Blake Hutchison is the CEO at Flippa and leads a global team as Flippa pursues its ambitious mission to give every business owner a pathway to exit. He has started and worked at ‘failed’ start-ups and led Australia’s fastest-growing travel company.
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3 Value Bombs
1) There is always a human story behind every digital asset listings. That is the most exciting thing about the Flippa platform.
2) Use the correct software or get help from the right people to fix your financial management on day 1.
3) Every digital small business owner is creating something of value. If you aim to set yourself up for an exit, then keep in mind that buyers pay for performance but look for opportunities.
**Click the time stamp to jump directly to that point in the episode.
Today’s Audio MASTERCLASS: Your Pathway to a Successful Business Exit with Blake Hutchison
[1:18] – Blake shares something that he believes about becoming successful that most people disagree with.
- He believes that you do not need to have a long tenure in an organization to succeed and rise to the top.
[2:13] – What is Flippa?
- Flippa is a peer-to-peer marketplace.
- Flippa is the world’s leading marketplace to buy and sell digital real estate, like websites, eCommerce stores, SaaS businesses, apps, and other online businesses.
[3:50] – Blake shares how he started with Flippa.
- He is not the founder of Flippa. He is the CEO, and he first got connected to Flippa when he sold his business on Flippa!
- While running Australia’s fastest-growing online travel business – Luxury Escapes – Blake got an offer from the board of Flippa for his services; he is now the CEO!
[6:06] – Blake talks about one of his favorite Flippa success stories.
- There is always a human story behind every digital asset listing; that’s the most exciting thing about the Flippa platform.
- The story of CrochetKim.com is one of the great stories for Blake.
- It is a crochet blog based in Philadelphia and had been running for 20 years.
- It’s a small community of crochet enthusiasts with an extraordinary search backbone and the site was making money through Google AdSense.
- When the owner posted the listing on Flippa, she exited with over $90,000 after just 96 hours!
[11:47] – Blake shares a Flippa story gone wrong.
- It relates to people who break the rules on the platform.
- The seller posted an app based in the US, and the buyer was based in Spain. The buyer was able to convince the seller to sell the app outside of the platform.
- It turned out to be a scam, and the seller lost money – and the app.
[16:39] – What are some basic things that entrepreneurs do wrong when launching a business?
- Financial Management – the sellers’ financial report will be all over the place if they don’t have good financial management, which causes frustration on the part of the buyers.
- Use the correct software or get help from the right people to fix your financial management on day 1.
- Distributing responsibilities to others – you are risking the asset by not doing this because some tasks can slow you down from reaching the goals that you have set for yourself.
- You might outsource your bookkeeping, content creation, images for social media… all so you can focus on your business.
[20:35] – Blake’s key takeaway for Fire Nation.
- Every digital small business owner is creating something of value. If you aim to set yourself up for an exit, then keep in mind that buyers pay for performance but look for opportunities.
- Make sure that you are always optimizing for revenue generation, but also recognize that there are a bunch of things that you can use to grow the business – point those out to your potential buyers.
[22:38] – Blake’s call to action.
- Flippa.com – Get a free instant valuation for your business!
- Flippa Daily – Sign up for a daily email that provides incredible tips on how to know more about other business owners’ strategies in selling assets!
Boom, shake the room, fire nation. JLD here with an audio master class on your pathway to a successful business exit to drop these value bombs. I brought Blake Hutchison on the mic. He is the CEO at Flippa and leads a global team as Flippa pursues, its ambitious mission to give every business owner a pathway to exit. He started and worked at failed startups and led Australia's fastest growing travel company. And today we'll talk about what exactly is Flippa. We'll talk about one of Blake's favorite success stories and of course failure stories and what most entrepreneurs are doing incorrectly when launching a business and how can we avoid making these mistakes and so much more.
When we get back from thinking our sponsors Flippa is the world's leading marketplace to buy and sell digital real estate, including websites, e-commerce stores, SAS, businesses, apps, and other online businesses get access to a free instant valuation plus insights on how to improve scalability for your business at flippa.com/fire. If you're feeling like you have no idea where to start on your online course journey, then think Kivexa five-day course challenge is for you. You'll walk away with a complete blueprint for your online course that you'll be ready to put into action. Sign up for this free challenge today at thinkific.com/fire that's T H I N K I F I C.com/fire Blake say what's up to fire nation.
0 (1m 29s):
And what is something that you believe about becoming successful that most people disagree with?
1 (1m 34s):
Yeah, so I think the thing that most people disagree with is that you need to have a long tenure in one organization to be successful and rise to the top. So that's the traditional and long-held view isn't it. But I think that actually you're far better off getting well rounded skills developed through multiple organizations across multiple industries. And therefore you don't necessarily need to be an industry specialist to be successful.
0 (2m 4s):
That is definitely my resume. Just a litter path of failures in different industries, niches and verticals until I found my thing, fire nation and Blake. Why don't you just say a quick what's up to fire nation.
1 (2m 16s):
What's up fire nation. Great to be here. Thanks for having me, John.
0 (2m 19s):
Love it. It. We're excited, man. I've already given your introduction. I've already teased the bullet points. So let's just dive right in. What is Flippa. Break down this business
1 (2m 30s):
So Flippa is a marketplace. So the interesting thing about that is it's peer to peer. So we have buyers. We have sellers and that is a keen to every other marketplace. Your guests will be familiar with and your listenership or love things like Airbnb, et cetera. And so in our case, our marketplace is about digital real estate, not about physical real estate. It's not about shops physical shops. It's not about land. It's not about apartments, condos and homes. It's about digital real estate. So that is websites. E-commerce stores, apps, SAS businesses, online businesses, anything that is digital, anything that is generating revenue or at least in most cases, generating revenue and therefore has some value attached to it.
1 (3m 18s):
Sellers or owners, operators of those assets list on Flippa. And they can then trade with the world's largest network of buyers looking for that digital real estate. So really cool space, obviously on trend given all of the things that the world has gone through over the last 12 months and a bit more so that's Flippa and we're growing it's fun. And we see incredible success stories every day of small business owners who have started something they're passionate about. They've got it to a size and now it's ready for somebody else to take it over and extrapolate even quite a value from it. It's a really, really exciting space.
0 (3m 59s):
Now talk to us about how you first got connected to Flippa it. Like what's the Blake and Flippa story.
1 (4m 7s):
Great question. So I'm the CEO here. I am not the founder and I got connected in a few ways. Firstly, I was a customer, so I sold my own business on Flippa. Now I didn't know the founders. I had no idea what Flippa was until I stumbled upon it. And what I had, John was a marketplace to sell specialty food. So food retailers would set up a website on our platform, a shop or storefront, if you will. And they would then trade with a community of buyers across the Australian market. You can probably hear my very thick Australian accent.
1 (4m 48s):
And so after about five and a half years, I was, I, well, let's be, let's be blunt. I was a filed entrepreneur. At least in my head. I lost some people discouraged me from using that term, but anyway, that's how I defined it. And so I then listed my marketplace for sale on Flippa. And so that was my first engagement with the brand. From there, I had followed from afar and when I was running Australia's fastest growing online travel business, which was called luxury escapes is still called luxury escapes. I got a tap on the shoulder from the board and they asked about my services and here I am
0 (5m 31s):
Love it all. And you know, you talk about that. Is it right to say failures are right to say that I was a failed entrepreneur. I've had so many failures throughout my life. I've talked to over 3000 successful entrepreneurs on entrepreneurs, on fire, by the way. And my first question then Blake is what's your biggest failure? What's your biggest entrepreneurial flop. Like tell us that story because we can learn so much from the failures, from the lessons that come from those, they make us stronger than because antifragile and also we can learn from other people's failures, which I'm actually a little spoiler fire nation going to talk about a flip a story, God bad and coming up here. But first let's start on the bright side of things. What's one of your favorites, flip a success stories.
0 (6m 13s):
I mean, I know you love all the success stories rightfully so. I mean, they're a success in large part because of the Flippapa of platform you provide. But what's one of your favorite that comes to mind.
1 (6m 23s):
Flippa is all about the human stories behind these digital assets. And so when somebody lists their asset for sale and that could be a blog, it could be a SAS business. It could be an app, any one of those things. There's a human story behind that asset. And that's the most interesting thing about our platform. There's human stories littered throughout the platform and mostly good stories actually. And so this particular example is for a, a crochet blog, believe it or not John. So the blog, I believe if I remember correctly based in Philadelphia and it is called crochetkim.com, check it out.
1 (7m 9s):
Crochetkim.com. So crochet Kim was run by a business. You can imagine run by an individual. You can imagine her name, her name was Kim. CrochetFlippkim.com. So that asset had been run for 20 years and it was a small community of crochet enthusiasts talking about crochet. And they had an extraordinary organic search backbone. They were making money through Google AdSense. They had a really, really strong readership of repeat visitors coming back to learn more about crochet and a really, really vibrant community.
1 (7m 50s):
The great news is that that asset listed on Flippa and 96 hours post listing sold for $90,000. Well, now Kim was about to go into retirement. So you can imagine that her retirement just got a whole lot prettier. You go from listing your asset on Flippa, not knowing how it's going to go to a $90,000 exit 96 hours later. You're feeling pretty good about yourself. And that's still today. One of my favorite stories because 20 years of passion put into a blog results in a $90,000 exit
0 (8m 24s):
Say, I love this. These are the stories fire nation. That just makes me say, do you believe me yet? When I beat the drum of saying, find a niche, solve the problem, be the best solution to that problem. And this niche needs to be something that you're passionate about, that you're excited about your enthusiasm about, but that you're also providing skills and value to the world. It's that combination living in your zone of fire, which Kim was doing for years and years and years. And that was almost a six figure exit. I mean, that is amazing stuff and you're not going to want to go anywhere fire nation, because we are telling a another story. When we get back this time about a flip a story gone bad. When we get back from thanking our sponsors, considering selling your business or wondering where to even start, when it comes to finding out how much your online business is worth, meet Flippa, the world's leading marketplace to buy and sell digital real estate, including websites, e-commerce stores, SAS, businesses, apps, and other online businesses, their mission to give every business owner a pathway to exit.
0 (9m 21s):
So how do they do it for starters, visit flippa.com/fire and get access to a free instant valuation for your online business plus insights on how to improve sellability Flippa has more historical sales data than anyone else. And they are the largest marketplace globally for buying and selling sites of stores, apps, and online businesses. So yeah, their valuations are accurate once you list for free on Flippa, you'll be connected peer to peer that's, right buyers and sellers meet on the platform and negotiate and exchange funds and assets with over 30,000 new buyers, joining Flippa monthly and over 300,000 buyers globally. It's no wonder Flippa is the number one marketplace to buy and sell digital real estate, get access to a free instant valuation plus insights on how to improve sellability for your business at flippa.com/fire that's F L I P P A.com/fire Thinkific is the best platform to create market and sell your own online courses.
0 (10m 13s):
And we speak from personal experience. We've been hosting our online courses with Thinkific since 2017, with Thinkific, we can deliver content to our students in a simple user-friendly way that allows them to learn and take action fast. Plus, our students are always raving about how easy it is to follow the flow of the content, thanks to Thinkific themes and templates. So if you're ready to create an online course to help you reach a wider audience, build revenue and make a bigger impact than Thinkific is the perfect partner to have by your side to prove it. Think if it has an exclusive offer for you fire nation, their five day course challenge. Here's what one of their recent students had to say about it. This challenge helped me gain the confidence and clarity I needed as well as the perspective required to compile my specialized knowledge into marketable content that others will be willing to pay for.
0 (10m 60s):
Sign up for this free challenge today at thinkific.com/fire. I'm one of the feature speakers, fire nation that's T H I N K I F I C.com/fire. So Blake we're back and we teased this before the break. I mean, you told us an amazing story and uplifting one, and you have countless of those, but Hey, we need both sides of the spectrum. Like things don't always go according to plan and that's okay. Like we said, we can talk about failures and learn from them. So what's a flip a story, gone bad
1 (11m 30s):
For asking the question. So there's lots of good stories, as you said, look, the first interesting thing to say about this story is it relates to people breaking the rules on the platform. And so when you stick with the rules and stay within the boundaries, that Flippa sets, it's highly unlikely, that would happen to you, but let's go through it. So what happens is a seller lists an asset on Flippa and then buyers are matched to that asset using our proprietary algorithm. They then come in and they inquire. So they're talking directly to the seller in this particular case, the seller had listed an app for sale.
1 (12m 16s):
Okay. Now apps can make money in multiple different ways as your audience will fall. Well, no, you can have a app which is backed by advertising revenue. You can have an app which is backed by subscription. You can have an app which is a pay to play so fee per download. Now, in this particular case, it was a small app and the list price was 12,500. Now, as it turned out, there was an offer placed for the asset at 7,500, the seller was based in the U S and the buyer was based in Spain.
1 (12m 57s):
So what happened? Unfortunately, the buyer was able to convince the seller to do the deal off platform, which is what we call marketplace to convention. John. And this seller said, yep, sounds good. I don't want to pay flip of their success Bay. Why would I want to do that? I don't need the protections of an, of a asset purchase agreement, nor do I need the protections of an integrated escrow service. I will simply go and engage with this buyer now via WhatsApp. And so here's what happened. The buyer said, I would like to pay a partial amount of this in crypto.
1 (13m 41s):
And I would like you to go to this crypto exchange and set up an account. So the seller goes to this crypto exchange and sets up an account. And of course the account it says, in order to set up the account, please provide your credit card details for a one time, a one time establishment fee of X. Now I must've made, I can't remember what X was, but it wasn't trivial. It was, it was a thousand dollars or something like that. And so in turn, once you had set up that and pay the establishment fee, there was some nice communication between the buyer and seller. And there was some kind of transaction that the seller was convinced to do by this crypto exchange.
1 (14m 27s):
And this seemed to happen more than more than the number of times you would expect to set up some type of account. In fact, in most cases, there shouldn't be a fee to set up any account. Long story short, the buyer didn't really exist. The buyer didn't really have any intent. This was quite simply I scam, which had been run across multiple marketplaces, encouraging this seller to part ways with their asset, by setting up an ex an account on a crypto exchange, the seller ended up losing a couple of thousand dollars. They had also lost their app because they parted ways with the, with the, the ownership detail on the iOS or Android store. I can't remember which one it was exactly. And long story short, what you've got as a seller, without a digital asset and a seller who has been skimped at least a couple of thousand dollars.
1 (15m 12s):
And that's a horrific story of fraud and scamming that has gone wrong. We've now got protections in place, which protect against that, but it can happen. And that's a horrific story that I don't like to tell
0 (15m 24s):
Big story, but I don't really feel like you, shouldn't not like to tell that because this is the kind of story fire nation that we learn from. And we realized that, Hey, maybe there is a reason why Flippa has certain protections and steps in place. And there's reasons why you don't circumvent these things and do these offsite things. Because listen, there's a reason why companies like Flippa succeed because they help people do things the right way. They have success stories. They have things in place to protect you. And this is on both sides of the equation. So these are lessons to be learned. Now that's obviously something that was done incorrectly Blake, but what's something just more basic, like at the ground level when these entrepreneurs and our listeners fire nation are starting in growing a business, what are some basic things that entrepreneurs do wrong when launching a business that if they didn't do it wrong, it would be so much better when it comes time to go onto Flippa and to potentially list their business or, you know, to look for a business to buy, like kind of share with us some of those sides of the equation.
1 (16m 22s):
Yeah, sure. There's a couple of points. The first one is financial management, and I know that's a really, really broad term, but the number of people who have fantastic digital assets, e-commerce stores, content, businesses, abscess, et cetera, but they haven't got the financial management in place. And therefore their financial reporting is all over the place. And so what that does is it upsets, I was about to say pieces off it upsets buyers because buyers who are looking to spend anything from $25,000 up to $20 million, have an expectation that they can understand and analyze the financial performance of the asset and the number of sellers who will say, well, look, I don't, I don't have, my expenses are in one place.
1 (17m 6s):
Revenue is reported in another place. My OPEX is all over the place. I don't really know. I don't really keep track of that. It's all in various spreadsheets. It's so easy. These days sign up for cloud accounting software. I don't know what you prefer, whether it be QuickBooks online, FreshBooks, Xero, whatever it might be when you start a business on day one, set up cloud accounting, software, push all of the costs, all of your revenue and all of your costs, lines into one environment and start off on the right foot. So that would, that would help that's piece one. Does that resonate, John?
0 (17m 38s):
This with me and you're so right. I see so many people not starting the right way. And then it is a little more difficult to go back and unwind that. So just start the right way, but Hey, if you're already down the road, there's like he software and there's opportunities and there's people there that can help you get it right now and go forward, be a real business, be a professional. This is your opportunity. So that resonates keep on going Blake.
1 (17m 60s):
The second one is to de risk the asset by distributing responsibilities to others other than yourself. And the reason that that is important is one, you get to buy back time so that you can use your head space, difficult problems to solve, but you know, maybe you're spending ad dollars with Facebook. And you're trying to find new pathway to one times row S and then two times ROAS return on ad spend. That is, but what we find is that sometimes small business owners who are selling on Flippa and all over the world, actually of doing, trying to do far too much themselves. And these days, what you'll find is with, with everything from marketplaces, like e-Lance and oDesk and Fiverr, and the list goes on, you can actually outsource a lot of the trivial mundane tasks, which are slowing you down from achieving the growth goals that you have set out for yourself.
1 (18m 56s):
And so you can outsource, we talked about financial management before you can outsource the bookkeeping and do that really inexpensively. You can outset con outsource content creation. You can outsource things like image, cropping, and all of those types of things that you might need to do to build a social media profile for your business, et cetera, et cetera, et cetera, but at source everything where you can buy back that time and spend the time thinking about solving the harder problems.
0 (19m 22s):
This is so important for our nation, that you are spending most of your time, if not all of your time in your zone of fire, what are the things that you need to be doing that you should be doing every single day? And how much time are you spending doing those things? And then how can you outsource the others? How can you build a team? That's going to be doing those things and taking them off of your plate. So you can again go back to your zone of genius, your zone of fire. So Blake we've told a lot of awesomeness, the fire nation today, we shared a fantastic success story. You know, a, a cautionary tale, we'll call it for sure. You know, stuff that entrepreneurs are doing incorrectly when launching a business and growing it the right way to maybe sell down the road.
0 (20m 3s):
What is one thing that you want to end this interview with, that you want to make sure fire nation really gets from everything that we've talked about today? Like wrap this up with a nice bow. What do you want to make sure fire nation really understands from this content? We're talking about?
1 (20m 18s):
The main thing is that every digital small business owner is creating something of value. And so there is a market out there, forget about Flippa for a moment. There is a market out there of buyers who are looking to acquire digital pieces of digital real estate that are revenue generating that have been around for at least a year, from as small as a couple of thousand dollars, all the way up to $20 million. And so what you need to recognize if you are trying to set yourself up for an exit, is that buyers pay performance, but look for opportunity. So what that means is that they are going to stare at your financial numbers, and that's how they're going to base your bullet base, their first initial valuation for your business upon.
1 (21m 1s):
But then from there, they are looking to figure out, can leverage the asset. You have created to grow faster, to find, to find opportunities for improvement and get a faster return on their investment than the multiple that they pay for your asset indicates at, at, at first glance. And so the key thing there is to make sure that you are always optimizing for revenue generation, but you are recognizing that there are a bunch of things that you can use to grow the business. And you point those out to potential buyers. When the time comes to exit, they pay for performance. They look for options.
0 (21m 41s):
I think those are wise final words to end on here, fire nation and Blake give fire nation a way that we can connect with your company that we can take advantage of things you have going on. I mean, I will say something that is pretty cool. All EOFire customer. So that's you fire nation, all listeners you can list for free on Flippa. When you get a valuation at flippa.com/fire. That's F L I P P A.com/fire. So you get a valuation there, you make things happen. It's a beautiful co-branded page. Cause we're doing some really cool things with Flippa right now. I love what they're doing. Blake. Anything you want to add to that? Any call to action.
0 (22m 21s):
Now's the time.
1 (22m 22s):
Yeah. Thank you, John. I appreciate the opportunity to be on. Look. The algorithm is really smart for the valuation. It relies on data from over 50,000 assets. So check that out. That's that's, that's really, really fun. You can get a quick valuation. It's free, as you said. The other thing is to simply sign up for our daily email, because it's, again, it's free, but you get some awesome insights and you get to see what other business owners are selling their assets for. And that's a great way.
0 (22m 45s):
Fire nation. You're the average of the five people you spend the most time with. You've been hanging out with B H in J L D today. So keep up that heat head over to EOFire.com type Blake in the search bar. And this show's page will pop up with everything that we've been talking about today. And we're talking best show notes in the biz fire nation. And of course flippa.com/fire flippa.com/fire. Check out evaluation. This should be fun like every like six or 12 months, like why don't I get evaluation? Like it's cool to see how things are growing and improving. If you're doing the right things, all that jazz. And we got some cool things for you. Fire nation from Flippa as part of this, but you can only get all of this stuff.
0 (23m 27s):
flippa.com/fire. So Blake, thank you for sharing your truth, your knowledge, your value with fire nation today, for that we salute you and we will catch you on the flip side.
1 (23m 38s):
Awesome to be part of the community.
0 (23m 40s):
Hey, fire nation today's value bomb content was brought to you by Blake ants, fire nation. I've created a treasure trove of free course courses, courses. Can I say courses of free courses for you? I teach you how to podcast run a mastermind, create funnels that actually convert and so much more. All you need to do is visit you'll fire.com/resources to start learning today. I'll catch you there, or I'll catch you on the flip side. Flippa is the world's leading marketplace to buy and sell digital real estate, including websites, e-commerce stores, SAS, businesses, apps, and other online businesses get access to a free instant valuation plus insights on how to improve sellability for your business at flippa.com/fire.
0 (24m 21s):
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