I recently did an interview with Acquire.com on my experience buying and selling a company on their website.
One tip I share in the interview is how to properly value a company.
Most of the time, we value companies based on a multiple of revenue. Eg If a company makes 10k/year and we give it a 3x multiple, then the company is worth 30k.
However, for smaller companies this is actually a mistake because it doesn’t account for the value of the IP itself. Especially at low revenues, the code and IP are worth far more than the revenue it generates.
So the proper way to value a company, especially if it doesn’t make that much money, is to ask these two questions:
1) How much would you pay for this company if it made 0 revenue?
2) Then add on the revenue multiple on top of your answer to 1).
And that’s the real value of the company.
In full transparency, I didn't make much on the acquisition, maybe $15k from the acquisition + revenue which I had to split with a partner and to cover some costs. But it was still an experience.
If you have any more questions on buying and selling companies, I’ll answer them below.
We often think building courses is the ultimate passive income play. But the reality is that selling a course is neither easy nor passive.
1. I only made about $1500 from two courses I built in the last 6 months.
Considering I spent 3 months on the first course, and 2 weeks on the second, I probably won’t break-even on either course for a long time.
2. I also have a sales conversion rate of 1.5%.
That means for every 100 people who land on my course pages, I can expect to make 1.5 sales.
Driving 100 people to a course page is actually very difficult, as it requires somewhere between 50k-100k post impressions to get there.
While attainable for people with a mid-5 figure audience, I’d have to post an insane amount to get that many post impressions to make a sale.
Stories of people making lots of money from course sales are anomalies. The reality is that most course creators likely won’t break-even on their course.
Those are all fine, and to some extent it can be considered for engineering, but isn't there a line to draw somewhere? At some point leveraging your expertise to do other work turns into a different role completely, at least in practice. I also think in programming, because it requires a high amount of creativity, there is lots of room for improvement that is only accessed by experienced programmers, which end up transitioning away into those other roles.
Hi everyone, OP here :) In this article, I discuss 3 common mistakes that junior engineers make that 10x engineers don't. 3 key takeaways:
1) 10x engineers are investors first and foremost. Their work is an investment of their time, and they go for tasks that have the highest ROI.
2) 10x engineers are not "lone geniuses". They know when and who to ask for help.
2) Being difficult to work with instantly nullifies the 10x factor. Engineering is hard enough - don't let your ego wash out your 10x engineering skills.
1) Before starting a DAO, always compare it to its web2 version. Example: before you start a crowdfund DAO, why wouldn't a web2 GoFundMe work just as well?
2) A DAO is only as strong as decentralized as its most centralized link. If treasury management or voting isn't decentralized, the organization can be co-opted by bad actors. If a DAO is ruled by a multi-sig wallet, what's stopping the voters from colluding with each other to steal the funds?
If you liked this article or wanna talk crypto more, DM's always open at twitter.com/_michaellin . Cheers!
A few months ago I bought a basic screen recording website off microacquire. As I tried to grow the website, I noticed that more and more people were using it for customer support use cases eg recording bugs, demo-ing steps etc.
Since then I've pivoted it into a full-fledged customer support tool. We've had a lot of users interested in the enterprise aspects - embedding a screen recording on their website, white-labelling, CNAME support, and gathering feedback via a simple widget.
One tip I share in the interview is how to properly value a company.
Most of the time, we value companies based on a multiple of revenue. Eg If a company makes 10k/year and we give it a 3x multiple, then the company is worth 30k.
However, for smaller companies this is actually a mistake because it doesn’t account for the value of the IP itself. Especially at low revenues, the code and IP are worth far more than the revenue it generates.
So the proper way to value a company, especially if it doesn’t make that much money, is to ask these two questions:
1) How much would you pay for this company if it made 0 revenue? 2) Then add on the revenue multiple on top of your answer to 1).
And that’s the real value of the company.
In full transparency, I didn't make much on the acquisition, maybe $15k from the acquisition + revenue which I had to split with a partner and to cover some costs. But it was still an experience.
If you have any more questions on buying and selling companies, I’ll answer them below.
My full interview is here: https://acquire.com/blog/how-to-buy-and-sell-a-saas-business...