Hi,

I’m happy to be back after a couple weeks off.

I’ve been thinking a lot. Thinking about the ideal acquisition. Thinking about my search process. Thinking about what I need to change.

I’m excited to share some of those thoughts as they’re ready.

In the meantime, I’m going to update you on a few owners conversations I’ve had the past few weeks.

I’m getting several responses a week, and have had three or four calls the last couple of weeks.

Web developer

I chatted with a web developer of a ~20 year old web development agency.

He’s all but closed down the business to focus on… Bitcoin. He was more excited to talk about Bitcoin than he was his business.

He told me he just took out a HELOC to buy more of it. Ha.

But the most interesting part of the conversation was his main client.

He said this client is pulling in $20m/year designing… airport lounges for airlines.

Now that’s interesting. But this web dev business was not.

Had to send him a note when Bitcoin hit an all time high this week, though.

Project management Windows app

I found this really interesting website dedicated to project management methodologies, templates, and software.

I like niches, and this looked like a good one.

After talking to the owner, I learned that he recently sold off the template and resources portion of the business, and is interested in selling the software application.

Here are the highlights:

• Windows application

• Sold 4,110 perpetual licenses over last 15 years

• Did $20k in revenue last year

• Email list of 45,000 project managers

This business wasn’t for me.

It’s slowly declining, and I’m not excited about being on the hook to service 4,000+ customers who paid in years past. He’s doing the basic marketing “best practices” on his website (email opt ins, free trials, social proof).

I just don’t see much opportunity here.

The email list? He got me excited when he said the open rate was 20-30% and click rate was 10%.

When I dug in, he pulled up his email sender, and we found that the real numbers were less than a third of what he remembered.

Bummer.

Owners tend to round up — by a lot — when estimating important numbers. :)

Proofreading business

I started reaching out to proofreading businesses because I thought there might be an opportunity.

Theoretically, it’s not a great time to own a traditional proofreading biz. Chat GPT does a pretty good job at proofreading.

I got a 17 year old proofreading business on the phone.

Consistent, steady business for a long time — until one day.

She said she held the #1 position in search results for a couple of key searches, then felt like it dropped off around March 2023..

Check out this chart.

I don’t think her issues are SEO related.

I think it’s Chat GPT.

Nevertheless, we talked about some easy wins on her website. She doesn’t have Google Analytics or Search Console set up. This is such low hanging fruit for a business that relies on search traffic.

Even in a world with Chat GPT, I think there’s room for good proofreading businesses.

If she had clients on retainers or a corporate client list, I would be interested in this business.

Chat GPT and offshore talent could be really helpful, margin-improving moves in that case.

But it’s not the case, and so I don’t see a fit.

I guess that was a bit of a theme for the past few conversations.

Buffett and Munger talk a lot about patience and waiting for the right investment.

Buffett likens good investing to Ted Williams’ approach to hitting: pitch selection. With pitch selection, you look for one specific pitch that you know you can do damage with. That includes pitch type and pitch location.

Everything else is a pass.

I think I’m building this discipline.

It’s a journey, but at least it’s mostly fun.

Mike