Navigating Business Exits – Chris Kurwie

Chris Kurwie:
If you take a business that is run by someone that understands the process of an exit, that is clued up and knowledgeable about all of these things, versus a business that isn’t, and that’s a great example. Understanding the value of recurring revenue and the different multiples that you get for recurring and non recurring revenue, the difference between those two is so huge, it’s almost unfair. You know, you’re talking maybe three times or five times difference, maybe between a business that is operated and structured in a way. Obviously you got to run the business, but you also need to think about if I’m ever going to sell this, is it built and packaged in a way that is acquirable.

Dana Robinson:
Exit Plan is a podcast for business owners and those who want to be business owners. I’m always in search of the lesser known stories of entrepreneurship. In the exit Plan podcast, you’ll hear stories from startup to sale and hear from the professionals who helped business owners achieve their exit. Hosted by me, author and private equity manager Dana Robinson, along with my co hosts and guests, you’ll hear real stories, tips, and tools that will help you plan for the exit you want, whether you are still working at a day job or running a business. Let’s get started with this episode of the Exit Plan podcast. Hey, everybody, it’s Dana Robinson coming to you with the exit Plan podcast, formerly the opt out life. And I’ve got a special treat today. I’ve got a former opt out life listener as a guest who has a journey that weaves in and out of kind of the same principles and things that Nate and I used to talk about in the opt out life.

Dana Robinson:
And Chris Kirwit has listened, learned, but also, a lot of that journey isn’t due to us handing out free advice. It actually was a lot of the same principles that we find successful entrepreneurs live, live out in their own life. So, super excited to get your story and find out, you know, kind of how you got to do what you’re doing. And I guess the easiest thing to ask you to do is let’s just introduce yourself. Chris.

Chris Kurwie:
Yeah, thanks for having me, Dana. Yes, I’m Chris, and I’ve had, as you said, a story that we’ve done a few things, starting off in a law firm, working on some big m and a deals, which I started off loving and ended up hating, and then moving into a corporate advisory firm and then starting and owning my own business with a friend of mine, which we were lucky to sell last year.

Dana Robinson:
Nice. All right, so we’re going to get a full entrepreneur journey, but you got to take me back to finish. Take me back. You’re a Brit who went to law school and then bailed on law. That must have disappointed some family members and all that. What drew you to law school and where’d you go?

Chris Kurwie:
So, yeah, law school was felt like a kind of least bad option in hindsight, which is kind of a dumb way to set your path in life as a 17 or 18 year old. Yeah, there are a bunch of options, and I honestly don’t think that was a really strong reason. But I chose studying law and then going to law school, and then out of that, joined maybe the biggest, actually and very prestigious law firm in London, which was really fun and exciting at the beginning. Young, with all of your mates, and you start earning good money and everything. And I love the strategy of the deals. Why is this company buying this other one? They want to get into a new market, or they’re struggling in this way. That was really fun. But the reality of it, which I learned pretty quickly, was, as a young lawyer, you’re just doing due diligence and that kind of thing for hours and hours on end.

Chris Kurwie:
There’s definitely a tipping point. We were advising someone that was looking to buy a big pizza chain. And if you’re buying a pizza chain, the supply chain side of things is important. I was looking at these mozzarella supply contracts for, like, weeks, and it’s like, I get it, you know, if you buy a pizza chain and, you know, Monday morning, there’s no. No cheese turns up, you’ve got a problem. But, Jesus, that was. That was tough. And there are a few experiences like that.

Chris Kurwie:
And what I actually realized was, you know, I prided myself on, you know, I was top of my class in law school and was really focused on my career and stuff, but I started to see myself slipping back pretty rapidly versus my peers who, you know, they loved it. They would go to all the training that was available. They’d make sure they worked on the most interesting high profile deals and building their profile in the firm. I was just doing the opposite. I was. I was high, literally hiding sometimes from work. You know, the partners do a lap of the office looking for some on a Friday, looking for some junior folk to. To pitch in, and I would literally go and hide from them to avoid work.

Chris Kurwie:
And I thought, you know, when you have that thing where this is something that is really contrary to your identity and how you see yourself. And I thought, jesus, if I keep doing this for 20 years, like, where am I going to end up. So I learned a lot. You know, it was a great, a great way to do the first or two or three years of your career. But I knew that that wasn’t long term, what I wanted to, what I wanted to do.

Dana Robinson:
And so as you’re at the firm, you’re looking around, you’re realizing you’re not a company man that’s going to stick around. Are you thinking, are you questioning whether you want to be a lawyer at all and kind of have an existential crisis of that sort? Or just thinking maybe you jump ship on the big law and go small law? What was the kind of process of the outlaw?

Chris Kurwie:
Yeah, yeah. I thought through a lot of different things. I definitely didn’t have anyone at the firm that I really looked up to. The senior guys were, you know, they were doing well financially, but, you know, people who were doing stupid stuff, like, you know, cutting their honeymoon short because a client had called them about a deal and, you know, not. I wasn’t really thinking about kids in the family at that point, to be honest, but I knew that seeing your children very, you know, once, once a week when you, when you got home from work early was. Yeah, it was not something that I was sort of interested in, so it didn’t look like a long term path. And I. I felt like I was.

Chris Kurwie:
My personality wasn’t really suited to being a lawyer. I’m not. I’m quite a energetic person when it comes to being creative and coming up with ideas and I struggle to follow through with them and being diligent and that sort of thing comes less naturally. It’s like you probably couldn’t pick a worse profession when, you know, when you want attention to detail, diligence, all that stuff. So it’s just pretty obvious that it wasn’t a good match. I just feel really lucky that I managed to figure that out after a few years because I think it’s easy to only figure that out after, let’s say, ten years, and then you got a lot of sunk cost and feels difficult to move financially. The pay is much better after ten years than after two or three, obviously. So the lifestyle has crept up.

Chris Kurwie:
So, yeah. The thing I’m most grateful for is I figured it out early.

Dana Robinson:
Did you see people at the firm? Did you see people that were unhappy and kind of. Obviously, people cutting their honeymoon short is a good proxy for expectations at big firms.

Chris Kurwie:
Yeah, I think the default state was stressed and overworked, I should say. It was an amazing place to learn. They, they taught me a lot and I still. I still use, you know, deep down, kind of subconsciously still use a lot of the things that they taught me, but, yeah, not a. Not a long term fit for me.

Dana Robinson:
And what. What came next? How did you get out of the law practice? Because that a, you did it before the golden handcuffs, which is pretty important because, as you say, at ten years, it’s very difficult because you’ll have grown your lifestyle to the most that you can accommodate with your income. And making that breaking free is hard, but it’s still not easy. I mean, you know, there’s some entropy there. There’s some. How do you knock this thing off course?

Chris Kurwie:
Yeah, you mentioned my parents. I mean, my parents. Pretty easygoing about it, but it’s a difficult conversation with them. You know, it’s also difficult with your friends, you know, even those that aren’t lawyers. It’s like, oh, you know, I quit. You know, that’s kind of a, you know, that gets chalked up as a. As a failure. You know, you couldn’t hack it.

Chris Kurwie:
Or, you know, maybe they fired him. You know, maybe he sucked at law and he’s just saying that he quit. And that’s, you know, you’re taking an l pretty early on in your career, and you’re, you know, young guys, everyone’s competing with each other, and it kind of quite a macho environment sometimes. So, yeah, I’m proud of myself, actually, for. For being able to be brave enough and do that. And, yeah, then I moved on. So I thought, what did I enjoy about the job? Because it wasn’t all bad. And like I said, the start of the process of a deal I found really interesting, you know, why is this transaction happening? What’s going on in this industry? All that stuff.

Chris Kurwie:
So I found that you could actually do that as a job itself. So joined a consulting firm, and we did some strategy type consulting and some corporate advisories to helping people raise money and sell their businesses. And I loved it. That was. That was really, really fun.

Dana Robinson:
Yeah. So did you make a, like, big move? I’m trying to remember your story. You. This wasn’t just like, move down the street and join a.

Chris Kurwie:
No, I moved to Australia. Yeah. Yeah.

Dana Robinson:
Wow.

Chris Kurwie:
So I changed it all at once. Yeah. My wife was kind of itching to go leave London and travel the world a little bit and go overseas. Had some friends in. In Sydney, Australia, and I thought, well, I’m going to change one thing. You might as well change it all.

Dana Robinson:
Yeah. Their accent is so different.

Chris Kurwie:
Yeah, yeah, yeah. People get. Apparently, I’ve got a slight australian tinge to my accent, which as a Brit, as a Brit is actually quite offensive, but I’ll let the listeners judge whether that, whether that’s the case. Yeah, that was, that was really fun. Small, interesting work and small business. So I was, I was the King’s fly squatter. I was following the owner of the business around day to day as his right hand man, pitching for work, speaking to clients, delivering the work. And yeah, it was a real change, change of scenery, change of pace.

Chris Kurwie:
And yeah, I felt like that work was much more aligned with what I, my personality, like I said, what I, what I think I’m good at and what I enjoy.

Dana Robinson:
Yeah, talk about some experiences working. And did you, were you just intentional about like I’m going to learn everything this guy knows, or was it just that you loved what, what you were doing at the time and made it easy to absorb? Talk about that, that kind of, that pre entrepreneur, we know you became an entrepreneur after this. So you, you made this big step out of law, took what you could with you skills and, and knowledge, and then you’re doing this thing that’s got a guy. Are you learning from his clients? Are you learning from him? Like, what’s that ecosystem and how did you begin to extract.

Chris Kurwie:
Yeah, so it was easy to learn because I enjoyed it and I was passionate about it. And he’s a great coach and a great mentor. I think he wanted someone who he could grow within the firm and could take some of the responsibilities off him. And yeah, he made a bet on me. We’re quite similar, both british, we’ve moved to Australia, similar interests. So we got on personally, which helped, I think we enjoy spending time together. And yeah, he invested in mentoring me. And, you know, that’s a great, I think, thing for anyone in their career is finding a mentor, someone that cares about you and is prepared to invest their time and energy in helping you.

Chris Kurwie:
So I was really lucky there and then. Yeah, the work was great. We were working with really interesting clients, trying to help them solve tricky problems that they faced. I think that the consulting industry as a whole has a bit of a bad reputation. McKinsey type companies leeching millions of dollars out of companies for silly PowerPoint presentations. I get that. There’s definitely a lot of slides that never see the light of day and overly complicated spreadsheets. We did our fair share of that, to be honest.

Chris Kurwie:
I also genuinely felt like we were having an impact. And this bridge to my entrepreneurial journey was working with not the big corporates, which we did some of. But working with founders of companies and companies that were doing pretty well because they’re in a position to pay quite a lot of money to have fancy consultants come in and do stuff for them. And I saw these people and they were living a life that, to be honest, I didn’t really know existed. I don’t know many entrepreneurs, didn’t know many entrepreneurs growing up. I’m not from a family, my parents are accountants, that there’s not a history of entrepreneurship or business ownership in my family. And I kind of didn’t really know these people existed. They’re sort of walking around freedom, doing what they loved, very wealthy in most cases, either earning a tremendous amount of money through their businesses or having exited them or part of the company recently.

Chris Kurwie:
And, yeah, I was just intrigued and actually realized that if I wanted to get any of those things, I had to be a business owner myself.

Dana Robinson:
Right. So at some point, you wake up to the business you’re in, which you’re flourishing in, and go, the only guy who’s going to get what I want here is the guy that owns this business, and then you’ve got a shelf life after that. Right. You know, you’ve got to make a move.

Chris Kurwie:
Yeah. And I think, yeah, the value in the business accrues to the shareholders. Right. And the employees get a slice of that, but typically a pretty small slice of it. And that was the case in the consulting business, you know, fair enough. He was the owner. He’d set the company up, he built the thing, and I was just helping him along the way. And so my focus then at that point became, how do I become an owner and how do I have the.

Chris Kurwie:
How do I create a situation where I can be an owner of a business like that? I think a lot of people, I think becoming a founder has become cooler, you know, in the last ten or 20 years with the whole sort of, you know, VC, Silicon Valley thing. I think a lot of people think I want to be a founder, but they want to be a founder. For the kudos and the status that you get from that. I think maybe, maybe this is just hindsight talking, but I felt like I wanted to be a founder because of the long term benefits of, like I said, the freedom and the, and the financial upside if you’re successful. So, yeah, that was my transition.

Dana Robinson:
Yeah, the word founder is sexy. The word operator is really not. But to be honest, I’ve been founder, co founder of too many businesses that have gone not very well. I haven’t lost a lot, but I’ve had a lot of not great, not successful, not big exits. And the businesses where I’m not a founder, where I buy a business and I fix it up and grow it and sell it, I’m an operator, it’s boring. But that’s where you get the benefit, right. The cash flow from the business and then when you sell that business, it’s yours. The founder title does have this cachet that I think is probably overly magnetic to young entrepreneurs.

Dana Robinson:
So I’ll shoot it down right now. Buy a business, man. But I want to hear how you started yours because you went founder, but you didn’t go founder because of the accolades. You went because you wanted to own a business.

Chris Kurwie:
Yeah. And then obviously the challenge is, well, what business do I start? And I think you see a lot of businesses that have started, I think, because that people wanted to start a business rather than because there was a need in the world for that business. So, yeah, I was stuck for a little while and eventually got lucky. I was approached by my best friend, who’s a doctor in the UK, and he was. He’d found that problem and it was something that was frustrating him so much that he didn’t really want to start a business, but he felt like he had to solve this problem, which is always, I think, a great sign. So he didn’t care about, I mean, he wasn’t involved. You know, he’s a doctor. So Silicon Valley Tech was all not really that interesting to him.

Chris Kurwie:
It was the idea of solving this problem. And the problem was hospitals are really bad at recruiting staff and moving their staff around. And that means, as a doctor, the whole process of finding work is so inefficient. Frustrating means hospitals are understaffed when they shouldn’t be because there are actually people willing to work if only they knew about them. And it’s archaic and lots of phone calls and spreadsheets and sms is going around late at night. And so that, to him, was something that he was passionate about solving. And to me, I could see that was an industry where you could bring technology and some of these other stuff that I’d seen through my clients in the consulting business and put those two things together and maybe we’d have something that was viable.

Dana Robinson:
Cool. What did you end up doing? Did you build this software?

Chris Kurwie:
Yeah. Yeah. So that was. That was and still is the goal of the business software to help doctors find work and to get those doctors working in hospitals. We had a period of at least three years where we were just stumbling around trying to find the right mechanism to solve that problem. And we tried a bunch of things that didn’t work. We really struggled to sell software to the hospitals. It’s difficult to get money out of very risk averse, large bureaucratic organizations.

Chris Kurwie:
I had a bit of a blind spot because I, you know, I thought I was quite good at sale. You know, I was starting to sell work myself in the consulting business before I left and was, you know, was, I thought I was good at that, but I just hit a brick wall talking to these hospitals. You know, it’s, you know, it’s committees of people that take three months to get together because of diaries and then risk assessments on everything. And, you know, you’re just a young company. You just want to get going and. Yeah, and do a pilot. We’ll give it to you for free for three months. Let’s just get started.

Chris Kurwie:
Let’s just make it work. And those two, those two things were really in conflict with each other. So we had a really, we had a really difficult, really difficult three years. We were lucky to raise some money, which took us through that period. But it was, yeah, it was not easy. And I had to accept a period of very low social status for a long period of time, which I think is what founders find difficult if they don’t have a problem that they’re actually motivated to solve. The whole, oh, it’s super sexy, I’m going to be this tech founder, and then all your friends are sort of going up that corporate ladder and earning more money every year and you’re not, and you don’t have a lot of success to shout about, you know, how’s it going? Well, not great, but, you know, you kind of make up a story as to, oh, we just hired someone new and we’ve got this new office. All these things that actually have no correlation to whether you’re successful or not.

Chris Kurwie:
And, you know, people are going on trips to Ibiza for someone’s birthday and you say no because, you know, you’re struggling to pay the rent and, you know, you’ve come from a career that was quite successful. Like, that was really, you know, personally, that was really difficult. And it was, yeah, three years of. Yeah, like I said, stumbling around, well.

Dana Robinson:
In this humble phase is probably, would that be about ten years out of leaving the law firm? So all the people are hitting their 10th year and starting to get that, you know, that accelerated pay. They’re buying bmws and vacation homes. Right. And you’re, and you’re trying to figure out whether you should wait tables to cover the nut. It’s definitely not sexy, but that’s. That’s a great piece of. Great piece of your journey.

Chris Kurwie:
Yeah, I think, yeah, there’s definitely a temptation to give up. Like, we actually came close to running out of money a few times. We should have taken the decision out of our hands, but, yeah, this idea of finding a problem that you’re passionate about solving, I think, is really powerful. Like, my friend and co founder, I mean, he just would never have quit unless that option was taken away from him. And so we just carried on. And I don’t think carrying on forever is always the best advice. I think sometimes you have to accept that the world isn’t what the world doesn’t want, what you’re trying to give it. And that’s definitely true sometimes.

Chris Kurwie:
But, yeah, we just. We just persevered. And then after about three years, we made some changes and we found something that worked. And then we went into this second phase where, yeah, we. It was kind of exactly the opposite. Like, we. Yeah, we. The thing was just growing out of control, and we were.

Chris Kurwie:
Everything we did worked, rather than everything we did failed, which was an amazing 180.

Dana Robinson:
Hey, Dana Robinson here. Quick plug for my book, the king’s fly swatter. You can see it here behind me. If you’re watching this, I’ve got it in my hand. It’s a beautiful hardcover book, printed to make it giftable, something that you can share with a family member buy as a gift. So this latest book, it’s a fable about a person who has a really crappy job. Let’s just start there. This is a book that most people can relate to because we’ve all had crappy jobs.

Dana Robinson:
This is the story of Ubar, a servant in the court of a babylonian king who masters his boring, monotonous job and then learns to listen to the king, hearing him rule the kingdom while quietly swatting flies behind a king. Eventually, Ubar becomes the wisest and most successful man in the kingdom. The story is fun, and it’s easy to read, but it’s not mythology. It’s my story. And as I shared the idea with colleagues and friends, I learned that it was their story. And guess what? It’s your story if you’re at a job of any kind, one that you love, one that you hate, one that’s just enough to get by. This little book gives fresh perspective on how to leverage that job to get you something greater than a paycheck. The lessons in this parable are entrepreneurial lessons, but not what you might think from the current entrepreneurial zeitgeist.

Dana Robinson:
If you or someone you know are looking for a real pathway to entrepreneurship, here’s the secret. Your job is the way out of your job. It’s counterintuitive, but once you see how it works, you can’t unsee it. Learn the way of the fly swatter from the parable of Ubar and from the stories I share from my 30 year business journey. You can get a free copy of the king’s fly Swatter by going to danarobinson.com. yeah. Let me see if I can draw two things out of you, one of which is maybe you can talk a little bit about the business that didn’t work, because there’s always something useful for people who are entrepreneurs to say, like, oh, yeah, I heard a story from Chris on this podcast about what he was doing that didn’t work for three years, and then talk about what worked. And then I have a quick question.

Dana Robinson:
Did you know, like, did you do the burn the boats thing where you just said, like, we’re going to make a pivot, or did you just dabble, dip your toe and see, see what worked until something hit.

Chris Kurwie:
Yeah, I’ll answer the second one first. So we. We dipped our toe. We had a side project. We had a bunch, actually. We were always trying new things once we realized that the core project wasn’t working. I’ll come back and explain why. And then, yeah, we were just trying to experiment.

Chris Kurwie:
We realized we had so many months left, we’d cut the team right down to extend that. That Runway. And then we were trying different things. And then, you know, we found the one that worked. The first phase of the company, like I said, was selling software directly to the hospitals. And there’s a few things that we got wrong there. Firstly, there’s this, I think, quite famous article by Mark Andreessen, the VC, where he talks about the market always wins. And you can take a great idea, great founder, great product in a bad market, and that market will drag you down.

Chris Kurwie:
And we’re in a bad market. Not a lot of money. You’re trying to get. Trying to get government, you know, taxpayers money in a risk averse environment where they don’t like technology, and you’re at the heart of the people. You know, we were trying to get doctors into intensive care departments. Like, that’s a risky place, and you can’t screw around with startups in that space. And it was just, I don’t think there was anything we could have done that would have given us the rapid growth that we and our investors were looking for. And there are some companies in that space doing similar things that are still around now.

Chris Kurwie:
I think it’s fair to say they’re all struggling and they’re great people, great products. It’s just a crappy market. And so we had to get out of that market. And what we realized, what the pivot was, was we’re solving the right problem, but in the wrong way. And selling software to hospitals is too difficult. But there’s a whole world of recruitment agencies that are solving the same problem, helping hospitals get staffed up. And they are small businesses, often still run by the owner, and they will buy your product in 20 minutes. I couldn’t believe, I mean, I went from being the worst sales person in the world to the best overnight.

Chris Kurwie:
I couldn’t believe it. 20 minutes. They’re like, yeah, we’ll give it a, we’ll give it a, we’ll give it a try. Sounds good. Yeah, send me a login. And do I need to speak to your procurement team? Do I need, do you need to do some risk? No, no. Just don’t mind with all that, you know, this can help us make money. So let’s just start today.

Chris Kurwie:
And I felt it was this, it was this mixed emotion because obviously it was an amazing, amazing to learn that, but I felt so dumb for not realizing that two years before.

Dana Robinson:
Okay, I was going to ask, I was going to ask, like, you’re in this ecosystem and, I mean, I happen to have a good friend. At some point, I’ll get him on the podcast. Jack Er Doc for most of his life, in fact, did two stints in Australia in that business. The, there is what’s called locums here, where the emergency rooms are staffed ad hoc based basically on independent contractor style, just to spread that, you know, they might have residential ER docs that are permanent, but, but they bring in all these others and they bring them in through agencies. So I happen to know a little bit about it just from having a very close friend in that space. You were in this business duking it out, fighting for market share and a market that didn’t want you. And your, and your partner’s a doctor then, did he, at some point did he go, oh, the agencies, like, what was the, aha. Where you go, wait a minute, we’re talking to the wrong.

Chris Kurwie:
Yeah, come to the wrong crowd. Yeah. So the question then is, why did it take you so long to figure that out? Which is a fair question. And I think the reason is we made a lot of promises to investors and to the team that we were going to go down this particular path. So we were actually helping to disrupt the agencies you don’t need. We’d say to the hospital, don’t pay these expensive recruitment agencies, use our software, we’ll charge you a license fee and then you don’t have to because, you know, the agencies are expensive. They’ll charge, they’ll charge a percentage on top of the doctors, on top of the doctor’s pay. And that became sort of like the ethos of the business.

Chris Kurwie:
And then it becomes very scary to change that. You know, promises can really drag you down and lock you into a certain path. And I think if we’d have had no team, no investors and we had complete flexibility over what we were going to do, I think we’d have made that change much sooner. We always talked about it a little bit, but it felt like a scary thing to change. We’ve hired people whose job it is to go and speak to hospitals. Our whole culture was built around this idea of empowering the hospitals. And a lot of the investors invested in us on the thesis that we were going to disrupt the agency market. And it took a while to build up the courage to say, actually, that whole thesis was wrong.

Chris Kurwie:
And actually there’s this other opportunity that we think. And to be honest, as soon as we had the evidence, it was. I didn’t get a lot of pushback at all. People were like, well, yeah, this is plan a really wasn’t working. And plan B looks, the data shows that plan B might work, and then it’s, yeah, burn the boats. We cut the team right back. We changed our positioning and became, yeah, went all in on helping these agencies to find the best talent and to help them place that talent into their clients.

Dana Robinson:
Yeah, I mean, you’re not just talking about the sort of uphill battle against the things you’ve been telling your shareholders, but this sort of mantra of your business, your mission, was disrupt, disintermediate of sorts. The agency, it turned out they’re your customer all along, the ones who you thought you would, you know, peel away from the business and good on you. Like, that’s a. I ask, you know, why it took, why it took so long. I think almost every business I’ve been involved with, there’s some second year, third year kind of aha’s where you. There was this commercial in the eighties where you say, I could have had a v eight. Like, people are drinking a soda and then they see a v eight which sells itself as a healthy, soft drink. It’s a tomato juice, vegetable juice.

Dana Robinson:
And then they kind of hit their head and go, I could have had a v eight like this. Aha. So it’s dating myself. But the sort of cultural meme of, I could have had a v eight. Those moments are like, I feel like that we ought to be always interested in that question without the shiny toy problem. I mean, the. I have seen plenty of entrepreneurs that are like, this isn’t working too soon. And then they’re like, but what about this? Let’s do this.

Dana Robinson:
Let’s do this. And then they’re chasing the shiny objects that feel like they’re either more sexy or suddenly, you know, we were, nate and I were involved with an ad business and an online ad business, and crypto was hitting, you know, whatever, six or seven years ago. And we asked the CEO, we’re all, are we doing something with crypto? Like, where’s our crypto play? And he’s like, we don’t have a crypt. We’re an ad business. You know, we’re just shiny. You know, there’s the sort of instinct of entrepreneurs is like, are we doing something with that? This is business that’s really flourishing. Shouldn’t we do something smart like get into crypto? And, you know, to his credit, the CEO was like, no, thanks.

Chris Kurwie:
It’s, leave that to someone else.

Dana Robinson:
Let’s leave it to someone else. But to always be curious and be asking, you know, are we doing the right thing? Is this the right customer? Is this, you know, is this the right.

Chris Kurwie:
It’s a difficult balance because you want to be, on one hand, impatient and asking those difficult questions and trying to find. Yeah. Being relentless and finding something better, but also patient at the same time because things take a while to compound, and you’re not going to be successful overnight. So, yeah, it’s such a difficult piece of advice to give. You should be both patient and impatient. Makes no sense, but I think you got to find, find the right balance. And back to that Marc Andreessen article. He says in there, ask the question, how do I know that I’m in a good market? And the answer is, it’ll be obvious.

Chris Kurwie:
Customers are just desperate for your product. They’re signing up on your website. People, you know, that you haven’t done any sales work to get them. People are telling other people about your product, and it’s all just happening. And I mean, that in the first phase of our life, that would have sounded ridiculous to even think about that, but actually became the case in the second phase. And I think if you’re, if the market is so important and you’re doing everything, you know, you’ve tried to optimize everything about the business, and it’s still so, so hard to get a customer, you might want to think, am I in the right market at all, or is there another group of buyers or another use case for this problem where I might be closer to that, that state that I want to be in?

Dana Robinson:
Yeah. Yeah. I’ve made this observation a couple of times. Just, I’ve had the benefit of being the lawyer for businesses that have tried to create a market. And certainly if you’re a Silicon Valley unicorn company that’s got $100 million valuation, you have plenty of money. You get to try to create a market. You get the privilege to try to create it. Anyone that’s got some family money, your personal money, your friends and family, a small, you know, angel group backing you, you don’t have the luxury of creating a market.

Dana Robinson:
Right? You really have to find a market. And if you test a market like you did and it doesn’t respond, you know, you poke that, you poke that thing and it’s dead. You got, you just got to leave it. Right?

Chris Kurwie:
Yeah.

Dana Robinson:
Could you have, could you have succeeded in the ultimate business that did succeed if you hadn’t kind of had the thrashing about for that first couple of years? Did you improve the product? Did you learn about the business? Did you become better so that when it hit, do you think you and your team were in a better place? Or was it just really you had to keep kind of moving knobs and dials until you hit the market?

Chris Kurwie:
Yeah, we, we changed a lot as people, my co founder and I, in that three year period, like, we’d become, we were kind of battle hardened in a good way that, you know, we were pretty resilient. We tried so many things that we built our skill sets and learned a lot of. Yeah, made a lot of mistakes along the way that definitely. And we almost felt like second time founders, even, even though it was still our first business. And probably one of the things that stands out most is the power of simplicity. So I think one of my blind spots coming from consulting was you do these fancy PowerPoints with strategies that have got five limbs to them and phase one to phase ten. It’s easy to sketch that out on a piece of paper and hand it over to someone and then go on to the next client. And I hadn’t appreciated that for every extra unit of complexity in the strategy you had like ten units of complexity when it comes to actually operating the business and doing the work.

Chris Kurwie:
And so we had a really complicated strategy that looked great on paper and helped us raise money and play to my strengths from my previous life. But as a first time operator, trying to run that business kind of like this octopus with all these different legs doing all different things at the same time, was just. Was just crazy. And so I’d overweighted the value of a fancy strategy and underestimated operational complexity and challenge. And so we learned that ourselves. And then the second phase of the business focused. Keep things simple. Only add something new if you absolutely must.

Chris Kurwie:
So the product didn’t change for the first six months. We just kept it simple. And there were all these cool things we could have added that the agencies were asking us for. And we said, no, we’re going to keep it simple. And, yeah, like I said, I felt like a second time founder who’d made a bunch of mistakes first time round and then was able to apply those to the second time. And the business that we built. Yes. Streamlined efficiently.

Chris Kurwie:
You know, we’re very proud of our operational side of the business. Like, we’re. We went from writing nothing down to having a handbook for everything just because it was chaos the first time. And I just didn’t want to build a business that was, you know, that was chaotic as it was growing. So, yeah, to answer your question, there’s no way we would have ended up where we. Where we got to if we hadn’t have been through the journey, as they say.

Dana Robinson:
Yeah, it sounds you had the benefit of, we’ll call it internal failure, which is the best. The best learning comes from. Right. It’s the. We don’t learn much from successes, we learn from the failures. And you got the benefit of one that was baked into your business cycle so that you didn’t have to suffer. I guess you paid your dues, but you didn’t suffer the way we do when we shutter shutter business and then lick our wounds and go back, go back at it. So talk about what came next.

Dana Robinson:
What, did you hit a point where you’re like, let’s sell this thing on a high note and. Or did you get approached by someone? What came next?

Chris Kurwie:
Yeah, so we managed to put three really great years back to back, which through Covid as well. I mean, we were lucky with COVID We were in healthcare, so we weren’t. I mean, it was probably a net positive. It was disruptive to business, but obviously the hospitals were. Were a bit busier than ever. And needing staff more than ever and were getting extra funding and stuff. So we were lucky with that and managed to put three good years together. And it felt like wed hit this inflection point where wed become profitable and were growing quickly and could also see a bunch of new opportunities and felt like maybe that was the right time to get an exit.

Chris Kurwie:
There’s definitely a little bit of fatigue as well that we’ve been. This was year six or seven at that point. And, yeah, I had a family in that time, two young kids. And, yeah, you know, I think in the life of a company, there are these inflection points when you become attractive to a buyer. And I felt like we were in one. And if we were going to say no, it could easily be another three or four years until you sort of get to another inflection point. Maybe, you know, you’re in order of magnitude bigger or you’re live in, have a second or third product, or you’re live in three or four countries, and then you’re kind of different. Beast and so, yeah, it felt right.

Chris Kurwie:
We were lucky that there was probably one obvious buyer for our business, a big multinational, very acquisitive, had, you know, you know, people talk about synergies in these deals, like, in these deals, and often you have to kind of scratch your head quite hard to kind of make them up. This was the opposite. Like, it was obvious what they could do with our business within their wider group. And so, yeah, they were, they were an obvious person to talk to. One of the things I’d observed from my past career is that most often the person that a company gets sold to, there’s been a relationship for a little while. Obviously, sometimes you hire a firm and they run an auction and you meet some folks and you do the deal. But that’s, I think, at least in my experience, the minority. And most of the time it’s a company that you’ve either had some sort of partnership with or you’ve at least had professional relationship with for a while.

Chris Kurwie:
And they obviously, they know the people and they trust the people. They know the business. It’s much easier for them to get their head around doing a deal. So we actually had the foresight to start talking to them a few years prior. And, you know, I used to send forward on my investor updates if we’d had a good quarter and that sort of thing. And, you know, met the guy for coffee a couple of times and they were keeping an eye on us, I’d say, and gave us a soft indication of that. You need to hit these sorts of milestones in terms of profitability and stuff before we’d think about it. But, yeah, that turned out to be really valuable because when the time came, they felt comfortable with us as founders and they knew a lot about the business already.

Chris Kurwie:
Think that made the deal much easier.

Dana Robinson:
That’s great. Let’s talk about the transaction. When you and I were talking before, you were saying that you felt like there’s not a lot of useful information other than paying brokers. The investment banking community exists to extract fees to navigate you through that process. Lawyers, obviously will help you when it comes to the terms, but they’re not really there to tell you. How do you fix your, how do you recast your financials? How do you negotiate for ad backs? How do you, you know, how do you be sure you’re getting the deal you want? You say you didn’t use a broker. What were some of the things that you figured out? How did you figure them out and survive that transaction?

Chris Kurwie:
Yeah, I did that. I did that myself. I felt like I had some, some experience in that and could do it myself. It was quite shocking at the start of the process. So first of all, how rare, actually, how rare acquisitions are or exits for founders are. Obviously, you see a lot of them in the news, but that’s a tiny percentage of the companies that get started. In some cases, some of our investors who are experienced, sophisticated investors, hadn’t had many exits or hadn’t had an exit for a long time. Yeah, it’s, I mean, that’s actually useful information if you’re starting a business because it’s definitely oversold this idea that, you know, you raise some money, you wait three years, and you sell the business, and that’s kind of what everybody does.

Chris Kurwie:
And I think actually you should start a business to think, I’m actually going to operate this business forever and maybe I’ll sell it, but most likely I won’t.

Dana Robinson:
So, yeah, I struggle exercise. Right. The, the, don’t start a business with an expectation that you’re going to create some value and sell that. The value you create actually happens when you say, this is my business, my problem, indefinitely, and then you’re forced to create value or you’ll die. Right? You’ll starve and, yeah, and you’ll think.

Chris Kurwie:
Long term as well, because you think, if I’m going to be running this forever, you know, how’s this business going to look in five years? Rather than a sort of pump and dump type strategy where you’re just thinking short term and thinking that you think you can press a button and sell a company. And actually it’s a bit, what’s the phrase? It’s like getting lightning in the bottle. Like, it’s. So many things have got to come together at the same time. You got to have a, you got to have a buyer that is in the mindset to buy a business at that moment, which is not always the case, and interested in your business in particular, and also willing to pay a price that you’re, that you think is fair. So there’s a lot that’s got to happen. So that was a bit shocking to me, and I really felt like I was on my own. Like, I struggled to find too many other founders that had recently sold their businesses that I could talk to and also really struggled, like you said, to find good information and resources to support me through that process.

Chris Kurwie:
Like, how do I work out how much this company is worth and what’s a reasonable price? How do I maximize the price that I get? How do I have one potential bidder? Do I need more? How do I get more people interested? Okay. Get the heads of terms or the letter of intent. When you’re partway through the process, what’s it supposed to say? Is this normal? Should I. We had a discussion in our deal about the amount of money that would get paid upfront and the amount that get paid in an earn out down the track based on the performance of the company. Is that normal? Am I likely to get this money or not? Am I going to get screwed over? All this stuff is all new to you, right? Because you’ve never done it before. And you’re kind of in this position that I found really difficult where you’re expected to know all this stuff, but you don’t. And I had a background in m and A, and I still found this really, really difficult. So for my co founder, I mean, I think he found the whole thing just at the beginning, just completely mesmerizing.

Chris Kurwie:
All these words that you’ve never heard of. Yeah, you expect to know all these things. You’re responsible for running the business as well. Like, obviously that doesn’t stop. And yeah, you’ve got a lot of expectation on your shoulders. You’ve got, obviously, the shareholders get, as soon as you might tell them that there’s a deal possible, they get super excited. So you’re responsible to them and your team. Even if you haven’t told your team you want to do the right thing for them because, you know, all of our team were minority owners as well.

Chris Kurwie:
By that point. And then your family, you know that this is what they’ve been waiting for. And, you know, my wife sacrificed a lot to help us get to where we got to. And so, yeah, it was really, it’s a really difficult and look, obviously worth it in the end. I’m not complaining, but, yeah, just a really challenging period to try and get, get up to speed with all that and manage everything and try and get the thing over the line.

Dana Robinson:
Yeah, I love that. I’m trying to bring intermediaries on the podcast. I’ve had one John over them. If anyone’s listening, that’s a broker who became a broker because he sold the business and saw that it’s a challenge. It’s tough to figure out. And the, my partners in the private equity fund and I have actually been talking about trying to create some mastermind or something, some gathering of people that just constantly talks about what do you need to do to sell your business?

Chris Kurwie:
Because you need to think about it.

Dana Robinson:
Three years in advance, right. You need to think, what if I want, if I don’t want to sell, I should still figure out what do I need to do to sell my business? What is gap and what are add backs and what are these balance sheet items and how does depreciation play into this? Like so many things that matter to I, we buy landscape companies and we’re constantly being presented with landscape companies that do one off construction, and we value that at zero. So we just say we, we don’t want to run a business that’s competitively bidding every day and not knowing how it’s going to pay its bills. We do recurring maintenance. And if you knew that as a landscape company owner three years in advance, then you’d spend the next three years slowly getting rid of your one off construction and building your commercial recurring maintenance department so that you’re prepared for the market of buyers who, who don’t want the business that you keep maybe throwing yourself into.

Chris Kurwie:
So I think there’s so much at stake because if you take a business that is run by someone that understands the process of an exit, that is clued up and knowledgeable about all of these things, versus a business that isn’t, and that’s a great example, understanding the value of recurring revenue and the different multiples that you get for recurring and non recurring revenue, the difference between those two is so huge, it’s almost unfair. You know, you’re talking maybe three times or five times difference, maybe between a business that is, has been operated and structured in a way, obviously you got to run the business. But you also need to think about if I am ever going to sell this, is it built and packaged in a way that is acquirable, let’s say, and in the process itself you’re running. I always say to people, what’s the one thing that makes the biggest difference? It’s just having more than one buyer. Because if you’ve got a competitive process where people, two eager bidders are bidding against each other, you will get at least a little bit more, if not significantly more than if you just have one buyer. And, you know, I don’t think that information is well known. So my sort of post startup project, which I’m starting at the moment, is to try and empower and guide business owners who are thinking about selling to get, and not in a broker way, but in a content community, maybe mastermind type way to help them get the best price and the best terms when they’re selling their company. We’re calling that Bismarck b I zma.

Chris Kurwie:
So it’s bismarckq.com. i literally started it in the last couple of weeks.

Dana Robinson:
Cool.

Chris Kurwie:
There’s not much there, but it’s hopefully growing pretty quickly. And I’d love to sit here in a few years and think, well, I’ve actually helped a bunch of folk who have built something really valuable and actually helped them extract the most value from what they’ve built with that sort of information.

Dana Robinson:
I love it. I think there’s a big need. It’s been on my mind, as I said, to try and create something. I mean, for me, I don’t need another job. So it’s whenever I have these ideas about, like we should. Like Nate and I did a thing. We did one event before COVID called Beach Camp, and we just brought entrepreneurs together at a beach hotel and charged just enough to be sure we could feed everybody. And it was fun because you just had people collaborating.

Dana Robinson:
We had panels talking about different things that were themes for most of the entrepreneurs. But I think there’s a need for cheerleaders. I guess brokers should be doing this, but I think they just want to be sure they lock down their fee before they share their secrets. Do you think, Chris? I mean, exactly.

Chris Kurwie:
I was just going to say that we spoke to a bunch of brokers and there are lots of impressive folk and they’ve done a lot of this stuff before. And I think if someone’s helped 100 entrepreneurs sell their businesses, you definitely want to get some of that advice. But yeah, it’s, you know, you have a quick chat and get to know them a little bit, and then you got to pay a pretty fair chunk of the business of the exit proceeds in fees. And, look, I think there’s a lot of value that these guys bring. And I think for many businesses, you should be using some. Some form of advisor, especially if you’re dealing with a very sophisticated buyer who’s going to have all the tools and you don’t want us to turn up. Turn up to that negotiation. Underpowered.

Chris Kurwie:
But what about before that? Yeah, there’s no. You go on the website and they just have, like, lists of deals that they’ve done.

Dana Robinson:
Yeah, yeah, yeah, yeah.

Chris Kurwie:
We just helped this guy, and it’s. Okay. Well, that’s great, but can somebody help me with the, you know, understanding some of this more basic stuff so that I. When I’m having these early conversations, probably before you would need an advisor, I feel. Well, you know, I feel well prepared and knowledgeable and smart in those. In those conversations. And then. Yeah, through the process as well.

Chris Kurwie:
You know, you get one advisor has one point of view, it might be different or strategy in the negotiation, I think some sort of mastermind where you can speak to a group of people that have been through the process of selling themselves, who can give you their views and sort of ask the. Ask the crowd a little bit. I think that would be really helpful as well. So, yeah, I’m not sure exactly what form it will take, but there’s definitely something there, and I’m really passionate about it. You know, it’s. Yeah. Even if it becomes just a hobby project that doesn’t go, that doesn’t build into anything material, I’d still be happy doing that.

Dana Robinson:
No, I’m eager to see how it goes. I’m definitely a fan of the idea. I’ll do what I can to tell people about it, for sure. Bismahq.com I opened the web. Just getting off the ground. Very simple, but awesome. A little bit of content for the website. I think maybe this is where the market will speak.

Dana Robinson:
Right. You’re doing something that I’ve had ideas around and that a bunch of people I know have had ideas around, and I want it to work. But you’re basically saying, we’re going to provide you the tools to become knowledgeable year two or three before you transact. And if you don’t do this, then you’re going to be under the gun with a broker who’s taking 6% of your deal, and they’re just. And you’re. They can’t help you at that point. Right. All they’re doing is helping you kind of engineer the deal, whereas you need to catch people a year or two before they transact, at least in order for them to become cognizant.

Chris Kurwie:
I’ll give you a real world example from our deal. So, having done m and a on the legal side, on the advisory side before, due diligence is a big thing. And what tends to happen, as you know, is you fix a price and then that price gets chipped away with any. You give the buyer any excuse, they’ll take 100 grand off of this or half a million off of that, and you end up with half of what you thought you were going to get, which is even if the end amount is actually great, psychologically, it’s still half of what you thought you were going to get. So it’s a horrible process, and due diligence is just a great way to trip yourself up. And this wasn’t two years before, but this was at the start of the process. I was like, right, we are going to get super organized so that when they say, hey, can we have a look at some data? We’re going to click our fingers. When we in the data room that’s got 20 folders, each with 20 subfolders with document seven, 9.12, all named in the right way, and they’re going to go, shit, these guys are so organized and disciplined and diligent.

Chris Kurwie:
There’s nothing in here that we can find fault with. And, you know, customer contracts, let’s say they’re going to want to see those. They were a mess. Some were in my email, some were in someone else’s email, some we hadn’t even signed because, you know, we’d sent the customer the PDF and they never sent it back. And we just got started anyway. And yeah, it’s a small thing, but it’s a signal of how you run your business. So we got all that in place and organized and, you know, and a hundred other things. And, yeah, if you haven’t been through the process before, you don’t know about that and it’s a mess.

Chris Kurwie:
And then the buyer goes, gosh, if this is a mess, other stuff must might be a mess, too. It’s not really feeling this anymore. Maybe we should pay a little bit less. Maybe we should back away entirely, maybe. Or at least pay a little bit less to sort of COVID ourselves. And, yeah, that’s how, like I said, you end up with a massive, you know, millions of dollars of difference between doing it, doing it perfectly, and making a bunch of mistakes and helping people close that gap is what I’m passionate about.

Dana Robinson:
I love it. And, you know, the entrepreneurs think it’s all going to shake out in the end and they’re messy and disorganized and, you know, the lawyer told them, create a due diligence folder. It looks like this here’s, you know, here’s like I’ve been in the position of advising clients. Buyers are type a, organized, detail oriented people. The lawyers they have are the people you mentioned at the beginning of this podcast. Right. Type a, excelling at being organized, excelling at sort of the, being able to dominate the diligence and find every detail and find what’s wrong. So, understanding that they’re not in the same cultural category or even personality as you are means that entrepreneurs have to get their head around that and begin to make that part of their job.

Dana Robinson:
Well, before that point, the other thing.

Chris Kurwie:
I noticed as well, which I think is also a problem to solve, is you get these advisors, the lawyers, and maybe a broker and their client is the company. Oh, sorry, it’s not the company, it’s the sellers, the shareholders as a group. And that might sound like a small distinction, but they’re not your personal advisors. Now obviously, if you’re the only shareholder, that doesn’t matter. But for us, we had a bunch of investors. My co founder and I own about half the company and they’re advising that group as a whole. And there are times, and it can be quite critical where your personal interests are different to the interests of the shareholders as a whole. And who’s advising you? And you can go and get your own lawyers, but it’s expensive and it’s more fees and I think that’s actually quite rare.

Chris Kurwie:
And so who’s helping you? You’ve been negotiating certain terms in the contracts. And how does this affect me personally? Think about an earn out, for example, where it might just be the operators of the business that partake in that. You know, I struggle to get, you know, specific advice for me on that because I personally am not the client of the advisor. And your lawyers can be quite picky about that, who’s your client? So. So, yeah, helping the founder, the owner, personally I think is important as well.

Dana Robinson:
Yeah, I love it. What a great story of bringing yourself from young pre law through a legal career, through a post legal career pivot to be being an entrepreneur that learned the business during running the business. I love it. Thank you so much for sharing it. And I love where you landed right now. I think that as a, you know, the new business for you is taking what you’ve learned and being able to share that with other people. I appreciate you sharing it for free on the exit plan. It definitely fits what we’re trying to do if people want to connect with you.

Dana Robinson:
Chris K u r wie I’m not sure there’s too many other Chris Kurwie on LinkedIn, but I’m assuming you can.

Chris Kurwie:
Find me on LinkedIn. Yeah, I’m not. I’m not a big socials guy, so you won’t find me on doing too much on Twitter or whatever, but yeah, you can find me on find me on LinkedIn.

Dana Robinson:
Awesome. And of course, mention your website one more time because you’re taking people onto a list so you can keep them updated with what you’re doing there. Bizmahq.com, right?

Chris Kurwie:
Yeah, either of those will work.

Dana Robinson:
Where are you living right now? Are you back in the UK now? Is this.

Chris Kurwie:
No, in Sydney. So I’m still working for the business. So I’m on an ear now, period. We’re launching our, like I said, one of the reasons that I think we’re an interesting company to buy is that we could take this product into new markets. So, which I’m really excited about. So we’re in Australia. I’m back in Australia launching the business out here. And, yeah, that’s been great.

Chris Kurwie:
Give me a new lease of life. It’s like a new startup in a way, because we’re starting from scratch. No clients, no revenue, and trying to get that done. And then, yeah, if that works, we might take that into a bunch of new markets, too, which will be fun.

Dana Robinson:
Cool. So you get a little bit of time here where you get to play with the business and someone else’s money and see if you can take it to the next level and at the same time, kind of have an eye toward the next iteration of life, helping people figure out. Love it. Chris, thanks for coming on the Exit Plan podcast. Appreciate it.

Chris Kurwie:
Thanks, Dana.

Dana Robinson:
Thanks for joining me on this episode of the Exit Plan podcast. I’d love to hear from you. Feel free to hit me up with questions or comments by emailing me at hello@danarobinson.com. or leave comments and questions by calling 858-252-7785 call 858-252-7785 and leave a message.