Hi,

I’m excited about 2024. I feel incredibly optimistic about many things, especially the opportunity to find and buy amazing internet businesses from great owners with no exit plan.

This time of year is my favorite. I love reflecting on the year and planning the next.

So, this email will be on my 2024 goals as they relate to buying a business.

The goal I’m not making

Let’s talk about my 2024 goals. Last year I made a goal: Buy a business in 2024.

Thus was born the activity I’ve written about: building a search process, hiring VAs, writing emails and letters, visiting owners, etc.

As I went, I uncovered a bigger goal than simply buying a business. I called it “My 3-5 year plan” and wrote about it here. Here’s the summary:

That was 3 months ago. Since then, I’ve grown even more convicted in steps 2-5.

So, that all leads me to the goal I’m not making:

Buy a business in 2024.

I thought about this a lot and decided it was the wrong goal for one reason: I’m not just trying to buy a business. I’m trying to find and buy a homerun business (or multiple).

The approach I’ve chosen is largely dependent on an off-market search. Many experienced searchers will tell you off-market searches are inefficient.

They are correct.

My bet is that an off-market search only works if search efficiency is not part of your criteria.

Selection > speed

I’m optimizing around selection, not speed. Find a homerun, then do whatever it takes to win the owner over. I want a relationship so solid with the owner that when they wake up one morning, roll over and tell their spouse it’s time to sell the biz, their next words are: “Let’s call Mike.”

I know that’s a little dramatic, but you get the point.

I’ve studied a lot of acquisitions this year, and I find a recurring theme from what I would call the “homerun” deals: the owner really liked the buyer. Many times, the owner had a relationship with the buyer.

(Side note: It’s impossible to build a relationship with an on-market seller. They do not want your Christmas card or your coffee meeting. They want your cash, assuming you are the highest bidder.)

My goal for 2024

Sorry to bury the lede. Here’s my goal for 2024:

Find 12 homerun-potential businesses and build personal relationships with the owners.

Right now I’m at 1.5 (the .5 is a relationship that’s just started — no in-person visit yet). So, I have about 10 more to go this year.

And that’s what my time is best spent on — finding 10 more businesses with homerun potential.

Will one or more of them be ready to sell — even anxious to sell — in 2024? Or 2025? Or 2026?!

I can only play the odds that, yes, the opportunity will come to fruition. I just can’t time it yet. But, when it does, I think it will be sweet.

What’s a homerun?

I had this conversation on 𝕏 this week, and someone asked me: What’s your criteria for a homerun. Here’s what I told him.

• Heavily under-optimized (neglect of one or more main channels like paid media, website, email, etc.)

• “Bought right” - it’s a good deal on a market-value basis

• Reasonable, upside path to 5x in 2 years

• Niche

• I love the business and like the owner

A critique on holding companies

It seems like “Hold Cos” (short for Holding Companies) are hot right now. A lot of folks talk about buying businesses, hiring great operators, and raking in that sweet, passive income while the business runs itself smoothly.

If I’m honest, what I talk about is adjacent, if not aligned.

I listened to a podcast this week that’s making me rethink the strategy to buy a lot of businesses.

It’s by Brent Beshore, founder of Permanent Equity (a Hold Co). He interviewed Bill D'Alessandro, a former Hold Co entrepreneur who unwound his Hold Co to focus on one stellar business in the portfolio.

The discussion was very critical of the Hold Co approach, all but calling it impossible to execute well.

It was a stiff drink coming from two pioneers of the modern Hold Co, and it made me think.

Should I really be thinking about buying multiple businesses that are unrelated to each other — i.e. a Hold Co?

I’m still thinking about the conversation. It’s challenging me. My conclusion is that it’s not for me to worry about right now.

See above for my goals. I’m focused on finding homerun businesses and building relationships with the owners. Then, I’ll focus on buying one of them.

After that… a Hold Co? Two or three acquisitions total? Just talk to owners for fun?

It’s not for me to know right now — one thing at a time in 2024.

Excited for it!

Mike