5 ms·

Is it really that low? 1 times annual revenue? So BCC would be worth only a mid-five-figure number (not sure what your last reported numbers were)?

by ntaso 12y ago

peterjancelis 12y ago
1 times annual revenue is actually a bit high. I've seen affiliate sites sell for 4 to 6 months of revenue. The reason is that after paying for the labor to maintain it there is very little profit in those websites. You are buying a job basically. Also, it's not unheard of for a small physical business to make 10% profit margin and to sell for 10 times profit. So that's around 1 time revenue as well.
- prostoalex 12y ago
  There's a premium for established sites (user community, backlinks, PageRank) compared to brand new sites.
patio11 12y ago
It really is that low. BCC might get a slight premium because I have better options for buyers than Flippa, it has an exceptionally long history, and there's some value from association with me, but websites are not valued like businesses or startups. There exist plenty of excellent reasons why this is true: extreme risk from sites which are overly dependent on one or two traffic sources, implicit cost of operation often not being counted as a cost by the owner (BCC runs itself... It only requires the very occasional attention of a Rails-competent Ubuntu sysadmin. That's "free" to me but not free to the new buyer, and that sort of stuff adds up quickly when compared to five figure revenues.), transaction costs (time, training new owner or staff, etc) having to get recouped, a risk premium because it is a market for lemons and buyers feel that sellers may sell because of material no disclosed information like "I recently pissed off Google and the site may vanish from the Internet", etc. Ultimately of course things are worth what a buyer will pay you for them, but market is about 1X for "typical" sites at the moment.
- mtrimpe 12y ago
  > Ultimately of course things are worth what a buyer will pay you for them An example of that would be finding someone (or more likely them finding you) who needs to build your product and can choose between starting an $XX.000 development project delivering in X months or your product which is ready right now.
  - patio11 12y ago
    Yep. A telecom did that for Appointment Reminder within a week of launch day. They wanted to do what Square recently did -- acquire a drop-in offering to cross-sell to SMBs. Anecdata: they opened with a $100k offer. I said that I had built it to run rather than to flip, but that everyone has a price, and that I'd be unable to turn down a million. No deal happened, obviously.
    - pbhjpbhj 12y ago
      Just ignore if you're not happy answering, but do you regret asking for that specific sum or are you content that it was the right amount to go for?
      - patio11 12y ago
        I feel like I'm hijacking someone else's thread now, so ask me some other time.
      - clarky07 12y ago
        As far as I know patrick hasn't released sales numbers, but I'm confident that he's got to at least be glad he didn't take 100k for it.
- lifeformed 12y ago
  How would you value a site that has no current revenue but many users? Would it just be something like PAGEVIEWS * POTENTIAL_CPM * RISK_AND_DIFFICULTY_FACTOR? I'm sure it largely depends on the type of site, but I was wondering if there's any general concepts to keep in mind.
kareemm 12y ago
In consultation with several sources including website brokers www.feinternational.com, most apps in the mid-5 to low-7 figure revenue range go for 2-3x earnings (in this case, earnings includes any salaries the founders / owners draw). This was consistent with the app I sold back in Feb, which went for 2.x times earnings. Rob Walling's Startups for the Rest of Us podcast did an episode on this recently: http://www.startupsfortherestofus.com/episodes/episode-197-how-to-sell-a-web-application-with-guest-thomas-smale http://www.startupsfortherestofus.com/episodes/episode-197-h...
- sharemywin 12y ago
  but that's usually something with years of sales history. it gets real shaky with only a few days of revenue.
damoncali 12y ago
That depends entirely on the type of site and how you come by that revenue. For some sites, it may be high. For others, it's way too low.
- sharemywin 12y ago
  potential revenue growth is the only factor that would make things go up considerably.
deleted 12y ago
[deleted]
amorphid 12y ago
At this point, I'm thinking of HackerExperience as a your job, a job that you don't want at the moment. HackerExperience is a new job, which may or may not stick around, and that job requires a lot of time and attention. It also doesn't pay very much. How much would you pay for a high risk, demanding job with low pay? Once you can prove that spending $X on customer acquisition returns $X+something, then it'd be easier for me to think of HackerExperience as a scalable business. Until then, it's a speculative venture to me. Good luck on your journey! HackerExperience will give you some great stories to tell :)

Is it really that low? 1 times annual revenue? So BCC would be worth only a mid-five-figure number (not sure what your last reported numbers were)?

by ntaso 12y ago

Is it really that low? 1 times annual revenue? So BCC would be worth only a mid-five-figure number (not sure what your last reported numbers were)?

peterjancelis 12y ago

1 times annual revenue is actually a bit high. I've seen affiliate sites sell for 4 to 6 months of revenue. The reason is that after paying for the labor to maintain it there is very little profit in those websites. You are buying a job basically. Also, it's not unheard of for a small physical business to make 10% profit margin and to sell for 10 times profit. So that's around 1 time revenue as well.

prostoalex 12y ago
There's a premium for established sites (user community, backlinks, PageRank) compared to brand new sites.

patio11 12y ago

It really is that low. BCC might get a slight premium because I have better options for buyers than Flippa, it has an exceptionally long history, and there's some value from association with me, but websites are not valued like businesses or startups. There exist plenty of excellent reasons why this is true: extreme risk from sites which are overly dependent on one or two traffic sources, implicit cost of operation often not being counted as a cost by the owner (BCC runs itself... It only requires the very occasional attention of a Rails-competent Ubuntu sysadmin. That's "free" to me but not free to the new buyer, and that sort of stuff adds up quickly when compared to five figure revenues.), transaction costs (time, training new owner or staff, etc) having to get recouped, a risk premium because it is a market for lemons and buyers feel that sellers may sell because of material no disclosed information like "I recently pissed off Google and the site may vanish from the Internet", etc. Ultimately of course things are worth what a buyer will pay you for them, but market is about 1X for "typical" sites at the moment.

mtrimpe 12y ago
> Ultimately of course things are worth what a buyer will pay you for them An example of that would be finding someone (or more likely them finding you) who needs to build your product and can choose between starting an $XX.000 development project delivering in X months or your product which is ready right now.
- patio11 12y ago
  Yep. A telecom did that for Appointment Reminder within a week of launch day. They wanted to do what Square recently did -- acquire a drop-in offering to cross-sell to SMBs. Anecdata: they opened with a $100k offer. I said that I had built it to run rather than to flip, but that everyone has a price, and that I'd be unable to turn down a million. No deal happened, obviously.
  - pbhjpbhj 12y ago
    Just ignore if you're not happy answering, but do you regret asking for that specific sum or are you content that it was the right amount to go for?
    - patio11 12y ago
      I feel like I'm hijacking someone else's thread now, so ask me some other time.
    - clarky07 12y ago
      As far as I know patrick hasn't released sales numbers, but I'm confident that he's got to at least be glad he didn't take 100k for it.
lifeformed 12y ago
How would you value a site that has no current revenue but many users? Would it just be something like PAGEVIEWS * POTENTIAL_CPM * RISK_AND_DIFFICULTY_FACTOR? I'm sure it largely depends on the type of site, but I was wondering if there's any general concepts to keep in mind.

kareemm 12y ago

In consultation with several sources including website brokers www.feinternational.com, most apps in the mid-5 to low-7 figure revenue range go for 2-3x earnings (in this case, earnings includes any salaries the founders / owners draw). This was consistent with the app I sold back in Feb, which went for 2.x times earnings. Rob Walling's Startups for the Rest of Us podcast did an episode on this recently: http://www.startupsfortherestofus.com/episodes/episode-197-how-to-sell-a-web-application-with-guest-thomas-smale http://www.startupsfortherestofus.com/episodes/episode-197-h...

sharemywin 12y ago
but that's usually something with years of sales history. it gets real shaky with only a few days of revenue.

damoncali 12y ago

That depends entirely on the type of site and how you come by that revenue. For some sites, it may be high. For others, it's way too low.

sharemywin 12y ago
potential revenue growth is the only factor that would make things go up considerably.

deleted 12y ago

[deleted]

amorphid 12y ago

At this point, I'm thinking of HackerExperience as a your job, a job that you don't want at the moment. HackerExperience is a new job, which may or may not stick around, and that job requires a lot of time and attention. It also doesn't pay very much. How much would you pay for a high risk, demanding job with low pay? Once you can prove that spending $X on customer acquisition returns $X+something, then it'd be easier for me to think of HackerExperience as a scalable business. Until then, it's a speculative venture to me. Good luck on your journey! HackerExperience will give you some great stories to tell :)