Ep 563 Heath Adams Said No to the Biggest Offer of His Life, Then Doubled It

Colin Morgan (0:01)

Hi there, and welcome back to another edition of Built to Sell Radio, the podcast designed to help you punch above your weight in a negotiation to sell your company. I'm the executive producer Colin Morgan. Now, you probably get emails asking you if you've ever considered selling. Now, most owners delete them, and our next guest did too, until a friend who had just sold his own company told him to stop. Heath Adams bootstrapped the cybersecurity company, TSM, which taught people how to hack, certifies that they can, and then gets hired to break into company systems and find the holes before criminals do.

Taking the advice of his friend, he answered one. It became an offer for more money than he'd ever seen. Half of it, although, was an earn out. He said no.

What he signed instead was worth more than double. Here to share with you the full story is Heath Adams. Enjoy.

Heath Adams (0:59)

Hey, thanks for having me.

John Warrillow (1:01)

You are a hacker. I hope a good one.

Not one of these hackers that go after people's bank accounts. But you helped people understand their security vulnerabilities. And the way you position TCM is kind of like, I'm a hacker but a benevolent one, so I can help you kind of understand your vulnerabilities. Tell me about how this company started.

Heath Adams (1:25)

Yeah, so exactly. It was called the ethical hacker. Another word for it is penetration tester. And companies hire us to come in and assess. And so we look at it from a bunch of different lenses, but network being the most common. There's also web applications, the websites you go to. There's a physical breaking and entering where we'd actually go and have a goal to get into a building or maybe access a server room or do something. And we're just trying to write a report at the end of the day that lists out the vulnerabilities and how you should fix them before somebody else goes and finds them. And so I got started into this around 2016, 2017

How did you get started? Yeah, honestly, I heard a friend, I was working on a help desk in IT, and a friend told me that you can be a hacker. And I thought he was full of it, to be honest with you. And I went home that night and started doing research. And sure enough, you could be a hacker and you get paid to do it. I thought same thing. It's just the bad people in the hoodies that you see. And there's ethical hacking. And so I started researching and found out what kind of training you needed, what kind of background you needed for it, and just started kind of earning certification, self-studying, and just kind of taught my way into doing it and eventually landed the job. Which eventually led to starting a business on the consulting side.

John Warrillow (2:41)

And what made you go from a job to a business? Like, why did you choose to start one instead of remaining employed by one?

Heath Adams (2:49)

Yeah, so I was doing some nonprofit work. I started a nonprofit for veterans in cybersecurity, some military veterans, and that was called VetSec, or VeteransSec, and it's still around today.

Basically we were trying to find a group of people that were either in the military, coming out of the military, and being able to guide them kind of getting into cyber. And so I started just making some YouTube content, like what does computer networking look like? What is basic ethical hacking? I started doing a little bit of Twitch streaming, and that just took off on its own. It was never an intent to have that take off, but what started happening was people online started seeing me and coming to the company that I was working for and saying, well, we saw Heath online. We want him to do consulting work for us. And I barely got a thank you, no referral revenue, any of that stuff. And so I was like, well, if they're making money off me, I could probably make money off of me too. And I decided one day I was just gonna quit and go do my own thing and see how it went, and it ended up going okay.

John Warrillow (3:48)

And how was the business model in the early days? Were you just charging by the hour, by the project? How did you make money?

Heath Adams (3:54)

Yeah, it was by the project, and it was pretty slow. I mean, we started as a services company and quickly became an educational company because I had that much downtime to work on courses and content and other things. But yeah, we would do basically by client, by project. We'd scope it out, and I would just say, in the back of my mind, I would say, hey, this is the amount of hours I think it's going to take me. Here's the rate I want to charge. I'm going to quote this as a project for this price and just give them that as a scope.