Hey friends, it's your host Ellen Yin welcome back to another bonus episode of cubicle the CEO, the podcast where we ask successful entrepreneurs the business questions you can't google in this week's guest case study that aired on Monday episode 204 with Teri Yu. Behind the buyout: the numbers and negotiation of Vibely's acquisition by Kajabi. Teri shared her experience selling the company she founded Vibely to software giant Kajabi. And what that was like from the perspective of a business owner, building a traditional venture backed company. So a company who receives funding raises money, and then has the goal of scaling to hundreds of millions or even billions of dollars and then going public or having an IPO unless, of course you sell to a larger company.
So in Teri's case, that's what she did, she sold Vibely to Kajabi. And it got rebranded as Kajabi communities. And Teri shared a really interesting insight in her interview, which again, I'll link below in the show notes if you haven't listened in yet. And that was the three factors that influence the valuation of your business or how attractive it is to potential buyers. And those three things were traction team and product. Now what's really interesting is, like I said, Teri built a traditional venture backed business. But she said, if you're building a lifestyle business, which is the type of business that you and I most likely are building, when I say lifestyle business, the way that I would define it is a business that typically is self funded. So you are bootstrapping the cost. Or maybe you borrowed money through a loan to start your business. And you are scaling your business to meet your own lifestyle or financial goals and to be able to support the team members who joined you on the journey. But you're not necessarily building a company with the goal of going public as the end outcome.
So keeping that in mind, assuming that most of us who are listening to the show our lifestyle businesses, an interesting insight that Terry brought up was that if you are a lifestyle business, out of those three factors, traction team and product, traction is actually going to be the most influential factor in the valuation of your business. And she defined traction as growth, right growth in terms of users and customers growth in terms of revenue, growth and audience. So anything around showing momentum or a positive upward trajectory in growth and capturing more of that market share. So with that in mind, I thought it would be interesting to dive a little deeper into this concept of traction and how we, as lifestyle business owners can improve the strength of our traction through two key things. One, of course, being revenue growth, and the other being audience growth.
So on the revenue growth side, I wanted to share an interesting tidbit that I gleaned from another friend of mine, Christina sclera, who actually did sell a lifestyle type of business. Christina is a very successful digital entrepreneur, she sold the contract shop recently. And one of the things that she shared with me over lunch a few months back when I was up in Washington visiting her is that if she could do things a little bit differently with the sale of her company, she would have focused more intensely on showing a big uptick in revenue in the months leading up to the sale of her business, because that would have, in her opinion, made her business more attractive and have sold at a higher price.
Now, granted, she had a very successful exit, and sold her company for a very sizable amount of money. But you know, if you were looking at optimizing, right, the process, that is one thing she thinks could have increased the sale price even more is if in again, the let's say 12 months leading up to when the business went to market for sale, as well as like during the actual negotiation process. If during that time window, the revenue had continued in an upward climb, it would have just driven the sale price up. So I think the takeaway we can have there is if you are ever planning to sell your business, maybe projecting out further in advance and saying, Okay, if I have the intention of selling my business, like is it going to be in the next year or so? And if so, what can I do to aggressively reinvest in my business at this moment in time to show that hyper growth over the next few months the next year to really put my business in a position where it's extra attractive to potential buyers and it's going to really drive that sales price up.
So that was like an interesting tip that I gleaned from my conversation with Christina and I want to make sure that you all know of her brilliance. And if you are interested in this idea of selling your business, and you want to hear it from the perspective of someone who is a lifestyle business owner, rather than a traditional venture backed company like Terry's case study showcased, then check out Christina's YouTube series, because she actually did a really interesting YouTube series, walking everybody through the process of selling the contract shop. So again, I'll put that in the show notes. So anything I mentioned, as always, any links I mentioned, will be below in the show notes. So you can go scroll and click on those and check them out.
And then the other piece, so audience growth, right, especially if you're an online business owner, like myself, your email list is probably the place where your audience lives, it's the only asset that you can actually sell and, and own complete distribution of like, when you sell a company, yes, you can, you know, turn over your social handles to someone or turn over your Facebook group to someone, but you don't control the distribution. on those platforms. It's rented space, right, you're utilizing an account that is hosted on a social media platform. Whereas with your email list, you own the actual list, you actually own the database of those contacts, and you have control over reaching 100% of the audience, at your will. So minus any deliverability issues, which of course happens to all of us. But that aside, right? If you have, let's say, 100,000 people on your email list, when you send an email, you can reasonably expect that that will reach 100,000 people's inboxes. And that's just something that you can't guarantee with social, you may have 100,000 followers, but maybe only 5% of them, see your content, and then even smaller amount, let's say engages with it. So there's a lot more variability and a lot more risk as well inherent in hosting your audience only on social or rented platforms like that. Because at any point, the social media giants can change the rules can change how their platform is structured, or the features they offer, what your reach is like or what the algorithm does.
And we've seen that I mean, even with the mayhem, in this current time window of what's happening between Twitter and threads, right, like, threads completely up ended Twitter, and now they're in a battle and figuring things out. And we're kind of as users, it's this cautious area of uncertainty. And I think, you know, as entrepreneurs, we are meant to take risks. But I think anywhere we can minimize risk, and build stronger foundations, it's in our favor to do so if we can minimize.
So, in relation to audience growth, I had two suggestions I wanted to bring top of mind for you all the first being with your email list. One thing that I think has saved me a lot of stress and money over my years as an entrepreneur, is aligning myself with software's that I can grow with long term. So when it comes to email marketing, there's only one platform that I have found that actually incentivizes your growth instead of punishes your growth. And that email platform is flodesk. I've used it since 2020. And it has been so instrumental in the growth of our business both from a revenue perspective, also from an audience perspective. And someday if I sell cubicle to CEO, that will be a huge asset that will play into the valuation of our business. And the reason I say that it incentivizes your growth or flodesk incentivizes your growth is because most email marketing platforms out there, the more you grow your list, the more subscribers you add, the more you pay. So every time you reach a new tier of subscribers, you're having to pay more and more and more, you also sometimes can be limited by what features you have available to you depending on the tier plan that you have. Or you can be limited by the number of email sends you can make in a certain time window, they may give you a quota. And that can all be really frustrating to work around.
So what I love about flodesk is they offer a flat rate pricing for unlimited emails and unlimited subscribers. So I never have to worry about oh, if I you know, add an additional 500 or 5000 people to my list, how is that going to impact my bottom line? Or how am I going to have to deal with figuring out how to weed out you know, the tire kickers. So I can make sure that I'm not overpaying for a list that isn't necessarily aligned with my goals or whatever the reason might be, especially as a media company, you know, we are our main products like our podcasts are actually free for you all It's actually free for you to consume. So we want to be able to incentivize our growth without having to worry about our costs skyrocketing. And so that's why I love hosting our list on Flodesk.
And I wanted to make sure that you all were aware of that because I know that for some of you even if you have a list, or maybe you have a smaller list at this point, you may not have run into this challenge yet. And I know how annoying it can be later on to switch over platforms. So if I can save you some trouble and help you align with the platform that incentivizes your growth and allows you to grow with them long term, then this will be my my good work of the day. So anyways, if you're interested in trying flodesk, I have a 30 day free trial to give you, you can also save 50% On your first year if you use our link, which is Ellen yin.com/flodesk, we'll drop that link below in the show notes so that you can directly click there as well. But if you use that link, you'll be able to sign up for that 30 day free trial. And then if you choose to continue on as a paid subscriber, it will automatically apply that 50% discount on your first year. So that's PSA number one.
PSA number two on the community side is like I just mentioned, there's so much variability when it comes to hosting anything on social. And I know for many of us, we host our communities or have hosted our communities on Facebook, because Facebook groups, you know, it's such a low barrier to entry, it's so easy to use, a lot of people use it. The problem once again is if you are thinking about, you know minimizing risk in your business from an asset perspective and thinking about how can I protect my assets and and grow my assets long term so that in the future, if I ever wanted to sell I would be in the best position to do so then I think that it's important to think through, okay, where should I be hosting my community so that I can control the distribution of the content to that community and the accessibility of being able to reach my community in the same way that I can with my email list. And for this, I would recommend for this use case, I would recommend Kajabi communities which we briefly introduced to you in our case study with Teri.
I talked a little bit about how we've moved our most recent membership that we soft launched to Kajabi communities and are really loving it there. But I also wanted to just expand on that thought a little bit more in this bonus episode, because I know that I mean, Kajabi communities as a product is newer, but also I think this concept of owning your community is also a little bit newer than this idea of owning your email list. So I felt like it was a good time to bring this top of mind for you. And I think the key here is that, you know, if you're hosting your group on social like on Facebook, not only do you not have control over everybody in your group actually seeing every post you make, but you're also competing with the noise of someone's newsfeed right when they log on to Facebook, they're not necessarily there only to consume your content, it's them being inundated with everything that's happening on Facebook. So all the notifications from their friends and their family, and all the other groups that are part of Andrew group, it's all hitting them at once.
So it's definitely a different experience than if you host your community on a private platform like Kajabi communities that you actually own, where it becomes more of a destination experience for someone. For example, if someone is logging into my membership community on Kajabi they're doing so because they specifically want to access the community and engage with the community. They're not there to just you know, mindlessly scroll, the newsfeed because there isn't a newsfeed, right. It's not a social media engine. So I think being able to think through those long term implications and how they affect your business and the value of your business is just something that more and more as I'm having conversations with friends like Teri, like Christina, who have successfully sold their businesses, it's just making me more aware of certain factors that we can easily overlook. As everyday entrepreneurs in the building mode, you know, we've got our heads down, we're focused on growing our companies in the current moment in time, and we're not often thinking about the big picture like 5, 10, 15, 20 years down the line.
And again, you may have no interest in ever selling your business like when you're ready to retire. Maybe it's just one of those things where you close up shop and that's great. But I think if you are going to dedicate years of your life to building something, you might as well build it in such a way that gives you options right at the end of the day when you are ready to hang up your hat in what you're currently doing. Having options is going to make a world of difference whether or not you choose the option to sell I think just having the option because you've built a business that is attractive and is viable to sell is just going to give you more peace of mind and we're We reward you honestly for the hard work that you've put in all of these months and years in building it and running this business yourself.
So anyways, that's just my two cents on this conversation I wanted to add in. If you are interested in trying out Kajabi communities, I don't have a discount for you, unfortunately. But I do have an extended 30 day trial. So their public trial is normally only 14 days, I can give you 30 days with our referral link. So if you want to try that as well and test out what Kajabi communities has to offer, it's pretty sweet. I mean, you can do everything that you would do in a Facebook group in there, you can post pictures, videos, comment on threads, you know, tag people, you can even livestream in the group basically replaces the functionality of zoom, you can do it right there inside the group, your users can access it through an app or through a browser on their computers. It's so easy to use. And there's so many more community oriented features available that I have discovered that I really like compared to Facebook groups. So anyways, if you want to give it a shot, Ellenyin.com/kajabi . Also, the link will be below as always in the show notes. So if you want to give that a try, do so and tag me tag, Teri, tell us how you end up liking it.
My goal anytime I discover a new tool or resource that I think could help you guys is to share with you my experience so that hopefully you can shortcut the learning curve of having to test out different things yourselves, and having to potentially waste money or time along the way. I would rather just hand you the shortcut and say, Hey, this is what has worked for me. And here's why. And then you can make an informed decision from there on whether or not it makes sense for your business. All right, I hope this conversation was enlightening. If it has made you think differently about your business in any way in terms of how you build it with the big picture in mind. Or even if you have sold a business before or maybe are now thinking that someday you would like to let's have a discussion about this. We can talk over on threads all start a conversation on this topic. And we can kind of go back and forth, I think it'll be really interesting to hear from those of you who have the inclination versus don't. And also to hear from the experiences of those of you who have actually successfully sold businesses in the past because I know there's many of you in that boat. And I just may not have met you or interacted with you in that way on that topic. But I'd love to hear your experience because like I said, I just love to soak up knowledge and even in that conversation with my friend Christina and also with Teri, which you got to hear on the podcast. I've just already learned so much.
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