How I Built and Sold My Company in 18 Months • Hacker News Board

Re: How I Built and Sold My Company in 18 Months

#11

Post by nezzor » Fri, Mar 29, 2019, 4:15 PM UTC

dyarosla wrote: post #2

Save your time and skip this article if you want any tangible takeaways; if you want to know what the company actually DID or how it MADE MONEY, spoiler alert: this article neither mentions or links to anything of the sort. Without this basic intro description, there’s little to no value in this article to prospective readers- companies aren’t created equal and lessons learned in one industry don’t necessarily transl…

Totally an interesting article though, even if the content didn’t completely live up to the title.

I learned things about the precise shape of the payoff curve I should be optimizing for (how investors evaluate assets), which was even an “unknown unknown” for me before I read it.

Re: How I Built and Sold My Company in 18 Months

#12

Post by gnicholas » Fri, Mar 29, 2019, 4:24 PM UTC

> Had I understood these simple concepts I believe I would have made very different decisions in building my business. I would have likely focused less time on maximizing profit (E) and more time investing in future earnings and value (M)

It sounds like he's suggesting that the acquirer didn't care about how profitable the company was. I'd be curious to know if others have found more focus on revenue and less on profitability. I've definitely talked to some VCs that invested based on revenue numbers, and didn't care at all about profitability. Does this happen with acquirers too?

Re: How I Built and Sold My Company in 18 Months

#13

Post by tomhoad » Fri, Mar 29, 2019, 4:28 PM UTC

pbreit wrote: post #5

dyarosla wrote: post #2

Save your time and skip this article if you want any tangible takeaways; if you want to know what the company actually DID or how it MADE MONEY, spoiler alert: this article neither mentions or links to anything of the sort. Without this basic intro description, there’s little to no value in this article to prospective readers- companies aren’t created equal and lessons learned in one industry don’t necessarily transl…

https://getsimpledata.com ?

This website looks like it was made in 2000.

Re: How I Built and Sold My Company in 18 Months

#14

Post by runako » Fri, Mar 29, 2019, 4:42 PM UTC

cylinder wrote: post #7

Why didn't you have any representation, such as legal or a deal negotiator, on your side? Broker isn't your friend. Is there any reason why you saw 2x "earnings" as the golden ticket?

Not the OP, but I would consider 2x earnings as a reasonable discount given the youth of the company. Given a normal customer acquisition curve, most of the revenue would be coming from customers with tenure (No scare quotes needed around earnings; the article doesn't suggest that there was any reason the owner couldn't just pocket the monthly earnings.)

Re: How I Built and Sold My Company in 18 Months

#15

Post by Kiro » Fri, Mar 29, 2019, 4:52 PM UTC

cylinder wrote: post #7

Why didn't you have any representation, such as legal or a deal negotiator, on your side? Broker isn't your friend. Is there any reason why you saw 2x "earnings" as the golden ticket?

I made a much bigger exit and didn't have legal representation either. It's completely overrated.

Re: How I Built and Sold My Company in 18 Months

#16

Post by 33degrees » Fri, Mar 29, 2019, 5:02 PM UTC

mwcampbell wrote: post #10

> But no one likes contracts and I don’t like conflict, so I didn’t ever transition to long term contracts. Again my lower brain (fear and the desire to be liked) took control and I decided to stick with month-to-month contracts. Then my upper brain came up with convincing arguments and justified this decision by saying I had created a “customer-friendly” pricing model. Your upper brain was right. You did the right t…

Are long term contracts customer hostile though? If the offered as an option that ans cost less, they should be advantageous for everyone

Re: How I Built and Sold My Company in 18 Months

#17

Post by hodgesrm » Fri, Mar 29, 2019, 6:57 PM UTC

mwcampbell wrote: post #10

> But no one likes contracts and I don’t like conflict, so I didn’t ever transition to long term contracts. Again my lower brain (fear and the desire to be liked) took control and I decided to stick with month-to-month contracts. Then my upper brain came up with convincing arguments and justified this decision by saying I had created a “customer-friendly” pricing model. Your upper brain was right. You did the right t…

This is not correct. From the perspective of the buyer long-term contracts limit liability for an extended period of time, which reduces variability in expenses and lowers overall cost. Not every buyer values the benefit equally but to say 'no one likes contracts' is simply inaccurate. It's a big deal especially in enterprise markets.