Community Platform Acquisition Strategy

The transcript discusses Tiny's successful acquisition strategy of buying established online community businesses, particularly highlighting their purchase of Dribbble. The approach focuses on acquiring platforms with existing user bases and clear optimization opportunities.

Key Points:

• Target Criteria:

  • Established platforms with millions of active users
  • Top 1000 websites
  • Independent social networks
  • Businesses with immediate optimization opportunities

• Day 1 Optimization Opportunities:

  • Improve advertising providers
  • Optimize revenue streams
  • Look for quick wins that can immediately improve business performance

• Valuation Approach:

  • Focus on businesses that can generate 20-30% cash returns annually
  • Look for prices that make deals "no-brainers"
  • Avoid complex financial modeling - focus on obvious value
  • Target businesses where purchase price allows for clear upside

• Community Considerations:

  • Focus on platforms where the community is vital
  • Understand community dynamics can "turn quickly"
  • Look for sellers who care about the future of their platform
  • Maintain trust with the existing community

• Deal Structure:

  • Negotiate fair deals that work for both parties
  • Focus on trust and relationship building with sellers
  • Look for opportunities where you can win deals without being highest bidder
  • Structure deals around seller's key concerns beyond just price