Startup Stories – Mixergy

Host: Andrew Warner
Guest: Kasey Grelli, Founder of Aux Insights
Episode: #2272 – “Aux: $10mil Advising Private Equity”
Date: February 21, 2025

Episode Overview

This episode features Kasey Grelli, founder of Aux Insights, a company that acts as an “office of the CMO” for private equity (PE) firms. Aux advises PE on digital marketing diligence and value creation in portfolio companies. With over $10 million in annual revenue within two years, Aux is bootstrapped, profitable from day one, and growing rapidly. Andrew and Kasey dive into Aux’s startup journey, unique business model, lessons from bootstrapping vs. VC worlds, and tactical growth and operational tips for service entrepreneurs.

Key Discussion Points and Insights

1. Aux Insights: Origin and Fast Growth

• Aux at a glance:
  • Revenue: 8+ figures (>$10M), extremely fast growth (02:23, 02:52)
  • Founded: June 2023 (02:59)
  • Profitable from day one—Kasey’s shift from VC-backed to “I’m too old/expensive for that. I want to make money now.” (03:25–04:08)
  • “We’re constrained not by demand, but supply. I’m really excited about the growth.” — Kasey (02:28)
• Bootstrapping vs. Venture:
  • Kasey’s VC background was about burning cash for growth; now, she follows Jesse Puji’s bootstrapping and profitability-first guidance.
• Partnership model:
  • Aux was spun up within Gateway X’s venture studio (founded by Jesse Puji), so Jesse is a “business partner, but not in the day-to-day.”

2. Aux’s Service Model: Private Equity Meets Digital Diligence

• How Aux works:
  • B2B service, contracted by PE firms during diligence (“Should I buy this company? What are the marketing risks?”) then post-acquisition to drive digital growth. (04:25–06:37)
  • Strict ROI bar: “We only take engagements where we know we can guarantee a 3x ROI on our fees.” — Kasey (05:50)
  • Example:
    • Staffing co. deal: During diligence, Aux flagged digital growth risks and growth levers; after PE closed the deal, Aux was brought back to execute. Result: $4M year-over-year revenue growth in January. (05:41–06:30)
• Team structure:
  • Mix of FT “unicorns” (ex-consultants + expert marketers) and huge bench of part-time, specialized experts. “Plug and play” per assignment, more nimble than McKinsey/Bain/BCG. (07:40–08:33)
  • “We’re more affordable than McKinsey for the same style of work.” — Kasey (07:05)
• Positioning:
  • “Aux is the office of the CMO for private equity...we become kind of their expert partner.” (09:51–11:09)

3. Why PE Needs Digital Experts

• Problem solved:
  • PE investors are “mostly finance generalists” and “don’t know the nuances of how to run a digital marketing business.” A resident expert can be spread thin and often out of practice. (09:51–11:09)
• Real-world impact:
  • Kasey recounts discovering black-hat SEO and plagiarism in a healthcare site’s diligence—potential existential Google risk.
  • “Can you still do this business if Google takes the entire website offline? If not, this is a major concern.” — Kasey (12:05)
• Tactical expertise:
  • The value is specialized: identifying not just risks, but also unexploited digital growth levers.

4. The Path to First Customers and Product-Market Fit

• Demand-first launch:
  • “We built demand before we even launched, before incorporating or hiring anyone.” — Kasey (22:41)
  • Pre-sold with discovery calls to all PE connections.
  • Initial thesis: 70% of revenue would be pre-acquisition/diligence; reality (due to deal slowdown): 80% value-creation post-acquisition early on. (23:54–24:26)
• Service spectrum:
  • Beyond diligence: Ongoing “value creation”—audit, model, and execute new digital playbooks.

5. Value Creation: Beyond Reports

• Aux’s extended services:
  • In-depth audits and actionable, prioritized growth plans for acquired companies. “If we just hand them that blueprint, it’ll sit on the shelf. We then build out the internal capabilities.” (25:27–27:13)
  • Coaching teams, building systems, fractional experts (“Aux Talent Solutions”) for clients not ready to hire a full-time team. (27:29–28:31)
• Notably, Aux aims to exit:
  • “We really want to get in there, build up your internal capabilities, then coach you on execution. We don’t want to be the consultant that sticks around forever.” (27:13–27:29)
  • Relies on referrals, re-engagements, and references as core growth metrics (“the three Rs”).

6. Pricing, Impostor Syndrome, and Charging What You’re Worth

• Aggressive pricing mindset:
  • Co-founder Jesse constantly “raised the price $5,000 more per week” every sales call. Terrifying at first, but it worked. (30:07–31:57)
  • “Every time we got on a call, Jesse raises the price...and I was terrified.” — Kasey
  • Realization: Charging more attracts higher-level talent and “people elevate their work to the price.”
  • Market benchmark: McKinsey et al. charge $250,000/week; “there’s room if you can build the brand.” (30:29–31:57)
• Guaranteeing ROI:
  • Kasey’s “operator side” means she takes pricing very seriously—won’t overcharge without clear ROI.

7. Operator to Owner: Letting Go

• Personal and emotional transition:
  • Switching from large company CEO to startup founder was more of an emotional roller coaster than expected. “Every 20 minutes, it was up and down for the first 6–9 months.” (33:23–35:02)
  • Learning to focus on her “zone of genius,” not operational minutiae.
  • “It is worth my time to find someone to do [processes] because I’ll spend 3x the time and lose 3x the revenue. I’ll focus on what I do best.” (33:23–35:02)
• Letting go of day-to-day:
  • Still very hands-on with projects but aiming to hire more partners and operational support to free herself for strategy and biz dev. (35:45–36:29)
  • Concrete example: Saved a client $500k by auditing an underperforming $2M/year agency relationship and transitioned to higher-performing channels. (37:15–37:50)

8. “Desired Future State” — Vision for Aux and St. Louis

• Vision (“DFS”):
  • Build St. Louis into a hub for digital talent akin to how Red Ventures did for Charlotte.
  • “I want to build out a hub in St. Louis where not only are we able to retain and attract young talent, we rebuild the city… That’s the thing that really excites me.” — Kasey (39:16–40:59)
  • Beyond consulting: see possible expansion into agency services, co-investment fund, AI/automation expertise, expanding to Europe/Asia.
  • “Aux is in its infancy. We could own the AI space, build research arms, and more.” (39:16–41:00)

Notable Quotes and Memorable Moments

• On profitability:
  • “I’m too old for that. I’m expensive. I’ve got kids. Like, that’s not the life I want [to grind unprofitably].” — Kasey (03:25)
• On confidence and sales:
  • “Every time we get on a call, Jesse raises the price... I was terrified. But he was right.” — Kasey (30:29–32:00)
• On diligence:
  • “It’s like getting back to my reporter roots—I’m trying to find all the problems and opportunities. It’s my love language. I love it so much.” — Kasey (21:48)
• On building St. Louis:
  • “I want to rebuild the city. We bring families here to build really good lives...” — Kasey (39:16)
• On building the business:
  • “We built demand for the business before we even launched, before we incorporated, before we hired our first employee.” — Kasey (22:41)
• On letting go:
  • “I figured, you know, I’m running this massive business… what I took for granted is, there is an emotional [toll]…” — Kasey (33:23)

Timestamps for Important Segments

| Timestamp | Segment | |---------------|---------------------------------------------------------------| | 02:23 | Aux Insights revenue, founding story | | 03:25–04:08 | Profitable from day one; mindset shift from VC | | 04:25–06:37 | Example of PE deal, what Aux delivers | | 07:40–08:33 | Team structure: unicorns and on-demand experts | | 09:51–11:09 | Why PE needs outside digital diligence | | 12:05 | Case study: black-hat SEO in diligence | | 22:41 | Building demand before building product/service | | 27:29–28:31 | Long-term client engagement, the “three Rs” | | 30:07–31:57 | Pricing fears and lessons | | 33:23–35:02 | Founder stress, finding zone of genius | | 37:15 | Example: Saving a client $500,000 | | 39:16–41:00 | Ten-year expansion vision, building St. Louis hub |

Conclusion

This episode offers a masterclass in building a profitable, high-impact, bootstrap service business for sophisticated enterprise clients. Kasey and Andrew share candid operational challenges, pricing “fear and courage,” and the importance of building both demand and expert networks before launch. Kasey’s vision for Aux Insights and her commitment to revitalizing St. Louis echo the ambitious potential for regional tech entrepreneurship. For startup founders, solo consultants, or agency owners, this episode is rich with practical takeaways and inspiration.

For more deep dives into founders’ stories and playbooks, visit bootstrapgiants.com.