Why a Developer Bought reporty.app, a $375 MRR Shopify App, for $20K on MicroAcquire (Interview with Owner Leibel Hecht)

Introduction and Background

Nathan Latka

00:00Hello, My guest today is Leibel Hecht. He used to be a rabbi that then moved into tech. He's currently a tech lead at ProDedge by day and on these days and nights and weekends, he works and hacks on various projects. Most recently, he acquired a Shopify app through MicroAcquire. He's spending all of his nine to five non nine to five hours on that label. How are you? Ready to take us to the top?

Leibel Hecht

00:20>> I am ready. Let's

What reporty.app Does

Nathan Latka

00:21So the app is called Reporty.app. Tell us what the company does.

Leibel Hecht

00:26>> Yeah. So it's a Shopify app that allows you to set various types of notifications and reports to be sent out daily, weekly, monthly about your purchases, your orders on your Shopify store, and you can include all sorts of tracking data, UTM values, etcetera, stuff like that.

Why Acquire Instead of Build

Nathan Latka

00:46And so I wanna get into the story of why you chose to acquire this versus build it from scratch. So so let's sort of dive into that. When did you buy it off of MicroAcquire?

Leibel Hecht

00:55>> So I closed it, I think it was last week, Monday.

Nathan Latka

00:58Okay.

00:59So very recently. Do you know when it was launched, when those founders wrote the first line of code?

Leibel Hecht

01:05>> Think about a year and a half ago. Very recently.

Nathan Latka

01:09Yeah, fairly young. So what made it stand out to you on MicroAcquire? There's a lot of companies for sale there, sort of micro SaaS companies. Why did you pick this one?

Leibel Hecht

01:18>> Yeah, so

01:21>> I've been hacking on various stuff on the side, all sorts of stuff from like an SMS based tipping app to like an automated deal aggregator.

01:32>> And I finally settled on, I want to kind of market I want to get into in SaaS, I want to get into e commerce tools specifically for various reasons. I have a bunch of friends in the industry. I think it's a growing industry and there's just a lot of potential. So I wasn't really planning on buying something. I wanted to start building something. I started looking into different inventory tracking options, talking to a bunch of friends

02:00>> that do e commerce, mostly on Amazon, but also some Shopify. And I would just kind of browse on MicroAcquire. I found that I think on Product Hunt and I've just been following their stuff. And then this came up. So I'm like, hey, this seems like a perfect opportunity for me. Look, I've never run a business. And for me, I've been following a lot of Rob Walling stuff, start small, stair step.

Nathan Latka

02:22Yeah, I love Rob stuff.

Leibel Hecht

02:24>> Yeah, so I was like, you know, this should be a great opportunity. I'm basically going to treat it as my mini MBA. It's not a massive acquisition and I just want to kind of milk it for everything I can get from it. Mostly learning and hopefully I can also turn it into something that can make a few bucks.

Nathan Latka

02:46How many customers did it have when you acquired it last week?

Customer and User Count at Acquisition

Leibel Hecht

02:50>> So I have those numbers in front of me. Great. So

02:55>> total of four fifty four free users, 27 paid users, sorry, 26 paid users. We have one new paid user since last week. So, you know, significant amount of traction

03:12>> for a small app.

Nathan Latka

03:13How much revenue does that mean for twenty ten customers?

MRR and Revenue at Interview Time

Leibel Hecht

03:16>> So it was $375 MRR, now it's a $385. Again, was a small acquisition, but I really plan to use this as, you know, like I said, my mini MBA. And I think the founder really hadn't done any marketing for it. And, you know, what gave me a lot of hope for it is probably the fourth day that I had the app,

03:43>> Fortune 500 consumer packaged goods company opened an account, a paid account. Little things like that. It's like, okay, there's probably a lot of potential here. It doesn't have to just stay with Slack notifications. Sorry, I don't remember if I mentioned it specifically Slack right now. It can move into WhatsApp reports and notifications, SMS reports and notifications, email reports and notifications, more smart logic based, if else based notifications and stuff like that. I think there's a lot

04:19>> of room to grow. But again, for me, it's really about learning the business side, the marketing side. I could do the tech side already.

Nathan Latka

04:25So 26 customers, they pay on average about $15 to $16 bucks a month. So $375 per month in revenue. You see opportunities to expand this from just updating companies in Slack via, you know, their e commerce reporting to other channels as well. What did you pay for the app?

Acquisition Price and Valuation Thinking

Leibel Hecht

04:42>> So all in it was $20K.

Nathan Latka

04:44Okay. And how did you think about that in terms of like valuation? Does it make you nervous that you're spending $20K on this?

Leibel Hecht

04:52>> So, yeah, I'm developer by day, but I got a couple of kids, so I don't have a ton of cash just sitting around. For me, it was really So, I mean, there's people who sell pre revenue starter SaaS at that. I don't think it's super expensive. It's not a super high multiple either. Let's say, you give it around $4,000 ARR. It's not a terrible multiple at all. And again, for me, it's such a small number in

05:25>> terms of big acquisitions that for me is about the learning. And if this is what's going to throw me into the industry and force me to learn about paid acquisition, force me to learn about churn, force me to learn about marketing, I think it's going to pay off tenfold.

Nathan Latka

05:40Did you ever do an analysis on what it would cost you to just build the thing and could you do it for maybe $5K instead of 20K?

Build vs Buy Analysis

Leibel Hecht

05:46>> I probably could, but again, because it's a nights and weekends thing, for me it's really about just throwing me in there. It's a lot harder to take something from zero to one than it is to take it from one to 50, in my opinion.

Nathan Latka

06:01I definitely agree with that. So got it, so 26 customers, so I mean you're in it now. You have some costs, you've got $20K in, so you're sort of now you've to make this thing work. What's the next step? What are you going to test?

Next Steps: Reviews and Customer Outreach

Leibel Hecht

06:14>> So I think next step is step one, originally I thought step one is kind of clean up the landing page, make it nice and modern, but then I realized, first of all, not to write a line of code, just reach out to the customers first. Reach out, see, first of all, if they're happy, can they give me a review? Reviews are everything on App Stores. That's step number one. Step number two is ask them what they'd

06:38>> like as their next feature. Maybe I can add more smart reporting tools.

06:47>> They'd Really, I guess the next step would be figuring out how to monetize those for users because there's quite a few of them. And maybe some kind of meter based charges

07:00>> or just basically grandfathering in whoever's already there and, you know, switch it to a fourteen day trial and really try and make the product better so people sign on to to a paid plan earlier.

App Store Strategy and Ranking

Nathan Latka

07:12Which app store which app store you're trying to get rankings in? Where is it listed currently?

Leibel Hecht

07:16>> So it's just the Shopify app store. It's a Shopify app.

Nathan Latka

07:19And how many reviews currently?

Leibel Hecht

07:20>> Eight five star reviews.

Nathan Latka

07:21And so how do you get that to the point where it's got like eighty, ninety, a 100, so that you start ranking high in that store, then you'll get, you know, free users from Shopify once you start getting higher ratings or

07:32or a higher placement in the app store?

Leibel Hecht

07:35>> Yeah, so I think it starts with talking to the customers, just personal emails. Like if I have their email addresses, I can reach out. I can try 10 a day, just send out 10 personal emails a day from Leibel at Reporty. Hey, are you enjoying this? I'd really appreciate if you can give a review. And then just hear their feedback. Maybe there are things that they would really push them from a free plan into a paid

08:02>> plan. Maybe there are things that I can improve that would make them happy to give me a review right away. So, yeah, I'm really in that just learning how

08:12>> to talk to customers phase.

Nathan Latka

08:13Very cool. And what would have to happen for this side project for you to go, you know what, I'm going to do this full time?

Going Full Time: What Would It Take

Leibel Hecht

08:21>> So this particular tool, I don't know if this one would become full time. If I can basically take the learnings of this tool and figure out how to make a full reporting suite, I guess, then that's probably something I could work on being able to take full time. I really, really do just see this as a as a learning phase. I live in I live in LA, I'm actually in Melbourne, Australia now, but it's kind of

08:50>> early, but

08:53>> that's why my brain's working a little bit slow. It's about 3AM here.

09:00>> So I'd I'd need something that's slightly bigger to be able to eventually jump in, something that potentially I can just get a little bit of investment for so I can jump in full time.

09:12>> So I don't think this tool specifically would be able to be that unless I can kind of expand it to a full suite or into maybe a basket of a few different apps. So, you know, you start with just a that one other thing I was thinking about is, know, let's say I do want to add a WhatsApp integration, a Microsoft Teams integration, email integration, all those. Do I want to do it under the same app

09:35>> umbrella? I don't really know how that would affect app rankings on the App Store, if it's good or bad. They'll want to do separate apps, one app, a few apps that feed into each other. So if I can kind of create a basket like that, maybe that's something that can take me forward.

Nathan Latka

09:48And then will you definitely want to learn marketing yourself? Or is this actually a measurement and for you to challenge yourself to figure out how to go find talent, a freelance marketer that can help work you on your fire? Or are you going to keep this a one man show with no team?

Leibel Hecht

10:03>> I'm not sure. I'm really That's why I said this is my I'm using this to learn. But you're

Nathan Latka

10:11a developer by trade. You're a full time job as your lead engineer at a company, correct?

Leibel Hecht

10:15>> Yeah. But I wouldn't say I'm necessarily the stereotypical engineer. I really, really like the business side of things. I write code every day, but I'm also managing a team and doing a lot of stuff on the people side. And, you know, I love all things business and investing. So I definitely want to learn the marketing side, the people side, the management side. Whether or not which direction they end up going, I'm not sure, but I want

10:43>> to learn that side.

Advice for Other Aspiring Acquirers

Nathan Latka

10:44For someone else listening to want to buy their first SaaS company, sort of micro SaaS, and they don't want to start from scratch. MicroAcquire is a great resource. Where else did you look? Where else should people hunt for these?

Leibel Hecht

10:55>> I looked on Flippa. There's a new one I saw pop up on Product Hunt called Buy My Side Project. I guess I would also ask them to just, you know, why are you buying it? For me,

11:07>> I have a family, so it's a little bit more difficult to get things off the ground after hours. So if you throw yourself in, for me, was a big motivation. But a lot of people don't have to buy it. Know, a lot of people would really benefit from just hammering it out on their own and learning the product market fit themselves.

Nathan Latka

11:24Yep. No, that makes a lot of sense. Very cool. Did you ever look at or think about financing the deal or were you always just gonna use $20K your own capital all paid cash upfront?

Leibel Hecht

11:36>> I briefly looked into it, but it's such a small acquisition that, you know, any of the loan options weren't really there. Like an SBA loan or anything. SBA starts at like 50, I think.

Nathan Latka

11:49Yeah. So you just did all cash upfront. Yeah. Yeah. Interesting. I mean, I imagine that there's a lot people looking at this going, wow. I'm an I'm an engineer. I could launch a bunch of these side projects and find people like, Leibel, to buy them for $20K. If I do three or four per year, that's great. That's all I need to do. Right?

Leibel Hecht

12:03>> Yeah. Well, look, then I can buy it and then maybe grow it to $2,000 MRR and flip it for three or four x.

Nathan Latka

12:10Is that your plan? I mean, would that be fun for you to sort of grow this to 4 or $5 a month and It flip it

Leibel Hecht

12:15>> it could yeah. Could be a fun opportunity. But, yeah, again, me it's all about learning, so we'll see where it goes.

Famous Five: Books, Tools and Habits

Nathan Latka

12:23Alright, Leibel, on that note. Let's wrap up with the famous five. Number one, what's your favorite business book?

Leibel Hecht

12:28>> So I'm not a big reader, but I like Tim Ferriss has like a coffee table book. It's called Tools of Titans. All his podcast kind of snippets and stuff.

Nathan Latka

12:37Number two, is

12:38there a CEO you're following or studying?

Leibel Hecht

12:40>> Andrew Gesdecki from MicroAcquire. He's just he's having so much fun.

Nathan Latka

12:44He is. I'm a big fan too. Number three, what's your favorite online tool for building a business?

Leibel Hecht

12:49>> Oh, I gotta say Slack because this is built on Slack, and it's a great tool.

Nathan Latka

12:53Number four, how many hours of sleep do get every night?

Leibel Hecht

12:56>> Usually six to seven. Except not tonight because it's 3AM there right now. Yeah.

Nathan Latka

13:00Number four, last set of questions here. What's your situation? Married, single kids?

Leibel Hecht

13:06>> I am married with two little kids. Two kids.

Nathan Latka

13:09How old are you?

Leibel Hecht

13:10>> I am 29.

Nathan Latka

13:11Alright. Last question. What's something you wish you knew when you were 20?

Leibel Hecht

13:15>> I thought about this. I think my answer is that what's the word? Expertise really begets passion, not necessarily the other way around. So go for the expertise first. Passion is a bit overrated.

How Hecht Funded the $20K Acquisition

Nathan Latka

13:30I would be remiss to end there. I should have asked you this. For other 29 year olds, they might be wondering, Wait, is this Leibel guy rich parents? Where did he get $20K from? I mean, you don't want talk about too much personal stuff, but talk to me about how you've been disciplined and maybe saved money. Like how did you get a 20 ks to spend on this?

Leibel Hecht

13:45>> Yeah. Honestly,

13:47>> I'll be fully honest. Saving, some small consulting gigs on the side, little stimmy helps. A little stimmy. Stimulus.

Nathan Latka

13:59Oh, got it. Got it. Got it. You're talking about the $1,200 checks the government sent out.

Leibel Hecht

14:04>> Yeah. That's just real, yeah. When you have a couple of kids, get a little bit more. So yeah, really just kind of scraping it together, and I chose to put it into this and I'm hoping it'll pay off.

Nathan Latka

14:16Was there any like, Hey to your spouse, I'm going to spend a lot of our savings on this thing. Are you cool with it? And she was like, Go for it.

Leibel Hecht

14:26>> No, I had to convince her, but look, I've been trying to get into these things for a while and I've been building things and so it's not like I just came up one day, Hey, let's go buy a business. You know, and it seems to make sense.

14:43>> Look, so far it's been good. So I hope it'll continue.

Nathan Latka

14:46All right, Leibel. Thanks for taking us to the top.

Leibel Hecht

14:49>> Thank you, Nathan.

Nathan Latka

14:51One more thing before you go. We have a brand new show every Thursday at 1PM Central. It's called Shark Tank for SaaS. We call it deal or bust. One founder comes on, three hungry buyers, they try and do a deal live and the founder shares back end dashboards, their expenses, their revenue, ARPU, CAC, LTV, you name it, they share it. And the buyers try and make a deal live. It is fun to watch every Thursday, 1PM

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