Cheddar is For Sale
cheddarapp.com
I'm selling Cheddar. The whole kit and caboodle — API, web and native apps, acclaimed code base and documentation, and 33,000+ user community — is being sold, not necessarily to the highest bidder.
cheddarapp.com
I'm guessing someone might buy it, but there's a heck of a lot more ways you could spend $125k building a similar company to get to profitability faster. There's even more ways to spend $125k to make $18k/year. I'll happily let you invest in my company at $125k with returns of $18k/year for few years. :)
The real value is the potential.
Serious question here: what portion of the audience base is using this because of you personally? Not that you know 30k people, but perhaps a large part came because of your connections. Relatedly, how many of them might leave if they saw it changing hands to someone they didn't know (or perhaps everyone would cheer because someone with more time for new features was taking over)???
Most buyers will start by counter-offering half your advertised price.
... Not necessarily. It's actually pretty difficult to start something that's consistently driving revenue at all or even into the 5-figure range. That said, $18k/year isn't super high and he's looking for roughly 5x the revenue to acquire the business, which someone would obviously only do in hopes of growth.
You are totally right when you say "There's even more ways to spend $125k to make $18k/year" - there are plenty of corporate bonds paying a yield of 10% vs Cheddar's gross yield of 14%.
Subtract from that 14% your time, additional investment to grow user base, taxes and salary; your are left with nothing and $125k less in the bank.
Good luck to the seller, but it's a tough sale.
Your craftsmanship and attention to detail on the UI and experience are great. I'll give you that. But this is a todo application. Not only that, but it's open source. Hell, I've built it and run the iOS app myself.
The only thing you're selling is 33,000 free users (rather, a list of them, not necessarily 33k active pekple) and a Ruby on Rails app. You also said it requires 4 dynos to operate, plus a Postgres db. I'd imagine the reason you're selling this is that it's costing you $200 per month and not making anywhere near that.
While I'm grateful for everything you have done with cheddar in terms of transparency and sharing with the community: I think you shot yourself in the foot. Reverse engineering the back end (from the app and api docs) and rebranding the iOS app would take me 2 weeks tops.
$125,000? Good luck man. If you can get that.. You're an even better magician than you are a developer.
Nobody cares how many hours you put into something when determining price. Based on your traction so far, this acquisition would be based on a revenue multiple, not as a strategic sale. For a niche SaaS product like this one, I would expect a valuation of 12X-24X monthly revenue depending on growth rate. Is this product making about $10K a month now to justify the $125,000 price? Take a look at some of the products on Flippa to get a sense of how much you could get.
edit: explanation http://soff.es/one-thousand-dollars-an-hour
By that rate and the 800-hour figure, Cheddar would be one of the most expensive apps ever (utility vs cost).
> This rate is designed to weed out less serious clients. Serious clients generally have more exciting projects. I'd rather not freelance. I need to focus on Cheddar.
I guess now that he's no longer focussing on Cheddar he can lower his rate.
If you're about to start a startup, I'd strongly encourage you to come up with some hypothetical figures for these metrics:
* Number of monthly uniques
* Percentage that will convert to trial
* Percentage that will convert to paid
* Average monthly subscription cost
* Churn rate
* Cost of acquisition
You'll be way off, but run the numbers you've made up past as many experienced founders as you can, and you might be able to come up with a model that's semi-realistic. Of course it will evolve over time as you get some real data and more experience, but the main point of the exercise is to then ask yourself questions like: "How can I get X0,000 uniques to my marketing site on a $0 marketing budget?", and "What can I change about my product/positioning/target market so I can triple my average monthly subscription cost?".
When I read the original announcement for this app. It sounded cheery. The design is really pretty good.
Over time, though, I've learned to keep an eye on these announcements. Not just cheddar, but all of the 'check us out' posts. Sure enough, a lot of these do not succeed. Some even blog during their process, to share some epiphany. Building a successful product is hard. Filtering the noise on HN is hard as well. When I see a new announcement, I look at the 'good' in the product, but only time will tell if the founders have hit the right mix.
Sam, the OP, is not one to hold back from backlash. He doesn't have too much pride. He shows his product on HN to ask for users. He isn't afraid to admit failure when it happens. He needs the money, so he asks for it. I'm sure there are hundreds in a similar spot. Yet, they will not make a similar post.
It is super important to see the lifecycle of projects here. It adds a good perspective to this community.
Back to Cheddar. Without a passionate founder, a product like this will die. It isn't a turnkey business. It will require much more product work to become a success.
I'm fairly sure this is impossible. I know people (with large apps and the right contacts) that have tried, and never heard of it being possible. Unless something changed recently. You could transfer the account (unless other apps are also on it).
Thanks for the info!
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Q: I sold my app to another developer and can no longer distribute it on the App Store. Can I transfer the app to the new developer's iTunes Connect account?
A: No, you can’t transfer the app to another developer account on iTunes Connect. To add the app to another account, remove the app from the current account and upload it to the new iTunes Connect account.
Note that uploading the app to a new iTunes Connect account will disable current customers from receiving automatic and free updates of your application. All customer reviews, rating, and ranking information will be reset. You will not be able to reuse the app name and SKU in the old account. If you have uploaded a binary or used the app with the iAd Network, your Bundle ID will not be reusable either.
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I have no idea if special exceptions are possible, but that is their official policy:
I am an iOS developer and have been since before there was an official API
Not to be a jerk. I really wish you well. But I'm curious: it would cost over $100k to make a todo list app? I would think that would be one of the simplest apps you could possibly make. Am I missing something?
[hmm... didn't see that your rate was $1000/hour. That answers part of my question.]
- Lawyers
- Dentists
- Doctors
- Notarys
But charging $1000/h for making trivial things is making the rest of us look bad. Especially when people do projects with 10000000 times the difficulty... for free.
Thats imho the wrong way to look at compensation. People are not being paid by the difficulty of their projects but by the value of the problems they solve. Being a construction worker is certainly a lot more physically demanding than an office job. Still they are (usually) paid a lot less because they are easier replaceable, less training, etc.
With an email address worth .60-.90 per month or more, they should be able to easily justify it. Just a thought
I love Cheddar, and judging by some of the sales data shown in the TechCrunch article it doesn't exactly look like it's bleeding money.
[1] (33,499 * 0.0262) * $1.99/month = $1,746.57. More annual accounts means less money.
Part1: http://5by5.tv/founderstalk/38
Part2: http://5by5.tv/founderstalk/39
Part3: http://5by5.tv/founderstalk/40
They really are a great listen.
Personally, while I really like Cheddar I do not feel that it is a service that I would ever pay a recurring fee for.
I am a pinboard, fever rss, and instapaper user and feel that all of these nominal one time investments were more than worth supporting these projects.
I could see paying a one time $30-$50 fee for Cheddar
It will definitely be interesting to see what happens.
Cheddar user $3.71 Facebook user £1.21 (May 2012)