A strategic deal for two productivity apps

March 26, 2024
​Read on web​

When these founders were introduced to each other, they realized they both used each others' products.

One was Notion, a popular productivity platform.

The other was Cron, a calendar app.

Several years before, in 2019, Cron was founded by Swiss-born software engineer Raphael Schaad.

The company earned a spot in the 2020 Y Combinator class, but because of Covid lockdowns, their entire cohort missed out on Demo Day, where companies typically pitch to investors.

Still, Cron managed to raise $3.5 million in seed capital in March 2020.

Two years later, in 2022, an investor introduced the founder to Notion's CEO.

Notion users had expressed interest in adding a calendar function, and acquiring Cron was a way for Notion to add it. Despite being pre-revenue, Cron sold for 8 figures.

More details in our full story:

​Cron and Notion’s founders used each other’s products before joining forces in this strategic deal​

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Why I finally moved to an online bank

Here's a personal story from me, Lexi, the founder of They Got Acquired.

A few months ago, I wanted to open a new bank account.

My old-school bank said I had to do that in person. So I took the train all the way from my house in West Virginia into Washington, D.C... and then spent four hours opening an account.

I was incredibly frustrated on the train ride home. I'd wasted an entire day doing something that should be quick and easy.

That's when it hit me: I've run online businesses for the last 15 years. Why have I not tried an online bank?!

So I researched all the options, ended up choosing Relay — and already made the switch.

Here's why I'm pleased with Relay so far:

✅ It's easy to do all my banking from home

✅ It's free (except wire transfers). They offer a $30/month upgrade, but so far the free tier has been plenty for us

✅ No account fees, overdraft fees or required account minimums

✅ Next-day ACH is easy and free

✅ It's built for a Profit First setup (the Profit First creator even uses it)

In this video, I walk through the pros and cons of this move:

If you've been putting off this move like I was, give Relay a try:

Relay is a financial technology company, not a bank. Banking services and FDIC insurance are provided through Thread Bank2,3; Member FDIC. The Relay Visa® Debit Card is issued by Thread Bank pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa® debit cards are accepted.

Why value created > time spent

Founders will sometimes say, I’d like to sell the business for $X, given how much time I’ve put into the business.

This is a red flag, especially when the amount they’re asking for is unrealistic in relation to revenue and profit.

👉 No buyer cares how much time and energy you’ve put into the business. They only care how much value you’ve created.

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Say you spent four hours a week on a project that brought in lots of revenue and profit over the last two years, and those buyers are on a subscription so the revenue will keep coming in.

Will a buyer pay top dollar for that business, even though you only spent a few hours on it?

You bet. In fact, they might actually pay more for that business if the time commitment going forward is expected to be small. Like you, they want a business that can bring in big bucks on little effort.

Now flip that. Say you spent 50 hours a week building a company over the last two years, and you have some revenue but not enough to pay yourself a salary.

Do you think buyers will pay a lot for that business even though it doesn’t generate much profit, just because you put a lot of time into it?

Nope.

Yet it’s easy to fall into this trap of calculating “sunk cost” math anyhow. We feel like if we’ve put lots of effort and time into building something, we should be compensated for that when we exit.

But the truth is, effort put in doesn’t count for much. Value created is what affects your sale price.

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Sometimes even founders who understand this concept can’t separate effort spent from sale price. But if you can get really honest with yourself, it can help you build your business more efficiently.

For example, it’s just not worth sweating the small stuff, or spending hours trying to fix tiny details that won’t affect the value of your business. When I think about it this way, it motivates me to prioritize revenue-generating activities.

That’s good for the business, yes, but it’s also good for me, because it helps me build a machine that’s profitable and sustainable, which likely means I’ll be happier and less stressed.

This perspective might also help you avoid overworking yourself. If the value created is what matters, it doesn’t make sense to overwork or burn out on your way to creating that value. You don’t get points for sitting at your desk like you might in a corporate job.

No one cares about how many hours you put in. It’s actually quite the opposite. You’ll be rewarded, in lots of ways, for putting in fewer hours.

So don’t focus on time spent.

Instead, focus on value created.

See you next time,

Lexi Grant
Founder & CEO
​They Got Acquired​

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P.S. If you have ideas or feedback related to this idea of value created > time spent, join the comments in this LinkedIn post.​