
Ask HN: How do you sell the software of a failed business? - archivator
Hello,<p>My parents attempted running a holiday-booking venture that didn&#x27;t go anywhere. In the process, they had a fairly advanced web app built with things like custom refund policies and self-service registration for the hotels.<p>This web app cost a lot and it would be nice to get back some of that money, so how would you go about recovering the cost?<p>Any failed business sale forums I don&#x27;t know about?
======
barrkel
Bespoke software is a bit like building a one-off car. Some chunks, like the
basic framework (e.g. Rails ~= car engine) are commodity, but the bits that
are custom aren't really worth more than scrap metal to other people unless
their requirements are very similar.

And even then, if the people who were working on it aren't part of the sale,
the new owners are going to face a chunk of cost just getting familiar enough
with the project to alter it in the right direction. Most people will be
better off starting from scratch.

Unless what's been developed is a fairly complete and self-contained solution
to a common problem, I think it's hard to see it being worth much at all.

------
tzs
The first thing to do is figure out if they have the legal right to sell it.
If it was developed by a contractor the odds are very high that it is not a
"work for hire" and the contractor owns the copyright, unless there was a
copyright assignment in the contract. Saying in the contract that it is a work
for hire is not sufficient.

(I am assuming this was in the US)

Google "computer software and work for hire" for more info. Sorry for giving
no links, but I'm tapping this out on my iPhone while waiting for a take out
pizza to become ready.

------
pbmarcano
Not an expert in this aspect at all, but you could always try a site like
flippa.com...

From what I gather its just a place to bid on websites, apps, domains, etc.

~~~
sadkingbilly
Flippa is probably his best bet, but you'll usually only get a couple hundred,
depending on the site's ranking and traffic. Better than letting the domain
just expire though.

------
andrewdubinsky
Finding a large software player in that market (or a similar one) is a good
way to find a buyer.

-Find out who sells the big management systems. They often have projects that may extend into your market. It's cheaper for a big company to buy existing code that can be rebranded than to start from scratch, especially if you're willing to be flexible.

-Find consulting shops that work in that space with larger hotel chains. They might be able to sell this in and give you a success fee.

-Find a "founder" with sales/marketing experience willing to take this on as a real project. Lots of non-technical people in the space have connections, but no capital/product. You're basically bootstrapping their company with technology investment.

-See if there are 'resellers' or marketing reps that sell similar systems in the space. They might be willing to help you find a company that can market & support the product for you.

-Be flexible on how you get paid. For example, provide the code to market for 24 months for a percentage of gross sales. That would mitigate the buyer's risk, while still providing you with upside potential.

My experience in buying sites is that without customers, it's basically a huge
risk, so prices are very low.

------
mattm
For a point of view from the buyer's side, you may want to check out these
articles/interviews from Rob Walling regarding his purchase of HitTail.

You'll see what a buyer is looking for when they are looking to buy a site
which is mainly that there are customers. If you have none, like other people
have commented, it will be very difficult to sell the code for anything unless
you just happen to find someone who is looking to build the same thing and
could use your code as a shortcut.

Notice how all his due diligence questions are related to customers. There's
nothing about the code.

I can't remember where I heard it, but I think in the Foolish Adventure he
says the seller said she invested $1 million dollars into the site. Rob was
able to talk her down to $40 or $50k because, in his view, he was only paying
for the established customer base and Google page rank. Anything more than
that and he would have been better off building himself.

If you don't have any customers, unfortunately, you're just going to have to
accept that you're not going to recoup the investment. It's a sunk cost.

[http://foolishadventure.com/audio/online-business-for-the-
re...](http://foolishadventure.com/audio/online-business-for-the-rest-of-us-
rob-walling/)

[http://www.softwarebyrob.com/2012/02/28/the-inside-story-
of-...](http://www.softwarebyrob.com/2012/02/28/the-inside-story-of-a-small-
startup-acquisition-part-3/)

[http://techzinglive.com/page/921/165-tz-interview-rob-
wallin...](http://techzinglive.com/page/921/165-tz-interview-rob-walling-
hittal)

------
scrollaway
"Holiday booking" (tour booking, <insert stuff here> booking...) is a pretty
common need. You can trawl sites like peopleperhour.com and such to sell it to
people looking for this type of site; and/or adapt it to people with similar
needs.

------
hpvic03
You could try flippa.com

------
lnanek2
Unfortunately, there are thousands of sites for booking out there, although
honestly, most of them just use Expedia's rebadging API. I don't think the
software is worth anything. If the site has any level of traffic, though,
selling the site can bring something in (although by someone who will just
throw out the software and drop Expedia in to take advantage of the traffic)
and there are sites for selling sites/projects/businesses.

------
contingencies
With difficulty. From around 2006-2009 I ran a hotel reservation business in
six languages across China with 3,000 individual relationships, map
integration, digital fax integration, custom call-center, etc. Didn't sell any
of the software: didn't even try. Did, however, look at investors to take it
to another market. Ultimately though, I just moved on. Despite the time spent,
I look at it as cheap experience.

------
junto
Can you outline the app a bit more? I'm struggling to understand the target
market.

What can the app do exactly?

Where was it sourcing its hotels / flights / hire car data etc?

~~~
archivator
It was meant to be hotels in a single country, it's still operational at
[http://bookinbulgaria.com](http://bookinbulgaria.com)

In this business, the big competitors all reserve a bunch of rooms in the
hotels and manage their booking themselves. The hotel is then not allowed to
touch these rooms.

The model here was to give the hotels a reception-desk piece of software and
have them use it to maintain availability. A lot of the hotels that signed up
had nothing like this, so it was definitely a win for them. Armed with exact
availability, you can have a much better booking system (and of course, if the
hotel only wanted to give you a chunk of their rooms, they're perfectly
capable of doing that).

Hotels can sign up on their own (including local bank details, etc) and just
need to be reviewed before showing up on the site. It supports i18n, scheduled
payments, lots of bells and whistles.

The fact of the matter is that this failed because of market reasons (too
small a market, dominated by big players, primarily) but it may have a niche
somewhere else on this planet. :)

~~~
guidedlight
Is it possible to pivot into another market sector.

For example, holiday home rentals? bed & breakfast? car rentals? I think there
is a lot of potential in the car rental market... e.g. allow private vehicle
owners to rent out their vehicles. There are probably a few insurance details
to work out, otherwise it sounds like you have 80% of that sort of system
built already.

~~~
junto
I'm thinking the same.

My brother works in the travel software industry (for a big player) and that
market is an extremely hard nut to crack, unless you are coming at it with a
boat load of contacts and money.

The big tour operators (I know this from the European side) are quite well
tied into the bug boys contractually. They often will enforce sole-usage on
hotels to prevent this kind of side market entry your parents have attempted.
the hotels can be penalized or dropped from the operator's books, for simply
offering rooms outside the tour operator.

~~~
rwhitman
Interesting. I have a client who has a booking engine for their very specific
education tour company and have been wondering if I could port the software
for resale. They sell direct to the traveler no agents or 3rd parties so it
works well for them but I've been curious if this model is adopted widely..

I don't know enough about the larger industry and what barriers there are to
entry however. What kinds of tour operators in Europe are blocking entry to
the market? Is this just tour groups making certain hotels exclusive, or the
booking sites?

------
cnaut
The justin.tv/twitch/socialcam founders sold their first startup's site (kiko
- the first AJAX calendar) on ebay once it failed. The ending bid was over
$250,000. Not sure if ebay is the best place for this but it is an interesting
story. Flippa, as mentioned by someone else, also fills this role.

------
JSeymourATL
Consider the buyer persona (other independents in the hospitality industry in
emerging markets). Find forums, meetups, trade associations for those people.
Point of strategy, focus on the value, features, & benefits of this app to
potential buyers, versus discussing what you're trying to get out it.

------
jliptzin
How much money went into its development if you care to share?

------
sideproject
[http://sideprojectors.com](http://sideprojectors.com)

(I maintain the site. So let me know if you have questions!)

------
privatedan
What are you looking to get for it?

~~~
jtheory
I'm pretty sure the answer to that will be "as much as possible" \- the OP is
trying to find out what's possible.

------
rrggrr
eBay

