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Ask HN: How do you sell the software of a failed business?

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Re: Ask HN: How do you sell the software of a failed business?

#11

Post by guidedlight »

archivator wrote: post #8
junto wrote: post #4

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?

It was meant to be hotels in a single country, it's still operational at 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…

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.

Re: Ask HN: How do you sell the software of a failed business?

#12

Post by 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.

Re: Ask HN: How do you sell the software of a failed business?

#13

Post by 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.

Re: Ask HN: How do you sell the software of a failed business?

#15

Post by 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.

Re: Ask HN: How do you sell the software of a failed business?

#16

Post by sadkingbilly »

pbmarcano wrote: post #2

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.

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.

Re: Ask HN: How do you sell the software of a failed business?

#18

Post by 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.

Re: Ask HN: How do you sell the software of a failed business?

#19

Post by 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://www.softwarebyrob.com/2012/02/28/the-inside-story-of-...

http://techzinglive.com/page/921/165-tz-interview-rob-wallin...

Re: Ask HN: How do you sell the software of a failed business?

#20

Post by junto »

guidedlight wrote: post #11
archivator wrote: post #8

Earlier quoted context omitted.

It was meant to be hotels in a single country, it's still operational at 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…

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.

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.

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