Constant Click revenue, CEO Jp Khoueiri, team size, customer count, churn, and more in 2024.

hello everyone my guest today is jp query he has spent the last 17 years working on digital assets with a distributed team of top tier software architects engineers and marketing specialists all built from scratch projects have ranged from sas to the development of peer-to-peer platforms he's in what feels like everything in the space create buy develop sell consult operate you name it jp's done it jp ready to take us to the top let's do it so let's work backwards you have some news today at least officially i know the deal closed a while ago but you've just sold your most recent company what was the name of that company what'd you do ninja outreach uh sold through flipper because of flip on actually the uh the ceo connected me with a buyer he felt was a good match and sure enough within a short period of time perhaps a week we had a deal down done after a few months of due diligence and paperwork we closed it out well tell me about the business first and then i'd love to talk about the flip up sort of process what was what the what's the company name and what it do so ninja outreach allowed you to discover social media accounts so you could connect with them and have them promote whatever it is you wanted them to get out into the world right a search engine for instagram youtube tick tock so to speak that's great now did you have this idea and you built it from scratch with that remote team you mentioned and the introduction or did you do like how did you how did you build the company so it's a hybrid i acquired ninja outreach when it was a blogger discovery database or search engine right and it was just at the moment when social media was starting to really catch on specifically the the micro influencers and i was i guess slightly early to the game and building what was that jp 2018 and built this database of instagram accounts and made it somewhat easy to communicate with them and we got lucky we our traffic grew we were slightly early and it went well now jp there's a lot of folks that have capital on the sidelines they want to buy a sas company they run into two challenges one finding a good one to buy that's not like a 100x evaluation something ridiculous and then number two challenge is if they get a deal they like and they actually close making sure they run it where it doesn't go right into the ground like there's an engineer a critical engineer that left and you can't log into the aws console for example so walk me through those two hurdles how did you find the business in the first place did you use a broker or platform and then two what were the first three moves you did after you acquired it so the discovery process for me is uh multi-pronged one i do scan the broker websites uh my favorite two are without a doubt flippa um and andrew's new play um so that is the discovery process is easy at this point because they come to me but this particular deal i found in a slightly unique way which was uh before josh sold bare metrics and they probably still have it they have this open page right and on that page they display sas businesses and their revenue and i just start started contacting the ones that i felt were interesting and ninja outreach was one of them after back and forth i was able to acquire it now mind you it took me two trips to london and lots of calls to get them to sell this asset it wasn't easy how much time between the initial cold email outreach and you actually getting control of the website the url the code about a year wow that's persistence okay i mean can i ask the scale of business when it was on parametrics open how much revenue was it doing in 2018 i'm going to guess it was doing 60 000 a month but 20 000 was from seo customers and i had come from running an seo agency for a decade and so the first thing i did when i stopped providing services and consulting was promised myself i'd never do that again and and so the day one i fired all the seo clients which was a third of revenue and so we went from 50 to 40 on day one got it so thousand dollars a month in revenue after you say hey we're not doing any of the seo stuff now there's a lot of people listening right now gonna wanna do this same thing they wanna buy a company can you let us in a little bit under the hood here how did you value the business and what did the deal look like back in 2018 so i i perhaps value things slightly differently than most people i ask myself is this the highest and best use of my capital right now i don't only look at other digital assets i might compare it to traditional real estate investing and say if i put the same amount of capital over in this other alternative asset class what would i get right what is the timeline how quickly are the underlying assets growing in valuation terms and then i ask how easy is it the obvious stuff that most people know is it easy to run right what's the overhead like is it a growth industry is there any customer concentration risk right and so i don't like any custody any customer to account for more than two to five percent of revenue before i bought ninja outreach i had a juggernaut of a lead generation company in the assisted living industry and i had two clients and one of them was 80 of revenue talk about precarious right and so ninja outreach uh was somewhat easy to run and had three developers when i acquired it it turned out it only actually needed one and so uh two of them uh left on their own accord um i would say a year too late you know i i didn't need them from day one and that was fortuitous that they did go and saved a lot of overhead and what was the other question a lot of people they finally get the deal done and then they run the business into the ground on accident so you let some engineers go you it sounds like increased profits what else did you do to drive growth and cut costs so when we let go of the seo clients we let go the seo management team i actually wanted to keep them but because of the transition here's a fun fact the the sellers understandably didn't inform the team that the company had been sold and the team that was doing seo was on a vacation together in italy and then one day they're on vacation they find out they have a new boss and they felt that they they were surprised now i completely empathize with both sides here i understand why the seller would try and you know keep things under tight-lipped until it's done that it's absolutely the right thing to do and i also understand the team's you know surprise and decision to go on their own way i guess they felt they knew how to do seo and they could just start their own agency and they quit um funny thing is had they asked me if they could keep all the customers or and get any new leads i would have said yes and but they they just quit and decided they were going to do their own thing and i would have actually given them that 20 000 in revenue if they'd have been cool and just asked and i didn't want it um so how do we keep it from falling apart well when you buy a company like i do that's at least three years old it's one of my prerequisites you really don't have to do much to just keep it running as long as you don't make a giant faux pas of a mistake you're okay now if you don't do much for too long it will eventually start to fizzle out and die as you know and so the idea is to find what is that next big thing how do we recreate ourselves in much the same way that you know steve jobs killed the ipod when he came out with the iphone because it performed the same function i needed i needed to disrupt ninja outreach because as it stood it wasn't going to last long as a blogger discovery tool and that disruption came with really transitioning it into a social media discovery tool so before we talk about leading up to the sale just recently and now what you're doing now with your time post acquisition can you take us back again to 2018 you did the deal it was at 60k per month top line you cut off 20k of seo it's doing 40k and true mrr so call it like a 600 to 800 000 annual run rate what did you pay what what personal capital did you put up at risk on the acquisition well i remember you told me i overpaid and i you're probably right i did i paid 1.2 and um did you get creative did you limit the amount of cash you had to put up somehow no i didn't um i've been very aggressive um in in a lot of my early deals actually in all of my early deals it was all cash all cash all cash up front there there was a 200 000 hold back for six months that's it yeah yep and of course i'm structuring my deal slightly differently now that people know that i'm good for it and that i pay and how obviously it's important for me from a risk analysis standpoint to hold some money back or to have the seller hold some paper or seller financing as they call it and as a risk component a and additionally just as importantly it helps my money stretch further so i can acquire more deal simultaneously so was i right or wrong did you overpay you were right yes and at that time if anybody looked at it they would say i overpaid but that would be true of...