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I write weekly case studies on interesting companies and boil down the lessons to share with others. This past week I went through (almost literally) everything publicly available for Base44 (the AI app builder bought by Wix last year), including a lot of the founder’s LinkedIn posts, and thought I’d share some of the most impactful takeaways with y’all.

Backstory

Maor Shlomo co-founded Explorium, a venture-backed data analytics company, and ran it as CEO for seven years. In late 2024 he stepped down because he wanted to get back to building products.

He tried to build a website and customer management system for his partner’s tattoo business in WordPress and kept getting stuck, even as the former CEO of a tech company. That frustration became Base44, an app builder where a user describes what they want in plain language and it builds the front end, back end, database, user logins and hosting.

He started with three friends sitting at a table every other day and let them build using the product, fixing any hiccups and bugs they uncovered. The launch in February 2025 went badly. Product Hunt brought in 15 users and a few thousand dollars spent on influencers and paid ads did nothing. Then he started building in public on LinkedIn, where he already had a following, and that’s when it landed. Just four months after launch, Wix acquired the brand and it had more than 140,000 users.

The Numbers

• Launched in February 2025, sold in June 2025.
• Four months from launch to exit (the fastest I’ve seen so far).
• Funding: none, it was profitable shortly after launch.
• 20,000 users by early March 2025, 140,000 by mid-April.
• $0 to $1M ARR within three weeks.
• $189,000 profit made in May 2025 (he expected $100K).
• The announced sale price was $80M including cash and earnouts ($18.1M cash at close and $74.1M in estimated earnouts).
• $200M ARR surpassed in August 2026.
• 10 million users by August 2026.
• The founder is on track to receive more than $150M from earnouts + cash.

Lessons

1. One distributon channel is plenty

Maor tried the traditional route for a startup: A Product Hunt campaign and a few thousand dollars spent on influencer marketing and paid ads. Neither amounted to any traction for the brand. His last resort was LinkedIn, a place he had grown a meaningful following as a CEO and where competition for AI products wasn’t yet overwhelming like it was on X. He built in public from the start, the building, the wins and problems he faced in development. He didn’t go posting on X, Instagram, Facebook and Reddit. He focused on LinkedIn and gave it all his attention. Most businesses (and creators) spread themselves thin across many platforms and the results speak for themselves. Start where people already know and trust you and give it your full effort. Once that channel has grown sufficiently over several months, add another.

2. Get inside the head of early users

This is such a gamechanger for builders. From the beginning, Maor worked with three close friends, sitting at the same table, that were building products of their own. Maor challenged them to build their products using Base44. Every bug, issue, and weakness they found was fixed until it ran and built apps seamlessly. He later moved to groups of 20 or so community members from LinkedIn and built alongside them every two weeks with the same aim. Maor knew that when he launched, it had to be perfect. He specifically targetted non-technical founders that couldn’t code, to make sure they were reliant on the product to build. The launch was better than expected, and because everything was optimized and ironed out, it achieved $1M ARR in just three weeks.

3. Paying users > everything else

Most of the founders I study are obsessed with users, followers or likes. Maor attributes much of Base44’s success to his obsession with paid users. Every build, feature, and enhancement was to optimize for the paid user, increase LTV, and make sure they had the support they needed. This matters even more for an AI product where free users cost the business money. You want paid users and to convert them quickly. Another interesting finding from Base44’s stats is the users that cancelled their subscription. Over one third of them came back within a month. If a product is genuinely useful and saves users time in their workflow, they will come back. Maor has also stated that a lot of work went into the experience provided in the first session. A user was quickly shown all of the capabilities and put to work building so that they could see the magic in action. What happened next? More often than not, a user would subscribe.

4. Audit costs like the IRS

Maor expected to make $100K profit in May 2025 but instead almost doubled it to $189K. This was partly attributed to paid user growth, but a significant portion came from the reduction of costs. Remember, a business is a two-pronged equation: revenue is only one of them. Here’s what he did:

• Switched to a better and more efficient AI model that had less bugs and hallucinations (Base44 didn’t charge users when mistakes were made so every bug cost him)
• Reduced the number of AI calls needed to build each app
• Narrowed down a single caching setting that was set to five minutes instead of an hour: something that had cost him almost $30k over the prior months

Take a look at your three biggest costs and compare what you expected versus the actual cost to run the business. Sometimes something as simple as a setting or different supplier can cut costs in half.

5. Bet on growth

Although the final sale price was reported at $80M, just $18.1M was paid cash at closing. The earnouts made up the remaining estimate. Not even 18 months later, Maor was on track to make more than $150M in total with earnouts running quarterly until 2029. He knew the company would continue to grow in the age of AI and the rise of vibe coding but didn’t have the resources to do it himself. Wix provided a meaningful solution: he is now set for life and can continue to build Base44 alongside the resources Wix provides. In August 2026, Base44’s revenue increased tenfold in the year from March 2025 to March 2026 (from $1M to $100M ARR) and then doubled again by August 2026. I couldn’t find the exact revenue targets required for the earnout payments but they are certainly more than was expected. If you want to read more about him, I wrote a full case study. I also recommend reading through his LinkedIn posts, there are plenty of gold nuggets from his public build.

My question: Would you have raised capital and grown it yourself, or was selling with much of the proceeds tied to earnouts what you would have done as well?

I write weekly case studies on interesting companies and boil down the lessons to share with others. This past week I went through (almost literally) everything publicly available for Tom’s of Maine (the natural toothpaste brand) and thought I’d share some of the most impactful takeaways with y’all.

Backstory

Tom Chappell quit a sales job at Aetna after he ranked top of his class of 65 and made just $300 more than the worst performer. After quitting, he and his wife Kate moved to Maine in 1968 where he spent two years working for his dad’s business learning to make cleaning products without phosphates (his dad’s business was focused on environmental solutions for the textile industry).

In 1970, Tom borrowed $5,000 from a close friend (equivalent to about $45k today) to start Tom’s of Maine with Kate. The first product was a natural laundry detergent, followed by the country’s first natural toothpaste in 1975.

Not satisfied with the growth of the business, they hired consultants from Booz Allen and McKinsey which led to a growth rate of 25% per year over the next four year period. Although the business was growing, Tom was miserable as there had been no innovation or new products during this time. He decided to to go back to school for theology while running the business to gain perspective. The time there allowed him to re-write the company’s entire mission statement and to identify the type of buyer he would sell to. Fast forward to thirty-six years after starting the brand, Colgate bought 84% of the business for $100M in cash.

The Numbers

Founded in 1970, sold in 2006.

36 years from idea to exit (the longest I’ve seen so far).

Funding: $5,000 loan from a friend, SBA loans, second mortgage on the Chappell home.

$20M annual sales by 1995 and about $50M per year at the time of the sale.

Outside capital: 12% sold to 15 investors for $6M in 2000.

Sold 84% for $100M cash (implied value of $119M). The Chappells kept 16%.

Tom was 62 at the time.

After the sale, $14.5M went into a wool clothing brand that nearly failed.

Lessons

1. Growth is often not the main act.

Although growth is a must for a company of any size, it often blocks innovation and stagnates founder creativity. When Tom Chappell hired consultants from Booz Allen and McKinsey, they did exactly what was required to grow the brand. It doubled in size over four years. Despite this achievement, Tom felt empty and unfulfilled because there had been no new product testing or innovation since the consultants were hired. It sparked a need for him to review the company’s values and take a step back before continuing. The new mission statement was designed to influence what was launched, who the business would sell to, what was recalled, how staff and customers were treated, and even introduced profit sharing with charities and paid employee volunteer time (mostly unheard of in this era).

2. Own your mistakes.

In 1992, the existing deodorant formula was altered to omit petroleum products. The result was unfortunate: the new formula didn’t work for about half the people that purchased. Instead of making up excuses or firing the people responsible, Tom recalled the product (taking a loss of $450,000), donated the recalled product to homeless shelters, sent customers deodorant with the old formula along with a coupon for their next purchase, and didn’t skip a beat. They lost money that year but they didn’t lose many customers. He took the hit for it, which showcases exemplary leadership. He could have blamed others or refused to recall but he didn’t because the company values had been made clear.

3. Don’t raise money to explore.

This one was a bit out of left field. Tom’s had grown for years unencumbered by outside capital. A herbal remedies line was launched in 1999 that more than doubled the product range Tom’s offered. Bigger companies in the space had already failed but Tom believed they had an edge as a natural products business. He was wrong.

The worst part? He didn’t just launch and lose money, he assigned the largest marketing budget he ever had and funded it by selling 12% of the business to 15 investors for a total of $6M. Growth metrics fell and the business lost money for a second year since its inception. Tom later told Forbes that they ‘tried to do too much’. It seems like he was compensating for the period where there was no innovation, something I like to call ‘revenge-growth’. The key here is that $6M could have grown the company significantly if used to market a product that already worked, such as the toothpaste line.

4. The price seemed low, which it probably was.

Tom’s wanted to strike a deal with Colgate for two simple reasons. They respected Tom’s as a brand and would allow them to tailer the deal to suit their needs. Tom and Kate didn’t care nearly as much about the sale price as they did about the terms of the sale.

In the end, they had an extensive list that they walked away with including:

16% ownership in the business

Tom as CEO and Kate as VP

Headquarters that stayed in Maine

10% profits to charity + 5% employee paid time to volunteer

Tom’s to continue operating as its own brand

They almost certainly could have gotten a higher price without some of these terms but that’s not why they sold. This is a common theme I have seen across seven of the nine case studies I have written to date. Terms, not price matters in the end.

5. Slow and steady wins the race.

Especially with the rise of technology, everything moves much more quickly. Tom’s of Maine was a great example. It took 13 years to get to $2M in sales, and 36 years to an exit. They weren’t in a rush to grow and it paid off. Tom then started Rambler’s Way in 2009, a wool clothing brand that initially launched online. He used $14.5M of the sale proceeds to grow the brand, which was close to going under just six years after it was founded. Even with the same founder, the results can vary. Slow growth was probably one of the best things to happen to Tom’s of Maine. It wasn’t planned and likely a financial constraint, but it led to a nine-figure exit in the end.

Is there something that you never worried about growing that took off after months or years of consistent effort? It was likely much more meaningful to you.

I research and write case studies on interesting companies. This past week, I’ve been working on one for the minimalist watch brand MVMT (I was obsessed with them and wanted one in highschool). Thought I’d share some of the insights here with y’all.

Last week's post had some comments asking for more context and background, I've added that below.

Backstory

Jake and Kramer were roommates while at school in Santa Barbara. Both had previously tried their hand at different ventures such as glow-in-the-dark T-shirts and wallets, with varying success. Jake’s T-shirt business failed, while Kramer’s wallet brand found moderate success through crowdfunding.

The two weren’t particularly interested or inspired by watches but noticed that no college-aged students wore nice watches because they were overpriced ($500-$1000 minimum). They decided to try their hand at a watch brand to bridge the gap.

After developing samples and going back and forth with manufacturers in Asia, they had six prototypes that were photographed and used for the campaign. **They launched on Indiegogo after two failed attempts on Kickstarter with a goal of $15,000 and ended up raising $219,898 from 2,887 backers. They went on to do a second campaign, bringing the total amount raised to just under $300,000.

Six months later, the pre-sales from Indiegogo were fulfilled and Jake learned Facebook ads himself. Once he learned what worked and what didn’t, sales started to climb. Adding influencer marketing as a channel while continuing to reduce the CAC increased margins to the point where reinvestment and continued marketing scaled the brand quickly.

In 2018, when the landscape for advertising on social media started to shift, the founders decided it was finally time to raise money. While in talks with Movado, they became an interested buyer and entered into a 75-day exclusivity period. They sold shortly afterward for $100M cash structured with an earnout valued at up to $100M. By the time the deal closed, the estimate for the earnout was less than 1/6 of the original quoted amount. Two years later, growth targets were missed and no earnout was paid. Jake left MVMT shortly afterward.

The Numbers

• Launched on Indiegogo in June 2013. Sold to Movado Group in 2018.
• 5 years from idea to exit.
• The only investment was ~$5,000 to build the prototypes.
• First crowdfunding campaign: $219,898 (compared to their goal of $15k).
• Revenue growth (nuts): $1M in 2013, $7M in 2014, $71M in 2017.
• Profitable since inception with a 7.4% EBITDA margin at sale.
• 20+ VC firms turned down. No equity was given up.
• Sold for $100M cash structured with a $100M earnout.
• Jake Kassan (co-founder and CEO) was 27 when MVMT was sold.

Lessons

1. Learn from your failures

At 17, Jake started a company selling glow-in-the-dark T-shirts that brought in $10,000 a week at its peak. It sold mostly through a physical store and at school so when competitors started selling online, it flopped. Starting MVMT, Jake had one mission: to sell exclusively online. Most entrepreneurs fail to see the meaningful lessons from a graveyard of failed ventures. The smartest ones pick up things they got wrong and make note to not repeat them.

On the flip side, if something worked before, it might work again. Kramer learned that crowdfunding was a meaningful way to gauge public interest for a product; MVMT was built around a crowdfunding campaign that ultimately kickstarted the brand and provided the capital to fund the first batch.

2. Being an entrepreneur really means doing it all yourself

After Kickstarter turned down the MVMT campaign twice, Indiegogo was their next best option. Desperate to make the launch a success, Jake worked tirelessly. There was no marketing budget so he scraped 200 emails from people in the press, posted on Reddit and then used VPNs to upvote his own posts. It wasn’t exactly a growth-hacking masterclass but it worked. The campaign closed at almost fifteen times the original goal.

While researching MVMT and Jake more specifically, I started to notice how many skills he just quickly learned himself that subsequently worked wonders for the brand. After the success of the campaign that he brute-forced his way through, he then taught himself how to code and built a basic website while the campaign was ongoing so sales wouldn’t die the minute it ended. The day it did, four sales came from the site.

Then he taught himself Facebook ads from YouTube since they needed a new way to grow. Within two years, the brand had grown from around $1M in sales to over $7M. By 2017 after he tried his hand at influencer marketing, sales exploded to $71M. He wasn’t afraid to mess up and just got started, knowing that everything he needed to know could be learned if he applied discipline and intensity.

3. Pre-selling your product is free market research

What I found very interesting was the absolute disgust these guys had with outside investment. While building the business, they were approached by more than 20 venture capital firms. All of them were turned down. Even at the start of it all, they didn’t want a loan or investor so they crowdfunded for pre-orders.

3,900 people paid for watches that hadn’t even been made yet but it ultimately paid for that first batch. Each future batch was paid for by the one before it.

It’s also a wonderful way to test the market. If nobody cares about your product after you spend weeks or months pitching, cold emailing, and selling, your product is dead. Crowdfunding is an easy and cheap way to figure that out instead of ordering a bunch of inventory and then stomaching a huge financial loss. Collect deposits to gauge demand. Even Elon did it with the Cybertruck.

4. The endless advertisement glitch

I understood quite well from my research that advertising on Instagram and Facebook was immensely successful if done right back in 2014-2018. What I didn’t realize was how it could be scaled almost infinitely.

Once Jake had his finger on the pulse in terms of what worked and what didn’t, he quickly scaled his advertising budget. At one point, he would spend just $20 on advertising to sell a $100 watch. In essence, he could do this all day every day with hundreds of thousands of dollars which he did for years (not confirmed numbers here since they weren’t made public). Alongside influencer marketing, this contributed to the huge explosion in revenue growth over those few years.

5. Be weary of anything other than cash

This one is a great lesson for all of you looking to exit at some point. Maybe I’m just a noob when it comes to this stuff but it kind of caught me by surprise. The deal was structured with a $100M cash component and a maximum earnout of $100M that was paid 50/50 on performance targets for the first two years after acquisition and the two years after that. By the time the deal closed it had fallen under $20M already, and by 2020, it was $0. Jake stayed on as a thank you to Movado for changing his life but admits that a part of him stayed for the money. He left MVMT that same year. Movado’s CEO chalked it up to ‘the brand not growing enough to hit targets’. I get it, $100M is plenty, but seemed like a bit of a misleading amount, especially since 2017 revenue was already roughly 70% of the cash component. Was the final price of $100M below what the brand was worth? Almost certainly.

6. Money doesn’t buy happiness

Okay this one is just cliche at this point but hear me out. What I found the most interesting was just how open Jake has been about the entire process from starting MVMT to his struggles post-sale.

Growing up, his only goal was to reach financial freedom. He found it at 27. He has spoken openly about enjoying the first few years of no responsibilities but then plunging into the darkness of depression and panic attacks. He understands that people find it hard to emphasize with someone who is rich and depressed but it also made him realize how lonely the top was.

He ultimately found himself again by choosing a new path forward with something to focus on. He had always loved filmmaking and editing, which is what he does now on YouTube without adding too much pressure. The human element of his videos and how open he is really made me think about where the goal of endless desires gets us in life.

I wrote an article on the founder of Sour Strips, Maxx Chewning, a few weeks ago. He started creating YouTube videos eight years before he ever started his business and has continued to this day a few years after exiting. He has never publicly stated that he was bored, unfulfilled or depressed. Keeping busy and focusing on something you enjoy seemed to work well for him.

What’s something you’ve learned that changed how you thought as an entrepreneur?

Nice to meet you all I am newer to this community and to my small business.

The issue I am faced with right now is distribution. I have about 12,000 followers from a slightly different niche of on Instagram and using Substack and natively posting notes/restacking others in the space while trying to put myself out there and trying different things. I've also thought about starting to build out my X following, however, that also appears to have gotten quite saturated (not saying I wouldn't try it).

For those who grew their small business organically, what was a meaningful distribution channel for your growth? I know with all of the slop out there and over-marketing people are getting tired of things shoved in their face (honestly, fair game I feel this way too sometimes).

In general I feel like a lot of distribution channels are overused and no longer very effective.

Any advice helps here, thank you.

I've been obsessing over SaaS founders recently and wrote up a particularly interesting example as a case study:

In 2013 a designer in Alabama got tired of exporting Stripe data into a spreadsheet every month to work out his own churn. He was running two small survey products at the time generating around $5,000 MRR.

So he built the dashboard he wanted. Eight days of actual work, spread across a month. He launched it on Twitter to fewer than a thousand followers. Launch day brought five or six paying customers, and one of them, a complete stranger, signed up on the $250-a-month tier he'd added to the pricing page without expecting anyone to take it.

The business? Baremetrics. Here's the part I think is actually worth talking about.

It was profitable before it raised anything.

By September 2014 it was doing $20,000 MRR with 250 customers and five people, only two of them full-time. Profitable. That same month, the Stripe Platform Fund put in $500,000 on a SAFE at a $10M cap. The stated plan was three hires.

Half the money was gone in 120 days. The team went from two full-time employees to six. In December 2015 he raised another $300,000 and headcount had increase to eight. By June 2016 the company was burning $40,000 a month and had eight weeks of cash left.

He called a meeting and said: we're running out of money and I need all of you to take a pay cut. The team took 15%. He took 30%. One person volunteered to halve their salary for a few months to get there faster. Expenses came down $20,000 the first month and nearly $30,000 the next. December 2016 was the first profitable month since the funding arrived. Twenty-seven months of losses, bracketed by profitability at either end.

Here's the bit that surprised me:

Revenue never stopped climbing through any of that. $25,000 MRR at the end of 2014. About $32,000 by mid-2015. $50,000 by spring 2016 — an all-time high, two months before the runway calculation. He published that number himself at the time, along with the line "and no we aren't profitable yet."

The business was growing the entire time it was dying. Nothing was wrong with the product or the demand. The money was just going out faster than it was coming in. Raising didn't fail because the bet was wrong — it failed because a one-off balance got converted into permanent payroll, and payroll doesn't switch off when the runway does.

Then it plateaued.

Sixteen months between $90,000 and $100,000 MRR while working hard the whole time. They rebuilt the infrastructure for real-time updates because customers wanted it, revenue barely moved. They launched two add-ons that recovered failed payments and explained cancellations which did improve revenue, because they increased cashflow for those already using the service. They launched a whole new product, killed it in three months, and sold that add-on for $100,000.

What they never did was change the price. Not once, in eight years.

And the marketing that built the company in the first place never restarted. It was numbers-first writing — "$0 to $25,000 a month in 12 months" was a common title, and it was a founder's hobby. By then the founder was managing ten people and actively seeking funding. The plateau starts almost exactly when he stopped writing.

He nearly sold in 2019 for $4.95M. An LOI was signed, then the buyer started missing deadlines, never introduced a lawyer, and stopped replying days before closing. They'd misrepresented their funding from the start. It cost him about $20,000 in legal fees and most of a year of attention. That deal was also structured as an asset sale, which would have been taxed as ordinary income.

In November 2020 he sold to a private equity firm for $4 million. All cash, three instalments, no earnout. Structured as a stock sale, which qualified for the small business exemption — he paid 5% to the state and nothing federal. Six weeks from LOI to close. $300,000 went to the team, and nobody was required to stay.

The catch: the deal only worked if both investors agreed to write off the entire $800,000. Not a reduced return. Nothing. Both said yes.

He's been clear that the decision to refuse an earnout cost him, being the biggest limiting factor on the price. He wanted out and was willing to take less money to do so.

The thing I keep coming back to is that he didn't care about the amount of money. He wanted out and to not have to be involved after the sale.

If you've got a business you'd sell one day, would you want to be completely done with it once it is sold or do you want a smooth transition or to even work for the acquirer?