AP 0506: Are Large Blogs Worth Their Valuation?

AskPat 506 Episode Transcript

Pat Flynn: What's up everybody Pat Flynn here and welcome to Episode 506 of Ask Pat. Thank you so much for joining me today. I am still under the weather but that's okay. We're still plowing forward and today we have a great question from Blanca, who has an awesome accent by the way.

Before we get to that I do want to thank today's sponsor, which is ZipRecruiter.com. If you are a solopreneur or even if you have a team already and you're looking to expand and you want to find the right candidates and people to fill in that position that you're trying to fill in your business. You got to check out Zip Recruiter because they make it really easy to find amazing candidates that will be perfect to fill in those spots. How it works is you put in one job description in one place, ZipRecruiter.com and they send it out to over 100 different job sites for you. They will find the top recruits for you so then they can connect you with them. It's so cool and it's free. Go ahead and check it out, ZipRecruiter.com/Pat. Again that's ZipRecruiter.com/Pat.

All right, here's today's question from Blanca.

Blanca: Hi Pat, how are you? Thanks for the podcast. My name's Blanca. I do have a blog but it's not really relevant for this particular question. What I'm about to ask though might be a bit of a weird question but it is a subject that I am really interested in. Now I think you'll have a lot more knowledge and a lot more resources to respond so I'm going to go ahead.

My question is how much do you think a site that isn't huge can make? I know you share your income and it is around $100,000 per month but how much other sites could be making? Is it a lot more than that? I found this site called Brit.co. I found out she got an investment of 1.3 million and then 6.3 million sometime after that. My question, is it really worth it? That much money and then having a team of 61 people? Is it really worth it? I don't know what they need that much money to begin with in a blog or a site and I don't think they could make that much to cover for all the salaries, not to mention to get back all those millions. I wanted to know your thoughts, thanks so much.

Pat Flynn: Hey Blanca, thank you so much for the question today. You were right, it is definitely an interesting question. I'm trying to make sense of it a little bit. There's two different components here. This is how much money could a site potentially earn which is obviously a weighted question because it depends on a lot of things, who the target audience is, what products are available all that sort of stuff. There's a lot more to it than just the site itself. There's the people behind it, team behind it, and the value that it can provide.

Then on the other side you're talking about this other site which talks about this seems like venture capitalists or when investors have come in to pay a bunch of money to help that company grow. Again that is a whole different conversion because that sort of stuff, getting investing and stuff. There's a lot involved with that. Just listen to the podcast called Startup with Alex Blumberg. That walks you through just what that process is like and it shows you how arbitrary a lot of the investment process is in terms of how companies are valued and how much people are willing to invest in what those expectations are.

We don't even know really what the plans are for Brit.co. They might have an amazing plan and business plan moving forward where they do believe that they're going to get that money back down the road. Somebody did believe that and therefore they were able to get some investment up front to help that company grow. It doesn't necessarily mean that they're going to get that back. A lot of times companies get investments and they go under. For a lot of companies they need that investment, that initial seed capital to be able to grow and build the things that they want to build. It's hard for me to speak on that.

In terms of a site that's for example smaller than SPI, yeah absolutely. There are sites out there making a lot more than how much I make. There's a lot of sites out there who are a lot bigger than I am who are making less. It's necessarily about the size of the site, it's the value that it can provide, it's the kind of audience that's there. The execution of that site too. There's a lot, a lot, a lot that goes into the evaluation, into the predictable income that can come from a particular business.

Now mind you that SPI has been around for about seven years now. It's been around for a long time. For the first year and a half it didn't make any money at all. This almost goes back to Brit.co because maybe they're in the stage where they're not making any money at all. When I think of Elon Musk and Tesla, they're not even making any money at all, they're losing money every single month and they're just pouring all those profits back into the business until they get to a point where they will become profitable. Again, there's a whole world out there that discusses this and that's way beyond my own knowledge and capability.

I'm interested to hear what everybody else thinks. If you have some thoughts about this and Blanca's question, use the hashtag #AskPat506 and let me know what you think and maybe Blanca will follow up on Twitter as well. Again that's on Twitter, hashtag #AskPat506. What do you think about how much a website could earn?

We could use SPI as the sort of benchmark for that. I would definitely say that SPI is an anomaly. I am one of a few people who put their income out there. That's not something that all companies do. In terms of investments I was able to build something without any investments at all from others from the outside. If possible I think that would be the best way to go but sometimes you need that and you need to share some equity. You need to just think of all the people that go on Shark Tank. A lot of times it's not about the business but the person behind it that makes those deals happen.

Again, a lot to think about. Blanca, I don't know if that answers your question or not. It at least gives us a good starting point and I think it's definitely something worth discussing in some way, shape, or form. I don't feel like I could add very much more to the conversation at this point. Blanca, thank you so much for the question. We're going to send you an AskPat t-shirt for having your question featured here on the show. For anybody else out there who has a question you'd like potentially featured here on the show, just head on over to AskPat.com, you can ask right there on that page.

I also want to thank today's sponsor, which is ZipRecruiter.com. They've served tens of thousands of people. Both those on the recruiting end and then the recruited end. If you want to find people who are perfect for that next position you're trying to fill in your business, use ZipRecruiter.com and make your life easier. ZipRecruiter.com will go out and find the top candidates for you and all you have to do is put in the job description on one site and click send, that's it. Try it out for free by going to ZipRecruiter.com/Pat. Again that's ZipRecruiter.com/Pat.

All right thank you so much for listening in today and to listening to my funky voice. Before we finish up as always I have a quote and today's quote is from Dr. Seuss, who I love. We actually had a quote of his last week too but I love this one too. I just recently found this and that is, “Be who you are and say what you feel because those who mind don't matter and those who matter don't mind.”

Cheers, take care. I'll see you in the next episode of AskPat. Bye.