
Tips for selling your side project - jurgenwerk
http://codeandtechno.com/posts/tips-for-selling-your-side-project/
======
JosephCarroll
I'm the Director of Websites at Flippa.com, we're an online marketplace for
buying and selling websites, domain names, and smartphone apps.

To date, we've signed up 900,000 users and have done over $180,000,000 in
total transactions, and we've helped thousands of entrepreneurs sell their
side projects :)

If you're looking to sell a side project, my biggest tips are:

1\. Keep an accurate accounting of financials

2\. Install analytics and ensure it is capturing data correctly

3\. Be realistic about price expectations (ex. websites typically trade at
2-4x annual net profit).

If anyone has a website and is interested in getting a free professional no-
obligation valuation, you can simply visit: [https://flippa.com/deal-
flow/sell](https://flippa.com/deal-flow/sell)

I'm also happy to answer any questions people might have about selling a
website, app or domain. You can contact me directly at
joseph.carroll[at]flippa.com or you can simply respond to this thread.

~~~
marktangotango
The sibling comments snark to you is unwarranted, at the very least the escrow
service flippa provides adds significant value to the process of selling a
site.

I recently found a site on flippa, after the auction had closed, with no sale.
I've been unable to contact the owner. I'd really like to make an offer,
unfortunate for me! Any tips on that situation?

------
mgkimsal
"They’ll see the code, and if the code is shit, then you may be in trouble"

Has anyone EVER gotten "in trouble" for shit code? It's about 80-90% of
everything I've ever come across in the last 15 years. And frankly, probably
50-60% of what I've produced in that time also falls in that camp as well.
It's only been in the last 5-10 years that attention to code quality has
_really_ been on my radar, prompted in part because I've had to provide
support on stuff I wrote 10-15 years ago and ... it really opened my eyes as
to where I cut corners and the huge impact it can have.

~~~
inputcoffee
This sounds like "half of the code I see is below average".

Good code is rare because goodness of code is a relative measure against other
code.

~~~
mgkimsal
doesn't have to be. it can be measured against defined standards -
documentation, tests, clear naming, complexity metrics, etc. it's not just a
case of "half of everything is above average".

I used to compare my code to my previous code and other code I saw, and most
of the time it was 'good'. When I started comparing my code to more external
measures, most of my own code would now be 'poor', because of the external
things it didn't measure up to. Now, often, there were valid reasons for
cutting corners, but... that doesn't make the code itself better, it just
justified the poor quality.

~~~
inputcoffee
I agree with everything you've said in your reply but it does not contradict
what I said.

To be more specific, the "defined standards" (docs, tests etc) are measures of
what makes something better or worse. They aren't a measure of what is good.
What is good is if those docs, tests etc are superior to the docs, tests etc
of other code.

And we are right where back to the relative measure problem.

One could come up with an objective measure of "good" which would require a
threshold for these measures. Such a measure would require us to say that a
project is good if the docs are of such and such standard, the test coverage
>60%, the names can be understood by most people and so forth.

However, I think that standard would still be informed by what most people do.

To put it another way, if we waved a magical wand and everyone started
documenting and testing starting tomorrow, then "good" code would require
something else.

------
greenspot
Don't want to be too negative but the entire post could have been shortened to
'put it on Flippa'. Then, the other advice is quite obvious.

Flippa isn't bad but if your side project is good for anything and you want to
achieve a better price, do a small M&A process: Identify potential buyers
yourself, approach them and keep the approaches synced to create and keep up
competition. Also you could combine this manual leadgen with Flippa.

~~~
jcoffland
You mean spam people?

------
sideproject
Hello. I'm Eric and I run
[http://sideprojectors.com](http://sideprojectors.com)

Thanks for listing it on your article.

I suppose unlike other sites, SideProjectors is completely free, so no cost
for people to listing it and selling it.

Then the immediate question is "how do you make money?".

Well, I'm a developer and I run other businesses so, SideProjectors is...
really my side project. And it has been for almost 4 or 5 years.

I started SideProjectors at a local hackathon where we won a prize from
Freelancer! and it all started from there. It receives a constant flow of
projects each day and a number of projects have been sold since it started.

In terms of getting the most amount of exposure, I think personally, the most
important thing is providing as much detail as possible. It's likely to be
featured on the front page, it will show people that you are serious about the
project and if not being sold, people will at least message you asking many
follow-up questions.

I've been meaning to add a bunch of features to SideProjectors, so hopefully
it'll continue to improve!

~~~
justinlardinois
Are you going to sell SideProjectors on SideProjectors someday?

------
mpcovcd
I buy side projects -- if you have traffic / revenue, drop me a line with the
URL and some high level stats and lets talk.

~~~
methehack
Cool. How do you personally think about the value of a small project? What do
you look for? Does the ideal for you look something like "buy it, let it go,
it never needs anything, and you make more and more money, hoping one of these
will really take off". Or maybe you invest in care, feeding, and growth... Or
both...

I suspect many of us here have side projects, so understanding them as
investments would help us help someone like you, I'm guessing.

~~~
mpcovcd
There are two investment strategies when looking at a potential purchase
either (1) buy and hold or (2) buy and flip. The value of a small project
stems from its upside potential. At a high level it's important to consider
the niche, growth potential (is there room to improve the website, position in
market, etc), buyers personal experience, and quite importantly the current
and historical traffic and revenue.

It's important to note there are rarely any websites where anyone can "buy it,
let it go, it never needs anything, and you make more and more money, hoping
one of these will really take off." I can't tell you the number of times a
developer thinks this is true for their side project, overvalues it, and comes
back a few years down the road telling me they are looking to sell but now
with traffic and revenue 10x lower than what it used to be.

------
filvdg
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
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?

~~~
filvdg
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
Where do you find the side projects to buy and how do you perform due
diligence on them?

~~~
filvdg
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.

------
epx
Would it be wrong to use a finance-textbook approach e.g. recurring revenue
divided by a rate of return? (Or rate_of_return minus rate_of_growth, using
the Gordon model.) For example, if I get 1k/mo in ads, dividing it by (0.25 /
12) would result in a sale value of 48k.

The rate of return must reflect of course the high risk of the investment
(e.g. users may migrate to other app and revenue dwindles) and must also cover
the costs of app maintenance (every major release of mobile app takes some
maintenance in code, at least).

I used 25%/year as example but I am not really sure if it is too low (or too
high). Fact is, not many investments yield 25%/year.

------
news_to_me
How do you know what your side project is worth?

~~~
appleiigs
Typical valuation methods are: multiples, replacement value, comparable
transactions.

1) Multiples: a comment from Flippa says websites go for 2-4x annual net
profit, which is similar to a Mom&Pop operation. So if your side project made
$5,000 per year, then value would be $15,000 at 3x multiple.

I like to think about multiples in years. It'll take me 3 years to make my
initial investment back - then I think is that good or bad? Apple's stock
price to earnings is at 12.6 years, Amazon is at 99 years.

2) Replacement Value: if you estimate your time to be $100 per hour and you
could replicate the app/website + business in 1 month, then $100 x 8 hrs/day x
20 business days = $16,000.

3) Comparable Transactions: if you see projects similar to yours going for
$25,000, then that's what the market is saying.

------
rtcoms
People interested in buying website should also look at
[https://empireflippers.com/](https://empireflippers.com/).

P.S. I am not associated with them in any way.

~~~
jurgenwerk
Thanks, I'll add it to the article.

------
libeclipse
Whenever I have a project, I have this insatiable itch to stick it on my
Github. I love open source, so unfortunately I don't think I'll ever be able
to sell something I make.

~~~
imron
Open source doesn't mean you'll never be able to sell it.

Your belief that you'd never be able to sell the things you make just means
you aren't thinking creatively enough about how to sell it.

~~~
justinlardinois
Exactly. The first thing that comes to mind is that the brand identity of a
product may be valuable enough that the fact you can get its source code for
free doesn't have a huge impact on its value.

Of course this would require you to license it in a way such that the source
code is free but the brand isn't, a la PHP.

------
imtu80
Nice article. I'm looking for a (SaaS) side project to buy. Some thing that is
making $3k or more.

~~~
manuelflara
I'm in the same situation, and I haven't found any marketplace save for
Feinternational where you'd be able to buy something like that. Either you can
buy SaaS with million+ run rates (which of course cost a lot), or you find
mostly ecommerce/AdSense/affiliate type of businesses (Flippa etc).

------
charlesdm
Anyone interested in selling their SaaS app? Mainly looking for / interested
in projects generating between $10-35k in MRR. If so, shoot me an e-mail (in
profile). That probably doesn't classify as a side project anymore, though..

------
brianwawok
What did the site in the story sell for? Beer money isn't descriptive enough.

~~~
zachrose
Lower bound for someone who "really likes beer" is maybe a six-pack a week or
about $500 for the year.

Upper bound is maybe three fancy pints per day or about $7500 per year.

About the same range as a used motorcycle on Craigslist.

~~~
brianwawok
So let's meet in the middle and call it $3k?

If you value your time at $100 an hour, and had $1k in expenses total (servers
+ ads), you would need to have spent 20 hours or less on the project to "break
even"...

Seems like I would just leave the sucker up to get a few bucks a month vs
selling so cheap.

~~~
coldtea
> _If you value your time at $100 an hour_

Because very many programmers, even in the US, make 240,000 per year?
($100x8x25 _12). Or even $300-$350K, given all the overtime people do?

How about $30-$40/hour to be more realistic ($70K-$100K per year).

And how about, it's your side project, so you get to work on it whenever you
like, using whatever technology you like, from home etc, and those aren't
exactly hours you'd be able to bill to anyone (and because you also have a day
job, you wouldn't even want to take extra billable customer work).

>_and had $1k in expenses total (servers + ads), you would need to have spent
20 hours or less on the project to "break even"*

Or you need to like what you're doing, and know that you would have done
something similar anyway even if not to sell it, and thus consider the money
an extra bonus.

~~~
daveguy
Your hourly wage should be priced much higher than your wage for fixed yearly
employment because the time is inconsistent and there is overhead.

If you make $100k/year at a full time salaried job you should price your
hourly at $100/hr. This is why plumbers charge $80+/hr -- it is skilled labor
and the work is not constant and there is overhead.

You have to consider vacation time/benefits/overhead/etc. To estimate yearly
salary _at full employment of near 40hrs /wk_ is double the hourly x 1000 per
year. So a $100/hr wage is about $200k/year _if you are working a full 40hrs
per week on client work and there is no overhead_. This is never the case --
there is always overhead.

tldr: $100k/hr is not at all an unreasonable level for a software developer to
value their hourly time.

~~~
brianwawok
> tldr: $100k/hr is not at all an unreasonable level for a software developer
> to value their hourly time.

I was with you until you added the k to the last line ;)

But yes, I don't think looking at a dev thing and valuing my time as $100 an
hour is that far off. Even if it is off by $50 either way, it makes math
easier...

------
inputcoffee
I would love to buy someone's side project if there is negligible work to
maintain it (although then why would you sell it). But still if someone just
wants something off their plate.

------
olkid
I'd recommend using https for the sign up form to improve the conversion rate.
Some people(like myself) would be more likely to join.

Free certificates available from letsencrypt.org (no affiliation).

------
jmcgough
Built basically the same thing when I was looking for a decent office chair
(scrape craigslist and send me an email), though it lacked the nice front-end.

------
simonswords82
I have a UK SaaS web business I'm interested in selling. If you're interested
you can find my contact info in my HN profile.

------
JustSomeNobody
No we need an Ask HN for project ideas that sell.

