I'm the Director of Websites at Flippa.com, we're an online marketplace for buying and selling websites, domain names, and smartphone apps.
To date, we've signed up 900,000 users and have done over $180,000,000 in total transactions, and we've helped thousands of entrepreneurs sell their side projects :)
If you're looking to sell a side project, my biggest tips are:
1. Keep an accurate accounting of financials
2. Install analytics and ensure it is capturing data correctly
3. Be realistic about price expectations (ex. websites typically trade at 2-4x annual net profit).
If anyone has a website and is interested in getting a free professional no-obligation valuation, you can simply visit: https://flippa.com/deal-flow/sell
I'm also happy to answer any questions people might have about selling a website, app or domain. You can contact me directly at joseph.carroll[at]flippa.com or you can simply respond to this thread.
The sibling comments snark to you is unwarranted, at the very least the escrow service flippa provides adds significant value to the process of selling a site.
I recently found a site on flippa, after the auction had closed, with no sale. I've been unable to contact the owner. I'd really like to make an offer, unfortunate for me! Any tips on that situation?
"They’ll see the code, and if the code is shit, then you may be in trouble"
Has anyone EVER gotten "in trouble" for shit code? It's about 80-90% of everything I've ever come across in the last 15 years. And frankly, probably 50-60% of what I've produced in that time also falls in that camp as well. It's only been in the last 5-10 years that attention to code quality has really been on my radar, prompted in part because I've had to provide support on stuff I wrote 10-15 years ago and ... it really opened my eyes as to where I cut corners and the huge impact it can have.
That reminds me, years ago I was on the corporate buyer end of a sizable project, and everything was rolling smoothly toward closing, until a fellow engineer and I went on-site to see the code. It was as if it had been run through a human obfuscator. The entire C codebase was a single main() function in one file, all "subroutines" copy/pasted over and over, cryptic variable names, no comments, no indentation. The "programmers" had to convince us this wasn't a prank before we walked out in shock.
If an organization or an individual were to be firm on two rules, shit would reduce drastically:
1. Effort of maintenance post-release not to exceed X times of development effort. Otherwise the current system warrants to be relooked at.
2. When in doubt, refer to rule #1.
In the real world, shit-producing daemons are ubiquitous.
doesn't have to be. it can be measured against defined standards - documentation, tests, clear naming, complexity metrics, etc. it's not just a case of "half of everything is above average".
I used to compare my code to my previous code and other code I saw, and most of the time it was 'good'. When I started comparing my code to more external measures, most of my own code would now be 'poor', because of the external things it didn't measure up to. Now, often, there were valid reasons for cutting corners, but... that doesn't make the code itself better, it just justified the poor quality.
I agree with everything you've said in your reply but it does not contradict what I said.
To be more specific, the "defined standards" (docs, tests etc) are measures of what makes something better or worse. They aren't a measure of what is good. What is good is if those docs, tests etc are superior to the docs, tests etc of other code.
And we are right where back to the relative measure problem.
One could come up with an objective measure of "good" which would require a threshold for these measures. Such a measure would require us to say that a project is good if the docs are of such and such standard, the test coverage >60%, the names can be understood by most people and so forth.
However, I think that standard would still be informed by what most people do.
To put it another way, if we waved a magical wand and everyone started documenting and testing starting tomorrow, then "good" code would require something else.
Good code often doesn't add value to the business or generate revenues. Getting a feature done does. (Doesn't mean I advocate writing below average code though!)
Don't want to be too negative but the entire post could have been shortened to 'put it on Flippa'. Then, the other advice is quite obvious.
Flippa isn't bad but if your side project is good for anything and you want to achieve a better price, do a small M&A process: Identify potential buyers yourself, approach them and keep the approaches synced to create and keep up competition. Also you could combine this manual leadgen with Flippa.
I suppose unlike other sites, SideProjectors is completely free, so no cost for people to listing it and selling it.
Then the immediate question is "how do you make money?".
Well, I'm a developer and I run other businesses so, SideProjectors is... really my side project. And it has been for almost 4 or 5 years.
I started SideProjectors at a local hackathon where we won a prize from Freelancer! and it all started from there. It receives a constant flow of projects each day and a number of projects have been sold since it started.
In terms of getting the most amount of exposure, I think personally, the most important thing is providing as much detail as possible. It's likely to be featured on the front page, it will show people that you are serious about the project and if not being sold, people will at least message you asking many follow-up questions.
I've been meaning to add a bunch of features to SideProjectors, so hopefully it'll continue to improve!
Cool. How do you personally think about the value of a small project? What do you look for? Does the ideal for you look something like "buy it, let it go, it never needs anything, and you make more and more money, hoping one of these will really take off". Or maybe you invest in care, feeding, and growth... Or both...
I suspect many of us here have side projects, so understanding them as investments would help us help someone like you, I'm guessing.
There are two investment strategies when looking at a potential purchase either (1) buy and hold or (2) buy and flip. The value of a small project stems from its upside potential. At a high level it's important to consider the niche, growth potential (is there room to improve the website, position in market, etc), buyers personal experience, and quite importantly the current and historical traffic and revenue.
It's important to note there are rarely any websites where anyone can "buy it, let it go, it never needs anything, and you make more and more money, hoping one of these will really take off." I can't tell you the number of times a developer thinks this is true for their side project, overvalues it, and comes back a few years down the road telling me they are looking to sell but now with traffic and revenue 10x lower than what it used to be.
I bought a number of side projects, its a nice way to get a validation of the market. I always like to see a number of paying customers even if it is just a few.
What so you do with them? Expand and flip, or maintain and reap the monthlies, or what?
I understand why someone sick of a project would sell it. I don't fully understand the buyer market. Why would someone pay 20k for some car muffler site that makes 2k a year in AdWords traffic?
I bought a number of smaller projects that serve as traffic generators to bigger projects, typical freemium services that provide me regular signups on a daily basis.You can make the calc: pay a few thousands for years of free referrals.
I bought a bigger project 10K+ and that has technical issues that need to be resolved (will migrate from Node.js to PHP) but i have an existing customer base that helps understand the problem you try to fix.
I am rebuilding the solution but in the same time i can experiment with pricing and traffic generation on the service i bought..
it is a de-risking strategy.
The reason why people sold in general because they don't have the marketing budgets to carry the project when its initial launch spike runs out.
EDIT : I typically pay 5x recurring revenu max or max 1K to 2K
for non revenue generating sites that have interesting traffic
of an audience I target
Edit 2: I want to build a recurring revenue stream to supplement my consulting business
I know that Node.js is the hype but the site was developed by consultants and has plenty of bugs in there that needs solving .. I thought with my JS knowledge that it would be easy to evolve but the reality is different,
it is one big mess of dependencies that is difficult to debug if you did not make it yourself ...
You will see that PHP (LAMP)projects are easier to sell than projects in more exotic stacks
I prefer to have all my projects in the same language -> PHP and i all move them to Google APP engine to keep maintenance to the lowest levels
It has nothing to do with performance
i prefer to build on technology that I master
You're in the ballpark, 5x profit is typically the absolute max and that's for something established with steady or growing revenue. If you're down 10% YOY for the last 18 months you'll be lucky to get half that.
That being said there are always exceptions - my current business partner bought a side project for 10x gross profit because he had a lot of contacts in the industry that the owner didn't and was still able to make a great return when he sold a few years later.
Out of curiosity how much do you spend? And is this the cheapest way to go about it?
It seems like that would be somewhat expensive just to validate the market?
Would it be wrong to use a finance-textbook approach e.g. recurring revenue divided by a rate of return? (Or rate_of_return minus rate_of_growth, using the Gordon model.) For example, if I get 1k/mo in ads, dividing it by (0.25 / 12) would result in a sale value of 48k.
The rate of return must reflect of course the high risk of the investment (e.g. users may migrate to other app and revenue dwindles) and must also cover the costs of app maintenance (every major release of mobile app takes some maintenance in code, at least).
I used 25%/year as example but I am not really sure if it is too low (or too high). Fact is, not many investments yield 25%/year.
1) Multiples: a comment from Flippa says websites go for 2-4x annual net profit, which is similar to a Mom&Pop operation. So if your side project made $5,000 per year, then value would be $15,000 at 3x multiple.
I like to think about multiples in years. It'll take me 3 years to make my initial investment back - then I think is that good or bad? Apple's stock price to earnings is at 12.6 years, Amazon is at 99 years.
2) Replacement Value: if you estimate your time to be $100 per hour and you could replicate the app/website + business in 1 month, then $100 x 8 hrs/day x 20 business days = $16,000.
3) Comparable Transactions: if you see projects similar to yours going for $25,000, then that's what the market is saying.
Whenever I have a project, I have this insatiable itch to stick it on my Github. I love open source, so unfortunately I don't think I'll ever be able to sell something I make.
Exactly. The first thing that comes to mind is that the brand identity of a product may be valuable enough that the fact you can get its source code for free doesn't have a huge impact on its value.
Of course this would require you to license it in a way such that the source code is free but the brand isn't, a la PHP.
I'm in the same situation, and I haven't found any marketplace save for Feinternational where you'd be able to buy something like that. Either you can buy SaaS with million+ run rates (which of course cost a lot), or you find mostly ecommerce/AdSense/affiliate type of businesses (Flippa etc).
Anyone interested in selling their SaaS app? Mainly looking for / interested in projects generating between $10-35k in MRR. If so, shoot me an e-mail (in profile). That probably doesn't classify as a side project anymore, though..
If you value your time at $100 an hour, and had $1k in expenses total (servers + ads), you would need to have spent 20 hours or less on the project to "break even"...
Seems like I would just leave the sucker up to get a few bucks a month vs selling so cheap.
Because very many programmers, even in the US, make 240,000 per year? ($100x8x2512). Or even $300-$350K, given all the overtime people do?
How about $30-$40/hour to be more realistic ($70K-$100K per year).
And how about, it's your side project, so you get to work on it whenever you like, using whatever technology you like, from home etc, and those aren't exactly hours you'd be able to bill to anyone (and because you also have a day job, you wouldn't even want to take extra billable customer work).
>and had $1k in expenses total (servers + ads), you would need to have spent 20 hours or less on the project to "break even"*
Or you need to like what you're doing, and know that you would have done something similar anyway even if not to sell it, and thus consider the money an extra bonus.
Your hourly wage should be priced much higher than your wage for fixed yearly employment because the time is inconsistent and there is overhead.
If you make $100k/year at a full time salaried job you should price your hourly at $100/hr. This is why plumbers charge $80+/hr -- it is skilled labor and the work is not constant and there is overhead.
You have to consider vacation time/benefits/overhead/etc. To estimate yearly salary at full employment of near 40hrs/wk is double the hourly x 1000 per year. So a $100/hr wage is about $200k/year if you are working a full 40hrs per week on client work and there is no overhead. This is never the case -- there is always overhead.
tldr: $100k/hr is not at all an unreasonable level for a software developer to value their hourly time.
> tldr: $100k/hr is not at all an unreasonable level for a software developer to value their hourly time.
I was with you until you added the k to the last line ;)
But yes, I don't think looking at a dev thing and valuing my time as $100 an hour is that far off. Even if it is off by $50 either way, it makes math easier...
I would love to buy someone's side project if there is negligible work to maintain it (although then why would you sell it). But still if someone just wants something off their plate.
Built basically the same thing when I was looking for a decent office chair (scrape craigslist and send me an email), though it lacked the nice front-end.
To date, we've signed up 900,000 users and have done over $180,000,000 in total transactions, and we've helped thousands of entrepreneurs sell their side projects :)
If you're looking to sell a side project, my biggest tips are:
1. Keep an accurate accounting of financials
2. Install analytics and ensure it is capturing data correctly
3. Be realistic about price expectations (ex. websites typically trade at 2-4x annual net profit).
If anyone has a website and is interested in getting a free professional no-obligation valuation, you can simply visit: https://flippa.com/deal-flow/sell
I'm also happy to answer any questions people might have about selling a website, app or domain. You can contact me directly at joseph.carroll[at]flippa.com or you can simply respond to this thread.