I sold my side-project for $30k
marc.io
marc.io
It's not a life-changing amount of money, but I think it's a more typical example of what you can expect when selling a bootstrapped side project. Hopefully it will inspire some of you who have been on the fence to start your own project.
Congratulations on your successful project!
A bit off-topic: what was the motivation behind you building WIP.chat ? I don’t see an about page on mobile.
To me at least, WIP looks like a cross between a todolist, Twitter and Product Hunt but targeted at indie hackers, no?
And while you can find many chat communities, they always seem like more of a distraction than something that really motivates me to do by best work.
So I created WIP[1]. Initially it was just a Telegram group chat, but with the added twist of being able to share what task you were working on. This oriented the discussion around the actual work people were doing, rather than just chit-chat.
Over time this evolved into more of a platform with a website, Desktop apps, etc. But the core remains the same: an online community of makers/bootstrappers/solopreneurs working in public.
[1] https://wip.chat
Did you email them directly or did you pay someone to make a press release? I have had similar products but I never seem to know how to get the word out. Any insight into your first day and how you marketed it would be highly appreciated. Thank you and keep it up!
So yeah, those are definitely two unfair advantages that are hard to replicate.
I guess the underlying two lessons are:
1) build and own your own acquisition channels if you can (I initially built BetaList to promote my other startup at the time), and
2) leverage whatever advantages you have. For me that happens to be the fact that I can quite easily get some initial traffic, but if you're a great writer you could use that. If you have a great personality you could invite yourself to podcasts, if you have a certain technical skill perhaps you build what nobody else can.
FWIW, I don't think it's worth paying people to write a press release. If you're an indie maker it's much more compelling for a journalist to hear from the founder directly. Just make sure you have a story worth sharing with their audience. (in a way your "pitch" is just as much a product as your product itself. But in case of the pitch you're trying to convince a journalist you have an interesting story to tell their audience wants to hear).
Did any customers reject the transfer of their data under GDPR?
> The remaining $20,000 is contingent on Tweet Photo making that much (or more) in revenue within 24 months of the acquisition.
So it's sold for $10k, and a max €20k revenueshare on a service that currently does 1620/year
Based on some initial tests and analysis of Tweet Photo's current funnel, that $20,000 goal seems more than plausible.
But you're right in that it's definitely not certain and this type of deal has some inherent risk.
Not necessarily saying you should have done, just think personally I'd be shy of anything more complicated than 'here give me cash and take this, kthxbye'.
You won't find any acquisition more than maybe $5k that is "Here's the cash, thanks and bye."
You built a service, I started to use it, I was happy to pay for it. Now you sold all the data your business had about me and the service, so I need to check the new EULA etc, and need to reevaluate if I want to use this service futher along the way.
Also my experience with apps/services/etc sold by their original creator(s), that they are shuting down in a year or two and I'm so tired of this trend.
So yeah, happy about your success, unhappy about another service which probably goes down the drain and I need to find something else to use, which probably not really has the same featureset.
Edit:
My point is, I would have been using this service and paying for it in the next few years, without the need of new features or so, so you only need to do maintenance of the infrastructure and keeping up with the security updates for mostly passive income. Probably this is the same for other users of the service. I think this should be considered, when you thinking about selling your passive income sideproject.
However if the maintainer happen to stop maintaining the service, I could setup the infrastructure and maintain it by myself with some learning, but that would take up more time I need to earn the money I'm paying to somebody else, who already done the groundwork and has the knowledge about the service. Also the service is worth $5-10 per month, but does not have enough value to worth the hassle of setting up the whole self hosted infra behind it and maintain it by myself.
I'm not sure why, but people recommending FLOSS as a solution tends to forget about the additional cost to setup and maintain infrastructure and software and a simple build pipeline (even if it's just a bash script, rsyncing the code to a server) when mentioning you could self-host it if they shutdown the service.
This is the "slightly annoying not to have this service, but not annoying enough to bother to replicate it even if I could" situation for me.
Freedom has a price.
I'm also tired of the trend of recommending FOSS when somebody is looking for a service. For personal solutions it works only if you are valuing your time really low or if you are having a lot of fun playing with it.
Frankly, if you think setting up your own FOSS is often a good solution you haven't listened to your advice enough times. It works if you have a few things. But if you try to do it with everything you will just give up after a few years and 50 things set up this way, or you will spend considerate amount of time on maintenance (which is fine as long that's what you want to do with your life).
But you inherently have less control over the situation when you pick this option. Sure, it's convenient to pay someone else to manage the service, but you expose yourself to the acquisition situation that this user did. Also, moving to another provider isn't usually an easy thing to do, it's not like deciding to shop at Costco instead of Wal-mart today. Beyond the most trivial of services, you usually pay a fairly hefty technical migration cost to move to another provider. Most companies can't just wake up on a Monday and decide to switch from AWS to GCP or another cloud provider.
I guess "Freedom" can mean different things to different people, but when you're at the mercy of a vendor like this, you're inherently less free than you would be if you ran your own service because you can't control what they do.
I am free to breathe, I have to physically do it though.
Some people have a machine to do it for them, they certainly aren't free -- https://www.theguardian.com/society/2020/may/26/last-iron-lu...
Sure, I sacrifice my freedom in the name of ease or expediency all the time - I'm not someone like Stallman, but I'm conscious of the tradeoff, and one of those is that services I use may well shut down, sell themselves, and indeed sell my data. That's part of the price of not being free.
If you want both, you could pay someone to manage a FOSS installation for you
This is exactly why you need the freedom of FLOSS. You can hire anyone to continue the development. You don't have to do it yourself.
Sure, and like everything else that has a price has to go through an cost benefit and an opportunity cost analysis.
Just because it "has a price" doesn't mean it's always worth it...
You just get the assurance that in the off chance somebody (including you) cares enough to maintain it, has the time, and is competent, they have have the license to do so.
But that's not that big a deal, except if its a project with many diverse backers and large diverse community (e.g. something like MySQL or SQLite or even Webkit will survive and be forked if needed - something like the average 1-3 main dev project not so much).
If an app can be a desktop app written in say JS (Java c# or similar term back-compat language) and not need “infra”. Or if it can be a Unix until that does one thing well. Then that is more likely to be a thing that can be forked and untouched for years and just work.
Granted anything that interacts with web services may have bit rot. However solid principles may allow those parts of code to be surfaced out to plugins etc.
Anyway let’s put it this way. I use YNAB 4 desktop budgeting software. No longer supported, not even FOSS and I’m not worried I can run that thing for the rest of my life, with little hassle, as long as I can run the last version of Windows that supports it in a VM.
If you just want a dependable service that's going to stay around, and you're willing to pay for it, what do you do?
As you say, anything that is SaaS could be canned/sold/etc. Anything that's FLOSS won't be as much of a service as you wanted, presuming you wanted to pay money on an ongoing basis to have a problem solved in a convenient way.
While I appreciate you being a paying customer, unfortunately you're in minority. When Facebook changed their API earlier this year and forced me to rewrite a part of the codebase I seriously considered just closing down the site. The service generates $140 in monthly revenue which is nothing compared to my other products. So my time is best spent elsewhere.
So when the buyer approached it wasn't just a way for me to cash out on the business (and make more money than if I just kept it in maintenance mode), but also a way to increase the chance of Tweet Photo sticking around long-term.
The new owner has both the resources and incentive to keep Tweet Photo running. As they are financially invested, plus they have a large userbase they plan on cross-promoting it to. Which means Tweet Photo will start generating more revenue, becomes more valuable, and in the end will have more reasons to be maintained and developed.
With regards to the EULA: Tweet Photo is a bit of an outlier in that it has to adhere to both Twitter's and Facebook's terms of service, so there's some protection in that. If the new owner were to violate those terms the whole service could be closed down.
So there's 2 global scale monopolies in the toolchain already and you're bothered the 3rd player might not be indie?
The cycle of (enterprise) life
They're using Facebook's APIs...
Maybe I'm just cynical, but I pretty much assume that any service I buy into will one day be acquired and the data transferred to someone else.
I understand this user's frustration, but how many times are we going to see acquisitions involving user data happen before we all come to the consensus that this is what people who monetize products do?
I think it's really naive in 2020 for someone to sign up for a tweet photo service like this to get upset that the product gets acquired and their data handed over. Let's be honest here, this service takes data from one massive aggregator of user data and posts it to another massive aggregator of user data. Are you really that concerned that someone other than Zuckerberg or Dorsey has your public instagram data now? It's not like either of those companies have glowing reputations around user privacy either.
It already supports Zapier but as soon as Instagram opens up its publishing API again, I will offer my own built-in automation features too.
If I could offer one piece of unsolicited advice, it's to build in that viral loop I did with "via tweet.photo". I think that alone 10x'd the user base and possibly the valuation as well.
P.S. I saw you're in Bali. Which part are you from? I've lived in Canggu/Ubud/Lovina for a while. Hope you and your family are staying safe in these trying times.
That's cool :) I've been living in Bali (Mengwi area) for almost three years now. Hope you are safe as well.
I'm not sure I'd call that $30k given the current revenue needs to grow more than 5x over the next 2 years to get the 20k (assuming the acquiring company even continues to monetize the project). Is that really the terms?
You might be able to build an app like this in a weekend or a few weeks, but unless you have a similar capability / vehicle to market it, you're going to struggle to sell it for anything.
I wouldn't rule our selling a side project if you don't have the net work though. These days there are more and more platforms popping up to help you do that.
Some that come to mind:
A little detail here is that BetaList just happens to be OP's other project.
Although to be honest it's not that hard to get featured on BetaList if you have a half-decent product :)
Also, assuming you get your money in 24 months and using a discounting factor of 5% (which is either much too high or much too low), you are looking at a little over 28k, not 30k.
The product already had traction—actual users numbering in the thousands—and from the buyer’s perspective, it was cheaper and/or faster for them to buy vs build a comparable service from scratch.
Also, by owning tweet.photo outright, the new owners can bundle it with other complementary services in their portfolio.
There is a saying that there are two ways to make money in software: bundling and unbundling.
https://www.lawinc.com/twitter-vs-twitpic-trademark-dispute-...
It seems like a complimentary product to the acquirers other portfolio of products. So it's probably a no-brainer for the acquirer even if 'overvalued' by traditional MRR metrics.
All available contractors where already busy building a FB clone on a weekend.
Domains are typically either worth a surprising amount, or very little (always surprising to inexperienced sellers). The gap inbetween tends to be very large. That's the common result I've seen most often over multiple decades of buying and selling domains. It's very common for people to think they have a valuable domain, and then inevitably it'll end up being worth a small fraction of what they think it is. Valuable domains are almost always super obvious (eg tweet.com would be), or otherwise you get lucky with someone that'll pay a few times over fair value because they've got a specific use case and really want it (eg tweet.photo is worth $750 if dropped on the market, someone pays you $2k-$3k because they have an idea for an app and that's in their mess around price range).
There may be nothing more annoying in this world (joking here) than the domain squatter sitting on a $300 domain that is fully convinced their domain is worth $100,000 or more. It's their chance, their lottery ticket, and they're not selling cheap. Back in reality, exceptionally few domains are worth more than a few thousand dollars.
I just want to add that while it might be possible for you and me to "build this in a weekend" (although in reality it always takes longer considering all the edge cases), for other businesses it might be cheaper than just buying an existing app. They know what they are getting versus hiring a freelance developer, writing a spec, managing them, etc, etc.
Fun side-note: I actually had another service called "EmbedTweet" back in the day when Twitter didn't have their own embed functionality (yes, that was a long time ago). They listed my service on of their official help pages.
So yeah combined with the fact there are so many "tweet"-based names, I think you're safe using that term. Oh, and when creating an app in their Developers portal the require you to enter a name, and they don't flag "tweet" but I think they do flag "Twitter".
They did acquire this trademark however ("subtweet"):
http://tmsearch.uspto.gov/bin/showfield?f=doc&state=4803:kmz...
And there is a new trademark published for opposition from August 25, 2020, related to bird food:
http://tmsearch.uspto.gov/bin/showfield?f=doc&state=4803:kmz...
[1] https://mashable.com/2011/10/10/twitter-tweet-trademark/
[1a] https://www.hg.org/legal-articles/update-twitter-finally-lan...
[2] http://tmsearch.uspto.gov/bin/showfield?f=doc&state=4803:kmz...
Another reason to dislike Twitter's disguised shortening...
(In the original tweet, viewed on Twitter, that should read 'called tweet.photo'.)
Would it be feasible for an SEO spammer to covertly include such backlinks in an npm package update?
Sucks that despite this being a 20+ year old problem, Google hasn't been able to fix it.
The majority of the time was spent in those first few days were I built the initial product. Tweet Photo is technically quite a simple product, especially if you're familiar with the relevant open source libraries and APIs which I was anyway.
But for me the main "cost" was knowing the APIs could change and I'd need to be ready to make the necessary changes.
> I believe in using the tools you’re familiar with, so I used Ruby on Rails to build the product.
Are you going to continue involve with the product development?
I won't be involved in the product development, but we might to the occasional video call or email to exchange ideas and insights.
Zapier etc probably have special deals with Facebook.
2. how do you come up with the startup/tool ideas?
2. Usually out of necessity. Something I want myself, but can't find an (appealing) existing solution for.
Most notable:
https://betalist.com (2010): $xxx,xxx/year
https://startup.jobs (2016): $xx,xxx/year (could hit $xxx,xxx this year)
https://wip.chat (2017): $xx,xxx/year
are they all 100% owned by you or did you drink out of the poisoned foundation (vc)?
also how do you toss up many sass so quickly? do you just have an auth and payment module you're comfortable that you reuse for every project?
I use Ruby on Rails which has a lot of pre-made libraries for common tasks.
I’ve been building products for 10+ years though. So it’s mostly a matter of time I think