For the costs, in the first year, it was definitely 10’s of 1000s of dollars. It wasn’t hundreds of 1000s and it wasn’t 1000s, it was 10s of 1000s of dollars and it was bootstrapped, so that all came out of our money. The be honest, it was largely my money, because the other guys had some financial constraints and I had done okay with a travel blog that I had been running beforehand. I had some savings, either I was living with my parents and paying no rent, or I was living in like South East Asia and also not paying that much, so I had the the extra cash to invest into developers and product.
In terms of growth, and the sort of channels that built the business. In the very early days, just getting a list of beta users, it was largely through outreach, and just saying: “Hey, we got this tool, would you check it out.” but then that shifted relatively quickly to content marketing and SEO. For the four years or so that we ran it, content Marketing SEO was largely the heartbeat of the marketing and what what grew the business.
Along the way, there were various inflection points, there were product launches that we did, we did a launch on Product Hunt, we did an AppSumo launch, those different types of things that got us up to the next plateau and eventually when you cross a threshold of say $10,000 a month or so, you just have a lot more to work with and at that point, you can be thinking about onboarding, you can be thinking about churn reduction.
Once we kind of hit that level, it was a lot of just like trying to optimize the business, the product and all those different metrics, and then just continue to pump out content and SEO.
Obviously, the motivation’s money, but there’s a lot more to it than that. Essentially, we had been running the business for four years and the majority of this time, we were not really paying ourselves like really much money at all.
There was probably two years of that for where we paid ourselves nothing and then we started maybe earning like $3,000 a month or so. We were paying ourselves a small salary and that’s because the business grew and we could have paid ourselves more, but we were always putting it into the team and trying to hire additional developers and marketers to grow.
I’m very “build a big team” type of person, maybe to a fault, we just assume that the business will grow faster the more people we had working on it and so all the spare money went into personnel.
But about four years into it, I think a combination of a lot of events came to fruition. Firstly, I think we were a little burnt out, we had been grinding for four years pretty hard and I just think we probably burned ourselves out a little bit, that was part of it. Another aspect was, looking at the tool and the solution that we had kind of come up with, I genuinely had doubts whether or not that was the appropriate way to approach influencer marketing. There’s a lot of different ways to go at that problem, some people have like marketplaces and stuff like that.
To the extent that we branded as an influencer marketing tool, it was very much used for prospecting email outreach, and that’s a little bit of a grey area in the sense that it sort of relates to spam. Basically people were using the tool to send out a lot of unsolicited emails, like bottom line.
So there was sort of this element of it being a spammy tool that made me uncomfortable with what it had become, and maybe where it was going, it was really difficult rein that in, because the user base just demanded those types of features. They wanted automated outreach, they wanted to be able to scrape large lists of people and they wanted contact information, they want all these things, and there wasn’t really a way to deny them that because if you do, they’ll just go elsewhere and they’ll get to somebody who will give it to them.
That kind of made me uncomfortable, GDPR was coming out in a couple of months, and there was absolutely zero way our tool is going to be compliant, and the very nature of the tool was not compliant with GDPR. It was unclear what impact that was going to have on the space, but there was definitely a lot of chatter about it, everyone was trying to be compliant, there were all these concerns about XYZ lawsuits.
In hindsight, I don’t think it has played as big of a role as maybe people thought it would, but I haven’t heard Elon mentioned it in forever but anyway, it’s out there, and stuff is going on.
I was was also looking to kind of traveling and settle into the US and get an apartment and have a kid and the vast majority of my net worth was in Ninja Outreach. Just doing the math you could see that, the only way you’re really going to net a profit from it is was to sell it.
You could argue sell it then or sell it later, but at some point it had to be sold, we just weren’t paying ourselves monthly enough that you were ever really going to earn an income from it, unless we held on to it for a really, really long time.
I wasn’t really comfortable saying “yes, I’m going to hold this for like 10 to 20 years”, so all that came together in like a big boiling pot.
We then essentially connected with an interested buyer, he reached out to us and he was direct, there was no marketplace in between us, there was no commission that had to pay, he was going pay it all in cash, upfront. He was going do a share sale, so he was gonna buy it as basically the shares of the company as opposed to an asset, which has tax implications because now you’re only paying like long-term capital gains tax, so your tax exposure is the last.
So the deal structure was very favourable towards us and the due diligence that he was requiring wasn’t that much and overall everything was pushing towards “why don’t we sell?”.
I agree that we probably could have done it for a few more years and probably had a bigger exit. Certainly, there’s like opportunity cost with doing that but I think just for all the things I mentioned, it just kind of made sense for us to sell.
It was weird, we sold it for, you mentioned like seven figures, obviously that’s a large range between like 1 million and nine, nine plus and there’s a big difference, obviously, between those two numbers and so I can say we sold it for a good amount.
It wasn’t like, “Hey, I never need to work again”, but it was also but it was, “Hey, I’m not in a rush to need to do something right away”.
So that was obviously a good place to feel like you have some financial stability in, you can go create, to an extent, the life that you want, and get the apartment, get married and stuff like that.
But on the other hand, there was this element of, my identity had been attached for so many years and even now, like I’m on this podcast because of that. So there’s still a lot of identity that’s connected to that tool and the team.
When you sell the business, you sell everything. Your team stayed on and I was no longer working with them and no longer played a role and whatever the newsletter was, and the audience that it had, and the traffic that the website had, and all that stuff basically, obviously, the bit the new buyer retains.
You virtually have nothing, unless you had been building something up on the side, which I hadn’t. So all of a sudden, in day one, you say “oh man, I don’t have an income, I don’t have an audience, I don’t have anything to kind of work on right now”. That’s a little bit scary. Again, I don’t want to overstate how scary that is because yes, you have money in the bank and you’re doing totally fine but to an extent, it’s something to be thought about, that exit plan and that post-course exit plan.