I sold my business, Audience Ops
I couldn’t be happier about this outcome. It was a chance to see my 3rd exit from a business that I bootstrapped from nothing. But this time, there’s something else that I feel especially excited about.
You see, when I started Audience Ops in 2015, I thought it would be a temporary stint. Something to generate some cash while I figured out what my next “real” business would be.
As it turned out, within a few months, Audience Ops grew to 5 figures in recurring revenue. Within a few years, it grew to a team of 25 people, serving hundreds of clients and accumulating a few million in revenue over the time I owned it.
Then in early 2021, I came to this very difficult, but honest assessment of Audience Ops:
It’s a fantastic business. It’s full of potential to grow and flourish in the coming years. But I’m not the person to take it there.
I’m OK with that. I want someone else to lead it to new heights. I want it to positively impact more people—especially the lucky and awesome people who’ve worked for Audience Ops.
With this exit, I found an opportunity to see Audience Ops off to an exciting next chapter. I’ll be rooting them on while I pursue new things—mainly ZipMessage.
Today I’ll share some details about the deal, the why, the how, and my lessons learned.
The asset sale officially closed on September 7th, 2021. The sale price was in the high six figures.
All in all, from first contact to close, it was about 10 weeks. 5 weeks of preliminary discussions then 5 weeks from accepted offer to close.
JD’s offer was the 2nd of 2 offers I received. Both offers were generally acceptable to me. The choice came down to who I felt better about handing off Audience Ops to. JD was the obvious choice there.
My decision to sell
Around 2018 is when Audience Ops shaped up to be an asset that could be sellable. By that point, I had removed myself from almost every aspect of the day-to-day operations. It had a great team in place, strong recurring revenue, excellent systems and processes, and a good brand in the market.
The thought of selling Audience Ops crossed my mind off and on since 2018. But it wasn’t until 2021 that I felt that the prospect of selling would be more attractive to me than the prospect of continuing to hold and run Audience Ops myself.
3 factors came together to bring me to that decision:
My deepening interest in software
I come from a background in web development and I had built some software stuff over the years. In 2018, I took this craft up a notch and deepened my personal investment in making software products.
In the past 3 years, self-funded by my income from Audience Ops, I invested in learning to build software using Ruby on Rails. I launched 4 SaaS products in 3 years. The most recent is the one I’m fully committed to now—ZipMessage.
I’m “all in” on software—the craft, the business—and I intend to make this the focus of my foreseeable future work.
Audience Ops increasingly took a backseat to my pursuit of software… Which leads me to…
I wasn’t giving Audience Ops what it deserved
The Audience Ops team is truly special crew of creative professionals. I feel incredibly honored and proud that so many of our team stuck with it for so many years. Some of the very first teammates are even still there today!
I’m a strong believer in crafting quality, long-term retainers for high caliber freelance professionals and giving them a role where they get to do what they love to do best, and then getting out of their way. Audience Ops proves this model.
It became apparent that since I’ve been focusing all of my energy, resources, creativity, and personal attention elsewhere (software), I wasn’t able to find ways to help my team grow. That prevented Audience Ops’ growth too because I could have let the team inspire and drive all sorts of new directions and un-tapped opportunities.
My “one-foot-in, one-foot-out” management of the business wouldn’t be sustainable forever, so I decided it’s best to fully step away while Audience Ops still has a great thing going.
Selling marketing is no longer for me
Audience Ops is essentially a marketing service. Specifically, a content marketing service.
Don’t get me wrong—I still strongly believe in the power of investing in content to drive real connections with customers. That’s still the only way I know how to market any of my products today.
But if the question is, where does my entrepreneurial energy take me today? My answer doesn’t gravitate toward the marketing space. I’m personally drawn more toward making and selling tools that fill a key utility. I believe “product-founder-fit” is important and I no longer find that fit in a marketing service.
These days, I prefer to limit my marketing work to my own products, rather than crafting and selling marketing services to others. There’s a huge and awesome industry for selling tools and services in the marketing space, but I came to the conclusion that this space isn’t where I want to point my entrepreneurial energy going forward.
How I sold the business
Once I (finally) decided it was time to seek an exit, I had a number of choices to make in regards to how I would go about selling this business.
To use a broker or not?
When I sold my previous business, Restaurant Engine, I worked with a broker and it was very good experience. However, the broker’s fee is significant (usually in the 10-15% range) and I felt it’s worthwhile to consider my options.
That was based on two factors: By this point, I have a decent network that could potentially lead me to finding a buyer. Plus, the rise of marketplaces like MicroAcquire present an additional channel to explore. With those in mind, I decided it’s worth a shot to go without a broker, at least to start the process.
Still—I had some reservations. What if my network doesn’t get me very far? What if those marketplaces are all hype? What if I screw something up in managing the process? A good broker eliminates these fears.
But sometimes you have to take these fears and proceed despite them. If nothing else, to gain the learning experience. That’s what I did when I decided to try selling this business without a broker.
The experience turned out as I’d expected: There were times when I wished I had a broker in my corner to help guide the process. But ultimately I don’t regret my decision to go without one, on this particular deal.
How to find a buyer?
Without the help of a broker, how did I go about finding potential buyers for the business?
I decided to pursue 2 sources simultaneously:
I worked my network—carefully.
It’s not like I could broadcast to the world that I’m looking to sell my business. Just the fact that I’m exploring selling could only be shared with people I fully trust to keep that info confidential.
I identified 5 specific people who I trusted enough to float the idea to, and who I felt could potentially be a good acquirer for Audience Ops. Meaning, they’ve proven themselves as someone who has purchased similar businesses before and who I saw could be a strategic fit as the next owner of Audience Ops. I had good initial conversations with all of them. JD Graffam—the person who ultimately bought the business—was one of these people.
I listed the business on MicroAcquire
MicroAcquire is a new marketplace for buying and selling all sorts of internet-based businesses. SaaS are the main draw there, but there’s a decent number of listings in their “agencies” category too.
I had no idea what to expect.
Here’s what I learned from the experience of listing Audience Ops in the “agency” category, from June-July 2021 (note: the time period of my listing was just before MicroAcquire announced their series A funding, which likely brought a rush of increased activity and publicity—which my listing didn’t benefit from).
There were plenty of un-serious inquiries who requested information but ghosted me after that. A few were more serious.
5 people requested phone calls to discuss and ask some questions. These ranged from solo operators to large companies with a strategic interest to private equity firms.
3 seemed interested.
1 produced my first offer and letter of intent, slightly above my asking price.
I found that offer acceptable. However, JD’s offer came around the same time. Both offers were very similar in structure. So I had a choice to make. Considering I’ve known JD for a lot longer and the fact he seemed like a better fit as the next owner, I went with his offer.
Would I use MicroAcquire again in the future, either as a buyer or a seller? Yes.
Why I sold to JD
A combination of reasons made selling to JD the obvious choice:
First, JD is just an all-around good guy, and someone I had known for several years. I had interviewed him on my podcast a while back, heard him on other pods, and generally knew he had a great reputation in our industry.
Second, JD and his portfolio show he has experience in both digital client services and B2B SaaS. Audience Ops has always operated at the intersection of these, so from a strategic standpoint, it makes total sense.
Third, JD has a successful track record of acquiring, holding, and growing calm profitable companies. That gave me the confidence not only that he’d be good to work with in the deal, but he’d be a great next owner of Audience Ops.
Fourth, and most importantly, I could trust JD will do right by our team and our customers. Throughout all of our discussions, it was abundantly clear that this would turn out to be a great outcome for them so I felt great seeing Audience Ops move forward under the positive leadership of JD and co.
Productized services... work.
I feel like I’ve been saying this for a while ;)
Well, it’s true. Pursuing the productized service model with Audience Ops resulted in 2 very important wins for me:
First, it was certainly that “path of least resistance” to growing a recurring revenue business that could (and did) run without myself in the day-to-day. On that front, it grew way faster than any SaaS could.
Second, it most certainly resulted in a more “sellable” business than just consulting or growing a big project-based agency. Sure, agencies get bought and sold often. But the subscription-revenue and highly predictable and scalable operations made Audience Ops much more “SaaS-like”, which makes it more attractive as acquireable asset.
Nurturing your network helps.
A lot of people don’t see the value of building a network or an audience. Doing podcasts, writing newsletters, attending conferences, etc. All of people think, “What’s the point?”
I get it. It’s not for everyone.
But if you do those things, you meet more people. And more people know who you are. That means more people—sometimes important people—are more reachable with an email.
And sometimes, one of those people might buy your business.
Your network can help, if you care to nurture it.
Building trust and credibility matters.
Even the best network or audience won’t get you very far if nobody believes you’re a truthful person and always mean well.
One of the hardest things about entering and completing a business sale is to maintain mutual trust at every step of the way. There should be healthy, sometimes challenging negotiations. But if one side believes the other is no longer acting in good faith, those negotiations break down, fast.
I’m glad that this deal came together between JD and me. First, we had that mutual trust that led to the initial email exchange about Audience Ops even happening. Then we were able to maintain and deepen that trust as we entered into the process of a business changing hands.
You don’t have to enjoy the process (of selling), but you do have to respect it.
One thing I learned about myself through this process: I really don’t like this process!
Deal negotiations, accounting, due diligence, contracts, sleepless nights, secrecy, bank mechanics… I could do without all of it! I’d much rather spend my time building and talking to customers.
But selling a business is part of entrepreneurship. It’s part of the deal.
This process is not something you want to cut corners or breeze through. Even if you’re in a deal between friends, you need to treat it with the seriousness and thoroughness that it deserves.
Selling a business is one of the few things in business that isn’t undo-able, so you need to know you’re doing the right thing. How? By giving it the time, the attention to detail, the scrutiny, and the seriousness that it deserves.
I feel good about closing this chapter of my career in the way I did. Thanks for following along.
Onto the next thing :)