Ep 282: Investing In Ecommerce Brands & Scaling Them to 7+ Figure Exits with Matt Edmundson

Jaryd Krause:

How do you take a six-figure e-commerce brand, scale it to seven figures or more and exit? Hi, I'm Jaryd Crause. I'm the host of the Buying Online Businesses podcast, and today I'm speaking with Matt Edmundson, who is an investor in e-commerce businesses and an e-commerce entrepreneur, making over $75 million in sales for his own businesses and over $100 million in sales for his coaching clients.

Now, he runs two podcasts. One is the Push to Be More podcast, and the other is the e-commerce podcast. In this podcast episode of mine, the Buying Online Businesses podcast, Matt and I discuss how he partners with e-commerce brands, how he comes in as an investor, how he structures a deal with maybe a little bit of equity, earning, maybe a retainer, and how he can work his way up to acquiring more of the business through equity.

And then what he does and puts in place to scale those e-commerce brands, get some ready and exit them with the other shareholders and partners he has in those businesses. We talk about a few that he has worked on and some of the marketing strategies he has implemented in these different businesses.

We talk about one specific business where he took it from about three million in revenue to about six to seven million in revenue and what he learned in the process of doing that, as well as what he learned with single source dependency of suppliers. We also discuss values in business, values as an entrepreneur, how to define your own success as an entrepreneur, and when is the right time to actually sell your business?

Now, there's so much value in this podcast episode. I know you guys are going to absolutely love it, but this is not the only way that I can help. If you're looking at buying a business, make sure you get my due diligence framework. It's what I use. It's what my clients use. It's what helped us make millions of dollars and save millions of dollars.

So don't go this route blind when buying a business. Get some help. Get the framework. You can get that at buyingonlinebusinesses.com. Now, let's dive into the pod.

Do you have a website you might want to sell, either now or in the future? We have a hungry list of cashed-up and trained-up buyers that want to buy your content website. If you have a site making over $300 per month and want to sell it, head to buyingonlinebusinesses.co, forward slash sell your business, or email us at [email protected], because we will likely have a buyer. Details are in the description. Matt, thank you for coming on the pod. Welcome.

Matt Edmundson:

Oh, no, it's great to be here, man. Loving it, loving it, loving it. This is the first time I've spoken to someone on a podcast in Bali, so I'm a mixture of excited and envious, Jaryd. I'm not going to lie.

Jaryd Krause:

I get this. I would say about 75% of the people that ask me where I live get that. I get that response, actually. It's crazy. But I'm a single man. I have kids. I have a partner.

It's easy for me to do that. It's very difficult and different for everybody else. And also, it's quite easy, I guess, because it's only a six-hour flight back to where I'm from, where all my family is. I love that.

Matt Edmundson:

It's only a six-hour flight. It just rolls off. It's only a six-hour flight. Well, for you guys, it's so far. Yeah, yeah, yeah. Because in six hours, I can be in Egypt. I mean, it's crazy, you know, when I think about where I can be in six hours.

Jaryd Krause:

Even two hours, right? for you guys. Yeah, you can be all over Europe. Yeah, it's amazing. So, talking about traveling, do you do much traveling with the lifestyle that you have?

Matt Edmundson:

Yeah, I do, which is wonderful. So, in a couple of weeks, I'm heading over to the States and speaking at an event over there. And while I'm over there, I'm going to go see some friends. I'm just, actually, one of my to-dos today is to hire a cabin by a lake so I can go sit in a cabin for five days and not be near anybody. Which I'm so looking forward to.

And so, yeah, do that sort of February thing. In England, the weather is just dreadful, gray and miserable. And so that's normally when I head to the southern hemisphere. So I'll head over to clients in New Zealand and sometimes Australia. So, yeah, I like to follow the sun. I'm not going to lie.

Jaryd Krause:

Yeah, I think a lot of Brits are the same. It's just that most people that are in the position to do so will leave and then, yeah, try and chase the sun. I've got a friend who swaps. He just left Bali. He's going back to—he's going to go down and live in Cornwall through the summer. And you'll probably do some traveling when it comes to the bleak skies towards Christmas time.

Matt Edmundson:

Yeah, yeah, yeah. No, I get it. I get the appeal. I really do.

Jaryd Krause:

Yeah. So, Mark, we're going to talk mostly about marketing, but you're also an investor. So what sort of investor are you? What do you invest in and why?

Matt Edmundson:

So, at the moment, my background is e-commerce. And at the moment, we are building an e-commerce group. We are out there getting involved with different e-commerce companies. Usually, turnover starts at about half a million—not all the time, but usually sort of the size that we start at. And the whole purpose is to roll them into this group; to build a group—maybe to build a group big enough to get private equity involved—would be the dream.

And so that's predominantly what I'm focused on at the moment, just mainly e-commerce businesses. We have started conversations with more related companies as well. So, do we go and... I've started one or two conversations with a few agencies, for example, that operate in the e-commerce space. Do we go and acquire those in the group and build that out, as well as just e-commerce businesses?

So, we're having conversations around that, looking at that at the moment. So, yeah, all exciting times. It keeps me busy. It keeps me traveling, you know, going back to the travel thing. It definitely keeps me traveling.

Jaryd Krause:

Yeah, for sure. And so when you say you've got a group, are you saying that you guys buy e-commerce businesses or are you working... you know, you've been in marketing for so long... are you working with e-commerce businesses, helping them grow and then acquire them? Like, what does this... you know, you're building out a private equity firm... what are... How does this look for you?

Matt Edmundson:

Yeah, as you probably know, I don't want to teach you how to stir cakes, but the reality is that no two businesses are ever the same, right? And so every deal is different. But our base point, or starting point, is that we want to take a minority stake in the business. So, like a 25% stake. We like to keep the owners of the business involved, and usually most of the staff of the business is involved where it makes sense.

And we bring in our team to supplement where it needs to be supplemented. And the reality is, I'm not after another job. I don't want to go and run somebody else's company when there are perfectly capable people in there. But we do want to go in, partner with them, and grow that business.

So, bring our expertise in growth and grow the business; work with them to get the business where it needs to be to see a good exit, you know, at some future point. Whether that's reselling that business on its own merit, whether that's rolling it up into our e-comm group, or whether it's... you know, I've not even thought about taking any company public, but I'm not going to rule it out. I mean, whatever, wherever the sort of journey goes, I suppose. So that's usually our starting point. And then…

We see what happens, really, because, like I say, every deal is different. That's the one thing I can tell you. But I'm very interested in working with businesses and investing in businesses that have good values, good, strong foundations, and good people involved who maybe have sort of reached or are reaching where they feel like they can take the business and just need some help to get it to the next level and to exit well.

Because, as you know, building a business is one thing. Selling a business is something completely different, having sold a few along the way. And so that's sort of our sweet spot, really.

Jaryd Krause:

Cool, cool. So, jumping in, taking a stake, and taking a bit of equity in the business up to the 25%-ish range. I'm sure it's going to change. Like you said, every deal is unique, and depending on the sort of marketing approach, it might need help or input from you guys. So, do you sort of get a bit of a retainer, or do you earn your way into the equity, or do you acquire the equity from the get-go? There are a few different ways you can go about it.

Matt Edmundson:

Yeah, there is. You're right. And again, every deal is different. So, I would say, thinking through the default mechanism for us, we charge a retainer, and that retainer will depend greatly on the business. Just my experience here tells me it's good to have a bit of financial skin in the game from the other company's point of view.

So it's not excessive. It's definitely not what we would charge for coaching or consulting. So it's a much lower consulting fee. And then there is equity, which we usually buy for a pound or a dollar. And then we decide whether to invest actual cash into that business if we need to, or maybe there's another way that we can help.

For example, one company we're talking to at the moment—the deal's almost done. For them, actually, we're going to bring their fulfillment operation into our warehouse.

So, we have a warehouse in Liverpool, and we're going to bring their entire fulfillment operation into that warehouse. And so that's going to really save some money for the company and give us the cash in the business to then go and grow and boost growth that way.

I like to be creative. I like to find ways that actually make sense for the business, rather than just... I always find that if you try and just put something on railroads, this is the way it has to go every single time. That works for some people. For me, I don't know. I just like the fact that every deal is different.

Jaryd Krause:

Well, I think also with the railroads, sort of like... I guess the system, if you want to call it that, or the mentality of doing business, can work. It can work for the person who sets up the railroad. But if you're getting into a deal where there are many moving parts, like a business that needs marketing, if it's not really aligned with those railroads, they don't work for the business owner, the operation staff and all that sort of stuff.

Then you don't want to create some level of resentment in the deal. Because that can start to... yeah, causing resentment with partners and stuff is not a good thing. And resentment, like you might not know, or we might not know, what sort of resentment is building up within somebody because it might not be spoken to or brought up unless you've got good conflict resolution put in place, like each time you have a meeting.

So yeah, I think the completely custom approach for these sorts of deals is the way to go. And also having room for adjustments as things move forward, to make sure everybody's super stoked with the exit, I guess. So when you get in with a deal, do you... what's the typical... I mean, we talked about railroads, but every single business is different.

Like, do you have a typical time frame that you'd like to run some of your marketing strategies? I want to talk about, you know, some of your marketing strategies soon, but is it usually a two to four or five year process? Or, um, where's it?

Matt Edmundson:

Yeah, I think e-commerce is a funny thing because you can make changes today and have an impact tomorrow, right?

Yeah, with ads. I mean, even with the slightest thing, like changing a piece of copy on one of our websites, the results were palpable the next day. I mean, it was just extraordinary—the difference. And so whether it's paid ads, whether it's changes on the website, whatever it is, you can often have some instant impact, right? So it varies.

I mean, marketing changes work like everything else, I suppose. They work in the short term, the medium term, and the long term. And I think there are things that you do that are quick wins. There are things that you do that work in the long term.

Then long term, I would say, is definitely sort of two to three years depending on where you go; right, this is where we want to be. Because, you know, again, it's what... it's an old phrase, an old saying, isn't it?

But it's actually quite true. Everybody wants to sell their business in three years. Whenever you talk to somebody, you know, with a potential deal in mind, and you sit down and say, Well, tell me what it is you want to do. Tell me about the future. Nine times out of ten, they're like, in three years, I want to exit, you know.

And, you know, there'll be a figure in their head, and it's either one million or five million—the sort of two magic numbers, right? And so, it is quite fascinating how that works. But I would say, yes, you know, we like to have a sort of 12 to 24 month outlook in terms of marketing.

And depending on where the company is, it can take two to three years to not only turn it around but actually build the mass that you need to get the exit that you want. So, um, yeah.

Jaryd Krause:

Yeah. Cool. Cool. Well, when you guys come to sell these things, you just let me know and I can link you guys up with buyers. Excellent. Or if you need some brokering or whatnot. That's the beauty of having this podcast and networking—you know, having people that are looking to exit and people looking to buy—it's great to link them up.

So, yeah. With the marketing, you're normally looking at helping out and working with companies doing half a million plus revenue. And then, are you typically getting to the exit stage of one to five mil, or are there other larger ones or smaller ones? Where do you draw the line sort of thing?

Matt Edmundson:

That's a good question. I don't know if I have a line. I think when it comes to exiting the business, the key thing is to make sure the shareholders of the business that's being sold are happy with the price that's being offered. On the understanding that it's not going to be... the money's not going to be in their bank tomorrow, right?

That's my other observation in all of this. Selling a business is not like selling a pair of sandals online. It's not like, oh, add to cart; there it is. There's a little bit more... If only, yeah. As you know, there's a little bit more nuance in that.

So it's a lot more like buying a house, you know. Selling a business in nine to twelve months, really, from beginning to end, seems to be about average, doesn't it?

Jaryd Krause:

Depending on the size of the business, but typically, yeah, six to twelve months, you know, in that low market to middle market range. Yeah, like one million, like seven-figure deals anyway. Yeah, up to those eight.

Matt Edmundson:

Like I said, I've never taken a company public, but I've been speaking to guys who have taken companies public. That just seems like a whole different time frame and a whole different ball game, which is just beyond me right now. I'm quite keen to learn about it in some respects, just not right now. I think it's one of those, isn't it?

It can take a little bit of time. But I think as long as the shareholders going into it know that someone's going to come up and, in effect, crawl up their inside leg and take all kinds of weird and wonderful measurements that they weren't expecting,. And that there's going to be a bit of time involved and that they're happy with the price and the terms, I think.

I think usually everyone wins at that point because the person, you know, buying the company is obviously happy with the price. There's always that niggling thing in your head. Could I have gotten more? But I think, you know, you have to sort of accept, well, no. Am I happy with this? Yes or no? Yes. Well, okay. Well, it doesn't matter if you could have gotten more. You're happy with this.

Life's too short to be thinking about that all the time.

Jaryd Krause:

Yeah. I think for people that are wanting to exit, I also think that yes, the monetary value is an important thing. But I also think the timing in their lives to sell also plays a big part. And getting that right is like it's—If you're focusing on one business, which I believe people should be if it's their primary source of income, put all that focus on it and then get ready to sell.

And when you get rid of that, or when you sell that, you open up so much more capacity for people who want to do different things in their lives, whether it be investing, family or whatever it is. I think that needs to align quite well as well. I guess it can be a little bit... different when you've got multiple parties or multiple shareholders in the deal.

Then, I guess, it probably becomes a little bit more about the sale—the exit value, I guess—because it'll be hard to get everybody's personal life situations linked or in sync for an exit. Whereas one owner and maybe, you know, say yourself as like a 25% equity owner stake, is, you know, it's probably more personal, personal situation than just, can I get more for it? I guess.

Matt Edmundson:

Yeah. No, it's a fair point about the timing. I think it's totally true; a lot of it is happenstance, isn't it? In terms of right place, right time. Does it feel right? Yeah. It's a bit like selling a house. You know, you can always make money selling your house, but do I want to? I don't, and I don't know if I do right now. You know, there's the—yeah, I get that point. It's a fair point.

Jaryd Krause:

The house example is a perfect one. Because you do move based on personal preference, not so much monetary value, or I want to, I want to spend more on a larger house.

Nobody wants to really do that, right? Um, but location is typically location and the type of house, I guess. As you change what you want in your life, that will change. It's really personal. And I think it's so similar to a single business owner, a one-person owner or the founder of a company.

Now, marketing is really cool. So you've helped a lot of companies do really, really well, you know, scale to the nine figures in, you know, revenue. And you've got a bit of a system. Tell us about your system and your slingshot framework.

Matt Edmundson:

So I'm a big fan of this. Have you ever heard of the story that you're familiar with, the David and Goliath story—the old, ancient story of David and Goliath?

How the little guy took on the giants and won. I don't know if you've ever read the book, um, David and Goliath, by Malcolm Gladwell.

Jaryd Krause:

He's the author; he's a great author, isn't he?

Matt Edmundson:

Oh, yeah. No, and he wrote this book, David and Goliath, talking about how the underdog wins and, you know, just a really great book, and tying it into that old story. So I have called a lot of e-commerce entrepreneurs digital Davids.

I liken them to, you know, David in the story because, um, you know, we're the little guys taking on Amazons and Walmarts and, you know, all these kinds of big, crazy guys with insanely deep pockets. And how do you do that? And how do you win?

It's a really interesting question. And so, yeah, I just coined this phrase, Digital Davids. So Slingshot is the reason behind the name, because obviously David had a slingshot. So what's our framework? All the stones inside the slingshot, if I really want to take the analogy so deep.

I haven't done this in a little while, but I think that there are seven areas of e-commerce that you have to focus on. So assuming you've got the foundations in place, right, so your values, your operations, your team—that's the given. There are seven areas that I think you have to look at. Number one is the product.

What is it I'm trying to sell, and is there demand for it? How much do I know about it? How can I sell this in a way that is unique, which ties into number two, which is all about branding?

Your story is about the customer story and how those two things tie together. And actually, it's probably one of the most important things to think about. We then move into the technology. So, tech stack. We move into number four, which is marketing. So how do we use the technology?

How do we market our business in such a way that people want to come to our website and buy? Number five, then, is about optimization. So once we're on a website, how do we get them to buy more stuff? How do we get them to invest?

Increase all those magic numbers that we need to track, which is super, super important. Number six, then, is about experience. So what happens to the customer after they've hit that buy now button?

You know, what goes on at that point? So the whole customer experience side of things is probably—

Jaryd Krause:

Is that the buyer's journey as well as the client's journey, I guess?

Matt Edmundson:

Yeah, it's one of those where, for me... If I look at all the businesses that I go into and do coaching with, probably the one area where I can almost guarantee that something could change and move the needle for the company is in this whole area of experience, what the customer experience is.

Because if you think about what happens on a website, you've gone to the website, they've bought the product, they've hit the buy now button, and especially if this is their first time with you, there is this... uncertainty all of a sudden, because up until now, everything has been pixels.

Everything we've done with you is digital. It's pixels. It's not real, really. It's just something on a screen. And so what happens after that buy now has been done and the card details have been put in, from the very first seconds to the first email that you send them, the follow-up sequence, how you package the product, what they do if they contact customer service, what delivery company you use, how they feel when they open your product, the opening experience?

All of those kind of things matter massively. There's a great story that I like to tell people about popcorn here because we had a beauty business, an online beauty business. I sold it a couple of years ago. And in that business, we looked at these seven areas.

Sorry, the seventh area, by the way, is growth. How do we increase business repeatability and referability? Just to close the loop for anyone taking notes. But in this whole experience, we were looking at it and thinking, Why does a customer buy from us? Why do they spend, on average, 75 pounds, which is about 100 US dollars?

Why do they spend that much money on skincare? As a moisturizer, why would you do that? Now, we looked deep and hard into that. So this is all number two, branding, story, and understanding the customer story.

And we realized that, actually, when people were buying the skincare, they were treating themselves. They were buying themselves a gift. And so it wasn't something that was functional. It was something that was meant to make them feel better about themselves.

I mean, that was very much psychology here. And so I remember sitting down with a team and going, Right, how do we make what we send more gift-like? Because they're buying a gift. So instead of sending it in the standard jiffy bag, you know, the padded envelope or the standard cardboard box, we were like, What would happen if we put an extra flap? Bizarre question.

But if we put an extra flap on that box to make it so the opening experience was delayed and anticipated a bit more to make it feel like there was something special in there,. What if we printed something on the box? It was just lovely and made you feel so much better about yourself. And then, when you open the box, you come across some tissue paper.

And so, you have to open the tissue paper. Now we're starting to feel like a gift. What would happen if we put one or two drops of essential oil in there to make it smell lush? And so we were like, Let's make the unboxing experience really magical. And bearing in mind, this cost me an extra two pence, which is like three cents, isn't it? Three US cents.

It's not a lot of money we were spending here. And the other thing that we did was because we were, you know, understanding our story a little bit. We wanted to be a bit quirky and a bit fun. And so at the time we were sending out the beauty products, do you remember the—I don't know if you remember them—sort of plastic pillows that you would find? You'd order stuff online and it'd come in a box with a bunch of plastic pillows to sort of pad it out.

And we were like, yeah, those air pillows. Yeah. And so we were like, I just don't; they're not very sustainable, not good for the brand story, not good for the environment. Customers don't really like them, et cetera, et cetera. And so we just had a bit of a, you know, brain fart, as I like to call it, one day. And we just decided, what would happen if we used popcorn as a packaging material?

And of course, no one had ever used popcorn as a packaging material at this point in their life. We're like, we don't know. We know nothing about it, so we went away and tested. I think it was over 20 different types of corn. I mean, it's just bizarre what we got into.

And in the warehouse, we installed these popcorn machines that you get at the cinema or at a fairground or something. We just had loads of them in the warehouse, and they were constantly making popcorn, just popping this corn all the time.

And so the warehouse smelled like a permanent popcorn place. And if you wanted a low-calorie snack, you just had plenty of popcorn on tap. And we put popcorn in the boxes as a packaging material.

Well, let me tell you, after changing all of that, instead of just plain brown boxes with plastic, you know, air pillows in, you now had a brown box that was printed. There was a delayed opening experience.

There was tissue paper inside, which had a nice sticker on it. You open that, and there was popcorn as a packaging material, which had that sort of smell and fun about it. Everybody started to post about this.

Jaryd Krause:

Yeah, I was going to say it's super Instagrammable, right? Like, the unboxing experience is so good for branding. And it's really hard to get a measured ROI on that, but it's massive.

Matt Edmundson:

Oh, it's huge. And I repeat, what happened was that you could see it in the return customer rate. So repeat orders went up. And I couldn't say that.

Jaryd Krause:

I love the skincare.

Matt Edmundson:

You know what? It was one of those things where we had to put a sticker on the packaging. Because I remember the customer service team coming to me one day and saying, "Matt, listen, people are eating this popcorn.

We need to be aware of this." You know, one lady wrote that she was sitting down with her grandson, eating the popcorn while watching a movie, right after she bought the product.

So we had to, I mean, it was a bit tongue-in-cheek, but we were like, "Guys, this is not produced in a food-safe environment. I really want everyone to be aware of that." So we put a sticker on the packaging that just said, "Listen, the popcorn's great for the birds, but probably not best for your own stomachs just because of the environment where it was produced." But everyone loved it. You know, 99% of people loved it. There's always the one percent that don't, but, um, yeah, really, really interesting play.

And that was all because we were playing around with this concept of the customer experience.

Jaryd Krause:

That really comes into play; that crosses a few things. You've got these seven sorts of, I guess, parts of the business. That really crosses a fair few of them if you look at them, like if you put it together like a Venn diagram. Like, you've got that covered product, that covers branding, covers marketing, um, covers experience and growth.

So it covers about five things in there—maybe not so much the tech and optimization, but yeah, it's really, really awesome. And I've experimented with that. I owned a suit brand. We used to do tailor-made suits called Suit Me Up, and yeah, we changed our packaging, our branding, and how people would open it and experience it. And we noticed that, you know, people were giving us far more feedback after getting it and happier to share it.

It's people who kind of want to go like, "Wow, you went the extra mile. We want to go the extra mile and get that feedback." And you can start to use that through your marketing with, you know, screenshots of the feedback that people have presented to you. And, you know, putting that throughout different video clips is huge for social proof, right? It's very valuable.

So I want to ask you about a brand or a company that you guys partnered with, and you helped them scale and then made an exit. Where did you, like, what stage did you start working with them? What were some of the things that you did? And then what was the sort of exit that you guys got to? How did it look in that?

Matt Edmundson:

Yeah, it's interesting, so I mean, going back to that beauty brand, that was somebody that had a similar sort of deal. When I look back to how it all began, we took an equity stake in that business. We grew that business. The business almost collapsed one day. I would quite happily take the blame for that, but I can actually, on this occasion, put that firmly on one of our suppliers.

I mean, we learned a lot through it. But we then grew the business and then exited it a couple of years ago. And you know when you've exited a business well because the other shareholder and I are still good friends to this day. And so we still call each other up, "Hey, how are you doing?" And I think it was the right time for that company to sell.

In that company, I owned 50%. I started out with a smaller equity stake, 20%. The business grew. I owned 50% of the business and my business partner owned 50% of the business. So when we exited, we were joint partners. And it was a wonderful experience in many ways. And in many ways, like I said, we had to ride.

I mean, resilience was a big thing. It was not a dream. When we got involved with the company, the turnover was maybe, I guess, $3 million, somewhere around there. We got involved. Within two years, we'd gotten the turnover up to $6 million. I can't remember the exact number—six or seven million sterling. And so, really, in the early days, we were absolutely flying.

And what we should have done was exited at that point when I look back at it, but we didn't. And we thought, you know, let's just ride this wave. It wasn't that we tried. We were having conversations with an e-commerce group here in the UK about them buying us, and they never really materialized. But what I never did was actively sort out buyers for that company, which I probably should have done at that point in time, right?

Jaryd Krause:

Point of time when you had an issue with supply around that six or seven mil range and then you had a hiccup.

Matt Edmundson:

Yeah, yeah, so what happened was the website. 80% of our sales came from one supplier. And so this is what I call that.

Jaryd Krause:

We call that single source dependency, revenue.

Matt Edmundson:

Yeah, and it was a problem. We didn't realize it was a problem at the time because we were just riding this wave. I'll never forget it. One day at the start of the year, I didn't even get a phone call. No warning, no conversation. We just got a letter from the company.

It's bizarre, isn't it, how these things work out? But the company sent us a letter saying that, basically, effective 20 days prior to when I received the letter, there was a new pricing policy and they were instituting this pricing policy, which basically said the more you buy, the more you pay.

Jaryd Krause:

Opposite incentive as usual.

Matt Edmundson:

Yeah, absolutely. And I can look at it and I can go. Well, from my point of view, that obviously doesn't make sense. They had a policy at the time that basically said nobody got any discounts. So just because I was selling millions of pounds worth of product, if you were buying that product, you would buy it at the same price that I did.

And so they would claim that they were protecting their brand. I would claim—I wouldn't claim because I don't want to get sued for libel, but I would question whether they were price fixing.

And I would also question whether what they started to do was put the internet retailers' prices up so much that they started to make much better offers on their own website. So they wanted to sell the product, right? They wanted to go directly to consumers.

And I understand that's business practice. I understand. But at the same time, they disregarded quite dramatically the people that helped them get to where they were. They sort of, you know, there were four or five of us that were doing quite well. And they just sort of railroaded everybody and then did it themselves.

Now, some may applaud that as good business practice. I'm not saying one way or the other, whether it's good or bad. I'm saying that it had a massive impact on us as a business. I think I call it, when I talk about the Slingshot framework, my $34 million mistake, because I think that's how much in sales we lost as a result of that one decision.

But if I look at the framework, I can see why we weren't doing well. And this is where the framework came from, because we were good at one or two areas of that framework, but we didn't think about all seven areas at all. And so it's a bit like the analogy I use, which is a bit like a guy who goes to the gym and just does arms.

You know, he's got massive arms, but his legs are like chicken legs; he skips leg day and all that sort of stuff. And so that was us in a business sense. And so, whilst I do not agree with their decision at all, and I think actually it was probably slightly immoral, I do recognize that in that we learned a lot, you know, and a lot has come out of it. A lot of good has come out of it.

Jaryd Krause:

I'm with you. I've learned that lesson myself with single source dependency on suppliers in an e-commerce business that I own. We were selling hanging chairs and we had one supplier or, sorry, we had, like, yeah, it's probably like 90% of them supplied 90% of that product. And we had a few other small ones.

And, uh, this guy quickly got wind that, you know, we were doing well, obviously, from sales and our marketing. And we decided, well, this guy's selling it from his site really well; why don't we sell it from our site, you know?

And then just stop—basically, stop good communication with us—and start sending out broken products to our customers. So then we'd have to refund them, and then they would buy from him.

And it was just like, dude, that's it. It was pretty, pretty bad. And anyway, I ended up selling the business because the person who was acquiring it had contacts with other suppliers that they could, like, come and put in place. So it was an awesome win. Um, so yeah, I mean, it's single-source dependency, not just on, like, income, but on, like, the products and so many other things. This is scary in business.

And so, what did you get? So you obviously got past that hiccup, and then where did you, what sort of, like, what was the result, the exit? What did that look like?

Matt Edmundson:

Well, the exit would have been much better had we sold when we were turning over $6.7 million. That beauty business didn't get back to the six, seven million under my leadership. I think we'd all gotten slightly deflated.

What we did was go and get other brands. This is where I discovered things like the power of podcasting to... to help me grow business, you know, things just that you would never have expected, which I'm saying you found as well.

Right. And we got it from other suppliers. We grew that business. It became much more stable. We became less supply-dependent. We started our own beauty brands, for example. And so, yeah, we... Someone, who was actually one of our competitors, came and made the offer to buy during COVID when everybody wanted digital businesses, which meant we got a much higher multiple, which was a great time to sort of exit, really.

But yeah, it's an interesting one because, looking back on it, part of me still regrets selling the company. Part of me still thinks, I wonder what would happen if I'd bought out the other shareholder and owned it 100% still. Especially in relation to the group that I am now building, would its valuation now be much higher? Um, but you just never know, do you? And that's that.

I think when it came to the exit, um, do I think we could have gotten more money for it? Probably. But the money wasn't really the key motivator. It was part of it. You know, we, like both my business partner and I, had to be happy with the sums of money that we were getting for the sale of the business.

But coming back to what you said about timing, the benefit for me was timing. And I think it was right to sell at that point in time to maintain our friendship.

I think had the business carried on, I just wonder if that part, because partnerships, they're great, but I feel like they have a lifetime. And it's, you know, towards the end of that sort of lifespan that you start to get really agitated and annoyed with each other.

So having a clear exit plan, I think, is essential for partnerships. It really is. But yeah, I would still maintain that actually keeping that friendship has probably been the most valuable thing that's come out of it.

Jaryd Krause:

Good word, really good word, valuable. Like, the value that you got out of that friendship is more than, you know, the financial gain of the exit.

And I typically tell people that when they acquire online business, typically there's far more value in the relationship than the asset you end up purchasing. And also, I find that time in business, like, I know what happened to me when I was running that e-commerce business and I was the main operator; the longer I was in it, the more I presented being in that type of business model and it sort of created some agitation within me that I just wasn't liking the space and enjoying it.

And then it's a personal thing where it's like it's a really good time to leave because that can be doing so much more damage to you personally that can reflect what you do in the future in any other sort of project.

And I don't think people as entrepreneurs really care for themselves first instead of the asset or the business and they don't realize that at the end of the day, they are the asset. The businesses will come and go. But if they destroy themselves in little or big aspects, that can really tarnish the experience, how you run a business or the decisions you make in the future as well.

Matt Edmundson:

Yeah, I totally agree. I totally agree. And this is why I think I'm bringing it back to your first point. I'm excited about our role with Ecom and our partnership with the groups because, actually, we're talking to people who have sort of come to an end of themselves.

And actually, you just need someone to run alongside you; just take the baton off you for a little while or bring you along.

Because I think running a business by yourself, you know, even if you're a married couple running the business or, you know, you're doing it with a friend or whatever, it's still quite a lonely place to be.

And so, yeah, I think, again, that's a valuable aspect of it, isn't it? It's just that sometimes, like when we were talking with a company last week, we might do a deal or maybe we won't.

I'm not entirely sure about it, but they've got a reason why they want to sell. It's not because they've got designs for a big exit. They just want to get out of the debt and the personal guarantees because they're just hustling so much every day just to make the debt repayments. They're like, they don't want to lose their house fundamentally.

And so it's a real one; it's a really interesting one, isn't it? Because of the belief and the desire that this company can and should succeed, it can lead you down a path where, two years later, you're regretting it because you've got this debt and these personal guarantees that are really just a mill around your neck.

Jaryd Krause:

Absolutely. And I think that's where we are. I wouldn't say all of us, but through consuming media, we can get conditioned into believing what a type of success would look like. And typically, making money and being good at business are what most people would call successful.

However, if you redefine or create your own values personally, and you adjust those values as you walk through life and your life changes, then you've achieved success because, I believe, you've worked out what your values are and you get to live by them.

And then, within business, if the business isn't feeding your value system anymore, then it's time to move on. And that's where the personal situation—the personal time to sell, acquire or do something else in business—is so important because then you're not, like, eating away at your values. And then you just become lost as a human being if you do that for too long, I believe.

Matt Edmundson:

I totally agree. I heard, again, a great analogy, football or soccer, as maybe the rest of the world calls it. And I heard a great analogy with this, that if you think about values as the boundary, you know, the field of play, and vision as the goal at the end of it,. Those who live lives that are totally vision-oriented have no boundaries, and therefore they'll do anything to achieve that goal.

Those that just live within their boundaries, you know, just live with values, can often go around aimless, as in, they don't... Do you know what I mean? They look back and they've had something good happen, but they're not quite sure. There's not been something to drive towards.

But when you mix both together, you actually get to play this game called life quite well. And the beauty of that, and I love the analogy, is that, actually, with football, sometimes, you know, without going too deep, you've got to pass backwards or sideways to go forwards. And that's okay because you're operating within your boundaries.

It's not about me; I have to go from A to B and B has to be in front of A; otherwise, I'm regressing. Actually, you're going; I'm going to go in 50,000 different directions, but I'm okay with that because I'm operating in this boundary set, which is my values. And at some point, if I just keep passing, if I keep moving, ultimately, I'm going to achieve the goal. Right.

And hopefully, I'm going to have more goals going in than goals against me. I mean, I'm going to have more wins than losses. And so that's what I often say. I often say that, you know, I'm successful because I've just had more. My successes have far outweighed my failures, you know, and that's a beautiful thing.

And I love the conversation about values. I do. And I think it's one of those conversations that's still not had enough, you know, understanding what your values are, both personally and as a business.

Where are we prepared to operate? What field are we prepared to play on? And as a result of that, how does that work? What's the goal we're trying to achieve over the next, you know, six months or 12 months?

Jaryd Krause:

Absolutely. I think I was surfing. I went on a surf trip a couple of weeks ago with a friend, and we're talking about...

Matt Edmundson:

Of course you did, because you live in Bali, right? I don't do that in Liverpool. Don't go surfing the Mersey River. I watch football.

So let's go with the surfing analogy now.

Jaryd Krause:

And we were talking about food. We're quite into our health as well, and we were talking about eating something that wasn't completely healthy but made him feel good. And I said to him, Sometimes it's not about what you do. Sometimes it's more about how it makes you feel. And it's the same in business as well.

You can run a certain strategy in business, and you can either feel really good about it or not so good about it. But as long as you know your morals and your values and it's making you feel good, then go with it, right? Of course, if it's just, you know, if it's like a just strategy. But, yeah, sometimes it's not about what you do. It's about how it makes you feel.

So I'm leaning.

Matt Edmundson:

Yeah, and I think if I were going to take it further than that, I think it's about the impact on humanity as well. You know, it's a bit like why one of the reasons I didn't want to use plastic air bubbles was... Yeah, I mean, popcorn created this wonderful story, you know, with our clients.

But fundamentally, me not using plastic bottles doesn't have a massive impact on the environment, but it has an impact because I was sending out thousands of parcels, you know. And I think it was interesting. There was a report; wasn't there one a few years ago, the trust report? I can't remember who did it. And we're obviously trusting governments and politicians at an all-time low.

And I wonder why. Yeah. The sort of segregation of people, really, and the extremism and the inability to talk. I mean, we could go all day long about that, but I think what the report came out with, which I thought was interesting, was that people's trust in business was at an all-time high.

And I think as business owners and as entrepreneurs, it's on us to do the right thing and not just, you know, outsource that to the government, but actually to make the right choices that are good for our business, but obviously also good for the planet and I think good for the people. You know, I was involved as a non-exec director in a fair trade business.

I got to see it firsthand. Actually, when you have a responsible supply chain, the impact is phenomenal on people in the third world. And I think, yeah, as entrepreneurs, we have that ability, you know, which is why I, and not to get too political, but I think if you're sourcing products from China, I don't have an issue with that. Some of our products come from China.

But I think wherever they come from, you have to know your supply chain, and you have to know what's going on along that whole sphere of things from beginning to end, whether you're buying from China, Thailand, wherever, South Africa, somewhere in Africa, wherever it's coming from, know your supply chain because there are other people's livelihoods at stake here.

And I think, having been so badly treated by a supplier, as you have as well, I just want to make sure that I'm not that supplier treating someone else badly down the chain, even without realizing it. So, yeah, I think, you know... Sorry, I'm going to get off my soapbox now just to emphasize that I don't... Yeah, what's good for me, but also what's good for other people.

Jaryd Krause:

Yeah, absolutely. And I think, yeah, it's more of a collective thing because, you know, if I could say, Hey, I'm the one that grew my business,. It's all about me. Well, not really. My customers told me what they wanted and what they needed, and I just adhered to giving them that.

So really, they grew it, and it's the same with most businesses. They're the real heroes that help us if we know how to tune ourselves in and to listen to them. But Matt, it's been such a great chat. Thank you so much for coming on. Where can we send people to find out more about you?

Matt Edmundson:

Oh, just go to the website, mattedmondson.com, and there'll be all kinds of links to whatever you need to go from there. Or hunt me out on social media, Matt Edmondson. That's E-D-M-U-N-D-S-O-N. And the reason I say that is because there's a Matt Edmondson spelled with an O rather than a U in the UK, and he's like a well-known radio DJ.

And so he's got, like, Matt Edmondson, and I've got Matt Edmondson, but obviously spelled slightly differently. So I keep getting requests from people saying, Oh, can you play this on the radio?

He must get really odd requests from people. I should reach out to him one day. He must get really odd requests from people going, uh, do you mind looking at my econ business?

Jaryd Krause:

Yeah. Imagine. You should reach out to him. That'd be great.

Matt Edmundson:

I really should, yeah.

Jaryd Krause:

Yeah, I love it. I love it. Thanks, guys. Everybody is just listening. Thank you so much for listening. I don't typically ask you guys to do much in podcast episodes, but I thought I was looking at reviews on podcasts the other day, and I thought I hadn't really asked people to do a review on the app. So, if you're feeling that you got value from this or any other podcast that I've done before, please share a review.

I greatly appreciate it. And thanks again, Matt. I'll speak to you guys soon.

Hey, YouTube watcher. If you thought that video was good, you should check out this video here on the two best types of websites beginners should buy. Or check out my playlist on how I made my first $100,000 from buying websites and how to do due diligence. Check it out. It's an awesome playlist. You'll enjoy it.