Ep. 66 — Brad Yasar: The Inflection Point Where Service Businesses Become Tech Companies

5 min read

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Episode Summary

You stare at your P&L and the business is humming. Revenue up, margins fine, customers happy. Then someone asks if you actually own the technology that runs it. Half your stack is rented. Your “IP” is whoever’s shipping features fastest on top of you. And the buyer across the table is going to look right past your revenue and value you like a service business, not a tech company. That’s the gap Brad Yasar and I got into on this episode. Brad has been an entrepreneur since he was six, sold his first software company at fifteen, exited a second one after college that was acquired by its beta client, and now spends his 16-hour days in the blockchain space. We covered why building a business with the sole goal of exiting makes the years until that exit miserable, the tax and entity structures that change the math on the day the check lands, the inflection point where renting your backbone caps your exit value, and how disintermediation is coming for every middleman role in real estate, logistics, banking, and insurance. Real numbers, real moves, and one of the cleaner explanations of where the next disruption wave actually lands.

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## Top 10 Takeaways
  1. If your only reason for starting a business is to exit, the years until that exit will feel miserable.
  2. Plan the tax and entity structure years before the sale. The structure captures more than the price negotiation does.
  3. Move ownership into a holding entity. Personal capital gains hit differently than entity-to-entity transfers.
  4. A holding company can pay for things in your life that an individual paycheck cannot.
  5. Your service business is renting the tech that makes it valuable, and the buyer sees right through it.
  6. The inflection point: stop leasing the backbone, start owning the IP. That is when service becomes technology.
  7. If you are built on AWS, the buyer values you at Amazon’s margin, not yours.
  8. Take the halfway approach. Own the UX and the differentiators. White-label the backend until your first year proves the model.
  9. Walmart and Geico did not pivot until they were forced to. You do not want to wait that long.
  10. If you do not adopt the tech that disrupts your industry, someone outside it will build it and use it against you.

Sound Bites

“If your only purpose starting a business is exiting, I think you’re going to have a rough patch until that exit comes, because all you’re going to focus on is, oh I need to do this and I need to get to this revenue and this valuation.” (@00:12:23) — Brad Yasar

“I work 16-hour days now, seven days a week, and not one day feels like I’m working.” (@00:13:21) — Brad Yasar

“You may have a billion-dollar business that’s running on Amazon web services, and when you go to sell it, you’re not going to get a billion dollars for it. They’re going to look at the revenue and your expenses and see, hey, Amazon is taking half of this.” (@00:15:50) — Brad Yasar

“If you catch that inflection point and you have the revenues or the investor support to build things internally, then you own them. That’s a very powerful position to be when you’re considering an exit, because now you’re not just a service business or a SaaS business. You are a technology company because you own your technology.” (@00:16:09) — Brad Yasar

“If you don’t build it, if you don’t adopt blockchain, someone else is going to build it and disrupt your industry and your business. So while you have the subject matter expertise, you have an advantage over the tech people who are looking into these things.” (@00:46:18) — Brad Yasar

About This Episode

Brad Yasar is a serial entrepreneur and early blockchain investor who has been building businesses since age six. He sold his first software company at fifteen, exited a big-data retail prediction business after college that was acquired by its beta client, and now focuses on blockchain ventures and early-stage investing. His perspective is unusual because he has lived both sides: the operator running the business, and the technologist who sees which industries are about to lose their middlemen. This conversation sits in the early run of the show and reads as a forward-look at how owners should think about IP, technology ownership, and where their industry’s disintermediation pressure is coming from.

Resources Mentioned

  • Brad Yasar — Email — brad@krowdmentor.com (crowd with a “k”)
  • The Innovators by Walter Isaacson — Referenced for the origin story of the internet and the inflection point when ARPANET became the Web.
  • Geico, Walmart, Airbnb — Referenced as case studies of pivoting from brick-and-mortar (or piggybacking on someone else’s data) to owning the technology stack.

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