Dom Wells thank you for joining me again on acquiring minds yeah thank you for having me it's great to be back Dom you're the CEO of onfolio which acquires and operates internet businesses this is your second time on the Pod you were a guest back in May and we talked about the different types of digital businesses that a acquisition entrepreneur a Searcher might buy so e-commerce SAS lead gen online courses and in fact since then onfolio has acquired an online course and in fact it was one that you and I didn't spoke about it's called proofread anywhere and it is a course that teaches people how to earn money as proofreaders so I wanted to learn uh more about this acquisition do a deep dive into it um because as we talked about in that conversation back in May successful online courses can be great businesses very high margins but they do suffer many of them from a particular weakness which is that they can be really tied up with in the brand of the founder who who is often you know the face of the course the promoter of the course often the person who might even teach the course and proofread anywhere is a perfect example the woman who founded it is is was really kind of the face of the course as I as I understood so I want to understand how you are going to take this business forward with that um key woman risk uh taking into account that keep women risk but start us off Dom with just telling us kind of the high highlights the bullet points about proofread anywhere please yeah sure yeah so as you mentioned it's a course teaching people to um build a career as a as a proofreader um it's uh you know it's just a one-time fee people come in they they buy the course and there's various tiers so they can buy you know like with every course there's like the basic course and then there's the pro version which comes with more teaching um you get access to a community and there's a few other um kind of side offers like smaller courses as well um so yeah the main thing for us is we don't really think of it as a kind of how to be a proofreader course even though that's what it is we think of it more as uh it's like uh a career opportunity course or a something that can teach people one of them anyways to to build an income online uh which is part of the reason it appealed to us so how much does you said there was tears but give us a sense of of the pricing um so the main one is 500.497. and then there's a few other smaller ones um you know so the main the main thing is there's no like kind of 50 dollar um starter course that you might see elsewhere it's it's really um yeah there's like a smaller one which is still several hundred dollars and then there's the 500 one is that is the main driver uh what most people go for yeah and let's just um explain to you I I have purchased multi-hundred dollar courses and I suspect many people listening have but I also imagine that a lot of people haven't and can't imagine spending 500 or 900 sorry 909 997 because they always yeah and it's seven that's a pricing strategy of course um they can't imagine spending that when they you know you might go to um and one of the the big online course platforms and they're selling them like you said there's probably a 50 option sometimes you'll see sales for 10 and 20 options so just explain how courses position can't a course can position itself to to be so premium to charge such such a premium when there is a lot of competition it's a lot lot more expensive it's uh it's a few things um but first of all yeah they position themselves as being premium they often come with a community and the people who are typically promoting the more expensive courses they have a large audience they have a lot of like brand Affinity already um and just the depth of the course is usually better but it's perceived as being better as well like at the end of the day you can go to udemy and buy a course for 47 exactly I guess the short answer is you know you kind of get what you pay for and a lot of people are aware of that and it's not saying that people who pay a 47 course are cheap or anything it's just people who buy more expensive course are probably looking for a more premium experience yeah yeah for sure you know it's just the the old you know price communicates value um psychology but you know what's it's just so it it's just such a start you know 10 times more extensive um but you know I paid 500 for an SEO course and I and I have I've never bought a 25 SEO course so it shouldn't be that mysterious to me um okay and just again a little bit more about the business so how old is this how when was it founded and you know kind of give us a sense of like did it grow kind of its growth trajectory and then what you can share what you recall about the founder of the business and you know and which is really going to be the Crux of this conversation and like I know I happen to know a little bit about her Caitlin Pyle I think is her name and and um and like what what her story is and how she ended up doing a course in Upper reading yeah um so she launched it in 2014. um and the course has been I mean I would say it's the market leader there's there's probably more copycats around these days but proofread anyway still considered generally the best um something like 15 000 people have gone through the through the course over those um seven or eight years um and we actually so um perfect anyway uses click funnels as it's like back back end for um facilitating sales and giving people the access that they need and so on and Caitlyn's actually been um like she spoken at events in the clickfunnels community she's well known in the community as a someone who's built a good course so when we saw proofread anywhere was for sale we actually were already familiar with the brand and I think that's part of the reason why Caitlyn sold to us rather than some of the other bidders because she she knew we were she was like oh you guys are in the click funnels Community like you're my people or you know I understand you so she knew we were just like some private Equity Firm that we're gonna uh destroy her Legacy um you know so um yeah off the top of my head I can't remember exactly why she chose proofreading rather than a different course but from what I can remember um she built her own career as a proofreader first yeah and then just was like okay I can teach others to do the same rather than she was like you know like an SEO who saw that there was a keyword opportunity and built a course around that it was more like I learned how to do this and now I'm going to teach others how to do it which is part of the reason why the course is so successful because she has you know that knowledge and the credentials to back up to back it up well it and the perfect story uh so that this is a perfect segue so yes she um got into proofreading herself was making 50 Grand a year or something um and it blew her mind and and that she could do this and then so she wanted to teach other people how to do it and so she just uh yeah I mean she just kind of personally invested in this Mission so how is it that how are you guys going to um you know take the take the uh the Baton and when you know her personal story is so wrapped up in this in this course yeah and it's a it's a good question and um I kind of want to break down the reasons why often courses are hard to buy when they're so wrapped up in the owner because there's a lot of reasons that we pass on courses you on like other courses and it being too wrapped up in the owner is a big part of it but it's not it's not necessarily the owner's face or the owner's story it's often the owner is the one going out and generating business for the course like they're promoting the course they're selling the course maybe they're speaking at events like how to be a proofreader um maybe they're doing the back end like they're actually teaching the course themselves they are um doing webinars with students they're fulfilling everything um maybe uh what else so there's those two there is the fact that they're the face of the brand so that's the third one um and they're also usually doing a lot of back-end operations so there's this kind of danger where um you take over the brand and it just kind of dies because everyone's like oh you're not teaching the course anymore or like oh you're not out there in Facebook groups or at conferences like evangelizing the brand um or you know just all of these things but with proofread anywhere Caitlyn was the face and she recorded all the the videos but she's not really doing anything else she wasn't running the business there's a guy called Cody on the back end who was the CEO and actually the cost of replacing him a CEO were built into the uh the p l uh which is very rare in an online business um so we didn't have to increase our expenses to hire someone to run the brand um she's not really and then back to Caitlyn Caitlyn's not going out and actively marketing the course a large part of the course comes from Facebook ads and um those can all con you know those can all continue um and she's recorded something like six to 12 months worth of like ad creatives and videos for us to use already and that was part of the part of the arrangement we also have the rights to use her image for um I think two years after the after the acquisition so we've got plenty of time to transition away from her and into somebody else um and you know there were some other things in our evaluation where while Caitlyn is the face there was also some and I don't want to go too much into this point because uh I think Caitlyn's great but there was some language on some of the sales Pages which was we thought actually was a little bit antagonistic where where you know it was like why is my course why do I need to pay for your course and the reply was kind of like why should I give it to you for free you know that kind of FAQ and so we thought there's actually some things we can improve about the brand and the way it interacts with its audience and so um it wouldn't be the end of the world if like you know two years from now Caitlyn's not the face of the brand like it's not gonna affect our ability to generate sales it's not going to affect people's experience of the course and it's not going to affect our ability to run the business um but if she was just gonna bounce on day one not let us use her image anymore then you know that that would that would be an issue and we probably wouldn't afford it and she understood that like there was no negotiation needed she was like yeah of course you know so um that's kind of how we approached that particular risk and it is unique because most businesses yeah like um the reason I knew it could work was because that was actually how we did it when I sold my previous company and and I was the face of the brand but I wasn't involved in the Fulfillment of anything I wasn't really involved in any of the biz Dev it was just my face so we just said to the owner yeah like you can keep my face and just transition me out over time and I think if you go to that old brand now I'm not there at all uh and from what I can tell he's growing the business so seeing that play out gave us a bit of confidence that we could we could do the same thing Okay so the core of this is that basically she was while she was the face of the business all of kind of the back office and and running the business she had done a great job of hiring people to do to delegate so none of that is wrapped up in her uh and that she that you have this plan to use her likeness her image for some transition period uh and she's on board with that she gets that to eventually kind of ease her brand her face out of the brand what what does that look like what does it look like in month 12 18 yeah and who knows how exactly how it's going to go because online businesses are so dynamic it it may it may end up changing but the general idea is you the way I've seen it work well before and how we're planning to do it is you basically just slowly introduce other people over time um so there's like an overlap period where so let's say for example in the Facebook ads sometimes it will be Caitlyn sometimes it will be whoever the new face is going to be and then sometimes obviously in an Ideal World you do them together but uh we probably won't have that ability and so people get used to seeing the new face and then the old face kind of appears less and then um one day it's like just the new face so it's a classic thing like if you wanted to get rid of if you if you no longer wanted to host this podcast and people and you were worried that people were gonna be yeah they're attached to you they'll they've got used to your voice and they're kind of like who's this new guy like there probably would be a little bit of a a drop-off so what you would do is you would bring your new host on to co-host with you for whatever however many episodes and then every now and then they do an episode by themselves you know they're like oh Will's busy right now and then eventually it's just them and and again I've done that before with a podcast uh pretty successfully it helped that the person that replaced me was actually better at podcasting than I was so uh that that's always a bonus um and we took over a brand about a year ago where the founder was doing all the Facebook ads um and training videos and stuff and we yeah we introduced a new person who was gonna come on and like run the business and then now that person's just in all the videos and and everything and it's almost as if the original founder never existed so I think the fear of what happens is actually often greater than like most people don't care you know and of course people who bought the course because of Caitlyn if she left they might be like oh okay Lynn's left that sucks but new people like a year from now a lot of people won't necessarily know that Caitlyn ever existed I mean you know not in a I'm trying to say that in as positive way as possible but if it's like hey I'm Sally uh his proofread anywhere and the main thing is what what worked about proofread anywhere with Caitlyn is first of all Caitlin's personality you know she's great but also like you said her story it's authentic and we've got 15 000 students who not all of them have the same success that Kailyn had but some of them many of them have done just as well as Caitlyn because of her course so that's actually an even more powerful story so if we have the ability you know and so what we're I don't know how far along we are on this because a we've only been running the business since October and B I'm I'm not the general manager of proofread anywhere but the idea is we're going to find one or even two or three of her students and you know ones who are charismatic and um good on camera but crucially ones who actually had a very good success yeah through the course and then they'll be the new brand evangelists and I I actually think that's even more powerful because they can even say like hey I I I've been through this course I learned I built my business because of this course um because again I don't know people who take a lot of online courses will know this some people don't but a lot of online courses are built by a Founder who had success once and then taught what what worked for them and a lot of time there's a bit of luck involved and you can't you can't teach that in a course so there's a lot of times you you buy a course and the founder of the course is genuine they've told you everything that they did and it worked for them you know 100 authentic but it still might not work for you and so if I was considering taking a course and the course was now being taught by three or four people who had gone through the course and had success with it I'd actually um I'd be more encouraged by that so completely that's such a that's such a great Point yeah so I think long term you know the future's more than bright for the brand uh and actually as you talked about you know 500 is quite a jump we actually would quite like to implement you know like a 90 dollar um offering or you know just the ability for people to get their feet wet and know that we're legit and then all the you know they wanna that this is a career for them and then have the ability to go to a more expensive course later um so really the only part to manage is how do you make it so that when you buy the business it doesn't die immediately like wow you're you're transitioning and yeah I think I've spoken to that already yeah yeah and then just the other thing that a Founder can a course founder really brings is like the vision for the product they're also basically the product Visionary um you know all of the content the syllabus all of that comes from their mind and they you know they really bleed into that um now I recognize that a lot of people can do courses and so maybe I'm answering my own question but is is it as simple as finding other people who just basically know how to develop proofreading skills and then go out to Market and get jobs as proofreaders and it's really um while she might have poured her Blood Sweat and Tears into this product you can it's not hard to find other people who can who can develop new content for the course on an ongoing basis yeah I think there's a mixture of both like you need people you need people who have the subject matter expertise who can teach the course and represent the brand and be like yes here's how you become a professional proofreader but you also need people who know a kind of online business or or online course businesses and people who can think of how to improve funnels like sales funnels how to do product development and that's what proof of anywhere did really well before because you had Caitlyn who was the teacher uh she does product development she still helped with marketing but Cody was the guy that did all the real sales and and everything um at least for the last couple of years I don't know if Caitlyn started out on on her own um and so what we did was when we were considering hiring somebody to be the new CEO of proofread anywhere we said here's the business you know sign an NDA we're thinking to buy this one what do you think about it what would you do to improve it and so on and they recorded like a 25 minute Loom video um of just awesomeness you know they're like oh yeah this is a great business here's what's great about it here's what I think I could improve this is confusing you know he found some things where for example I know people like to hear tactics so um a lot of the introductions to the brand that uh like the customer journey is a free webinar a free like one hour Workshop a free ebook and then pay 500 and so a lot of the feedback from students is just a little bit like well like I wasn't expecting to have to suddenly pay for something um and so there's a little bit of dissonance there where we can either kind of be more upfront like look we have a paid course this is what we do but you can get a free taster of it here um or here's like a 50 course to get involved first and then you can stair step to the the 500 one um so just things like that that he identified and we don't know that these are going to work because you never know until you try them um but you know it gave us the confidence that from a product development side and a operations and like a Biz Dev side like okay yeah we've got someone who knows what they're doing and and then we've got a lot of student feedback and a lot of like successful students who can make sure to help us with the um uh the other stuff we talked about like you know the kind of subject matter expertise I I wanna um well one thing that you just said there um reminds me of something you said to me in May which is like a big part of this success of course is where the operational uh intelligence that you need to do of course well is that funnel funnel Mastery I mean a lot of a lot of the online online course game is about is about funnels uh hence why hence why Caitlyn was a a regular face at click funnels uh events and so on click funnels being a big SAS tool for people doing funnels for those who don't know um yeah I mean that's actually the different side of you to me for a lot so a lot of people launch a course they stick it on udemy job done but you go to udemy and you can see how many students of course has there's there's a lot of very good courses or new to me with like a thousand students no let's say even worse like 100 students and the course has been around for four years so they've made lifetime they've made like four grand in four years from creating a very good course yeah so um if if creating a good course was the the thing that's going to move the lever you know they'd have a lot more students so it yeah like you say it's about the the ability to build the sales funnels I want to compare this to SAS so margins are very similar in SAS and courses I mean uh the the marginal margin you're you know for selling a new unit costs you nothing essentially in both um it's just bits that you're selling um but one of the thing and so what's one of the reasons people really like software the margins are so good but of course if you buy a SAS business you do need to price in the fact that there will be ongoing product and you know feature development you're going to have to you know the product never is never static it's never finished um so you so you need to basically allocate resources every year to continue to build out your product your SAS product and of course is it the same thing or is this course done like what Caitlyn has you know the content is basically done maybe around the edges you need to you know you need need to keep things current you know the job market for proofreaders probably evolves a little bit year over year um but you don't basically how much are you allocating to ongoing development of the course yeah good question um I think with most courses there's always going to be a a few things here and there that update like for example let's say you're teaching a course about Facebook ads that video is going to be fundamentally the the courses are going to be the course is going to be fundamentally sound up until like say a big thing like iOS 14 which changed the game for Facebook ads but even outside of a big thing like that which changes the game it's more or less going to be sound for years but Facebook changes their back end like every I don't know three months because somebody gets paid 400k a year they need to do something um you know it's like you log in and you're like why is this moved again I don't know there's no reason for for moving around their back end every six weeks um so it must be the song it gets paid for 100k a year um you kind of saw that with all the Twitter layoffs and joke layoffs where people are like yeah I always paid 500k a year to change the color of the like button every now and then um anyway so what some people do is every time there's a small change to something like if we're teaching people how to install WordPress so they can build their proofreading website maybe the version of Wordpress is no longer up to date so it doesn't match the video so you can kind of just say to people like look the back end changes if it changes significantly we'll update this video if not don't worry about it because some people do get quite annoyed like you said click the button that says start here but it's actually start there you know but um the fundamentals of if you take this course and follow these steps you will succeed in the outcome that the course is teaching usually that doesn't change so kind of back to your question about how much are we allocating I would say we're more focused on additional product development so like I talked about bringing in some lower end offers um I don't know if we're going to do this because we're still we're still like doing a little bit of r d for it but um a lot of people are like will you guarantee that I get a job as a proofreader if I take this course and we don't because that's actually not what the course is for but maybe there's something out there where people can pay us to find a job as a recruiter or maybe there's something out there where we can partner with recruitment agencies to find a proofreader sorry I said recruiter because I was thinking ahead of myself but like they can partner with a recruiter to find a job as a proofreader um that's just an idea like I have no idea if it's viable maybe it won't be but we're focusing more on like okay what can we do to augment the current um course Suite and then we just update it where it's necessary like if something like is yeah like it needs updating because you know maybe there's a module about how to fire your taxes as a proofreader and then the tax laws change you know something like that you have to go back and change that but otherwise essentially a course is done so it's different from SAS in in that way but it's also different from SAS because it doesn't have recurring Revenue so SAS yeah has a little bit of the forecasting looks different with SAS um although many many courses do have recurrent Revenue so and yeah there are similarities sure Tom last question for you so um given that you know you've laid out this kind of road map for or playbook for acquiring a course that um or you've you've spelled out what sort of course would be a good candidate for acquisition even when the founder might be the face of that course does that mean that that um they're you know there are a lot of courses out there does that mean that digital acquisition entrepreneurs listening to this should should con you know consider looking for courses out there what's the opportunity here what's the opportunity take away from this conversation between you and me I mean or I mean or is it going to you to me and finding some really great but you know really great course that the poor guys only made four thousand dollars over four years but the content is you know great and he should be selling it for 9.97 and approaching him and buying his you know what what would you what would you tell the audience is their next step um you're smiling is that is that already your strategy maybe um I forgot I forgot it was a video I was like I've got someone on my team who will be annoyed if I answer that question um I would say it depends on your skill set like what it you know is your skill set like yeah that could be a viable strategy is your skill set selling courses is your skill set um creating courses so an acquisition entrepreneur is probably going to want to look for um a course yeah buy a course improve the back end I still think it's I think there's risk involved with buying a course and taking it off udemy because you have no idea if it's going to sell um and you have no idea if the udemy course creator is going to want to sell um because like who knows um I think that that is a potential strategy for sure I think the better thing to do is find a course that's already doing well and um ideally where there isn't some like kind of key man or key woman key person risk with um the course owner slash founder Creator like you know there are courses out there where there is no face yeah and you could not only does that remove that risk but also it gives you an opportunity because generally courses sell better when there is a face so you can then add in a face um if I was going to buy a course off udemy I'd probably try and buy one that was doing well on udemy and just keep it on udemy and you know um I try to avoid uncertainty but that being said like yeah I mean that's not a bad idea well I'm gonna leave it there Dom um thank you very much for talking to us about proofread anywhere this acquisition and and the strategy of acquiring a course super fascinating to me I've as I said I've ponied up for a number of courses so I really appreciate the business model as both a consumer and an acquisition potential acquisition entrepreneur so until next time yeah thanks a lot