Hi Andy,
Former founder, now investment banker here.
Sorry to hear you're not interested in continuing the business moving forward. Btw, if you really want to sell, probably best to work on this answer [ e.g. I love other things > i hate this ].
My quick take:
- $2500/mo MRR in ~6mo is nice validation of the opportunity. A natural question would be "are you interested in pursuing this as an actual business, and becoming a startup founder?" You should expect this question from any & every potential acquirer. Btw, I'd coach you that "i don't love this space" isn't best answer; try "i find this super interesting, but I love XYZ and that's where my heart is..." Follow-up question: would you join us as a developer on this for 12 months?"
- You'll be viewed as "side hustle," not pre-seed startup. By that i mean to say you're level of 'completeness' and value will be categorized this way. This will make it challenging for a buyer to consider you an 'acqui-hire' level target, e.g. the old adage "$1M / developer" type acqui-hire valuation some co's use for buying teams.
- I think you're most likely acquirers will be influencer marketplace and/or related mktg / agency / services firms [ e.g. Hypr, Traacker, similar ]. They're the independent alternatives to TikTok, Snap, whomever's own features in this area.
- Scraping will be considered a fundamental risk, e.g. "does your current usage fully abide TikTok Terms of Use?" Do they offer an API? If so, why aren't you using it? How at risk is your scraping of being cut off by TT in the future? Have you spoken with a TT biz dev person about this? See 'ckdarby' comment on friend's Insta business getting C&D ltr from FB legal; very hard for you to be acquired if you have any of this risk.
- Valuation: you're super early stage; sorry, i'm not super familiar with valuation around side-hustle projects so I'd google this a bit to see if there are nice precedent / comparables.
- Classic mba style valuation rules-of-thumb, for later stage / at scale businesses: 6.5-7.5x EBITDA. Fairly standard business school valuation rule-of-thumb, e.g. if you were at scale business being considered by private equity buyers they'd start their valuation & waterfall model around here.
Finally, congratulations -- this is a fantastic side-hustle. You may be able to find a way to get a deal closed, especially if you're willing to go with the code-base to help it land, migrate off scraping to API, etc.
Not sure I totally get your point about my reason for selling. Are you saying I should or shouldn't say my heart's not in it? That's the genuine reason and I've always built in the open and been transparent about my business/ goals.
My primary motivation now is starting another SaaS project like this one, but in a niche that I'm more interested in. At the moment I think that's B2B lead gen or SEO.
Obviously very different beasts to this - mature industries etc but things I've developed an interest in by doing this more opportunist project. So I'm 100% not looking for an acquire-hire!
Happy to be viewed as a side hustle. That's basically what it has been until very recently.
Yes, those are the main people I'm speaking to at the moment. Also Indie Hacker types.
Agree, if it wasn't for the fact it relies on scraping this thing would be worth 5 x much as I've suggested in the doc. I'd say this is very hard to value, even looking at historical multiples on Flippa etc.
"Not sure I totally get your point about my reason for selling. Are you saying I should or shouldn't say my heart's not in it? That's the genuine reason and I've always built in the open and been transparent about my business/ goals."
=> Just phrasing. Say you love something else more than this; saying you don't want to do it has negative connotations. Again, just semantics, but they can seriously influence likelihood of deal & valuation...
From 1995 to 2002 I led biz dev for DataChannel's XML parser [ the first written, most widely licensed to other platforms eg MSFT, and likely most widely adopted ]. I coordinated our participation in XML & all the related web services standards bodies.
We got to participate in a lot of amazing projects, whether relatively simple open standards for DTDs that made it easy to interchange crisply [ eg MathML, many others ], or for industries with considerable interchange challenges [ eg SWIFT ]. These projects were typically fairly lightweight, and fortunately many simply 'worked' and succeeded. In this capacity XML seemed to "just work" and seemed to make the world a better place -- "victory!"
Of course you can't really discuss XML without discussing "Web Services," which is what many consider the "xml ecosystem."
Around 1996 Norbert Mikula, Mike Dierken, John Tigue, myself and probably a few other characters began riffing on various ideas of how XML + HTTP could be used. What if you could simply lookup a signed DTD for how your data was suppose to be delivered to you? Lookup a signed DTD for how to invoke its API / RPC calls? Hell, why not have a DNS-like directory of what services are available, whether on your intranet, or from vendors? That's where the original 'whitepages / yellowpages / greenpages' naming convention in the very earliest days of web services came from btw. Naive? Over-optimistic? Absolutely... But we didn't know any better, so why not. We started discussing it with lots of smart people in SGML and XML space, the concepts started turning into prototypes and it started to build momentum.
People who were interested fairly wisely said "a standards body should lead this stuff [ instead of some vendor ]," so the early work landed inside OASIS [ the original SGML standards gangsters ]. Their wisdom gleened from long years building incredibly complex SGML doc systems spared the early XML services from many potential debacles btw. Momentum began to build, and super interesting things started being built.
As Fortune500 IT, startups, middleware vendors and app servers became increasingly interested in tapping in this magic a very interesting dynamic changed: the platform players perceived all this interop, open standards as a serious competitive threat.
Microsoft and IBM in particular got very involved very quickly, and the once simple & elegant concepts quickly devolved into multiple competing standards that were a horrible, illogical, impractical mess. This happened in less than two years... Open-standards based web services essentially became an irrational choice vs just "staying with your existing vendor's stack..."
That glimmer of amazing potential magic was quickly and effectively killed. Am I saying XML & web services were perfect? of course not. I am saying a thread of amazing potential was pulled, then around 1999 it was cut. And it was sad to see first hand.
I hope GraphQL, JSON, the incredible variety of cloud services and other interesting bits tap into that same magic.
Blockchain... imho interesting, but I fail to see many use cases where business side buyers [ aka budgets ] must have a blockchain-based solution. Looks like tech still searching for need and product/mrkt fit to me... think long-term it offers many areas an interesting evolutionary step, but I don't see it as hugely revolutionary gamechanging stuff.
I've been using Bitwarden a couple months now and can only speak highly. We'll see how it's security audits & stands the test of time, but so far so good for me.
Long time ago, in a dot.com startup epoch long ago:
Our Seattle/Bellevue based startup hired VP & Dir of outside sales in Silicon Valley. Expensive hires, big payout to recruiting firm, then these two proved extremely difficult to get on the phone, schedule meetings with, et al.
SVP Sales flew in unexpectedly, called & had them pick him up at San Jose Airport. When he threw his bag into the trunk he noticed they had not only our sales & mktg materials, but SEVEN other companies' materials as well. He grilled them on what work they'd accomplished, clients called / met, et al, then ended up firing them before he flew home.
We passed along info to authorities, who later shared the recruiting firm had been in on it, and they were trying to collect evidence to persecute. Sounded like they were collecting recruiting fees & salaries, then sharing among all 'co-conspirators.' FBI was pulled into it, so I assume it involved fairly substantial cash.
Ask your student(s) to look at a map, or better yet, open up Google Maps and flip to 'Earth' view.
All that satellite imagery? Every single pixel, from every single satellite fly-over / observation, all interpreted / post-processed / calculated into actual meaningful data via Pythagorean theorem.
E.g. every data point processed for "incident angle" of the observation platform above parcel/pixel observed. Basics @
They never wanted to sell this data -- it's far too valuable.
They merely wanted US gov't approval to use it in any possible way they choose to, which they have not had previously.
Other concepts to discuss:
> API versioning, perhaps in Services DSL, and toolset to enable factories and testing more easily against multiple versions
> Modular 'apps' from singular codebase: could single Rails codebase support multiple individual apps / services, consolidate onto single CI > deploy path, simplify / automate hot updating. Perhaps overly ambitious...
tldr: My year off was fantastic. Not life-changing, but amazing. In the years since I find individuals reaction to hearing of my year off very telling in what they'll be like to work with and their take on work/life balance. May have set career back... by a year-ish. I would do it again.
I'd spent around seven years as part of an early-stage startup team, built up company to 500+, was worth tens of millions on paper then actually made nothing. I needed a break, and thought a couple months off would be great.
I had hundreds of thousands of frequent flyer miles and had planned to go first class to India, train around, see the Himalaya, then end up on a beach in Thailand as the finale. Still hope to do this, some day.
Instead I stayed in N America: skied Mt Rainier and several other Cascade volcanoes, rafted Grand Canyon with my parents, lived in Yosemite Valley climbing for nearly two months, climbed many amazing places in Cascades, Rockies & Alaska. I ended up spending around ten months off chasing adventures.
I did receive phone calls about jobs from people who knew I was off, wondering if/when I'd come back to reality. One of these calls lead to my next job, consulting at Microsoft for several years.
With over a decade passed since I took this year off I can say concretely I have no regrets. It may However, I do have friends who've taken extended time off who've felt it hurt their careers...
I've noticed a curious thing: I now intentionally tell people about my year off when interviewing, etc, and find reactions to my extended time off very telling indicator:
reaction: "Hmmm, really. What can you tell me about your work ethic?"
=> Do not work for someone like this, period...
"A year off? I hope you got that out of your system and are ready to work hard here at Widget Corp."
=> Likely have zero concept or concern about work/life balance; will question your time-off requests.
"I could never do that, sounds so scary but incredible... did it hurt your career?"
=> These people are fine, and will love your slide-show screen-saver; intentionally pause your powerpoint every now and then to give them a taste because they'll enjoy it.
"OMG really??? I've always wanted to... where did you go? how awesome was it? would you do it again?"
=> Almost 100% of the time people with this reaction are awesome. Find these people.
Sorry to hear you're not interested in continuing the business moving forward. Btw, if you really want to sell, probably best to work on this answer [ e.g. I love other things > i hate this ].
My quick take: - $2500/mo MRR in ~6mo is nice validation of the opportunity. A natural question would be "are you interested in pursuing this as an actual business, and becoming a startup founder?" You should expect this question from any & every potential acquirer. Btw, I'd coach you that "i don't love this space" isn't best answer; try "i find this super interesting, but I love XYZ and that's where my heart is..." Follow-up question: would you join us as a developer on this for 12 months?"
- You'll be viewed as "side hustle," not pre-seed startup. By that i mean to say you're level of 'completeness' and value will be categorized this way. This will make it challenging for a buyer to consider you an 'acqui-hire' level target, e.g. the old adage "$1M / developer" type acqui-hire valuation some co's use for buying teams.
- I think you're most likely acquirers will be influencer marketplace and/or related mktg / agency / services firms [ e.g. Hypr, Traacker, similar ]. They're the independent alternatives to TikTok, Snap, whomever's own features in this area.
- Scraping will be considered a fundamental risk, e.g. "does your current usage fully abide TikTok Terms of Use?" Do they offer an API? If so, why aren't you using it? How at risk is your scraping of being cut off by TT in the future? Have you spoken with a TT biz dev person about this? See 'ckdarby' comment on friend's Insta business getting C&D ltr from FB legal; very hard for you to be acquired if you have any of this risk.
- Valuation: you're super early stage; sorry, i'm not super familiar with valuation around side-hustle projects so I'd google this a bit to see if there are nice precedent / comparables.
- Classic mba style valuation rules-of-thumb, for later stage / at scale businesses: 6.5-7.5x EBITDA. Fairly standard business school valuation rule-of-thumb, e.g. if you were at scale business being considered by private equity buyers they'd start their valuation & waterfall model around here.
Finally, congratulations -- this is a fantastic side-hustle. You may be able to find a way to get a deal closed, especially if you're willing to go with the code-base to help it land, migrate off scraping to API, etc.
J