XO Capital's Fund Stuff Andrew Pierno

In our latest episode, Danny steps in for the October 2023 update (a bit overdue, but packed with insights). We discuss hitting our 5% month-over-month growth goal for the first time and review the performance of various companies in our portfolio, with most seeing growth except for Analytics. Danny delves into our plans for November and December, including a Udemy course launch, partnerships with prominent figures in the SEO space, and a growth experiment tracker to monitor our new initiatives. We also discuss our recent Google Search Console integration, product launches across our portfolio, and an increase in new subscribers and accounts for Analytics despite mixed reviews about data quality. The episode also highlights successful growth strategies for Cool DM and a slight uptick in MRR for Sheetbest. Tune in for an in-depth analysis of October’s results, future plans, and interactive content to explore.

"Journey to Success: Tales of Triumph and Challenge"
Dive into the candid chronicles of entrepreneurial grit on "Journey to Success." Hosted by a seasoned entrepreneur with a knack for storytelling, this podcast delves into the highs and lows of building and scaling businesses. From a stark "Failure to Raise" capital to ingeniously creating the "Flip Fund," where business acquisition and swift scaling lead to rapid exits—our host shares it all. With a recent spotlight on the acquisition of Journey.io, a storytelling sales tool with a penchant for scale and customer love, listeners get an insider's view of the strategic decisions that lead to 10x growth. It's an unfiltered look at the tactical journey of fund-raising and business development, flavored with the host's dry wit and smart insights. Join us as we navigate the thrilling path of turning challenges into stepping stones for success.

In today's episode, Andrew from XO Capital dives deep into the ever-evolving investment thesis of the fund, giving listeners an insider's view on how the team approaches deal flow and capital allocation. Andrew starts off with the challenges of traditional venture-backed company building, emphasizing the power law distribution where a very few winners give outsized returns.
The crux of the episode? XO Capital targets what the VC world might deem as 'failures'—companies that couldn't secure the next round of funding but are far from being bad businesses. Andrew argues that these companies often have viable products and reasonable growth rates, making them hidden gems.
Key Takeaways:


Opportunistic Strategy: XO doesn't box itself into a rigid thesis, offering flexibility to spot unconventional winners.


Power Law Reality: Understanding that in the VC game, only a handful of investments bring in big returns.


Relative Failure: What venture capital sees as failure could be an opportunity, especially if the business shows some growth and revenue.


Quality Over Quantity: XO aims to buy the best products in a category, moving away from settling for second or third best.


Operational Realities: Businesses bought must be 'complete'—ready to sell today without requiring significant engineering work.


Channel & Growth: Acquisitions should come with a promising customer acquisition channel and a nominal growth rate.


Initial Customers: Preferably a hundred or more, with no single customer making up more than 20% of the business.


The episode closes with the cheeky remark that founders should meet Paul Graham at the start of their journey and XO Capital at the end. Tune in to get a full grasp of XO Capital's unique angle on investment.

Summary for Podcast 33 - Post-Acquisition Growth Strategies
Hey, it's Andrew from XO Capital. Dive in with me as we discuss how to approach growth after acquiring a company.
Key Takeaways:


First Steps: If you've bought right, you should have an operational growth channel. But beware of depending on a founder's personal social media for growth; you might be left starting from scratch if they move on.


Leverage What's Working: Often, one solid channel can catapult you to seven figures. Look at what brought in the money and focus on amplifying that. If it’s SEO or ads, double down on it in the first months of ownership.


Expand Smartly: While working on the main channel, experiment cautiously with others. Ensure you're clear on what each experiment is designed to test.


Learn from the Past: Delve into the previous owners' experiments. Understand which ones worked, which failed, and the reasons behind both.


Diverse Outcomes in Portfolios: Just because a strategy worked for one company in your portfolio doesn't guarantee success for another, even in the same market.


Experiment Before Buying: If possible, before making an acquisition, test your growth strategies. This will give you a clearer picture of post-acquisition realities.


Utilize Low-Hanging Fruits: Sometimes simple changes, like refreshing UI or adding an onboarding process, can boost user engagement and conversions.


The Value Proposition: Always aim to provide immense value, even for free. Sharing your knowledge establishes trust. As the saying goes, "Give away the secrets, sell the implementation."


Remember, many experiments won't bear fruit, but they're all part of the learning process. Stay persistent and keep refining your strategies!
Catch ya next time, and keep growing those acquisitions!

In the September 2023 recap of XO, Danny discusses the theme of "spinning plates," emphasizing the company's focus on quality over quantity. The month was about taking baby steps to improve the quality of their portfolio companies, team, and customer experience.
Financially, September was a mixed bag. While MRR was up for some products, net volume was generally down compared to August. Danny dives into the performance of individual portfolio companies, mentioning that each has its unique challenges and growth trajectories.
Cold DM saw its first uptick in months, thanks to overcoming Twitter API changes. Screenshot API remained steady but lost some larger customers. Analytics struggled due to new competitors and LinkedIn changes, but a new path forward is in sight.
Danny also touches on upcoming growth strategies, including backlinking processes, Google search cloud integration, and a shift to free trials for some products. The goal for October is to move from a reactive to a proactive approach in managing their portfolio.
Overall, the episode offers a transparent look at the ups and downs of managing multiple SaaS companies and sets the stage for what's to come.

This week, Danny is taking over with an in depth breakdown of our ownership of Growthbar over the first 90 days. It's been turbulent but appears to be stabilizing.
Here's a teaser:
Month 1 - We didn't change much. great month
Month 2 - We removed forcing people to enter a credit card and nearly destroyed the business.
Month 3 - Recovery