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Selling Tiny Internet Projects for Fun and Profit

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Re: Selling Tiny Internet Projects for Fun and Profit

#131

Post by borepop »

andersource wrote: post #106
qixxiq wrote: post #61

Earlier quoted context omitted.

Yes. The buyer would might have been willing to pay $15,000+, but wanted to anchor (and start low) so went $4,500. The real max was introduced when the seller gave the $15,000 number... buyers never want to or will reveal their number (i.e. the $7500 was a lie.)

Thanks! So basically (typically, of course depending on circumstances) any number explicitly stated by the buyer is less than the true maximum and you can expect to converge on a higher price?

Normally, yes, and as was mentioned higher in the thread this initial figure is referred to as an "anchor," meaning that it has the psychological effect of implying that anything higher than that number is somehow a real concession on the buyer's part, when the reality is that the opening number could have just been higher. It's rather like when a store says "this is normally $500 but now it's on sale for only $250" instead of just pricing something at $250 in the first place. Getting to Yes, also mentioned above, is a useful book on negotiation.

Re: Selling Tiny Internet Projects for Fun and Profit

#132

Post by tomlagier »

Seems like a pretty low ROI to me.

Generously, we're talking about ~$100/hour, my guess is it was actually a lot less than that, maybe as low as half or a third, and this is for an idea that got some traction.

That could be a good wage for some groups of people, but my guess is you'd find a much better one either a) growing something to a larger size or b) working for someone else.

If you're really interested in building these tiny products though, then it could be a way to support yourself doing what you're interested in. I just wouldn't generalize this strategy to "this is a good way to make a living".

On the flip side, I bet doing this sort of thing really sharpens the entrepreneurs skillset - identifying good ideas, quickly bootstrapping a product, and negotiating for funding, so I bet you're getting some pretty big personal levelups as you go.

Re: Selling Tiny Internet Projects for Fun and Profit

#133

Post by robocat »

jjeaff wrote: post #126
SamBam wrote: post #102

Earlier quoted context omitted.

That's a common complaint about seller's agents in real estate. Unsure what the solution is. A seller can, of course, say that they refuse to sell for under $X, though that could potentially still be leaving money on the table if the buyer might have been willing to offer $X+Y.

I think one better way to handle commissions for home sales is to have no commission for the first $x of the price. X being a price that it would be very easy to sell at, a price low enough that the property would just immediately sell without much effort because it is too low. Then apply a much larger commission percentage to the amount it sells for above that "easy sale" price. That way, the seller and the agent ac…

Have you negotiated this?

Or have you ever seen an agent offer this?

To explain the issue in detail for others that don’t understand the dynamics:

A flat percentage is the standard where I live. Selling agents are only incentivised to get as many sales through as quickly as possible, and the agent will deceive and cheat to achieve that goal. Selling 20 homes at 5% discount is almost double the earnings (commissions) for the agent than selling 10 homes.

Agents make wayyyy more by selling more houses quickly than they ever could by spending more time selling each home to get a few percent more.

Yet the person selling the home really really cares about that few percent because their home is often highly leveraged: if they have paid 20% of principal and get 1% more from the sale, that is actually 5% extra return (which can easily be equivalent to avoiding many extra years of work before a home is paid off).

Re: Selling Tiny Internet Projects for Fun and Profit

#134

Post by j45 »

tomlagier wrote: post #132

Seems like a pretty low ROI to me. Generously, we're talking about ~$100/hour, my guess is it was actually a lot less than that, maybe as low as half or a third, and this is for an idea that got some traction. That could be a good wage for some groups of people, but my guess is you'd find a much better one either a) growing something to a larger size or b) working for someone else. If you're really interested in buil…

Building something that people want and will pay for has a compounding effect far beyond trading time for an hourly rate.

Sometimes what you build can be early, and it needs to simmer for a while or flesh out. There is a real opportunity time cost for sitting on things to ripen that someone else may be in a place to work.

It’s really shouldn’t be worded as a backhanded compliment that if it’s really what you want to do. There are people who have built and scaled things and have decided what’s good for them, and how it’s good for them.

Having 10m on a 100m exit or 10m on a 30m exit, or 1m of 1-2m exit is all the same to the bank account, maybe not ones self image.

Being an exited founder at any dollar amount puts a person in very small company, and learning to exit small deals can also teach one to be prepared on what to look out for on the bigger deals. This is probably the biggest thing, if entrepreneurship is in your blood you want to make sure you’re well rounded and prepped for those biggest outcomes of your life.

Still, it’s fun to see what you’re made of and see how much you can make of nothing. One can imagine what is possible with $ efficiency.

Re: Selling Tiny Internet Projects for Fun and Profit

#135

Post by edmundsauto »

Spinosaurus wrote: post #83

I wonder how viable a sort of "micro PE" firm would be, basically a company that just buys many of these micro indie projects with positive cash flow with the goal of holding on to them for profit or investing into their operations and eventually reselling them. There's been this trend of new firms popping up that acquire small ecommerce brands (in fact, there was one on HN just the other day). I'm wondering if the s…

I think it's going to be more common than it is. Or, maybe its already super common and we just don't hear about it.

My reasoning is as follows: small products/companies have de-risked the initial PMF exploration, but aren't at a scale where they can hire specialists. Sure, maybe you can find a 10 hours / week data engineer who can build your analytics infra MVP. It's more likely you don't find someone good, IMO.

Building a portfolio of these means you can hire a specialist who can focus on the low hanging fruit of 3-4+ companies at a time. That's a huge advantage over the small companies.

Re: Selling Tiny Internet Projects for Fun and Profit

#136

Post by a1369209993 »

SamBam wrote: post #118
twobitshifter wrote: post #84

Earlier quoted context omitted.

This negotiation as written was just moving down by the same amount offered by the buyer, is that what the book would recommend as a technique? It gave a gain of $750 over splitting the difference from the start.

I haven't read the book, but, in general, it's not a good move to split the difference from the start, because there is usually at least one more round of back-and-forth. So once you've split the difference, you're already going to end up closer to the other person's initial bid. e.g. "I want 10,000" -> "I'll offer 5000" -> "Let's spilt the difference and say 7500" -> "How about 6000?" -> ... now you're already betwe…

> "I want 10,000" -> "I'll offer 5000" -> "Let's spilt the difference and say 7500" -> "How about 6000?" ->

"Okay, spliting the difference on that works out to 8000. Sounds good."

Re: Selling Tiny Internet Projects for Fun and Profit

#137

Post by SamBam »

jraby3 wrote: post #122
SamBam wrote: post #120

Earlier quoted context omitted.

Everything I've seen around here has been from the seller's perspective. Has anyone here bought a tiny startup/project like that? If not, is there some demographic not represented on HN who is buying these?

I’ve purchased several websites on empireflippers.com in the $10-30k range. Happy to answer any questions.

What's your main line of business, and what went into the decisions to buy those sites?

Did they all have revenue, and the owners just couldn't be bothered with the upkeep, and you figured you could? (Just going off OP's story here.)

Re: Selling Tiny Internet Projects for Fun and Profit

#138

Post by canadianfella »

robocat wrote: post #133
jjeaff wrote: post #126

Earlier quoted context omitted.

I think one better way to handle commissions for home sales is to have no commission for the first $x of the price. X being a price that it would be very easy to sell at, a price low enough that the property would just immediately sell without much effort because it is too low. Then apply a much larger commission percentage to the amount it sells for above that "easy sale" price. That way, the seller and the agent ac…

Have you negotiated this? Or have you ever seen an agent offer this? To explain the issue in detail for others that don’t understand the dynamics: A flat percentage is the standard where I live. Selling agents are only incentivised to get as many sales through as quickly as possible, and the agent will deceive and cheat to achieve that goal. Selling 20 homes at 5% discount is almost double the earnings (commissions)…

1% of a home’s sale value is never “many extra years of work”.

Re: Selling Tiny Internet Projects for Fun and Profit

#139

Post by Quarrel »

ambicapter wrote: post #76
Quarrel wrote: post #22

Earlier quoted context omitted.

escrow.com is a licensed escrow operator. This is how it works, they don't get to just decide the outcome or they'll get shutdown during their audits. This is a good thing in transacting on the internet.

Does escrow licensing not allow for a "transaction closed in 3 months or assets released to original owner" contracts?

I'm pretty sure it does, actually. They just need a clear flow chart and then for people to not want to change it after the fact.

Re: Selling Tiny Internet Projects for Fun and Profit

#140

Post by idiotsecant »

axaxs wrote: post #117
stefandesu wrote: post #39

Earlier quoted context omitted.

Germany's biggest Craigslist-like service recently added a service like this for purchases that are shipped. I sold my previous MacBook using the system and found it really stressful to wait for the buyer to confirm the item. In my case, it was just someone who was a little bit slow and just forgot, but I can imagine abuse in the system. Same thing happens with PayPal buyer's protection. I can't think of a better sys…

A better system would have some agreed upon holding period. Two weeks perhaps? Enough time at least that the buyer has received the goods. As much as I hate Paypal, that's essentially what they do. They hold the funds until they've confirmed the item was delivered.

No, a better system would give the buyer incentive to release funds in a timely fashion while still offering the escrow company incentive to implement. Maybe you pay escrow 110% of the cost, you get 10% back when you release funds, 5% if you take more than 10 days, 1% after that.
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