Startup Acquisition Stories w/ Marc Abousleiman – Co-Founder & CEO at Appregator

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Andrew Gazdecki (00:04):
Yes. All right, I’m here with Marc from Appregator and he recently Acquired, or I should say Acquired a Shopify app for seven figures. So Marc, thanks for joining me on this podcast.

Marc Abousleiman (00:17):
Appreciate it, Andrew. Thanks for having me. And I want to give a quick shout out to my co-founder Mishaal who’s not able to join us, but is with me every step of the way.

Andrew Gazdecki (00:26):
Her name’s Michelle?

Marc Abousleiman (00:29):
Mishaal.

Andrew Gazdecki (00:30):
Oh, Mishaal like [inaudible 00:00:31]. My wife’s name is Michelle, so it’s like, wow a combo.

Marc Abousleiman (00:34):
A lot of people call him Michelle and he’s not too thrilled about it. So feel free to do that if you want to get under a skin a bit.

Andrew Gazdecki (00:39):
I will next time I talk to him. Well hey, Appregator, I’d love to know a little bit more about how’d you guys get started, background of the firm, just really what you’re looking to accomplish with Appregator?

Marc Abousleiman (00:53):
Yeah, happy to. So Appregator Acquires scales and builds Shopify apps, that’s what we’re focused on. That’s kind of what we do every day. Mishaal and I started the firm earlier this year, officially launched in June, so it’s still quite recent. Acquired our first Shopify app, so we’re pretty pumped about that, thank you for making it such an easy process. But our goal really is to become a one stop shop for merchants and kind of fulfill any need they need in eCommerce enablement. And so whatever that might be, if you’re just a small store and you’re getting started and you want to pick a theme, we’d love to be able to do that. If you’re a much larger store and you’re doing really complex things, trying to get your conversion rate up 10 basis points, that’s something we can help with as well. So our vision is to become kind of an integrated set of software solutions that’ll let you as a merchant run your eCommerce store on Shopify as efficiently as possible.

Andrew Gazdecki (01:50):
Nice, I love it. If you could Acquire one Shopify app, what would it be? What’s your favorite one?

Marc Abousleiman (01:58):
Just one?

Andrew Gazdecki (01:58):
Yeah, like the biggest one at a reasonable price or maybe [inaudible 00:02:05].

Marc Abousleiman (02:06):
Yeah, I think I’m going to have to go with the one we just did. It’s nothing like shouting out our own portfolio, but we just bought an app in the SMS marketing space called supercharged SMS. And the reason we did it is because in the new reality of [inaudible 00:02:24] today, it’s really difficult to get the same return on ad spend that used to get. And it’s really imperative to have a channel to communicate with your customers one on one, to be able to personalize commerce. That’s why we wanted to go for that, it’s such a powerful building block for anything we want do in the future. Being able to chat directly with your customer’s and let’s face it, most people want to text these days, they don’t want to email, they don’t even open their emails anymore. And so that’s kind of what drew us to that acquisition and listen, it won’t be the only one but we’re really thrilled to get started with it because its such a powerful tool you can use going forward.

Andrew Gazdecki (03:00):
Nice. So, that sounds like a fantastic acquisition. So congrats on closing that. Can you walk me through… You know what? There’s a lot of deals on Acquire, as you know, there’s lots of different Shopify apps that you could Acquire. Can you walk me through, aside from just the product, how did this one really come to close? You spoke with a buyer, what made you confident that this was a good sound acquisition comparative to maybe the other options on Acquire?

Marc Abousleiman (03:38):
Yeah. I mean, listen, you guys do a great job putting up opportunities that are compelling across a bunch of different industries and size ranges. We’re always poking around Acquire, even looking at stuff that we wouldn’t buy, just because it’s interesting. And so it’s a really good first filter to figure out what’s going to be within our investment thesis and within our size range. I think what really jumped out to us is the capability set that we’d be acquiring here and the financial metrics, there’s nothing to prove how good your company is than showing a bunch of growth and healthy margins. And so for folks out there who might be thinking of selling their app, having really good metrics and financials in place just makes life easier for people who want to take it over, for buyers who examine it because the more you have to dig and figure out what’s really going on the longer that process can take.
And so Acquire, you guys do a great job laying out all the metrics, all the financials, at a quick glance you can see what’s interesting and what’s not interesting and kind of make everyone’s life easier deciding to either move forward or pass.

Andrew Gazdecki (04:47):
Nice, and I really love that answer, I guess another thing I’m curious about is, was there anything in particular that the seller did that just gave you confidence? Given the size of this acquisition, you really want to cross your T’s dot your I’s on this one. Was there anything that the seller did that gave you additional confidence, maybe things that you would like to see every seller that you interact with do the same?

Marc Abousleiman (05:20):
Yeah, I’d say like once you put together a really good package and you first get someone’s attention, that’s kind of the first step and you want to give yourself the best possible chance at a good solid conversation with potential buyers, then it kind of becomes and you get a little bit off Acquire but how do you perform on the initial call? So we will on the phone with opportunities that we think are interesting and chat with the founders and ask basic questions like why’d you get started? What are the issues facing the business every day? And through those conversations, you can see two things. Number one, how well the founder understands their own business and is able to clearly communicate that. And number two, does it match up with the stuff that was on Acquire in the first place?
And usually it does, but it’s pretty common to have like, oh, it’s like a slight detail that was different in your listing. And so it’s really important to just be completely transparent and as upfront as possible. Because the buyer will probably figure it out and it’s better to just be upfront about stuff than to have him figure it out later. And that’s something that this seller did particularly well was just, “Hey, this is what it is. This is what it isn’t. We wish it was all these things that’s not there yet.” And so you kind of know what you’re stepping into and can assess that risk.

Andrew Gazdecki (06:38):
Nice. What does your due diligence process look like? If I can ask. Just from a high level, you don’t have to go into super detailed-

Marc Abousleiman (06:46):
Yeah, it’s pretty straightforward because of the fact that we’re only focused on the Shopify space, the things that you want to look for become pretty standardized, like we’ll get access to someone’s Shopify partner dashboard and they do a great job just kind of streamlining the data so we can get in there and poke around revenue, customers, we can understand the positive reviews you’ve been getting and why, and that’s kind of on the growth revenue side of things. And then we’ll take a look at the expenses as well. And so we’ll do a full financial due diligence understand what the monthly financials have been, that’s one pillar of our work streams. We’ll go across similar things across tech, operations, legal, really a full review of what the business is alongside some of our advisors and it feels like pretty overwhelming for someone who hasn’t done it the first time, but it’s super important to be able to get a full and accurate picture of what you’re potentially buying.

Andrew Gazdecki (07:49):
Nice. And I asked this question and I think you’ve touched on a lot of good points, but I ask this to pretty much every person I talked to on podcast. But if you had to give maybe two or three pieces of advice for founders looking to sell, what would it be and why?

Marc Abousleiman (08:08):
Yeah, I think in this space in particular, the first piece of advice would be document your code and document everything you’re doing, because it might make sense in your head and you might feel like you’re slowing down by just writing down all the steps you need to do to run your business. But the reality is if you’re looking for an exit or if you’re even considering an exit in the future and you’re not sure, having everything clearly laid out and kind of making yourself no longer mission critical for your business is a very, very powerful thing because it means that someone else can take it over… It doesn’t mean that there’s no work done for it, it just means that handoff is smooth and people will reward you for that. Like having something that’s quote unquote, plug and play is super valuable. And so that would be my number one piece of advice.
And then the number two piece of advice would be, no matter how small your business is, try and run it professionally. Try and have clean financials, try and have well documented code, like I mentioned, because the clearer it is for external parties, I find the clearer it becomes in your own mind and then you can make better decisions as you go.

Andrew Gazdecki (09:13):
Nice. So I assume you talk to a lot of different sellers and with that sometimes you have a great experience and sometimes you have a bad experience. What are some of the pet peeves or maybe yellow flags that you see common with founders?

Marc Abousleiman (09:33):
Yeah, maybe one of the biggest red flags, Andrew is I understand that some people might have pressing needs for cash, or maybe they’re working on a super exciting new project. But whenever someone says, I want to offload this really quickly, like this needs to be done ASAP kind of raises suspicions for me, just because it’s like, how quickly is quickly? Why do you want to get it done so quickly? You’ve spent months, if not years building this, what’s going on? And so making sure you don’t put yourself in time pressure, or you have the time to answer questions and you might have to go through multiple buyers, that’s super important because it kind allays people’s concerns.

Andrew Gazdecki (10:13):
Yeah, they can kind of signal… Yeah, trying to get this off quick, because there’s something bad about to happen or something like that.

Marc Abousleiman (10:21):
Right.

Andrew Gazdecki (10:22):
So I agree with you there. So yeah, just honesty and transparency, I think goes a long way because that’s always my first question is why are you looking to sell? And I think that answer can kind of raise more questions and it addresses the question. So I really-

Marc Abousleiman (10:41):
Yeah. And those answers are always varied. We’re super open, like people who have built a successful business should have the opportunity to be rewarded for that. And that’s why we try and be as flexible as possible. Some people just want to sell and then move on to another project entirely other people feel like they need help and they just want to join a bigger team and have more resources behind them to turbo charge their growth and whatever category you find yourself in, just know that there are buyers out there that will be amenable of both. But the more honest and transparent or the more someone can really put themselves in your shoes and understand that like, hey, if I were sitting where you are, I’d probably want to sell too, the better it is because there is information asymmetry. Like you don’t know what you don’t know and if someone’s really looking to sell, is something bad coming down the pipe? I don’t know, but that’s a really great point you made.

Andrew Gazdecki (11:35):
Yeah, I appreciate that. In terms of the Shopify ecosystem as a whole, there’s so much potential with eCommerce going forward. Is there any other categories that gets super excited specifically?

Marc Abousleiman (11:50):
Yeah, I think right now we kind of separate the world from two points here. It’s like, what’s nice to have and what’s neat to have? So you might have some apps that make your website look super cool and they give a really sleek feel, but if there’s a tough economic environment and people are starting to look for ways they can save money, is your solution mission critical? Are you saving merchants time and money? And when you think of things like fulfillment solutions or anything, that’ll increase conversion rates, maybe it’s a bundling app or something like that, those tend to have pretty clear, measurable ROIs. And so I’d be hard pressed to find emergent who’s like, oh times are tough, let me delete all my bundling capabilities on my website because you’re going to hurt yourselves. And so we kind of like right now, anything that’ll save emergent time and money. And there’s a lot of new and exciting things, especially with the updates that Shopify push to its checkout functionalities that are right in the middle of our focus right now.
But it’s not to say the other apps don’t have a place, it’s just that what is that churn going to look like if the world gets a little bit tougher? And what does success look like for that app?

Andrew Gazdecki (13:09):
Nice. So would you agree with this, busy vitamins or excuse me… Pain pills over vitamins.

Marc Abousleiman (13:18):
Yeah, pain pills over vitamins. The vitamins certainly have a place but it’s just a question of price, I would say. It’s not that they’re not interesting, just a question, can you ascribe the same value to something that is a nice to have? Is a vitamin?

Andrew Gazdecki (13:35):
Nice. So with Shopify, so much tremendous growth over the past, let’s just call it pandemic tailwinds or what will you, and that’s kind of tapering down a little bit, but I think everyone’s in agreement eCommerce has so, so much potential, where do you see a Appregator and just kind of the Shopify ecosystem as a whole two or five years from now?

Marc Abousleiman (14:13):
Yeah. I think look, Shopify has done a tremendous job, not only in the last couple years since COVID, but even before that empowering merchants to just tell their own story and have their own website and have full flexibility. I think a large part of why they’ve been so successful is the attitude they’ve taken towards their developer partners and like the partner ecosystem as a whole, other players could probably see it as a little bit competitive or confrontational, like Shopify’s out here empowering the partners, like I think the partner ecosystem makes three or four times more revenue than Shopify itself. And they’ve used that as a phenomenal mode, I think people want to build on Shopify because they know they can build a real business and they can get a huge merchant base there. And that’s not something that is measured in months, that’s measured in the years.
Like you pointed out eCommerce in the US, but also globally, still massively under penetrated, more people are going to shop online on their phones, kind of everywhere. And Shopify has done a great job, positioning itself at the forefront of that. So for me can I predict the future on a six month basis? I wish I could, I’d make a lot of money, but I think that this has 10 plus year [inaudible 00:15:27], I think that in the handful of years if you can pick the right apps that are going in the right direction, Appregator will be in a phenomenal position to be part of that change. And yeah, that’s kind of where I see it going, I don’t know about you.

Andrew Gazdecki (15:42):
Nice. I’d say I’m in agreement in terms of just everything moving online. I think it’s a natural sort of progression of just technology taking, say even main street businesses where they’re starting to open up eCommerce stores, it just makes sense and you get a global audience of customers rather than just your geographical customers. So yeah, it’ll be exciting to see the next two to five, 10 years of eCommerce and how all that plays out. I think I’m also biased to… I’m big in SaaS and everything, so I’m bullish on kind of everything. So take that with a grain of salt. But I’m going to throw a curve ball at you, what do you like to do for fun? Marc?

Marc Abousleiman (16:31):
I’m a big water sports fan. So I do a lot of kite surfing, paddle boarding, stuff like that for fun.

Andrew Gazdecki (16:39):
Nice. I have never been kite surfing, but I’ve always wanted to. I grew up surfing, but kite surfing getting it up initially, do you do it by yourself? Or do you have like a buddy that kind of lifts the kite up and then it goes?

Marc Abousleiman (16:57):
Yeah no, it’s really dangerous to do it by yourself, you should do it with a friend. Most accidents that happen are people slamming themselves on the beach or stuff like that. You want to be safe there, but once you get going, it’s phenomenal. You feel like you’re flying, it’s really an incredible sport. And I actually do with my whole family. So like my parents, my brother, everyone’s an addict and we kind of do it as a family, which is a nice thing.

Andrew Gazdecki (17:21):
Nice. Where are you based again? I’m sensing a pool of water next to you.

Marc Abousleiman (17:28):
No, I’m based in Boston right now, but my family’s originally from Lebanon, close enough to the water-ish. There’s some pretty decent kite surfing spots, but I kind of get wherever I can.

Andrew Gazdecki (17:44):
Nice, I had a friend in high school who had always ask me to come help him, kite surf. And I never did. I was like, no, I don’t want to, I probably should have after hearing you tell me it’s a little dangerous, although. But all right, moving back on to acquisition questions, if you could only look at one metric when you’re looking at these Shopify apps, what’s the one metric that stands out the most to you, or is most important. If literally that’s all you could look at, what would it be?

Marc Abousleiman (18:21):
I would look at customer LTV. That’s kind of a cheat answer because it captures multiple metrics in one, but that’s a good-

Andrew Gazdecki (18:30):
Yeah, that’s a good answer.

Marc Abousleiman (18:31):
Who are your customers? How long are they sticking around for? And why are they using you? I mean, the interesting thing about the shop by app store is people vote what they’re feeling. So you could think you have a good solution, but until you have the user base and the growth to prove it someone else is grabbing that market share. And so it’s really democratic in a sense where anyone can spin up, it’s not very difficult. If you want to do it and you dedicate the time to do it, there are a ton of resources to becoming an indie developer and time will tell. You put your app on the app store, you do some marketing. You should be able to get traction pretty quickly if you have product market fit and you’re solving a real problem. And if you’re not you can keep [inaudible 00:19:15] and trying get that. So for me, customer-centric metrics are the most important ones and everything else like margin et cetera, will fall out from that. Are you real problem for your customers?

Andrew Gazdecki (19:26):
Nice, and then in terms of Appregator, do you guys have a goal in terms of acquisitions over the next like 12 or 24 months or anything like that?

Marc Abousleiman (19:41):
Yeah, I mean, we’re flexible, it depends kind of what’s available. I think our goal is more product focused than acquisition focused. So we have a very clear roadmap of the capability set we want to have going forward and often we will apply that lens against the acquisitions that are coming through. So there could be a company that’s super interesting that has great growth rates, but it doesn’t really fit in our product roadmap and we won’t really go after it. I think our target is probably to be doing an acquisition every month or every other month. Now some of them have multiple apps in them and so it gets a little bit more complex do it on like a per app basis, but that’s kind of how we’re thinking about it.

Andrew Gazdecki (20:24):
Nice, I love it. I guess final questions would be, I always like to ask this, who’s one entrepreneur that you look up to?

Marc Abousleiman (20:34):
Oh, that’s a tough one. Listen, I think people who do things very differently tend to fall in the entrepreneurial bucket because they’re not conforming and they want to do things their own way. And so I don’t really have an answer to tell you, frankly. I’m not really reading entrepreneurship books and looking up to people specifically, it’s more people in my own personal network that I’ve done that and then friends that I really look up to where I see them do something completely differently. And whether it’s inside a real company or they’re founding their own company, I think you can be an entrepreneur as they say, and so it’s more personal based than it is looking up to public figures if you will, for me at least.

Andrew Gazdecki (21:26):
No, I understand.

Marc Abousleiman (21:28):
Sorry for the non-answer, yeah.

Andrew Gazdecki (21:30):
No, that’s a great answer. I mean I think that’s what fuels a lot of entrepreneurs is just close relationships with other entrepreneurs, because you’re not talking to Elon Musk on a daily basis or anything like that or Toby at Shopify.

Marc Abousleiman (21:45):
He’s not returning my calls sadly, yeah.

Andrew Gazdecki (21:48):
Yeah, he’s not responding my emails either. And then next question would just be with all the success. And again, I’m super excited to see how far you go with Appregator, what’s maybe one tip or if you can go back in time and just tell yourself one thing, what would it be?

Marc Abousleiman (22:12):
If I could go back in time and give myself one tip it, would’ve probably been stick with computer science after college. And I worked in private equities, I really enjoyed that, but man, it took a while to dust off my coding skills and to go back five years and think about that, so that would be my one tip for myself.

Andrew Gazdecki (22:33):
Well, it’s never too late, you can always go back to school, man.

Marc Abousleiman (22:36):
Yeah, exactly.

Andrew Gazdecki (22:38):
All right, Marc. It’s been an absolute pleasure just hearing your story and congrats again on the acquisition. I’m rooting for you and your team and if people want to get ahold of you, maybe they have a Shopify app and they want to see if Appregator is a fit for you, what’s what’s the best place to contact you?

Marc Abousleiman (22:57):
Thank you, Andrew first of all, for having me on, really appreciate it and really appreciate everything you guys do for the ecosystem. I think you guys are really doing an amazing job.

Andrew Gazdecki (23:05):
Thanks man.

Marc Abousleiman (23:06):
Yeah, of course. If you guys want to get in touch, the easiest way is just to go on our website appregator.io, there is a contact form, we have our email linked there and you just ping us a note and we’ll get right back to you.

Andrew Gazdecki (23:20):
Cool. I’ll put that in the show notes, but Marc, thanks again for coming on. Rooting for you all the way, man. And don’t get hurt kite surfing, man-