy anything for 9 months. These periods of inactivity are
As part of UCLA's MBA program, I've had the opportunity to sit in on some VC pitches. It's been a while since I've stepped back and looked at the broader startup ecosystem. My head has been in the micro saas space for a bit too long. I don't believe engineering
XO V1 concluded with 10 acquisitions and 1 "fund". The V1 "conclusion" is really a line in the sand but it feels right as we continue to offload assets to focus on larger deals using outside capital. This will transition us into v2 which we're still modeling out. Last week
I spoke with an entrepreneur recently who, after 5 years of running a successful and growing business, said "After 5 years I finally know the real business we're in.". It means they outwardly do X but on the inside the hard part is Y. As an example: Let's say you
💡We've finally rolled out a small community of folks interested in acquiring saas businesses. The first few weeks of it have been a delight. It's the highlight of my week chatting with other people interested in this space. Join us! https://notes.xo.capital/community/ We've decided to consolidate our
I've been debating / delaying this moment for 3 years. They say to build a business these days, one smart way to do it is build a community first. We do have a community. It's on discord. It's been useless for all but the past month or so. A few weeks
This week Danny jumped on a live Twitter Spaces with me. We talked about: * When to "quit" * XO community, courses, * Motivations for picking a startup idea * Decision making differences between short holds and longer holds.
💡Side note. To build our community up a bit, we're putting a cohort together to help 5 people buy their first saas company. If this one is successful and we can add some value, we'll do another one! Jump in our discord to stay informed!Reach Out On Discord We
A couple of people have asked about deal structures so here are a few we commonly use for buying micro saas companies. All Cash Pretty straight forward. You do all cash. Usually it's 100% into escrow.com and release maybe 50% before asset transfer and 50% after asset transfer complete
Couple of announcements: We've got some fresh cheddar! We just got access to up to $2M to deploy. We're looking for 1-2 businesses: * b2b saas * $30k+ MRR This is about 2x what we've already deployed so far which is a big deal. We will still of course be operating our
2023 was a tough year for us. A pure grind. What worked: * The business model * Our Team * Raising $ + deploying it What didn't work: * Growth was tough * We got bit by platform risk * Too many small portfolio companies is death by a thousand cuts We have two relatively passive companies. Well
2023 was a tough year. It started out with a bang (high expectations, everything going right) and ended with a whimper for us. The zero interest rate environment really came down hard on a few products like Cold Email Studio and now that the AI craze is cooling off, we're
Nov 2023 We set an ambitious Monthly Recurring Revenue (MRR) goal of $41,398.78 but concluded the month with an MRR of $36,446.85. Key highlights include the utilization of our first full month of Google Cloud Credits and team adjustments, notably the departure of a developer. Our
Check out my most recent guest appearance: By the way, Shiv has this podcast thing down. His background was so good looking, the whole thing was super buttoned up, and he even sent an amazon gift card after. #podcastgoals I also did an interview on Indie Hackers you can check
Happy Turkey Day! 🦃 Hope you all have taken some time off and gotten a bit of rest. Journey is XO's 11th acquisition. Let's take a look at what has been accomplished so far in the past two weeks. Acquisition #11 - Journey.io (aka Don’t Stop Believing)Spotify Amazon
Spotify Amazon Apple This week Danny Takes over for our (slightly delayed) Oct 2023 update! 0:00 Alrighty, a little bit overdue it's the tenth already but wanted to do a recap of October for us. Again, this is, this is reported from Stripes. 0:16 So take it with
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 RaiseAt the beginning of the month
In hindsight, growth in 2020-2022 was easy. It required no discipline, no luck, no grinding effort to find truffles in a field of manure. I started an agency that got to $35k MRR in a few months ... I thought I was smart. Nope! We do half the revenue now. That
To say Chat GPT is useful isn't very insightful, but I recently got access to their advanced data analysis plugin and it's amazing. If you haven't poked around with it yet, you should! For a deal we currently have under LOI, I've made great use of it to ask all
💡This thesis is self serving. It's also true. This only applies to b2b saas (which is our universe) Watch: Listen: Spotify Amazon Apple Company building is hard and capital inefficient. Because of this, many businesses raise venture capital, which has a business model. That business model requires outsized returns following
Watch: Listen: Spotify Amazon Apple So you bought a SaaS! Nice job, welcome to the first day of the rest of your hold period. Let's jump into what's next: a post acquisition growth strategy. The good news is that if you acquired the company "correctly", then you should already have
Growth
Check out the monthly recap report for September 2023.
After about 4 weeks, we've raised a total of $565k from 11 investors. 9 of them have been avid readers of our blog over the years proving (not for the last time) just how important it is to build and own an audience. Investors put in $510k, and we put
This week, Danny is taking over with an in depth breakdown of our ownership of Growthbar over the first 90 days. It's been turbulent but appears to be stabilizing. Here's a teaser: Month 1 - We didn't change much. Great month. Month 2 - We removed forcing people to enter
Watch: Listen: Spotify Amazon Apple I'm a pickleball addict. This weekend I played in a tournament and had some tough opponents. There are some games you can come in and just dominate. You'll find a trick, or a weak spot that works for that game and just keep pounding away
Watch: Listen: Spotify Amazon Apple If you're tired of hearing about 'synergies' and 'long-term strategic visions,' you're in the right place. Today, we're getting into the nitty-gritty of micro SaaS negotiations. Keep in mind, this is our style. You may develop your own but this is how we do
Products have versions, why don't companies? Watch: Listen: Spotify Amazon Apple A Lesson Here's a quick riddle and a dopamine hit. A very strange lesson in psychology. We purchased Growthbar. It required a credit card on signup. Also the entire country of India was blocked due to spam. One of
💡Flip Fund® update - $485k committed. We're closing next week! Watch: https://youtu.be/lki4BGnKmzQ Listen: Spotify Amazon Apple There are many paths to Rome. I didn't think mine would take me on a journey through acquisition land, but that's life isn't it. You probably know what acquisition entrepreneurship is
Learn
This post is for people looking to buy their first company. You could be an entrepreneur with a successful company already and looking to expand or an acquisition entrepreneur looking to buy a business you can operate yourself. Flip Fund We have $485k committed to the Flip Fund (!!!!!). We will
Listen: Spotify Amazon Apple Watch: XO Buys SaaS companies. We've bought 10. I thought it would be helpful for people to take a look at a snapshot in time for our most recent acquisition. This was all the data available at the time we bought it. Not 100% of it