Selling Your Business to an Advertiser
Being a former PR guy, Peter Shankman has a deep Rolodex of friends and acquaintances. One day, a journalist friend asked Shankman if he knew an expert source for a story he was writing. Shankman sent the journalist's request to his database of e-mail addresses and was able to find an expert keen to be quoted for the story.
The journalist must have told a few of his friends because soon Shankman was fielding dozens of queries from journalists on deadline who needed an expert source to quote.
Overwhelmed by the number of journalists' requests he was getting, Shankman set up a Facebook group to streamline the process of connecting journalists with expert sources. The volume developed to a point where, Shankman says, "we outgrew Facebook," and he decided to set up his own website.
Within three months, Shankman's site and company, Help a Reporter Out (HARO.com), had 10,000 members receiving three e-mails per day, packed with 30 to 40 media queries each.
The 75 percent open rates on his e-mails had advertisers taking notice of Shankman's service and asking if they could buy ad space on his site. One of Shankman's largest advertisers was Vocus, the parent company of PR Web, a business that distributes press releases on the Internet.
After advertising steadily for more than a year, Vocus approached Shankman about buying his business. Since the two companies knew each other well, Shankman and his counterpart at Vocus were able to hash out a basic set of deal terms over two martinis at Morton's steakhouse in Manhattan. A few weeks later, without shopping his business or enduring a lengthy and emotional negotiation cycle, Shankman sold his company.
The entire process from start-up to the sale of HARO took two years. "For the first time in my life," says Shankman, "I had to decide if I wanted to work anymore."
Shankman did indeed decide to keep working and continues as HARO's chief executive while finding time to write books—his latest is called Customer Service: New Rules for a Social Media World.
Shankman's story serves as a good reminder that sometimes the very best candidates to buy your business will not be found on your list of competitors or suppliers but could, in fact, come from your list of customers who know you well and who—since any money spent with you could be saved if they owned you—have at least one built-in reason to buy your company.
JOHN WARRILLOW | Columnist | Sellability
John Warrillow’s new book, The Automatic Customer: Creating a Subscription Business In Any Industry will be released on February 5, 2015. John is also the author of Built to Sell: Creating a Business That Can Thrive Without You and the founder of The Sellability Score, a company dedicated to helping business owners improve the value of their company.