We'll be doing a more formal announcement and proper introductions soon, but there are a couple of things we wanted to add to this discussion.
First, we are thrilled to be at the helm of Sortfolio. We have a lot of experience in the area and are excited about the plans we have for it.
Second, the guys at 37signals were a pleasure to work with. They were open, transparent, and are committed to the success of Sortfolio.
We'll be doing the full transition in the weeks to come. Once we are all done, we'll post a proper retrospective and fill everyone in on the details.
We can't wait to share more!
Perhaps they already had a buyer in mind and just needed some negotiation leverage or wanted some free publicity.
I imagine people who were genuinely interested in bidding for Sortfolio feel a bit cheated with this announcement coming out of the blue.
Also, this is not out of the blue. We lost interest in considering all sorts of complicated deals a while back. So we told everyone that the price was $480K and that the deadline for closing a deal was July 1st: http://37signals.com/svn/posts/3172-sortfolio-going-once-goi...
So there was really no "bidding" after that point. It was quite simple: Give us $480K and the site is yours. The new buyer's did just that. End of story.
If you didn't want people to draw their own conclusions then you should have acted responsibly and made some attempt to answer and respond to the questions posted on sale page.
If you had no intention of providing this additional information because it was not worth your time, then you should have made it clear to people that no additional information would be forthcoming.
Instead, all the "chinese whispers" of people throwing ideas around seems to have really got you disgruntled, when you only have yourself to blame, and then you take your arrogance out on people asking straight and to point questions.
Do I think you got the $480k asking price? shrugs
Would be nice if it was an actual update in the original thread instead of leaving us to speculate, though.
Edit: Thanks for this update at least. Congrats on the sale.
How about this? Nice job guys. Congrats on sticking to your guns and getting the price you felt was fair.
I would have sold for less.
The whole story just sounded so contrived from the start and didn't play out much better.
I mean, we know 37signals and reality are not best friends, but just throwing away 220k/yr in nearly passive income if it doesn't sell for the desired price, seemed a little far out there to begin with...
With that kind of money at stake I'd have expected at least a little more enthusiasm in the flippa-auction from their end. No least given how much DHH likes to bash the VC-gambling - how does that jive with playing russian roulette on a product raking in that kind of money, for no plausible reason?
My pet theory is similar to yours; I think they simply had a buyer from the start, and offered to throw in some "37signals original flavor media spin" as a bonus.
Whichever the truth is, it obviously worked out for them.
We tried to sell Sortfolio a year earlier and nothing came through. We decided to try again this time with a deadline and a public price.
This deal materialized because the buyers were interested in what we were selling, we liked their enthusiasm for the product, and we reached an agreement. The deal came together towards the end of the deadline.
It would have been a lot easier and less stressful for all involved had we had the buyer up front. We of course would have taken the up front easy way had it presented itself.
Everyone had an equal chance to buy Sortfolio - one party stepped up and got it done.
HN has this culture of entrepreneurial voyeurism. When a unique scenario like Sortfolio gets posted, we like to watch how it unfolds and learn from the process. When dozens of interesting questions piled on without any response from you guys, I was disappointed.
Clearly you're well within your rights to do what you did, but I hope this sheds some light on some of the negativity and speculation. I am grateful for these last few updates you guys have given and I hope you'll consider writing a more detailed report once the dust settles.
The subtext to some of the comments here suggesting that its all made up, is really odd! Why would 37 Signals even need to waste ours or their time making this up? They run Basecamp!! they really don't need to impress us with selling a relatively small business! its completely beneath them!
Instead of poking holes in this story, we really should be celebrating it. Building a business of this size is not that hard, a few hundred customers and a solid model and by solid model i mean, Charging for your product is all it takes. If this doesn't serve as inspiration to us all then i don't know what will.
Here's hoping we get some follow-up posts about how it goes for the new owners on SVN.
We'll be sure to follow the life of Sortfolio after the sale.
If you'd said from the start this was the case you'd have got many more bids, on HN alone I saw many comments from people stating they would bid if this was the case.
Maybe I missed something big or I'm not aware of something, but this was what the negativity was about, not the fact that the site is worthless and can't sell.
If I had to guess I'd would say that the people who bought the site had offered 480k but you didn't want to say that you had a solid offer for a certain amount. Speculating that you told them you would sell to them at that price if a better offer didn't come in. This seems to dovetail with the somewhat cavalier attitude of previous posts and 37signals principals HN comments.
"despite the HN peanut gallery's perception of the world, there is actually a market for profitable businesses."
I've bought and sold several businesses both as the business owner and as a go between (collecting a commission for the sale of a business).
What research went into discovering that there is a market for profitable businesses?
This really shatters the idea that the point of business is not to make money.
The Inside Story of a Small Startup Acquisition - https://news.ycombinator.com/item?id=3511437
http://www.startupsfortherestofus.com/episodes/episode-83-hi...
This is good. Sortfolio may not have been worth the $480,000 otherwise. I imagine that requiring customers to re-enter their info would cause an immediate drop in the number of paying customers.
If Sortfolio provides significant value to its paying users (customers), they won't lose a great proportion of their revenue on CC re-entry. Those who don't re-enter billing info are the people no longer getting regular value from the product.
Folks, this is a huge success! It's a company that bootstrapped themselves (and get some credit for many other bootstrappers, myself included) and found an exit strategy that's a win for all parties: they make money. The buyer has a business that provides real world value to its customers. And the customers will continue to receive their value for dollars spent. (How many articles bemoan buyouts that are "bad for original customers/early adopters/etc."?)
Let's just take a moment and appreciate a successful exit. Everyone wins -- the founders, the buyers, AND the customers.
Current sortfolio customers got told clearly, 37s doesn't care about their business. Users of other ones of 37s' 'second-tier' products got a warning shot: your tool could be shut down or sold off any day. 37s hasn't revealed the new buyer, and appear to be hands off from here on out.
Just seems like a lot of value has been lost here. I think a better way to go would have been trying to find a strategic partner, and taking a longterm equity stake. Or bundling up Sortfolio, the 37s Job Board and The Deck into a new advertising company, with a CEO who will grow it. Something where the handoff can grow the legacy, instead of 37s washing their hands.
Instead Sortfolio lives, 37s got their money, but the whole thing feels icky. my 2 cents, no conspiracy theory
When I first read their blog post I was quite interested. I mean, here was a profitable business built by a well known company.
The only really unanswered question was whether or not existing customers would need to re-enter their payment information. I asked the question and recieved a prompt response.
I'm sure I would have had more questions if I could have convinced my partners to pony up their share of cash. But in the end, the deal wasn't for us.
Congratulations on the sale and congratulations to the new buyers!
According to Compete.com, in the last 12 months Sortfolio traffic decreased more than 75% (4 times):
Deadlines work.
> It seemed improbable back then.
Naw. You have to keep in mind that the HN community has gathered around a very specific way of doing business. Where people start to make a mistake is in thinking that this is how the rest of the world works too, and that there isn't any other way to do business.
There is still a huge amount of activity in the business world that revolves around long-term, sustainable, profitable businesses, especially those coming from people with the kind of reputation that 37Signals has. It's just that all those people don't have their own little online community where they share notes.
(If 37Signals offered such a community, I'd sign up in a heartbeat and my HN activity would finally finish it's long descent to 0.)
I didn't think it was improbable. 37Signals knows what they're doing.
Now we'll see how the site does once it is no longer associated with 37s. Maybe we'll be surprised again. it would be great to see Sortfolio thrive in the long-term.
I'm generally a defender of 37signals' methods, but it seems they didn't think this one through. They're lucky they found a buyer—it saved them a lot of embarrassment.
37S gets to sell Sortfolio in whatever fashion and to whomever they want. Oh man... you guys should try to rent an apt in NYC.
Buyer: Umm ok, how about we pay your $480K publicly and you quietly give us $430K in 37 Signal's stock?
37S: Deal.
In all seriousness I'm a big admirer of 37 Signal's and I like their equity grants concept[1] for employees. This above is meant as a joke.
[1] http://37signals.com/svn/posts/2987-an-alternative-to-employ...
