This situation presents an interesting contrast with that of Instagram. Here you have a site generating revenue - and more importantly profit - that is on sale for 0.00048 the sale price of Instagram... and then gets absolutely skewered in the comments for suggesting such an amount. Obviously, the purchase of Instagram comes with much more than simply a maintenance-free website and some paying customers. I'm not saying that Instagram is or is not worth $1B or that Sortfolio is or is not worth $480k, I'm just saying there's probably an interesting nugget hidden in this contrast that says something about what we value these days.
Sortfolio: Going once, going twice...
81–90 of 98 posts
Re: Sortfolio: Going once, going twice...
#82I don't see what is actually of value in this deal for someone to merit a 480K purchase: 1. Site code - Sure you are getting a head start since you don't need to build from scratch but the site doesn't do anything special that can't be duplicated. 2. Brand Name - I think it's more about 37signals being behind this rather than Sortfolio being an awesome product. I don't know how many customers are going to actually us…
Why do you think the buyer would need a new billing solution?
Because it mentions it directly in the link that this discussion is about.
"Since Sortfolio is hooked up to our centralized billing system, you’ll need to write your own code to charge customers."
Re: Sortfolio: Going once, going twice...
#83I think Sortfolio's secret weapon is not the code, the design or the feature set -- which I'm sure are all good -- but the fact that it was promoted by and connected from, eyeball traffic-wise, the huge audience that 37Signals, Basecamp, JF, DHH, already have. That said, if they can find a buyer who also has the ability to park it adjacent to a pre-existing web property, then it could be a smart buy. But if you don't have that? Probably a bad buy at the price they're asking. I'm reminded of how Atwood and Spolsky banded together to leverage their pre-existing eyeball streams to promote and get StackOverflow off the ground (essentially a repeat of what Spolsky did alone with his blog and FogCreek, but then on a large scale). There are lots of easy ways to make money if you already are famous and/or have a large traffic base. (See Paris Hilton.) Those methods don't exist for folks who don't start with that.
Re: Sortfolio: Going once, going twice...
#84Such a weird sales tactic - sell it for $480k or shut it down. Isn't that a bit like the landlord of a profitable duplex selling it with the real estate listing as "Buy it for $480k or we'll burn it to the ground"?
Re: Sortfolio: Going once, going twice...
#85Am I alone in feeling insulted in how this blog post was written/handled?
Re: Sortfolio: Going once, going twice...
#86When you say profit, do you really mean profit? What is one to make of those numbers in that spreadsheet? Surely there are hosting costs and processing fees that eat into that. Or do are those numbers figured after costs are taken into account?
In any case, I completely agree with everyone else here. Unless the 37Signals sites continue to link through to this site, it instantly loses at least 20-30% of it's value right off the bat. There is very little value in this site from an IP perspective. It appears that all the value comes from the existing user base and the publicity generated from 37Signals. I'm not going to discount the user base, that's obviously huge. But I'm not sure it's worth much without the 37Signals name behind it.
I have a hard time believing it would be worthwhile for them to hawk the site publicly just to fuck people over though, so I do take them at face value when they say that they believe it is worth that to them.
Re: Sortfolio: Going once, going twice...
#87@JasonFried
“Sortfolio just isn’t core to our business.”
Also, what about the Job Board?
Job board is effectively the same as Sortfolio, yet it makes millions per year. Why not shut down Job Board as well?
Lastly, what about Deck Network? This is yet another million dollar per year generating site that is a pure advertisement property. There’s no way you can claim the Deck is core to 37signals.
So why don’t you just admit what is truly happening here. You are unhappy with the relatively low revenue, and don’t want the buried of the services anymore.
Re: Sortfolio: Going once, going twice...
#88I suggest you donate the profits to charity each year
Maybe to help kids learn how to code?
Re: Sortfolio: Going once, going twice...
#89Earlier quoted context omitted.
That feels a little heavy handed and like you are projecting of your own values onto the situation to me. The 170 customers are paying right? If the site works and is providing those 170 people what they want then what exactly is wrong with that? If its not providing them what they want why are they still paying $99 per month for it?
$99 is an easy line to overlook on even a small-business account, especially when it's going to a theoretically reputable company like 37s. I bet that one single "update your billing information" email detailing what the $99 was for, followed by culling everyone who hadn't updated their information within 30 days would result in an 80%+ drop-off in the revenue of Sortfolio. Not even disclosure that the service was fo…
I fully appreciate that subscription plans go some way towards exploiting the laziness of people, but I think you're being a bit harsh:
1. Ultimately, the buyer has every opportunity to cancel the service. I strongly doubt 37signals are going out of their way to make it difficult, as other companies have.
2. If it does what it's meant to do, why would they need to continually update and improve the site?
3. I agree that with a reminder, people may unsubscribe, but it's definitely also possible that people see $99/mo worth of value in their listing. The links are not nofollowed, so the backlink would be worth something. Also, getting a single decent project referral ($10-20k) each year could justify a listing.
Re: Sortfolio: Going once, going twice...
#90Looks like very few (or none) of the people here have actually used Sortfolio as paying customers. I believe a lot of the doubt wouldn't be here if you would have done that.
As for some background information, then I run a small Ruby on Rails development agency called PerfectLine (http://www.perfectline.ee) that caters specifically to startup founders who need to create their minimum viable products.
We have been paying for Sortfolio since the beginning of 2010 and actually couldn't be any happier with the kind of leads it brings in. I can say that quite a big chunk of our customers have actually found us first on Sortfolio and they usually convert to actual sales pretty well. It might be that our price and quality of service is in the right spot but on the other hand there's a good chance that the people coming through Sortfolio usually have a decent knowledge about what they want and what to expect.
I believe that Sortfolio has actually helped quite a few small design or development teams get off ground. It worked really well for us and I don't see why anyone else should see any worse return rates. That $99 per month is so little when compared to actual return it will get you.
I noticed that Sortfolio currently has around 10,000 free users and I believe that with little upselling it would be possible to convert a good portion of them to paying customers thanks to the value it actually provides. So from that perspective it shouldn't be too hard to earn back the $480,000 37signals is asking for Sortfolio.