Labors of love with unproven revenue rarely get valued by the market as high as founders think they should be valued.
a) They've been taking money for less than two full months, after a year of playing the things-on-Internet-should-be-free game.
b) They sold $4,000 worth of domain names at a cost of $2,000 for themselves in October.
c) They describe the business as being on a "growth curve", which is an interesting induction from one data point. I would be worried about whether you've shaken out all of the freebie customers who were dying for domains, causing the sales to crater the next month.
d) Cost to duplicate the site is not high. Barriers to entry in the market are zero. The site has no defensible competitive advantage, certainly not one which will survive the founders departing.
e) Whoever acquires it will need to find themselves a Rails specialist and they're not cheap at the moment.
I think anything over $40k is a great price for their product. The bubble is over, and a giant valuation for something that could easily be re-created in a few weeks just isn't going to happen right now.
not surprising based on what the thing looks like...if I were those guys I'd spend a few days to come out with an updated design at least for the front page...also I'd come up with a few designs myself that actually look good for the samples...the current designs in "Samples" look worse than what you can do with myspace
And they also have a patent for sale! And all goes below the reserve price. As vaskel said, they surely need a new design. Especially the intro on the left of the homepage looks cluttered
Provisional patent, at least in software, is only worth it for telling investors "we have a provisional patent." If it's a lawyer written provisional patent it may be worth more if it can be refiled as a regular patent with minimum work, but anyone can have a provisional patent for $125.
a) They've been taking money for less than two full months, after a year of playing the things-on-Internet-should-be-free game.
b) They sold $4,000 worth of domain names at a cost of $2,000 for themselves in October.
c) They describe the business as being on a "growth curve", which is an interesting induction from one data point. I would be worried about whether you've shaken out all of the freebie customers who were dying for domains, causing the sales to crater the next month.
d) Cost to duplicate the site is not high. Barriers to entry in the market are zero. The site has no defensible competitive advantage, certainly not one which will survive the founders departing.
e) Whoever acquires it will need to find themselves a Rails specialist and they're not cheap at the moment.
And for that they wanted greater than $40,000.