Welcome to Upper Market

Costco barely makes a cent selling you groceries. Its margins on the actual products are wafer-thin, close to breakeven - the whole shop, by design, roughly washes its face. Nearly all of the profit comes from one place: the annual membership fee you pay just to walk in the door.

So the business that looks like a giant supermarket is really a subscription with a warehouse feature.

When you buy a business, the first job is to find where the money actually comes from and where it makes its money - because it's often not where the sign points.

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I’ve spoken about it enough - and it’s here.

Today, you can buy your own copy of Speedrunning Capitalism - physical or E-Book.

There’s bonus content attached for anyone who buys (Audio Version plus the inaugural “Becoming Investible” framework I’ll be teaching to help you raise capital for deals.

Writing the book was easy. The editing was a pain in the ass.

People with early copies have said it’s entertaining and it broke down in simple language, Business Acquisition.

I’d love to hear what you think about it - link here: Speedrunning Capitalism

A proprietary software platform, 100% recurring revenue on rolling annual contracts, 20-plus blue-chip customers including listed companies, and "extremely low churn." Asking $700k - and, tellingly, no revenue figure anywhere in the listing. A software business with genuinely good bones and one big blank to fill in.

This is a compliance SaaS platform out of Hamilton with a long operating history, over 50,000 stakeholders using it globally, trademarks and multi-language for offshore growth, and a low-touch model. On paper it's the good kind of software business - contracted, sticky, scalable. The homework is the number they didn't print, why a "scalable" platform has stayed small, and who keeps the code alive.

It's a proprietary, independently-operating compliance platform - not bolted to client systems - trusted by 20-plus blue-chip customers across New Zealand and overseas, including publicly listed companies, and supporting more than 50,000 stakeholders. Revenue is 100% recurring on rolling annual contracts with extremely low churn, and there's an offshore growth path with trademarks and multi-language functionality already built. The seller frames it as a low-touch model with a proven commercial base, and even pre-empts the AI question - arguing the value is in the embedded service, security and relationship, not just code a machine could now write cheaply. Notably, the current revenue base is "modest relative to the platform scale and addressable market."

What I'd Want to Understand:

First is the number that isn't there. There's no revenue or profit figure in the listing, so nothing about $700k can be judged yet. The single most important thing to get is the recurring revenue - the actual annual contracted value - and the churn rate over several years. "100% recurring, extremely low churn" is the whole pitch, so I'd want it proven in numbers: what's the annual recurring revenue, what did each of those 20-plus contracts renew at, and how many have ever left?

Second is why it's stayed small. A "long operating history" plus a "modest revenue base relative to the addressable market" is a polite way of saying it hasn't scaled. That's either genuine untapped upside - a great product no one has sold hard - or a signal that scaling this is harder than it looks. I'd want to know what's actually stopped it growing: no sales effort, a niche smaller than claimed, a product that needs work, or a founder who never pushed it.

Third is who keeps the software alive. Code needs constant maintenance and security work just to keep running. So who built it, who maintains it now, is it documented and transferable - or does the platform live in one developer's head? For a compliance product handling data for listed companies, security and continuity aren't optional, and a single-developer dependency is the biggest hidden risk in a deal like this.

Fourth is the real moat and the customers. The defensibility here should be switching costs - a compliance tool embedded in blue-chip customers' workflows and contracts is genuinely hard to rip out - so I'd confirm exactly how embedded it is, how concentrated revenue is across those 20-plus names, and whether the contracts and the relationships transfer cleanly on a sale. And I'd test the AI claim honestly rather than taking the seller's reassurance.

Growth Angle: If the recurring revenue and low churn are real, this is a classic "scalable asset that's never been scaled": the product, the contracts, the trademarks and the multi-language build are done, and the addressable market is large relative to current revenue. A strategic buyer - an existing software, HR, compliance or professional-services business - could plug it into a real sales engine and an existing customer base, which is exactly where the leverage is. The economics of software mean incremental customers are highly profitable once the platform exists.

The Drawbacks: No disclosed earnings, a long history of staying small, and - until proven otherwise - potential single-developer risk on a security-sensitive compliance product. "Low-touch and scalable" is a promise you have to verify against years of flat revenue. It's a genuinely interesting asset, but almost all the value depends on numbers and technical facts the listing doesn't give you.

Final Thought: A contracted, low-churn, embedded compliance platform with blue-chip customers and offshore optionality is exactly the kind of software asset that can be worth far more than $700k - or a codebase that's stayed small for good reasons. Get the recurring revenue and the churn, find out why it hasn't grown, and meet whoever maintains the code. Prove the recurring revenue is real and the platform won't fall over without the founder, and this is a rare, scalable buy at a small number. Can't, and you're paying for a promise.

If you want more details on any of these businesses or would like an introduction to the sellers, just reply to this email.

$378k of SDE on $1.85m of revenue, 150 recurring service customers, 10,000 records in the database, and a freshly-renewed 10-year franchise deed. Asking $1.395m plus stock - around 3.7x. An established East Auckland pool-and-spa business where the brand, the systems and the buying power come from head office - and so does a cut of every sale.

This is a proven retail-and-service operation inside a major franchise network: recognised brand, established systems, a capable team and a loyal local base, with recurring pool-valet income already in place. For the right buyer it's a de-risked way in. The things to weigh are the franchise itself, the retail-heavy revenue mix, and whether 3.7x is fair once the fees come out.

It runs product sales, water testing, scheduled pool-valet services, repairs and equipment upgrades from a prominent East Auckland site, split roughly 60% retail and 40% service. FY26 revenue was $1,846,450 with normalised SDE of $377,753. There are more than 10,000 customer records and about 150 recurring pool-valet customers, a team of a full-time office manager, five part-time retail assistants and three full-time technicians, and a newly renewed 10-year franchise deed bringing brand, marketing, systems, supplier relationships and local support.

What I'd Want to Understand:

First is whether the SDE is before or after franchise fees (this is the whole deal). SDE of $378k needs to be after the royalties and marketing levies the franchise takes off the top - if those fees haven't been deducted, the real owner's earnings are lower than they look. I'd want the fee structure in full, confirm the $378k is net of it, and note the SDE also includes the owner's own labour, so a hands-off buyer subtracts a manager on top.

Second is the franchise deed itself, because it's half the deal. The deed was just renewed for 10 years, which is a genuine plus - but I'd read it closely: the fees, the required spend and refits head office can mandate, the brand standards, the supplier lock-in, and crucially the rules on who I can sell to and what the franchisor takes when I exit. You're buying the right to operate under someone else's system, and that system's terms decide a lot of your economics and your freedom.

Third is the revenue mix, because retail and service aren't equal. It's 60% retail - competitive, lower-margin and increasingly exposed to online and big-box pricing - and 40% recurring service, which is the stickier, higher-quality half. I'd want the margin on each, how defensible the retail is against online competition, and whether the real value (and the growth) sits in expanding that 40% recurring service rather than the shopfront.

Fourth is the database and the team. 10,000 records but only ~150 on recurring valet is the headline opportunity - a big reactivation and service-conversion pool - but I'd want to know how live those records are and how the team is placed to work them. And since it's an owner-involved operation, I'd confirm what the owner does day-to-day and how much the capable team can already run without them.

Growth Angle: The upside is sitting in the database: 10,000 customer records against just 150 recurring valet clients is a large, warm base to convert into scheduled, recurring service - the stickiest, best revenue in the business - through the reactivation the franchise systems are built to support. Add equipment-upgrade sales into that base, lean on head-office marketing and buying power, and there's a clear path to shift the mix toward higher-quality recurring income. It's a grow-what-you-have story, backed by franchise scaffolding.

The Drawbacks: You're buying the right to run it, not the business outright - ongoing fees come off every dollar, you're bound by the deed's rules and head office's decisions, and you can't freely sell. The revenue is 60% competitive retail exposed to online pricing, and at ~3.7x on an owner-operator SDE that still has the owner's labour in it, it's not cheap. Strong platform, but price it on earnings after fees and after paying for the owner's job.

Final Thought: An established, systemised, franchise-backed pool business with a recurring service base and a big database is a genuinely de-risked way to buy a solid local operation - the brand and playbook are done for you. The deal comes down to reading the franchise deed as carefully as the accounts, confirming the $378k is after fees, and deciding whether the real prize - converting 10,000 records into recurring service - is worth 3.7x. Get the fee-adjusted number right, and it's a fair price for a proven, supported business you grow from the database out.

If you want more details on any of these businesses or would like an introduction to the sellers, just reply to this email.