Nano Thought

Hey y'all!

Ever heard the saying, "The best way to learn is by doing"? Well, I'm living proof.

Despite years in the tech world, advising on SaaS acquisitions, and investing in 8-figure ARR companies, I'd never bought a SaaS business myself... until recently.

These past couple months? A whirlwind of hands-on learning, fixing, and prepping for relaunch. Every day brings new challenges and lessons.

Want to master something? Get your hands dirty. Theory's great, but nothing beats real-world experience.

James Camp 🛠,🛠 @JamesonCamp The best way to learn is by doing I used to be an SVP of digital for a inc 5000 fastest growing Telehealth company, Ive advised on some saas acquisitions, and in investor in some big ones doing over $20M in ARR But I had never fully bought one myself until a couple months ago… https://x.com/i/web/status/1841888891709882556 10:11 AM • Oct 3, 2024 0 Retweets 23 Likes Read 4 replies

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Now, speaking of opportunities to learn by doing, I've got a juicy one for you this week...

Nano Flips Special Offer

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SEO is Magic - The Gift That Keeps on Giving

We like to keep it simple - great content + fantastic strong backlinks = ranking and free traffic from Google.

Here are some results for a couple of our current clients:

We are a small team - and I like to keep it that way.

It allows me to have a personal relationship with every client we have.

If you are an eccomerce or local business doing over $10k a month and want to start cracking into the flow of traffic that is from Google - we have space for a new client next month:

​Book a call here to chat​

This Weeks Opportunities

Deals this week

​All-in-one AI-powered platform for content creation, chatbots, images, codes, voiceovers & more​
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All-in-one AI-powered platform for content creation, chatbots, images, voiceovers & more 🎉

​Here's a site for sale you might be interested in on Acquire

Let's dive deep into a fascinating AI SaaS business that's perfect for someone looking to get into the AI tools space. Here's the breakdown::

The Basics:

• What: An all-in-one AI platform for content creation, chatbots, image generation, and more
• Current Profit: $417/month (based on $5,000 TTM profit)
• Asking Price: $25k, but we'll suggest $20,000 (about 4x annual profit)
• Revenue Model: Tiered subscriptions at $9.99, $19.99, and $59.99 per month

The Platform: AI Tools 101

For those unfamiliar, AI tools are rapidly becoming essential for businesses across various industries. They're used for content creation, customer service automation, image generation, and much more. The market is growing exponentially as businesses seek to leverage AI for efficiency and innovation.

The Opportunity

This business is a classic "nano acquisition" - small enough to be manageable as a side hustle, but with significant growth potential. Here's why it's interesting:

1. Growing Market: The AI tools market is expanding rapidly, with businesses of all sizes looking to integrate AI.
2. Clear Value Prop: All-in-one platform saves time and money for businesses needing multiple AI functionalities.
3. Low Initial Overhead: $7,500 in credits (Azure + OpenAI) cover core costs for 6-12 months.
4. Comprehensive Offering: Includes popular AI models like GPT-4, Claude, and DALL-E, setting it apart from single-function tools.

Current State

• Monthly Revenue: $750 (based on $9,000 TTM revenue)
• Monthly Profit: $417 (based on $5,000 TTM profit)
• Profit Margin: 56%

Growth Strategy

Here's how one could potentially grow this business in 12 months:

• SEO Optimization:
  • Aim for a 10% increase in organic traffic over 12 months
  • Current monthly visitors: 3,000
  • After 12 months: 3,300 monthly visitors
• Content Marketing:
  • Publish 2 high-quality blog posts monthly
  • Share across multiple channels: social media, Reddit, Medium, AI forums
  • Realistic traffic projection: 1,000 additional monthly visitors by year-end

Total monthly visitors by end of year: 4,300 (3,300 from SEO + 1,000 from content marketing)

• Website Conversions & Email List Building:
  • Direct website conversions:
    • 0.2% conversion rate from website visitors to paid users (1 in 500)
    • 4,300 monthly visitors * 0.002 = 8.6 new paid users per month
    • Over 12 months: 8.6 * 12 = 103 new paid users
  • Email list building and conversion:
    • 0.5% conversion rate on website traffic for email sign-ups
    • 4,300 * 0.005 = 21.5 new email subscribers per month
    • Over 12 months: 21.5 * 12 = 258 total new email subscribers
    • 1% conversion rate from email list to paid subscribers: 258 * 0.01 = 3 new paid users
• Partnerships:
  • Collaborate with 2 complementary SaaS tools or AI content creators
  • Aim for 3 new paid users from each partner
  • Total: 6 new paid users

The Numbers

Let's calculate the net new paid users over the year, accounting for a 10% monthly churn:

Month 1: 8.6 new users Month 2: 8.6 new users - (8.6 * 0.1 churn) + 8.6 = 16.3 total users Month 3: 16.3 - (16.3 * 0.1 churn) + 8.6 = 23.3 total users ... Month 12: 59.7 total new users at the end of the year

Total net new paid users over the year: 60

Assuming even distribution across tiers:

• 20 BASIC ($9.99/month): $2,397.60/year
• 20 BRONZE ($19.99/month): $4,797.60/year
• 20 SILVER ($59.99/month): $14,397.60/year

Total New Annual Revenue: $21,592.80

Existing Annual Revenue: $12,000 ($1,000 * 12 months)

Combined Annual Revenue: $33,592.80

Profit Projection With $7,500 in credits covering main operational costs: Estimated profit margin: 80% Year 1 Profit: $26,874.24

Valuation Estimate Using a 3x multiple on Trailing Twelve Months (TTM) profit: End of Year 1 Valuation: $26,874.24 * 3 = $80,622.72

Implementation Plan

1. Acquire the business (negotiate $15,000 cash + $5,000 seller financing)
2. Set up a bi-weekly content creation and distribution routine
3. Implement SEO optimizations and set up tracking
4. Implement website conversion optimization and email marketing funnel
5. Reach out to potential partners for collaborations

Bottom Line

1. Investment: $20,000
2. Year 1 Profit: $26,874.24
3. End of Year 1 Valuation: $80,622.72

Remember, success in SaaS comes from a balanced approach of acquiring new customers, retaining existing ones, and gradually increasing the value derived from each customer. This projection emphasizes the importance of all these aspects.

As always...do your own due diligence, the above is based off of what we see as an opportunity from the info provided in the listing and some light due diligence, not a deep dive. It just one of many scenarios that could play out and its up to you to do your own due diligence and see if this makes sense for you!

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​Thought Leader Theater

A little video I did on how you cant be forced into be an entrepreneur, but you can unlock the entrepreneur inside of you.

Give it a view here​

And give me a follow on IG!

James: https://www.instagram.com/thejamescamp/​

That's all for this week!

And don't forget to hit that reply button and let me know what kind of businesses you'd like to see featured next week.

Thanks yall!

James

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P.S.

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All investment strategies and investments involve the risk of loss. Nothing contained in this newsletter should be construed as investment advice. Any reference to an investment's past or potential performance is not, and should not be construed as, a recommendation or as a guarantee of any specific outcome or profit. Some of the links in this email may or may not be paid placements in which we are paid by advertisers for placing.