Omer (00:11.520)
Welcome to another episode of the SaaS Podcast.
I'm your host, Omer Khan and this is the show where I interview proven founders and industry experts who share their stories, strategies and insights to help you build, launch and grow your SaaS business.
In this episode, I talk to Thomas Smail, the founder of FE International, an M and a firm that helps business owners to sell their SaaS E commerce and content businesses.
FE International offers comprehensive exit planning services as well as direct access to an established network of pre qualified international investors.
And Thomas has consulted with hundreds of Internet entrepreneurs on exit strategy growth and business development.
So you're hoping to sell your SaaS business in the next year or two, but you're not sure where to begin and how to put yourself and your company in the best position for a sale.
In this episode, we're going to teach you how to make your SaaS company more sellable so so you can get the best possible outcome from a future sale.
You'll learn what the overall sales process looks like and then we'll look at the typical mistakes that SaaS founders make and share some key lessons with you.
By the end of this interview, you should have some great insights and know exactly what you need to do to build a SaaS company that you can sell.
Thomas, welcome to the show.
Thomas Smale (01:46.820)
Hey Omar, thanks very much for having me on.
Omer (01:49.140)
So what gets you out of bed?
What inspires or motivates you to work on your business?
Thomas Smale (01:53.940)
Many years ago it was kind of building something good and that's going to benefit, benefit people.
But now it's really just the clients we have and the team we have.
We find that when you sell a business to someone, it's a very rewarding, very rewarding exercise and you're often changing their life, their family's life.
So working with more people just kind of keeps you going.
Omer (02:18.120)
So tell me about FE International.
What do you guys do there?
Thomas Smale (02:21.400)
So we're an M and a firm that works with business owners who want to sell their company.
So we specialize in SaaS businesses.
We work with E commerce businesses, content and a range of other different business models, generally all online focused.
Omer (02:38.520)
In terms of SaaS, what size of deals have you helped close?
Is there maybe a range you can get a sense of?
Are we talking about really big deals or does it vary?
Thomas Smale (02:49.930)
Yes, we work with business owners of all different sizes.
We'll generally start looking at a business once it's above thousand dollars mrr.
So we do businesses in the five figure range, all the way up to the eight figure range and Then we have teams internally that specialize in different business models and different sizes of businesses.
But yeah, we do cover a range.
Just for reference, last year we closed around 140 transactions.
So we're a high volume business and we work with a lot of different people.
As long as it falls within our core business models, chances are we'll take it on and be able to sell it.
Omer (03:30.380)
What I really wanted to focus on with you today was to help people start thinking about what they should be doing to sell their business.
Now we're not talking about, you know, people who are ready to go out and sell their SaaS business today, but more in terms of maybe it's something that you see as a potential exit down the line or something that, you know, you've been thinking about.
And really we want to help people to understand how can they start to prepare and put themselves and their company in the best position to get a successful outcome and sale.
Before we get into that, I think for people who aren't familiar, it would be great just to maybe if you could give us an overview of like, what does the sales process look like for a SaaS company working with you?
Thomas Smale (04:26.300)
Yeah, sure.
So generally what we like to do is start with putting together evaluation for people.
So wherever they are in their business, we're always happy to put together evaluation.
And the reason we do that is it really just firstly starts the relationship off.
We get to know you, you get to know us, builds a little bit of trust.
We don't charge anything for that process.
And it helps you as the business owner get an understanding of where you're at and where you need to be.
So it may well be that we look at your business and say, hey, your business is worth a million dollars.
And you say, thomas, I'd really like to get to $10 million.
What do I need to do to get there?
And then we'll work with you to give you some suggestions on what might need to be done to get there.
Or you may say, hey, Thomas, look, I'd love a million dollars.
Let's go.
If you said, let's go on a sell the business, we have a pretty like, well set process now that we've kind of continuously improved over the years.
We're signing an engagement agreement review and then we put together a detailed prospectus on the business.
So we, we ask you around 100 questions about your business, we dig into your financials, the operations, the technical side of the business, lots of different things to put together the final prospectus, which is generally around a 30 page document, which effectively is what gets sent to investors.
Once you're happy with that, we go out to a network of investors in three stages.
So we have a first group of buyers who we have segmented based on data we keep in our internal CRM.
So tens of thousands of active buyers.
But we'll narrow that down to usually a group of 500 to 1000 who have specifically told us they're interested in a business like yours.
So we reach out to them first and then a week later we go out to a wider network of all of our buyers.
And in fact, we use that scarcity as leverage for buyers, which is, hey, you're getting a first look.
In a week's time, it's going out to tens of thousands of more people.
So if you're interested, you need to make an offer, you need to kind of get moving on the process.
And then we go out to some other wider channels after that.
And then hopefully quite soon after listing the business, we will start getting offers in and up front.
We would have been very clear with you what to expect.
So if we say a business is worth a million dollars, we're not going to put an offer in front of you, that's $200,000, and say, hey, Omar, great offer, you should take this.
Usually it's, we've got an offer of say, 900,000 and then they want to pay you another hundred thousand in 12 months, assuming you can help support them for a certain period of time or many other different terms they might come up with.
So we'll hopefully get multiple offers and then we'll negotiate on your behalf based on the feedback you give us and the number of buyers we have interested, and then hopefully agree a deal.
Once we have a deal agreed, the buyer signs what's called a letter of intent or an loi, or some people would also call it a term sheet, which effectively outlines the formal terms of their offer.
And then we go into a due diligence period where the buyer will take some time.
Depending on the size of the business, this might take a week, it might take four weeks, which is fancy verifying that everything you've told us in the prospectus is true.
So if you say you made $10,000, you need to prove you made $10,000.
If you have a expense that you've paid for hosting, you need to prove that what you paid for hosting is what you said for hosting.
And then they'll look through the code, they'll want to understand the technical side of the business, the operational side, to make sure they can take over and run it.
So once all that's done and agreed, there'll also be a purchase agreement or a contract which is negotiated for the sale of the business.
We will put that together with the buyer and seller and also any legal counsel that gets involved.
Depending on the size and complexity of the deal, there might be multiple people involved at that stage, and then eventually the deal is done, the contract gets signed.
There's usually a transition period.
Again, depending on the size of the business, it's usually a month.
Can be up to three months for larger businesses, where the seller, as a previous business owner, will spend time training the new buyer on how to run the business, and then that's it.
Like most deals, particularly below $10 million, are generally quite simple in terms of their structure.
You're going to get the majority in cash.
The new owner is going to come in, take the business over.
You don't have to stay and work for the buyer for three years, which is definitely a misconception.
We see a lot of people think if you sell your business, you have to go work for the buyer for the next 10 years, which really isn't true on much larger transactions.
Yes, that's quite common.
But if you're taking someone's going to pay you $100 million working for them for years, probably not the worst thing.
If you sell a business for a hundred thousand dollars, working for someone for a year doesn't make sense.
So almost all deals are cash.
There are some very experienced buyers in this space who want to buy businesses like yours.
So they'll take it, run with it, go there.
So, yeah, that's an overview of the start to finish.
There's a little bit more complexity, but as a high level, that's the overview.
Omer (09:56.070)
Great.
Now that's really helpful.
So for, let's say, you know, I have a business that you and I have agreed is valued around $5 million.
Let's find somewhere in between 1 and 10.
And we've signed a letter of engagement to sort of kick this off.
How long does that process, on average take to get from that engagement to a sale?
Thomas Smale (10:20.290)
Yes, it depends a little bit on the size of the business.
Generally speaking, as a guideline for business at the $5 million level, we would expect to have offers within 30 days and then an additional 30 days to close from there.
Sometimes they can take longer than that, sometimes it can be faster.
We did a deal last year that was about 6.5 million and it was closed within a month and a half, which is very Fast.
But we got a lot of interest very early on and then leveraged the buyers each other against each other and got a really good deal.
So, again, that's definitely a misconception or probably pre the existence of companies like ours.
The M and A process can take many, many years for us.
We have buyers ready to go, so 30 days, 60 days, depending on the size.
Omer (11:10.200)
And then what is your business model?
You take a commission of the sale price.
Thomas Smale (11:16.120)
Yes, exactly.
So we don't charge you anything up front.
There's no retainers.
We generally charge 15% on completion.
Omer (11:23.040)
Great, great.
Thomas Smale (11:23.960)
Okay.
Omer (11:24.920)
So if somebody is listening to this and they are already at the stage where they're saying, I'm serious about selling my business, this podcast probably isn't for them.
They should probably just get in touch with you and start a conversation to figure that out.
But for people who are at a little earlier stage where they are not ready to sell that business right now, but they see that as something that they potentially want to do down the line, maybe in a year, maybe in a few years, I want to spend some time to try and understand what are some of the things that they should be doing to help themselves get in the best position.
And in many ways, you know, you and I were talking before we started recording.
It was really about sort of learning from you, like, what are some of the mistakes that founders make when it comes to selling their business and what we can learn from you about that so we can help give people some advice on things that they can start doing today to.
To move in the.
In the right direction.
Does that sound good?
Thomas Smale (12:33.720)
Yeah, absolutely.
I mean, I think in general, there's a lot of different information.
I mean, like your podcast, for example, there's a lot of information out there to help people grow their businesses.
I think one of the really important things to figure out quite early on, and this is part of the reason why we offer that valuations for free, is really to get an understanding of what you're trying to achieve, and then that helps dictate the decisions you might make.
So if you establish your business now is worth a million dollars and you only want a million dollars, then you're not gonna have to do a huge amount to make that happen.
But if you want to get to $10 million, the decisions you may need to make and the time that might take could be completely different, or you might want to get to a billion dollars, and to get to a billion dollars, the decision is going to be completely different again, you may need to make completely different Decisions that you'd have to do in a 10 million dollar business.
So I think it's like there's lots of good information out there, but it is important at a personal level to establish what you're trying to achieve.
So some people have a time based goal.
So it's like, oh, I'd really like to sell.
By this age.
Traditionally you look at business brokers, traditional business brokers, they're the number one reasons for selling for them is retirement.
So the baby boomer type generation generally own restaurants or whatever business they might have that's offline, they want to sell and they want to retire in this space, I'd say that's way less common.
We don't deal with too many people who are selling to retire.
They're generally selling to reinvest into a new project or business.
So you'd say it's important just at a fundamental level to think about what you want to do and what you want to achieve.
And there's no right or wrong answer to that question.
There are definitely right and wrong ways to do other things, but what you're trying to achieve is a very personal thing and only you can decide that.
And that then really helps dictate decisions from there.
So once you've figured out where you want to get to, I say it's always worth getting an understanding of where you're worth now versus where you want to get to as well.
So it may well be that you are much closer to your, your goal than you may expect, or you might be much further away from your goal than you expect.
But if you don't have a clear understanding of that now, then you could be working on completely the wrong things and then when you do need to sell, you might not be in the right position to do that.
Omer (15:01.430)
So I don't want, I don't want to kind of talk too much about valuation because that could be a can of worms on its own that we could spend a long time talking about.
But is there a kind of a super simplistic way that maybe people can think about as a ballpark to kind of just understand where their business roughly might be at in order to be able to know when is a good time to come and talk to you guys?
Thomas Smale (15:27.860)
Yeah, it does really vary.
I mean, I'll follow up.
I can send you an article we have about how to value SaaS businesses.
I would say in my general rule is I don't like giving blanket statements on valuation.
Valuation because it really does vary.
There are so many different factors that go into it.
So what applies to your business could be completely different to mine.
So I say I can't really answer that question with any degree of accuracy.
There's a lot of information out there about valuation and a lot of, I'd say, misinformation.
One of our biggest challenges as a business, like with our marketing team, for example, is fighting against misinformation in the industry.
So I would always be careful of people who cite generic valuation principles for SaaS businesses.
I see it a lot on places like Twitter.
Quite often someone will say, oh, I got offered to sell my company for this.
And then people start saying, oh, it's worth 10 times revenue or 1 times profit or 50 times profit, or all sorts of different metrics should.
The short of it is there's no ballpark way of looking at any business without a. I mean, I guess that's reasons why companies like us exist.
The valuation data is hard to come by.
The reason we're very good and accurate with our valuations is we've completed hundreds of millions of dollars in acquisitions, so.
Omer (16:51.160)
And ultimately it's worth what a seller is willing to pay.
Thomas Smale (16:54.000)
Yeah, absolutely.
I, I would say that's definitely.
Omer (16:58.330)
Sorry, buyer.
Thomas Smale (16:59.130)
That's definitely true.
I would say we can usually predict that quite accurately just because we have so much transaction data.
So we know what a business is going to sell for within a reasonable degree of accuracy.
Omer (17:10.810)
Yeah, okay, fair enough.
Now that's good advice.
So we can include a link to that article you mentioned in the show Notes, and if people are interested in sort of learning more about that, that can be a potential starting point for them to go and read that.
So let's say you talked about what a sale might look like.
What do you want to get out of it?
You talked about timing.
Is there a particular time that you want to sell this business?
Is there a particular amount you have in mind beyond that?
Assuming people have figured that out, what's the next thing that they should be doing?
Thomas Smale (17:50.320)
So from there, I guess once you have an understanding of where you want to get to and where you are now, it's really then a case of deciding what you want to focus on.
Because let's say you want to 10 10x the value of your business, you might need to focus on lots of different things.
You might need to focus on pricing, customer acquisition, customer success, onboarding, and product.
A lot of the time I try to simplify it for clients and we try and the team try and do the same thing.
So you might not need to focus on that.
Many things.
I would say the vast majority of SaaS businesses we look at, particularly smaller businesses, tend to get pricing completely wrong.
The most common thing we see is small business owners tend to limit themselves in terms of pricing.
So they're generally too cheap.
And the obvious answer to that is just increased prices.
And also they tend not to accurately define a value metric for customers where they can pay you more based on their usage.
So usage based pricing, per seat pricing, volume pricing, whatever that might be.
Too many SaaS businesses will have unlimited plans where a customer who might be willing to pay you 5 or $10,000 a month is only paying 300 because you have an unlimited plan.
So never have a like a top end plan that includes everything in sas.
Always have a way for your best customers to pay you more because over time you'll end up focusing on those and it can become an entire revenue stream of itself focusing on expansion revenue.
So I'd say number one is get your pricing right.
I think a lot of it comes down to confidence.
When you're early stage people somewhat limit themselves by what they might be willing to pay.
So if you're just a small one man company, what you're willing to pay for a product is probably going to be significantly different from what a 5,000 person company with a billion dollars in the bank is willing to pay.
So from that perspective, don't limit your pricing based on your own experience.
Get the feedback from, from customers.
In general, you can generally keep increasing prices until people say stop.
So pricing is definitely one.
Omer (20:09.140)
So just to kind of recap on the pricing.
So what I Heard was number one that you see a lot of SaaS businesses, their pricing is too cheap and you should sort of certainly be thinking about that and making sure that you're delivering value, but you're doing it.
You're constantly looking at ways on figuring out how you can increase your prices.
Secondly was around really you talked about value metrics or usage based pricing.
But the whole concept of how can I get each customer to pay more if I'm delivering them more value or they're using the product more, whatever that model might be most appropriate for you.
And steer clear of unlimited plans because they might be a great way to get customers in the early days.
They'll probably come back to bite you at some point.
Thomas Smale (20:57.060)
Yeah, absolutely.
So I think maybe in the early days it can make sense to, particularly if you don't have any outside funding.
Sometimes you may need to offer better deals to get people in the door.
But I think don't be Afraid to increase that with time.
It doesn't necessarily mean you shouldn't grandfather people.
Again, that's a whole new podcast discussing whether you should grandfather or not.
But over time, particularly to get traction, increase your prices and make sure there's a very clear way for your best customers to pay you more money.
And they'll be more than happy to do that if they like your product and find it helpful.
Omer (21:31.830)
Yeah, the grandfathering conversation is great because I've had people come on the show who kind of, from a principled perspective just say, no, I just, I would.
Once I've grandfathered people, that's it, you know, I'm not going to raise prices on them.
And there are others who've kind of decided against that and sort of had to go out and tell those people, look, I'm going to start charging you more.
And both, you're right, both of those have their own pros and cons and probably a separate conversation to discuss that.
But yeah, I mean, I've totally seen that.
And you know, I've had people on the show who started with a product where they were charging 10, $20 a month for, and within a matter of years they got to a point where they were charging, you know, maybe their, you know, entry level price or tier was $500 a month.
And a lot of that just came from constantly going back to your customers, figuring out how you can deliver more value to them, and then basically doing that as a way to keep raising your prices.
Thomas Smale (22:40.830)
Yeah, absolutely.
I think just so many people just don't, don't do it.
And I say almost any business has the potential to keep doing it.
Like I said, the grandfathering conversation is definitely, definitely a different conversation.
There's lots of different schools of thoughts that how you can deal with that.
Omer (22:57.440)
Okay, so pricing, we sort of summarize that.
What are some of the mistakes that you see founders make that we can learn from?
Thomas Smale (23:06.240)
I say particularly when it comes to sellability specifically, one thing that most small business owners do really badly is just finances and keep you on top of their, their general metrics.
So having clean books and bookkeeping is really important.
So just keep clear records of everything you've spent, everything you've made, and when it does eventually come to a sale, that's going to be very beneficial, metrics wise.
I say generally SaaS businesses are quite, quite good at this.
But there are tools you can use out there like ProfitWell Bare Metrics to get free SaaS metrics or close to free, which you really shouldn't see.
As a major expense in your business.
It's really important to understand these metrics from day one particularly.
You should then set targets around particular metrics you don't think are very good.
So that might be revenue churn, it might be free trial to paid conversion rate, it might be all sorts of different metrics you may have, but if you don't track them, it's very difficult to make a conscious effort to improve them.
So from that perspective, start checking your financials and your metrics as early as possible.
I think a lot of people get a bit paranoid about costs early on.
When it comes to selling.
I wouldn't really worry a huge amount about costs.
The real key is building a good business that people like.
People want to hang around.
People recommend the business, people are willing to pay you more.
People like the product versus cutting corners and people canceling.
People not being able to cancel because you've hidden the cancellation button.
Yes.
Are short term things you can do to make a bit more money or a bit more profit.
But ultimately they're not really the kind of businesses people want to buy.
So don't get.
Particularly when you understand that valuations are based on a derivative of your profit in, in general, particularly when you're early stage and trying to get traction, don't cut corners just for the sake of keeping your expenses now.
It's really not, it's really not necessary.
So that's definitely something that people make the mistake of.
They'll kind of cut corners early on.
So you might have limitations in your, your funding, which is fine.
I bootstrap my business as well, so I completely get it particularly early on.
But as you grow, it is important to make sure you're investing the right amount.
And tracking that properly.
And then with metrics is so simple to do in 2019, there's really no reason why you shouldn't be doing that.
Omer (25:41.980)
Are there any specific metrics that are more important than others when it comes to selling your business?
Thomas Smale (25:49.350)
I'd say the general answer to that is it really depends on the buyer.
One of the advantages of working with an M and a firm is we'll bring multiple buyers to the table.
So there'll be some people who'll be very focused on revenue churn.
Some people will care about customer churn, some people will care about your free trial to paid conversion rate.
There are lots of different things different buyers will look at and that will really depend on who that buyer is because every buyer comes in with their own angle.
So for example, if they're looking at the say, free trial to pay conversion rate.
They might have a strong marketing background and that they might be really good at getting more people to convert from a free trial into a paying account.
So that's why that metric might matter to them.
Some companies might come in with a really good background in kind of improving onboarding and customer success.
So to them, customer churn might be really important because they want to retain as many as possible.
For some it might be revenue churn.
Because I always think revenue churn is a better metric than customer churn to focus on particularly is that that means you should then spend more time focusing on your bigger clients without ignoring the small ones and getting that expansion revenue.
You as soon as you have the ability to get expense and revenue in your business or people to pay more, then focusing on that revenue churn number I always think is really important.
If you can show to buyers that firstly people aren't cancelling at a particularly high rate and people are willing to pay you more with time, that's extremely powerful in any business.
So there were almost no buyers that wouldn't find a strong revenue churn metric to be a good thing.
So from that perspective, it does really vary though.
Buyers come from lots of different backgrounds, they have lots of different skill sets.
Some people like businesses that are doing really well, some people like businesses that are not doing really well.
Some people want to see a really good revenue churn metric, other people want to see the opposite because they think they can improve it.
So it really depends.
I would say you should really focus on what you're good at and improving those metrics.
Don't worry about things that you're not so good at.
Do some things really well and kind of double down to improve them.
Omer (28:10.560)
You mentioned profit well and bare metrics.
If people invest in one of those products or already using those products, then they're probably in a good shape when it comes to tracking a variety of metrics and financials.
And I think you're right that it probably wouldn't be smart for you to start optimizing your business based on what you think a seller would be interested in.
But more from the perspective of what does a healthy business look like from your point of view and what do you feel that you can execute the best on?
Thomas Smale (28:48.780)
Yeah, I definitely see people make the mistake around building their business around a potential buyer because if you build a product that gets some traction, chances are you're going to get approached by potential buyers.
The vast majority of those will not be serious, but I've spoken to A lot of people over the years who have spent a bunch of time making changes in their business or a particular direction because they are obsessed with the idea that they're going to sell to a specific type of buyer or like, hey, I'm going to sell my business to Amazon or Apple or whatever.
Yes, that is possible, but the likelihood is like very, very minuscule.
So I always like to think it makes sense to build your business with the majority of buyers in mind versus a very specific thing you might need to do to get someone like Apple interested, which is probably highly unlikely in the first place.
So definitely don't go off track based on what one investor has told you or just what you've heard on one podcast or one conference.
There are lots of different ways to do things and buyers will look at lots of different things.
Great.
Omer (29:59.070)
Is there anything else that we haven't talked about?
Thomas Smale (30:01.390)
So I'd say another thing that people should really focus on, particularly if you want to improve those metrics further down the line, is how good your onboarding is.
I think a lot of people look at Churn and they think, oh, we've have high Churn.
Either the product is bad or the customer support is bad.
Generally speaking, say the vast majority of businesses we see, particularly those who take the time to listen to podcasts like this, they probably have built a good product and they probably do care about customer support.
So usually Churn is more a reflection of how well you've onboarded that client in the first place.
So again, there are lots of different ways to do onboarding depending on the value of your product.
If it's someone's paying you $10 a month, you probably can't do a demo call with all of them, whereas if it's a thousand dollars a month, you probably should.
But anything you can do to improve onboarding is super important to the process in, in, in general.
So the more time you can focus on that early on, the better and just test lots of different things.
So for example, in some businesses you might need to do demos, like I just mentioned, some you might want to have live chat.
Sometimes live chat won't work at all.
Sometimes it will work really well, depending on the nature of your audience.
Sometimes you might need to spend more resource on documenting everything, particularly if you have a technical audience.
So if your average buyer is a developer, then they generally like a lot of documentation.
But if your average buyer is a small business owner who's not that, say web savvy, they probably aren't going to read tons of documentation they just want to do a phone call.
So get an understanding of your audience and focus on onboarding.
Because if you do onboarding really well, it really does flow down to many other other metrics.
So I would definitely spend some time thinking about it and constantly trying to improve your onboarding.
Because if you do onboarding well, it just benefits so many other things in the short and long term and so many businesses.
I mean every single business out there can improve the way it onboards clients.
Even though we're not a SaaS company and we're effectively a service business, we put a huge amount of time and effort into improving our onboarding process all the time.
And that's one area of the business we always focus on.
Because if you onboard clients well, then it has many other benefits down the line.
You're much more likely to get word of mouth, you're much more likely for that customer to be happy.
In general, generally the process is going to be faster.
So if you're concerned about revenue early on, if you can get someone onboarded and set up for your product in three days, that's better than them figure out themselves in 30 days.
So think about these things, focus on onboarding people properly and it will benefit lots of other metrics I say depending on the business.
And this is why we like to have a one on one conversation with businesses or business owners in general.
There are so many different other factors you could work on.
It really does depend on your business and where you're at.
So I say that that varies.
Beyond that, great.
Omer (33:15.320)
Now if people haven't already guessed from listening to you, you are a fellow Brit who is now living in the US in terms of clients that you work with and where you sell, is there any limitations there?
I mean there are people who, people from around the world listen to this show are all of those potential people that FE International would work with.
Thomas Smale (33:38.460)
So we have clients, as the name probably suggests, we have clients internationally.
So all over the world.
There are very few places we won't work with from a customer perspective.
We have two main teams based in London and New York.
So they cover basically all of the different time zones.
Then we also have some other smaller satellite offices and some of our team are remote in different places.
So we really do have that 24, 7 time zone coverage.
So we work with clients everywhere.
Probably about 50% of the sellers we work with are in the US or Canada.
About 25% are in Europe and then 25% are Asia, Australia.
So yeah, very much international.
I would say a lot of the investors and buyers do tend to be based in the US which is part of the reason why our head office is in New York.
There's a lot of investor money in the us it doesn't necessarily exist elsewhere, particularly for buying businesses.
Omer (34:39.360)
Okay, let's wrap up and get onto the lightning round.
I'm going to ask you seven quick fire questions.
Are you ready?
Thomas Smale (34:46.960)
Yeah.
Omer (34:47.680)
Okay.
What's the best piece of business advice you've ever received?
Thomas Smale (34:51.520)
Yes, I think.
Well, I've had lots of good advice over the years but say in general it takes a very long time to build a good reputation and not very long to lose it.
So it's important to do the right thing by your customers, even if that costs you money or maybe even lose money.
The benefits of doing the right thing really do compound with time.
You may not necessarily think it straight away, but in the long run doing the right thing is always the right thing.
Omer (35:16.830)
I agree with that 100%.
What book would you recommend to our audience and why?
Thomas Smale (35:22.270)
So I think a good book.
I read this many years ago when my business was much smaller than it is now and the book was Tipping Point.
Tipping Point is not necessarily about building a business as such, but it's really just around the notion that everything can get to a certain stage and then it tips and then it affects where you can completely go from there.
So generally think of traction in your business.
I think it's really easy when you're quite early stage to give up too early.
But if you read that book you'll get an understanding of kind of everything can take some time and then once it tips, you move to a completely new new level.
And we found that in our business over the years you kind of stair step or whatever you want to call it to the next stage and then have another tipping point to another level.
But really interesting book, not just about business, but definitely worth a read.
Omer (36:17.110)
That's the Tipping Point by Malcolm Gladwell.
Thomas Smale (36:19.830)
Yeah, that's right.
Omer (36:20.950)
What's one attribute or characteristic in your mind of a successful entrepreneur?
Thomas Smale (36:26.150)
Patience, I think kind of leading on from Tipping point in a.
Well, I guess any business, particularly in small businesses, particularly if you're the entrepreneur running the the day to day or maybe you have a partner who helps you on the day to day.
Lots of things are going to go wrong, things are going to take longer than you expect.
Some things won't work at all.
And if you're anything like me, quite often I'll have what I think is a good idea and it will not work.
At all.
Sometimes I'll have what I think is not a good idea and it'll work really well.
So being patient is really important.
Omer (36:58.010)
I love that.
It's just like I was just having that this morning in terms of the number of times I've had what I thought was a great idea, which really turned into be a pretty dumb one.
But I guess you just have to go through that process.
Thomas Smale (37:13.710)
Yeah, I think that's why being patient, like, I think it's really easy to get discouraged early on.
I think once you've been doing it for a while, you kind of.
I get used.
I'm at peace with myself now that I know I'll be wrong reasonably regularly.
But you don't need to be right too many times to build something really good, particularly if you're testing with like relatively low resistance areas.
So for example, marketing is something you can test lots of different things.
You probably shouldn't test lots of different things with customers.
So for example, I wouldn't split test calling a client on the phone or setting up a slack channel with them because in general I believe that calling them is always the right thing to do, assuming that's how they want to communicate.
So we wouldn't test things like that.
But like marketing wise, tons of different things you can test.
If it doesn't work, it's fine, move on, be patient.
Omer (38:04.100)
What's your favorite personal productivity tool or habit?
Thomas Smale (38:08.100)
So we use Asana for basically everything internally for project based, we have our own CRM for anything related to deals, but Asana for internal projects.
And obviously as an entrepreneur involved in the day to day, we do lots of different things.
So having Asana and we have employees in lots of different places.
So it's really important that we can kind of keep on top of projects of multiple different people.
So I wouldn't be able to live without Asana to keep on top of what's going on.
Omer (38:38.050)
What's a new or crazy business idea you'd love to pursue if you had the extra time?
Thomas Smale (38:41.970)
So something we've been working on anyway.
But I'd love to spend more time working on conferences in general.
One of the big challenges with conferences is making them affordable.
So just for reference, we run an event called LTV Conference in New York.
And the cost of running a conference is much higher than I think most people would expect.
So I've seen a lot of people kind of publicly complaining about other events and how expensive they are saying, oh, it's, it's not fair that conferences can charge all of this Money for a ticket.
If you actually look at the economics behind running events, they're very expensive, particularly in.
In major cities.
So I'd love to figure out a way to kind of get more people to whether that's our events or anyone's events in general in a affordable way.
So maybe you'd have to solve the actual venue problem, which is venues are very expensive or more companies, I guess, like us.
I think a lot of the best conferences out there are run by companies who don't necessarily need to be for profit on the event.
So most events and most conferences out there make a loss, which is fine if you have a wider business to support it.
So that's definitely like saying, I'm working on at the moment and if I had more time, I would just run more and more events.
Omer (40:00.340)
What's an interesting or fun fact about you that most people don't know?
Thomas Smale (40:04.740)
Last year I flew 10 times around the world, or the equivalent to around 250, 000 miles.
Wow.
Mostly going to conferences and eventually.
Omer (40:15.550)
Wow, you must have some serious miles.
Frequent flyer miles.
Thomas Smale (40:21.230)
I do.
Like I said, we have clients all over the world, so we go to lots of different places.
So it's quite difficult to fly with the same airline all the time.
I've got a little bit better at it recently.
So, yeah, a lot of flying, a lot of time spent on planes.
Cool.
Omer (40:35.390)
And finally, what's one of your most important passions outside of your work?
Thomas Smale (40:39.310)
So I think this is kind of a boring answer, but the stage I'm at now, it's really just spending time with my.
My wife.
I spend so much time on the road traveling, so 10 times around the world, that puts a lot of kind of.
That's very difficult from a personal perspective.
So when I'm.
When I'm at home and around, I just like spending time with her, assuming she wants to see me.
Great.
Omer (41:04.100)
Okay, awesome.
Thank you so much for joining me.
It's, you know, this is a topic that, you know, we've done over 200 episodes of the show, and it's about selling your SaaS companies.
Not something we've ever covered before.
And so I'm really glad we got a chance to get you on here and pick your brain and learn a little bit more about that.
I know there are a lot of people listening who will get a ton of value from your experience and your expertise, and hopefully that will potentially lead to some success stories of people selling their companies.
Now, if people want to find out more about FE International, they can go to feinternational.com if they want to get in touch with you.
What's the best way for them to do that?
Thomas Smale (41:54.150)
The best way is like find whatever social media channel you like and, and find me there.
I'm active on all of them, I'd say.
In general, I get about 500 emails a day, so you could definitely email me.
That's Thomas at feinternational.
Com.
But social media is much better.
I'm active on there.
Messages are much more like much less likely to get lost in the.
Lost in the inbox.
Great.
Omer (42:18.610)
And so I'll include links to your Twitter and LinkedIn in the show notes so people can get hold of those and LTV conf.
When's the next event?
Thomas Smale (42:32.170)
Yeah, so it's 3rd to 4th of July, April 2019 in New York City.
We've got really good speaker lineup.
We're generally looking for.
You're the right stage of coming to LTV conf if you're below $10 million in ARR.
So we have a good audience talking about all of the different effects you.
We've created a lineup of speakers around the topics that we like to teach our clients and kind of help our clients with.
So there'll be speakers talking about pricing, onboarding, hiring, if you're a little bit further on down the line, lots of different things.
So if you're interested, I'll also send a discount code for the listeners of the podcast.
So if you want to come along, you can have a discount courtesy of oma.
Omer (43:20.360)
Oh, thank you.
Yeah, let's figure out how to do that so people can take advantage of that.
