6 Lessons Learned from Selling My Side Project for $20,000.
The story of how I acquired an abandoned side project, monetized it, and eventually sold it for $20,000.
The Origin Story
I’ve wanted to be an entrepreneur my entire life but never had any true success. I would often come up with new startup ideas, make a landing page, tell all my friends about my idea…and then never actually get any customers.
In April of 2021, I decided that I wanted to try again — but this time with a different approach. I noticed that I had trouble acquiring an initial set of customers, so I wanted to start by acquiring a product that had a small user base that I could grow.
I found a SaaS marketplace called MicroAcquire.com where you could buy and sell SaaS products. I found a product that I really liked called Shareit.video, an online screen recording tool similar to Loom.
Shareit.video didn’t generate any revenue, but it did have about 50 people visiting the site daily to record screen recordings.
Acquiring an Abandoned Side Project
I eventually was able to negotiate with the owner of Shareit.video to acquire the website for $12,000.
In retrospect, $12,000 was probably too much to spend for the website with no revenue or registered users.
However, I rationalized that the most important thing to me was time. I could have tried to reproduce the website myself, but it would take me at least a couple of months. The $12,000 would give me an organized code base and a working product with a few users that I could immediately begin working on monetizing.
I asked myself if I would be happier buying this screen recording website and trying to grow it, or if I would be happier spending the $12K towards a new car or investing it in crypto.
The answer was clear — buying the website would get me closer to being a real entrepreneur and that is something I truly wanted over everything else.
Furthermore, putting down such a large amount of money would force me to commit to making this project a financial success and prevent me from giving up too early.
A Year of Progress
I rebranded the website to be called RecordJoy and worked on it with my cousin for about a year. Within a year we generated roughly $5000 in sales and had about 3000 registered users.
In total, we spent around $3500 in ads, hosting fees, and software subscriptions in order to operate the business.
The majority of our sales came from a partnership with AppSumo, which would advertise our $120 Life Time Deal subscription in return for 30% of the revenue.
After about 6 months, we decided to put RecordJoy mostly on maintenance mode since we were unable to find a scalable user acquisition channel.
We tried improving SEO, redesigning our landing page, and other growth hacks but nothing really worked.
Despite not being able to grow RecordJoy any further, I had already learned so much from working on the project so I was fine with putting it on maintenance mode. In addition, RecordJoy was still generating around $500 a month in revenue which was great lunch money.
Getting Acquired
One of our customers emailed me asking for some feature requests and I replied that we weren’t going to add any more features in the near future. They replied asking if we were interested in selling.
We got on a call with the customer and I asked if he would be interested in buying RecordJoy for 15k. The customer said he was hoping for something near 8k but would think about it.
Since we were already negotiating with one buyer, we decided to put RecordJoy on sale on MicroAcquire to see if there were any other competing offers.
We quickly got 10+ offers in a few days. Eventually we got an offer for 18.5k. There was also about $1000 in AppSumo that we could not withdraw, so we agreed to transfer that over for $600 since about 40% of our sales on AppSumo usually end up being refunded.
Lessons Learned
Build an Acquisition Channel First
RecordJoy failed to grow because we weren’t able to find a scalable acquisition channel. If I were to start another project, I would make sure that I had a strong acquisition channel in place first before building any products. This could be a strong following on LinkedIn, Medium or YouTube.
Acquisition Price Depends on the Buyer Purchasing Power
Some of the buyers we spoke to were individuals looking to buy side projects, as well as companies looking to launch a new product category. The companies had much bigger budgets to spend than the individual buyers.
AppSumo customers are different
AppSumo customers value life time deals and low prices, which may not a good way to build a business with reoccurring revenue. Designing your product towards the needs of AppSumo users may also result in a product that does not connect with users outside of AppSumo.
Try to Build Trust in an Acquisition
Many things can go wrong in acquisition. The buyer can get cold feet and stop communicating, find something else they want to buy instead, or even just run away with your product. It is important to build trust with the buyer so that the asset exchange goes smoothly. In our first acquisition meeting, we were so awkward and the price negotiation felt very stiff. In later meetings, we spent the first few minutes trying to get to the know the buyers motivations and background before jumping into the negotiation, which helped build trust.
Operating Costs Can Drain Your Profits
Make sure to monitor your operating costs. We were really happy when we withdrew the $5000 we made from AppSumo and Stripe until we realized that we had spent $3500 in operating fees. At the same time, don’t be afraid to spend money on software and consultants that can help you better understand what you need to build.
Don’t Spend Too Much on Ads
We spent around $1500 on Google Ads and didn’t generate much revenue from it. For a side project, its better to focus on organic traffic from SEO rather than paid ads unless you know your ads are going to have a positive ROI.
Want more startup advice?
I’m Ben, a jack-of-all-trades engineer who has worked at Netflix, Uber and Microsoft. I spend my free time trying to build profitable side businesses. I’m also currently an MBA student at UCLA Anderson.
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