If you’ve never written a line of code, your first adventure in developing software is likely a sandbox. Maybe a copy of Coding for Dummies on your desk. But what if you could learn to code while building a product people want to use? One that you later sell in a five-figure deal.
That’s what Jonathon Ringeisen did when he built Essential Studio Manager (ESM), a CRM for photographers. After eight years in the army, dropping out of business school, and a stint in a food distribution warehouse, Jonathon wanted the freedom of running his own business.
So he picked up a book and taught himself to code. Unlike most people, who’d probably build a by-the-numbers app until they’d learned the language, Jonathon chose to code an application he could monetize. Little did he realize it would later lead to a $90,000 exit on Acquire.
Six years and countless iterations later, not only was Jonathon’s pet project profitable (around $1,600 MRR), but his 200 customers raved about it. But Jonathon had only nibbled on his competitors’ cheese. To steal it, he’d need a lot more money.
As Jonathon struggled to balance pricing and customer acquisition costs, his competition splashed the cash to command the market’s attention. Jonathon wasn’t sure he wanted to compete. He knew things now that he hadn’t before and wanted to apply them to a new business rather than back everything on his first foray into entrepreneurship.
Discover how this self-taught coder broke free of the sandbox to build a profitable business that he later sold on Acquire, and why you should consider doing the same.
The Veteran Coder
After serving two combat tours overseas, Jonathon returned to the US ready for change. He’d spent eight years in the armed forces, and while it taught him skills you don’t learn in classrooms, he didn’t want to spend his whole life in the army. He decided to give college a try.
“When I left the army, I didn’t know what to do with my life,” Jonathon said. “College seemed to be the thing everyone did, so I signed up for a business degree but later dropped out. I was one credit away from getting my associate’s degree, but college just wasn’t for me.”
It hurt to abandon college so close to graduating, but the army had taught Jonathon to make difficult decisions quickly. Either he pushed ahead doing something he hated or switched to an activity he wanted to do.
But what would that activity be?
While mulling it over working at a food distribution warehouse, Jonathon’s wife, Elena, started her own business selling Lightroom presets. It did so well that Jonathon could afford to leave his job and take some time out to decide what to do next. It was then he discovered coding.
“I started teaching myself to code with online tutorials,” Jonathon said. “But rather than build software inside a sandbox, I wanted to make real applications. Many people learn while building apps they can’t monetize. That never made sense to me. If I was going to write hundreds of lines of code, I wanted them to mean something.”
Essential Studio Manager was Jonathon’s first project. In the five years it took to build the software, Jonathon experimented with different builds and frameworks. He started learning PHP, building ESM’s back end on Laravel and the front end using Blade. (Today Vue handles the front and Laravel the back.)
“I could probably build the same thing now in six months,” Jonathon jokes. “I was learning at the same time, so failed frequently. I iterated and improved and the tech stack changed two or three times, but it was much more motivating to work on something real.”
Beware of Underpricing
Jonathon’s wife Elena had built an extensive network of photographers who paid for her Lightroom presets. At its peak, the business made almost $600,000 a year. Since ESM was a photographer’s CRM tool, Jonathon launched ESM by emailing Elena’s customers.
“My wife had built this email list through her previous business, so that’s how we launched ESM. As soon as I’d built an MVP, we shared it with the email list, started running some Facebook ads, and soon enough, we won our first few customers.”
ESM’s first iteration was basic. Customers could manage clients and check off a to-do list and little else. They couldn’t invoice clients or sign contracts. As a result, Jonathon only charged $5 per month. It seemed fair value, but some customers thought it belittled his offering.
“When we first launched, we got around a hundred users within the first two or three days. It grew steadily from then, but some customers thought it was too cheap. So we increased the price from five bucks to fifteen and then later, twenty-nine.”
At $29, ESM was still cheaper than its competitors. Jonathon grandfathered those on cheaper plans at their current rates. To compete long-term, Jonathon committed to adding new features, going so far as to build a feedback tool into the platform.
“I built a feedback tracker so any user could leave feedback. It didn’t matter if it was a bug or feature request, they could easily suggest improvements within the platform. That’s how I knew what to work on. And customers frequently told me it’s the best CRM they’ve used.”
Marketing Too Expensive? Time to Sell
Despite those rave reviews from hundreds of customers, Jonathon never got pricing to a level that compensated for marketing spending. The problem, he argues, was that competition in the CRM space was fierce, even in niches like photography, and many competitors are VC-backed.
“It’s challenging to sell a CRM,” Jonathon said. “You’re up against a ton of competitors. Once someone runs their whole business through a CRM – invoicing, contracts, and all that stuff – convincing them to switch is hard. It cost us around thirty-five to fifty dollars just to Acquire a customer – and that didn’t guarantee we’d keep them. In contrast, my wife’s business paid seven dollars to Acquire a customer.”
Jonathon tried everything to reduce customer acquisition costs. He even built a referral system but removed it when none of his customers used it. Growth stalled. In the five years of running the business, it never generated much more than $1,600 in monthly recurring revenue (MRR).
The choice was clear: increase spending on ads or invest funds elsewhere.
“We had the money. I probably could’ve found ways of reducing customer acquisition costs, too. But it was my first project and I wanted to invest my time and money into something that offered the best return. It was highly unlikely that my first project would be my most successful.”
Jonathon and his wife had been working on another project together called Wordsmith, a services platform that delivers 15 professionally-written social media captions every month. In its first year, it hit $17,000 in MRR, putting ESM’s peak of $1,600 to shame.
“I built Wordsmith using different technologies but applying the same principles I used with ESM,” Jonathan said. “I integrated a feedback tracker again, so I’m constantly improving and iterating on the product.”
ESM had become an expensive distraction from Wordsmith, a project that was doing well. But Jonathon kept returning to his customers’ feedback. They adored the product, and it didn’t seem fair to abandon it. Jonathon wondered if someone might buy the business instead. The only problem was he knew absolutely nothing about selling a business.
“I knew nothing about acquisitions before going in. I thought that you sold everything including bank accounts, LLCs, and all this stuff. My wife said, ‘No, you don’t give them bank accounts. You keep that money.’ And I said, ‘No, I don’t think that’s how it works.’ Then she pulled it up on Google and proved me wrong.”
Jonathon’s preconceptions tied a knot in his insides. How would he navigate all the contracts and legalese? What if he signed or agreed to something that made him worse off?
But Acquire’s guided acquisition process simplified every step with support documents, legal templates, and more. And after meeting his buyer, any residual worries evaporated. He didn’t even use a lawyer: “Acquire made it that straightforward,” Jonathon said.
Valuations and Negotiations
Valuing a business causes anxiety for most founders. Ask for too much, and you’ll never attract buyer interest, but go too low, and you risk leaving money on the table.
Jonathon had read the Acquire Multiples Report and decided to apply a 7x multiple to net profit, settling on an asking price of $90,000.
At first, the price seemed ideally pitched. Buyers flooded his inbox asking for more information. But those early leads grew cold, raising a question mark over Jonathon’s valuation. It was a pleasant surprise when a buyer appeared offering the full asking price.
“I was a little skeptical at first because he wanted to do sixty thousand upfront and then thirty thousand six months from the acquisition date,” Jonathon said. “Then we’d have the option of taking the thirty grand or a five percent equity stake in his fintech company.”
Jonathon did his homework to establish the buyer’s credentials. He googled him, reviewed his social media profiles, and then video-called to test the vibe face-to-face. They got on well, so Jonathon accepted his offer. A few days later, the first $60,000 payment landed in his bank account.
While the buyer had fulfilled his end of the deal, Jonathon is still fulfilling his.
“Transferring assets has been difficult because he wants to host the platform on Google Cloud and I hosted it on Digital Ocean,” Jonathon said. “That requires taking the website down, swapping it over to Google Cloud, creating a database on Google Cloud, relinking everything, and then spinning up the website again. That’s been the hardest part so far.”
Does Jonathon harbor any regrets now the deal is done? While he’s yet to transfer everything into the new owner’s hands and is still undecided on whether to take the cash or equity, he’s happy to have time to work on more profitable ventures.
“If it hadn’t been for Acquire, I don’t know how I’d have sold ESM,” Jonathon said. “I’d have needed to market it somehow. But how? Facebook ads? I wouldn’t know how to start that process and it would need money. Acquire made selling super easy.”
Despite ESM not gaining the traction Jonathon had hoped for, he’s proud of his accomplishments. ESM taught him to code and run a business. Usually, you pay for an education, but Jonathon got a five-figure payout instead.
“If you’re getting into programming, don’t go the typical route,” Jonathon said. “Build something that solves a pain point for people and monetize it. There are a million different to-do apps on GitHub that people have built just because they want to learn something, but why not learn something worth monetizing?”
Time is everything when you’re an entrepreneur. Time to market, time to build, time to monetize. If Jonathon had spent five years building in a sandbox, he wouldn’t have had a business to sell. A smaller exit is still an exit and the lessons learned are worth their weight in gold.
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