I got the opportunity to sit down with the maestro of business exits, Mac Lackey.
He’s a legend in the business world, successfully exiting six 7-8-fig businesses in his 25-year career (so far).
With such an impressive track record, I was all ears for…
- How entrepreneurs should gear up for a successful exit
- The biggest misconceptions surrounding mergers and acquisitions
- And how to get the highest premiums
Mac divulges his exit strategies, providing an impromptu masterclass on how to do it right.
So, if you’re like me, and planning a successful exit is on your goal list – this one’s a must-listen.
Transcript:
Mel:
Hey, everyone, welcome back to innovative minds. And I have a innovative mind here with me, Mack lackey, who is actually uniquely qualified and has exited six companies for eight figures, he just told me, and he’s going to be sharing with us how he did that. As I was just talking to him backstage, he said that he’s made a lot of errors, and left a lot of money on the table as well with those exits, that he would love to help share that knowledge. So you listening on and if you’re planning to exit can learn from that exactly the mistake is made and not have to make it something interesting about Mac that I found out that he’s also the owner of a Spanish Soccer Club. So that’s super interesting. So I’d love to hear more about that Mac. And he is actually the founder as well of exit DNA. And Mac, why don’t you tell us a little bit about your soccer and your company, and welcome to innovative minds.
Mac:
Well, thank you. Thanks, you so much for having me. It’s such a pleasure to be here. And yeah, I as you said at the beginning, I’ve been very fortunate to have six exits over a 2526 year period. But I’ve also made so many mistakes that I often feel like a lot of the value of these days is just sharing some of the mistakes I’ve made. So hopefully people can avoid those. But yeah, I’ve had a very fortunate and interesting journey along the way.
Mel:
So tell us about your journey. A little bit. Tell us the journey. Also, when you decide to even buy the soccer, you know, team is that after a big exit, I’m guessing but to go back to go back to the you know, start what’s, where does it start with the journey start in terms of what’s the first company that you start? And does it exit?
Mac:
Yeah, so my journey actually does really, I think about my life and kind of two pretty big buckets. The first part of my life, from early childhood was about soccer. It was kind of my passion life I started playing when I was about four years old, and was very fortunate to play, you know, through college, was a collegiate all American, played professionally briefly. Soccer took me to some other countries. So it was a really big passion of mine and all my goals and dreams were soccer related. But because of my age, you know, I came out of college, before Major League Soccer existed in the United States. And it was really still unrealistic for most Americans to go play abroad. And so my career kind of ended. But it was still such a passion of mine. And then I started my first business in the first quarter of 1995. I started an internet company shortly after Netscape launched the commercial web browser. So you hear a lot of people talk about the importance of timing, very much the case for me, I started my first company, at the beginning of a massive wave of internet innovation. That business was really a typical garage startup, I started it in a one bedroom apartment, I had a business partner, before I got married. It was you know, eating peanut butter and jellies pretty much every night because we didn’t have any money, but we were doing something we believed in. And fast forward about three years that little business had grown to a pretty significant player in our market, we were working with Fortune 100, fortune 500 companies developing their first internet strategies. And we started getting offers from groups that wanted to buy our company. So I actually sold my first business in 1998, and an eight figure exit in my 20s. So in a lot of ways, it was truly a life changing experience. I went from kind of eating peanut butter and jellies to having a pretty significant windfall, certainly for someone that was early in their life and early in their career. So that was really a moment where not only did I check off some some financial things, but most importantly, I was able to look back and say, Gosh, over three years, because we worked really hard and I surrounded myself with some brilliant people that were a lot smarter than me. We created a lot of value and someone was willing to pay us a lot of money for that value. And so I kind of fell in love with this idea of building companies. So that’s kind of where it started for me. And then again, happy to talk about any of the companies in detail what part of my journey was really able to kind of weave my love of soccer into my passion around business. So several My company’s had a soccer related theme. And then ultimately, yeah, later in life, I decided that I was going to buy a team because it was kind of a personal passion. So it’s kind of a theme throughout my journey.
Mel:
Got it, I want to go back to, you know, like, we always hear these journeys or exit it after, you know, three years. And, you know, it sounds so amazing. But sometimes we are as entrepreneurs grinding for a much longer time. And you know, I can say to you like, it does just sound like it just kind of fell into your lap. At the right time. It sounds you got lucky because you’re not eating peanut butter. And, Jim, you’re working hard. It sounds like you had the work ethic, but some of us are grinding for much longer. And that exit still doesn’t come. Was there any other? Was it just you know, it was other special techniques that you said work ethic? Right time? Right place, right. Industry? Was it the right business partner as well, that, you know, was there was everything just kind of fell into place? Because a lot of people don’t, in the first time they ever do something? It’s a very high chance that your first company, you’re going to fail? But you know.
Mac:
Yeah, absolutely. And what’s interesting about I completely agree with your, your comments, and I think in a lot of ways, you know, any entrepreneur that tries to tell you how smart they are brilliant they were. The reality is, I’ve been very fortunate, you know, good timing. One of the smartest things I ever did early in my career, and I have done consistently ever since is surrounding myself with people a lot smarter than me, whether that’s an engineer do
Mel:
that? How do you surround yourself with more people that are more brilliant than you’re like? Why would they hang out with you? I mean, a lot of people say this, you know, surround yourself with people. But how do you really go about truly doing that.
Mac:
So I think for me, you know, I don’t have that many things that I would say are gifts. But there are a few things that I have done reasonably well. And one of them is I’ve had a relatively consistent ability to see opportunities, and get people excited about where things are going. And so for me, I was not an engineer, I saw the internet as a really, really emerging technology set. And I thought, You know what, this is going to change everything. And I was able to convince some engineers and graphics designers and people that again, were brilliant, that their careers would be dramatically enhanced by pursuing something that was really game changing versus sitting in a cubicle doing something that would be paid reasonably well, but next year would look a lot like this year plus 10%. And my theory has always been around risk, and this applies to getting smart people to join you is that if you’re working in a traditional setting, as a engineer, or banker or designer, or whatever your skill set is, and you decide to leave to do something like a startup, I believe, to my core, that even if it doesn’t work, you’re gonna be able to go right back into corporate America, or corporate, wherever you are in the world, with a much better skill set, because everyone else has just been kind of plodding along in their cubicle, and all of a sudden, you come back, and you’ve learned about raising capital, and engineering and finance and growth. And that experience is like an accelerator to your career. And so I was always able to paint this picture of it may feel risky, but it really is almost no risk. Because if it works, you’re going to have a much brighter future, you’re going to learn new things. If it doesn’t work, or our startup fails, you’re going to take a new skill set back, and you’re going to be better and further along than your peers. And so I don’t know, I think for me, that’s always been really important is trying to show people the future. And if they agree with me, then you know, they’re more likely to sort of join me on some adventure.
Mel:
Absolutely. What about the equity or profit share? Like how do you entice them to join you?
Mac:
I’m a big believer in everybody’s an owner, you know, I think in order to have the ownership mentality of people that are going to put in the extra work that are going to be thinking about how to make a business better, they have to be truly vested in its success. And that generally means equity stock options upside. It’s also particularly important, or at least has been in my case that, you know, I couldn’t compete with I’m in a banking town and the United States and you know, some of the banks pay incredibly well and I couldn’t offer the salaries. So what I could offer was that unique learning experience the learning curve, which is a lot faster exposure to a lot of things, and equity, you know, upside and so just about every one of my companies After a short period of time, whether you were my co founder or an engineer, or someone working in the customer service department, you got some sort of ownership or equity in what we’re doing.
Mel:
Got it? And how would you go about dividing? And deciding what kind of equity portion you give away to him?
Mac:
Yeah, it’s, it’s very situational sits situational. It’s, it’s eight o’clock for me. So my brain is, you know, I think, at the idea stage, or the founding table stage, of course, equity, you think it’s incredibly valued, but you can also say, you know, it’s not really worth a whole lot in the real world. So it’s a lot easier to say, co founders or early employees are gonna get significant equity, whereas people joining later are gonna get less
Mel:
significant in your opinion.
Mac:
Well, I think, you know, anything over, you know, 10% of a early stage business that has potential should be, or have the potential to be life changing for people. And you know, you could further say, Okay, what is life changing, you know, for someone who’s making, you know, six figures or hopes to make six figures, and they have 10% equity in a startup, you know, they should be able to make years and years of a salary or have an upside that is seven figures when that business is sold. That type of potential, is what most people should be thinking is that it’s going to be multiple of what I could make in a year doing what I’m doing today. Doesn’t always play out that way. But that’s the way I tend to think about it.
Mel:
Yeah, absolutely. Absolutely. So when you started that first business, did you have an exit mentality in mind?
Mac:
No, so one of the things that changed almost immediately after that first business is, you know, in a lot of ways, your your earlier question was kind of my own point, which is that business? You know, we got a lot of things right, I do think we created some great products, we were really early, we had some great innovations, we worked incredibly hard, it’s easy to say, Yeah, we sold it in three years and, you know, made 10 million plus, but there were, you know, I remember many days sitting with my co founder, one of us literally in tears saying, Could you make it another week without getting paid, we need to hire somebody else. And I can’t, you know, we can’t get paid if we’re going to hire someone. And you know, it’s not easy by any means. So it’s easy to look back with Rose coloured rose coloured glasses and say, Oh, it was great, built up and sold it. But we also realised that in that case, not only did a lot of things line up, well, we realised that going forward, and this has happened again, and again, that was the only time in my career that someone really proactively came knocking on our door. Every other experience I’ve ever had, whether it was a company I started or company I invested in, I had to be proactive in finding prospective buyers trying to create demand for my company is trying to get people interested in buying them. So my philosophy actually changed after that first first exit. Because that was the only one and I now know, with lots of data and statistics that is really rare. You know, a lot of entrepreneurs believe if you build something great, someone’s gonna come knocking on your door and offer you life changing money, it’s almost never happens. And so most of my experience has been, you have to be very proactive, you have to be very intentional about creating exit opportunities. I believe that companies are sold, they’re not bought, you have to as an entrepreneur, you have to make that happen. So my first experience was a little bit of an outlier based on everything else I went through in my career.
Mel:
So then how do entrepreneurs prepare to have an exit? And so for example, do you have that mindset at the start of a business or should you just be focused on creating value? And then you start to think, Okay, I’ve got reoccur, I’ve got interests I’ve got reoccurring is that the time you switch and go? Okay, I’ve got to now really think about, you know, who would be the buyer? Am I actually able to sell it? For example, with me, I was just like, okay, just doing this consulting thing with LinkedIn for a moment. Okay, just producing thought leadership for a moment. But then all of a sudden, you get to this point, and you’re like, I’m scaling at this point, and I’m on this bus and I don’t know how we’re going to stop I’m just on this ride. It’s going so fast, and then the business hasn’t been operationalized. And you’re like, even if someone bought this, they wouldn’t know what the hell secrets are, what the hell is going on, like, Who Would Buy This crazy bizarre thing that I’ve created. And then you have to step back and operationalize and go, okay, if I’m actually going to exit this thing, there’s got to be processes in place, because no human would be able to walk in here and actually know what’s going on, except for yourself. So walk me through, like, how do you think that you know, an entrepreneur should be looking at? And I guess service and product is also different? As to, you know, how you prepare for that. So what’s your you know, at what point I guess the first question is, do you prepare? And how do you prepare?
Mac:
So it’s a really key question. And actually, one of the things we’ll I’ll share at the end is I wrote an ebook. So I took everything I’ve learned over this journey, and created what I think are kind of four critical shifts people have to make. And they’re very doable, very actionable things. And so we’ll talk about that, because I’ve got an e book that I will certainly make available to any of your listeners for free. But one of the things that, that I determined really early, is that the most powerful position for an entrepreneur is to have the option to exit, I really believe that’s what you want, you want the option or the ability to sell your business and have someone want to pay you a lot of money for it. Because the option gives you choice, you can say, You know what? Great, it’s a life changing offer, you can have my business. But if you have the option, it means you’ve created something that people value that they think they could take over to your point the systems and processes to someone, they could say, gosh, you know, we could buy your business Mac and move you out of the way and it’s still going to be successful. So I believe that you have to be intentional to create an option, it doesn’t just show up on your door. And a lot of it comes down to thinking about kind of the, with the end in mind. So I don’t I didn’t start any of my companies to flip them. You know, people used to accuse me, oh, you just build and flip. And I said, No, that’s not the case. I build businesses that I loved, that I believed in. And because they were valuable, someone was interested in buying them. And I said, you know, everything’s for sale. And so we were fortunate that someone bought our companies, but I also could have decided instead of selling it, I could raise capital and double down on growth, I could keep it myself and just be profitable and run it because as long as I have that option, I have the best of all scenarios. And so, you know, one of the first things that I always sort of talked about with entrepreneurs is you have to start looking at your business through the lens of a prospective buyer. And it’s a it’s like a muscle, you can exercise very easily just by startup saying, if someone looked at my business today, what would they see? What would they value? What concerns would they have? And just to your point, a lot of businesses, they would say it’s a great company. But you know what, Max in the middle of every decision Mac’s in the critical path. If Mac’s not there. The meetings don’t go the same way there isn’t anybody else to follow up, there is no SOP, there’s no documentation. And so just by asking really simple questions very early in a business’s life, it tends to give you a lot more clarity about how a third party would look at your business. And I believe and I’ve seen it happen again, and again, it just helps you build a better company. So looking at your business through the lens of a prospective buyer, is one of the best things you can do at an early stage to create value over time.
Mel:
Yeah, yeah. Let’s, that’s the best sort of what about with a prospective buyer, as you’re looking through it? What do you think are really the key things that is really valuable to most prospective buyers? Is it the reoccurring revenue that they’re wanting, so they know that they’re gonna, you know, if they put in x, they will have ROI within three to five years? I’ll be out, like, what do you think are you know, the main key things most prospective buyers look for?
Mac:
This is the biggest misconception in all of the world of mergers and acquisitions and exits is that people buy because all you all you hear about is EBIT on multiples and revenue multiples and so whatever your company is doing, people are gonna say, Gosh, I would love to pay you five times EBIT da or two times revenue. And I absolutely know for a fact that what people buy and what people want to pay a premium for or is strategic value to them? Not where your business is not what your revenue or your EBITA is. But what would your products and services and brands and people and customers mean to this prospective buyer? So strategic value, which is a very broad definition is is what people buy, and why they pay a premium. And it’s it’s confusing to a lot of people, because we’ve all heard, you know, what’s your EBIT? Ah, what’s your last 12 months revenue? The reality is, no one really buys that, that just makes prospective buyers comfortable that you have a decent business, it’s like the first check mark, do you have some revenue? Great, are you profitable? What is your EBIT? Ah, great. But what they really want to know is, do you have proprietary products that I can take to my customers? Do you have intellectual property brands or trademarks or trade secrets? Or patents, that if I own those, I could do something 10 times bigger? Do you have a set of customers that I really want? Or are you in a geographic market that I’m trying to expand into, and you’re the best way for me to get into that market? So strategic value is what people buy, and what people pray, pay a premium for, not financials. And so it’s a big misconception. But when you start changing your framework around that, then as an entrepreneur, you can start saying, Okay, well, what have I created that’s valuable? And more importantly, who in the world would value that? Who wants it? Or needs it? That’s who is a great buyer of my company?
Mel:
Yeah, yeah, you’ve just put something into my head. Because when I initially was thinking about exits, the first thing I started talking to other agency owners, they were like, they had so many different beliefs about exits. Some people were like, This is not worth exiting, because I’m only getting like 2.5 times, you know, my Rev. And why would I do that I can just do that in 2.5 years, on this thing, so and then I had other people that really believed, you know, that exit was totally, you know, great in the agency world, and it was. And so people have these different views. I was like, really confused, but just talking to you now, as you’re thinking, PR companies right now who, you know, have traditionally always published in the paper and in the media, and in the Forbes, they want to get into social media, but they aren’t, they’re really sucky at, you know, how do you own a LinkedIn, you know, algorithm? Or how do you kind of get, you know, transform, and I can see the need that they have, because I have these clients going, can you guys help my PR company because they’re not performing? So yeah, just hearing you talk, they would have such strategic reasons that they might actually pay a way more premium than you know, someone else, that’s an agency that might look at you or someone that wants freedom from, you know, their corporate job in that buys you out. So you’ve got to think it sounds like a lot more deeper as to who’s struggling with something that you could really solve for them and make their business way more bigger and holistic, because I’ve already got the client base that is just going to introduce your system and operationalize that and be able to grow massively. So that’s, that’s what you just kind of made me feel and think, like,
Mac:
yeah, and one of the things that is really interesting is the biggest premiums are typically paid. When a company is trying to enter a new market, you gave a good example, if you have a very traditional PR marketing firm, that’s kind of old school, old media, for example, TD TV and print and things like that. And they’re trying to enter the digital space, or they’re trying to enter social media or something new. That is where they’re going to enter a new market. And they have to pay a premium to establish a market. And so when you find someone’s trying to break into the market that you’re already in, and you’re already dominant in, that’s when you see really interesting things happen. And again, that’s it’s kind of counterintuitive, because most people, when they think about selling their company, they really look for a larger version of themselves. If you’re a agency and you’re doing a million in revenue, you look for a $10 million agency, which would be the perfect buyer. And in some cases, that’s true. But generally, they know your industry, they know the margins, they know the challenges and so they’re just doing basic math, whereas someone in traditional media saying you change our whole business, every one of our customers needs what you have, you need your skills, we need your processes, every one of those things stacks value to a buyer in a different industry. So that’s a that’s a huge opportunities. Find someone that’s trying to break into your market.
Mel:
Yeah, amazing. So with your company Mac, exit DNA, what, like Fast Forward made To when you come and build this, you know, when you go, Okay, I’m going to now build a company that helps people I believe, exit, and I’ve done. So tell me when that happens, maybe tell me the story before, of what you know has happened and lead up to when you go aha.
Mac:
So yeah, it was really a lot of my working life. I was hyper focused, I had two things in the world that kind of mattered to me. Whatever business I was running at the time, and my family, I kind of optimised around my family and time with my family. And so everything else in the world was kind of I was head in the sand wouldn’t pay any attention. I didn’t read the newspaper, I didn’t watch the news. I didn’t go to events, I didn’t speak, I didn’t do anything and just heads down building the company. It’s been in town with my family. And so I actually, over the course of like I said, 2526 years, built and sold six companies. But it really wasn’t until my sixth exit, which was in 2018. That was the first time in my working life, that I sold a company and I stopped and I said, You know what, I’m going to take a breather. And I’m gonna look back over my career, because I want the second part of my life to be based on lessons I learned, hopefully, things that I did well, I want to do more of in the future mistakes I made, I certainly want to avoid in the future. And about that time, I got asked to speak at an event. And I told these organisers I wasn’t, you know, I didn’t really go to events, I wasn’t a good speaker. And they said, Well, you’ve had a unique exit journey, you’ve sold your six company, we’ve got a big group of entrepreneurs, we’d like you to come, just share stories about your exits. So long story short, I went to this event, I’d been thinking a lot about my my journey, to share the stories. And as I was walking off the stage, about eight entrepreneurs, Kenny came jogging up to me, and they were like, Mack, I need your help. And in hindsight, now, it makes perfect sense. Everything I said on the stage was so different than they ever had heard from their investment bankers and attorneys, and CPAs. Because I said things like, I’ve sold six companies, but I never sold for a financial multiple. I never talked about EBIT, I never talked about revenue. I sold companies for seven figures and eight figures, I sold companies that haven’t even made money yet for eight figures. And they were like, how do I do that? Because I think I have a valuable company. And so I realised at that moment that my set of experiences over the years was relatively unique driving to exit six times different industries, I sold to public companies and private companies and all kinds of different experiences. I thought, You know what, the second part of my life, I would really like to help entrepreneurs, because I know how fortunate I am to have defied the odds, because the odds are only about one out of five entrepreneurs who are trying to exit ever sell their company. So 20% of all the entrepreneurs that are even trying to actively sell a business truly get to an exit. And a very small percentage of those can truly say after the exit that they maximise value. And again, I know from my early exits, I left a lot of money on the table just because I didn’t know what I was doing. I didn’t understand the process or how to find the right buyers or how to articulate value that I had created. So I said, You know what, that’s something I can help people with. So I started exit DNA as a way for me to really provide entrepreneurs confidence and clarity on how to create that exit option. So I started that back in 2019, kind of informally, and it’s evolved into a programme now I work with, you know, entrepreneurs, 5060 entrepreneurs around the world at any given time, that are all on this kind of exit journey that want the option to sell their companies. And so yeah, that’s kind of how I got started. And it’s been, it’s been super rewarding.
Mel:
Awesome. So how do how do we work with you like as entrepreneurs? Is it a programme like, is it videos that are sent through weekly or is that like we come online and talk to you or do you actually help? Actually the selling of the business? Like how does Yeah, how does it work?
Mac:
Yeah, so actually been a there’s a couple of kind of ways I work with people. The first is I truly, genuinely tried to help people. So I like I said, I wrote this, this free ebook, which is super actionable. I hope everybody chooses to download that because it just gives you a lot of stuff you can do starting today. X DNA itself really comes in two formats. There is a kind of a self paced course where all the content that I’ve created is online and you can kind of go through it at your own pace and just kind of self educate access frameworks exercises. cetera. But my real focus is I have a group called Exit DNA helix, which is kind of a private group where I work directly with entrepreneurs in kind of a small group format, over zoom, had one session this morning, actually, I generally do about two or three live sessions a month. And over the course of a couple months, we just take people through all of these frameworks that they can go implement, and execute in their businesses. And so I work in kind of small groups, I don’t actually sell companies, I’m not a licenced broker dealer. What I help entrepreneurs do is get ready, you know, make sure that they know how to maximise value, how to think about finding the right buyers, and then they have the option to choose, do they want to go hire an investment banker, I can often introduce them to, you know, plenty of options. But I really found that most entrepreneurs are successful, because they have a core skill set. And they have a passion and a work ethic, right. So they’re an engineer or designer or a marketer. But of course, they’ve never sold a company. And so when it comes time to do you think you could sell your company in six months for maximum value, if an entrepreneur is being honest with themselves, they’re gonna say, I don’t know how to do that. And so really, what exit DNA does is help people in that context is really make sure that they feel confident and clear on the steps they need to take things they need to do. And I think it was Einstein had that quote about compounding interest is the eighth wonder of the world. And he was talking about stocks, I look at exit preparation the same way, there’s just some little things that I can that I teach people every day that they can do with 15 minutes a week, 30 minutes a week. And if you do those things over the course of two to three years, that just compounds into enormous value that you’re going to get in an exit, versus your competitors who are going to show up and one day, say, I want to sell my company, and I’m gonna go find a buyer. But if you’ve been making the small changes, and being strategic about it over the course of two or three years, you end up getting a lot more value. So that’s kind of where I’m focused.
Mel:
Yeah, what like, what are some of like, you know, che, like one of those things that you know, people can implement right now from listening on.
Mac:
So one really simple thing that I recommend that everyone does. So if you, let’s say you were one of those incredibly rare individuals that just got this offer out of the blue, if someone called you and said, I would love to buy your business, I’d like to start due diligence, and look into your business and see what you know, we pay you for this. Almost everybody that receives that rare call, realises that they don’t have their books in order, their financials haven’t been updated. They have employment contracts for some employees, and not for others, and everything is kind of all over the place. And the reality is, when it’s time to sell your business, you have to provide a very structured what they call a deal room that shows HR finance, operations, technology, it’s all got to be ready. For most people, that’s either a scramble that they never get done, or it is an absolute Herculean effort, before you ever put your company on the market. So one of the first things we do with with people in exit DNA, is they actually use a due diligence request list from one of the largest law firms in the world. That is exactly how large buyers look at companies and they say we want to buy your company, here’s the due diligence request list, here’s how we want you to provide all this information. And we have our clients organise their Dropbox or Google Drive or whatever they use Box. Exactly along the frameworks of the due diligence request list
Mel:
services, first product companies and exiting each one of those, you know, and the, like, is there like, you know, diff? Is it more difficult exit a service? Or is that just what people say? Or, you know, what, what’s better? Or it doesn’t really matter? What’s your thoughts on that?
Mac:
I, you know, I think the reality is, I’ve, I’ve had both types of companies myself, I work with, you know, individuals with service companies, product companies, companies that are a combination of the two, I do think there is something, you know, fundamentally more challenging to scale a service company because just by the very nature of delivery, you know, there’s people and there’s kind of a process that’s, that’s a little more challenging. So service companies by themselves, generally are harder to scale. And therefore, buyers know the same thing and so buyers look at them with a little bit more of a tight lens to say, Okay, well, what am I really buying And is there a long term contract with customers? Is there a long term contract with employees, because if it’s a service that leaves the doors at night, because people leave, and customers can leave, then those tend to be more difficult to sell. What I end up doing, is when I’m working with someone that has a service company, because again, they can be great companies, I’ve had some some, you know, nice service companies, and they certainly can be great exits. But you have to put a little more effort into what have you created, that is durable, you know, what are your unique and proprietary processes? You know, what are how does your business operate? In the absence of key employees? You know, can you productize, some things that are, you know, part of your service delivery model, maybe you have a branded product offering. And so, oftentimes, it’s you have to build a little bit more around service companies to make them look, lower risk to potential acquirer. So if I had to, you know, pick, yeah, it’s a little easier to sell a product oriented company, but service companies just need a little, little different work a little different positioning to have the same type of exit.
Mel:
Yeah, I see a lot of, you know, service based companies bringing in products, you know, whether they do, you know, do it yourself online kind of thing, or a book or, you know, a product that’s innovative, that enables people to do what they do in a part of it. So, I think it must be, that’s why because it’s just more scalable, isn’t it, like when you’ve got a product that can be, you don’t need more people, and people, when you’ve got too many people, that’s what you need in service, you just need to keep adding people, and people and people, that’s when it becomes more problematic, because you’ve got more people to handle. And you’ve got more people to make sure that they understand all your processes. So I feel like that people adding can and then the cost of that, as well. And I think there’s
Mac:
something really important that we spent a fair amount of time on, which is just how an entrepreneur articulates what they’ve built. And so I have this one session, I called Building your irresistible exit story. But the whole idea is, if you have a almost like a commodity level service, you’re doing something that someone can easily say, well, a lot of people do that. And there’s an agency on every corner, or there’s a marketing consultant on every corner or whatever. As you start to learn to articulate, you know, yes, we’re more marketing consultants, but we have a proprietary process we take our clients through, we have a trademarked framework, we have a unique and proprietary distribution model, we’re we’re the only marketing company on Earth, that can deliver to this particular client base, you know, the way you sort of talk about what you’ve created, oftentimes is really important. Now, of course, that has to withstand due diligence, you can’t just say all those words, you have to actually have a proprietary process and trademark things. Yes, you can put a lot of really important wrappers around service that people will say, Okay, well, that’s, that’s different, and it’s protected. It can’t be knocked off, because you’ve filed trademarks, and you file patents. And so I do think there’s a lot of things that you can do to sort of enhance a very even commodity oriented service offering.
Mel:
Cool, and what’s not like, we heard your first story about your exit in a company, can we hear another one? You know, and how that went down? And what, you know, the gruelling parts of it, the good parts of it, and how you kind of, you know, so exited by?
Mac:
Yeah, I think one of the later exits was, I think, kind of an interesting one in that. We had a technology company back in the mid. This was about 20. started the company in 2012. And that particular company, it was sports focused, you know, I mentioned I had this kind of love of soccer that was always woven into what I was doing. So we had this sports technology company mostly focused on soccer. And we were building what I thought were incredibly innovative products. And, however, very quickly, our competitors started raising enormous amounts of money. You know, we had one competitor that raise $50 million in venture capital. And then I had another competitor, that partner with a massive multibillion dollar media company that so suddenly they had unlimited money behind them. So our little startup went from kind of innovative to why would someone work with us when they could work with these much better funded organisations and so we really had a critical decision. tend to make do we try to fight head to head with these much larger or much better funded competitors? Do we raise capital? Do we sell the business. And it really tested some of the things that we’ve talked about today, which is, you know, we had to find buyers that really, really, or investors that really valued what we’d created. Because we were a startup, we had a, you know, a couple products, we raised a few million dollars, we hadn’t really even started generating much revenue yet. And I realised very quickly that one of the things that we had done is we had signed these exclusive agreements with a couple of partners, that we were going to build some technology for them. And as a result of us doing that, we were going to be the only product that they would take to market. And so when we started brainstorming about what we had created, I had a long list of things that I thought were great products and brands and all that. But I thought, you know, these, these agreements that we’ve signed, seem to be really appealing to some of our competitors. And so, incredibly long story short, when we started talking to prospective buyers, one of the organisations that we ultimately we sold the company to NBC Sports, we found out that they really needed a distribution partner to reach all of the soccer clubs or 9000 soccer clubs in the United States. And they were cold calling trying to get them to use their software. And I had an agreement with one of the largest providers to those soccer clubs that had about 6000 of them they were already working with. So what was really interesting is we sold the company for millions of dollars, the day after the deal closed, they effectively turned off our technology, they wanted that sheet of paper, that was the exclusive distribution agreement I had signed. So it was a really good reminder for me that you’re creating products and services and revenue and EBIT da and you have people, it could be something as simple as a really smart, go to market distribution agreement you signed to be the exclusive provider, or it may be some, you know, single agreement where you are the only organisation in Australia that can buy from this particular supplier. So that level of you really looking at your business, and trying to find people in the market that value something you have played out big time because we were talking to multiple buyers and every single prospective buyer, we were talking about something different. For some of them, we were talking about our technology. For some of them, we were talking about our agreements, and some of them we were talking about even our brand, because we had a you know, a cool brand. And some of these were older companies. And so it was really a validation of you really have to find buyers who need something that you have. And that’s where you can get a premium. Because again, they literally turned off what I thought was some of the best software in the industry, because they didn’t even care about it. They wanted the agreements. So I thought that was really kind of interesting. Accent just because it proved one of those key points.
Mel:
Yeah, awesome. And well, most of your companies, the 60 Did all in technology. Is that where you’ve always, you know, played, or did you have so traditional my
Mac:
companies, I would say we’re technology kind of enabled. And to some degree, you know, it was always kind of a theme. I did have I had an apparel company that was in the outdoor industry. You know, I’ve had a couple of had a media company. But most of my company’s technology was a key part of what we built or how we took our products and services to market. So that was kind of a theme that I continued with.
Mel:
Cool, cool. I’m curious to know, on a personal level, when you started building the personal brand, when did you see you know, the importance of your personal brand? Is that something when you started exit DNA? Or was it before that you thought or you just didn’t think about like you didn’t need to back then when did the journey I think for me, I mean, a little bit
Mac:
of a product of, I guess my age, but I you know I was so focused on building companies and I was always promoting my company or my product and what we’re doing and I really never had much of a social media presence and I definitely didn’t speak at events and I didn’t think of myself as a thought leader per se I just was you know kind of heads down building my companies. And then about the time started exit DNA. Someone said to me and it was it was really valuable. They just said you know, Mac, you can help a lot of people you seem to want to help a lot of people you Have some unique things. People need to know who you are. So they can help they most people don’t know who you are, they don’t know you’ve sold six companies, they don’t know you can help them. So you have to get your name out there. So that was kind of a lightbulb moment for me. I don’t I still don’t think I’m very good at it. I don’t think I’ve done near enough. But I’ve tried to at least let people know. You know, I can help them. I’m here to help. So. So that’s kind of the moment where I said, Yeah, I need to I need to let the world know, I’m at least trying to help.
Mel:
Yeah, that’s awesome. And what is now your social media strategy from, you know, from podcast into? Do you think that you need? Like, are you focused on the one platform? Are you thinking like you want to be, you know, focus on a couple of platforms? Or how are you thinking about your personal brand and where you want to fish? You know, I
Mac:
think for me, I am not a I’m not a very good self promoter. I think it’s just the way I was raised, you know, can always hear my dad have a great relationship, my parents, I can always hear my dad, you know, my ear be like, don’t talk about yourself kind of thing, you know, and, and so I think, yeah, I really liked the format of, I love podcast, I love being on stage, where I really feel like I’m just trying to help people. And so that that tends to be, you know, answering questions or being on, you know, formats where I’m just trying to be helpful versus, you know, standing up and speaking or recording into a mic. So I like formats better. And I’m not very prolific about doing anything on social media. But I try to share if I have, you know, a foul, or if I’ve recorded a video for a client or something, sometimes I’ll put those out on LinkedIn, because I think that audience is very business oriented. And it seems to resonate. But I’m still learning. I still need I need to get better.
Mel:
Yeah, no, of course, are you putting out your podcast then on your LinkedIn to people in your network? Seeing it? Or is it just is that part of your strategy, too?
Mac:
Yeah, just just now, I mean, just really recently started being a guest on podcast. And, and, and as those you know, come out, I will definitely be sharing it with my network and, and trying to share themes that seem to resonate with people. So that’s kind of part of my go forward strategy is hopefully some of these sessions where I talked to, you know, great people like you, and you ask smart questions, Mike. Okay, that’s a great question. Hopefully, I answered it. Well, we share it with my audience. So that’s kind of the point.
Mel:
Yeah, no, absolutely. I think that, you know, I went and looked at your LinkedIn profile, and I went to look at your videos as the, how you come across, in order to before I’m going to have a guest over. So it’s very much what we all do in industry is, you know, we go and look at how they come across how they speak. Do they provide value in the in their social media? So you know, I think, you know, providing snips is, and will provide you back some snips on this as well, for you to back to share. But yeah, that’s, it’s so funny how people are like, literally, we go back and suss out LinkedIn to make those decisions. And I’ve said it before, like, you know, whether someone comes on or not comes on really depends on how they are positioned, right there on their social media. So it was good that I actually did see a video and I saw everything there. I’ve had such an, I’ve learned so much from this, that, you know, is challenged so much of the way that other people have told me about exits. And, and it really made sense what you said, and I really believe you know, that’s why it resonates with so many people because what you talked about wasn’t just exit and multiple. And that’s it, like you’ve got to think so much more strategically. And I you’ve really, you know, caught my attention to think different and I’m so glad you’ve got a programme as well, where we can actually go further into and change our mindset to not just think single, singularly you know, just have much more bigger and that’s what I think you’re doing which is really making us think like it could be so much different to the way that it’s currently presented to us entrepreneurs. And so I’ve really appreciated that
Mac:
Thank you Well, as I mentioned earlier, you know, I have a book it’s exit dna.com Ford slash book, it’s a free book, I used to charge for it and sold 1000s of them and I thought you know what, I’m just gonna give it away. I think it’s really important valuable content. So hopefully people will go there it’s got kind of the changes you need to make some of the frames or works you can use and then of course if I can you know be helpful beyond that I’m always available and love to help people but hopefully that’s something actionable your your listeners can can take right away.
Mel:
Awesome. We’ll include that in the description was include Max LinkedIn in our description so you can go over and connect with him and ask him questions and check out his programme. Thanks so much. I’m so glad we’re connected and I’ve got you in my network. You are awesome. So I’m really looking forward to staying connected so
Mac:
much for having me.
Mel:
It’s a pleasure. You’re listening to innovative minds.