Episode Transcript
Ashley Segura: So, all right, well, let’s kick things off when you are not at your desk and you find yourself in the kitchen, what is your go to dish to cook?
Blake Hutchison: I think my go to. Dish to cook is a bit of a cop out because it’s spaghetti bolognese. It’s got to be the easiest thing to prepare, but it’s fun. My daughter loves it.
My wife loves it. And as long as you’ve got good quality spaghetti and good quality meat, then it’s a good part, good, good place to go.
Ashley Segura: Do you have a preference on the meat that you like to use?
Blake Hutchison: Yeah, that’s a good question. I must admit I’m obviously over here in Australia. You can hear my very thick Australian accent.
A good fun one is kangaroo mince, but I must admit that’s pretty rare. We might do that once a year. We more do our standard organic beef mince.
Ashley Segura: The classic meat. Not so much the classic kangaroo meat.
Blake Hutchison: That’s right. Kangaroo meat is very lean. And so it’s actually really good for you. And, but it’s a bit rich.
Ashley Segura: Yes. Yes. I’ve actually had it. I’ve been lucky enough to go to Australia a few different times and have tried it a few different times and it’s not bad. It’s really not that bad.
Blake Hutchison: Now that the good things, as I said, it’s good for you, but yeah, it’s mostly a bit, unless you cook it perfectly, it can sometimes be a bit tough.
Ashley Segura: Yeah, yeah. Definitely understandable. Well, can you start us off by telling us a little bit about your journey to becoming the CEO of Flippa and really what inspired you to get involved in the online business marketplace?
Blake Hutchison: Yep. Almost all of my career, I’ve spent serving founders with big missions and Flippa is no different.
We were founded by two visionary founders who wanted to give entrepreneurs an opportunity at an exit, get liquidity from all of their hard earned, their blood, sweat and tears. And so as a function of all of my sort of experience representing founders and helping them grow their businesses, then I was a good fit for the founders here as well.
I’ve worked across so many different industries and I’ve always had a passion for small businesses, but first and foremost, I worked at Lonely Planet, which was in the travel industry. And that was really interesting because I was based in San Francisco. We had recently digitized the company’s 35 years worth of guidebook content.
And we were then preparing that to license out to travel portals, American Express, Expedia, Yahoo travel, those types of businesses. And that gave me a great deal of exposure to obviously the digital sector, I’m going back now to 2005. Then from there, a combination of startups in the travel space, fast growing technology businesses in the cloud accounting space, all the way through to online travel agencies.
And so all the way through that experience and journey, I’ve always represented founders and helped founders grow their businesses. And that’s what makes Flippa so fun, because all we do is spend our days representing founders and business owners who have created something special. They want good quality representation.
They want to find a pathway to liquidity. And as a function of that, the board thought that I would be a good fit. I obviously think I am a good fit. Six years doing the job. That’s really fun to say that each year we represent hundreds of thousands of business owners and we help them. Wow.
Ashley Segura: That’s got to be very rewarding.
To be able to be a part of that process. And when a business owner is able to successfully sell and move on to whatever it is next, or if that was their ultimate goal, it’s got to be a really rewarding journey.
Blake Hutchison: That’s the best part of it. Their stories and how emotionally connected they are to the exit journey and what it actually means for them.
And so people think that exits are reserved for all of those stories on the front page of the wall street journal or the Forbes magazine. But in reality, there are hundreds of thousands of founders, business owners, and entrepreneurs all over the world who have built businesses and those businesses can find a new home on Flippa.
And the customers we represent, they’ve just had such experience and such great stories growing their businesses. And I can tell some of those because they get They’re what kind of those stories get me out of bed in the morning. They make me think that the team tick, we’re really proud of the platform and what it can do for a business.
Ashley Segura: Yeah. And storytelling, being able to tell your brand story really well is got to play a huge part in attracting buyers, not just the content that you produce online, but the overall brand story. So how have you found from your experience selling so, and being a part of selling so many different businesses, how have you found that leveraging content really helps make online businesses more attractive to potential buyers?
Blake Hutchison: Yeah. So this is a really important question because most business owners have never contemplated that critical moment nearing the end of their life cycle when they contemplate an exit. So what we’ve really done is built our brand story around that concept and tried to make the exit idea more well known and ultimately one day, hopefully ubiquitous.
And so today, if you line up a hundred small business owners and say, what are you working on today? They don’t say I’m preparing my business for exit. What they say is I’m working on new content. I’m packing boxes. I’m recruiting contractors. I’m finding VAs. I’m, Paying Google and Facebook for new customers.
They do all of the things that you need to do to grow a business. And so to answer the question, we have created a concept called the exit, and we’ve run that across our owned media assets. And so we have a podcast called the exit, and it’s only about stories. Of business owners exiting, we have a meetup series that runs around the world and we pop ourselves up in certain cities around the world, invite guests of the community as a function of that.
And that’s called the exit meetup. And we talk about what Flippa can do for you. We tell some stories of customers who have obviously had a really good experience on the platform. We also have obviously our own blog and that is filled with stories of entrepreneurs who have exited. And so as a function of that, Um, the brand story is built around the exit concept, and our job is really to make sure that as many business owners around the world, exit ready when that time comes.
Ashley Segura: So, how do you get exit ready? Because I, I, And I’m sure a lot of business owners and vision, the same beautiful, shiny package of how great their business looks. And you need a ton of content to support that, whether it’s a bunch of blog posts and showcasing like a length of time of content produced or content on social media.
So do you have a pattern or a secret recipe of like, This is how much content you need to be attractive or does it really, I’m sure varies by industry or.
Blake Hutchison: Yeah, that’s right. The most obvious answer is longevity and revenue. Now of course we need to break that down, but the critical thing is anyone who’s looking to acquire a good quality blog wants to know that it is a credible publisher wants to know that the content Is evergreen for one of a better description, and it has the ability to attract customers through Google and predominantly organically.
And so, therefore, a blog that is one year in age hasn’t yet reached maturity enough to be acquirable for the most part. And a blog that is 10 years old has so much predictability into it. An acquirer thinks that this is a short bet and acquiring a digital asset, including a blog is very much about an investor saying, I want to buy this because next year when I run it, it will perform at least to the same level.
And therefore my investment is protected. So longevity is a good thing to contemplate as a blogger. Now, of course, revenue is a function of one. Can you acquire customers? And that’s predominantly going to be through long tail organic search. If you built a great brand, maybe you’re getting some good direct traffic as well.
And then the revenue will come as a function of your advertising revenue strength, be that affiliate or be that some kind of a Google AdSense integration or even a preferred publisher program, like a Mediavine or an Ezoic. Okay. So what a buyer will do is look at those things. And so therefore, as a blogger.
You want to make sure that your page views are really well optimized for revenue. And so
the best way to think about that is to get a revenue per page view metric or an index from which to aspire to meet. And so the key thing really is to get exit ready is to ensure that you are continuing to produce great quality content to ensure your back catalog.
So the archive of content you have is always up to date or being updated does receive page views from Google. And then ultimately that your revenue elements are well integrated.
Ashley Segura: What happens in this scenario? Like we had the, the helpful content update last year and a bunch of great blogs got hit in a bunch of websites in general that were producing great helpful content.
They got hit. Our traffic really tanked. So in those kinds of environments, like this is just one scenario, but say this 10 year old blog, There’s been, in the last 10 years, all sorts of fluctuations that not necessarily a blogger or brand owner can control. Are there ways to still tell that story of this is still who the brand is, and this is what the potential of the content has, or like, how do you go about those kinds of situations?
Blake Hutchison: Yes, it’s difficult. And I can tell you that about 40 percent of the blogs on sale on Flippa right now were impacted by one, if not two or three of the helpful content update up. Yeah. So it’s a real problem. I can also tell you a story of an asset which sold only last week for $600,000 and it was an asset in the home learning space.
So it was a blog home learning students and parents and that was hit by the helpful content update. Now it was an eight year old blog. Clearly, the impacts of those updates were evident in the Google analytics interface and therefore ultimately the traffic base. And so what you had to really do was focus on where it was at now and its ability to generate revenue from that new baseline. And so instead of looking at trailing 24 months revenue or trailing 12 months revenue, We were looking at trailing three and trailing six as more indicative of what the new real picture was for that blog. Mm-Hmm. . Now, of course, you need to deal with a rational owner because yes, that blog is no longer worth what it was.
Mm-Hmm. . And that sucks. But it is the reality of the Google environment that we all live in now. Mm-Hmm. , what did we talk about? We talked about the fact that homeschooling and home learning as a category. Is recession proof and not going anywhere. We talked about the fact that the editorial content included within that blog was of a high caliber and we can provide evidence for the workflow and the standard operating procedures that blogger, that publisher used to acquire that content so we could demonstrate its credibility and then it was a function of saying, do we believe that this blog still has longevity in this particular space?
Ashley Segura: Mm hmm.
Blake Hutchison: And do we believe that over time Google will correct itself and re reward this blog for the quality of its content and for the engagement of its audience? Now, of course, you then need to find an investor or a buyer who equally believes that story. In this case, they did. So I won’t say it’s easy right now, but the reality is good quality blogs are still identifiable by the traffic they get, even if it has been impacted.
The audience engagement and their ability to generate revenue from the current page view volume that they still support.
Ashley Segura: Yeah. I love that you were able to use content to describe content and make a story where the initial story was a fairly negative breaking news sentiment. And you were able to highlight, these are what the potentials are.
This is from past data. This is to where we could actually see the successes and the SOPs, the the standard operating procedures, that’s really big too, because a lot of times when we’re talking about content, we’re forgetting the frameworks that are built in and that we’ve established as a brand to actually create content.
Have you seen certain SOPs that have like really been impressive to buyers, to buyers more than other SOPs, or is it just the process of actually having a process?
Blake Hutchison: Yeah. So you either have like a professional blogger who is essentially analyzing and interpreting long tail keywords and then producing content around that, or you have someone who’s extraordinarily passionate about a subject matter, knows almost nothing about SEO, but continues to produce extraordinarily strong quality content around something that they have a subject matter expertise for.
They’re very different strategies, obviously, in one case, workflow is produce one article weekly of at least X length because the audience has proven to engage better with articles of that length and the other one says, play the SEO game, try to understand exactly what Google wants you to do and then scientifically and methodically go through a workflow which games the long tail keyword opportunity for your given category.
So it is different for every person. The one thing that is consistent is the best bloggers have optimized their blog really well for revenue generation. And so that comes down to, are you connected to AdSense? Do you have partnerships in place with various affiliate channels? Are you a premier publisher on either the Mediavine or Ezoic channel or other for that matter?
And have you designed a blog which is as good as it is for content but equally for ads? Because ultimately what bloggers will often forget when they’re on that initial journey and for all the right reasons, they’re just passionate about a subject matter. And I want to get their story out there. But what they often forget is that in the event you did want to sell your blog, ultimately the people who acquire it.
Do so from an investment framework. And so that is how has this business performed in the past? And can I predictably estimate that it will perform in the same or a better way in the future? And that comes down to yes, the quality of your content, but more so than that, it comes down to the quality and the predictability of your revenue generation.
So hopefully that makes sense. We have seen blogs where. They are underutilized on a revenue generation standpoint, but the investor understands how exciting that opportunity might be. For example, we sold a blog which was about crochet and it was a wonderful blog, great quality traffic, some user generated content from the crochet community, always producing new content while steadily building a great backlog of content that Google was clearly friendly to and that they were acquiring an audience for.
Now that business was, that blog was almost, it was underutilized. There was very little that was set up by way of revenue generation, but a savvy investor came in and said, well, hang on, this is cool. I like the subject matter. I like what they’ve been able to produce. The quality of the audience is fantastic.
It’s predominantly American. It’s 98 percent organic traffic. It’s a recession proof category. They have a stable set of writers who are always contributing. The cost of producing that content is trivial. And now if I layer in some revenue generating aspects, then this is a good play.
Ashley Segura: Yeah. So it really does have to make sense from an investment standpoint, if someone’s going to buy it, whether it’s making the right profits now, It needs to at least have the potential to do so, if not continue to do so.
Are buyers looking at things like backlinks or any kind of internal link strategies? Like how deep are they going into the metrics aside from of course, revenue metrics?
Blake Hutchison: Depends on the size of the blog. We sold a, an 8. 3 million GDPR compliance block. Now in that particular context, given the size of the deal, yes, the acquirer is a institutional acquirer.
So they were a Inc. 5000 publisher or Inc. 1000 publisher. They, Did a level of due diligence, which would only be considered would be considered nothing but forensic. And so as a function of that, yes, backlink profiles are critical. And they’re also trying to understand obviously the quantum, but also the quality.
Ashley Segura: I guess when you’re also analyzing whether A brand itself, say a blog is worth the investment. You’re looking at the full brand package. So it’s not just how much content is published on the website, but it, do they have social channels? What does that social channel engagement look like? How much have you seen social play a role in evaluating whether our content is, is worth it?
Blake Hutchison: Yeah, this is really interesting for the most part. There isn’t a great correlation between a large social following. And your ability to generate revenue for the most part. Now that’s not to say that establishing a big community and building brand awareness doesn’t have some kind of network effect and ultimately impact your business positively.
Of course it does. It’s also not to say that you shouldn’t focus your energies on a social strategy to distribute your content. And build greater following for your blog. It’s just to say that when an investor thinks about acquiring a blog, they’re looking at the predominant source for the traffic and the revenue and a good quality blog is still for the most part, a function of SEO and so therefore, when we’ve seen investors inquire, negotiate, conduct due diligence, and think about deal structuring, they think about it in the context of how strong is the SEO presence for this blog. And they mostly discount the social side of the business. However, they do love things like email databases.
And where you can show evidence of an engaged community that is, that you are communicating with via email and show that it’s growing, show that open rates are high, show that you can really drive a high CTR click through rate from newsletter into your blog, then that’s looked upon really favorably.
Ashley Segura: Sorry. My dog had just brought in a squeaky toy. Of course, the one time I forget to close the door, sorry about that. No worries. So then email marketing, that is a huge component of a bloggers community. And most bloggers will have like a newsletter form on their website and they’ll have it throughout different places on a single piece of content.
Like on a blog post, is there an impact on how many subscribers they have that makes a difference? Or is it more like you were saying the engagement of it? So what are their open rates? What are their click through rates?
Blake Hutchison: Yeah, this is a funny thing when you have a channel, but the channel operates at low volume, it’s essentially discounted by the investor.
Ashley Segura: Okay.
Blake Hutchison: I know that sounds horrible because we all need to start somewhere. But if you say, look, I’ve got a hundred thousand visitors a month, I’m generating $5,000 in monthly revenue. That’s coming as a function of AdSense. And by the way, isn’t this great, I have 5,000 subscribers to my newsletter and I send it out once weekly.
The investor will listen to you. The acquirer will listen to you, but ultimately what they care about is the fact that you’ve got traffic and the traffic’s generating revenue. And given the subscale nature of your database, they don’t care for it. It’s not to say don’t continue it as a strategy. It’s just that they don’t care for it at that scale.
Now on the flip side, if you said my blog gets a 100,000 visitors a month, it generates 5, 000 in revenue. It’s the same equation. I have a very large following of 75, 000 on my email and each month around 20 percent of the traffic is a function of that email database. That’s a different story.
And that’s a critical component that businesses, that blogs ability to generate revenue. And therefore it’s critical that the investor understands that.
Ashley Segura: So it’s a different story because of the potential with that email list to draw traffic to the blog.
Blake Hutchison: It’s two things. One, the scale. So I think I said 75, 000 subscribers versus 5, 000 subscribers.
And then it’s impact on the revenue generation is critical to the business. So if I acquire it, I need to understand that because I’ll need to continue it. And in addition to that, I understand that, wow, if it’s worth 20 percent of the subscriber of the user base today, then I better continue to invest in it.
And it’s at a scale from which I can imagine growing it further. Whereas 5,000, I’m essentially going down. I’m still in zero to one territory. Buyers are looking for one to 10 territory. They don’t want zero to one.
Ashley Segura: So that new blogger that you talked about in the beginning, that maybe they’ve been blogging for a year or just under a year.
Is there a certain amount of content they should aim to produce before they start to think about selling? Like, do they need to have like 10 posts published a month or a hundred posts in their archives? Like, is there a specific formula?
Blake Hutchison: No. Because unfortunately the answer’s no, Ashley, because the, I’ve seen blogs sell and the GDPR compliance blog that I alluded to before was 13 pages. So it’s content, amazing backlink profile, highly credible content referred to by some of the biggest sources in the world and generating an enormous amount of traffic off very little content. WordPress, adSense optimized to the hilt for revenue. Short answer is on that example alone, you could have a blog, which was 13 pages of content worth millions of dollars.
However, what I would say is instead of aiming for the number of posts you need to produce to derive an exit result, aim for revenue, because then you’re getting a return on investment on your content. production effort, whether you create it yourself or whether you pay to create it. And that’s critical to the long term viability of your blog, regardless of whether you choose to sell or not.
And so aim for revenue per blog post. And certainly, yes, I wish I had them at my disposal, but there are some metrics for that. I’m happy to provide them for the show note. We’ve always talked to people about, it may not be trying to produce another 5, 000 bits of content. It may just be optimizing your existing content.
So I think it’s different for every category and different for every subject matter. So that’s probably not that helpful, but that’s, you know, that’s genuine belief.
Ashley Segura: I think it does give a lot of hope though, because A lot of bloggers, not just bloggers, a lot of us people are strapped on resources and usually have this idea that we need to do things in mass production or in order to see any kind of results.
And I love that you touched on, sometimes it’s just optimizing the content that you already have to get the traffic that’s eventually going to get you to the ad sense to eventually get you to the revenue versus always trying to reinvent the wheel of. All right. We need to build a whole brand new strategy of 5,000 new blog posts and see what’s going to actually stick because that’s not always how it works.
It’s more of optimizing what you have using the resources towards that, and then identifying what topics are doing the best for you, what pages are doing the best for you and creating more like that 13 page website example. I’m sure they found their unicorns and just honed in on that alone.
Blake Hutchison: So for example, I’m looking at a blog right now, and I’ll just very quickly do the math.
So it’s doing 3, 600 in monthly profit, and it’s doing 94, 000 page views a month. So this is simply going to be 94, 000, 3, 600, doing this on the fly. So they’re making 6 cents, 3, 6, 0, 3, 7. Yeah, they’re making, they’re making 3 cents a page view.
Ashley Segura: Hmm.
Blake Hutchison: Three cents a page view. So 94, 000 page views, 3, 000 a month in profit. So three, three cents per page view. And is that common? I don’t know. I can look at the numbers for across a number of different sites. That’s probably some, a good way to think about it. This site’s got a hundred, nearly a hundred thousand page views a month and ultimately ended up selling for 130. So, you know, think about it.
From the context of a blog will probably be sold at about three times profit multiple. They’re obviously running at quite a high profit margin. So if you’re not, you don’t have a cost base, you could also think about that as a revenue multiple. So three top revenue. So if you’re doing three, 3, 000 in revenue.
A month, you’re going to therefore to be doing 36, 000 in revenue per year. Multiply that by three, you’ve got about a hundred thousand dollar exit value.
Ashley Segura: That makes sense. That’s a really helpful example. And thank you for actually doing the metrics and the math on the fly. I’m not good at math on the fly, so I appreciate you calculating everything for us.
Blake Hutchison: I hope i got that right
Ashley Segura: sounded about right. It sounded about right. I’m sure we’ll have some fact checkers at some point, but so as we wrap up and bring this full circle, what is your current secret sauce or what piece of wisdom or advice, or even maybe a book that you recently read that can really help content creators and bloggers who are trying to get onto the path of selling or are seriously ready to sell.
But. Need to polish up their content perhaps.
Blake Hutchison: I think everyone needs to simplify their blogs and their businesses and therefore focus on the thing that they know works. And so you really need to take a deep breath, perhaps go for a walk around the block and try to ascertain exactly what it is that makes your blog tick. And it could be that it’s one amazing article that draws the attention of 90. 95 percent of your audience. And therefore it’s not actually about creating another hundred pieces and agonizingly produce content day after day. It’s just about optimizing for that particular subject, that particular blog post and revenue generation around that particular blogpost
for other people, it is about long tail content and therefore the need to continue to produce. For flippa it’s all about understanding exactly what ensures an exit success. And so we clearly list thousands upon thousands of assets a month, but we know there are certain assets which will move really quickly.
And certain assets which will move slowly. And so clearly when we think about where we point our sales team and think about where they spend their time and which particular business owners they speak to, we have them go after those assets where we believe they’re going to trade very quickly. And so I guess my point is every time I meet a business owner, they’ll give you a thousand things they’re working on and a thousand problems they’ve got to solve and a thousand opportunities for their business or blog.
Ashley Segura: Yes. Absolutely.
Blake Hutchison: I think if people can distill that down into the one thing that’s working and the one thing they’re going to continue to capitalize on, we’d all be a bit better off.
Ashley Segura: I feel like that’s advice for literally everything in life is to just simplify and simplify it a lot, hone in on what’s working really well and ignore the rest of the flutter and the mess.
That’s fantastic advice and a really good reminder. Appreciate you being on the show and everything you shared with us today.
Blake Hutchison: Thank you so much, Ashlyn.
Ashley Segura: Awesome.
