6 Month Review of a SaaS Acquisition

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[00:00:00] Colin Keeley: Hello and welcome back. This is Colin Keeley here,

[00:00:04] Brent Sanders: and I'm Brent Sanders

[00:00:05] Colin Keeley: and we are two guys buying and building wonderful internet companies.

[00:00:09] Brent Sanders: Yeah, yeah, we are. And it's, it's the end of July, right? So it's, it's time to do a mid-year review on, I think we're not gonna do the entire portfolio, but today we're gonna talk about kind of where we're at, on Scout, roughly six months in, right?

I mean, it's a little bit more than that technically, but. It's a good, halfway point to the year, and kind of provide an update. 'cause it, it's been, a fun and bumpy and interesting road with all sorts of, of cool findings I think people will get a kick out of.

[00:00:39] Colin Keeley: Yeah. So just, to recap for people, it's been a little longer than six months, but six months sounds better.

So we're gonna stick with the, the six month review here. so we bought it a little over six months ago. It's, business management software for dog walkers and pet sitters for the most part. Some other pet care providers as well. mission critical, steady growth, tailwinds,niche product with a few other competitors.

and then we also see kind of natural expansion. so once someone gets started they add more walkers over time. That's kind of how it's gone. So we've tried a lot. I dunno where you wanna start. I could start with all the growth stuff we've done. though we could talk through the product stuff.

Yeah, that sounds good. Sure. so let's talk about the things that have worked first. so we have 10 x our organic Google traffic. so we have one guy in the Philippines we pay that does all the writing. I've also, stepped in not as writing as much, but a lot of cleanup. So the big things we did there, we moved from WordPress to Webflow.

and did some nice stuff to like customize webflow blog posts, adding like table of contents and things like that to give a better experience. we updated and improved old articles, so that improves the rankings of those. And then we've written probably a few articles a week for about half a year.

And our, if you look at a Google search console, it basically is just up and to the right. so that's been super fruitful. and yeah, that was the best money spent, I would say on the growth front.

[00:02:01] Brent Sanders: Yeah. Cool. and then we've done some paid advertising, right? We've, we've kind of dabbled in, in almost everything.

Wanna talk about some of that?

[00:02:09] Colin Keeley: Yeah. So going down the list, Capterra ads are profitable, as they often are. I think for software companies. I think it's the most dependable way to spend money. 'cause these are potential customers that are already like comparison shopping the different software platforms.

But the scale is limited. I mean, you can only spend so much there. So we've spent, a little over $3,000 there and have seen 29 conversions from it. And then other platforms we've spent money on. Google Ads is one we're trying to figure out right now. they've worked okay. I'd say there's a lot of noise around related interests in, like, in this space, more so gig workers that are trying to get a job at like Rover or Wag.

so more of those dog walking marketplaces. And so it's always a battle of like trying to exclude those people and exclude those keywords. but the tent is generally pretty high here, so some keywords are working for us. We spent, again, a little over $3,000 on this, and I've seen six plus conversions.

It says six, but I think we had conversions kind of screwed up initially, so it's a little better than that. but that's a focus we're working on improving that. I think we could scale there.

[00:03:17] Brent Sanders: And we've, we've done Facebook, which is like, that honestly, what has it been? It's been about 18 months or or longer when Facebook, really Apple introduced these changes.

Facebook has just kind of been kind of a, a wasteland for, for. Ads. I mean, some people have been refiguring it out and tailoring, but it on first blush, like it's not really a B two B advertising platform is the way I think of it. I'm sure some people, would disagree that know, know it better, but it seems like that didn't really pan out all that well.

[00:03:49] Colin Keeley: Yeah. Hasn't worked for us thus far. So we've been trying it. I think it's a lot of a similar issue of gig workers, not like business owners as much. we still use it for retargeting. So you, they come to our website, they, engage with our product, and then we could send them basically testimonials.

So we have something like 50 videos, from users where they're recording themselves saying they love scout or whatever. And you could play those as ads on,Facebook or Instagram . And so we spent, a little over a thousand dollars there. Haven't seen any conversions from it yet, but still have faith in the retargeting, at least.

And spending a little bit going forward there.

[00:04:26] Brent Sanders: Yeah. The videos I thought were a great source of content, right? Like, I think that those videos, they're, they're glowing reviews. They're people that are like on a dog walk almost, a lot of 'em are literally doing their, their job and, and recording while they're doing it.

And I think editing that stuff down and having like a, a proper, oh, I don't know, like, call to action with that. It seems like it's really powerful. So I'm kind of surprised. That hasn't panned out at least that content, but I think that's been pretty recent. The combination of

[00:04:55] Colin Keeley: retargeting. Yeah, adding that to Facebook for retargeting is new.

That's not like what the bulk of the spend has been on so far. it is a question of like, I don't know where else to put those. Like I think we probably should put 'em all over the website. I dunno if it makes sense to upload 'em all to YouTube just so it like exists somewhere in the world. but yeah, we're sitting on some gold there for sure.

[00:05:16] Brent Sanders: Yeah, I mean, I think that stuff's awesome. It's really, it's glowing feedback. It's like scout's amazing. I couldn't have done my business without it. And so if somebody's kind of on the fence between one or another, it's, it's great to have like real, and you can tell it's, it's real people. It's not like, paid advertising where it's like I'm, a, a dramatization of a dog walker.

So it it, in my mind, that works better than like the product video. Where it's like, you can do this with scout and you know it, this is a person that you, you should be able to empathize with because they're doing the job.

[00:05:46] Colin Keeley: That's what people say for landing pages. It's like put the bare minimum of like benefits and like just the headers and then it's just like an entire wall of social proof and that seems to be what converts best.

So we should probably adopt that, on our page as well. other things which we spent a little money on, we added reward full to incentivize kind of word of mouth. I don't remember what our offer is. It's like 30% for the first year, first 12 months, 24 months, something like that. so we just put that up.

I think we're adding it now to like the user flows so they know it exists. we've only spent $152, including like the subscription and we've seen two conversions from it so far. so I have faith in that one. It's just is early days still?

[00:06:27] Brent Sanders: yeah, I, and that is a good lead in, like what I've been doing is pointing any of the, the franchisors that are out there.

And there's a lot of companies we've spoken with, probably about a dozen that have a dog walking franchise or want to try to get it off the ground. And they see this as a, actually a pretty good entry point is like, Hey, if I can, recommend or require the software that like my franchisees use, I can, pull reports and then I can also get some sort of upside financially from, each month.

[00:06:59] Colin Keeley: Yeah. And then other stuff we've done as we tried this money back guarantee. So instead of a free trial, we tried a 60 day money back guarantee. So in theory we're pushing on all these paid ads. I wanted all that money up front, which would let us spend more money on ads. and the reality is it really hasn't panned out as well as we kind of thought it would, or we were hoping it would.

the money back guarantee I would say has been fine, but we've also seen that there's a lot of these potential customers that want to try out scout in the product first and didn't want to like throw it on their credit card, and we're losing that kind of top of funnel that we would have otherwise. So we're moving back to a 14 day free trial with our requiring credit card.


[00:07:37] Brent Sanders: takeaway here is that you can't really do it in a competitive space. I mean, if your competitors have,equivalent features. You're not like a complete standout. Like the case of, we brought this, if you're a listener, we brought this up as like a case study of WP Engine, right? At the time they were the only ones doing this.

And in many cases, even still, there are competitors, but there's no like one-to-one competitor to them even still that, is doing that. So it kind of makes sense like, hey, if you're gonna use us, commit right now, do it. Versus we have, two to three, maybe five to six, on the broader scheme of like competitors, I would say we have two to three really close competitors, and then maybe five to six broader, they don't really work the same way.

They don't really do the same thing, but their software for, this same, vertical. so that seems to be the takeaway is like if you're in a semi crowded space or even, competitive space and all the others are offering trials, but I think you, you nailed it like the. Seeing the responses on Facebook groups of like, Hey, I, I, I tried out three of 'em.

I'm gonna just, basically try all of them in a free trial and see which one I like the best.

[00:08:44] Colin Keeley: Yeah, definitely a lot more comparison shopping going on here. so that was just a learning, it was a worthwhile, I think, experiment for three months. Other things, that we're starting but like don't have great results on yet to talk about, a freemium plan.

So experimenting on pricing a little bit more. raising prices, lead magnets. I just added some of those. so we'll see how that goes. Doing more demos with people and offering them like opportunity to call in or do a webinar or like different things like that. a newsletter, affiliates, I already had YouTube.

We're doing more producing stuff, posting it to YouTube for Scout, and then also courses. so offering free and maybe even potentially paid courses unlike. Very much teaching people how to go from, a single dog walker into building, a nice business side of it.

[00:09:31] Brent Sanders: Yeah, yeah. Which heavily relies on the feature set of, of scouts.

So it, it dovetails really well, and in my mind it's like almost a great thing to give away for free because it's, it's just, hey, if you want to learn how to do this and use this system, otherwise using something else won't really work. Or you're gonna have to kind of figure out a different approach.

[00:09:50] Colin Keeley: Yeah, it's mostly free. for sure. I mean, they're free right now. I wanted to experiment with paid, just doing it at cost as a way just to like, if you could run it at cost, you could pay for exposure more. So, sure. So we're gonna do that as a test as well, but we haven't done that yet. what other I'd say positive that I, we haven't covered is like, I would say we've built a really nice remote team.

With people all over who've cobbled together over the last six months. So running down, I have this list. You can tell me whether they're, great or not. A senior developer, that's in South America. Two junior developers in Cleveland. customer support in Argentina, a writer in the Philippines, QA in the Philippines.

And then our growth guy is in Colorado.

[00:10:30] Brent Sanders: Yeah, I mean, I feel like it's, we've put together a great team. I would say one, one of the developers is actually an intern, and he's, wrapped up already this, this summer. So we, it was really like two months of work, but it's, well take him off the list.

It's been awesome to have, yeah. Take him off the list. No, he's, hopefully, the, the whole point of this is he comes back, after he graduates, that's the. The whole kind of structure that I think about when, a whole separate conversation around internships. But junior developer, has been doing awesome.

he's taken a ton of ownership over our mobile applications and, is at this point, like leading, development on new features, right? Like we, we help and work with each other and, and support one another, but he's really, Kind of stepping into his own. And then the, the latest introduction, the senior developer really just started last month, has just helped us kind of hit our stride.

We're really able to ship and catch up like our backlogs clearing out really quickly. And, it's not gonna be a permanent thing, but it's, it's definitely helping us catch up and, and actually get ahead of our timelines for, for, all the work we wanna get done.

[00:11:39] Colin Keeley: sweet. do you wanna talk about, things in the product side?

I think that's mostly where things are at in the growth of marketing.

[00:11:46] Brent Sanders: Yeah. Yeah. On the product side, it's, what, what has gone well is we've kind of swallowed the toad from a infrastructure perspective. We, we've had to, as we talked about in a prior podcast, we've had to sort of just pull the bandaid off and upgrade the database and upgrade our, overall, system, everything's been, been updated and that's been the, the scariest and most challenging part of this process, which is, try not to break things.

But, but I would say the biggest surprise and, and none of that was a surprise 'cause in diligence we knew like, hey, this is running a, a database that's way outta date and it, it works, but how do you scale or it works, but how do we add new users? So that was kind of the theme of the first three months was like, hey, We're using a billing system that new customers can't seem to use or a, I remember our first day taking over support.

I, I don't know if you recall it, but it was like manually getting credit cards updated because there was no way to do it. And it was like, it had just kind of fallen into a, a bit of disrepair for certain use cases where you had to go to customer support. And by the way, you're locked out of your system.

People want to pay you for dog walking. You can't until you get in touch with us. And we figure out a way to get your credit card updated. So it was a, went from kind of a nightmarish place to a, a better place. But the, the process of of doing that was difficult. It was really hard because there are, a, there's a microservices architecture here where from a tech perspective, you're probably out there rolling your eyes.

'cause this is not a huge system, but, by its sort of design and creation, it's been broken into all these little pieces. So we have a billing system, we have a subscription system, and anytime you want to update like a domain of the system, you've gotta upload and deploy like four different things concurrently and hope all that works well together.

And it, and most of the time it does, but sometimes it's, it's been challenging, That feels good to have done. and behind us now, and I think some of the, the things that could have gone better or I'd like to see continue to get better is just, like creating waves for customers. That's been the one thing that of across other products I've worked on there is usually like a window of time where you can make some changes or even have downtime.

And it's like, because it's global, because it's mission critical. We just have zero leeway with our customers to be like, Hey, this is going to be down for a period of time. And it's, it's difficult to explain to someone. It's like, Hey, we have to take this down for an hour or two hours, and like, no, no, no.

I like, we can't run our business. And there's zero sort of offline, capability. That's one of the challenges. And the other biggest challenge that I'm, I'm realizing and I'm, I just, we've slowed down the release of new features and new. capabilities or new UI is like people are set on how this thing works.

They don't really want to see changes. They want to see fixes, they want to see improvements. They don't really want to see new features. I mean, they say they want new features. They say they want messaging and in video, but they also prioritize disruption as the worst thing you can do. So there's really no point in, in even gambling with a feature that might be disruptive to a workflow.

So I think that's been the, the biggest realization of like, Coming from more of a startup background of like, Hey, we're gonna launch these features, throw them out and see what the response is. Like, no, no, no, no. You can't, you can't even put the button there for them to see because, you have to kind of fully train, provide documentation well in advance and, and it, which makes sense.

I mean, it's putting your shoes in an owner's perspective. You can't just, you can't really have any change. Like a lot of the dog walkers are not technical. They're not super tech savvy. They're dog people. They are great with pets. They're not necessarily like great with figuring out permissions on their mobile application, which, yeah.

I would say like going back to a prior episode, that's probably been the biggest pain point, is, customers that were already kind of annoyed or upset with the platform when we took over, and then having any further disruption causing them to either churn out or, or find an alternative. And it's funny, I've, I've been in touch with some of the customers that, we have one, major customer that that left and that was, I was trying to retain, they were already at risk when we had our first intro conversation, like, Hey, this is, we're the new owners and we're gonna invest in Scout.

And they were already like, we're switching. We're going, we're already annoyed with it. We're already, upset with it. And, but it's funny, even as we push a, a pretty large release yesterday and sent out an email and they responded. Which they, they are still a customer, but they're not like, to the extent that they were, they've moved their walkers to, they're already kind of transitioned to another platform, but they're like, Hey, we're still rooting for you.

We're hoping to come back. Like they, I think that is the, the realization that like, during diligence, this company was still growing. And despite that, we were kinda of looking at the tech being like, wow, this, this stuff's going to need a lot of work and we're gonna need to dig into it. And a lot of it was like, well, it.

It's still growing. So what I think we were seeing largely though was just the natural cycles of, of companies growing, right? That, as you pointed out, that's one of the reasons why we we bought the business is that by itself, without adding new customers necessarily, you're seeing, the, the seat and headcount grow.

[00:17:06] Colin Keeley: For sure. I guess one thing to circle back on, we talked before about that Facebook group that was problematic. It was becoming super negative. I feel like we have won it over. the negativity is mostly stopped. Yeah. You're posting like updates, we're getting like valuable responses. yeah. If any issue ever pops up, I always pop in and, try to neuter it real quickly and try to help.

And then it seems like the negativity kind of gets stopped in its tracks. So I feel good about that one. Yeah, I think that's like an asset now going forward of having engaged users in like one group.

[00:17:38] Brent Sanders: Yeah. And in fact, I'm confident adding more people to it now. I think there, there have been customers that didn't know or don't know it exists that I've let 'em know, Hey, this is here and we, this is where I'm gonna post new features.

I mean, I've, I post the new feature, kind of upcoming features that we're innovating on, and we post that as part of our release notes. Like, Hey, here's what's coming next. Give us your feedback and. Man, the feedback we get is so, so, so positive. But the reality is just people are really, I think pent up about kind of, Hey, I've been asking for these things for years and they haven't happened and now I have this issue happening with my billing.

Or, it's like they get so frustrated I think that they've been waiting and so we're giving them what they're asking for, which is movement, and we're investing in this, and so, I think we just need to see, more continual and stable releases happening. it definitely did not help to have the outage we had.

I think that is, something that every day that goes by that we don't have an outage and we've, mitigated a lot of those issues. having this new database just gives me so much better sleep. it's the main, that's the main thing is like, it, it's if you have something that is a potential, a bottleneck on a system like this.

I, I think if I had to do one thing over, I would've probably done that before anything else. Now that I know what I know is like, I would've just said, Hey, we're moving the database right now. Even though my philosophy around the product has been like, don't touch anything for as long as possible.

'cause things, I'm still learning the system, but I think that would've been. that would've probably been wise to even do it earlier, which I, this, I think our plan was to replace this database a year after the, in another six months or so, and just kinda let it link along until we really need to really understand the system.

But that's, that's small scale, these, these micro SAS businesses is they, we bought it with the hair on it and, it's just, that's the, the situation we took on. And I, I don't regret it. Right. I guess I don't want to. See, seem like, oh man, we, we bit off more than we can chew it. That's definitely not the case.

It's just, it would've been nicer to do this in a planned way rather than a forced way. That's, that's the case that I, I kind of wanted to avoid

[00:19:54] Colin Keeley: for sure. any final thoughts? Anything you wanna talk through on Scout? I think we covered most of all the stuff we focused on. Yeah, no, I

[00:20:02] Brent Sanders: mean I think like continuing to win over that Facebook group is, is it's a great place to leave this, and I think we're seeing that with customers, especially longtime customers.

The thing that I'm seeing is a correlation to happier customers and referrals coming in. I think that there's a lot of, as you, you might see on, on Slack, we get a notification anytime somebody signs up, but it feels like sentiment is rising again. And I'm seeing more and more my friend uses Scout and recommended it.

And to these like personal referrals actually have an impact in our, monthly signups, which, with, with ad spend paused or, it's hard to know because, you're also running ads and it's simply a

[00:20:43] Colin Keeley: tight knit community. people seem to really help other dog walkers. Like there's all these other Facebook groups and people are always asking like, what software should I use?

What leashes do you like? so I think, yeah, word of mouth. That's why it's a little weird that affiliate hasn't panned out yet. I mean, it seems like word of mouth is great for us, and China incentivize it just hasn't quite made a difference quite yet. But I think over time it will. Yeah,

[00:21:06] Brent Sanders: I, I totally agree.

I think, the affiliate program maybe is confusing. I dunno, p I, we get a lot of questions and support about it and they don't really get escalated to me. But if I'm, I do a, a daily or twice daily kind of walk through support and see what's kind of coming through and it people. Don't seem to, I I don't think they understand the pricing and that's a whole separate bag of tricks, which is our pricing is and always has been kind of weird.

It's very fair, but I think that's one thing I would love to look at in the next six months. And, and we've talked about this internally of like other ways of charging that are simpler. 'cause frankly, in arrears is not normal for this space. And it's very, very fair. But it's also very, very, Difficult to maintain.

It's difficult to explain. It's difficult for new customers to understand.

[00:21:52] Colin Keeley: Can you hear me, Colin? No. I've been having quite a bit of internet issues. I assume what you said is

[00:21:57] Brent Sanders: freaked up. Yeah. You were breaking up a little bit.

[00:22:02] Colin Keeley: Yeah. Yeah, I don't know what is going on with Riverside, but it has been problematic recently. Weird.

[00:22:10] Brent Sanders: All right. Well, either way. I think that's it in terms of, we're, we're scouts at, I'm super optimistic on this business. I'm spending, I, over the last six months I've spent most of my time on this. I'm starting to kinda get back to some of the other businesses and pair my time between them.

But, I still am super bullish on this and I think this is,going to be a big opportunity for us.

I didn't hear what you said, but yes, I, I agree fully. all right, Colin. Well, thanks so much for listening,

[00:22:38] Colin Keeley: everybody. All right. Take care. Bye-bye. We'll try to figure out this internet stuff.

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