Chat Joglekar Podcast Transcript
Chat Joglekar joins host Brian Thomas on The Digital Executive Podcast.
Brian Thomas: Welcome to Coruzant Technologies, home of the Digital Executive podcast.
Welcome to the Digital Executive. Today’s guest is Chat Joglekar. Chat Joglekar is the co-founder and CEO of Baton, a marketplace for buying and selling small businesses. Baton is on a mission to create the next great asset class for all and empower small business owners and buyers on their entrepreneurial journey across America.
Prior to founding Baton, Chat built multiple 100 million plus businesses at Zillow, Spotify, and Google, Chat now works with his co-founder, Dylan Gans, to unlock data-driven business valuations for every small business. Ultimately becoming the Zillow for Small businesses scaling idea from paper to real revenue is Chat’s sweet spot.
He’s done it and loved it. There’s nothing more exhilarating than taking a fledgling business and turning it into a powerhouse.
Well, good afternoon Chat. Welcome to the show.
Chat Joglekar: Thanks for having me.
Brian Thomas: Absolutely, my friend. Appreciate you hailing outta New York today as we get on a podcast. We’re just traversing one time zone. I’m in Kansas City, so I appreciate you making the time Chat. Let’s jump into your first question. You’ve helped build $100 million plus businesses at Zillow, Spotify, and Google.
What inspired you to shift, focus and launch Baton in the small business market space?
Chat Joglekar: Yeah, I mean, I think it’s kind of a similar ethos. Like at Zillow, the goal was to create a better way to buy and sell homes. Spotify was a better way to listen to all the music in the world, right? And Google was to find everything.
And I think Zillow is the most close proxy, but kind of the world of real estate. Pre Zillow to now everyone understands kind of what the asset is worth, whether you’re the homeowner, you’re a home buyer, and it’s a very similar thing with information, asymmetry, gatekeepers, et cetera. My mom was a real estate agent, and so i’m familiar. I used to sit in the back of the car on the weekends when she would take clients out and drive into the office, print out all the listings from the MLS, and then drive the client around to the various listings. And you know, Zillow has changed all that by letting people actually see homes, see the prices of those homes, and then get a lot closer to the table where they can decide do they want to negotiate.
Brian Thomas: That’s awesome, and I really like that you’re bringing a whole new level of, again, as things get disrupted, over the last gosh decade, we’ve seen a lot of things happen, right? You talked about some of those businesses, Zillow and others, you know, Airbnb and Uber, but bringing more transparency to this makes it obviously a lot easier for the consumer to get involved and make those purchases and really disrupting the space.
But I love the story behind it. You’re obviously making a great and a better way to buy and sell small businesses, so I appreciate that. Chat, Baton aims to be the Zillow for small businesses. Can you explain what that means and how your platform brings transparency and value to this market?
Chat Joglekar: Yeah, and I think it really starts with that transparency.
So it’s really easy for folks to understand when you say the Zillow for small business, ’cause everyone can go on Zillow and look up kind of what the homes in their neighborhood are worth, what their home is worth. Anywhere else. And I think that creates a level playing field. So when someone reaches out to you, even outside of Zillow and says, I’ll pay you a million dollars for your house, you know, if that’s a good or bad offer.
And the difference in small business transactions is 98% of small business owners have no idea what their business is worth. ’cause they’re not, you know, looking at sales comp multiples on a day-to-day basis, they’re building amazing businesses. And so. The ability to just bring that transparency to bear, then lets, that kind of unlocks the market.
Because imagine if 98% of homeowners had no idea what their home was worth, you know, how would you even think about buying a home, reaching out to them? And that’s very much how the small business acquisition space works today. There’s a lot of folks that’ll reach out to people being, you know, saying stuff like, I’m interested in buying your, you know, HVAC business or your car wash.
But if that owner doesn’t really understand what a good price for their business is and what recent other car washes or HVAC companies have actually sold for, they’re not empowered to actually move forward with that decision.
Brian Thomas: Thank you so much. Appreciate that. Again, just highlighting that Baton is all about the transparency, right?
You’re unlocking that market, truly providing, you know, valuation for anybody to see, and so. You feel more confident about whether you’re buying or selling that particular business. So I appreciate the share. And Chat, how does Baton leverage data to provide accurate business valuations? And why is that critical to empowering both buyers and sellers?
Chat Joglekar: Yeah, I would say it’s kind of a couple key sources of data. One is the actual business data itself. So. Owners can connect their QuickBooks. They can upload statements from their accountant, whatever they have access to, and we’re actually looking at their p and l statements, their kind of income statement and balance sheet, and then running a valuation using seven different models from discounted cash flow to sales comps, industry multiples, and.
So first we get the data from the owner, and then we have a bunch of data on recent sales. Both that have happened on Baton and have happened, have been reported to lenders or other brokers have reported. And so that’s kind of matching those two things together to say for a, for example, liquor store here in New York, we can have several hundred recent sales comps.
That enable us to tell that owner of a liquor store what a good price for their business is, given the cash flow that is flowing out of the business. And I think that’s the final piece is that we operate and kind of bring every business to one key number, which is a adjusted cash flow. So it’s really the cash that the business is generating, whether that owner wants to pay themselves, wants to invest in the business, is funding a loan.
There’s a lot of stuff that. That cash can be used for. And so you can look at an HVAC company, or a doggy daycare or a retailer and kind of be able to see the amount of cash and the durability of that cash flow. And we’re able to see that through actually running a valuation on their business, which historically when we started the company, you know, it’s $3,000 to $30,000 to get a valuation in three weeks and sending a bunch of stuff to a CPA or a broker, and.
We can turn those things around in a matter of minutes because we’ve built it into the platform because we want to give every small business in America a valuation that’s really robust and accurate.
Brian Thomas: Thank you. I think that’s awesome. The data that we talked about here is easy for you to integrate. You know, people that have a different type of ERP financial system, QuickBooks, whatever it is, can upload their financials so that you can get that p and l balance sheets, comps, cash flow, et cetera.
And what I highlighted is. Cashflow is key. Obviously, you can run an accurate valuation that way, and the turnaround time is probably a hundred times faster than the traditional methods, so I appreciate you sharing that. Chat, last question of the day. What trends are you seeing in the small business acquisition space, especially in a post pandemic or shifting economic climate?
Chat Joglekar: A couple things here. I mean it, it’s maybe overused, but everyone will talk about the silver tsunami, right? The baby boomers that are getting ready to retire, and there are some key stats. I think 75% of small businesses are owned by baby boomers and kind of by definition, if they’re still running them, they’re probably making a bunch of cashflow and.
Their kids aren’t gonna take it over ’cause they’re doing other amazing things and so there’s not really a good solution for them right now. And then I think on the buy side, there’s also this concept of, you know, people used to wanna work at Google and Facebook and I think they’ve realized that they are entrepreneurial, but we’ve kind of conflated entrepreneurial with startup or working at a startup when actually the small business owners.
In America and around the world are the true entrepreneurs starting an amazing business, growing it, scaling it, and the ability to purchase that business that is throwing off cash flow and using your skills, whether it’s in operations and finance, in sales or whatever, and then grow that business or bring in new technology, et cetera.
I think those two trends are kind of macro tailwinds for this space, really growing.
Brian Thomas: Thank you for sharing that. I, I really appreciate that. And we do see, I talked to several of the guests on the podcast here about baby boomers having that generational wealth and especially you mentioned that 75% of small businesses owned by baby boomers, which there’s gotta be a kind of a shift here.
And I think what your platform does is bring that information and that availability out to make it a lot easier to transition for others to get into this business or, or buy a business. So I appreciate that and Chat. It was such a pleasure having you on today and I look forward to speaking with you real soon.
Chat Joglekar: Yeah, this was great. Thanks for reaching out and enjoyed the conversation.
Brian Thomas: Bye for now.
Chat Joglekar Podcast Transcript. Listen to the audio on the guest’s Podcast Page.
