Cheddar is For Sale

by samsoffes • 14 years ago

66 54 14 years ago

I'm selling Cheddar. The whole kit and caboodle — API, web and native apps, acclaimed code base and documentation, and 33,000+ user community — is being sold, not necessarily to the highest bidder.

jmduke• 14 years ago

Just curious -- why are you choosing to sell it instead of holding onto whatever passive income it generates?

I love Cheddar, and judging by some of the sales data shown in the TechCrunch article it doesn't exactly look like it's bleeding money.

aaronbrethorst• 14 years ago

At best, it's generating about $1,750 per month right now[1], and probably represents a huge opportunity cost for Sam, especially given that he's involved full-time with another startup.

[1] (33,499 * 0.0262) * $1.99/month = $1,746.57. More annual accounts means less money.

propercoil5• 14 years ago

- 30% apple cut

swb1192• 14 years ago

Curious - are you selling because it's a flailing company with not enough revenue or because the growth is hard to handle on the development side of the company?

bsims• 14 years ago

How do you expect someone to answer this question?

fourstar2• 14 years ago

With honesty, I'd hope.

samsoffes5• 14 years ago

Boom.

samsoffes5• 14 years ago

Not selling because it's "failing". I consider it a success. I just don't have time to make it profitable enough to live on. I'd love to see some one take it to the next level.

mgkimsal2• 14 years ago

33503 users, 2.61% are paying 'plus' customers, at, say $20/year = ~$18k in revenue. You'd need to grow and monetize that base a lot more to get back $125k purchase price.

I'm guessing someone might buy it, but there's a heck of a lot more ways you could spend $125k building a similar company to get to profitability faster. There's even more ways to spend $125k to make $18k/year. I'll happily let you invest in my company at $125k with returns of $18k/year for few years. :)

samsoffes5• 14 years ago

Solid point. On the other hand, getting 30k users in general is pretty expensive from a marketing perspective.

The real value is the potential.

mgkimsal2• 14 years ago

No doubt, and it wasn't meant as a potshot, although perhaps it came across too sarcastically; anyone that can build an audience of that size, especially with paid users as a portion, is doing something right. I wrestle with free user bases barely 20% of that, and growth is harder to achieve that most people think.

Serious question here: what portion of the audience base is using this because of you personally? Not that you know 30k people, but perhaps a large part came because of your connections. Relatedly, how many of them might leave if they saw it changing hands to someone they didn't know (or perhaps everyone would cheer because someone with more time for new features was taking over)???

pedrogrande• 14 years ago

When selling most big ticket items you need to start with your dream selling price and hope someone will pay you that.

Most buyers will start by counter-offering half your advertised price.

benguild2• 14 years ago

"a lot more ways you could spend $125k building a similar company to get to profitability faster"

... Not necessarily. It's actually pretty difficult to start something that's consistently driving revenue at all or even into the 5-figure range. That said, $18k/year isn't super high and he's looking for roughly 5x the revenue to acquire the business, which someone would obviously only do in hopes of growth.

antr• 14 years ago

This is the classic example of the seller mixing price (cost) with value.

You are totally right when you say "There's even more ways to spend $125k to make $18k/year" - there are plenty of corporate bonds paying a yield of 10% vs Cheddar's gross yield of 14%.

Subtract from that 14% your time, additional investment to grow user base, taxes and salary; your are left with nothing and $125k less in the bank.

Good luck to the seller, but it's a tough sale.

fourstar2• 14 years ago

You'd probably have more success posting this on Flippa if you haven't already.

samsoffes5• 14 years ago

Haven't heard of that. I'll post it. Thanks!

fearless2• 14 years ago

I would set the minimum bid on Flippa far lower than the $125,000 asking price if you want to get any interest on there. People on Flippa are not startup guys and are a lot more realistic about valuation. I for one would be interested in exploring buying this, but it's not worth anywhere near what you're asking, so it's a non starter for me.

propercoil5• 14 years ago

They will get crushed on flippa. On flippa your value is about 10 month incomes worth - this is the market right now. So if they did $1000/m for the last couple of months (neto) they would get $10,000, $11,000 tops.

PanMan• 14 years ago

To answer a question on the page: "I'm not sure how transferring apps from one Apple ID to another works. We can figure it out though."

I'm fairly sure this is impossible. I know people (with large apps and the right contacts) that have tried, and never heard of it being possible. Unless something changed recently. You could transfer the account (unless other apps are also on it).

samsoffes5• 14 years ago

That's what I was thinking I'd have to do. The only other app on the account is Shares - http://getsharesapp.com.

Thanks for the info!

Codhisattva• 14 years ago

I've heard anecdotally that you can transfer apps but you'll need App Store support involved. It's not immediate though.

dsDavidSmith• 14 years ago

The official line on this from Apple in their iTunes Connect FAQs:

----

Q: I sold my app to another developer and can no longer distribute it on the App Store. Can I transfer the app to the new developer's iTunes Connect account?

A: No, you can’t transfer the app to another developer account on iTunes Connect. To add the app to another account, remove the app from the current account and upload it to the new iTunes Connect account.

Note that uploading the app to a new iTunes Connect account will disable current customers from receiving automatic and free updates of your application. All customer reviews, rating, and ranking information will be reset. You will not be able to reuse the app name and SKU in the old account. If you have uploaded a binary or used the app with the iAd Network, your Bundle ID will not be reusable either.

-----

I have no idea if special exceptions are possible, but that is their official policy:

gte910h2• 14 years ago

It's been possible for awhile. It involves talking to people at apple developer support.

gte910h2• 14 years ago

Why is this being downvoted? This is true. Talk to people about it, you CAN transfer an app from one account to another. This is why the kindle app is now on amazon's account instead of the company that wrote it.

I am an iOS developer and have been since before there was an official API

josephlord• 14 years ago

From what I've read you can convert individual developer accounts to company ones and transfer ownership of them with a company sale but you can't split them or transfer apps between accounts. I would be really interested if anyone has experience that is different to this.

fearless2• 14 years ago

Your stats don't mention how much revenue Cheddar is generating. That's the most important metric for determining the price!

Nobody cares how many hours you put into something when determining price. Based on your traction so far, this acquisition would be based on a revenue multiple, not as a strategic sale. For a niche SaaS product like this one, I would expect a valuation of 12X-24X monthly revenue depending on growth rate. Is this product making about $10K a month now to justify the $125,000 price? Take a look at some of the products on Flippa to get a sense of how much you could get.

propercoil5• 14 years ago

On flippa it's worse than that 10x, 12x at most. People there have a huge BS radar, they seen it all. Their revenue is maybe $900/m after apple's 30% cut looking at the stats.

dh123• 14 years ago

Can I ask what is defined as a plus user? I cant see any evidence of a plus option on the cheddar web app.

propercoil5• 14 years ago

look at the left hand side: https://itunes.apple.com/app/id524382948

NonUmemoto• 14 years ago

How about sharing your next big ideas in public or at least some of them? You might encourage more people to buy it.

ricardobeat2• 14 years ago

Does he really charge $1000/hour or is it a joke I didn't get? http://hire.samsoff.es/

edit: explanation http://soff.es/one-thousand-dollars-an-hour

By that rate and the 800-hour figure, Cheddar would be one of the most expensive apps ever (utility vs cost).

campnic• 14 years ago

Thats funny. You must not work in the 'apps for government agencies' space. :)

ricardobeat2• 14 years ago

I imagine in that space most of the money evaporates into the machine, instead of going to a single person.

Ives• 14 years ago

The best sentences on that page are

> This rate is designed to weed out less serious clients. Serious clients generally have more exciting projects. I'd rather not freelance. I need to focus on Cheddar.

I guess now that he's no longer focussing on Cheddar he can lower his rate.

jakemk• 14 years ago

He works full-time at Seesaw now.

propercoil5• 14 years ago

It's worth whatever the buyer will pay for it. Best of luck guys

gs7• 14 years ago

Sam, what's the plan if you can't find a buyer for the amount you're looking for?

jere• 14 years ago

>This price is $125,000. I think that's a steal for what you get... If you were to hire me or anyone else to make Cheddar for you, it would be much more expensive.

Not to be a jerk. I really wish you well. But I'm curious: it would cost over $100k to make a todo list app? I would think that would be one of the simplest apps you could possibly make. Am I missing something?

[hmm... didn't see that your rate was $1000/hour. That answers part of my question.]

mitchi• 14 years ago

I don't mind him charging that price to

- Lawyers

- Dentists

- Doctors

- Notarys

But charging $1000/h for making trivial things is making the rest of us look bad. Especially when people do projects with 10000000 times the difficulty... for free.

georgemcbay• 14 years ago

If people are actually paying him $1000/hr regularly then it is making us look bad, but only because we are allowing ourselves to be so woefully underpaid. However, I suspect (but don't know) that he isn't being paid $1000/hr regularly (let's say for more than 3 hrs a week on average, which would be regular enough for most folks at that rate).

stfu• 14 years ago

Especially when people do projects with 10000000 times the difficulty... for free.

Thats imho the wrong way to look at compensation. People are not being paid by the difficulty of their projects but by the value of the problems they solve. Being a construction worker is certainly a lot more physically demanding than an office job. Still they are (usually) paid a lot less because they are easier replaceable, less training, etc.

vermontdevil• 14 years ago

Then you or they shouldn't do this for free. Put a price up front and treat the relationship as a business. Otherwise people will take advantage of you for free. But people will pay if there's a great need for the product or service

nfm• 14 years ago

This is something I've experienced first-hand, and an extremely valuable lesson for people thinking about starting a startup. At a low average monthly cost (say less than $30), it's really damn hard to get enough people into your funnel for a reasonable cost of acquisition. And you need to reach a LOT of people for your service to be a significant source of long term income.

If you're about to start a startup, I'd strongly encourage you to come up with some hypothetical figures for these metrics:

* Number of monthly uniques

* Percentage that will convert to trial

* Percentage that will convert to paid

* Average monthly subscription cost

* Churn rate

* Cost of acquisition

You'll be way off, but run the numbers you've made up past as many experienced founders as you can, and you might be able to come up with a model that's semi-realistic. Of course it will evolve over time as you get some real data and more experience, but the main point of the exercise is to then ask yourself questions like: "How can I get X0,000 uniques to my marketing site on a $0 marketing budget?", and "What can I change about my product/positioning/target market so I can triple my average monthly subscription cost?".

guynamedloren• 14 years ago

Sam - how's the $1000/hr consulting going? In your original post you mentioned that it was intended to supplement your income while working on Cheddar. Are you going to continue consulting now that you're selling Cheddar?

whalesalad• 14 years ago

You're batshit crazy to try selling for this price. The most recent reviews suggest it loses data and isn't very innovative. I tend to agree. It's yet another fish in a sea of todo apps.

Your craftsmanship and attention to detail on the UI and experience are great. I'll give you that. But this is a todo application. Not only that, but it's open source. Hell, I've built it and run the iOS app myself.

The only thing you're selling is 33,000 free users (rather, a list of them, not necessarily 33k active pekple) and a Ruby on Rails app. You also said it requires 4 dynos to operate, plus a Postgres db. I'd imagine the reason you're selling this is that it's costing you $200 per month and not making anywhere near that.

While I'm grateful for everything you have done with cheddar in terms of transparency and sharing with the community: I think you shot yourself in the foot. Reverse engineering the back end (from the app and api docs) and rebranding the iOS app would take me 2 weeks tops.

$125,000? Good luck man. If you can get that.. You're an even better magician than you are a developer.

drudru11• 14 years ago

Perspective.

When I read the original announcement for this app. It sounded cheery. The design is really pretty good.

Over time, though, I've learned to keep an eye on these announcements. Not just cheddar, but all of the 'check us out' posts. Sure enough, a lot of these do not succeed. Some even blog during their process, to share some epiphany. Building a successful product is hard. Filtering the noise on HN is hard as well. When I see a new announcement, I look at the 'good' in the product, but only time will tell if the founders have hit the right mix.

Sam, the OP, is not one to hold back from backlash. He doesn't have too much pride. He shows his product on HN to ask for users. He isn't afraid to admit failure when it happens. He needs the money, so he asks for it. I'm sure there are hundreds in a similar spot. Yet, they will not make a similar post.

It is super important to see the lifecycle of projects here. It adds a good perspective to this community.

Back to Cheddar. Without a passionate founder, a product like this will die. It isn't a turnkey business. It will require much more product work to become a success.

v66jack• 14 years ago

As a Cheddar user you're worth $2.50 more than a Facebook user. Isn't that nice. :)

Cheddar user $3.71 Facebook user £1.21 (May 2012)

czbond• 14 years ago

Talk to the guys at Asana or similar. If you could transition your 33k users to Asana or similar (through an upsell, conversion, etc) then they would be paying (roughly) $3.73 per acquiried user.

With an email address worth .60-.90 per month or more, they should be able to easily justify it. Just a thought

ferostar• 14 years ago

This might be considered off-topic, but i find the VentureBeat post about Cheddar's sale (http://venturebeat.com/2013/01/05/cheddar-for-sale/) really sad . The app is called a "cult classic" among "hackers and mac fans" and there's a disclosure at the end: it was written by the wife of Seesaw's founder (where Soffes currently works).

mcfrl• 14 years ago

What makes Cheddar stand out for me is how well crafted the experience is. Good luck with the sale.

QuantumDoja• 14 years ago

Just because I think this is relevant, here are the three founders talk(http://5by5.tv/founderstalk) podcasts Sam did:

Part1: http://5by5.tv/founderstalk/38

Part2: http://5by5.tv/founderstalk/39

Part3: http://5by5.tv/founderstalk/40

They really are a great listen.

fendmark• 14 years ago

I am a Cheddar user with a free account and have to say that it really is a well designed, intuitive app.

Personally, while I really like Cheddar I do not feel that it is a service that I would ever pay a recurring fee for.

I am a pinboard, fever rss, and instapaper user and feel that all of these nominal one time investments were more than worth supporting these projects.

I could see paying a one time $30-$50 fee for Cheddar

It will definitely be interesting to see what happens.

Cheddar is For Sale

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