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Sortfolio: Going once, going twice...

37signals.com

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

#41

Post by jasonfried »

larrys wrote: post #6

The bottom line when evaluating whether to purchase this or not would involve doing due diligence and contacting the paying customers at the very least to determine how satisfied they are with being listed there. The site is using auto-renewal billing and having someone not cancel is not the same as someone finding value in the service. Also even though they would like to get $480,000 they should also invite any offe…

"If nobody bids at $480,000 they will have to try to sell it at a lower price and it will seem like a fire sale."

It's not being sold for a lower price. It's $480,000 by July 1 or we close it down.

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

#42

Post by joshaidan »

alex_g wrote: post #31
rockarage wrote: post #28

Earlier quoted context omitted.

> 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.

So if 37 Signals is more popular than you, what value there in paying $480,000 for a site whose customers may not be interested in it after 37 Signals leaves?

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

#44

Post by joshaidan »

I question whether this site it worth $480,000 cash, and here's why:

1. How much of the site is tied into the 37 Signals brand, and is the reason people pay to be listed on the site because of it's affiliation with 37 Signals and the Ruby on Rails community?

2. What's preventing competition from making their own similar service? Is there some barrier to entry or an unfair advantage?

So if this site is sold to someone else, will people still be interested in it now that it's no longer a part of 37 Signals? And what would prevent a competitor from creating a similar site for less than $480,000?

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

#45

Post by rockarage »

alex_g wrote: post #31
rockarage wrote: post #28

Earlier quoted context omitted.

> 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.

Exactly, so you should expect some customers will leave once there is a sale, perhaps a significant amount. And if there is no sale they will be closing shop on July 1, so 37signals won't compete with your product if you build an alternative.

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

#48

Post by jcampbell1 »

aviv wrote: post #39
jasonfried wrote: post #32

Earlier quoted context omitted.

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?

It is possible 37signals doesn't have the information, but the gateway does and would be willing to transfer the credit card numbers. Either way, this is critical detail that needs to be worked out.

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

#49

Post by moe »

JumpCrisscross wrote: post #40

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 ove…

the investment will generate a 10% yield after 7 years.

Except 7 years ago the most popular social network was called MySpace. The iPhone, Twitter and ycombinator did not exist (amongst other things). Rails 1.0 was released that year.

Why would a niche job board, detached from the brand name that was its only asset, prevail through 7 more years of internet time?

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

#50

Post by [deleted] »

g0su wrote: post #35
rockarage wrote: post #28

Earlier quoted context omitted.

> 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.

[deleted]
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