Last updated on September 13, 2017
Lots of people dream about creating a business… but what about buying one?
When it comes to startups, there are plenty of downsides:
This is why Jonathan has bought 29 companies.
In this post, you’ll learn:
Have you ever built a product no one wanted?
Even successful people, like Jonathan, have tasted failure many, many times.
Instead of giving up, Jonathan kept adjusting, experimenting, and trying.
Persistence paid off. His luck changed when he acquired a company from a friend (who went on to start Intercom).
The company had a few customers and was making about $3,000 per month. Jonathan brought the company for $250,000 (paid over 30 months) and began to make small tweaks, starting with pricing.
When acquiring a company, Jonathan will only focus on companies he knows he can improve. He looks for 5 main elements:
I’ve learned to focus on similar high-leverage items — and ignore the rest — while building my 8-figure business Sumo.
It’s possible for you to use these ideas to grow your business too. Don’t let the wantrepreneur mindset pull you off track.
|BONUS: 7 marketing tools I've used to grow multiple 7+ figure businesses|
When you’re buying a business, you need a great team.
But most companies hire crap employees… even if they say they’re A players!
Avoid them completely!
Instead of obsessing over hiring the people who work at Google or Facebook, look for market inefficiencies in the hiring world.
Jonathan thinks of hiring like a quadrant to take advantage of weaknesses in the market.
On the y-axis you have highly skilled workers and underdeveloped talent. On the x-asis you have great teammates and bad teammates.
Jonathan eliminates three sections of the quadrant:
This leaves great teammates with underdeveloped talent.
“I hire them every single time,” Jonathan explained.
For example, when Jonathan hired his right-hand woman, Keri, she’d just returned from the Peace Corps.
Keri didn’t know:
But Jonathan loved her attitude and thought he could teach her how to be successful in business.
She’s ROCKED it. Today, she’s Jonathan’s director of operations. 🚀
Great teammates who don’t have the talent yet are diamonds in the rough:
Focus on market inefficiencies to hire teammates other people undervalue.
Pricing is super hard to get right.
We started 100% free. Then, we played around with a bunch of different variations until we hit the pricing point that’s just right (for now).
These pricing changes were a big part of our journey to become an 8-figure company.
|Want more ways to 2x (or more) your business?|
Most entrepreneurs totally mess up their pricing.
If you do this, you’re potentially leaving tons of money on the table.
Changing price is the easiest win for a young company to GROW.
When Jonathan acquired one company, the product was being sold for a one-off fee of $5.
Through pricing experiments, Jonathan managed to increase the pricing to $9 a month before sign-ups fell off.
Money in the BANK. 💰💰💰
Once you’ve found the right pricing structure, you can also start to invest more in marketing to increase revenue.
This means you could test a bunch of marketing tactics:
When you find a marketing channel that works, go all-in. And squeeze all you can from the channel using the Content Multiplication formula!
Here are 5 key lessons from Jonathan buying 29 businesses...
Want more lessons from Jonathan Siegel — the entrepreneur who’s bought 29 freakin’ companies?
Check out the full episode below.