E174: Acquisition Entrepreneur Michael Frew on Buying and Growing SaaS Companies - Watch Here
About The Guest(s):
Michael Frew is an acquisition entrepreneur with a background in engineering. He has been acquiring and running online businesses for the past eight to nine years, specializing in SaaS software. Michael enjoys working with other engineers and focuses on cloud infrastructure, engineering tools, and engineering services.
Summary:
Michael Frew shares his journey from being an engineer to becoming an acquisition entrepreneur. He explains how he stumbled upon the idea of acquiring online businesses and why he decided to pursue this path. Michael primarily focuses on acquiring SaaS software companies and discusses the factors he considers when evaluating potential acquisitions. He also talks about the market conditions for buying and selling businesses and the importance of finding a team that can successfully replace the original owner. Michael emphasizes the need for a good tech stack and the role of customer service in growing and maintaining a business. He concludes by encouraging engineers to consider acquisition entrepreneurship as a viable career option.
Key Takeaways:
- Acquisition entrepreneurship is a career option for engineers looking to transition from their corporate roles.
- Finding a team that can successfully replace the original owner is crucial when acquiring a business.
- The tech stack of a business should be considered when evaluating potential acquisitions.
- Customer service plays a significant role in growing and maintaining a business.
- The market conditions for buying and selling businesses are constantly changing.
Quotes:
- "Acquisition entrepreneurship is pretty professional in the brick and mortar world. We're getting there with online as well." - Michael Frew
- "Don't be discouraged if it takes a little while to find the right business to buy." - Michael Frew
Article:
The Journey from Engineer to Acquisition Entrepreneur: A Comprehensive Guide
Introduction
In today's rapidly evolving business landscape, engineers and developers are finding new and exciting opportunities beyond the traditional corporate career path. One such avenue is acquisition entrepreneurship, where individuals acquire existing businesses and leverage their technical expertise to drive growth and success. In this thought leadership article, we will delve into the world of acquisition entrepreneurship, exploring the journey from engineer to acquisition entrepreneur and providing valuable insights and advice for those considering this career path.
The Origin Story: Transitioning from Engineering to Acquisition Entrepreneurship
Many engineers find themselves at a crossroads in their careers, where the transition from technical roles to management positions may not align with their passions and aspirations. This was the case for Michael Frew, an acquisition entrepreneur with a background in engineering. After 18 years in the corporate world, Michael experienced a quarter-life crisis, realizing that he no longer wanted to continue down the traditional career path. However, like many engineers, he struggled to envision an alternative path that would utilize his skills and provide the same level of fulfillment.
It was during this period of exploration that Michael stumbled upon the concept of acquisition entrepreneurship, specifically in the realm of online businesses. While there was ample information available on acquiring offline businesses, the online business ecosystem was still relatively new and uncharted territory. In 2015, Michael made his first acquisition, a five-figure online business, and quickly realized that this was the path he wanted to pursue. He was able to break free from the constraints of the corporate world, become his own boss, and build a portfolio of businesses that aligned with his passions and expertise.
The Art of Acquiring Online Businesses: A Diverse Portfolio
As an acquisition entrepreneur, Michael has explored various types of online businesses, ranging from content-based websites to affiliate marketing, e-commerce, and software-as-a-service (SaaS) companies. While he initially dabbled in different niches, he eventually found his specialty in SaaS software, particularly in the realm of cloud infrastructure, engineering tools, and services. This specialization allowed him to leverage his engineering background and work closely with other engineers, creating a dynamic and fulfilling work environment.
Currently, Michael runs three SaaS companies, two of which are in the six-figure range and one in the seven-figure range. While these businesses keep him busy, they also provide the freedom and lifestyle he desires as an acquisition entrepreneur. However, it is important to note that the journey to building a portfolio of successful businesses is not without its challenges. It requires careful consideration of factors such as revenue, churn rate, and market conditions, as well as the ability to identify projects that align with one's interests and expertise.
The Importance of Tech Stack and Team Integration
When acquiring online businesses, one crucial aspect to consider is the tech stack and team integration. While some entrepreneurs may be comfortable with a wide range of programming languages and technologies, it is essential to assess the feasibility of integrating the acquired business into one's existing portfolio. For Michael, the preference is to have engineers who are familiar with the same tech stack across all businesses, allowing for seamless collaboration and knowledge sharing. This not only streamlines operations but also creates a sense of continuity and efficiency within the team.
However, it is worth noting that the tech stack should not be the sole determining factor in the acquisition decision. While it is advantageous to have a team that can easily adapt to the acquired business, other considerations such as revenue potential, customer base, and growth opportunities should also be taken into account. Flexibility and adaptability are key when it comes to integrating new businesses into an existing portfolio.
Maximizing Potential: Growing and Scaling Acquired Businesses
Once an acquisition is complete, the focus shifts to maximizing the potential of the acquired business. This involves a combination of strategic marketing, customer service, and continuous improvement. Michael emphasizes the importance of customer service as a channel for growth and feedback. By actively engaging with customers, listening to their needs, and addressing their concerns, businesses can build trust and loyalty, ultimately driving revenue growth.
In addition to customer service, Michael highlights the significance of staying attuned to market conditions and industry trends. This allows for the identification of new opportunities and the ability to adapt and innovate accordingly. By constantly evaluating the business landscape and seeking feedback from customers, entrepreneurs can stay ahead of the curve and position their businesses for long-term success.
Lessons Learned and Future Outlook
Reflecting on his journey as an acquisition entrepreneur, Michael shares valuable insights and lessons learned along the way. He emphasizes the importance of awareness, encouraging engineers to explore the world of acquisition entrepreneurship as a viable career option. By being open to the idea of acquiring existing businesses, engineers can leverage their technical expertise and build a portfolio of successful ventures.
Furthermore, Michael highlights the need for patience and persistence in the acquisition process. Deal flow can be limited, and finding the right business may take time. However, by staying focused and actively seeking opportunities, engineers can find businesses that align with their interests and goals.
Looking ahead, the future of acquisition entrepreneurship is promising. The online business ecosystem is maturing, and more professionals are recognizing the potential of acquiring existing businesses. As the market evolves, it is crucial for engineers to stay informed, adapt to changing conditions, and continue seeking opportunities for growth and innovation.
In conclusion, the journey from engineer to acquisition entrepreneur offers a unique and fulfilling career path for those with a passion for technology and business. By leveraging technical expertise, embracing continuous learning, and staying attuned to market trends, engineers can build successful portfolios of online businesses and create a lifestyle that aligns with their aspirations.
---- MORE COOL STUFF ---
Are you ready to take your podcast listening to the next level? Subscribe to "DEEPER by How2Exit" newsletter and never miss out on our latest episodes. Join our newsletter HERE
Want to stay in touch with what's happening in the Main Street M&A Space? Subscribe to The Hub - Acquisitions Hub
