Micro-PE Course & Buying vs Building

Colin and Brent discuss Colin's Micro-PE course production and buying vs building Shopify apps.

Apple Podcast / Spotify / Google Play / Overcast

Colin Keeley: [00:00:00] Hello. And welcome back. This is Colin Keeley. Here

Brent Sanders: [00:00:03] And I'm Brent Sanders.

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

Brent Sanders: [00:00:08] Yes, indeed. And this week ,  it sounds like Collin's been busy working on his course. It sounds revitalizing ,  the spirit of avocado, although it doesn't sound like your course is going to end up on an, on our baby avocado.

Colin Keeley: [00:00:20] Yeah, it's a bit of a betrayal of me and you. But I, yeah, I've done a lot of research and we know the course of action really well. I'm leaning towards podia for hosting the course.

Brent Sanders: [00:00:29] To back up, the course would be on what exactly.

Colin Keeley: [00:00:32] so I tweeted this out this week. I've gotten the habit of tweeting out ideas like startup ideas, course ideas, and gotten really good responses for things recently. So I did a sleeping egg that got a good response on Twitter, a new good reads. And now this micro P course,

Brent Sanders: [00:00:47] wait ,  sleeping. Oh yeah, like you sleep in and like a big cocoon.

Colin Keeley: [00:00:51] I've had this idea for a long time and I think everyone thinks I'm crazy, but I think you want to control as many variables in your sleep as possible. And especially like living in a city there's noise and like air quality actually matters a lot for your sleep. So I do think it sounds ridiculous, but, and people should be sleeping in some kind of like egg effectively, like where, or like a hyperbaric chamber, like a, one of those inflatable balloons where everything is. Controlled. So eight sleep controls your bed temperature effectively, but there's also like noise and light and all these other things that matter air quality humidity. So if you could just control all variables, it seems like that's the natural end game of perfecting sleep.

Brent Sanders: [00:01:31] I like it. I like that idea. We can pursue that on a, we'll spin up another set up the docs for that separately, but ,  the course itself would be on micro PE. Yeah. Basically how to buy these businesses grow 'em and, sell up. So I think it could also work for all these founders bootstrappers that are like, trying to understand this whole process that they're probably only going through once or twice.

Sure. I think there's,  that, you have experienced and done. There's probably parts of it that you haven't. So how are you going to fill some of those gaps?

Colin Keeley: [00:02:00] Yes. Good question. So I have a lot of these like docs in can walk through the process that I've done already. I also would like to do guest speakers for certain topics. So like SBA seven, a loans. I've never actually done one. Like I know generally how it works and I could give a lecture on it, but I'd love to bring in someone that knows it better than me.

Or like bringing in guest speakers for like content sites and how they've done acquisitions and like walking through it. I want this to be like super tactical. So you'd take this course and you know exactly what you need to do to go from finding a deal, to closing a deal, to growing it, like every step of the way.

And I think this is just like such a early space that there's like teaching could go a really long way here.

Brent Sanders: [00:02:40] Yeah. Besides the fact that you're, we talked about last week, this like mindset of abundance, like it's better to have, I don't know. There's plenty of deals, plenty businesses. Like you're not going to share. You're probably going to create a bunch of competitors for us, but  there's enough to go around.

There's just, it's a lot of commerce. It's not if you had, a hundred, 200 more people looking after the same deals. Sure. It will get competitive. But ,  that's not how the world really works. It's especially if can foster someone else to, learn how to do this, build a business and create some sort of like financial independence.

And they're send you a note and say, Hey, I was able to do this. Sure. It would be nice if you could do that too, but still there's gotta be a lot of satisfaction in enabling other people that, don't have the resources to do it ,  to try this out.

Colin Keeley: [00:03:25] Yeah, I love this online education space. Obviously we launched avocados, so we're in it. Back in venture capital times, I met with every CEO of these college alternatives. I just am a huge believer in this ,  No online learning and what the future could hold for it. And I've been looking for my spots.

And I think there's just for my tweet, there's clearly so much demand here and people would love to do it and they don't really know how. And so I started working out at this week, is that right? Outlining it to me and making a course is like the biggest component and takes the most time.

So I had all these notes in Roam for the most part already. So now it's just like organizing them all. Then I'll put them into a effectively, a PowerPoint and then record the videos and everything. And I have, all this stuff set up for the podcast already. So it's like organizing my thinking is the biggest time suck, but I'm making good progress.

Brent Sanders: [00:04:13] Any ,  any guests in mind that you'd have come on and talk about some of the gaps like that you haven't done or aren't as tooled up on.

Colin Keeley: [00:04:20] Yeah. So how do you know all these people, like I've had calls with them? So live Oak bank is the leader in the search fund or private equity world for the debt side. So I've spoken with some of them before. I'd like to have one of them on. I spoke with a micro angel. What's his name?

Anyway. Eel. Toledano had really struggled with names today, but

Brent Sanders: [00:04:47] Okay.

Colin Keeley: [00:04:47] he agreed to do a guest lecture. He runs a awesome newsletter called micro angel. So he's buying and rolling up Shopify apps. So he'd be another one. I'd love to have Andrew Wilkinson on to talk about how he compensates CEOs and find CEOs.

I think that's super interesting.

Brent Sanders: [00:05:02] Yeah. Yeah. I've heard ,  I heard him talk about that and go through the structure and that was. Inspiring is it is one model. It's not the only model, obviously, there's interesting ways, but it's this idea ,  that you can design your own strategy.

There is no one way to do it. And it's the F the art of this, that, that makes it fun to me. Other than, it's, I don't know. My favorite part about this space is that these are existing businesses and you're not. I'm just spent way too much time finding product market fit for businesses and for projects, I've worked on it.

It's a breath of fresh air to already have it and then be able expand upon it.

Colin Keeley: [00:05:37] Yeah. Finding product market fit is really hard. Like you just get so much more, leverage it. Like any little change you make when something already has revenue and significant revenue is just awesome. It makes a huge difference versus Oh, hopefully this takes off. Hopefully all these little decisions we're making are actually meaningful because there's a good chance.

They aren't.

Brent Sanders: [00:05:56] It's true. It's true. Cool. Yeah. So the course, no, no release date, kinda in mind, you're in the early stages of just getting the outline together. You're going to do video though. You're not going to do audio.

Colin Keeley: [00:06:09] So I'm going to record video and like screen shares with the idea that you don't really need it for most of this stuff. And so the audio will be the biggest component. So I'm thinking I'll have recorded with loom and have slides on the screen that. All right. Like just a few words or pictures or something like that.

And then the audio is like the real component and where the real information flies. And then with podia, which is what I'm leaning towards, you have all this text below, so you could link out to other things as needed as well. And then I'm thinking of like a community on the backend. So once you complete the course, you graduate to a community.

And I think that's just going to be enormously valuable for people going forward and for ourselves as well. Like sharing deals or getting feedback on stuff, finding investors like someplace for all these micro PE people to live. That's not.

Brent Sanders: [00:06:56] Yeah. Speaking of which anything blow up on Twitter this week, I really have been heads down. But ,  is there anything interesting in the Twitter sphere and that you've been saying?

Colin Keeley: [00:07:03] Like drama the week.

Brent Sanders: [00:07:05] Yeah. What do you got?

Colin Keeley: [00:07:07] nothing in particular. Elon Musk is an, sabotaging my Bitcoin, which hasn't been ,  appreciated, but.

Brent Sanders: [00:07:14] Yeah. The doge father. Yeah. That's all right, now I'm glad I didn't miss anything on Twitter, but ,  one thing that I was spending a little bit of time this week has been in that Shopify world and it reminded me of what was the guy that. It an implosion wasn't fast. What was the name of the ,  the company that was, they were going to do international payments and stores to compete with Shopify.

We talked about it. I think one of our earlier podcasts when he imploded, that was the reason I asked. It was just curious if there were any new Twitter dramas that had popped up, but I've been doing a little bit of work in the Shopify world and I really do see like what everyone's been talking about the.

Size of that ecosystem is phenomenal and there are still plenty of gaps to explore. I, we always take a five minute break to talk about, my, my goofy candle business, but, it's, it is funny that there isn't anybody who ,  and I bring this up because you and I had this conversation about a year, maybe, no, this is two years ago.

It was before Albert was born. About, are you sure you want to build that yourself? Can you just do it on Shopify? There still is not a, an, so I, we tried out two subscriptions apps now and none of them really do what like the Cratejoy model is, or the boxed subscription model is. So I dug into that to see what it would take.

And it really does seem like there's a lot of opportunity there because they have so many stores, they have so many people and you can really charge a significant, like a fair amount as opposed to It's funny, people will pay a hundred dollars a month for a extension to a Shopify app. So let alone an app that powers a major part of your business.

Like a thing that you need. Eat Hey, it's going to change the skew every month. It's we got to have that. Otherwise our reporting is going to be off. And so you easily charge in that space versus if you look at like desktop software, like people won't pay 10 cents for anything, it's all free software.

And  that, that model just seems really right for. Additional growth. Like I thought it would be played out by now, but I really don't think it is. So anyways, that's the little ,  tech update from the Shopify subscription ecosystem, which ,

Colin Keeley: [00:09:21] Yeah, there's a monster premium for Shopify apps versus SAS apps generally in the micro P world. Just like it's growing so fast and it's so closely tied to making more money for these e-commerce stores. If people are willing to pay, Hey, I have a friend that runs a, like a online coffee business and he was saying subscription apps were crappy.

Is that a thing? It's just hard to find good subscription apps and

Brent Sanders: [00:09:44] It's going to tell you about recharge. It was great. We, they had a great sales team. They sold us on it, but they don't do prepaid. So it's like our business model just didn't fit. So you purchase, like you want to buy a six month subscription for your mom for mother's day, which a ton of people did, which is great.

But. They don't really do it. Like they do it, like you're going to buy this and then it's going to renew every single month or every three months. It's just not how the box model subscriptions tend to work where there's Hey, you got an order by a cutoff date. And there's all these goofy little rules we have.

And that's just kinda how the business is. And we like it that way because I get all my orders upfront. I know exactly how many. Jars, I got to order how much wax I got or how many weeks order, how much fragrance oil. It makes it a very nice manageable business, but nobody does it. And ,  so I'm probably going to end up building something like that.

I don't know. I'm maybe I'm not, I shouldn't be announcing this right now, but I'm looking into, I had to do so much work with recharge with their API APIs. That I was like, I might as well just build this a subscription app. This is like I'm having to work around so hard. So we ended up calling it off.

It sounds like they are working on it, but they just raised a series B their sales guy reminded me. He was like, Hey, we just raised a bunch of money. We're going to get this done. So they're really nice people, very helpful. But ,  they, we couldn't just. It really wouldn't work for what we were doing.

So I think the short answer is there are about six or seven major players that are doing subscriptions, but they each have their own sort of model that they're supporting. And no one seems to support the model we're going after. So yeah, I might have to spin up a small Shopify subscription app.

Colin Keeley: [00:11:18] So it's a a larger question. Do you want to spin it up or would you like to go find one of the six and acquire one and add these features that you know, it needs, and obviously you feel like it's not, living up to its potential.

Brent Sanders: [00:11:31] Yeah, that's a great question. I need to, I think we need to go and look at the other ones. Like I'm really only looked at. Too in depth. And it does take time because the salespeople tell you, Oh, it does exactly what you need. It's the right choice for you. And then when you go integrate and you get a sort of like a support engineer to actually tell you the truth as Oh no, it doesn't work like that.

It's really meant for this. And there are these workarounds and furthermore, there are plugins that there's one, that's a hundred dollars a month that just changes the renewal date. To the desired date you want on shop on, sorry on recharge, not even on Shopify. So you're buying plugins for the plugins to, to fit your business.

And there, they were charging a hundred bucks for it. And I, all it is a web hook. And so it's this idea that, Oh ,  you're going to have to get a developer and they're gonna have to make sure that the server stays up. It's there's a lot of stuff out there that I think is going to go away because people are going to get a little more savvy.

It's you could just use pipe, dream or Zapier web hooks to like, do some of this stuff for you, but people aren't, they're in the e-commerce business, they are in the candle business. They're in the coffee business. They don't know how to do this stuff. So I think there is a lot of like crust around that market that will probably go away.

But if you can add real value and be. The platform for a business I'm of the mindset, because I have a use case I just want to build to that. See how it goes. And then, there's a big difference between building a subscription app for my business and then building a subscription product on Shopify, because it's just, there's a layer of abstraction.

You have to add on top of it. And this is the reason why the current. Sorta incumbents aren't working for me is because my business is different. And you want to support one and one way of doing things which you could do because the model we use is based on how Cratejoy works. It's very similar in that.

That's where the business used to be run by the old owners. They ran it on Criteo and it took a big piece of the margin. But you could easily market to all the Cratejoy people and say, Hey, you want to move Shopify? This is exactly how Cratejoy works. This is the same model. And you're on Shopify. So here I'm giving away my free ideas.

If somebody wants to build it, who's listening. Let me know. I would be happy to sign up. I don't know that I want to spend my time doing this, but ,  I need to do it. Because frankly ,  as we look at this business, which is on autopilot, we can't sell it being unaccustomed platform.

You know what I mean? I probably should have done this a while ago, even though these APIs weren't available then, but I think you have a really hard time selling a. Business that has good revenue, recurring revenue, but if it's an e-commerce business and it's not on Shopify, I feel like you're going to run into some issues.

Colin Keeley: [00:14:03] Yeah. Any profit you have will get enough by paying developers to maintain your custom installation. Basically

Brent Sanders: [00:14:09] Exactly. Even though  I haven't had to do anything with it, but yeah. I think you need to have something that's. Like robust and supported, but I would tell you under the hood with a lot of these Shopify businesses, I think it's this, you're just moving all that code into plugins and custom apps that are also the same thing as custom code.

So as long as you can plug into something. So in our case, because there is no perfect subscription plugin for us ,  we still have to, in order to, or we have to change our business, which I don't want to do. We've got a good business.

Colin Keeley: [00:14:44] Okay, so which one is this? Is this a, like a request for startups is to say, you want to go buy one or you're going to go build one.

Brent Sanders: [00:14:52] I'm going to do some research, but I'm like, bill, I think we're going to, I'm going to build in, into it. I'm going to build something. And I think when I'm done building this thing, which is only gonna take a week or two to support. This is a subscription model we want, then I think taking a look at like how much more work would it be to spin up a business to do this.

And I think the incumbents are not going to have a good time because this is an API that's been changing. And I think a lot of the struggles that they've had is we used to do it this way, which to do, and I hope we're not going too far in boring the shit out of our listeners. But the reason this was is changes.

You had to support your own checkout process that was old Shopify subscriptions. You basically checked out on your site, which was all custom. And now you can use Shopify checkout as of what, 2020. And so I think all the players like bold and recharge, they've had to retool and rework. And so with that, all I hear is technical debt.

You like ,  we had, it's like what we ran into with avocado, where we wanted to change the model. It's like that introduced. The debt of now it's not so easy to change now. It's not so easy to make fixes. And so the longer you're around, I think from a tech perspective, the more risk you're holding onto ,  with legacy code.

So I do think in this world, it may make sense to, to actually start from scratch. Although I just said how much, I don't want to start from scratch. It's a much more painful process, but I do think it's ,  I'll report back. We're going to do this integration. We'll see how it goes. We'll see how hairy it is.

And have a better sense. But I, my sense is it's a startup

Colin Keeley: [00:16:25] Yeah, I think this is fun for people to hear how we think about buy vs build and like they're both viable options and you have to weigh the pros and cons of each.

Brent Sanders: [00:16:33] yeah. I got to take a look at more of the products. I think that's probably the other homework is, so I brought a partner on to Winsley ,  my candle business and. I will have him do some more research. He's definitely the marketer of the two of us. And he's also Hey man, we gotta be on Shopify, but we've got to integrate with Clavio.

And that's the other risk is you gotta start integrating with all these different platforms. So it's like the idea of building it is a little scary, but maybe it's just what you gotta do to, if you want it to work the way you want it to work.

Colin Keeley: [00:17:03] For sure. Anything else you want to cover?

Brent Sanders: [00:17:05] No, I don't think so. I think I'm trying to think what we have going on the blink cell front or some, we're getting close to the end of our  main development sprint. We've finally got a really good team put together and ,  I feel like that's going smooth. We've been continuing to improve the product and I'm excited to finally start getting the main sort of migration underway.

Colin Keeley: [00:17:26] for sure. And then on the marketing front, our writers, I work in it, turning out articles. Haven't seen the uptick in Google analytics that we'd like, but it's probably just unrealistic to expect that so quickly.

Brent Sanders: [00:17:38] well, there is. So that's the other big news. I think in two weeks we are expecting a pretty major algorithm update where page speed is the number one priority, or I think they're calling it core web vitals. So that's on, that should be on every business radar right now is make sure your site's optimized.

If you don't know how to optimize your site, reach out to me on Twitter. I will point you in the right direction. But no, this is a pretty serious thing that I think it's going to be a rebalancing that they do. And for businesses like ours that do rely on SEO and, are. Domain authority.

It's going to have an impact. So thankfully we just redid our site. It's on Webflow. That's probably the best advice is just move your site to web flow and let them deal with it. But ,  yeah ,  that's going to be the major change thing to look out for in the next two weeks.

Colin Keeley: [00:18:21] That could only help us. We're about as, I think, as fast as you could be

Brent Sanders: [00:18:25] Yeah, I think we're in a good spot. It's funny. The best ratings you can get is like going back to a 1991 website, which is just like text, but obviously we want to be cooler than that. We got to look sharp.

Colin Keeley: [00:18:40] All right. That's all I got.

Brent Sanders: [00:18:42] yeah, me too. Thanks for listening everybody.

Colin Keeley: [00:18:45] Take care, everyone. Bye-bye.

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