EP 79 RONIK PATEL audio
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[00:00:00] Corey Quinn: If you're not involved in the day to day, why not just let the business run and you live off the cash flow and move on in that direction. Today we're joined again, this is a repeat visitor. It is Ronik Patel from Unlimited WP. Welcome Ronik.
[00:00:14] Ronik Patel: Thank you, Corey. That was always the thought that if you don't exit if the business is not dependent on you it independently without you You're not detached in that sense Second is the burden of growing right all the the founders all the owners of all the business We always have this burden of growing we have [00:00:30] that and doing that without your involvement to the extent it may become difficult Because there's not an active strategy or planning or any contribution that you are bringing on the business So, you know, there's that Fear that things may go downhill from here and if it goes downhill and then you try to exit, you probably won't get, you know, what you're looking for.
[00:00:52] Corey Quinn: Welcome to the Deep Specialization Podcast, the show where we blend focus, strategy, and client intimacy in order to scale and [00:01:00] simplify our businesses and our lives. I'm your host, Corey Quinn. Let's jump into the show. Today we're joined again. This is a repeat visitor. It is Ronik Patel from Unlimited WP.
[00:01:11] Corey Quinn: Welcome Ronik.
[00:01:12] Ronik Patel: Thank you Cody.
[00:01:13] Corey Quinn: So, so you are a repeat visitor on the show, which happens very rarely. I think only one guest came on twice, Sam Schepler. Uh, he's an amazing guest, uh, but one of the reasons why, uh, I'm excited to speak with you again is that the last time, uh, I [00:01:30] spoke with you, we were talking all about productizing your business so that you can scale.
[00:01:35] Corey Quinn: And now that you've productized your business so that you can scale, you've now gone through a transaction. You've sold your agency. Is that right?
[00:01:41] Ronik Patel: Yes, I have.
[00:01:44] Corey Quinn: And the cool thing is that the business that you sold your company to, uh, is also, uh, one of the guests of the show, uh, my niche and his company is E2M.
[00:01:56] Corey Quinn: Is that right?
[00:01:57] Ronik Patel: Yes.
[00:01:58] Corey Quinn: Yeah, that's awesome. So [00:02:00] first off, congratulations. Sold your agency. Yay. And of course that can mean a lot of different things to a lot of different people, but still it's a big, it's a big, uh, congratulations to you.
[00:02:11] Ronik Patel: I think if you've been running agency for a number of years, for the most people listening to this, it would be, yeah, that's, that's, that's amazing.
[00:02:19] Corey Quinn: Yeah, it is absolutely amazing. And what I would love to do is for those of us who want to sell our business one day, which is including me, um, want to understand kind of picking [00:02:30] up from where we left off on the last conversation. The last conversation we went, uh, deep, I'll, I'll, I'll share a couple of notes.
[00:02:36] Corey Quinn: Number one, you had a hundred team members with offices in Boston and, um, in India. You were a seven figure agency service, obviously providing, uh, uh, WP or WordPress services to agencies as a white label solution, a hundred percent recur of your business was recurring. Uh, you rebranded about four years ago, exclusively [00:03:00] on, um, WordPress development for agencies.
[00:03:02] Corey Quinn: And I remember from our conversation, a big part of that was, uh, Just, um, you know, so you could streamline the business and take a lot of the complexity out of it. Uh, back then when we spoke, you said you, you were aiming to help 3000 agencies by 2027 was a big goal of yours. Uh, and so you were on that path, right?
[00:03:21] Corey Quinn: You were. You had productized, you had, um, a great client list, a great, you know, seven figures, a hundred percent retention. [00:03:30] Uh, so tell, tell us, you know, sort of walk us through the journey from, I guess, where you are today, which is on the other side of the transaction. Let's start way at the beginning of this.
[00:03:41] Corey Quinn: When did you realize that you wanted to sell?
[00:03:45] Ronik Patel: I think it was during the MBA I did, uh, 10 plus years ago. One of the professors, I remember his name, Bob Stinger. He. He used to say, like, from the day you start your business, you need to think about your exit, literally from the day one. [00:04:00] And I kept that in my, somewhere in back of my mind, and that did always played a role in any decisions that we take.
[00:04:09] Ronik Patel: And I'd heard it from numerous other people that regardless or not, if you exit or not, do plan for it and do prepare for it. Because even at the end if you don't decide to exit it still works out in your favor Uh, and you know simple reason being if you want to exit then one of the first thing you would want to do is Not have anything [00:04:30] be reliant on you, right?
[00:04:31] Ronik Patel: Otherwise the there's no buyer that's going to buy you if your entire business is reliant on you Either be it from the sales and marketing perspective or the operation perspective, right? Uh, so now, you know, you should do that regardless if you exit or not So many of these things about you know, we speak about streamlining operations and deep specialization Uh, those are the exact sort of factors that would help you exit So in our case In that sense, we had been thinking about [00:05:00] that from the day one, but now when would that happen?
[00:05:02] Ronik Patel: There was no fixed timeline. Yes, we had goals. And I think that's one of the tricky part is you have these goals and you know, you're thinking about exit But at the same time you're executing everything as if that exit is never going to happen, right? So it's been tricky to When we started we did have a five year goal that you know in five years Uh, if we reach to a certain number, then we would be open to exit, uh, and [00:05:30] just having that thought in back of your mind, uh, helped us, uh, make all the decisions, uh, from that perspective.
[00:05:37] Ronik Patel: Like, you know, not taking any work outside WordPress was, well, Hey, what if somebody was interested just in our WordPress service and not the other services that we offered? Uh, that could be, you know, make or break the deal. So let's just be specialized on one because, you know, working with agencies, they're like, can you help us with Shopify or can you help us with SEO?
[00:05:56] Ronik Patel: Can you help us with design? And it's so tempting, right? Cause you [00:06:00] have those clients. And if you just say yes to it, that's an additional revenue for you. So just being disciplined in those moments, having those exit goals, uh, in mind, uh, they do really help you shape, Uh, the way you are running your day to day, uh, of your agency.
[00:06:16] Ronik Patel: Yeah.
[00:06:17] Corey Quinn: So just to feed that back to you, it sounds like you built the business so that you had the flexibility to sell one day, uh, meaning you were not necessarily, uh, reliant on as the founder to run the sales, marketing operations. [00:06:30] So why not just, I mean, if you're, if you're not involved in the day to day.
[00:06:34] Corey Quinn: Why not just let the business run and you live off the cashflow and you kind of, you know, move on in that direction. What, what's, what helped me understand like some of the benefits, at least in your mind, early days of selling versus just continuing to operate more as a. a senior leader in the company
[00:06:54] that that was always a thought right that if you don't exit and if you if the business is Not dependent on you.
[00:06:59] It [00:07:00] can run it independently without you maybe hire some ceo and do it right a lot of other businesses have done that Uh, but in our case being a small company Uh, even if we were to do that that there are always things that you need to get involved not Necessarily that there would be a bottleneck in your exit process But if you were actually, you know owning the business, I mean people still find you on linkedin and they say you're you know You're the owner and there may should be a message that actually did happen Uh, [00:07:30] a couple of times.
[00:07:30] So, you know, you, you're not detached in that sense. Uh, second is, uh, there is the, the burden of growing, right? All the, the founders, all the owners of all the business, we always have this burden of growing that we carry, right? That if you, uh, it's like how Tony Robbins says, if you're not growing, you're dying.
[00:07:47] Uh, so we have that and doing that without your involvement to the extent, uh, it may become difficult, right? Because there's not enough. Active strategy or planning or any contribution [00:08:00] that you are bringing on the business. So, you know, there's that fear that things may go downhill from here and if it goes downhill and then you try to exit you probably won't get You know, what you're looking for.
[00:08:13] So that's another risk, uh, that, that I guess, uh, I wasn't willing to take.
[00:08:17] Corey Quinn: Absolutely. So you built up the company to a point where it was, like you said, five years and it was, you were independent. Imagine the revenue is in a spot. Did, did you go looking for acquirers or did they come find you or how did that, um, trans [00:08:30] transpire?
[00:08:31] Ronik Patel: So that, uh, I don't know where I read it or how that got into me, but, uh, I, I believe that if you want to exit, then start looking for your potential buyers. Right now, like who could potentially buy you? Is it, uh, some another bigger agency? One of your bigger clients and hosting provider is very common, uh, in a lot of the spaces, right?
[00:08:54] Ronik Patel: And if you know who that buyer is, then again, you can prep your agency [00:09:00] so that it's, it'll be more suited to that particular buyer in, in my case. So, so we E2M and Manish has been friend for, Uh, six, eight years, uh, even before unlimited WP, he was, uh, uh, he was a friend. I met him at a conference in Denver, a digital agency conference in Denver.
[00:09:19] Ronik Patel: And the first time we met, we didn't speak to each other. We treated each other like competitors. Uh, it wasn't a first good interaction. The second year at the same event, we, we [00:09:30] met and things had changed. We both had a open mindset, that abundance mindset, uh, and we actually connected and then a year after that, he visited me in Boston.
[00:09:39] Ronik Patel: Uh, from last couple of years, I moved to India where E2M is also, uh, based out of, in the same city, we, our offices were actually two miles apart. Um, so we started this ritual about meeting once or twice for a lunch. Uh, and you know, this lunch would go on for like three hours and we being The competitors [00:10:00] if you if you were to search like white label wordpress development, it's usually in top three Unlimited wp and e2m.
[00:10:06] Ronik Patel: So, you know, they're being our Biggest competitor, uh, but also I I became friends with manish right now that was just developing that relation Now, it was just the bike happened to be that we became friend too, right? But let's say if we weren't even, we didn't become a friend, it's just still knowing him and him having known unlimited WP from the start, the buyers have this fear too, right?
[00:10:29] Ronik Patel: Like, what [00:10:30] am I buying into it? Like, are these guys legit? Is our numbers made up, right? That they have all just like a seller. You have all this doubts. The buyer has probably a lot more doubts than. You have about your, you know, insider reasons on why you're selling. So, uh, in order to mitigate those things, what would be the best thing is like, you know, make a list of potential buyers, whoever they may be, do the introduction right now.
[00:10:54] Ronik Patel: Uh, so by the time you're ready to sell it, and then if you reach out, you know, [00:11:00] likely you won't get paid, uh, the amount if you had reached out to them earlier and if they had known, uh, your journey from the early days on.
[00:11:08] Corey Quinn: Yeah, that makes perfect sense. Uh, and so just for, um, clarity, did, does E2M do, do the same exact thing as, as unlimited WP, your business, or was there, did they do other things?
[00:11:20] Corey Quinn: Were they a direct competitor?
[00:11:21] Uh, no, they were direct competitors. So they, they only work with agencies as well. Like us, they, big chunk of what they do is WordPress. They do do [00:11:30] Shopify design SEO, the things that I was talking. So that, that makes a strategic fit for them as well, right. That they could upsell, uh, Cross sell other services that they offer, uh, but they also exclusively work with digital agencies.
[00:11:43] Corey Quinn: Love that. And so when you were, so you had this relationship over five, seven years with Manish and that was an option, but were there other options you were considering?
[00:11:53] Ronik Patel: Uh, yes. So there are other couple of people that I thought they could be a good potential buyer too. [00:12:00] Uh, I was in contact with them. We would catch up like once or twice a year.
[00:12:04] Ronik Patel: So they at least know what's happening with us. Um, so yes, there were a few other options, uh, sort of panned out, uh, Manish jokingly had told me during the COVID, uh, he's like, I'll buy a limited WP, uh, you know, and whenever you're ready for it. Uh, so of course that option was about everything else cause he had shown that it was way early on.
[00:12:26] Ronik Patel: Uh, but yes, there were other options like [00:12:30] anything that I could, I can think they could be a potential buyer. Uh, I was in talk with them. I was in talks with them. There were even, nothing we never publicly discussed, but there were other parties even last year. Uh, who was going to buy a majority of the stake and come in and scale the company at another level, uh, for a few of the reason it didn't work out.
[00:12:49] Ronik Patel: Uh, but they had their mindset as well that, uh, if I was, you know, was just selling the whole thing, uh, they would also be interested. Funny thing, after I did this, one of, [00:13:00] another competitor reached out to me on LinkedIn, uh, cause I know him. We, we have talked a few times too, and he's like, uh, I'm pissed.
[00:13:07] Ronik Patel: That, that you didn't even give us a chance to counter offer anything, right? And in a way I was happy to see that, but also I was like, huh, well, you know, that, that's maybe lesson learned that, you know, if there are other people who you had panned out, maybe it would be good to give them a heads up before you make a public announcement.
[00:13:26] Ronik Patel: Yeah. Cause they, they may feel like, oh, well we had this thing going [00:13:30] on and we were never given a chance to talk about it.
[00:13:33] Corey Quinn: Sure. Sure. So, um, when it came down to the decision or, or getting down to the decision over some of the factors that were important to you in deciding who the right partner was going to be.
[00:13:48] Ronik Patel: So one thing is I wasn't seeking for a total. Uh, cause I know that there's a lot of potential with what we were doing, like our branding and things were just like awesome. [00:14:00] And we didn't feel that we had reached to the goals that we had set up. What would you, uh, say earlier about 3000 agencies, right? We didn't, we were like way off from that target.
[00:14:10] Ronik Patel: Yeah. Even in terms of being seven figures of one thing, I think we had, A potential to grow much, uh, more. Um, so one of the, the idea was that, uh, still, you know, doing it a partial sort of merger too, and it's not a pure exit. Uh, so somebody who's also willing to, uh, you know, make me a [00:14:30] shareholder of the merged entity, right?
[00:14:32] Ronik Patel: That, that was, uh, Uh, the thing that I wasn't ready to sell it right now and like I and Manish, we struck a deal where, uh, I am still, I will be a part of a U2M as well, uh, as a growth advisor, like no day to day active role. But today, for example, we had like a three hour long discussion around growth. Uh, so I will be involved in that sense moving forward, uh, in the U2M.
[00:14:54] Corey Quinn: Okay.
[00:14:55] So that, that, yes, probably the biggest one.
[00:14:59] Corey Quinn: Okay. [00:15:00] And was, if there was another, um, acquirer or potentially a partial acquirer who would give you the same terms as let's say E2M, what, what else was important? So in addition to that, what else is important to me in making this decision? I
[00:15:15] Ronik Patel: think getting the, the timing, uh, is also an important, right?
[00:15:20] Ronik Patel: Uh, is it's, I mean, you could get an amazing offer, but that timing may not work for you because then you as a founder, you'll think. Naturally, right? Not as a founder, as a human [00:15:30] being. Oh, what would I do after that? So unless you have those things figured out in a way, or even at least some, unless you want to just go on a vacation, that's a different thing.
[00:15:39] Ronik Patel: Um, but I, you know, had to have that next thing, uh, sort of ready, you know, and for us, uh, uh, AI sort of picked my interest, uh, quite a lot since last year. And I was spending gazillion hours on it anyways. Uh, and so, you know, I started hiring machine learning developers and we started [00:16:00] building this. tool for digital agencies on the side, because that's the only market we, we know, right?
[00:16:05] Ronik Patel: So we started building that tool, uh, it'll go through alpha release, uh, sometime later this month or next month. Uh, so that was sort of figured out as well, you know, that, okay, after this, there is something else lined up.
[00:16:17] Corey Quinn: Something to look forward to and excite you that you want to go. Sink your teeth into type of thing.
[00:16:23] Corey Quinn: Hey, it's Cory. I hope you're enjoying this episode. And I want to let you know that I have a new best selling book that has [00:16:30] just come out that gives you my proven system to escape founder led sales. It's called Anyone Not Everyone and it's been endorsed by Aaron Ross. April Dunford, Dr. Benjamin Hardy, John Rulan, and many others.
[00:16:43] Corey Quinn: If you'd like to get the audiobook absolutely for free, there's a link below in the description, or you can simply go to anyonenoteveryone. com and start listening right now. And, um, gosh, I'm curious. So what can you share about the new, uh, the new software for, [00:17:00] for agencies? Anything you can share?
[00:17:02] Ronik Patel: I think you'll have to invite me third time for that.
[00:17:05] Ronik Patel: Okay. I'll break all the rules. No, it's an exciting like an at our agency, you know, we had over 100 people. So how do you like really deploy AI in a team? Right? I mean, chat GPT is great. And how do you, with the, everyone has it, how do your custom modes work and how does it actually get into your systems and processes?
[00:17:26] Ronik Patel: Right? Uh, so it really helps you optimize even on top of [00:17:30] whatever time the chat GPT is already saving. Um, so we're building this product, which is essentially a wrapper around JetGPT Gemini. It works with all the models, model agnostic, uh, but it is meant for team spaces. So you have your brains that are by departments and, uh, you have your custom boards and prompts and, uh, everything's around agency.
[00:17:50] Ronik Patel: And right now we are contemplating how do we. Uh, sort of train, uh, with the base model, uh, with more agency [00:18:00] specific things. So imagine if they, you know, if they were to give some details and they will create a proposal for them and a proposal that's like, I mean, ChatGPT can do that right now as well, but it's not exactly trained on just agency specific data.
[00:18:12] Ronik Patel: What if it was just trained on all the material that's publicly out there, uh, for agents? And there's a lot, right? There is, I mean, there. Amazing people like you, uh, who like generously create all this content and you're putting it out there. Uh, so there's a lot of content out there. Uh, if the model is trained, that's [00:18:30] sort of the end goal, uh, is training a model on that data.
[00:18:33] Ronik Patel: Uh, so everything that happens in the agency lifecycle for the entire team on a one platform, you're automating all of those things. Uh, and just saving tons and tons of hours.
[00:18:45] Corey Quinn: The one thing that, uh, stuck out to me, I think all that's brilliant. The one piece is pricing. Pricing is in the sales process for an agency.
[00:18:54] Corey Quinn: It's always a manual, not always, but typically a manual process where it's like, okay, so tell me what your situation is, [00:19:00] what kind of leads do you want and how much budget do you have? Great. I'm gonna go, I'm gonna go over here and I'm gonna go build a whole strategy and I'll figure out a price and I'll come back to you when, you know, when do you want to meet again?
[00:19:09] Corey Quinn: So we can talk about that. If you can be able to provide that strategy in real time, that's, that's really powerful.
[00:19:15] Ronik Patel: Yeah. One of the boards that even we are building right now is I talk to agencies, right? And some of the things they, they struggle with is, uh, how to do a project discovery. Uh, you know, cause you need to be having enough experience with the, uh, [00:19:30] Uh, web dev or design to ask those right questions to the client, right?
[00:19:34] Ronik Patel: Uh, and if you don't do that, then you get into the project and then there's a scope script and, you know, everybody complains about that because, you know, there wasn't a proper project discovery done. It's because it's the proper one is time consuming, uh, to asking the ability to ask those right questions from limited information that client provides you, right?
[00:19:51] Ronik Patel: Like counter questioning them. Uh, and there's this flow that I always used to go through. It's like, you know, if I do a discovery. Is just my mental [00:20:00] model around how I do discovery now, you know, I mean, that's just my thing that I can translate Uh into a boat But as we get more and more users on platform and agencies, we see their use cases and bringing those to The, you know, all the other users of the platform, uh, that, Hey, it is an amazing, uh, board to do your discovery.
[00:20:19] Ronik Patel: And so the possibilities are endless. We had a hard time deciding a niche. Uh, we were like, Oh, we are such a niche believer. Do we do that from the day one or do we keep this platform a [00:20:30] generalized? And after, uh, endless discussions, we, we, uh, concluded that, you know, we would like to have agency as a niche.
[00:20:39] Corey Quinn: Yeah, well, it follows, that follows, uh, a pathway that I'm a big believer in, which is become an expert in a vertical markets, provide solutions to their problems, but at the same time, find additional adjacent problems that they have, and you're very well positioned to go and build a great solution for that as well.
[00:20:57] Corey Quinn: So it's, I think it's brilliant. [00:21:00]
[00:21:00] Ronik Patel: Yeah. Uh, exciting, uh, exciting day.
[00:21:03] Corey Quinn: So, um, okay. So timing has to be right. The, the, the, um, the, the setup or the deal flow or the, the actual, um, situation of the deal has to actually align with what, uh, what you want as a founder, anything else that's important in your, in your experience in, in trying to decide, let's say you have three of the three people who want your, do you want to acquire you, um, any, any other criteria that you [00:21:30] went through?
[00:21:31] Ronik Patel: Um, it's like, what do they value more? Because different people would value different things, uh, from you, uh, for example, it could be your clients, right? Or it's size of your client or your reoccurring revenues would thereafter, uh, it could be team, uh, it could be your marketing channels, right? If are you just, because they may be bigger in size, but they may be stuck with their marketing channels, but they're not able to scale it.
[00:21:58] Ronik Patel: And they do want a couple of [00:22:00] different marketing channels that we, which you happen to have. Uh, so, you know, those, uh, factors do play in quite a lot, uh, well, I just experienced, right? But I didn't think that there would be a value for it, like many showed an extra interest on those things. Uh, which, you know, I had sort of discounted, I'm like, yeah, that, you know, you should have that.
[00:22:17] Ronik Patel: Right. Um, so I learned that. So I think even learning early on, uh, through your competitors or this potential buyers, I just seeing how would your business align better. Uh, with theirs, [00:22:30] it's maybe they're, they're looking for something that's missing in their business or they're just looking for scale, right?
[00:22:35] Ronik Patel: Uh, so understanding those things, I, I, I shouldn't be lecturing on it because I, you know, that, that's something I realized, uh, while going through the transition, uh, that how do you put a value on the different things that you are bringing to the table, uh, that changes, uh, depending on who the buyer is, right?
[00:22:53] Ronik Patel: Uh, so that, that, that was an interesting insight that I learned from the process. [00:23:00]
[00:23:00] Corey Quinn: That's interesting. Um, did you involve like an investment banker or some kind of third party kind of, um, brokers to help negotiate this deal? Or because you had a relationship with Manish, like how, how did, how did it play out as far as the, the actual transaction?
[00:23:19] Ronik Patel: Uh, yes, in terms of the price, that negotiation just, you know, having known Manish for a long time, that, that was something mutually hashed out. Uh, [00:23:30] but for everything else, Yes, uh, tons of other people got involved and you know, that's when it stops being exciting. I think you can't really. Enjoyed I mean you're excited when it's like you mutually agree that you're doing it And then as soon as you start the process all the mojo is gone Uh, it's you know all boils down to numbers and how do we migrate this and taxation and balance sheets and you know Nothing pretty I mean, I you know, most founders don't enjoy [00:24:00] that part, right?
[00:24:00] Ronik Patel: So but then that takes up the huge time Uh, announcing it to the team, announcing it to the client. Uh, those are some pretty, uh, pretty tough calls to, to make. Uh, and, you know, just showing your genuineness and, and why you're doing it. Like once again, you need to connect with your clients and your, uh, team members.
[00:24:20] Ronik Patel: Uh, we planned this, uh, since both the teams were local. Uh, we, we rented out Hyatt, uh, in their grand ballroom. We had a AMA [00:24:30] session with me and Manish sitting there. And both the teams, like almost 300, uh, employees were there. Uh, and you know, early on we planned those things out, but it takes like immense energy.
[00:24:40] Ronik Patel: Uh, from you. So, you know, when we started this process, we were like, how long can that's, can this take? Right. And just from what we've heard from other people, like, yeah, this is a three, six month long process. Uh, and me and Manish, so this is in April. And we were like, Oh, we still have the remainder of the year.
[00:24:58] Ronik Patel: Uh, let's [00:25:00] not waste it in this MNA, right? Like, how do we expertise everything, uh, so that we get back on track, uh, and just, you know, keep growing the business rather than, uh, putting all of our energy and, you know, marking 2024 as just an MNA. Um, we were determined, like, it's not just about MNA. Let's make this is the biggest year as well.
[00:25:19] Ronik Patel: Uh, by other means, right? So, so that, uh, everything we wrapped it up in about two months, which, you know, we were expecting it could take up to six months, like [00:25:30] everything was wrapped up, uh, in a two month. Uh, now some backend things are still, even after a month now, uh, they're still happening. So I haven't fully enjoyed it.
[00:25:41] Ronik Patel: We, me and Manish, we haven't celebrated it yet. I got a champagne, uh, when we decided that we still haven't opened it. So, you know, in that sense, uh, uh, the process can be draining, uh, being prepared for it. Uh, it doesn't matter how prepared you are, like when you start that process [00:26:00] and you speak with this consultants and, you know.
[00:26:02] Ronik Patel: Uh, and at the same time, you're still trying to run the business, right? It's not that you, you can, uh, let go things there. 'cause if the, during the due diligence, if the, you know, things don't work out, uh, you're back in the business and, oh, I'm 20% lower than I was before I started this discussion. Right?
[00:26:19] Ronik Patel: So just maintaining your energy level, uh, in that time, I think that's very, uh, critical and not getting too excited, right? Because the deal may [00:26:30] fell through and it may not happen.
[00:26:33] Corey Quinn: During this two months of let's call it rapid integration, you know, you were telling the clients, telling the employees, you were merging all the, all the things, uh, were there any sort of surprises or, um, you know, uh, things that you didn't expect to happen that happened during that time?
[00:26:51] Well, nothing in terms of, uh, just those migrations, uh, I learned a lot more about numbers, uh, you know, [00:27:00] when you get into the nitty gritty of, uh, Uh, balance sheets and p and ls and how stuff reflect. I mean, you know, uh, learn a lot. And there were a few surprises, uh, on that front. Uh, but the other things, uh, I think once again, just like knowing, uh, your buyer beforehand, there is a trust, right?
[00:27:19] So you, you don't have that fear. They're like, oh yeah, they'll understand. I know I said, uh, it's 40, but then, you know, you look at it, it turned out it's 60 or it's 20, right? So as long as there's [00:27:30] that trust and you know, you were honest. Uh, in, in our case, uh, whenever those sort of things happen that, you know, whatever I had said in discussion, Oh, we probably have roughly this many clients on, you know, spending this much with us.
[00:27:41] And then when you actually do the numbers, it may be lower than what you expected, but then you're not worried about it. If you're doing versus if you were doing this with some PE, uh, or a VC or something, right? That may just derail the
[00:27:53] Corey Quinn: adversarial. Yeah. It's a problem.
[00:27:56] Ronik Patel: Yeah. Yeah. Yeah. It's a problem. So I think, [00:28:00] uh, when, once again, it helps if you had that trust built, uh, prior to the whole, uh, MNA.
[00:28:06] Corey Quinn: That's, that's super clear to me. What I'm, what I'm getting from this conversation is that you were able to do this transaction very quickly and roll it out over a two month period. Um, it sounds like there wasn't a lot of hiccups. Um, based on the fact that you knew the acquirer, right? You knew Manish for a long period of time, a lot of trust that you guys have built over the years.
[00:28:27] Corey Quinn: He trusted you, you trusted him. So it was just easy to [00:28:30] make through, make it through the process. That's, that's the sense I got.
[00:28:33] Ronik Patel: Yes. Yes. And a couple of years ago I acquired a few like assets, like a websites, like a blog and a design blog and things like that. And those were small acquisitions, like under 200, 000.
[00:28:45] Ronik Patel: Uh, and just doing those, I, in those cases, I was the buyer. Um, so I kind of had that little experience of how buyer must be feeling about things. So that also helped, uh, in the process. Cause I could sort of, you know, [00:29:00] feel that what the other party must be feeling about the, uh, uh, this things, or at least how the entire process goes.
[00:29:06] Ronik Patel: Like generally we're like, Oh, who pays the money first? How do you like, you know, the closing date and all this concept, if they were new to you, uh, then. It adds an additional, uh, sort of stress on you because it's the first time you are even hearing the term closing date, right? So that, that could, uh, potentially just add more stress.
[00:29:27] Ronik Patel: I mean, you will ultimately figure it out, but. Potentially [00:29:30] can add more stress. Uh, if you weren't familiar with those concepts,
[00:29:34] Corey Quinn: nice. So, um, when are you and Manish going to celebrate?
[00:29:37] Ronik Patel: We're saying it, uh, in, in two weeks. So we're still saying, let's say September is the E2Ms, uh, I think, uh, 12th, uh, or 13th, uh, anniversary.
[00:29:48] Ronik Patel: Uh, and they always celebrated big time. Um, and which is coming up next month. Uh, so, so likely it would be next month.
[00:29:55] Corey Quinn: Okay. Well, I'm excited to hear all about that and see, see some fun photos. [00:30:00] Um, any, any last kind of advice to agency founders who maybe have are down the road are productized or vertically oriented.
[00:30:09] Corey Quinn: They've really built their agency so that it is not completely reliant on the founder on them as the founder. Um, any other sort of advice you can give them as they're thinking about maybe finding an acquirer that, uh, maybe you haven't mentioned yet.
[00:30:23] Ronik Patel: Yeah. I think that they should listen to our first, uh, podcast, uh, cause I think this is just talking about like [00:30:30] actually exiting with, there's a lot that you need to build your business in a way.
[00:30:33] Ronik Patel: that even somebody would even find it attractive to buy, right? Um, and having that niche and your systems, your processes, your SOPs, uh, those things are probably way more important than what happens at that, uh, that the time of the acquisition, uh, because those things, you know, as you had said, if you hire a consultant, they'll tell you how the process works.
[00:30:54] Ronik Patel: They can even walk you through it. through, uh, walk you through it, or they may even represent you in the deal. So I think [00:31:00] those things you could figure out, but first of all, you need to bring your agency to the level where they're, you know, potentially, uh, so, I guess this would be a good exercise if people listening, right?
[00:31:10] Ronik Patel: And if they are looking to, uh, Sell sell one day make that list of who could be your potential acquirer, right? And I think that would be a good exercise to start thinking about it If you can't list anybody, well, you've got big problems, right? If you can already list people down then you can then After that list [00:31:30] on what maybe like what is it in that your agency?
[00:31:33] Ronik Patel: They're interested Do you have some star employees that you know, would that be your asset or is that your clients? Is it the revenue is a big thing to think about right like? go In the agency space, uh, the multi pulse. Generally people talk about 3 to 5x of your IPTA, right? Uh, which is the products would have a much higher than that.
[00:31:54] Ronik Patel: And that's the whole idea about productizing your service. So you can increase that multiple, uh, [00:32:00] multiple. Uh, that's because, uh, if you don't have, uh, Uh, your revenue, uh, as a reoccurring revenue, then the buyer is always going to think about the LTV of, uh, your clients and, uh, they'll always be skeptical about it that, Hey, that's probably because they, they're, you know, they're friends, like, yeah, they're friends of yours because you've worked with them for, uh, such a long time.
[00:32:21] Ronik Patel: Once I acquire, they don't stick around, right? Uh, so what LTV that you have had, that may not be the LTV that they would consider. And [00:32:30] that goes into the price factor. So I think thinking about those factors, uh, if the agencies out there looking to exit one day, uh, that would be an amazing start.
[00:32:39] Corey Quinn: I think that's great advice.
[00:32:41] Corey Quinn: So all the listeners out here, Listen to the first episode on this podcast with Rana Patel. And he goes into great depth about how he took his generalist agency into a specialist and then a prioritized business. And look at this amazing outcome you've had. So congratulations again. And, [00:33:00] uh, thank you so much for coming on and sharing all this amazing wisdom.
[00:33:04] Ronik Patel: Thank you, Cody. And thanks for having me again.
[00:33:07] Corey Quinn: Yes, and we'll wait for the third time now, . That's it for today. I'm Cory Quinn, and I hope you join me again next time on the Deep Specialization Podcast. If you received value from the show, please go to Apple Podcasts and leave us a review. Thanks, and we'll see you soon.
