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My Show HN Project got acquired after 6 months
- jhow15 7y agoHi everyone, Josh here the writer. I’d like to give thanks to all the people here on Hacker News who supported the project during that launch and any questions or comments just let me know! The short version (summarized from the article): I spent 2 months building an app to detect trends. Launched as a Show HN and reached #1 on Hacker News (briefly!). Another 4 months growing and improving it but failed to monetize. But I got enough traction to get acquired by Brian Dean founder of Backlinko.
- leetrout 7y agoCongrats!
- jhow15 7y agoThank you!!
- toomuchtodo 7y agoCongrats. You didn't fail to monetize, you just pivoted to a different monetization method.
- jhow15 7y agoAhah - I like that. That's what I'm going to say from now on :)
- foo_in_bar 7y agoThat was a good read, now I want to try doing something myself. Thanks!
- jhow15 7y agoI'm glad I could help :) You should go for it!
- tozeur 7y agoFor the sake of all the other HN founders here building our own apps and trying to sell/monetize, how much did you get acquired for? I think it’d be super insightful to get a data point here.
- achenatx 7y agorecurring revenue is king. Typical valuations are 7-10X revenue (crazy right?) for a strategic acquisition. For example a friend of mine was doing about 3m in revenue (about break even) and I believe sold for about 15-20M (I forget the exact number). I think it took him about 8 years to get there. Another friend got a similar multiple on 7M in revenue. On the other hand I was talking to a founder last week about acquiring his company. he is doing about 1M in revenue and was asking about 600K. I dont think we can close before the end of the year so passed, but would definitely consider it if he is still available next year.
- tozeur 7y agoThanks for the info! I understand fairly well how software companies are valued. I, and probably many others, am just interested in a number/ballpark.
- shrimpx 7y agoMy guess is a few hundred thousand, like 3 or 4. It sounds like an acquihire with a decent signing bonus more than an acquisition.
- pc86 7y agoStrategic is the key word here, though, and this is only for tech. 80%+ of acquisitions will not be strategic in this context so even in tech it's very unlikely to get 7x top-line revenue. In many sectors, especially with brick-and-mortar businesses, 3-5x gross profit is more likely. In low- or mid-margin businesses this can easily be less than 1x gross profit for the last 12 months, let alone the tricks places like FE Int'l play like just multiplying the last quarter's revenue by 4 and calling that yearly revenue.
- throwaway_tech 7y agoNice work and congrats. Do you mind sharing the "x" multiple in the acquisition? I think in tech the norm is a 10-14x multiple for acquisitions...but this case seems different in a few way (6 months, no investors, etc...).
- criddell 7y agoIs your newsletter going to continue? If so, where is the signup? Also, I had never heard of unreadit.com before reading your article and it looks exactly like something I've wanted. Thanks for that! Congratulations and thanks for writing it up. It was a great read.
- jhow15 7y agoThank you - glad you enjoyed it! Yeah you can subscribe to stay updated here: https://explodingtopics.com/subscribe https://explodingtopics.com/subscribe We're going to make that much more prominent in the future, currently it's in the footer :) And yeah, unreadit.com is awesome and Fab the guy who made it's a really nice guy!
- bspammer 7y agoRegarding the data granularity, I'm curious if you ever managed to figure out how to get high granularity (daily) data over a large timeframe. For those who don't know, google "helpfully" changes the granularity for you when you request longer ranges, and normalizes the response so that the largest datapoint in any given range is 100, so you can't just concatenate consecutive requests. My very hacky attempt at solving this involves overlapping short range requests, and finding the scaling factor of best fit between them: https://github.com/bspammer/rebuild_trends https://github.com/bspammer/rebuild_trends I'd be really interested in hearing if there are better approaches out there to squeeze this data out of Google.
- jhow15 7y agoYeah you're spot on with those data limitations. I think the easiest solution would be to just store the more recent, granular data and accumulate that over time. But now way to get granular historical as far as I'm aware.
- pgutfreund 7y agoWhy professional bloggers as your target audience? There are several institutions I can think of that would pay a lot of money for near exclusive access to a more specialized version of what you've built
- a_band 7y agoCongratulations, Josh! This is a huge success for a six month project. Based on my experience with acquisitions, that was a very fair offer that you got.
- petercooper 7y agoNeat result. I've sold a few side projects over the years, it's always nice at first, though I've then ended up wondering "what if" as the years go by :-) This jumped out to me: We settled on an amount equivalent to how much I’d earn as a US-based engineer working 6 months, but then multiplied by X for the traction/success factor already achieved. It sounds like you have a pretty significant win here, considering there was no real revenue. I'm guessing we're talking at least $50k multiplied by something.. so not exactly pocket change :-)
- jhow15 7y agoThank you! And congrats on selling your side projects too :) You're pretty close there yeah - so it was a huge win! Especially given it had no revenue like you say.
- gingerlime 7y agoThanks for writing up the experience. With screenshots and explaining how things panned-out. Very interesting read! Curious about the secrecy about the price. I guess I'd feel awkward to boast about the specific price tag, but was there an NDA or something stopping you from naming the price? It's interesting how much you exposed and shared, but when it comes to $$s then it's usually a secret... :) not passing judgement at all, but just interesting to observe this (also on patio11's posts and I guess others).
- Infinitesimus 7y agoCongrats on executing so well and the sale! We often have so many "what if someone built xyz" thoughts and do nothing with them so I'm stoked you got off your bum and made this happen PS: it'll be funny if you use this to find the idea for your next product
- jhow15 7y agoThank you so much! That's actually exactly why I built it in the first place, so definitely going to be "eating my own dog food" with this for the next project idea :)
- swalsh 7y agoThis is a really cool project. To be honest, I think Brian got a steal on this. There's a ton of potential here, and I think if it was developed a bit more (developed from a business model point of view), there was potential to sell for a heck of a lot more.
- jhow15 7y agoHahaha - maybe he did! Completely agree it has huge potential. But I think I came out of it well too and still have a revenue stake :)
- kohanz 7y agoI think it's possible to be a steal for both. Brian has the unique position of being able to leverage this business into something far more valuable than what he paid for it (a road that would have been much longer, difficult, and riskier for Josh), while Josh got a sum for the business that far exceeds typical super-early stage SAAS valuations. There are probably many owners of SAAS businesses generating up to, say $3k in MRR (obviously, exact numbers are impossible to pin down), that would be thrilled with such an exit. It sounds like Josh also got to hold on to some of the upside while taking a bit of risk off the table. Seems like a win-win on the surface and with the experience Josh will get working with Brian, he may be able to grow his next venture to a later and more valuable stage. Kudos to both of them.
- jimmytucson 7y agoCool app! Curious about the data sources, or is that a secret sauce? For example, you have "google cloud platform" trends going back 15 years - does that mean you have 15 years of data from all your data sources? How do you backfill that?
- omarhaneef 7y agoFrom the medium article: "I needed something that could surface opportunities by automatically monitoring the web for new topics. So that I can then plug them into Google Trends. Heck, it could even check Google Trends itself so I don’t have to."
- jhow15 7y agoThank you! Yeah that's part of the secret sauce... but what I can say is that we monitor lots of different places: search, shopping, online communities looking for interesting topics and then we cross-check that against Google Trends data and curate topics ourselves.
- dbancajas 7y agoI'd love to try out this product. So just curious, is this another meta post to drive traffic to the site? Hehe. Congrats on the sale btw! It's not easy pulling the whole thing off.
- jhow15 7y agoHahaha - thank you! I did want to have the story on paper for myself to look back on, but some traffic is a nice bonus :)
- pidg 7y agoIt seems to be focused now on tech topics - is this going to remain the case?
- jhow15 7y agoRight now that's because of my founder bias, but we're looking to include more and more types of topics across health, business, marketing, fashion and so on.
- Schweigi 7y agoCongrats on the sale! Came here with the same comment. My wife has an online store for clothing/fashion and does it now manually to detect trends, think: "megan markle jacket". This tool would be super useful and save a lot of time. Btw. is the possibility of adding new topics currently down? Nothing seem to happen when clicking "Add a topic".
- joshdance 7y agoWhere do you source the data? Looking at Google Trends, the graphs don't match up at all with your graphs, so I assume you have another data source that you prioritize.
- jhow15 7y agoHi there, the graphs do actually match up - it's just the Google Trends default time period is usually different to ours. Plus the width and height of their charts make the chart gradients look flatter than ours :)
- deleted 7y ago[deleted]
- knicholes 7y agoI'd love to know how he literally shook hands over Skype video.
- losthobbies 7y agoI really enjoyed reading about this. Its cool to see someone get their side project out and get a bit of money too. Need to get out of my head and start working on my side project now....
- blunte 7y agoNot speaking negatively of Trennd or Josh - this illustrates the point that marketing skills are critical to success in these kinds of ventures, much moreso than development skills. Tenacity and willingness to expose oneself (at obvious risk of being told negative things) is requisite to achieving success like this so quickly (and probably also when done slowly).
- j_kao 7y agoThis 100%. Think of all the "bad" or "clunky" products out there (not to say that this is a bad product, it's a great idea) that we use every day at work - this is why there's the saying "Sales cures all."
- citilife 7y agoI think a large part of it has to do with design... I have a similar product offering: https://hnprofile.com/compare?search=AWS,GCP%20|%20Google%20Cloud,Azure https://hnprofile.com/compare?search=AWS,GCP%20|%20Google%20... We offer to businesses, have a few pilots, but the slickness of Trennd is probably something we'll copy. It was clearly easy to see how the UI helped here - congratz on the sale too (if you're reading this).
- micael_dias 7y agoIt would be nice to let me leave the website using the back button (chrome android)
- throwawaymath 7y ago> As for the acquisition number… that’s why you’ve read this far, right?! Yes. > We settled on an amount equivalent to how much I’d earn as a US-based engineer working 6 months, but then multiplied by X for the traction/success factor already achieved. And I also still have a stake in the project going forward. Working where in the US? Software engineers can make wildly different amounts of money depending on where in the US they work. Even within SFBA and NYC, a subset of companies pay significantly more than others as well. So why not just say the actual acquisition number?
- gowld 7y ago> Working where in the US? Doesn't matter, because it's multiplied by X plus equity. > So why not just say the actual acquisition number? Because he didn't want to say the number, but he wanted to say that it was high enough to justify his effort.
- throwawaymath 7y agoSo it's inconsequential that we don't know one of the variables, because the one it's multiplied by is likewise unknown? It's materially different to have an X multiple of an NYC salary versus an X multiple of an average US salary, for all values of X.
- reificator 7y ago> It's materially different to have an X multiple of an NYC salary versus an X multiple of an average US salary, for all values of X. Let X = 0
- netsharc 7y agoLet's say SF.. I'll say half a year's wage im SF is 100 - 125K. What's X? 4 to 10? So I'm guessing he got $500K to a million.
- throwawaymath 7y ago
- k__ 7y agoI don't understand this site. It only shows stuff from the past.
- Nairus 7y agoIt would be incredible if it showed from the future.
- ghostbrainalpha 7y agoYa, if this site could accurately predict future trends, it would have been worth..... at least.... (counts using fingers).... 7 times as much! *(Holds up 4 fingers)
- k__ 7y agoThen I don't get it. Nothing there is new information to me, so why would anyone pay for it?
- BaconJuice 7y agoDid you read the post? He literally highlights a use-case on the first half of his post?
- k__ 7y agoI used the tool and found it pretty useless, but you're right. What I know is just an idea, this tool is basically a validation of the feeling I have. Thanks.
- tw1010 7y agoGee I remember when this was first posted. I remember being jealous for not thinking of the idea myself. Can't believe it's been 6 months and that you've been acquired already. Really kind of inspirational and makes me realize what wonderful things I could have built in that span of time instead of, well, not shipping.
- psychometry 7y agoAll I want to know is why reddit is showing you ads for hurdy-gurdys.
- peteforde 7y agoAwesome, congrats! I've been subscribed to a similar service called Glimpse for some time. Who thought of it first? You seem to have very similar trends identified. The most recent issue contained: Tiktok lights, Air Fryer Chicken, Chiropractic Y Strap, and Heated Razors.
- deleted 7y ago[deleted]
- umlc 7y agoCongrats with the acquisition. Love how you pivoted into specific niche to gain more traction!
- md8 7y agoImpressive. What keywords did you track on Google trends?
- csomar 7y ago> We settled on an amount equivalent to how much I’d earn as a US-based engineer working 6 months, but then multiplied by X for the traction/success factor already achieved. And I also still have a stake in the project going forward. Why not just, simply, put the price? You know that most people are only, barely, interested in the "acquisition" price rather than the story of how you got there.
- whalesalad 7y agoNot always true. If you are a first time seller and you are trying to put a dollar amount on your product, it can sometimes be tough to do. There is the tangible value your thing provides but also all of the intangible value, the FOMO factor, etc... that can infuence things as well. This equation is totally unique to SV but the fundamentals transcend geography and industry. I certainly appreciate candor when it comes to these sorts of things.
- wolco 7y agoHow they got there is more interesting. In the end he got paid 60k + the value of 3000 emails + brand.. 3 dollars an email? 10000+ My guess is 75,000 + 5%
- csomar 7y agoIt's not interesting to me if I don't know how much he got paid for it. There is a difference between $10k and $120k. The way he worded it (engineer salary) is not quite useful as the range in the USA is quite wide.
- sintaxi 7y agoIt was nice of him to tell us as much as he did and as far as I'm concerned he did tell us how much he got paid. The answer is he made more than he would have working as an engineer over the same amount of time ("more" is based on the value of the brand and the email list). For reasons that should be obvious it's not more by a lot. > There is a difference between $10k and $120k How do you get 10k based on what he told us?
- Geee 7y agoIsn't it a clone of Glimpse (https://meetglimpse.com https://meetglimpse.com)? They seem to have monetized it pretty well.
- Papirola 7y agolooks like. anybody knows where do they get the raw data from ? I had a brief look at Google's public APIs and the closest I could find was trends. However, they do label some charts with searches per month....
- neonate 7y agoThe Show HN was https://news.ycombinator.com/item?id=20478339 https://news.ycombinator.com/item?id=20478339.
- eigenvalue 7y agoA couple suggestions: 1) it would be nice to have mouse hover-overs on the charts that show the exact date. 2) If something is highly cyclical (e.g., Ring doorbells seem to spike every holiday season), it's probably not right to say they have "peaked". I would suggest instead looking at the Year-over-year percentage change in the trailing 1- or 2-month period, and if that is also significantly lower, then you can more accurately say if something has peaked. 3) if the query in question is for a commercial product/company (e.g., Victure), then why not add a direct link to the company, which could be an affiliate marketing link? Seems like an obvious way to monetize this.
- __m 7y agoCongrats, so what’s your next project? ;)