Today in Built to Sell News, we’re covering:
- 5 reasons big companies buy small ones and how to become irresistible to an acquirer (listen now)
- The hidden strategy used by some of the top subscription companies to jack up their value
- Entrepreneur Jim Ratcliffe’s $6 billion trophy purchase
- Sam Parr’s rationale for selling The Hustle to HubSpot
👀 The Hidden Strategy Behind the Success of Top Subscription Companies
If your objective is to use a recurring revenue model to jack up the value of your business, last week’s news about Disney+ is significant.
On March 17th, subscription analytics firm Antenna published a report detailing the effects of Disney’s price increase on its subscriber base since its announcement in December. The report revealed that 95% of Disney+ subscribers accepted the $3/month price hike from $7.99 to $10.99 without canceling their subscriptions. In other words, Disney raised its subscription price by 38% and still retained 95% of its subscribers.
Considering Disney didn’t introduce any new offerings to existing subscribers, the 38% increase flows directly to their bottom line. This exposes the powerful strategy employed by the most successful subscription companies globally: get customers hooked and gradually raise the price.
📣 Quote of the Week
“Disney+ is truly the ultimate babysitter on demand. If you look at the popularity of titles like ‘Moana’ and ‘Mickey Mouse Clubhouse,’ it’s clear what resonates with families. My guess is that there’s still pricing power, even at $10.99”.
Richard Greenfield, Media Analyst, LightShed Partners
🎤 Built to Sell Radio: 5 Surprising Reasons Big Companies Acquire Small Ones
In this special edition of Built to Sell Radio, John Warrillow reveals five reasons why large companies target smaller businesses for acquisition. John provides insights on how to make your company irresistible to potential strategic acquirers. In this episode, you’ll discover how to:
- Skillfully position your company to captivate the interest of a strategic acquirer.
- Uncover the ideal strategic acquirers for your unique business.
- Recognize the distinct reasons a strategic buyer would find your company attractive.
- Assess whether a financial or strategic acquirer best aligns with your business goals.
In this clip, Sam Parr explains why he was adamant about selling The Hustle to a strategic acquirer rather than another media company. Ultimately, in 2021, HubSpot acquired The Hustle in a lucrative deal.
💰 Life After the Sale: What Founders Do After Selling
Speaking of Parr, yesterday he launched his latest venture: Hampton – an exclusive community for top-tier founders and CEOs.
🏆 The Trophy: How to Commemorate Your Win
After selling his first company, Webs.com, Haroon Mokhtarzada, and a friend decided to purchase eFoil surfboards from Lift Boards. Listen to the excitement in his voice as he describes the experience at the 1:15:30 mark of the episode.
📈 Recent Deals
- Speaking of trophy purchases, the competition for Manchester United intensified this week as Jim Ratcliffe, the billionaire British entrepreneur, is said to be preparing to increase his bid for the English football team to over £5 billion ($6.1 billion), as reported by The Financial Times. Ratcliffe faces competition from Qatari businessman Sheikh Jassim bin Hamad al-Thani and other contenders in a process that may establish a record-breaking price for a professional sports team – or, conversely, not result in a sale at all.
- Also, this week, Tom Brady is taking a stake in the WNBA’s Las Vegas Aces. (Axios)
- A 16-Month-Old Chatbot Startup With No Revenue Is Now a $1 Billion Unicorn – WSJ
We’re always on the lookout for inspiring entrepreneurs to feature on Built to Sell Radio, and we need your help to find them. To nominate a founder, head here.
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Colin Morgan, Executive Producer of Built to Sell Radio
John Warrillow, Host of Built to Sell Radio
Daphne Parsekian, Copy Editor
Denis Labataglia, Audio Engineer