Summary

Michael Frew shares his journey of transitioning from a corporate career to becoming an entrepreneur through 9 acquisitions. He discusses his experiences with different types of businesses, including Amazon affiliate sites, software as a service (SaaS) companies, and e-commerce platforms. Michael emphasizes the importance of finding the right fit and matching his expertise with the businesses he acquires. He also highlights the lessons he learned from each acquisition, such as the significance of customer service and the need to thoroughly understand the business before making a purchase. Michael's acquisitions have allowed him to build a portfolio of successful businesses that generate cash flow. Michael Frew shares his experience and insights as a serial acquirer of tech businesses. He emphasizes the importance of finding businesses that align with your tech stack and maintaining a similar tech stack across your portfolio. Frew also discusses the benefits of hiring US-based programmers and the value of goodwill in business acquisitions. He shares his approach to acquiring smaller businesses and adding value through marketing add-ons. Frew highlights the significance of scalability and robustness in acquired businesses and the challenges of finding the right people to replace him in operational roles. He concludes by offering advice for new buyers in the tech industry.

Takeaways

Transitioning from a corporate career to entrepreneurship through acquisitions can be a viable path
Finding the right fit and matching expertise with the businesses being acquired is crucial
Thoroughly understanding the business and its operations is essential before making a purchase
Customer service plays a significant role in the success of a business
Building a portfolio of businesses that generate cash flow can provide financial stability and growth Find businesses that align with your tech stack and maintain a similar tech stack across your portfolio.
Consider hiring US-based programmers for higher quality and customer satisfaction.
Goodwill is important in business acquisitions to maintain the mission and purpose of the acquired company.
Focus on scalability and robustness in acquired businesses to ensure long-term success.
Finding the right people to replace you in operational roles is a challenge but necessary for growth.
Take the time to educate yourself and immerse yourself in the world of acquisitions before jumping in.

Watch the Video:

 

Transcript:

Jon Stoddard (00:01.134)
Welcome to the show Michael. How you doing? Yeah, thanks for being here. So I'm really interested to hear your story because I like your website Michael fru .com List everything about what you do and you've done nine acquisitions But we're gonna rewind and just talk about how you got here. Like what were you doing before? You did this. Yeah

Michael Frew (00:02.99)
Good, how are you?

Yeah, it's great to be here.

Michael Frew (00:22.478)
Right. Yeah. I probably like a lot of your listeners started in the corporate career. I was an engineer, developer, did that. And, you know, in many respects, you end up on multiple projects at multiple companies. There's not a lot of company allegiance and jumped around. You just always get in the kind of a pay raise each time.

but never really super fulfilled with what I was doing. It worked for a while, and then I'd have what I always call like a quarter life crisis, and I quit my job suddenly and try and go find something else. But one challenge I think when you're in technology is we get those golden handcuffs, right? We're paid really well. And it makes it really hard to walk away from the education that you've earned, which we've all spent decades learning, and to try and find somewhere that you're going to get.

even close to the same amount of money. So it's harder for us in the development and the IT world to move laterally and try something new unless you really are.

Jon Stoddard (01:14.19)
That's, I gotta tell you, that is even harder today because of what you see in those AI engineers getting paid. They're up to $500 ,000 to a million dollars.

Michael Frew (01:19.694)
Sure. Yeah.

So as long as you like it, that's fantastic. But if it wears off on you a little bit, you do get a little lifestyle creep there and you get a little stuck. And so I was encountering that as well. Even when I do my quarter life crisis, I'd kind of save some money and I could only do my crisis for a few months before I had to go back. And each time I tried to pivot a little bit of, OK, maybe I didn't like this industry. Let me try technology in a different one. But in the end, after a couple of years, I kept having this a little bit of a panic where I would.

Jon Stoddard (01:25.07)
That's right, yeah.

Michael Frew (01:50.798)
kind of resign and then go back and try and re look at this situation again. So did that for about a 19 year career, just kind of on again, off again and took what I now call a sabbatical. And we, my wife and I, we moved to Grand Cayman. We had a place on the beach and just kind of step back to try and figure out what was going to be my next step. And I think like a lot of your listeners and a lot of what we're told is that if you want to leave the corporate world, you have to start your own business. And I had tried that like every tech person.

I think all of us have an archive set of documents of businesses that we've tried that failed hundreds of domains that we never got to. We all got that. And so it's just, yes.

Jon Stoddard (02:28.142)
It's a cemetery. It's the domain cemetery. I have like 20 or 30 of them. Yes.

Michael Frew (02:35.15)
And yeah, for me, I'm willing to admit, you know what? I'm not a very good zero to one entrepreneur. I just couldn't get anything off the ground that even I'm trying to scratch my own itch. What I turned out to be, and as I reflected back on my career, was I was a pretty good firefighter and a pretty good operator. And that is what started to make me pivot a little bit into the acquisition world. Because there you're starting, obviously, with a business with cash flow that already has marketing, that's already got a team.

And you just kind of show up as an operator and you just try and scale the business and make it more durable and scalable for long term. That fit me really well. And I wish I had just heard about it a little bit earlier in my career. I maybe would have tried some different spots in the corporate world. But I'm always trying to speak to Michael from 10, 15 years ago. Even just being aware that this is a career step one could make can kind of make a big difference on what jobs you choose before you make that step.

Jon Stoddard (03:26.382)
Yeah. And you're sitting in a beach on the Cayman Islands and where did this idea come from? Instead of going from zero to one, I'm going to go to one to two or yeah, one to four. Yeah.

Michael Frew (03:36.174)
Yep. Yeah, back. So this is about a decade ago. So the online business world back then wasn't nearly as mature as it is today. A little bit more of a Wild West. I came across. Fortunately, for a long time, I knew I wanted my own business. So I had been taking as many courses as I could, listening to everything from all the podcasts and taking everything about how to run a small business, how to do a startup. So somewhere in there, I had come across things like Empire Flippers podcast, where they started talking about how they were flipping niche websites.

And digging into that a little bit is where I started to find, oh, there's actually brokers for online businesses, which is stuff that I like to run. They're selling projects that are very similar to the projects I'm running in the corporate world. I could actually go out and buy a project that I was working on previously. It's basically the same thing, except I get to pick a project that I want to work on and build a team that I want to work with and run it the way I want to. That kind of mindset change made a huge difference career -wise.

Jon Stoddard (04:32.014)
Yeah, and when did you start going, OK, I'm going to fill out my buy box, what that looks like?

Michael Frew (04:37.518)
Yes, boy, that would be me being way too intelligent at the time of knowing what to do. I attacked it as anybody else that's kind of naive. I acquired my first business with my own money. I was really looking at anything that was online that I thought might work. I started with an Amazon affiliate site.

Jon Stoddard (04:53.998)
that you, I gotta tell you, we're all like naively arrogant on this one. He goes, oh, I got to exist. Well, I can grow this real easily. And I just would buy it a hundred percent cash. Yeah.

Michael Frew (05:01.742)
Yep. Yeah, we all do it. And then the worst thing that can happen is it goes well, because then you think, this is easy, right? Let me go buy five more. And so I went that path just like everybody else. The first one worked out really well. I bought a small one to see if I liked it. It was like perfect. Moved up to a six figure acquisition, acquired that. That went really well. Moved up to a seven figure. And that's where I hit my first bump in the road. And I was like, aha, this isn't as easy as I thought it was going to be. So it's that maturation process there. And

But yeah, the first time was, you know, there wasn't as much education out there and I just was kind of winging it. And again, one of the reasons I'm talking on podcasts now is to try and help get that education out there so people don't have to wing it as much and approach it with as much knowledge and experience as they can.

Jon Stoddard (05:47.534)
Well, let's talk about those individually. That first one. So what was that, a SaaS company?

Michael Frew (05:53.326)
It was an Amazon affiliate site. So basically, yeah, just getting revenue from affiliate marketing. That was able, I was able to spin that into a second Amazon site. So I started kind of building that portfolio. That was pretty fun and it's great every day to check in, you know, and you can see, oh, I made some money. Yeah. Yeah. I continued to, so this site was a golf range finder site. And if you can imagine Grand Cayman, I think it has two or three golf courses. I don't golf. I have no intent to golf.

Jon Stoddard (05:55.566)
Amazon affiliate site. So yeah.

Jon Stoddard (06:10.894)
Well, what do you do? I mean, how do you fix that or improve that?

Michael Frew (06:23.438)
And shipping things to Grand Cayman was pretty difficult to get golf range finders, but I had to do it. And basically, I was putting up reviews of what I thought of each one, how well it performed. And people would search for reviews on those range finders. They clicked my link, and they bought it from Amazon. And anything else they put in their shopping cart, we'd get a small commission from that.

Jon Stoddard (06:41.038)
Oh, so it was just kind of what makes the bell ring is you putting reviews and they're going to click. I understand that, Philly. I didn't know how you would do that on scale. Like, how do you, yeah.

Michael Frew (06:46.158)
Yeah.

Michael Frew (06:51.246)
Yeah, it's definitely something that's really easy for, let's say, a side hobby. I think a lot of people do run those on side hobbies, especially if it's something that you like to buy. And you're going to be buying a bunch of them. Golf range finders, maybe not, but there's plenty of other affiliate things out there. And so it's a little bit of a content site. Yeah. It just hit the price range I was looking to try, and it worked out really well. And yeah, that was my first step. It was a baby step. I know a lot of people have that question of, should I go big?

Jon Stoddard (07:00.718)
Yeah.

Jon Stoddard (07:06.574)
And you don't golf, and you were buying a golf range fighter.

Michael Frew (07:20.046)
my first acquisition or should I just kind of try something small?

Jon Stoddard (07:21.582)
Well, what are you talking about, baby step? Are we talking about six figures or five figures?

Michael Frew (07:25.998)
No, it was five right around $18 ,000. Felt comfortable trying that. And yeah, and it opened the door to say, okay, now I can look at moving up. And there you're kind of switching brokers. There's different brokers that handle different size businesses and different types of kind of verticals there.

Jon Stoddard (07:41.262)
Yeah. And then did you, you still have it? You sold it or what?

Michael Frew (07:46.67)
I think I finally shut it down a couple of years ago. It had reached the point where even just renewing the domain and the hosting was more than it was making. But that was really because once you get the six figure business, you're not going to pay attention to that one. So I just, it was on cruise control and just let it go until it was unprofitable.

Jon Stoddard (07:54.286)
Yeah.

Jon Stoddard (08:03.566)
Yeah, yeah, that's asset allocation. You gotta put your energy where you're making more money. So, yeah.

Michael Frew (08:06.318)
Yeah, all your time allocation. Yeah, you really got to go with that horse that's really running. And so for, you know, like a lot of your listeners, right, you have kind of a portfolio of different businesses. You kind of push the ones that are really working and the other ones that, you know, they just kind of spin while they're. Yeah. Yeah. Just dropping itself.

Jon Stoddard (08:19.918)
Drop out and sell, man. Yeah, convert it to cash. You can spend, yeah. What was the second one?

Michael Frew (08:26.35)
Second one was one that I still run today. So that was my first low six -figure acquisition. That was in software as a service, right? So the SaaS kind of niche. And that is what I knew was probably going to be my long -term niche. And that's what I've stayed with. I've stayed pretty narrow with that. Once I had that acquisition that's next where I failed, I thought, OK, I'm a software person. I like handling these projects. This is where I should stay. I really shouldn't be buying Amazon affiliate sites. I shouldn't be buying content or.

Jon Stoddard (08:35.694)
Yeah.

Michael Frew (08:54.83)
FBA sites. I'm a software person. This is where I want to stay.

Jon Stoddard (08:58.894)
Yeah, it's interesting you had to, you know, go through that process to figure that out. We all do that. Yeah.

Michael Frew (09:05.294)
We do. You can read about it, but until it happens to you, it's like owning your first business, right? So I've been a W2 worker for almost 20 years. The first time you talk to your CPA after you have your own business and you see the difference in taxes from W2 versus owning your own business, you can read about that. I have an MBA. They told me all about it. But until I actually experienced it and saw what happens in your actual taxes and in your bank account, then I understood what they were talking about. So sometimes, yeah, it just has to happen to you.

Jon Stoddard (09:34.414)
Yeah, that's how Buffett talks about that. It was like my secretary spends a higher tax margin than I do. Yeah. So where did you find that second business?

Michael Frew (09:43.918)
at FE International and so that broker yeah and so spoken with him quite a few times just to always you know like everyone we speak with the brokers just so that they know what we're looking for so if something comes across their lap you know they can reach out to us but that one worked really well yeah so low six figures.

Jon Stoddard (09:46.03)
Yeah, I know Thomas Mail. Yeah.

Jon Stoddard (10:01.038)
No, no, he wouldn't be selling $200 ,000 or some mid $200 ,000 sites anymore.

Michael Frew (10:04.558)
Not anymore. So it's really been great to see how FEI has moved up that market chain. Back then, that maybe would have been like their middle or lower business. It would be pretty tough to find it today on that broker.

Jon Stoddard (10:11.982)
Yeah.

Jon Stoddard (10:20.206)
Yeah, I'm at your site right now. And is that this SaaS business and enterprise cloud infrastructure? Yeah. And then you grew that business to over 20X in eight years and ARR to $2 million. Yeah. Yeah. And that's your, what did you do? I mean, what did you do to grow it in marketing? And how did you, you know, start working above the business, put somebody else in charge or you're still working on it?

Michael Frew (10:34.606)
Yep. Yeah, that one's been fantastic.

Michael Frew (10:49.71)
We actually did a little bit of a pivot with the business. It was solving one problem, but what we kept seeing in customer service was people saying, you know, that's a great problem to solve, but I actually have a different one that's kind of related. So we built that product and built that service. So that got us into two categories. We pushed it onto all of the cloud marketplaces that we could. And then we just go hang out where engineers and developers are. Everyone on my team is an engineer and a developer. I'm kind of an ex -engineer developer.

So we feel like we're all speaking the same language. It's the people we enjoyed speaking with. And so it grew a lot by word of mouth. It grew a lot by being on marketplaces, which really help you with the marketing because they do a lot of that pushing out for you. And it never had a hockey stick growth. It's just been a very slow growth, which is now close to, I think I'm coming up on 10 years next year. And you just add a little bit each month. Next thing you know, it really becomes something else.

Jon Stoddard (11:42.158)
Yeah, and how active are you in the business? How much time do you spend?

Michael Frew (11:45.934)
Today, I work outside of it most of the time. I am negligent on doing what we're supposed to do, which is work on the outside of your business, not in it. I absolutely love working inside my businesses. Even if you write me today, I am probably the person that's going to write you back on customer service because we get so few tickets. I still enjoy kind of learning what the engineers are doing, getting that feedback. And I've stepped away a few times. What's that? Oh, boy.

Jon Stoddard (12:03.15)
Yeah.

Jon Stoddard (12:08.942)
What kind of programmer were you? I've got an engineering degree a long time ago, but I just stopped programming a long time.

Michael Frew (12:14.926)
Yeah, same here. And you get pushed off the machine as you get into management. And that was kind of disappointing. That kind of caused some of those quarterlife crises, because I wasn't doing the fun part, which is doing the development. But this started, we were before the internet, right? Because I'm in my upper 40s. And so, yeah, it was before the internet. The way we were building things was so different back then. And so even if I looked to go back now, I'd almost have to start from zero.

Jon Stoddard (12:41.582)
It's almost like, yeah, it's so basic, the Fortran and everything else, C++. So, I mean, you would not have been able to see this opportunity. You completely built a new product, zero to one, but you would not have been able to see this opportunity and this need had you not purchased this $200 ,000 business.

Michael Frew (13:04.878)
Absolutely. That's exactly right. So I could maybe say, yeah, we take a little credit from building the new product, but it was very much influenced by the one that was there. So it was an easy step. It's hardly what I would call like an entrepreneurial move. And we kept iterating on that every year. And it just really helped it grow.

Jon Stoddard (13:23.694)
Yeah. Now you have any intention, you have any intentions to keeping this or what are your intentions long -term?

Michael Frew (13:29.198)
Right. So I still a little bit like Buffett. I'm kind of a buy and hold most of the time. I did sell the one that wasn't a good fit for me. But at the moment, I still enjoy running it. It's cash flow. As you know, trying to sell a SaaS business, when you look at the financials, it's so hard to convince yourself because if you're going to get four or five X and I look at it and say, man, I could just sit on this for four or five years, but then I get another five years after that. So they're very hard economically to sell if they're growing or even just staying.

Jon Stoddard (13:52.75)
Yeah! Yeah!

Michael Frew (13:58.734)
stable, but that doesn't mean I won't at some point.

Jon Stoddard (14:01.006)
But aren't you getting like, you know, double digit multiples on these things now?

Michael Frew (14:06.702)
It depends. It really depends on everything. Market, what type of business it is. A lot has changed, right? So we're talking in April 2024. So we're about a little bit over a year since CHET GPT came out. That changed a lot of online businesses. We've got interest rates that have changed. So multiples have really changed from when I had my last acquisition. The way I financed that, I couldn't even do today just from the interest rate change.

Jon Stoddard (14:32.782)
Yeah. So how did you buy this second one? Did you pay out cash out of your pocket? Yeah.

Michael Frew (14:38.638)
was also cash. Yeah, such a newbie move. Yeah. So I didn't even leverage my dollars very well. It felt safer at the time. But, you know, now I know. All right. Maybe even if I have all the cash. Yeah. Fortunately, yeah, I picked the right one to do all cash.

Jon Stoddard (14:46.926)
Yeah.

Yeah, but you've gotten a return on investment after this since 2015. Yeah.

That's great. That's great. Let's go on to that third one where you learned a lot more.

Michael Frew (15:00.974)
Now, yep, so that was the educational one. So this one, first seven figure deal, it was about 50 % seller financing, which might have told me something, right? When that comes out, they did. And so that to an experienced acquirer probably would raise an eyebrow, right? But I wasn't that person. Yeah, so that was a seller -initiated.

Jon Stoddard (15:13.39)
Did they offer that or did you ask for that? Okay.

Jon Stoddard (15:22.094)
Yeah, usually that offer's coming from the buyer.

Michael Frew (15:27.886)
So that should have told me, OK, so some people have passed on this business. There's something wrong with it. And what I learned just over time.

Jon Stoddard (15:32.622)
Yeah. How long was it for sale?

Michael Frew (15:37.55)
It's also a good question. I'm not sure I know. And that's another thing I would have investigated at the time had I had the education and experience. Yep. So acquired that one. And it was about a year where I realized that the value in the business came from the prior seller. So the common example, right, Oprah's business is not worth anything because Oprah is the business. This was very similar. So this wasn't someone who was

Jon Stoddard (15:40.526)
Yeah.

Jon Stoddard (15:46.19)
Okay.

Jon Stoddard (16:03.95)
Yeah.

Michael Frew (16:07.534)
out on social media. No one really knew his face. But what he could do very well is sell through customer service channels. So if someone wrote in, it was a software product. And so there were many little modules. They're little add -ons for a e -commerce platform. So someone would write in. And what he would do is he'd solve that problem. But then he'd look at their store. And he would say, here's about six different add -ons that you actually need to buy for your store. Let me wrap this all up into you only have to pay for four. And he was a really good at.

landing those kind of sales.

Jon Stoddard (16:39.534)
Are we talking about e -commerce stores? Yeah, like what kind of platform?

Michael Frew (16:41.198)
Yep, this is an e -commerce. I was on my Gentile.

Jon Stoddard (16:45.294)
I know I used Magento for five years. It's like, I had the same issue. Like, you know, it was better to pay somebody to design something on Magento than add 10 add -ons to Shopify. And then it's a thousand dollars a month. Yeah.

Michael Frew (16:46.734)
Okay.

Michael Frew (17:00.334)
Yep. Yeah, Magento is its own beast. That was also something. So Magento was not something I had experience in. I thought because the add -ons were a software as a service, that's where I kind of said, oh, this is in my ballpark. But what really I was buying is kind of an e -commerce business on a platform I didn't understand. And so that was a challenge for me. I wasn't going to be as good at selling because he was very good at selling through customer service because he had a very good understanding.

Jon Stoddard (17:07.566)
Yeah.

Jon Stoddard (17:26.958)
He because he knew e -commerce Yeah

Michael Frew (17:29.358)
Yeah, he knew a very deep understanding, which I was not going to have. It was going to be impossible for me to hire someone to do that. So that's where I started to see I did not acquire a business that I have expertise in. It is not something I'm willing to devote the time to become that expert. And then I probably need to sell it to that person. So that took me a couple of years to kind of make that shift. And then that's where the lesson is. Now you don't acquire so quickly. You start digging a little bit deeper.

Jon Stoddard (17:55.438)
Yeah, how did the revenues go? I mean, did they start getting worse for you after a while? Is that why?

Michael Frew (18:00.686)
Yep. As you can imagine, you know, after that six month bump there, it started to turn and go down. So, yeah, it was still I was able to pay off the seller loan, still able to make a profit and be able to sell the business for a little bit. I think it was a little bit more. But yeah, this wasn't going to be the growth that I expected. It should have been a great cash flow business. So all in all, a huge disappointment, tons of lessons learned to this day. Every business I look at, you know, I've got that in back of my mind.

Jon Stoddard (18:28.878)
Yeah, well those are great lessons. I mean, 50 % seller financing. Did you pay the other cash? Yeah. Yeah, do you have any sense of what the other guy's doing since you sold it, you bought it from him?

Michael Frew (18:37.486)
Yeah, I was just happy to knock off that one.

Michael Frew (18:44.334)
Here's another warning sign for you. The person, his name was a very generic name. And they had some trouble identifying who he actually was. And when he was going to sell it, he was going to move to a different continent, get out of the technology world, and do whatever, maybe some charity work or something. So there was a challenge with.

Jon Stoddard (18:46.99)
Yeah.

Michael Frew (19:13.71)
Who is this person? How are you going to contact them in the future? He did stick around for the 30 days and he did help, but I've never heard from the person since. Couldn't even tell you how I'd start to find him. That's another lesson that, you know, and it's easier today, you know, back even 10 years ago, people could get away with not having LinkedIn. A little different today. You're kind of research the seller. But again, I was naive and did not know. Yep.

Jon Stoddard (19:38.03)
It's hard to be off the grid. I mean, you have to really make an effort to be off the grid and not be found in what your track record is.

Michael Frew (19:44.75)
Yep. Yeah, I think we did actually get copy of his passport just to verify it was a real person. But there was something, I would love to know the story. Something else was going on there. And I, we get acquisition fever, right? I just wanted it to be as good as it looked and didn't want to dig into something if it was, if it, you know, oh, I hope this doesn't mess it up. I don't want to dig too deep.

Jon Stoddard (20:02.03)
Yeah.

Jon Stoddard (20:07.278)
Yeah. So all this way you're creating this acquisition playbook and you added another chapter. Where did you buy it from? What site?

Michael Frew (20:13.358)
Yep. That one was a quiet light. Yep. Thank you.

Jon Stoddard (20:17.23)
Quite light. Well, they do pretty good. They're pretty rigorous about the products that they sell, the companies I say.

Michael Frew (20:24.96)
Oh, absolutely. And there was nothing really wrong with the business. I just couldn't replace the owner. You know, I could not replace the operator. And that was, that was my real lesson is can I.

Jon Stoddard (20:30.03)
Right. Yeah. So what questions would you have asked the broker to ask the seller? What were the questions? Like, that zeroed in, how many hours do you work? What do you do? What?

Michael Frew (20:45.23)
Yeah. Well, it's that challenge of, you know, if you ask me how many hours I work on the business I've had for 10 years, I'll tell you, it's like 30 minutes a day. But if if I get hit by a bus and my wife has to take it over, we have an entire playbook that she's going to spend eight hours a day on. So those are tough questions. You know, you always double or triple what they say. Well, I now pay very much attention to the customer service tickets to see what kind of interaction goes on in there, because that's how he was selling so much and upselling.

Jon Stoddard (20:53.55)
Yeah.

Jon Stoddard (21:01.326)
Right.

Michael Frew (21:14.83)
It obviously tells you a ton of how compatible the product is, how much trouble it is for people to onboard. I find that customer service queue to be one of the first things I really dig into in due diligence. And ask, can I be live while these are coming in? I just want to see what do the customers think of you? What is the rate of tickets per signups? I really want something that's onboarding and simple. I don't want something that scales that every 50 customers, I got to add a new customer service person.

Jon Stoddard (21:30.958)
Yeah.

Jon Stoddard (21:42.606)
Yeah. So what did you do with it? You sold it? Yeah. Okay. And then off to your, uh, now we're on your four. I mean, did you really take a big bath? It sounds like, you know,

Michael Frew (21:53.454)
No, no, it was a pride bath, let's say.

Jon Stoddard (21:58.24)
Okay, all right. You're smarter. Now you're on to your fourth acquisition. What was that?

Michael Frew (22:01.39)
Yeah. Yeah. This one was interesting. So actually, it's sold by a well -known developer. And so he had blogged everything he did for his two SaaS products. And like many developers, we all followed him. He's still a really prominent voice in the industry. And I saw a business show up one morning on FE International. And I read the prospectus. And I remember talking to my wife. And I'm like, I know exactly what business this is. Because they're usually pretty general in the prospectus. Or actually, it was even just the headline.

I was like, I know exactly what this is. I really think we should try and get this one. And so that's where I learned the first time of, if you think of the first two, the first one was so technically complex, I was really the only person trying to buy it. Yeah. The second one already people had passed on, so nobody else has really, this was the first time I was a buyer with other buyers. So I had to kind of win that opportunity. So this was the first time I learned,

Jon Stoddard (22:43.758)
You're swinging at anything.

Michael Frew (23:01.262)
how important the seller phone call is going to be, how important getting that rapport is, how much my background matches what the business is doing. So that's where I started to build that piece of the playbook of how do I position myself as a buyer so that software developers that research me would say, oh, this is exactly the person that should be running the business because he's such a good fit. He's been doing this well this time. Yep. Yep.

Jon Stoddard (23:23.726)
Yeah, peers tell to peers, right? Yeah, yeah, yeah. But this is also on the other side of the coin is your attachment to wanting this business is like applying for a job. Like, oh, I'm perfect for this role. I'm perfect. And you don't get it, right?

Michael Frew (23:36.302)
Yep. Yep. And so that one, I really pulled out all the stops. I flew out to see the seller, which I don't think happens very often in the online world, and did it again just to do the closing so we could do it. Nope, not at all. I just said, obviously, hey, I've read your stuff on Hacker News for as long as I can remember. Really awesome to meet you. And I just think this would be a good match. I gave him my background. Here's what we would do. Here's who would work on it.

Jon Stoddard (23:49.934)
Did he know you from the industry? No? Okay.

Michael Frew (24:05.902)
I'd love to come out and see you and just talk about it. So that worked out really well.

Jon Stoddard (24:08.814)
Which one is this on your site? It's the...

Michael Frew (24:11.79)
It would be also the low 200s.

Jon Stoddard (24:14.286)
Oh, the scheduling SaaS business in the SMB medical facility category. Yeah, okay. And he, what he was just, was, you know, I've met a lot of the developers over the years and sometimes they just crank stuff out and they don't have any management experience like to run it. And people just buy in it because it's a great product and they never have foresight to like, oh, I can build this as a multimillion dollar business. Because they're just coding, they're a way of coding. Yeah.

Michael Frew (24:15.982)
Yeah. Yeah.

Michael Frew (24:38.158)
Yeah, I think he really enjoyed it. He did a great job. He was really ahead of the curve on a lot of challenges that now today you and I take for granted. But he kind of had to build his own striped front end, whereas now we'd hook in with one line of code. So unfortunately, we had to take a lot of that out, right, because it was legacy code. But what he was doing at the time, that's what he was writing about. And that's why he got so much following, because he was doing really cool things. And he got an opportunity to go do something he wanted to do really bad.

Jon Stoddard (24:57.678)
Yeah.

Michael Frew (25:07.31)
and he had to divest all of his assets, and that's how this came about.

Jon Stoddard (25:11.054)
Why did he have to do a divestiture? This is always a question I always ask. Retirement, easy to understand. Buying somebody's business that, oh, I have other businesses to, I wanna invest in. So this is not a good return for you?

Michael Frew (25:28.654)
Yep. I dig into that pretty heavily myself. Really want to know why are you selling. So I try and make it's not a rule, but it's a really strong guideline. I don't want anything that's negative. I don't want someone selling the business because they haven't paid their taxes or it's a divorce, you know, those kind of things where they're selling it for a negative reason. When we look, when I look back at some of the reasons, the sellers, two of them have been that situation where maybe they got funding. And part of that funding requirement is you have to divest of any other business interests.

Jon Stoddard (25:43.758)
Yeah.

Michael Frew (25:58.638)
So that's why they had to sell those two. One guy was completely moving careers but into like the VC world. So he's staying in the same thing but was ready to just say, all right, I'm now going to be the investor into multiple businesses. I don't have time to run it. So yeah, I agree with you that I really do. Whatever's in the prospectus is probably not the truth. And you kind of have to talk around it to find out what is the real reason. And there is something and it's a.

Jon Stoddard (26:10.414)
Yeah, those are distractions. I understand those, yeah.

Michael Frew (26:24.974)
It's tangential to what they wrote, but it's usually something more emotional.

Jon Stoddard (26:29.582)
Yeah. And how did you, what was the cap stack there? How did you buy that? Cash or?

Michael Frew (26:35.118)
That one.

Michael Frew (26:39.566)
I think that was all cash too. Yeah.

Jon Stoddard (26:41.358)
Yeah, so you still haven't learned that lesson.

Michael Frew (26:44.366)
But that might have been because the competition for the acquisition was so heavy. It was really, he's...

Jon Stoddard (26:49.07)
Yeah, what was what was the who was the Thomas smell was the?

Michael Frew (26:53.838)
So this one I was working with David Newell, I believe, and he has now since gone to Quiet Light. And again, this is April, so who knows if I'm off now. But he also worked on my first one. He's been fantastic, if anybody knows him. I'd love to work with him again. But yeah, so that worked out really well.

Jon Stoddard (26:57.454)
David. Uh huh.

Jon Stoddard (27:12.046)
So what was he telling you that said, Hey, we got multiples offer than this. You need to become up with more cash or what?

Michael Frew (27:17.135)
Yeah, so it was basically you kind of need to hit the asking price. And if you do 10 grand over the asking price, you can get it. And so I was like, all right, I'm not going to offer 20 % seller financing at asking. You're not going to win that. So I think like you mentioned, I had that emotional, I really wanted it. And so I was just going to make it work.

Jon Stoddard (27:35.534)
Yeah, you like, Barbara Ann's at the gate. I really wanted it.

Michael Frew (27:38.606)
Yeah.

Jon Stoddard (27:42.51)
So you've had that since 2017. By the way, you can just go to michaelfrou .com forward slash acquisitions and look at his history here. Yeah. And he grew the business 3X to an ARR of mid six fixtures over the next six years. Yeah. And how's...

Michael Frew (27:53.486)
portfolio there, yeah.

Michael Frew (28:02.286)
Yeah, that one's been fairly fun too, because he had it set up correctly, just like you said. He could have taken it wherever he wanted, but he had an opportunity that I think for him was better for his long -term career.

Jon Stoddard (28:12.014)
Yeah, yeah, that's great. And you still own that? How much time do you spend on that one?

Michael Frew (28:15.502)
Yep. That one probably I spend the least amount of time. It's one of those products that's kind of solved is not the right word, but it works. We've kind of gotten all the bugs out. We have a lot of customers that just keep coming back and.

Jon Stoddard (28:30.574)
Who does the sales?

Michael Frew (28:32.654)
It's all SEO word of mouth.

Jon Stoddard (28:36.878)
And is it kind of a local type of paid ad? I see that you primarily focus through paid advertising in the SEO. Is it, is it a kind of a local?

Michael Frew (28:42.958)
Yep. Well, actually, you know, in a way it is local because it only works in the US. So if you think about appointment scheduling, right, phone numbers and how voicemails work, how text messaging works, that's a lot more complex if you're going to jump into different countries. So he wrote it for the US. We've got a huge market here. So it's been doing well enough for me that I can definitely put it on the back burner.

Jon Stoddard (28:48.814)
Yeah.

Michael Frew (29:08.526)
Because like we said earlier, I've got bigger horses to ride. And if that one just keeps churning out cash, I'm happy with it.

Jon Stoddard (29:14.158)
Yeah. And ARR mid six figures. Okay. It's just throwing off cash and you're, you're CEO. Do you have people running these? Like the, the, the SaaS business? Yeah.

Michael Frew (29:25.678)
an operator. Yeah, that's where I kind of fail and because I'm still kind of the head operator of all of these. I work with the technical team that so one thing that I've done I've learned over time. I wish I had planned it from the beginning is trying to acquire businesses that are roughly the same tech stack or somewhat the next step forward. So that does two things. I can have the same engineers running all of the businesses and

Jon Stoddard (29:31.534)
Yeah.

Jon Stoddard (29:47.79)
Yeah.

Michael Frew (29:52.43)
then they can also learn new technologies, which are kind of very close to these, to keep them getting better, keep them interested in the job, and moving forward with their careers as well. And so that's one thing I've always said has been fantastic, is trying to find things that are in your tech stack. So if you think of Magento, when I bought that, that's all, I think it's all PHP. And we were all Ruby, and this meant I had to have two completely separate teams. Nobody was talking, and that was a mistake I'd made.

And so that's something I've learned is try and keep our tech stack pretty similar across the group.

Jon Stoddard (30:24.302)
Yeah, and are these programmers, where are they? United States or in India? Yeah. Wow.

Michael Frew (30:28.174)
All based US. Yep. Yep. Yeah. And that's one of the things I mentioned when I'm sure it's much more expensive, but I that's one of the things I mentioned to the sellers is, Hey, I'm not going to buy this ship this off overseas and pay guys $5 a month. And then your customers are all just really mad. That's not the business I'm trying to run. I'm trying to take what like idea you had, what your mission was, what your purpose was. We're just going to continue it. And you know, we're paying a high dollar for really good people that are based in the US.

Jon Stoddard (30:33.614)
How much more expensive would that be?

Michael Frew (30:57.518)
So yeah, that's one of the things I bring up during the seller call.

Jon Stoddard (31:00.59)
Yeah. So what was your next business?

Michael Frew (31:04.078)
So after that, I think it was a couple small ones. And they were a little bit of add -ons, more from a marketing point of view. And so they're pretty much open source. They're free to use. And all I did was throw right on the top, I just said, hey, this was run by the same group that does this business. If you like this. And the tools are very similar where, all right, if you're running our core business, you might need these tools to help test. So we just do that as a free service.

Jon Stoddard (31:10.478)
Yeah.

Jon Stoddard (31:27.566)
Yeah.

Michael Frew (31:30.638)
that helped a developer that just wanted to exit it and move on to something else because they were small. And it's been actually, I think, our third highest inbound from search and stuff comes from those sites. So that's actually worked out pretty well. And it's nice to be able to give back a little bit and run something for free because we've got enough cash flow that we can lose money on it. Yeah, it's nice.

Jon Stoddard (31:51.502)
Well, it's goodwill. It's always goodwill. Yeah. Are you, when you say tech stack, you're trying to stay with the Ruby real real, all the current stuff. Are you trying to stay in a specific industry or a platform like, you know, Microsoft is your IBM or something. Yeah. Or.

Michael Frew (31:57.294)
Yep.

Michael Frew (32:04.75)
Yeah, that's a good question. So I think I'm turned off by if I can see a business is pretty much a Microsoft shop, that's not going to be our bread and butter. And so that right there, even if the business was really good fit, I would be concerned about that. So I don't try and stay in any specific vertical. But yeah, it's a hard answer. Sometimes it makes sense. Sometimes I feel like maybe it would distract us.

Jon Stoddard (32:31.438)
Yeah. So what are you looking for now? Are you looking for something bigger or?

Michael Frew (32:37.294)
Yeah, I love the, let's say, from an SDE point of view, 500 to 1 .5 million range. So multiple wise, you're talking, yeah. Yep. So you're looking at, let's say, 1 and 1 half to 5 million. So you're just staying under that PE level. I just fit in there well. It's easy for one person to run instead of starting to get a bigger team.

Jon Stoddard (32:46.414)
Yeah, that's any acquisition in the future, right? Yeah.

Michael Frew (33:03.502)
I did an acquisition about a year ago. It's probably somewhere on the site there. So that was, there's probably another one. Yep. So that was.

Jon Stoddard (33:03.918)
It is.

Jon Stoddard (33:08.366)
Well, which one's this one? Oh, platformer as a service? Yeah. Acquired for price of $1 million in 2022.

Michael Frew (33:18.862)
Yep, that was our largest acquisition so far. What was kind of cool with that is I brought some of the team along and said, hey, if you're interested in this acquisition entrepreneurship kind of idea, why don't you just put a little bit of money in here? And then you see what it's like to be an owner, right? So they've been working as, you know, listening to what I've been told. Yep, so now to work as an owner, I've really seen a difference. And because they work on the other businesses, I see a difference. They'll answer questions for the one that they have small piece of ownership.

Jon Stoddard (33:35.438)
Just contract, right? You know, hourly wage contract stuff. Yeah, yeah.

Jon Stoddard (33:46.702)
Does that change their motivation, inspiration levels? Yeah.

Michael Frew (33:48.622)
out. When someone cancels, like, you take it personally, right? So I'm with thousands of customers. But when I see a cancellation email, it wrecks my whole day. And it's not like that when you're just doing contract work. So now they feel that same pain. And they understand why sometimes I'd be like, Hey, can we just like reach out and ask why, you know, it seemed like everything was going well, and then it just disappeared, you know. And so that makes a difference. But that, that acquisition, it's probably about a couple years from from now, I guess.

I did a seller loan with that. I did, yeah, this one was different. Nope, did seller loan. I did a loan with Bupos, if you're familiar with them. So they do. I say Bupos. I might be wrong though. Yeah, they are fantastic.

Jon Stoddard (34:22.158)
Yeah, what? Yeah, SBA loan? No.

Boo -boos? Yeah, boo. How do you say it?

Yeah, I know you're talking about. Yeah, I've had that conversation with those guys. So it's a platform as a service software company used by SMBs and indie developers for deploying cloud -based apps and services. What are you referring to? Like Cloudflare or what?

Michael Frew (34:49.998)
No, so it's a deployment platform for the Elixir development language. So Elixir is a very niche development language. It has a lot of people that just really absolutely love using it. But it has some challenges for doing DevOps. And so if you don't want to be doing your own DevOps, which usually your business use case is not to be really good at that, it's supposed to solve something, we're a good platform to deploy it on. And so we take care of all the operational stuff. We make sure your apps are running and your websites are running. Yeah.

Jon Stoddard (35:16.878)
This is very techy, yeah.

Michael Frew (35:18.926)
And that's what I always tell brokers. Like if you see a prospectus that you don't even understand what it says because it's too technical, just send it my way. It will probably like it. That is, I want to say it's also FEI, right?

Jon Stoddard (35:26.254)
Yeah, and where was this one found?

Jon Stoddard (35:35.694)
Yeah, you're a good friend with, you're a good friend at FEI.

Michael Frew (35:36.206)
Yeah, it was. Yeah, it was. Sorry, it took me a second, but I'm 99 .9 % sure. Yes, that's true. Yeah, and so then I got.

Jon Stoddard (35:44.75)
Yeah.

And how much, what did that cap stack, was 50 % seller financing or the other?

Michael Frew (35:52.654)
So it was 20 % seller financing, 10 % PUPOS. My wife bought in, one of the engineers bought in. I put in cash in and then I think I got a family loan from my dad, but he didn't get any equity. So I just paid him back at like a 8 % rate or something like that.

Jon Stoddard (36:06.862)
Yeah. And how was that business doing before you bought it? Like, what was the, uh,

Michael Frew (36:14.702)
It was doing really well. So it became another one that was very highly sought after. I came across it. Actually, Bupro sent it to me. And just they wrote and said, you know, have you seen this business for sale on FEI? And I was in Bora Bora on vacation. And I knew when I saw the prospectus, I was like, oh, man, this is just my vacation is over. I got to get this business right. It's the same as the other one where I was like, this is the businesses I like don't pop up very often. So when I see it, you know, it has to be full, full on right then.

Jon Stoddard (36:44.014)
Yeah.

Michael Frew (36:44.462)
So it did. It kind of stayed in Bora Bora, but I was on the phone a lot putting everything together. And sorry, I actually forget what your question was. It's just starting to go off. Oh, gosh, yeah. So that's kind of how it put together. It was just different pieces. So had engineers in there. My wife jumped in there.

Jon Stoddard (36:54.734)
Oh, uh, you know what the cap stack was?

Jon Stoddard (37:03.566)
Yeah, and what was, so what was, what was it that kind of the revenue and the profit? Like, yeah.

Michael Frew (37:09.038)
Oh, yeah, you were asking about growth. That's right. Yeah, so the business had been doing well. So it was really oversubscribed for people to buy it. It continued to grow even through the acquisition, which, as you know, sometimes can be rare. People take their foot off the gas. So we were able to take over. Hopefully most of the customers didn't notice while we kind of got our feet running underneath it. Former operator was able to step away, and now we run it all ourselves. Continued to grow, and we're looking to actually. Yeah, and it was really fast.

Jon Stoddard (37:34.542)
Yeah, it says you grew up by 50%. Yeah.

Michael Frew (37:38.51)
And so that was fantastic. And we're actually looking to, you know, we'll expand kind of like I did with that first business. We're going to take another language that's a little bit smaller, add that capability to it. And then that kind of doubles our addressable audience, you could say.

Jon Stoddard (37:52.398)
You mean take this Elixir, which is it's built on and then take it to another platform with a bigger customer base. Yeah. Gotcha. And you just had, you've had this for two years.

Michael Frew (37:58.766)
Yep. Yeah, exactly.

Michael Frew (38:06.542)
We're about two years and a few months. So that's what, on a timeline I've noticed for businesses about this size that are software, that first year, we try not to really touch anything. We're just learning how the business works. Where does it break? Most entrepreneurs don't ever realize that their business is going to grow, so they're not made to scale. And that's where you start hitting problems, is you get a good customer and they start bumping up against the walls and things start breaking. So in the first year, we're working on scalability. We try not to.

Jon Stoddard (38:20.174)
Yeah.

Michael Frew (38:36.302)
cause any problems and we start getting the feedback of, OK, what should we improve? What features do people need? Then we start putting that together in year two. So that's kind of where we are now is, all right, now we're starting to run it because we've had the time, had a couple of years under our belt, making it more scalable, making it more robust, trying to keep it from falling over, those kind of things.

Jon Stoddard (38:54.606)
Yeah. And why did the guy sell it?

Michael Frew (38:56.942)
For him, he was the one that was interested in moving into venture capital.

Jon Stoddard (39:00.302)
Okay, interesting.

Michael Frew (39:01.55)
And so yeah, career switch for him that he had kind of done a few steps. This was a really successful business. He was able to take that cash and say, OK, now I can help do this piece and go back to Silicon Valley.

Jon Stoddard (39:14.35)
Anything you learned about this? Like what do you think the size is? Well, again, this looks like another opportunity where it's a good model and it throws off good cashflow, but to get it bigger, you're gonna have to rewrite it for another platform.

Michael Frew (39:28.654)
Yep, yeah. So having that base platform and customer base already, it just gives you that kind of gasoline and ammunition that you need. It gives us the cashflow to be able to build that piece over the next year and then launch that as well. I really do like, it's interesting that you've brought this up for a couple of the businesses, because that seems to be what we're doing is we take something that's really cashflow positive and then we can find something very similar to it, launch that as a new product and then that's all just extra revenue.

Jon Stoddard (39:57.294)
Yeah, interesting. How long does it take to you to program something like that? I know you did it already once and you're doing it, concurrently doing it. Now we're investigating it.

Michael Frew (40:06.318)
Yeah, each one has been at least, I'd say, nine months to a couple years to really make it where you're comfortable saying, all right, we're ready to release to the public. We'll do a few people at first. I remember we still had people that tested it with us, and they still run for free. And it's something that's like $500 a month. They still get it for free. So yeah, the usual testing and growing. But yeah, nine months to about two years, I'd say.

Jon Stoddard (40:32.269)
What is this? So this is a platform as a service. How many customers do this?

Michael Frew (40:37.038)
We've got, I think the last time I looked, we're about somewhere between 400 and 500 customers. And so it goes, yep. And I mean, it actually, for your platform, people will pay quite a bit for infrastructure as long as it's running and you're running a really good business on top. But it goes from everybody from the indie hacker that's in a garage to a Fortune 100 company running on it. So it's an interesting customer base to make sure everybody's happy.

Jon Stoddard (40:42.158)
and it's like 500 to $1 ,000 a month or so.

Jon Stoddard (40:59.022)
Yeah.

Jon Stoddard (41:02.798)
What any churn on it though? What's the churn percentage?

Michael Frew (41:05.934)
It's actually quite low. What we've seen from Churn, especially the last few years, it's almost always the customer goes out of business or they bring it in -house. And so this is that argument between Cloud and running it in -house. And this has been going on for a decade, right? When everybody was being, yeah, security can be one of them. Do we want to end? And so that's the feedback we've gotten, which I'm comfortable with, right? If the company goes out of business, that's not that we can do there.

Jon Stoddard (41:21.806)
Usually for security reasons, right? Yeah.

Michael Frew (41:33.23)
And if you're bringing it in house, there's a pretty good chance we'll see you in two years when you realize like, oh, wow, that was a lot of work. We're sick of getting woken up in the middle of the night for emergencies. Let's just send it back to Michael. He can wake up in the middle of the night and deal with it.

Jon Stoddard (41:45.006)
Yeah. And what this FE International, you're a pretty good customer there. And they usually have pretty good multiples on their business. Look, I tried to buy a business that was in the UK from FE International about six, seven years ago. And it was a fantastic, throwing off a lot of profit. We had to borrow some money to do it. And, but FEI International put a very good multiple on it. Very attractive. Of course it had generated a lot of offers. Yeah.

Michael Frew (41:52.334)
I guess so, yeah.

Michael Frew (42:02.382)
Yeah.

Michael Frew (42:13.806)
Yeah, they were really pushing those multiples up right up until this interest rate thing changed. And it was getting scary because I thought, OK, as an individual acquirer, I've only got my own resources. Is this market going to get away from me? Has this got more popular and everything? And so I've been happy to see multiples come back down because, yeah, I was a little afraid I was going to get priced out and I couldn't do what I've enjoyed doing, which is buying these businesses and growing them and just getting to run them myself.

Jon Stoddard (42:41.518)
Yeah. So also on your website under michaelfrou .com forward slash acquisitions, you kind of act like a private equity firm where you're offering annual returns on invested capital between 2019 and 2023. And you started out at 32, then 2020 it's 34, then you're moving up just gently. And then you take a big jump in 2022.

Michael Frew (43:10.254)
Yep, that's the acquisition of the last business. Yeah. Yep.

Jon Stoddard (43:10.702)
is you bought that bigger company, throwing off a lot more cash. And then 2023, so last year was 43 % return on capital. So what are you trying to do here? Are you trying to raise cap money from somebody else to help you purchase bigger?

Michael Frew (43:27.566)
I remember putting that up there. I think so for 10 years. I didn't go online or talk about this anywhere and and then I started writing about it a few years ago and I started to get the feeling that Like imposter syndrome and I thought man, this is crazy So I've bought all these companies and I'd hear people talk on YouTube and they'd have a huge channel and they bought and sold one business and I was like well, that seems really weird to me that I have imposter syndrome and

Jon Stoddard (43:35.31)
Yeah.

Michael Frew (43:56.11)
yet I feel like I've done a little bit more. So I think there I was just trying to show like, this is kind of what my results are. I just haven't talked about it a lot. And so I'll be honest, I'm not terribly comfortable leaving that up there sometimes. And I've gone back and forth. If you looked at this a month ago, it might not have been there. And so yeah, it's almost a deal a little bit with in this industry, because nobody knows what you're doing. How do you prove that you're not just smoking mirrors? And even just me putting numbers on the website. Yeah.

Jon Stoddard (44:23.392)
Let me tell you about that. Yeah, let me tell you about that I've had a number of podcast guests that were just complete frauds and then I go through I say well, you know today I said well show me the acquisitions like who'd you buy them from and I can verify that pretty quickly because I know Fe I I know quiet I I know all these places and I said well, you know show me the you know LinkedIn post or the Twitter post or whatever it is like

Michael Frew (44:29.966)
Really? Wow, man.

Michael Frew (44:35.886)
Yeah. Yeah.

Michael Frew (44:48.878)
Yeah.

Jon Stoddard (44:52.078)
It's pretty easy, like I said, you can't do this off the grid anymore. People can track this stuff.

Michael Frew (44:56.206)
Yeah, that's very true. And you're right, I've got a few things out there. I know we did interviews with Effie. I did a Boopos interview. So yeah, you can always point to that. But I didn't even know people would even look that deep. So yeah, I think it was when I finally started talking about it, I just felt like, man, I got nothing to back me up. I wasn't big on LinkedIn. I had to change all that. And then start reaching out and saying, hey, I'd like to talk about this. And so you as a podcast host,

Here's kind of what I've been doing. I just haven't really posted about it at all.

Jon Stoddard (45:26.958)
Yeah. Well, I think it's great. I tell you what happens is, is you're going to start getting people reach out to you and do more interviews or they just go, look, I, you know, it looks like you're doing a great job. I like 43 % returns on investment. That is, that is.

Michael Frew (45:40.718)
Yeah, it's, I'm all good. I'm not so sure I'm really great. I don't want to raise money or anything like that. But I'm super happy. The one thing I would say is if you have questions, just like send me an email. Super happy to help. I've gotten reach reach out from a lot of people that are trying to sell their business. So maybe right before they talk to a quiet light or FBI or wherever, what do I need to do for these 12 months to make it look better? And man, like, you know,

We've got a huge list of here are mistakes that sellers make. And let me help you not do this. And then it'll save you a couple hundred thousand on your sale. So that would be great.

Jon Stoddard (46:13.166)
Yeah.

Jon Stoddard (46:20.686)
Yeah. Well, it's interesting. We all go through this process of like just swinging at anything until we figured out, you know, why don't I stay with what I know, which would it did for 20 years in a specific industry? Yeah.

Michael Frew (46:30.734)
Yeah.

Michael Frew (46:34.222)
I'm still tempted sometimes I look at like, wow, that business is doing really well, but it's well outside of what I know to do. You know, would I just try it, but we just don't have enough time in our lives, right? I couldn't spend eight hours a day on that and then try and keep everything else going.

Jon Stoddard (46:45.262)
Yeah

Jon Stoddard (46:48.974)
So that sounds like your next challenge is like, how do you put somebody else in these roles where you move up a little bit? You don't take your gun out of your holster, as they would say. Yeah.

Michael Frew (46:56.782)
Yeah. My wife, she scheduled a month long trip to Australia. And that was the first time I knew a year ahead that, OK, this is going to be a problem. I can't, you know, and this was we were doing a cruise, all sorts of other. I just wasn't going to be online when I normally am. And that's where I started bringing in. So I had an assistant come in. And so now he runs most of the operational stuff in the day. I just get to still play in there when I want to. So that's been helpful. But.

You're right. The next real, if I really wanted to mature it even more, bring in an operating person that completely replaces me. Yet my first question is always, so what am I going to do all day? Keep searching for the next business. You know, like I said, it takes me a long time to find what I'm looking for. So I get a little worried about getting bored.

Jon Stoddard (47:47.086)
Yeah, I don't think it's like the guy from Constellation Software, Mark. I mean, his general manager is a business units. They make their own decisions on acquisitions now. Completely. They get a playbook where just follow this, do this. This is what the business needs to look like. This is what it needs to be doing. You know, make your own decisions. There's no veto power from Mark. It's very interesting how he's done that.

Michael Frew (47:57.549)
Interesting. Yeah.

Michael Frew (48:05.486)
Yep. Yeah.

Michael Frew (48:13.07)
Yeah, it's been really interesting to kind of follow how that story has unfolded. I sometimes wonder, at least for me personally, I get to live basically my own lifestyle here where we can travel when we want. I live in Las Vegas, so we can go to the strip whenever we want. The more people that I bring on, that starts to get compressed a little bit, more responsibility. And so, yes, they're helping me with the operational part. However, it then adds more overhead to me in other ways. So.

Jon Stoddard (48:32.078)
Yeah.

Jon Stoddard (48:41.358)
Yeah, let me ask you about that. Is that the fear of not finding somebody as invested as you are or as capable? Nobody's ever going to do the job you can do, right? Or.

Michael Frew (48:42.734)
Yeah.

Michael Frew (48:54.222)
Yeah, I understand you've got to, you know, the best you can get is somebody that's going to do it 80 % as well as you. Right. So even if we say that, I do think that is that is a concern. The thought of having to turn someone.

Jon Stoddard (49:00.078)
Yeah.

Jon Stoddard (49:06.446)
Did you do hiring at your last jobs? Did you do hiring at your management roles or? Yeah.

Michael Frew (49:09.934)
Say that I missed the first part. I did not. No, I was always either just the engineer or doing consulting. I never dealt with hiring. So it's probably, remember I mentioned away in the beginning if I had heard about this 10, 15 years ago and thought, OK, maybe later in my career I'd like to do some acquisitions. That's where I think it would be important in the corporate world. Don't just work in engineering. Get a time over at HR. Get some time over in accounting and finance. Learn how all those pieces work so then when you come out,

you're going to be fantastic at running your own business because you've got all these pieces. Right.

Jon Stoddard (49:39.918)
That's what they do at GE. They find out that they can put you in all different kinds of roles. Yeah.

Michael Frew (49:44.462)
Yeah. So that would be, I wish I had known that because I stayed very focused on tech. I always did consulting for development and everything. Boy, but I had opportunities to work in other spots that now could really pay off and I have to kind of learn on the fly.

Jon Stoddard (49:59.662)
Yeah. So what's next? I mean, what are you looking for? Are you looking for other businesses actively? Yeah.

Michael Frew (50:03.726)
Yep, same thing. Pretty actively, because now it's been a couple of years. So I've got the time, right? So we've got the most recent acquisition. It runs on its own. We've got the new stuff coming out soon. So it's about that time where I can kind of step away and start looking at the next thing. And we just put it into the machine. So that's.

Jon Stoddard (50:21.646)
And how have you done about accumulating cash to be able to make an acquisition? Yeah.

Michael Frew (50:25.838)
Yep. Yep. So it sits in my accumulated cash accounts just waiting so that when that one business comes up, I can move as fast as possible. Because as you know,

Jon Stoddard (50:35.246)
That's the point, like you gotta take cash with you and you're ready to move fast. Yeah.

Michael Frew (50:39.022)
Yep, you keep those relationships fresh. You know, even if there's nothing going on, like just reaching out, hey, I'm still here. Haven't, haven't disappeared. Cause I know brokers are just overloaded with people contacting them all the time. And so you just kind of try and go to the right events, all of those things. And.

Jon Stoddard (50:49.55)
Yeah.

Jon Stoddard (50:54.414)
Yeah, you're at the point where you need to look for also off -market deals, you know, that not going through the brokers. Yeah.

Michael Frew (50:58.094)
Yep. I do have a firm that does that as well. Yeah. And they're, they kind of were, we're both learning together of like, here's the very specific thing that I'm looking for and they're narrowing it down.

Jon Stoddard (51:08.046)
Very specific buy box.

Michael Frew (51:09.934)
Yeah, I have pretty specific criteria now, which as you can tell from the prior part of our conversation was not as strict back then. But yeah, I've got a lot tighter criteria now, so it's a little bit harder to find. But that's what I feel is what's gotten me success.

Jon Stoddard (51:23.886)
Yeah, you know, used to be in the software industry, you could see everybody in the industry by the trade shows they go to. Now they don't go to the trade shows anymore. They don't need to. It's just, yeah.

Michael Frew (51:33.774)
Yeah, it's all online. Well, that's another benefit of living in Vegas is half of the shows just come here. And so I just walk down the street and yeah, I just go see everybody.

Jon Stoddard (51:41.166)
Oh, that's right. Yeah, that's very cool. So let me ask you about your wife because she's been involved in this. Is she tech background or just a good sounding board or what? Yeah.

Michael Frew (51:46.51)
Yep. Yep.

She built her own company with her ex -husband. And they built that quite large. They sold it. And she was very happy with what she got for that and said, hey, I'm going to be retired. And I would like to travel. And so I've kind of pulled her into the business saying, hey, I need a little help with this. I could use some help with some of the HR questions. Because they obviously had to do everything, right? There really was something that started out of their basement. So yeah, I've pulled her in. She's invested in some of the last companies.

And that way it kind of allows her to have her it's her own cash that I you know it's not something she has to ask me if she needs to spend. So that's kind of cool to that she's got her own equity in the business as well.

Jon Stoddard (52:27.982)
Yeah, yeah. Yeah, what kind of business was that?

Michael Frew (52:31.854)
That's the last one that we did there with the platform as a service. Oh, yeah. It was a medical gas company. A medical gas company. She's going to laugh trying to listen to me explain this. I believe it's a medical gas and equipment company. So when you go to the hospital and it's got the wall of everything that's behind you when you're laying in the bed, they put a lot of that together and install what all those things do.

Jon Stoddard (52:34.606)
Well, I mean, what kind of business did she have with her husband?

A what? A medical gas? Like they're for use for anesthesia?

Jon Stoddard (52:56.27)
Yeah.

Michael Frew (53:01.838)
That is the impression I got from it. And I don't think she went any deeper on that, but the company did really well. So yeah. And it shows, you know, it wasn't something that she had any experience in, but she ran all of the different departments and they were just able to make it successful. Yeah.

Jon Stoddard (53:07.118)
That's a niche too, yeah.

Jon Stoddard (53:17.87)
That's fantastic. Well, you got it. Now you got a great board of advisors with you too that can help you out. Yeah.

Michael Frew (53:21.806)
Right. It is really nice to have someone that is in the house that has been an entrepreneur as well because they know what the lifestyle is like. They know there's really bad days sometimes and then there's really good days and that you need someone to talk to.

Jon Stoddard (53:36.686)
Well, it's an informed opinion too. It's not, hey, oh, I got my opinion, but yeah, but yeah.

Michael Frew (53:43.022)
Yeah, and it's tough when she disagrees because I'm like, ah, man, I really thought I knew what I was talking about there. No, that's not really how I see it.

Jon Stoddard (53:50.158)
Yeah. And do you kind of make presentations to her like a deck and put together and goes, Hey, this is a new business I found. I think this is why.

Michael Frew (53:59.534)
I don't know if you heard that from a different podcast, but I've always done that. I remember when we moved to Grand Cayman, I put a PowerPoint deck together, showed it for everybody. So yeah, I really enjoy putting that together. I just make it fun, right? And we all laugh. But yeah, that's kind of how it like, here's what I'm looking at. Here's what this would mean for you. This is what it means for our time. Here's the money we would invest. What do you think? I hope I've covered all the bases. Where am I missing something? And yeah, I'll do a big presentation.

Jon Stoddard (54:24.43)
No, no, I was just thinking of that movie with Will Ferrell where he does that presentation to his family.

Michael Frew (54:30.67)
Yeah, hopefully I do it a little bit better, but probably not as memorable as his, that's for sure.

Jon Stoddard (54:35.374)
Yeah.

Yeah. Well, that's fantastic, Michael. It sounds like you're just getting started and really like, it's like a tuning into an AM radio station. You got to go back and forth a little bit until that you get that oscillator perfectly line. Yeah.

Michael Frew (54:39.726)
Yeah.

Michael Frew (54:51.15)
Yep. Yeah, it really is. And I think for everyone, it's kind of going to be like that. You know, your first, even your first sale, you know, you may not sell it to the right person, but you build the next business, sell it to a better buyer. You know, it's all a process here and it's, it's just a such a fragmented private industry. It's hard to know. So thanks for doing the show so that more people learn about this as well.

Jon Stoddard (55:10.606)
Yeah. I mean, any advice for new buyers in the tech industry that you would just say, you know, do this, like, this is what I've learned.

Michael Frew (55:18.894)
Yeah, I would say don't jump into it right away if you're inspired by this interview, right? Treat it like you're buying a house, right? So you need to save some money for that 10%, 20%, 30 % that you need to put down. Educate yourself. There are courses out there. There's YouTube videos that will help you. And just make sure you understand what you're doing before you jump into it. I'm probably guilty of being like, oh, I'm just going to go do that right now. I'm going to cut everything else off. That's very tempting to try, but.

you know, reach out to me. Like I'll help with here's what education I would do. Here's the five books I would read. And here's the 10 people I would talk to to get you started, you know, and just doing it that way and just doing it a measured pace.

Jon Stoddard (55:56.974)
Well, why don't you, what are the five bucks? Can you re -

Michael Frew (55:59.79)
Ooh, that's a good one. I just got, where is it back here? I was just working on buy and build. Yep, Ace Chapman has a really good one. Where is it? Now you got me trying to remember. You know him?

Jon Stoddard (56:04.942)
Right, yeah. Walker Diebel. Yeah.

Jon Stoddard (56:11.63)
I know Ace. Yeah. I know I'm from LinkedIn. I don't know I'm personally.

Michael Frew (56:16.27)
Gotcha, yeah. So he put one out a few years ago that was really good about how you can't convince that guy to start his own business. He acquires businesses and that's kind of how he built his wealth. I would say anything.

I'm trying to think of it. Turning Pro, which isn't obviously about acquisitions, but it really was a mental mind shift for me of me just playing like an amateur game, just doing this for fun, to, wow, this actually is really my career. And I need to get really serious about it. And I need to find everywhere that there's education about it. I need to find every book that's on it. Yeah. And that's.

Jon Stoddard (56:35.95)
Turning pro.

Jon Stoddard (56:45.102)
Yeah.

Jon Stoddard (56:52.942)
Just consume, immerse yourself, everything. Like, yeah.

Michael Frew (56:57.934)
That's sometimes tough for a lot of us that feel like we're interested in so many things to just focus on one thing. And that's the hard part. So that one was pretty pivotal for me, I thought.

Jon Stoddard (57:10.734)
Well, Michael, thanks for being on our show.

Michael Frew (57:13.134)
You got it. Thank you for having me. This is great.