
The Inside Story of a Small Startup Acquisition - aaronbrethorst
http://www.softwarebyrob.com/2012/01/25/the-inside-story-of-a-small-startup-acquisition-part-1/
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TamDenholm
I'd like to see a marketplace for small acquisitions like this, flippa is full
of turnkey crap and i'd be more than willing to spend up to low 5 figures for
a decent small SaaS app or even buy one of the thousands of half finished apps
i know you guys all have.

So, if anyone's selling, email me. contact@myusername.com

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jckay
@tamdenholm - I am creating a company called Apptopia - we will be almost
exactly that. A marketplace to broker the sale of mobile app (micro business
acquisitions).

Have fantastic traction so far, and I have a handful of apps already for sale
if you were interested I am @jonathanckay.

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klbarry
I would also be very interested in this list, for myself and others. Email in
profile.

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dugmartin
More info here on the latest TechZing podcast -
[http://techzinglive.com/page/921/165-tz-interview-rob-
wallin...](http://techzinglive.com/page/921/165-tz-interview-rob-walling-
hittal)

~~~
highace
Ha, I had to lol at:

It's 3 o'clock in the morning and you get a call...

"hello?"

"yes, your server has gone"

Well worth a listen, there's plenty of juicy stuff and insights on the whole
process and decisions made that aren't mentioned in the blog post (yet, at
least).

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joshu
Sadly, this glosses over the actual acquisition process and details.

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rwalling
What else do you want to know? This is a multi-part series so I can go into
more detail.

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gameshot911
Personally, I'm interested in numbers. What was your opening offer, what did
the seller come back with? What did you settle on? (Totally understandable if
you're not comfortable sharing that information).

Also, user information would be great. # of users prior to purchase, # since,
changes in conversion rates, changes in revenue, etc.

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wtn
Yes, if you can go over the valuation methods each side used, that would be
very helpful to know, even if you don't share the cash figures involved.

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joshu
What both parent comments said. Plus terms, etc. I see a lot of acquisitions
but they're all SV style so I am curious what it's like.

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bryanh
Interesting, I feel like HitTail's previous condition is a bit like a site of
mine that has kind of been accumulating technical debt for a while:
<http://bitbuffet.com/>

There are users, they pay my rent, they use the service. Its just... flat. A
few bugs, various problems not worth the effort to rectify as a quick 1 minute
Django admin tweak solves the problem.

Maybe its time to finally visit Flippa or suck it up and revamp the damn
thing, any advice on going down this route?

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Flippa_com
Hi Bryanh. Interesting site. Drop a line to our support team if you do decide
to sell on Flippa as we'd be happy to come to the party and cover your listing
fee in this instance.

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bryanh
Wicked! Thanks guys!

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davidw
Speaking of taking something and rebuilding it, I'd like to see LangPop.com
sold to someone who will do something cool with it, and won't trash it. The
big caveat is that programmers are completely ad-blind, so I don't think that
site'll ever make any money on plain old advertisements. Better to use it as
an ad or bait for something else.

~~~
jcrites
Is there a way to send private messages on HN? I wasn't able to figure that
out.

I might be interested to acquire the domain from you. I may be happy to keep
it online without advertising as a public resource, depending on the total
traffic volume.

What kind of price are you looking for? Providing value to the community is
what I'm interested in; I'd be happy to operate it in a not-for-profit way.

~~~
davidw
If you click on "davidw", it takes you to a page about me. If you click on the
links, it'll take you to pages where you can find out how to get in touch with
me.

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keeptrying
I'm doing my own startup now and I would gladly buy my next startup. It just
saves a huge bunch of time as long as the code is in decent shape.

Again this is a story of someone seeing value where no one else does. That
seems to be key skill of successful entrepreneurs.

I met the founder of HitTail about 5 years ago. He seemed pretty bright and
they seemed be doing pretty well given the number of people they employed.

~~~
rwalling
The inventor of HitTail is very sharp - we're in touch every week or two as he
continues to have insights into this space.

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dennisgorelik
Traffic graph looks impressive:

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

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matdwyer
Maybe I'm missing something, but why is this a subscription app? Couldn't I
run this on my site for a month, find the long tail keywords I need to
improve, and then cancel? For most sites wouldn't the keywords generally stay
the same?

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rwalling
No, they vary pretty widely, even week to week. I have several years of
suggestions now and new ones continue to come up every week as I add new
content and my rankings shift in the engines.

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nickfromseattle
From what I know about SEO, it takes time. Why is the data useful if the
results are wildly changing from week to week?

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rwalling
The results are not changing wildly week to week, but you do receive new
suggestions frequently (depending on how much traffic you receive). And with
this kind of SEO (long tail), the point is that if you write a single blog
post or article focusing on the suggestion, you will rank on the first page of
the search engine within a few days. That's the point of HitTail - it picks
out terms you will very easily (and quickly) rank well for.

~~~
matdwyer
Interesting. I'm going to take the trial for a run shortly, may write a review
about it in the future.

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Soupy
Great article, thanks for sharing. I would have loved more information about
the acquisition process (maybe even including your initial email) because this
is the most interesting part to me. I would also like to know where the final
price settled between your initial offer and the 5x rebuttal (no need for
actual price, just a reference).

On a side note, amazing job with the redesign. The new hittail landing page
looks great. One thing I noticed however was that you have an extra checkmark
on the last row of the pricing page that doesn't seem to correlate with
anything. Done on purpose?

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rwalling
Cool; I'll try to cover the things you raised in part 2 or 3.

>>On a side note, amazing job with the redesign. The new hittail landing page
looks great.

Thanks!

>>One thing I noticed however was that you have an extra checkmark on the last
row of the pricing page that doesn't seem to correlate with anything. Done on
purpose?

LOL...that's awesome. I'm not sure how no one else (including me) has noticed
that. Removing it now; thanks for pointing it out :-)

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Blocks8
Thanks for sharing this story. I think it speaks to the commonly overlooked
notion that you should set out to build a business, not just a web product.
Details on which costs you chose to attack first (technical debt vs. free
subscriptions vs. UX) is something all web businesses should think about.

How does the original owner feel about the revamped HitTail?

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rwalling
>>Details on which costs you chose to attack first (technical debt vs. free
subscriptions vs. UX) is something all web businesses should think about.

Good point. I'll try to cover that in more depth in parts 2 or 3.

>>How does the original owner feel about the revamped HitTail?

Positive feedback all around, both from the original owner and developer (they
are different people). They've also made helpful suggestions along the way
since they know this space quite well. I think they are happy that HitTail is
getting a chance at a second life.

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pnathan
How is this a startup? Isn't this a failing product from a firm that got
acquired and turned around?

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idoh
If you define a startup as a business that has the capability of scaling well,
but hasn't scaled yet, then this fits.

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pcmyers
Interesting story; definitely differs from the conventional wisdom regarding
building it yourself. Reuse of a previously built codebase is something I can
approve of... especially if your competitors are constantly reinventing the
wheel.

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jamie_ca
Also, existing customer base and established brand identity are nice bonuses.

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lrobb
Rob - how do you make the decision between going to oDesk vs doing it
yourself?

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Ecio78
I think he explains it here: [http://www.softwarebyrob.com/2011/11/02/9-ways-
to-decrease-y...](http://www.softwarebyrob.com/2011/11/02/9-ways-to-decrease-
your-chance-of-bootstrapping-a-successful-company/) and here
<http://blog.asmartbear.com/virtual-assistant-startup.html> and here
[http://www.softwarebyrob.com/2009/07/14/one-of-the-most-
comm...](http://www.softwarebyrob.com/2009/07/14/one-of-the-most-common-
startup-roadblocks/)

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idoh
A very interesting post. I'm a product manager that isn't great at coding, but
I'm really good at dealing with remote teams / contractors. I've often
wondered if this is a route I could take, it looks promising.

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jaredmck
How does this deal with small sample sizes? The monthly visit numbers at each
payment level are fairly small, so I wonder what sort of conclusions can be
drawn from the sample sizes available.

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rwalling
The algorithm has analyzed 1.2 billion keywords and been optimized to work
well. If you get 1200-1500 uniques per month, HitTail will likely provide
enough value to make it worth the cost.

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codex82
Interesting, what data does the JS send back to HitTail (interested in scope /
privacy here)? Does it have any dependencies?

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rwalling
It sends back the referrer URL from the search engine that contains info like
what keyword was searched on, whether it was paid or organic, which search
engine, etc...

The JS doesn't have dependencies in terms of external libraries - self-
contained but it obviously depends on our server since it makes an async call
back to save the keyword data.

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akkartik
How does hittail work? Do you have to insert a piece of js into your site
template like for google analytics?

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rwalling
Exactly. Asynchronous JS snippet on your site (so doesn't affect page speed)
that sends analytics info back to our database, where our algorithm is able to
analyze it and make recommendations.

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harrisreynolds
Cool story. I'm looking forward to part 2!!

