David speaks with Brandon Pindulic, President of Spacebar Ventures, a digital business incubator and investment firm. He also previously founded OpGen Media, which he sold in a 7-figure exit at age 21.
They talked about:
🏢 Building OpGen Media and leading it to a 7-figure exit
🤝 Surrounding yourself with successful people
🐋 Landing big clients and growing the business
🚫 Learning from failed business ventures
🚀 The importance of going big in business
⚖️ Making decisions as a founder, operator, and investor
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🎧 Listen on Spotify:
📹 Watch on Youtube:
📄 Show notes:
[00:00] Introduction
[02:15] How Brandon built businesses earning over $10,000 as a 15-year-old high school student
[09:20] Is university or college worth the cost and time?
[11:20] Journey from side hustle to 7-figure exit with OpGen Media
[13:45] Key steps to get right when starting successful businesses
[19:25] Important lessons from selling a business for seven figures
[22:15] Spacebar Ventures - how Brandon runs venture capital using his own money instead of debt
[30:13] How Brandon developed good judgment for investing in startup ideas
[38:18] Traits of a Successful Business Operator
[44:21] The strategy behind Spacebar Ventures' success
[48:43] What Brandon would do differently if starting his career again
[53:49] Brandon's biggest lessons from mistakes in money decisions and hiring
[59:40] How wealth and work affect family relationships
[1:04:39] The impact of your social circle on your success
[1:08:48] How to build friendships with the right people
🗣 Mentioned in the show:
Spacebar Ventures | http://spacebarventures.com/
JasBerry Chauffeur | https://nicholasanglin.myportfolio.com/
Karmaloop | https://www.karmaloop.com/
Wasabi Ventures | https://www.wasabivp.com/
Proof HQ | https://business.adobe.com/products/workfront/proofhq.html
Workfront | https://en.wikipedia.org/wiki/Workfront
Adobe | https://en.wikipedia.org/wiki/Adobe
Oracle | https://en.wikipedia.org/wiki/Oracle_Corporation
Citrix | https://en.wikipedia.org/wiki/Citrix_Systems
DocuSign | https://en.wikipedia.org/wiki/DocuSign
American Marketing Association | https://en.wikipedia.org/wiki/American_Marketing_Association
Master Service Agreement | https://en.wikipedia.org/wiki/Master_service_agreement
Companion Ventures | https://companyon.vc/
American Express | https://en.wikipedia.org/wiki/American_Express
Infor | https://en.wikipedia.org/wiki/Infor
Ziff Davis | https://en.wikipedia.org/wiki/Ziff_Davis
Planet Compliance | https://www.planetcompliance.com/
Regulatory technology | https://en.wikipedia.org/wiki/Regulatory_technology
HubSpot | https://en.wikipedia.org/wiki/HubSpot
SAP | https://en.wikipedia.org/wiki/SAP
Salesforce | https://en.wikipedia.org/wiki/Salesforce
Subscribed | https://www.subscribed.net/
Hot hand fallacy | https://en.wikipedia.org/wiki/Hot_hand
Pardon | https://www.pardon.com/
Optimism | https://www.optimism.com/
Hermes Robotics | http://hermes-robotics.com/
Rick Guerin | https://en.wikipedia.org/wiki/Richie_Guerin
Warren Buffet | https://en.wikipedia.org/wiki/Warren_Buffett
Charlie Munger | https://theknowledge.io/can-you-beat-your-opponent-in-their-own-game-mungers-law-and-the-art-of-the-steelman/
The cost of being King | https://www.theknowledge.io/the-cost-of-being-king-why-all-the-tech-bros-are-single/
Jeff Bezos | https://en.wikipedia.org/wiki/Jeff_Bezos
Elon Musk | https://theknowledge.io/elons-law-beating-hofstadters-law-with-ridiculous-deadlines/
Proof HQ | https://business.adobe.com/products/workfront/proofhq.html
👤 Connect with Brandon:
Twitter / X: @bpindulic | https://x.com/BPindulic
Website: Spacebar Ventures | http://spacebarventures.com/
Subscribed | https://www.subscribed.net/
👨🏾💻 About David Elikwu:
David Elikwu FRSA is a serial entrepreneur, strategist, and writer. David is the founder of The Knowledge, a platform helping people think deeper and work smarter.
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📜 Full transcript:
How Brandon built businesses earning over $10,000 as a 15-year-old high school student
David Elikwu: One of the first things that I actually wanted to ask you was, I saw that you started a business when you were in high school that I think grew to somewhere in the mid five figure range.
So I'd love to know two things, I guess. One, tell me more about that business, but then also what got you on that path? 'cause I think that is one of those things that for a lot of people, very early, maybe you see some data points around you in life. Maybe there's a relative or maybe you just have a natural aspiration for business or to create something that then leads to later success.
Brandon Pindulic: Yeah. Yeah. It's funny, I don't get asked that question a lot 'cause I almost forget that I even did that. I had a handful of businesses back then. I had a landscaping, I made fishing lures at one point and I would sell them eBay.
But the one that you're asking about was a clothing business. It was called JasBerry Chauffeur. I started with a friend. I [00:03:00] was probably, I don't even know, 14 or 15 years old when I did it. And I probably ran it until I was, I guess, 18 maybe.
Why I started that? Just wanted to do a business and then I, you know, clothing was just something that, you know, my business partner at the time wanted to do. So I said, let's do it. But it was fun. We actually had some designers, we had contracted designers that we would have. They were based in Jamaica. One of our friends was from Jamaica, introduced us to them. We were in New Jersey. I remember paying them in like, Louis Vuitton and stuff. Like, they couldn't get certain goods in Jamaica. So we would go to the, somewhere in New York, get like a belt or whatever and give it to him is kinda funny. But they didn't want cash. They just wanted like, stuff. And we're still friends with them today.
So anyway, we'd make these shirts, we did hat shirts, sweatshirts, all that stuff. We'd sell them online. I mean, this is even before Shopify too. This is, I'm 30, I was probably, you know, 15 years ago, let's say. So we were on big commerce, and then we would, manually send each package out. So it was kind of a pain.
We got all of our sales outside of like, just you know, friends and family that knew us. We got all of our sales online [00:04:00] about 80%, and then the rest were in stores and we sold it through influencers. So people who had YouTube or Instagram or whatnot, either like a, a rapper, a model, somebody along those lines. And then they would drop a link in there and, and we would get sales that way.
We didn't track it. I don't even know how we would've done that necessarily, but we had like promo codes a little bit, so there's manually tracking. And then there was a company called Karmaloop that's not around anymore, and they were based in Boston. I forget why, but they got shut down for some reason and we sold on their store. So that they had a an independent section and we got a bunch of sales that way. And then we just sold in stores. Like we were just kind of go door to door, you know, places in New York City and New Jersey put up the clothing in there. It was mostly on consignment. Nobody was paying up front for our stuff. And then it was an honor system. I'd come back in 30 days, see what we sold, but we didn't sell, change it out, get the cash, and that was that. So it was a funny business. It never did that well.
We did sell actually a decent bit of stuff. I wanna say our last year in business we sold maybe like 55 or $60,000 worth of clothing. I mean we're buying like all kinds of inventory and [00:05:00] stuff. I think there's still inventory in my parents' basement somewhere.
David Elikwu: That's awesome though, especially considering the time that you started. I don't think I actually realized that we're pretty much the same age, and ironically started my first business when I was around 13, 14, so probably around the same time. It's an interesting point in the internet, I think for a lot of people actually.
Brandon Pindulic: Yeah, for sure. I mean, it was interesting. It was really easy to do. I mean, we just did it with LegalZoom and then I have no idea how we found Big Commerce. I just remember that being the back end of the site. We got a web designer to build it. And then off you go and we added incorporated, like it was a legit business, you know, it was just not a very good one.
David Elikwu: But you mentioned you did some other stuff as well, so love to know either more about those or like what got you into doing this? Was it just you needed money, you wanted money? It was just the allure of selling stuff and buying stuff. What was going on there?
Brandon Pindulic: Yeah, I got into stocks and things like that before business. So I had a few thousand bucks that I'd saved up from like graduation or landscaping or things like that. And 08 I invested all of it in mortgage companies thinking that they would bounce back and they didn't.
So I [00:06:00] lost all that money and I'm like, man, this is a lot tougher than I thought it would be. So I'm like, lemme just go start a business. And then I continued on with just like landscaping work, but then I started fishing lures, like making these, these lures. There's a company called Meps and I was just making like knockoff, like spinner beet kind of lures there.
So I did that. I would sell on eBay. Again, I don't remember, I have no idea how much I sold or whatnot. It wasn't a lot, but it kind of got me thinking like, I had a wholesaler distributor somewhere in Texas. I'd buy it kind of I knew my margins and things like that on it, and then I would ship it and just like manually go to the post office and do it.
And then what was the earlier question? Kind of like how I started that, or why I got into that?
David Elikwu: Yeah, but I mean, okay. I'll just give you a, a slightly different question off the back what you were saying just now. How old did you say you were again?
Brandon Pindulic: Oh, now I'm 30.
David Elikwu: Okay. So how in 2008, how were you the same person that is investing in mortgage stocks and then also starting like a fishing law company?
Brandon Pindulic: Well, I didn't know what I was doing. I was just kind of trying it out, so I was just like, all right, well.
My whole thing was, I mean, the economy was going pretty poorly in 08. I [00:07:00] had, I guess, a slight advantage, right? You know, I was living with my parents, right? I was in middle school, so I didn't need the money.
So I think I had $2,500 and I opened up this account called Trade King, which is now owned by Ally Bank. I still have it open. They send me a letter every year. I have like few hundred bucks of some worthless stock in there. Yeah, I just, I don't know, I don't remember why I just did it. And then I lost all the money, so I didn't make anything doing that.
And then I simultaneously was trying to start these businesses. So I basically had a, I mean, I guess I wouldn't really call them failures necessarily, but they didn't do that well. And then that took me to, you know, 18, 19 years old. I went to college for one year which is, I guess, Uni for you guys. And then I had a an unpaid internship with a VC firm called Wasabi Ventures. And I met him just randomly, the guy, his name's Tk, he is great. I still work with him. We're actually business partners in a small deal right now too. So I met him and then from there he called me up the year after my freshman year and was like, Hey, you know, did you find a job yet? Would love to give you one if you haven't. I didn't know what he was [00:08:00] talking about. And I was like, no, I'm going to school. And he is like, oh, I thought you were a senior at Loyola. I was a freshman at Xavier. So he, I didn't even know if he might've hired the wrong guy. I have no clue. I've never really asked him. So I ended up taking that job. So I was only in school for a year. It was a, a low paying job, right? It was just, but it was remote. I was working at home in New Jersey. I'd go up to Manchester, New Hampshire where he was at the time, probably once a month or something like that.
And then from there, I started this, I wouldn't call it an agency. This was before my first actual business. I had like kind of more of like a freelance thing on the side. And then that was just like marketing work. I was working with businesses. I found the niche of working with B2B SaaS companies.
So I took a full-time role with this company called Proof HQ. I did that for a year maybe a little more than a year, and they got bought. So now it's probably 20 years old. And then from that point in time, like 21 or so is when I started my first actual business, which was called OpGen Media. So that was kind of the, like the path of what got me on this route I'm on, I guess.
Is university/college worth it?
David Elikwu: And it's funny, I think [00:09:00] we've had slightly similar trajectories, but yours is obviously drastically more successful. I'm interested in, so at the point that you left university has that made you think anything about the value of going to college based on, okay, the fact that you got a job? First of all, did you have any concerns about, there's a traditional path that lots of people take, were you concerned at all that, oh, if I leave, then it might impact me at all down the line. At that point you'd run some businesses in the past, so maybe you're thinking I can do just fine on my own. Being able to have a business that makes, you know, 50, $60,000, it's still more than an average person might make, and so maybe you felt like, okay, no matter what you can kind of get yourself through things.
Brandon Pindulic: You know, I don't, at the time, maybe I don't really remember exactly what I was thinking, but I don't remember being that concerned about it. I just kind of did it. I mentioned that that one job I had was not a high paying job. I think I was getting paid maybe like 1200 bucks a month. I mean, it wasn't a lot or 1400 bucks a month, I don't remember. And I was working a lot, like I was for sure below the, the minimum wage line. I didn't do that job for the money. I was [00:10:00] like, you know, I'm working for this firm. Worked with smart people. Some of the people I worked with alongside there built 20 to a hundred million dollars plus businesses. So it was great to work with those individuals. I don't remember thinking that a lot.
And then when I worked at Proof HQ, I was, I got the job when I was 20, so I guess I was like 20 to 21 at that point. They sold to a company called Workfront, which then got bought by Adobe. So that one did well, I had no equity or anything. I was just I got paid 60K a year. This was in 2014. I was 20 and then I did, think it was 60k, 60k a year. And then I had like probably 20 or 25k a year in additional income from just like freelance stuff. So for me, I was like, my expenses were pretty low. It was fine for that, but I only did that for a year.
Actually when they hired me, they asked me if I was going back to school. 'cause they weren't gonna hire me if I was thinking about doing it. They didn't wanna invest the time and, and money and then me go back. Honestly, I, I don't have any opinion on college for or against. I don't think anyone's asked me about it in the last 10 years, to be perfectly honest. It was kind of just something that I, I did for a little bit, [00:11:00] didn't. And then my thinking at the time was I knew I wanted to start a business. I didn't do that right away. I didn't do it the second I left college. It took me about a year and a half or maybe actually a little bit longer to do that, but I was like, why, why waste the time and money? Right. It was expensive. So I just left, took the job, paid off whatever loans I had quickly, like within that year. And that was pretty much that decision.
Journey from side hustle to 7-figure exit with OpGen Media
David Elikwu: So then you went on to build OpGen media, I think, well said you built another business before that then OpGen media, which had a seven figure exit, which is pretty awesome by most ordinary people's standards.
I would love to know what was that journey like in terms of being able to build that business? What were the, the high points, the low points, how easy was that, I guess, considering your past experience as well?
Brandon Pindulic: Yeah, for sure. So that, that was a good one. So that was my first actual business and I, that's kinda like why I consider my first real one. I started that, kind of on the side initially in 2015, but I went full-time with it February 1st, 2016. That was when I left, you know, ProofHQ slash Workfront.
But along the way I was building it up a little bit on the side, so I probably technically [00:12:00] started that in, you know, September of 2015. And I told myself I needed to match my income, which, you know, at the time was 60K a year, so I guess 5K a month. I was like, but I can make at least 5k a month off this side hustle for three months in a row. No exceptions. I'll do it. And I did it in the first three months, so it got to where I was making more money off that pretty quickly than I was from the job. So it just made a lot of sense to make the switch. I went full-time with it. it was a service business, so I didn't need a lot of money to start that. You know, I just had some clients and whatnot take on. And then, because I was started at three to four months previously I had built up some cash. I don't remember the exact number, but I had at least probably somewhere between like 10 to 20K in that account. So I felt like I had a buffer, and then whatever personal savings I had, I was like, let me go out and do this.
But the first six months it wasn't crazy, you know, difficult, I would say in those first six months. In many ways, it was actually kind of a, an easier point because I had extremely low burn. I mean, I was a single guy, 22, living by myself, I wasn't spending a lot of money. I was actually living in Boston at the time. I had an apartment up there, so that's where [00:13:00] I started it.
And then Interestingly enough, one of our first clients was Oracle, so we landed a big account pretty quickly. Now, they didn't pay me until like nine months later. So that was, if you're talking about a low point, I had to float, I had to float the expenses on that account, which was big. I had to pay our commission only sales rep who ended up staying with us for the entire lifecycle of the business, which was great, and I can get into that. But I paid everybody out of pocket first. So I had like, I don't remember no money at that point, 'cause Oracle was taking forever to pay me. I was floating expenses along the way of creative and contractors and sales and all of that stuff.
That was probably a tough point, but I was kind of, you know, I had other clients coming in, so whatever money was in, I was able to, to get that. And then when they finally paid me, it was a, I don't remember the exact amount, but it was probably north of 50K. So once I got that. It was pretty good.
Key steps to get right when starting successful businesses
David Elikwu: So tell me about some of the other the war stories along the way. I mean, you had one job for one year and then you from that to having to hire people to build this business. So, you know, what was that process like of hiring people? Were there any things that I guess two categories of things, like [00:14:00] one is maybe underrated wins.
So for example, being able to get Oracle, I think the process of getting to that exit. Was there anything that, there's lots of business advice that people might typically give, right? Get the big things right, but I think simultaneously there's also a lot of maybe underrated things that you could innocuously get right very early on. Maybe not even intentionally, or it could be intentional, but by virtue of getting those things right early on, then you get the wins later.
Brandon Pindulic: Totally agree. So unintentionally I got a lot of things right and I didn't realize that at the time and I don't think I realized that until recently too, 'cause you know, now that I'm in the business of starting and buying other businesses. I realized that OpGen was smooth sailing from the get go, and that is absolutely not the norm for most of these businesses.
So things I got right and didn't necessarily mean to was, this was 2016 and I was doing all enterprise tech 2016, if I remember correctly. I could be wrong, 2016 and 2018, I think were not great for SaaS companies in the public markets. But it had no, no impact that I saw, at least from our business because especially, you know, with sales cycles and [00:15:00] budgeting and whatnot. If you have a down year in 2016 usually affects the, in 2017 is because budget's already planned out. Unless there, there's something drastic that happens. But I got that right? So I was riding a wave essentially with tech companies and I sold the business in 2021. So I never had a bear market from that business. And that's just something you, get lucky with.
So that was really important. Getting Oracle was huge. I knew at the time that was big. I, I just don't think I understood how important that was because then once we got Oracle, I don't remember how quickly after, but relatively quickly after, then we got Citrix and then we got DocuSign, and then we got, you know, you name it. We worked with a lot of larger, a lot of larger, more mature tech companies. Those are really our ideal clients.
And for the first two and a half or three years of that business, we were pretty much purely a lead gen company. So we were performance based. That was the other thing too. So the sale was easier. They were basically like, Hey, we need this. And I said I would get them that, whether I knew we could or not. And I don't think we ever, I mean maybe a couple times, like some small deals for the large companies, we definitely never [00:16:00] dropped the ball for them on that. mean, if we had to go out of pocket to make something work, we did.
David Elikwu: Okay, so how did you land the first big fish? Because, I mean again, you're a 22 year old kid. How do people trust you to bring home the bacon?
Brandon Pindulic: Yeah, so we had a commission only sales rep. His name was Jess. And he had worked on American Marketing Association previously he was at about.com. He was at a few others. So he had been in the media space for, you know, north of 30 years. And the initial contact at Oracle came from one of his contacts.
So that, that ended up being a very common theme with us. We would get one person eventually it was, you know, split between whoever at the company. But Jess initially got those first couple of deals in for us. We had one contact, one small division of the company. And then we would just land and expand from there.
So with Oracle at the time I think they had over 200 different companies under the Oracle umbrella. We were working with one of them and I can't remember the name of the business now, but it was one of their e-comm businesses like e-comm SaaS companies.
[00:17:00] So then from there we did well, but you sign an MSA, Master Services Agreement. So now I can go and sell into any company with an Oracle. And it's not like as helpful as you might think it is, but you can't do business with other companies that have that. So you go through this whole painful process of getting approved as a vendor, and then once you're approved, now you can go and sell internally within that business, and it's a lot easier for those employees to bring you in.
And then same deal with agencies. So from there we would get one contact at an agency or one contact at a brand, and then we would just spend all of our time making sure we did well with them and expanding from there.
David Elikwu: So how do you go from selling your company to then having a holding company that owns loads of other companies?
Brandon Pindulic: Well, I ran that business for six years. Never really thought about selling it. It was extremely profitable. And we never did more than a million and a half in revenue. Like we never grew that big, but the net margins were really good. When I sold it, the average net margin was 38% after paying myself a salary as well. So the margins are really strong in that business. And then I sold it, you know, I had a multiple of [00:18:00] cash flow for it.
So when that happened, this was March of 2021. There was basically for the rest of that year, I was transitioning out of that role. So that only took me maybe four months to really deeply get out of that business.
I thought it would take a lot longer than that. And then from there my plan was to take a little bit of time off in that summer and then kind of figure out what was next. But what ended up happening was, I started working with a VC firm. So they're called Companion Ventures. I'm an LP in them. And then they just needed a bunch of, you know, kind of like fractional marketing leadership work. So I turned them down initially because I didn't think that was really the right fit for me. But then I went from exiting the business to basically I remember that early, that summer in 2021, I had basically nothing to do for like two days. And then one day later I got a client to go in. And then next thing you know, I had three or four, one big, 1 anchor client, and then maybe two or three others. So for the rest of 2021, I ran a consulting business and I did 30K a month, a little bit more if you count stock [00:19:00] options and things. And I was working across a few different businesses and it was pretty good because it was a lot less stress than running the business.
But there was, there was no scale either, right? It was basically I was capped out at that amount. So I did that through the end of the year and then that's what took me into starting Spacebar Ventures.
Important lessons from selling a business for 7-figures
David Elikwu: So now that you are both building and buying a ton of companies, are there any lessons learned in retrospect that you look back at your sale of your company and either think, maybe I would've operated it differently, or maybe I would've sold it differently, maybe I would've ran it differently?
Brandon Pindulic: Yeah. So the, in terms of the sale, I think it was pretty fair. I think at the time it was a good price for the business. The seller did really well. I had an earnout in that, you know, it was obviously, it was my first company. All my clients and employees were very close with each other. In fact, my sister still works at that company. She worked for OpGen media and now works for real access to company that bought them. So she's still there. So all of that was really important for me to get right.
So I don't have any regrets in that process, but what I realized I learned a lot more in that transition period than I think I did in the six years of running [00:20:00] that business. Because you think, there's certain things that I think is common in your first business where you're like, okay, you know, very important in this process of the company, or this is the way we, we do it because whatever reason. And then you realize how another company does it, and you start to see other people closing deals without your involvement or whatever the case is. Which only really happened on the lead gen side. The backup we had lead gen, and then we had the agency, the recurring component of the business as well.
So what I realized was like, wow, I, I just didn't delegate enough and that's why we never scaled the business. So if I had done that, I probably would've never have sold it because we would've grown more. Our net margin for sure would've been lower from a percentage basis, at least in the short term. But we would've been much bigger.
So I take that approach and that's actually why I started the holding company. It's a very common thing now, at least on Twitter, you see a lot of people talking about holding companies. For me, the reason I did it is not necessarily because I think I have all these great ideas and all this money that I need to, like, put to work and all this stuff. I did it because it was the only way that I could think of for me to go and [00:21:00] scale a business without getting that bottlenecking that business.
So I thought if I start a business from the get go or buy a business and install an operator in it, someone that has profit sharing and equity and things like that, and they're better at going from one to whatever, then I want to do that.
I think I'm good in the starting phase. I think I'm like, okay, you know, average to probably even below average at kind of that scale up phase and then anything after that. I mean, it's going to be useless, that's why I ended up taking that route.[00:22:00]
Spacebar Ventures - how Brandon runs venture capital using his own money instead of debt
David Elikwu: In what you do now, there's a lot of decision making wrapped up in that, so I'd love to know, first of all, tell me about Spacebar Ventures, and particularly how you think about like structuring the business and what type of businesses you want to build or hold or acquire.
Brandon Pindulic: Yeah, for sure. So from a, a legal structure, this is something that we're just finalizing that too, because we had it set up a different way previously, but we have it set up where it's a holdings company and it's an escort. So me and then our operating partner, George are the only employees at the company that are getting paid from the holding company vehicle. I own a hundred percent of that. And then Spacebar Ventures, the holding company has equity in each business we bought or incubated. But I'm not a hundred percent owner of any of them except for one. Which was actually our first business that we acquired, which I can talk about that as [00:23:00] well. So the rest, I don't, I don't, I'm not a hundred percent in and I really don't have a structured day-to-Day role in it. So that's kind of the legal structure of it.
But Spacebar Venture is really what it is. Technically we're two years old, but I look at it only being a year old. Just the way I operate it now versus what I did two years ago.
We're a holding company that starts and buys businesses. So we'll incubate a company, meaning either we have an idea, someone comes to us with an idea, we mutually come up with an idea, and we hire somebody and give them money and they go and start the business. And we support, we support pretty actively, especially that first year. So we do that and then we'll agree to a an equity split with that operator and co-founder. And then we have you know, the acquisition side of it, which is just simply we acquire businesses.
We're not a fund and as of today, we're not a syndicate either. So we have not raised a single dollar for any deal that we've done. I have not used debt. I do have a potential LOI going out for a deal where we're going to use debt either seller [00:24:00] financing or SBA, it really doesn't matter to us, we're working through those details right now. And then another one, which would have debt, but it would be more of an earnout and seller finance as well.
So eventually we'll do it, but we, we just haven't done anything with investors or debt yet.
David Elikwu: So I guess that leads me to my next question. Just off the back of what you were saying now, I'm interested to know, you talk about, okay, you're putting a hundred percent of your money into it. How do you validate the businesses that you choose to, to either build or to acquire, especially when it's a hundred percent of your own money?
I can imagine there might be a bit of a sunk cost feeling when, okay, you've worked for six years to build up this nest egg that you've got from selling the business and now that's exactly what you're deploying. You're not leveraging, you're not using other people's money. You're not taking you on any debt or raising funds. 'cause I think, the principle agent balances is very different there. If you are going out and raising, let's say 250 million and, and then with that, oh, you sure I'll buy this business. Sure, I'll take that. And sure, I'll try lots of different things. When it's your own money, maybe you feel differently about it.
Brandon Pindulic: Yeah. I mean, there's a loss always kind of sucks, right? And I've [00:25:00] done, we've had losses. Two of our businesses that we started, we incubated failed pretty much right away and the third one did well. So we did three incubations this year, and we were one for three. Next year we're gonna do two, but there's a lot of learnings behind. How we're gonna do that differently, which I'm happy to share.
So the feeling of losing money is never good. And I think this year in particular, it was more of a like, let's see if this works and let's learn. Now it's more, okay, let's apply the learnings that we've had and think about how I can scale this. So everything is about how do we scale this above a million dollars in cash flow to the holding company. Which would be after, you know, profit sharings are paid out, it'd be after reinvestments are paid, and that's kind of the North star metric of that. We're not gonna get there next year, I don't think outside of, you know, maybe some of these acquisitions that we're gonna do, because I'm investing in decent bid back into the, the incubated business and the businesses we've bought.
But it does make it a little bit more challenging. But, you know, probably the most difficult part about it is, it's forced us to buy some smaller businesses. [00:26:00] So if we take plan compliance, for instance, I literally bought that deal for $65,000. So it was a, a niche media business. It was actually based in the UK. So when we were talking before the podcast, I mentioned when I was in London, it was because of that deal. And that one, it was a cash deal. I literally just bought it on an Amex because Joe Osh, who was, he's my friend now, and he was the one running it. We were like, what's the easiest way to do it? I forget why we didn't use an escrow. I told him, I'm like, listen man, I can pay you in Bitcoin , or I could pay you on a credit card. I really don't know how else to do this. 'Cause we wanted to do it really quickly and just move. I, again, I don't remember why I didn't wire the money. I, I really don't recall the scenarios two years ago now. But I just threw it on a credit card and then I called up the credit card company and paid them that next day to do that.
And then that business has grown you know, this year we'll probably end at like 140K in revenue, something like that. But it's pretty much all profit because it's not, it's just a website. That one's grown. it's done nice, but then it forces your thinking, okay, what do I do from here? Do I just cash flow this business? Do I look at strategic options like bringing in an [00:27:00] operator because that one, I technically just run that one or sell it or whatever.
So you have to think about capital a little bit differently. I don't have to sell it or I don't have to bring in an operator, but as I've proven the concept out of you know, incubating or buying these, these smaller businesses, now it's time to go larger. So each of the deals we're looking into now all do over a million in revenue, you know, a million and a half in revenue, really. Mostly earning 25 to, I guess in one case, maybe closer to 40% net margin. So, owns a little bit of a, of a lighter business.
So looking at some of those businesses and then, you know, time will tell if we go above that, I'm sure we will, but right now I'm pretty comfortable in that area. So I'm trying to kind of tear up the approach from that. And when you only have your own capital and I haven't taken on debt yet, it does kind of limit you and what you can do. So I've quickly learned, all right, concept was proven now how to go bigger and map this out back into the cash flow targets that we have.
David Elikwu: So what went into making that first decision? I mean, putting 65K on the credit card, like how do you decide that this is the right business to [00:28:00] do? And then also, what did you do that within just two years, you can go from like you're now making in revenue, double what you bought the business for, or more than double actually.
Brandon Pindulic: Yeah, that business is only doing, I think, 22k a year in revenue. So two things, one the entire thesis initially at Spacebar Ventures was to buy B2B media properties. So planet compliance is perfect, it's a website that just writes about business regulation and compliance topics.
The issue I found was there's not that many of them out there that are for sale. A lot of them are owned by conglomerates like Infor or Ziff Davis, or there's like some smaller ones as well, you know, even like business journals or things like that. So I ended just being a little bit of a pain, so I'm like, all right, well, we can build them or look for other opportunities.
I bought Planet Compliance. I did quite literally nothing with it the first year. It was a it was a membership based business, so companies were paying 600 pounds. It was a British company, 600 pounds a year just to get access to the website, like post content, have their business on the directory. It was RegTech and legal tech companies.
And then on January [00:29:00] 1, 2023, so this year I shut that down so I completely shut the revenue down completely. What I did was I said, all right, we're just the media business. The recurring revenue thing is overrated in this industry. Let me just sell sponsorships. And then that's what I did. So it was sponsorships and lead gen. So email a little bit of sponsored content, but primarily just email. And then companies back it out into lead gen. And then we did, you know, like we'll end up probably around 140K this year maybe a little more depending on how some of these deals shake out. And then that's pretty much all margin. 'cause we have hosting cost, we have email, you know, or whatever our ESP, which you pay maybe 600 bucks a month for. And then I have part-time editor. And then our content is free 'cause people write content on our behalf, like thought leadership content. That's really it, so.
David Elikwu: That's awesome. That's the perfect kind of business.
Brandon Pindulic: Yeah, it's easy to run. Honestly, I legitimately spend less than five hours a week on that, but I think about it, so it's like, you know, you have that in there too, but I don't spend a lot of time on [00:30:00] it.
David Elikwu: Yeah. You think about it when, when the checks come right,
Brandon Pindulic: Yeah. or the, or a random problem. We have an email scheduled and, you know, you gotta jump in at midnight to like change an HTML thing in there. Just like little things like that. But overall, it's not a heavy lift.
How Brandon developed good judgment for investing in startup ideas
David Elikwu: But then you also had some other swings which didn't go as well as that. So what were the lessons learned there and and how do you pattern match, like what the difference was between the good decisions you've made, the ones that didn't turn out so well?
Brandon Pindulic: So it really comes down to not going big enough. The two incubations that did not work out, we hired people part-time you know, they're a little more inexperienced or one person was experienced, but his background was SaaS and self-serve and we were trying to have it more in like an enterprise service role.
So you have to match people based on their strengths. I think the incubation model only works when someone's doing this full-time. We had one person work, our company, Spacebar Visuals. Ryan runs that business. He was part-time, but he is just like a different breed. Like he had it in him right away. I knew it was gonna work that business, we create animated videos, explainer videos, repurpose content, things like that. So I always [00:31:00] tell Ryan if I could find 10 of him, I would do that deal 10 out of 10 times. But so it comes down to the person and not going big enough.
Same deal with, we bought an agency called Axamo, so it's axamo.co. We bought that in, I don't know, March or April, maybe. It was a small agency doing 150K a year mostly profit because the operator there, the owner of the business was doing most of the work himself with some freelancers. And I bought it for 20K. And I'm like, all right, perfect. If nothing else, I'll, I'll make my money back on the design work that we need.
But what ended up happening was, I just didn't think about the business at all. So for the first six months of owning it, or five months owning it we brought in some projects and it was fine. The work we did was really well, but I didn't think about scaling it. So now what I did with that one is I gave our operating partner, George, 30% of that business, and he is spearheading it and now it's getting better. I just did that deal with him though, so it's taking some time. But we're, we moved over to the unlimited design model. We're playing around with pricing to be transparent, it's $2,500 a month now, and we have a few clients [00:32:00] on that. But we're probably gonna come out with a lighter tier and then a heavier tier as well.
But I wouldn't do that deal again regardless if it works out or not, because it's just too small. Like, it's just, it's just not worth buying a business that small because it's the same thing as starting one. Unless there's like Planet Compliance or the, it was such an obvious opportunity on what to do. It was a great asset with a bad business model, you know, I wouldn't do that again.
So this whole year was just kind of like testing stuff out, like, will it work? Can we make a business out of it? And now, next year as we're gearing up to, you know, potentially acquire two businesses that are, you know, north of a million dollars and obviously continue to incubate businesses, I think it'll be a lot, it's a lot different of a mindset now.
David Elikwu: And you mentioned a few times this idea of buying things that are too small.
What changes in nature of the business? Is it simply just like finding product market fit? It seems like there's a, a chasm to cross. There's a point at which, okay, you're having to do a lot of work in the early growth stages, and then it gets to a point where suddenly a switch flips and things are very different on the other side of that.
Brandon Pindulic: Yeah. So I think it's gotta have a couple things. I have said enough, if [00:33:00] you're gonna buy a business, I think it needs to have enough money to where you can hire an operator to run it and still cover whatever, you know, debt service you have on that. I think that's extremely important.
We have a business in mind, so out of the two businesses that we're gonna potentially acquire, one, we know exactly who the operator will be. We've already kind of talked through that with them, and now it just comes down to actually doing the deal. The other one very solid, very niche business. It needs a very specific type of person to operate that. And I don't know who that person is yet, that's a big risk in it.
So that, that has to be solved for if you're buying a business the way that we intend to do it, which is in a holding company structure and not just like a searcher going out and buying a business and running it yourself.
The other thing is these small businesses, like with Axamo, we'll get that one to work and we'll probably keep that one forever because it's gonna cash flow well, and we use their design services a ton. So every website built in our portfolio is built by them, all of our ads, landing pages and stuff like that.
So it's kind of been a cheat code in that instance, but like from a spreadsheet, it doesn't look very good right now. So [00:34:00] that small business, I could have just built it and then just, you know, not had to go through the process of buying it and things like that.
David Elikwu: It's interesting because as you are going on this journey, you are learning, you've already had to learn everything for the first time as you've gone so far. But continually, as you are acquiring businesses, as you're building new businesses, you are learning and iterating. And I guess what you are building is your pattern matching ability, and you're building intuition, right? You've had those three businesses that you acquired or incubated, you've seen, okay, when I've tried it this way, here's how it went, here's how it worked. When I tried these other two, here are the lessons that I learned. Here are the nuances that I wasn't considering beforehand.
I guess beyond that, as you talk about some of these other businesses that you are looking to build and develop, how do you think about the way in which you plan to, I guess, refine your intuition? Is it simply just by the experiences that you have when you go and do something, or are there any other levers that you think about pulling?
Brandon Pindulic: Yeah. So couple things on the incubation side. We're trying to build a little bit more of a defensible and well researched [00:35:00] idea before going out and testing it. So I was pretty open to whatever. At the beginning of this year, we had an idea, if the person we identified had an idea, I'm like, let's just try it. Let's see what happens.
Now what we're doing is we're trying to pre-vet ideas and pre-vet operators further out. So I'll give you an example. We have a business idea, I've had this for years. not, not anything novel, but I'm a hundred percent gonna to do this, where we wanna partner with a SaaS company that's doing at least 20 million a year in arr. I think it has to be at least 20, maybe it's up to 50. And we're gonna set up a, an agency or a consultancy that specializes in that product. So it has to be an enterprise SaaS company. And think of HubSpot and SAP and Salesforce and whatnot. They have preexisting partner ecosystems, right? They have, there's, you know, gold tier, you know, platinum, diamond, whatever. We're trying to get in with that business before they get to that point.
And we're saying, we're gonna hire two to four people some overseas one operator in the US or Europe or wherever. And for the first, you know, probably at least three months, we are going to do [00:36:00] nothing but understand your product, learn it, research your industry, talk to customers, things like that. And we're building alongside you to be a professional service that can implement and consult on your product. All of the money we put in, we're not charging them anything, we're not billing the software business. What we hope in turn, and we'll have some language around this, is that they can pass us leads for deals that make sense. We can get some sort of official certification from that company that we're a partner agency and then we're just doing this ahead of the curve. So the idea is that they continue to grow. They eventually build out this ecosystem, and then we were, you know, kind of one of the first or, or the first agency in it.
So pre-vetting that idea is critical. We'll find the operator based on the company that we choose. We have one in mind. I can't really go into that too much right now, but we are beginning these conversations now and my thought is that we'll have a higher success rate doing that. When we do that, I'm gonna hire this person full time, so we're gonna have, you know, six months of runway, we'll get money, seed it in the account and we'll work with them quite heavily in that six month period. Peel off a little [00:37:00] bit from there and then you know, probably after 12 months, sort of, sort of be a little bit more on the back burner.
The other thing on that note is how do we pay ourselves from this? So we own equity in each business and we have profit sharing from that. But it's really easy for me to, to not want to take the profits out and just keep putting it back into the business. And then the operator can then, you know, get paid their base and then their portion of the profits. But what we're thinking we're gonna do, and this is a little bit TBD, but I think what we settled on is essentially charging a management fee to the portfolio company in an incubated scenario. You know, maybe it's 2k a month, 3k a month, 5k. It really depends on the size and the scope of the work that we're doing. That will count as an expense to that business and then they would have to keep us on for at least 12 months. After 12 months, they can pause us or resume us at any point they want. But if they have a way to take that 3K or 5K a month and put it to something that they feel is more productive, that's perfectly fine with us.
I mean, we still have our equity. We're still backing that, we're not in this to make a few grand a month and management fees, if you [00:38:00] will. But it's one way for us to kind of build up a, make sure that the portfolio company knows that we are a, a paid resource and they can use us or they, or they can roll us off.
Traits of a Successful Business Operator
David Elikwu: And I guess you've mentioned a few times this idea of picking the right operator. And I know, okay, you used Ryan as an example in terms of how great he was. If you could have 20 of him, that would be fantastic. And then also you mentioned before in the other business you incubated was, you know, you had someone that was part-time and actually now that you know, you probably have someone fulltime.
Are there any other, maybe aside from just the context in which you put them in, so for example, like being, part-time or full-time, are there any personality traits that you look for in operators that either might come from Okay, your own personal experience? What was it that made you special as an operator and what made you able to build the business that you ran? Or also some of the people that you've met, people like Ryan, people that you've already brought in. What are the, the traits that you look for?
Brandon Pindulic: Yeah, for sure. So I think it's they have to be a self-starter and ethical and, you know, you have to kind of fit within our team and can we work together. Another thing I think I'm gonna do is before making that offer, [00:39:00] you know, work in person for a week we didn't do that in Ryan's case. We did that afterwards, but there's a lot of unlocks you have in person because we're, we're fully remote, so that's critical.
I think they have to have either equal parts or 60, 40 one way or the other, an operator mindset. And then also more of you know, is willing to get out in front of customers and sell. The businesses that we start are not technical. They're niche B2B services or B2B media businesses. So for us, operations and sales are, are critical. And they have to have people skills.
So that's what we look for, tech talent and you know, things like that don't matter as much to us, we can fill that in. Marketing is helpful, but doesn't matter as much because my background, our DNA within Spacebar Ventures like getting leads is not an issue for us. Our portfolio companies get hundreds of leads a month that's just not, it's just not a challenge for us. Getting the right kinds of leads in and then convert, of course that's always a challenge. But there's certain things that we know we do really well. And if we have an operator who can do some sales or a salesperson that can do some operations, we're gonna be fine. We'll make that work more likely than not.
David Elikwu: [00:40:00] Do you have any process of reviewing either the decisions that you make personally as the person running this entire operation or some of the more granular decisions that happen within the businesses that you operate?
Part of the reason I ask is something I was thinking about recently is just this idea of the hot hand fallacy.
And I think you've escaped this partly because you've had some, some mistakes early on or some things that didn't pan out exactly the way that you wanted on, which is actually a really good thing because it helps you to avoid, you know, this idea that, okay, so for example, you have a basketball player that has made five shots in a row.
He's likely to shoot a sixth because he's got a hot hand, right? That is functionally extremely different from someone flips a coin five times in a row and they think they've got a hot hand. They're excited and that's what makes people double down, right on their next go. Because you've built this track record of, Hey, I flipped this coin four times. I got heads every time I, I made the right call. I'm gonna do it one more time, I'm gonna double down. And that is suddenly what blows people up sometimes.
And sometimes when you have consecutive successes or [00:41:00] you don't necessarily get upfront failures or upfront feedback from the decisions that you make, it makes it hard to, to quantify the quality of the decision that you're making. Like, was this a good decision or was it not? Because a lot of the time, people just base it on the outcome, right? So if it ended up okay, that means it was a good decision. If it ended up badly, that means it was a bad decision, and it's hard to get more granular feedback beyond that.
Brandon Pindulic: Yeah, I think it's a great question. I definitely to use your basketball analogy that a heat checkin didn't work, right. Pretty much right away. So I think, I think I learned that quickly, very quickly, that it's a lot more involved because OpGen was such a success right outta the gate, that it's good to have those failures early on.
I think we're learning this right now. So I think I don't have a great answer on how it's gonna exactly work out, but the example I gave with the you know, kind of incubating a business and doing the market research ahead of time and testing the waters and building the partnerships ahead of time is what is ultimately needed.
So I think there's potentially up to six months of work ahead of time to [00:42:00] vet these ideas and potentially vet these operators, which I'm kind of doing naturally as well. Like, you just kind of meet people now that I'm sort of in the market doing this, people come to you with ideas or you meet them. So I think that stuff's really important and if you can kind of do many tests along the way.
Another example actually is not on the incubation or acquisition side, but I hired an operating partner. His name's George. He's based in Milwaukee and I hired him in full-time, October of this year. So October 1st was his second, whatever it was his first date. But we had worked together part-time for probably three or four months up until that point. And that was a great way to test it. I had a, you know, a hunch that he would work out. We worked together really well and it did work out. And we had certain goals that we hit. He was driving part of the process. I was driving part of the process. The day after I brought him on part-time, I went to Ireland on a, for a family trip. So I was like totally checked out for two weeks and he ran things really well. So that was probably not the best way to onboard somebody, but it was a good, like, just test it and see if it works.
That to me, I think is [00:43:00] important on how to do that stuff because it's like, it, there's, you know, you're never gonna get this right a hundred percent of the time, but doing that is a lot. I think we've already seen it, but I think we'll definitely improve our success rate quite a bit from where I was doing it before, which is just, Hey, met this person. They sound cool, they got an idea, let's run with it.
David Elikwu: Yeah. Okay. So going right off the back of that, what function does trust play? I know that I think you've mentioned you found partners on operators online, on Twitter and perhaps friends of friends or through various spaces.
What function or what role does trust play in these decisions? Both in terms bringing someone on, but then also in delegating and allowing them to run a business.
Brandon Pindulic: So every, a hundred percent everything. And I'm still, like, sometimes I'll probably jump in things where I shouldn't. But if you cannot trust someone a hundred percent or allow them to go a week or two weeks without any intervention then you don't have the right person, especially on the operation side of things.
So it means everything. Now, we'll track KPIs, both leading metrics and certain sales goals and things like that. And we do [00:44:00] review them weekly. I imagine we're gonna get to a point where we do it monthly. But that kind of, you know, constant checking and just sort of measuring and helping each other along way is critical.
Brandon Pindulic: I think, hit the head. The trust part is, without it, I just don't think we could do what we do.
The strategy behind Spacebar Ventures' success
David Elikwu: So in building Spacebar ventures. I think, you know, we talked earlier about how there's a lot of people that talk about building personal holding companies and different types of things like that, and you hear people say, oh, we're gonna be the Berkshire Hathaway of this, or Berkshire Hathaway of that. I was wondering what your strategy is overall, not just for the business, I guess, but personally in your ambitions or aspirations. Like what exactly are you trying to build? How do you think this develops and, where do you want it to go? I think, you know, there's probably two paradigms that you think of.
One is, okay, people that look for big wins, right? You mentioned looking for bigger businesses to acquire things that are already at a further more advanced stage. You think of a lot of people that may be just investing companies that do angel investments and actually what they want is a 10x, a hundred [00:45:00] x return. They are trying to find the business that they can get in early on that suddenly it's gonna be a rocket ship and it's gonna go to the moon. And then on the other side, maybe you have maybe a bit more of a Warren Buffet type approach where it's like slow accumulation. You buy a business, you grow it over time. Something that you know, or you have like a strong thesis behind the decisions that you make, that you're gonna hold things perhaps forever, and that is going to be, you know, a long term decision.
Brandon Pindulic: So the way I think about it is just from a compounding standpoint, I don't, I mean, I've done angel investing and some VC investing and things like that. It's just not really my interest. I actually haven't done any of that at all this year. Not because the markets are bad, I just don't have the interest in it.
But it's from a compounding standpoint of a collection of small businesses. I don't take the hold forever approach, and I also don't take the, I need to sell this in a certain period of time, PE approach. It's kind of more of like, I think John Ballone said it like, everything's got a price there at some point. Like, I'm willing to deal with somebody and, and make a sale. I'm willing to hold. But [00:46:00] it's a compounding approach. We can buy a business at sub three x earnings or a good business at four x, you know, whatever. And we can grow it, and there's multiple expansion in there and things like that. I think it's a great way to live your life and, and make a good bit of money. And I'm absolutely focused on autonomy.
So I think that's really important for me. So that's why, you know, never say never, but, I don't see myself, especially with my background, so I don't see myself raising a fund. I'll syndicate a deal and I'll do deals with debt. I don't think I'm gonna take a fund approach. So I like the holding company model. I think that I'm gonna get, and this is a big part of what we're getting into in the new year, doing it in a much more structured way. So the way we're dealing it now is two incubations and two acquisitions.
It could obviously switch a little bit from there, but everything rolls up into that million dollar a year cash flow target which is after debt, after profit sharing, after reinvestment. So that would be like true cash flow out money out of the businesses.
If there's something that I don't [00:47:00] think will get us at least 10% there in one move, I just don't think I would do that. So that's kind of, I say kind of the North Star metric because if we sell a business and it technically puts us down from a cashflow standpoint, but you get what I'm saying? So.
David Elikwu: Yeah. Okay. Maybe a different version of that question is like, what does success look like for you, both for the business and also personally?
Brandon Pindulic: Well, I think it's, I like the idea of de-risking entrepreneurship for others. I think it's people who start companies take it for granted that, you know, they could just start a company. So for me, luck was on my side. I was able to work remotely. I mean, my job was remote in 2014. So I was working remotely, I could start on the side and I had some niche skillset that I was able to monetize on. And I was working in tech where there's, you know, the whole from, from the time I started up until like, even now, I mean, people say it's a recession, it's really not that bad out there in tech. So we've been riding a wave and I think that's important.
So de-risking entrepreneurship from the side of incubating a company with somebody. And taking care of their living expenses and risk, but sharing in the upside with them [00:48:00] is important and fun for me and I, and I think it's very economical.
And then same deal with buying a business. You can buy a business you know, I'm not scared of putting in money or PG debt. And then have someone run that business and then now all of a sudden they can put themselves in a different position. So that's, that's very important to me and then the autonomy piece of it. But I'm also money motivated too, so it's like, how do we make sure that this is cash flowing at an above average rate and we're growing at an above average rate, and then it could turn into something big, but I don't want to do that at the expense of raising a fund. And then now all of a sudden I have a bunch of LPs and additional compliance things that I'm dealing with that I otherwise wouldn't have.
So as long as those two things remain constant then we're gonna be in a good spot and that's my main goal.
What Brandon would do differently if starting his career again
David Elikwu: So when you think about the difference between what you're doing now, running and owning this holding company, and when you were running just one business, does this feel like the thing, or does this feel like the thing you get to do after doing the thing, right? Like if you had to start again, would you try and speed run to get to this point where [00:49:00] you could do something similar to what you're doing now? Or would you still focus on trying to get the initial big win?
Brandon Pindulic: No, a hundred percent that one. I would, I'd focus on the big win first. And I wouldn't even say mine was like a massive win. It was more of like a get comfortable then, then go for something bigger. I definitely would not have been able to do this at 22 when I was starting OpGen or 21, 'cause you need the money, you need the experience to do it. So I don't see how that's, that would make sense.
And you could argue that I'm doing it too soon now. Like maybe I could have done another business, you know, got it to five or 10 times larger than I got to OpGen and then did something. But I did this really just, just out of a, desire to do it.
If someone told me, make the most amount of money you possibly can in three years, I would start a single company, not a holding company. I do think overall, based on my skillset and personality and what I know for myself, I'll make more money in the holding company model. Eventually, well, I'll definitely have more fun doing it, the single company thing, I think I'm just not a good manager, so I can get us to a certain point and I would've to replace myself, and then that just gets you back at the same point. Then I would just do that again and again in 10, 15 [00:50:00] years time, I'll have three or four businesses with different managers.
So I think I was just realistic about what I'm good at and what I'm not good at.
David Elikwu: I mean, you mentioned it's not really a big win. How, how much did you end up with ballpark, roughly from, from the sale of OpGen?
Brandon Pindulic: Well, so I had, I had the sale, but it also, it cash flowed really well. So I was, I paid myself a salary and then it would cashflow probably four or 500K a year after expenses. And then when I sold it, I didn't get a lump sum. Well, I did get a lump sum, but I didn't get all of the money upfront. I had an earnout.
But overall, probably just from the sale, maybe 1, 1 2 or 1.3 million. And then you know, for a, I don't know, I'd have to look back at some of the numbers from a three or four year period. It had that cashflow there. And then I was investing along the way, so I've invested the pretty much the best.
I would actually say too much. I think people talk about investing as a good thing. I think I invested too much of my money. 'cause I would, I would love to have some of that be liquid K or stuff that's a liquid now back in my portfolio to start things or buy things. But it adds up [00:51:00] like over time. I didn't need to make a salary right away.
And then I also, I'm still getting an earnout check from that business. And then there's a smaller one after that. But by then you know, these businesses already are, are cash flowing pretty decently well. So that allowed me to not take any money at all out of the businesses we started this year. I mean, I've taken money out of planet compliance, but that's pretty much it. And then I can put it back in and that was a, that was definitely a cheat code.
So I don't know if that answers your question directly, but the other thing is like, I'm pretty pro seller financing and earn out for some of those reasons, so you don't get the lump sum right away and just stick it in whatever, because I sold this thing in, I sold that in 2021, so you can imagine what I would've been investing in, you know, crypto and startups and stuff like that.
David Elikwu: Yeah, exactly. I think you've also partly answered, you know, there's that famous question of, you know, would you rather have X amount upfront or X amount over time? And it's interesting that, I mean, first of all, it seems like you are already pretty disciplined if you are investing in mortgage companies back in 08, and you've overinvested now, it seems like you already had some discipline to [00:52:00] invest.
But maybe a difference between if you'd gotten all of it as a big lump sum versus being able to spread it over time.
Brandon Pindulic: Yeah. No, it was definitely conservative. Even running OpGen to a fault. We probably, you know, we would keep like whatever, six or 12 months expenses in the bank at any one point, which is people say to do that and it's not bad advice, it's just not great advice for growth. So I didn't really, you know, spend a crazy amount on that side.
And then even then, this is sort of an aside. We didn't talk about it, but I talked a little bit about the consulting thing I did. So I had a business where that was no expenses, that was just my time. So I did that consulting for a while, which was great because again, that was more capital I was able to save up and things.
But even to this day, I took on a couple small consulting deals in 2022, 'cause Spacebar Ventures really wasn't anything. So just kind of trying to figure out what I would make it into. But I did a deal with this family office called Pardon. So in this month I did a deal where in addition to running Spacebar ventures, so I have this other thing going on now. Where we built [00:53:00] website and AM and a vehicle called Subscribed, so it's subscribed.net. And we're literally just going out and looking to buy digital media companies. So the deal I structured with them is I get paid them a monthly consulting fee and then we're gonna use their capital. I'm gonna invest in some of the deals, and then you know, we're gonna do an SPV as well, and then we'll buy these media businesses. And then I get a percentage of the profits either distribution or when we sell.
So I did that as another way to further A, keep myself busy to not do something dumb and then B, get some cash out to where again, like I, I just didn't have to take money out of these businesses while they're, you know, in their infancy in the first 12 months.
So that's exciting, that's great, I mean, those types of deals are consulting's like really tough to get the right client, but like, you know, Pardon and companies they own called Optimism and it's like one-on-one. I mean, they're, they're great to work with, so.
Brandon's biggest lessons from mistakes in money decisions and hiring
David Elikwu: Are there any bad decisions you've made with money? I feel like most of the ones so far apart from the one or two investments that didn't work out, they're a bit like those interview questions where they asked you, what's your weakness? And you say, oh, I [00:54:00] work too hard. I invest too much.
Brandon Pindulic: No, I got, I'll pull them up. I keep a list. So I invested in Bolt, Do you remember that company? It was like,
David Elikwu: Yes. Oh, this is something I wanted to ask you actually but yeah, tell, tell me about it.
Brandon Pindulic: Yeah. I don't even know what to tell you about. I invested in Bolt, that's a dog of a company I invested in. I've invested in companies. There's one I'm looking here, it's called Hermes Robotics. I couldn't tell you what this company did. I don't know why or when I invested in it, but I looked back actually recently.
So I'm like, all right, let me look through, because I, a lot of these deals you had done on a Carta or AngelList. It's like a crypto staking company, but when I invested in it, initially they were doing like autonomous train driving or something. I have no idea. So, I mean, yeah, I know I got some serious losers in the portfolio from 2020 to 2021.
Now there are some good ones like where I knew the company or where I stayed in my lane of enterprise B2B software at the seed A area. Like, I mean you're still gonna have more failures than that, but I, I can figure that out.
[00:55:00] Anything outside of that was terrible. I think every stock I've ever picked went down, and I'm not kidding, it's not a joke. I don't think I've ever made money off of a stock. So that's why I was like, all right, I'm only going to invest in small businesses and then B2B enterprise software and everything else I don't care about, you know, I mean, I have index funds, it's like one of my good friends is my financial advisor, so I give him money to do that.
But other than that, I am totally out on investing in anything outside of these areas.
David Elikwu: Okay. Fair. I guess in that case, maybe it's a good thing that you didn't get all the money up front, right?
Brandon Pindulic: No, that's a great thing. I didn't get the money up front. I did have crypto. I'm not really into that stuff, but I don't think I definitely missed the point to sell, but I don't think I did terrible on that one. But relative, right, you could've had some bad losers. So those are mistakes.
Hiring, I'm pretty bad at hiring. I've gotten everyone that I've worked with currently and employees that I had an option and stuff. I mean, I had some like, absolute home runs, but if you look at my spectrum, it's like either someone worked out amazingly well or just like, I had one guy who just like stopped showing up to work for a [00:56:00] month and I was like, I mean do I fire him? What do I do?
So, I've had some really bad hires as well that just didn't work out because I'm too trusting in the beginning. Like I take everything at face value. I'm just like, all right, this person's great, they look like they work hard, they're smart. I like them. Let's just hire. I've never done a reference check, all that stuff. So I'm trying to build this into my process now where I'm like, not everything is gonna work out. Here are some ways that I can do stuff that, you know, will at least save me, like just low hanging fruit will just save me some headaches down the line. So,
David Elikwu: Yeah, I mean, okay. Well tell me more about that in terms of like lesson learned or what you are changing as a result. So you mentioned hiring as an example like, is there anything that you now know that you could have done differently in terms of hiring? Aside from just like reference checks or maybe that's part of it. And then maybe from some of those other mistakes as well.
Brandon Pindulic: Well, I'm, I'm still trying to figure that one out. So on the hiring side it's always gonna be difficult for a, a co-founder operator. So I think that's you know, that there's a lot of sort of inherent trust that has to be built up initially.
So, if they come from your network or [00:57:00] you organically meet them and you can kind of build things over time, that's great. I'm very, I mean, I've hired a lot of people on contract work, so I love to do that before bringing someone in full-time. In fact, probably if I look at all of the hires that have worked out, I think all of them actually started that way. When you have that to your advantage, you can do that well. And then the way to do that is really simply, if you have someone that's working remote or someone who, who has the ability to do like a night or weekend or something like that, just pay them above, significantly above market rate for whatever project they're doing to make it fair, to work out great. If not, no harm, no foul. So that's an important one.
I suppose, I mean, I haven't worked with recruiters or anything like that, but I suppose that's a decent way to do it. Those are, those are some of the, I think, just like important things. If you can kind of test the relationship first then that's always ideal.
David Elikwu: Have you ever heard of Rick Guerin?
Brandon Pindulic: I don't think so.
David Elikwu: So he was actually, speaking of co-founders, he was effectively like the third partner of Warren Buffet and Charlie Munger, except almost one side of him [00:58:00] now because, I mean, the irony is he was a great stock picker. Like he was actually, it's not like he was bad, he was great. That's why he worked with Warren buffet and Charlie Munger early on. But he used leverage and so he ended up getting margin cord.
And I think this goes to what Charlie Munger talks about often, which is this, idea of avoiding unforced errors. Like not trying to be smart, but just avoiding being dumb.
And I think, you know, it goes to what you were saying in terms of some of the decisions you make or some of the mistakes that you make. A lot of it can just be about getting the simple stuff right and avoiding some of these other mistakes, right? Like not just jumping on the latest hot trend, not just investing in the latest hot company, but actually taking a step back and thinking about things slightly longer term as well.
Brandon Pindulic: I think that's spot on. I think I heard them say, he wanted to get rich quickly and they wanted to get rich slowly. I think those are important distinctions there from that. Plus another thing too from I think it was Charlie Munger said this, but somebody had asked them at one point, how does he do the deal?
So they'll go in, they'll buy a business and they'll [00:59:00] keep, you know, their whole thing is the day after the deal closes, they want the business to run as if they never acquired them, right? They like to keep management intact and all of that. So they've asked him about how he's done deals and how he thinks about incentives and things like that for management.
And someone who's, you know, the kingdom doing this even said that it's different on a deal by deal basis. So that's why when I think through hiring or deal structuring for a co-founder, an operator or something. I think there's almost no perfect way to do it where it's one size fits all. I think ultimately you, you just have to assess the situation and see what makes sense in that, in that area.
How wealth and work affect family relationships
David Elikwu: Yeah. So I know that you've never had like one incredible windfall, at least relative to the fact that you've always been able to pay yourself relatively well, but I'm still interested in, are there any constraints that you found just from being able to make like a pretty decent income? And the best example I can think of this being, not that you are married, and I don't think you have been previously, but one that has been on my mind has just been this idea of like the, the cost of being King.
And I've seen some people [01:00:00] talking about it, but I've been writing about it just for a little while. And you just think of this idea that, okay, in fact, some of the very people that we were talking about, Warren Buffet, you think of some of the richest people in the world. I think almost every single one of them, Jeff Bezos Warren Buffet, Elon Musk, all of these people, what do they all have in common? It's divorce, right?
So it's almost like Yeah. Like there is an inherent cost of becoming incredibly successful, incredibly wealthy. And I was trying to think of, okay, like, why does that happen? Why is that the case? Nobody goes out to be successful thinking, oh yeah, this is gonna blow up my life and my family and everything that I think that I love. And also simultaneously, nobody gets married hoping that they'll get divorced.
I think maybe there's three factors that I have in my mind, like one is that some of these things, so, and, and you can expand this beyond marriage, obviously for the purposes of this conversation, but like one of them is maybe these things are just negative externalities, right? So this is just the cost of doing business. You make a lot of money, you have a lot of great success [01:01:00] and a lot of just negative stuff happens as a side effect. The other is maybe it's just a self-selecting cohort, right? So the type of person that is likely to be extremely successful in business, maybe they're very disagreeable, maybe they drive hard bargain, like they have some traits that also might make them difficult to maintain friends or difficult to maintain a partner, things like that. And then the third type is perhaps just like poison fruit. Like maybe there is something inherent in the act of becoming extremely successful that either changes you as a person or changes the other people around you in a way that. You know, like you are now different as a result of having that success and the people around you are also different as a result of you having that success.
I wonder if any of those ideas resonate with you and the journey that you've had and yeah, just like how that lands for you.
Brandon Pindulic: Yeah, I mean, it's a pattern I've recognized, right? So I even just a lot of people that I know socially in my group who've done really well and what I mean really well, like, [01:02:00] you know, $50 million plus exit, something like that. A lot of them are divorced or didn't get married or something like that.
So I have a girlfriend, we live together and we have two dogs. And it's something we've talked about too, because like we're both career oriented people and we just like have these conversations to where, you know, it'll work and obviously the plan is to get married and things like that.
But I notice it, you just see it either in like the examples you gave, like the Elon Musk or Jeff Bezos examples. Down to people I just kind of know personally that's, you know, have done well but aren't in the media. So I think that's like I would not consider myself having outsized successes in those, especially not in those senses.
So I think that's actually probably something that's held me back. I do like to work and if, if it were up to me, I'd work pretty much most of the day. But at the same time, like, I mean, you could see by running OpGen, like I was totally, I, I like, I love the lifestyle businesses. I love the idea of cash flow and I've never, I mean, I've never been interested in running startup ever. It's just not, I don't find it interesting for me to work on one idea for five to 10 years, pay myself nothing for a couple of years, then go to a modest salary and [01:03:00] then have a big exit. And the irony is, that's kind of like literally what I'm doing with Spacebar Ventures, but I see the cash flow come in and then I just don't distribute it to myself and I can put it to, to work to do stuff.
So that resonates a lot more with me than, oh, our MAUs are going up, or our ARRs up, or our burn is 100K a month and you know, I gotta raise my X around next around at any point that can just kind of implode on you.
You know, I think the mindset I have is, is a lot different than that. And I think for sure, like I'll be upfront never gonna be a billionaire. Like, I just don't think I have anything like that in me. But I do think I can get to like. 10, 20, $30 million doing this without having to sacrifice, like your personal life and what, what you wanna do.
Now that does come at the expense. Like there are times where you gotta like miss something or whatnot. But to be honest, like I kind of think that narrative is overplayed a little bit in small business too, because I work remotely and because I've had the benefit of being in B2B. Like our clients are working nine to five, generally speaking Monday through Friday. So if I need to get something done on the weekend, which happens a lot, I can kind of get it [01:04:00] done on my own time. Where if you're in E-commerce, if you're in hospitality, something like that, you usually don't have those luxuries built into your business. So I do think that's helpful too.
And then now obviously as you're building a team, I view teams as leverage. So you have people that are working with you, the ideas can get bigger, you can do more. Like just two weeks ago, we have a small team and we had two people out. One was sick, one was on vacation, so then I'm like jumping in and doing the work and that's fine. But you know, I gotta like catch myself up, up to speed on like what they're doing, how we're doing that, and then that ends up kind of slowing you down a little bit further.
So there's a lot of truth to that.
The impact of your social circle on your success
David Elikwu: I think perhaps one of the last questions that I would ask very much on the track of what we were just mentioning. So first of all, you just mentioned you have friends that are doing similarly well, or even better, you know, they're running great businesses, they've sold great businesses.
And we've talked a bit in the past as well, I guess about, you know, people in your network, et cetera. And I think this is, it's actually a really important point and perhaps an underrated one, right? About the people that you run with and the people that are around you and how that [01:05:00] shapes and can either constrain or expand your idea of normal.
And actually, I think I've written about this as well. I forget the name of the post but, just this idea that, if you are driving at, okay, I'm gonna use miles per hour just because I, oh yeah, you guys use miles per hour.
Brandon Pindulic: Yeah. Yeah.
David Elikwu: So here, like in a normal suburban area, the speed limits might be about 30 miles an hour, right? And if you are driving at 30 miles an hour in the suburbs, everything is fine. Everything is dandy, you get along with everyone, everything is fine. If you start driving at 40 miles an hour in the suburbs in a 30 mile per hour zone, suddenly people are looking at you like a maniac, like you are driving too fast. It's unsafe for children. Like, what? are you doing? You are a crazy person, right? But that same person driving at 40 miles an hour, if you went onto the motorway or a highway. Everyone there is driving at 70 miles an hour and suddenly you are now so slow that you are also gonna kill people like you are a health hazard, in the same way that you would've been a health hazard in a zone where everyone's driving at 30, now you're a health hazard 'cause you're driving too slow.
And [01:06:00] I think that is a very similar to the way that, the friends that we have and the people that we keep around us can either like constrain or expand our idea of what normal is. And if you have people around you that are driving at a really high speed, that is just what you're used to.
So I'm interested to know like both early on from your early twenties, 'cause I remember actually even that business you started when you were 15, that was a business, you started with a friend, right? And even now as you run this business, you have friends that are running 50 million plus businesses. So I'd love to know what you think the impact has been of the people that you've kept around you and how you think that has impacted your level of success as well.
Brandon Pindulic: Yeah, totally. So I think that's you know, even going further back, that's kind of like when people talk about the value of education and you kinda ask about my thoughts on college and whatnot, that's why parents will put their kid in private school if they can or something or whatever. They go to the, the school district with the good whatever.
I always went to public school and I did one year in college, so it was like different for me. But think people do that for their, like to get around other people that are in that area and they try and like morph their children to think that way.
I don't know. So I, [01:07:00] I have a kind of a unique sense on it. 'cause all of my friends that run businesses, I mean, I think, they all do better than I do, honestly. Like, I kind of joke that I feel like I'm in, like, baseball may not be as big in the UK, but I'm in like the minor leagues and they're I know like, I'm friends with the professionals. But I'm still kinda like, I'm good but you know, not there.
But at the same time I see what they're doing and I can kind of like get inside, you know, what, what they got going on and we can trade. And I've definitely benefited from that. But all of these people I've met just through like random stuff, like through work or I reached out to them, or they reached out to me, it's, it's, it hasn't been like through one cohesive thing like a school or, you know, growing up in the same area or whatnot.
Brandon Pindulic: I've taken the approach of I'll invest in the people that I identify as, oh yeah, they got it. Like at the expense of whatever this person has that thing. And that's, that's done well for me. And there's people that I'm friends with that haven't, you know, had that big exit or haven't started that company yet, but I know for a fact. They have the ability to have an outsized return on something and I'm just gonna invest in whatever they're gonna [01:08:00] do.
So, that's it. And my whole thing is how do I make a bunch of cash flow to where I can do that and then invest in it and then, you know, not care if it fails. But if it does succeed, it'll be pretty massive win.
And I've done this before too. I mean even the company I'm invested in, it's based in London actually. It's called XI Flow. I invested in them because the founders that founded Proof HQ and I saw Matt and that what they did at Proof Hq and I'm like, these guys are absolutely operating at a different level from what I've seen.
So whatever their next thing is, like I just put money in. And whenever they weren't raising money for a while, 'cause they made money on the previous exit, but finally went that route. And I did that and that's going to be like you know it's not gonna be like a hundred x but it's going to be a really good one when they eventually exit. So, that's the approach I've taken where I can kind of like get that upside but not necessarily having to do it at the expense of running that business and sacrificing everything else.
How to build friendships with the right people
David Elikwu: I mean, maybe the last question I'll ask you is, is there anything that you have done in particular or that you would recommend to cultivate those kinds of friends? Because it seems like throughout your journey, you've always [01:09:00] had friends like that.
Brandon Pindulic: Yeah, it is kind of random. People have asked me that before. I don't know what the answer to that is.
I mean I've always lived in cities. I've lived in like New York, Boston, Austin, so I'll go, I've met people just like going to random dinners or events I've put on dinners and events, which is helpful and that's been a good way.
I've actually met a lot of people on Twitter, even though I've only kind of recently become active on Twitter. So that's a great, I mean, that's actually how we met. So, that's a great way to do it. But I take calls and meetings with a lot of people. So in 2022 I think this is an interesting example.
I set up this investment network called Pantera, and we were just look at alternative investments. We'd source them, we would do SPVs. I was initially gonna make it a paid group that people were paying for, and I just refunded. like, I don't wanna do this full-time anymore, but I would meet with professional investors and I'd meet with high net worth people or people. I just wanted to invest in things and I made a lot of friends and interesting connections that way, but I didn't make a dime off of it. I did raise money for deals, so, you know, in theory I can make money off the carry of those things. But that was like a very intentional way for me to build [01:10:00] out a group of people that I thought were interesting.
And then I would take probably 10 calls a day, and then I'd go and meet people. I was just I went to whatever city or country or whatever, I would just set up meetings and meet and we'd hang, hang out and have fun and like just kind of friendships became, you know, turned into that, that thing. 'cause I'm really interested in like what people are doing.
So I think it's cool, like if someone's got a business they're running or an investment fund, a podcast, they're writing a book, whatever. I'm interested in like, kind of like seeing how they're doing it and what they're doing and then naturally I think when you're good, I guess when you're naturally interested in what other people are doing, they kind of just, you just sort of become friends that way.
David Elikwu: Thank you so much for tuning in. Please do stay tuned for more. Don't forget to rate, review and subscribe. It really helps the podcast and follow me on Twitter feel free to shoot me any thoughts. See you next time.
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