Beyond the deal: finding hidden growth potential in SaaS acquisitions with Colin Keeley @Verne

saas.unbound is a podcast for and about founders who are working on scaling inspiring products that people love, brought to you by https://saas.group/, a serial acquirer of B2B SaaS companies.

Episode #27 is the special episode where Tim Schumacher takes over the hosting of the podcast to welcome Colin Keeley, Co-Founder of Verne, buying SaaS companies.

Colin Keeley is an operator turned acquirer, leading Verne, a software holding company based in Austin, Texas. Verne focuses on acquiring various software companies, ranging from database backups to business management tools for pet care businesses. Colin is also known for his detailed operating manuals, which provide valuable insights into managing and improving acquired businesses.

Verne’s acquisition strategy has evolved, shifting from targeting smaller companies to focusing on those with a minimum of $1 million in Annual Recurring Revenue (ARR). This shift allows them to engage with more established companies that have proven product-market fit, which is crucial for sustainable growth.

Improving acquired companies

Colin emphasizes the importance of not just acquiring companies but actively improving them post-acquisition. The first step in this process is understanding the existing customer base. By pulling feedback from current users, Verne can identify pain points, desired features, and overall satisfaction levels. This feedback drives product improvements and helps prioritize which features to add or enhance.

One of the tactics Colin employs is running targeted Google ad campaigns to assess where the sales funnel may be breaking down. This data-driven approach allows for informed decisions on where to direct resources for product improvements.

Another key strategy involves optimizing marketing materials and pricing structures. For example, Colin often revamps marketing sites using Webflow, focusing on effective copywriting and positioning. Pricing optimization is also crucial; adding premium tiers and adjusting prices can significantly impact growth and revenue.

Colin’s approach to acquisitions also includes a long-term vision. While he aims to hold the best companies, he’s not opposed to selling smaller, less strategic acquisitions that don’t align with Verne’s core focus. This flexibility allows Verne to concentrate on its most promising assets.

Labor costs and global talent acquisition

In today’s global economy, sourcing talent from various regions can significantly impact operational efficiency and cost management. Colin has tapped into the Latin American market through his staffing agency, Jules, which focuses on recruiting skilled professionals across the continent. This approach addresses the challenges of hiring talent in regions like the Philippines, where time zone differences and cultural barriers can hinder productivity.

By hiring in Latin America, Colin has found a pool of talent that is not only cost-effective but also culturally aligned with North American businesses. Countries like Argentina have become primary recruitment hubs, offering professionals across various fields, including finance, tech, and marketing. This strategy not only reduces labor costs but also enhances the quality of work due to better alignment in work hours and cultural understanding.

Balancing multiple ventures and focus areas

Colin’s journey in the SaaS space has led him to juggle multiple ventures, including Verne and Jules. He likens managing these companies to navigating different seasons; when a new acquisition occurs, the focus shifts entirely to that venture until it is stabilized and an operator is in place. This method ensures that each business receives the attention it requires to thrive.

Colin’s partner, who serves as the CTO, plays a crucial role in the technical side of acquisitions. Together, they work to integrate new companies into Verne’s portfolio while ensuring that existing operations run smoothly.

As Colin continues to expand his reach in the SaaS market, he emphasizes the importance of content creation. After taking a break from writing, he is now focused on sharing insights and experiences that can help others in the industry navigate similar challenges.

Lessons from successful operators

Throughout his career, Colin has drawn inspiration from successful operators in the SaaS space. He references figures like Mark Leonard, known for acquiring over 600 vertical market software companies. The key takeaway from Leonard’s success is the importance of maintaining a robust outbound communication strategy. By keeping in touch with potential sellers and building a comprehensive database, operators can stay ahead of acquisition opportunities.

Colin also admires Robert F. Smith’s detailed playbooks, which outline best practices for incentivizing sales teams and optimizing operations. These resources serve as valuable guides for new operators looking to establish effective processes within their own companies.