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Why do software companies shut down like this instead of finding someone that may be interested in taking it over? All I ever see are notifications of services

Why do software companies shut down like this instead of finding someone that may be interested in taking it over? All I ever see are notifications of services shutting down, many of them "labors of love" that have been around for X years. Why not find someone that will take it over and keep your dream alive?

DangerousPie 6y ago
Presumably they tried and failed.
- toomuchtodo 6y ago
  Or overvalued the business and/or assets. “Welp, no one wants to pay asking price, nuke it” when it could’ve lived on as a one person shop at a lower sales price.
  - asdfasgasdgasdg 6y ago
    If the value of the site were enough that they could make any money after transaction and transition costs, they would likely have taken that step. Given the time horizon on which they are shutting down, I would guess that they have been out of money, and that the service makes less than it costs to run even with a skeleton crew. Another comment in this post cites information that confirms this.
    - rhizome 6y ago
      > If the value of the site were enough that they could make any money after transaction and transition costs, they would likely have taken that step. ...if it occurs to them. They have to do the calculations in order to make that decision, after all.
      - asdfasgasdgasdg 6y ago
        You don't have to guess whether it occurred to them, since you can read the information in the other comment. https://news.ycombinator.com/item?id=23805099 https://news.ycombinator.com/item?id=23805099
jsnell 6y ago
Handing over a site with user data requires a lot of trust in the new owner. If they were not vetted and turn out anot good stewards of the data (e.g. end up hacked with all the databases leaked, even if not actively malicious), some of the moral culpability lies with original owners. User data is toxic. It's your responsibility to make sure it gets disposed of properly when winding down a failed venture.
- rhizome 6y ago
  > If they were not vetted and turn out anot good stewards of the data (e.g. end up hacked with all the databases leaked, even if not actively malicious), some of the moral culpability lies with original owners. I appreciate your point, but I'm struck by the impression that this never results in consequences.
  - jsnell 6y ago
    That's why I wrote the "moral" part there. I agree that it's basically guaranteed there will be no legal consequences, but you'll still know it was your fault.
    - rhizome 6y ago
      Capital is amoral, though. Which, I appreciate your point, but it's literally not a term in any capitalist transaction. Ethics? There's a reason why people make jokes about "Business Ethics" being the shortest class in any Business major curriculum. You can advocate for inserting religion, PBCs, or any number of "hey come on guyz" strategies, but none of it carries any significance. I'd certainly like to hear of post-Industrial Revolution capitalists taking shame or guilt into account.
      - vikramkr 6y ago
        Creators might have another venture they want to work on in the future. Being seen as amoral could increase customer aquisition costs and lower lifetime NPV
- 6y ago
kolinko 6y ago
Having been in a similar spot - user data and reputation. If you spent a bunch of years building a site, you really want to trust someone to not exploit the site by spamming users and so on. Even if the site is sold, your reputation will still suffer if the new owner has a data leak or starts selling user data. Also, a bunch of people will say that they want to take over the site, but finding someone that you think is competent enough to maintain it is really difficult. In my case, I tried two different people and both of them made some really bad decisions regarding the design during the trial period.
adamcharnock 6y ago
Having also been in a similar spot, it was a combination of things: 1) I just wanted to be done with it, I was totally sick of the project and wanted to move on with my life, and 2) the money offered wasn’t that great, and 3) it would have had to be decent money to persuade me to be involved in the handover (which would have been required).
tzs 6y ago
It's costing them 10k/month to run it, and they are getting 1.5k/month revenue from it. Now it is quite possible that they are using more server resources and bandwidth than are actually necessary to support their current users and the current usage patterns of those current users. But there is quite a gap between 10k/month and 1.5k/month, so if you take it over with the intent of making it profitable as opposed to simply making it less unprofitable you are probably going to have to find a way to increase revenue substantially even if you can reduce costs. It's hard to see a good way to do that. Their revenue comes from ads shown to their free users and subscription fees from the users who have paid for an ad-free experience. To increase ad revenue you can either try to get advertisers to pay more per ad or show more ads. Getting advertisers to pay more seems unlikely. It's too random a user base to really be valuable. Showing more ads might increase revenue. But it might also make the experience for free users worse, leading some to leave. Free users leaving does reduce operating costs a bit...but if it also reduces new content, it might make the experience worse for paying users, so you might lose some of them. How about increasing subscription revenue? Maybe you can impose limits on free users to encourage them to subscribe--but that might drive some away. Maybe raising subscription prices would work...or maybe lowering them so more buy them would work. Or maybe adding features for subscribers beyond ad-free would entice more to buy. The problem is that you can't really tell how well any of these things will work. All you know for sure is that they have somehow built a user base of 6 million apparently somewhat satisfied users and if you take over you are going to have to poke it with a few sharp sticks to get it going the right way and hope it doesn't get too annoyed.

DangerousPie 6y ago

Presumably they tried and failed.

toomuchtodo 6y ago
Or overvalued the business and/or assets. “Welp, no one wants to pay asking price, nuke it” when it could’ve lived on as a one person shop at a lower sales price.
- asdfasgasdgasdg 6y ago
  If the value of the site were enough that they could make any money after transaction and transition costs, they would likely have taken that step. Given the time horizon on which they are shutting down, I would guess that they have been out of money, and that the service makes less than it costs to run even with a skeleton crew. Another comment in this post cites information that confirms this.
  - rhizome 6y ago
    > If the value of the site were enough that they could make any money after transaction and transition costs, they would likely have taken that step. ...if it occurs to them. They have to do the calculations in order to make that decision, after all.
    - asdfasgasdgasdg 6y ago
      You don't have to guess whether it occurred to them, since you can read the information in the other comment. https://news.ycombinator.com/item?id=23805099 https://news.ycombinator.com/item?id=23805099

jsnell 6y ago

Handing over a site with user data requires a lot of trust in the new owner. If they were not vetted and turn out anot good stewards of the data (e.g. end up hacked with all the databases leaked, even if not actively malicious), some of the moral culpability lies with original owners. User data is toxic. It's your responsibility to make sure it gets disposed of properly when winding down a failed venture.

rhizome 6y ago
> If they were not vetted and turn out anot good stewards of the data (e.g. end up hacked with all the databases leaked, even if not actively malicious), some of the moral culpability lies with original owners. I appreciate your point, but I'm struck by the impression that this never results in consequences.
- jsnell 6y ago
  That's why I wrote the "moral" part there. I agree that it's basically guaranteed there will be no legal consequences, but you'll still know it was your fault.
  - rhizome 6y ago
    Capital is amoral, though. Which, I appreciate your point, but it's literally not a term in any capitalist transaction. Ethics? There's a reason why people make jokes about "Business Ethics" being the shortest class in any Business major curriculum. You can advocate for inserting religion, PBCs, or any number of "hey come on guyz" strategies, but none of it carries any significance. I'd certainly like to hear of post-Industrial Revolution capitalists taking shame or guilt into account.
    - vikramkr 6y ago
      Creators might have another venture they want to work on in the future. Being seen as amoral could increase customer aquisition costs and lower lifetime NPV
6y ago

kolinko 6y ago

Having been in a similar spot - user data and reputation. If you spent a bunch of years building a site, you really want to trust someone to not exploit the site by spamming users and so on. Even if the site is sold, your reputation will still suffer if the new owner has a data leak or starts selling user data. Also, a bunch of people will say that they want to take over the site, but finding someone that you think is competent enough to maintain it is really difficult. In my case, I tried two different people and both of them made some really bad decisions regarding the design during the trial period.

adamcharnock 6y ago

Having also been in a similar spot, it was a combination of things: 1) I just wanted to be done with it, I was totally sick of the project and wanted to move on with my life, and 2) the money offered wasn’t that great, and 3) it would have had to be decent money to persuade me to be involved in the handover (which would have been required).

tzs 6y ago

It's costing them 10k/month to run it, and they are getting 1.5k/month revenue from it. Now it is quite possible that they are using more server resources and bandwidth than are actually necessary to support their current users and the current usage patterns of those current users. But there is quite a gap between 10k/month and 1.5k/month, so if you take it over with the intent of making it profitable as opposed to simply making it less unprofitable you are probably going to have to find a way to increase revenue substantially even if you can reduce costs. It's hard to see a good way to do that. Their revenue comes from ads shown to their free users and subscription fees from the users who have paid for an ad-free experience. To increase ad revenue you can either try to get advertisers to pay more per ad or show more ads. Getting advertisers to pay more seems unlikely. It's too random a user base to really be valuable. Showing more ads might increase revenue. But it might also make the experience for free users worse, leading some to leave. Free users leaving does reduce operating costs a bit...but if it also reduces new content, it might make the experience worse for paying users, so you might lose some of them. How about increasing subscription revenue? Maybe you can impose limits on free users to encourage them to subscribe--but that might drive some away. Maybe raising subscription prices would work...or maybe lowering them so more buy them would work. Or maybe adding features for subscribers beyond ad-free would entice more to buy. The problem is that you can't really tell how well any of these things will work. All you know for sure is that they have somehow built a user base of 6 million apparently somewhat satisfied users and if you take over you are going to have to poke it with a few sharp sticks to get it going the right way and hope it doesn't get too annoyed.