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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

by filvdg 10y ago

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.

brianwawok 10y ago
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?
- noahc 10y ago
  My understanding is that you would only pay $5k - $8k for something like that at most.
  - pc86 10y ago
    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.
- filvdg 10y ago
  My experience : 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
  - simonswords82 10y ago
    Where do you find the side projects to buy and how do you perform due diligence on them?
    - filvdg 10y ago
      I find the sites on the services mentioned in the article, Sideprojects and Flippa I do due Diligence myself , I have a good technical background and a good digital marketing background.
  - nulagrithom 10y ago
    Maybe a little off topic but, from Node to PHP? That's interesting. What's the reason?
    - filvdg 10y ago
      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
      - nulagrithom 10y ago
        Isn't that a full rewrite though? How much is salvageable? (Even more interesting is that I'm getting downvoted... has the hype pendulum swung that far?)
cven714 10y ago
How has that worked out for you? I hadn't considered profitable side-project from the buyers side until right now, curious to hear your experience.
kevindeasis 10y ago
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?

by filvdg 10y ago

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.

brianwawok 10y ago

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?

noahc 10y ago
My understanding is that you would only pay $5k - $8k for something like that at most.
- pc86 10y ago
  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.
filvdg 10y ago
My experience : 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
- simonswords82 10y ago
  Where do you find the side projects to buy and how do you perform due diligence on them?
  - filvdg 10y ago
    I find the sites on the services mentioned in the article, Sideprojects and Flippa I do due Diligence myself , I have a good technical background and a good digital marketing background.
- nulagrithom 10y ago
  Maybe a little off topic but, from Node to PHP? That's interesting. What's the reason?
  - filvdg 10y ago
    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
    - nulagrithom 10y ago
      Isn't that a full rewrite though? How much is salvageable? (Even more interesting is that I'm getting downvoted... has the hype pendulum swung that far?)

cven714 10y ago

How has that worked out for you? I hadn't considered profitable side-project from the buyers side until right now, curious to hear your experience.

kevindeasis 10y ago

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?