How Adam Spiegel Built and Sold Ownloop

Today, Website Closers’ Gwen Sylvester joins host Izach Porter to chat with Adam Spiegel, who built and sold Ownloop, because he needed a way to make money when his career took a turn for the worse because of the pandemic.

Previous How I Built and Sold This Episodes

How a Dog Training Guru Built and Sold Her Business

Breakthrough in Hair Care, Overcoming Tragedy, and a Successful Exit, with Beth Di Maio

From Kickstarter to Successful Exit, with California Beach Company’s Austin Wright and David Shoham

Laser Precision: How Strikeman CEO Scott Hutchison Built and Sold his Company

Netpicks’ 7-figure exit in the day trading industry

An ecommerce exit in the $150B+ supplements market

Cryptocurrency and Ecommerce: Brothers Bryan and Colin Aulds’ Successful Exit

How this 22-year-old built his eCommerce brand and exited for 7 figures

A high performance exit with GWA Auto Parts’ Gregg Alper

How RARI Exited the Supplement Space by Rising Above with Real Ingredients

Adam’s new company, EcomRelated.com.

This episode of Deal Closers is hosted by Izach Porter, brought to you by WebsiteClosers.com, and is produced by Earfluence.

Transcript

Adam Spiegel – 00:00:05:

 

I was expecting COVID to end and I was going to go back to my cyber career. So there was no long-term strategy. I was taking it week by week and month by month. And it just got to the point where I was like, “you know, this is my life now. And let’s turn this into something real”.

 

Izach Porter – 00:00:33:

 

All right, you’re listening to The Deal Closers Podcast brought to you by WebsiteClosers.com, a show about how to build your e-commerce business to be profitable, scalable, and one day even sellable. I’m Izach Porter, and on the show today, Website Closers’ Gwen Sylvester joins me to talk with Adam Spiegel about exiting Ownloop, a company he founded because he needed a way to make money when his career took a turn for the worse because of the pandemic. You know, these types of episodes where we talk to founders about how they built and sold their companies are some of my favorites. And one thing that really sticks out to me is how they don’t necessarily have any amazing skills in e-commerce and they don’t go to school to learn about business or digital marketing. They simply practice fit foe. They figure it the blank out. They start from scratch, they go to YouTube University, and they learn. And they keep learning until they get it right. That’s what happened with Adam Spiegel, who’s also one of these people who had the entrepreneurial itch from a very young age.

 

Adam – 00:01:36:

 

My mother was a pharmaceutical rep, and at the time she used to get a ton of promotional materials, pens, post-its, letter openers, and me and one of my close friends used to set up a wagon in our community and try to sell them to cars passing by.

 

Izach – 00:01:53:

 

Adam went to the University of Michigan for college and got his career started in cybersecurity. But when the pandemic hit, budgets for what some companies felt were non-essential things started tightening up significantly.

 

Adam – 00:02:05:

 

People were scared for their jobs. Budgets were getting cut left and right. And I was left without anything to do. So I literally just started Googling ways to make money online. Came across drop shipping. This was summer 2020, so in the heat of the pandemic. And I just started teaching myself, you know, watching YouTube videos, reading books. I took a course on copywriting. And really just immerse myself into the e-comm world and try to teach myself everything I possibly could. And just tried to figure things out.

 

Izach – 00:02:49:

 

It’s so interesting to me because we’ve had a lot of these episodes where we talked to founders who have successfully exited their companies. And one of the common themes that I’ve seen over the last couple of years doing this is that almost everybody is self-taught in this field. And so many people have gone through exactly the process that you’ve talked about where they’ve gone to college, some of them have gone to college, some of them haven’t gone to college, but they’ve just immersed themselves in learning about e-comm through YouTube and, you know, just content that’s just out online and then some paid classes. But there’s really no way that I’m aware of, there’s no formal way to get an education to be an e-commerce entrepreneur. You have to figure it out on your own and there’s just so much trial and error that goes along with that.

 

Adam – 00:03:40:

 

I totally agree. And I don’t think the formal education system has changed much post-internet, in a wide adoption of the internet. It’s so easy to learn now, basically for free, especially with YouTube. You absolutely do not need a college degree to go into e-comm.

 

Izach – 00:03:58:

 

It’s so interesting, right? I agree with that. So the company you founded was called Ownloop. You started it, it sounds like in 2020.

 

Adam – 00:04:08:

 

Yep, September 2020.

 

Izach – 00:04:10:

 

During the pandemic. And then just tell us about like the idea, what was the concept, what does Ownloop do, how did you come up with it?

 

Adam – 00:04:20:

 

Sure, so I tried a few things before Ownloop. I was doing a lot of earning on drop shipping and you know, whether to start a very niche brand for a specific product or a wider catalog of products. So I tried a few different things that didn’t work, all focused around driving traffic through Facebook ads. I just through trial and error landed on selling Apple Watch accessories. I’ve always been an Apple fanatic. I was the guy that was waking up at 4:00 am to wait in line for the new iPhone before they started the pre-order system.

 

Izach – 00:05:02:

 

Yeah.

 

Adam – 00:05:03:

 

So I knew how passionate people were about Apple products. And the learning curve was very short for me to get up to speed on those types of products. The perceived value of them is very high relative to the cost of goods. So I just decided to give it a shot. I launched a few different types of Apple watch bands and the one that I least expected to do well popped off right away and we were off to the races.

 

Izach – 00:05:35:

 

What was that product? What does it look like?

 

Adam – 00:05:37:

 

So it’s the third party version of what Apple calls the silicone solo loop. So it’s just one piece of silicone. It has no buckles or clasps, and you just slide it onto your wrist like a bracelet. There’s different sizes and it’s just basically a stretchy silicone band.

 

Izach – 00:05:55:

 

Super interesting. So I take it you didn’t have any pre-existing knowledge about the accessory components for Apple watches you figured it out as you were going into this process of starting Ownloop and then you tested out a couple different different varieties. How many different products did you test out to find out that the Ownloop, silicon single loop band was going to be the winner.

 

Adam – 00:06:21:

 

So I had two other higher end bands listed for sale and I was trying to run traffic through Facebook ads. One was a leather band and one was a stainless steel band. Both were at a higher price point and I ended up throwing what ended up being our bestseller onto the website as it was intended to be an upsell and no one ended up buying the higher price bands. Everyone was obsessed with the silicone bands.

 

Izach – 00:06:49:

 

So were you advertising the silicone bands or you were advertising the higher price point bands and then people purchased the silicon bands when they got to the site.

 

Adam – 00:06:58:

 

Yeah, that’s exactly right. We were running no traffic directly to the silicone bands. The product page was not built out at all. It was really just an upsell. People were clicking through based on the ads we were running for the higher ticket bands and then skipping right over them and going and buying the upsell by itself. So once we saw that, we focused all our attention on the silicon bands and dropped everything else.

 

Izach – 00:07:29:

 

Okay, so you ultimately did then run traffic to silicone bands. You didn’t keep the strategy of…

 

Adam – 00:07:35:

 

Absolutely. Yeah, we doubled down on those bands and they ended up. I think over the lifetime in the business, it ended up being like 80% of our sales were from that one product.

 

Izach – 00:07:45:

 

Nice. So interesting.

 

Adam – 00:07:47:

 

So the whole strategy ended up being built around that product and similar products.

 

Izach – 00:07:53:

 

What other type of startup costs did you have? Did you have to pay for any development of that product or was it an existing product that you rebranded? I assume you had to buy some initial inventory and front the marketing costs? What was your, how much did you have to invest in the business to get it up and running in cashflow positive?

 

Adam – 00:08:11:

 

Sure, so I remember when I opened up the business bank account, I deposited $5,000 into it as an initial investment. I don’t think I ended up using even close to all of it. I started out dropshipping. For listeners who don’t know what that is. It’s a business model where you don’t buy any inventory upfront. You drive sales and as customers place orders, I then place those orders directly with the supplier and the supplier ships the products directly to my customers. So you’re not paying for any inventory upfront, which is one of the biggest startup costs typically for Ecom businesses. So it was really some software overhead and marketing. So the startup costs were very low if you’re able to drop ship, which we were. And we did that. We ended up dropshipping for about six to eight months before we place a bulk order through a manufacturer, got it fully branded. And really dialed in on the branding aspect of it.

 

Izach – 00:09:23:

 

Okay, smart. So you figured out the path of least resistance from a capital perspective, started dropshipping, tested your products, figured out what worked and then once you built momentum and started generating some cashflow. You branded, brought in inventory, and then throughout this whole time, were you selling exclusively on your own website? 

 

Adam – 00:09:46:

 

Selling exclusively on our own website through Shopify. And we were cashflow positive from the first month on. So I was just basically putting money away and eventually used that money to buy inventory. So I didn’t end up investing anymore after that initial 5k that I put in.

 

Izach – 00:10:07:

 

Well done, man.

 

Adam – 00:10:09:

 

I appreciate it.

 

Izach – 00:10:10:

 

I think it’s so hard to do. For everybody who’s successful at that, there’s a dozen people who tried and weren’t. You know, great job of putting the pieces together and figuring out how to unlock that puzzle.

 

Adam – 00:10:23:

 

I appreciate it. Yeah, I was just taking it day-by-day. I was expecting COVID to end. You know, I wasn’t expecting, you know.

 

Izach – 00:10:30:

 

You and everybody else in the world.

 

Adam – 00:10:31:

 

I was expecting COVID to end and I was going to go back to my cyber career. So there was no long-term strategy. I was taking it week by week and month by month. And it just got to the point where I was like, you know, “this is my life now. Let’s turn this into something real”.

 

Izach – 00:10:51:

 

Yeah. So maybe this is a good point to bring in Gwen into the conversation here. You know, how did you guys get introduced and Adam, when did you realize that you had something that potentially could be sellable?

 

Adam – 00:11:06:

 

Yeah, so I had a, how Gwen and I met was, we have a, one of Gwen’s former colleagues is my close friend, they used to work together for one of the big Amazon aggregators. So just by way of having that, you know, my ear to the fire in terms of buying and selling of e-com businesses, I always knew that it was a thing, you know, that I could build something valuable and that there’s a market for it. We scaled up pretty quickly. We were doing like six figures a month in revenue by month eight or nine. So it was not long before I realized that. You know, this was a real thing and I should pay attention to what needs to be done to keep the value in the business.

 

Gwen Sylvester – 00:11:56:

 

And Adam, in all truth in our first meeting. Things in the business weren’t at their highest when we first met, right? You had gone through some pitfalls when we first met. Can you talk a little bit about what happened there? And then I can talk a little bit about the strategy we had. Thinking about selling the business.

 

Adam – 00:12:18:

 

Yeah, so in terms of my mindset going into it, I didn’t expect this to be a new career for me or something that, you know, initially something that was. To be a full-time commitment for a number of years. I really saw it as a COVID side project. So instead of building out a team and really turning it into a business early on, I started haphazardly outsourcing different pieces of the business. You know, brought on some contractors to do customer service, brought on a bunch of agencies to run Facebook ads, run TikTok ads, do email marketing and it got to the point where I was coordinating too many agencies and contractors at the same time. Our overhead went through the roof. And I had a come to Jesus moment where I had to dial things back, retake control and figure out what needed to be done to level the ship. And that was around the time when I started talking to Gwen about selling.

 

Gwen – 00:13:34:

 

Yeah, and I wanted you to talk about that, Adam, not to relive painful memories, but you were fantastic at writing that ship right as soon as we talked. So, you know, the business had seen some decline. And I know when we first talked, you know, I, you know, we talked about how it might be more difficult to sell the business. And you knew exactly what had to happen in the business to get it going the right direction again. And you implemented those things right away. And we immediately saw the business start to climb again and really do well. So, kudos to you for that. I think that’s why we ultimately got it sold.

 

Adam – 00:14:17:

 

Yeah, I appreciate it. Yeah, I think once I had that inflection point, I knew what needed to be done to get things on the right track again. And I think we ended up growing month over month for four or five months up until we close the deal.

 

Gwen – 00:14:32:

 

So Adam, you had a very specific strategy. You only sold direct consumer on your website throughout the lifetime of the company. Can you talk a little bit about why you chose that strategy and avoided Amazon, which I know many potential buyers asked you about as we were talking to them.

 

Adam – 00:14:51:

 

You know, I was getting advice from different people along the way. One of the people that I leaned on for advice was my friend who worked for the Amazon aggregator and he was very anti-Amazon for these types of products. And, you know, talked about how competitive it was on Amazon. Lots of different sellers trying to steal your buy box. And it sounded like one, I don’t think I had the bandwidth to kind of, you know, I was teaching myself everything. So I didn’t necessarily have the bandwidth to start learning another full platform and marketplace. But just doing, the other thing was doing research into selling on Amazon. It’s a total different animal. When you’re selling direct through your own website, you can really lean in on brand. And leverage the power of your brand to charge higher prices. And curate the customer experience from end to end. You don’t really have the same power to do that and the same flexibility on Amazon. You don’t have a beautiful website to help sell the product. Most people don’t scroll down to the short area where you can build out some imagery and website copy. Most people just look at the photos and the short description. And the, you know, similar products are being sold on Amazon for a fraction of the price that I was selling them for. It’s just a different animal.

 

Gwen – 00:16:33:

 

Absolutely. Mark, kudos to you. I mean, I think just having that super focused vision really led to your success. So many people try and do everything all at once and you were incredibly focused, learned Facebook ads and that’s what drove your success.

 

Izach – 00:16:52:

 

Yeah, I was going to ask that too. Did you ever expand outside of Facebook for paid traffic? Were you running Google Ads or was your primary focus on Facebook ads the entire time.

 

Adam – 00:17:05:

 

Yeah, we tested most platforms. We tested TikTok, Snapchat, Google, a little bit of SEO, but Facebook was far and beyond the best for us. And drove 80% of website traffic, I’d say. I think the market that we were selling to was, I think about 80% of our customers through like 18 months into the business was women 35 to 55. And that audience, I think, does the best on Facebook. 

 

Izach – 00:17:45:

 

Yeah. It’s a big audience. 

 

Adam – 00:17:46:

 

And that was… Yeah, it’s a good audience to sell to. They’re big buyers and when Facebook finds an audience that works for you, they tend to continue to try to get similar types of buyers. So I think that was just the initial audience that we had really good success with. And then Facebook inherently doubled down on it. And we just kept driving traffic to similar audiences.

 

Izach – 00:18:14:

 

So if you started in 2020, then you went through the iOS 14 to 15 upgrade and the issues that created for attribution on Facebook. How did you work through that?

 

Adam – 00:18:28:

 

Yeah, that was a massive, massive, massive issue. 100% of our customers were iOS users because you need an iPhone to have an app like.

 

Izach – 00:18:37:

 

Totally, yeah. Oh man, I haven’t thought about that.

 

Adam – 00:18:40:

 

Yeah. So it was, it was dark for, for a moment in time. Attribution was like overnight, almost impossible for us. You had all these software startups, starting to come into play saying that they could fix it, you know, and they had the golden ticket. We started, we tested out a bunch of them. Nothing worked. We went through two or three different agencies to try to figure out. If anyone knew what we can do. And I think Facebook was just woefully ill prepared for that to happen.

 

Izach – 00:19:14:

 

Yeah, totally.

 

Adam – 00:19:16:

 

Yeah. And they started to get better over time. We ended up going with a software platform, an attribution platform that ended up working really well.

 

Izach – 00:19:25:

 

Who was it?

 

Adam – 00:19:26:

 

Triple Whale.

 

Izach – 00:19:28:

 

Okay. Yeah.

 

Adam – 00:19:29:

 

But it took. It took like six or eight months for us to figure out that challenge and it has never been the same. It’s just infinitely harder to target on Facebook. Than it was pre-iOS 14. For sure. Pre-IOS 14. We could literally target an apple watch interest on facebook and it would just show it to everyone who has an apple watch. And you just can’t do that anymore.

 

Izach – 00:20:03:

 

So you said something that was really interesting there. You talked about testing out a bunch of different softwares and agencies. And I think what’s interesting to me in that is that it sounded like you went through them in pretty quick succession because the timeline we’re talking about here is fairly truncated to begin with. So I think that’s just a great practice in general to test fail fast, iterate, and change. How did you think about that when you were testing? So you’re in this point in time, right? The algorithm changes, the world changes. You can’t target your clients or your customers that you were targeting effectively before. And now you’re testing these softwares. How much time did you give each software to determine that it was or was not working? And then how did you know then to change and find another one and find another, Triple Whale now I think is probably the market leader in this space. So, you know, it seems like you came to the conclusion of probably the most effective software that I’m aware of. The question is, how long did it take you to determine the other ones weren’t working? And how confident were you in making those changes? Because there’s also expenses when you’re testing these things out, right? You’re incurring costs.

 

Adam – 00:21:14:

 

Absolutely. From a software perspective, we didn’t give it much time at all. You know, a couple of weeks, you could get a quick sense, is this going to work? From an agency perspective, a little bit longer. You know, if I’m working with a new agency or a new contractor who’s running ads, maybe a month to six weeks. Give them a little time to try to figure things out. But if someone runs Facebook ads for a living, it shouldn’t take them more than a few weeks to understand. Kind of delay the land, especially because I always had control over creative development. So it wasn’t like I had to wait for anyone to really understand the selling points of the product or create content. I was handling all of that anyways. So we ended up, I totally agree with your point about failing quickly. I think that’s the only way that you’re going learn and grow quickly. But the other point I would mention is it was at this point where we really started to focus on lifetime value. And realizing that customer acquisition costs are going up exponentially. And it seems that they’ll just continue to head in that direction. And the importance of launching new products to sell to your existing customer base, really squeezing as much juice as possible out of the customers you’ve already acquired. And also leveraging other forms of marketing to help with that. So email marketing, SMS, things like that where it doesn’t cost much and the ROI is massive.

 

Izach – 00:23:09:

 

And throughout the… I guess that you startup period were you collecting all the data about your customers. So you built an email list. You knew who your clients had been up until that point before that IOS update.

 

Adam – 00:23:27:

 

Yeah, we were doing list building from the very start. So I always knew the importance of having a list. I think it’s important to minimize to the extent possible your reliance on third-party platforms. It, we luckily it never happened to us, but I’ve heard countless stories of ad accounts getting banned on Facebook. At no fault of the advertiser, just an algorithmic mistake. And having to shut down for two weeks. So I knew the importance of having a list, building a list, so you always had that to fall back on. But It took a while to really monetize it to its fullest extent.

 

Gwen – 00:24:20:

 

When did you actually start thinking about selling the company was there a moment or a trigger that you said now is the right time?

 

Adam – 00:24:29:

 

I think it just got to the point where, like I said at the beginning, I had started this as a side project and it had turned into a full-time two and a half year endeavor and I was ready to take what I had learned and all the skills I had acquired and work on something new and exciting. I didn’t see this brand as the end all be all, or what I wanted to spend the next few years working on. And I think I was also just a bit burnt out from jumping headstart into this and really not taking a break for a number of years. So it. Yeah, I think it was just an inflection point and I was ready to move on to other things.

 

Gwen – 00:25:21:

 

I knew that as soon as I met you that. You were ready to move on to something new. This is not a situation of like, this is my baby and I want to cherish it the rest of my life. You’re ready to move on.

 

Adam – 00:25:35:

 

Yeah, I never had a crazy emotional attachment to it or anything like that. I always saw it as a revenue stream, which I think is a good way to look at things. You want to have some attachment to it to nourish it in the way that it needs to be nourished. But, I think looking at it objectively for what it is, which is a business and a revenue stream. There comes a time when it makes sense to move on to something new and exciting.

 

Gwen – 00:26:10:

 

I think you had a smart relationship to the company. So I was looking back at our timeline. I think we worked together, start to finish for about eight months. Can you describe what the process was like for you? Was it the longest eight months of your life? What were the biggest obstacles? 

 

Adam – 00:26:28:

 

I think I was naive going into the selling process. I think you’d attest to that. I was like, you know, let’s get this done in two months and move on. The whole thing was a huge learning experience for me. It was a long eight months for sure. I know we we went through a few different buyers. You know, a lot of negotiations on LLIs that ended up falling through. And it probably took five months till we found the right buyer that we ended up closing the deal with. I don’t think I thought about the importance of finding a good buyer as opposed to just any buyer early on. So kudos to you for leaning into that and making sure that the buyer was a good one because you end up working really close with the buyer. I love who I ended up selling the business to and we have a great relationship, you know, to this day, we’re still in touch.

 

Gwen – 00:27:29:

 

That’s great to hear.

 

Izach – 00:27:31:

 

That’s fantastic.

 

Gwen – 00:27:33:

 

It is probably, Izach can probably agree with this, but it is one of the hardest things to convince a seller of that we are not just here to find you a buyer or even necessarily the highest bidding buyer, but the best buyer who A, can actually close and B, obviously it’s going to get you the best deal possible, but lots of people can offer you a lot of money and not actually close the deal.

 

Adam – 00:28:00:

 

Yeah, 100%. And also a lot of the times there’s some sort of earn out structure. Are some incentive for the business to do well after you close. So you definitely don’t want a situation where you close and then something happens and they need to shut down the business or it goes into rapid decline. So I think making sure, you know, that not only do you work well with the potential buyer. But that you’re also confident that they have the skills to execute after close.

 

Izach – 00:28:36:

 

Super important. I think, almost any transaction there’s at least a three-month transition period and sometimes up to a year and sometimes sellers retain equity and stay involved indefinitely with the businesses that they’ve sold a majority of. Yeah, that relationship and the skill set for the person that you’re selling the company to becomes really important. And to your point, Adam, if you’ve got any type of a contingent payment structure. Where you’re depending on them to run the business in order to get the full valuation, then it’s really important that they can do it, that they can run the business successfully. And sometimes, Gwen, going back to your point, what we see is that is not always the absolute highest offer that’s the best offer. Part of our job is to help give the sellers that we’re working with. All the information that we have, all the information about the buyers and pull that information out of potential buyers so that our sellers can make a really informed decision.

 

Adam – 00:29:41:

 

For sure. Yeah, I would not hesitate to recommend, you know, Gwen and Website Closers in general, you guys were awesome. And I, I had actually worked with another company for a short period of time beforehand. So, I saw the other side of what a bad broker looks like. I appreciate all the work that you guys do on your end.

 

Gwen – 00:30:06:

 

Thanks, Adam.

 

Izach – 00:30:07:

 

What do you think were the biggest obstacles that you encountered? What were the hardest parts to get through in the transaction and maybe what were you surprised by?

 

Adam – 00:30:18:

 

I think just coming to, just agreeing on the terms of the deal. You know what? Reps and warranties are you willing to give, I think agreeing on the overall comp structure is fairly straightforward. But then talking out, talking through potential earnouts, you know, what the indemnification timeline looks like, all the finer legal points of the transaction that you don’t really think about going into it. It took a long, really long time to agree on and you’re constantly going through this risk formula in your head. In terms of you know, what am I willing to live with? And what am I comfortable claiming to make sure that you’re protected from a legal standpoint? Should something come to pass that you didn’t expect or didn’t realize. You want to make sure you have someone in your corner. Whether it’s an attorney that’s done this, that works with the econ businesses or some legal advisor that can really educate you on the points of the deal and make sure that you’re factoring the risk and reward in the right way.

 

Gwen – 00:31:47:

 

I think. This deal was on the surface. Pretty straightforward economically. I think the whole process is the term, the devil’s in the details, is like perfectly sums it up. We spent a lot of time going through the minute details of the purchase agreement. And Adam was incredibly comical and collected the entire time. But it was a lot of detail to get through. I think we ended up with a great deal. But yeah, I think we were both surprised how long the negotiation process went on. Pretty much nothing that had any large economic value to the deal itself, right, Adam?

 

Adam – 00:32:34:

 

Yeah, 100%. And the longer that it takes, the more issues creep in. When you’re a month in or six weeks in, now you need to order more inventory. You don’t want to invest in more inventory if you’re not going to get it out of the deal. So it’s talking through that. Who’s going to fund this inventory purchase, some random things like that that creep into play as you’re going through the negotiation process.

 

Izach – 00:33:11:

 

So one of the things I always find interesting is that most sellers that I talked to at the beginning anticipate that the hardest part of the process is going to be finding a buyer. And in fact, what I see is the hardest part of the process is getting from the point when a buyer makes an offer to buy the company to closing. And so all the stuff that you just talked about, negotiating the APA and reps and warranties, that’s all after the LOI is signed. And so, I think it’s really important to have a good team in your corner with a good attorney. A good transaction intermediary like Gwen who can advise you on all these details and help you get from the point when the buyer says, “hey, I want to buy your company and you agree to the high level terms to the point when you’re actually getting paid”. Because that’s where rubber really meets the road and that’s really where the deal gets. The fine points of the deal get put together. And then your point about time is also really, really good, Adam, because I think it’s hard to anticipate what’s going to come up for the business during that period of time. And we’ve seen all sorts of, you know, you were fortunate to have your business was during that time when you’re under contract, your business was performing well. But it certainly happens where we go under contract and a business doesn’t perform well, which introduces a whole nother layer of complexity. Some of those deals fall out of contract and other ones, you know, we need to adjust the structure and change. But it can be, that can really get dicey for transactions. So, I’m glad you did not have that issue. But if you’re thinking about your entire experience from start to finish. And you’re from the perspective of another founder who’s thinking about going through this process, what would be some advice you would give someone to think about or to do that you didn’t necessarily anticipate it anticipate when you went into the to the process yourself? 

 

Adam – 00:35:15:

 

Process in terms of selling or getting started? Selling process.

 

Izach – 00:35:18:

 

Yeah, the selling process.

 

Adam – 00:35:22:

 

There’s going to be a lot of information requests. Make sure you are extremely organized. A lot of people don’t have their financials in good order. You know, they’re just randomly categorizing things in QuickBooks. You really have to make sure that your financials are in order. They’re accurate. It’s really easy to see the story that they tell. And then in terms of, you know, other, other documentation, you want to make sure that. Whatever questions the buyer has, it’s really easy for you to answer the question and you can provide documentation that you know, tells a cohesive story. And helps them understand what they’re buying and how the business is doing. Even things like making sure that you have wire receipts that match up with your inventory purchases. Things where they can clearly see your costs and just the overall story of of the last 12 months of the business. And I think also just making sure, you know, just being patient. And letting the intermediary or the broker do what they need to do on their end to line everything up for you. Is good advice, I think.

 

Gwen – 00:37:03:

 

Great advice.

 

Izach – 00:37:04:

 

You made another point early on that I thought was really interesting that I want to just come back to a little bit. You said that you weren’t emotionally attached to the process. And I think that’s probably easier said than done, right? Cause even though this wasn’t, this wasn’t “your baby”, right? You started this up and it grew and it became something meaningful and sellable. A lot of founders are in the position where it really is their baby. It’s something that they really are super passionate about. So when you go through the sales process, it’s very easy to get to let your emotions go, guide your actions, especially when you’re negotiating details like legal documents and reps and warranties. What if the worst case scenario for this business happens and who’s liable for that? You have to go through those conversations in a sale process. But I think it’s great advice to just remove yourself from the emotional part of it and try to really think about it from a business transactional perspective. Deals often fail because sellers get emotional about that exact point in the negotiation process and you can see, having gone through it, you could see how you could become emotional there. You’re talking about all these unlikely scenarios that are really bad and you’re trying to prevent them or trying to prove, you know, each party is trying to make sure they’re not going to be liable for like a worst case outcome. And so it can be really tricky to maneuver that process without getting emotionally attached. But I think it’s great advice to just atleast try to take a step back from that emotional impact of finishing out those negotiations. And if you’re committed to selling the company, get yourself to the closing table and close the transaction. Because I’ve had so many times where a seller has told me they were going to back out of a deal, got mad at a buyer. And we talked about it. And worked them through it and they closed. And then, you know, six months or 12 months later, they’ve, I’ve gotten in touch with them again, just to see how things are going. And they said, I’m so glad that you talked me into doing this. Because it ended up being a really good outcome for them. And after they’ve got removed from that emotional part of finishing out the negotiation and they’ve looked at the financial impact and what they’ve been able to do and how they’ve been able to invest that money and maybe start another company and, and they’ve been, it’s been really good. So- 

 

Gwen – 00:39:29:

 

Well, I think sometimes it can feel like someone’s attacking your integrity, right? Like that, that especially on those reps and warranties, like, you know, our eyeballs can read through those really fast. The first time you look through an APA, but then you start negotiating things and you’re like, well, I would, I would never do that. And the buyers, you know, making up all these scenarios, well, what if you did this? And what if you did that? And it can get really emotional. Like, I’m not a bad person. I wouldn’t do those things. Um, but Adam, you, you were – 

 

Izach – 00:39:58:

 

And you start to think, well, wait, if you’re thinking, I’m going to do those things, are you trying to trap me? Are you doing something? Bad? There can be this whole, it can get, it can get really, um, it can feel really personal when it’s not. And I think when, you know, for brokers like Gwen and I, we’ve been through a bunch of transactions. We know that that happens on every deal there. There’s some iteration of those discussions happen on every deal, but I think that’s a great point Gwen. Yeah.

 

Gwen – 00:40:21:

 

But you were, you were, you were great through the whole process. Very. Very patient.

 

Adam – 00:40:26:

 

I appreciate it. Yeah, the only, the only other couple things I’d add to that are, I think building trust with the buyer is super important. It’s kind of like dating. You’re meeting someone for the first time. You’re trying to build a relationship with them. Trying to build trust. And it’s, I think it’s super important, but by the end of our transaction, we didn’t even end up using escrow. We had just built up the trust to… Just complete the transaction, I ended up going down to close with them in their offices. And it was. It was easy as can be, you know, after all the negotiations. I think it’s also important to ask when you’re getting started asking the buyer why they’re interested in buying your business then you can put yourself in their shoes. Understand that they’re not adopting your child. They’re hiring your child to go out and make more dollars for them. Or whatever their objective of the business is. Maybe they’re folding it into a complementary business to scale that way. Maybe they’re just trying to grow it organically. But I think really understanding why they’re buying it will help you put yourself in their shoes. Talk through things rationally.

 

Gwen – 00:41:57:

 

So Adam, what are you working on now that you’ve sold the business?

 

Adam – 00:42:01:

 

Yeah, so I’m… I’m working on scaling up some new brands using the skills that I’ve learned through building this brand and bootstrapping it through exiting from it. And I also started a marketing firm called Econ Related to help other seven and eight figure brand owners scale profitably with paid marketing. So if you want to, if there’s anyone listening that wants to talk Ecom, just chat about Ecom in general or needs help scaling their business, you can check us out at ecomrelated.com.

 

Izach – 00:42:42:

 

Great. Awesome. Ecomrelated.com and that’s the best way to get in touch with you.

 

Adam – 00:42:47:

 

Yep, EconRelated.com or you can email me at adam at EconRelated.com.

 

Izach – 00:42:52:

 

Awesome. Congrats, Adam. That sounds really exciting.

 

Adam – 00:42:55:

 

Thank you so much, I appreciate it. Thank you so much for having me.

 

Izach – 00:43:04:

 

All right, that was Adam Spiegel, who you can now find at ecomrelated.com. And if you’re looking to learn more about OwnLoop or buy a band for your Apple watch, visit ownloop.com. Thanks everyone for listening to this episode of The Deal Closers podcast brought to you by WebsiteClosers.com. If you like the show, be sure to rate us, write a review, press the follow button and share it with your network. And of course, if you’re looking for help selling your e-commerce business, be sure to visit WebsiteClosers.com. This episode was edited and produced by EarFluence. I’m Izach Porter. Follow me on LinkedIn, Instagram and TikTok, and we’ll see you next time on The Deal Closers podcast.