Even if you’ve never heard of Syed Balhki, you’ve definitely been on one of his websites (or at least a website that uses the technology he’s created). As the founder of OptinMonster, WPBeginner, WPForms and other resources, his software is currently running on more than nine million websites worldwide.
I recently had a chance to sit down and chat with Syed, and if you’re a serial entrepreneur – in practice or at heart – you’ll love the key tips and takeaways that came out of our conversation.
On Running Multiple Companies
Syed doesn’t pull any punches when it comes to the secret of his success running multiple companies. “I have a very good team,” he explained, “and I have General Manager/President roles for every company that I own or that I’m a majority owner in. That’s the trick: I’m not involved in the day-to-day of a lot of them.”
In general, Syed works with these leaders on planning on a quarterly basis and hosts catch-up calls once every 1-2 weeks. He’s also benefited by elevating original co-founders of the tools he’s either built or acquired to leadership roles, though this has meant helping technical specialists become more business-minded.
“They understand the product really, really well,” he said. “But it’s one thing to build a product. It’s another thing to build a company. On the program side, you can have a good gut feeling about, ‘Hey, this is the way we need to write this code so it scales.’ But you might not necessarily have that same gut feeling about, ‘This is the pricing change we’re going to make, and it’ll be fine.’”
On Buying and Selling Companies
Syed’s early work on WPBeginner gives him significant insight into the things that small businesses or bloggers are struggling with.
In his words, “We do a survey asking, ‘If you could have us build one product, what would it be and how much would you pay for it?’ Because the easiest customer to sell to is the customer that you already have. We look at the survey data, and then look at the market of what’s available and would anyone sell to us. Or, because I understand the ecosystem, I can also reach out to people I’ve never interacted with before and just say, ‘Hey, I see you have this plugin, and we’re trying to solve this problem. Are you interested in selling?’”
When evaluating a potential acquisition, Syed has a number of priorities. “I’m looking at the team that’s running it because, a lot of times, I end up keeping the same team. I’m looking at the product quality. Is it following the user experience? Does it have good reviews? It’s really hard to turn around a product that has a terrible reputation. And of course we look at the revenue numbers and the churn numbers – all the normal metrics you’d look at.”
Once he has his sights set on a particular plugin or company, he explained, “It’s a pretty formulaic approach. We don’t really negotiate. We have a multiple we’re willing to offer, and that’s the multiple the deal has to be done at.”
If you’re on the flip side of the equation – trying to sell a tool to someone like Syed – he has a number of tips to offer, based on his experiences: “Make sure your books are squeaky clean. Another thing is to document your processes. We try to document everything so when the new owner’s coming in and taking over, it’s very, very easy for them to come in – which makes it easier for us to exit and step out.”
He also recommends using a broker. “The good ones will guide you through the whole process,” he explained. “When I was selling List25, I was driving around Utah’s national parks. I sold List25 and bought three companies during that 20 days while I was traveling, and I wouldn’t have been able to do that if I didn’t have the right people on the team.”
One final tip is to be rational and patient throughout the process. “There will be times when deadlines aren’t met,” he said. “Closing dates have to be extended because somebody’s legal team was slow. Financing didn’t clear. Those things happen as part of every transaction. You’re not alone. It’s not unique to you. Just keep your tempers down, frustrations low. Just be calm.”
On Building and Hiring a Team
Like so many entrepreneurs these days, Syed’s companies are distributed. He explained, “We’re all over the world, because although talent is everywhere, you don’t have opportunity everywhere. You can get the best people in different places.”
Syed is a big fan of the book Who: The A Method For Hiring. “It helps you ask the right questions and hire selectively,” he said. “You have to be selective. You can’t just take the first person to come down your pipeline.”
In terms of recruitment activities, Syed prioritizes tapping into his existing networks. “I would ask someone, ‘Who’s the best marketer that you know?’ I’m not going to ask who you think I should hire; I’m going to ask who’s the best person you know, and I’ll do the rest of the work.”
Once new team members are onboard, Syed uses the Entrepreneurial Operating System (EOS) methodology to make sure the right workers remain in the right seats. “We use that process across all the different companies, and it helps people self-select themselves out if they’re not going to be a good fit,” he said. “If you’re not doing your job you’re going to be like, ‘Uh, I’m just going to hand in my resignation.’”
I’m grateful to have had the chance to connect with Syed, and I hope you found his insights useful. Anything that surprised you? Share your thoughts by leaving me a note below:
Image: Unsplash
I build and grow SaaS companies.
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