Getting the ball rolling
Small wins, better questions
Another week of Maloche (for all the non-Germans, Maloche is one of my favorite words. It's commonly used by people working blue collar jobs and translates to hard work or slog). Last week I wrote about leaving my startup job with no plan and gave myself some goals to figure out what's next.
Time for the uncomfortable truth: I didn't crush it.
I set the following goals for myself:
Research 3 specific industries with businesses for sale in Europe (Small progress)
Research 3 potential niche software ideas and set up customer discovery calls (Still in the ideation phase)
Write 1 more post to see if this Substack thing has legs
Talk to 2 people who've actually bought boring businesses (Good progress)
Overall I think the output could have been better, but I'm still happy with the progress. It's a marathon not a sprint, right? But let’s take inventory and see what I actually got done.
Research 3 specific industries (Small progress)
I didn't get to looking at individual industries in detail like I planned. I looked at a few but didn't go deep. But I figured out a narrower direction I want to explore more.
I narrowed down the search criteria to this:
Small and fragmented but growing market
Large share of older business owners (succession problem)
Business models that have recurring revenue (monthly fees, contracts)
Low tech but lots of upside if you implement basic and down the line more advanced software
Where software makes each person you hire/have way more productive
The inspiration for that came from the startup world. There are a few startups that I looked at in Germany that are now going out and buying small SMBs. One example is Buena.
Buena is a Berlin-based startup that started building software for property managers. After that didn't work out, they pivoted to a tech rollup strategy, where they buy existing property management companies. Effectively turning past customers into subsidiaries. I personally think this is brilliant, since you can capture much more of the value you create. Instead of selling software to those businesses for let's say a couple hundred euros, you can buy these property management companies for relatively low multiples and make them much better companies by implementing the software you used to sell to them directly.
With time and scale, you can drastically improve the margins of a property management company. For example, an old-school property manager could manage a few hundred units with monthly revenue of 30€ each month. With software you can automate a bunch of manual tasks, giving property managers time to focus on more units. At the time of this article, Buena manages around 60,000 units just in Germany with a team of just 300 people (only 25 working on the actual software). They've grown quite rapidly in the last 2-3 years to 25 million € ARR and recently raised a 58 million $ Series A from GV and 20VC.
Property management fits all my criteria perfectly. Small players, growing market, mostly older owners, monthly fees from property owners, and software can handle most of the admin work. I think it's interesting that more startups are now adopting such a model. But I'm also curious if it's necessary to raise so much money or if you could also just buy one of those companies and then grow organically. Especially because these companies can be bought for relatively low multiples.
Software ideas (Still in the ideation phase)
This is where I really stalled. Coming up with ideas out of the blue is difficult. I have one idea that keeps coming back:
A GTM tool that gives you everything about a company in one place. Whatever you want to know about a prospect—financials, recent news, key contacts, tech stack, recent hires—you get it instantly. Think of it as having a banking analyst that covers every company you want to sell to.
But I'm forcing myself to slow down. Usually by now I'd already be building some crappy MVP with Cursor or Replit. This time I want to understand if this is actually a problem people will pay to solve, not just something that sounds cool.
The anxiety voice keeps saying "you're wasting time, just start building something." The rational voice says "the graveyard is full of perfectly built solutions to problems that didn't exist."
Write 1 more post
You're reading it. This one went way easier than the first post because I already had the structure from last week's goals. The first post got decent traction for week one, but nothing crazy. Quite cool to have the analytics here on Substack as an immediate feedback loop.
But first and foremost I am writing these posts for myself. There's something about putting your thoughts and plans out there publicly that forces you to think more clearly. And the cherry on top is if even only a handful of people read this stuff.
Talk to people who've bought boring businesses (Good progress)
This was the win of the week. I haven't actually talked to anyone yet, but I have 8 calls scheduled for next week, including conversations with:
A search fund investor who's seen dozens of these deals
An ex-startup guy who bought a traditional German company
Someone currently running a business rollup in Europe
I want to use these calls to figure out three main things. First, I want to hear their stories. Why did they decide to set up a search fund, buy an SMB in Germany, or start a rollup in their sector? What drove that decision?
Second, I want to understand the dynamics of buying an SMB in Germany better. With VCs and startups, you have two sides that are both open to a lot of risk. But from what I've read, this isn't the case with SMB founders. They've been running stable businesses for sometimes decades and are usually more risk-averse. So what are they actually looking for in a potential buyer, that is going to take over their life’s work? What commitments do they want? How long do they expect to stay involved in the transition?
Third, I need to understand the financing side. What's the best option for someone like me at 26? What are the pros and cons of each financing route? What financing issues could kill a deal? And if I go the search fund route, what are search fund managers looking for in their entrepreneurs? How is that different from what VCs look for in founders they back?
Finally, I want to get their take on whether the areas I'm exploring actually make sense for ETA or search funds, or if they think I'm barking up the wrong tree.
What's next?
Looking back at this week, I realize it's good to set goals, but it's also okay if you don't reach them. Especially if you end up asking better questions instead. That's exactly what happened last week.
Next week I'm going to:
Get into the weeds on industries - Pick one sector that fits my criteria (fragmented, older owners, recurring revenue, low-tech with software upside) and go deep instead of surface-level research.
Extract maximum learning from those 8 calls - Focus on understanding their stories, SMB acquisition dynamics in Germany, financing options for someone my age, and whether my target areas make sense.
Test one real software idea - Find something that seems like an actual problem people face and reach out to 25 potential users to validate it before writing any code.
Keep reading broadly about all kinds of stuff.
Building something real takes time to understand what's actually worth building. That's the real Maloche—not just working hard, but working through the uncertainty until you find something worth the slog.
Thanks for following along. If you made it this far, high five 🙌