I bought a number of side projects, its a nice way to get a validation of the market. I always like to see a number of paying customers even if it is just a few.
What so you do with them? Expand and flip, or maintain and reap the monthlies, or what?
I understand why someone sick of a project would sell it. I don't fully understand the buyer market. Why would someone pay 20k for some car muffler site that makes 2k a year in AdWords traffic?
I bought a number of smaller projects that serve as traffic generators to bigger projects, typical freemium services that provide me regular signups on a daily basis.You can make the calc: pay a few thousands for years of free referrals.
I bought a bigger project 10K+ and that has technical issues that need to be resolved (will migrate from Node.js to PHP) but i have an existing customer base that helps understand the problem you try to fix.
I am rebuilding the solution but in the same time i can experiment with pricing and traffic generation on the service i bought..
it is a de-risking strategy.
The reason why people sold in general because they don't have the marketing budgets to carry the project when its initial launch spike runs out.
EDIT : I typically pay 5x recurring revenu max or max 1K to 2K
for non revenue generating sites that have interesting traffic
of an audience I target
Edit 2: I want to build a recurring revenue stream to supplement my consulting business
I know that Node.js is the hype but the site was developed by consultants and has plenty of bugs in there that needs solving .. I thought with my JS knowledge that it would be easy to evolve but the reality is different,
it is one big mess of dependencies that is difficult to debug if you did not make it yourself ...
You will see that PHP (LAMP)projects are easier to sell than projects in more exotic stacks
I prefer to have all my projects in the same language -> PHP and i all move them to Google APP engine to keep maintenance to the lowest levels
It has nothing to do with performance
i prefer to build on technology that I master
You're in the ballpark, 5x profit is typically the absolute max and that's for something established with steady or growing revenue. If you're down 10% YOY for the last 18 months you'll be lucky to get half that.
That being said there are always exceptions - my current business partner bought a side project for 10x gross profit because he had a lot of contacts in the industry that the owner didn't and was still able to make a great return when he sold a few years later.
Out of curiosity how much do you spend? And is this the cheapest way to go about it?
It seems like that would be somewhat expensive just to validate the market?
I understand why someone sick of a project would sell it. I don't fully understand the buyer market. Why would someone pay 20k for some car muffler site that makes 2k a year in AdWords traffic?