How John Rush Grew His SaaS Business By 44% After Acquiring It

This page may contain links from our sponsors. Here’s how we make money.

I publish many success stories about people buying and selling online businesses. While these stories are certainly inspiring, the reality is that many acquisitions don’t go as planned. Today, I’m sharing a success story that initially looked like a failed acquisition but later turned out to be very lucrative.

In June 2022, John Rush purchased the no-code website builder Unicorn Platform for $800,000. Immediately after the acquisition, monthly recurring revenue (MRR) dropped by 12%, and churn spiked. The platform suffered from technical issues and significant downtime, contributing to the problem.

These setbacks led John to make changes that drastically improved the business and increased stability. Today, Unicorn Platform generates $23,000 MRR (44% higher than at the time of the acquisition) and is growing quickly.

In a recent conversation, John shared all the essential details with me. Read on to see how this once-bleak acquisition became a resounding success.

From Startup Founder to Acquisition Entrepreneur

John Rush had significant experience before purchasing Unicorn Platform. He’d already been a founder, co-founder, CTO, or CEO of 30 startups. He’d been through some of the world’s top accelerators, secured funding, and even had a successful exit. But his only experience with an acquisition was a small transaction buying an icon directory ten years ago (he wound up selling it after a short time).

In 2022, John was thinking about starting a business for a no-code website builder when he came across Unicorn Platform. He liked the tool and even used it himself, so he wondered if buying an existing business would be better than starting from scratch.

In early 2022, John contacted the founder and learned that he was already interested in selling. John offered $800,000, which was about 5x the trailing twelve months’ revenue at that time.

John spent the next few months watching the business as part of his due diligence. “I watched the startup for three months, all their stats and numbers,” he said. “I got access to all their data, and I watched closely.” Everything looked good, so he moved forward.

The deal closed in June 2022, and John was the new owner of Unicorn Platform. The 5x valuation was fairly normal for a profitable SaaS business at the time, but John admits that he wasn’t careful enough about the purchase price and bought at the “top of the valuation hype.”

John mentioned that his background with VC-backed startups and lack of familiarity with bootstrapped indie makers contributed to the issue.

Post-Acquisition Decline

Shortly after the acquisition, things started going downhill. The platform was buggy and frequently inaccessible, and the downtime and poor performance led some users to cancel. The business, which was at $16,000 MRR at the time of the acquisition, quickly dropped to $14,000 MRR.

This issue was difficult to fix because the founder/seller had little experience with these types of platforms, and the code base proved to be an issue. “This is typical for indie maker projects,” John said. “They do everything on their own and often have average experience in every field.”

“He [the seller] worked for me after the acquisition, and I hired his former team,” John said. “But none of them had the skills to actually solve the problem.”

Eventually, John and his own developers solved the issues and improved the platform’s stability.

The removal of the seller from the business also contributed to the decline. As an indie maker, the seller’s personality was significantly tied to the business, and many customers felt connected to him personally. When he was no longer involved, some of those customers left.

John also wasn’t as proactive in growing the business. “The original founder was grinding every day promoting the product everywhere,” John said, “but when I bought it, I didn’t do that. I did pretty much nothing and hoped for organic growth.”

The Rebound

With the increased churn and slowed growth due to a lack of promotion, John knew something had to change. He decided to get feedback from users to see what mattered to them and what didn’t.

John used Crisp for support. He said, “I created an automated email that was sent to all users who canceled and, after that, to all users who paid.” After hearing from more than 200 users, it was clear that a slow pace of development was a problem. Many users thought nothing new had been added to the platform in over a year, even though that wasn’t accurate.

Based on the feedback, John and his developer spent two weeks on a “hackathon” that improved the platform and allowed them to add new features much faster. They also focused on communicating the improvements and new features to users.

Another key change involved a focus on SEO and social media. Instead of doing nothing to promote the platform, John became much more active. In April 2023, he started adding SEO-focused content to the site, which quickly led to increased traffic.

When John bought the business, it had a lot of mentions on social media from happy users. In April 2023, about 10 months after the acquisition, he searched and found very few recent mentions, a much different situation compared to the time of the acquisition.

At the time, John had 72 followers on his personal Twitter/X profile. He became much more active and by the end of 2023, Unicorn Platform had a much stronger presence on social media as a result. When asked about his approach to social media, John said, “I promoted my personal brand with stories (like this one), and it created interest for my products.” Today, John has more than 17,000 followers on Twitter/X.

Growing to $20,000+ MRR

At the end of 2023, Unicorn Platform’s MRR had grown to $18,000 per month, $2,000 higher than at the time of the acquisition and $4,000 higher than the low point after the acquisition. And John’s promotional efforts continue to drive results.

In March 2024, less than two years after the acquisition, MRR reached $23,000, a 44% increase since the acquisition.

Today, John runs Unicorn Platform with one developer and one support agent. He works on the business part-time alongside several other projects.

Key Takeaways

John’s story presents a few key takeaways for those interested in buying online businesses.

1. Don’t underestimate the owner/seller’s involvement and influence. John found out that many of his customers were more connected to the original founder than they were to the brand or platform.
2. Don’t expect to grow organically or passively. This is a mistake I see a lot of buyers make. They buy a profitable business and then do very little to promote it. Unicorn Platform’s performance turned around once John took a more active approach.
3. Don’t assume the business has a solid foundation. In John’s case, significant changes had to be made to the code base, but he didn’t know that when he purchased it.

John also pointed out that he learned a valuable lesson about moving on from the founder/seller after an acquisition. “Don’t make the former founder work on a product after you bought it,” he said. “Switch to your own team within 30 days after the transaction.”

Although many acquisitions fail, John Rush’s experience with Unicorn Platform shows that initial setbacks can be overcome. While at one time he questioned the decision to purchase the SaaS business, he overcame the challenges and turned it into an excellent investment.

Interested in being featured on Flip My Site? We’re always looking for entrepreneurs with great stories. If you’ve bought or sold a website or online business, please contact us about being featured.