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Building an online business that generates $120,000 – $140,000 per month with a two-person team sounds almost impossible. Yet, that’s exactly what Spencer Patterson accomplished with a SaaS business that he sold for $3.5 million in 2023.
Spencer’s incredible story proves that the right idea and execution can lead to impressive results and a life-changing exit.
Building the MVP
Before starting his business, Spencer Patterson worked as a licensed broker for a few financial institutions. As he met with high-net-worth clients, he noticed a pattern. “I would ask as many as I could their backstory on how they acquired their wealth,” Spencer said. “99% of them were not doctors or lawyers, but business owners or real estate investors. I knew I had to get to the other side of that table.”
Following his stint as a broker, Spencer became a product developer at a core processor for banks. All the while, he was constantly looking for opportunities on the side.
In 2019, Spencer got involved with some online trading groups and began a partnership with one of the expert traders he met. Spencer and his partner had the idea of building a platform with educational and entertainment content. “We started our own group,” Spencer said, “and within a few months, we had hundreds of users but no real way to manage all of them.”
Spencer decided to invest his own time and money to create a solution. He used his experience as a product developer to create a minimum viable product (MVP).
Other group owners immediately reached out to Spencer about using his system. Realizing that this side project offered unlimited potential, Spencer negotiated an exit with his partner on the content platform so he could focus his energy on this new SaaS business.
Growing the Business
Spencer knew his business had the potential to thrive because it solved a specific problem for content creators, but he had to improve upon the initial MVP. Looking back at the challenge, Spencer said, “I had to modify the product to allow for multi-tenancy as well as charge users for this.”
Since he’s not a programmer or developer, Spencer hired a developer to bring his ideas to life. After the development was completed, Spencer turned his focus toward acquiring users and growing the business.
While there are many different ways to grow an online business, Spencer credits persistence and perseverance. “I reached out to everyone and sold the hell out of it as best I could,” he said. “I offered it for free to start. I said yes to almost every feature request. I focused on building the product around what my merchant’s pain points were, and I expanded on it every chance I got. That eventually snowballed.”
Spencer’s Lean Team
One of the most remarkable parts of Spencer’s story is that he was able to grow the business to six figures in monthly recurring revenue (MRR) with just himself and a single contractor, a programmer.
The programmer “handled everything on the technical side. Feature requests, bugs, maintenance, infrastructure, etc.” Spencer focused on marketing, product development, outreach, and UI design.
A Seven-Figure Exit
After running the business for a few years, Spencer felt it was time to move on. He no longer enjoyed the daily tasks involved in running and growing the business. Additionally, Covid had delayed some things in his personal life, like getting married and starting a family, and now his long working hours were also a hindrance.
“I was at the point where I had enough money where I felt I could start enjoying life again and moving forward with important life events, but I was putting in 12+ hour days almost every day,” he said. “I was in golden handcuffs, and I wanted to ease the pressure a bit.”
Although he knew he wanted to sell the online business, finding the buyer and completing the process was a journey that took longer than Spencer expected. “From the time I listed,” he said, “it took about a year and a half to close, but this was between a few listing sites.”
The process of trying to sell the business on Acquire.com was Spencer’s introduction to private equity, venture capital, angel investors, and broker agent buyers. “Each one had their own unique way of doing diligence,” he said. “I thought the questions would all be pretty similar, but each time, I was surprised by more and more unique asks.”
At the time, Acquire.com didn’t have advisors to help sellers navigate the process, and Spencer was overwhelmed. After looking at several brokers, Spencer chose to list the business for sale on Flippa through their Managed by Flippa program.
“I decided to pay for a white-glove service with Flippa, where they handled the vetting process of buyers, and I only needed to worry about the post-LOI due diligence,” Spencer said. “This saved me countless hours because doing M&A is its own animal and full-time job.”
In 2023, Spencer’s business sold through Flippa for $3.5 million.
Spencer says the biggest thing he learned through the process of selling his business involves the need for experience. “There are so many loopholes and traps that experienced buyers can get you with if you’re not careful,” he said. He suggests other sellers surround themselves with lawyers, accountants, and advisors who can assist throughout the process.
After going through the process of building and selling a seven-figure business, Spencer has turned his focus toward helping others as a consultant, advisor, and investor.
Spencer is forming a collective of startup founders to form a venture capital studio that will build projects as a group. The group members will focus on their unique skill sets to build, acquire, and run businesses. He also provides M&A exit advisory for founders looking to exit.
Keys to Success
Looking back at his experience growing the business, Spencer says the keys to success were persistence and the motivation he got from seeing growth. “Watching the numbers go up day after day, knowing that strangers on the internet are paying for something you built is pretty crazy,” he says. “It makes you work harder and faster and gets you in this obsessed mode.”
Spencer believes the key to success lies in being obsessed with your project. He emphasized the need to get feedback and continue improving. “Don’t take any of it personally,” he says, “just take it all in and keep grinding.”
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