Rev $9.2M profit $7.9M (86.03% profit margin!!!)

A quick note before we jump in…

I have a research file where I have written various notes over the years.

One part is about people who have built extraordinary businesses.

Going through it yesterday I found the following:

Carl Icahn

• An introvert,

• A loner,

• Spends a lot of time by himself,

• Reads all day,

• Wants “more”, wants something “better” in life,

• Not expecting things to be given to him,

• Stays quiet and studies hard,

• Socially isolated

You want to work with people like that — with a Carl or two you can build something remarkable.

- - - -

When talking to business owners, I've started asking the following question:

“Where would you invest your own money?”

I ask this because I want to see which competitor they admire the most and where would they invest their money.

You start getting a very interesting overview of the market; even acquisiton targets.

- - - -

Imagine making 100 calls a day. At least that's what billionaire art dealer Larry Gagosian does.

When selling bonds here in the Estonian market, there are days when I make 10-15 cold calls and that seems like a lot.

When looking for companies to acquire, I sometimes do 25-30 calls a day. Again, seems like a lot…

But imagine making 100!!

The passion is real and he must truly believe he is selling the best product in the world.

His take on this was:

“If you love what you do, the only exit strategy is death.“

- - - -

I thought I loved what I was doing...until I couldn’t find product market fit.

Here's the story of what I learned from a guy who built a business that made almost $10 million in NET PROFIT selling VPNs.

With 9 employees…

In 2017, I found a VPN/affiliate site that made 6,500,000 USD profit.

Yes, in profit.

I did some research and found the owner of this business.

Surprise, surprise, he lives in the same city as me.

Small world.

I approached him at a restaurant as he was eating out alone — sounds really weird but I smiled and said how are you and then introduced myself. (A closed mouth don’t get fed anyway.)

I  was very generous, we talked for 10-15 minutes and he asked me to email him.

My goal was to create a website that reviewed CRM (Customer Relationship Management) software companies.

• Keap

• HubSpot

• Monday dot com

• Pipedrive

• Salesforce

• SugarCRM

• Freshsales

• Zoho

• Insightly, etc

Sending emails back and forth.

His number one piece of advice: “I would focus on creating content for the next year so your page gets bigger and so on. Try to become an industry 'go to' page - as much information as possible about CRM and CRM software.”

That's what I did the next year.

I was single back then, so I had a lot of time.

I woke up at 5 am and wrote straight until 10 am - again, I did that for more than a year.

It felt like I was torturing myself. Which in some day I felt I did.

But I got used to it.

And I started to like it because I started to get better at it.

Years later I found a video of Jerry Seinfeld (the almost-billionaire comedian) saying:

“Find the torture you can tolerate that nobody else can.

What's the painful thing you can do and think about for hours that would make others tap out within minutes?

It can be difficult to find since you might not understand how unbearable things are for others when they're tolerable for you.

It feels like trying to swim in the middle of the ocean for most, but for you, it's like doing some simple laps of a pool; tiring, but not hellish.

If you can find it, you'll do well.”

Anyway,

I researched different CRM software providers.

In short, this site started making me money.

But not through CRM affiliates, but rather through consulting.

Although I did not expect to build it.

I received an offer to sell the page for $100,000; which I respectfully declined.

6 months later — I didn't want to do it anymore, I almost hated it — I asked if they were still interested in buying and they said no.

I shut down the website: CRMAdvice dot org; and moved on started building another company.

The goal was to redirect my mind (since troubling, nagging thoughts about this business will always keep popping in).

A few months later I was free. My mind was free.

Lesson 1 and 2:

Humans are extremely capable of doing anything they truly desire. You just have to put your head down and get the job done. For me, it was a writing period from 5am to 10am every day.

The importance of selling the right product: I couldn't really find the right product-market-fit; After 18 months, I learned that people and businesses don't buy CRM the same way they buy a VPN. Although they preferred to buy a consultation from me.

One thing leads to another.

Lesson number 3:

Having someone who is 5 or 10 years ahead of you, or someone who has built the exact business you want to build, gives you a huge advantage.

Looking back, he told me he wasn't sure about the niche, but when it came to traffic, content and growth, he was a true master and didn't hold back on advice.

- - - -

How has been the week in my small holdco world?

More and more people have started sending me deals.

Good deals.

(We are negotiating the terms with these companies, if we make an offer, it must be an attractive multiple and we must be making money on day one.

For example, buying for 4.5x EBITDA even though it is worth 6x EBITDA, that's our goal and that's why I'm under no pressure or rush to make a quick deal. (I’m here for a long term.)

That being said, to understand your interest in what we do, get on my list here and I’ll send you more information about the deals. (17 investors have already done this last week)

When talking about a consumer loan company

In October, we issued loans worth $289,000

Speaking of bonds, we've raised nearly $300,000 in the past three weeks.

I have many investors interested in investing from the US, but please give me time, we will work out the documentation, contracts and the capital review process.

Take care,

Mikk aka PrivatEquityGuy

P.S. In case you want to see our future deal flow, get on my list here and I’ll send you more information about the deals.

Lastly,

I have interviewed twelve people on HoldCo Builders podcast. People have said they loved the show. Which is pretty cool.

Here’s the recent one with Alec:

As always, thanks a lot for following the journey.