Monthly Letter #07 - Bento
Let’s cut to the chase. So, after a few months, I realized that the vision I had initially was not exactly the one I wanted to pursue.
Buying & Building is a great business model. I’m not really having doubts on that. But I don’t think it’s the ideal one for me. I love working on product, and working on the operational side of things. But it takes a lot of time, and if you look at it coldly, it’s not the best use of my time.
Business-wise, it would make more sense to raise a maximum amount of capital (either as a small fund with LPs, or through equity investors such as family office), and to then spend the majority of my time thinking about how to deploy that capital through bigger and bigger acquisitions.
Basically becoming obsessed with capital allocation, and disengaging from most of the product strategy issues, marketing tactics or innovation.
Constellation, one of the most successful business (> $40 billion market cap!!) in that “buying software companies” model, is mainly that. Mapping the landscape of possible targets, becoming really good at capital allocation, increasing the volume of deals, rince and repeat.
Yes, they do have a significant expertise in the actual “work” of managing these companies, but it’s mostly through the lenses of efficient management and organizations, and milking as much profit as possible while not innovating much.
Most of their growth is coming from new acquisitions and price increases, and not through natural organic growth of revenue from existing portfolio companies.
So, it really is a financial play, and I’m not super excited about that.
So, what does it mean for Bento now ?
Well, I will keep pushing !
Recently, I’ve been told by two different people (friend/family) who read this newsletter that the last one was kind of depressing and not really motivational. 😅
They were worried it would not reflect well if I wanted to attract investors or partners. And… they’re kind of right.
I said I didn’t really care because the whole point was to be transparent about the ups & downs of this journey, I was not really raising capital, and I wanted to write in order to get the benefit of accountability in order to keep myself in check.
But still, it’s a really positive experience I’m actually still pumped to work everyday !
So I will keep working on the existing products :
I work with less freelancers now to focus more on my own work & value-add
I’ve been coding a lot in the past couple months to improve SurveyNuts who had been in maintenance mode for several years. More than 150 tasks completed in the past 9 weeks!
I don’t know yet if this will be enough to grow 10x, but I’m now super confident that SurveyNuts will continue to exist and attract clients in the next 5 years. The first paying customer signed up in 2015, so it will soon be 10 years that it’s in the market - and it brings me joy to work on projects which can stand the test of time.
With Ben helping me, we also upgraded the Rails version of Temper and fixed a bunch of bugs. Temper - which I acquired in 2019 - was also created a while before and was due for an upgrade. Something they don’t tell you in product management books is that you can rarely be completely hands off on a product. The tech becomes obsolete after a few years, a hosting provider or PaaS (in this case, Heroku) does security upgrade, Postgres upgrades, stack upgrades, and it results in multiple problems if you just do nothing for years. Not to mention security issues!
The partnership we’ve worked on for Seasons is going great, bringing fresh content to our coaches, attracting new leads and feature suggestions.
As for Velocity, we’ve been mainly in “customer support” mode, responding to inquiries and fixing issues, but not really innovating much. I think there is a possibility to do a Velocity for Notion as product expansion, but don’t have much time to work on it and it would not be a quick one to work on immediately.
To sum up, I’m continuing to work on these existing products in the Bento portfolio and I love it. It also brings me a great work/life balance for other stuff (I spent a whole afternoon in a rehearsal with a bunch of comedians from the play “Les Producteurs” just two weeks ago thanks to a friend!).
However, this is a tiny business and it could be a slow one to grow significantly without doing new acquisitions. So, I’m also open to new opportunities!🙀
It could be part-time freelance work, or perhaps even another entrepreneurial project (preferably with a team). I’m not really sure - but if you want to chat or send something my way, don’t hesitate!