506: Insider Details About Our Recent Company Exit With Mike Jackness

Podcast: Download (Duration: 52:30 — 60.4MB)

Selling an ecommerce business almost never runs on the schedule the seller expects, and the ecommerce brand my guest Mike Jackness and I owned together is a case study in exactly how much can go sideways. We listed it in February 2022 expecting to close by that summer. We finally closed in June 2023, after two failed LOIs, a private-equity backout, an SBA lender getting acquired mid-close, and a buyer landing in the hospital with Lyme disease.

Mike is the founder of EcomCrew and has owned dozens of ecommerce brands over the last 20 years. In this episode he walks through what happened, why he then sold nearly all of his other brands and laid off his Philippines team, and the single “focus on one thing” lesson he now runs his life by.

Here is the full timeline, the mistakes worth learning from, and what Mike is doing next.

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Key takeaways

• Selling the ecommerce business took 15 months and three buyers: private equity backed out over interest rates, SBA buyer #2 got Lyme disease mid-close, SBA buyer #3 walked because the SKU count intimidated him. Buyer #4 closed in days because prior due diligence was reused.
• Investors returned double-digit annualized returns during a period the S&P 500 returned about 2%, so the outcome was good despite the process.
• Mike then sold every other ecommerce brand he owned except one (Ice Wraps) and laid off nearly his entire Philippines team.
• The lesson: running one thing beats running seven. The second brand is not “twice as easy,” it is roughly five times harder, and attention gets fractionalized across a portfolio.
• Real moats matter more than ever. Great photography and copy used to be a moat; AI has closed that gap for overseas sellers. IP, manufacturing, and defensible product categories are what still hold.
• Consumable products with defensible IP (his old coloring-book brand, Color It) are the model he is trying to rebuild toward next.

Why selling an ecommerce business took 15 months and three failed deals

Selling an ecommerce business took 15 months in our case because macroeconomics, SBA lender consolidation, and pure bad luck stacked on top of each other in a way none of us could have predicted. The business itself was solid the entire time. It was the deal process that broke, three separate times.

We put the business up for sale in February 2022 through Andrew Youderian’s investor group at eCommerceFuel, expecting a summer 2022 close. Mike had been running it for about 14 months. The board decided we could sell it now for what we had hoped to get in year three, so we booked the win.

The first offer came from a strategic private equity buyer at above-market value. Due diligence took months (they hired four separate diligence firms because private-equity rules do not scale down for smaller deals). The buyer signed off on everything.

Then interest rates spiked, the stock market dropped 40%, and PE said they were freezing all new investments. Deal dead.

The Lyme disease deal that fell apart at the finish line

We put it back up for sale, got under LOI with an SBA buyer, and got all the way through underwriting. Then the SBA bank funding the loan got acquired the same week we were supposed to close. The loan was handed off to another bank, delaying close by a week or two.

The buyer, frustrated at the delay, went on a hike. He got bit by a tick. He got Lyme disease bad enough to end up in the hospital and could not close the deal.

That is not a metaphor for a bad deal, that is the literal reason it fell through.

We relisted in January 2023. Third buyer got under LOI, made it through due diligence, and then decided the business was “too complicated” (roughly 100 SKUs and light assembly). He walked.

The banker who saved the deal

The SBA banker had already done all the paperwork twice and refused to lose the file. He said he knew a buyer he had recently sold another business to who was looking for exactly this kind of deal, and the fourth buyer closed within weeks because we reused the previous buyer’s due diligence report.

We signed the closing paperwork at Seller Summit in May 2023 (Mike literally signed the DocuSign during my keynote about hitting the Wall Street Journal bestseller list). The deal officially closed June 2, 2023.

Net outcome: investors got double-digit annualized returns during a period the S&P 500 returned about 2%. On paper it was a success. On the ground it cost Mike 15 extra months of his life and derailed every other plan he had.

What Mike would do differently the second time selling an ecommerce business

The biggest thing Mike would do differently is never commingle operations between a business he owns solo and one he owns with investors. On paper the acquired business had its own team, its own contracts, its own cost accounting. In practice they all worked out of the same Philippines office and knew each other.

That created a soft failure mode: any HR decision Mike made in one business rippled into the other. Layoffs, benefit changes, or a bad manager conversation in Brand A would spread through the office and destabilize Brand B. Even though the entities were separate on paper, the humans were not.

Second thing he would change: do not commit to a “run it for one year, hand it to a new CEO in year two” plan when you have never run a hired-CEO transition before. He now believes it is very hard to find someone who will care about a business as much as the owner-operator.

Why he now believes reusing prior due diligence is the deal-closer

The reason deal four closed in days instead of months is that the fourth buyer accepted deal three’s due diligence report unchanged. It had been produced by a well-known ecommerce diligence firm within the last 90 days.

If you are selling and a deal falls through late, keep every diligence artifact. The next buyer will save months by inheriting it, and a smart broker or banker can push for that reuse. It is the single biggest lever we saw for compressing a deal timeline.

Why Mike sold every other brand and laid off his team

Mike sold every ecommerce brand except Ice Wraps and laid off nearly his entire Philippines team because he concluded, after 20 years and a five-brand portfolio, that focus beats diversification for entrepreneurs like him. The revenue was fine. The mental cost of running it was not.

His argument, drawn from The One Thing and Essentialism and from watching peers like Spencer Jan at Solo Stove: successful founders who compound to nine-figure exits almost always ran one thing at a time. The founders with 17 side projects and five brands tend to plateau in the seven figures across all of them.

His own portfolio proved the point. Any single brand, given his full attention, could have been dramatically bigger than the whole portfolio was together.

The “twice as easy” trap

The specific trap Mike wants ecommerce founders to avoid is the belief that the second brand will be easier because you have already done it once. His experience: the second brand is roughly five times harder, not half as hard.

The setup mechanics repeat and stop being novel. New LLC, new bank account, new insurance, new tax return, new Amazon seller account, new social accounts, new email list, new ad accounts. None of it feels exciting the second time, so you cut corners.

Meanwhile the founder’s finite attention gets split. One brand pulls ahead, one stays flat, and the bottom three get almost no time at all. The end state is a portfolio of underperforming brands instead of one strong one.

The moat conversation: why AI killed the “great listing” advantage

Mike’s ecommerce moat for a decade was writing better copy and shooting better photos than sellers in China, Pakistan, and India. That moat is now closing fast because AI tools have given every overseas seller the same capability at near-zero cost.

His mental model: he had built a moat, and now dump trucks are backfilling it every day. The only response is to find a different moat.

The moats that still hold in 2024 are the ones AI cannot replicate cheaply. Physical manufacturing capacity is one. Intellectual property is another (his old coloring book brand Color It had copyrightable artwork that was easy to defend).

Local final-assembly operations and consumable products with real repeat purchase round out the short list.

Why Color It was his best moat and what he wants to build next

Color It, Mike’s coloring-book brand, had four moats stacked: consumable product (buyers had to reorder), copyrightable IP (artwork that could not legally be knocked off), a proprietary manufacturing process, and a defensible category. He sold it because his cousin (a partner in the business) needed liquidity, and the business was cash-strapped from growing 2x per year.

In hindsight, Color It is the one he wishes he had kept. It is the closest thing to the business he wants to build next, though he is not ready to name the specific product category on a podcast yet.

The playbook he is rebuilding around: consumable, IP-defensible, ideally with a manufacturing or assembly component that overseas sellers cannot replicate from Alibaba.

What is next for Mike, and Ice Wraps as the SBA-ready exit

Mike’s plan for Ice Wraps is to run it clean and focused through 2024, generating a strong trailing 12-month P&L and a clean tax return, then list it in early 2025 for a mid-seven-figure SBA-qualified sale. That is a deliberate, boring, disciplined 15-month plan and it is a shift from how he used to operate.

He is intentionally not starting the next business yet, even though he has one in mind and wants to lease the building and buy the machinery tomorrow. The discipline is the point. He wants to feel what it is like to run one thing at a time before he adds the next.

The de-stress since selling the other brands and letting the team go, he estimates, is roughly half from having one brand instead of five, and half from no longer carrying the weight of investor and employee expectations.

Frequently asked questions

How long does it take to sell an ecommerce business?

A clean SBA-financed ecommerce sale typically closes in three to six months from listing, but 12 to 18 months is common when deals fall through. In our case, the business took 15 months and three failed buyers before we closed with buyer four. Macro conditions (interest rates, credit markets) can add six-plus months to any timeline.

Why do ecommerce business sales fall through?

The three most common reasons are financing (SBA lender changes, interest rate shocks, private-equity investment freezes), due diligence surprises, and buyer cold feet about complexity or SKU count. In our 15-month process we hit financing failures, an SBA bank acquisition, an actual medical emergency (the buyer got Lyme disease), and a buyer who decided the SKU count was too high.

Should I run multiple ecommerce brands at once or focus on one?

Focus on one until it is genuinely maxed out. Mike Jackness ran a five-brand portfolio for years and concluded that a single focused brand almost always outperforms the same operator’s diluted attention across five. The founders who hit nine-figure exits (Spencer Jan at Solo Stove is a public example) almost always ran one brand at a time.

What is an ecommerce moat and which moats still work in 2024?

An ecommerce moat is something that makes it hard for a competitor to copy your business. AI has erased the old moat of “great copy and photography” because overseas sellers can now generate the same quality at near-zero cost. The moats that still hold are intellectual property (copyrightable artwork, patents), physical manufacturing capacity, local final-assembly operations, and consumable products with real repeat purchase.

What is SBA financing and why does it matter for selling an ecommerce business?

SBA (Small Business Administration) financing lets a buyer put down as little as 10 to 15% instead of the traditional 20% and finance the rest through an SBA-backed loan. That expands your buyer pool dramatically because more individual buyers can afford your business. To qualify, you typically need a clean trailing 12-month P&L, three years of tax returns, and books that stand up to lender scrutiny.

How do you avoid commingling operations between multiple ecommerce brands?

Separate the physical workspaces, not just the legal entities. Mike’s Philippines team for the co-owned brand shared office space with his other brands’ teams, and even though every contract and cost was separate on paper, the humans talked, and HR decisions in one brand rippled into the other. If you must share a building, isolate teams by floor or wing and treat internal communication between them as a compliance issue.

What should I do if my ecommerce business deal falls through late in diligence?

Keep every diligence artifact and negotiate hard for the next buyer to reuse it. Our fourth buyer closed in days instead of months because he accepted the third buyer’s due diligence report from a reputable firm produced within the last 90 days. A good SBA banker or broker can push for that reuse and cut months out of the next attempt.

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