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[00:00:01.280 --> 00:00:06.960] All products aren't perfect, and you will have metrics that aren't where you want them to be or are lower than the benchmarks.
[00:00:07.600 --> 00:00:13.040] Don't hide these, be very forthcoming about them, but present in your roadmap how you're going to solve them.
[00:00:13.040 --> 00:00:18.320] Hello, and welcome back to Indie Bytes the podcast where I bring you stories of fellow indie hackers in 15 minutes or less.
[00:00:18.320 --> 00:00:22.720] Today, I'm not actually joined by an indie hacker, but by someone who can help a lot of indies out there.
[00:00:22.720 --> 00:00:26.320] Josh Peleg is the head of biz dev for mergers and acquisitions at Blue Throne.
[00:00:26.320 --> 00:00:30.080] Essentially, he knows all about how to sell a business from the buyer's side.
[00:00:30.080 --> 00:00:40.720] In this episode, we're going to learn from Josh exactly what you need to know about selling your indie product: how you find an acquirer, what does the process look like, and how you can get a deal over the line.
[00:00:40.720 --> 00:00:49.840] Now, I've spoken to some indie hackers who have gone through some exits, such as Rob Walling, Rami Kafash, Tebow Louis Luca, and more, but not so much from the acquirer side.
[00:00:49.840 --> 00:00:51.760] So, let's find out what it takes.
[00:00:51.760 --> 00:00:52.960] Josh, welcome to the pod.
[00:00:52.960 --> 00:00:53.680] How are you doing?
[00:00:53.680 --> 00:00:54.560] I'm doing great, man.
[00:00:54.560 --> 00:00:56.080] Thank you very much for having me.
[00:00:56.080 --> 00:00:57.200] So, let's talk about Blue Throne.
[00:00:57.200 --> 00:00:59.440] I was trying to figure out exactly what Blue Throne does.
[00:00:59.440 --> 00:01:00.800] I know it's VC funded.
[00:01:00.800 --> 00:01:02.000] I know you acquire at.
[00:01:02.000 --> 00:01:06.800] You've done like 10 at this point, maybe more, but I couldn't figure out what you actually did.
[00:01:06.800 --> 00:01:11.040] We basically try to be the indie hackers' best friend.
[00:01:11.040 --> 00:01:19.920] We raised a bunch of VC money about three years ago to find indie hackers in the app space that had taken a really nice product idea from zero to one.
[00:01:20.240 --> 00:01:35.200] And then, what normally happens is they get overwhelmed because suddenly they've got thousands of users, they've got problems with community management, community moderation, they've got server issues, they don't know which marketing channels are best to optimize, and they can bring advisors to help with these things.
[00:01:35.200 --> 00:01:41.360] But often, when we come in, the best thing that happens is we come in with the support to solve all of these problems for them.
[00:01:41.360 --> 00:01:50.560] And the deals we typically end up doing an acquisition of the founder's company, and then we kind of bring the solutions to the problems that that founder has been experiencing.
[00:01:50.560 --> 00:01:56.000] So, for example, a deal we did last year, the founder had really big issues with community management.
[00:01:56.000 --> 00:02:03.560] He was getting a lot of dodgy people entering into his app, chatting with his users, joining his Discord server, and he didn't have the manpower to deal with this.
[00:02:03.560 --> 00:02:14.040] Now, we have like a whole community management team inside, so we kind of added that to his product, solve that issue for him, and then kind of helped him go past the zero to one point and from the one to ten point.
[00:02:14.040 --> 00:02:29.960] So, if I'm in Indie Hacker and I've been building my app, I get to a certain revenue milestone and it's starting to get tough, like the support burden's starting to get tough, or I've got to the point where I want to move on to the next project.
[00:02:29.960 --> 00:02:30.840] I don't know.
[00:02:30.840 --> 00:02:33.480] But Exton's looking like an option.
[00:02:33.480 --> 00:02:36.920] Where am I going to go to look for a potential acquirer?
[00:02:36.920 --> 00:02:38.200] Where does one start?
[00:02:38.200 --> 00:02:40.760] So, here's the thing, and this is kind of an insider secret.
[00:02:40.760 --> 00:02:44.680] A lot of the acquirers out there are tracking the market very, very carefully.
[00:02:44.680 --> 00:02:47.960] They're using platforms like Data AI and Sensor Tower.
[00:02:47.960 --> 00:02:48.760] So, what does that mean?
[00:02:48.760 --> 00:02:57.640] If your app is on a growth trend and you are doing very well, I can pretty much guarantee you that you've got 10 pairs of eyeballs sitting in an office somewhere watching your app grow.
[00:02:57.800 --> 00:02:59.560] They're very much aware of you.
[00:02:59.560 --> 00:03:06.840] If you want to increase your chances of being found and you really are kind of aiming for that exit, there are a couple of actionable steps you can take.
[00:03:06.840 --> 00:03:10.680] First one is pretty obvious, but you'd be surprised at how many people don't do this.
[00:03:10.680 --> 00:03:12.680] Make sure your company has a LinkedIn profile.
[00:03:12.840 --> 00:03:18.040] Doesn't have to be super active, but make sure you are able to be found if you want to be found.
[00:03:18.040 --> 00:03:19.160] Then there's the other side of it.
[00:03:19.160 --> 00:03:25.400] Let's say you want to be acquired by someone a bit more niche who maybe is not acquiring stuff as their main business.
[00:03:25.400 --> 00:03:27.880] So, with these guys, you can do a couple of things.
[00:03:27.880 --> 00:03:32.760] A, you can start building relations with them before you're thinking about exiting.
[00:03:32.760 --> 00:03:36.280] The other thing you can do is try and attend these conferences.
[00:03:36.280 --> 00:03:40.840] And because these big companies have money, they normally send people to these development conferences.
[00:03:40.840 --> 00:03:45.120] I'm thinking about the Google conferences, I'm thinking about App Promotion Summit.
[00:03:44.840 --> 00:03:47.120] I'm thinking about Mal Vegas, for example.
[00:03:47.440 --> 00:03:53.840] If you go to these places and you have an eye out for these kind of people, you will find there and you'll be able to start building relations with them.
[00:03:53.840 --> 00:04:02.960] The final piece of advice is go to VCs, even if you're not fundraising, because VCs will be very well connected with potential buyers.
[00:04:02.960 --> 00:04:12.160] So if you go to a VC and you strike up a relationship with some of the associates or managing partners there, they will be able to intro you to relevant buyers for your product.
[00:04:12.160 --> 00:04:15.200] And if they're a good VC, they'll understand your product really well.
[00:04:15.200 --> 00:04:16.960] So they'll be able to make the right intros for you.
[00:04:16.960 --> 00:04:21.200] And they can do, you know, 10 intros in one week, which will save you tens of hours.
[00:04:21.200 --> 00:04:22.080] Yeah, it's interesting.
[00:04:22.080 --> 00:04:30.080] The type of company we're sort of talking about now are ones that do have a certain amount of traction that would entertain a conversation with a VC.
[00:04:30.080 --> 00:04:33.440] What sort of level of revenue are we talking here, Josh?
[00:04:33.440 --> 00:04:41.920] So for Blue Throne, we look for anything doing between half a million a year all the way up to seven, eight million dollars a year.
[00:04:42.160 --> 00:04:47.760] For those that are doing MRR, that's half a million is around 40k MRR and up.
[00:04:47.760 --> 00:04:54.000] Now, when a lot of these entities are starting companies, Josh, they might not always be thinking about selling.
[00:04:54.000 --> 00:04:56.640] Now, I interviewed a chap called Arvid Carl.
[00:04:56.720 --> 00:04:58.560] He sold his app Feedback Panda.
[00:04:58.560 --> 00:05:01.520] They're around 65k MRR at that point.
[00:05:01.520 --> 00:05:03.600] He noted the book Built to Sell.
[00:05:03.600 --> 00:05:15.040] So I'm wondering: are there things you can do when you're starting that are quite easy to do to make sure further down the line, if you get to a good point with your business, it is going to be attractive to an acquirer?
[00:05:15.040 --> 00:05:19.920] So the first thing I'd say is actually your number one priority should be building a fantastic product.
[00:05:19.920 --> 00:05:26.080] And you shouldn't be worrying yourself with things like the right accounting software or the right data room at that point.
[00:05:26.080 --> 00:05:32.360] But let's say you do have a great product and you can start thinking about structuring your business to be sold more effectively.
[00:05:29.600 --> 00:05:47.000] Some of the really important points to consider are splitting your staff, understanding who is a consultant, who is a full-time employee, making sure this is clear to the acquirer, making sure your books are in order in terms of accounting and tax paying, because that stuff will be dug up in due diligence.
[00:05:47.000 --> 00:05:57.320] And then the other thing is having a really strong, forward-looking product roadmap, because as soon as you start a discussion with an acquirer, they're going to want to know what does the future look like.
[00:05:57.320 --> 00:06:00.920] Because let's dive into the mind of an acquirer for a second.
[00:06:00.920 --> 00:06:07.800] It's just maths that they want to buy you for X today with the assumption you'll be worth more than X tomorrow.
[00:06:07.800 --> 00:06:15.720] And so to do that, you need to present this product roadmap of how you're going to achieve those levels of growth once this company acquires you.
[00:06:15.720 --> 00:06:23.560] And I'll just add another point there that all products aren't perfect and you will have metrics that aren't where you want them to be or are lower than the benchmarks.
[00:06:24.120 --> 00:06:25.160] Don't hide these.
[00:06:25.160 --> 00:06:33.560] The best way to tackle your worst metrics is to be very forthcoming about them, but present in your roadmap how you're going to solve them.
[00:06:33.560 --> 00:06:39.400] But from the other side, Josh, what should I look out for in an acquirer in terms of red flags?
[00:06:39.400 --> 00:06:45.880] What am I looking for that means it might not be a right fit for that potential acquirer to acquire my company?
[00:06:45.880 --> 00:06:59.960] Yeah, this is such a good question because as much as your acquirer is going to do their homework on you, you should absolutely be doing your homework on the acquirer because you might be about to work for them and they might be about to take control of your baby, your project.
[00:06:59.960 --> 00:07:04.680] So let's go through a few actionable things you can kind of tick off as you're in these discussions.
[00:07:04.680 --> 00:07:05.160] Okay.
[00:07:05.160 --> 00:07:13.560] So number one, look at the acquirer, look at their past acquisitions, and you want to look for, has this acquisition grown since it was acquired?
[00:07:13.560 --> 00:07:15.000] You can check this in a number of ways.
[00:07:15.280 --> 00:07:21.680] If you have access to SensorTower or Data AI for mobile apps, you can check the numbers, check the revenue, check the downloads.
[00:07:21.680 --> 00:07:25.440] You can also check the headcount of the acquired company on LinkedIn.
[00:07:25.440 --> 00:07:30.080] If the headcount has grown since the acquisition, that's a really good green flag.
[00:07:30.080 --> 00:07:35.120] It means they're investing, they're hiring, they're not just firing people, which is one of the risks.
[00:07:35.120 --> 00:07:36.080] What else can you check?
[00:07:36.080 --> 00:07:43.760] So you can check the leadership of the acquiring company, check out their LinkedIns, understand do they have experience in your vertical?
[00:07:44.320 --> 00:07:46.800] Did they work at companies that you highly respect?
[00:07:46.800 --> 00:07:48.000] All of these things.
[00:07:48.000 --> 00:07:56.000] And the next thing you can do, which is a bit more tricky and requires more work, but I would really, really recommend it, is do some referencing.
[00:07:56.000 --> 00:07:58.640] So how can you do that if you don't have the network?
[00:07:58.640 --> 00:08:04.880] Go to the acquiring company, go to the leadership, and maybe look for a couple of mutual connections on LinkedIn.
[00:08:04.880 --> 00:08:11.520] Or you can go and talk to the VC that back this acquiring company and say, listen, I'm in conversations with X.
[00:08:11.520 --> 00:08:12.720] They're looking to buy me.
[00:08:12.720 --> 00:08:14.320] I'm really interested in this deal.
[00:08:14.320 --> 00:08:16.640] However, I just want to do some homework on these people.
[00:08:16.640 --> 00:08:19.680] Can we set up a 20-minute call just so I can pick your brain?
[00:08:19.680 --> 00:08:22.560] This is like a super casual, super normal question to ask.
[00:08:22.560 --> 00:08:23.520] It's not weird.
[00:08:23.520 --> 00:08:27.200] And it will just allow you to reference these people to understand: are they great?
[00:08:27.200 --> 00:08:28.000] Are they respected?
[00:08:28.000 --> 00:08:31.600] Or are they actually people you don't really want to be working with day to day?
[00:08:32.320 --> 00:08:37.200] What about how I can find an acquirer that is just perfect for me?
[00:08:37.200 --> 00:08:38.560] What am I looking out for?
[00:08:38.560 --> 00:08:40.160] What are the green flags?
[00:08:40.160 --> 00:08:44.160] Okay, so you're looking at acquirers that are either very profitable.
[00:08:44.160 --> 00:08:46.160] If they're a public company, you can check that.
[00:08:46.160 --> 00:08:50.160] B, if they're a venture-backed company, did they recently raise a fundraising round?
[00:08:50.160 --> 00:08:54.400] Because this signals that they have the cash to spend on the acquisition deal.
[00:08:54.400 --> 00:08:57.360] C, is their own headcount increasing?
[00:08:57.360 --> 00:08:59.520] This is a really good sign of growth.
[00:08:59.720 --> 00:09:12.440] And the other thing you can do, which is kind of sneaky, but a really good tip, is if the acquirer has recently acquired another company, you should reach out to that smaller company's founder and say, hey, mate, listen, love your work.
[00:09:12.520 --> 00:09:14.120] Think you've done a great job.
[00:09:14.360 --> 00:09:15.960] You're a big inspiration to me.
[00:09:15.960 --> 00:09:17.560] I saw you were just acquired by Bumble.
[00:09:17.640 --> 00:09:19.000] How was that experience for you?
[00:09:19.000 --> 00:09:20.440] How was the integration process?
[00:09:20.440 --> 00:09:21.480] How do they treat you?
[00:09:21.480 --> 00:09:23.320] How are they in the due diligence process?
[00:09:23.320 --> 00:09:29.640] And I think nine times out of ten, that founder is going to be very happy to kind of give you some feedback and actually tell you how it went.
[00:09:29.640 --> 00:09:33.000] And just one more point before we move on.
[00:09:33.000 --> 00:09:36.440] Before you sign on the dotted line, there's going to be months of work.
[00:09:36.440 --> 00:09:38.200] There's going to be financial due diligence.
[00:09:38.200 --> 00:09:43.240] There's going to be conversations with the CFO of the company, the CEO, et cetera.
[00:09:43.240 --> 00:09:45.080] This is a great litmus test.
[00:09:45.080 --> 00:09:47.480] Do you enjoy having these conversations with them?
[00:09:47.480 --> 00:09:48.360] Are they a burden?
[00:09:48.360 --> 00:09:49.320] Are they stressful?
[00:09:49.320 --> 00:09:50.520] Are these people rude?
[00:09:50.520 --> 00:09:53.080] Are these people asking the right questions about your company?
[00:09:53.080 --> 00:10:01.640] I think you should use every conversation with that acquiring company to really generate an understanding of how they operate because how they talk to you is how they do business.
[00:10:01.960 --> 00:10:04.200] So if that works for you, then it's a good sign.
[00:10:04.200 --> 00:10:08.120] It's interesting about the type of acquisitions that can happen.
[00:10:08.120 --> 00:10:14.680] Like as you're going through this due diligence stage, some founders might be done with their business at this point.
[00:10:15.000 --> 00:10:30.360] So the point I'm trying to get to, can you talk me through the different types of acquisitions and how you can sort of tailor your approach to each of these earnouts, like cash, you're done, clean cut, exit, equity?
[00:10:30.600 --> 00:10:32.200] What should people look for?
[00:10:32.200 --> 00:10:42.040] So there are a bunch of different options, which really depends on your financial situation, your stage of life, essentially whether you want to continue working for this company under them or not.
[00:10:42.040 --> 00:10:44.120] The most simple option is cash on day one.
[00:10:44.120 --> 00:10:47.600] This is when the full price of the acquisition is paid on day one.
[00:10:47.600 --> 00:10:49.040] This is a really simple option.
[00:10:49.040 --> 00:10:52.000] It makes legal work very, very easy.
[00:10:52.000 --> 00:10:56.160] But it can be a bit of a more rare option because it increases the risk.
[00:10:56.160 --> 00:11:00.800] of the acquiring company because they're putting all of their cash on day one.
[00:11:00.800 --> 00:11:06.480] This works best for founders who basically want to kind of wash their hands of their company and say, listen, I've spent the last few years building this.
[00:11:06.480 --> 00:11:07.440] I'm kind of done.
[00:11:07.440 --> 00:11:14.560] One tip I would give you guys if you're after this kind of exit is you can be pushed to accept a lower valuation.
[00:11:14.560 --> 00:11:20.560] And this is normal because essentially the acquiring company is taking on a much bigger risk by giving you the money on day one.
[00:11:20.560 --> 00:11:24.240] And to basically protect themselves, they will kind of offer you less money.
[00:11:24.240 --> 00:11:26.640] Let's talk about another situation which is pretty typical.
[00:11:26.640 --> 00:11:27.680] It's called an earn out.
[00:11:27.680 --> 00:11:39.120] This is when some cash is paid on day one, but then yourself and the founding team are basically working for a set number of years, often between one and three, for the company.
[00:11:39.120 --> 00:11:45.200] And you'll be paid additional money for the acquisition based on the performance of the product that was acquired.
[00:11:45.200 --> 00:11:48.000] So there'll be KPIs set at the point of signing.
[00:11:48.000 --> 00:11:49.360] And this will be part of the negotiation.
[00:11:49.360 --> 00:11:53.280] Obviously, it's in your interest to make these KPIs as achievable as possible.
[00:11:53.280 --> 00:11:58.240] And if you hit these KPIs or go over these KPIs, you will basically earn more money on your acquisition.
[00:11:58.240 --> 00:11:59.680] That's another option.
[00:11:59.680 --> 00:12:02.080] Another option is equity deal.
[00:12:02.080 --> 00:12:04.320] This will often be cooked with cash as well.
[00:12:04.320 --> 00:12:06.160] So you'll get cash on day one.
[00:12:06.160 --> 00:12:09.680] And then you might be given equity in the company that is acquiring you.
[00:12:09.680 --> 00:12:13.120] So let's say you sell your company for $100 million, for example.
[00:12:13.120 --> 00:12:15.760] They pay you $60 million on day one.
[00:12:15.760 --> 00:12:21.200] And then $40 million is actually given to you in equity of the acquiring company.
[00:12:21.200 --> 00:12:23.040] Now, this can be really good.
[00:12:23.040 --> 00:12:24.640] It can also be a bit more dangerous.
[00:12:24.640 --> 00:12:26.080] Why can this be good?
[00:12:26.080 --> 00:12:28.480] This can be good if you believe in the acquiring company.
[00:12:28.480 --> 00:12:38.040] If you can see their stock price on the market and it's rising and you believe in their products and the management and the leadership, then in theory, your equity today will be worth more tomorrow.
[00:12:38.040 --> 00:12:39.080] Why is this bad?
[00:12:39.080 --> 00:12:40.200] And this is really important.
[00:12:40.200 --> 00:12:41.560] There's two reasons.
[00:12:41.560 --> 00:12:47.240] The first reason is you're now relying on that company to grow the value of the equity.
[00:12:47.240 --> 00:12:48.840] This is out of your control.
[00:12:48.840 --> 00:12:50.360] This is down to the management of the company.
[00:12:50.360 --> 00:13:00.760] So if they're not doing a good job, or you see on the finance sites that their stock's going down, the equity they give you today might be worth less tomorrow.
[00:13:00.760 --> 00:13:08.200] And the other problem as a founder with this deal is that if you have equity, equity is not cash.
[00:13:08.200 --> 00:13:10.200] You have to wait for a liquidation event.
[00:13:10.200 --> 00:13:13.800] A liquidation event is a money when cash is exchanged for the equity.
[00:13:13.800 --> 00:13:19.160] And this is normally another fundraising round, a secondary round, or an IPO, for example.
[00:13:19.160 --> 00:13:23.720] So let's say, again, to the old example, your $40 million is wrapped up in equity.
[00:13:23.720 --> 00:13:33.080] If that company does not raise more money, do an IPO, or do a secondary sale, you have no way of accessing that money until those events happen.
[00:13:33.080 --> 00:13:35.320] And that also is very much out of your control.
[00:13:35.640 --> 00:13:46.760] Well, Josh, I think you've done an unbelievable roundup with decent frameworks and actionable ways indies can find the right acquirer and set their business up to be acquired.
[00:13:47.720 --> 00:13:53.400] I end every episode on three recommendations: a book, a podcast, and entrepreneur.
[00:13:53.400 --> 00:13:54.440] What have you got for me?
[00:13:54.520 --> 00:13:58.760] I think podcasting, my go-to at the moment, is 20 VC by Harry Stebbings.
[00:13:58.760 --> 00:14:04.200] In terms of a book, I just finished reading, The Master and the Margarita by Mikhail Borgakov from Russia.
[00:14:04.200 --> 00:14:11.800] It is a piece of fiction, but it's really good to kind of intersperse your kind of business learning with a bit of fiction because fiction tends to be more fun.
[00:14:11.800 --> 00:14:19.680] And kind of what I like about it is it kind of lets you hold up a mirror to your life and kind of analyze what's going on in your life versus you know what's happening in this book.
[00:14:20.000 --> 00:14:22.960] And I think the third question was was an entrepreneur I really respect.
[00:14:22.960 --> 00:14:24.160] Is that correct?
[00:14:24.640 --> 00:14:25.680] I think there's a lot out there.
[00:14:25.680 --> 00:14:29.360] It kind of reminds me of something that Dimitri Gursky of Flow said.
[00:14:29.360 --> 00:14:31.600] Never take generalist advice.
[00:14:31.600 --> 00:14:36.560] Dimitri basically argues that these people have no knowledge of your life and your specific scenario.
[00:14:36.560 --> 00:14:43.440] And so taking bits of advice from random people on the internet like me and you who don't know anything about you is not the correct way to do it.
[00:14:43.440 --> 00:14:55.200] And the best way to get advice is to talk to people who know you, even if they're not, you know, top of their field or whatever, because these guys and girls can really apply advice to your specific life, which is generally a lot more helpful.
[00:14:55.200 --> 00:14:56.880] Josh, fantastic place to end.
[00:14:56.880 --> 00:14:58.480] Really appreciate you coming on the pod.
[00:14:58.480 --> 00:14:59.120] Amazing, man.
[00:14:59.120 --> 00:14:59.760] This has been great.
[00:14:59.760 --> 00:15:00.480] Thanks.
[00:15:00.480 --> 00:15:06.560] Thank you very much for listening to this episode of Indiebites and a big thank you to my sponsor, Email Octopus, for making the show happen.
[00:15:06.560 --> 00:15:07.440] That's all from me.
[00:15:07.440 --> 00:15:09.360] See you in the next episode.

Prompt 2: Key Takeaways

Now please extract the key takeaways from the transcript content I provided.

Extract the most important key takeaways from this part of the conversation. Use a single sentence statement (the key takeaway) rather than milquetoast descriptions like "the hosts discuss...". 

Limit the key takeaways to a maximum of 3. The key takeaways should be insightful and knowledge-additive. 

IMPORTANT: Return ONLY valid JSON, no explanations or markdown. Ensure:
- All strings are properly quoted and escaped
- No trailing commas
- All braces and brackets are balanced
Format: {"key_takeaways": ["takeaway 1", "takeaway 2"]}

Prompt 3: Segments

Now identify 2-4 distinct topical segments from this part of the conversation.

For each segment, identify:
- Descriptive title (3-6 words)  
- START timestamp when this topic begins (HH:MM:SS format)
- Double check that the timestamp is accurate - a timestamp will NEVER be greater than the total length of the audio
- Most important Key takeaway from that segment. Key takeaway must be specific and knowledge-additive.
- Brief summary of the discussion

IMPORTANT: The timestamp should mark when the topic/segment STARTS, not a range. Look for topic transitions and conversation shifts.

Return ONLY valid JSON. Ensure all strings are properly quoted, no trailing commas:
{
  "segments": [
    {
      "segment_title": "Topic Discussion", 
      "timestamp": "01:15:30",
      "key_takeaway": "main point from this segment",
      "segment_summary": "brief description of what was discussed"
    }
  ]
}

Timestamp format: HH:MM:SS (e.g., 00:05:30, 01:22:45) marking the START of each segment.

Prompt 4: Media Mentions

Now scan the transcript content I provided for ACTUAL mentions of specific media titles:

Find explicit mentions of:
- Books (with specific titles)
- Movies (with specific titles)  
- TV Shows (with specific titles)
- Music/Songs (with specific titles)

DO NOT include:
- Websites, URLs, or web services
- Other podcasts or podcast names

IMPORTANT: 
- Only include items explicitly mentioned by name. Do not invent titles.
- Valid categories are: "Book", "Movie", "TV Show", "Music"
- Include the exact phrase where each item was mentioned
- Find the nearest proximate timestamp where it appears in the conversation
- THE TIMESTAMP OF THE MEDIA MENTION IS IMPORTANT - DO NOT INVENT TIMESTAMPS AND DO NOT MISATTRIBUTE TIMESTAMPS
- Double check that the timestamp is accurate - a timestamp will NEVER be greater than the total length of the audio
- Timestamps are given as ranges, e.g. 01:13:42.520 --> 01:13:46.720. Use the EARLIER of the 2 timestamps in the range.

Return ONLY valid JSON. Ensure all strings are properly quoted and escaped, no trailing commas:
{
  "media_mentions": [
    {
      "title": "Exact Title as Mentioned",
      "category": "Book",
      "author_artist": "N/A",
      "context": "Brief context of why it was mentioned",
      "context_phrase": "The exact sentence or phrase where it was mentioned",
      "timestamp": "estimated time like 01:15:30"
    }
  ]
}

If no media is mentioned, return: {"media_mentions": []}

Full Transcript

[00:00:01.280 --> 00:00:06.960] All products aren't perfect, and you will have metrics that aren't where you want them to be or are lower than the benchmarks.
[00:00:07.600 --> 00:00:13.040] Don't hide these, be very forthcoming about them, but present in your roadmap how you're going to solve them.
[00:00:13.040 --> 00:00:18.320] Hello, and welcome back to Indie Bytes the podcast where I bring you stories of fellow indie hackers in 15 minutes or less.
[00:00:18.320 --> 00:00:22.720] Today, I'm not actually joined by an indie hacker, but by someone who can help a lot of indies out there.
[00:00:22.720 --> 00:00:26.320] Josh Peleg is the head of biz dev for mergers and acquisitions at Blue Throne.
[00:00:26.320 --> 00:00:30.080] Essentially, he knows all about how to sell a business from the buyer's side.
[00:00:30.080 --> 00:00:40.720] In this episode, we're going to learn from Josh exactly what you need to know about selling your indie product: how you find an acquirer, what does the process look like, and how you can get a deal over the line.
[00:00:40.720 --> 00:00:49.840] Now, I've spoken to some indie hackers who have gone through some exits, such as Rob Walling, Rami Kafash, Tebow Louis Luca, and more, but not so much from the acquirer side.
[00:00:49.840 --> 00:00:51.760] So, let's find out what it takes.
[00:00:51.760 --> 00:00:52.960] Josh, welcome to the pod.
[00:00:52.960 --> 00:00:53.680] How are you doing?
[00:00:53.680 --> 00:00:54.560] I'm doing great, man.
[00:00:54.560 --> 00:00:56.080] Thank you very much for having me.
[00:00:56.080 --> 00:00:57.200] So, let's talk about Blue Throne.
[00:00:57.200 --> 00:00:59.440] I was trying to figure out exactly what Blue Throne does.
[00:00:59.440 --> 00:01:00.800] I know it's VC funded.
[00:01:00.800 --> 00:01:02.000] I know you acquire at.
[00:01:02.000 --> 00:01:06.800] You've done like 10 at this point, maybe more, but I couldn't figure out what you actually did.
[00:01:06.800 --> 00:01:11.040] We basically try to be the indie hackers' best friend.
[00:01:11.040 --> 00:01:19.920] We raised a bunch of VC money about three years ago to find indie hackers in the app space that had taken a really nice product idea from zero to one.
[00:01:20.240 --> 00:01:35.200] And then, what normally happens is they get overwhelmed because suddenly they've got thousands of users, they've got problems with community management, community moderation, they've got server issues, they don't know which marketing channels are best to optimize, and they can bring advisors to help with these things.
[00:01:35.200 --> 00:01:41.360] But often, when we come in, the best thing that happens is we come in with the support to solve all of these problems for them.
[00:01:41.360 --> 00:01:50.560] And the deals we typically end up doing an acquisition of the founder's company, and then we kind of bring the solutions to the problems that that founder has been experiencing.
[00:01:50.560 --> 00:01:56.000] So, for example, a deal we did last year, the founder had really big issues with community management.
[00:01:56.000 --> 00:02:03.560] He was getting a lot of dodgy people entering into his app, chatting with his users, joining his Discord server, and he didn't have the manpower to deal with this.
[00:02:03.560 --> 00:02:14.040] Now, we have like a whole community management team inside, so we kind of added that to his product, solve that issue for him, and then kind of helped him go past the zero to one point and from the one to ten point.
[00:02:14.040 --> 00:02:29.960] So, if I'm in Indie Hacker and I've been building my app, I get to a certain revenue milestone and it's starting to get tough, like the support burden's starting to get tough, or I've got to the point where I want to move on to the next project.
[00:02:29.960 --> 00:02:30.840] I don't know.
[00:02:30.840 --> 00:02:33.480] But Exton's looking like an option.
[00:02:33.480 --> 00:02:36.920] Where am I going to go to look for a potential acquirer?
[00:02:36.920 --> 00:02:38.200] Where does one start?
[00:02:38.200 --> 00:02:40.760] So, here's the thing, and this is kind of an insider secret.
[00:02:40.760 --> 00:02:44.680] A lot of the acquirers out there are tracking the market very, very carefully.
[00:02:44.680 --> 00:02:47.960] They're using platforms like Data AI and Sensor Tower.
[00:02:47.960 --> 00:02:48.760] So, what does that mean?
[00:02:48.760 --> 00:02:57.640] If your app is on a growth trend and you are doing very well, I can pretty much guarantee you that you've got 10 pairs of eyeballs sitting in an office somewhere watching your app grow.
[00:02:57.800 --> 00:02:59.560] They're very much aware of you.
[00:02:59.560 --> 00:03:06.840] If you want to increase your chances of being found and you really are kind of aiming for that exit, there are a couple of actionable steps you can take.
[00:03:06.840 --> 00:03:10.680] First one is pretty obvious, but you'd be surprised at how many people don't do this.
[00:03:10.680 --> 00:03:12.680] Make sure your company has a LinkedIn profile.
[00:03:12.840 --> 00:03:18.040] Doesn't have to be super active, but make sure you are able to be found if you want to be found.
[00:03:18.040 --> 00:03:19.160] Then there's the other side of it.
[00:03:19.160 --> 00:03:25.400] Let's say you want to be acquired by someone a bit more niche who maybe is not acquiring stuff as their main business.
[00:03:25.400 --> 00:03:27.880] So, with these guys, you can do a couple of things.
[00:03:27.880 --> 00:03:32.760] A, you can start building relations with them before you're thinking about exiting.
[00:03:32.760 --> 00:03:36.280] The other thing you can do is try and attend these conferences.
[00:03:36.280 --> 00:03:40.840] And because these big companies have money, they normally send people to these development conferences.
[00:03:40.840 --> 00:03:45.120] I'm thinking about the Google conferences, I'm thinking about App Promotion Summit.
[00:03:44.840 --> 00:03:47.120] I'm thinking about Mal Vegas, for example.
[00:03:47.440 --> 00:03:53.840] If you go to these places and you have an eye out for these kind of people, you will find there and you'll be able to start building relations with them.
[00:03:53.840 --> 00:04:02.960] The final piece of advice is go to VCs, even if you're not fundraising, because VCs will be very well connected with potential buyers.
[00:04:02.960 --> 00:04:12.160] So if you go to a VC and you strike up a relationship with some of the associates or managing partners there, they will be able to intro you to relevant buyers for your product.
[00:04:12.160 --> 00:04:15.200] And if they're a good VC, they'll understand your product really well.
[00:04:15.200 --> 00:04:16.960] So they'll be able to make the right intros for you.
[00:04:16.960 --> 00:04:21.200] And they can do, you know, 10 intros in one week, which will save you tens of hours.
[00:04:21.200 --> 00:04:22.080] Yeah, it's interesting.
[00:04:22.080 --> 00:04:30.080] The type of company we're sort of talking about now are ones that do have a certain amount of traction that would entertain a conversation with a VC.
[00:04:30.080 --> 00:04:33.440] What sort of level of revenue are we talking here, Josh?
[00:04:33.440 --> 00:04:41.920] So for Blue Throne, we look for anything doing between half a million a year all the way up to seven, eight million dollars a year.
[00:04:42.160 --> 00:04:47.760] For those that are doing MRR, that's half a million is around 40k MRR and up.
[00:04:47.760 --> 00:04:54.000] Now, when a lot of these entities are starting companies, Josh, they might not always be thinking about selling.
[00:04:54.000 --> 00:04:56.640] Now, I interviewed a chap called Arvid Carl.
[00:04:56.720 --> 00:04:58.560] He sold his app Feedback Panda.
[00:04:58.560 --> 00:05:01.520] They're around 65k MRR at that point.
[00:05:01.520 --> 00:05:03.600] He noted the book Built to Sell.
[00:05:03.600 --> 00:05:15.040] So I'm wondering: are there things you can do when you're starting that are quite easy to do to make sure further down the line, if you get to a good point with your business, it is going to be attractive to an acquirer?
[00:05:15.040 --> 00:05:19.920] So the first thing I'd say is actually your number one priority should be building a fantastic product.
[00:05:19.920 --> 00:05:26.080] And you shouldn't be worrying yourself with things like the right accounting software or the right data room at that point.
[00:05:26.080 --> 00:05:32.360] But let's say you do have a great product and you can start thinking about structuring your business to be sold more effectively.
[00:05:29.600 --> 00:05:47.000] Some of the really important points to consider are splitting your staff, understanding who is a consultant, who is a full-time employee, making sure this is clear to the acquirer, making sure your books are in order in terms of accounting and tax paying, because that stuff will be dug up in due diligence.
[00:05:47.000 --> 00:05:57.320] And then the other thing is having a really strong, forward-looking product roadmap, because as soon as you start a discussion with an acquirer, they're going to want to know what does the future look like.
[00:05:57.320 --> 00:06:00.920] Because let's dive into the mind of an acquirer for a second.
[00:06:00.920 --> 00:06:07.800] It's just maths that they want to buy you for X today with the assumption you'll be worth more than X tomorrow.
[00:06:07.800 --> 00:06:15.720] And so to do that, you need to present this product roadmap of how you're going to achieve those levels of growth once this company acquires you.
[00:06:15.720 --> 00:06:23.560] And I'll just add another point there that all products aren't perfect and you will have metrics that aren't where you want them to be or are lower than the benchmarks.
[00:06:24.120 --> 00:06:25.160] Don't hide these.
[00:06:25.160 --> 00:06:33.560] The best way to tackle your worst metrics is to be very forthcoming about them, but present in your roadmap how you're going to solve them.
[00:06:33.560 --> 00:06:39.400] But from the other side, Josh, what should I look out for in an acquirer in terms of red flags?
[00:06:39.400 --> 00:06:45.880] What am I looking for that means it might not be a right fit for that potential acquirer to acquire my company?
[00:06:45.880 --> 00:06:59.960] Yeah, this is such a good question because as much as your acquirer is going to do their homework on you, you should absolutely be doing your homework on the acquirer because you might be about to work for them and they might be about to take control of your baby, your project.
[00:06:59.960 --> 00:07:04.680] So let's go through a few actionable things you can kind of tick off as you're in these discussions.
[00:07:04.680 --> 00:07:05.160] Okay.
[00:07:05.160 --> 00:07:13.560] So number one, look at the acquirer, look at their past acquisitions, and you want to look for, has this acquisition grown since it was acquired?
[00:07:13.560 --> 00:07:15.000] You can check this in a number of ways.
[00:07:15.280 --> 00:07:21.680] If you have access to SensorTower or Data AI for mobile apps, you can check the numbers, check the revenue, check the downloads.
[00:07:21.680 --> 00:07:25.440] You can also check the headcount of the acquired company on LinkedIn.
[00:07:25.440 --> 00:07:30.080] If the headcount has grown since the acquisition, that's a really good green flag.
[00:07:30.080 --> 00:07:35.120] It means they're investing, they're hiring, they're not just firing people, which is one of the risks.
[00:07:35.120 --> 00:07:36.080] What else can you check?
[00:07:36.080 --> 00:07:43.760] So you can check the leadership of the acquiring company, check out their LinkedIns, understand do they have experience in your vertical?
[00:07:44.320 --> 00:07:46.800] Did they work at companies that you highly respect?
[00:07:46.800 --> 00:07:48.000] All of these things.
[00:07:48.000 --> 00:07:56.000] And the next thing you can do, which is a bit more tricky and requires more work, but I would really, really recommend it, is do some referencing.
[00:07:56.000 --> 00:07:58.640] So how can you do that if you don't have the network?
[00:07:58.640 --> 00:08:04.880] Go to the acquiring company, go to the leadership, and maybe look for a couple of mutual connections on LinkedIn.
[00:08:04.880 --> 00:08:11.520] Or you can go and talk to the VC that back this acquiring company and say, listen, I'm in conversations with X.
[00:08:11.520 --> 00:08:12.720] They're looking to buy me.
[00:08:12.720 --> 00:08:14.320] I'm really interested in this deal.
[00:08:14.320 --> 00:08:16.640] However, I just want to do some homework on these people.
[00:08:16.640 --> 00:08:19.680] Can we set up a 20-minute call just so I can pick your brain?
[00:08:19.680 --> 00:08:22.560] This is like a super casual, super normal question to ask.
[00:08:22.560 --> 00:08:23.520] It's not weird.
[00:08:23.520 --> 00:08:27.200] And it will just allow you to reference these people to understand: are they great?
[00:08:27.200 --> 00:08:28.000] Are they respected?
[00:08:28.000 --> 00:08:31.600] Or are they actually people you don't really want to be working with day to day?
[00:08:32.320 --> 00:08:37.200] What about how I can find an acquirer that is just perfect for me?
[00:08:37.200 --> 00:08:38.560] What am I looking out for?
[00:08:38.560 --> 00:08:40.160] What are the green flags?
[00:08:40.160 --> 00:08:44.160] Okay, so you're looking at acquirers that are either very profitable.
[00:08:44.160 --> 00:08:46.160] If they're a public company, you can check that.
[00:08:46.160 --> 00:08:50.160] B, if they're a venture-backed company, did they recently raise a fundraising round?
[00:08:50.160 --> 00:08:54.400] Because this signals that they have the cash to spend on the acquisition deal.
[00:08:54.400 --> 00:08:57.360] C, is their own headcount increasing?
[00:08:57.360 --> 00:08:59.520] This is a really good sign of growth.
[00:08:59.720 --> 00:09:12.440] And the other thing you can do, which is kind of sneaky, but a really good tip, is if the acquirer has recently acquired another company, you should reach out to that smaller company's founder and say, hey, mate, listen, love your work.
[00:09:12.520 --> 00:09:14.120] Think you've done a great job.
[00:09:14.360 --> 00:09:15.960] You're a big inspiration to me.
[00:09:15.960 --> 00:09:17.560] I saw you were just acquired by Bumble.
[00:09:17.640 --> 00:09:19.000] How was that experience for you?
[00:09:19.000 --> 00:09:20.440] How was the integration process?
[00:09:20.440 --> 00:09:21.480] How do they treat you?
[00:09:21.480 --> 00:09:23.320] How are they in the due diligence process?
[00:09:23.320 --> 00:09:29.640] And I think nine times out of ten, that founder is going to be very happy to kind of give you some feedback and actually tell you how it went.
[00:09:29.640 --> 00:09:33.000] And just one more point before we move on.
[00:09:33.000 --> 00:09:36.440] Before you sign on the dotted line, there's going to be months of work.
[00:09:36.440 --> 00:09:38.200] There's going to be financial due diligence.
[00:09:38.200 --> 00:09:43.240] There's going to be conversations with the CFO of the company, the CEO, et cetera.
[00:09:43.240 --> 00:09:45.080] This is a great litmus test.
[00:09:45.080 --> 00:09:47.480] Do you enjoy having these conversations with them?
[00:09:47.480 --> 00:09:48.360] Are they a burden?
[00:09:48.360 --> 00:09:49.320] Are they stressful?
[00:09:49.320 --> 00:09:50.520] Are these people rude?
[00:09:50.520 --> 00:09:53.080] Are these people asking the right questions about your company?
[00:09:53.080 --> 00:10:01.640] I think you should use every conversation with that acquiring company to really generate an understanding of how they operate because how they talk to you is how they do business.
[00:10:01.960 --> 00:10:04.200] So if that works for you, then it's a good sign.
[00:10:04.200 --> 00:10:08.120] It's interesting about the type of acquisitions that can happen.
[00:10:08.120 --> 00:10:14.680] Like as you're going through this due diligence stage, some founders might be done with their business at this point.
[00:10:15.000 --> 00:10:30.360] So the point I'm trying to get to, can you talk me through the different types of acquisitions and how you can sort of tailor your approach to each of these earnouts, like cash, you're done, clean cut, exit, equity?
[00:10:30.600 --> 00:10:32.200] What should people look for?
[00:10:32.200 --> 00:10:42.040] So there are a bunch of different options, which really depends on your financial situation, your stage of life, essentially whether you want to continue working for this company under them or not.
[00:10:42.040 --> 00:10:44.120] The most simple option is cash on day one.
[00:10:44.120 --> 00:10:47.600] This is when the full price of the acquisition is paid on day one.
[00:10:47.600 --> 00:10:49.040] This is a really simple option.
[00:10:49.040 --> 00:10:52.000] It makes legal work very, very easy.
[00:10:52.000 --> 00:10:56.160] But it can be a bit of a more rare option because it increases the risk.
[00:10:56.160 --> 00:11:00.800] of the acquiring company because they're putting all of their cash on day one.
[00:11:00.800 --> 00:11:06.480] This works best for founders who basically want to kind of wash their hands of their company and say, listen, I've spent the last few years building this.
[00:11:06.480 --> 00:11:07.440] I'm kind of done.
[00:11:07.440 --> 00:11:14.560] One tip I would give you guys if you're after this kind of exit is you can be pushed to accept a lower valuation.
[00:11:14.560 --> 00:11:20.560] And this is normal because essentially the acquiring company is taking on a much bigger risk by giving you the money on day one.
[00:11:20.560 --> 00:11:24.240] And to basically protect themselves, they will kind of offer you less money.
[00:11:24.240 --> 00:11:26.640] Let's talk about another situation which is pretty typical.
[00:11:26.640 --> 00:11:27.680] It's called an earn out.
[00:11:27.680 --> 00:11:39.120] This is when some cash is paid on day one, but then yourself and the founding team are basically working for a set number of years, often between one and three, for the company.
[00:11:39.120 --> 00:11:45.200] And you'll be paid additional money for the acquisition based on the performance of the product that was acquired.
[00:11:45.200 --> 00:11:48.000] So there'll be KPIs set at the point of signing.
[00:11:48.000 --> 00:11:49.360] And this will be part of the negotiation.
[00:11:49.360 --> 00:11:53.280] Obviously, it's in your interest to make these KPIs as achievable as possible.
[00:11:53.280 --> 00:11:58.240] And if you hit these KPIs or go over these KPIs, you will basically earn more money on your acquisition.
[00:11:58.240 --> 00:11:59.680] That's another option.
[00:11:59.680 --> 00:12:02.080] Another option is equity deal.
[00:12:02.080 --> 00:12:04.320] This will often be cooked with cash as well.
[00:12:04.320 --> 00:12:06.160] So you'll get cash on day one.
[00:12:06.160 --> 00:12:09.680] And then you might be given equity in the company that is acquiring you.
[00:12:09.680 --> 00:12:13.120] So let's say you sell your company for $100 million, for example.
[00:12:13.120 --> 00:12:15.760] They pay you $60 million on day one.
[00:12:15.760 --> 00:12:21.200] And then $40 million is actually given to you in equity of the acquiring company.
[00:12:21.200 --> 00:12:23.040] Now, this can be really good.
[00:12:23.040 --> 00:12:24.640] It can also be a bit more dangerous.
[00:12:24.640 --> 00:12:26.080] Why can this be good?
[00:12:26.080 --> 00:12:28.480] This can be good if you believe in the acquiring company.
[00:12:28.480 --> 00:12:38.040] If you can see their stock price on the market and it's rising and you believe in their products and the management and the leadership, then in theory, your equity today will be worth more tomorrow.
[00:12:38.040 --> 00:12:39.080] Why is this bad?
[00:12:39.080 --> 00:12:40.200] And this is really important.
[00:12:40.200 --> 00:12:41.560] There's two reasons.
[00:12:41.560 --> 00:12:47.240] The first reason is you're now relying on that company to grow the value of the equity.
[00:12:47.240 --> 00:12:48.840] This is out of your control.
[00:12:48.840 --> 00:12:50.360] This is down to the management of the company.
[00:12:50.360 --> 00:13:00.760] So if they're not doing a good job, or you see on the finance sites that their stock's going down, the equity they give you today might be worth less tomorrow.
[00:13:00.760 --> 00:13:08.200] And the other problem as a founder with this deal is that if you have equity, equity is not cash.
[00:13:08.200 --> 00:13:10.200] You have to wait for a liquidation event.
[00:13:10.200 --> 00:13:13.800] A liquidation event is a money when cash is exchanged for the equity.
[00:13:13.800 --> 00:13:19.160] And this is normally another fundraising round, a secondary round, or an IPO, for example.
[00:13:19.160 --> 00:13:23.720] So let's say, again, to the old example, your $40 million is wrapped up in equity.
[00:13:23.720 --> 00:13:33.080] If that company does not raise more money, do an IPO, or do a secondary sale, you have no way of accessing that money until those events happen.
[00:13:33.080 --> 00:13:35.320] And that also is very much out of your control.
[00:13:35.640 --> 00:13:46.760] Well, Josh, I think you've done an unbelievable roundup with decent frameworks and actionable ways indies can find the right acquirer and set their business up to be acquired.
[00:13:47.720 --> 00:13:53.400] I end every episode on three recommendations: a book, a podcast, and entrepreneur.
[00:13:53.400 --> 00:13:54.440] What have you got for me?
[00:13:54.520 --> 00:13:58.760] I think podcasting, my go-to at the moment, is 20 VC by Harry Stebbings.
[00:13:58.760 --> 00:14:04.200] In terms of a book, I just finished reading, The Master and the Margarita by Mikhail Borgakov from Russia.
[00:14:04.200 --> 00:14:11.800] It is a piece of fiction, but it's really good to kind of intersperse your kind of business learning with a bit of fiction because fiction tends to be more fun.
[00:14:11.800 --> 00:14:19.680] And kind of what I like about it is it kind of lets you hold up a mirror to your life and kind of analyze what's going on in your life versus you know what's happening in this book.
[00:14:20.000 --> 00:14:22.960] And I think the third question was was an entrepreneur I really respect.
[00:14:22.960 --> 00:14:24.160] Is that correct?
[00:14:24.640 --> 00:14:25.680] I think there's a lot out there.
[00:14:25.680 --> 00:14:29.360] It kind of reminds me of something that Dimitri Gursky of Flow said.
[00:14:29.360 --> 00:14:31.600] Never take generalist advice.
[00:14:31.600 --> 00:14:36.560] Dimitri basically argues that these people have no knowledge of your life and your specific scenario.
[00:14:36.560 --> 00:14:43.440] And so taking bits of advice from random people on the internet like me and you who don't know anything about you is not the correct way to do it.
[00:14:43.440 --> 00:14:55.200] And the best way to get advice is to talk to people who know you, even if they're not, you know, top of their field or whatever, because these guys and girls can really apply advice to your specific life, which is generally a lot more helpful.
[00:14:55.200 --> 00:14:56.880] Josh, fantastic place to end.
[00:14:56.880 --> 00:14:58.480] Really appreciate you coming on the pod.
[00:14:58.480 --> 00:14:59.120] Amazing, man.
[00:14:59.120 --> 00:14:59.760] This has been great.
[00:14:59.760 --> 00:15:00.480] Thanks.
[00:15:00.480 --> 00:15:06.560] Thank you very much for listening to this episode of Indiebites and a big thank you to my sponsor, Email Octopus, for making the show happen.
[00:15:06.560 --> 00:15:07.440] That's all from me.
[00:15:07.440 --> 00:15:09.360] See you in the next episode.