Startup Acquisition Stories w/ Jonathon and Elena Ringeisen – Founders of Essential Studio Manager

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Transcription –

Andrew Gazdecki:
All right. I am here with Jonathon Ringeisen, who recently got Acquired. John, so great to have you on the podcast. How you doing?

Jonathon Ringeisen:
Great, man. How are you?

Andrew Gazdecki:
Good. So you have a guest with you as well. Do you two want to maybe take a second and introduce yourself for those listening?

Elena Ringeisen:
I’m Elena, John’s wife, and over the past couple years, we’ve kind of built things together, and I handle more like the idea behind it and then he builds it, so that’s kind of what we’ve done.

Jonathon Ringeisen:
Yep. And I’m a software engineer, self-taught, didn’t go to college. I bootstrapped a business together and we sold it on Acquire.

Andrew Gazdecki:
That is amazing. This might be my favorite podcast and we’re two minutes into it. So you guys recently had a business Acquired. It was Essential Studio Manager. Is that correct? Awesome. And did you two build that together?

Jonathon Ringeisen:
We did. So I do all the coding and build everything by myself, and then she does all the marketing and all the other stuff.

Andrew Gazdecki:
That’s so awesome. You need someone to build a product. You need someone to market and sell the product, so seems like you two make a great pair. For those who maybe might not know, what does Essential Studio Manager do? What was the problem it was solving?

Jonathon Ringeisen:
So it’s a CRM for photographers specifically.

Andrew Gazdecki:
Nice.

Jonathon Ringeisen:
It basically helps photographers manage their business via invoicing, managing their clients, booking sessions, basically any aspect of a photographer’s business, it allows you to manage it.

Andrew Gazdecki:
Awesome. I love those types of businesses. You kind of caught me off guard when you were like, CRM for photographers, because it’s so clear, crisp, understandable, no jargon.

Jonathon Ringeisen:
Yeah.

Andrew Gazdecki:
I can already think of pain points that photographers have where maybe something like Salesforce or the hundred other CRMs might not fit. But tell me about your experience on Acquire. So you list on Acquire. How did things go with buyers? What was the reach out like? Maybe we’ll start there and then I’ll have some more questions after that.

Jonathon Ringeisen:
Yeah, it was good. I listed it and we did get a handful of people that would reach out, but then it would be crickets and we didn’t hear anything, but I would say there was probably more people that responded than we got crickets from. And then it was listed for what? Two weeks?

Elena Ringeisen:
Yeah.

Jonathon Ringeisen:
Two or three weeks, and we had an individual contact us, and within another two weeks, it was Acquired.

Andrew Gazdecki:
Wow, that’s pretty fast. So two weeks from meeting the buyer to close. Nice. Can you walk me through, just due diligence? Or let’s go, so how did you know that this was the right buyer? There’s people that reach out. They say something. We’re interested. They go away. How did you narrow in on this one buyer as the one to Acquire your business?

Jonathon Ringeisen:
So we got to talking about what his plans were with the company, because we really didn’t want to sell it and then someone Acquire the customers and then scrap the company or the intellectual property, like the website and stuff. So he was coming on board, or he was acquiring the company to merge with a company that he’s built, so they kind of benefited each other and so that was the main reason why he was acquiring it, and we kind of liked that idea and so we decided to go with him.

Andrew Gazdecki:
Nice. That’s always nice when you sell to a buyer that will take what you, I assume spent a lot of blood, sweat and hopefully not too many tears building, and you get to see it continue to grow. So you find the buyer. What was due diligence like for you? Can you walk me through just kind of the initial steps? What was requested? How’d you handle that?

Jonathon Ringeisen:
Yeah. So he sent a contract. Now keep in mind, I had never sold a company before, and before I found Micro Acquire, I was like, crap, how are we going to sell this?

Elena Ringeisen:
How do we do that?

Jonathon Ringeisen:
I don’t know anybody, I don’t network, so I didn’t know the first step when it came to acquiring or selling a company, so I stumbled across Acquire. And he sent us a contract. We read the contract, and then I have a friend that’s a lawyer, a friend of a friend that’s a lawyer, and so we sent the contract to him so that he could look it over, and it was a short contract.

Elena Ringeisen:
Very simple.

Jonathon Ringeisen:
I think it was like two, three pages, and so he looked it over and he was cool with it, and so we signed it. It was good.

Andrew Gazdecki:
Very nice. And then in terms of transferring the assets and all that fun stuff, any advice for other founders as you’re going through that, as you transfer the website, the actual software?

Jonathon Ringeisen:
Yeah. So when I built the ESM, I didn’t build it with the idea of being Acquired, so the one thing that I would tell people is if you’re going to build something, I would, from the get go, try to keep it all in one, keep everything together and don’t mix it with other companies.

Jonathon Ringeisen:
So for instance, I have Amazon AWS and I have one account where I keep all my buckets to store files in, which includes the one for the ESM. So now I have to go and create another account for the ESM and then create a new bucket and then transfer all that data, whereas if I created its own account initially, I wouldn’t have this issue. So it’s really not that big of a deal. It’s pretty simple to do, but I would just recommend keeping everything together, separated from another.

Andrew Gazdecki:
Nice. So now that you’ve been through the acquisition process before, if you had to give any advice to sellers looking to get Acquired, what are maybe three big learnings that you kind of learned along the way?

Jonathon Ringeisen:
Oh man. That’s a tough one. So one, not to toot your horn, but I would say get listed on Acquire. Two, networking is probably another big one, because the more people you know, the more people that you can talk to and communicate that you’re trying to sell your company with and you can have better chances of selling your company. And number three.

Elena Ringeisen:
I would say be optimistic in the process. I think when you list your company or anything you’re trying get Acquired, it’s so easy to be like, oh, who’s going to be interested in this? And then we were super surprised that someone found it. It was the right person, but we had talked to multiple. Sometimes you just find that perfect fit for it, so I think being optimistic in the whole process.

Andrew Gazdecki:
I like that. I like both of those a lot, especially just being optimistic and also patient, because sometimes I hear of startups being Acquired in two weeks, sometimes six months, sometimes a year. In my personal experience, it did not take two weeks for me to sell businesses. So just being optimistic and really just being patient in terms of finding that right buyer because you never know when they’re going to come along, and then obviously during that time, continuing to focus on your business. So you’ve successfully sold the business. What are you guys working on now? I got kind of a feeling you guys already have something that you’ve been working on.

Jonathon Ringeisen:
Yeah. So to give you a little backstory, we had created, my wife created a company back in 2012 I think it was, and in the peak we were making roughly, we were grossing $600,000 a year with that company, and that company, so there were a couple issues that happened. There was some piracy going on, and so now that company doesn’t generate that much revenue, so we kind of pivoted and she created a product of that company and started bringing in, and so it’s a subscription model, and she started bringing in revenue with that. And then I was like, why don’t we build its own standalone subscription-based platform? And so we ended up doing that. That’s called Wordsmith. So it’s usewordsmith.com and it’s basically captions for small businesses or really anybody to basically use for their social media platforms.

Andrew Gazdecki:
Nice. So you’ve been operating that business for about a decade?

Elena Ringeisen:
The first one. The main company, it’s like we kind of start new things underneath that main company, but since the old products were stolen and posted online, we’ve kind of had to pivot away from those products and figure out, okay, what else can we do with it. So the main company is still open, but underneath it, I’m kind of launching my new businesses within that and kind focusing on what’s taking off and what’s doing well. So Wordsmith is one right now and then I have a couple other ideas. I always have ideas.

Jonathon Ringeisen:
Yeah. We got a few things we’re working on.

Andrew Gazdecki:
That’s awesome. I love how you two compliment each other’s skill sets. That’s sometimes really what it takes to build a business, unless you could somehow do both, which is very rare.

Jonathon Ringeisen:
Yeah.

Andrew Gazdecki:
I guess just to wrap things up, it sounds like you guys have been entrepreneurs for so long, a decade. If you had to give just general advice to maybe people looking to get started building a business, what are some main things that you guys have learned or think about often or perspectives you have to be able to create these successful businesses over and over?

Elena Ringeisen:
I would say for me, the biggest thing as an entrepreneur is to try and solve a problem for someone. I think everything I’ve launched has always been with the focus of, okay, this is something that I need for my business or SR or as a photographer. And if you build a product that serves something for yourself and solves a problem, there’s going to be other people that have that same problem. So sometimes it can be something really simple like social media, but knowing how time-consuming it is to create content all the time for your business for social media, and really connect to the ideal times that you want to connect with online.

Elena Ringeisen:
It’s crazy how quickly that took off. And I think in general, just kind of keeping an open mind when you’re building things and solve a problem for it, versus trying to come up with something where you see lots of money or you see a lot of retention because other people are doing it. I think solving a problem is number one for me and has always been kind of at the core of everything that I build. The most important thing for us.

Jonathon Ringeisen:
Yeah. And I would say also to new entrepreneurs to just be persistent. Just work hard, and one of the things is that you’re not always going to know the answers, and it’s a learning process throughout the entire journey. We’re learning all the time and we rarely know the answers. Have we learned a lot? Can we use those things that we’ve learned? Of course, but we always run into roadblocks and it’s always a learning experience.

Andrew Gazdecki:
Yeah. That’s great advice. I can see a lot of entrepreneurs or I do see a lot of entrepreneurs often building products that don’t really solve a problem for maybe… I think the biggest one is, you may have a problem but you want to make sure you validate that other people have that same problem.

Andrew Gazdecki:
It’s a big misconception that I run into and give advice on is it’s good to scratch your own itch but you want to make sure other people have that same problem. And then validate it as quickly as possible so you don’t spend six months or a year building something that people still want.

Jonathon Ringeisen:
That’s right.

Elena Ringeisen:
Exactly.

Andrew Gazdecki:
And then, yeah, persistence. People think it takes a year or two to build a successful startup, and sometimes it does, but more often than not, it’s a journey and a ride, so great advice.

Andrew Gazdecki:
All right. I guess I’ve been asking this question on the podcast, but you guys are actually on an island, so I’ve been asking if you could bring just one book and one album, music album, on an island, what would it be? But you guys are in Hawaii on an island, so I don’t know how this question’s going to go, but if either of you could bring just one book or one album to listen to you on an island, what would it be?

Elena Ringeisen:
That’s so tough.

Jonathon Ringeisen:
I know. There’s so many books. The first one that comes to mind for me is The 10X Rule by Grant Cardone.

Elena Ringeisen:
I was going to say the same thing.

Andrew Gazdecki:
So you’re both bringing the same vote?

Elena Ringeisen:
I guess that we’re going to share.

Jonathon Ringeisen:
And then music, I don know. It would probably be, something I’ve been listening to lately a lot is, what is that song? It’s Dirt Road.

Jonathon Ringeisen:
Yeah, yeah, yeah.

Elena Ringeisen:
It’s some country song.

Jonathon Ringeisen:
Yeah, it’s a country song. Dang, I forgot that. But it’s something about buying dirt or something.

Andrew Gazdecki:
All right. Well, there we have it. Well, thanks so much for joining this podcast. It’s been wonderful chatting with you, and congrats again on getting Acquire’d.

Jonathon Ringeisen:
Yeah, any time. Thank you.

Andrew Gazdecki:
All right. Well, cheers. Enjoy your time on the island and thanks again for chatting with me today.