From Passive Income to Pokemon: Why Pat Flynn Sold and Who is Taking Over to Continue the Legacy

0:02Who's ready to rock today, Fire Nation? JLD here and welcome to Entrepreneurs on Fire, brought to you by High Level, the all-in-one sales and marketing platform. Today we'll be breaking down going from passive income to Pokemon, why Pat Flynn sold and who is taking over to continue the legacy. To drop these value bombs, I brought to Pat Flynn in EO Fire Studios. Pat is a father, husband and lifelong learner from San Diego who has built a reputation as one of the most influential voices in digital entrepreneurship. Liz Wilcox is an email strategist and keynote speaker showing small businesses how to build online relationships and make real money with emails.

0:38And today we talk about the deal that felt right, why sell, why buy, and of course, life after the acquisition and to owe so much more. And hey, big thank you for sponsoring today's episode goes to Pat and our sponsors. NetSuite Next is the next generation of NetSuite with AI woven into the tools your business already relies on. If your revenues are at least in the seven figures, get NetSuite's free business guide, Aligning for the Agentic Era, How AI is Changing Everyday Work, at netsuite.com slash fire. If you are building a real business, you need real infrastructure. High Level gives you website hosting, funnels, email marketing, automation, calendar booking, payments, and course hosting all on one platform, plus award-winning 24-7 support.

1:21Get a 30-day free trial and my full bonus stack that includes a 15-minute private call with me and much more at highlevelfire.com, highlevelfire.com. All right, Fire Nation, we are here. I am talking to the guest who was guest numero uno, that's number one for you non-Puerto Ricans, on Entrepreneurs on Fire way back in 2012. That's 14 years ago. It's crazy. And he went from passive income to Pokemon. And we're gonna talk today about why Pat Flynn sold and who the heck is taking over to continue the legacy. And I don't use that word lightly. It is an absolute legacy. This is a power brand. It's the reason why I got into podcasting as a host.

2:04And man, I want to talk about the deal that felt right. So Pat, take us back to the beginning. Like how were the two of you first introduced? Like when did it feel like you both were just like in the same place, the same mindset about this deal just makes sense? yeah well first of all john thank you again for having me back on i did not plan for this to happen it just it just kind of happened um the really interesting thing is during covet especially once we launched our community you know we had a recurring revenue for the first time the community was thriving that's the first time i had other people on the outside kind of even offer to buy spi that had never happened before and i think it was because you know it was so tied to me and the personal brand and now there was this like vehicle for revenue that other people were interested in But all those people, they weren't just people, they were companies and specifically venture capitalists who wanted to come in.

2:58And they presented some crazy offers. I'm not going to get into the numbers, but these are these are, you know, eight figure offers. And it was very easy for me to say no. And the reason it was easy for me to say no is because I knew exactly what they were doing. They just saw dollar signs and my customers and my subscribers and they were going to squeeze everybody dry. Right. They were going to come in and dismantle the brand, this brand that I've spent so long building. And even though I would have maybe walked away with a ton of money, I would have not been able to sleep at night because I care.

3:31I care about my audience and have always cared about the audience and the subscribership. So it was very easy for me to say no. But that was kind of the first time a seed was planted in my head of, oh, this thing is actually sellable. It was built to sell in the way that we reshaped the business and organization to have recurring revenue, to have systems and operations and all this stuff. And, you know, I had been taking longer breaks from the brand. The team was doing what they were doing. And I was getting this time back to put into other things like Pokemon, of course. And my energy and my excitement was starting to grow in the Pokemon space.

4:05My kids got me into that in 2020. The brand started to take off. I started to see a lot of movement there. but it was still 15 to 25 percent of my time most of my time was at spi but i crossed paths with liz a couple times liz wilcox from liz wilcox.com uh email marketing extraordinaire and specialist because i invited her on the show once before and it was amazing she invited me into her community to talk about passive income and other things and so we had this relationship already but it actually wasn't until my live event for pokemon people called card party this this was our third one, it was in Seattle.

4:39And I mean, we attract seven to 10 ,000 people to these events. I mean, these are big card conventions that I put on and Liz's sister, Patricia was there. And it was the first time that she had come into work and we had just hit it off because she had been doing some amazing support work for me. And, um, apparently, and again, this is a story that I got from Liz because I didn't know that Liz had even the idea of potentially buying SP. I'm sure she'd want to come in and tell her side of the story here. But Patricia presented to me that you, Liz, were curious if this was something, because I think you also saw that I was having this energy in the Pokemon space and was just like, you know what, I'm just going to reach out and see what happens.

5:19And lo and behold, of course, I'm fast forwarding the story here. We came up with a number and some deal structure. And lo and behold, in April of 2026, I handed over the keys. I handed over the baton. My business SPI had turned 18 years old and it was going off to college now. And it's scary. It's exciting. It's nerve wracking. But I felt the time was right. The energy was not fully there for me. And I wasn't doing the best I was doing to serve the audience. And here comes Liz, who's just, even since April, has absolutely crushed it for bringing more activity and energy back to the community.

5:55Even doubling the size of the community since she came on as community director early on in April. and I couldn't be more happy and feel more blessed that we found the person to not come in and dismantle the brand, but take it to that level that even I couldn't bring it to as I have these big plans and energies elsewhere, which I'm sure we'll get into, but that's the story kind of in a nutshell. There's so much that I love about that. I mean, the analogy about college, 18 years, I mean, it's so apt. It's so just the right analogy for the situation because at some point, you know, when you've grown a business to a certain level And then you have other focuses elsewhere, which you have such amazing traction.

6:32I mean, once in a lifetime opportunity to do what you're going to do in the Pokemon world, in the Pokemon space, it's like that needs and it probably deserves your full attention because that is just, you know, a rocket ship. You're either going to be on or you're not. And so it's really awesome to see that you were able to do that and just do it in the right manner. And I think I really want to double down, Pat, because, you know, you were talking and thank you for sharing that, you know, you were approached and you were given some eight figure offers and just wasn't right for the reasons you said they're going to bleed you dry, et cetera, et cetera.

7:00Your customers dry specifically. And, you know, for me, like I've had similar scenarios where, you know, I've been approached where I actually at one point even like put entrepreneurs on fire out there into the marketplace because I knew that if I could find the right partner, if I could find the right acquirer, it just made sense. because I knew that that would allow me to take the business to where I knew that it could be. Because like you and me, Pat, like we start with a microphone, like in our basement essentially, and we built the audiences that we have and we love doing that, but we maybe don't love or have the expertise in all the other areas that are going to like take this business to like insane levels.

7:37And so for me, it was like, well, if I can find somebody that's the right acquirer, because listen, Pat's key man, I'm key man in our business, like in my business, he's key man in his business. Like there's a risk there when you are acquiring a business with quote unquote key man. I mean, everybody that I was talking to, and I'm sure you were too, Pat, was like, we're going to have to take out like millions of dollars of key man insurance and all this and all that. And I'm like, like, Hey, like if that's what you have to do, like that's what you have to do because this is what it's going to take to acquire this business.

8:04So before we move on to Liz, like, first off, thank you for sharing that story. Cause I think it's gonna be really helpful to people to realize you can build a personality, authority, influencer first business and sell and hand it over and be acquired. It's absolutely possible. And again, Pat, just blazing the way. Why Liz specifically? I knew the first time that Liz and I spoke together that there was, there was a lot of overlap with our audiences, number one. So that was important. This, this, this person coming in knew exactly who my audience was. In fact, already in her way, served the audience just with her specialty.

8:40Secondly, you know, a lot of the negotiation process was actually not about the numbers. It was about who we wanted to serve and how we wanted to serve them and Liz's values and her mission to help people who are just starting out or who have some momentum and want to keep that going and avoid those roadblocks and obstacles that all of us new entrepreneurs go through. Like that was her mission as well. So to know that I could hand the baton in like a relay race and somebody could take it even faster, right? Kind of anchor that race versus slow it down in her own special way was just really exciting to me.

9:16So that was the biggest thing was, you know, the vibe check was key. You know, the vibe check was key. Like honestly, the numbers are whatever. I didn't need the money. I wanted the opportunity to dive fully into this new world. And I'm sure we'll get into that. I mean, there's big aspirations and things like - I've told this story before of when I got laid off. When I got laid off in 2008, I felt like for a while, as I started to dive into entrepreneurship, that I was climbing two ladders. And you can't quickly or efficiently climb two ladders at the same time. In fact, it's pretty risky. And for a while now, since 2022, really, when things started to really go crazy in the Pokemon space, I mean, we're talking millions of subscribers, the highest revenues I've ever seen across any businesses that I've ever done.

10:06But more than that, the impact that it's making on people. I've been straddling two ladders for a very long time and holding on to my baby. Right. I mean, I don't I didn't want to let my baby go off to college quite yet, but I found the right person to take it to that next level, knowing that it was going to be taken care of. And that's why Liz is the perfect person. Like, honestly, I can't even imagine anybody else doing it. I've had even conversations with people who have been on your show before, personalities and even friends of ours john who have expressed interest in spi and it didn't seem like a right fit but liz absolutely is that perfect profile for a person to come in and bring that energy and plus she like me as a millennial is all into like her personality and bringing that weirdness sorry but you're weird and so am i and all of us are and i talk about that i preach that all the time embrace your weird and she is the perfect person to do that if you've ever seen her on camera she's got her in sync poster she's wearing her headband um fun fact about liz if you didn't know she was on survivor and she just talks about that experience but also is a family person and and her sister works for her like there are so many parallels to liz and my my career she even has passive income not just in her membership but she's also sold businesses before she had an rv blog that she started back in the day kind of near around the time that i started so i mean there's so many parallels.

11:24She's the perfect person. And again, it like I know I'm going to upset a few people with this news. I know that some people are going to be disappointed, but I also think there's going to be a number of people. In fact, the majority of people who stick around in the community, especially who go, man, this has been amazing since Liz has come on. In fact, we're already getting that kind of feedback even before we announce this publicly. It's just to me, I feel so blessed, dude. It's like it's it's I know this is rare, too, but it's perfect. All right, Fire Nation, we're going to be tapping into Liz's brain when we get back from thanking our sponsors.

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13:48The guide is free to you at netsuite.com.fire, netsuite.com.fire. Fire Nation, if you are building a real business, you need real infrastructure. That is why High Level is Entrepreneur on Fire's featured partner. High Level gives you a website builder and hosting, funnels and landing pages, email marketing, appointment scheduling, payment processing, course and membership hosting, and so much more. Everything you need to succeed, all under one roof. No duct tape, no juggling five platforms, just one clean system for your business. And their award-winning 24-7 support has your back when you need it most.

14:23When you sign up at highlevelfire.com, you also get my exclusive bonus stack, a 30-day free trial, a private 15-minute call with me, JLD, access to my weekly live office hours, a digital copy of my book, The Common Path to Uncommon Success, my 50 Days to Something Execution Roadmap, and more. Visit highlevelfire.com and start building your something today. All right, now we're going to shift the microphone to Liz. So Liz, thank you for being patient. And man, what a journey, what a story. I want to talk specifically about why Liz, why you wanted to buy. So tell us the whole story that led up to you wanting to acquire this business.

15:05And then of course, we'll dive into some details there. Yeah, what up Fire Nation? There's a new key woman in town. I'm so excited. And it was very similar to what Pat just said. I, you know, I was working with my sister. She said, hey, I'm hanging out with Pat. And he's straddling these two ladders. He looks tired. And I had been following Pat loosely, you know, on and off the newsletter for years and years. And I just realized, you know, in that moment when she said that, wow, Pat and I actually do have a lot of parallels. And I am still, you know, I don't have a Pokemon channel. I'm still on this path of helping early stage entrepreneurs.

15:47And I have such a freaking passion for it. This morning, actually, I was looking at old Pat Flynn videos. You know, I want to really create and keep the legacy alive. Right. And so I'm watching old Pat videos and I watched it must have been his second or third video on YouTube, guys. And it was him saying, you know, here here's my office. And it was in this one bedroom apartment. He was walking his dog. Gizmo. Shout out Gizmo. And he shows this little itty bitty desk and he says, hey, guys, you know, you don't need to worry about all this equipment, all this stuff. You can just start making money online right now.

16:36And I'm sitting at my desk. I'm I'm on vacation right now. So I literally have the same computer Pat has in that video. I've got it on a dining room table right now. and I've got this, you know, very like elementary setup right now. And I just started crying and I thought it's still true today. It's still true today. And I love that Pat is a creator first. He's always been, you know, the, the crash test dummy of entrepreneurship, right? He's been sharing everything and creating in many different ways for nearly two decades. And now it's time for Pat to move on and to keep showing us to keep leading by example.

17:22Right. And I, what an honor it would be to be able to continue helping the people he's built over here with smartpassiveincome.com. So he can go be the creator that he's inspiring people to be too. And Liz, that just reminds me of like the Jeff Bezos door picture where like Jeff Bezos is in the office. He's literally took a door off of one of the rooms that they were at and just put it down because he's like, I don't still have time to go get a desk. Like we're working here on amazon.com. Like let's go, let's work. We can get this started. And that's such a great message to share. And I really want to keep moving this along because I want to get into life after the acquisition because you know, a lot of people get excited about the actual acquisition itself.

18:06And we'll maybe touch upon a couple of those points if you want to kind of dive into that. But since the acquisition closed, Liz, like what have been some of the early wins? What have been some of the maybe surprises? And of course, the new momentum within the business. Of course, you know, Pat has a team, right? Had a team with SPI. So I think one of the early wins was nobody wanted to quit immediately. So that's another part of the acquisition, you know, acquiring a team, right? And coming in and being able to assimilate, my number one goal was not to rock the boat with them, to help them get things where we wanted them to be.

18:46And so that felt like a very early win. And then, of course, externally, you know, I don't want mass exodus, right? I don't want a bunch of people, you know, removing themselves from the SPI community. And we've actually been able to, with Pat's help, launch something called the Superfan System. and, you know, double the numbers inside the community in less than 90 days, which that's, that felt insane to me. That was a huge win. And I'm even getting people to reply to emails now, right? Of course, it's a huge list, right? But we want to make sure that they know me, they feel comfortable with me, things like that.

19:26And I'm getting replies, I'm interacting in the inbox and everybody seems really excited. There's this renewed energy. So Pat mentioned I was on Survivor and I'm one of the new era players of Survivor. And I'm looking at smartpassiveincome.com as this new era, right? What are we going to do here? And we're taking it from Team Flynn to Team Wynn. Wynn stands for what's important now. And it's been so awesome to see these early stagers or these people who have some momentum, like Pat said, and they're trying to grasp more of it, it's been awesome to see them focus in on the one thing that they need to work on now and actually see results.

20:07So that has been a huge, huge win for me in this acquisition. Okay, I want to kind of talk about behind the deal now. I mean, looking back, what would you say, Liz, are some of the biggest lessons behind the deal for entrepreneurs who are maybe thinking about succession acquisitions or building a business that's bigger than themselves? and maybe just a couple of really brief ones because I want to pass it to Pat for the same thing. Yeah, as far as being the buyer, come prepared to meetings. Come prepared knowing what you want to talk about, knowing what's important to you. For me, the numbers were secondary to making sure that this was in alignment because it is a personal brand, right?

20:43It is something that I have to take over and those are huge, giant shoes to fill, right? First episode of Entrepreneur on Fire. Are you kidding me? Right? And so making sure I was the right person, making sure I could fulfill Pat's vision and my vision was so, so important. So being crazy prepared for those meetings, I think, is the biggest lesson of all. What about you, Pat? Yeah, I mean, I got to give a shout out to Matt Gartland, who former CEO of SPI, who is a small minority owner of or was a small minority owner of SPI as well. when we acquired his business and his team back in 2020, or actually 2018, excuse me.

21:27But anyway, Matt had contributed so much to this deal in the sense that he being a financial wizard and spreadsheet nerd, I mean, Matt's good in the sheets. Like, let me tell you, I mean, he does crazy things with spreadsheets and he was able to kind of come up with calculations and numbers and go back into the history of SPI and our recurring revenue and course sales and sponsorship revenue. Like he was able to quickly bring all that to the table. And that was the benefit of working with him is he was in a way kind of CFO of the company. So when the acquisition discussions started to happen, all those numbers were already there.

22:01I think a big thing, especially with personal brands, is a lot of brands don't necessarily keep track of those numbers in that way. That would then be easy to present. There's a lot of having to go back into the history and having to go back into the documents and statements to kind of figure all that out. That stuff was already available. And I think that maybe helped things along quite quickly, especially Liz, you coming in and having gone through this process before, like Matt did a stellar job of making things hopefully clear for you. And, you know, even with the deal structure coming up with different scenarios where, you know, hey, if you pay in this amount of time, it's cost you're going to cost this much quarterly versus, you know, if you want to extend that out a little bit, we'll add a little bit more to that total cost.

22:41but it'll be easier. I mean, there was a lot of numbers to go through, but, but Matt and his sort of wizardry made it easy for sure. Yeah. And I think, um, both Pat and I knowing what our vision was, right. Pat having the Pokemon knowing, Hey, this is my calling and me knowing my calling is to work with those entrepreneurs and to get them, uh, you know, to the next level and just having that vision in mind, I think made our conversations really, really easy, right? If Pat had never thought about selling or didn't have the Pokemon channel, it would have been an awkward conversation, right? But we both knew what we wanted out of the deal.

23:24And I think that made it go really, really smoothly. You know what else helped? And John, I think you would resonate with this are my mastermind groups. You know, I'm in two mastermind groups. We've been together for over a decade each. And, you know, I was going back and forth a lot with this. I mean, there were a lot of things that were telling me not to do this because this is my baby and I care so much and so deeply about the subscribers and the audience and the customers. It's like, how would they feel? But a lot of my colleagues were able to sort of read the label outside the bottle because you can't read the label when you're inside the bottle.

23:54Right. And that's on that line. Liz coming in from the outside was able to dramatically and drastically change things for the positive because I had been just so deep into SPI for so long. In fact, immediately she saw some things that were like, why aren't you guys doing this? And we're like, oh yeah, that kind of makes sense. And so she's been able to put her DNA into this and do it very, very well from the outside. But my mastermind group, I mean, they helped me wrap my head around this whole idea and, and kind of helped me find myself in this conversation. And, and my big goals with, with this were to make sure everybody was taken care of and leave people better off.

24:29Right. I was taught from a young age to always leave the room cleaner than when you arrived and I kind of wanted to do this in the same kind of way but also now that I'm on this ladder that is fully Pokemon I've recently become a partner like like officially with Pokemon the company now which which is a very rare thing to happen they they have recognized the channel which is incredible and that's provided a lot of opportunities but even with where we're going I mean I recently purchased a building in San Diego 8 ,000 square feet where we are building a film studio to tell deeper stories and really push the envelope on live streaming.

25:05Now in the world of YouTube, we're seeing a lot of YouTubers actually break Hollywood. They're actually able to go around that red tape that's always been there with telling stories and getting in theaters. I want to do that too. And in fact, a lot of people who I tell or even my mastermind group when I told them that this was going down, here's what they said. They're like, Pat, we knew this was eventually going to happen. and we could see you lighting up again. And that's the big thing. I'm lit again. I feel like how I did in the early days of SPI when I could just play and be curious and try things and fail, but then get back up again.

25:40And that was hard for me to do with SPI with how much I've already put into it. So I'm feeling it. I'm excited because, and I'll end here and get your response, John, but a lot of people have said that the channel, the Deep Pocket Monster channel with how big it is and how many people it's reaching, that it's the sort of, I'm the Mr. Beast of Pokemon. And I go, no, I don't want to be the Mr. Beast of Pokemon. I want to be the Mr. Rogers of Pokemon. I want to be that regular programming that family and kids could watch and get value from. And that is already happening. And I needed to do this to be able to reach those levels and reach more people and become that.