Aggregating Sites and Taking a Portfolio Approach to Scale with Scott Oldford

Scott Oldford is a seasoned entrepreneur, advisor, investor and mentor, and runs a diverse portfolio of multiple assets.

He’s now back on Flippa to build an ecosystem of businesses in two niches: entrepreneurship and lifestyle development. 

Scott has already acquired five businesses on Flippa this year, and he’s ready to acquire a dozen more by next year. His number one tip when it comes to buying businesses? Consider buying multiple assets, and put them together to build something bigger. Listen to Blake and Scott’s conversation and find out more about the biggest challenges of buying and selling businesses, how to successfully scale a business and much more.

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Read the full transcript of the conversation below. 

Scott’s Entrepreneurial Journey

Blake Hutchison: Welcome to another episode of Humans of Flippa. My name is Blake Hutchison, I am the CEO here at Flippa, and today I have Scott Alford joining us from the Bay Area, specifically from San Rafael. Scott, thanks for joining us.

Scott Oldford: Great to be here today.

Blake Hutchison: Now this is the first time we’ve got to know each other, thanks for joining again, but you’ve just revealed that you joined Flippa some 13 years ago, is that right?

Scott Oldford: It was like 13 years ago and I had my first business when I was seven. I used to have, by the time I was 16, I had a million dollar business, programming and building different things, online stuff. And I remember selling my first website on there, I think it was May or June of like 2010. I just went back in my Gmail because I don’t delete anything and was saw the day I signed up April 27th, 2010.

Blake Hutchison: And I believe it was a content website.

Scott Oldford: It was an online form for people that talked about Phish. Back then I used to build online communities, that was part of what I used to do. And I think I was getting rid of them because I was redirecting my direction, and focus and I got rid of a couple of websites I own like that.

Blake Hutchison: That is very cool. Obviously we’ve got a big community and some of them like yourself have been around for a while. We’ll get into your Flippa stuff in a minute, but let’s just start very high level. How would you describe yourself, your job and what you do on a day-to-day basis?

Scott Oldford: I mean, I’ve been an entrepreneur, as I said, since I was literally a kid selling eggs on my parents’ acreage in Canada. And today I’m largely advisor and investor, I have ownership in 34 companies, so I run a portfolio group, so that’s part of it. On side of that as well, I also mentor a lot of entrepreneurs and have been doing that now for the last about eight years. And up to this point, I’ve helped about 250 businesses all online, go past seven, multiple seven figures, many of them past eight figures. So when it comes to education businesses, media businesses, courses and coaching and consulting, those are the ones that have helped scale and build behind the scenes as well as my own. So now I bring that into pretty much everything that I do. We’re focused on media, education, certification companies, those types of things and some software as well.

Blake Hutchison: So some of them software that would mean tech startups?

Scott Oldford: We do a little bit of investing on the angel investing side, but largely when I’m looking for a software, I’m looking for a tuck-in software. We have all this audience, we have all these people, what are the things they need? What ends up happening is I see a software that failed at being able to get market adoption, they ran out of money and they’re selling us their software, their customers, they’re trying to go do something else. They weren’t able to raise, they weren’t able to… But I’m able to take it, and because we have an audience of over a million people in the entrepreneur niche, I can take it, tuck it into all the different businesses we have so that everything redirects there. We take away the marketing sales cost and that business just ticks away, we’re not trying to scale it to this some big thing, it’s more so solving a problem that a lot of our audience needs solving.

Blake Hutchison: Diverse background, you obviously get to see lots of different businesses. You probably therefore get to see that the operational problems that some businesses have are very similar to the operational problems that other businesses have, and no doubt that gives you a pretty strong sixth sense for what a good asset might look like or does look like.

Scott’s Portfolio Approach to Scale

Scott Oldford: I think the largest part is a lot of the time if you are only buying one business, you really are at a disadvantage than buying and saying, “Okay, this is my investment thesis, this is what I believe.” And the economy as a scale really solve a lot of the problems that you have when you get into buying and acquiring businesses at the end of the day.

Blake Hutchison: It’s a really good point actually, because the vast majority of people who buy on Flippa do buy more than one business. In fact, most of the time when you see quite a big acquisition budget, let’s say someone lists themselves as having a 5 million total acquisition budget, you’ll see that their budgets for acquiring businesses could be as low as say 50,000 dollars or 150,000 dollars because their entire approach is to take what they think works, but apply it across a portfolio.

Scott Oldford: I think it’s a more diversified approach, it’s less risky. If something doesn’t work, it’s not a big deal, it’s not a big part of the budget. I also think it allows you to get gold where you wouldn’t be able to get gold otherwise. I’ll just give you one example, one of the things that I bought from Flippa was… I won’t disclose what it is particularly, but it is a software company and if someone didn’t buy it and brought it into a current ecosystem, there’s just no way this makes sense. It just does not make sense, and it sat there for a while and I was able to get it, I think 30,000 dollars under what the actual price was because it was just something that by itself made no sense.

But I already have a programming team, I already have the marketing, I already have an operator, I already have the marketing taken care of. I can plug it in, and the software itself is great, but everything that surrounded it just wasn’t. So that acquisition was only about six months ago and I think I’ve made three times my money back on that already.

Blake Hutchison: Already?

Scott Oldford: Already, just because it’s plug and play.

Identifying the Right Businesses on Flippa

Blake Hutchison: That’s exactly what I’d love to talk a little bit about right now, these businesses that you identify. Now, my observation is that you were pretty active on the platform in the last half of 2022.

What is it you are looking for, what is the theme?

Scott Oldford: Coming into 2022, majority of my business beforehand was someone’s paying me money and it’s a good deal of money. I had a very successful business generating anywhere from three to seven million dollars a year mentoring and selling courses on how to scale a business, a couple books, those different types of things. And that’s still rolling, that’s still going, but I’m no longer focusing majority of my attention there. I said, “Okay, I’m at a point where now I want to be able to build an ecosystem of businesses.” And my belief is if we are looking at the next 10 years, software, education and media, meaning newsletters, podcasts, blogs, things that we can control, at some level we can control not just the website that has search traffic, but the website that also has a quarter of a million email addresses on the back of it that we own.

I said, “Okay. That’s the way and direction that we’re going to go in.” That’s what brought me to saying, “Okay, let me sign up for Flippa,” as well as the different other competitors of yours obviously as well and let me start seeing what is in there. I mean, I haven’t made any massive acquisitions off of Flip, but by any stretch of imagination. More so what I’m looking at is either number one, either a tuck-in or number two, something that I might not fully know but I’m going to dip my toe in to see and understand if that’s something that I want to bring into the overall ecosystem. Or in a couple of cases, I went and started talking with a person behind it and I was like, “I think that person might actually have the skillset,” and in two of the cases, they’re on my team now.

I bought the property, but in reality I really just wanted to hire the person because I was like, “They built that, they got all that off the ground, that’s interesting. Let me get that skillset and let me bring that into my entire group of companies.” I mean, more than likely, I’ll probably do another dozen acquisitions in 2023 from Flippa alone, continuing to do that because a lot of the time, again, there’s a lot of gold, by itself you can’t extract it, you bring it in, you put it into the whole gold smelting machine, and now you actually have some gold. So largely I’m looking for properties that are new newsletters, we own a few podcasts. Right now we own 13 newsletters, we own a few podcasts, we’re going to continue to grow the podcast network and content sites.

But again, things that are inside of, I have two large niches, entrepreneurship and business, and then lifestyle, wellness, personal development. If it’s outside of that, I don’t touch it, I don’t care about it. If it doesn’t make sense in those two, I’m done. If a SaaS is not a tuck-in, meaning it needs its own marketing, I’m out. If a media site doesn’t have a newsletter on the backend or some type of thing I own, besides the search traffic, I’m out. If it’s an education business, I’m not looking to buy those, I’m looking to partner on those, but that’s because that’s my background and that’s my clients, and my deal flow on that is just great. I’m looking for deal flow largely on media and software.

Blake Hutchison: Okay, and as part of this, how do you undertake the search? Are you simply going to Flippa or somewhere else and using a keyword, are you using filters? How are you finding out about these deals? Where are you getting your deal flow from?

Scott Oldford: My son came about eight months ago, at the beginning I had a lot of free time in between because I went back from the business, said, “Okay, I’m going to take a step back.” I got a lot of time on my hands, and I would just spend time going through Flippa, and the other different websites, and doing a little bit of due diligence, and this and that. And obviously I’ve been investing in businesses probably for about four years, this last 16 months by far majority of my focus.

Now, I essentially have somebody else that does it for me, goes on the website, compiles and essentially says, “Hey Scott, I think this might be good to look at.” I take a look at it, an initial look at it, and then I go from there. That’s how I do it today, obviously when I started back in the summer, I had all the listings to go through because it was all new, I wasn’t looking at it each day. And then as time went on, there was only so many listings that come up, but that’s the process today, and there’s not that much in my criteria really come when it comes down to it.

You’re only going to see probably a few deals a week that fit my criteria at this point, and understanding your criteria is also important so that you… You just waste so much time on due diligence, it’s just the biggest time suck ever. And also you have people that you just don’t know when you’re buying from somebody, you just don’t know them.

Scott Oldford: The amount of due diligence you have to do of going in there, I’m used to going into business, people literally pay me a lot of money to go into their business and say what’s wrong, and I’m really good at that. I can look at a business and in 10 minutes be like, “All right, this-this-this is all messed up, now what matters? Does that matter?” And it was also fun at the beginning, and now that I’ve done it so many times and just whenever I do something, I do it obsessively, and then I move on and I delegate it to somebody else. So that’s what I’ve pretty much done. But it was just me on my phone just being like, “Look at this bit. Let me talk to this person,” and it was a lot of fun.

Blake Hutchison: I love that. So first you did it yourself, now it sounds like you’ve got your own personal deal origination service, which is pretty cool.

Scott Oldford: We’re expanding that now… Because obviously an advantage when you have more time, and more cabinets to go and say, “Can we start approaching people versus people that are actually looking to sell?” And there’s advantages and disadvantages on both sides of doing that at the end of the day.

Blake Hutchison: Wow, you just gave me a opportune time for a plug. Flippa just recently launched our off market, so for those of you who are new to Flippa, click the search button, then next to the live listings, you actually see 10,000 off market listings. They’re not actually for sale right now, you get to prospect on that directory. That’s pretty cool, and hopefully we can help you out with that Scott.

Scott’s Scaling Process

Blake Hutchison: We’ll be continuing to add to that, and then it sounds like you are clearly very experienced and so to some extent you have an ability to de-risk your acquisitions. But what I’d love to get into, just briefly, if you don’t mind, you mentioned you bought a site, whatever it was, three months ago, and I think you said two or three times the return on that small investment. What is it you do once you take over the asset to either stabilize the patient we might call it or accelerate?

Scott Oldford: I think we finished that acquisition in October, it’s February right now. So that’s the timeline on that, and it really depends on every business. Some businesses, I’m like, “We literally don’t have the time to do anything with the business.” I’m actually buying one right now, it’s a little software that allows you to do some legal stuff, and I’m buying two businesses, I’m buying the software, and then I’m buying the legal templates from… I’m buying two businesses, bring them together, and then the lawyer’s going to be on retainer to be able to take care of that.

I got a SaaS that didn’t work, and then I got legal templates with a lawyer that doesn’t know how to market it. I brought it together, and then I have an entire army of entrepreneurs that need contracts that don’t want to pay 10,000 dollars for a contract, you can’t screw that up.

In this case, it was a situation where I went in, I did the due diligence, I liked it, I gave a low-ball offer and they accepted it. And I was like, “That’s great,” and I think it was the first sale I did on Flippa if my memory serves me right. I did that, it went smooth. My due diligence, I actually went into the thing… Funny enough, I actually knew the people that sold it to them, they were friends of mine. So I went to them and I was like, “Hey, what’s the deal with that?” And they’re like, “Listen, this is going to be a pain in the if you’re going to try to build it by its own thing. We sold it because we couldn’t make it work because of this…” I’m like, “Okay, cool, sweet.”

Then I went to my programmer, my head programmer and I was like, “Hey, can you do a little bit of a review?” And he’s like, “We don’t need to screw around with the code, we don’t need to update it, assuming that we don’t want to do this, this and this.” I’m like, “Well, I don’t want to do this, this, and this.” So then I was like, “Okay, sweet, let’s do the deal.” So I did the deal, it was 33 days from the time that I submitted the offer to the time that the cash was done, it took about a week to do that. So then I went and I talked to the operator and I was like, “Man, this guy’s worth the money alone, this guy’s amazing, he’s been there from the beginning, he’s bought in, he loves it. I’m in the process right now giving him a percentage of the business because I believe in him, I believe in his vision.” So it has about six and a half thousand a month in monthly reoccurring revenue, 6,500 bucks. In the entire scheme of things, never going to miss 6,500 dollars.

I said, “Okay, 6,500 dollars covers all the expenses so it’s basically at zero.” We need change the website, we need to change the marketing, we got to activate the email list, we got to get some marketing stuff, we got to get the backend. How many clients can we actually take? So beforehand it was a do it yourself and it was 35 bucks a month, and I was like, “Listen, we’re never going to be able to scale with that. We’ve got to be able to bring in some done with you or done for you element and bring the SaaS on the back of it.” So then I took that, helped on the marketing a little bit, and then I went to all the certification companies that I’m owner in or partner in, I said, “Listen, we’ll give you the first year free, and then after that it’s going to be 399 dollars a year.”

You can go to every single person and tell them, “Hey, we’re doing this promotion, we’ve partnered with this business and it’s working incredibly well, but now here’s what the other thing that happened, there’s a 3,000 dollar upgrade.” We’re getting all these people come in getting their free thing, it’s going to cost us about 70 dollars per person for the first… So of course it’s going to be a loss, but we are capitalized, that’s fine. But as people are coming in, some people are upgrading and they’re pushing a buy button right there and then, we’re getting the cashflow from that because we own in the education businesses, we don’t have to pay any affiliate fees on that. And based on our current projections, that business will probably 15X within 16 months it’s revenue that I bought it with. If again, the churn rate’s not massive in 12 months from now, again, I don’t know what that’s going to be.

That was my strategy on that particular business. Again, this is the advantage of having sort of an ecosystem versus just one business, and it’s also not particularly easy to build an ecosystem and it takes time. And there’s a massive unfair advantage where when I buy something, it’s really hard for me to mess it up.

Blake Hutchison: It’s super enlightening. I hope people are listening in who are first timers and thinking about how they can chop up their overall acquisition budget to begin that ecosystem play. But the other thing I like about what you’ve just said is, you know what you’re getting into. You’ve got a business which is doing 6,500 a month. You’ve bought it probably on a multiple performance or I at least imagine that was how it went out and then…

Scott Oldford: I got it for 70. It was a firing sale.

Blake Hutchison: And all you’ve really done is gone, “Well, it’s a good business at the heart of it, but it’s financials and its operational metrics don’t quite make sense, so what I can do is add my ecosystem network to ensure its efficiency and then optimize for performance long term,” and as you said, whatever you said then, 16 times.

Scott Oldford: My thesis is, my belief is, “Let’s get all these people here.” Worst case scenario, in three years, it has probably a couple thousand customers if I keep on going this way, and I can do a long-term flip and probably get two and a half million for it, maybe more. Or it’s just a cash cow, and we just keep on doing it and it churns a little bit every year, obviously every month, every year, and I’m collecting checks. But it’s not a business that I’d go into where you’re like, “Okay, I need 70 grand to buy it and then I need…” You wouldn’t need a quarter million, a half a million, and you wouldn’t even be able to compete because this is not something that by itself is any better than its competitors.

The advantage I have is proximity, and I think that this is probably one of the biggest lessons I could probably tell anybody that’s going to get into buying and acquiring, which is if you don’t own the traffic and you can own traffic through paid ads, or organic, or partnerships or all three, but if you don’t own the traffic, that’s one of the biggest risks you can have. You can fix operations, you can get in there and figure out operations, you can get in there and figure out customer support. Those operation and delivery issues are generally not that expensive, but if you run out of money trying to get customers from a marketing and sales perspective, you’re done, pack up the bags and you got to sell it again. I think probably most people overestimate their skills on marketing, and sales and how much it costs to get that momentum for our business.

Finding Your Niche and Expanding It

Blake Hutchison: The number of people who say, “Yep, I’m making this product, or I’m going to sell this product, or I’m going to run this service, getting my first thousand customers will be easy,” and not recognizing the cost to acquire, and not recognizing the unit economics and the contribution margin for that effort is surprising. So that lesson is really pertinent, and critical and thank you for mentioning it. I’m going to put you on the spot here, and I hope you don’t mind me saying, I’ve discovered an asset that you’ve purchased and it’s in the camping space. I want to know why you bought that asset, I’m looking at it, I know why you bought it because I can see the data here, but you’ve bought an asset that is essentially campground booking software, so why do you like it?

Scott Oldford: That’s a test for sure. I told you part of what I’m going to is lifestyle, in the lifestyle niche. I also own a productivity company, so we got a productivity planner, some productivity products, and some e-commerce products. E-commerce is not my strong suit, I don’t know e-commerce but it came with 94,000, and this wasn’t off a Flippa, this was off… Came with 94,000 planners, so I said, “Well, worst case scenario, I sell them all to my audiences and I make my money back, worst case scenario.” So I have that, I also just acquired another from Flippa website in the spiritual niche. I just acquired two other spiritual websites that all collective have 10 million visitors a year, majority in America. So I’m creating a little bit of a lifestyle media brand.

So I don’t really care about… The software is terrible, but there’s a couple of very powerful assets that came with that. So number one, I had a great operator that ran campsite and RV phone sales, so they would actually sell to the camp and I was like, “Well that’s wonderful, that’s great, you understand it.” He knows a copywriter that also writes for another campground software company so we brought that person in, then I went and I bought a camping newsletter that already had, again from another website, 20,000 people on that email list with about a 70% open rate, which is phenomenal.

This one came with 50,000 email addresses of people that booked, people that spent money, not just email address, people that literally booked a location in America. We’re going to turn the software of booking, the reservation system, which is basically what this is, a reservation system in the camping niche, and we’re going to turn it into a directory. Right now the business model’s taking 10% of booking fees, which is a terrible business model for SaaS unless you have massive scale. So we’re going to turn it into a directory sell ad space there. We’re about acquire a podcast and a Facebook group so that there’s a community and there’s a podcast on the back of that.

Blake Hutchison: There’s a theme here.

Scott Oldford: We acquire all the assets and then we’re going to utilize influencer marketing and audience swaps of other lifestyle brands and that type of thing build half a million-person email list and now we can go and sell advertising. And because I have a media brand with the media where we’re selling, we’re buying, and newsletters and media brands, we already have the infrastructure to be able to do that, that’s the play. Whether or not it works, I don’t actually know.

Blake Hutchison: I mean, it’s a system, the system is benefited by the ecosystem, the ecosystem implies that there’s a community and then there’s a theme here, and the theme is that you’re going after operators who have subject matter expertise to some extent, therefore, the asset is defensible because they know what they’re doing. You don’t have to worry about having to school yourself up on that particular industry or category, they already know it.

Scott Oldford: Another part of my due diligence is that there’s always an operator that always has a part of the company that understands that niche intimately. If I don’t have an operator, I will pass on a deal just for that reason, or if I really love it, I’ll buy it and just let it sit until that person comes.

The Experience with Flippa

Blake Hutchison: Amazing. And now if you don’t mind a selfish question, why do you love Flippa? Why are you buying six or seven sites per half year on Flippa right now?

Scott Oldford: I feel like Flippa is the OG of the space, you have great market share, great deals that are there, it’s easy to use. From a functional perspective, it’s probably the easiest of the platforms that are available. I mean, it’s interesting from a market perspective, you go from the guys that have 10-20 million dollar business, I’m not looking to buy those businesses, that’s not my budget, that’s not how I’m looking to build what I’m building, at least not right now. So it’s interesting because on Flippa, you could see that 10 million dollar business, that 10 million dollar business might be there, but at the same time you also have the 7,000 dollar business or the 170,000 dollar business. So the range of that is nice, I think a lot of the search filters and those different types of things, I really like that.

Not that there’s so many, there’s a couple of dozen that are necessarily out there, and I think the other part of it is that in the buying that I’m looking, I’m not looking to have some broker involved that makes my life just terrible, which not against brokers. I think that brokers for a certain type of business make a lot of sense-

Scott Oldford: I would want a broker if I was selling, don’t get me wrong, but for the way I’m going about buying, having a broker is just going to make it so that negotiating is impossible, and it’s just going to make the deal three times longer and all these different types of things. So I like the fact that, obviously, there’s a level of due diligence that Flippa does, and at the same time I’m not dealing with, “Well, let me talk to my client and I’m here waiting for three days.” The other advantage is a lot of the time when I’m buying, I want to ideally even hire the person that’s selling whether or not for a long term… [inaudible 00:29:08] Well, a lot of the time people want to keep working on their thing, they just ran out of money, and that to me is the perfect person to be part of that because I mentor people for a living, I can help them be able to make it work. So that’s some of the reasons.

Blake Hutchison: Excellent reasons, and thank you for articulating that. It’s a really important piece. You want to get to know the person selling the business, you want their skillset, you want their knowledge, and the fastest pathway is to go direct to do that. Particularly for a certain size of business, and we all accept that over a certain value advisors and brokers are absolutely critical so that’s a key point too. Now, Scott, thank you, because what you’ve talked about today is really critical. You’ve talked about the value of buying something versus starting something. You’ve talked about the fact that multiple transactions across multiple different marketplaces, including quite frenetic buying in the last half of last year. You’ve also talked about the fact you might do even more of that in the future now that you’ve got a system and a process to do it. So thank you, I really appreciate you being a part of Humans of Flippa today.

Scott Oldford: It’s fun talking about this stuff. I think it’s super cool, I think buying them building makes a lot more sense than just starting, especially if you can do it, and I think buying a portfolio allows everything to grow faster than just putting all your eggs in one basket. So I’m excited to share once it all works, I’m excited to share the results of it.

Blake Hutchison: Let’s get you back in six months time, we can talk about that portfolio and how it’s going. Thank you again, Scott.

Scott Oldford: Thank you.