Lessons from an 8-Figure Business Exit 💰
Insights and Takeaways from Timothy Armoo's Path to an 8-Figure Exit
👋 Hey, Mike here! Welcome to this month’s free edition of the VAMO Newsletter. Each week we share tips to sell more and market better.
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I was scrolling Twitter a few months back and spotted this tweet from Timothy Armoo, the former CEO of Influencer Agency FanBytes. In his tweet, he shared valuable lessons he had learned during his journey of selling his business for an eight-figure sum.
I immediately recognised parallels between his experiences and my own with Learning Heroes. So I asked if he’d be willing to share (and expand on) the story for our VAMO audience. I was pleased when he agreed, and I enjoyed recording this conversation for you. There are some great insights and takeaways. Enjoy!
Question 1: Why did you decide to start your own business?
I started really because I wanted to be rich and I realised that a business was probably the fastest way to get there. At 17, I was tinkering around on the internet and I started my first real company called Entrepreneur Express, and that was where I found out the value of social communities and social pages.
Within 11 months, that company got bought by an American company, and I realised, “Oh my God, this thing can fundamentally change my life”. For the next three to four years I tried a bunch of ideas, pretty much all of them failed, and then I discovered FanBytes. As a consequence of the right market timing and right skills, we grew the company from zero to 75 people and sold it in May of 2022.
Question 2: How did you get started?
In the beginning, we focused on a particular niche, specifically music labels, and then we scaled by doing a lot of speaking engagements, and content marketing. By just focusing aggressively on just that one niche, we became known as the best people in that particular niche, rigorously marketed into that set segment of people, and then eventually became so popular there, we could then go to other industries.
I found this really interesting. I’m a big fan of owning a small niche first and working your way up the leagues. "Riches are in niches," a famous quote by Pat Flynn, emphasises the importance of identifying a specific market or audience to excel in business. Go too broad early on and it can be challenging to compete. For example, surpassing established figures like Steve Bartlett or Joe Rogan in the podcast space is unrealistic for newcomers.
However, by focusing on a specific niche, you can establish yourself as the go-to source of information in that area. For instance, hosting a super niche podcast on Agile Training may not achieve viral numbers, but it enables you to create the best Agile podcast worldwide and become a recognised thought leader in that niche.
By conquering battles in your niche, you gradually pave the way for broader opportunities and overall business success.
Question 3: What obstacles did you overcome?
The biggest obstacle that I faced was probably getting out of my own way. What you need at the beginning is to have that sense of self-belief that you can actually do it. It's so easy to read a lot of books and documentaries and think that the people who've achieved what you're trying to achieve are better than you. And starting at 21, I had this sense that I was not as great as the people I read about.
So, actually getting out of my own way and understanding that they are human beings just like me. And they have a way of thinking about the world, which I just need to adopt. And so once I got out of my own way, I was able to think bigger. I was able to act bigger. I was able to just be bigger, which meant that anytime I had a problem, I just intuitively thought about a bigger solution because someone else had actually solved that problem for me.
Question 4: Did you ever feel like quitting?
I never felt like quitting. In fact, I was chatting to my co-founder and commented “Isn't it funny that we never thought there was no other outcome than to sell the company?”
At no point did we think about failing because we just had this view of the world that there was only gonna be one outcome to this business, which was for it to be acquired. My age also helped me quite a lot. The fact that I was 20-something, I started in university. I didn't have any dependents or anything like that. Therefore, I just had this attitude to risk, which was very Laissez-faire.
If I did quit, what else would I do? What I would do is still run a business. So if I'm doing the thing, which I would've done if I quit anyway, I might as well just keep going on.
Ian and I resonate with this mindset. When we embarked on the journey of starting Learning Heroes, we were unwavering in our belief that there would be only one outcome. Doubt never crept in.
However, we've come to realise that this level of unwavering certainty hasn't always been present in other projects we've been involved in. And from those experiences, we've learned a valuable lesson. If you don't feel 100% confident about accomplishing the specific end goal you've set for yourself, it may be worth reevaluating your chosen direction.
If doubt begins to overshadow your confidence, it might be an indication that some adjustments or reassessments are needed.
Question 5: Can you sell? If so, what is your sales style?
From where I grew up, I didn't know anyone who had built a business, so everything I had to learn was through books. So I’d just go on Amazon and get the top 10 books on sales and read them.
I have this fundamental belief that rather than trying to sell, the aim is to get people to buy.
How can you get someone to not only recognise they have a problem but then also convince themselves that your product and your solution is the right thing for their problem?
Nobody ever pops out of the mother's womb and goes, “I now know how to sell.” It's a trait and it's a feature that you can consistently hone, but I think it's all a mental thing like you tell yourself that you are not a salesperson, so therefore you don't actually go out to sell. You have to build an identity around just being someone who can learn and upscale rather than I'm this type of person.
When someone says they hate sales, usually what they really mean is they don’t want to be salesy. But you don’t have to be salesy to sell. If selling makes you feel sleazy, you’re doing it wrong.
Your goal isn’t to persuade or trick someone to buy. It’s to help them make a decision.
I’ve closed millions using a simple technique built around asking questions.
You have to forget selling for a moment and leave behind all the negative connotations associated with that word.
Instead, you’re going to have a conversation that helps you to understand the prospect's problems and see if you can help them.
When you get the prospect to talk, closing becomes easier. There are different ways to close, and different books and gurus share their own systems. But I shared my system here: My 6-Step Closing Technique
Question 6: What pisses you off about the business/entrepreneurial world?
There are a lot of things that piss me off about the business and entrepreneur world. I'll name a few. The first one is the need for people to always rush into getting investment. They do that before they’ve made sure the product or service is something that people actually want. People wanna skip that section because they believe that fundraising is the achievement. I blame the press for that. You know, they celebrate a lot of things around fundraising.
The second thing is people who have a very unrealistic view as to what their business success actually looks like. I spoke to someone who runs a doughnut company, and the previous year made around 20k, and the following year they made 40k.
I asked him “So, what's your (exit) number?” And he said, a hundred million. It took all my strength to not slap him around the face and just go, “Come on man. Your business is in no way going to make a hundred million even if you did this for the rest of your life.”
So, having unrealistic expectations. For us, I was very clear to investors, to my team, to my co-founder. I said, look, the odds are this company is not going to be a billion-dollar company. This company's also not going to be a hundred million, but I can comfortably say this company's going to be sold for tens of millions.
And it's exactly what happened because I understood the way these businesses were valued. I understood it was a tech-enabled agency, and understood that people were at the core. And when we sold the company, we had 75 people. But to get to say hundreds of millions, We'd have had to be doing it for another 10 to 15 years.
So, those two things are the things that really piss me off. Unrealistic expectations and standards, and there's a constant desire for investment and fundraising when really what you need to do is figure out, is this something people want? Do the hard yards of actually seeing, is this something customers want?
Build something that can actually scale before you go and get investment.
Question 7: What part of the business growth did you enjoy the most?
When we were going through the business sale I actually created a lot of voice notes on my phone (every single day). I would give my thoughts on how I was feeling etc. About two weeks out, I remember saying to myself, “Oh my God, I can retire. I'm completely done”. I was thinking about all the fancy places I'd go to and all that stuff. And I did that for two months. For two months I intentionally tried doing nothing, and the truth is doing nothing is actually incredibly hard. It ends up being quite boring. It ends up being quite repetitive.
More importantly, as entrepreneurs, we think that the end goal is to work really hard so you can just chill and relax. But I actually think that especially when you go through a company acquisition, what it gives you is a freedom of choice to be able to choose to do things that you actively want to do, rather than doing things that you have to do.
Question 8: What was the biggest lesson you took away front the experience?
The biggest lesson I took from selling my company was actually not to be too greedy. A lot of founders start their companies and they want to absolutely rinse everything out of the market opportunity. And then when they're tired or frustrated, that's when they sell. Actually, what you want to do is focus on where there's room for growth.
So rather than trying to rinse out 100%, get to the point where you've got to 70% of the story, 70% of the opportunity complete. Because when a buyer is coming, they're buying future growth.
Don't get too greedy because a lot of people want to max out everything in their business. And then when you then choose to wanna sell it, or someone is approaching you and they ask you, well, “what are the growth levers we're going to pull to be able to get 3, 4, 5 times back our money?” You say, “Whoa, we've done everything. We've expanded everywhere. We've served all customers”. Then there's nothing for them to buy.
This is a great reminder that businesses are more appealing to buyers when they demonstrate the potential for further growth. You might think, "I won't sell yet because if I secure some significant deals, I can sell for a higher multiple."
However, that's not always the case. Buyers are not interested in acquiring a business when there's no one left to sell to. Holding onto your business for too long can be counterproductive.
Prospective buyers are looking for businesses with untapped markets and growth opportunities.
Just like a bird isn't afraid of the branch snapping, don't become too attached to your business, thinking it's the one and only opportunity.
Owning a small niche first and working your way up can lead to business success. Focusing on a specific market or audience allows you to establish yourself as the go-to source of information in that area, gradually paving the way for broader opportunities.
Overcoming self-doubt is crucial. Recognise that successful individuals are human beings who have faced similar challenges. Adopt their way of thinking and believe in your own capabilities to think bigger and find solutions.
Having unwavering certainty and a clear outcome in mind can drive your entrepreneurial journey. Doubt should be a signal to reevaluate your direction if you're not feeling 100% confident about achieving your specific goals.
Selling is not about being salesy or persuasive. Instead, focus on helping potential customers make informed decisions that address their problems. Engage in conversations that allow you to understand their needs and provide relevant solutions.
Unrealistic expectations and a rush for investment can hinder business success. Prioritise ensuring your product or service meets customer demand and build a scalable foundation before seeking external funding.
Selling a business requires avoiding excessive greed. Instead of maximising every opportunity, focus on demonstrating potential growth to appeal to buyers. Keep room for future expansion and avoid exhausting all possibilities before considering a sale.
I hope you found the conversation useful and apply some of the learning to your own journey.
Thanks again to Timothy for being generous with his time, I hope we can catch up again after his next big exit.
That’s all for this week.
I’ll be back next week with more tips and strategies to help you sell more and market better.