Episode Transcript
[00:00:00] Speaker A: Foreign.
I'm a bad podcast host. I should have started recording the second that you got on the call because you said something that was so impactful, which is like, yeah, this is the thing that's keeping us up all at night.
[00:00:18] Speaker B: Right.
[00:00:18] Speaker A: Like, this is the thing that we went from, I think, two years ago, a pretty sure market. Right. Like, everything's going well, like, the world is what it is, but, like, I kind of know what's about to happen in my business, and now I don't think any of us do. Right. I don't think any of us say, oh, two years from now, Castos will be what it is, or SaaS Group will be what it is, but we don't know what that's going to be. Right?
[00:00:43] Speaker B: Yeah, very true. When I started with SaaS, I was like, this is like real estate. You buy a building and you collect rent and not so sure anymore.
[00:00:52] Speaker A: Yeah. I heard Andrew Wilkinson say on my first million podcasts that SaaS, or software in general, I think he might have been saying, is not as good of a business as it used to be because of AI. And I hear all these people on Twitter saying, oh, I'm just going to go build this application in a weekend with replit or cursor, which I don't buy. Right. Running a SaaS business, I know it's way more complicated than that, but do you think SaaS is as good of a business now as it was two years ago?
[00:01:19] Speaker B: Oh, I actually think it is because I think it's the foundation for everything. You still need everything. I mean, SaaS is still a lot about getting certain processes digital, having all the data in one place, having proper processes for things, and those are the things you build AI on top. So, yes, it is a threat, but it's also a huge opportunity.
[00:01:42] Speaker A: In what way do you see it as an opportunity?
[00:01:44] Speaker B: Well, it's an opportunity because you need data first and you need proper systems before you can replace human work with agent work.
And SaaS is the first step. So, I mean, I could name any example of our brands, for example, but I'll take one because among our 25 brands, they're much ahead in, in AI stuff. It's a brand called Zenloop. And Zenloop collects customer feedback from e commerce shops and. And so on and so forth. The first step is collecting feedback, and the second thing is then analyzing it with AI and making sure the right conclusions are taken. If you don't analyze the feedback and putting feedback analysis into your processes, which is a skill in itself. Then you're not going to get to any of the AI part. And I think the same applies for every single business we have.
[00:02:45] Speaker A: Yeah. Is that kind of the path through which you are guiding your kind of portfolio of companies and leadership there to think about AI adoption? Right. It's not just like a ChatGPT box in your application anymore. Like it's a little more natively integrated. Is that kind of the path you're asking folks to take?
[00:03:06] Speaker B: Yeah, yeah, absolutely. So I think there, there are certain, certain levels and it, all those has like the whole thing has, has pretty profound implications to consider in system design and architecture and development processes.
So. So a couple examples. So. So one is, I think SAS will transition from those monolithic feature rich platforms with a lot of UX to nimble, much more API driven data providers. So for example, one of the things is really okay, become API based first and then once you have that, you integrate your APIs also directly with the AI stars, the new kids on the block.
And so that alone is a shift away from being purely human centric on SaaS traditionally being very much okay, UX UI is super important. That's I think going to go down in importance.
To name one example, I'm trying to.
[00:04:08] Speaker A: Kind of real time process what you're saying and apply it to our business. So Kastos, we're a podcast hosting platform.
We think UI is like quite important. We get a lot of folks saying like, gosh, you know, it's such a great application, it's so easy to use, it's so beautiful, it's so intuitive. I think the thing that we ask customers to do is complicated. Right. Doing a podcast is hard. We're recording this, you edit, you publish, you, you know, grow your audience. All this kind of stuff, we're just one small piece in that.
And I think what I'm, what I'm hearing you say is that the way we should think about it is how can we make ourselves and the data of our customer, customers available to more places? Is that kind of what you're saying?
[00:04:49] Speaker B: Yeah, that is, that is one element. Of course it depends a lot on what type of business I would say podcasting. That's also why I'm actually quite bullish on. Podcasting is a, is an inherently human thing. Yes. You know, we can use AI avatars, but I think there's there even in five years, 10 years down the road it's going to be somewhat artificial. So I think there's going to be this human connections of two, two humans talking. Whether it's like what we're doing at the moment virtual or it's in person. I think that that part will remain maybe more important and then UX will be super important, continue to be super important. So I really kind of agree with what you said. I was thinking a lot like when I thought about this, I was thinking our business is like Our scraper, scraper API, SaaS product is a scraping platform or the user feedback thing, which is Zen loop. There it's a lot more about data collection, data analysis.
And there I think the UX will become a lot less important. But it really does depend.
[00:05:53] Speaker A: No, that's healthy. I saw a thing for this new CRM day AI D A Y and it's doing what you're saying. It's taking all of the shit and the million pages that you have in HubSpot and just abstracting the data to say, here's the view of the customer in kind of one place. And I saw that, I was like, oh my gosh, that's. Yeah, that's. The next iteration of a CRM is like using AI to better understand the whole picture of the customer and present it to you in a kind of human way. Not segregated by tiles and screens and fields and stuff like that.
[00:06:27] Speaker B: Absolutely.
[00:06:28] Speaker A: To kind of go one step or maybe a couple of steps up.
I was having a conversation with a friend last week and kind of took what could be the progression of AI to like its end. Right. Of like, we're in this panacea, nobody's really working anymore. We're all just gonna go get farms out in the country and raise chickens. Right. Because what they were saying is like, if all, and I'm air quoting, for those of you just listening, you should be on YouTube because it's better. But if you're not, if all of the knowledge workers are replaced by AI or even, heck, if even 20% of the knowledge working workforce is gone, the world is going to be a really different place. Companies like Google, you know, laying off 20 or 30% of the workforce would have a profound impact on kind of the global economy.
Do you see that happening or will it be, hey, we just have a better shovel now? Everybody elevates their capacity within the company to meaningfully contribute.
[00:07:26] Speaker B: I would say the latter, of course, as every shift, whether it's the invention of the steam machine or the Internet around late 90s, I mean that's at least when it kind of, it hit mainstream all the way going into, into 2000, 2005, when, when a lot of those shifts happened as well. We've not seen mass unemployment. You could say the, say this, say the same thing. I mean when I was a student I went to the, to the university library and I, there was a librarian giving me those books I wanted. And all those people, I mean they're all out of the job and in information knowledge that transformation the last 20 years was profound. And yet like I think we're, we're at record deployment in most countries these days scrambling for qualified workers. And I think AI is going to be no different because also the, the demand will increase. I mean if you think about, also think, think of something like reporting accounting we're all predicting because rebound accounting is very, is very repetitive. That that's one of the jobs, one of the, I think it's you, you have those lists of AI risk to certain job types. And I think accountants are very, very much on top of this list. And that makes sense because analyzing certain receipts and slips and put them into the right buckets is a task AI can already do.
But also the amount of the granularity of accounting work has massively increased in the last 20 years. If I think about how I originated the business compared to reporting needs now and also having virtual credit cards with, with probably 10x the amount of, of individual items compared to 20 years ago when I started my first business. And I think the same is happening with AI. I think it just raises the bar for everyone. Everybody is going to do so, so many more things and at the end of the world, yeah, this, this rebound effect of work will be the same with, with AI.
[00:09:42] Speaker A: It's interesting because I, I find it really intimidating to be honest. You know, I, I, I say like if I, I already think I'm operating at a pretty high level relative, I'm not the smartest guy in the room. But if AI is going to ask me to be 50% better than I am now, that's intimidating to me and I'm going, gosh, what am I going to do? How am I going to do that? Do you think it's going to be obvious and challenging like that or is it going to be a gradual thing where I just stop doing this thing and I pick up this other skill over here and it happens organically over a few years?
[00:10:21] Speaker B: Yeah, I think that's what it is and I think it's already happening. What we always say to our teams as well as kind of Level I, Level 1 of AI is really AI usage. Just become a user yourself because that's the first thing. And then you Experience things. And before you put things into your own product, you become a user. And just like that, I mean, we're all a user of ChatGPT probably, but I'm just like you, probably every day discovering some new AI tool and try them out. And most of them, frankly are bullshit. But then I don't know, once every week or so, I discover something really cool. I was like, okay, it's going to take out this work task. But again, I think that also, it makes me so much better, but it also elevates the work. I'll give you a practical example for this. So I think about a couple, couple of weeks ago, I discovered a note taking tool called Jamie and Jamie. I've tried tons of note taking tools. I think I've tried dozens of note taking tools and that one was like, wow, this actually, it writes really perfect notes. It uses the right acronyms, the right context.
Everything was pretty perfect. It's multilingual because I mix in between German, which is my mother tongue, and English quite a bit. But it worked with all of that. And, and I was actually so happy that I contacted the founder and eventually did an angel investment. So for full disclosure here. And since then, I'm using this meeting tool with every meeting and it runs in the background really nicely.
And it's the first time I write meeting notes. Before that, my meeting notes, I was actually quite bad in meeting notes, maybe just a sentence or two or something. And now I have real meeting notes. I glance over them real quickly.
Do I do less work? Like I do more work, Much more work. But it's not that it saves me real time, it just has elevated what is actually needed. And I think that's what's happening everywhere because everybody now does proper meeting notes where before those tools they just didn't happen. And I'm not saying that that's always better because there's certainly so much more information, but I think that's what we're seeing, we're seeing everywhere.
[00:12:36] Speaker A: Yeah, yeah, you said something I want to drill in on, which is, you know, everyone in the, in your companies is using AI.
Have you had employees who are resistant to adopting technology?
You might, you know, kind of be like too high level to see that.
[00:12:54] Speaker B: But that's a great question. I mean, I don't think, because generally SaaS Group is very technology friendly. It's remote first. It's, we have a very, very positive company culture. But I could see people seeing deep in their heart, well, you know, once I've done this, I'm going to be the first casualty. I think that's going to be a problem in companies, for example, that are stagnant or shrinking. The good thing is in our case also, because we acquire new companies and generally we're growing and whenever the pie is growing, people don't worry about those things that much. But I can very much see that in, in stagnant companies where it's a lot about more like, oh, you know, they're cutting costs and now they're using AI to cut costs. Absolutely. I think that's, that's going to be a problem.
[00:13:47] Speaker A: Yeah. So we've seen, I'll say, hesitation and skepticism on, on several fronts. And I think most of it is, is well, well spirited. It's like, hey, this, you said a lot of these SAS tools are bullshit. I think it's like, hey, cursor makes more mistakes than is good. Right. So I just don't use a native AI development tool or hey, we don't want to replace our support docs with a chatbot because the chatbot, like the AI chatbot, replies wrong a lot of the times. Um, so, yeah, I mean, just transparently and as a founder, like, we've. It's been something to negotiate for me is like, okay, I want. I, I'm leaning very heavily into AI. I know it's not perfect and I kind of take it with a grain of salt a lot of times, but, but kind of asking the team to do the same thing has been, has not been a straight line, I guess.
[00:14:44] Speaker B: And how much do you think of that is resistance versus not being generally as open for new things as entrepreneur, you're also probably above average in openness for new things in general.
It's like, what would you say?
[00:15:03] Speaker A: I think it's, I think it's probably a pretty even mix of both. I think, I think it's, you know, people being concerned for their jobs because I think it's a very, I think it's a very valid concern in some cases, right? Like if, if a $80 a month SAS tool can do the job of a person, like, that's, that's what it is. I think the other one which I mentioned is like, it's just not as good as people. You know, I think the best thing is like, it's a tool, right? It's a tool to make me a better founder. Claude is just a better tool to make me write better or more at least.
And I think that when we, when we position it like that, it's, it's good. You know, it's like, hey, this is going to help you do more and you can go do more meaningful stuff. It's adopted. Well, yeah, yeah, I've heard that. Yes. I guess it's those three things.
[00:15:51] Speaker B: Yeah, I've heard that quote of that. It's not the question whether your job will be disrupted by AI. It's the job. The people who adopt AI will prevail and the other ones will get disrupted because yeah, the benchmark will go up for everyone.
And like with the meeting notes, it's not the question whether you know you'll get disrupted by it, but it will be expected of everyone to have really proper meeting notes which 10 years ago or even two years ago, maybe the CEOs had because they had an assistant sitting next to them, but everybody else just didn't have. Now we're going to expect meeting notes from everyone and for that you need AI, otherwise you're just not going to do it. But I think people will eventually pick up on this notion just like they've picked up on using Google to research or using online tools to get other jobs done. Pre AI.
[00:16:52] Speaker A: I agree. I think like you mentioned, it's bringing out the adaptability in most of us, I think because it is touching a pretty core emotional point.
I want to ask what are you most excited about and what are you most fearful of when it comes to AI, either at work or personally kind of for society?
[00:17:14] Speaker B: I mean in terms of excitement, it's definitely this aha effect of trying things and work that before took hours or days. Even things like writing research papers now with ChatGPT research as an example research when SaaS group, when we look at a new company to acquire, we're basically hey do research on this company. We have a right a good prompt for that to also give some more guidance to the research bot. And it's amazing. The stuff that comes out usually has taken an intern a week. But also again it means that we do a lot more of this research before that we did a lot less. But it's just amazing. Or I have a tool now that pre writes my emails and yes, I need to look over them but I have a probably 70 to 80% time saved in email response.
[00:18:15] Speaker A: Is that. Is it flight?
[00:18:18] Speaker B: I'm using Fixer in this case.
[00:18:20] Speaker A: That's what. Yeah, yeah, yeah. Fyxer, right?
[00:18:23] Speaker B: Yeah, yeah. Pretty, pretty amazing tool.
[00:18:25] Speaker A: Yeah.
[00:18:26] Speaker B: And so it's really this wow effect of massive effectiveness of things.
What makes me afraid. I think it's as long as AI stays the way it is.
I don't think there's that much to be afraid of. It's really that question. But it's something which is hard to me for grasp because I'm not an AI expert. I'm good as a user.
I can judge on where certain developments at the moment and how can I put them into my companies and brands so that they actually provide something meaningful. But I'm not someone who could think, okay, where's AI? It could be 10 years down the road. So what I want to get to is the question of the super intelligence of could there be an AI that really goes rogue? Because the AI does things on its own without any human intervention control, I think that I'm afraid of. Oh, and by the way, also, of course, as every technology, as we've seen with social media as well, AI in the hands of the wrong people. And looking at the world, there are too many people who are bad actors. And of course they all have AI from kind of Russian interference and bot trolls to many, many others who use AI not for the better of the world or just to provide their own services, but for, for negative action and destructive action. And that definitely worries me.
[00:20:05] Speaker A: Yeah, I agree.
I am most hopeful. I think that it levels the playing field. I think the one thing with AI that I don't hear talked about a lot is folks who are not native English speakers or don't have access to technology as much as, you know, those of us in kind of first world countries. For 20 bucks a month, which is a lot in some places. But for 20 bucks a month, you, you know, they're level set with you and me with, you know, a ChatGPT plus account which, which opens a ton of doors and I think that that could be really transformative.
Yeah, I think the thing I'm, I think the thing I'm scared about is kind of the, the unknown unknowns.
[00:20:46] Speaker B: Right.
[00:20:47] Speaker A: Like the things we don't see yet. Like I talked about with like if 20% of the workforce gets laid off, which I think is actually really possible.
Like we're talking about a really fundamental shift in the economy.
I think that's as likely as not right now.
Yeah, I consider myself very lucky with our business, I think being relatively AI resistant. Um, you know, we're not a content marketing agency. We're not, you know, one of these things that are just getting decimated by the next OpenAI release.
And in that respect, I sleep pretty well at night, but I definitely think about this stuff a lot.
Kind of like looking at SAS Group and, and the companies that you that you invest in and acquire, obviously, you know, growth rate and margin and churn and all. All the obvious stuff. Right. In P and L and the balance sheet. What is it about when you say yes to a company, what is it about that company, besides the obvious, that really makes them a winner in your eyes?
[00:21:55] Speaker B: It is almost all the obvious stuff. I mean, there's always of course a component of gut feeling which is hard to put into numbers or something, but the feeling is that a market, which is a winning market and AI plays a big role there.
Is AI potentially harmful to a business or can AI actually be turbocharging a business? Absolutely, that is a factor.
It's never this one thing. It's always a whole set of things from the team to the product to customer views, reviews, of course, all the revenue metrics, the ones you all named, all of those. But then also of course that is all linked to the price because sometimes we have businesses that are flat, profitable, but flat.
Not a lot of dynamic growth or anything, but they could still be good purchases because that's reflected in the price. And we have other hypergrowth businesses where we pay more for. So it's all. At the end of the day, it's always a. Yeah, those things are, It's a trade off. Right off. Yeah.
[00:23:10] Speaker A: Just from a personal perspective, it is, I think, you know, we're eight years into Castos and, and this is like that time, right. Like they talk about the seven year itch with marriage.
[00:23:20] Speaker B: Right.
[00:23:20] Speaker A: At seven years you're like, nah, I kind of have gone through that and I'm, I'm on the other side now.
But one thing I really worry about is like, this is a pretty successful business. You know, like, we're doing good, we're fine. We have know positive cash flow, we're growing. I don't know if I could do this again. I heard you on John Warlow's show saying like, you don't, you don't know that you would go from 0 to 1. Again, how, how risky do you really think that is? And, and how much is it that you've just kind of found a better way? Like how much is it like you don't know if you could actually do it or you just don't want to because buying and growing is easier.
[00:23:58] Speaker B: I don't know if it's easier. It. I think there's, there's this term, I mean we all know the term of the product market fit, but there's also the term of a founder market fit or founder product fit. And I think I for myself have found this founder market fit. I like buying companies, I like scaling them, but there are other people whom I have deep respect for who can do get something done out of nothing in this early phase. And I think one isn't better than the other one. I think it's just important that you find your own founder found a product fit. And so yeah, I think a lot of founders we talk to who ultimately also end up selling to SaaS Group, they're after the seven year mark and they're like, okay, you know, maybe I'm tired of doing always the same thing and I want to get to something new and that might be a new business, but it also might not be another business because most exits of bootstrap companies they give people enough financial freedom to also pursue a completely different career, which sometimes is more fun because it's new and you don't have to repeat the same. But also we see other founders who are repeat zero to one entrepreneurs and they saw. So for example, the founders of usersnap.com is one of our brands. It's a product in UX research SAS and they, they user snap was the third company they built and sold and now they're building the fourth. So they went right into the next thing and that's just their, their mode of operating and that's kind of cool too. But it doesn't have to be that way. We've seen great people doing something completely different and being, being successful in what they do, which is something completely different.
[00:25:54] Speaker A: Yeah, yeah, if you.
And I'll answer too I guess. But if I said okay Tim, SAS Group doesn't exist anymore, you have to go kind of do something else, what would you do?
And I guess particularly in the kind of AI lens like with AI on the landscape, what would you do?
[00:26:15] Speaker B: Okay, I thought you would say software doesn't exist anymore because that makes it harder.
So I would do if Sasko wouldn't exist and I would have to start something kind of from scratch, but it can be still in software. I would probably, because that's my other passion, I would do something at the intersection of AI and climate tech. I still, I run a climate tech fund on the side, mainly my colleagues because climate tech is an inherently physical thing, not software. So we do a lot in food, agriculture, land use and energy transformation, manufacturing, all topics I know quite little about. But there is a, there is a software component also in climate tech with very interesting applications on, on efficient use of energy, efficient use of food, intelligent ways of circular Economy and AI is needed for a lot of those things. And, and those things I find, I find very fascinating because it kind of is the intersection of, of one thing I know fairly well, which is software, and the other thing which is I, I think is the biggest challenge of humanity in the long run.
[00:27:27] Speaker A: Yeah.
[00:27:27] Speaker B: And I would probably do something in that segment.
[00:27:30] Speaker A: How. Okay, so I'll, I'll answer because I said it would, but then I want to get into the kind of green, green energy.
I think if I'm really honest, one, one thing because I'm not a, I'm not a developer, I'm not a software guy. So I think that anyone who's listening, which there's probably two or three listening who are single non technical founders, find SaaS challenging because the built in costs are actually quite high. Like if I'm not a developer, my first and second hires are developers and they're expensive and so you're not really making good money till you get to 50k a month or something.
And so I think SaaS is less good of a business than some people because, because I'm not a developer, I probably wouldn't do SaaS again. I would probably even, and maybe especially in AI, I would probably run some sort of kind of high end information business probably around investing. I think there's a lot you could do with investing and like market analysis and sentiment and modeling to build a quite solid business. You're building products which is just like software but similar to you. I think that the few things that we will always need is, you know, a nice place to live and climate. Right. That makes it hospitable to go outside and we all need money of some sort. I think the other one would be healthcare and kind of wellness and longevity.
But that probably has too many capital hurdles to get through for a kind of mostly bootstrap company. So I wouldn't choose that.
[00:29:09] Speaker B: And you would bootstrap.
[00:29:10] Speaker A: I want to ask a. Oh, good question. Yeah, so we're kind of mostly bootstrapped. So we joined tiny seat like start accelerator program. So we gave up some equity for some cash there and we raised about 750,000 as like a safe note after that.
And so yeah, I still have kind of 100% board control and the vast majority of ownership, but it is this kind of like half pregnant state that we're in. I would either go 100% bootstrapped cash flow, slow and steady lifestyle business or I would go super hard, raise a bunch of money and not be remote.
[00:29:50] Speaker B: Okay.
[00:29:50] Speaker A: I think if Anyone raising a bunch of money in a remote team is missing the boat. I just think that a bunch of smart people in the same room are more effective than them being at home. When you got the dog barking and the, you know, plumber coming over and the kids getting out early at 3:00 from school. I just don't think largely people in a remote environment work as hard.
And we're a remote team and I'm fine with that. But if I was like, hey, I have the next billion dollar company, we'd all be in the same room.
[00:30:21] Speaker B: Yeah, good point. There is a point to it on the other side.
That's for example, what I'm seeing with SaaS group is the. You get less interactions, but you get a much more diverse set of people in different countries, different views, different everything.
Even if they interact less, at least on a personal level, it adds a new level of openness for the world that non remote teams, so physical teams don't get. And when we look at a lot of companies, we've also bought some companies, the companies who have remote, who have physical offices, at least that's what we're here seeing in most of the European countries is they are much more focused on their own markets. So there's like a German team and we look at their business and it's like 95% of their revenues are from Germany. While the remote teams, because they hire remotely, they're all over the place for them. Also, already the world is the market. And so far we've had great success with that mindset because then, you know, you're basically, you are international from day one.
And it has a lot to do with the mindset. Sure. If you probably get the smartest people in the room who have that mindset from day one, you got the best of two worlds. But reality is that that's less the case.
[00:31:46] Speaker A: Yeah, no, that's, that's a really good point. So we're, we're a team of nine people.
Seven of us speak another language and most of those fluently.
[00:31:56] Speaker B: So you had that from the beginning, but also as a remote setup. And your customers are also from all over the world, I guess.
[00:32:03] Speaker A: All over, Yeah. I mean, we follow the typical kind of distribution of podcasting, so call it 70% in North America, continental Europe, Australia, New Zealand, and then it falls off pretty heavy from there. I want to maybe wrap up with kind of hearing the story of Cedo. So you're a founder of cdo, kind of built it and sold it. So folks who I've Been living under Roxedo as the place to go buy kind of premium domains, right. So if you want, you know, whatever amazing domain, it's already taken, it's probably on Sito, like kind of parked or for sale.
And I want to ask because you know, one of my mentors, Rob Walling always says like hey, don't build a two sided marketplace, right? Especially don't bootstrap a two sided marketplace. And you did tell me about that. I know it's been a few years, right. But like tell me about that journey and then, and then I have a few questions.
[00:32:59] Speaker B: Yeah, sure. That that was my first real business. I mean we had some predecessors, small predecessor businesses as students, which were sizable for us back then, but not after. So it was my real first business. Started that right out of university together with three friends and we kind of bootstrapped. We took a little bit of money from a strategic investor, but it was just a couple hundred grand.
Starting point was 2001, so right after the dot com bubble burst. So not a good climate to raise money.
And we were, yeah we were as you said, we were and still are one of the world's largest marketplaces for domains. Started with a simple idea is to make buying a domain as easy as registering a new name.
Knowing that a lot of like pretty much all good domains are taken.
And that company, I grew that for, for about 10 years as the CEO from yeah as four friends to all the way up to about 300 people.
And I think in our case what really helped and was also the probably in a positive way the turning point is actually that we turn from being only a two sided marketplace, which is what we're still mostly known, to being a subscription based business with our domain. You mentioned the domain parking, which essentially means that while you sell a domain you put some ads on that and we have an automated system for that essentially those some variety of Google Ads and then you collect money for it and also get some traffic stats and everything. And that was kind of the innovation. And today it sounds of course trivial, but about 20 years ago that was actually pre Google AdWords, I have to say. So the first was actually with another provider that was a real, real rocket science innovation as much as Google AdWords itself.
And that was probably the biggest single change to our trajectory because we decoupled ourselves from being purely a two sided marketplace.
That business just provided a super steady, super high profitable revenue stream.
And of course also the two things helped each other because every park name had a much high kill of being sold through us and, but, but also two sided marketplaces. I think your friend is right. There is, is, is hard because you know, you, it's a real winner takes all market and we've acquired also quite a few other marketplaces that struggled over time in, in our effort to constantly build momentum.
Because yeah, as a two sided marketplace, it's not, not like SaaS, a market where you can have 20, 30, 40, 50 profitable players, but you really, you only have a handful.
[00:36:05] Speaker A: I never really thought of that, that the, the challenge of a marketplace is that it's a winner take most game. I, I thought it was more. You have to have both sides. You have to have supply and demand. If you don't have both. Yeah, but, but that's interesting. Yeah, yeah, that's definitely not on my list of like if Castos goes away tomorrow, I'm not going to start.
[00:36:28] Speaker B: You have that supply and demand, that one actually hack at the beginning. So it was one of those interesting founding stories we set together. We were super young, we were like 22 or something when we had the idea. And we were always doing those web projects for others as a mini agency or student job essentially coding websites. And so we always ran into this problem with the domain names and at some point we're like, oh, we need to do this marketplace because all the good names are taken and let's build a marketplace. What a great idea. And then once we kind of got to research it, it was like, oh, you know, there are actually 20 marketplaces out there already like great domains.com and others.
And then after we discovered that, and that was one of our hacks for your question of the two sided marketplace was we started by crawling all the marketplaces, scraping them essentially and becoming a search engine for domains. That's actually also what CDO stands for. Most people think it stands for cell domain, but it stands for search engine for domain offers. So we said, okay, we're gonna cover the supply side by searching. We're gonna send over every link, every, every visitor to those marketplaces while we build our own supply essentially. And of course we didn't back then, we didn't know that. But it's essentially the Playbook how Google kills all their competitors. They, they scrape everyone for, let's say e commerce stores and then they build their own supply by internalizing that which is part of the DOJ and other antitrust things at the moment. But it's now a common strategy, or it has been a common strategy among search engines is scrape first, build supply later to exactly avoid what you've been saying, the two sided marketplace problem.
[00:38:16] Speaker A: I had a few follow up questions, but I'm going to deviate because you said something that piqued my curiosity, which is obviously a lot of companies sell to you. Founders come and they're like, hey, I'm seven years in, I want to go do something else. AI, you know, I have this great idea over here. But, but for me, another, another option would be I don't want to sell my business, I just want to hire a CEO and have them run it and me be chairman of the board kind of, you know, thing.
When does that make sense?
[00:38:47] Speaker B: Do you think that actually can make sense also to get ready for a sale? Because for us, of course, if the founder is still, ideally still on board in some capacity and says, oh, I kind of have this person here and he or she is ready to take on, is already doing most of the work, but I'm still kind of guiding, that's a compelling thing for a sale because it ensures that there's someone who is, who is interested in the business and offers continuity. It's better than a founder says I'm burned out and I have this new idea and I can't wait to drop everything and leave things with you.
[00:39:26] Speaker A: I'm critical to the business, but I'm.
[00:39:28] Speaker B: Critical to the business.
That's definitely tougher. So it can be a thing on the other side. It's hard. I mean I've hired replacements for myself, I've replied replacements in other companies really hard. And even with a lot of experience I have, my failure quote is still somewhat high and it's a hard thing to do. So also the founders can waste 1, 2, 3 years in finding that right person.
Generally fan in this case is to hiring from within. Seeing you know, do you have that one person who is an outstanding individual in your company already, but where you as the founder, you're kind of an invisible glass ceiling to their career because they're always going to know is like, oh, you know, founder is going to be CEO, what career path is there? But the second you go, you remove that glass ceiling. And we've seen people who were like the number two or number three in a company suddenly blossom and often being better than the original founders because they're better as managers, they're better team players and they are the right person to then take the company from 1 to 10 while the founder was the right person to take the company from zero to one. Not everywhere. We've also seen failures there. But, but sometimes we've seen very surprising results.
[00:40:50] Speaker A: Yeah, it's interesting. I think this like 0 to 1 versus 1 to 10 is something I think about a lot. I, I think I consider myself a zero to one person.
I still think we're in the zero to one or maybe we're in the one to five literally kind of phase. I, I don't consider the work that needs to be done at Castos to be a scaling thing. Like we, we still are just in kind of like baseline growth mode and to me those are just a little different. Like we're not, we're not going to grow to a team of 50 people.
Like, we, we just need whatever the step is before that, so. Interesting. Yeah. I mean, you know, transparently, I think that's probably the most likely thing that happens with my business is like, you know, do we sell it to someone like SAS Group? I, that, that's not what I would most like. You know, nothing against you. Right. I would just. I like, I like my business and I want to keep it. I probably just don' the person running it forever. And so to me it seems like a viable option.
[00:41:46] Speaker B: It absolutely is. And sometimes it's also a step process. I've seen that myself is like when you hire a CEO, you already remove yourself from the day to day operations and you're less emotional than if you're a CEO. You hire people yourself. And then sometimes two years later I'm like, okay, you know, this is, everything is running. I have this new shiny object now. And like you've emotionally distanced yourself from a business which two years ago you, you could have not imagined selling. Yeah, though. Or you keep it forever as a dividend. That's, that's fine too. It's. I think there's no right or wrong. Everybody has to do what, what's right for him or her.
[00:42:25] Speaker A: Yeah, for sure. For sure. Tim, this is a really great chat. Thank you so much for your time. Really great insights and, and I think everybody will have gotten a lot out of this. For folks who want to connect, SAS Group is kind of where y'all are at on kind of social or what's the best place for folks to connect.
[00:42:41] Speaker B: Yeah, Timas Group or LinkedIn also with that email.
[00:42:47] Speaker A: Okay, awesome. Tim, thanks so much.
[00:42:49] Speaker B: Thank you.
