Laurits Just

Laurits is the co-founder and co-CEO of BitsForDigits. He has a background in finance working in London, UK at BlackRock and Rocket Internet. He holds 3 degrees in Economics, Information Systems and Business Administration, including a Masters of Science from the London School of Economics. His academic focus has been on digital innovation with a dissertation on AI applications and a master’s thesis on DLT platforms.

Originally from Denmark, Laurits first left Europe at age 19 to study in Seoul, South Korea during his undergraduate degree, and afterwards went to study in the US in Raleigh, North Carolina. Upon graduation he moved to London in the United Kingdom to work at startups and VCs. The following year he began his graduate studies by simultaneously enrolling in separate degrees in London and Copenhagen. He graduated one year early with distinction and took an offer at BlackRock.

At BlackRock he was tasked with developing and implementing investment software solutions for asset managers and asset owners in the EMEA region. He was promoted to Associate in half the time, after only 1 year and 2 months. After being with the company for a few years he left and relocated to Berlin, Germany to start BitsForDigits with his friend, JP, whom he had met in college. JP had worked for Facebook and Google in Dublin, Ireland, so the two paired up to bring their finance and tech experience to the micro M&A space.

Where did the idea for BitsForDigits come from?

I was working at BlackRock and Jan-Philipp Peters at Google when I stumbled upon a blog post by our fellow alumnus from our university in Copenhagen, David Heinemeier Hansson, the co-founder of Basecamp, a profitable bootstrapped Software-as-a-Service (SaaS) company. The title of this piece was “the deal Jeff Bezos got on Basecamp” and details how David and his co-founder sold a minority stake to the founder of Amazon in a secondary transaction. We got him on a call to discuss the minutiae of the deal to better understand the structure. Its simplicity surprised us! What Jeff Bezos got and still gets is a portion of the annual proceeds equal to his piece of the pie. In other words, the yearly profits that the founders pay out to themselves as dividends gets distributed amongst the owners proportionally to their share of the business. It’s known as a profit distribution or shared earnings agreement.

This deal was unusual for the time but since that time in 2006, more self-funded business owners have sought more options for getting personal liquidity from their assets. Full exits via full acquisitions is a popular option and one that we also offer on BitsForDigits. Yet, partially exiting from selling minority and majority interests is gaining popularity as it allows founders to have their cake and eat it, too. But without investors on the cap table it is harder to get participation for these types of deals. That’s the problem BitsForDigits solves: discoverability – because not everyone has high net-worth individuals like Jeff Bezos on speed dial!

Thus, our marketplace offers owners of software and internet companies a platform to list their business and advertise liquidity preferences for either a minority, majority or full acquisition. This happens with total anonymity to incentivise owners to share sensitive information about financial performance and product technology. Prospect acquirers can then reach out to them with questions and offers directly on BitsForDigits. From there they can sign an NDA to reveal identities and proceed to signing an LOI after further negotiation.

What does your typical day look like and how do you make it productive?

Our days vary a lot but there are certain repeat offenders. Business-as-usual from an operations standpoint involves reviewing new business listings that we receive on all hours of the day given our global presence. We have a minimum annual revenue requirement for businesses that seek to list on the marketplace of $100,000 USD. So if a business generates less than that on an annualised basis, then we refer them to websites that focus on selling side projects and failed startups. Our marketplace focuses on profitable “real” businesses because the buyers on our platform tend to be micro private equity firms, family offices, search funds, strategic incumbents and acquisition entrepreneurs with deeper pockets.

Our day-to-day operations also involve verifying the buy-side of potential acquirers when they make their profiles. We ask them to sign up with their professional emails and LinkedIns for us to cross reference their identity and profession. Once they are verified, they can direct message business owners. As part of the verification process we publish their profiles to the marketplace so sellers can see which types of buyers are on the platform.
Aside from Ops, we spend a fair amount of time engaging with our community of founders and investors via different channels. Twitter and LinkedIn are quite big for us. So are online communities like Indie Hackers and Product Hunt. We share our resources in forums and with the wider ecosystem to educate bootstrappers in particular on how the acquisition process works. Helping stakeholders in the internet economy is essentially our number one user acquisition funnel.

How do you bring ideas to life?

We use a whole host of free tools to formulate and visualise new ideas. Google Drive is typically where it starts in a G-Suite doc, sheet and slide. If we’re talking about a new product feature it typically moves into Figma for quick wireframing. The great thing about all these tools is their collaborative nature allowing our entire team to participate and align on a concept. Later we will mock up the idea using Webflow or another web app builder. This allows us to publish to a domain and share it with pilot users for feedback.
For bigger ideas and concepts, we sometimes take a different route by skipping intermediary steps and going directly to interviewing potential users. For conducting these we use many of the best practices laid out in the book titled “The Mom Test”. Interviewing potential customers is an illusive exercise with many pitfalls so it is important to structure these in a way that produces valid answers and truth, not wishful thinking and fairytales.

One example is our Advisor Directory, which we built and added to our platform on request from owners on the marketplace. It is essentially a collection of local experts on matters related to M&A offering services that a broker would otherwise perform for a 15% commission. As such we have unbundled the middleman to offer help with valuations, due diligence, contracts, tax and accounting without giving up an arm and a leg. This started out in a doc and moved to the drawing board before being built and shared.

What’s one trend that excites you?

We are extremely excited about the growing participation in private markets. M&A in the nano and micro cap company range is much more inclusive to buyers and sellers in the internet economy. SaaS, eCommerce, mobile apps and content businesses are in high demand while the supply side keeps growing in part thanks to the no-code revolution. We play a big role in lowering the barriers and requirements to participate as expensive middlemen get disintermediated by our platform.

What is one habit of yours that makes you more productive as an entrepreneur?

We use tools like Trello and Slack to stay on top of tasks and coordination in our team. We use our office in Berlin as a hub for those based there but don’t limit our labour pool to just Germany. That’s why our team stretches across the EU member states to the United Kingdom. Remote working is enabling us to do more and effectively reach more users as well.

What advice would you give your younger self?

Start building and experimenting with different ideas. Don’t keep them in your head. The only way to know is to try. Failing isn’t that scary and the learnings will stay with you for life.

Tell us something that’s true that almost nobody agrees with you on.

True wealth is built in equity, not wages. Evidently most people labour for salaries rather than ownership. Working for yourself comes at the risk of working for nothing, and in the beginning that is often a reality, but it has never been easier to get a business started than right now!
My other contrarian opinion on a more macro-civilisation and existential note, is that the nuclear power plants of today produce safe, clean energy and we would be wise to maintain, build and use them to combat our dependency on fossil fuels.

As an entrepreneur, what is the one thing you do over and over and recommend everyone else do?

Take stock of where I am in life once in a while. Jeff Bezos’ regret-minimization framework is a helpful tool to ensure I stay on track living a life well-lived where I seize the opportunities that present themselves without having to wonder what might have been (too much).

What is one strategy that has helped you grow your business?

Aside from our community engagement, word of mouth is the biggest growth driver now. What helped us get here was Indie Hackers, Reddit, Twitter, Discord, LinkedIn and directories of people and businesses relevant to our cause. That’s how we solved the cold problem: by sharing the knowledge we acquired working in finance and tech at first, then co-learning with other bootstrappers and investors in the internet economy. We came to the scene as first time founders ourselves so there were experiences we had to go through first to understand where fellow entrepreneurs are coming from.

Aside from content marketing our marketplace resources we also write a newsletter sharing the newly listed businesses and acquirers with the existing members of our platform. This quickly grew into the thousands and provides a great converter of interested parties to verified members on BitsForDigits.

What is one failure you had as an entrepreneur, and how did you overcome it?

We are still learning how to tune out noise from signals when it comes to feedback. As we do, we pivot. An illustration of that is the fact that our marketplace began its early days as a platform exclusively for partial buyouts. We thought we had seen the light with partial acquisitions and stubbornly stayed the course for months until we finally listened to the owners that were approaching us to sell their entire business. Not everyone was looking to stay invested in their creation and hence we were turning away people with a similar discovery problem to those that wanted to sell a piece. So we introduced full buyout acquisitions too after having turned away more founders than we dare count.

What is one business idea that you’re willing to give away to our readers?

Virtual data/deal rooms (VDR) as a service. A lot of buyers and sellers go off platform after connecting and we would love to see more SaaS solutions for hosting these transactions since many end up using Google Drive and Docs because alternative solutions frankly suck. We have yet to see a compelling VDR and would rather integrate one than build it from scratch ourselves.

What is the best $100 you recently spent? What and why?

The best $100 bucks I spent recently was on our monthly tech stack subscriptions which amount to twice that but is split between me and my co-founder. It is amazing to me how much value we get for such a modest amount of money. Consider the alternative of building all software from scratch ourselves to run BitForDigits. Instead we use more than 10 existing software solutions that integrate together to form a marketplace like ours.

What is one piece of software or a web service that helps you be productive?

Integromat is a real time-saver when it comes to workflow process automation. We couldn’t scale without a tool like this as it ties together all our other software and databases in the front and back end.
For instance when a business owner submits a listing to our marketplace, the data gets populated in our content management system (CMS) and sends an automated email internally reminding us we have 24 hours to review the submission.

What is the one book that you recommend our community should read and why?

I took Elon Musk’s advice and read the Hitchhiker’s Guide to the Galaxy by Douglas Adams and now extend his recommendation. It’s funny and evokes curiosity about the world. There is a philosophy of exploration embedded in the book about finding answers and thereby asking better questions. Plus it’s short so anyone can read it! (Btw, so is The Mom Test)

What is your favorite quote?

I would rather have questions that can’t be answered, than have answers that can’t be questioned.

Key Learnings:

• The idea for BitsForDigits came from following bootstrapped internet entrepreneurs and noticing the inefficiency of private markets to solve their liquidity problems
• We always visualise, build and test new ideas using low-code tools
  Speaking with customers and getting useful data is a skill we practice a lot
• Helping fellow bootstrappers realise their dream exits is incredibly rewarding