On today’s episode:
- How buying a company can be less risky than starting your own -01:55
- His experience working at a great place, but feeling like he was a bad fit- 04:34
- The different pathways of acquisition entrepreneurship- 07:24
- How he acquired his business in a space he had no experience -10:04
- How a second child can become a catalyst for many entrepreneurs – 12:06
- Should you do due diligence yourself when you buy a company (and a story about a strip club)- 14:40
- When buying a business think about if you will be able to afford to maintain customer relationships – 17:20
- Why you should build your business in public (and how it can help you overcome loneliness)- 19:29
- The goal for his company: bringing technology into an analog game- 22:47
- The relationship he has with his business sponsor family- 25:20
- If you are looking to buy a company, narrow your search using this method- 27:45
- Is Ayo Phillips going to transform his company into a tech company? – 31:11
- Legacy: 2 things that are important to him (it’s ok to be bad at things) – 32:53
- Lessons learned #1: Acquisition entrepreneurship is a risk-mitigating choice- 38:07
- Lesson learned #2: Building in public (keeping things in perspective) – 38:27
- Lesson #3: Near stream niching down -39:04
- The difference between acquisition entrepreneurship and startup entrepreneurship is that you are buying something that already exists, so you should be reducing your risk profile. In fact, only 1 in 10 venture-backed companies succeed.
- The work you do at a job can be both intellectually stimulating yet unfulfilling at the same time.
- Pathways of acquisition entrepreneurship: traditional self-fund pathway; sponsored search (partnering with someone/a family).
- It is easy to look at a business from a customer concentration perspective, it is more important to look at a small business from a relationship concentration perspective. This means that even if a certain customer is only 2% of your revenue, you want to understand how relationships are maintained in the long term and it should be sustainable.
- You have to hang out where your clients hang out, so when you buy a business make sure that you can afford to do that before buying that particular business.
- There is a large opportunity in bringing technology to old-school businesses.
- A good way to find lucrative companies to buy is to look for industries that are off the beaten path that has not yet been optimized by technology and find a way to glean efficiencies and capitalize on that gap.
The best way to find a business to buy is this:
“So if I were to say, for anyone who is listening to this, who is thinking man, what areas can we go into and how can we add value – I would find businesses that are off the beaten path, industries that are off the beaten path, who haven’t yet gone on this technology optimization path and find a way inject some of that into those business’ processes and glean efficiencies from those things” – Ayo Phillips (29:35)
What is your advice for people who want to acquire a business? Tell us in the comments and don’t forget to say hello if you would like to share your entrepreneurship story on our podcast.
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