The Inside Story of Petco’s Acquisition of Shark Tank-Featured PupBox

Transcript

Disclaimer: Transcripts may contain a few typos. With most episodes lasting 60+ minutes, it can be difficult to catch some minor errors.

John Warrillow:

Hey there. It’s John Warrillow. Listen, if you’re brand-new to Built to Sell Radio, welcome. It’s good to have you along for the ride. We’ve been doing this show now for five years. I’ve interviewed literally a different entrepreneur every week for the past five years, and I’ve taken some of their best practices, their tips, and tricks, and negotiation hacks, and distilled them all into a field guide. It’s a book called The Art of Selling Your Business, and it is a little bit of a recipe card for you to punch above your weight when it comes to negotiating with an acquirer. You can get it at BuiltToSell.com/Selling.

Fun story coming up with Ben and Ariel Zvaifler, who started a business called PupBox, after they had a puppy and realized that other people might need help training their puppy and getting age-appropriate toys, and food, and training, et cetera, throughout the life cycle of their puppy’s new journey. It was a subscription box. So, this episode is chock-full of recurring revenue insights. So, if you’ve got a transactional business model and you’re thinking of moving it to subscription, listen up, because Ben and Ariel will describe some of the key metrics, some of the tips and tricks of moving to a subscription offering.

You’ll also hear some interesting insights about what it’s like to negotiate with a Fortune 500 giant. Petco was the ultimate acquirer for PupBox, and you’ll hear some of the ins and outs, pros and cons of selling to a large enterprise organization. Why it’s important to negotiate a VP title, which is the first I’ve heard of that, and very interesting insight. What you can guarantee in your earn-out, the things that you need to guarantee frankly to make sure you can hit your earn-out. Lots more to come when you hear this interview with Ben and Ariel. Enjoy.

Ben and Ariel, welcome to Built to Sell Radio.

Ben Zvaifler:

Thank you. Thanks for having us.

Ariel Zvaifler:

Yeah, thank you.

John Warrillow:

This is the second husband and wife team we’ve done in like a month, so this is great. I’m really excited about it. I’m so thrilled to be talking about this episode because I had a chance to read up on your story beforehand, and my son is a big Shark Tank fan. So I’m like, “Guess what, buddy? I get to actually interview someone that’s been on Shark Tank.” And he’s like, “Oh cool, what are you going to ask them?” And so we had this big back and forth about what should I ask the guys from Shark Tank.

So, tell us about this company, PupBox. What did you guys do?

Ben Zvaifler:

Yeah. So, we started the company back in 2014. Essentially we started the company when we got our first dog, Maggie. She was a Goldendoodle, and she was an eight week old puppy and we were a young couple, no kids, and Maggie became like the center of our life. We treated her like she was our first daughter, and we were obsessed with her. We wanted to get her the best products, we tried to take her to all the best training classes, but honestly it was just kind of a disjointed experience. We didn’t know what to do, we’re constantly searching for content and training information, but it was a lot of conflicting information. So, we start PupBox to kind of mitigate this disjointed puppy process.

What it is, it’s a subscription box, and every month you get a box that contains five to seven products and a training guide, and everything is targeted to your puppy’s specific age and months and physical characteristics, and it really helps and walks the new puppy owner through all the steps of puppyhood. So, we start with crate training, and house training. We work into the challenges of teething, and then we go through adolescence. Then we just through that brand loyalty we work to retain the customer into their adult years with some long-term product and content.

John Warrillow:

I love this, because I wrote about BarkBox in my last book, and it was … BarkBox, for those that don’t know, it’s a subscription based dog box. But for me, I was like, how many dog toys could you actually need? Eventually when you get another box of another toy, it’s like at some point you got enough toys.

Ben Zvaifler:

Yeah.

John Warrillow:

But you guys took a different angle. It was like training advice and all appropriate to the age of the dog, which I thought is such a cool angle.

Ariel Zvaifler:

Yeah, and then the puppies also go through a lot more toys than an adult dog.

John Warrillow:

Of course they do.

Ariel Zvaifler:

So they’re constantly destroying them, and they’re teething, so they want to nip on everything. So, they actually do go through those toys and need new ones.

Ben Zvaifler:

We looked at the BarkBox model obviously, they were the big player in the space, even when we started the company. The thing that we noticed, especially talking to subscription box founders, is that retention rates what they are, these founders, it’s a subscription business but they weren’t holding onto the customer for an eternity.

John Warrillow:

What were you hearing in terms of the average tenure on a subscription box?

Ben Zvaifler:

Yeah, so like a 10% churn rate is really good for a subscription box.

John Warrillow:

Per month.

Ben Zvaifler:

Yeah, month, 10%.

John Warrillow:

So you’re churning through your entire subscriber base every year.

Ben Zvaifler:

Every year. So, we figured why not focus on a shorter timeframe and make it a really curated experience, right? If we can acquire a customer who is newborn, two months old, we hold onto them for a full year. We’re actually at the higher end of the retention spectrum, and we can make it a much better process for the customer. So, that’s kind of the mindset we went into. Also knowing in the back of our mind that this is a very valuable customer, because it’s like the Disney model. If you can connect with them when they’re young, you can upsell them and cross-sell them into new products, new brands, and that becomes very powerful for a major brick-and-mortar retailer, say.

John Warrillow:

Yes. Can imagine. It’s like the Pampers, they target the moms in the hospitals, right? They want to get them hooked on Pampers, not Huggies, or Huggies, not Pampers.

Ben Zvaifler:

Right.

John Warrillow:

This is, I assume, a similar model. So, how did you win customers? Because subscription boxes are expensive to acquire customers generally. What was your model?

Ben Zvaifler:

Yeah. So, just to give you some background on what our roles in the company. We started the company together. I was in charge of all customer acquisition, business development, also IT and development oversight. Ariel ran all of our operations. So, she was in charge of all the merchandising, supply chain, distribution. So, we kind of had a kind of split the spectrum in what we covered.

So, customer acquisition is really hard, especially for a new company, a startup that’s just getting going. It’s hard to figure out. For us, there were some benefits and challenges with the way we positioned ourselves. So, because we were focusing on puppy, we were very targeted in this niche. So, it became both more difficult in the sense that we can’t use the spray and pray model, per se.

John Warrillow:

Sure.

Ben Zvaifler:

But it also became beneficial to us, because we could really target our marketing strategies to bring us our target demographic, new puppy owners. So, we used a lot of inbound strategies. We developed a lot of training content, we focused a lot of energy on organic social, working with influencers who had puppies, so that people would see the product kind of in the wild, and that would then drive this targeted prospecting group to our site, and that would allow us to then just really hone in on that smaller group of people. So, again, it was kind of a blessing in disguise as we started down this very niche market path.

John Warrillow:

When you got someone to opt in for some training content, for example, did you call them to get them to subscribe or was it all email?

Ben Zvaifler:

No, everything we did was digital. It was interesting. We actually built our website to essentially be a giant lead engine. So, when you land on our website it asks you about your puppy, it asks you your puppy’s name, and then it pushes you directly from essentially any call to action on the site into this profile process, where we’re asking you your puppy’s name, gender, birthday, physical characteristics, allergies. A lot of the time people don’t like these longer funnels because they feel it creates friction, but we found with our customer because they were new puppy parents, they’re so excited about having a new puppy in the house, we could really get them to engage with this profile process, and then give us their email at the end when they create an account.

So, we’d essentially drive all of our traffic into this lead acquisition funnel, and then we could follow up with all of our email marketing. So, we did a lot of drip campaigns, we had that were lead nurturing campaigns, we did a lot of promotional stuff, and we were able to convert pretty well and all that.

John Warrillow:

Can I just say, I love the fact there’s a dog barking in the background. It could be an audio that you piped into the [crosstalk 00:09:18].

Ben Zvaifler:

That makes one of us. It’s actually, because we’ve worked in the pet industry for so long now, it’s just become very normal. In all the calls that we’re on, there’s always some animals in the background.

John Warrillow:

Some ambient noise.

Ben Zvaifler:

Yeah.

John Warrillow:

Nice. I love it. Okay. So, digitally native, inbound marketing strategy, convert off the back of the funnel, capture the email at the end once they’ve sort of vetted into the process of profiling a little bit.

Ben Zvaifler:

Yeah.

John Warrillow:

Okay, I think I got it. What kind of conversion rate were you getting from initial profile to becoming a paid subscriber?

Ben Zvaifler:

So, I think our overall site conversion rate was in like the four to 5% range, but we-

John Warrillow:

What does that mean, overall site conversion?

Ben Zvaifler:

That’s overall site conversion, yeah. Then if we could get someone to fill out their profile and give us their email, that jumped up to like 20%. So, we’re converting 20% of people who would actually engage with the brand.

John Warrillow:

Okay.

Ben Zvaifler:

Obviously I should caveat, the inbound stuff was what we really focused on in the early days. I think that lays a really good ground work, it helps develop the brand, but then obviously as we’re looking to scale, you have to really layer on a lot of the paid strategies, which we did, focusing primarily on paid social and some search.

John Warrillow:

Got it. That’s helpful, for sure. At what point did you decide to go on Shark Tank? Was there a trigger, Ariel, that you thought okay, Shark Tank is a great strategy?

Ariel Zvaifler:

So, we were in 500 Startups at the time, and we met somebody who said, “Hey, I know a producer, does anyone want to go on Shark Tank?” And we thought, “Well, yeah.”

Ben Zvaifler:

Perfect.

Ariel Zvaifler:

Great, of course we do. So, we did their long process of making a video, and it took a couple months. It was kind of grueling, and then we actually got on, which was great.

Ben Zvaifler:

In our video pitch the promised, we said if you let us on the show we will bring puppies on the set with us. When we got our first call from the producer, out of the blue they said, “Were you serious about bringing puppies on the show?” And we were like, “Yeah, let’s do this.”

Ariel Zvaifler:

That’s how we got on.

Ben Zvaifler:

We made it happen.

John Warrillow:

So, for folks who were not able to watch the episode, now we’re all going to go Google it, or YouTube it or whatever, but if we weren’t able to watch it, paint a picture as you walk out of the doors onto the set, who are you with? What’s accompanying you, et cetera?

Ariel Zvaifler:

It was nerve-wracking. So, we walk out there. We had gone to a dress rehearsal the night before, and they want to make sure that you’re going to do okay, and we totally blew it.

Ben Zvaifler:

Not the sharks, just the producers.

Ariel Zvaifler:

Just the producers. Ben forgot all of his lines.

Ben Zvaifler:

Yeah.

Ariel Zvaifler:

Which he had never forgotten them before. I was the one who forgot them, but I actually did well. So, we thought we weren’t going to get on. We thought we won’t get a call. So, at 11:30 the night before they said, “Be hair and makeup ready by 5:00 AM.” Which they do your hair and makeup, so it’s kind of weird that they said to do that.

Ben Zvaifler:

It’s just intimidation.

Ariel Zvaifler:

Right, it was just intimidation, but we got there and it was really surreal. You walk out and it actually looks like the show because of the lighting, and the way they’re sitting, they’re kind of far away, and it was completely nerve-wracking. They make you sit there for 30 seconds to just stare at everybody, because they are fixing the lighting, and that’s very awkward. I fixed eyes on Lori, as she’s very nice. Then we started, we said our pitch, and then it became very conversational, and we both relaxed and it was really fun. We were up there for about 80 minutes I think, up there for 80 minutes.

Ben Zvaifler:

Like an hour, I think. Yeah.

Ariel Zvaifler:

Hour, 80 minutes, somewhere in there.

John Warrillow:

Wow.

Ariel Zvaifler:

The sharks were-

John Warrillow:

Because on TV it’s really short, right?

Ben Zvaifler:

Yeah.

Ariel Zvaifler:

Seven minutes.

John Warrillow:

It’s like 10 minutes.

Ben Zvaifler:

They cut it down. 10 to 12 I think is what they cut them all down to, but they told us that the pitches typically range from 45 minutes to a little over an hour, and then they’ll cut it down to 10 to 12 minutes. So, they definitely chop it up a little bit, but yeah. I mean, luckily we didn’t forget, I didn’t forget the lines of our first two minute pitch. I’m Ben, this is my wife Ariel, and this is our dog Maggie. We nailed that, and then yeah, it just became like this. It’s like people were asking us about our business that we knew.

Ariel Zvaifler:

We knew our business well.

Ben Zvaifler:

Really well.

Ariel Zvaifler:

So we could answer all the questions.

Ben Zvaifler:

Yeah.

Ariel Zvaifler:

They were arguing back and forth, and they would ask us a question and wouldn’t let us finish the answer, and then another shark would ask a question. It was kind of crazy, but it was very fun.

John Warrillow:

Let’s talk about the numbers, because I think you were asking 250 grand for 10%. Was that the ask?

Ben Zvaifler:

I think that was the ask and we landed at 250 at 15.

John Warrillow:

At 15%. So, an implied valuation of around a million six or a million seven, somewhere in that range, right?

Ben Zvaifler:

Yeah.

John Warrillow:

Got it. Okay, and roughly what was your revenue at that stage of the game? [crosstalk 00:14:07].

Ben Zvaifler:

I think we were like a little over half a million dollar run rate, I think.

John Warrillow:

When you say run rate, you mean-

Ben Zvaifler:

Annualized.

John Warrillow:

… annual recurring revenue.

Ben Zvaifler:

Yeah. So, I think we were at 50 to 60 monthly recurring revenue.

Ariel Zvaifler:

Yeah.

John Warrillow:

Got it, got it. Got it, okay. That’s super helpful. So, kind of a three X on annualized recurring revenue.

Ben Zvaifler:

Yeah.

John Warrillow:

Was the implied valuation. Okay, that’s super helpful.

Ben Zvaifler:

We had raised a little bit of money before Shark Tank. We were in 500 Startups, as Ariel mentioned, which is an accelerator program, but they actually invest kind of in your seed round, and we had raised a little bit of money from family and friends. So, we actually had a more aggressive valuation prior to going on Shark Tank, but talking to the producers they’re just like, “This isn’t The Valley. The sharks are individual investors, they want to make sure they’re getting a good deal.” Yada yada yada, and for us it was we were going on the show, we wanted to work with the sharks, so we went in knowing we would be flexible. So, yeah, it all worked out well.

John Warrillow:

Got it.

Ben Zvaifler:

A lot of the deals you see on the show don’t close afterwards. So, there’s a whole due diligence period after you leave the tank. Obviously, these are professional investors, so they go through all the numbers. They make their requests, you work through term sheets and then I think like 50 to 60% of the deals actually fall through. We actually did end up doing a deal with Robert. So, we worked with him all the way up until recently actually.

John Warrillow:

Got it, got it. What was the most surprising thing Robert asked for in the due diligence phase?

Ben Zvaifler:

I think, well, one thing that kind of surprised us is he wanted a board seat, and we didn’t feel like it was enough money to warrant a board seat. So, that was a bit of a sticking point. We actually negotiated away from that, and we actually ended up taking less money at the same valuation, and it worked out for all parties, because they ended up asking for a little bit less, and it really worked out for us because we still got him as a partner.

John Warrillow:

Why didn’t you want Robert on the board?

Ben Zvaifler:

Well, we didn’t have a board at the time, so we didn’t want to go through. It’s kind of hard if you have a single person on the board, so that would’ve entailed us then also going out and trying to raise more in institutional capital, go filling out the board. It was a whole … That becomes a strategy in and of itself. It wasn’t something at that time that we were sure we wanted to do, and honestly we didn’t. We ended up getting acquired super early instead of raising multiple rounds of venture capital, further diluting ourselves, building a board. We decided to go with kind of the acquisition approach, so.

John Warrillow:

Yeah. I want to get there, for sure. Ariel, you focus more on the operation side of the business. As you grew beyond just you and Ben, can you talk about how you structured the company so that it could work without you and Ben? Did you create procedures, processes? How did you structure it so that it could kind of grow beyond just you two?

Ariel Zvaifler:

It was a struggle. We definitely, we didn’t have as many processes, we didn’t have a way of doing things, we just hustled to get things done every day. As we brought on, we brought on Savannah, who works with me. She was our operations manager, and she helped make a lot of processes, and we made a tracking sheet for all the shipments coming in, and just little things. We’ve been making little changes every week since we started that just make everything more efficient.

So, now it runs very smoothly. We have a large operations team. It’s pretty amazing how we’ve kept this team fairly small, but it runs very efficiently at this point.

Ben Zvaifler:

It’s like, what’s the term? It was like eating a whale or something like that, you have to kind of do it in chunks, right?

Ariel Zvaifler:

Yeah.

Ben Zvaifler:

It’s like we don’t know what the right processes are until you get to a point where you need them. So, it’s like do them as they come, and for us it was always we try to run this business pretty lean, and so we didn’t raise a whole lot of capital and we hired people when we had the cash flow to hire them. We built new processes and automation as we had kind of the ability to do so. It’s amazing to look back now that we’re whatever, seven years in, to see how many processes, how many employees, because it feels like you’re doing things the same as you did them day one.

Ariel Zvaifler:

Actually, I think the best thing that happened was I had to go on maternity leave at Petco. When I had my first child we still owned the company, so there was no maternity leave for me. I was there every single day. Then when I had to go on maternity leave legally, and I wasn’t allowed to open my computer, I had to figure out how to have other people do my job for three months, and it was terrifying, and we did it. So, a lot of processes came from that.

John Warrillow:

What sort of [crosstalk 00:19:28].

Ben Zvaifler:

It’s definitely a learned … Sorry, go ahead.

John Warrillow:

No, you were going to say, it’s a learned skill. Tell me more about that.

Ben Zvaifler:

Yeah. I think it really is a learned skill. Something that both of us are very can do type of people, and so when we see a problem, a lot of the time we would prefer to just tackle it ourselves because we know we can get it done faster, easier, or whatever, but to I think your larger point and your book and stuff, is that’s not really the way to do it. You need to build a company for scale, and you need to be able to set up processes and relinquish some of that control in order to really reach full potential. It’s something honestly as young entrepreneurs, we’ve learned over the course of building a business that’s now pretty substantially large.

John Warrillow:

Yeah, yeah. Ariel, when you went on maternity leave for the second time, what were some of the highest priority things that you want to create process around?

Ariel Zvaifler:

Ordering product. We do a lot of ordering.

Ben Zvaifler:

Merchandising.

Ariel Zvaifler:

Yeah, the merchandising was really big, because I am very passionate about what I put into the boxes. I want to make sure that the customer is always first, and that’s something I think about every day. Is if I was the customer, what would I want to see opening the box? And what would I want the shipping to look like? So, a lot of times people just look at the numbers, or the weight of the item, or the prize, and so I just getting that passion into somebody else was what I was most concerned about. Everybody did a great job, it was fine. Ben helped a little bit.

Ben Zvaifler:

I was there, cracking the whip.

Ariel Zvaifler:

That and then also just the vendor relationships. Just keeping up on all that, and so I had people shadow me and just taught them. I think it took me a whole almost six or seven months to get everything ready.

John Warrillow:

Wow, wow, that’s amazing. As soon as you know you’re having a kid you started the process.

Ariel Zvaifler:

Yeah.

Ben Zvaifler:

Yeah, yeah.

Ariel Zvaifler:

But now I don’t have to do as much of that because I put all those things in place, and now I have a lot of people on my team and they do a great job, because I finally learned how to teach people how to do it.

John Warrillow:

Yeah. So you scaled this business first on organics inbound, and then ultimately you moved to paid social, like I’m assuming Instagram was a major channel for you guys, Facebook. Yeah. Got it. So, you’re placing paid ads, and so what did Robert bring to the table other than his checkbook? What did you leverage beyond that?

Ben Zvaifler:

So, his team was really helpful. They were always a call or email away. The one thing they helped us with probably the most was just PR, getting our name out there. So, they got us some placements in Forbes, and Inc. and some major publications, which I mean, don’t get me wrong, those things don’t drive significant acquisition at scale at all, but it is good for the brand to get out there, to get you some more visibility, and that was really something since he is in the show business too, it’s like that was very much in their wheelhouse and that was something they helped with.

John Warrillow:

When you charged people for a subscription, were they paying each month or did you give them a break if they bought an annual subscription?

Ben Zvaifler:

We had breaks for longer subscription terms. So, when we first launched the company because we were also working primarily off cash flow, we had a different pricing model where we would charge people upfront for the entire term. So, if you sign up for a year you pay the full $300, but it’s a discounted rate, versus if you’re paying monthly. We actually changed that several years ago, but we changed it so that you could lock in a lower price at a year, but you’re still paying monthly. So, that’s what most people opt for. We were really able to change the dynamics of the business by doing that, because with the subscription business really what you’re trying to do is lower the barrier of entry to get them in the door. So, but then also maximize retention, right? So, if you’re pushing everyone into a one month subscription, you might be lowering the barrier of entry because it’s a single month they have to opt-in for, but you’re going to see a much higher churn rate because those people aren’t as engaged with the brand, and they’re not locked in. Even their mentality is not in it for the long term.

So, when we made this shift we pushed a lot more people into our six and 12 month subscriptions, but because they were able to pay monthly we could actually drive a lot more volume there. So, we saw our acquisition go up and we also saw our retention go up, and that was actually a major unlock for the company’s growth.

Ariel Zvaifler:

Yeah, and we have mostly six and 12 month subscriptions now.

Ben Zvaifler:

Now, yeah.

Ariel Zvaifler:

The one month is the least popular.

Ben Zvaifler:

Yeah, now it’s like-

Ariel Zvaifler:

Just great.

Ben Zvaifler:

… I think 3% of our subscribers opt for the one month option. It’s essentially nonexistent.

John Warrillow:

And the other 97% are using the [crosstalk 00:24:13].

Ben Zvaifler:

We have one, three, six and 12.

Ariel Zvaifler:

Three, six, and 12.

Ben Zvaifler:

12 is probably half of our subscription base or more, 12 is by far the most, and then it’s kind of split almost evenly between three and six.

John Warrillow:

Got it.

Ben Zvaifler:

We see different dynamics for each of the different plans. We actually have better retention on our six month plan than our 12 month plan, because with our 12 month plan sometimes we get a lot of people who are just looking for the lowest price. Whether it’s they want to pay a low monthly price, or they’re using a discount that drives them to the 12 month plan, you get a lot more of that type of customer, the deal hunters. Whereas our six month plan has by far best retention because it’s a very intent driven selection. You select six month, I think your mentality is you’re in for six months, you’re willing to pay a little bit more, but that’s kind of what we’ve seen, which is always interesting to me.

John Warrillow:

And what happens at month seven on the [crosstalk 00:25:10]?

Ben Zvaifler:

So, you automatically renew for another term. So, if you’re on a six month plan you automatically renew for another six months, but if you cancel before the first six months is up, you just are done.

John Warrillow:

Got it. Business to consumer subscription models are really tough to get them to honor the lock in contract, right? So B2B I think it’s a little bit more common that you can sort of enforce a contract, business to consumer, it can be tough to enforce it. How did you enforce the longer term commitment?

Ariel Zvaifler:

I mean, I think also we don’t want people to get boxes that don’t want them. So, putting the customer first, again, it’s like if they don’t want the box, we’re not going to force them to keep it. So, it’s actually very easy to get out of it.

Ben Zvaifler:

We’ve built a long process and flow to try to retain the customer. If they’re on the 12 month plan and they want to opt out after month three or four, we say, “Hey, why don’t we switch to our six month plan? You have two more months left.” They say, “No, I still don’t want that.” We offer them the month to month option at their 12 month price. We have this whole tiered system to really try and meet them halfway to see what it is we can provide them to get a better experience. A lot of the time it’s a product issue too, which we always try to address. So, if a dog is tearing through toys, we say, “Well, why don’t we add a tough toy option to your box so you’re only getting tougher toys?” A lot of the times that’s all that’s needed. So, we have this long involved process to try and just win over the customer. If the customer just says, “No, I just don’t want it, or I don’t have the funds.” Then yeah, we just kind of release them into the wild.

I think it’s what you said is right. It’s harder to retain customers in a B2C model in general, especially if they’re trying to get out of that lockout period, but at the same time, it’s often a lot easier to acquire them. So, it’s kind of this trade off, where you’re able to drive a lot higher volume at a lot lower customer acquisition cost. Kind of knowing that your lifetime is X, whether it’s six months, 10 months, 18 months. As long as those unit economic work, comparing your customer acquisition cost to your lifetime value, nothing else really matters. You just want to maximize that ratio.

John Warrillow:

What’s your customer acquisition cost?

Ben Zvaifler:

It’s fluctuated over the years. I don’t think I’m probably not supposed to say, so I probably will leave it at that.

John Warrillow:

Okay.

Ben Zvaifler:

Ours was really low for a very long time. It was very favorable.

John Warrillow:

Organic, when you were on the inbound organic model.

Ben Zvaifler:

I mean, even when we were focusing on paid, we were able to keep our customer acquisition cost very low and our unit economics were really favorable. I think we had a four or five X return from a [crosstalk 00:27:49].

John Warrillow:

When you say four to five X, are you talking about like LTV to CAC?

Ben Zvaifler:

Yes.

John Warrillow:

Long term value, lifetime value to customer acquisition cost. So, you started at four to five, and that of course is a lot of investors say, “Well, that’s great in the early days, but how does that scale, right?” And so you found that it started to get more challenging.

Ben Zvaifler:

It ebbs and flows. So, as you start to spend more money, your CAC is going to go up, right? Because you’re driving more traffic, a lot of it is traffic that maybe is less valuable than what you would’ve gotten further down funnel. But as you continue to spend, if you continue to lean into that spend, it starts to even out because you start to find things that work and then you focus more attention on those and stop doing the things that don’t work. So, as you scale, it’s just about putting these building blocks on top of each other to see what works and what doesn’t, because yes, as you spend more money, your CAC goes up, but you can start to mitigate that as you get better at that price point. I think that the problem is that some companies are so overfunded and so focused on inorganic growth that they plug so much money into marketing that their unit economics come completely out of whack, and I think that’s more a model of a broken capitalization system with venture capital than it is true marketing.

John Warrillow:

Mm-hmm (affirmative).

Ben Zvaifler:

If it’s growth at all cost and you can afford to spend as much as you’re making on a customer, then yeah, it’s going to be expensive, but.

John Warrillow:

And how did you finance it? Because after Robert invested his, whatever, a couple 100 grand, sounds like a little bit less in the end, I’m assuming you’re still needing to raise capital to fund the growth. What was the model there?

Ben Zvaifler:

Yeah. I mean, well, after that we had raised some money. So, we had some money and it drove our growth. When we kind of got to this impasse and we realized we needed to raise more money to continue to fund the growth, and that’s actually when we approached Petco. We decided we wanted to look for more strategic investors and less institutional investors. We had a conversation with Petco. We knew that we could be a good feeder program into dog food, into a lot of their other business lines, training services. So, we actually asked them to invest as a strategic. They had made some investments in the past that they were not all that excited about, and so they ended up saying, “You know what? I think we’d rather just acquire you guys, bring you on internally. Even though it’s early, we’ll be able to fund this business internally, leverage resources across all of the different departments and really stimulate more growth doing it that way.” So, that’s actually what we opted for.

John Warrillow:

How big are you at this point when you started initiating the conversation with Petco?

Ben Zvaifler:

I don’t think I can say that either, but we were in the millions.

John Warrillow:

Got it, okay. Okay, so significantly bigger than when you went to the Shark Tank interview.

Ben Zvaifler:

Yeah.

Ariel Zvaifler:

Mm-hmm (affirmative).

Ben Zvaifler:

I’d say yeah.

Ariel Zvaifler:

We were acquired almost exactly a year after we aired.

Ben Zvaifler:

Yeah.

John Warrillow:

Got it, got it. So, you were on a fairly steep growth trajectory.

Ben Zvaifler:

Yeah. Ever since we launched we were growing pretty exponentially, and even to this day. I mean, since we were at Petco, again, we were able to fund the business just internally off the Petco balance sheet, and we were able to grow really significantly. I think we’ve grown, I don’t know.

Ariel Zvaifler:

A lot.

Ben Zvaifler:

30X in the last three, four years.

John Warrillow:

30X, wow.

Ben Zvaifler:

So yeah. It’s a pretty sizable business at this point, and yeah, it’s all been … It’s not organic, but we’ve always worked within our means. We have always had a really good unit economics. Petco being a profitable business looking to drive EBITDA dollars, they didn’t want something that was just going to throw a lot of money out the door. So, we were able to scale the business really in a healthy way.

John Warrillow:

What was your reaction when they turned the tables on you and said, “You know what, guys? We’d rather actually acquire you than invest in you.”

Ariel Zvaifler:

It was awesome.

Ben Zvaifler:

I think we had mixed emotions. I mean, we were like, “Do we want to do this this early?” [crosstalk 00:31:53].

John Warrillow:

This is like a He Said, She Said episode.

Ben Zvaifler:

Yeah.

John Warrillow:

She’s like, “It was awesome.” And Ben is like, “Ah.”

Ben Zvaifler:

Yeah, I think it was though. It was, it was awesome. This is our first … Ariel had had a company previously that she exited, but this was like our first major potential exit, and as entrepreneurs we knew we wanted to continue starting and scaling businesses. Getting a successful exit under your belt is, one, looked really favorably upon when you go out and raise capital or whatever you do in the future, and two, it’s a huge learning experience. I mean, now that we have this full lap around the track, it gives us a lot of perspective on corporate America, on how to capitalize a business in the right way, how to grow a business in the right way, how to structure union economics frankly. A lot of stuff that we didn’t have, I don’t think we would’ve had that hindsight have we not sold the company because it allowed us to see a lot of different things.

Ariel Zvaifler:

We’re a lot more experienced now.

Ben Zvaifler:

Yeah.

Ariel Zvaifler:

For sure.

John Warrillow:

What do you mean by unit economics?

Ben Zvaifler:

So, I think one, I, like you, am a huge fan of recurring revenue models. I think it’s kind of the only way to build a business, is to drive customer loyalty and get recurring revenue from the same customers. So, I think you need to build into the unit economics that customer acquisition cost component. Have some sense of how much it’s going to cost to acquire a customer. What your payback period looks like, how you’re going to fund the business if the payback period is long and you need to grow. I think all of those things really came into view more and more as we were continuing to scale, because they don’t get easier, they get harder, right? You have to acquire more customers. Going from go up 10 million to 20 million is a lot harder than going from half a million to one million. So, yeah, I think it’s something you need to think about early on, and often people don’t.

John Warrillow:

Got it. Let’s go back to Petco. So, the tables get turned, you’re like, “Hey, we think we’re going to acquire you.” What happened next? I mean, did they go, “What do you want for the company?” Or did you say, “Well, that’s interesting. Why don’t you put together a term sheet?” How did you respond to that offer?

Ariel Zvaifler:

Kind of ran the show on it.

Ben Zvaifler:

Yeah. They had a ballpark they presented us with very early to say this is kind of where we are, even before looking at your numbers. Just knowing kind of what your revenue is, and what you guys are doing, and the value the two of you and your team bring. So, the ballpark was in a place where we were comfortable with it. Again, we had a small child, we were essentially working and paying ourselves very little for a long time. So, it was something that we could chalk up as a win and we were happy with. So, from there kind of just started down the due diligence process, diving deeper into the numbers, getting to a term sheet, and then negotiating that term sheet.

It was brutal. I mean, I’m not going to …

Ariel Zvaifler:

It was brutal.

Ben Zvaifler:

I’m not going to lie. The acquisition process was brutal. It was long and involved, it was not a large acquisition like in the larger scheme of things. You see this acquisitions in the billions or hundreds of millions, it was not there, and it was still just as painful. So, it was a long process, a lot of lawyers, a lot of back and forth over minute details that you would never even think about. In the end, it all worked out. The deal structure was cash, plus the earn-out, plus equity stock, and then they-

Ariel Zvaifler:

And our salaries they put in there.

Ben Zvaifler:

And salaries, and the full employment package too. That goes along with the earn-out. So, we had to talk through all of these different components, and in hindsight to 2020, again, it all actually worked out really well because we were able to hit all of our benchmarks, but it was an involved process.

Ariel Zvaifler:

And then we thought the stock would be useless, that we couldn’t. When they told us that with that, well, this is basically worthless, we’re not going to-

Ben Zvaifler:

They were private equity owned, so.

Ariel Zvaifler:

So we’re thinking [crosstalk 00:36:00].

Ben Zvaifler:

They needed a liquidity event in a few years, so it was like well, that doesn’t seem like [crosstalk 00:36:05].

Ariel Zvaifler:

So we didn’t even consider that as real money, and then they actually did go public right before Ben left.

Ben Zvaifler:

Yeah. So it worked out.

Ariel Zvaifler:

It worked out.

John Warrillow:

Got it. So, Petco at the time was privately held. The equity that you were offered was in a privately held company, therefore it had no liquidity, and that was you discounted it for that reason.

Ben Zvaifler:

Correct.

John Warrillow:

It was like not, yeah, got it.

Ariel Zvaifler:

[inaudible 00:36:27] if it happened to do anything.

John Warrillow:

So, what was their initial, I mean, if we can talk. I know we can’t talk specifically, although the dog would like us to. I know we can’t talk specifically about actual numbers, but can we talk a little bit about multiples of revenue or multiples of EBITDA, if it would make sense, that was the initial sort of offer? The ballpark that they sort of said, “We’re thinking around X.”

Ben Zvaifler:

Yeah. So, we were valued on a multiple of revenue, which was nice. We had some profitable quarters but no profitable years at that point. So, working on a EBITDA multiple was just not in the cards. They didn’t discount us for that, which is nice. They knew we were a quickly growing subscription business, so EBITDA is very hard to come by, especially when your focus is scale. So, yeah, the ballpark they threw out was a revenue multiple, and that’s kind of where I’ll leave it, but knowing what our revenue was, we got a revenue multiple, and it was within the range of what we thought was reasonable, and so we kind of negotiated back and forth. With the other additions they were able to include, such as the stock and the salary and everything else, we figured we’d give it a go.

Ariel Zvaifler:

[inaudible 00:37:52].

John Warrillow:

Got it.

Ariel Zvaifler:

We had goals to reach that we get more, which we did reach our goals, which [crosstalk 00:37:57].

Ben Zvaifler:

Yeah.

John Warrillow:

Yeah. I want to get into that, for sure. So, the multiple, the Shark Tank multiple was around three X. Again, I don’t know if you can say or not, and just say I can’t say that, but I’m assuming it was somewhere in that neighborhood.

Ben Zvaifler:

Yeah.

John Warrillow:

It wasn’t astronomically more.

Ben Zvaifler:

We can’t say specifically, but it was in that neighborhood.

John Warrillow:

Got it, okay. That’s great. So, it’s being valued as a subscription company, a multiple of revenue, and that makes total sense, and it was a hybrid. Again, tell me if you can’t say, but I think people would be interested to know sort of proportionally speaking if you had the whole pie, we think about the pie as being cash, earn-out, stock, and salary. Could you put some round numbers percentage wise to those? Again, ballpark.

Ben Zvaifler:

Yeah. I guess it was probably 75% cash in earn-out.

Ariel Zvaifler:

Yeah.

Ben Zvaifler:

The majority was salary and stock, and then that’s-

John Warrillow:

The minority, the rest of the 25%.

Ben Zvaifler:

Yeah, the rest of it, sorry. Then of that 75%, I think like of the cash component, I think 70% was in cash and 30% was earn-out.

John Warrillow:

Got it. That’s helpful, for sure. And the earn-out was tied to your revenue or churn rate, or what did they tie the earn-out [crosstalk 00:39:28]?

Ben Zvaifler:

Yeah, it was tied to revenue targets over the course of a few years.

John Warrillow:

How did you ensure you would get the budget to finance the growth in order to hit the top line revenue targets?

Ariel Zvaifler:

That’s actually really interesting that you point that out, because we were talking about that this morning. We-

Ben Zvaifler:

Did not.

Ariel Zvaifler:

… did not do that.

John Warrillow:

Okay.

Ariel Zvaifler:

There was another company that was purchased at the exact same time as us, and we have become very good friends with that owner. He did put in his contract that he would get a certain marketing budget in order to keep growing, and we didn’t. At one point the company needed more EBITDA dollars, and so they did cut our advertising budget right at Black Friday, right in December.

John Warrillow:

Oh wow.

Ariel Zvaifler:

And we were like, “Oh my god, I can’t believe they did this. It’s going to be a nightmare.” And he said legally you have to give me the marketing budget. So, we got through it, we’re fine, but we thought we should’ve put this in the contract too. Why didn’t we think of that? But there were a lot of little things like that that we hadn’t thought of, because it was our first time doing this, that next time we will think of.

Ben Zvaifler:

I think-

John Warrillow:

What else or [crosstalk 00:40:35].

Ben Zvaifler:

Someone told me [inaudible 00:40:37], “You should get a coach or someone who has sold a business before.” When you’re selling a business it’s really important to have someone who’s done it before, really help you look around these corners and see these things that we didn’t necessarily do. Someone told me that during the acquisition process. I kind of blew them off. In hindsight, that is really good advice. You should find someone who’s been through the ringer with this before so that you can see these things.

Ariel Zvaifler:

Yeah.

John Warrillow:

Yeah. I think it’s so important. We talk a lot about the analogy of Sully, the guy who landed the plane on the Hudson River. He never had a chance to do it, he never had a chance to practice it, and for a lot of entrepreneurs, that’s what it’s like to sell a company, right?

Ben Zvaifler:

For sure.

Ariel Zvaifler:

Right.

John Warrillow:

You have no idea what you’re doing, and it’s helpful to have somebody guide you. Ariel, you were going to say, there were two or three things that you might do differently. One of them would be to lock in the budget contractually to meet your advertising budget. So, that’s one. Are there two or three others that you might share, like I wish I’d known that before I went through this process?

Ariel Zvaifler:

Yeah. I think another thing I would’ve done is, which our counterpart, the other guy did, was he had asked for a VP title. We could care less about titles, we’re not trying to climb the corporate ladder at all, we’re trying to build businesses and sell them. So, they made us co-general managers and not VPs, which was just about at the VP level. We’re structured just one step away, two steps away from the CEO, but in a corporation, it’s like the military. Your title matters a lot, whether things get done, the respect people give you, bonuses, all these things that I had no idea because I had never worked in a corporation before. In hindsight, I would’ve asked for that VP title.

John Warrillow:

It’s really good advice. What else?

Ben Zvaifler:

Keep a thick skin. [crosstalk 00:42:38].

John Warrillow:

Why do you say that?

Ben Zvaifler:

Corporate American can bang you up pretty good, I think. There’s a lot of competing priorities. There’s a lot of different business units. When you’re running your own show you’re kind of the king or queen of the castle and you are dictating what matters and what doesn’t. As soon as you’re part of this larger entity, while you’re all fighting towards the same goal, there’s a lot of infighting to try to get resources, to try and get attention, to try and get marketing exposure, and frankly just dollars, budget. So, you kind of have to … Having a good sense of that component of corporate America definitely would have helped early on.

Ariel Zvaifler:

And I think-

Ben Zvaifler:

So, we learned. We’re quick studies, so we picked it up.

John Warrillow:

Makes sense.

Ariel Zvaifler:

I think the planning of how are we going to integrate, how are we going to work in the grander scheme of Petco, it was just exciting at the time. We had all these ideas of how we can help Petco, and how Petco can help us, but everyone is incentivized for their department. Everyone wants Petco to do well, but they have their own agenda. So, having the buy-in from other departments and talking to. You’re talking to someone from marketing, you’re talking to someone from merchandising and actually figuring out okay, is everybody on board? Not just one person. How are we actually going to get integrated in doing this? I don’t know if it’s feasible for that to actually happen before an acquisition, but it would’ve been nice.

John Warrillow:

Did you try to drum up an offer from Pet Valu, or PetSmart, or any other sort of direct competitors to Petco?

Ben Zvaifler:

No.

Ariel Zvaifler:

No.

Ben Zvaifler:

That was another point of advice. The person who told me that I should get a coach to help sell the business also said you are going to have zero leverage unless you have another acquisition offer. If you have another acquisition offer, I don’t care what it is, you can really drive up the price. It’s something that we did not pursue to the extent we probably should have, but yeah. If you are in a place where you’re ready to sell your business and you’re shopping it around, even if you can get that second offer, you can start a bidding war and it really can drive up the price.

Ariel Zvaifler:

And we knew that. I mean, we did know that, we knew that we didn’t have a good alternative, so they kind of had us. But we also were running out of money and we were really excited about Petco was in San Diego, and we were excited about what they were doing, and we wanted to be part of it. So we thought, “Well, let’s just do it.” And not keep this thing, try to find something else, because who knows what would have happened to the offer.

Ben Zvaifler:

Raising money is really hard too, and we were not huge fans of the venture capital landscape at the time. We didn’t know if we wanted to take venture capital. Private money was drying up a little bit, so it was kind of our best move.

John Warrillow:

What advice did you get from Robert in the process of negotiating with Petco? Robert being the Shark Tank super star [crosstalk 00:45:46].

Ben Zvaifler:

He actually did. They did pass on some … He passed on some advice and actually I can’t even remember, this is bad, but I can’t even remember what it is at this point. I’d have to go back and look. But they were really supportive. They said, “Whatever you need from us, we’re here. Let us know. Let us know if anything comes up that you want us to review.” They were really supportive during the whole process. Honestly, from an investor standpoint, that’s sometimes the most you can ask, is for them to be kind of the silent investor who’s there to support you versus the more vocal investor who wants something for themselves. So, that was really great.

Ariel Zvaifler:

500 Startups was also very helpful-

Ben Zvaifler:

Yeah, same way.

Ariel Zvaifler:

… and supportive. They are very founder friendly. We talked to them about the numbers. We renegotiated our deal with them at the very end as well of how much they would get from the deal, and they were just a pleasure to work with. They were super supportive and excited for us. So, I’m very pleased with that.

John Warrillow:

What was your justification for renegotiating their terms with 500 startups?

Ben Zvaifler:

We had a convertible note with them that hadn’t yet converted. So, they had like a preference of multiple on the note that was more than they would’ve gotten for their equity share essentially. So, we just negotiated with them to take essentially their equity share, and it worked out well.

Ariel Zvaifler:

And we had said if we don’t … Our reasoning was if you keep it the way you are, the way that it is, it wouldn’t be a great acquisition for us and we might not do it.

John Warrillow:

I see.

Ariel Zvaifler:

[crosstalk 00:47:23] well, we want this to be a good experience for you. We don’t need to take more. That’s fine.

John Warrillow:

Got it. Can you explain what a convertible note is?

Ben Zvaifler:

Yeah. So, it’s an investment instrument that when an investor invests with a convertible note, they’re putting in essentially debt on the company and then at a later stage, whether usually it’s the next fundraise, it will convert at a specific valuation that’s set on the note. So, if you have like a $4 million cap, it will convert at that cap, even if you raise $10 million, it will convert at four, so they get their valuation at four. It’s just it makes it, it streamlines the investment process because there’s not nearly as much legalese or paperwork as actually selling units or shares because it’s just an instrument of debt. But it typically does have verbiage and language in there that it will accelerate based on a liquidity event and there’s a million parameters that can be impacted.

John Warrillow:

Why didn’t it convert when Herjavec invested through Shark Tank? Because that [crosstalk 00:48:31].

Ben Zvaifler:

He also invested with a note.

John Warrillow:

Oh, he did. Okay. It was a convertible note.

Ben Zvaifler:

And there was a threshold. There was a threshold on both of the notes that it had to be a funding round of I think a couple million dollars or something for them to convert. So, all the investment that we had at the time were convertible notes.

John Warrillow:

I see, okay. For a new entrepreneur who is just discovering convertible notes for the first time, what advice would you have for them in structuring them?

Ben Zvaifler:

Just go over them with your lawyer and just make sure you understand what everything means and how it all works. I think they’re really great because they can speed along the process quite a bit, but definitely understand the acceleration, what it means if you were to sell the company. There’s oftentimes preference, which you have to watch out for, and then obviously the valuation. Where the cap is set, if there is a discount on top of the cap, which is also customary. So, there’s a lot of those [crosstalk 00:49:31].

John Warrillow:

And a discount would be basically on the valuation that the institutional investor was investing in, a discount would be.

Ben Zvaifler:

Yeah. So, if you had a $4 million cap and your round was at a $3 million valuation, they would essentially get a discounted rate, something like that.

John Warrillow:

Got it, got it. That’s super helpful, for sure. So, what’s life like now? You’ve got obviously pets on the background. You’ve got kids, so how has life changed now that you’ve sold this business?

Ariel Zvaifler:

It’s dramatically changed.

Ben Zvaifler:

Life is good.

Ariel Zvaifler:

Life is good. Life is definitely good. I feel like we are experienced entrepreneurs at this point. We are working on another company. I feel like we know what we’re doing this time. It’s way easier to raise money, easier [crosstalk 00:50:23].

John Warrillow:

Do you want to just give a plug for the new company or?

Ben Zvaifler:

Yeah, sure. So, I just left Petco a couple months ago, Ariel is still there, kind of finishing, transitioning things over, but we’re starting a new company called Cloud Water Filters, and essentially it’s a direct-to-consumer water filtration brand. Everything is digitally native, and it’s really baked in that premise of the recurring revenue model. So, our first product is a reverse osmosis system that’s installed under your sink. Every six to 12 months you’re going to get refills for those filters.

John Warrillow:

I love it.

Ben Zvaifler:

Yeah.

John Warrillow:

Because we got one of those Nimbus things, but where do you get the refill?

Ben Zvaifler:

I know.

John Warrillow:

Right? And like-

Ben Zvaifler:

It’s really a problem. So, it’s also [crosstalk 00:51:07]-

John Warrillow:

And how do you remember to do it, and oh, it’s late.

Ariel Zvaifler:

[crosstalk 00:51:07].

John Warrillow:

And so it’s dirty water. It’s a mess.

Ben Zvaifler:

Yeah.

John Warrillow:

And this sounds brilliant.

Ben Zvaifler:

It’s a connected device as well, so it hooks up to your phone to let you know that it’s working, and then based on the usage it actually triggers those replacements versus just you remembering, or setting up some arbitrary timeline that you don’t understand. It actually is sending the data to your phone saying like, “Hey, your filters are low. We’re just going to auto ship you new ones.”

John Warrillow:

I love it. I love it. I’ve got a weird question for you.

Ben Zvaifler:

Sure.

John Warrillow:

You guys both seem like really switched on, really smart people who I’m guessing could get a job. You’ve had a job now for a couple of years at Petco, but just hearing you talk I think there would be a lot of big companies that would love to hire either of you. Have you ever sat back and looked at the opportunity cost of entrepreneurship and said, “We invested X number of years in our life in this startup and we had a Y return from that. Had we gone to work at Apple, or Google, or IBM, we probably could’ve gotten X”? Have you ever done that sort of cost benefit or the opportunity cost, and said like [crosstalk 00:52:18]?

Ben Zvaifler:

Yeah.

Ariel Zvaifler:

We do that a lot.

Ben Zvaifler:

We do that a lot, but I think we fall on the other side of the spectrum.

Ariel Zvaifler:

Yeah.

Ben Zvaifler:

It’s like we see the opportunity cost of not starting another business. I have a buddy, a business partner for Cloud. He always says, “I like to work for chunks, not checks.” You know? It’s if you can do this right and you can have an exit in some liquidity event, you’re always going to make more in the end. So, I think there’s a huge opportunity cost for people to kind of take the complacency to be complacent with where they are, what they have, and it’s like if you’re going to risk money in the market or real estate, in our mind it’s like we might as well risk it in ourselves. We think we’re smart people, a lot of our friends probably don’t, but.

Ariel Zvaifler:

I mean, we’ve had our earn-out period ended in January. At that point that’s when Ben decided to leave, and I also decided I’m only staying for a little bit longer. We were working for the rest of our earn-out. Once that ended, it’s like what are we doing here? We make a lot of our money for our salary and we get stock, and we get our bonuses and blah, blah, blah, but still it’s checks not chunks. Yeah, it’s a nice, it’s a very comfortable life. We can afford things, but it’s not exciting because we’re not really building anything. So, we want to do it again.

Ben Zvaifler:

Yeah. I mean, it’s hard. It’s definitely hard. It’s also that some people are okay working for other people, and some people aren’t, and I’m definitely the aren’ters.

Ariel Zvaifler:

We’re not very good at it. There’s a new replacement for Ben who is running PupBox now, and so she’s … I need her because she’s going to take over when I’m gone, but it’s very hard having somebody else making calls, and deciding things.

Ben Zvaifler:

Step into a role.

Ariel Zvaifler:

It’s weird. So, I’m excited to be my own boss again.

John Warrillow:

Well, I think there’s great things to come from Cloud Water Filters. I think that’s an awesome new business. I can’t wait to follow that. I’m so grateful for you guys doing this. If people wanted to reach out, do you take LinkedIn requests or what’s the best way to reach out?

Ben Zvaifler:

Yeah. LinkedIn is easy. You can also email us obviously. You can do ben@cloudwaterfilters.com or ariel@cloudwaterfilters.com, and definitely have your listeners check out the site. It’s going to be launching early next year. We’re just in production now, manufacturing product. The site is live and I think it’s worth a look. So, feel free to reach out if there’s any questions for us personally or about the business or anything.

John Warrillow:

Cool. Ariel and Ben have a unique spelling of their surname, so I’ll put that in the show notes. Just go to BuiltToSell.com/ … Ah, jeez, I should know this, blog, radio. You’ll find it. It’s [crosstalk 00:55:10].

Ben Zvaifler:

[crosstalk 00:55:10].

John Warrillow:

Yeah, you’ll see it, and that will be included in the show notes, including both LinkedIn profiles for you guys. So, listen, I’m so grateful for you sharing your story with such candor and humility. I love it. I can’t wait to track the next business. Thank you for doing this.

Ben Zvaifler:

Thanks.

Ariel Zvaifler:

Thank you so much.

Ben Zvaifler:

Appreciate it.

John Warrillow:

Hey, if you liked today’s episode, you’re going to love my new book, The Art of Selling Your Business. The book was inspired by the cohort of my guests over the years who have been able to negotiate an exit far better than the benchmark in their industry, sometimes two or three times more than I would’ve expected. I was curious to understand the tactics and strategies of these entrepreneurs, and what they do differently from average performers. The result is a playbook for punching above your weight when it comes to selling your business. To learn more, go to BuiltToSell.com/Selling, where we’ve put together a collection of gifts for listeners who order the book. Just go to BuiltToSell.com/Selling.

Built To Sell Radio is produced by Haley Parkhill. Our audio and video engineer is Denis Labattaglia. If you like what you’ve just heard, subscribe to get a new episode delivered to your inbox each week. Just go to BuiltToSell.com.

Outro:

Thanks for listening to Built to Sell Radio, with John Warrillow. For complete show notes with links to additional resources visit BuiltToSell.com/Blog. John is the founder of The Value Builder System™. To find out how to improve the value of your business by 71%, visit ValueBuilderSystem.com. John is also the author of Built to Sell: Creating a Business That Can Thrive Without You, and The Automatic Customer: Creating a Subscription Business in Any Industry. Connect with John at Facebook.com/BuiltToSell or on Twitter @JohnWarrillow, W-A-R-R-I-L-L-O-W. Thanks for listening.