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Comment by ploggingdev | Hacker News Reader

First of all, congrats to csallen, I have been following your journey from the day you launched on HN and it was fascinating to follow along. If you haven't read his month in review posts, highly recommended.

I hope it's not taboo to speculate on the acquisition price, so here's my take :

* extrapolating a $5k/month revenue to a year = $60k/year

* acquisition price is roughly 2-4x yearly revenue so $120k to $240k

* Plus a full time salary at roughly $120k/year

Really cool stuff man, congrats again!

One of the things I dislike about advertising on IH was that it was distracting. I see multiple adverts while reading an interview along with links to tweet pull quotes, not a fan of both those aspects. Glad to know that the advertisements will be removed.

Can't wait to see how IndieHackers grows, especially the community.

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Your numbers are low. They didn't buy a suburban lawn care business. I'd ballpark >$1m up front and >$250k annual comp with upside going forward, in some mix of cash and stock. Great move by Stripe. Congrats to Courtland for the exit and what seems like a win-win for both parties.

I'm not so sure. I haven't seen the higher big ticket multiples scale down to smaller businesses very well (only in the small biz media negotiations I've been involved in or tipped off about - so I am no expert!). I'd certainly take a 16x revenue multiple any day of the week though :-D

They didn't buy the site really for the revenue so it's hard to go off of that when estimating acquisition price

16x mature revenue, sure. But if revenue is growing 20% month over month, then what?

I see pure talent acquisitions (no tech, no site, no brand) once a month for >$500k/head. Here the founder is a course 6 (CS) MIT grad, obviously smart and talented, able to act as an evangelist to broader communities, with a pre-built launchpad in place. There's real value to that.

If the stock component vests over some period of years, it could easily run into the millions, and still be a steal by Stripe. I'll echo another comment downstream: it's interesting to think about whether, in the spirit of the site, they will (or should) reveal the economics of the deal.

No way it was >$1m. It's specifically because it's not a steady business like suburban lawn care that there is no way it is going for a 2-4x annual rev. It's definitely not going to go for more than that.

I'm going to guess they got it for a song with a job for the owner and his brother attached and the promise that they could focus on content and not selling ads.

Would be great to see some facts and numbers not more suburban lawn care anecdotes.

Go on any website selling site like flippa or Latonas and you can see sales prices for lots of similar businesses with similar or higher revenue.

Also the lawn care point wasn't an anecdote it was an example of a generally predictable and steady income stream business vs a blog like this which is neither.

Those sites don't include employees who will stay on the to run the company. You also don't think Stripe paid a premium over what the site would have fetched in a flippa sale?

Right they had one employee who now has a regular salary working on something he enjoys as well as getting a job for his brother(who wasn't employed before by the site) means it's even less likely stripe is going to pay a huge multiple.

They might have paid some premium but they aren't paying 150x when the going rate is <2x AND throw in a job for the brother.

You're ballparking 1 million upfront and >250K for a site that made barely 60K a year? That seems extremely optimistic and emblematic of dot.bomb numbers.

By that logic YC and other VCs are continuously and systematically making bad investments every year.

You need to look at it as the total value this will provide Stripe. It's a community of people who will buy their service. It's good will too.

But what's the upside? Will this website EVER net Stripe a (figurative) DIME after paying 2 salaries? I think not. Maybe it will entice a few dozen new account signups per month. Who knows.

Community outreach is a good thing (tm) but I see now way any sane/experienced business person would pay a million dollars for this.

No way. A blog like IH is an internet business but it's still a small business and much closer to the suburban lawn car business you mention than something like Stripe. There is no big scale for something like IH in the future without it being reinvented. It would not command a multiple of 15x+. Stripe would need to justify the purchase price to their board. If you were running a company bringing in $72k a year and it was a total schlep dealing with the day to day and then also selling ads being able to sell to a great company for 1-4x + a good salary for you + 1 is an awesome outcome.

I'm not speculating about purchase price because it's more about what was the best alternative for IndieHackers founder but it's doubtful Stripe cares about the site's revenue, today or in the future.

IndieHackers' revenue is ads and the amount they make ($6k / month) is nothing for company like Stripe.

The article says that csallen will no longer spend his time looking for advertisers. That means that either someone at Stripe will take over that role (doubtful) or that they'll remove the ads when the current contracts expire and loose the revenue stream for the site.

My best guess is that Stripe is profitable enough that they can run the site at a loss and they hope for the best case (but hard to quantify) scenario where the site serves as an (subtle) advertisement for Stripe services (and it has to be noted that the site already was a subtle advertisement for Stripe given that many of the interviewed companies already use Stripe, so the site would promote Stripe even if Stripe didn't pay a cent for it).

When the PH was aquired for 20 million, I thought about how much a smaller company like IH would cost.

And how much would it benefit from belonging to a company that have already found their cash cow. There is not a perfect formula to make money on news and interviews, or you place ads everyerve or charge people direct. With Stripe taking care of most costs, IH can focus on what it really does best, produce content.

I don't think you can use PH to compare to any other deal, that was monkey business. No way in any world a message board that couldn't get beyond a niche audience, that (I think most would agree) was past it's prime, and had no obvious path to revenue is/was worth $20M+. It was only able to get that because of the people that had invested. The right people can make anything happen, it was not an ordinary deal under ordinary circumstances.

What is PH?

product hunt

> * Plus a full time salary at roughly $120k/year

There's absolutely no way that's correct. It'd basically be pushing csallen to leave (he's an experienced YC founder, MIT grad, and full-stack developer). His market salary is way more than $120k/yr.

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