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Ask HN: Should I sell my SaaS (400k rev)?

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Re: Ask HN: Should I sell my SaaS (400k rev)?

#31

Post by _ah »

Sell 90% of it. Or some other structure where you give up ownership and control, but retain some residual.

You'll have to reduce your asking price quite a bit (so maybe you end up with $450k vs $600k), but I'm guessing that won't really matter in the grand scheme.

As for what's next, you need to figure that out anyway. It doesn't sound like your business is going to continue forever without some new passion, so this gives you 2-3 years of runway to figure out what gets YOU excited.

If you choose your buyer well, maybe you'll get a huge recurring payout over time. Or maybe you'll get nothing. But hey, without passion your business is on its way to zero anyway, so there's no real loss there.

Re: Ask HN: Should I sell my SaaS (400k rev)?

#32

Post by yaknow »

You've probably done some churn analysis at this point -- do you know what % is passive churn (i.e. payment-related) versus customers who are explicitly canceling?

I'd consider spreadsheeting the biggest leaks and getting super aggressive with multiple approaches. Empower your team, consult with professionals, leverage third party tools, outsource... all out offensive.

It's difficult to know the ONE THING that will increase retention, but improving many things by a percent or two will give you noticeable lift.

And by compressing it into a short timeframe, you'll reduce the number of variables around cohorts, seasonality, etc.

Re: Ask HN: Should I sell my SaaS (400k rev)?

#33

Post by 19eightyfour »

just_to_ask_sam wrote: post #24
19eightyfour wrote: post #8

Have you talked to your customers to understand what they need now and why they are churning?

Of course, but the feedback has always been completely different, depending on the size of the business/customer. It'd range from "price is too high" (value) to "you don't do X" (x being a all-in-one suite, as our market often bundles products together) to "not what we were looking for"

That could be frustrating. It's an interesting problem. I think the knowledgeable people of YC would probably have an answer for you on, or a way to think about, what to do in the situation where you have unworkable churn and when you talk to your customers and they all have different advice depending on their type.

I don't know if it well help you and I don't know anything about your business but I'll throw in my 2 cents since you're asking for opinions.

Even tho it sounds from your post like you'd like to sell it, the sense I get is you'd actually like to save it if you can. It's your baby, right? And this whole process is extremely frustrating to you. You feel the pressure right now, right? So what I see is this is a sort of real crisis for you. So that's where you are.

And so my question for you is what did you want to achieve when you started this business? What was your goal for it or the very cool idea you had in mind? If you can find that maybe you can get back to that. And if you need to make some changes, and drop some types of customers, and focus on other types of customers, to get back to your core purpose with this, then you'll do that, because this business is that important to you. You're welcome.

Re: Ask HN: Should I sell my SaaS (400k rev)?

#35

Post by Blackstone4 »

softwarefounder wrote: post #29
davismwfl wrote: post #6

Having sold a couple of companies now I will put it to you this way. If you were to sell right now you are selling from a position of weakness, not strength. If I was in your position and if you are just tired and want to do something else you need to get the business growing consistently again month to month. Maybe that means finding some fresh blood to bring in. Another option is instead of selling, look into hirin…

This sounds like great advice. Agreed on the "selling from a position of ...strength". Being able to point to a continually increasing MRR is huge. If I, as a potential buyer, see a decline in MRR [and customers], I'm going to try to get the company for a steal.

The flip side is that the market segment he operates in is very popular and this might blind some less disciplined buyers. So if you focus on the popularity part you still might be able to get a good price.

You have to be positive and down play the churn by saying that you haven't really been focusing on the company and that the new buyer can step in and make a difference....play to their ego....

Re: Ask HN: Should I sell my SaaS (400k rev)?

#36

Post by brianwawok »

mod wrote: post #25
just_to_ask_sam wrote: post #21

Earlier quoted context omitted.

OP here. I've considered this "passive income" approach, and perhaps am in this right now – I haven't been doing much work on the business, just collecting checks. I often wonder what the value/problem of the upfront cash would be. I feel like I could do big things – but I just can't get over the fact that I wouldn't know what to do with $600-750k in cash, to produce more cash.

Some people buy businesses that passively generate income for them, so that's a thought. Wait...

New app: business swappers

Re: Ask HN: Should I sell my SaaS (400k rev)?

#37

Post by brianwawok »

just_to_ask_sam wrote: post #22
simon_kerstein wrote: post #17

I have created this account for responding to this answer. Move product development to 3rd world country, by spending 6-7K$/month you can gain 3-4 fresh bloods, who will continue working on your project. You will go to passive CEO position, where you control project development and oversea new features. may sound weird, but you dont need to think about giving shares to new employees, taxes for salaries or giving them…

Thanks for the idea. I'm already doing this – my burn rate is $6k for my team of 3 (support, sales, dev).

Well this answers why your team doesn't have good product insight.

Perhaps you need to do the opposite. Hire American talent with college degrees. They can provide real useful feedback.

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