Let’s face it – the digital world is ever-evolving, and so is the nature of our online ventures. Whether it’s that personal blog you started as a passion project or an e-commerce site you’ve nurtured to success, there comes a time when selling might be on the horizon. If that thought has even remotely crossed your mind, then you’re in for a treat with today’s episode.
I had the fantastic opportunity to sit down for a chat with none other than Blake Hutchison, the charismatic CEO of Flippa. We’ve all heard murmurs about Flippa, that powerhouse platform where online businesses change hands, but how much do we really know? Today, we’re diving deep, pulling back the curtain, and shedding light on the nuances of the digital marketplace. Whether you’re a seasoned seller, a curious buyer, or just someone keen to learn the ropes, this conversation promises insights you won’t want to miss.
What You’ll Hear
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From Flippa User to Flippa CEO: Blake’s Journey
When I asked Blake about his journey, his response was an engaging story. Interestingly, before leading Flippa, Blake was once a customer. He shared how he kickstarted a digital business in 2010 and by 2015, turned to Flippa to sell it. Having firsthand experience with the platform provided him with a deep understanding of the customer’s perspective.
Blake didn’t just stop at using Flippa. His impressive career spans various leadership roles across multiple fast-growing tech businesses, from running the fastest-growing online travel agency in Australia to contributing to startups in Silicon Valley and leadership roles in renowned companies like Xero. This experience has granted him a broad perspective on the different facets of digital business models.
What’s Flippa All About?
If you’ve ever wondered about Flippa’s core function, Blake likens it to eBay or Airbnb. But instead of goods or accommodations, Flippa is where digital businesses are bought and sold. The sellers are business owners from across the globe, dealing in diverse domains like e-commerce, SaaS, content sites, or even apps. On the flip side, buyers are typically investors scouting for potential digital assets to add to their portfolios.
What Makes A Website Sellable?
Transitioning our conversation to the meatier bits, I delved into what it takes for a website to be sellable. Blake’s insights were crystal clear: historical financial performance and consistent performance. A t-shirt selling e-commerce business, for instance, gains value only when it demonstrates the capacity to sell at a scale appealing to potential buyers.
Blake detailed an e-commerce example from Flippa. A pet-based website retailing leashes, dog collars, and other pet products. Operating for six years with a steady track record, the business was clocking in about a million dollars in revenue. With a dependable brand, loyal customer base, and efficient operational processes, it presented itself as an attractive asset for potential buyers.
Selling Content Websites: The How-To
The realm of content websites differs significantly from e-commerce. The inputs, in this case, are content pieces which drive the desired outputs – traffic and revenue. Buyers assess the nature and origin of traffic, the relevance and quality of content, and, of course, the revenue model – be it through Google AdSense, Mediavine, direct sales, or other avenues.
Blake cited two contrasting examples for context. One was a niche blog in the crochet space, selling for $90,000 within 48 hours on Flippa. On the larger scale was a GDPR compliance blog, with 20 years of content history, selling for a whopping $5.2 million.
From $1,000 to a Staggering $35 Million: The Scope of Flippa’s Marketplace
When I probed further about the highest sale on Flippa, Blake’s revelation was truly astounding. The highest sale ever recorded was a whopping $35 million for an app, which was both iOS and Android compatible. This app, rooted in the small business niche, provided tools for creating brochures and logos. Originally developed in Singapore, this asset caught the eye of a U.S. buyer.
Decoding Successful Niches: E-commerce, Content, or SaaS?
The million-dollar question is, which niche stands out as the most successful? Blake illuminated how trends shift, largely influenced by market dynamics and emerging tech models. Back in 2021, there was a pronounced tilt towards e-commerce, particularly businesses capitalizing on Amazon’s fulfilment model. While content assets have a long history with Flippa, Blake notes a burgeoning interest in apps. Given the ubiquity of mobile usage, he anticipates this to be a lasting shift. SaaS remains a highly sought-after model, yet genuine, high-quality SaaS businesses are fewer in comparison to the plethora of e-commerce and content domains.
The Exit Strategy: Is It Premeditated or an Afterthought?
One burning query that resonates with many budding entrepreneurs is whether business owners build with an exit strategy in mind. Blake candidly shared that, while it would be ideal if everyone planned for an exit from day one, in most cases, selling is an afterthought. The progression typically moves from creation to revenue generation to personal wage. Preparing for an exit usually follows these primary steps.
For those considering a sale, preparation is paramount. This includes understanding the financial health of the business, maintaining thorough documentation, and having standardized operating procedures. Blake highlighted that a buyer seeks clarity about what made the business what it is today. This mandates documenting even rudimentary processes, from order checking to shipping label printing.
Demystifying Sales Success: Why Do Some Websites Sell While Others Don’t?
Given the competitive marketplace nature of Flippa, it’s worth understanding the success ratio. Blake stated that roughly 50% of all assets on Flippa get sold. It boils down to the suitability of an asset for a prospective buyer. It’s also imperative to note the role of pricing. Whether it’s a $25,000 business or a multimillion-dollar asset, value assessments from both buyers and sellers are crucial in sealing the deal.
Buying Digital Assets as a Growth Strategy
As digital landscapes continue to evolve, so do the strategies businesses employ. Blake elaborated on an emerging trend where businesses don’t just view online assets as standalone entities but as crucial cogs to propel growth. Instead of traditional methods like door-knocking, PPC advertising, or content marketing, businesses are considering the acquisition of proven online entities to bolster their reach and revenue.
Imagine owning an e-commerce site in the pet niche, generating $50,000 in revenue. By acquiring another site with a similar revenue in the same niche, you’ve effectively doubled your business size. But it’s not always about the direct revenue; sometimes, it’s about the audience. A car repair business could benefit immensely from acquiring a blog about car mechanics, leveraging the audience to promote its primary business.
The Future Landscape of Digital Assets with Flippa
Peering into the future, Blake provided some insights into Flippa’s roadmap. At its core, Flippa seeks to empower its users with more data to make informed decisions. However, the platform also recognizes the changing dynamics of what constitutes a ‘digital asset.’ Beyond e-commerce, SaaS, and content, the realm of digital assets is expanding.
Podcasts, newsletters, and other forms of digital content have amassed significant audiences and revenue streams. Recognizing this, Flippa aims to accommodate these new asset types, providing a marketplace that truly reflects the digital era’s diversity.
AI and The Future of Content
With rapid advancements in AI, the future of content generation is a hot topic. I asked Blake about the impact of AI-driven content on website sales. His prediction? Younger sites may feel the impact more as AI makes it easier to generate content. However, well-established sites with a solid search footprint will continue to hold their value.
Conclusion
There’s something electric about the world of online business, isn’t there? Diving deep with Blake, it became crystal clear that Flippa isn’t just a platform—it’s the pulse of the digital business world, where dreams are traded as readily as websites and apps.
So, if you’ve ever toyed with the idea of selling that blog you’ve been hammering away at, or maybe buying one that tickles your fancy, Flippa might just be your next pit stop. Remember, behind every domain for sale, there’s a story, a strategy, and sometimes, a stroke of genius. Dive in, do your homework, and who knows, maybe your digital dream is just a click away. Catch you on the flip side!
Connect with Blake
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