Is it really that low? 1 times annual revenue? So BCC would be worth only a mid-five-figure number (not sure what your last reported numbers were)?
BCC might get a slight premium because I have better options for buyers than Flippa, it has an exceptionally long history, and there's some value from association with me, but websites are not valued like businesses or startups.
There exist plenty of excellent reasons why this is true: extreme risk from sites which are overly dependent on one or two traffic sources, implicit cost of operation often not being counted as a cost by the owner (BCC runs itself... It only requires the very occasional attention of a Rails-competent Ubuntu sysadmin. That's "free" to me but not free to the new buyer, and that sort of stuff adds up quickly when compared to five figure revenues.), transaction costs (time, training new owner or staff, etc) having to get recouped, a risk premium because it is a market for lemons and buyers feel that sellers may sell because of material no disclosed information like "I recently pissed off Google and the site may vanish from the Internet", etc.
Ultimately of course things are worth what a buyer will pay you for them, but market is about 1X for "typical" sites at the moment.
An example of that would be finding someone (or more likely them finding you) who needs to build your product and can choose between starting an $XX.000 development project delivering in X months or your product which is ready right now.
Anecdata: they opened with a $100k offer. I said that I had built it to run rather than to flip, but that everyone has a price, and that I'd be unable to turn down a million. No deal happened, obviously.
Users are generally 30-day active (trailing average). Here we're talking about a spike in traffic that the project got after some public exposure on news sites, I doubt we could predict at this point if everything will drop into the Trough of sorrow [1] or stick. Personally I tried the game and it seems to be at the first iteration in terms of usability for the masses, so I assume there will be little (if any) retention and more usability work to be done.
[1] http://andrewchen.co/2012/09/10/after-the-techcrunch-bump-li...
Some improvement feedback:
(1) develop more game-ability before explaining concepts on 5+ pages of text. Try to have a full-blown gaming engine with as few clicks as possible, and add concepts on top of it when the user levels-up.
(2) watch your page loading speed. If it's not as fast as browsing a magazine, it's too slow for a game.
(3) work to simplify the interface. Consider showing part of the vertical tabs only when the user levels-up. This should go hand-in-hand with (1).
(4) try to move at least partially some content before the login screen. Give people a reason to sign-up.
A perfect example to guide progress on those items: http://adarkroom.doublespeakgames.com/
Is it easy to introduce ads? Would it be AdSense-friendly? If so, what kind of ads would it attract?
The best way to come up with comparables is browse the "for sale" section of Flippa https://flippa.com/websites/established
A question for you: let us hypothetically assume that you have identified a particular basket of stocks worth $5,000 using this approach, applying your personal estimate of their risk and your investment goals, and purchased them. Three weeks from now you receive a call from the CTO of one company you invested in saying that a vulnerability in the hypervisor at your VPS provider allowed a compromised co-tenant to execute commands in your instance as root. What is your plan of action for preserving the value of your investment, and does this retroactively change your approach to valuing the stocks you have purchased?
This is a silly question, of course, because if one invests in publicly traded securities one does not have to operate their businesses for them. That is one of many reasons why owner-operators of businesses do not value them as if they were equivalent to investments in publicly traded companies.
Discounted cashflow = bullshit used to rationalize the sale price ( it can have some use in super long term predictable business like real estate with 10 year lease and well diversified tenants)
Hope this was helpfull
To your answer: I wanted to point out what is being valued and how it works. In this case the only thing that is being valued is the income. All risks associated must be accounted for. This was also supposed to be a hint to another question regarding how to value a website that does not yet create revenue: here you value future estimated revenue.
To your argument: You are absolutely right, of course. But still you start with expected future income.
Similarly, icu argued that you do not have just one figure. I completely agree. But that also happens if you consider a range of assumptions instead of concrete numbers. And even if you have a limited amount of potential buyers and they might pay more or less, you have to have an idea of whatever your are selling is worth.
Relating all this back to the post, I'd say that this entrepreneur is trying to do just that... Basically trying to give arguments for as high a valuation as possible.
This is why I believe comments giving an exact figure of $x are invalid insomuch that your method for answering "what something is worth" is not the optimal approach.
Also, it's not unheard of for a small physical business to make 10% profit margin and to sell for 10 times profit. So that's around 1 time revenue as well.
This was consistent with the app I sold back in Feb, which went for 2.x times earnings.
Rob Walling's Startups for the Rest of Us podcast did an episode on this recently:
http://www.startupsfortherestofus.com/episodes/episode-197-h...
Once you can prove that spending $X on customer acquisition returns $X+something, then it'd be easier for me to think of HackerExperience as a scalable business. Until then, it's a speculative venture to me.
Good luck on your journey! HackerExperience will give you some great stories to tell :)