3 years in a very unpredictable field is a very long time. Anyone can come up with exactly the same product in much less time than before.
It wouldn't be an _impossible_ task to outcompete BCC I suspect, especially if the new owner just lets it coast and wind down instead of staying on top of the game (which Patrick readily admits he hasn't done for some time), but I suspect you'd probably need a PPC budget of around the same magnitude that the new owner just paid to kick-start a competitor - even if you already had production-ready code and a suitable hosting platform ready-to-go.
I think you're right - in that assuming "it'll be paid off in three years" is a naive view of the way SaaS businesses age - but I also suspect there are already several "exactly the same product"s out there already, none of which have got the traction BCC has, and that the value here is not in a bunch of code that makes PDFs from lists, but in the business backend and the historical web presence and SEO.
* There's a fairly liquid market for sites of any sort that have a demonstrated ability to generate revenue.
* The valuation of those sites goes up when revenue is recurring.
* The valuation goes up with history/track record.
* That market is not especially oriented towards teachers.
Given the universe of different sites you could build that would charge a subscription fee to serve some niche of customers, it would be pretty weird to compete for the Bingo Card space.
(I was surprised at how liquid the market for this stuff was.)
I guess the only counter argument is that there's now a "product market validation" that says a Bingo Card site is "worth" $60k to someone. If I had nothing else to do and - for example - a Wordpress plugin that'd let me create one of these in a weekend, it'd be a not insane idea...
Not an accurate assessment, but at least a vaguely supportable "here's why I'm going this side project!" claim...
I'm fairly surprised by this too. Why do you think that market is so liquid?
I will note that in Software, Entrepreneurship == Innovation in many people's minds (i.e. a startup inventing something new).
In non-software entrepreneurship, buying an existing business and running it is considered a very common path to becoming a business owner. As is starting a copy of other existing businesses (e.g. another restaurant), or even flat-out extending an existing business (e.g. the amazingly successful business innovation of "franchising).
Further, the income generated from BCC is extremely seasonal and its not anti-seasonal with other education based markets. All in all, I'm as interested (if not more so) in hearing from the purchasers as I am from Patrick.
Anyway, I remember hearing the same argument when Youtube exploded. It's one thing to have a product (Bingo Cards, Youtube or whatever) but distribution and an existing client base is another.