I spoke with Michael Cyger, founder of iSixSigma.com, about his experience founding his content business all about Six Sigma over 20 years ago. Here is our conversation:
Let’s start at the beginning: Can you tell me about your experience building iSixSigma? What led you to found it?
During the dot-com boom in the late 1990s, I saw company after company raising money for what appeared to be somewhat silly business models. My thinking at the time was something along the lines of, “if they could do it, why couldn’t I?”
So when my wife and I were on vacation in 1999, I made the decision to launch my own online business in an area I had recently become educated in called Six Sigma. Six Sigma is a disciplined, data-based approach to process improvement, and its rigor and rationalness appealed to me. It helps people determine how to deliver defect-free products and services to customers such that they are delighted with your company. In the process of accomplishing this, employees have greater job satisfaction and shareholders see greater returns on their investment. Six Sigma includes a methodology, toolset and process to fix any issues in a company.
I took the knowledge I had gained successfully implementing Six Sigma at GE Power Systems, GE Capital and Citigroup and launched iSixSigma.com — an online magazine and community to help business people learn, share and network about Six Sigma.
Using my then recently acquired ASP programming skills, I cobbled together a set of pages and databases that later became better known as a content management system and iSixSigma.com was born. We had published articles, a discussion forum, an event calendar, a dictionary and a newsletter signup form. Over time, we added a jobs board and an e-commerce marketplace.
If you could do the process all over again, what would you do differently?
In the years 2000 to 2007, we created an umbrella entity and launched sister companies to iSixSigma.com focused on tangentially related topics like innovation, outsourcing and business process management. These communities weren’t as successful as iSixSigma.com and didn’t generate as much revenue.
I think our company would have been better served by focusing our staff and resources on further developing iSixSigma.com and launching our own training and certification program before the market was flooded by others.
What is different for today’s founders, as opposed to what you experienced 21 years ago?
In 2000 there were no social media networks like Twitter, Facebook or Instagram. And in 2000 I remember paying 1 to 5 cents a click for pay-per-click marketing on Yahoo.com and GoTo.com. The world has changed significantly since then and publishers need to reach potential readers where they spend their time, which is on social media platforms like Facebook, Twitter and LinkedIn. The “good old days” of SEO were much simpler.
I understand that at one point you sold and then re-purchased iSixSigma. Can you tell me about that process. When did you sell and why? And what ultimately brought you back?
In the 2000s, I wanted to grow iSixSigma.com as big and as fast as possible. It was my first company and I was excited to apply business principles that I had learned elsewhere to my own venture. We were fortunate and experienced year over year growth and in 2007 I decided to sell to spend more time with my young family and to pursue other entrepreneurial interests. Additionally, one of my professional goals for iSixSigma.com had been to launch a conference company and the new owners had the experience and resources to make it a reality.
The process to sell in 2007 was long and arduous. It involved many in-person meetings, a cadre of lawyers with varying degrees of experience in media-specific asset purchase agreements with earn-out provisions and a week-long due diligence process in a hotel conference room. We sold and closed in late 2007, luckily just before the impending worldwide financial crisis.
In the ensuing years, the financial crisis caused the financial lender of our acquirer to exit the media industry and the new owners went into bankruptcy. I was notified that my past company assets were available for purchase, and it appeared that no other company was interested in buying distressed, non-operational (at the time) assets — so I stepped forward to make an offer and buy back my company assets in late 2011. After a couple of months transitioning from a Joomla-based content management system to WordPress, we relaunched iSixSigma.com with a simplified business model by closing down our conference business, recruiting service and print magazine and focusing on our online magazine, e-commerce store and jobs board.
Why did you decide to sell again?
In the past nine years since buying iSixSigma.com back, it became clear that my wife and I (both Six Sigma trained and certified) were not as excited about publishing in this space as we once were. So we decided to see if there was someone who might be interested in taking the mantle and stewarding the 21+ year history and brand forward.
What was different about this exit process, compared to the first time?
It was a night and day difference selling the second time as compared to the first time. Technology aided the process greatly the second time with FE International.
By providing FE International with access to my QuickBooks Online and Google Analytics, as well as uploading copies of our advertiser agreements to a secure, digital document room, they were able to quickly complete an initial due diligence and craft an offering memorandum. Not having to pull together reports saved me time and — I suspect — gave FE International greater confidence that the business was delivering the results I said.
In addition, FE International removed all the “tire kickers” (people who have little intention of buying but want to learn more about your business) from the process — which you’ll typically find at marketplaces where you list your business for sale. And because FE International has multiple tranches of buyers (e.g., “qualified and purchased from FEI in the past,” “qualified but not purchased” and “interested in learning about opportunities”), they could go to their best potential buyers first and answer questions about my business before I even needed to get on a “meet and greet” video conference call. In the end, I probably joined about eight “meet and greet calls” that generated four offers.
What advice would you give someone who is looking to exit? How can they best prepare?
First, spend the time to make sure your books are in order by ensuring your personal income and expenses are separate from your business income and expenses. If you’re not sure how to do that, hire a competent bookkeeper and have them reviewed by a CPA once per year.
Next, keep clear records of any agreements related to income, such as advertising insertion orders, marketing and lead generation agreements, affiliate agreements and the like. Organize them so you know what you have and where it is.
Finally, speak to at least two brokers to determine who has the best connections to buyers in your business area (e.g., e-commerce, publishing, affiliate, SaaS, etc.). I looked into different options and decided that FE International was the right choice for me and my business.
What’s next for you?
We will be simplifying and focusing on one media company in our portfolio. We have developed an online training program for investing in domain names as an asset class, called DNAcademy.com and have built an appraisal methodology, toolset and community. We are the chosen training provider for domain name brokers at GoDaddy, Uniregistry and Sedo and train thousands of people around the world who make domain name investing their full-time role or part-time side hustle.