How I strategically sold our SaaS company for a 7 figure deal

Adam White: 00:00:00

I just, I always knew that I was a solopreneur on that one. I didn't have any, found any employees. I didn't have any co-founders and I was like, I wanna be, I wanna build a, a SaaS business that I do by myself and sell it for over a million dollars. That was always the goal. And so to me it was like for, in terms of valuation, I was like, Would I be happy taking a million dollars for this? Yeah, I probably at this point I would. Right? And so that was, that was literally how I did it, like for them. But, but it doesn't matter how you value it, because frankly, it's what somebody's willing to pay for it. That's the only thing that matters. There, there was about, I think there was about $20,000 of MRR in terms of subs, software, subs. And then, like I was saying, like several hundred thousand dollars worth of back links on the per year, on the back end. Right? So, so however they got to that number based on those things, they were able to see that it was, it was worth it to them. And you know, We got over the seventh figure mark, you know, and it turned out to be a great deal for me.

Upendra Varma: 00:00:57

You're listening to the B2B SaaS podcast with your host Upendra Varma. Every week I talk to the world's best B2B SaaS founders and ask them everything about their business. There's a lot to learn from every founder, whether they're just starting out or already doing tens of millions in ar. It could be their zero to one journey, their top of an elite generation, their lead conversion strategy, their churn and account expansion process, their product journey, or even how they sold their company. Everyone has interesting story and insights they've gained over time. I'm here to decode them by asking the right questions, no superficial and lengthy conversations in just 15 to 20 minutes, I'll deep dive into one of the above themes backed by real metrics so that all of these insights are data backed and actionable. Let's listen to today's episode. Hello everyone. have Adam White with us. Adam here runs a company called Squid Vision. Hey Adam, Welcome to the show. What's going on? I'm doing good. So Adam, let's try to understand what your company does? What Squid Vision does, and why do customers

Adam White: 00:01:57

pay you money? Yeah, so Squid Vision, actually we're in, we're in be closed beta right now. We're launching and literally getting ready to launch it in the next week or two. But, but it's it's essentially like Hot Jar, but with revenue tracking. So if you get an see an overlay of your website, any page on your website, you can see exactly how much revenue every single button or link has actually generated on that page to see where, what, you know, where the, what is actually happening, where the, where the revenue is passing through, what, which calls to action are working. You know, it's really good for conversion rate optimization and, and landing page optimization and, and just understanding and, and also content marketing to see which, which blog posts are generating revenue and all that stuff. So it's really cool. All right.

Upendra Varma: 00:02:39

So you mentioned you're in closed beta, so does that mean you have any active users on your platform as affiliate?

Adam White: 00:02:45

We do. Yeah. There's just a few that we'd allowed to test it for us as we work out the, the, the final bugs. But yeah, we'll be going live probably in the next seven. All right.

Upendra Varma: 00:02:55

So yeah, so what are your plans? What happens once you go live? So how are you gonna get those first 10 odd customers and what's gonna happen after that? So what, what marketing channels are you really experimenting with so far?

Adam White: 00:03:06

Yeah, so I, I've had a lot of success in the past doing seo. So we'll do a lot of content marketing also with, with my last company that I sold last. I was really able to make some serious traction with Facebook ads and so we'll probably those will be the two main channels that we hit right from the beginning. I'm also the a co-founder of just to reach out.io, which is like, it's like outreach tools to help to get you more back links and also PR press mentions and stuff. Anyways, that we have a large list of customers there that we can kind of pitch this to as well. So, so it's not, you know, we'll, we'll have some, we'll have an audience already that we can kind of go to and say, Hey, check out this new thing, you know, and, and probably get a handful of people there as well. Can I

Upendra Varma: 00:03:48

ask where you build this audience list from?

Adam White: 00:03:50

So with, just reach out, it was, We have really good rankings on Google. We do Google

Upendra Varma: 00:03:56

ads. Okay, so you are gonna use your audience of a different product and then you're trying to go to them and pitch it,

Adam White: 00:04:01

is it? Yeah, exactly. We'll, just because, Because what this is, this is a feature. What Squid vision is the feature that doesn't really exist anywhere else. Right? Like I, I saw this, the head of analytics for a big Fortune 500 company showed me, it's like, Hey, check out this cool tool that these guys have on their. You know their website and he showed me and it, and it was like, it blew my mind how awesome it was. I'm like, Dude, small businesses will never get this. We'll never be able to, to look at our, an overlay of our website and see how much money every button and link has, has made has made that day. Right? He just doesn't exist. And so I'm like, I'm gonna build this for, for small businesses because this is awesome.

Upendra Varma: 00:04:37

So, so, so just from, from a product perspective, right? How exactly are you doing this? So I can understand how you would typically get analytics from like where a visitor would spend time on your page. That part is pretty easy, but how do you tie it up with the actual revenue that's being generated or those actual revenue metrics? What exactly are you doing? Take.

Adam White: 00:04:55

Yeah, so, so it's, we're just, we're, we're piecing it together using different tools, right? So we, we, obviously you have tools out there that track clicks already. It clicks in, in, on locations of, of your page, so you can see exactly where everyone's doing that. So we're, we're using that technology and then, and then we're also just. In tracking the user sessions and, and getting the revenue through. Like right now we connect to Strip and Shopify, the two that we actually have integrations with, and we're build, we'll build out more as we go, but we'll start with those two. So we get the revenue data from those and tie it all together. It's, I mean, it's, it's, it's been some work and it's pretty complicated, but at the same time, like we just have. You know, heads down going, Let's just solve this problem and, and people are gonna love it. So,

Upendra Varma: 00:05:37

yeah. Yeah. So I could really see the value in solving such a problem, but I can also understand it's gonna be pretty tricky for you because it's not easy, right? Attributing a new lead, for example, to a particular page thing that, Hey, you spent time on this particular article, that's why I ended up converting, and that there's your new revenue from this channel. So how do you even do that? It's, it's really, really hard and you need to integrate with all of. I guess payment systems, all of those things. So, so what I want to ask is, can you just pick one example or one use case where you're doing this, you know, really well, maybe for a Shopify app or, or for, for some customer of yours. Explain me how this is actually working and how exactly are you doing this?

Adam White: 00:06:13

Yeah, so, so I'll just use, I'll just, we, we, we use it to track on, as one of our testers is just reach out or my other SaaS company. And so what we do is we, I I, you know, I add in all of the, the blog posts that are our highest traffic blog posts, right? I add those in and create, you know, heat maps for them. We call 'em revenue heat maps. So then, then what I can do is I can go into the software and just look, literally, just look at the, at the page and go, Okay, what is this traffic converting? Customers to, to sign up, right? Is anybody turning into a sign up from this page? And which buttons, which calls to action are actually doing it? Right? Where, where on the page are they clicking and where is that revenue being generated? And so, so it'll show me, Hey, they clicked right here. They turn into a trial. And then whenever that trial runs out, the revenue will start showing up on that button, and I'll see on that button, Hey, this one's generated this much revenue. And as time goes on and more revenue hits, it'll just add up on that button. You'll see that that worked, that that call to action worked or it didn't work, right? So, So then you can go, All right, well, this call to action at the top, for some reason, nobody's clicking on, or it's not generating any signup. Lots of people are clicking, but they're not signing up. Let's. You know what I mean? So it's, it's that kind of stuff. Yeah.

Upendra Varma: 00:07:19

That, that makes a lot of sense. All right, so, so let's talk about your future growth prospects here. So you've mentioned you, you're pretty good at seo, but since you're just launching, I'm assuming you're just starting, right? You, you just started writing out content or stuff like that, and it's gonna take you time, maybe months or quarters before it can sort of generate you any meaningful revenue. So what's that zero to one journey is gonna be like, So are you betting on Facebook ads or are you betting on this email list? So how, how is that zero to one gonna take?

Adam White: 00:07:45

Yeah, I think, I think that initially for the first probably 20 to 30 customers, I'll just do some, some manual. I'll reach out to customers like one by one by hand. Like just go pick, pick a user and go, Hey, Hey, it's me. I wanted to show you this one thing. Let's jump on a call real quick. Like for my, from my previous business SEO jet that I sold last year, I have, I had, I built some good relationships with guys I know will get value out of Switch Vision. And so I can just reach out to them day, Okay. I wanna show you this thing we just built and we'll jump on a call and I'll show 'em and, and I am sure I'll be able to get a good handful of people to sign up that way. But then we're gonna hit the Facebook ads really hard right from the get go because you know, frankly, you just don't need to have a huge, you know, you, you could just do that right, right from the beginning and be success.

Upendra Varma: 00:08:27

Adam, so let's talk about SEO jet for a while. So just to g give everybody some context here. So Adam has sold this company, it's called SEO Jet. So Adam, just, can you just give us a sense of where the company was when you actually sold it in terms of revenue, in terms of customers?

Adam White: 00:08:41

Yeah, So, so we, the, this, the, the website, just so you know it. It solves the problem of doing link building the right way. Like people don't, especially with anchor text, like people didn't know, like, what anchor tech should I be using in my back links so that I stay safe from Google penalties and it looks natural to Google and I rank better. Right? So that was what the software did, is it solved that problem kind of gave you a roadmap of exactly which links to build. To rank number one, right. Anyways, I, I don't remember exactly how many customers we had. I think it was in the 200 range SEO agencies and, and SEO consultants using it. When, when I sold it there, the the revenue, we had two ways of getting revenue, right? We had the, the, the subscription for the software, but then on the back end we also had our, had a link building, like people could buy guest posts on the back end of the software that we just, I just marked that up and. Had three different companies fulfill that for us. Right. So, so between the two of those, the revenue was pretty high. But, but what I did was I went to one of those three companies that was fulfilling the link building and said, Hey, I'm gonna sell this. Are you interested? Cause I knew it would be worth more to them than anyone else, cuz they could cut out the other two guys, take all the link orders and dramatically increased our revenue. So that's what we did. And it, it, it worked out. Okay,

Upendra Varma: 00:09:53

so, so, okay. So let's, let's try to deep dive into this a bit. So you've had a subs, a substitution business going on, and then you had this couple, you had tie with a bunch of agencies who, who were basically solving your customers needs of sort of doing those back, building those back links manually and all of those things, and you ended up selling it to one of those. Is that it? Mm-hmm. Yeah. And so, so, so what was your thought process then? Was, was this company always been built to sell? Or, or, or it just happened and it made sense for you on that day. So what was the journey when, when you were sort of, what was your thought processes when you were sort of selling the company? Yeah.

Adam White: 00:10:30

You know, I've, for me, I, I've, I've actually sold 17 internet businesses in the last 15 years, so I don't. Yes. 17. So I don't like, I don't hold onto them very long. I don't, I, I like to sell. I'm always like, at some point I'm gonna sell this. Right? That's always, that's always how I approach every business. Now, it just depends on how long I hold it, you know? It, sometimes it's different. But with that one, I had it for four years and that was the longest I've ever had any internet business. I got to a point where I was like, Oh, I'm kind of getting tired of running this. You know, I wanna move on to something else, time to sell. But it was right when the business was kind of stagnating. There was no, there wasn't good growth. It, I was like, If I sell it right now, that'd be really stupid because it's, it's gonna be worth the least amount that it will ever be if I sell it right now, all I have to do is just like, hit it really hard and, and grow it a little bit and I'll, I can get way more out of it. Right. So I, at that time that I wanted to sell it when it wasn't doing great. I think it someone, I think they offered me about a half a million for it, and I was like, Nah, just, I don't, it's just not enough, right? Cause I know I'm about to build something else and I, I need, I need more of a buffer. So that's when I, I reached out to a, a mentor, a guy who's who I knew had been doing Facebook ads really successfully. And up until that time, I'd only been doing seo. I hadn't started Facebook ads. And I reached out to him and said, Hey, look man, I, I need help. I know, you know, s Facebook ads really well. Teach me how to do it. And so I, I paid him, I paid him a good, a, a large chunk of money. He teach me exactly how he was doing Facebook ads. I implemented all the things that he taught me. And like literally within six months, the business had doubled in size. I had really good growth and it was much more appealing to, to a buyer, and I was able to sell it. Seven figures. So it worked out really well.

Upendra Varma: 00:12:16

All right. So, so my question here is, so when, when you were sort of looking to sell, when you felt that the, that, that it's the right time to sort of sell, so how do you buy, find these potential buyers? I know in your case you had three of them right in front of you, but did you sort of do put in any manual efforts to reach out to more, more folks who might value your business better? Did you do anything else or was it just, you know, there was really no

Adam White: 00:12:37

other option? Yeah, I. I didn't, I had one guy actually reach out to me about buying it earlier, and I just didn't want, you know, he wasn't a strategic partner, so I only reached out to these guys first because I knew that, you know, because there was probably five to $600,000 worth of revenue happening on those link sales a year. Right. So it was significant amount and they were only getting a third of it. You know what I mean? So knowing that they would, didn't just have a huge jump in revenue because of it, that, that it would be more valuable to them and they would offer me more. So I really wanted one of them to buy it because I'd get, I'd get more out of it. Right. And so I didn't, I never reached out to anybody else. If I was gonna do it again, and I didn't have a strategic partner like that, I would probably send a few cold emails to some BC firms or whatever. And, and, and Or go to Micro Acquire, which is a good marketplace for, for sas. Sales. Yeah.

Upendra Varma: 00:13:37

So let's talk about valuation here. So it looks like you had two different set of businesses there. One subscription business that that's serving everyone where they're paying for your software and other those for those link building services. So it looks like your buyer was majorly interested in those link building services because there they could potentially triple their, you know, in incoming sort of leads, right? So, So how do you value a business like this? Right? So you've got both this, you know, product part as well, and then you also got the services layer as well, software as less services layer. So how do you value something like this? Like can you talk about the valuation when you were negotiating this?

Adam White: 00:14:11

Yeah. I didn't like, I just, I always knew that I was a solopreneur on that one. I didn't have any, found any employees. I didn't have any co-founders and I was like, I wanna be, I wanna build a, a SaaS business that I do by myself and sell it for over a million dollars. That was always the. goal And so to me it was like for, in terms of valuation I was like, Would I be happy taking a million dollars for this? Yeah, I probably at this point I would. Right? And so that was, that was literally how I did it, like for them. But, but it doesn't matter how you value it, because frankly, it's what somebody's willing to pay for it. That's the only thing that matters. There, there was about, I think there was about $20,000 of MRR in terms of subs, software, subs. And then, like I was saying, like several hundred thousand dollars worth of back links on the per year, on the back end. Right? So, so however they got to that number based on those things, they were able to see that it was, it was worth it to them. And you know, We got over the seventh figure mark, you know, and it turned out to be a great deal for me.

Upendra Varma: 00:15:10

So, but, so was there any formula that they used or is, was it just, you know, it made sense for you on that day? Okay, this looks like a nice number for me based on where I am. And was it No.

Adam White: 00:15:19

In fact, yeah, when we, we had some conversations where they were trying to offer less and I'm like, and it was like literally I'm just on the phone call with him going, Look guys. I'm, I'm, I, this thing is growing so fast now that it doesn't make any sense for you to sell it any less than this number. So if you can get me to this number, I'll sell it to you. If you can't, I'm just not gonna do it. But, but

Upendra Varma: 00:15:41

how, how do you come up with that number? Right? And how do you convince that that's the right number? I, I, I guess that's the trickiest part,

Adam White: 00:15:48

right? There wasn't a good method to it. It was just literally like, I think I wanna get at least 1.2 million. So, Let's try to, let's ask for more than that. Mm-hmm. and then get, and then hopefully we'll end up there, Right? Like, that was kind of where my thought process was. And it, and, and we even did better than that. But, but it was just like, okay if I have to build a new business, what amount of money do, am I okay taking? Like that's really the, that's the psychology for me is what amount of money am I okay receiving, because I'm gonna have to build something else after this. You know, just making a million dollars is not, is. It's gonna last that long, right? You know, I have a wife who has seven kids. You know, that it's just like, it's not gonna last forever. So I'd have to build something else. So at what point do I, what, what's the number where I'm like, Okay, this, this money will keep us comfortable while I build something new and, and, and launch it. And, and so I just came up with the number in my brain. I said, This is what it is. If I, if I got that amount, I'd be happy. And then I had, because I had really, really strong growth for like two or three months in a row. They couldn't, like, that was the, the biggest selling factor, right? They're like, we see if we wait three more months, we're gonna to pay more money for this same business. Right. Cuz it's growing so fast. So they, they wanted to get the deal done right.

Upendra Varma: 00:17:03

So, so Adam, I, so I want you to sort of go back, right. Let's, a couple of years back, right? And when you were building this business, so you had subscription business as well, services later as well. So was, was, was selling part always in your mind? And if. Why, like, why was it always gonna be these three major agencies that you were dealing with or when exactly did you actually start planning this bar? So, okay. This, this is a nice business going on, right? So, but I'm gonna sell it at this point. Right? So what, when exactly Did that happen?

Adam White: 00:17:32

Yeah, I did, I wasn't really thinking about selling it in the beginning For the first couple years, I, I was enjoying it. Because when I create a new business, and especially with software business, cuz you can always be making improvements to the software, and that always excites me. It's making the software better. So, so that kept me engaged for a long time. I say a long time, it was two years probably. And, and that for me is long. But it, it was probably about the point where, see what had happened was, I, I had this software set up to where you couldn't just go sign up on the site, you had to request an invite to use it. Mm-hmm. And so an email would automatically get sent out to if you, to you 20 minutes later, once you requested an invite. Well, I found out that that email was going to everyone's spam folder. No one was ever seeing that email. So I, so for six months, 6,000 people requested an invite to sign up and never got the email went to their spam. I just thought nobody wants to use my software anymore. Barely. Cuz there was one other way to sign up through the blog, but, but if you didn't like come to, but if you came to the homepage that it would go to your spam folder. Right? Like that, that was the majority of people. So I was like, well I guess no one likes my software. Things are terrible. I it's gonna, this business is gonna fail. When I figured that out, then we, I was able to start to turn things around. but it was, it was kind of like that experience made me go, Oh, do I really want to, like, I'm kind of losing steam on this business. Maybe I should start to to sell it. Mm-hmm. But it was like, I need to sell it six months to a year from now because I, there's things I need to do to get this to a place to sell, right? Mm-hmm. So I was building it from that point on to sell it. So one of the major things I did was I switched the way the subscriptions worked cuz I wanted more money on the subscription side. Yeah. Cause I knew it would be more valuable that way. So I said, Okay, I'll give people bigger discounts on the links on the back. If they pay more for subscription, right? So if you pay this, you do the 3 99 plan a month, you get 25% off the links, right? So if they're buying a lot of links anyways, they'd end up saving money that way. So that was, that was one of the major things I did to get, to make the business more valuable at that point.

Upendra Varma: 00:19:27

And what about the team? So you mentioned you were a solopreneur, so who, who built the entire product?

Adam White: 00:19:32

Yeah, there was a, I had a developer, he was just part-time, he had a full-time job and he would just work on this part-time at nights and, and frankly, that made it go really slow and painfully slow and, you know, and it was very frustrating. But at the same time, you know, I just, that I was, I was bootstrapping it. I didn't have money, so I just said, you know, when you're, when you don't have the money to spend to make it go fast, you just have to go slow. And that's what we. It probably cost me a quarter of a million dollars, how slow everything went, but mm-hmm. you know, that's just the way it works. Was

Upendra Varma: 00:20:01

that just that one developer that you had in your team all, all through those five?

Adam White: 00:20:06

It was just him. He was the only

Upendra Varma: 00:20:07

one. Okay. And so, so I guess that would've made your sale much easier because you really didn't have a team to sort of, you know, sell or whatever you call it, transition to a different sort of company. Yeah.

Adam White: 00:20:18

It, it was very, very simple. And he did, he did consult with them for a while. I'm not sure if he still is doing that, but he, he did for, at least for the first few months while we did the transition. But yeah, other than I had one other girl that I contracted. She was, you know, she wasn't an employee yet. I think 20 bucks an hour to do this, do some manual labor stuff for me. And, and yeah, I just, once I sold, I just kind of gave her a bonus check and said, Thanks for your help, and moved on. All right.

Upendra Varma: 00:20:46

Hope you scale Squid vision to much greater heights and sell it to you know, much, much higher number to what you already sold.

Adam White: 00:20:54

Yeah, let's, let's 50 x that number

Upendra Varma: 00:20:57

So, So Adam, so at this point, I know you're just launching the product, I know it's still early days, right? So what's your vision for this company? Right? So for example, let's say two years down the line, where do you see. Your company growing too, and what would happen five years down the line? I know it's still very early days, but, but what's, what's that? You know, not staff. Are you, at this point of time, what are you focusing on? Well,

Adam White: 00:21:18

ev we're, so I told you we're, we're launching with Shopify and, and Stripe. Right. Those two marketplaces. If we get 1% of that, of, of both of those marketplaces, we'll have a hundred million dollar business. Right. So, We're like, my, my intention is within four years to sell it between 15 and a hundred million. Like, that's, that's my goal with, with Squid Vision.

Upendra Varma: 00:21:38

And are you gonna raise any external

Adam White: 00:21:39

funding? I won't rule it out, but, But we're not planning to. Okay. We've already had people, we've had people offer, like we, people are asking to invest in our, in the company. That's totally expected. Yeah. And, and, and we're just like, Nah, we'll

Upendra Varma: 00:21:51

hold off. Yeah. And what about your team? So how are you planning to sort of build the team this time?

Adam White: 00:21:55

It'll probably be more, I, I have a co-founder this time, you know, and we have, we have a full-time developer and he's, you know, and then, you know, we'll probably build out a team, a real team from here I to to, to build a 50 to a hundred million dollar company. You, you have to have a real team. I can't soure that. So, so I, I'm gonna let my co-founder kind of manage that more. He's, he's worked in the. The world's a lot more than I have, so I'll, I'll handle growth and he'll handle, you know, probably be the ceo.

Upendra Varma: 00:22:22

Yeah. So, so Adam, so in terms of valuations, right? So like I know it's, it, it all, you always get much, your value is always higher when you sell it. When it's the strategic acquisition, like, like the way you've did. Because it, it actually made sense for them. But if you were to sort of take your, take, take your company to, to, let's say a PE firm or some other firm who's just looking at your business and trying to value it based on revenue, multiple of growth, it's always gonna be a lower number. Right? So, so for the business that you're planning to sort of spill and sell, so was it, was it, is it gonna be a strategic acquisition or is it always gonna be, you know, selling it to a PE firm or something like that?

Adam White: 00:22:56

I don't know that it'll be strategic, honestly. I, I want it to be because I want somebody to take it over.

Upendra Varma: 00:23:01

Yeah, of course. You want it to be. My question is, is there something that you can do from this point onwards to sort of, you know, get there?

Adam White: 00:23:08

I, I, If there is something, I don't know what it is yet, Right? Like it would have to be a partnership that we've developed that is it like mutually beneficial? We don't have that in place. I don't. I just don't know if that will work out, you know, frankly, if, if the business is growing steadily and has worked that much, I'm not gonna mince over, you know, If I may, if I sell it for 50 or a hundred million, I'll, I'll be happy with both. Right. Yeah. So it's so in the end, it'll, it'll be great. Yeah.

Upendra Varma: 00:23:34

All right, Adam. Yeah. Thanks for taking the time.

Adam White: 00:23:36

Yeah, it's been a pleasure. Thanks for having me. Yeah.