When the company Flo was working for, experienced a mass layoff in 2005, he jumped from part-time job to part-time job for a few years before quitting the workforce altogether to become a full-time entrepreneur, ultimately selling his online business on Flippa. Flo started his business in 2006 after experiencing the layoff and scaled the website for three to four years before selling it on Flippa for $40,000. Read more about Flo here.
Watch more Humans of Flippa stories here.
Read the full transcript of the conversation below.
Flo’s Entrepreneurial Journey
Blake Hutchinson: Hello everyone, and welcome to another episode of Humans of Flippa. For those of you who don’t know me, my name is Blake Hutchison. I am the CEO at Flippa and I’m talking to Flo David. Flo is based in Austin, Texas, and I’m over here in Melbourne, Australia, and Flo and I have been talking a little bit about his journey, not only with Flippa, but also some of the other entrepreneurial pursuits that he has. For those of you who are not familiar with Humans of Flippa, it’s our opportunity to talk to great people from all over the world who have successfully used the Flippa platform to either buy or sell. In Flo’s case, he’s got lots going on, but he did in fact use the Flippa platform to sell a business sometime ago now, and it’s a privilege to meet Flo today. Hey, Flo, thanks very much for joining us.
Flo David: Thanks for having me.
Blake Hutchinson: You know, you sold a business with Flippa now some time ago, but you’ve got lots going on. Maybe just a 30 second overview of Flo and what you do?
Flo David: Currently, I do consulting, digital marketing, manage sales teams, and we have a cloud sales and marketing platform that we’re developing right now as we speak, so Flippa has always been near and dear to my heart because it was very helpful at a time where I was making a transition in life.
Blake Hutchinson: We hear that a lot because obviously bit of blood, sweat and tears will go into the creation of any of these assets and then people will want to exit them so that they can use that money and those funds to do something new or achieve something else.
Flo David: I got laid off in 2005, which was not part of the plan. The plan was to have my business online, replace my income before I got laid off, but I got laid off before the income could actually replace my work income.
Combining Strategies to Achieve Success
Blake Hutchinson: That would’ve been a not so good chapter of the journey, but sounds like you’ve landed on your feet now. Let’s talk a little bit about the asset, what did it do, was it E-commerce, was it content, was it Sass, was it an app? I obviously go through all of those because that’s what sold on Flippa, but what was it Flo?
Flo David: Well, in the early 2000s, I think blogging was a really big deal. I don’t think anybody talks about blogging anymore, but it was just starting to get traction as far as a great way to get traffic for free and then I had a brilliant idea of combining blogging with paid advertising. I started running ads for my blog content, whereas most people were teaching at the time, at least the teachers you could find, they were saying a blog was a great way to get free traffic but since I got laid off from my job and I needed to make income quickly, I had been studying Google AdWords for a few years. I spent maybe $500 in my first month just to try to get some traction because I knew with maybe a six month runway with unemployment insurance they have here in the States, and the little bit of savings I had left, which was pretty much nothing, I had no savings. So with that, I knew I needed to either replace that income quickly or get a job.
I just combined two strategies, which was the blogging and the paid ads with Google AdWords and believe it or not, my first month I made $1,700 and then by the seventh month I was close to $10,000 a month and this was 2005. I was 26 years old, out of college, and that was maybe at least double my income from my job at that point. So it was an exhilarating journey to say the least.
Blake Hutchinson: Let’s dig into this a little bit. So you are actually buying traffic to feed the blog, and then how are you making money?
Flo David: That was another piece of the puzzle. I paid for the license to a marketing course that I was studying that was really good, that was teaching these strategies and I was learning from some of the other people. They would call them the godfathers of internet marketing at the time and so I had a product that I could sell, and whenever we would make a sale on the front end, it was a eBook of $20, but the actual course was $200 and $700, so anytime I would make a sale, the funds would go to my PayPal account, then I would have to run down to Staples, which is a FedEx office type place, and I would print out a physical course, buy a binder, they would punch holes in it for me, I would put it in there myself, and then I would burn copies of the CDs that came with it and ship it off. So the cost, the physical cost to do all of that was less than $100, including shipping and obviously the average course is, if you combine the 200 and the 700, it was about $450.
I was making three to $400 profit per sale on those courses, and that’s how I was able to quickly get to, what was it, $10,000 a month.
Blake Hutchinson: This is serious hustle Flo, I’m loving this. The paid ads you were buying, the paid ad keyword related to buying the course or buying the eBook, one of the two?
Flo David: No. So one of the strategies I learned, which could be very helpful to people watching or listening to this is that if you focus on people that are buyers and looking to purchase something, maybe they’re doing research and then you can redirect them to something similar, you’re going to have a lot higher quality traffic and you’re also going to spend less money because you’re only focused on people that want to buy something. It might not be your product, but once they read your content and you build up a little bit of credibility, some of those people will end up buying from you. So I would try anything related to business, investing, making money, and I would be surprised at which keywords would actually lead to sales.
One night, very early on in the first few weeks, I was just up late at night watching infomercials because they used to have a lot of infomercials back then, and there was a stock trading program called Five Star Stock Trading, and I said, maybe I should create some content around this keyword and drive traffic to my website. So that night at midnight, I created an ad for that keyword and I didn’t even write the article, it was just going to a blank page with a stopped sign that said, “Hey, if you’re interested in making money and learning about marketing something like that, click on this link,” and by that next morning I had made a $200 course sale from that one keyword.
So once that happened, it was like an addiction to find the little gold mines all over the place because the biggest issue with paid advertising is the competition. So that’s why I created that ad because I thought, okay, this product is a infomercial, maybe a lot of people aren’t running ads about this product, and really no one was and so by the next morning I had made $200 and it was just a two, 300 page course about online marketing and how marketing works, how direct response works, which there were not many courses online at that time that you could actually buy that were actually useful.
Flo David: I did that for about four and a half years.
The Experience with Flippa
Blake Hutchinson: Four years into the journey you decide to sell, why did you sell it? It sounded like you needed to sell to pay some bills, start something new. What was the motivation?
Flo David: There were a couple of things that happened. In 2008, I got married, 2009 we had our first child, Grace, who’s almost 13 now, and all while that was happening, Google had this big issue that was going on because they were getting lawsuits because they were health related supplements being sold online saying that you could lose weight and it wasn’t really true and they were charging people and not… So anyway, big lawsuits and Google said, “We got to clean up all this direct response stuff on our platform.” So they just did a wide… They just basically banned anyone that was using direct response in their ads and big bold letters on their websites. So they did that and then 80% of our sales were coming from the paid advertising. So we went from making 12 to 15,000 a month, sometimes 20,000 a month down to 2000 a month overnight, have a new baby, new marriage, new mortgage, and I’m thinking, this is not good.
Blake Hutchinson: Isthis the point you decide to sell it?
Flo David: I didn’t even know Flippa existed at that point. Someone was telling me, “Hey, well you’re not getting a lot of traffic. Maybe you should think about selling it,” and I heard of this site, maybe you could list it on Flippa and I said, “Oh, that’s interesting.” So I listed the website on Flippa and one of the big names in the industry, he recognized the name and he saw that the branding, it had a good brand in his eyes so really he bought it just based on the brand recognition and the list I had built up.
Blake Hutchinson: It’s interesting because you’ve mentioned a few things that come up at Flippa quite a lot. The first thing you mentioned was the passive nature of the revenue and income was what was so exciting for you and continued to drive cash Flo for you, initially. You talked about direct response ads and the fact that you had this course and then you figured out how to get some efficiency out of that by outsourcing that so you didn’t have to run down to Staples every day but then you’ve mentioned the fact that there’s a Google change that happens quite regularly in the industry that we all operate in a lot of content sites, a lot of big content sites have been hit by certain changes that may have happened in the macro environment.
You then change tactics and start doing your own email marketing. Now, what’s interesting about that of course, is it probably helped you to run at slightly a higher margin, even if it was a bit more work because you no longer paying Google for the customer. There’s some benefit in people understanding that need to have, I guess, a multi-pronged attack, some way of diversifying the way in which you capitalize on a customer base and then the brand, we talk about this a lot, the fact that there’s some inherent value in a good quality brand that people recognize that played out for you. Let’s talk very briefly about the actual sale. So how did it work? You listed on Flippa, this individual notices the brand, what happened from there?
Flo David: Somebody just reached out to me and said, “Hey, I’ve heard of this site and I knew of him in the industry,” and I said, “Yeah, it’s for sale,” and he says… I don’t even think it was up for more than a week and he just said, “I want to buy it,” and next thing he sends me four PayPal payments because at the time you couldn’t send a payment for more than $10,000 and I was just shocked that I wanted it to sell, but I had never sold something of that magnitude. Obviously the amount was good, acceptable to me, but it was a fact that I could leverage that to buy myself more time to create something new. It was really inspiring because that made me actually start looking into Flippa and when I branched off into consulting, I would always reference that story and then show people, new entrepreneurs, all the other sites, businesses, et cetera, that were being sold on Flippa.
Over the years I’ve probably made 50 different videos about Flippa with my private clients just telling them, because what I found out is when I was teaching, a really easy way to teach is to be able to have someone look at something that’s actually in existence, show them why it’s working and maybe why you think it’s selling or why it’s sold. That’s a lot easier to get someone to understand it versus showing or telling somebody something that’s not real or they can’t, it’s not tangible. I ended up using that story and then that motivated another friend of mine, he didn’t sell his site on Flippa, but his wife, we told her to do the same process and she ended up selling her website for hundreds of thousands of dollars. So, it kind of had a butterfly effect in my life and other people’s lives.
Blake Hutchinson: Ah, that’s nice to hear and there’s some outstanding tips there because we talk about it as digital real estate. You described it as building a home, constructing something, a shopfront or retail, you live and breathe this thing, it does pay you a wage, but then eventually, you have the ability through the Flippa platform to on-sell it, so mid five figure exit for you but it’s bigger than that, isn’t it? It’s the ability for it to provide learning material, a training resource, inspiration I suppose, for anyone else you now speak to. That’s obviously quite compelling.
Flo David: Speaking of real estate, I just sold my house and made almost a hundred percent ROI, so other than that, I loved what the platform stood for and how seamless the process was.
Blake Hutchinson: Ah, that’s fantastic Flo. I’ve actually learned a lot from you here and there’s also some recurring themes that we do here a lot as well. So it’s been super nice to meet you. It’s been wonderful to hear your story. I’m actually really glad I didn’t know it was going to go this way, but I’m really glad that you’ve used the Flippa experience as you described it, as a butterfly effect to help empower, I suppose, a bunch more people in your community, so thank you for that. Thank you for being a part of Humans of Flippa today and all the very best with what comes next.
Flo David: Thank you for starting Flippa.
