Ep46: How Flippa Became The #1 Market Leader For Buying & Selling Websites

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068e5b8Today we’re talking with the General Manager of Flippa, Nick Kenn. Nick is a marketer by trade working with agencies and businesses like Learnable, Betfair and Flippa’s parent company, SitePoint. Before serving as the General Manager for Flippa, Nick was in the gaming space for 7 years before looking for a smaller company he could take a bigger ownership role in. To date, Flippa’s has over 500,000 registered users and their biggest website sale was $1.5 million dollars.

 

Keypoint takeaways: 

Despite Nick’s eclectic background going from gaming to website flipping, he’s always been passionate about online businesses. He also wanted to take a more serious ownership role in a company where he could make an impact. Betfair has over 2,000 employees while Flippa has 20. Despite its small staff size, Flippa corners 70% of the marketplace for website, domain and app buying and selling.

Spotting trends

Flippa has the unique advantage of being spun off from a huge parent company. SitePoint launched in 1998 as Webmaster Resources before it rebranded itself as SitePoint in 2000. Over the years, it amassed a huge following. That audience proved valuable when Nick and his team tapped into trends and opportunities straight from its forums. The team noticed people asking other users to design their website logos and SitePoint spun off 99Designs. Activity in the forums also showed people buying and selling websites from each other and soon Flippa was born.

Growing an audience

While working at Betfair, Nick and his team heavily focused on SEO on niche markets. Nick points out Australia itself is a niche market with only 22 million people, making it easier to rank for local SEO search. But organic SEO isn’t enough to compete with the big guys with tons of revenue.

Betfair invested heavily in paid search and brand building partnerships with sports teams and poker players. They also invested in contextual search. When someone visited a soccer website and scores for a game were being broadcast, Betfair would show its live odds for who would win the match.

Dominating a marketplace

Flippa corners 70% of the market share with no major competitors to speak of. Website brokers make up the other 30% with a handful of buying and selling forums peppering the website flipping world. Flippa positions itself s the only destination to have safe, secure experience and find buyers and sellers and attracts over 500,000 registered users.

Flippa sells over 2,000 items a month including websites, domains and apps with its largest sale reaching $1.5 million. Nick says its buyers have an opportunity to spot opportunities and add revenue and content to maximize its potential. Flippa also sees opportunities to give its buyers and sellers tools they can’t find elsewhere.

Flippa can tap into your Google Analytics and showcase your data to entice buyers. They also offer verification tools and escrow service so there’s little to no risk involved for either party.

Day-to-day challenges of a General Manager

Nick’s day-to-day is mostly focusing on business strategy, managing the financial health of the business and finding the right people for the right roles. The latter takes up the majority of his time. With a small staff, it’s crucial to find the right people the right time and pass on anyone he has reservations about. He’s developed a system for whittling down his candidates from 30 to about 15 Skype interviews to a handful of in-person meetings.

Spotting trends in website buying and selling

Spending some time on Flippa and studying its buying and selling activity proves helpful in narrowing your focus on up and coming trends. Bitcoin was huge with a flood of sites for sale in the last 6 to 12 months, as well as 3D printing. Nick says he sees activity on Flippa that doesn’t hit the mainstream until months later.

Buying and selling apps has also been a relatively new trend on Flippa with only 70 or 80 in the mix. While domain buying comes with a name appraiser tool to give a range of options, appraising apps is harder and virgin territory. Nick sees relatively simple games similar to Angry Birds becoming increasingly popular on Flippa and monetized through advertising.

Top mistakes selling websites

Too many people rush through the process when selling a website and don’t provide all of the relevant info upfront. Nick advises the truth will always come out in the end and it’s best to declare everything out in the open. He also recommends writing a thorough description to see an increase in bids and a higher success rate for selling.

But there are plenty of success stories on Flippa ranging from a few thousand to over a million. Here are a few of the case studies they’re currently featuring:

Case Study: A Hidden Gem Pays Off: Paid2Review.co.uk

If At First You Don’t Succeed: FileBackup.com Sells for $11,300

How to Ask Your Wife Permission to Spend $250,000 on a Flippa Auction

Resources:

“Delivering Happiness: A Path to Profits, Passion, and Purpose” – Tony Hsieh of Zappos explores how an emphasis on corporate culture can lead to unprecendented success. He touches on the effect of offering new employees $2,000 to quit and the overall science of happiness to running a business. It’s the book Nick makes all of his employees read.

Transcript:

Eric: Hi everyone. Welcome to this week’s edition of Growth Everywhere where we interview entrepreneurs and bring you business and personal growth tips. Today we have the general manager of Flippa, Nick Kenn, and Flippa is actually a website that helps you sell and you can even buy web businesses as well. Nick, how are you doing today?

Nick: Very good. Thanks. Nice to meet you.

Eric: Yeah. Thanks for being on the show. First of all why don’t we go through your background really quick?

Nick: Sure. I guess I’m a marketer by trade. I’ve always worked in various marketing or commercial type roles, agencies, and businesses as well, so client side. More recently before running Flippa.com I was running a business called SitePoint.com which is actually the parent company to Flippa, and also another business in the same group of companies called Learnable.com and those two business are focused one educating web developers. I was the general manager of those two businesses.

Prior to that I was the head of customer acquisition for a business called Betfair which is a global betting site based here in Australia and in the U.K. So, I’m now in Australia. I used to work in the U.K., but I came across here with that company Betfair so I was responsible for acquiring their customers, and various other marketing roles before that. That’s a brief history of my time.

Eric: Thanks for that. It’s really interesting. You’re the head of user acquisition for a huge gambling company and all of a sudden you become a general manager. Walk us through that transition.

Nick:               I guess I’ve been in the betting gaming space for quite some time, about six or seven years. It’s given me a huge amount of experience. As you probably know, most of your audience knows, it took the three P’s; Porn, Pills, and Pokers as being the pioneers at the internet. Things that happen in those three P’s tends to kind of filter down to the other industries over time. So, some of the stuff we would do, and Betfair is totally legal in the countries in Australia and the U.K. and all of Europe as well. So, not doing anything illegal, just to clarify that.

We actually owned a business in the U. S. as well. Betfair was all about, for me, was all about marketing and acquiring customers. How to view success: So, I launched a brand in Australia, so it didn’t exist before 2008. And when I came down here we just got a license to operate in Australia and my brief was to really launch the brand and grow customers and acquire market shares, so we—by the time I left I think we’d grown about 10-15% market share.

There’s one monopoly in Australia that runs—that had all the betting and gaming and now there’s a half a dozen or so betting companies down here. But why did I move across the site? I guess I’ve always been passionate about online businesses. We’re based in Melbourne here in Australia. I started looking around for smaller businesses. Betfair has 2000 employees. It’s a big, big company and I was looking for something a bit smaller where I could take more of an ownership role. Sitepoint came along.

SitePoint’s based in Melbourne, but it has a global reach. It has three or four million visitors in a month. It’s a huge site. U.S. traffic is huge so being based in Melbourne but really being able to talk to the world with our products and that really excited me. I guess the groups really innovative. We’ve launched out of SitePoint a number of companies. You might have heard of Ninety-nine Designs.

Eric: Yes.

Nick: Okay. That came out of SitePoint and six or seven years ago Flippa.com came out of SitePoint. They all sort of interrelated to the SitePoint audience which was originally web designers and web developers. SitePoint’s been around since ’98. It’s one of the original destination for webmasters. It actually used to be called Web Master Resources and then it re-branded as SitePoint in 2000. So, it’s been around a long time with a huge audience and with a huge audience I guess you can spot trends and opportunities, and what that audience are doing in some of the trends we spotted over time where people were asking other members of the SitePoint in community to design logos for their businesses.

We spun that out into a business called Ninety-nine Designs and a few years later we spotted people in the SitePoint forums and marketplace for buying and selling websites between each other. We decided to create a new business which we now call Flippa.com. Flippa’s been going for about five years. Similarly with Learnable, and Learnable is a subscription business for web-designers and developers to learn their trade. They subscribe to watch online tutorials and download e-books about CSS, HTML, Ruby on Rails, whatever it happens to be, they’re all kind of interconnected to this huge audience that SitePoint had originally.

Eric: Okay. Awesome! It’s funny, we’re kind of interlinked. I used to play a ton of online poker and then I went to head up growth on Treehouse which is kind of a competitor. They never let me buy ads. I’m like, “Come on man. Let me buy some ads.” It’s cool. Let’s not talk too much about the gambling part, but as an online marketer it’s really tough to do online marketing when it comes to gambling. Is there one key take-away that you can share with someone that, perhaps, is trying to grow a gambling business on line?

Nick I don’t think anything I can say now is going to be probably ground-breaking. Some of the things that we were doing back in the day were really heavily focused on SEO. That was the cool thing we were doing and there was SEO focused on niche market. So, Australia is a niche market. It has twenty-two million people. It’s easier to do things in order to rank here in Australia than it is in certainly in the U.K. and probably in the U.S. as well. SEO was a big component and paid search, where you can’t do SEO we obviously spent a lot of money on paid search.

I guess with niche gambling business or smaller businesses you really do have to spend money because you’re going up against the big guys who have a lot of money in their pocket. We did a lot of brand building and partnerships associating with sports teams and poker players and just trying to get the word out through those sort of things. So, [Brown Ambassadors 00:06:33] was a big component of our strategy.

We used to sponsor various football teams’ websites and advertise at the games on the big screen where it displays the score. All sorts of tricks and tactics. But I guess one of the things I would say is that the more, it may sound obvious, but the more targeted the advertising the better it is.

I guess the example I would use is; we used to display live ads in real time through our banners on various sites so you’d be cruising around a soccer website and you would see Man[chester] United are playing Arsenal right now, the score is 2-1 to Arsenal so bet their odds, or whatever they happened to be a that precise moment. Really capture people at that precise moment and that was a really successful tactic having contextual messaging at the right time on the right market.

Eric: Awesome. I think that’s something that people can take away today. I think it’s something that people need to be reminded about. Thanks for that. Let’s talk about Flippa today. How many—Flippa obviously is the number one market place for buying and selling websites. What did you say market share was at today?

Nick: It’s about 70%.

Eric: 70%

Nick: Yes, so we don’t have any major competitors which is quite an interesting position to be in. There are website brokers which really handle the top end of the market and there really are the other 30% and there’s a few foreigns where you can buy and sell websites as well, but really we’re the only destination where you can have a safe and secure experience. You can trust that you’re going to find buyers and sellers alike. We have a huge audience. We have half million registered users on Flippa.

It’s a big opportunity if you’ve got something to sell or want something to buy you’re almost certainly going to find it on Flippa. It means we have a hell of a lot of listings so typically we’re selling about two-thousand items a month and that’s mainly websites, but more recently domain names and apps as well so you can find some apps through Flippa. One of the questions people often ask me is, “Why on earth would you want to buy or sell a website?” It’s really just about making money, so these are web businesses primarily.

People buy them because they can see an opportunity to take something someone’s already done the ground work, they’ve got a domain name, they’ve got a site, it may be getting some traffic, maybe there is some advertising on it, but you spot an opportunity. If you’re a marketer like me you can see maybe these guys don’t even have an email data base and you can start capturing email and sell additional products or services or. Maybe they’re not running advertising on their site already and that’s an opportunity to further ad revenue to it and maximize the potential of the site. People are buying these sites to make money and there are typically thousands of these sites being sold on Flippa every month.

Eric: Okay. Got it. So, if I want to sell my site all I need to do is go to Flippa, sign up for an account and then start entering in information, right? It’s as simple as that?

Nick: Absolutely. It would probably take you about three or four minutes to get something live. The more information you post up the better, say the revenue information. We actually can check your google analytics for you so you just give us access to your account, it’s all automated so we’ll go in and grab all the data so you can showcase how much traffic you’ve got, where it’s from, bouncing right, that sort of thing, which is really what buyers are looking for. They’re looking to for them to do the homework before they buy and we help you do all of that stuff, so it’s pretty straight forward. So, jump on there, have a look.

Eric: Okay.

Nick: On the flip side, excuse the pun, if you’re looking to buy, on the home page there’s a get started button. It will guide you through a series of questions: What are you looking for? Is it AdSense site? Are you looking for a word press site? What niches are you interested in? Pets, cars, or whatever it happens to be and here’s some relevant sites, or domains, or apps that you might be interested in.

Eric:                 Okay. Great. Out of curiosity has there been any cases where people have scammed someone else, like, “Hey, I’m going to sell you this. I take your money. Ooop. Hey. I’m not going to give you the site.”?

Nick: We make sure that we offer escrow which hopefully your guys, your audience are familiar with. What it means is if you’re selling or buying a website you put your assets and your money into a third party, an escrow service and then the buyer can check that it is what the seller says it is before the money gets released to the seller. You basically have an opportunity to verify everything is true that the seller has said. That’s one things that’s really important to be aware of. If you use the escrow service then there’s no risk to you. You’re able to view absolutely everything before you actually transfer money.

So, the second thing is around doing your due diligence. We provide you a number of tools on the site. I mentioned the Google Analytics, you can look at how traffic’s been over time. You can look at the revenue information. We can also go into your ad-sense account and pull out all your ad-sense data just to verify that it is what you’re saying it is. Some other tricks that people tend to use are doing a live video walk around of the site and their traffic information that, which you can either post up or you can do it in real-time. You can Skype the buyer and talk them through and show them in real time and the buyer can ask you to click on that button and this button just to prove it’s not pre-recorded.

There’s plenty of ways you can do your homework to make sure you’re getting what you think you’re getting. I guess doing your due diligence up front, make sure you know what you find, you look at the description, you look at the data, you do your homework, and you do some of the other methods I suggested.

Eric: Got it.

Nick: Okay.

Eric: Backtracking a little bit. Something that’s really interesting, you started out as a marketer, like an internet marketer and you transitioned into learning operations which is almost totally different and that’s something I’ve had to learn to do as well. What’s one thing someone can do to be transitioned from that, “Hey, I’m an internet marketer executive.” and go into operations?

Nick: It’s a question I guess it’s just having an open mind. I’d probably start off by describing what my role is and I really divide it up into three things. First and foremost it’s setting a strategy for the business. Secondly it’s about putting the right people in the right roles in order to execute on that strategy. Thirdly it’s about managing the financial health of the business. That gives you an idea of some of the things I do on a day to day basis.

Managing people and hiring people is probably the core component that takes up most of my time, but we have a team of twenty people here at Flippa and we’re spread across the world so we have people in the U.S., and Europe, and here in Australia as well. So, I’ll say: managing teams and learning how to hire people is one of the skills that I’d highly recommend to your audience.

You work and read about—one of the tips I’d have around that is, and it may sound very obvious once again is, if it’s not an immediate yes, it’s a no, so make sure you’re hiring the best of the best because it’s very easy to accept someone who seems okay, they’re not 100% perfect, but you’re kind of desperate to fill a role, and that’s not good enough. Just make sure you’re hiring the best of the best. If there’s any questions in your mind when you’re walking out the interview, “I’m not sure whether they’re perfect for this. They’re really good at this, but not sure about that.” then you’ve got to say no. Just make sure there’s no doubt in your mind before you hiring people.

Something else I’d like to say about the transition is; you have to keep an eye on everything. Some people describe that as micro-managing, other people say it’s having a bird’s eye view of everything, but it’s really important that as a general manager or operations manager you do have a view of everything. Things can easily get out of hand if you’re not keeping an eye, it doesn’t have to be a close eye, but certainly and eye on each part of the business and in this business we have four core area developers; marketing, operations, and products, and it’s important we’re regularly catching up with the people on that team. So, just keep an eye on the numbers, the metrics. We use a lot of dashboards around this place to keep an eye on different KPI’s around the business and I think that’s pretty handy.

Eric:  Some people have said, as a general manager or CEO type person, maybe twenty-five percent of your time or a third of your time should be spent on continually interviewing people and focusing on hiring. Would you say that’s true?

Nick: Yes, absolutely. I spend at least that amount of time. I guess it goes through phases. Sometimes you’re heavily recruiting and you might spend 100% of your time for two weeks interviewing and hiring. I guess to give you some stats on that sort of thing, from my experience you tend—when we put our job out you may get between 30 and 50 applications of which, and I always tend to skype interview first just to save time for both parties. I’ll review those applications. I might interview, by skype, ten people and it’s typically a 15 or 20 minute interview just to make sure we’re both on the same page, and they know what the job is and I know roughly what their background is.

And see, these aren’t really useful anymore you have to really talk to someone and get inside the nuts and bolts and make sure you’re aligned in terms of salary expectations and so on. And then out of those ten you’re probably down to between three and five of in person interviews which hopefully you hire one. So you can see it’s quite a—going from 50 down to, or 30 down to one it’s time consuming. But it absolutely has to be done. It’s one of the most important things you can do as an operations manager or general manager, or CEO. It’s hard to hire the right people, the best of the best.

Eric: You know, that’s a really good point. What I’ve found was, I use something called Zip Recruiter. I just put up a job post recently, 140 people applied for the job. I said one very specific thing; in your cover letter, and you have to right one, you have to write a very specific line in it. Only 8% of the people of that 140, 150 people did that. I think this goes into what you’re saying. You’ve got to build a funnel where you can filter people out and that’s super important.

Nick: Yes. That’s a great tactic and we’ve used it actually. Use a specific sentence in your subject line, “please don’t send your CV now.” You’d be surprised how many people send their CVs anyway, or resumes you guys say. But, those are great tricks for filtering out things like attention to detail.

Eric: Yes. Totally. Cool. So, let’s talk about Flippa more. You have 500,000 registered people. How did you get to your first 1000?

Nick: Like I said earlier we actually were born out of SitePoint so we had these other companies. I guess we focused heavily on email marketing across all the companies in the group. SitePoint has an email data base that is close to a million names. It’s a big data base and therefore it’s—it consists of various different groups of people including people that are interested in buying and selling websites. It’s quite an easy start for this company, but because we’re one of the first, in fact the first company to actually offer this service to the general population—there were a few brokerages around before us, but as a market place we were the first.

We had a bit of a head start and people were talking about us. We got some P.R. and coverage and became a name that people still kind of use today. Flippa is the destination for buying and selling websites. It’s the go to place. People write books about us. People run conferences about us. They know it’s the place to go. So we actually had more of an easy start then perhaps some of your own audience would have.

Eric: Okay. Got it. Cool. When it comes to selling a website things change over time so what are some interesting trends you can share with the audience about buying and selling websites especially in the last year or two.

Nick: I guess aside from the business trends some of the things I find most interesting watching, general internet trends come and go. Bitcoin was huge 6-12 months ago. We had a flood of sites which were bitcoin related. 3D printing was another trend which everyone would know about. But you see these trends starting to bubble up on Flippa maybe a few months before they make it into the main stream news. People are creating sites and buying the domain names already because they’ve spotted an opportunity.

Those sorts of things I find really interesting about Flippa, just looking for what’s hot, what’s coming up next. In terms of platforms I guess WordPress is the pre-eminent platform. For buyers and sellers alike it’s really easy to use. A good two-thirds of the sites from Flippa would be WordPress. It’s just really easy for someone to pick up and start running with. That’s grown and grown over time, I think I read 100,000 new WordPress sites launched every single day.

Eric: Wow!

Nick: Crazy stuff like that. So you can imagine a lot of them getting into the market on Flippa. Different advertise or monetization methods. So you see affiliate networks come and go and advertising networks come and go, but I guess you’re safe in the hands of Google if you’re using AdSense. You know that that’s a stable network to use, which is why we actually offer the service to verify your AdSense revenue.

Just having a look at what the networks are that’s quite an interesting place to play in Flippa You can actually go in there yourself and feel to buy different niches and monetization methods and see what’s popular, how much these sites are selling for. Even if you’re not interested in buying or selling websites it just gives you a good indication of what the rest of the industry or market is interested in at this particular time.

Eric: Okay. Cool. I used to use Flippa a lot. To your point we were talking about validation, marketing validation and maybe it gives some people ideas on what project they should be working on and things like that. I know a lot of affiliates that have done that. In terms of valuation for your website how do you go about valuing your domain? Any tips you can share there with your audience?

Nick: Yes. I’ve got a couple of tips for you. In terms of domain names we’ve actually got a valuation tool that we launched this year. If you go to Flippa.com and click on domains there’s something called appraisals. It’s a crowd based tool so you can punch in your domain name and a crowd of people; and remember we’ve got a half million customers on our site, so the crowd will tell you what they think it’s worth and you’ll hopefully get a range of opinions and we’ll show you what the median price is.

Domain names are really—everything’s quite difficult to value because, there’s this saying; one man’s trash is another man’s treasure. If you launching a business in a certain niche then certain domain names are going to be more important to you than someone whose not in that niche. You need to bear that in mind. So, domain names is quite tricky. That’s why we launched the appraising tool which give you a range of opinion.

The other way you can evaluate domain names is obviously looking at the traffic a particular keyword gets, if the domain contains a key word, that is. With websites it’s a bit easier because if the website’s making money you can use standard business brokering and multiples; two or three years’ worth of net profit that kind of topple into town when you’re talking five, six, or even seven figure deals. That’s typically how the website businesses are valued. But at the lower end it’s really, once again, it’s what someone’s prepared to pay for it.

So, maybe you’re really into dogs so you’re willing to pay a premium for a dog site over and above seeing what it’s making or what the traffic is right now. At the lower end the multiples vary quite a lot. At the higher end it’s up between—the last valuations or report I ran it was about 2.7 years was the typical valuation of a six figure web business. I guess there’s a sliding scale.

Domains are harder. ROS apps probably even harder still because the market’s relatively new. You can buy or sell ROS app on Flippa and its virgin territory right now. We’ve only got about 70-80 apps on Flippa right now. It’s quite a new market. People don’t really realize you can actually do that. You can actually transfer an app between owners. It’s a relatively new market so I can’t really say what the valuation techniques are right now, but they’re probably around traffic, downloads, and if it’s monetized through advertising or in game purchases then you can use a similar sort of multiple.

Eric: Interesting. Have you seen—you’re saying the app space is really new and I can envision that being huge, selling apps, and things like that. Do you have an example of one really interesting app that was sold on Flippa recently?

Nick: Yes. I’ve got dozens. One of the things that’s funny about the apps is that they’ve got these huge long names. Princess Fairy Tale Castle Jump was something that came out a few months ago. There are even longer ones than that. The reason they do that is because in the app store I guess the more key words you have in your name that’s how the search works in the apps store. So it’s better to have these really long names with lots of key words.

I guess some of the interesting apps that have come off the site are things like review sites, lots of review sites, and not so much kind of—games. Games is the most popular in terms of apps on Flippa. They are typically monetized through advertising. Occasionally they have in-app purchases. They’re usually really simple games similar to Angry Birds. They’re fairly simple games monetized through advertising and that seems to be what’s selling quite well on Flippa. It’s quite easy to take these apps over and add some new advertising network or even add an in-app purchase or maybe you change the monetized to pay for download. Games is really what’s selling on Flippa right now.

Eric: Interesting. I’ll have to check that out after. What are some top mistakes you see people making when they’re trying to sell their websites?

Nick: I suppose it’s trying to rush the process and not provide all the information. The truth’s always going to come out in the end. If someone’s going to buy a site you need to declare everything; how many hours does it take to run, there’s no point in not declaring that one on the description; where the traffic’s from, it’s easy to find out where the traffic’s from so you may as well declare everything out in the open so the buyers can read through exactly what they’re getting.

I guess the most common mistake is probably trying to rush through the description and try to get it—not provide all the details because you’re in a rush or whatever the reason may be. It’s worth just thinking through, “How long does it take me to run this business? What are the services I use? If I’m using a particular type of posting how much does that cost me a month? How many people draw or employ freelancers? How many articles do I need a month?” Just kind of going through before you actually start typing out your description just make a list of all the operations, I suppose, that the site’s required to run it. That’s probably the most common mistake people make is not putting enough time and sort through the description of what they’re selling.

Eric: Okay. And obviously the better description you have, the simpler you make it, the higher conversion rate you have, right?

Nick: Absolutely. The better description you have the more people will watch it, the more bids you’ll get, and the more bids you get, the higher up the search result you get on Flippa and therefore you’ll incrementally get even more bids which will lead to a higher sales price. So, Flippa works on an auction model, the more bids you get the better valuation you’re going to get for your sale. It’s really important that you get people watching and there’s a functional Flippa to watch at auction or a seller so more people watching leads to more bids and more activity and a higher price for you eventually. So, it’s worth thinking through everything you’re going to need to run the business and document it on the sales description.

Eric: Out of curiosity what’s the most a website has sold for on Flippa?

Nick: Yes. A good question. We actually had our biggest sale about two months ago in June and we sold a site for on and a half million dollars. But in the last six months we sort of focused on website brokering is what and we also have an arm of Flippa called Deal Flow and if you go to Flippa you’ll see what a little tab called Deal Flow and they have, they’re brokers. So, they do everything for you.

If your site’s worth over $20,000 you can use Deal Flow and you’ll be put in touch with a broker and they will write your description for you. They will value it for you. They will market it for you. They’ll find buyers for you. So they handle the whole price list for you. That’s the new service we offer for the high-end. That one and a half million dollar sale came through Deal Flow.

Eric: What percentage do the brokers take?

Nick: We charge a 10% fee. That’s pretty competitive in that space. Typically brokers charge from 12.5%-20% so 10% is really competitive.

Eric: Wow.

Nick: Just to give you another example. The biggest to domain we sold is Stock Photo.com which we sold from Flippa and sold it for $250,000. We’re in touch with the guy that’s running it, he’s bought the domain, he’s launched his site, his name is John Yao. He’s based in Perth here in Australia. He’s having a great time launching his business with stock photos. He’s got hundreds of thousands of stock photos on the site now and he’s doing great. Good success story.

Eric: Nice. Good domain. Cool. When you obviously transition over from gambling, you went to SitePoint, now you went to Flippa. Can you could tell us about one big struggle that you faced while growing Flippa?

Nick: I guess aside from kind of putting the right people in the right roles, that’s a learning curve. I talked a bit about that already. That’s really important. I suppose something else I can talk about is investing in usability or UX. It’s something that Flippa’s really struggled with in the past. When we launched Flippa it was the first of what we were doing.

Anything was better than nothing in this marketplace and giving people a good experience in that sense in that now that they can transact, but as time developed it’s really important to invest more time in the users and it’s something that I encourage all the teams to do. It’s just really about putting their heads inside the user’s head and trying to understand, “How this is being perceived? How this post is being perceived? This new feature? This kind of email message?” Whatever it happens to be, just trying to put their heads inside the users heads and it’s something we really haven’t done enough of until fairly recently and hopefully you can see some changes over the last few months. Certainly coming up you’ll see some major changes around the usability of the site, providing better information.

For us to do that homework some of the stuff I’ve really talked about providing visual charts and tabular formats and data that you can easily scan and see what’s happening on the site is something I’m interested in trying, all sorts of kinds of usability features that we’ve introduced over time to make the site easier for buyers and sellers alike. Something we’re going through right now is re-designing our sales price list so when you list a site for sale on Flippa you go through a series of steps, input the information as you go through it. That’s something that we’re working on, we’re trying to improve constantly.

I guess that’s our sales funnel so it’s really important that we’re tweaking different parts of the funnel at different times so we spent a few months tweaking the home page and our wizard on the home page, you click it and get started, it guides you through what you’re interested in and what’s available to buy and that’s a really big usability feature. It helps you find what you’re looking for quicker and that’s really what the goal of Flippa is; to put the right sites in front of the right people at the right time.

Eric: Got it. Okay.

Nick: Usability.

Eric: Okay. So, there’s usability, you guys are doing email marketing right now obviously and I assume the SEO has to be pretty strong for you guys as well. What’s one interesting thing that you guys are doing to grow the business today?

Nick: Outside the normal stuff that everyone’s doing; SEO, PPC, display marketing and so on, we’re investing more time in partnership. We work with bloggers and other internet industries which [INDISCERNIBLE 00:32:14] to publish the sites that we’re making, for example, in terms of domain names there’s a blog called DN Journal [ph 00:32:19] and they publish every week the top 100,000 that’s happened in the whole industry every week. Just being in touch with those guys. They know what’s happening in Flippa and, “Here’s it’s a list of what we’ve sold this week”. In the website space there’s a few key names.

We have a presence in social media and forums, and blogs as well that we work with to talk about their experience of buying and selling on Flippa. And that’s a tactic which may sound obvious, but it really works. These are real people that have had real experiences on Flippa so they’re story counts for much more than our marketing messages. They’ve had a great experience so how can we help them tell their story. What information do they need to tell their story more frequently in a better way? Do they need data from us, if they say yes, we can provide that. I guess we’ve encapsulated a brand as ambassadors. That’s something that’s becoming more and more of a focus for us.

Eric: It sounds like, you talk about partnerships. It’s more like also influencers as well. You’re looking for those people, case study kind of things.

Nick: Absolutely. It’s really important in the website spaces to say we have a 70% market share. Really, in order to grow you really need to grow the whole market. It’s really hard to grow from that position when there’s limited space left. It’s important that we’re trying to grow the whole market which is about raising awareness. For example we’ve recently partnered with Pat Flynn’s Smart Passive Income. During August we were running some features in these podcasts at AskPat.com and those went pretty well. These sorts of guys have a reach beyond the Flippa audience. But his audience is interested in what we’re doing they just don’t know about it yet. Finding people like that to work with and partner with has become really important for us.

Eric: Got it. Okay. Cool. That’s very helpful. What’s one piece of advice, if you can go back, what’s one piece of advice you would give your 25 year old self?

Nick: I guess, focus on something you’re passionate about. It’s easy to take a job or role that’s paying well and it’s not really something you have an interest in personally and you’re never going to get the best out of yourself, the company’s never going to get the best out of you if it’s not something you’re passionate about. So make sure you’re doing something;

  1. You passionate about
  2. That challenges you.

There’s nothing worse—the amount of people I interview I hear a lot of stories and constantly hearing the story, “I’m in this high pay job, but it’s just so boring. I want to work for a startup or a business I’m passionate about or interested in and challenged by.” Challenged by is one of the key facts, you might have read that in your pinks [ph 00:35:09] book about how it’s really important to work in something you’re challenged by and same for the people that work on your teams, to make sure you’re challenging them.

You get the best out of people when they’ve got difficult problems to solve, right? They don’t want to sit there all day just with their brain half engaged. They want to be totally engaged in the problems that they’re solving. That’s really going to get the best out of people. Do something you’re passionate about, do something you’re challenged by, and the other thing I’d say is, something I really uphold is about executing fast. It’s easy in a big company to go with the flow. The bigger the company is the more you can go slowly with the company as it goes in different directions, but in a small business, and this is a small business, Flippa, it’s really important to execute fast because someone’s going to be hot on your tail if you’re not executing fast, someone will do that thing before you, build that new thing or start that new business or market place, or whatever it happens to be. You’ve got to get something out there and execute fast.

Eric: Okay.

Nick: That’s one of the messages that I’d give to my twenty-five year old self.

Eric: That’s really helpful. I agree with the executing part, executing fast part anymore. Next question. What’s one productivity hack you can share with the audience?

Nick: I guess, I don’t know whether this is considered a hack, but it’s more of a guiding principle and it’s something I recently learned from the founder of these businesses. He’s made this one of my most memorable points, I guess. It’s; dividing your time up into motion verses action. I’m not sure if you’ve come across this concept. It sounds pretty basic, but really what it means is make sure you’re taking action more of your day than actually going through the motions. What I mean by that is; an action is actually writing that blog post, writing that email, and coding, and building this feature, you’re actually doing something.

Motion is: going through the motions and just planning, thinking about it, having a meeting and really you should be spending more of your time taking action rather than just going through the motions. Once again it sounds overly simplistic, but you’d be surprised, if you roll up your day or your week and think about what action this week or next week what am I actually going to action, how much of your time do you actually spend doing something productive rather than just thinking about or planning something which, needs to happen, but really it doesn’t actually count for anything until you execute it or take action.

Eric:                 I couldn’t agree more with that. Motion—a lot of people mistake motion for action. Final question from my side. What’s one must read book you’d recommend to the audience?

Nick: Probably going to sound a bit cliché, but something I give to all my staff here is “Delivering Happiness” the Zappo’s head, Tony Hsieh. And the reason I give it to all of my team here is because it has a few messages in there which resonate for any small startup business and probably any business globally. In fact it’s one of those is about the importance of the customer and customer service in a company. So, if you’re a business selling a product, we provide a service and we do have a customer service team and they’re interacting with the customers on a day to day basis.

Their interactions will be remembered by the customers for evermore and they’re giving out the perception of what Flippa on a daily basis with our customers. They’re almost our marketing channel. They’re our number one marketing channel. It’s extremely cost effective. They’re talking to people on a day to day basis who then talk to their friends and family, hopefully about the good experience they’ve had dealing with us. So, the role of customers, not just in marketing, but in every part of the business, I think is really important, comes out of that book.

I would like to make a point on that question. You typically read a lot of kind of entrepreneurs talking about the books they recommend and yes, there’s a heap of books you can read, there’s also a concept of being book smart or street smarts. Being book smart, if you’ve read all the books, but that doesn’t necessarily mean you can execute or solve problems on the fly which you need to do in terms of a small business or in the startup space. You need to be street smart as book smart. So, make sure your audience is taking everything out of books and taking it at face value. You really need to write promos and try to solve problems for yourself. That’s the way you’re going to get ahead of your competitors by doing things differently to how it’s said in the book, using that as an example than interacting [INDISCERNIBLE 00:40:05].

Eric: Got it. You bring up another point. You mentioned “Delivering Happiness”. It’s something you want everyone to understand customer service, you want everyone to have a really great culture, but how to do you hold people accountable to that standard of thinking?

Nick: I guess there’s an easy way which is measuring everything. So, we have a measuring system for our interaction with customers and that’s the easy way in terms of the people that are dealing with customers. I guess it’s less tangible when it comes to, for example, the developers, how do you insure they’re thinking about the customers in everything they’re building? That’s very difficult to measure and it comes down to the stuff they’re releasing. Is it well received? What’s the feedback on the stuff they’re releasing?

It’s different for the marketing staff. They have a different way of measuring it. I’m not sure whether you’ve come across this net promoter school feedback which is something that we tend to use here to get feedback on products or services that we offer as a way of measuring things. But yes, it’s tangible in some areas and intangible in others, but you generally get the gist of a number of these sources or metrics coming in from different channels, whether things are going the right direction or the customer’s happy or not and that promoter score is ultimately probably the number one indicator that you’ve got a good score across a number of transactions then you’re probably doing a good thing across the board.

Eric: That’s helpful. for people that—you guys obviously use Google net for motor score, Survey Monkey has a really good net for promoter score or Quiz, or something like that, or a survey that you can send to your customers. That’s something I highly recommend. Nick Kenn, thanks so much for being on the show. Everyone, go to Flippa, check it out. See what trends are popping up. It might give you a few ideas here and there, but I highly recommend it. Thanks so much Nick.

Nick: Thank you guys. Cheers.

Eric: Cheers.

 

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