[Ecio78]

according to some people a quite common exit is between 12 and 24 months[1] of the net profit. Considering his expenses (1700$) and sales (2500$), and initially ignoring the licensing fee, he had 800$ profit for six months, so let's round it to 150$/month, 3500$ is 24months of this profits. If we want to consider the single licensing fee, let's say he licenses once a year, it's 1500+1800 = 3300$/year, and so 3500 is a 12month evaluation. Still acceptable. 10-15k$ I think it was not acceptable (by the buyer of course) with this numbers, even thought he could have reduced significantly his EC2 expenses (and so having a much higher monthly profit)

[1] http://www.softwarebyrob.com/2012/02/28/the-inside-story-of-...

[brico]

I always assumed the 12-24 month-rule only applied to "content"-sites like a blog or a forum, but Dan built a unique service that cannot be copied with the same effort as a techblog or a bulletin board

[Ecio78]

the link I posted is about Hittail, that is surely not a "content" site but a service

[jacquesm]

Start-ups are not judged by the same metrics as brick-and-mortar companies or established service companies.

When you're starting out everybody knows that the first couple of years will likely (but not always!) be a time when money is tight if you want to maximize your growth and hence profits will likely be depressed. You can reduce your growth to increase your profits but most parties would rather aquire a much larger company with an amazing growth track-record than something that earns a few thousand $ / month on a much more flat growth curve.

[suking]

He also could have only spent $150 on hosting and been fine - wasted a lot of $. I imagine since he didn't work on it, sales were declining as well.