Bootstrapped To A £500M Acquisition

GM! It's Thursday, February 16th - Today, we're covering the FTX bond guarantors released, the WallStreetBets founder suing Reddit, a $500m bootstrapped acquisition, and Adam Neuman's new company.

- Callum

FEATURE

Bootstrapped To A £500M Acquisition

In just 7 years, Oliver Cook bootstrapped his eCommerce business MyProtein to £7.5m/yr in profit and owned 100% of the business. He exited the business for £500m in 2011.

What's The Business?

MyProtein was founded in 2004 in the United Kingdom with just £500 and quickly become the #1 sports nutrition brand in Europe. In 2011, the company was acquired by The Hut Group (THG) for £60m.

Oliver maintained his equity in the business until the company IPOd in 2020. THG generated £2.94B in 2021, and Oliver estimates his net worth at £306m

How Did He Win?

Oliver was into fitness and a user of Maximuscle. At the time, they didn't sell online, they were just retail. This was Oliver's 'aha' moment.

1. Innovative Distribution: Oliver didn't take any market risk by starting MyProtein. He was a heavy user of the Maximuscle product, but most nutritional supplements were not sold online at the time. MyProtein was one of the first to do that.

2. Maximize LTV: MyProtein is a consumable, regular customers would order their protein every single month. This creates a very sticky opportunity, but Oliver took it a step further. He vertically integrated the business to maximize margin, but it also enabled him to launch new products systematically. He could think of a product idea in the morning and have it live on the website by the afternoon. This is very similar to the Zara business model.

3. Underutilized Marketing Channels: Oliver systematically looked for underutilized direct response marketing channels. He would always know exactly how much it costs to acquire a single customer. MyProtein found Google Ad words early and reported customer acquisition costs (CAC) of $2.34 in the early years.

4. Service First: Service is critical to maximizing conversions and lifetime value. Oliver doesn't focus on expanding the business until his service is high-quality and systematized. 1 bad review can kill dozens or hundreds of sales.

See the story from the founder here.

IN PARTNERSHIP WITH NAQI

The $195B Video Game Industry Is About To Get Rocked

Virtual reality is one thing. But what if you could control an entire virtual world with your thoughts?

That is the kind of potential Naqi is bringing – not just to video games, but to just about every aspect of life – with an earbud.

And it’s creating a huge investment opportunity for our readers.

How An Earbud Will Change The Game

After researching the brain-to-machine connection behind prosthetic limbs, Naqi’s founder David Segal wanted to apply the same thinking to other areas. One of his biggest potential targets is the fast-growing video game industry.

Believe it or not, gaming is becoming an increasingly popular spectator sport with millions of fans. And thanks to tools like Naqi, the competition is set to rise to a whole new level as players discover a more immersive, controller-free gaming experience with the rise of virtual and augmented reality.

The Naqi earbud gives users the ability to control digital devices using “microgestures”, which means that anyone wearing the earbud can control connected digital devices without any touching or talking.

National esports champs at Harrisburg University have already been testing Naqi’s technology, and it’s only a matter of time before it hits the world stage.

Invest in Naqi as they transform the way games are played around the world.

HEADLINES

Sam Bankman-Fried Bond Guarantors Revealed

> The Secret Is Out: FTX founder Sam Bankman-Fried’s two bond guarantors unsealed, a former Stanford Dean and Stanford Professor.

> WallStreetBets founder sues Reddit for ousting him.

> Mortgage rates are climbing back to 7%

> Want Weed? Twitter becomes the first major social platform to allow weed ads

> Charlie Munger on BYD versus Tesla: "This carmaker is so ahead of Tesla in China, it's ridiculous"

> Meta just increased Mark Zukerbergs security allowance from $10m to $14m.

> Subway Sandwiches is looking to sell - WSJ estimates it could reach $10B.>

> Rihanna Saw A 390% Boost In Song Sales After Super Bowl Halftime Performance

ON TREND

Adam Neumann’s New Real Estate Company, Flow

You should know:

WeWork Founder Adam Neumann is starting a new real estate company called Flow. Here’s what’s going on with the new business and what business leaders and influencers are saying:

• Neumann is making his comeback after a company ouster at WeWork in 2019. The serial entrepreneur left the venture with $1 billion.

• During the pandemic, Adam Neumann became a lead investor for a real estate tech company named Alfred.

• Verak Insurance CEO Rahul Mathur says Neumann’s family office bought up multi-family homes during the Covid downturn, over 4,000 of them.

• Putting his resources together, Neumann then founded Flow, and received a $350 million investment in August from a16z.

• Not everyone is convinced. Popular Twitter stock reviewer, Meet Kevin, said, “I don't think this guy, Adam Neumann, has ever: A) been a tenant or B) been a landlord.”

• But Stonks.com says Neumann is a, “Legendary founder. Prolific investor. Real estate guru.” If he’s got Horowitz’ backing he might be doing something right.