Show HN: I made a simple platform to buy/sell side projects
Hi Guys,
I made a simple platform to buy/sell side projects. Current solutions are over complicated so I decided to make things simpler. Let me know your what you think about this.
I made a simple platform to buy/sell side projects. Current solutions are over complicated so I decided to make things simpler. Let me know your what you think about this.
This is the rough idea tough, will try to get feedback on the same and improve it further.
Regarding the market system: why did you pick a lump price rather than a bidding system?
A few notes for improvement: the “My projects” page feels empty at first: it could use a call-to-action with a quick explainer and a button. The “Go home” button has an odd wording; maybe “Main page”? Clicking on the logo to go to the main page is a classic, but not everyone is used to it; adding a link from the hamburger menu could be good. The website pricing and the way to settle are a bit unclear.
If you want some kind of delayed call to action maybe some kind of toast at the bottom would be better. As it is today I'm primed to abandon sites that do a full screen take-over while i'm reading.
Looks great though!
- Outsource/"borrow" supply from other people until you can bootstrap the demand side (eg: scrape/syndicate other marketplaces; subcontract services)
- Heavily incent the supply side of the marketplace (eg: offer a guaranteed base pay to subcontractors regardless of demand)
- Bootstrap the supply side yourself (eg: for a forum, use sockpuppet accounts to create the appearance of of a thriving community)
It's hard!
"Hey, I saw your listing on X. I wanted to invite you to list your project on Second Founder. We have X,XXX views per month. You don't have to do anything except create an account, and I'll migrate this listing over."
Some minor feedback:
- I wonder if the pre-revenue column should be left, and the >5k MRR should be right, so it goes from least expensive to most?
- Can the category dropdown be checkboxes (so you can choose more than one) and also have an "All" category if you're just casually browsing?
- Some measures of time might be useful, like how long a project has been active ("since 2019") and how long it's been listed for
- Could you please add some tooltips or similar to explain what MRP and MPP are? Just a one-sentence description like "Monthly recurring profit is ____, as reported by the company/calculated by our algorithms/whatever".
Adding them to the roadmap.
At least mine is making net profit, most SaaS trading on stock exchanges with the same multiples are losing money and unlikely to remain at current market caps if not already.
Four years of seller discretionary income is not an unusual sale price for small solo projects that have traction. Iirc, Patio11’s bingo card creator sold for something around this multiple.
That said, it’s unclear if this project has as much traction as others that sell for this multiple.
If there are only a few clients, especially if they are friends of the current owner, then the business is fragile.
for instance, you could have a thousand customers but with low LTV (they cancel after a month or one off).
which is more fragile here?
You seem interested in getting some answers, so I will give you my two cents worth…
> but customers who have been with you for 8 years is the anti-thesis of fragility.
Sure. How many of your customers have been around 8 years? How did you acquire them?
> for instance, you could have a thousand customers but with low LTV (they cancel after a month or one off).
Since this is basically 100% MtM churn, this is not a viable SaaS business.
> which is more fragile here?
If you take the 1000 customer SaaS and make it a more reasonable 10% or even 20% churn, then your business is more fragile for sure. We have no idea what might cause people to churn in your business because the n is so low. With 1000 customers, we can probably find some reasons (possibly before even buying) for the churn and halve it, thereby doubling LTV.
So questions I would have for you if I were serious about purchasing:
1. What’s the TAM?
2. What’s your moat?
3. How did you acquire your customers (esp. the 8 year ones)? If it’s a personal relationship, that is very bad, since they may leave when you aren’t the owner.
4. How many of your customers are new (1 year or less)?
5. What marketing have you tried?
6. What is the language of communication with these customers?
7. Where are your customers located (country)?
So after a quick glance with only the information you have given so far, I would probably be willing to pay $5k for a business like this and give it to an intern to develop. At $10k, I would be tempted to have one of my programmers make a copycat and just compete. As such, we could probably meet in the middle at $7-8k. This is probably a bad deal for you.
More information could increase or decrease this price.
Note that my biggest concern would be that all of the customers could instantly jump ship after you leave, because they were only customers because of you. This may seem odd to you, but I’ve seen entire business that make ridiculous amounts of money for the owner(s) exist purely because of personal connections. How do I know that this is not the case for you business? Since you have so few paying customers, I can’t even be sure that an answer you give me is true.
My totally unsolicited advice to you is to find a young and competent SaaS sales person and offer them 50% rev share (maybe with a 2 year cap). This allows you to grow your business with relatively little grunt work, and you get to keep the cash cow. Selling cash cows is almost always bad unless the money completely lacks significance, and then you should look more for a competent owner to hand it off to rather than optimizing sale price.
I will be happy to answer more questions if you have them.
Best of luck!
but at $399/month x 12 = 4800 USD / year (since 2014) is nearly 40k USD.
also tough to get an intern to copy anything other than the landing page
It doesn't make sense to throw out an offer like 5000. Even at 20,000 its a tough sell because you know that by not selling you will still collect that around year 4.
Now multiply this by a factor of 100 and you will see why from my perspective it would be a tough to accept an offer with only a year.
It makes no sense to sell a business at 10xMRR because of very high probability that it would collect that in 10 months and likely continue to do so.
So imagine now I am doing 39,999 a month, would I accept an offer of 400K? Hells to the no, it will make that in a year (accounting for churn).
I really doubt there's people who would accept this offer unless there is serious looming problems to the business.
Something like 160 x MRR would be justified here, especially if your revenue has been predictably stable for the past 8 years, its like to continue another 8 years and another 8 years is my thinking.
Basically my situation is, I don't make enough to raise cash and hire people (no need one man automation) and turn it into a company nor desire to do so. If I want to sell it I will lose cash flow.
Ideally without this inflationary macro environment you would sell it up front for a very large multiple of MRR and invest somewhere but that is no longer an option it seems.
high probability of being in business for another 16 years :
40k MRR X 160 = 6400000
but the buyer would try to convince me that it won't happen (it will as its a sticky product that solves a real world pain) and will low ball me to accept $27MM this year and try to break even at year 8.
Even if inflation reaches past 15% I would have cash flows that could be adjusted and pass on the cost to my customers. By accepting a lump sump, I would be chump
To address some specific points:
> also tough to get an intern to copy anything other than the landing page
I am guessing $10k worth of programmer time should be able to replicate your app. That’s about a month or two of very good European programmer time. I don’t know how long it would take since I don’t know this product well, but I’m guessing it’s not a long time (and maybe as low as a week). The website would take a day or two max (this I’m confident about).
The intern would be a marketing intern, and yes, a good marketing intern could do a lot with a small product like this. I would expect the MRR to go from 3 digits to 4 digits at least. The amount just depends on who the market is (again, I don’t know the market).
> It doesn't make sense to throw out an offer like 5000. Even at 20,000 its a tough sell because you know that by not selling you will still collect that around year 4.
Agreed. This is why I said it was a bad deal for you, and you shouldn’t sell your cash cows.
> Now multiply this by a factor of 100 and you will see why from my perspective it would be a tough to accept an offer with only a year.
Lololol… you just moved the goal posts.
In order to get to 40k a month, either you have a lot more customers (thereby lowering the likelihood that they are all friends and family customers) or your price is much, much higher (which means enterprise sales).
Either of these de-risks your business quite a bit. That de-risking is worth a higher multiple.
That said, you can’t just hand-wave your revenues to 100x and assume everything else is the same. It won’t be.
> its like to continue another 8 years and another 8 years is my thinking
I would bet that you think wrong.
For reference, 16 years ago, smart phones as we currently know them barely existed. The iPhone had not yet been released.
The tech landscape will most likely change drastically over the next 8 years, and almost certainly over the next 16. Your service might be obviated.
At best, it will be able to pivot to the new tech, but that will essentially be a new product at that point, and only the relationships with the few customers you have would be worth anything (and that’s one good salesperson away from being taken from you).
> Basically my situation is, I don't make enough to raise cash and hire people (no need one man automation) and turn it into a company nor desire to do so.
I don’t think you need to raise cash or hire people.
You either need to cowboy up and start doing some marketing, or you need to partner with someone who will do it for you.
As I mentioned before, a rev share is fine. That’s not an employee. That’s pure commission.
I don’t know how that would work in Europe, but affiliate deals are a thing.
> Even if inflation reaches past 15% I would have cash flows that could be adjusted and pass on the cost to my customers.
Yep.
I forgot to mention in my first reply… you should probably raise your prices if your customers love it so much.
Start now.
As inflation increases, raise them more.
> By accepting a lump sump, I would be chump
Yup. This is exactly what I said.
Don’t sell your cash cows.
Your best hope to sell is to find some executive retiree who wants to dabble in business to keep themselves busy, and the price you’re asking is a meaningless amount to them.
If you are serious about selling, I would talk to FEI:
They are a SaaS market place, and they will give you an honest evaluation of the value of your SaaS. They are motivated to get deal flow at prices that owners will sell at and buyers will buy at — they have a good feel for market price.
If your SaaS can actually pull $20k-25k (minus fees), they have access to buyers who will pay it.
I’m guessing that they will say that your business has too many vulnerabilities to be sold at that price (possibly any price above dev time), but I would love to be wrong about that.
Best of luck!
That’s quite fragile unless they have been long term clients, and this type of system has high transfer costs.
The fact it only makes $400/mo after 8yrs is a negative signal, not a positive one.
*up to a certain point.
I mostly use these sites to get ideas.
Some folks who make good side projects make little or no effort in growing them. A professional marketer can often scale these quite easily.
That said, this strikes me as an unreasonably large multiple unless there is a juicy market, a moat, and little or no competition.
Thank you for your kind words
Was hoping for a site that allows you to search the technology stack used to create a project (i.e. search for React apps that are for sale).
Congrats!
On the one hand it sounds nice for me to be able to sell a side project and have finality. But also I've never had the patience to actually advertise/monetize them, so the valuation a pre-revenue service would get is too low for me to accept the sunk-cost fallacy. I suppose that's the small-project catch 22
1 Are you taking a fee on sales completed through the platform? Couldn't find this at a quick glance, but it's important info.
2 Did you look into legal / liability aspects regarding the veracity of expense / revenue / profit claims? Do you vet projects/owners before listing them? How do you ensure that the offer is legit (ie the seller actually owns the project)?
3 Does the platform facilitate safe transactions (eg deposit access credentials / purchase price in an escrow service)?
4 Any reason that only sellers can post a public ask price? Using eg a second-price public auction system could make sense here.
Happy to support btw, feel free to reach out, contact info is in my profile.
The game right now is free to play with no ads, so it generates no money. But it has over 7k installs, which is pretty neat.
The name hints at finding a co-founder, while you describe it as a platform for selling projects (transferring the project from one founder to another)
Being able to price a stack would probably let software developer get easier access to funding or borrowing since at least you'd have some way to use the code as a collateral.
it would probably also helps developers develop products using more decomposed, standardized and documented components (to facilitate selling them in parts) which is always a really good thing.
You could argue that future growth justifies higher valuation, but that's hard to swallow when revenues are in 3 and 4 digits.
Also, the idea of selling a business that is pre-revenue is kind of laughable. That'll never be anything but people trying to get a few grand for abandoned side projects
model it after the already successful site that exists for this (flippa)
if you want to compete with it you must at least match it first
then you need to find a way to have an advantage over them (one way would be to curry favor with users here)
Let’s say the solo founder spends 80 hour a week running sales marketing ops dev and then sells. He could artificially make his profit high if he isn’t billing for his time
We will be expanding to connect project owners with 2nd Founders looking to join, and not just do a buy out.
~ 2nd Founder of SF
Anyway if someone wants to make me an offer for the domain and text content of Candy Japan (candyjapan.com), email me. Gets ~2000 clicks on Google per month, 7000 uniques. It's the oldest Japanese candy subscription box domain on the internet, but the service itself hasn't been running for 2 years.
Japanese candy subscription box. Includes domain and right to use text content only. Specifically does not include any code, customer list, or anything else.
# Asking price.
$6942
# Why sell?
It's the oldest candy subscription box domain in the world! And there's old content with decent backlinks as well. In other words: Google likes it.
I used to run this subscription box, but shut it down after Covid made global shipping impossible. If it's extremely low effort for me, then I would be willing to sell the domain and site content to someone who wants to start a similar site, or to use as lead generation for a competing service.
I am selling this site, because I know it still has value.
Despite the service being down for 2 years, the site still gets ~2000 clicks on Google each month, and ~7000 unique visitors. From past experience, this would convert to a few (let's say 5) new paying subscribers each month with no marketing at all. With an LTV of ~$40, should have lead generation value of at around ~$2400/year.
But I won't set up your website for you. I'll just transfer the domain to you, and sign a poorly worded document telling that I allow you to keep using the site content.
You will not get the code. Because it's terrible, and I don't want you to punch me or have even a remote risk of having to set it up for you or maintain it.
You will get the rights to use the blog text content, but you'll have to copy paste them yourself from the website. Because they are in some bizarro combination of two different formats in a database I barely remember how to log in to.
Again, you only get: the domain name, and the right to use the blog content text. But no right to ask me time-consuming questions. After I have transferred the domain to you, I consider my work to be 100% done.
# Competition?
The Japanese candy subscription box scene is admittedly intensely (ridiculously?) competitive. See here for a full list: https://www.candyjapan.com/wow/japanese-candy-boxes
Lol, intentional I assume?