Acquisition Ecosystem

If you don’t remember who I am, I’m Scott Oldford, an investor and advisor who owns 40+ online businesses, and this newsletter is dedicated to giving a behind-the-scenes look.

At some point, you decide that you want to sell your business. However, the planning that you did before deciding is what will matter how much you can sell it for.

In 2012, I sold my agency for $1 to avoid going bankrupt. It was a deal that included about $30,000 in debt payments being taken over by the buyer. I didn’t define the terms because the deal closed 5 days before I couldn’t pay anyone who I owed money too.

5 years later, after getting out of debt and making $7M in a year, I had a moment where I asked myself, “What’s the point of life”… I decided to go and travel the world. I didn’t even sell my business, I just shut it down.

A client of mine in 2018 returned from Peru for an ayahuasca experience and told me… “I want to go travel the world… how can I sell my business”.

We sold the business in 30 days for 1/5th of what it was worth.

In 2021, I had someone come to me and said… “I’m sick, I need to focus on me.”

I bought the business in 4 days for 1/6th of what it was worth.

Earlier this year, I acquired a business from someone who realized that they simply weren’t able to get product-market fit. They built a business around a feature— it was a great feature, but it didn’t make sense by itself. I acquired the audience of that business for $0.08 each.

I promise, I’m not a capitalist idiot.

When I do these deals, I’m 100% transparency and upfront— I also provide those I’m doing these deals the opportunity of the possible return in the future— for doing nothing.

But… here’s the truth: When you sell a business you either…

1. Planned the sale 2-3 years ahead of time and are selling a stabilized business to someone who is looking to invest in cashflow.

2. You didn’t plan the sale and you’re selling for an external life reason.

Most businesses I see for sale are in the second category. Sometimes it’s due to health reasons, the Entrepreneur is burnt out, they ran out of capital or some reason in-between.

In 2018, I realized how big of an opportunity this was…

The story I’m about to tell you is both sad and funny at the same time.

In 2018, I was running a business that mentored Entrepreneurs who were generating $1-10M/year in revenue.

We had over 100+ Entrepreneurs we were working with that paid us $100-200K/year for my help.

At one point, six of these Entrepreneurs, together, went to South America partake in a few weeks of exploration and ayahuasca— having been around enough Entrepreneurs, I had an idea of what was going to happen.

When they returned, all 6 of them blew up their businesses, burned down the current version of their lives, and started from scratch. For me, it was sad because, while I fully supported their choice to do this (I did the same before), I knew if they built their business differently, they would of been able to exit the business and go to the next thing that was more aligned.

All of these experiences stuck with me, and I knew there was an incredible opportunity.

In order for a business to work,” a lot of things have to happen in succession with each other. The compound effect has to occur in a multitude of areas.

In my book, The Nuclear Effect, I talk about the 6 pillars of scaling a business.

They are: marketing, sales, operations/team, delivery, finance, and mindset. However, we both know that these are the starting pillars, and inside of them are many others.

Take a single pillar, and there are 1,000 potential problems, Further, if you get one of the pillars with the right strategy but the wrong timing— it won’t work, and timing in business is generally even more important than strategy.

In essence, generally, it will take an Entrepreneur multiple rounds to find a winning business, as failing forward and mentorship are truly the only two ways to “figure it out”.

Sometimes a business had a good idea, but bad execution. Sometimes it ran out of capital. Sometimes they couldn’t deliver. Sometimes they could deliver but couldn’t acquire customers. Sometimes they had customers but didn’t charge enough.

In building my portfolio, The Wisdom Group I wanted to leverage what I knew about businesses and Entrepreneurs.

That if a business isn’t successful an entrepreneur must move on and that if an entrepreneur is successful, eventually they want to move on.

See, if you take 5 different businesses that by themselves didn’t make it, however, those 5 businesses all had the right things.

One had a great online web property with amazing SEO.

One had a great delivery platform that allowed for people to be happy.

One had a great marketing funnel that produced amazing results and customers.

One had an excellent audience via email and social media.

One had a great team that could execute.

And all of those 5 businesses had the same idea, you could take 5 businesses that didn’t work and bring them together.

With the Wisdom Group, that’s much of what I’ve spent the last number years creating…

An ecosystem where we can take either:

A. Businesses that have really good assets (but isn’t a hit out of the park)

B. Businesses where the Entrepreneur is ready to move on (for whatever reason).

C. Businesses where they Entrepreneur simply can’t take it to the next level.

And at scale, help those businesses scale leveraging our unfair advantages of having the network effect, economics of scale and vast levels of expertise.

Further, I believe that in the industries we’re focused on we’re going to see this happen much more as we move into the future.

We’re focused on Education, Media and SaaS. Inside of these industries is a lot of growth, however, it is going to be potentially more difficult to compete unless you’ve become the category king.

In SaaS, if you don’t have money to burn, it can be very difficult to get traction. However, if you have a good product and a good team with low overhead, our ability to tie the software into 50+ businesses to solve user acquisition, while using our high ticket SaaS methodology allows us to build winners.

In Media, many businesses that rely on sponsorships only, may have a difficult time moving into the future. Further, the costs of running a media business that isn’t a portfolio of media creates a difficulty of margin. We believe that many newsletters, niche sites, blogs, podcasts and communities will be sold into the future. Underlying is an amazing asset, simply with not enough growth on the front-end for someone who isn’t running a portfolio of media.

In Education, we believe that there is a lot of untapped audience that hasn’t be properly utilized alongside of brilliant intellectual property that is simply sitting on the shelf. With our background in memberships, certifications and accreditations we believe we’ll be able to help scale these businesses easily.

If you talk to 10 different people about the future of the economy you’re going to get 10 different answers.

In building a portfolio of companies, I wanted to build on an investment thesis that allowed for success if times were good and even more success if times weren’t as good.

If things are great in the foreseeable future, we will be able to have great businesses in our portfolio and, over time, increase our partnerships and acquisitions.

If things aren’t great in the near future, we will be able to acquire and partner at lower multiples while deep diving on our business model.

My belief is that SaaS will continue to grow (optimization) alongside Education (skills) and Media (trusted lead generation).

If you add this on top of an ecosystem that was designed from it’s inception to be able to acquire and partner at scale— you have a business that allows us to solve the Entrepreneurs problem..

“What the heck do I do with this business that I don’t want / can’t run anymore”.

While building a massive amount of value by building businesses that are optimized across all pillars.

This is what I’ve been spending my time and money doing. Building the infrastructure to support the ability to do this…

The majority of what I’m doing is a complete experiment.

Yes, I’ve scaled 100’s of businesses past 7+ figures.

Yes, I now had dozens of companies that I personally owned scale past 7 (many past 8-figures).

However, betting at the level I am on industries, niches, and the economy as a whole is purely my belief of where the world will go and my investment thesis will come down to a single thing— timing.

Everything I’m currently doing is purely to build the infrastructure and write the operating system to do this at scale.

While everyone is so concerned about the “right” deal. I’m not, because I’m looking to learn in real-time and quickly.

While everyone is concerned about the right marketing channels, I’m not, because I learn in real-time.

While everyone is afraid of the economy changing— I’m excited.

The beauty of a long-term view is that you can make choices that short term thinkers don’t see.

For me, my intention is by the end of 2024, we have an entire ecosystem that can smoothly partner with or acquire a business like clockwork and bring it into our ecosystem. Along with that we’ve proven we can do what I’ve spoken about above.

To acquire and partner with businesses with undervalued assets, bring them together, and build a successful, profit-driven, and exit-worthy companies, at scale.

Once this occurs, we will start The Wisdom Fund, allowing us to deploy larger quantities of capital.

The future is bright for those who look beyond just tomorrow.

Until next time…

- Scott

P.S. We’re currently raising capital for multiple businesses inside of The Wisdom Group, feel free to reach out at [email protected]