10x Revenue Exit

Speaker 0: exiting your company at ten times revenue is a huge achievement. what was the turning point that set you on the path to that successful outcome?

Speaker 1: we randomly, out of the blue, got an offer in twenty nineteen. we exited in twenty twenty two. in twenty nineteen, we got an offer. it didn't go through. we kinda got to the eleventh hour, and they pulled out. it was a big learning experience because until then, we hadn't really thought about exit. we were so busy trying to build a business. and by the way, you know, we were bootstrapped. we could not get a a venture capital firm to invest in us because anytime i'd use the word anthropology, people would turn their brains off. they'd go, too academic. nobody's gonna invest in this. how are you gonna scale this thing? and nobody would invest in us, so we had no choice but to bootstrap this thing. so in our first year, we exceeded a million in revenue, and we were already profitable because we had to be so that we could invest the money in building our technology and all that jazz. because we started with five grand in the bank. that's all we had. and so, by the time we got to twenty nineteen and, you know, we're four and a half years in, we were starting to scale, but, you know, it's the difference between what the world expects from you versus your own internal desires, and there's always this inherent tension between that. so what does the world expect from you? what does an acquirer expect from you? they expect you to show them a healthy business. fine. we could do that. but they also expect you to show them that you have somehow run some experiments where you have been able to scale your business, without needing to constantly add headcount in sort of a traditional saas sense. right? scale it without losing profitability. and, we hadn't done that. we hadn't performed those internal experiments yet. we knew it theoretically that we could do it. obviously, we had a track record, but we hadn't done that fully. and so that became this constant point of tension. that was the big learning experience. so after twenty nineteen, we reshaped how we looked at the business, and one of the first things we did was demonstrate how we could continue to scale the business without needing to spend a lot. and and i know this is counter to the entire vc model. and, by the way, nothing against the vc model, and i'll just add a little sidebar here, which is that, you know, the vc model works for less than one percent of companies, less than one percent. and majority of us and i'm giving us a healthy dose of reality check. right? the majority of us can have very successful businesses and never be part of the one percent, and that's okay. right? you can make millions and have a really successful business and have multiple exits, but you're not part of the one percent, and that's absolutely fine. we don't need to be. so if you're not part of the one percent, what do you do? you have to think about profitability. you have to think about scale without throwing millions of dollars at it. and so you have to figure out how to scale by first bringing the money in, which is the opposite of the vc model. right? so how do you scale by first bringing the money in? you sell. you bring the money in. you have a guarantee of the money coming in over the next twelve months, and then you build the tools and technologies like mad to serve that market. and so that's what we did. so between twenty nineteen and twenty twenty two, we demonstrated that we could scale the business whilst, also scaling revenue, maintaining profitability. we actually became more profitable, lo and behold, and that transformed everything. and so that ultimately gave us our ten x exit.

Speaker 0: yeah. i like to say, you know, instead of build it and they will come because it's just not true, sell it and they will come.

Speaker 1: that's right.

Speaker 0: if you're selling and you have customers, the investors will really start paying attention. and, you know, a lot of entrepreneurs are under the impression that a lot more startups get vc money and become successful than actually do.