Welcome to the Tech &A Podcast.
presented by the Quorum Group.
Welcome to the Tech &A podcast.
Here we dive into the strategies, challenges and candid stories of tech entrepreneurs who have successfully sold their companies.
Today we speak to Dwayne Miller, the co-founder and CEO of Unifi Labs, a cloud-based platform to create and manage BIM content across the lifecycle of building projects.
Thanks for talking with me today, Duane.
To start off, could you please introduce yourself and the company you sold?
Yeah, my name is Duane Miller.
I was CEO and co-founder of Unifi Labs.
What caused you to decide to sell and what was different about your particular space than other software markets?
Well, we were at a point where we were either going to have to take on outside money.
had bootstrapped and, you know, it's always bootstrap as long as you can, because with outside dollars comes a lot of a lot of complexity that gets introduced to the
organization.
So we were at a point where we really needed to go for outside funds or see if we could get to a liquidity event.
And my co-founder and myself had been the primary investors in the company over the 10 years that we were actually
13 years that we were building the software platform.
So at that point, we really wanted to see if liquidity would be an option as opposed to taking on additional partners and having new people introduced to the board and people who
didn't really understand the domain engaged in our business.
Our space is a construction space, which is a little bit unique.
It's not a consumer app.
It's a B2B application.
and the construction industry is very slow.
It's not that they're tech averse, it's just that they're very busy in the realm of execution.
And so the software that they're going to adopt, there's learning curve that comes with it.
And you wanna make sure that the ease of use and the value, it just takes time to prove that.
So you're not gonna see, I say all of that to say that it's not a hockey stick growth.
type of software platform in terms of SaaS that's sold into the construction space.
There's a slower adoption just because of the velocity that the overall domain moves up.
And I came from the domain and so did my co-founders.
So we really add a lot of understanding of the nuance of how the construction industry works, particularly on the design and engineering side and on the construction side.
So it was, that really helped us that understanding and empathy for the end user.
really helped us with relationships with a lot of the big names.
Most of the bigger engineering firms, architect and engineer and even general contractors were working with our platform.
You and your co-founder had both been through &A before.
Why did you end up choosing Coram and not just trying to go at it alone?
I think it was my co-founder because we had started kind of investigating which
You know, we wanted to look at liquidity event.
And we also know that when you're talking to companies, Brand X who've done hundreds and hundreds of mergers and acquisitions meeting on the buy side, when you're looking at these
companies, they have entire groups that focus on nothing but &A.
So to think that we're going to be able to go into that and broker a really good arrangement for ourselves was made us a little bit nervous.
You you don't know what you don't know.
I formerly owned an engineering company, worked in &A for a while.
And so I kind of got the buy side.
I also knew that we don't know what we don't know, particularly, know, enterprise SaaS is completely different from service business.
So we had started looking at different companies.
I had talked to a few and what we really liked about Corum, my co-founder, Ken Gardner, found them when he was online and I was talking to some other companies.
He said, Hey, we may want to look at these guys.
What really attracted us was their focus.
didn't want as a generalist, you know, somebody who works with service businesses, somebody who's outside of the SAS space.
It's a very unique space.
Really it was their focus in the specific area that we really needed help with.
You know, we understood we'd done &A.
My co-founder was company was acquired, you know, a few years before my engineering company was acquired.
both service businesses though and not really in the SaaS space.
So when we found Corum and saw their Hydro Focus in software space, that intrigued us.
all your experience on the service side, what ended up surprising you now that you were trying to sell a SaaS company?
Well, I think there's just more moving parts.
know, the way it's very different when you're selling time for dollars, which ultimately service businesses is what they're doing.
That's different than enterprise SaaS company with recurring revenue, with looking at retention.
mean, there's a lot of different levers that are different from a service business where you're working with clients for an engineering business.
Or in the case of my co-founder, he was selling product, being a large kit for the big buildings that we were working on.
And that's just...
Again, it still comes down to relationship at the end of the day.
I relationship is what really drives any business, even a SaaS business, particularly a startup, because when you're smaller, you don't have the marketing horse tower of the 800
pound gorillas that you're competing with.
Yeah.
So it really does come down to relationships.
So I think the the all of the different moving parts because the financial.
dynamics are different, valuation is different.
When you look at a service business, a multiple on EBITDA is pretty simple to do back a napkin math on.
When you're looking at a burgeoning startup and where they're at in retention, what their growth rate has been, how they're doing for net revenue retention, gross revenue
retention, and what really is driving the valuation in terms of strategic value that they might have in the marketplace.
There's a lot of different factors that go into it than when you're dealing with just a strictly a service business.
Did you find that Unifi Labs had a strength evaluation that you hadn't considered before?
We thought we would have strategic value.
So there it was interesting because we talked to a lot of different potential partners or acquirers and you could tell the ones that were really about net-net, you know, it's like,
okay, we're to do a multiple.
You know, they basically want to stack EBITDA or stack recurring revenue and see how they're going to build that.
And some of those want to do that in isolation where others were thinking a more integrated approach.
And we knew for a more integrated approach that that would probably drive a higher valuation because it's a bigger technical play than Unified just standing on its own as a
product.
And ultimately that's one of the main drivers of the acquisition that occurred was really about our technology, not so much about the ARR we would manage to build.
The retention piece was important because that meant the tech is good.
Yeah, that's really what you take a look at.
It's great to have new sales, but if you are filling a bucket with a gallon of water and you're losing half a gallon, I think that gets sussed out pretty quickly in the &A due
diligence process.
So you're staying on to help integrate UnifiLabs with the buyer, is that right?
That's right.
How do you navigate that change of mindset?
It's just different, not good or bad.
I've always been part of a fast break offense.
And I think any CEO or founder who's going to be part of a go forward, I think you have to recognize, and I learned this with my first sale of a company, that once the paperwork is
all signed, it's not your company anymore.
And that's okay.
You just have to be, you have to...
lean into different.
I think if you get caught up in wishing things were the way they were, that just leads to a really negative place.
I think you just have to understand that the simple matter is you don't have control of the entity that you founded anymore because someone else owns it.
They paid you for it and they bought it and they want to put it to whatever, toward whatever use within their organization or they want to drive it forward in whatever way
that they want to do that.
And I think you have to be prepared for that because if, know, emotionally 10 years in building or 15, my last company was 20 years.
You have to be willing to, okay, you know, let go, you you de-risk and with that de-risk comes, you know, loss of control.
Can we quickly circle back to the basketball metaphor you used, the term fast break offense.
Can you expand on what you mean by that in this context?
Yeah, it's much easier.
There's just less moving parts when you're a 30 % company and you have, you know, you've got your dev team, your product team, and everybody's kind of under one, you know, one
roof where, you you can get the whole team together and you can make a decision in an afternoon that, you know, takes bigger entities.
And it's not a knock on bigger entities.
It's just the nature of the beast.
You know, they've got so many different
things they have to think about that are gonna be impacted by a decision made by one group, because just the sheer size of the organization and the complexity of it.
So we were able to run a lot of, I call it fast breakoff.
I think sometimes entrepreneurs don't make, they make better employers than they do employees.
Because they can't get comfortable in an environment where things don't move at that pace.
And you just have to understand that it's not, again, it's not,
good or bad, or wrong, it's just different and you've got to lean into different during the integration process if you don't want to drive yourself crazy.
Speaking of not driving yourself crazy, have you gotten to enjoy any of your new liquidity or are you head down focused on the integration process right now?
Well, it's been pretty focused, but it's also, it's kind of odd because when you go from a CEO role to more of, I think my title right now, yeah, I'm an acquired executive.
So I'm really there kind of on the sidelines just in case they need a specialist about how the organization works.
And initially, I was a lot busier in that, but I think over time it takes on a life of its own within the new organization and my input becomes less and less critical, which is a
good thing.
And it depends.
I think in some cases, my last acquisition I did, I ended up staying for two years and I was heavily involved in &A.
there are things that I could do for the organization to provide value.
And it becomes more challenging once you're acquired executive, depending on where you are in your career too.
mean, if you're, whatever that timeline is for you, if you want to lead in and be part of the go-forward enterprise, then there's nothing wrong with that.
Or if you want to just make sure that the investment that they've made in you comes to a good conclusion through integration, I think that's fine too.
So think going into it, I would suggest just be open-minded because sometimes if you're closed-minded, opportunity could present itself and you won't recognize it.
If you're open-minded, if the opportunity is there, then at least you make a choice to, you know, is this something I want to pursue or do I want to go, yeah, set my hair on fire
again and do another startup?
What about you?
Are you setting your hair on fire with another startup or what are your plans for after the integration period ends?
I think for me, I don't have anything that's
in front of me right now.
There's a few things that I'm looking at, but I don't know that I want to be remain in the SaaS space.
I've kind of done that, been there, done that.
So we'll see if there's a next.
I'm trying to just relax for a while and kind of go with the flow, which is hard to do.
But I'll always be busy doing something.
But I don't know that I feel as burgeoning desire to just go do another startup right now.
Well, it sounds like you're also very involved in your community.
So I assume that will keep you busy.
Well, that and fly fishing.
What key lesson do you think you've taken away from this process?
think, you know, in our case, I came in, we for about 10 years, we're 10 years into it.
And we had been trying to use someone other than myself or my co-founder to run the business.
And a lot of the people that were in the position of leadership, the thing that they were kept thinking about was liquidity.
So my suggestion for any CEO of a startup is don't focus on liquidity, focus on running a good business, build a good business, build a valuable product and liquidity will take
care of itself when the time is right.
But I think there's this hyper focus on, know, we're going to build this and we're going to be able to sell, we're going to have this big windfall.
And I think
that you do your business and yourself a disservice when you approach it that way, because really what people want is you create something of value and the opportunity will show up.
So I would say that's what I would, anybody who's running a small startup right now, focus on taking care of your customer, focus on building a really good business fundamentally.
I make sure you've got good retention, that you've got a good customer success journey, that you are
You have good relationships and a good empathy for the domain that you're serving.
And I think all of that will culminate in at some point, someone's gonna come in and see that value.
And then, or if you go out and pursue that value, you have a real story.
Any final thoughts?
I will say, Coram was good to work with.
I enjoyed the working relationship.
was really good to have them and their expertise and their focus and the specific area that we were looking at.
really helped with the investor prep for the investor deck and all the different presentations that we had to do.
So I think I would definitely recommend Coram if you've got this, particularly in the enterprise SaaS space for sure.
Thank you so much, Dwayne.
Thank you.
Good talking to you.
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