Subscribe: 
About three months after Jeremy Schoemaker launched AuctionAds, an eBay advertising network, eBay called wanting to acquire it. A New York firm then offered to outbid eBay every time it made an offer, and Schoemaker agreed a deal over dinner, negotiating the numbers on a napkin. Years later, the managing partner he had dealt with told him over drinks that they had been prepared to pay 10 times more.
On Episode 320 of The Exit, host Steve McGarry talks with Schoemaker, the serial entrepreneur and software engineer known online as ShoeMoney, about how he builds businesses, why he chases user growth before revenue, and how he decides when to sell.
From the Sears sales floor to a six-figure AdSense check
Schoemaker was 20 and selling washers and dryers at Sears when a woman starting an internet company offered to double his pay if he started the next day. Doing customer support there, he learned Linux and web hosting, terminal skills from 1996 that he says he still uses today.
At college he ported the game Quake to the Mac, which led to advertising income from the site that supported it. He still took a “real world” job for security, ending up as a lead Linux security engineer at Wells Fargo. Then a hobby site offering mobile ringtones earned him a Google AdSense check of more than $130,000 in his first month, and he moved into mobile products and, eventually, affiliate marketing.
Users first, revenue later
AuctionAds paid its publishers 100% of commissions on net-zero terms, something Schoemaker says he would not recommend to anyone. It was a deliberate choice: “I didn’t need money, I needed users,” he says, because he believed users would lead to a big exit.
That belief still shapes how he values a business. When the buyer took over AuctionAds, he says, it didn’t even want to do anything with eBay and turned the network into shopping ads for general shopping. What it wanted was a banner display network with plenty of users, the missing piece in a portfolio that already had email and affiliate networks.
His summary is blunt: show him a company with good revenue but flat or negative user growth and he doesn’t know anyone who would want to buy it. Show him one “growing like a weed” with a money problem, and “I can fix that.” That is one founder’s view, formed in ad-tech and online marketing, rather than a rule for every type of business.
Separate each business before a buyer asks
Asked how an owner can prepare a business for sale, Schoemaker starts with segmentation. Even though AuctionAds began as an offshoot of his other sites, it had its own accounts, including PayPal, which mattered when, in his last month running it, it paid publishers a little over $2 million. Shared tools and mixed accounts, he says, can “turn off people so fast.”
Buyers often want to start with napkin math, he says, and for AuctionAds that was literal. Invited to New York City by the buyer, he negotiated the deal on a napkin over dinner with one of its managing partners, and says he knew all his numbers exactly. His test for any owner: ask yourself, “if I was to buy this company, what would hold me back?”
The same formula, repeated
Most of what Schoemaker has sold started as an offshoot of something else. He builds a tool or service he wants that doesn’t exist, shows it to friends, and if it catches on, turns it into a business and “cranked up the fuel.” He keeps each one in its own lane, and says several went nowhere while some sold for “a good chunk.”
PAR Program, short for people acquisition and retention, followed the same pattern. It ran email funnels for large clients and could match an email address against public social profiles so brands could tailor their marketing. Schoemaker says it reached about a million dollars a month in revenue within nine months. GoSocial, its biggest client, offered to buy it; by then the company had almost 300 employees. His bio puts the price at $12 million in 2015, a figure not discussed in the interview.
Know what you will do with the money
Schoemaker’s timing rule comes from knowing his strengths. He likes architecting and scaling a product and driving rapid user growth; managing large teams is “not really for me.” At that point, he says, he has to either hire the person to run it or sell.
When an offer arrives, his first question is what he would do with the money. Each time he sold, the business was not his main source of income, and he had a plan: putting a large amount into investments and other businesses. He worries about owners who sell “just because they can get like a million bucks” without knowing what comes next. McGarry agrees, noting that many founders find a long stretch of sitting still after a sale “almost like a nightmare.”
That is also how Schoemaker frames the AuctionAds price. Told the buyer would have paid 10 times more, he replied that he still thought the valuation was “very generous.” He was managing people constantly, customer support was “horrific,” and the sale was “a giant payday at the time” that let him move on to his next project.
Expensive lessons from offices and passion projects
Asked about his favorite mistakes, Schoemaker points to the time he “tried to be something I’m not.” Encouraged to act like a traditional business, he took a large building in downtown Lincoln, Nebraska, hired heavily, brought in groceries and a chiropractor, and even sponsored the local weather, though he had no local business. He says having people work from home turned out to suit him far better.
His other lesson was a passion project. A big fan of mixed martial arts, he bought the domain fighters.com for about $60,000 and sponsored UFC fighters. Selling the domain later roughly covered what he had spent. He calls it a fantastic experience, but warns: “passion projects will kill you.”
Looking back on the past decade, his advice to himself is to trust his own formula, which he compares to Coca-Cola launching new versions of Coke. He also regrets not bringing in someone to run his fast-growing ringtone site, which no one would buy because of the copyright litigation attached to it, and which eventually faded.
What comes next
Schoemaker has worked with machine learning and AI for about seven years. He now builds open-source AI tools, runs AIranks.net, which gives sites a free report on optimizing for ChatGPT, and has written a book, AiBook. His sales follow the same pattern: build something users want, grow it quickly, and sell when the next project interests him more than running the current one. Find him at shoemoney.com, on LinkedIn and on Instagram.
