Search is Sales

As a person doing a search fund, I rely heavily on cold outreach to business owners. About a month ago, I came to the realization that my internal processes were not generating the volume of leads that I needed to meet my benchmark of five owner conversations per week.

Search is sales

Former searcher and current CEO Lori Harrington has a great way of describing a search fund: “Search is running a marketing campaign where the product is you.” 

Going into search, I realized this would be the case. I knew I’d have to show up on Zoom and in person with businesses owners and display enough credibility and kindness that they would consider selling their business to me. On this front, so far so good - I’ve enjoyed this work and am getting better at it with time. I think of this as the closing work - once a I have a good lead, can I convert to sale?

What I didn’t realized was the effort I’d need to put into building a system that generates high quality leads. At a high level I need to: 1) generate ideas of industries that meet certain criteria (primed for growth, predictable revenue, capital light, etc), 2) generate a list of companies in that industry that meet other criteria (size, org maturity), 3) generate outbound campaigns to owners of those companies. I think of this as pipeline work - generating enough leads to hit my goal of five conversations per week.

Building the machine

For the first few months of the search, I was just surprised and happy when anyone responded to my cold emails and wanted to talk. I was also learning how to do the calls, so I didn’t necessarily want a high volume. But about a month ago I realized that 1) I was ready for a lot more calls and 2) I didn’t have the people and processes in place to generate those calls. I went back to the drawing board with “Building the Machine” in mind. This meant:

1. I hired Oliver Velasco, a Operations Lead based in the Philippines to help me with process work. It has been incredibly helpful to have someone working with me 30 hours a week in a predicable way, and Oliver will also provide leverage with training interns and answering their questions.

2. I developed a plug and play system where interns have a clear idea of workflow and their role in pushing a piece of work to completion. Interns will have end-to-end ownership of the three step process described above as “pipeline work.”

3. I’m hiring more interns. Now that I have a consistent, repeatable process, I feel good about adding more people. I’m looking to hire six people by January. If you or someone you know is interested, you can apply here (must receive credit from a university, as the internship is unpaid).

The value of a healthy pipeline

I’m excited about putting these new processes & team in place, and I see a number of benefits:

1. I’m learning more: business owner conversations are the best ways to learn an industry. More conversations leads to more ideas and more adjacent industry investigations. Owner conversations are also the most fun part of my job.

2. I have a more confident mindset: getting to know a company is an emotional rollercoaster, and it’s a lot easier to fall in love when you feel like you don’t have a Plan B. Unlike the dating world, in search it’s very appropriate to have multiple relationships in various phases, and a backlog of great conversations lined up reduces a feeling that any one opportunity has to be “the one.”

3. The machine runs without me: if I get pulled into diligence, my pipeline won’t dry up because I have other people working to generate new leads.

Future Newsletters

Thanks to those of you who have written with suggestions on future topics. If there’s anything in the ETA world you’d like to see covered in more depth, drop me a line and let me know.