Why You Should Start Multiple Companies In The Same Niche

BizBrainstorms #48

Welcome to Biz Brainstorms –

My name's Connor.

I go down weekly rabbit holes of business ideas, lessons, & good finds.

Why You Should Start Multiple Companies In The Same Niche

Today's Outline:
🍣 How I Learned About A $150M Company Over Sushi
📈 Framework For Starting Companies
🛜 5-Under-The-Radar Entrepreneurs Following This Path


Did someone forward you this email? If so, you can subscribe below:

Todays Sponsor: Constant Hire

I don’t run ads in this newsletter so…

If you’re an agency owner hiring for your company

We find really good talent. Faster than you can. For less than every recruiter on the market. Let me know if we can help you find your next top performer.

Sushi Banter

I was getting sushi with a friend a few months ago and he said something that got my attention:

“Did you know the Lemlist portfolio of companies is worth $150M in 3.5 years?”

Ummmm…

No. No I didn’t. Tell me more.

I used Lemlist 3 years ago for cold email software.

Going back to the website now I see they’ve built/acquired 5 separate products:

  • Lemlist – Cold email at scale

  • Lemwarm – Domain activation service

  • LemCal – Calendly compeitor

  • Taplio – LinkedIn Scheduling

  • Tweethunter – X Scheduler (oof, they need a rebrand)

This is an interesting approach. And not uncommon for Software companies.

Even look at the $200B behemoth Salesforce who acquired other MarTech companies like Pardot, Demandware, Tablaeu, Slack & Mulesoft.

But here’s what stuck out to me:

All 5 of these companies serve the same exact customer.

Company owners (likely agency owners) who are scaling & need help promoting their stuff!

Blueprint

The thesis is extremely simple:

Step 1: Find a really valuable customer:

B2B sales organizations, Real Estate Owners, Wealth Managers, etc.

Step 2: Understand their problems

  • Cold Email is hard

  • Insurance renewals are too hard

  • Tracking clients returns is too complicated in 100 spreadsheets

Step 3: Build or acquire as many products and cross-sell to a customer who already trusts you.

This reminds me of my favorite internet marketer quote:

“Whoever can afford to spend the most to acquire a customer, wins.”

When your LTV on cold email software is $750, spending a penny north of $750 to acquire a customer via FB ads makes 0 sense.

When your LTV is $3,500 because you’re cross-selling cold email software with calendar booking, automated LinkedIn posting & more, you can spend $2,000 and not blink an eye.

The pros:

  1. Lower Customer Acquisition

  2. Better understanding of problems customer experiences

  3. Total enterprise value grows

  4. Better distribution

The downsides:

Sector risk – if people start drinking less, being Anheuser Busch really stinks.

5 Lesser Known Examples

Cory Sylvestor

Cory is the king of this game.

Cory bootstrapped a 7-figure data product, Radius Plus, that helps self storage owners & developers find opportunities.

Then he said “well, I have this valuable data, let me put some capital and buy the assets.” So he launched DxD Capital which now has $335M AUM.

Then he said “managing these assets is hard. Let’s build more software to make it easier”, and launched Manage Space.

He’s becoming an expert in this space. Plus it’s a space with a lot of capital.

Laura Roeder

Laura started entrepreneurship the way most people do:

Consulting/Service-based business with the thing she was good at – Social Media Marketing.

From there she launched 2 companies in the same categories.

The first was Meet Edgar which, similar to some LemList products helps with social media scheduling.

And the second is Paperbell, a coaching software that helps coaches manage their clients better.

Rob Walling

Rob has built a career bootstrapping MarTech software companies.

His biggest hit was Drip (email marketing) which sold to Leadpages in 2016.

From there he spun out HitTail (SEO tool).

And after exiting a handful of his business ventures, has leaned into the Bootstrapping world writing books & even running conferences.

Syed Balkhi

Did you know that 43.5% of all websites on the internet are built on Wordpress?

If you’ve built on Wordpress, you know that you need a lot of plugins to build your site.

Syed owns those plugins.

In fact, he owns WPBeginner, OptinMonster, WPForms, MonsterInsights and countless more.

I first learned about Syed on the My First Million podcast, where he talked about his desire to roll up Quickbooks apps next!

David Heinemeier Hansson

Alright, DHH and the Basecamp founders are very well known.

But I’d feel silly to leave them off this list.

Him and his partner run 37Signals which owns Basecamp, HEY, & Once (which owns a lot more products).

They are masters at selling software to remote teams (Product Management, Email, Slack competitors, etc.)

That’s a wrap! What did you think?

✌️ See you next week

-Connor

PS – If you’re into Real Estate, I’m making a ton of content on this channel here.