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Sortfolio: Going once, going twice...

37signals.com

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Re: Sortfolio: Going once, going twice...

#31

Post by alex_g »

rockarage wrote: post #28
sandofsky wrote: post #12

I'd be worried about the requirement to switch billing. I'm not sure there's a clean way to switch a customer from one billing system to another without requiring user intervention. In general, recurring billing is a scam by its opt-out nature. If you aren't on top of your accounting, tiny charges slip by. When you spot them, you may be too lazy to immediately cancel it, so you forget. It isn't enough to know how man…

> We’ve put Sortfolio on the clock: We either sell it by July 1, or we close it down. I'm wondering, If you had $480,000, why not spend 10% of that to build an alternative, and release it on July 1. After all the customers are going to have to signup to a new payment system either way.

Because 37 Signals is more popular than you are.

Re: Sortfolio: Going once, going twice...

#32

Post by jasonfried »

evdawg wrote: post #16

We contacted 37signals when they originally announced their intention to sell Sortfolio. Having bought and sold sites before we asked for some pretty standard information about traffic, revenue, etc. These questions weren't answered and we did not pursue the matter further. I'm not surprised the site wasn't sold; the "business" of buying and selling sites isn't exactly very "37signal"-y. With a price now available it…

I provided traffic/revenue figures to anyone who asked. If you're a serious buyer, and you have other questions, please contact me directly at jason@37signals...

Re: Sortfolio: Going once, going twice...

#35

Post by g0su »

rockarage wrote: post #28
sandofsky wrote: post #12

I'd be worried about the requirement to switch billing. I'm not sure there's a clean way to switch a customer from one billing system to another without requiring user intervention. In general, recurring billing is a scam by its opt-out nature. If you aren't on top of your accounting, tiny charges slip by. When you spot them, you may be too lazy to immediately cancel it, so you forget. It isn't enough to know how man…

> We’ve put Sortfolio on the clock: We either sell it by July 1, or we close it down. I'm wondering, If you had $480,000, why not spend 10% of that to build an alternative, and release it on July 1. After all the customers are going to have to signup to a new payment system either way.

It's a customer challenge not a technical one.

Re: Sortfolio: Going once, going twice...

#37

Post by jasonfried »

danielhellier wrote: post #20

I don't believe for a moment he will shut down $200,000 profit with little maintenance. It's condescending to suggest "I want it to go to a nice home but I'll close it down if I don't get x." If you're willing to entertain such thought then you do not truly value the user.

Believe it.

Sortfolio isn't right for us anymore. Our attention is elsewhere. If we can sell it for a fair price (we consider $480,000 fair), then we'll sell it. If not, we'll close it down and move on. There's nothing condescending about that.

Re: Sortfolio: Going once, going twice...

#39

Post by aviv »

jasonfried wrote: post #32
evdawg wrote: post #16

We contacted 37signals when they originally announced their intention to sell Sortfolio. Having bought and sold sites before we asked for some pretty standard information about traffic, revenue, etc. These questions weren't answered and we did not pursue the matter further. I'm not surprised the site wasn't sold; the "business" of buying and selling sites isn't exactly very "37signal"-y. With a price now available it…

I provided traffic/revenue figures to anyone who asked. If you're a serious buyer, and you have other questions, please contact me directly at jason@37signals...

Do you have (and are willing to share) the credit card information on file for each customer? Or is the new Sortfolio owner expected to contact or otherwise prompt existing customers to re-enter their payment information?

Re: Sortfolio: Going once, going twice...

#40

Post by JumpCrisscross »

37signals is pricing this deal with the assumption that there will be a significant (>50%) departure of customers upon the deal closing, that cash flow growth thereafter will be meagre (If we assume a $480 000 purchase price, annual cash flows of $212 277 (12 times the mean monthly, which is fairly normally distributed save for March 2012) growing at 2% a year, and abandonment after 7 years the investment yields over 10% (IRR) so long as cash flows crash less than 56% from purchase to year 1. In other words, if first year cash flows are at least $93 000 and grow 2% a year from there, the investment will generate a 10% yield after 7 years.

This analysis is stylised, but it remains that even if one takes a 1/4 drop in cash flow from purchase to year 1 and manages to lose 5% of cash flows each year thereafter, the investment will earn a 23% yield assuming abandonment after 7 years.

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