Money July 9, 2020

How to sell a side project

Anthony Castrio @AntCas

Last week we invited Helen Ryles to Indie Worldwide for a Q&A on how to sell your startup.

Unfortunately, our recording of the meetup failed, so I've reconstructed the meetup here as an IH-style interview based on my notes and squeezing the memories of other attendees.


Introduce yourself, give an overview of your story so far.

Helen Ryles, currently working as a Product Manager and building and selling side projects.

Where do you source your buyers?

Buyers sourced from Indie Makers, Indie Hackers, and communities specific to the project.

Some of my best deals came from reaching out to people I knew would be a good fit.

Don't take it personally when someone gives you a lowball offer, it's just business. You're free to decline bad offers and hold out for what you think the project is worth, or take the deal if it's close enough.

Is it any harder to sell a no-code project that a code project? What are the differences?

No-code projects surprisingly can fetch a higher price than code projects because no-code projects have a larger potential market of acquirers. To sell a code project the buyer has to be able to program themselves (in the same languages you used) or have the money to hire someone who can. That narrows down how many people can buy your side project.

When someone buys a side project, what is it that they're buying typically? Users, Tech, a Mailing List?

Any or all of the above. You need to make it very clear what is included in the sale. Buyers often presume something is included that's not, ie they might assume you have a big email list that can market to right away when you've been doing all of your marketing in forums.

Saas usually sell for 3-4x annual profits.

Consider the following: Does the purchase include an email list? Does it include social accounts? Does it include the original owner being present for the next 6-12 months as part of the handover?

Do you use escrow?

If it's an amount of money that's important to you then consider escrow. For some reason buyers who don't require escrow have been less likely to fall out of the deal than buyers who did want escrow. Same with lawyers and contracts, if it's a smaller deal (below ~$10k USD), you don't necessarily need a lawyer as long as the terms of the deal are clear. You'll have a paper trail of emails as well.

Bigger deals, yes get a lawyer. Use escrow.

Logistics?

Deal signed, transfer domain (Can take a few days), take payment, then transfer the rest of the assets (all designs, code etc in a zip file).

I value privacy so I try not to use Google Analytics on my side projects.  Will that make it harder to sell if I don't have third-party stats to show a buyer?
-- Marc LG

You can often get aggregate stats at a higher level, your DNS provider or a CDN. Analytics is not a must, but not having them might reduce your number of buyers, consider activating it 30 days before listing to get the best price for your project. If you don't have any analytics then you'll need to use other proof of traction. For example: sales.

How many users do you need to get for a product before you can sell it? Is it possible to sell a product with no users yet?
--Chris Tsongas

There are buyers for your project at any amount of traction. It's possible to sell a project that has no users. I've sold a project that was just a "packaged up idea", I'd built it but never launched.

Example Valuations:

iOS app making ~$3k MRR, positive reviews, great landing page with social proof. ~$50,000

Community product with $1k MRR, ~$10,000. The handoff might be tricky if you're the face of the community. You might need to turn down deals in order to find the right person to hand off to if you want the community to survive. Including a drawn out handover faze where you introduce the new person to the community.

Insurance related tool with $0 MRR and a few users per day. Possibly up to $1k if you can find the right buyer and make a case for how it could be grown into something larger. e.g. used as a lead generation tool for an accounting firm. Maybe invest in writing some blogposts to drive more traffic before considering a sale.


Join the next Indie Worldwide meetup: https://indieworldwide.co/

  1. 3

    It was great to chat @AntCas
    Shame the recording didn’t work out!

    Happy to answer any other questions that come up! 🙌

    1. 1

      I was really bummed, you'd done such an amazing job.

      Thanks again for the live experience and offering to answer questions here!

  2. 2

    Really interesting, thanks for sharing

    1. 1

      Thanks!

      We're doing another meetup in a couple weeks about no-code startups and marketing. If you're interested, tickets are free (optional donation):

      https://hopin.to/events/no-code-business-acquired-after-3-weeks-q-a-w-louis-vieira

  3. 2

    Thanks for sharing these!

  4. 2

    Great article, Anthony!

  5. 2

    Wow, that recording not working is a real bummer. Some great information in here all the same!

  6. 2

    I really enjoyed this one (meetup + write-up), thanks @AntCas & @HelenRyles :)

  7. 1

    Thanks! This was useful!

    1. 1

      Thanks!

      We're doing another Q&A on Friday. This is the link if you're interested:

      https://hopin.to/events/no-code-business-acquired-after-3-weeks-q-a-w-louis-vieira

  8. 1

    Hi @AntCas,
    Good information here. Just yesterday, I've created an IH group "Business for Sale" https://www.indiehackers.com/group/business-for-sale. I am sure subscribers would like to read more of such content.

  9. 1

    Great Q&A @AntCas and congrats @HelenRyles for all the success!
    I've also recently sold a side-project and am writing a book about my experience :)

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