The Secrets Behind Building a Sellable Business with Danny Mizrahi

In this episode of the DealQuest Podcast, Danny Mizrahi, founder of Contango and current CEO of Sunbird Messaging, shares his remarkable journey from hustling as a teenager to leading cutting-edge businesses. As the driving force behind Contango, an Inc. 5000 company and "Best Workplaces" honoree, Danny built a thriving IT managed service provider (MSP) from the ground up, leveraging his business acumen and passion for leadership. Now, he’s at the helm of Sunbird Messaging, a revolutionary app bringing iMessage to Android users, as featured in The Wall Street Journal.

Danny reflects on his early ventures, Wall Street lessons, and the pivot that led him to sell Contango and fully focus on Sunbird. His story highlights resilience, leadership, and the ability to seize new opportunities in the ever-evolving business landscape.


NETWORKING AND RELATIONSHIPS ARE KEY TO ORGANIC BUSINESS GROWTH

Networking is more than just exchanging business cards—it’s about forming meaningful, long-term relationships. Danny’s story highlights this perfectly. While a lot of entrepreneurs lean on cold marketing, sales teams, or digital ads to grow their businesses, Danny found that his biggest growth came from good old-fashioned word-of-mouth and the connections he made through his personal network.

He shared that even though he tried different sales strategies, it was the relationships he built with clients and peers that truly helped take Contango to the next level. In fact, that strategy helped him hit $5 million in revenue without burning through a ton of cash on ads. For entrepreneurs, especially in fields like IT, law, or consulting, where trust and reputation are crucial, this is a valuable takeaway.

ADOPT SCALABLE BUSINESS MODELS FOR LONG-TERM SUCCESS AND A PROFITABLE EXIT

When Danny first started Contango, he chose to go with an hourly project-based model, which worked well in the beginning but limited the company’s ability to scale. Over time, he realized that a recurring revenue model could make the business more stable and valuable. So, he made the smart move to switch to a subscription-based model.

This shift helped Contango grow more efficiently and made the company much more attractive to potential buyers. In the end, it was a key factor in positioning the company for a successful exit. The takeaway? Moving to a recurring revenue model—whether through subscriptions, retainers, or long-term contracts—makes your business more predictable, scalable, and appealing to investors. If you're thinking about selling or want to set your company up for future growth, adopting a subscription or recurring revenue model can really boost your business’s value.


FOCUS ON PARTNERSHIPS TO SCALE YOUR BUSINESS

One of the most powerful lessons Danny shares is the importance of focusing on "who" rather than "how." Rather than trying to handle every aspect of his business himself, Danny chose to bring in experts who could help him scale. He gave a great example of how, after recognizing that his business could improve, he brought in an MSP (Managed Service Provider) consultant. This expert helped him optimize Contango's systems and processes, turning the company into a well-oiled machine. He also hired a service delivery manager who had worked at a $10 million company. This person helped reshape Contango’s service desk, which made a huge impact on how efficiently the business operated.

Danny’s decision to move away from trying to do everything himself and instead find the right people to help was a turning point for the company. The key takeaway here is that you don’t have to know everything or do everything yourself. By finding the right experts to partner with, you can scale your business more effectively and avoid getting stuck in the weeds of everyday tasks.

CONSIDER ACQUISITION AS A GROWTH STRATEGY

For years, Danny focused on growing Contango organically. But at a certain point, he realized that acquisitions could be a faster and more effective way to grow. This shift came after seeing other entrepreneurs in his network successfully acquire smaller companies using low-interest SBA loans. Danny shared that these entrepreneurs were able to rapidly expand their businesses by acquiring others, and he saw the potential for Contango to do the same. So, he decided to explore acquisitions as a strategy for growth.

Even though Danny had built the company organically for years, he understood that acquisitions could accelerate the process and make his company even more valuable. It’s important to stay open to different growth strategies—whether it’s through organic methods or acquisitions. By diversifying your approach, you open up more opportunities to scale your business in ways you might not have considered before.

BUILD A BUSINESS THAT RUNS WITHOUT YOU

Selling a business becomes easier when it can operate independently of the owner. To make the business more sellable, Danny focused on building solid systems and processes that allowed it to run smoothly without him at the helm. He invested in developing a strong company culture and nurturing an excellent team, which helped ensure that the business could thrive even in his absence.

Contango boasted 135-star Google reviews, a flawless set of operating procedures, and a well-established brand— all of which made it an attractive proposition to potential buyers. By putting these elements in place, Danny set his business up for long-term success, ensuring that it would continue to run efficiently after his departure, thus making it far more valuable and appealing to any buyer looking for a company with strong foundations.

EXPECT THE UPS AND DOWNS ON THE ENTREPRENEURIAL JOURNEY

Starting a business, particularly in the tech world, comes with many challenges. As Danny Mizrahi shares, even when you have a big vision—like building a billion-dollar company—you need to be ready for the difficult times that are an inevitable part of the process. He gives the example of raising funds right before the great recession in 2007, highlighting how unpredictable the journey can be.

Entrepreneurs often experience moments of uncertainty, such as running low on cash or facing delays and obstacles in product development. What’s important to understand is that these struggles are part of the entrepreneurial ride. In fact, they’re often what help businesses learn and grow. The key is to keep pushing through the tough times, knowing that these challenges are just steps along the way to success.

FUNDRAISING IS MAJOR PART OF BUILDING A STARTUP

One surprising reality that many first-time entrepreneurs don’t anticipate is just how much time they’ll need to spend raising funds. Danny shares how, early on, he didn’t realize that fundraising would take up so much of his focus. In the case of his company, Sunbird, fundraising became a huge part of his daily job. As he put it, "95 percent of my job was going to be fundraising."

For tech startups, especially, securing the right investors is crucial to sustaining growth. Founders often begin with a great product or service in mind, but they soon realize that no matter how innovative the idea, the business can’t grow without the necessary capital to make it happen. Understanding this reality upfront can help entrepreneurs manage their expectations and make fundraising a top priority to ensure their startup can continue moving forward.


BALANCE PASSION WITH EMOTIONAL RESILIENCE

Danny Mizrahi opens up about the emotional rollercoaster that comes with building a business. As an entrepreneur, he feels deeply passionate about his work, especially when it comes to growing his company, Sunbird. However, that passion also comes with challenges, particularly when things aren’t going well. It's normal to worry about the business and feel concerned about the pressure, but he also shares how important it is to not let those emotions take over and affect your decision-making.

For example, Danny mentions how he cares about both the investors and the success of the company, even when things aren't going as planned. He’s learned that if he wasn’t worried about these aspects, it would mean he didn’t care enough. Yet, he also stresses that it's crucial not to internalize every setback—entrepreneurs need to bounce back from challenges without letting them cause burnout or overwhelm.


UNDERSTAND THE DIFFERENT STAGES OF FUNDING AND INVESTORS

In the early stages, like the one Sunbird is in now, many startups struggle to find the right capital to scale. Danny explains how important it is to match your funding strategy to where your business is. Right now, they’re raising money from "friends and family" to bridge the gap until they hit the milestones that will attract venture capitalists (VCs).

Here’s the deal: early-stage investors like friends and family are more likely to jump in when you’re still testing the waters, while VCs usually show up later when you’ve proven traction and growth potential. If you don’t time it right, you risk stalling your progress. The key takeaway? Know your stage, pick the right kind of investors, and set your business up for success.

Tune in to this episode to hear Danny Mizrahi’s insights on building a business that thrives in the face of challenges, scales with purpose, and creates lasting value for all stakeholders.

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Listen to the Full DealQuest Podcast Episode Here

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FOR MORE ON DANNY MIZRAHI:
Sunbird Messaging
Danny Mirzrahi 's LinkedIn
Sunbird Messaging’s Facebook


FOR MORE ON COREY KUPFER:
Corey Kupfer's LinkedIn
Corey Kupfer's Website
DealDen

Corey Kupfer is an expert strategist, negotiator, and dealmaker. He has more than 35 years of professional deal-making and negotiating experience. Corey is a successful entrepreneur, attorney, consultant, author, and professional speaker. He is deeply passionate about deal-driven growth. He is also the creator and host of the DealQuest Podcast.

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