Blake Hutchison is the CEO at Flippa, the largest marketplace to buy and sell online businesses. He's seen more entrepreneurs exit than perhaps anyone else and specializes in growth marketing, marketplace dynamics and leadership.
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[00:00:00] Ron Skelton: Hello and welcome to the How2Exit podcast Today I'm here with Blake Hutchison. He's the CEO of Flippa. And man, you've been on the show here before, but I wanna welcome him back. You were on in June of 2022. Welcome back to the show. I'm looking forward to this conversation. You guys have made a lot of changes since the last time we chatted.
[00:00:17] Blake Hutchison: Yeah, thanks Ron. It's really good to be back with you. I appreciated the interview last time. Good to be back now. And as you said, we've been doing a lot. Yeah, for sure. It's been a very, very big last six months.
[00:00:29] Ron Skelton: I just have you on here for the cool Australian accent. People love Australian accents here in the United States because the, like we even like use British for Australian accents for our like higher voice talent to answer our phones and stuff cuz people think it's cool. We're just here for the cool accent and the unique things you call certain stuff, right?
[00:00:44] Blake Hutchison: I still need to make sure I enunciate very well because, us Australians can get a little bit lazy, but Americans are very good at enunciating their words to the level that you can always understand them. So we're getting better.
[00:00:56] Ron Skelton: But, for the people who didn't see the first show, or God forbid, somebody doesn't know what Flippa [00:01:00] is, kind of give the high level view of what Flippa is and what you guys do. And then we're gonna dive into some cool new stuff you're doing.
[00:01:06] Blake Hutchison: Yeah. Appreciate that. So we are a marketplace, the number one marketplace globally, to buy and sell online businesses and digital assets. So what does that actually mean? We're on a mission to democratize the exit. All the business owners around the world who are operating digital assets and online businesses, we offer a marketplace to connect with buyers around the world. We've got advisory, we've got technology. Our mission, as I said, democratize the exit. But on the flip side of that, we're also here to help people and enable business ownership, what we might call acquisition entrepreneurship. So we sell around 12,000 online businesses and digital assets per annum.
[00:01:41] That could be a Shopify business. Could be a word press blog. It could be an iOS or Android store, an iOS or Android app. Think digital, think big tech supporting small business. And then, think about how people traditionally have wanted to buy and sell businesses. They can now do that in a marketplace context with all the support they need.
[00:01:59] Ron Skelton: It's [00:02:00] brilliant. I was a little shocked. I was looking through your PR stuff online, said you guys were founded in 2009. But the number that caught my eyes is 300,300 and 300,231. There's a counter on your side on how many digital businesses sold worldwide is what it says on there. That's impressive. If you think about your average broker, I would wonder, I'm gonna have to get somebody from, biz buy sell out here that does the brick and mortar. I don't know if they sell that many businesses a year. Like, I dunno if they track it, but.
[00:02:27] Blake Hutchison: Yeah, so that's a really good point. I mean, certainly, when we were founded, the size, the average size of a digital asset or online business was a lot smaller than it's today. So you were selling typically and historically a lot smaller businesses. That's changed quite dramatically over time. It's not actually necessarily that we're selling more assets each year.
[00:02:49] Now, it's just that the assets are more mature. And so they're now, revenue generating cashflow, generating assets, and, we sell many, many, 10, 2000 [00:03:00] thousand dollars online businesses, but we're now also selling $10 million apps, $20 million e-commerce businesses and in some cases 15 to $30 million online businesses. So there's a lot of activity and clearly since 2009, it's matured a lot.
[00:03:15] Ron Skelton: It's interesting. And you guys are innovative in the, you're always adding products and adding, services to your existing products. A lot of people don't know, like you can't, you don't go to one of the brick and mortar, biz buy sell or something. Find a website in there and then offer to help you do the due diligence. Right. You have a due diligence service. Let's talk about some of the stuff you've done recently. Cuz back in June, I don't think a lot of this is here. What have you added to the website or what to your business model that's new?
[00:03:42] Blake Hutchison: Yeah, a lot since June. Let's start off with, data integrations cause that's at the core of our business. And so, what do we mean by data integrations? Online businesses are great, in the sense that, because they are inextricably connected to some kind of sophisticated platform which [00:04:00] underpins their operation and performance. You can tend to understand the quality. and objectively assess the financials and business performance metrics.
[00:04:09] And so what we do now is we enable business owners to connect to one of 15 different integrations. So since June we've added nine new integrations. And so that includes things like, QuickBooks online for cloud accounting, as well as Zero, which is their number one competitor worldwide. We also have Magenta, big Commerce, Shopify, Stripe, eBay, Amazon and WooCommerce for E-com. So that means that an online business owner can pull down, connect their data, expose that data. And then on the flip side, you're giving, buyers access to that data to basically make informed judgements as to the performance of the assets. So that's really critical.
[00:04:48] We have that. Similarly for content sites, Google Analytics, we have SCM Rush. We have a bunch of different advertising revenue sources that are plugged in as well, and you can use those for the same reasons for, to [00:05:00] assess the asset. That's become really critical because the other thing we added, Ron, was insights. And so you can't really provide insights, on an objective basis unless you have that data. And so first it was about helping business. onboard to our platform in a more seamless way. But the second part of that was actually saying to buyers, would you like to compare assets? And that's a really important thing because, if you're in the market by a content business, it's one thing to look at a good business.
[00:05:30] It's another thing to be able to compare one business versus another. And of course you can do that quite well in real estate. But you can't really do that so well in, in online business world. So we've made, flipper insights and that's in its infancy. But essentially, in short, what you can do is you can look at the ask, so the price that the seller or the advisor has listed the asset at. And you can see how that price compares to everything else for sale, as well as everything else that has historically been sold that is similar. So that gives you some sense of [00:06:00] whether the price is reasonable or not. And that's a really quick key thing for new buyers into the space.
[00:06:04] The second thing you do is look at key metrics. So for example, in e-comm, it's one thing to say, I've done $50,000 in revenue per month. It's another thing to say I'm doing $50,000 in revenue per month, but my refund rate is 35%. And so now you can compare refund rates. You can compare average order value. If it's a SaaS business you can compare churn, lifetime value, annual recurring revenue, or monthly recurring revenue. If it's a content business, you can compare, page views, you can compare bounce rates, you compare all of these different things. And that's really, really key because of course digital, businesses are made up of metrics.
[00:06:38] It's very competitive out there and you just wanna know how something's performing. So insights was a key part. You mentioned due diligence. So we now have a 10 person team that's verifying assets when they onboard. But in addition to that, we've built a due diligence team and the due diligence team can be armed by a prospective buyer or acquirer at any point in time to do a forensic due [00:07:00] diligence on any given asset. So it's not a standard feature, it's an opt-in, pay to play offering. But they do an exceptionally good job. Certainly, for the 12,000 assets we're selling per annum. In reality there's probably only two to 300 that are off the size where people are actually buying, the forensic DD offering.
[00:07:18] But regardless, it's there. And that's part of us building out more than a marketplace, Ron. It's kinda a bit of a market network. So what we actually are leaning toward is we're building the investment bank for the 99%. And so think about everything that you could imagine big m and a support offering, Flippa is going to do that through a combination of tech as well as human-based resource. So that's been really, really compelling.
[00:07:45] Ron Skelton: I was looking at one of the, I won't say what the listing is on your site there, but you guys, the best site of data I've ever seen put together. I've used to flip websites back. I'll date myself back when it came out of Warrior Forum, right? Like you remember the Warrior Forums and [00:08:00] stuff? I used to buy websites out of there. I would buy something that was kind of late nineties. Like the graphic users that are interface with sucked. But they had good revenue. They had do, decent content and now I'd update the look and feel of it. I had some more links to it. Had a partner that was really good at SEO and then we would clean it up. Double the revenue and then sell it cuz it's better looking and we'd sell it for more.
[00:08:19] So we'd buy it at like 18 months revenue and nip selling it at 24 to 36 back then. And just cuz it was well run. And, one of the, your due diligence catch my eye and the data you have catches my eye because one of the reasons I got out of it is it wasn't a big deal in the respect for money I have now and what I invest now into things. But I bought a website for around $36,000. And they had spoofed everything. They had a private link network. All their traffic was in-house and, but they've created these photoshopped images they sent me of their PayPal and everything else. And it was just, it was all faked. It was very good.
[00:08:53] And considering I'm a trained photo guy, my military career was looking at satellite imagery. When you do that, you kind of get into photos and stuff like [00:09:00] that. The fool me was really like, I just thought I would, I thought nobody was gonna be able to edit a document, via Photoshop and send me a edited document back then anyway. And I wouldn't be able to tell, but it was dead on. I looked at it a lot after that and the traffic dropped off a day after. I love that you're removing that. You've got these connections and you're pulling the data from the source, right? It isn't somebody's like uploading a spreadsheet and saying, this is what my financials are.
[00:09:25] It makes two, it does two things. It alleviates the stress from somebody like me wanting to buy something as like, am I getting into a high risk, transaction here? I'm willing to pay more because I can trust the data. And it helps that seller cuz he's gonna get more for his business, because people can trust the data. They know it's, I won't say hackers can do anything. I wouldn't say it can't be spoofed, but it's pretty solid that's the data you're getting from those sources.
[00:09:50] Blake Hutchison: Yeah. And that, someone who really wants to screw you, can screw you. But it's more difficult to doctor that type of information straight out of a platform. The other thing is, if you're connecting multiple platforms, you can tend to [00:10:00] rationalize the data. And then finally sometimes if something's too good to be true, the key thing is benchmarking. So if you benchmark something and it actually looks like, wow, hang on, they're claiming a profit margin of 99%. Well that, wow, I'm looking for a passive income. 99% profit margin. Wow. What a dream come true. Well, the reality is 99% passive income businesses don't exist. The data, yes, you still need some sense about you need to sense check stuff. Absolutely. But the point is that the data is there to facilitate and help you better understand the performance of the asset and it's coming straight from the source.
[00:10:39] Ron Skelton: Yeah. One of the new things you got, going on is the flip and invest. So I want to get into that. Before we do, what else has changed? I mean, other than the investment. We've got better insights now. We've got better, tools. It seems like, are you getting more listings? Cause it seems like there's a wider variety of stuff.
[00:10:56] Blake Hutchison: Yep. So we certainly have a team that's working harder to win [00:11:00] great quality assets from around the world. And I would say that, one of the things we may have done, by the time we last spoke, although I must admit things go so fast. Here at Flippa, it's hard to recall, but we did add, 13 different currencies. And so what that did was give business owners from, markets like Europe. Markets like Singapore and Hong Kong. Even markets like Australia where we haven't historically, focused at all because our core business is certainly American and North American centric. British Pound, we obviously added two. And so what that meant was Flippa was a bit more accessible and a bit more friendly to a global universe of digital asset and online business owners.
[00:11:42] And what we saw as a result of that. It's not that you couldn't list in the past, you could, but you just had to do so much heavy lift. So if you were, if you're a British based business owner, you'd have to convert all of your profit and loss statement and everything else into U S D, which isn't actually a friendly way to build a marketplace. So those 13 [00:12:00] currencies may have added to the diversity of that assets available. And so that's certainly, helped us bring better quality assets from around the world into the mix. Probably the only other thing I would add is that, we're a lot more aggressive on the marketplace integrity front.
[00:12:15] Right. So just to be clear there, it can sound like a negative, but it's all part of Marketplace integrity. We ban almost 300 users a month. Right. What does that mean? It just means that, as a marketplace, we're always working on ensuring that the people who are aiming to buy and sell, are there to buy and sell, in a trustworthy and respectable fashion. So we continue to add resource there. Yeah, there's a couple of really cool features, Ron. So we audit, we built an off market.
[00:12:42] Ron Skelton: So outta curiosity, what does it take to get banned on Flippa?
[00:12:46] Blake Hutchison: So there's a couple of things. There's some really obvious things. Derogatory, Racist and or the like. Commentary from one to another. Instant ban, really basic. Yeah, just gone. No tolerance whatsoever.[00:13:00] Evidence, of an effort or attempt to scam or defraud. And we actually haven't seen an example of fraud or a scam in about 18 months. So that's been really great, for obvious reasons. So evidence, and we work with sift. So sift is a global, marketplace integrity, technology solution. I think outta San Francisco. And so that is like our spidey sense. It tells us when there might be something, a little bit untoward going on. And so that's key. And then the only other thing that you know, you might get is, someone who is just a bit of a nuisance on the platform.
[00:13:36] Frankly, maybe they try to do, they've got six deals underway. It looks like they've got intent. And they're really just trying to discover what might be going on in a particular business. So that's a tough one. But if we sniff that out, that's a band too. It's all about just trying to make sure that people respect the marketplace, that it is there to be. Buy and sell online businesses. We know that people use Flippa for [00:14:00] research. That's not a problem. Right? Of course, people come in and they wanna know what it looks like, what a good e-commerce business looks like, what a good content site looks like, and we encourage that.
[00:14:08] It's there for that purpose. Ultimately we're built by entrepreneurs for obvious of course. And we understand what it takes to build a great online business so people can come and have a look at that. The other products we released one's called Flipper Invest and the other one's called the Off Market. The off Market is essentially Flipper attempting to map the world of digital assets. And some people will suggest that there's hundreds of millions of online businesses around the world, and certainly we believe there is. And so what we're doing is we're trying to understand the performance of those assets, whether they've listed on Flipper or not.
[00:14:40] And so every night, our mapping takes over. And so we're mapping a couple of thousand assets each evening. And we're trying to understand those. We're trying to understand their relationship to each other. We're trying to understand who owns them. We're trying to understand if they've ever been traded or sold before. We're trying to understand the [00:15:00] subject matter that the business is about. And that then forms essentially a business development tool for buyers out there, who can express intent. And if they express intent, we know enough about these businesses that we can then solicit and tell these business owners that there's a buyer interested. And so it's one thing.
[00:15:20] Ron Skelton: Let's dive into that real quick. I come from the real estate world, right? And inside of real estate, one of the most lucrative places I found good deals are what we called expired listings. So there were two things you could hire, and I'm a marketing nerd. My master's degree is in marketing. So we're gonna delve into this just a tiny bit. In the real estate space, and I have not, I've yet to find this in the m and a space, but I'd love to find this. In a real estate space, I can just take any market figure out, who tried to sell our house on the last six months and it expired, it never sold.
[00:15:47] And then I can reach out to 'em and say, Hey, if you're still interested in selling it, maybe we should chat. The other thing that it would be cool, and, I'd love that on, on your side and or biz buy sell and stuff, like, show me the ones where they're out of contract now, they never sold. [00:16:00] And chances are on biz buy sell anyway, it's that because, they talked to four brokers and took the highest, the guy that told them they could get the highest offer and their business isn't realistically worth what, it worked its way up to. That said, having a realistic conversation and seeing how we can get the owner to where they want to be or need to be is still worthwhile.
[00:16:18] Same thing goes inside of this space. I would love the ability to say like, here's a good one. Instead of just expired listings on Flippa, you're categorizing all these websites out there, and a lot of these are content based, right? So they're producing content. I would like to know when, I'm looking for B2B content, talking, writing or anything in the small to medium business space. So they're talking about marketing, talking about software reviews. I've got a list of stuff I'm looking for. I would love to see, gimme a list of websites that are on Google's first or second page, right? They show up in search results, but they haven't produced new content in six months.
[00:16:54] They're starting to lag on content, right? They're starting to fall off on producing stuff, cuz those are the [00:17:00] guys I wanna reach out to as they're, it's indications that they might be burned out and looking for something else to do.
[00:17:03] Blake Hutchison: So it's a really important point, Ron, because if you take Flippa's keyword search, we see literally hundreds of thousands of keyword searches on Flippa each month. If you take SaaS, which is the number one searched keyword, we saw 38,000 people to 38,000 unique, searches for SaaS in Flippa's search tool. Now, the problem is when you come to the flipper on market, the actual marketplace, we might have maybe a hundred SaaS businesses. But now with our off market, we can add tens of thousands and actually figure out what it is that Ron wants out of a SaaS business. Similarly, to your point. Maybe you want to look at something which is about, dog beds. You type in dog beds and maybe on the marketplace we've got two businesses that are actually actively for sale.
[00:17:59] But in the off market [00:18:00] we might have 300. And so you can then express interest and as a result of that expression of interest, we will then solicit, programmatically solicit the online business owner to say, look, there's a guy called Ron, he's based in California, he's good for the money, and he's looking for dog bed businesses. Would you be interested in talking to Ron? And we will basically circumvent our onboarding. And bring that business owner directly into what we call our deal room. That business owner will see Ron and you will see the business owner. You'll able to say, Hey, let's have a chat about your business. Now maybe they sell it to you, maybe they don't, but at least you're now connected.
[00:18:35] Ron Skelton: It's interesting as I have a, just today I have a small team whose their job is to do cold outreach for me on, using Sales Navigator and a few other things for people who have content B2B content based sites. I get a message from one of the executives at HubSpot going, okay, I don't think we're for sale. And I was like, that is way above and beyond. Like, I'm hoping to build something someday just to sell them. So I had to like, send an apology to him. He was a good sport about the whole thing. But, like, [00:19:00] okay, there's gonna be some reevaluation of my selection criteria and retraining of my team of who to reach out to.
[00:19:06] Blake Hutchison: We have, quite a complex, I would say mapping to try to understand whether something is in the wheelhouse or not. And we also try to predict. Value it. So once you can predictably value, you should in theory, avoid connecting with a HubSpot, which might be, tens of billions of dollars in enterprise value. Versus something which might be, anything from 50,000 up to 5 million.
[00:19:30] Ron Skelton: And I was like, let me confess. I have a team that's reaching out call to reaching out to people who are d B2B content related businesses and they should have never reached out to you. But I love that you guys are building that out and you have it in place and you're working on improving upon it because there's a huge value in that. There's things that happen in, a much more mature market, the real estate market that just, those tools don't exist in the B2B or, sorry, m and a of small tome and business market. And it's, I think, you can tackle it [00:20:00] inside of the online space cuz the data is reachable.
[00:20:02] And at some point I think people might be able to take what they learn from what you guys do and do the brick and mortar side and have some of those tools built out in that space too. Right. Especially in countries.
[00:20:13] Blake Hutchison: I think the brick and mortar space is actually still quite untapped. I mean, biz buy sell clearly the market leader there, but they don't exactly do a lot to help you understand an asset. They do a great job, don't get me wrong, but it's just that they haven't necessarily gone to the point where they're mapping the world of online businesses and giving you that, instability to compare at your fingertips.
[00:20:32] Ron Skelton: A lot of it is, the data is a lot more subjective to user input because, we like in certain countries, like in Europe, they have that, what do they call it? Company's house or something like that. It, they're mandatory turn in the United States, if you're not publicly listed, you can, your books are your own. So there's no way to get in and see that. And there's no, like SEO tools or something gonna look at a brick and word or company. We can make some estimations.
[00:20:55] Like if you, you can start learning in industry and say, okay, in this industry it's [00:21:00] typical if they, if I can figure out how many employees they have, it's typical. , the revenue should be around a hundred thousand dollars per employee. And you can make certain assumptions and usually they're close. Right. But it's a reach, right? That's kind of how I probably got ahold of, hub spot on accident is I looked at X number of employees, in the B2B content space and, all that criteria matched and they haven't updated the fact that they're a multi-billion dollar company inside of their sales navigator.
[00:21:25] So when I did the search on sales navigator for the team to reach out to, it fell in that room. But anyway, let's talk about, I wanted to jump, maybe, we'll go back and forth a little bit here. Let's talk about Flippa Invest. Cuz that's something unique that you're doing and I love both aspects of, as an accredited investor being able to invest in something like that and or if you've got a business and you're growing it and you need some capital to grow it looks like you have, you're doing matchmaking for those, those two individuals, right?
[00:21:54] Blake Hutchison: Yeah. So it's a really interesting, uh positional [00:22:00] move for us, and it's come as a result of market demand, really. So Flippa's in a unique position that we see a couple of thousand online businesses each month. And so we understand where they're at in their lifestyle. and of course, Flippa's core business, our marketplace to buy and sell online businesses. That's clearly operating at a certain part of the life cycle. Business owner wants to exit, perspective buyer wants to acquire, but so many other businesses are growing and looking to scale up through the use of growth capital.
[00:22:34] What people mostly forget is that accessing capital is actually reasonably difficult. And so if you are privileged, if you are well networked, if you are Ivy League educated, if you are based in San Francisco, you can probably tap into a network of investors relatively quickly and introduce your concept and [00:23:00] get a seat at the table. That doesn't mean you will raise, but at least you get a seat at the table. If you are not well network, how do you get access to growth capital? And so it's difficult, but there's so many good quality businesses around the world, and there's so many very high quality accredited investors in the US that when we were looking at business owners coming through our valuation experience and asking them, it sounds like you've got a fantastic business here.
[00:23:31] Would you actually be interested in raising growth capital? We had such an overwhelming response. To people who said, yeah, I mean, my options are limited because I'm unlikely to be a unicorn. I don't have the scale or the market size, the target addressable market to, to scale to the moon and back, but I can build a great quality, big thriving online business, eCommerce, SaaS, app or other. [00:24:00] I would love to get access to an accredited investor who was willing to put in some growth capital, perhaps as low as a hundred thousand dollars and perhaps as high as maybe two and a half million dollars. And so then we went into our buyer network. We call it the buyer network, but in fact, they could just as easily be investors.
[00:24:19] And so we went into that network and for about 18 months, We collected data. Now we don't usually operate that slowly. Flippa works at warp speed. But it was the type of initiative where we wanted to have very, very strong conviction about what we were doing. And so 65% of Flippa's US buyer base said that they had the, appetite to invest rather than acquire and operate. And of course that makes sense, right? Because there's only so many people who have the time to operate, but there's many people who have dry powder for one of a better description, that they might wanna deploy into an asset class, which is not [00:25:00] overvalued, which is not speculative, which is so easily accessible, right?
[00:25:06] If something's been growing 10% month on month for the last 12 months, beat the bottom dollar that next month, it's also growing 10%. With our data connection, we should be able to provide access to, some sense of how that asset will perform over time and essentially predict investment returns. And so now, and we, at the very beginning, there's only seven opportunities live on the Flippa website and we'll go from seven to 70 and then 70 to 700 in, in very short order. But we wanted to get it off the ground such that someone like Iran can look at a business. For example, right now there's America's biggest yachting community and market and, sharing marketplace on, on the investment side. And so Ron can say, Hey, this is cool. I wanna put a quarter of a million dollars into this marketplace.
[00:25:57] I don't wanna operate. But I love yachting. I love what they're [00:26:00] up about. They're unit economic stack up. They've got good opportunity to grow and I'm gonna put whatever, a hundred thousand dollars in, I'm an accredited investor and I'll sit on the cap table by way of a special purpose vehicle. And so now, Flippa's has offers people the opportunity to not only buy and sell, which is our core business, but also raise an invest.
[00:26:19] Ron Skelton: It's interesting cause I think you're gonna get a lot of, opportunity there when you do your cold outreach right. To your off market. Because I know in my cold reach I get a lot of responses. Like, I'm not ready to sell. I wanna grow this a lot more before I do. Are you interested in investing at this stage? I'm kind of like, I'm not interested in investing in anything I don't control. Right. But at some time, like, and that's just because I'm in acquisition mode of some of these other projects and I'm gonna keep my powder dry, but as soon as I get them up running, they're generating revenue.
[00:26:43] It's the same thing as real estate. In investing in real estate or on business, you're gonna have one or two problems. You either got more capital than opportunities or more opportunities than capital. So when, and the pendulum switches back and forth. So as I do these acquisitions, there 23 and 24 are probably gonna be my years of building the [00:27:00] online content stuff. As that starts to run and they start generating where I, what I'm planning for them to generate that money has to, I don't believe in leaving money idle. I used to joke around when I was doing real estate saying I had a house buying addiction. Which meaning that if there was more than a few, if there was more than 30 or $40,000 sitting in, around on one of our accounts, hey, that's a down payment.
[00:27:17] Let's go get another one. We really, I don't money are soldiers and we don't let the soldiers set idle. But I think when you're reaching out to this off market and you're saying, Hey, I got interested buyers, you're gonna get a lot of responses. It's like, yeah, I'm still wanting to grow this quite a bit. Cool. Are you looking for capital? And then, especially when you start, it's an ecosystem. You're building an ecosystem here. And it's something unique, in the space that, an investor like myself could either buy something or go, Hey, I kind of like the whole yachting thing. May wanna buy it at some time. Like I'm helping one or two little content businesses right now. And, with this whole intent that I've already told the owners, like, when you're burned out on this, let me know. Cuz I probably, I want to be in the loop of when you wanna [00:28:00] sell it.
[00:28:00] I may not be your buyer, but I do wanna look at it and I'll probably make an offer. And, that's just because I like what they're building. I'm gonna help 'em build something I wanna buy later, right? It's a synergistic, what's the word I'm looking for? Symbiosis. Or we're helping each other. Like, they do something, I do something. We're in the same market space, so why not help 'em? So one day when they're burned out and they don't wanna do it anymore, I might want it.
[00:28:21] Blake Hutchison: That's exactly the thesis here, right? One person can invest. They facilitate, they assist great quality business to continue growing. And then of course, the marketplace comes back into play when that person may want to sell in the future. And so to some extent, you've got the ecosystem. You're also able with the data connections to provide almost a portfolio management tool back to the investors so they can see on any given time literally by the minute, they could actually see how many orders their investment has taken over the last 30 days or whatever it might be. It all kind of comes together. So when you ask what has Flippa been up to? Like everything is there to fit a part of the jigsaw puddle.[00:29:00]
[00:29:00] Ron Skelton: Now I'm curious, like what's on the horizon? Like, we both know, we're recording this show, so by the time this comes out it'll be, a few weeks out. Is there anything on the horizon that you're gonna, might be announced by the time this show's out or shortly after that?
[00:29:12] Blake Hutchison: Yeah. Thank you for asking the question. I mean, the most exciting thing for us is we have a lot of buyers and the problem we need to solve is buyers finding what they want. And we've clearly just spoken about off market invest and that's super cool. But what we know is that when a buyer comes to Flippa, it's not like you wake up every morning for the rest of your life and think, oh my God, I better check on what, check what's on Flippa today. Yet. So all these buyers come on and then they drop off at least for some period of time, Ron comes on and lists his business and he missed all of those buyers who had come before. And so what we're actually building is what we call an invite engine. And imagine you're in a situation where you can say, wow, there's the network of buyer [00:30:00] opportunity for my business. And instead of doing what Flippa does today, which is just match you where the buyer is currently interested, and the buyer then inquires, you'll be able to see the universe of buyers that have ever been on Flippa that makes sense for you.
[00:30:14] And you'll be able to pitch those buyers and invite them to come and look at your business. They'll then get an sms, obviously on an opt-in basis only, and they'll get an email. And so Ron will say, hey, Blake, Flippa tells me that you've looked and or bought businesses similar to mine in the past. I would like to invite you to come in and check it out. And so that will be live by the time we're on it. So that's the invite engine. Internally, we call it a demand generation builder and we're really excited about that. It actually looks very cool cuz you've almost, you're sitting inside your deal room as a business owner, and on the left hand side you've got all those active inquiries.
[00:30:51] And on the right hand side it says, Flippa recommends pitching this cohort. Now, of course it'll be anonymized. We won't show you, we won't tell you, give [00:31:00] away, public information or sense of information, but we've got a way to anonymize that and give you the opportunity to invite directly. And we think that's gonna be a really, really fun tool. But we also think it'll help business owners sell.
[00:31:11] Ron Skelton: I think it will, if you think about it, like even going back to my, what I know, right? The real estate space. We bought and sold many of homes. I won't say the number here, just cause I don't like bragging about it, but it's big. We were from 2008 till 2017. Dozens, hundreds. And I could walk in a house and, within seconds go, okay, not for me. Right. But I'm still gonna make an offer on it because I know this is a, I know all the buyers in town. I had such a rapport with all the other investors in town that I knew if I bought it at a certain price, that somebody else would buy it from me, and I could make a few dollars off of it or whatever.
[00:31:41] So kind of at advanced whole selling. But I'd just walk in there and I would restructure. In that case, I could restructure how I'd been on the house, cuz I knew. Our buying criteria back then was we didn't move walls. We didn't do major like reconstructions if it needed major foundation issues or walls needed to be moved. Cuz some people build houses that are just not logical, they just don't lay out [00:32:00] right. I just didn't do that. So I walked through and I knew who did. So I would walk through and go, okay, well here's our offer. And I just knew who I was selling it to already. When people come to you and bring businesses, you're building this portfolio and there's gonna be repeat buyers.
[00:32:12] There're gonna be guys like me. They're building a holding company of multiple assets. And as you learn that and have that insight, cuz you're collecting all the data, I could very well see that you would have the best insights like, hey Ron, check out what just came on the market. Real estate guys do, you can almost mirror a lot of what you do right off of the, the advanced side of MLS in the United States. Because in a real estate portfolio, I can give 'em an exact criteria, what I buy, and I get automated. Somebody lists the property, that matches my criteria. It'll just email me. It's like, Hey, somebody listed something that matches your exact criteria, you probably should go make a look.
[00:32:42] Blake Hutchison: Yeah, totally. One, we do spend a lot of time obviously looking at real estate and what people have achieved there cuz there is some analog, it is a little bit analogous. But the data is so powerful that we sit on and we historically haven't leveraged that. And so that's what we are talking about here, right? Because we can say, here are X number of [00:33:00] buyers who have looked at content websites in the, whatever. I don't know why it keeps on coming up. Dog beds. So content websites, dog beds, niche. Alright. But we can also say content websites, anything, animal niche. Or content websites, anything, sport niche or mental health niche.
[00:33:19] And so you'll find that buyers, whilst they have reasonably, constrained mandates, they're not super, super specific. And so people will be willing to go outside their mandate, as long as the asset is a good quality asset. And so we can organize all of that data and ascertain a very, very large, accurate pool of prospective buyers for you. And so rather than being reliant on the, 50 to 55,000 active buyers on the platform at any given time, we can actually be reliant on our millions of buyers that we have access to and become a very, very [00:34:00] proactive business development resource on behalf of the business owner looking to sell.
[00:34:03] And we, of course we do that using our tech and our platform. We're excited by that. The thing that I love about it is just, it almost becomes, like a directory showing the mix of buyers in the universe and the mix is actually quite outstanding. I mean, we've seen business owners sell $5 million businesses who they thought would be a great fit for an institutional and strategic buyer. And of course, they've inquired. But then a high net worth comes in who you would never under, you would never know, you've never heard of them anywhere. And they've got a portfolio of assets very similar. They come in and sweep it up. They do an all cash deal. They operate very quickly. And so our job on behalf of business owner is just to drive an efficient sales process. And so we keep on engineering around that.
[00:34:47] Ron Skelton: If you look at the, search criteria is, there's a couple things that come to mind, right? Search is inherently advanced. There's, you've got all this data to sort through and there's so many different ways to do it. Even if you look like Elon just bought, that Twitter and he brought on, some [00:35:00] guru hacker guy that fixed their search. He like it, it was a challenge. The guy challenged him. If you heard the story of it, the guy challenged him. He's like, I think I could fix it. I don't even want to get paid. Just pay me a living stipend. And this guy's like world renowned hacker. I can't remember the guy's name, but, and Elon says, okay.
[00:35:14] Come on in here. So for like 12 weeks, you give him 12 weeks or so to do it. He's paying him a, a couple grand per week for a living stipend, expenses, where he is at in San Francisco, and then maybe, I don't know what they're gonna get on the back end, some stock or something. But he's in there fixing the algorithm. It's not an easy tackle, thing to tackle. It takes some advanced stuff, but once you get it done right, if you think about, I go back to my marketing thing and the reason I wanted to do this is, If I was on a list of like I gave you my exact criteria and weekly, monthly, or on any given time you say, Hey, here's the things that closely match your criteria.
[00:35:48] That list could be monetized. If you look at the way that like flyers and mailers and marketing advertisements have been used over the years. You remember here in the United States, I dunno if you get 'em in Australia, but you get your monthly or weekly thing, it's an insert [00:36:00] into the newspaper. It's a mailer to your house as, walmart or one of the local shopping store and it's got all the ads. What other people don't understand is I'm dating myself, cuz this comes from back when I was doing my master's degree in 2007 or so. One of the things we were taught is those are profit centers for those places, Levi pays money to go on sale and be in the front page of their ad.
[00:36:19] So the advertisement itself is profit center. Your newsletters and stuff like that could become a profit center for Flippa. And the fact that, other people would be, you've got such a huge user base, and in markets you're not gonna go into or not already in. You could say, Hey, here's somebody we trust. They would pay for that subscription. You could have another revenue source, and you're giving us valid data. I'm so used to seeing at least one or two placements in every newsletter I've got. Right. And I'm actually looking at buying newsletters. I'm starting one of my own, but, they're a lot easier to to monetize than these podcasts are.
[00:36:50] So, but I just, there's so much opportunity there. You guys are right on the top of it. You're the biggest. I'm really encouraged to see where it goes and where you guys are taking it.
[00:36:59] Blake Hutchison: [00:37:00] Yeah. Look, I appreciate you saying that. We've always agreed that, email notifications are, the thing that get gets the best cut through, and it's quite extraordinary. I think we send out 290,000 alerts a day purely on an opt-in basis only. What is incredible is the open rate, the click through rate in the engagement generally with those newsletters. So yeah. For everyone out there who's sort of thinking about this space, newsletters are still a tried and true method for communicating with the customer.
[00:37:31] Customers tend to like it as long as the content's very relevant. And we agree that if we can actually figure out a way to make those more personalized and more accurate over time, then they can be leveraged by us in many, many ways. But better than that, they can actually help small business owners sell faster.
[00:37:47] Ron Skelton: Oh, yeah. So now I'm gonna, I made it all the way through my notes. How about story time? Man, I love good stories. We've talked back in June. Has anything really occurred? You guys sold something really cool, or have you had like, a major listing? The biggest, like a new biggest [00:38:00] gold or the new craziest, website or online product you, actually helped work?
[00:38:05] Blake Hutchison: Yeah, that's a great question actually. Let me just, I have this, list I call the top 100 and, it just gives me, ideas around this stuff. There's always some interesting ones. I can't recall whether I alluded to this one last time, but we sold a, a GDPR compliance blog and so it sounds funny because for most people the subject matter would be considered quite boring. But it would all, it was just to give some people some confidence and context around how efficient and profitable blogs can be. It was a 13 page-website. And each page was obviously an article, and those articles were orientated to gdpr, privacy and compliance governance. Of course, after the, the European law change, the blog took off. I mean, we're talking about, five or six years ago now or whatever that was.
[00:38:52] But point being is for a very long time, the business has been an extraordinarily stable performer and reputable [00:39:00] resource for everyone looking to understand GDPR compliance. Point being though, is it was a solo operation. One man show only really updated the content as required, based on any law reform. Running at a very, very high profit margin, Google AdSense revenue generating and sold for $5.2 million. So the gentleman who is, if I remember correctly, maybe, Australia or New Zealand based, he was of an age where he was considering retirement. He'd sat on this business for about 13 years, was obviously making a very tidy profit. Ended up achieving an eight or nine times multiple on earnings. And I love that story. I love it for a few reasons. I love it for the global nature that is Flippa. So he was based here in the Southern Hemisphere and he sold to a publisher in Florida. I love it for the fact that he has now got a good check, a damn good check that he can now utilize for his retirement.
[00:39:59] I love it for [00:40:00] the fact that it shows the diversity of topics subject matter that you can build a business around. And sometimes the most boring businesses are the most profitable and most lucrative and most, leverageable for a potential acquirer. So take that, and consider that as you think about building out something, if you are doing that. We love being a part of those stories. So hopefully that was a good one for you.
[00:40:20] Ron Skelton: I like it. And, it, I love the simplicity of, as, like you said, it was a 13 page website, right? You don't have to have a thousand pages or 1500 or 2000 pages of content to actually have something that is of value, right? You just have to ha you have to create value in the market space. So what they did is they tackled something that was very relevant in the time and gonna be relevant, very in the future. A topic that needs to be dealt with and, right place, right time. Right. Because I'm for probably a half a dozen sites out there that cover that topic now he just got traction on his before others did.
[00:40:51] Blake Hutchison: Exactly right. That's exactly right.
[00:40:54] Ron Skelton: Cool. So, how do people find out more about you or more, like if you wanna reach out to you, have you on [00:41:00] their podcast or, wanna work with you on a particular project, or, they've got a major person they want help with, who do they reach out to inside of Flippa to do that.
[00:41:08] Blake Hutchison: Yeah, I appreciate you asking. I mean, the first thing I would say is if, if you've got a good quality asset, we do represent businesses, as low as $10,000 and up to us high as $50 million. We've got a universal buyer base, private equity, family offices, high net worth, and of course, just acquisition entrepreneurs. Best thing to do is check out the valuation tool for sure. That's, it's free, it's quick. It gives you an indicative valuation-based on now. Historical sales data. If you need my help specifically, I'm very accessible. I respond to everyone. So that's Blake, b l a k e at flippa, F L I P P A.com. I'm reasonably active on LinkedIn as well, so feel free to connect and say hello. Say that you heard me on your show, Ron. And yeah, love connecting with everyone and very happy to help it. It's a space that requires community assistance and help from everyone. So I'm here to do that.
[00:41:56] Ron Skelton: Sounds like you got one heck of a team over there too. Do you guys have a team, if somebody's gonna [00:42:00] acquire multiple assets, do you have a team that you to not just work on the website that you do personal interaction with any of the teams? Like, hey, we're an accredited buyer, we're a family offices we're buying, 15 different content sites or 15 different e-commerce stores. We're doing a roll up, whatever. It's a bigger project. It's a multi-million dollar project. Do you have a team that works with those type of individuals?
[00:42:20] Blake Hutchison: Yeah, it's a good question because we've, our team structure is back flipped. So, we're essentially pure pay, pure play tech. And now we're, our biggest team is our sales and advisory team. And so they're there to help people with valuations. They're there help people buy, they're there to help people sell. There's an advisory network globally, which will operate as a conduit between buyer and sell, particularly as you get up into higher value businesses. You need that support. And so we've got SaaS experts, e-com experts, content experts and app experts. We also, to your point Ron, we do have buyer managers, and so those buyer managers will take on a mandate and just go hunting.
[00:42:55] Ron Skelton: That's awesome. That's awesome. Well, I appreciate you having you on here today. Don't wanna hold you. I know you have some places to be. [00:43:00] So thank you for being here. I had fun. So, we'll call that a show.
[00:43:03] Blake Hutchison: Thank you again, Ron. It's a pleasure to be here.