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How I Sold My Bible App Company
- junto 11y agoThe joy of Streak, and the fact that they work remotely, is that I could see them forwarding my email to each other. You’ll see in the map below that it was opened in multiple locations, multiple times. It’s like sending a text to someone you’re interested in after a date, and knowing that they’re talking to their friends about how to respond. They’re interested. This doesn’t always work obviously, but it gave me a ton of confidence in the moment. Interesting... Tracking people opening your app. I assume this tracking using a hidden image in the email?
- frgewut 11y ago"hidden images" don't work with most clients. I guess it was some link with a token they were clicking.
- andyjohnson0 11y agoSee [1] for a description of how the tracking works - scroll down to "So how does that tracking work?". It appears to use embedded links to message-specific 0-by-0 pixel remote images. [1] http://www.ghacks.net/2014/02/22/can-streak-really-track-gmail-emails-read/ http://www.ghacks.net/2014/02/22/can-streak-really-track-gma...
- frgewut 11y ago"Whenever a user opens the email without proper protection" is the caveat here.
- peteretep 11y agoSomeone posted a site they'd built recently that would send you an email with all the nasty tracking tricks in them, and let you see which your client fell for. I was sad to see gmail choked on most of it.
- rhaps0dy 11y agoWell, I am very happy to see that OS X's Mail.app with remote content disabled does not trigger a single one of them.
- hotcool 11y agoNo need to feel sad. People who use Gmail likely aren't concerned about privacy anyway.
- garblegarble 11y agoI just tested gmail with emailprivacytester and it didn't fall for any of them (and only fell for the image tags when I clicked a button to allow images in the e-mail to be displayed) so they may have beefed things up in response to that site
- sp332 11y agoMake sure to check that the IP addresses are yours. Gmail loads images to their own servers and then serves them to your Gmail UI from there, so trackers shouldn't get your actual IP.
- dannysu 11y agoI wrote a blog post about this for iOS apps: https://dannysu.com/2015/12/11/best-ios-email-apps-for-privacy/ https://dannysu.com/2015/12/11/best-ios-email-apps-for-priva... If you're on mobile, basically majority of the apps out there suck at this. You need to turn image loading off by default and then Gmail, built-in Mail, and FastMail are the only ones that pass.
- porker 11y agoIf anyone can identify the site peteretep mentions, eternal gratitude: I want to test it.
- davecardwell 11y agohttps://emailprivacytester.com/ https://emailprivacytester.com/ by https://news.ycombinator.com/user?id=mike-cardwell https://news.ycombinator.com/user?id=mike-cardwell
- rpgmaker 11y agoDidn't google started to host copies of images referenced in gmail a while back though? This should make this method useless for a lot of email addresses.
- monsieurbanana 11y agoWhat about non-hidden images with a token?
- robbiet480 11y agoThis was an excellent read giving a great insider look at an acquisition from the seller side
- x5n1 11y agoI don't see how any small time hacker agrees to any indemnification. It's not as if you could even if you wanted to even defend a small lawsuit (I don't know how much they paid him). So what's the point. If you are afraid of being sued, buy yourself insurance. You are a large company, that's something you can do. And it will actually provide you protection rather than a contract which I can not possibly fulfill.
- roddux 11y agoI was also rather confused at this. Why would he be liable for anything that happens with the app after it's been sold? Is this standard practise in such deals?
- JabavuAdams 11y agoI imagine it's the acquirer protecting themselves against due diligence oversights.
- flippyhead 11y ago> Basically I spent 2 weeks convincing them to let me write this blog post! And I'm grateful you did. This was very interesting to read. Thank you!
- Sealy 11y ago> My wife was out of town so to “celebrate” I treated myself to In-n-Out for lunch! I love your frugal approach. You deserve everything you got. Nice to see how professionally you both handled the negotiations and it certainly teaches me the virtue of patience!
- Sealy 11y ago> Since the app performs so consistently and takes so little of my time (~1 hour per month) it needs to make financial sense to give it up… Can I ask what you did with the rest of your time?
- LaBiblia 11y agoWhy don't you donate a large % of your winnings to the Church? You know, the ones who made this all possible?
- chrisan 11y agoIs "winnings" the right word here? Seem like he solved a problem people were willing to pay for http://trevormckendrick.com/my-first-year-in-the-app-store/ http://trevormckendrick.com/my-first-year-in-the-app-store/
- tbirdx 11y agoIn English it is not, but in other languages, such as French, "winnings" is indeed how to say "earnings".
- incepted 11y agoHe just sold them an app worth a lot of money, why would he give more? Besides, churches already make enough money as it is.
- eckza 11y agoAccount created 50 minutes ago; comment posted 47 minutes ago. Someone's feelin' salty.
- wyclif 11y agoSomeone's a troll. Plain and simple. That kind of comment is why visible account creation dates matter.
- incepted 11y agoWhy does the account creation matter? Because the point made bothers you so you'd better discuss the personality of the person who made them? Address the topic, stay away from ad hominem. Besides, my account is 209 days old.
- itaysk 11y agoVery interesting!! thanks for sharing
- mattchamb 11y agoFor anyone interested, this is the relevant information about the sale in Salem Media's SEC filings: > On September 3, 2015, we acquired the Spanish Bible mobile applications and their related website and Facebook properties for $0.5 million in cash.
- raverbashing 11y agoI wonder where did he got the Bible text from though? Was it a public domain translation?
- hugi 11y agoThere are quite a few versions of the bible in the public domain - http://christianity.stackexchange.com/questions/16377/what-major-translations-of-the-bible-are-in-the-public-domain http://christianity.stackexchange.com/questions/16377/what-m...
- workitout 11y agoYou can get it free here: http://www.gutenberg.org/ebooks/10 http://www.gutenberg.org/ebooks/10 There is an aspect to be considered about making money on this topic.
- lucozade 11y agoTrevor answers a question on this in the blog. He says that the first one he sold was PD but he also sells others as in-app purchases that are licensed.
- yohann305 11y agoWhat a great story! I want more stories like these. The author Trevor, really gave us so many behind-the-curtain information, at some point I even thought it was so much that he could get in trouble for it if the buyers read the story. (he mentions later in the post that he got it covered) Thank you!
- emptybits 11y agoI sold my company (Verrus PayByPhone.com ) several years ago and so much of this resonates with me. Thanks to the author for his candid sharing. It was cathartic to read, even. > ... over 7 months, hundreds of emails, ... psychologically exhausting and definitely the hardest part of the 3.5 years I ran the business. This. The hardest part for me and my cofounders was keeping the business operating, and growing, while spending what seemed like full time on the "distraction" of a sale process with several potential buyers. > I always assumed it was dead until the cash was finally in the bank. ... various levels of depression occurred throughout the sales process. Yet, in the end: > The deal made a ton of sense and I’m glad it got done. Amen and congrats to you!
- robmcm 11y agoAny idea why paybyphone doesn't give you a list of parking locations near you?
- emptybits 11y agoI can only comment on the "early years" of the company (2000-2011). It was a business decision -- we felt we created more company value by applying limited development budget and effort to winning entirely new strategic customers (large metro centres, each with their own integration, payment, and back-office requirements that most people never see) than to adding more than core features to the user experience. Naturally, every potential feature, once implemented, has ongoing costs and risks with respect to availability, data quality, maintenance, impacts on customer service, image, impact on our municipal customers, etc. We were a small, lean organization then. It's impossible to know if we struck the optimal balance; you're reasonable to ask! I am now just another user of the service and I love it ... but in 2016, location-based everything is a reasonable expectation! Cheers. :-)
- robmcm 11y agoYes I imagine most of the work was bureaucracy and integration. Nice work on the exit.
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- bigtunacan 11y agoTrevor, This is an interesting read and congratulations to you. If I understand it correctly the app was pulling in $100,000 a year and required only an hour of maintenance per month? I'm curious why you chose to sell for $500,000 rather than continue with a long term revenue stream? Was there concern on your part that you could keep these revenue up in the long run?
- nxzero 11y agoTrevor I believe explains in the post, that being often within M&A there's a window of opportunity to engage a party interested in buying a company or its assets. If he declined, it's possible he would have never received an offer as high as the offer he received and would have to hope the app paid out over the next 5+ years, which was 2x the duration the app had been at its current revenue, which had been consistent for 2.5 years.
- rpgmaker 11y agoIt seems the app developer was dying for the thrill of selling his first company. Spanish media is growing, particularly in the US, so there's no reason to think his app sales were about to decline, at least not enough to sell his golden goose for a mere 500k. But congratulations to him on selling his first company.
- nedwin 11y agoThis was not a zero risk business. There is no such thing as zero risk. He made a 5x revenue exit, a life changing decision. Only someone with a time machine could calculate if his business would survive 5+ years it would need to take provide a similar return.
- blisterpeanuts 11y agoI had the same question, but I would suppose he just had his own reasons for wanting to sell. The cool part of the story is that even though it took him seven frustrating months to close the deal, he was earning money every month. Theoretically, with that kind of revenue stream he could have dragged things out for months or years, and the buyer probably understood that. A great position to be in, and to be so young, too. * envy * :)
- kdamken 11y agoThis was actually a really fascinating article. It was cool to read what it's like when you finally hit it big. I have a lot of respect for your negotiating as well. It's hard enough keeping that up during the interview process for a job, I can't image doing it for six months, for that much cash. Congrats on your success man.
- timsayshey 11y agoThere is a ton of opportunity in the christian media industry with huge markets. I hope more christian developers get involved and start making stuff that would help believers, missionaries, churches, etc. There are so many things to disrupt. For those that are interested and want encouragement or help finding ideas. I found a christian startup slack community http://thirdpathinitiative.com/christian-startup-community http://thirdpathinitiative.com/christian-startup-community and there is also a really cool hackathon organization http://codeforthekingdom.org http://codeforthekingdom.org
- GFK_of_xmaspast 11y agoOn the one hand, Christ was the original " (╯°□°）╯︵ ┻━┻) ", on the other hand, consider what He was disrupting in the first place.
- BoppreH 11y ago> I hope more christian developers get involved According to the Business Insider article[1], Trevor McKendrick is atheist: Though McKendrick doesn't have to think about money, his booming Bible-selling business does have him worrying about one thing: his morality. See, McKendrick isn't exactly a believer in his product. "We don't believe in Christianity," he told Blumberg. "We don't believe in the Bible." "I would describe myself as an atheist." [1] http://www.businessinsider.com/atheist-makes-100000-selling-bibles-2015-2 http://www.businessinsider.com/atheist-makes-100000-selling-...
- timsayshey 11y agoThanks for sharing and clearing that up, but this actually validates my overall statement all the more. We need real christian developers and there are so many opportunities to have a huge impact for the kingdom!
- adventured 11y agoWhy would there be a specific need for Christian developers? Sure looks like an atheist can do just as good of a job.
- wtbob 11y ago> A few more emails/phone calls laters (this became a theme) they finally made their first offer. It was around 3.5x revenue. Is this the standard opener now? Also, is that 3.5 annual or monthly revenue? For centuries I believe that 20x annual revenue has been a rule of thumb for properties, companies &c.
- vinceguidry 11y agoI think online properties are generally worth less because they take less time to cultivate and build. Also while their earning potential might be solid over the short term, over the long term it's not so easy to gauge. His Bible app is obviously different than most such properties, which is why he was able to bump up the offer. But still, if the app landscape changes, that can make their purchase worthless overnight. So you have to price that into the offer.
- prawn 11y agoSome online properties are valued at 17-20x monthly revenue. This guy did fine!
- seibelj 11y ago1 hour of work per month, $100k per year, each hour of his time was worth nearly $10k. Cool story but I never would have sold. This is the ultimate side business.
- rpgmaker 11y agoIt's crazy, he was dying to sell his first company. Vanity makes us do crazy things.
- cpwright 11y agoHe has 0 risk once his check for $500K clears. Every month he keeps the app there is a risk that something goes wrong; and that 1 hour a month probably doesn't include time that is spent thinking about those things going wrong. Getting the money all at once reduces his ongoing cognitive load.
- infinite8s 11y agoWell, except for the stuff he indemnified them against.
- prawn 11y agoHe return he got was excellent. Definitely the right move to sell.
- giarc 11y ago$100K revenue != $100K profit.
- aprdm 11y agoThanks for writing this! Really good article.
- novaleaf 11y agocan anyone give advice on what a reasonable indemnification clause would be? (reasonable for both parties)
- OldSchool 11y agoI'm surprised this isn't more discussed in the comments. It's a major element to consider when you're selling your business. He correctly identified it after all, as a potential deal breaker. You're selling something, so in an acquisition you will have to represent and warranty what you actually own and you're selling. This sounds simple on its face, but technology isn't nearly so well-defined and legally sorted as, for example real estate. In software, even if you are 100% certain you can transfer all of the code and there are no potential content copyright issues or latent prior agreements by yourself or other sellers, current/former employees who think they own something, etc, you still have at a minimum, a hard-to-quantify "Sword of Damocles" in the form of thousands of potential patent claims hanging over you, trolls or not, it doesn't matter in a sale. As in business itself, the bigger the money involved, the more visible you become to potential claims. A publicly-traded buyer is likely to be less flexible on terms, but in any case you as a seller have also to consider that in a sale, you're most likely going to be forced to shift liability from your corporation to yourself personally. If you're prudent, as this seller was, you realize this creates a time period increased personal risk, despite your increased assets. Keeping this period as short as possible and limiting its scope and magnitude is your objective. A few limitations I can vouch for making it past public company scrutinity are 1. any dispute costing less than $X are not your responsibility. 2. a maximum liability limitation equal to the purchase price in cash / shares (in case share prices drops) 3. a time limit of two years or less. 4. escrow of a portion of the purchase consideration (shares and/or cash) as a warranty cap for the duration of the warranty, perhaps with release/reduction over time. The tax treatment of this arrangement would have to be considered carefully. Finally, it's worth noting that insurance for an acquisition deal may be available from big name insurers, likely for some low single-digit percentage of the deal value. However, their legal department will undoubtedly be more sophisticated in this area than your counsel, so at its worst insurance gives you little more than a contract with an insurance company over which to sue, likely at great cost. Overall, as lawyers always say, "it depends." Unless the deal and/or your resources are immense, likely it is a problem with no risk-free solution. If you're young and have nothing to lose, risk is an easier choice. For everyone else, all you can do is optimize based on present knowledge.
- overcast 11y ago$100,000 a year doing basically nothing, and you sold it for basically nothing. They made the deal of the year, and you lost out big time. I applaud this guy for creating something popular, and monetizing it well. But that is up there with one of the worst self offs I've ever read. With only $500,000 now you're on the five year crunch to get a new product built or find a new job.
- sixQuarks 11y agoThere's no guarantee that app would continue doing $100k a year - competitors pop up, platforms change, economy collapses, you name it. I think he did alright.
- overcast 11y agoSo rather than a chance that something may happen, you've guaranteed nothing will. The app could have just as well doubled its revenue. Selling out such an absolutely minimal work involved app is not worth the chance that the "economy collapses". Spend all that free time setting up apps on all platforms. You don't get anywhere without taking chances.
- rconti 11y ago$500k is nothing to sneeze at. Some folks get too wrapped up in how important they THINK their business (or stock options, or whatever) should be worth or might be worth. Rather than valuing them at what they're ACTUALLY worth.
- sixQuarks 11y agoHe has actually guaranteed that he will make $500,000. If that's nothing to you, then you're doing really well, congrats.
- kleinsch 11y agoIt's not a risk that the economy collapses, it's a risk that his app isn't the #1 search result for Spanish language bible in the App Store. Given the nature of App Stores, he's one Apple search algorithm change away from making $0/month. Someone else could launch a free app that provides the same content and features and make his paid app irrelevant. Five years worth of revenue is a lot compared to that risk. He also launched an Android version and it didn't blow up like the iOS version.
- trevmckendrick 11y agoTrevor here, creator of the Spanish Bible app. IkmoIkmo got this spot on in his/her comment. Biggest two mistakes people are making in this thread: 1. $100k was revenue, not profit. 2. I get capital gains rates on the sale, versus ordinary income rates. (If you didn't know about #2 you should probably sign up for my accounting and tax course for freelancers and entrepreneurs: http://trevormckendrick.com/accounting-course-for-entrepreneurs-and-freelancers/ http://trevormckendrick.com/accounting-course-for-entreprene...)
- pc86 11y agoIs your web server down?
- trevmckendrick 11y agoProbably. I'm long overdue for changing hosts.
- Veratyr 11y agoSorry if this is incorrect but wouldn't a better term be long term capital gains rates? Short term capital gains are taxed at ordinary income rates but they're still capital gains.
- trevmckendrick 11y ago:) Yes you are correct. I try to avoid details when higher levels of abstraction are sufficient for my audience.
- elcapitan 11y agoDo you have more information on how that course is going to look like? Are those going to be video tutorials, or some degree of interactivity like on Coursera?
- markdown 11y agoHave you considered developing an accounting or bookkeeping app, since that's obviously your domain?
- bpicolo 11y agoThat full page ad on first load is incredibly annoying
- giarc 11y agoI thought I had clicked on the wrong link.
- pklausler 11y agoAnother app idea for making money off Christians: the Rapture Alert, which would set off an alarm if a configurable proportion of its users suddenly vanish.
- bpg_92 11y agoCongrats!!! I got a small app and some ideas, stories like this make me want to pursue this fultime.
- ericjang 11y agoThis was a great read. Congratulations!
- bambax 11y ago> 8. If there is any content in the app who wrote it? Err... God?
- pbhjpbhj 11y agoGod wrote it with His Spirit in the hearts of the believers and they provided a translation in to [mainly] Hebrew and Greek, those that have translated those translations then created new copyright works (NASB, NIV, NKJV, ESV, Vulgate, etc., etc.). I think it's these later translators the question is concerned with. For example News International owns Zondervan who own the NIV copyright; I wish that those who got together to write the NIV (one of the most popular English language translations) would have used a CC license.
- titomc 11y ago@Trevor, Curious to know how did you get hold of the content for the Bible App. Did you purchase it or compiled it on your own ?
- nkrisc 11y agoThe first comment on his blog post actually asks that. Q: Yen Tan > I’m very curious – isn’t there copyright on the bible/ translated bible? How did you deal with that? A: Trevor > Great question. The first first I used was in the public domain. I also sold other versions later as in-app purchases, but I licensed those from their respective copyright holders (i.e. Biblica and The American Bible Society)