Startup Acquisition Stories Podcast w/ Michael Michelis, Co-founder of Intelistyle

Watch the interview

Learn more about Michael –


Transcription –

Andrew Gazdecki:
All right, I’m here with Michael Michelis. How’re you doing Michael?

Michael Michelis:
Hi, Andrew. Good, how are you?

Andrew Gazdecki:
Good. Just wanted to thank you for coming on the podcast. I’ve been excited to hear about your story, getting MicroAquire recently, but for those that may not know you, do you want to give just a quick intro on yourself?

Michael Michelis:
Yeah, sure. So my name is Michael. I’m from Greece originally. I spent a lot of my time in London. So my background has been in data engineering. I used to build big data solutions for companies like PMG and GM, but I always had this passion for entrepreneurship. I started a company around five years ago in the fashion tech space, so it was a enterprise SaaS, which is still going on, and I’ve been always passionate about startups. In the middle of my journey, I thought I found this amazing platform, MicroAquire, and I thought it would be a good challenge to build and sell something there. And yeah, here I am.

Andrew Gazdecki:
Nice. So for everyone listening, Michael was telling me the… so I don’t know what company Mike, Michael had Acquired, so I told him, “Don’t tell me, let’s get this live on the podcast.” So Michael, what was the company that you have MicroAquire-ed? What did it do? What problem did it solve? All that fun stuff.

Michael Michelis:
Yeah, and the funny story is when I decided to build something for MicroAquire, I had no idea what was going to be. So it was like I’m going to spend some time finding an ease problem, solve it, build something, and then, in the end, sold it. The app was basically a Shopify app, and it was solving the problem of merchants or Shopify store owners installing Google Analytics onto their shop, which could be a bit complicated if you’re not technical. So it would just make the process very simple: just one copy paste and you set it and forget it. So it was a pixel installer for Google Analytics on Shopify stores.

Andrew Gazdecki:
Nice. I like that. Just nice, simple, clear to understand problems. You would be surprised at how many startups we see at MicroAquire, where we look at them and they’re really good, but we’re like, “What do you do?” So when you see the newsletter, that’s usually us doing them some help in terms of clearly explain that. I clearly understand the problem that you were solving there. My next question would be, so you decided to sell. What made you want to sell in the first place?

Michael Michelis:
So initially I think it was the whole idea that I wanted to build something, grow it in a certain state and sell it. So it was a journey from the beginning to the end. Selling was part of the completion of the journey. It was at a point that I had a lot of… going on in my life with my current startup. That’s… Enterprise has a big company right now, so it was getting really busy. The app came in the lockdown period, that everyone had some free time, picked up baking for a while. Then I tried to build the Microsoft… and at some point Shopify was doing some changes on the authentication and had to spend a couple of days working on the app. At some point I was like, “Okay, I need to sell this and move on and focus on my current startup.”

Andrew Gazdecki:
Nice, that makes total sense. Well congrats on the larger startup as well. It’s always fun to have a side project or just build something. Yeah, I can relate to that more than you know, but for those listening focus on one startup. So you decide to list on MicroAquire, I’m assuming multiple buyers reach out. Do you want to walk me through how that process went and how you finally landed on the buyer that ended up acquiring your Shopify app?

Michael Michelis:
Yeah, so after I got some traction, as I said, it was the plan to sell. Obviously, one of the problems, it was a new app, so I didn’t have a lot of history. It wasn’t running for 12 months, I believe I listed it after three months. So a lot of the buyers wasn’t meeting their criteria at first. Obviously, had kind of overestimated the value of the app being a new app with low record, low traction. I set it at high price point, then I just… I read the report of the evaluations of Shopify apps, I believe was 2.7 X V A R. At the end I sold for 30 something, and when I lowered the price, I got more qualified buyers. The whole process was super simple to be honest. So the buyers would just ask for a few final sell, some screenshots, then we would see if it would meet their investment thesis or acquisition thesis. At the end, we had one, two calls with the actual buyer and a last call where I handed everything over and it was really…

Andrew Gazdecki:
Nice. Well, congrats. My next question would be in terms of from the time you listed on MicroAquire to actually finding the buyer, how long did that process take?

Michael Michelis:
I think that the process took around three months, but that was only because at first I had say at high price and it was just three month old up. But once it got some traction, it was the six month period I got more qualified buyers and I ended up selling.

Andrew Gazdecki:
Nice. Yeah, I would say that’s probably the number one reason we see startups not sell on MicroAquire is when they just price way too high. By doing now what you do is you… as buyers are going through MicroAquire, they quickly will skip over it and you’ll lose that initial interest. So reading the multiples report, I’m glad you did that. If you’re in line with those valuations, your buyer interest is based on our data, it’s like two to three, four times higher if not more. So good job on that. My next question would be how did you transfer all the assets over? I know Shopify’s a little bit easier in terms of just… did you just hand over the Keys? Did you have a Zoom call? Did you have a list of all the items that you were going to transfer? How did that part work?

Michael Michelis:
Yeah, I think because I had, when I went into this journey or challenge, I had in mind that I’m going to sell it at some point. So from the beginning I had structured the entire infrastructure like that. So I had separate AWS account, separate Shopify account, separate hosting, web hosting. So everything had a separate account, so I would just hand over the accounts to the person that actually Acquired them. I think that saved me a lot of hustle and time because usually all my projects are under one umbrella and it’s a mess. But that really helped. So the whole process was easy. We jumped on a Zoom call. He sent over some terms that… I think he was the first buyer as well. So he found the terms on MicroAquire, we went through Escrow. So it was just a journey that we were discovering the process, both of us. So it was really smooth.

Andrew Gazdecki:
Very nice. Yeah, I would say that’s probably another, maybe not mistake, but just something to think about if you’re looking to eventually sell your business. I can’t even tell you how many times I talked to founders who have one AWS account with multiple different projects. There’s startups in it, then you have to pull it out and do all this extra work. Just being able to kind of hand over the keys is so much easier for both you and both the buyer too. Also in terms of just building confidence, because when you move something you got to make sure it works and it’s new environment, et cetera. So good job on that, and good job on using Escrow too. I can’t recommend… people that Acquire stuff without using Escrow service, I think, are crazy. So luckily, it’s just an unnecessary risk.
Luckily we don’t see that too often, but some people can be fast and loose. Now I’m wondering, are you able to talk about… with founders looking to sell their business based on you going through the process successfully, is there any tips you would give new founders looking to sell their business? Because I really like how you came and prepared your accounts were separated, you had a realistic valuation. Maybe I’m giving all the little tips away, but if you had any tips to share in terms of how to maximize your chances of being Acquired, what would those be? I probably just gave you like five. Sorry.

Michael Michelis:
Yeah, you did a good intro there. I believe how you handle potential buyers is really important. Being honest, being upfront, having everything ready, respond on time. All these kind of things help potential buyers see that you will be honest through the process. You will be there to support, if needed. So we built a good report with an interested buyer, and I think that’s helped the process a lot because there’s so many apps right now, and being able to have a good cooperation between the buyer and the seller is really important in the process. And of course, having a data room as well, I think that’s important, especially when you’re have a bigger company, having everything ready, like your P&L statement, everything that the potential Acquire might ask. That would definitely help with the process.

Andrew Gazdecki:
Yeah, I completely agree, especially on the P&L. That’s usually depending on the size of the business. I think once you get into the six, $7,000,000 acquisitions, a P&L is absolutely required for larger buyers to really understand the health of your business. So that’s really great advice. Given that you build multiple startups, are there any sort of tips you would give to startup founders just looking to build a startup? Are there any sort of themes that you believe in, or any sort of quotes that are your favorites?

Michael Michelis:
Yeah, a good tip would be to do a lot of market research before you go into building something. Usually, because I come from an engineering background, I get excited from this idea that I have, the technology is really exciting, and there might not be a market for it. Well, another very simple and stupid thing back there I built might actually have a market for it and you might not join it that much. But once you’re getting the first customers in, that will be a good payoff. So I would definitely recommend, especially to all the engineers out there, do your market research, make sure you have a go-to market plan and make sure there is an actual market out there. Hopefully a competitor too. I would never go into building something without a competitor trying to educate the market. Yeah, I think that will save you a lot of time and a lot of headache later.

Andrew Gazdecki:
I couldn’t agree more. I always say if there’s no competitor in your market, that’s a really bad sign, and you’re right. Educating a market is very expensive. Because one of my favorite business quotes is, “One of the hardest things to do in business is to change consumer habits.” So people are so used to doing something a certain way and your business does it completely different. I’m trying to think of a company that actually did this and it worked out. But anyways, if you’re coming to the market with something that, you’re right, they’ve never heard about, there’s no competitors, it’s not clear what problem solving, and you have to just educate, educate, educate. You’re going to need a lot of time and a lot of capital. So I like that, and I do agree. I think competition also just breeds improvement and fun too, to have competition in markets.

Michael Michelis:
Plus you gives you ideas on what to do, what to avoid, what to do better. So it’s definitely good job competitors, they’ll push you forward, you’ll push them forward. So it’s going to be good for everyone.

Andrew Gazdecki:
Yeah, I completely agree. All right, I got one last question, then I’ll let you run; my goal. So, I’ve been asking this random question just for fun because I think it’s funny on every podcast, but if you were stuck on an island and you could only bring one thing, it could be a book, it can be a tool. What would that one item be?

Michael Michelis:
If it was an island with good waves, I would bring a surfboard for sure.

Andrew Gazdecki:
Remind me.

Michael Michelis:
I think that would make me have a lot of fun in the island and I wouldn’t mind staying there.

Andrew Gazdecki:
Have you seen the movie Castaway? Not… is it Castaway, with Tom Hanks? He gets stuck on an island.

Michael Michelis:
With Wilson, right?

Andrew Gazdecki:
I literally thought that exact same thing because if you watched the movie again, the waves are actually really good.

Michael Michelis:
Yeah.

Andrew Gazdecki:
I’m like, “this guy needs a surfboard it and he wouldn’t want to leave.”

Michael Michelis:
Exactly. You’re set there and you wouldn’t mind at all. I do surf sometimes here in the island and it clears your head, it’s a meditation for me, so I would recommend it to everyone.

Andrew Gazdecki:
Yeah, I grew up surfing, so I can relate to that. It’s probably the only way for me to go anywhere without my phone, even though I believe the new iPhone is completely waterproof, but still. All right, Michael, well, pleasure speaking with you. Thanks so much for sharing all this, and congrats again on the acquisition. I’m rooting for you, man.

Michael Michelis:
Thank you Andrew, and thank you for making it possible. I wouldn’t be possible without MicroAquire, and did give me the inspiration to just build something, sell it. It’s a big market for anyone listening for new ideas. So yeah, thank you for making it happen.

Andrew Gazdecki:
Yeah, my pleasure. All right, cheers, Michael.

Michael Michelis:
All right, bye Andrew.