Ask HN: How do you sell the software of a failed business? Hello, My parents attempted running a holiday-booking venture that didn't go anywhere. In the process, they had a fairly advanced web app built with things like custom refund policies and self-service registration for the hotels. This web app cost a lot and it would be nice to get back some of that money, so how would you go about recovering the cost? Any failed business sale forums I don't know about? |
And even then, if the people who were working on it aren't part of the sale, the new owners are going to face a chunk of cost just getting familiar enough with the project to alter it in the right direction. Most people will be better off starting from scratch.
Unless what's been developed is a fairly complete and self-contained solution to a common problem, I think it's hard to see it being worth much at all.
(I am assuming this was in the US)
Google "computer software and work for hire" for more info. Sorry for giving no links, but I'm tapping this out on my iPhone while waiting for a take out pizza to become ready.
From what I gather its just a place to bid on websites, apps, domains, etc.
-Find out who sells the big management systems. They often have projects that may extend into your market. It's cheaper for a big company to buy existing code that can be rebranded than to start from scratch, especially if you're willing to be flexible.
-Find consulting shops that work in that space with larger hotel chains. They might be able to sell this in and give you a success fee.
-Find a "founder" with sales/marketing experience willing to take this on as a real project. Lots of non-technical people in the space have connections, but no capital/product. You're basically bootstrapping their company with technology investment.
-See if there are 'resellers' or marketing reps that sell similar systems in the space. They might be willing to help you find a company that can market & support the product for you.
-Be flexible on how you get paid. For example, provide the code to market for 24 months for a percentage of gross sales. That would mitigate the buyer's risk, while still providing you with upside potential.
My experience in buying sites is that without customers, it's basically a huge risk, so prices are very low.
You'll see what a buyer is looking for when they are looking to buy a site which is mainly that there are customers. If you have none, like other people have commented, it will be very difficult to sell the code for anything unless you just happen to find someone who is looking to build the same thing and could use your code as a shortcut.
Notice how all his due diligence questions are related to customers. There's nothing about the code.
I can't remember where I heard it, but I think in the Foolish Adventure he says the seller said she invested $1 million dollars into the site. Rob was able to talk her down to $40 or $50k because, in his view, he was only paying for the established customer base and Google page rank. Anything more than that and he would have been better off building himself.
If you don't have any customers, unfortunately, you're just going to have to accept that you're not going to recoup the investment. It's a sunk cost.
http://foolishadventure.com/audio/online-business-for-the-re...
http://www.softwarebyrob.com/2012/02/28/the-inside-story-of-...
http://techzinglive.com/page/921/165-tz-interview-rob-wallin...
What can the app do exactly?
Where was it sourcing its hotels / flights / hire car data etc?
In this business, the big competitors all reserve a bunch of rooms in the hotels and manage their booking themselves. The hotel is then not allowed to touch these rooms.
The model here was to give the hotels a reception-desk piece of software and have them use it to maintain availability. A lot of the hotels that signed up had nothing like this, so it was definitely a win for them. Armed with exact availability, you can have a much better booking system (and of course, if the hotel only wanted to give you a chunk of their rooms, they're perfectly capable of doing that).
Hotels can sign up on their own (including local bank details, etc) and just need to be reviewed before showing up on the site. It supports i18n, scheduled payments, lots of bells and whistles.
The fact of the matter is that this failed because of market reasons (too small a market, dominated by big players, primarily) but it may have a niche somewhere else on this planet. :)
For example, holiday home rentals? bed & breakfast? car rentals? I think there is a lot of potential in the car rental market... e.g. allow private vehicle owners to rent out their vehicles. There are probably a few insurance details to work out, otherwise it sounds like you have 80% of that sort of system built already.
(I maintain the site. So let me know if you have questions!)
My brother works in the travel software industry (for a big player) and that market is an extremely hard nut to crack, unless you are coming at it with a boat load of contacts and money.
The big tour operators (I know this from the European side) are quite well tied into the bug boys contractually. They often will enforce sole-usage on hotels to prevent this kind of side market entry your parents have attempted. the hotels can be penalized or dropped from the operator's books, for simply offering rooms outside the tour operator.
I don't know enough about the larger industry and what barriers there are to entry however. What kinds of tour operators in Europe are blocking entry to the market? Is this just tour groups making certain hotels exclusive, or the booking sites?