I've been wondering what's up with Liz and Pat teaming up these past few months. They keep emailing us at the same time. They're wearing matching t-shirts. Was she working for him? Was this a partnership? Now, it's clear. Pat just sold his business, Smart Passive Income, to Liz.
In my view, this is the best possible exit for any business and it's one all creators should learn from. I've never paid much attention to Pat Flynn but this deal makes me an immediate fan. He didn't want to sell SPI to investors or private equity who would destroy it. He sold it to another creator who would breathe fresh life into it. Certainly that makes him less cash but it's an ethical exit that takes good care of his audience while allowing him to move on with money in his pocket. (I'm estimating this was a low 7 figure sale because Pat alludes to getting 8 figure offers though it's possible they worked out some kind of longterm profit sharing model.)
Pat was early to the content sales game launching Smart Passive Income in 2008, just 3 years after YouTube went live. SPI is a content and course business that helps creators make money through things like email marketing and YouTube. Pat wrote the book Superfans about how to build a powerful audience and he's a big YouTuber and podcaster too. Liz Wilcox is an email marketer, famous for her $9 email template membership and her stint on Survivor.
What's Pat gonna do next? He's building his Pokémon business, Deep Pocket Monster. In his interview with Liz about the sale, he talks about being the next Mr. Rogers to help kids and families navigate in confusing times. He also references Walt Disney's legacy building an immersive brand around great stories. Pat recently bought a $3M studio to support his foray into filmmaking.
Selling a creator brand without the creator attached is hard to do. Pat is the face of Smart Passive Income and it will be a major shift for his fans and customers to see someone else instead. "It was never about me. It was about the kind of people we attract," he said on the podcast they released today, which speaks to his intention to build a self-driving community where he's not the linchpin. But this leadership change only works because Liz has just as big a personality and she has her own audience. He didn't sell this to some no name wannabe. Liz is a viable leader because she stands on her own with a compatible vision for SPI. She has the skills to execute it and the entertainment chops to keep it interesting. Also, Pat has managed to build his personal brand separate from SPI, writing books, speaking and advising creators. While he's selling off his biggest project, he still has plenty of IP that he holds exclusively.
As for what Liz will do now that she's in charge, she says she's focused on getting creators more wins (win is an acronym she's using as part of her transition message—What's Important Now) through fostering community and running coworking sessions. She wants to highlight case studies from more accessible creators on the podcast, not just the most famous ones, to widen the audience. Legend Sara Obando was recently featured in their List Building Live series.
“Around here, we’re not trying to make a killing. We’re just trying to make a living,” Liz said in their announcement episode. That said, she knows lots of us are curious about what this acquisition is like on her side, so she's selling behind the scenes emails of her SPI reign for $20.
I truly love to see this. I hate watching people who launched fearlessly independent businesses sell out to the greedy villains of Wall Street. I get that business is about money, but our businesses are not just about money. If they were, more of us would work in finance or military defense where that money actually is. This is the kind of transition more creators should be planting the seeds for. Finding compatible buyers, investors or partners who share our vision and take care of our customers. Finding people who don't just want to buy companies. They want OUR company. It's a unique and special thing that Pat and Liz are doing and I'm excited to see where they take both of their ventures next.
