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MattRogish

For a B2B SaaS company, the easiest/most likely[1] algorithm to succeed[2]:

1) Be embedded in the industry for a while

2) Make lots of connections, build credibility

3) Build SaaS app to solve key pain point you experienced in #1

4) Sell to the folks you know from #2

5) For bonus points/de-risking: find 25 potential customers (from #2) and reach out to them and validate this idea (Jobs-to-be-Done). Get a handful of them to commit, even verbally, to buy this when you've got an MVP built.

[1] Clearly this is not the only way to be successful, but "I have a random idea lemme build it" is a great way to be not successful

[2] Succeed = your business that makes enough revenue to support you and a reasonable lifestyle, equating (and/or eventually surpassing) what you would typically make at a W2 gig, from a diversity of customers and not trading your personal time for money.

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This is exactly the recipe I used and sold a company for $10m. Also, I am a absolutely terrible programmer and v1 of the product, with which this recipe was executed, was full of copy pasted code, unhashed passwords, all of the hallmarks of terrible programming. I got to $100,000 revenue before a friend of mine joined who actually knew how to program and rewrote the whole thing (literally zero lines of my original code were preserved).

Care to share what the company was?

Can I ask a little more please?

How much of the company did you own when you sold it?

How did the sale happen - did someone just turn up and offer you money, or did you go find a buyer?

Was there negotiation from a higher price down to $10M?

Did they buy the entire company from you or just buy the software assets?

How long did the sale take from when the buyer turned up till money in your account?

How much money did you end up with after paying tax on the sale?

What did you do to celebrate?

What did you do next - another business, get a job, sit at home watching TV?

Would you have handled the sale process differently if you could do it again?

I made just over $1m because we raised a bunch of money for growth that didn’t pan out. Because LOL California the money went straight into a house. I still have a mortgage and a day job.

damn

And I guess the moral of the story - don’t raise money if you got to $100k+ revenue alone by yourself?

Bigger lesson is to buy a house as soon as you can. I’ve made more money on paper living in this house than building the company.

I kind of needed to raise the money. The wheels were falling off the bus because the software was so bad and it needed to be professionally written. I should have raised less and sold sooner though.

Unless you live in Japan where real estate depreciates.

I’m not the poster here but I’ve been involved with the sale of a few businesses like this and I consult for a VC. I’ll answer a few of these.

I’ve seen owners (either single or partners) who own between 5% and 100% of the business when they sell it. Unfortunately, most of them seem to own between 5 - 35%.

Most of the sales I’ve been involved with are the company trying to find a buyer. However, occasionally a VC will flat out ask if the company is for sale. Though it’s probably 10 to 1 in my experience.

There’s usually some level of negotiation. There is a “SAAS multiplier”. Right now the VC I consult for looked at about 3 - 5 times EBITDA. This gives you a healthy negotiation range.

People should absolutely consult an accountant and an attorney when figuring out what to do with the money they make. Often if you handle it right you can pay significantly fewer taxes. Taking stock or equity is a good way to handle reduction of those tax burdens.

I’ve seen people celebrate by buying multiple very expensive cars. A house on the beach in Hawaii. Huge trips. I’ve seen people blow huge amounts of money very quickly. The fastest was two guys who blew through $3,000,000 each in 6 months. It was stupid.

Most of the sales i have been involved in kept the former owners in a working capacity at the company.

I hope this helps a bit. Obviously it’s just my observations.

Post an Ask HN. There are many people on here who have sold their companies (me included).

That’s a wild and wonderful story. Thanks for sharing inspiration.

If you're at all interested in adding your story to this list or future lists, let me know! Sounds like something we could all learn from. I'm courtland@indiehackers.com

Hey, it's the founder of indiehackers.

When I first saw indiehackers, I was in love with it. The execution was fantastic. You did a great job.

Then it got bought, and changed. Now it's forum-first, interviews second, and half of them are sort of locked.

Why do you now have to sign up for a forum to view the older product interviews? It's super annoying, so I just stopped reading. It also seems detrimental to the people who gave interviews early, they wanted press, rather than being hidden behind a sign up thing.

Is there any interest in reverting from this pinterest-style login-wall, or is that just too costly?

If this sounds blunt, it's only because I'm disappointed that a site a loved became less fun to use.

Walling off the content directories was an experiment to boost community membership signup, as community members are far more active than anonymous visitors. It's worked — people have joined the community at a much higher rate — but the downstream results haven't been significant enough for this to really be the backbone of our growth strategy. I will likely revert it soon in favor of other approaches, for example, creating search engine friendly evergreen content like this article.

Slightly off-topic, but what happened to indiehackers? I liked the page more before the redesign/stripe-takeover.

The page was more clearly arranged and you could browse it without being logged in or having an account. There is also this ridiculous "stripe-verified" badge for businesses doing business with Stripe now, which is not that interesting for indie hackers I guess.

It also seems the interviews are not that important anymore, but being some kind of community is - but I don't think that people want that, because we have that already here or at reddit - the nice thing were the interviews.

>> you could browse it without being logged in or having an account.

That's a fair point I hear quite a lot. Not sure what the reasoning is there (assuming it is the case).

>> It also seems the interviews are not that important anymore, but being some kind of community is - but I don't think that people want that, because we have that already here or at reddit - the nice thing were the interviews.

Have to really strongly disagree on this point... The IH community is - without a shred of doubt in my mind - the single most impactful thing Courtland has built at Indie Hackers. Happy to believe that you don't want that, but there are a lot of founders and lurkers on the IH forum who really do want it...

> That's a fair point I hear quite a lot. Not sure what the reasoning is there (assuming it is the case).

That it's incredible inconvenient? I don't want to do discussion there, but just read what other people tried and did.

The result is that I just make throwaway accounts for such websites to get to the content and I appreciate if I don't have to do that.

Sorry, you misunderstand me. I meant I'm not sure what Courtland's reasoning for walling off the interviews/articles is.

Oh, sry, I see.

I guess that it's just a Stripe marketing channel and the number of sign-ups supports some metric.

I personally liked the interviews and now it’s just a summary :(

The interviews haven't gone anywhere: https://www.indiehackers.com/interviews

What do you mean by summary?

I think the confusion is that the design of this page:

https://www.indiehackers.com/products

is closest to the old layout where each block linked to the founder interviews. I basically wrote the site off until today because it looked like the interviews had been walled off.

Agreed, but there is a slight twist to that I have seen be even more effective.

1) Consult in the industry as a contract developer at X/hour rate.

2) When you find a problem that they're facing that you might be able to turn into a business, offer them 0.75X/hour while you work on it in exchange for the right to commercialize it.

Obviously this doesn't work for everything, but it's a non-obvious way to get paid while fixing a real problem and build a business.

Good advice. I have a B2B lead gen system that I offer - built on 19 years of experience - for 75% of the price of someone who has 2 years experience.

2.b Be independent contractor. Carefully work on side-biz on your own time. Have good documentation and git-log in case someone at the client ends up caring when you worked on it (zero risk if it's not core biz for them and they aren't assholes). Don't tell anyone what you're working. Don't use proprietary data in your product. Profit

Again, every situation is different. But the benefit of bringing the client in is that they can act as your first reference client (the hardest to get), and that it's not job+sidebusiness, but a hybrid so your time is more efficiently spent.

" but "I have a random idea lemme build it" is a great way to be not successful"

I should print this and frame it in my home office. You rock!

I think they call it an Entrepreneurial Seizure.

1 through 3 is 100% correct in my experience. I left my job recently and after a short break I called 3 friends from the industry side and 3 friends from the customers-of-that-industry side and said "if I do this will you pay me?"

This has nothing to do with comming up with idea like the title suggests. And it's because having ideas is overated. You find good ideas everywhere, all the time. the execution matters the most, which is part of what you describe.

Nice and succinct. This is exactly what I did for DNSimple.

Extremely well stated. Thanks for taking the time to write this.

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