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Bootstrap to Exit — Rich Ruddie Does It Right
Devin Johnson is an experienced executive. He is the CEO of BRANDefenders, a digital marketing company that offers numerous branding services. Devin is no stranger to creating brands and helping them grow. He was the Founder and CEO of ReelWorld Gear, Owner of Proform Landscapes, Co-founder and CEO of MyOilMarketing, and a Founding Team Member for ClearCenter, Clear Companies, and DirectPointe.
Richart Ruddie is a Strategic Advisor at BRANDefenders. He owns multiple online marketing, SEO, and reputation management businesses including Alpha Paw, Class Updates, and The Reputation Management Company (RMC). Richart has been featured in Entrepreneur Magazine, Forbes, the Wall Street Journal, and more.
Chris Wozniak is a Business Advisor with Quiet Light and the Founder of The George Ryan Group, LLC. He began his career as the Founder, Business Broker, and Mergers and Acquisitions Intermediary of Lesdon & Associates Business Brokers LLC. Through his work representing hundreds of sellers and being a member of the International Business Brokers Association, Chris has earned accreditations of Merger & Acquisition Master Intermediary and Certified Business Intermediary. He also earned the Board Certified Broker designation as a member of the Texas Associations of Business Brokers, the Broker Dealer license issued by the Texas State Securities Board, and the Real Estate Broker license issued by the Texas Real Estate Commission.
Here’s a glimpse of what you’ll learn:
- [04:04] Richart Ruddie explains bootstrapping a company and growing from the ground up
- [10:52] Why due diligence is crucial for a brand’s exit strategy
- [16:59] What weight does speaking openly and honestly have when selling your brand?
- [23:19] How Devin Johnson helped clients understand what they are purchasing
- [29:46] Putting effort into your brand awareness
- [40:40] Devin explains rolling equity while growing a business
- [45:55] Richart talks about how relationships can aid in growth
- [54:20] Why slowing down and taking your time can prevent client and revenue loss during an exit
In this episode…
Brand attributes characterize your organization in someone’s mind — they constitute your brand’s personality. But what happens when these attributes are compromised? What can you do to add value to your brand when negative messaging hits your consumers?
Creating holistic end-to-end solutions for your brand’s marketing department is what Devin Johnson and Richart Ruddie assemble. Your brand and reputation go hand in hand, so highlighting the value of your products can help reduce the noise or stickiness unwanted content brings. By repairing your brand’s reputation, you can achieve your desired growth. But when it comes time to exit and step away from what you’ve grown, Devin and Richart know just how much of an impact honesty makes. Are you ready for an extraordinary exit?
In this episode of the Quiet Light Podcast, Joe Valley and Chris Wozniak sit down with Devin Johnson and Richart Ruddie from BRANDefenders to talk about curating confidence in a buyer during an exit. Devin and Richart explain generating energy within your brand, the results from holistic conversations, and why brand awareness is crucial. Stay tuned!
Resources mentioned in this episode:
- Devin Johnson on LinkedIn
- Richart Ruddie on LinkedIn
- Quiet Light
- Quiet Light on YouTube
- Joe Valley
- Mark Daoust
- Chris Wozniak
- Chris Wozniak’s email: [email protected]
- Quiet Light Podcast email: [email protected]
- The EXITpreneur’s Playbook: How to Sell Your Online Business for Top Dollar by Reverse Engineering Your Pathway to Success by Joe Valley
- Genius Litter
Sponsor for this episode
This episode brought to you by Quiet Light, a brokerage firm that wants to help you successfully sell your online business.
There is no wrong reason for selling your business. However, there is a right time and a right way. The team of leading entrepreneurs at Quiet Light wants to help you discover the right time and strategy for selling your business. They provide trustworthy advice, effective strategies, and honest valuations. So, your Quiet Light advisors aren’t your everyday brokers — they’re your partner and friend through every phase of the exit planning process.
If you’re new to the prospect of buying and selling, Quiet Light is here to support you. Their plethora of top-notch resources will provide everything you need to know about when and how to buy or sell an online business. Quiet Light offers high-quality videos, articles, podcasts, and guides to help you make the best decision for your online business.
Not sure what your business is really worth? No worries. Quiet Light offers a free valuation and marketplace-ready assessment on its website. That’s right—this quick, easy, and free valuation has no strings attached. Knowing the true value of your business has never been easier!
What are you waiting for? Quiet Light offers the best experience, strategies, and advice to make your exit successful. To learn more, go to quietlight.com, email [email protected], or call 800.746.5034 today.
Joe Valley 0:33
Hey folks, Joe Valley here. Welcome to another episode of the Quiet Light Podcast today is all about accident, right? We’re talking to some folks that sold their agency, and I’ve got Woz on the podcast as well, because he was the advisor involved in the process. And when we see agency, we’re not talking about your typical ad agency or SEO agency and things of that nature. This one is pretty complex. They offer a lot of different services, they’ve been around for more than a decade, growing pretty consistently. And Rich, the original founder of the business did something really smart back in 2017, he brought in Devin, who had experienced to take help him take this business to the next level in directions, where it would add recurring revenue and a lot of referral revenue as well. It was a really smart move on Rich’s part, and I compliment him on the success of doing that. And you’ll see that as you hear Devin talk about the business and the things that they did, and the transaction itself and what instilled a lot of confidence in buyers. This is a substantial exit. I can’t give you the exact number but it is sizable in nature. And the next exit that will happen eventually with the goal of the buyers of this company will probably be a nine figure exit Woz involved in this whole process. He was integral to the success of getting this business sold. And I can just tell you, these guys love Woz. So after this podcast during this podcast in the middle of this podcast, if you want to reach out to him and get a valuation for your company, it’s [email protected] All right, let’s go and listen to the 3d guys talk about their very, very successful exit. There we go. Rich Devin, welcome to the Quiet Light Podcast. Thanks, Joe. Connect. And of course, folks, we’ve got Chris Wozniak with us the broker on this deal. And today’s co host of the podcast, Chris, how are you? I’m doing good. How’s
Chris Wozniak 2:28
everybody doing? And testing your math? Right?
Joe Valley 2:32
Except Except Richart, I are in warm weather. And you and Devin are freezing your tails off in Dallas and, and Utah minus 11 degrees. You just said right? Yeah.
Devin Johnson 2:42
Yeah. Yeah. Chilly morning this morning.
Chris Wozniak 2:46
Yeah, I was gonna say I’m freezing and 28 degree weather. But negative 11 is a whole different world that I’ve never experienced. So
Joe Valley 2:52
yeah, that’s that’s a dip dip. We call that that’s that’s a hell no kind of thing. No, thank you. That’s why Rich? Could I don’t even go visit my family up in Maine in the winter months.
Richart Ruddie 3:04
In the summer that time, though, it’s great. And I agree. Yeah, it’s one of the great things about having a digital business, right is the decentralization aspect of it and being able to travel and work from wherever. So in the summer, if you want to go and work out of Maine, you can are absolutely in the mountains and negative 11 degrees. C with Devin, you can do that as well.
Joe Valley 3:27
So and I have more and more conversations with buyers that are in the corporate world that want to live that digital life and move from the north down to the south and be able to work independently wherever they are. So you know, a lot of folks in the audience are just wanting to do that themselves. And that’s why they listen, and learn from podcasts like this. So let’s jump into the learning part of it. Rich. Talk to us about the company. Did you did you? I forget you and I started talking years ago. Did you buy this company originally? Or did you build it,
Richart Ruddie 4:00
bootstrapped it and built it from the ground up with literally less than $1,000 was able to start it back in late 2010. I had a friend who saw that I was learning to do digital marketing at a start up in South Florida and even the backstory but before that is that I wanted to work in finance. And I was interviewing and I wrote down a list of every single brokerage every single bank, every single investment management firm in South Florida. And I started reaching out to every single one of them. And it was right after Lehman Brothers had collapsed. So it was a similar time in the finance world for hiring as it is in tech right now if you were trying to apply at meta or Google or Twitter or any of these places, that just laid off over a half a million people in the last six months. So it was a really rough time to try and get into the industry. And luckily, I’d remember that I connected with a friend when I was doing some volunteer work up in Baltimore, Maryland, where I’m from, just said that his uncle actually had a hedge fund and an office down in South Florida. So he was able to connect me with him. And he said, I don’t have a position trading, but I’m putting money into a startup. And you can learn SEO and search engine marketing and start to learn that and if it takes off great, if not, then eventually you’ll have a job on the trading floor. So that’s how I initially crafted and learned my skills. And as I started doing that, friends and people took notice that I was I was being successful in building out a brand and start for the startup. And he said, Why don’t you see about helping me with this website? And I was like, I don’t know, I’m really busy. I don’t think I have the time. And eventually, I capitulated and posted an ad on Craigslist, and we got our first SEO client. And then from there, somebody said, Well, can you do the opposite sort of promoting something, somebody had an incident in college, and they’ve recently graduated, and they’re looking to get to get a job. And it’s still something even 13 years later that we still come across people asking with similar issues and said, Can you help him and help him kind of suppress or push down content and get good content out. And that’s how the whole idea for the whole brain Defender Service was born. So it started from that and started with one client, and then parlayed that into doing some internal SEO work, and build the website up from there, and then started getting more inbound leads. And then as you grow a business through the years, and you do a really good job, and you do right by your clients, as we had done, it just continued to snowball, and our monthly recurring revenue continued to grow, as well as the referral base of both PR firms, lawyers and clients older knew that would come through the door, either because they had some new issue or because they had a referral. And they were they were happy with our work. I mean, just a few weeks ago, there was an attorney that we helped with some issues. And one of her clients said, I don’t want to be too nosy. But I noticed that you used to have some some press online that wasn’t so favorable. And now I don’t notice any of that there anymore. Do you mind sharing with me I don’t I don’t mean to, you know, get into your into your business too far. But do you mind sharing the whoever helped you because we tried this on our own and we hired one company and they it was a very high dollar PR company. And they didn’t they didn’t get the job done. But obviously I see you, you can get it done. And that’s kind of been the story of our business between getting leads online and getting referrals for the last 11 years. So I started from the ground up and then started talking to you about potential either expanding or exiting, I think in late 2016, early 2017. And just kind of toyed with the idea until I think the right opportunity finally came along and along. And luckily, you know, you taught me that I need to have a really good team in place and certain things I was missing. And that’s where Devin and the Utah team came into into place. And now we can say the rest is near history.
Joe Valley 8:09
Yeah, yeah. It’s amazing that you and I started talking that long ago. It feels like a lifetime ago. Did we? We didn’t say it at the beginning. We didn’t discuss it before I hit record. But are we sharing the name of the company itself? Devin What do you think? Or just really you want to get more specific on the service? It’s it’s it’s it’s helping people suppress bad press about them online? Is that summarize what you do?
Richart Ruddie 8:38
We have so many we have numerous websites.
Devin Johnson 8:41
Several brands show several brands service offering has evolved. And I can talk a little bit more to that.
Joe Valley 8:49
And the give us more of an indication of the different types of services that your agency provides to it. Folks, this is an interesting one because, you know, we don’t often sell agencies it’s happening more and more Chris Wozniak who’s quietly listening here and smiling at something I’m not sure what is had more success selling agencies than the rest of the team at this point. And this one was a fairly large sale. A fairly large multiple as well. And as you said, Rich the key was making you less and less important in the business and having a really great management team. And that’s where Devin, you came in. Talk to us about how Rich what what point you were at and Devin, how you guys connected and what your role became in the company back in what was it 2017 or 18 2000?
Devin Johnson 9:45
Yeah, late 2017. We connected early early 2018. We we consummated a partnership. So Rich, if you want to kind of Yeah, absolutely.
Richart Ruddie 9:52
So I initially was just using and putting feelers out there with a A an MLS for businesses, biz, buy, sell, and as quite like can confirm, and anybody else, it’s a lot of work to try and solve business. So I don’t recommend anybody trying to do it on your own. Hiring a broker is by far and away the much better solution, especially if you value your time and time equals money and then the back and forth and a lot of people that they know how to filter through it and also reach the right people, right? It’s not just being on being on an MLS,
Joe Valley 10:29
even even if it’s Chris Wozniak, it’s still a good idea.
Richart Ruddie 10:32
Definitely work on was super high.
Chris Wozniak 10:33
Not only took you 10 minutes, Joe,
Devin Johnson 10:36
you know, one of the things not to cut you off for Rich, but you know, you guys bring such a wealth of knowledge and expertise to determining multiples, auditing all the valuations, to looking through the financials to helping us put together a really nice due diligence package, that when you do that on your own, it takes so much time so much guessing that goes on as to what a buyer is going to be interested in. And unless you’ve been a buyer, and done your own mergers, acquisitions, any type of due diligence as a buyer, it’s hard as a seller to really know what type of information that buyers is going to want. And so you guys made it very easy for us to put this information together to present it accordingly to the right buyers. So for that I’m I’m super grateful. Rich, go ahead, sir to cut.
Richart Ruddie 11:20
Yeah, and definitely that was one of the biggest things in differentiators. I have emails and Devin does as well of different brokers, bankers investment funds all the time knocking on our door, trying to see if we’re interested in either raising money or exiting. But a lot of them don’t want to actually put in the diligence and hard work before going to market. And that was one of the biggest differentiators that I saw with with Chris and the Quiet Light team. Beyond the fact that I have a couple other internet marketer friends that have successfully sold with Quiet Light. But they we saw a lot of them said, Okay, you pay us a monthly retainer fee. And we’ll just go to market and all they want to see is just your basic p&l, where I like that Quiet Light did a lot more diligence, seeing a lot more of the financials, really understanding the business, doing interviews with the team, and really discussing about the business model and who may be good potential acquisition targets. So I found that was really valuable in working with Quiet Light, and getting getting a deal done. One of those things was the SBA. So when I looked at selling previously, we didn’t pre qualified the business with with SBA and one of the buyers wanted to do a deal and was going to buy the business. Luckily, the deal fell through because they didn’t get qualified and they couldn’t they couldn’t do it. And the banker that they had hired with the SBA brokerage side didn’t understand digital marketing. He didn’t understand a business that doesn’t have fixed assets. And he was very confused by it and perplexed and wasn’t getting it approved. And by the time we had to step in, and we said hey, here’s here’s how the business works and was able to explain it. They said, Oh, and he said absolutely. I said no problem. You know, I’ll prove the business now. But But at that point, the buyer had already gotten cold feet and had walked away at the time to maybe our chagrin, but now to our to our delight that we’ve continued to grow the business and then had a bigger exit down the road. But that was one of the biggest things is pre qualifying with SBA. And even though we maxed out at SBA and didn’t ultimately didn’t end up needing it. It’s just it was a really good qualifier for getting the right buyers in front of us.
Joe Valley 13:36
Yeah, well, it also, the great thing about being SBA qualified is that gets cash buyers off the fence, they tend to a little quicker, because they know that SBA buyers can pull the trigger a little faster, so to pick was talk to us about the valuation process. You took this over when and how long were you talking to Rich and Devin before you, you know, decided to go to markets when the value is right for them? And how do you come up with a value of a business like this?
Chris Wozniak 14:03
Yeah, so I think, Rich and Devin, I think we first spoke in maybe October November of 2021, I think is when we first spoke. And then I think over the course of maybe three or four months of kind of getting financials together. You guys were growing really quickly. I think we finally had the you guys had engaged me and then we kind of took a while to get the package ready because we wanted to capture that growth from a valuation perspective. So I think probably end of first quarter 2022 was when we were ready to launch. And I think on your deal, we did a launch and then growth kind of continued we had a handful of buyers. And then I think we I think one SBA buyers kind of came forward. That deal didn’t happen and so we relaunched at a higher price and we kept the multiple the same which I think we went out at a 4.75 Multiple on you know very strong SDE adjusted EBIT a number. My thought process was, you know, in my industry and Quiet Lights realm agencies, it’s kind of thought that they maybe aren’t as sought after, necessarily, or maybe don’t garner those types of valuations. I looked at you guys as a. And this is why I was smiling earlier, Joe, because Joe and I had a call last week where we were talking about valuing agencies. And Joe had a good point, like, is there another name versus just agencies and we were kind of thinking like third party service provider, all these different names, because that there’s just a strange connotation there. So I looked at you guys as a highly organized company, with a really strong staff that had a lot of repeat and referral business, like the majority of your business repeat referral, and that your margins were kind of like, out of this world, you know, like 75% net margin, or maybe a 65%. net margin. So just huge. So and then, like to, to Rich’s point, getting an SBA pre qualified, it doesn’t necessarily mean we need to find an SBA buyer, it just puts, in my opinion, every buyer on notice that we have the ability to go the SBA route. So I think that’s important and putting upward pressure on valuation. But I kind of took all those factors in and then just in speaking with both you and Devin, I just felt like you guys were present. So well, two buyers. That was a huge part of it. So
Joe Valley 16:35
how big of a how big of a part of that is it to you, Chris and two potential buyers that Rich and Devin are true professionals and present themselves? Well, do you think that matters a whole lot to buyers? Or do you think it’s all about the numbers? I know the answer, you know the answer, I want the audience to hear it.
Chris Wozniak 16:52
Yeah, I think it does matter very much. So it’s hard to quantify what that would mean to evaluation. But I think it I think it does mean something to the value of the company, the purchase the asking price. But what I also think it really means is, which is probably more important than anything is can we get it through the finish line. And so a seller’s ability to speak openly and honestly and with clarity to buyers is huge. If you have a seller that is more disagreeable, and not necessarily for any good reason that can make it more difficult. And the same goes for buyers, if a buyer is difficult that that’s going to decrease the likelihood of us getting to closing. So I think it means a lot. But like I said, it’s hard to quantify. I don’t know what you think, Joe,
Joe Valley 17:38
it gets you a little higher push on the multiple because you know that buyers are going to trust the sellers. Like in this case, I had a deal back in I think it was 2017, where I had a 72 year old person that was selling a business and it was a 17 year old content site. They just traveled the world and and had daily contests and questions. were picking out prizes and stuff. And he’s back then it was for this would push a multiple is literally 2.7 fours because it rounded down to 2.7. Online. And he’s like, no, no, I want to go I want to go out at four times, Joe, just get me on the phone with them. And we’ll be fine. And that was kind of it was poor prior to 2017. Because I was little it was I was a little greener. So it might have been a few years before that. And I forget to John it was his name. Okay, John will go out and do that. And I’ll be home we we sold it at four times we had multiple offers. And it was all about him instilling trust in the buyers, buyers trusted him he built a good coming out to his credit, just like written down. And it was a 17 year old business with a steady, slow, steady climb in revenue. And he had a little bit of repeat revenue. I think that’s probably one of the big factors here is that guys, you had recurring revenue and you had referral revenue and you are growing pretty consistently. And Chris, would you agree that that’s one of the reasons you were able to push the multiple of that higher?
Chris Wozniak 19:07
Yeah, absolutely. I think it’s all those reasons. It’s, I think mostly it’s, it’s their business, all the metrics and the indicators, the repeat business, the margins. And I think it’s it’s the fact that we were able to get SBA pre qualified is all due to their record keeping their documentation, their tax returns were clean and match their p&l Was I mean, it was just, it was a from a advisors perspective. It was a perfect scenario. And I thought, let’s not shortchange, let’s give this a shot at 4.75. And I think what I think we closed at 4.5. So I think we were, you know, we all had the right mindset on valuation there.
Joe Valley 19:44
Yeah. Now, Richard Devaney market also
Richart Ruddie 19:49
spoke to the valuation based on what people were coming in offering and we actually had offers that were even over the valuation, but the terms of the deal are also important to right where Some people wanted to put a little bit of money down and then pay some millions dollars more than the asking price. But over a period of time because they liked the model so much they just weren’t familiar, or they didn’t have the right business background. And to Devin and I, we said, you know, we’re only going to do this if it makes sense and the right buyer comes in. And even going back to when I first connected with Devin out in, in Utah in late 2017. I was so impressed like how Chris was impressed with how we were diligent, I was so impressed with Devin’s diligence, and both his quick understanding of the business and how it works, as well as documentation and putting together paperwork, but plans of actions, and just an overview of how to take the business and how to continue to grow it and scale it and change it from really a traditional lifestyle business that focused and really relied mostly on just me to building out a team and having repeatable processes in place and things like that, that, I’m sure,
Joe Valley 20:59
yeah, no, I want to I want to drill down on that, because I was gonna say, really smart people hire really smart people. And you took a big risk, in a sense, Rich, you gave up a certain percentage of the company, to have Devin come on board and help you. And I mean, if I memory serves your financials, which were a mess when we first started talking, right, and they might have been co mingled with something else, I can’t remember exactly. But it was hard to get to the valuation back then. And we talked about the transferability, the business, clean documentation, things of that nature that you all, I mean, you jumped on and you worked towards. And then you brought in Devin and I was in the early parts of you. I think Devin and I are saying we might have been on a call or two back in 2017. But talk to me about first Rich about your mindset of of connecting with Devin, and what made you think this guy, I want to bring him on board to help me grow this company, to where to where it’s, you know, get to the next level for an eventual exit?
Richart Ruddie 22:02
Well, I guess I’ll say I didn’t feel it was a risk, but Devin, and that’s why he was here, right? So I was I was glad to give up equity, and put the right pieces into place with him. And that that was really important. But there were other people that introduced me to him. And some of them were not ones that I felt a high level of trust with or that I believed they had the capability to grow and expand. And and I tried to work through with terms with them, and it just wasn’t working. And I told him I don’t I don’t believe you’re the right partner. And I reached out to Devin and I said, if you still want to come on board, here’s what’s happening there. And he the guy was putting some pretty well to do people in place and trying to get everybody together. I mean, newskin is a very big, one of the biggest companies in all of Utah was getting one of their top public relations and branding marketing people in place some other people had corporate experience with and then and then the very last person they actually introduced me to was Dev and towards the end and Devin was going through kind of a transition time and the timing fortunately for us worked out really well. And it didn’t feel like a risk because I could see his diligence and then after he came on board, we actually had a big home builder client in South Florida so he came you know, he’s come to my house we’ve had very personal time together and went to go see and visit clients in person so and just his grasp of the business expanded really fast from there. And right after that, I mean anybody who calls in he could sell sell them probably as good if not better than I could and explain and really be very detailed in helping clients understand what they were getting. And also explained to them how the process works today in the future and what to expect and those were things that I wasn’t really necessarily always great about. And I ran the business really like as a small business owner. It wasn’t that the financials were a mess, but I just didn’t document them every month and I would typically do it right when tax season would come and then
Joe Valley 24:11
that’s that’s considered a mess just for the record press
Chris Wozniak 24:14
one in our world that’s a mess.
Richart Ruddie 24:17
So they were a mess but I would do them once a year and then organize everything and whatnot. So and we never had a losing month from inception in 2011 till till 2023 So everything has been you know on the rise up and up and I think that’s also something that any buyers that sell the business that’s what a great cashflow businesses is
Joe Valley 24:35
oh it’s the margins are just fantastic. That’s one of the things Chris and I were talking about a couple of weeks ago the margins on businesses like this just incredible. And there’s such a misperception or conception about the you know, agency model versus owning a brand. I think the margins on something that’s brilliant. I had one once upon a time. That’s why I guess I could say that for sure. Now Devin, why Rich? Why this company? What was your background? Before jumping in and, and getting equity and and did you have to pay Rich to get equity talk to us about that a little bit?
Devin Johnson 25:08
Yeah, good good questions Joe and good introduction there Rich. So I had a little bit of a unique perspective on the business I was brought in without knowing that the business was for sale, I had just exited another tech company that I’ve been a tech entrepreneur for most of my career, we’ve grown that business to over 20 million users behind our software platform, that business is still running, I still have holdings in that business, I don’t operate it. But in in that transition period that Rich alluded to, there were some feelers that were put out by a venture group here in Utah that was looking at buying Rich’s business from him. And so as they started putting those pieces together, I had the view and the insight into the business from the buyers perspective, which a lot of the sellers that will listen to the podcast are prospective buyers, we tend to kind of keep our view of a deal, very one sided. And so if we put it, you know, put our view in other people’s shoes, and we start thinking like the seller, we think like the buyer, we think like the operator, there’s a different perspective to each of these, these different angles. And so from the buyers perspective, I was able to look in at what Rich was building, I saw a wonderful track record, of technologically being able to deliver on a solution that he was he was positioning in a market that really hadn’t been tapped into yet. Right? If we kind of think back to what gives us our gray hair, we think of the marketing days when it was it was a limited pie, right? You have website, you had some on premise or on on site, SEO work, you’d have trade show budgets, and you’d have a little bit of ad spend budget, and that made up your marketing budget, right? It was it was very clear, very defined. Nobody really thought about reputation management. Nobody knew what brand management was or brand amplification. And so what Rich was doing is really becoming a pioneer in a space that hadn’t yet taken hold. And so there there are a lot of agencies in this space, there are very few leaders. And what we found was there was a really good referral basis of clients that were coming to Rich. Most of them were project based, right? So from the project based revenue side, you see a much shorter term, three to six month projects, right. So all of a sudden, over the course of an annual client record, we’d be looking at like an 86% customer churn rate annually, which for project based agencies is not uncommon, right? But we start to think as buyers, how do we turn that into repeatable revenue? Right to where things are on a monthly recurring schedule, we have a longer term with them 1224 36 month terms? And how do we broaden our stickiness our service offering a little bit more? And that that’s, that’s really where I’ve spent my career, right, regardless of industry is looking at how can we take something that’s valuable to a client and provide more value than what we’re charging money for. And so as I met with Rich, I understood his passion for the business. One of the things Joe that stood out to me was that Rich as an entrepreneur was willing to stick with the business. He wasn’t looking for a quick cut and run. That’s a warning sign, right? Myers. So that was one of those things that I thought, Okay, here’s, here’s an entrepreneur that stands behind what he’s selling. He’s, he’s along for the ride, if he needs to roll some equity back in, that led me down the path of doing due diligence on my prospective partners, right, those who are bringing me to the table saying we need a CEO can really take this opportunity and grow it into what we hope it can become. And that’s when the deal fell apart. And so at that point, when we started to see that the writing was on the wall, that might not be the right buyer for Rich to sell his business to, I went ahead and push the brakes and said, Guys, if something concentrates, then let’s let’s go ahead and reengage at that point, and we can continue strategizing. And so when things didn’t go, according to their plan, Rich did reach out and and say, Hey, would you be interested in just the two of us kind of taking and running with this? And it was, it was like other deals that you would that you would do with the vesting schedule. It didn’t require a large amount of capital to be invested. It does require a large amount of time, right? Because when you’re bootstrapping any business, especially one that’s been a hobby business for a single entrepreneur, that really is still in its ideation phase, right? Where you have a proof of concept that can tends to be proof of concept to proof of concept three repeated over 10 years. But it’s not something we can just simply train a bunch of staff on and roll a bunch of systems out and all the sudden scale it. And so we had to start like, like partners building a company to say what’s really the right brand? Right, Richard done a great job building SEO presence around a couple different agency names, but we had to really rally around one to say, what are we going to put all of our effort behind to grow our awareness and continue becoming more and more of a leader in this space. And as we did that, that was a brand that we had that we still have technically, but that we realized is limiting us as we expanded that stickiness that I mentioned. And so When you talk about reputation management, the overall association with that term, or the thing that comes to mind is it tends to be negative information, right negative information that needs to be cleaned up. And, and while there are certainly instances in many companies and individuals past that, that warrant kind of quieting that noise putting a past lawsuit, you know, behind a popular soda, beverage brands, you know, search results. We didn’t, we didn’t want that to be the only service offering that we that we offered to the market. It’s not where we could add value, individually and collectively. And so what we said was, let’s come up with a list of services where we can define, defend and develop these brands. And that starts really fundamentally right there messaging, what’s understood from from kind of the C suite all the way down through their team, how is that then making its way onto the web? How was it received by your audience and your consumers? Is that really, what is felt about your brand? So what’s the overall sentiment of your brand? And what information is being shared? Right? Is it just simply press releases coming out of your, your your media team? Or is it just blogs on the website? Are there are there any missing pieces there that we could ensure that we’re kind of closing the gap on and as we did that, what we found, Joe is that we create a really nice holistic end to end solution for the marketing department at these organizations. In some cases, that’s working with existing marketing teams, to where we’re just closing gaps, where they may not have resources. And in other cases, it’s us being an outsourced cmo for them, where we literally assemble a team in house to be their social media presence, their media buying team with paid advertising, we’ll do blog writing, website development, we can do reputation management, brand management, and really see that through to where a brand is really ready to hand off to a Quiet Light broker saying, now you’ve not only grown and established a really good presence for your brand. But if you’re ready to exit, here’s a really nice clean brand that we can hand off to you guys to make for an easy sale, you’re using the
Joe Valley 32:01
term brand a lot. Is it truly a brand? Isn’t something physical? Or in most cases, is it a brand as in a company’s brand and reputation? And the people in the suite C suite level that are managing that company? Or is it a balance between
Devin Johnson 32:16
question? You know, what we’ve found is that when you do sit down to what an online reputation is, it’s a keyword. It’s a phrase, it’s something that’s searched, it’s something that you want known about yourself, right? It’s associations with either philanthropic organizations that someone works with or with a professional bio that supports a career that they’ve had, or it’s products and services that they may offer to the market. And ultimately, the reputation is defined by how someone responds to that keyword. And most of the time, that keyword is a brand. And so it could be like saying a popular one, Coca Cola, or Home Depot or things of that nature. And naturally, we think Coca Cola equals red equals soda, right, we can start to put a couple little attributes around a brand the same way we would with Home Depot being orange. And there’s, you know, emotions to colors just from the marketing standpoint. But when you look at an individual, right, if you talk about some popular individual in the media cycle, their name is their brand. Right. And it’s the search term that really brings up the reputation results online. And it’s treated the same way from a reputation management organization standpoint. So when we’re looking to clean something up, when we’re looking to build a moat around some keyword online, we’re really targeting what the brand is, and then what brand attributes are associated with it. And so yeah, that that term starts to become ingrained in our speech pattern. So you’ll hear it roll off my tongue, you know, quickly, because most of the time when we’re talking about these clients that we serve, we’re always trying to break it down to what is the brand? What are affiliated keywords? What’s the value proposition, or their products and services that we need to highlight? Are there challenges or fires that we need to quiet the noise on. And as an agency, regardless of what service is your core competency, you should always be looking at what additional services you can layer on top of that core competency, to lead to greater revenue, greater stickiness better monthly recurring revenue, which then makes Chris’s job easier to say, You guys are really moving the needle forward. So if we think back Joe to when we connected in 2017, or when you and Rich connect and 2017 I connected with you and 2018 some of those challenges were you were looking at it saying okay, the churn is pretty high revenue is still significantly lower than than it was at the point of our exit here a month ago. And so we took that to heart. And so entrepreneurs if you connect with a broker, here’s a word of advice when they tell you that your revenues are a little low or that you need to kind of shore up your revenues and a couple of these other areas. Pencil that in, write it down in your little moleskin there create some actions and some Ask for your team and buckle down and do it right, because your guys’s advice is what helps us have a healthy strong exit. And it also makes for happier customers. And so that’s really what the last five years that Rich and I’ve been partners has looked like, right? It’s been buckling down saying what are our core competencies? What can we be better than everybody else at? Another good one, Joe, that that is important to mention is we had to look through our books to say, what was easy revenue for a one man shop? That was kind of easy project work? And does that line up with great revenue and great clients that we want to have moving forward that are repeatable, scalable, and predictable once we have a team? And the short answer was no, there was a lot of clients that didn’t meet that that bar. And so as we kind of built our partnership together, Rich now years ago, we had to let go of some clients, which means a sudden dip in revenue. So how do you recover and predict new targets, new verticals to go after, to set a new buyer up for success? Continuing that growth
Joe Valley 36:05
cycle? So Rich, the more Devin talks, the more brilliant I think you are for bringing him on board and seeing a vision that was beyond yourself and bigger than yourself. You did you did you feel back in 17, that you take in your your agency as far as you could with a lifestyle that you wanted to, but that it could go so much further, that you weren’t the person to take it there because your passion wasn’t there? Or what was your mindset back then,
Richart Ruddie 36:35
I think knowing what important thing in business is knowing what you know, and knowing what you don’t and knowing that if you want to grow, that you need other great people around you. And as you just alluded to, and stated after speaking with Devin and hearing him talk, it was pretty easy to see that it was a great fit. And when I went out to Utah, a lot of our clients were in the direct sales industry through the years and it was like direct sales heaven there of different corporations all throughout Utah County there and I said, Oh, wow, this is really a Mecca and Haven haven for it. And then years ago, I also had a 3d printed eyewear startup out of Silicon Valley that I had started. And exotica who owns Ray Ban sunglasses hot Oakley and all these other big brands, had just completed an acquisition of a company called one 800 contacts. And they wanted to bring us to Utah to see how their employees worked, how diligent they were and everything like that. And when I was out there meeting with Devin all that was coming back fresh in my mind that the people in Utah really work harder, and even through COVID, where the rest of the country was struggling with higher unemployment than pre COVID. Utah was the only state in the entire country that had us lower unemployment number than they did pre COVID at the time. So it showed that Utah people, they’re diligent, they like to work, they’re not too busy going out and getting drunk and partying like they’re very focused. And that was a really big factor as well in setting up and building out an office there in Utah.
Joe Valley 38:12
Kudos, man, kudos, good job. was talking about how important Devin was, in terms of the equity roll. Devin, you’re staying on with the company, you’re rolling equity, you’re gonna gain more equity as the company grows, as I understand it. Can both of you address how important that was to the eventual buyer of the business? And where do you think the company’s going to end up going first was Woz don’t you address it a little bit? Yeah, I think the
Chris Wozniak 38:44
Devin’s role, and I’m speaking from, from the buyers perspective, to say it was critical would be an understatement. I think a big part of the value that they saw in the company was Devin’s role going forward and what he had to offer, I think, I don’t think it would have been a deal that they would have done without Devin enrolling equity. And then also Rich and Devin being able to explain Devin’s role going forward and what that would mean to their investment. So that they I think, they have huge plans for where the company is going to hopefully end up. And so it’s gonna be really fun to watch from the sidelines and keep in touch with Devin Rich, because I consider them friends. And we’ve worked together now for a year, year and a half. So I have a kind of a personal investment interest in what happens. So it’s always very exciting to see an equity roll, especially in a situation like this where it’s not fluff. I mean, I think it’s a perfect fit. I don’t know how much we want to talk about the buyers but Devin, you would mean clearly you know more about what the plans are going forward and how integral you are to that plan.
Joe Valley 39:54
And before we jump into that, I want to ask Rich, are you really equity as well? Or are you more or less is
Richart Ruddie 40:00
done, more or less done?
Joe Valley 40:03
Is that what your primary goal was?
Richart Ruddie 40:07
Well, I think also initially, we were looking at SBA, which doesn’t allow for that was was one of the things I wasn’t I wasn’t, I guess, offered as part of the deal. And, but then I think it gives me a kind of a clean slate to go out and start hustling and, you know, see what, what else I can build and do
Joe Valley 40:28
your next adventure. All right, Devin, talk to us about your mindset in terms of wanting to stick around rolling equity, why don’t you tell us what rolling equity means in this situation, and, and what you see is the future of the company.
Devin Johnson 40:40
Yeah, so in this situation, you know, we’ve we’ve also kept engagement with Rich on on an affiliate, and advisor role. So while it’s not in a day to day operations, capacity, the brilliance that Rich exudes around technical expertise, marketing, digital marketing, and really the strategy that goes with reverse engineering and suppressing unwanted content. It’s not simply doing the old SEO game, to try to target negative content and get it removed. And so there’s a wealth of knowledge there that that Rich’s has built over the years, and adds a ton of value to the organization. The new buyers, when they came in, we’re pretty clear on what their goals were. And their goals were simply to continue growing the business the way we had at a much quicker pace. Now, when you’re bootstrapping a company, as entrepreneurs to, especially after many years of of growing the business, you want to take some of those earnings out. And you want to be able to kind of continue growing your lifestyle and building a family and all that kind of goes with, with reaching success and enjoying that success. When new buyers come in, they’re much more ready to double down reinvest, and, and kind of try new angles to growing the business. There are several areas that Rich and I prior had identified as as areas that we could grow the business if we wanted to really double down and, and grow. But again, if we look back to when Rich and I originally connected, and I may be speaking at a turn here, Rich, but I’ll speak on your behalf, there was already an interest in 2017 at being able to free up some time, free up some capital and be able to invest in some of the other ventures that Rich had already been engaged in. And so as we moved forward, and five years of continued engagement and growth that occurred, we certainly wanted to afford that to Rich that if he wanted to cash out, you know, his holdings and be able to work in some other capacities that that now would be a good time. And so for me, I came in knowing what this company could become, I hadn’t had an additional 10 or 12 years of exhaustion behind growing a new startup. And so, you know, my my, my tenure was a little shorter than Rich’s. And so my, my excitement and passion for continuing to grow the business wasn’t maybe as fragmented and didn’t have other ventures kind of competing for my time, as it did for Rich. And so with this new buyer, the new buyers came in a little different background, they didn’t come in as a different agency trying to roll up another agency, which is fairly common, right, we had several buyers that engaged Chris, looking from the agency roll up standpoint to say, here’s a really good leader in the market. But if we could pick them up for a good price, but really add a lot of momentum to our brand. That wasn’t the case with these buyers. And so I had to look at these buyers and say what do they bring to the table that gives a nice shot of adrenaline to our team, to our company culture to the opportunity for us to continue to grow our client base while still delivering with excellence the services that we deliver. And as we got a little bit more under the hood and start that kind of courting and dating process before actually Consummating a marriage later on. We found that these guys really understood repeatability, they understood how to scale of business, even if it’s in a different vertical with product centric offerings versus service oriented offerings. And as we started building out the deal, it wasn’t until really late in the deal. Right, Chris, that other partners came to the table because of the excitement that these new buyers had.
Chris Wozniak 44:30
Yeah, it’s not that they needed to raise any money whatsoever. But they Yeah, I think they brought on what four partners now. Due Diligence, yeah,
Devin Johnson 44:39
I just got back on on Sunday, from a little bit of a road tour through some of these new partners and meeting with some of these new individuals and with their teams and, and and discussing what it is that we do. And what was really interesting, Joe is that several of them pulled me aside later and said our team is just in awe of the presentation of such a technical solution that you guys provide, that’s really been reduced to very, very simple understandings of how search engines work, how AI is affecting the search engines, how marketers need to start changing, really their intent, and really the value that they’re providing. It’s not the old, you know, write a blog, post a blog, watch the blog rank, it’s changed, the whole game has changed. And, and for me, it was simply looking at some of these brands that these new partners already represent, to the tune of billions of dollars in annualized revenue, just across their own customer base to say, what is it that we could offer to these organizations? If there isn’t a reputation management problem? Right? How do we proactively offer solutions, which really widens our net on the ability that we have to be successful and to grow our business, which was really our strategy from the get go, it’s how do we make sure that we button up all the services that we offer so that as we introduce new ones, we can we can make sure that with a nice small, tight team, we can we can still do that with, with excellence for our clients and not sacrifice the quality of our prior services. So meeting with these new partners, just reaffirmed for me, Chris, that these were the right buyers, their excitement, their passion, their zeal for just getting started getting the under the hood, trying to understand the market. It’s it’s fun for me, because I now put myself in Rich’s shoes where I’m sure I came in a little green. I was never in the marketing department, I was always a tech entrepreneur and operations executive and, and really had wonderful team members around me, that really kept the wheels going round. And so when I came into the business, right, Rich, Rich would smile as I would ask these, these very, you know, simple questions. And I’d be, I’d be off the mark five or 10 degrees on kind of positioning the solution, and he would help train me up. And now as I hear these new partners coming on board, and they’ll talk about what’s AI, right, or what do you mean that if I search for, you know, a product on on Amazon, that it’s going to appear on my Facebook stream, you mean, you could actually target an audience that way, right. There’s, there’s, there’s kind of a new learning, and a new exposure that these guys are getting. But as they do that, what, what we’re finding is that because we selected the right buyer, we’re also now seeing the door start to open, which was that value add, right that they would bring to the table, they weren’t bringing other teams that already had service expertise we needed, they weren’t bringing a bigger client base, that could instantly compound our revenue. What they were bringing is relationships. They were bringing growth capital, if needed. And, and so their expectations are highly aligned with where Rich and I had already set the course for the business to go. We’re expanding that rapidly. We’ve had a lot of great strategy meetings already on fast tracking some of the things that we were already looking at building out from an automated standpoint, moving into a SaaS model, slightly different than what Rich and I had had kind of disgust prior. But again, to a seller, this is the this is the value this the excitement that a new a new buyer brings is is new expertise, new eyes,
Joe Valley 48:29
fresh energy, fresh passion, and capital. And as you said earlier, you know, as a bootstrap entrepreneur, Rich myself was we all done it before the devil you as well, you, you build a business, and you’re taking as much in terms of distributions as you can, you know, to a certain level, and you don’t think, well, you know what, I’m going to cut my pay in half and just grow this company like crazy. Sometimes you do that, but it’s at a risk that it sounds like the bottom line, discretionary earnings at this moment is not as important to the new buyer, because they see the potential in terms of putting in growth capital and growing this company 10 times the size as what it was when you guys sold it. Is that a correct assessment?
Devin Johnson 49:14
Yeah, yeah, I’d say that’s, that’s correct. Excellent.
Joe Valley 49:18
Rich, serial entrepreneur, smart guy. Brilliant for bringing Devin on. What’s next?
Richart Ruddie 49:27
Ah, you know, I’ve looked at a lot of different things. And even prior when we first started talking, we have a dear close friend who started the ramp business if you remember and sold over $20 million in dog ramps and so forth. And we talk all the time about ideas and things and I you know, one point wanted to get into more of an e-commerce type of play. And then it’s all some of the logistics and headaches that come with that. So one of the things that I’ve started doing kind of playing with just recently I is I have a 16 month old daughter who loves some of these children’s YouTube channels. So I started recording with an artist some nursery rhyme songs for infants. So it’s still very, very early stages. But that’s just kind of a small side fun project. I’ve never done YouTube. As far as an influencer, you know, most of the time, it was people saying, hey, there’s copyrighted materials on YouTube, can you help us fix this, and you know, help us get a legal notice out or something like that. So this is a completely different thing with YouTube that I’m doing now, or at least exploring. So that’s one thing and just trying to see what else I can I can build on. I’d like to see if there’s some maybe 10 Gentle service that the old company as they grow, that they’ll buy, and maybe I can be a vendor to them. And that way, there’s still ties, and as they grow, I can still have a some benefits tied to that. So I don’t know, I’m just kind of exploring options right now. I know from the first few days out, I was still like, alright, answering calls, and how can I help and you know, make sure it just think continues to grow. And then I’m like, Oh, wait, I gotta I gotta stop that, because then I’ll never let go. And then next thing I know, I’ll be working for free for the next two years. I’m like, wait,
Joe Valley 51:20
let it go. It’s been your baby for the last decade.
Richart Ruddie 51:22
It’s hard. And as I told Devin, it’s kind of bittersweet in some ways, or in many ways. So it’s scary.
Joe Valley 51:30
Did you ever have moments of doubt where you’re signing this loi and go in and like doing the right thing? Yeah,
Richart Ruddie 51:35
all the time, all the time. I mean, Devin knows we had offers and we pulled out many many times, saying you know, it’s just continued to grow this and I you know, I put a lot of trust in Devin and really just gave him the keys and have kind of been almost like a board member and consultant in a lot of ways but still also behind the scenes helping when need be, which I’ll probably still be doing behind the scenes but it was definitely came up as does this make sense to sell or not, but I want to at least get my chance myself a chance to see if I can do something else. And and I’ll know and check back in, in in a few years and we can have the conversation whether or not you know, it was the right idea? Well, I
Joe Valley 52:18
can tell you our buddy that you’re talking about Ramon he went from running a content site sold it for just about almost just under eight figures to buying a YouTube channel bought an e-commerce business that’s what he ramped is the dog ramp business. And he never took any time off to reflect on on what he really was excited about and what kind of lifestyle he wanted to live. He owns genius letter Now folks, if you get a cat, genius letter, you can buy an online and I think I think he is it Petsmart I was gonna say Costco nationwide
Richart Ruddie 52:58
Petsmart Canada as well. We just had a conversation about that. And, you know, he said, you know, he knows I know a lot about the factoring industry and said I don’t know if you’re interested in helping with any factoring because he said we got big orders we got to fulfill and you know, very capital intensive so I said I think I’m gonna stick with digital businesses but I didn’t have a lot of time just on calls with other people seeing what they’re doing and just throwing out ideas and I definitely know inherently I just I have that will just keep on building something. You know, I don’t want to retire I probably could even with the type of lifestyle that I live but I want to keep hustling keep growing keep building and doing something else. So
Joe Valley 53:40
I’m excited to stay in touch and hear about what’s going on in your life and your future. You can always reach out to Chris and I for you know, we’ll tell you what to dumb idea and what sounds like a great idea. Work God no, don’t ever do that. Don’t ever do that. Like Ramon tells you e-commerce is tough sometimes if it’s if you’re not in it. I mean, think about the last five years you guys never had to deal with any supply chain issues. And your margins are huge. So it’s all a good thing for you guys.
Richart Ruddie 54:06
Yeah. And and I was helping a friend launch an e-commerce nutraceutical product, and just with iOS updates and security changes and things like that, I mean, it become very, very difficult. Where are these like, it’s hard to make, make the numbers work. So in ways that you know, I come back to Am I doing the right thing exiting a really profitable really great digital marketing agency that has never lost money will continue to grow. So a lot of those things come come to mind when you’re selling a business. And like we said with Ramon, and some of our other friends who have sold have gone on to do really big things. So I think the ball is in is in the seller’s court and just them moving forward and making the most out of their skill sets and whatever they it is they want to build decks
Joe Valley 54:59
Yeah. Woz wrapping up with you. I know, for me personally, when I have clients like Devin and Rich, it makes my job a whole lot easier. It’s enjoyable. And you’re invested in their success. Did you feel the same way in this process?
Chris Wozniak 55:17
Yeah, I did. I think Joe, if you if you just listen to Richard Devin just on this call, I mean, that’s what I got to experience. When I first met them trying to understand their business, it’s what I got to experience, when we finally launched and got buyers on Zoom calls, you can see both of their different strengths and how they balanced each other out and how well they both present the synergy there. I mean, as an advisor, it makes my job so much easier. It gets them a higher valuation a higher sales price. So I’ve told them a million times, I was so grateful for the opportunity to represent them, and they put their faith in me. So I consider the both Rich and Devin friends, good friends that I want to keep in touch with and see what success is each of them has going forward. So it’s it’s exciting.
Joe Valley 56:05
Rich, and Devin, any last props you want to give was, before we wrap up,
Richart Ruddie 56:10
I would say just keep sending over, you know, updates to us with any agencies or things that come in through the door, I’m sure there’s probably a lot of third party benefits that Devin and the team will probably see whether it’s working with them, and we’ll be offering as an add on service. And then that will help everybody kind of grow their bottom line numbers and and help Quiet Light. But I’m just want to say thank you, you know, you were a pleasure to work with. And you were able to get the deal done and your diligence and hard work and follow up was was really good. My only thing that I always said to Chris is he’d send me a text and say you haven’t been and I’m like, it’s Yeah, I was like Is something wrong? It’s something bad. And he’s like, No, No, nothing’s wrong. And I was like, Oh, I was like the way you just always like spooked me when he would say that. It was always good update got
Chris Wozniak 56:58
a kick out of doing that. Yeah. That’s one of
Devin Johnson 57:01
the areas that I that I would give you praise Chris. And there’s so many that we could but if somebody is fortunate enough to work with you, during the liquidity of their business than one of the things I appreciated the most was your availability. Right? Your your tact your candor, your you were very direct when you needed to be, you were suggestive when we needed to kind of take some hints, and you’d repeat it. Your follow up was was impeccable, the timing was great. And it really helped us stay focused. It’s one of the hardest things that that a lot of people don’t anticipate is the amount of work that goes into selling a business while you operate a business. And selling a business guys doesn’t happen overnight. It takes months, months and months of work. And even with cash buyers who can come in and close really rapidly, what happens is you you’ve got some buyers that are kind of come in, they’re going to saturate a lot of your time, and they’re not going to work out. And that’s time spent. And you don’t want to have that time spent be something that your company revenue suffered your team suffered communication with your clients suffered, because you redirected all your focus just on following up with with an industry interested buyer. And so having a good was in your back pocket that keeps you on on track, keeps you focused on the right things really, really makes the difference. We’ve worked with several other brokers in the past have done several other exits. And I have to say you guys were the most enjoyable to work with made it the easiest of anybody that we’ve worked with in the past. So I’m excited for the next time we get together. The next time we have a sale of the business, it’s going to be an even grander sale. I think this one was was grand in its own right, it certainly was much more grand than than what it would have been had we done one back in 2017 with the gel. So sure, I’m glad that Rich was willing to stay on board and enjoy the ride, reap the fruits of that ride, and be able to now do some more great things. So thank you guys for all your hard work.
Joe Valley 58:58
Well, thank you both. Thank you, all of you sharing your story. Hopefully it’s gonna inspire some other folks and what a journey. I’m excited Devin to have you back on Sunday, talking about the second x that you had the second bite of the apple as they call it and were you able to take the company. So all three of you. Thanks so much for your time. I greatly appreciate it.
Chris Wozniak 59:18
Thank you guys. Good talking to you. Bye.