Selling Tiny Internet Projects for Fun and Profit
tinyprojects.dev
tinyprojects.dev
I sold a website on Flippa once. The buyer put the money on Escrow.com, I transferred everything over, and they went AWOL. What I found out is that there is no straightforward way to obtain the funds when it happens. Apparently there is no way at all except via the court system. Which would mean the only real protection Escrow gives is against the buyer going bankrupt (or using false identity, I suppose).
Fortunately, they came back several weeks later with some nonsensical excuse and closed the transaction, but I will never use Escrow.com again.
[1] I wrote more about my experience in my ebook - https://gum.co/side-project
I was in a similar situation to the parent commenter. The buyer had deposited the funds into Escrow.com and received their assets. I notified Escrow.com that the business assets had been handed over and they awaited the response from the buyer - which never came.
Escrow.com sends notices after 3, 7, and 10 days of inactivity.
After 15 days the buyer requested a cancellation and Escrow.com notified me via email that I had 48 hours to provide proof that "the domain" had been transferred or the transaction would be cancelled and the buyer would received their funds back.
My issue was that there was no domain transfer associated with this purchase. The buyer was receiving software that they intended to use under a new brand and thus had no use for the domain.
I raised hell with Escrow.com. Calls, emails, assurances that someone would get back to me. The cancellation came on a Friday and no one contacted me until Tuesday. They called to ask if I had spoke to the buyer and then politely explained that they couldn't do anything because there was no domain attached to the sale.
Well, the buyer is out of the money in any case, which is a pretty big protection.
It's not a matter of whether it's possible but whether the seller had the foresight to use the service in such a capacity.
Because at the end of the day, an escrow is a trusted third party used to facilitate a trade. We typically think of them in terms of money because that's typically what they hold, but there's no good reason they can't be trusted with any good.
This is how it works, they don't get to just decide the outcome or they'll get shutdown during their audits.
This is a good thing in transacting on the internet.
if (delivered) pay();I never used it in any of my projects nor I know anyone using it. I just had an itch of learning Clojure and building libraries for android, and iOS, so I made them.
Since it's "just" so simple, can you better explain what those done/delivered conditions might look like? And preferably how that would also be more secure than Escrow.com?
I can't think of a better system though, to be honest.
I've noticed that most sites end up implementing "automatic confirmation", but after a while they shorten the confirmation deadline because lots of buyers just "forget" to approve.
I've also seen others (MercadoLibre) who have a "reputation" for sellers where they can get the money even before confirmation.
The inspection period can last for up to 30 days, and is agreed upon by all parties at the beginning of the transaction.
https://www.escrow.com/support/faqs/what-if-the-buyer-forget...
https://www.escrow.com/support/faqs/what-is-an-inspection-pe...
It's definitely a do things that don't scale idea. You need humans in the transaction confirming what's actually occurring. That tends to be expensive, because you also need them to know what they're doing, understand the broad details of the exchange and be trustworthy. That cost and difficulty of scaling is exactly why Escrow.com doesn't try to do it for every transaction across their system.
I've sold a few projects in my time, but this conversation makes me think I should really look at having an agent represent me in future. The whole "I can only offer $7500" but then that turned into a $10500 sale just goes over my head - the communications skills needed are next level, and I've read Getting to Yes and such books :-) Maybe having someone less emotionally attached to a project could work in negotiations to increase the price to far more than cover their fee?
Huh, didn't even notice. Thanks for pointing that out!
e.g. "I want 10,000" -> "I'll offer 5000" -> "Let's spilt the difference and say 7500" -> "How about 6000?" -> ... now you're already between 6000 and 7500.
"Okay, spliting the difference on that works out to 8000. Sounds good."
I know this is negotiations 101, but it's tough to put it in practice most of the time if one person wants a little bit more to see the transaction through. Surprisingly, communications skill doesn't play that big of a role, unless you really want to "sell it" most of the conversations goes the same way OP mentioned.
Unsure what the solution is. A seller can, of course, say that they refuse to sell for under $X, though that could potentially still be leaving money on the table if the buyer might have been willing to offer $X+Y.
Or have you ever seen an agent offer this?
To explain the issue in detail for others that don’t understand the dynamics:
A flat percentage is the standard where I live. Selling agents are only incentivised to get as many sales through as quickly as possible, and the agent will deceive and cheat to achieve that goal. Selling 20 homes at 5% discount is almost double the earnings (commissions) for the agent than selling 10 homes.
Agents make wayyyy more by selling more houses quickly than they ever could by spending more time selling each home to get a few percent more.
Yet the person selling the home really really cares about that few percent because their home is often highly leveraged: if they have paid 20% of principal and get 1% more from the sale, that is actually 5% extra return (which can easily be equivalent to avoiding many extra years of work before a home is paid off).
Yes it is an exaggeration at 1%, but not such an exaggeration when you consider that 3% is a realistic amount extra that a real estate agent can get if motivated. https://financialpost.com/real-estate/the-realtor-client-dil... - “a real-estate agent keeps her own home on the market an average of ten days longer and sells it for an extra 3-plus per cent, or $10,000 on a $300,000 house.”
When I wrote it I was specifically thinking of low paid friends who missed out on about 5% when selling their home due to poor advice from the agent during a hot market (my friends also failed to think straight because they don’t work in negotiation jobs, and they struggle with emotions involved with the amount involved). The reduction in principal will translate to requiring a total of ~10% extra over the lifetime of the new mortgage (extra interest = ~5%). I imagined how that would translate to extra years of work for them when they should be retiring. I also thought that the story of my friends happens to many, because many people are not used to negotiating sales for $x00,000 and have little financial experience to understand the impacts of their decisions.
I especially think that buying agents have the most messed up commission structure out there.
Not only is their real incentive just to make as many deals as possible, just like a seller's agent, but they actually get a bump in commission the more you overpay for the property.
Does this business model not make it easier for the little guys to squat themselves for a small price?
I have gone on a weird rollercoaster of liking the article, but initially disliking the tinybusiness.
My own non-involvement in social media as a person is one thing; but I can't help but really like the idea of creating a little service that could be a tinythorn in a domain squatters operation.
Terrific work!
early on, it's a free for all. grabbing the special names feels scummy, but I get why they're grabbed. Silent, ghost accounts, I don't feel are detrimental to the community. (but I'm totally open to education about why that sucks)
It's kind of annoying since I would like to have chosen something different, but I'm not bothered that much about it.
The buyer would might have been willing to pay $15,000+, but wanted to anchor (and start low) so went $4,500. The real max was introduced when the seller gave the $15,000 number... buyers never want to or will reveal their number (i.e. the $7500 was a lie.)
salary negotiations are a little fraught because they’re low trust and information-asymmetrical to start but because jobs are a longer term relationship, you don’t want to trigger distrust. one of the reasons employers like to keep salaries/comp private is that it gives them an significant information advantage in negotiations. they know every comp package they’re paying and that they’ve offered, as well as comp packages at various other companies and industry average info that they subscribe to. it’s often prohibitively expensive for each worker to gather similar data, which creates a real disadvantage.
in light of that, i’d suggest starting at 110% of what you’d consider a reasonable maximum, not minimum, and have 3 justifications ready (based on value you’ve generated for other companies, your overall experience level, specific skills/relationships/resources you bring to bear, public salary/comp information, etc.) to counter the obvious first objections (usually on experience or comparative comp data). anchoring high, but not unreasonably so, and then negotiating with justification should get you a higher comp package while not triggering distrust. you’ll also learn some important bits about the company which may give you reason to forego the offer (happened to me a couple times actually).
A few thousand dollars doesn't sound bad for a decent domain name and an interesting idea into which someone has put a few days' worth of time and effort. A functional webapp would be nice but not strictly necessary.
I don't have time to devout 40 hrs/week to projects, but can spend a few hours here and there. So for me, if I can turn some free time into cash and scratch that itch, all the better.
Has anyone here bought a tiny startup/project like that?
If not, is there some demographic not represented on HN who is buying these?
I'd say that $10-30k range is blogs with high search positions and established affiliate partnerships, but that's just my uneducated guess.
BTW: empireflippers.com seems to be down right now, possibly due to all the hype caused by HN audience.
Did they all have revenue, and the owners just couldn't be bothered with the upkeep, and you figured you could? (Just going off OP's story here.)
I figured that I could either increase traffic or use simple strategies to increase revenue and then resell them at a higher price. I’m not sure what the owners motivation was for selling. Usually to buy something bigger is my guess.
Edit: forgot to answer one question. I had just quit being a minor partner in a VC and wanted to learn about online marketing, and also realized how much I valued freedom over my time over making more money. I tried buying, holding/improving and then selling websites for a couple years. I didn’t really love it - Google’s unpredictable behavior carries way too much weight.
https://www.sideprojectors.com
The original premise of SideProjectors was to buy and sell small indie projects. Over the years, I've seen many many of these small projects (often ecommerce shops, dropshipping businesses, but at times quite interesting ones too) being submitted.
As a side note (pun intended) - I've been also watching out for off-the-shelf template softwares that are being posted and making sure they are filtered out. As an example, you can buy a "Privacy respecting Google Analytics Alternative, launch your own SaaS" from themeforest for $49, repackaged and being sold in many places. Their pitches are usually similar.. "hey, I developed this, but haven't had time to do marketing, it has so much potential, just need someone to take over and start making that passive income".
However, good point about the pre-packaged apps. If someone describes it more honest, would you feel better about them? For example, if someone was upfront and said "I've done the work of putting together this site, you don't need to know the mechanics, you just need to run it."
1. Don't wait for the right idea. Just build a less than ideal idea and iterate. More than likely you will gain insight that leads to a better idea along the way.
2. Copy somebody else's idea. Nobody executes perfectly, and no two founders will execute the same way. There is always room for competition.
The projects that work are the ones that solve people's problems. The ones that fail are the ones that try to create solutions for problems people do not have.
Point being, you might just keep building and dabbling and score a winner now and then.
As an exercise, you could try doing a rough design of a working system to get a feel for how much work it would be. On top of that, you could try imagining all the things that could go wrong and try to predict the likelihood of each. That's what I would do, anyway.
I haven't tested this yet, because I haven't shipped my 90%-complete project from 2 years ago yet…
Honestly I'd probably never trust a business doing this. From my POV they're probably just after cash from a buyer, not a good place for my data.
I know I'm probably an outlier though, I don't think I've seen anyone else note a lack of privacy policy on the names one for example
Yeah that's my concern haha
There's been this trend of new firms popping up that acquire small ecommerce brands (in fact, there was one on HN just the other day). I'm wondering if the same model can (or has) been applied to small "indie" companies and projects.
It would probably not be "viable" in the sense of it becoming a unicorn, but it probably is a viable small business or side project. I get the feeling that once you become a medium sized business, you kind of necessarily outgrow the "micro" part of the monicker.
My reasoning is as follows: small products/companies have de-risked the initial PMF exploration, but aren't at a scale where they can hire specialists. Sure, maybe you can find a 10 hours / week data engineer who can build your analytics infra MVP. It's more likely you don't find someone good, IMO.
Building a portfolio of these means you can hire a specialist who can focus on the low hanging fruit of 3-4+ companies at a time. That's a huge advantage over the small companies.
Generously, we're talking about ~$100/hour, my guess is it was actually a lot less than that, maybe as low as half or a third, and this is for an idea that got some traction.
That could be a good wage for some groups of people, but my guess is you'd find a much better one either a) growing something to a larger size or b) working for someone else.
If you're really interested in building these tiny products though, then it could be a way to support yourself doing what you're interested in. I just wouldn't generalize this strategy to "this is a good way to make a living".
On the flip side, I bet doing this sort of thing really sharpens the entrepreneurs skillset - identifying good ideas, quickly bootstrapping a product, and negotiating for funding, so I bet you're getting some pretty big personal levelups as you go.
Sometimes what you build can be early, and it needs to simmer for a while or flesh out. There is a real opportunity time cost for sitting on things to ripen that someone else may be in a place to work.
It’s really shouldn’t be worded as a backhanded compliment that if it’s really what you want to do. There are people who have built and scaled things and have decided what’s good for them, and how it’s good for them.
Having 10m on a 100m exit or 10m on a 30m exit, or 1m of 1-2m exit is all the same to the bank account, maybe not ones self image.
Being an exited founder at any dollar amount puts a person in very small company, and learning to exit small deals can also teach one to be prepared on what to look out for on the bigger deals. This is probably the biggest thing, if entrepreneurship is in your blood you want to make sure you’re well rounded and prepped for those biggest outcomes of your life.
Still, it’s fun to see what you’re made of and see how much you can make of nothing. One can imagine what is possible with $ efficiency.
This whole thread seems really fishy.
The theme of an entire thread discussing building and selling businesses like it's just something you can choose to do in your free time or not ...
The theme of an entire thread is discussing building and selling businesses like it's just something you can choose to do easily in your free time or not ...
Oh, just build that random idea you had and sell it for 10K in a couple of months ...
That does not seem worth 10k to me. What do you think?
I struggle to take seriously a site that lists "Our team" as characters from Silicon Valley.