Update: RE Wisdom Group :)

It’s been over 4 months since an update here. If you don’t remember me, I’m Scott Oldford and have a portfolio of online businesses and use this (or used?) to give you a behind the scenes look at what I’m doing.

The last 6 months have been difficult. There’s really no way around that and that’s been a large part of not sending an email to you. On top of having my Beehiiv account hacked and used to send 100K+ spam emails :|…

What do I mean by difficult?

Well… I can safely say that in the past 18 months, I’ve learnt more than what I believe most people learn in business in 10 years. It’s been beyond a journey and perhaps what it feels like for a first-time entrepreneur.

While I’m on the other side of the most difficult side (hence being able to talk about it)… I believe there’s a lot of lessons both that I’ve gone through, while being on the other side that are valuable.

And so… it’s time to talk about it again.

Here’s a little timeline…

In 2019, I decided I was going to start being a partner in businesses at a low-end level of less than 20%.

This continued for a few years, while I focused on my personal brand business which generally made $3-7M/year.

At the end of 2022 I decided to go all in on a portfolio and my investment thesis by partnering with Entrepreneurs, acquiring businesses and raising money.

Almost none of it worked the way I wanted… but not for the reasons you’d perhaps expect.

While going into “all in” mode… I knew that most things wouldn’t work… I would mess up timelines, etc. I missed a crucial step of the puzzle.

The missing piece? Truly knowing “why” I was going “all in”…

Generally, when I mentor Entrepreneurs I try to understand the “why” and in most cases a why is defined by either…

A. You’re running away from something.

B. An emotional wound, past trauma or you are scared.

C. You are a high level of energy and hierarchy of needs.

The problem is that a lot of the time you don’t know which one of these is true.

In my case, it was #B and I didn’t realize it. That was a problem.

See… when I made the choice to do this at the velocity I did it happened shortly after having my Son. In hindsight, I should have caught this.

However, in being a new Dad, it put my world upside down. Instead of going internal on this and working through it. I decided that I wanted to spend 100% of my time with him as he got older and got the weird idea that building a $100M portfolio company and selling it would be my “exit”.

The problem with that?

I love what I do. I don’t need to spend 100% of my time with my family.

And… now I had a “timer”… instead of allowing for perfect timing. A lesson I’ve learnt deeply in my life.

If I push something… it doesn’t work. If I relax and have patience, it has its perfect timing.

This created a scenario where each day I was learning 20 new lessons…

That’s great. However, learning so much at that velocity is a lot.

In a regular business, you make a decision and then you wait for a feedback loop.

The problem with a portfolio with so many moving parts is that everything impacted everything else.

Meaning…

If I bought a company and we couldn’t get it integrated with another quickly… It would hurt the other company.

And that other company if partnered with another company, would hurt that other company.

Or if I have for example a million dollars to invest in growth and I invest it in an opportunity with a slow-to-return ratio, it could mean it’s very difficult to continue.

Essentially, I was playing an advanced game of Chess where it felt like I had 30+ chess boards.

A part of me loved that and while I discovered a lot. If I could go back in time, I’d do a lot of things differently…

I’ve already made those changes of what I would do differently and they’ve been implemented.

The process of making those changes have been very difficult…

I had to fire over 100 people…

I had to restructure investment deals….

I had to restructure acquisition deals…

I’ve had to sell businesses I didn’t really want to sell…

And go through the belly of the beast in regards to feeling inner disappointment, discouragement and straight up embarrassment.

Thankfully, it’s not my first time experiencing something not working the way I preferred.

And… because of that it’s been a process that would likely cripple most people and for me, simply realigned things with a little pain that will be a thing of the complete past by the end of the year.

As a reminder our investment thesis was largely based on Media, Education and SaaS.

That thesis I found is completely true. However, the way I went about it wasn’t ideal.

There were two sides of the company. The first being when we owned businesses outright (100% ownership) and the second being when we owned a minority ownership (20-40% ownership).

Both didn’t work ☹️ 

Here’s why…

When we fully owned a business I under-estimated how important it is for an Entrepreneur to be the one running a business until about $5 million a year (at a minimum).

Most of the businesses we acquired were under $3 million and this miscalculation made it impossible for the acquisitions to make sense.

Why?

Because an operator can get 20% return per year on a business. However, if I’m buying a business I’m not looking for a 20% return.

I can get a 20% return anywhere.

On the partnership side of things, I realized that we were taking too large of a percentage and while no one ever complained… eventually they would. Further, because the partnership side of the business wouldn’t be profitable until 2026…

And the growth of the acquired businesses was lower due to not being entrepreneur led…

Well… you can see where this is going.

Let’s also not forget another curveball, while I’m figuring all of this out…

I have multiple investors that committed that for personal health and family reasons had to pull out. I went from having enough capital to burn into 2026 to have less than 60 days of capital in the account for Wisdom.

That was my fault and certainly not those who didn’t invest. Money isn’t money, until it’s in your account and someone can’t do a chargeback.

However, due to my relationship with these people in the past, I assumed their word and didn’t calculate outside forces.

This created a perfect storm…

Where the businesses we acquired weren’t going to grow fast enough…

The partner business weren’t going to profit for a while…

And… to add more into the mix of things…

I realized that one of our core sides of the business… media needed a level of scale and velocity that I wouldn’t be able to achieve without a massive amount of capital.

In 2022-2023 we acquired 18 media assets such as blogs and newsletters.

As a business, we got it to work and from a growth perspective, we got it work. Further, they are lucrative opportunities.

The problem? Our infrastructure to run these media properties was only going to work if we had far more media properties or if they were much larger.

In both cases, I didn’t have enough capital or enough time to be able to make it happen and I essentially had to take a media company that was operationally working really well and…

Pull the plug.

Of course, that’s not the end of the world. As of writing, I’ve sold 7 of the 18 and 2 more are being bought by a public company by May (which shows how powerful media really is).

So… at this point we have a lot happening at once…

I’m running a lot of things that timing isn’t “working” for…

By themselves it all makes sense…

Media is a good bet…

SaaS is a great bet…

Education is a great bet…

Partnerships is a great bet…

Acquiring is a great bet…

All of them were great bets… I simply “stacked” them in the wrong way and in doing so, created a scenario where things didn’t work.

But wait… I’ve got another curveball 🙂 

Remember my personal brand business? Well… while building all of this, I let this decrease in revenue. 2023 was my lowest month of revenue in that business since 2016.

When you go all in… I believe in going all in.

If you add the decreased revenue on top of the fact that majority of my money in 2023 was going into a personal investment project (that I couldn’t stop or I’d lose millions of dollars) I couldn’t inject capital into the portfolio beyond the money I put in at the start in 2022.

The result? I have a brilliant model and I ran out of the steam.

Of course, as this was happening it wasn’t as clear as it is now in hindsight. A part of that is the fact that there were so many things that by themselves weren’t “bad”…

And many things that occurred would normally be no big deal.

However, if you take 1,000 things and add them together you’ve got a perfect storm of death by a thousand paper cuts.

Now… don’t worry… this isn’t the end of the world. This isn’t a bankruptcy post and by the end of 2024 it’ll be as if nothing happened…

See… in going into having a portfolio, I did a couple major things that were smart…

A. I always ensured the asset value of the business was far above invested money or debt.

B. I always ensured that I had outside assets that could be turned liquid if needed.

C. I always knew that I could “turn back on” my personal brand business at a moments notice, if needed.

D. I always knew that unlike past businesses of mine, if something isn’t going to work, I cut things early and often.

Unlike times when I didn’t have a net worth, assets, or a plan for if things didn’t go as preferred. I simply ended up being in a transition which obviously hasn’t been fun.

Having to restructure deals… delay things… all that occurs when you bet on the wrong timing. It isn’t fun.

However, it is part of business and part of the experience and it was a good reminder for me… considering I haven’t had a hard emotional experience in business for a very, very, very long time.

So, what am I doing going forward?

Well… it’s pretty simple:

#1. We’re in the process of selling all of our fully owned acquired businesses. Simply put, this was the biggest bet that didn’t work.

Acquiring a business and merging it our tucking it into an existing business with an entrepreneur works. However, you need a real entrepreneur in a business until a certain level to make it work.

#2. In the case where we didn’t want to sell the business, we are divesting our majority ownership.

#3. We eliminated a number of partnerships where we were an owner at the 20-40% owner where we don’t believe that our total value received will be above $2 million by 2027.

This allows us to focus on the “best of” and allowed me to change our strategy on partnerships. Without going into detail, partnerships are now about exit-worthy businesses only that have potential to exit for a minimum of $25 million dollars.

#4. I started going back into my personal brand business, however, with an internally different context and “why” than I had before. Which I’ll write about soon. It’s already been working and in the month of March I generated more revenue than I have in a single month in over 2 years.

#5. I restructured investment deals and obligations with every single person in my world. Those conversations weren’t fun, however, they were needed and I have zero doubt that both of us will look back it as history in a very short period of time.

#6. I restructured another part of our partnership business and combined it with my personal brand mentorship business which gives me small <5% ownership in businesses. Allowing me to have future upside, without the obligations of 20-30% stakes in businesses.

#7. I restructured deals with investors so that they get the option to choose if they want to covert to equity of what I do in a few years from now, or simply have their cash and interest returned. For me, this works, as it allows me to create my portfolio from a place of oppertunity and passion and for the investor it allows them to decide how things look in a few more years.

In going forward, further, I’m doubling down my efforts on a few of our top businesses where I’m putting my full effort, while allowing the model to work a little more simply like this:

A. I generate $3-5M/year profit in my personal brand.

B. I take that capital and invest it into businesses that are the top partnerships/owned businesses.

C. I sell at least 1 business per year in the portfolio of businesses with high level potential after 2026.

D. I have control over wealth and as this continues and builds I take the return from these bets and push it into more truly passive opportunities with a lower risk, but lower return.

E. I end up with a small percentage in a lot of companies and get to do what I do best. Mentoring Entrepreneurs and sharing my mistakes and journey with others so they don’t make the same mistakes.

F. I get best of both worlds. I get to invest. I get to mentor. I get to have a personal brand. I get to help others. I get liquidity while having long-term return.

I’ll write a book someday about all I’ve discovered and understood from the past 18 months…

However, I’m grateful for it.

I’m in a new season now. I apperciate every person that has helped me and those who showed me massive grace, ease and flow.

I truly had a reflection of understanding just how much people believe in me and it allowed me to understand both the true reason of why I’m on the planet— right now, along with what I want my life to actually look like.

That’s all for now… hope you enjoyed a behind the scenes…

I don’t know the frequency going forward, however, I love sharing my lessons when it comes to investing, partnerships and higher level business.

Missed you and this space.

Talk soon,

-Scott 🙂