Acquiring a marketplace and growing revenue from $3M to $5M within a year

Mark Whitman bought a marketplace and grew it to roughly $5M in revenue per year.

On the side, he's constantly testing and pivoting new ideas — and the ideas that he's currently "incubating" are bringing in $35k+ per month.

Here's how he does it. 👇

Getting from zero to one

Mark: I’m a big fan of the “Ready, Fire, Aim” principle.

James: Tell me more about that.

Mark: It means taking action fast, failing quickly, and adapting on the fly. This is why I usually incubate businesses before going all in on them — I like to test an idea in the real world without spending too much time or money.

If I see an idea is getting traction, I then invest more time and money until it’s clear that the business can stand on its own.

James: How do you know if it can stand on its own?

Mark: It is generating enough revenue to recruit a small team and scale without too much continued investment from me.

James: Is this the “right” way to do it?

Mark: It works for me, but might not be right for everyone.

I don’t see many people validate and iterate to success. Most either get stuck at the idea stage and do nothing or spend way too much time and money on things that don’t matter.

James: Like what?

Mark: Like their logo, website copy, social media presence, or perfecting their product.

James: So what matters?

Mark: In the beginning all that matters is getting a customer. This is real validation. To do this all you have to do is clearly articulate your proposition and then push that message out to as many people as possible to get feedback.

From there, you iterate and pivot quickly until you get product-market fit.

James: Sounds like you do this a lot.

Mark: Yeah, I would say my core competence is going from zero to one - i.e. from an idea to an actual business generating sustainable 6-7 figures of annual revenue.

James: Handy skill. What do you have to be good at to go from zero to one?

Mark: I’m strong at proposition development, growth marketing, and iterating and pivoting an idea until it gets traction. I’m also strong at recruiting a talented team to help me scale.

James: What’s your zero-to-one playbook?

Mark: In short, I always start with the development of a clear proposition, like I said. What problem am I trying to solve and how does my business solve it?

Once I have this, I clearly articulate the proposition on a landing page with a nice shiny (but quick) logo, pricing, and the basic elements that help drive conversions, like social proof, case studies, testimonials, FAQs, etc.

James: Do you build this before the product?

Mark: I often don’t have the product or service at this point. I might have an MVP of the product or the basics of how the service will be delivered, but I usually don’t have a polished product or service.

This is where a waitlist or some other low-commitment offer is great, as all I’m looking for is validation.

James: What happens next?

Mark: I drive traffic to the landing page using Ads, paid sponsorships on newsletters and podcasts, and cold email.

At this point my idea makes contact with reality and, if I’ve done a good job on the proposition, I get sales or expressions of interest (e.g. people joining a waitlist, joining a Facebook group, or downloading a free eBook).

This whole process can take 4-8 weeks and cost around $5k.

If enough people show interest, I know I might have something. I then invest more money and time to develop the proposition, and we’re off to the races.

A two-niche focus

James: Are you doing this currently?

Mark: Yes, I’m incubating a number of smaller businesses, including SerpsBot ($20k MRR), KeyClusters ($1k MRR), and Sauce (on track to do $100k in the first 6 months of 2024).

James: And this is in addition to your main project, Skyhook. How’s that doing?

Mark: We’re on track to do $5M in marketplace revenue this year.

We did $940k in marketplace revenue in Q1. This is the total amount of booking value that went through the till; not our revenue or takehome. We take a commission percentage on every booking, which is usually around 20%.

James: Where did all this start?

Mark: I started launching small affiliate marketing and content websites in 2010. By 2013, I had a portfolio that was generating a tidy “passive income”.

A number of the sites were in the adventure travel niche, where I was driving leads to tour operators.

In 2015, I launched Kandoo Adventures, and then got bought out prior to acquisition.

In 2018, I launched a marketing agency, Contentellect, which I sold to Onfolio Holdings in 2023.

Then, I acquired the adventure travel booking platform, Skyhook, in 2023. That’s my current focus.

James: Where was Skyhook's revenue when you bought it?

Mark: It was doing around $3M in marketplace revenue.

James: Is focusing on one or two niches across your products helpful?

Mark: Very. I used my existing strategic advantage in adventure travel to scale up Skyhook.

James: How?

Mark: I own a portfolio of travel blogs in the adventure niche, and have leveraged these to drive very high-quality traffic to Skyhook.

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Advanced funnels

James: How have you grown Skyhook?

Mark: Skyhook was predominantly scaled off the back of Meta ads. It was heavily dependent on them when we bought it.

But today, we have an advanced marketing funnel with lots of channels.

James: What’s your ROI on ads?

Mark: We’re currently achieving a 7x return on ad spend with Meta. That’s to say for every dollar we spend we receive $7 back.

James: So why the switch?

Mark: We still use Meta ads but our funnel is now much wider, more automated, and more diversified

James: Tell me more about this funnel.

Mark: Instead of just one main marketing channel, we now have SEO/organic traffic, organic social media traffic, Youtube traffic, email marketing, and affiliate partners.

These channels are bringing a lot more people into our funnel.

James: Decent spread.

Mark: We’ve then added various automation features to engage leads and existing customers.

For example, a user can ask questions about our trips, but they first need to create an account. This gets people into our email marketing funnel where we have advanced automations that send marketing emails when people take certain actions like adding themselves to waitlists and wishlists or abandoning checkout.

James: Sure.

Mark: At the bottom of the funnel, we’ve heavily focused on reviews, which are critical in travel. Our customers get automated trip review emails after they have traveled. These reviews bake in a lot of social proof as travelers can upload their pictures and videos too.

James: Anything else?

Mark: Another thing that worked is we added a lot of urgency and scarcity features into the marketplace.

For example, when someone is checking out, we show them how many spaces are left on a trip, which creates a sense of urgency, as we’re often fully subscribed for many trips.

Bulk content strategies

James: Let’s talk about SEO.

Mark: We’ve invested heavily in SEO, as I have a particular strength in this area.

James: Has the investment paid off?

Mark: Traffic is up twentyfold.

James: How?

Mark: By deploying a bulk content strategy where we identify all the relevant keywords in our niche, group them into topical clusters, and create hundreds of high-quality informational blog articles that target these clusters.

We also carefully interlink these articles to create a sophisticated matrix of joined-up content on our site. To date we’ve produced over 400 awesome blog articles.

James: 400? Are you using AI?

Mark: I used to run a content marketing agency that specialized in bulk SEO blog content. I’ve applied the same strategy we used at our agency in our business.

James: How does it work?

Mark: Specifically, for every destination, I’ve created a detailed topical map of all the keywords associated with traveling to that destination. I’ve then grouped those keywords into topical clusters using our tool, KeyClusters.

For each topic that is informational, we have created blog articles using a combination of four writers and one full-0time editor. Writers are allowed to use AI, but every article receives significant human editing.

James: What are your SEO tips for indie hackers?

Mark: The first lesson of SEO, never listen to an SEO expert. Just kidding.

I think the principles are the same as they have always been: Create high quality content that serves a users search intent perfectly, and do this consistently at scale for years.

Do that, and you’ll achieve results. No one wants to hear that; they want a quick win. But SEO doesn’t work like that.

James: Darn.

Mark: Of course, there are lots of important components that one needs to get right as part of this strategy, including keyword research, technical SEO, and on-page and off-page factors, but the 80:20 of these can be learned by watching a few good Youtube videos.

Achieving multiple exits

James: You mentioned selling some businesses.

Mark: I’ve sold quite a few small websites and online tools.

James: Can you share numbers?

Mark: I’ll share the details of my marketing agency, Contentellect, as this is in the public domain.

We sold it for $850k in an all-cash deal. At the time of the sale, the business was generating around $60-$70k per month, and about half was recurring.

James: How did you calculate the price?

Mark: We got a 2.5x multiple on net profit, which is relatively low, but agencies don’t generally achieve high multiples and I accepted a lower valuation for all cash with no earn outs or seller financing.

James: How did you go about selling?

Mark: Contentellect sold in an off-market deal that came through a contact. The others were on brokerage marketplaces like Flippa and Empire Flippers.

James: Why did you sell?

Mark: With Contentellect, I was very concerned about AI disrupting our business and wasn't that keen to run an agency anymore.

James: Any tips for indie hackers looking to sell?

Mark: My advice, if you’re keen to sell, is to make sure your house is in order as early as possible. This will speed up the process and help avoid many headaches in due diligence. It will also make your company more sellable.

Key things to focus on are:

• Making sure your financials are up to date and in order

• Removing yourself as much as possible from day-to-day operations

• Removing as many risk factors as possible, like an over-reliance on a single customer or supplier

• Building as much recurring or repeat revenue as possible into your business model

• Establishing a sustainable sales and marketing machine that is not reliant on you as the founder

Choose the game

James: You've come a long way. What do you know now that you wish you knew when you started?

Mark: A lot of one’s success is dependent on the game they’re playing (i.e. the type of business), who they are playing with (i.e. the competitors and team they engage), and the field (i.e. the broader industry).

James: What does that mean in practice?

Mark: Choosing a low margin business in a highly competitive industry that is being disrupted by technology is a lot harder to succeed in than choosing a high-margin business with lots of diverse customers in a growing industry.

So don’t just follow your passion.

James: Isn't passion important?

Mark: I think it’s important to have an interest in the area where you’re trying to build a business, but trying to perfectly match your passion with a business idea is, in my opinion, highly flawed.

I just don’t believe it’s the most reliable way to achieve results.

A better logic is to first figure out what interests you, then identify what you are uniquely good at, and then identify what people want solved. If you can find something that intersects with those three areas, you might have a winning idea.

It might be worth it for indie hackers to look into the concept of Ikigai.

James: Distill this advice for me.

Mark: Choose the game and field very carefully.

James: Where can people find you?

Mark: I'm on LinkedIn and you can check out Skyhook or Sauce.

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