When Andrew Askins started software development agency Krit with two long-time friends, the business was “a dev shop for anyone and everyone.”

At first, the business struggled to land high-value clients and grow its revenue.

Yet a change in positioning eventually allowed Krit to reach $1 million in revenue and sell to long-time client GreyNoise Intelligence.

A change in positioning accelerates Krit’s growth

Askins, Austin Price, and Bill Brower founded Krit straight out of college in 2014 with $16,000 in funding from a University of South Carolina accelerator.

At first the business offered development services to all kinds of companies, differentiating itself mostly with its low prices. Finding clients was slow and difficult in those early days.

What changed things for the business was narrowing down their positioning both horizontally — they focused on app development for non-technical founders — and vertically — they specialized in working with Seed-Series A cybersecurity startups.

“It took us a long time to make the decision. We did several months of customer research and hired two different consultants to help us analyze the decision. But once we committed, marketing became noticeably easier,” Askins told They Got Acquired.

With their new sharper positioning, “it was easier to identify the places we needed to be to

network and connect with prospects, and they were more interested in talking with us. Suddenly, cold email even started working,” he says. Askins wrote up this process and lessons learned in depth on his blog.

Bigger agency, bigger stresses

This greater focus led to more effective marketing, and the business started to grow more quickly.

Krit eventually reached just over $1 million in revenue in 2021, with many sales coming from referrals from satisfied clients. Serving about 4-6 clients at a time, the fully remote team grew to six, including the two co-founders, along with a handful of freelancers.

Despite these successes, running the business day-to-day remained stressful for the two founders. (Third founder Brower left the company in 2018.) Customer acquisition came in waves, meaning the volume of work did, too. That made getting staffing levels right challenging. This, along with skyrocketing tech salaries, contributed to employee churn.

“Revenue was unpredictable and we weren’t as profitable as we needed to be. That meant we couldn’t afford to offer super competitive salaries,” explained Askins. “We got consistently positive feedback on our culture, but ultimately our salaries and the size of our team made it difficult to grow, and so we were often a stepping stone more than a long-term place to work.”

“I was incredibly stressed at many points while running the business,” Askins said. “Ultimately, my co-founder and I were tired of the ups and downs of running an agency.” They began to think about the possibility of selling.

How a client becomes a buyer for their agency

They didn’t have far to look for a buyer, and in fact, the buyer ended up approaching them. For four years Krit had worked with cybersecurity company GreyNoise Intelligence, which was looking to beef up their technical team. GreyNoise proposed an acqui-hire.

Askins was blunt in summing up his experience of hammering out the deal: “Selling your business sucks.” Though the process only took about three months and was relatively straightforward, “it was still one of the most stressful things I ever did as a founder,” he said.

Both the secrecy and the uncertainty of the process weighed heavily on Askins. “You have to continue to operate like business as usual, you can’t tell your employees or clients, and yet you

know everything might be about to change. It becomes very difficult to make decisions, which is your whole job as a founder,” he said.

Both Krit and GreyNoise nearly backed out of the deal at various points, adding to the stress. But in the end, “it was worth it,” said Askins.

The deal closed in June 2022, and the sale price was not disclosed. “It was down-payment-on-a-house money, not never-work-again money,” Askins said.

Life after selling the company via an acqui-hire

Along with the rest of his team, Askins went to work at Krit, but ultimately decided life as an employee wasn’t a great fit for him. He took some time off to hike the Camino de Santiago and then transitioned to consulting work and building a new software product called MetaMonster that helps SEO agencies automate metadata cleanup for their clients.

His biggest advice for other founders thinking of one day selling their company is to focus on profit.

“It sounds obvious, but the best way to have leverage in acquisition talks is to build a great business that you don’t want or need to sell,” he said. “We lost a lot of leverage because we weren’t very profitable and we wanted out.” With his current company he intends “to build a business that is very profitable from day one.”

But even if you’ve nailed down your company’s positioning and finances, expect the unexpected.

“If you do get to the point where you’re actively in sales talks, just be prepared for it to be an up and down process. Try your best to stay focused on your day-to-day and not to let it consume you,” he said. “The more willing you are to walk away, the more leverage you have.”