2024 Revenue Review from our 2nd Acquisition
Revenue details on 2024 and the plan to get back on track in 2025
~3 years ago I quit my W2.
After a wild 10+ years, 3 saas companies going from $1m → $20M, $30M and $100M+ in ARR…
It was incredibly rewarding.
And incredibly exhausting.
I quit after a 24 month run at a company called Workstream. I had hired 80 reps in 24 months…
But I don’t think I had felt any lower in my career.
So I quit.
I thought to myself, I’ll take a few months off then go find the next company.
After 3 months, I started consulting early stage startups on building a repeatable GTM motion.
I remember telling my wife, ‘hell, let’s give this a run. See if we can build a 1-person consulting agency and pay our bills… worse case scenario, I go get a job’.
Best decision of my career.
Since then I’ve had the pleasure of working with >20 companies, buying a vending machine business and then a 40 year old electronics distribution company.
This blog helps to document this entire journey with as little filter as possible.
Long story short, after consulting for ~9 months we decided it was best to try and diversify our income outside of ‘my brain’ as an insurance policy. So, we bought 2 small businesses because Codie Sanchez told me to.
It’s been a wild ride.
For you new folks here (nearly 350 of you in the last few weeks), I’m honored you’re here and reading this. I’m an open book, don’t hesitate to ask or reach out.
Our Second Acquisition - Appleton Electronics Group
We’re 18 months in. Yes, I’m a bit late to getting a 2024 recap for this business.
It’s been brutal. Absolutely terrifying.
I spent many nights the last 18 months in the fetal position, wondering how we’d get out of this situation.
It wasn’t until January of this year that I finally got access to ALL historical sales, revenue and customer data.
Yup.
You read that right.
Like someone just grabbed you out of the audience of the cruise ship your on, brought you to the top deck and gave you the steering wheel, then left.
I had been working off some physical spreadsheets for the past 16 months of historical sales data. It was strewn across a few documents that I luckily copied into Google drive in my first few weeks of diving head first into this mess with weights strapped around my ankles.
The thing about this business is that customers re-order, often. Typically the same time each year.
So the lack of visibility was killing me.
Literally.
We ended 2024 at $235k, down 65% from 2023.
A soul crushing loss of a year. You can read the details from my September update here.
We were in do or die mode. A lot had to change to get this thing back on track.
And it had to change fast.
Finally seeing some trends…
After countless hours on the phone with quickbooks, calls with QBO experts, uploading data manually from thumb drives and even trying to code stuff into QuickBooks manually (don’t ask me, I was desperate)…
It just worked. I figured out a way to extract the files I from the previous owners desktop and get them transferred to QuickBooks online.
I still have no idea why it was so complicated…
All that matters now is, it works.
Now I can finally get insight in things that will better inform our moves to get this thing on track.
I can finally start doing things I know how to do…
Figuring out the who, what and why of customers and build a GTM motion around that.
Diving into the Data
Our largest customer contributes a whopping 37% of the gross revenue for the last 5 years.
This customer is a medical device company buying industrial grade SSD from us (whom we’re an authorized distributor of) and has designed this part into their product.
All that means is we should get orders every FQ from them, typically in the same amount… for many years.
That’s reoccurring revenue right there.
All other customers are much more reactive in their needs, less frequency in reoccurring purchases.
But, some of those same customers have reoccurring orders… just not with me, yet.
Big opportunity.
I start to break out the volume of customers and revenue by year to understand our customer retention and churn.
2020: 19 total customers, ($436k)
2021: 30 total customer, (789k)
2022: 25 total customers, ($1.17M)
2023: 15 total customers, ($700k)
2024: 25 total customers, ($235k)
**Note: I obviously knew the revenue by year leading up to the acquisition, but the intricate details of the customer count, deal volume, etc were things I didn’t dive into in my due diligence. Big learnings.
2024 Revenue Stats:
Gross Revenue: $235,000
YoY Revenue: -63.96%
Excluding a single deal of $200k that made up 29% of total revenue in 2023 would bring this to -49% YoY
Existing Customer Revenue: 78.5%
Net New Revenue: 13.6% (First time a net new customer was added in 4 years)
Reactivated old customers: 7.9% (old customers that haven’t purchased anything in over 5 years)
Top 10 customers Review
4/10 accounts didn’t purchase anything in 2024
3/4 these accounts turned over our contact within the first FQ of 2024 (retired)
3/10 accounts have 1 contact that we have a relationship with and is actively buying from us. These 3 accounts are very large and doing >$20b in annual revenue. Lot’s of opportunity here
These 3 accounts have >80 cumulative subsidiaries. We’ve been selling to 1 for >5 years. About 16 of these subsidiaries are within ICP
Top customer has contributed 37.7% of the total revenue the L5Y on a single product
Positive from 2024
Added 6 net new customers (completely net new from cold outbound & knocking doors)
Re-engaged 5 old customers (old customers that haven’t purchased anything in over 5 years)
Both re-engaged & net new made up 21% of all revenue
Questions I’ve spent a lot of time on
How do I got find 2-3 more of my ‘top’ customers a year. If I could find even 1 more, it would be substantial for the business. This will be a big focus for the year
How do I keep the wheels on the bus with the new, somewhat smaller customers while focusing on the much larger, much harder to penetrate customers
I’ve designed out a lot of systems here to automate the long tail of engagement and move out of automations as we move up the value chain
Goals for 2025
Grow revenue 50%
Add 12 net new customers
These are the two needle movers we’re talking about every single week.
**As of May 19th we’re at >70% YoY bookings, a much better start to the year.
How will we get there:
Increase spend from last years top 10 customers ~20%
Measuring this on a weekly basis
Already up 20% on our largest customer YoY!
Net New Customer Revenue: 15% of total revenue
Old customer (re-engaged): 10% of total revenue
Long Tail (outside top 10 customers): 5%
Execution Plan
Top Customers
Onsite 3x in 2025
Establish relationships with 10 more contacts (applicable within 3/10 accounts)
2 days in territory each month (30 customer visits in person/month)
50%+ of these visits will be net new
30% of them will be focused on authorized distribution line of products
Ramp part time operator (will take 12 months)
I can use your help
If you know any buyers or engineers in the following fields, I will pay a very nice commission on referral fees for any deals.
Specifically, I’m looking for design engineers that are likely designing products that will have industrial grade SSD & Memory devices in them. We an authorized distributor of these devices, we have a competitive edge on stocking inventory and being agile on delivery to meet real time needs by our OEMs:Industrial Automation
Industrial PC and Edge Computer
Factory Automation
Robotics
Test and Measurement
Medical Devices
Imaging
Monitoring
Surgical Robots
Pharmaceutical
Networking / Telecom
Broadband Access
Wireless Access
Optical Transmission System
Transportation
IFE / Avionics
Drones
Automotive
Maritime
"because Codie Sanchez told me to" is the realest sentence I've ever read