Introduction
On January 15th, 2020 we pulled PricingBot off the grid after selling it to our Serbian competitor: Price2Spy.
In this post I'll explain why and how we did it, without BS, hoping to help fellow indie-hackers like us.
Before you ask, I won't be able to share the exact amount we sold PricingBot for. What I'm allowed to say is that we sold it for the price of a nice car.
Oh I see, this kind of car ?
Nope, not this kind of nice car.
Oh this kind of car then?
Not this kind either 😉.
PricingBot's history
In January 2016 Kevin and I built ShopToList, a browser extension allowing you to save the product you wanted to buy online and get notified once they are on sale.
We had some traction on ProductHunt but we quickly understood that it would be hard for us to make a living out of it.
However, we noticed that some people used ShopToList to monitor thousands of products and we quickly understood why.
Those people were actually e-commerce owners using ShopToList to monitor their competitor's prices.
We thought it was a good business opportunity, and after some market research, I left my full-time job and joined Kevin on the indie-hacker road to try to build a price monitoring service.
We managed to have an MVP in about 3 months, we opened the free beta and had around 40 users.
This beta taught us two important things:
- Matching users' products with their competitors' would be a key challenge to face in order to reduce friction during onboarding.
- Not all e-commerce users need price monitoring, even if they think they do.
9 Months getting and losing clients
In January, we send an email to all our user-base telling them that from now on, PricingBot would not be free anymore and that if they wanted to continue to use it, they would need to pay for it.
Five minutes later we have our first paying customer. We were ecstatic.
However, the days that followed were more difficult. We had that one client that had a catalog of 600+ products that needed to be matched with 6+ competitors.
We offered to do everything by hand and would not charge more for this setup.
We were, you know, doing things that don't scale.
He said yes and subscribed to our $300 monthly plan, our most expensive one.
I think Kevin and I both spent 50 hours matching his products only to have him churn one day before renewing his subscription.
I remember he told us: "Thank you for everything guys, but in the end, I don't need price monitoring that much 🤷♂".
We also had this other lead whom we had almost 60 emails exchange with, we completely set up his account without being able to make him a customer.
We were stuck with onboarding, the process was too time-consuming to do by hand and way too difficult to expect from our users to do it.
We ultimately managed to gather clients here and there but after 6 months we only had 6 clients for $600MRR.
Getting and growing traffic.
Parallel to building the product we had to build an audience so we decided to go with content marketing.
Content marketing was the best choice for us because:
- It was free in dollars, even though it takes a lot of time
- It brings a qualified audience to your domain
- It builds up SEO
This is why we wrote 4 good pieces of content that allowed us to quickly rank very well on important keywords such as "price monitoring" for example.
We also did a successful ProductHunt launch that brought us tons of attention.
All of this to say that while we were struggling on the product side, traffic-wise we add good and valuable results.
At this point, PricingBot was not making tons of money but the traffic was constantly growing and we were getting multiple new users per day.
Looking for the 🐝
During the summer we decided to build a web scraping API.
Of course this idea, did not come out of nowhere, I explained in great length the whole process in my Indie Hacker interview.
We quickly managed to have great results and in 2 weeks we already had more clients than with PricingBot.
Because we were developers ourselves we also managed to get people's attention by publishing good pieces of content such as this blog post about Python web scraping (40k reads)
A few months ago we decided to sell PricingBot in order to be able to focus exclusively on ScrapingBee. It was becoming clear that we'd have more success with ScrapingBee than PricingBot so why not try to sell it to someone that could actually make something big(ger) out of it.
Who to sell it to?
When you sell a SAAS on the internet you have basically 3 options, either you use a platform such as Flippa.com or a broker that will show your website to potential buyers or you can try to find the buyer yourself.
A few months ago we sold ShopToList using a platform such as Flippa and it was very very time-consuming.
A lot of potential buyers would ask us all the same questions and require many talks without even being clear about their intention.
In retrospect it was overkill, especially considering the size of ShopToList at that time.
For PricingBot, remember that we decided to sell it because we did not have time to take care of it, so we really wanted to avoid spending too much time in endless Skype meetings that would go nowhere.
We needed to sell it quickly (to not lose our traffic and Google momentum) and preferably to someone who understood the product and the industry well (to ease the handover).
We made the first move I contacted our competitors' CEO on LinkedIn.
I decided to be very clear from day 1 and to went straight to the point, here is the message I sent to Misha, Price2Spy CEO:
I contacted some other people but ultimately Misha was the quickest to show his interest in PricingBot.
Misha stated that he was interested, he knew the industry perfectly so he knew what our numbers meant and was able to quickly assess if PricingBot was worth something after asking 10 precise metrics to us.
How to sell it?
From this point we agreed on one important thing, PricingBot was worth something and Misha wanted to acquire it.
Now comes the hard part. When you sell your business, the two biggest aspect of the negotiation will usually be, well, the price of course (not only the price but also the structure of the payment: equity, cash, in one time or not etc,...) and the implication of the founders in the product after the sale.
In a perfect world (for a seller) when someone buys a business, he transfers the money and receives a bunch of email/password allowing him to get control of everything and that's it. Of course in the real world, it does not work like that. A buyer will spend money for your product but he will want to have a product that works perfectly, well after the selling takes place.
Incentives are completely different between the seller and the buyer (as always you could argue). The buyer usually wants 2 things:
- control of your product
- ability to update/integrate the product into his/fix the product, at will
The seller usually would like to get the money as fast as possible and move on with his next project.
All of this is written into a contract that goes back and forth between the buyer and the sellers until everyone agrees with the term.
Fortunately, with Misha, this negotiation was really easy and took less than two weeks. What he was asking and offering was completely aligned with our interest and beside small details, the draft and the final contract were almost the same.
Basically, we agreed to split the handover to PricingBot in 3 phases and each phase came with some payment. The most important of which was phase 2 where I would go to Belgrade to basically give the PricingBot's keys to Price2Spy team.
I am very grateful for Misha and his team for making this handover so interesting and easy. Everything was well organized. When I arrived in Belgrade, I had 5 meetings with the different teams of Price2Spy to help them taking over our product. Everyone was ready and knew what to do to make this heavy process as seamless as possible.
Misha also took the time to show me around in the city while sharing his detailed knowledge about Serbia history, Misha if you read this, thank you!
We also talked extensively about how they handled the problems we failed to solve and how they ran a price monitoring company with that scale.
A word about the selling price
As mentioned at the beginning of this article, I can't disclose the final price of the agreement, however, I can say that between the first and final offer the price went up by 50%.
How? To put it simply, supply and demand. Early on we said to our buyers that we had multiple buyers on the line (which was true) and that we could not sell it to the price he offered us.
One funny thing is that during the due diligence I have him read-only access to our Google analytics. During the one final mail exchange, he offered us his initial offer plus 20% for PricingBot.
We said that it was too low, thanked him for his time and wish him good luck with Price2Spy.
Two days after, I remove his access to our Google Analytics and 2 minutes after I revoked him I received this email:
Conclusion
Keep in mind that this selling was that simple because PricingBot was not very big and because we were lucky to have Misha with whom it was a pleasure to work with.
We were lucky to only deal with honest people with clear intent, of course, it can get much more complicated. If you'd like to read other stories like this one take a look at those:
- Selling My Bootstrapped SaaS Business by Tyler Tringas
- An incredible story about a SaaS acquisition nighmare, really don't know if everything is true
And don't forget to check out this Nathan Latka's book if you haven't already, it taught me a lot.
I am really happy how things turned out with PricingBot and Price2Spy.
Kevin and I will now both be able to commit 100% on ScrapingBee 🐝.
Stay tuned!
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