Dave Rodenbaugh is the founder of Recapture.io an automated abandoned cart recovery for Magento & Shopify. Dave started his entrepreneurial career by acquiring businesses and making the developmental changes that turned them into profitable companies.
Dave is the host of the Rogue Startups Podcast alongside his co-host Craig Hewitt where they have weekly conversations about entrepreneurship, eCommerce, and marketing.
Dave Rodenbaugh is the founder of Recapture.io and the host of the Rogue Startups Podcast. His provides an automated abandoned cart recovery for Magento & Shopify businesses. Dave initially started his career acquiring small businesses, where he learned where businesses needed the most help to create profitability.
In this episode, we talk about how much Dave acquired his first companies for, where to find those same deals today, and how he acquires new customers for Recapture.io.
This is The Lean Commerce Podcast.
How did you get started in business acquisition?
1:46 I joined a group of micro-entrepreneurs over a decade ago. What we all had was a skill to build something but we didn’t have an understanding of how to sell it and how to sustainably set up a business that can scale. Overtime, the founders of this group created a conference, called Micro Conf, which is now held in Miami.
4:42 I spent time looking around at various marketplaces, such as eBay, and found smaller businesses with potential and bought them at a low costs. Then I started figuring out what parts could be outsourced and how to scale these businesses.
How much did you initially acquire these companies for?
5:46 I had a $2,000 budget. Now a days, you could do it for under $5,000. I bought a small business making $100 a month, tried to grow it and make it legit but it turned out there were a lot of fraudulent users on there. I cleaned up the platform, marketing, and sales page and then sold it for the same price. What I came out of it with was knowledge and experience. The second time I did that I found a bunch of WordPress plugins and a business that was drowning in support. The women in charge wasn’t systemizing it or funneling it, so I spent time setting up a pricing page, making a free version vs. premium version, and created a support forum and turned it into a $3,000 a month business from a $300 a month business in three years.
Where would you find these smaller deals today?
15:00 I’m on a lot of little lists. Side Projectors is one for example. You’ll find a lot of good businesses and some really bad ones. For example, people will rewrite Slack and want you to pay for it.
16:19 The only thing that truly adds value to a business if it’s make money. If it’s not generating money, it’s not worth anything. In some cases, you might be able to say that it can be monetized. For example, a Shopify app that needs another distribution channel. Now, you can use that to cross promote your other Shopify app and use it to make the other one more money.
How many acquisitions have you made?
29:50 I think I’m somewhere around eight or nine done deals, not including the ones that haven’t worked out.
What does it look like to acquire new customers for Recapture.io?
31:20 I won’t lie, it can definitely be a struggle. We also have a high LTV. You have to find the right channel. You can try cold emails, pitch to agencies or store owners, etc. All of this takes time and money and as an individual founder there is no way I can do all of it by myself. I have to hire out to get it all done.
36:58 The hardest thing to overcome is trust. You need to show people that you know what you’re doing and they can account for your services.
Where are the distribution channels to get in touch with store owners today?
38:19 The problem is that there is no one answer to that. Even if you had an answer, it could change in 6-12 months and then change again. Communities come and go. I compare the level of interaction and engagement within groups to see if it’s hit or miss. Sometimes the moderators are cutting off the users and shifting groups, it doesn’t seem like they are ever sitting still.
What eCommerce solutions are out there for businesses?
48:35 It’s the time of the No Code Movement, you can build something without having to be a programmer. All you have to do is assemble a bunch of things, like what Shopify has created and what WooCommerce attempted to do.
Resources Mentioned in the Podcast: