
Sortfolio lives - gr366
http://37signals.com/svn/posts/3196-sortfolio-lives
======
Sortfolio
I'm part of the team that bought Sortfolio.

We'll be doing a more formal announcement and proper introductions soon, but
there are a couple of things we wanted to add to this discussion.

First, we are thrilled to be at the helm of Sortfolio. We have a lot of
experience in the area and are excited about the plans we have for it.

Second, the guys at 37signals were a pleasure to work with. They were open,
transparent, and are committed to the success of Sortfolio.

We'll be doing the full transition in the weeks to come. Once we are all done,
we'll post a proper retrospective and fill everyone in on the details.

We can't wait to share more!

------
shazow
There were so many unanswered questions in the Flippa posting and the HN
"peanut gallery" that it makes me feel like 37signals was never looking for
new buyers.

Perhaps they already had a buyer in mind and just needed some negotiation
leverage or wanted some free publicity.

I imagine people who were genuinely interested in bidding for Sortfolio feel a
bit cheated with this announcement coming out of the blue.

~~~
dhh
Here's another wild theory: The buyers contacted us directly, got the answers
to the questions they sought, and closed the deal.

Also, this is not out of the blue. We lost interest in considering all sorts
of complicated deals a while back. So we told everyone that the price was
$480K and that the deadline for closing a deal was July 1st:
[http://37signals.com/svn/posts/3172-sortfolio-going-once-
goi...](http://37signals.com/svn/posts/3172-sortfolio-going-once-going-twice)

So there was really no "bidding" after that point. It was quite simple: Give
us $480K and the site is yours. The new buyer's did just that. End of story.

~~~
richardv
Why are you always so bitter to people asking straight questions?

If you didn't want people to draw their own conclusions then you should have
acted responsibly and made some attempt to answer and respond to the questions
posted on sale page.

If you had no intention of providing this additional information because it
was not worth your time, then you should have made it clear to people that no
additional information would be forthcoming.

Instead, all the "chinese whispers" of people throwing ideas around seems to
have really got you disgruntled, when you only have yourself to blame, and
then you take your arrogance out on people asking straight and to point
questions.

Do I think you got the $480k asking price? _shrugs_

~~~
FuzzyDunlop
Given several potential dates, you don't court them all equally.

~~~
jaylevitt
I think it's unfair to expect any of us on HN to understand this metaphor.

------
floydprice
I really don't understand the negativity around here for this, is it really
that hard to believe that somebody paid good money for a profitable business?
Now clearly 27 Signals have moved slightly from the original flippa terms,
they are not imposing that customers re-ender details which I imagine was a
show stopper for any potential buyer.

The subtext to some of the comments here suggesting that its all made up, is
really odd! Why would 37 Signals even need to waste ours or their time making
this up? They run Basecamp!! they really don't need to impress us with selling
a relatively small business! its completely beneath them!

Instead of poking holes in this story, we really should be celebrating it.
Building a business of this size is not that hard, a few hundred customers and
a solid model and by solid model i mean, Charging for your product is all it
takes. If this doesn't serve as inspiration to us all then i don't know what
will.

------
gr366
I don't know if they ended up being the acquiring party, but one of the people
seriously considering the purchase reached out privately to my company (a
Sortfolio customer), with a few short questions. It was a polite email that
made it clear they were looking for opportunities to improve the service (as
well as address the original concerns about credit card info not carrying
over), so I was happy to provide my feedback. I'm happy Sortfolio has been
acquired and plan to stick with the service.

------
ForrestN
Wow! From DHH in the comments, it appears it did sell for the full asking
price. Very curious to know more about the new owners. Buying a business
outright and then running it isn't a scenario that gets covered very often on
the startup behind-the-scenes circuit.

Here's hoping we get some follow-up posts about how it goes for the new owners
on SVN.

~~~
dhh
Yes, despite the HN peanut gallery's perception of the world, there is
actually a market for profitable businesses. It's surely less exciting than
selling your no-revenue photo service for a billion dollars, but that's ok.

We'll be sure to follow the life of Sortfolio after the sale.

~~~
citricsquid
uh, you are aware the majority of negativity and questioning about the asking
price was because you did not at any point answer whether or not billing
information (and subscriptions) would be kept, even when people on the Flippa
auction requested this information?

If you'd said from the start this was the case you'd have got many more bids,
on HN alone I saw many comments from people stating they would bid if this was
the case.

Maybe I missed something big or I'm not aware of something, but this was what
the negativity was about, not the fact that the site is worthless and can't
sell.

~~~
jasonfried
Anyone who was a qualified buyer, and asked privately, got the answer. Lots of
people asked privately. We even put serious buyers in touch with our credit
card processing company so they could get additional questions answered
directly.

~~~
citricsquid
The comment implied that the average HN user doesn't have the capacity to
understand how business works, but the information the buyers had is not what
the public had, that's a bit... disingenuous.

~~~
tptacek
The average HN user _certainly_ doesn't have that capacity. Come on.

~~~
ThomPete
Now that's disingenuous. :) I am pretty sure you know what was meant.

------
Smudge
_That’s correct. Customers will not have to re-enter credit cards or do
anything. This is pain free for customers._

This is good. Sortfolio may not have been worth the $480,000 otherwise. I
imagine that requiring customers to re-enter their info would cause an
immediate drop in the number of paying customers.

~~~
Travis
I agree that it would affect the final number, and probably adjust short term
revenue (and thus value). However, I also think it's a misplaced (but common)
mindset that short term revenue determines valuation.

If Sortfolio provides significant value to its paying users (customers), they
won't lose a great proportion of their revenue on CC re-entry. Those who don't
re-enter billing info are the people no longer getting regular value from the
product.

Folks, this is a huge success! It's a company that bootstrapped themselves
(and get some credit for many other bootstrappers, myself included) and found
an exit strategy that's a win for all parties: they make money. The buyer has
a business that provides real world value to its customers. And the customers
will continue to receive their value for dollars spent. (How many articles
bemoan buyouts that are "bad for original customers/early adopters/etc."?)

Let's just take a moment and appreciate a successful exit. Everyone wins --
the founders, the buyers, AND the customers.

------
dylanhassinger
I think 37s is well within their rights to do this however they wanted. But
still feels lame, how it all went down.

Current sortfolio customers got told clearly, 37s doesn't care about their
business. Users of other ones of 37s' 'second-tier' products got a warning
shot: your tool could be shut down or sold off any day. 37s hasn't revealed
the new buyer, and appear to be hands off from here on out.

Just seems like a lot of value has been lost here. I think a better way to go
would have been trying to find a strategic partner, and taking a longterm
equity stake. Or bundling up Sortfolio, the 37s Job Board and The Deck into a
new advertising company, with a CEO who will grow it. Something where the
handoff can grow the legacy, instead of 37s washing their hands.

Instead Sortfolio lives, 37s got their money, but the whole thing feels icky.
my 2 cents, no conspiracy theory

------
consultutah
Man. Is it jealousy or just blind hate?

When I first read their blog post I was quite interested. I mean, here was a
profitable business built by a well known company.

The only really unanswered question was whether or not existing customers
would need to re-enter their payment information. I asked the question and
recieved a prompt response.

I'm sure I would have had more questions if I could have convinced my partners
to pony up their share of cash. But in the end, the deal wasn't for us.

Congratulations on the sale and congratulations to the new buyers!

------
kondro
I don't know why everyone thinks the company was overvalued. $480k seemed like
a steal to me and if we weren't in the process of purchasing another business
when I saw this deal come across the Internet, we would've submitted an offer
too.

------
dennisgorelik
Does anyone have an explanation why it wasn't possible to sell Sortfolio when
it was more popular, but suddenly at the deadline the deal materialized at the
price that it was announced long time ago?

According to Compete.com, in the last 12 months Sortfolio traffic decreased
more than 75% (4 times):

<http://siteanalytics.compete.com/sortfolio.com/>

~~~
rkudeshi
Same reason so many people are at the post office at midnight on April 15th
filing their tax returns.

Deadlines work.

------
aeurielesn
I would like to see how this developed from [1] to this sale. It seemed
improbable back then.

[1]: <http://news.ycombinator.com/item?id=4087116>

~~~
thaumaturgy
I'd like to see that too, just for curiosity. I expect that'll be up to the
new owner though.

> _It seemed improbable back then._

Naw. You have to keep in mind that the HN community has gathered around a very
specific way of doing business. Where people start to make a mistake is in
thinking that this is how the rest of the world works too, and that there
isn't any other way to do business.

There is still a huge amount of activity in the business world that revolves
around long-term, sustainable, profitable businesses, especially those coming
from people with the kind of reputation that 37Signals has. It's just that all
those people don't have their own little online community where they share
notes.

(If 37Signals offered such a community, I'd sign up in a heartbeat and my HN
activity would finally finish it's long descent to 0.)

I didn't think it was improbable. 37Signals knows what they're doing.

------
chawkins
I was really, really skeptical that they'd be able to get full price. But sure
enough, DHH responded to my comment and confirmed that they did. That's pretty
amazing.

Now we'll see how the site does once it is no longer associated with 37s.
Maybe we'll be surprised again. it would be great to see Sortfolio thrive in
the long-term.

------
jpastika
Am I the only one here on HN that finds the whole 37Signals vs HN battle
entertaining? DHH makes a direct (sometimes arrogant) comment, HN jumps all
over him, Jason "clarifies", and HN hugs Jason. DHH and Jason seem to have
contrasting personalities which is probably an important contributing factor
to their success. DHH says what he thinks, whether we agree with him or not
isn't the point. Jason calms the storm. I'm happy for the Sortfolio customers
who see value in the service continuing. I'm also glad that 37Signals shared
at least some of the details behind the sale and the process. But most of all,
I'm entertained!

------
mhartl
I'd still be interested to know the motivation for their process. If someone
made a firm offer of $450K, it doesn't make any sense to shut down the service
just because they didn't meet the $480K requirement. That would flush $450K
down the toilet. The obvious solution is an auction, not an ultimatum.

I'm generally a defender of 37signals' methods, but it seems they didn't think
this one through. They're lucky they found a buyer—it saved them a lot of
embarrassment.

------
raheemm
Reading all these comments I feel sorry for 37S. I guess this is the downside
of having a successful blog - people get to have an opinion about you.

37S gets to sell Sortfolio in whatever fashion and to whomever they want. Oh
man... you guys should try to rent an apt in NYC.

------
jpalomaki
One should probably view this in context of 37's other businesses. Spending
lots of time and effort to squeeze few extra dollars from website sale may not
be worth it if your core business is something else and generating much higher
profits.

------
junto
_37S: You need to pay us $480K. We advertised this price publicly and kind of
went on and on about sticking to it.

Buyer: Umm ok, how about we pay your $480K publicly and you quietly give us
$430K in 37 Signal's stock?

37S: Deal._

In all seriousness I'm a big admirer of 37 Signal's and I like their equity
grants concept[1] for employees. This above is meant as a joke.

[1] [http://37signals.com/svn/posts/2987-an-alternative-to-
employ...](http://37signals.com/svn/posts/2987-an-alternative-to-employee-
optionsequity-grants/)

------
ommunist
I never liked it before, and I do not believe it has a future. UK represented
very poorly there anyway.

------
stevebenjamins
Oh man. What's with all the conspiracy nonsense? 37 Signals have been nothing
but transparent through this entire process. Hopefully these HN comments are
not an accurate sample of what most people are thinking.

