I’d like to give thanks to all the people here on Hacker News who supported the project during that launch and any questions or comments just let me know!
The short version (summarized from the article):
I spent 2 months building an app to detect trends. Launched as a Show HN and reached #1 on Hacker News (briefly!). Another 4 months growing and improving it but failed to monetize. But I got enough traction to get acquired by Brian Dean founder of Backlinko.
For the sake of all the other HN founders here building our own apps and trying to sell/monetize, how much did you get acquired for? I think it’d be super insightful to get a data point here.
recurring revenue is king. Typical valuations are 7-10X revenue (crazy right?) for a strategic acquisition. For example a friend of mine was doing about 3m in revenue (about break even) and I believe sold for about 15-20M (I forget the exact number). I think it took him about 8 years to get there. Another friend got a similar multiple on 7M in revenue.
On the other hand I was talking to a founder last week about acquiring his company. he is doing about 1M in revenue and was asking about 600K. I dont think we can close before the end of the year so passed, but would definitely consider it if he is still available next year.
Strategic is the key word here, though, and this is only for tech. 80%+ of acquisitions will not be strategic in this context so even in tech it's very unlikely to get 7x top-line revenue. In many sectors, especially with brick-and-mortar businesses, 3-5x gross profit is more likely. In low- or mid-margin businesses this can easily be less than 1x gross profit for the last 12 months, let alone the tricks places like FE Int'l play like just multiplying the last quarter's revenue by 4 and calling that yearly revenue.
Regarding the data granularity, I'm curious if you ever managed to figure out how to get high granularity (daily) data over a large timeframe. For those who don't know, google "helpfully" changes the granularity for you when you request longer ranges, and normalizes the response so that the largest datapoint in any given range is 100, so you can't just concatenate consecutive requests.
My very hacky attempt at solving this involves overlapping short range requests, and finding the scaling factor of best fit between them: https://github.com/bspammer/rebuild_trends
I'd be really interested in hearing if there are better approaches out there to squeeze this data out of Google.
Yeah you're spot on with those data limitations. I think the easiest solution would be to just store the more recent, granular data and accumulate that over time. But now way to get granular historical as far as I'm aware.
Do you mind sharing the "x" multiple in the acquisition? I think in tech the norm is a 10-14x multiple for acquisitions...but this case seems different in a few way (6 months, no investors, etc...).
Why professional bloggers as your target audience? There are several institutions I can think of that would pay a lot of money for near exclusive access to a more specialized version of what you've built
Congratulations, Josh! This is a huge success for a six month project. Based on my experience with acquisitions, that was a very fair offer that you got.
I’d like to give thanks to all the people here on Hacker News who supported the project during that launch and any questions or comments just let me know!
The short version (summarized from the article): I spent 2 months building an app to detect trends. Launched as a Show HN and reached #1 on Hacker News (briefly!). Another 4 months growing and improving it but failed to monetize. But I got enough traction to get acquired by Brian Dean founder of Backlinko.