MicroAcquire is a platform that is a marketplace for startups to get acquired. The company has already helped 300+ startups get acquired entirely for free and has posted $370,000 ARR as of March 2021, and is on course to hit $1 million ARR by the end of 2021.
Andrew Gazdecki’s entrepreneurial journey started right out of college when the serial bootstrapper founded Bizness Apps, a low code DIY mobile app builder that enabled small businesses to create, edit and manage mobile apps online. Over eight years, he led the startup from 0 to $10 million+ ARR right up to a successful acquisition. In this episode of The Orbit Shift Podcast, Andrew talks to us about his latest venture MicroAcquire, a startup up acquisition marketplace. Andrew talks about how minimum your MVP needs to be, the advantages of bootstrapping, how he builds in public and tips based on his experience for a successful exit of your startup.
Edited Excerpts.
Q. Andrew, you started your first company, Bizness Apps, from your dorm room in 2010. Tell us about the experience.
A. I always knew I wanted to be an entrepreneur. I knew that education and getting a job wasn’t the path for me. I went to Chico State University to party, but I used to do this thing where I’d start a company every summer, basically side hustles. One of these was a job board called Phone Freelancer, where I bought a clone Upwork script, put it on a server and niched it for mobile developers and businesses and spent a whole winter break commenting on blog posts until I could get some traction. This was when the iPhone had just come out, and companies had to build mobile apps. On the job board, I would see recurring requests for mobile apps from small and medium-sized businesses, and that was the genesis of Bizness Apps. I was 21 and still in college, I had built a very ugly MVP that only I could use, and the initial business was just me building mobile apps like a semi-custom mobile app design agency. I used to be a designer by trade, so I’d configure all the design and add in all the content, and for the framework, I had an engineer. I was at the company for eight years, from when I was 21 to 29 until our acquisition.
Q. How important do you think it was in your journey to build an MVP that was ugly but enabled you to get out of the gate before the competition?
A. Extremely important, because we weren’t the first app builder, but we were the first app builder to come out and say, this is for these types (small and medium) of businesses, here’s why while the app builders were broad with their targeting.
That being said, today, I have a different opinion on this. The things that you could get away with in 2010 are a little bit different from 2021. Today you want to release a minimal functional product where it’s usable. With the number of startups being created, the amount of competition, the number of people in the ecosystem, and entrepreneurship becoming cool and trendy, you can’t release a low-quality product full of bugs.
Instead of focusing on releasing something as quickly as possible, focus on speed of execution. You can release a landing page, but make it look nice and then get feedback from customers and then start building the product. When you release the product, have it ready to go where you can solve at least one pain point for people. The age-old ‘’if you are not embarrassed by your first release, you’ve waited too long’’ is outdated because the competition and the quality expectation of consumers have dramatically increased from 2010 to where we are today.
Q. You bootstrapped Bizness Apps, and you’re bootstrapping MicroAcquire as well. You seem to be like a serial bootstrapper. Tell us why do you pick bootstrapping?
A. The best businesses are built with a capital-efficient business model in mind. Going back to Bizness Apps, I always used to tell the team at Bizness Apps that we aren’t a software company; we’re a distribution company. We focused heavily on having the most cost-efficient business models that we could have, and that was through mostly white-label resale partners.
It’s the same thing with MicroAcquire. MicroAcquire is a super capital-efficient business. Our competition is large investment banks and brokers with 100 people on their payroll, and we’re able to provide the same level of service with innovation and software, and that’s a key focus for us.
When you raise funding, you’re putting yourself up for just one option for the business, an acquisition. You’re signing up to be acquired or for an IPO. There’s no in-between. You can’t raise 10 million bucks and then cash-flow a million bucks every year.
Bootstrapping is good because it lets you crystallise how big the market opportunity is and what your ambitions are, and then once you answer those two questions, that’s when fundraising makes sense. But along that journey, you build a very capital-efficient business, and you spend every dollar like it’s yours because it is. Then if you ever do decide to raise capital down the line, you’ve built those values and those traits in your company culture. We always used to say at Bizness Apps, we put money into the business to grow the business and make our customers successful. We had furniture from IKEA, and we had crummy offices. It was in the DNA of the company that helped us succeed in some way.
Q. As you build the business out, you’ve been sharing a lot of lessons on Twitter. What parts do you feel like you should share, and what details do you not share with the audience?
A. When you share a lot, you inspire people, and people root for you. For me, entrepreneurship is a pathway to financial freedom. I grew up poor. My mom had me when she was 18, my dad died when I was six, we were on food stamps, and life was hard. Entrepreneurship for me was a survival mechanism, it saved my life, and I want to inspire other entrepreneurs. I want to show people you can build a company if you’re passionate about it, and you put in the work, and you want to make a difference in the market. That’s why I like to build in public; it’s a great way to get exposure for what you’re doing and show people that this is happening; join me on this journey. Things I don’t like to share are negative things; I don’t like negativity. I try to be a positive person. But I have to share the bad stuff about MicroAcquire when it happens.
Q. You’ve done a thread on branding and positioning your company. And if you were to talk to an early-stage entrepreneur or a startup, what are some of the things that you would advise them to do to get their brand, their positioning and their story right?
A. Number one, understand your audience. If you’re selling to finance people, you don’t want to be talking about marketing tips and stuff like that. I also think that founder market fit is essential. If you have a background in marketing, focus on a marketing type of startup.
With MicroAcquire and me, there’s a good personal and professional fit because I’ve gone through the acquisition side of things a few times. I’ve also seen a lot on the buy-side as well. I can understand and articulate that story to entrepreneurs and educate them in a way that I don’t think others have in the market.
The best way to think about branding is to think about- Why did you start this company? What itch were you trying to scratch? What is your background? Why is this different from the current solutions available today? Another example at Bizness Apps is that it was a do-it-yourself mobile app builder, but we drew customers in with a bigger story than that.
We had a David versus Goliath story where we were saying Starbucks builds a fantastic mobile app, but they spent $2 million on it while we were allowing the small mom and pop shop to build a mobile app for the price of a newspaper ad and compete with these big public mega-brands down the street and win back customers and we drew customers in with a compelling story.
Q. You also talk about why it’s important to write down your positioning statement, which is an expression of what your brand will do and also will not do for your target customers.
A. Go to your sales team and ask them, ‘’what do you guys do?’’. You’re going to get 30 different answers. Go through the elementary questions like what problem are you solving? Who is your customer? Why do customers choose you over your competitors? Who are your main competitors? What are your strengths and weaknesses compared to them? And then you start to create things like a value proposition and mission statement and have the whole company telling a cohesive story. You’d be surprised how often everyone has their version of what you do. You want that to be cohesive across the whole organisation, and that’s why I say write it down, so everyone’s on the same page in terms of the vernacular and the customer. At Bizness Apps, we had a big brand book that had our mission, our values, our culture, who we serve, why we serve them, why are we in business, what’s our purpose, what is the product; all clearly articulated on day one in this nice book.
Q. You talked about selling your company, and now you help other companies sell. What are your biggest learnings from that experience? What’s something that you would say a founder should and shouldn’t do while trying to exit a startup?
A. When you’re trying to sell, don’t stop growing. Always stay focused on your business. The easiest way to sell a business is just to have a good one. Have a great product, have a great team, make sure you’re not burning a bunch of cash unless you’re at a scale where it makes sense, but for smaller businesses, a profitable startup is what many companies should be shooting for.
Other simple things can help show a buyer that you’re serious. Like having a clean P&L, having your metrics in order, if you get strong interest from a buyer, then hiring an M&A advisor always helps as well.
Articulate this is what I’m trying to sell it for. If we need to grow into that valuation, let’s talk in a year or two years. That was the situation at Bizness Apps as we grew into the valuation. So, just keep growing the business, play the long term and build relationships with buyers. You must get to know the person or the firm or the company you’re selling to because there’s nothing worse than signing an ally, reaching deep into due diligence and then getting a nice haircut on price. You want to sell to a reputable buyer and then be clear about terms. What does life look like post-close? How long are you going to be staying on with the business? Think through all those items and communicate those clearly with the potential buyer.
Q. As you are building the company and learning on the go, you also recommend that you have to build fast, and there are a lot of new tools which have come into the picture which help founders get to the market quickly. What are some of the things that have helped you get off the block fast?
A. With MicroAcquire, I made all those mistakes. I built a website with a talented design team, fully customised, and it’s not on Webflow. I wish it were because then I could easily A/B test stuff. I highly recommend tools like that, especially as you grow because you want to move fast. You want whoever is leading marketing to be able to make changes without bugging an engineering team. What I try to do is optimise workflows. Anything that I’d find myself doing manually, I build in a process that streamlines that whole aspect; an example would be creating newsletters or taking startups through an automated process while still keeping quality high.
