At what point is a startup "sellable"?


4

I have an idea for an online business, but I don't have the time to actually "execute" it. Is it sellable if I develop the business plan, website, etc.?

If so, or if not, when does a business become sellable? Who will buy it?

Selling Business

asked May 21 '11 at 17:12
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Richard Des Londe
206 points

6 Answers


8

Ideas are a dime a dozen. They are worth very little, it’s the execution that’s worth it’s weight in gold! So if you don't have time to 'execute' it then it's not sellable at all.

How would you sell it anyway? As soon as you mention your business plan to someone nothing stops them from implementing it straightaway (without giving you anything).

Also how would you value the business if it doesn’t exist yet (and therefore has no income)? The only thing you could sell would be the domain name if you have already bought it (and even so it's only worth something if it is a very good domain name for this particular business you have in mind) and potentially the website (you don't give much information about it: would it be database driven? static? etc)

answered May 21 '11 at 17:53
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Anthony
203 points
  • Yeah, database driven. It would be quite complicated. . . – Richard Des Londe 9 years ago
  • @Richard: in this case the website might have some value but no more than it would cost a developer to redo it from scratch. In this case doing the website is part of the execution especially if it's quite complicated. I'm a bit confused now: in your question you said you didn't have to execute it but now you're implying that you would take the time to 'execute' this complicated website... – Anthony 9 years ago

4

I've had at least 3 product ideas today, but that actually means nothing.

Anyone can have ideas but not everyone can execute. Execution is hard, like really hard.

Building the product

Branding

Building team

Finding money

Finding customers

Marketing

Administration

Persevering when you encounter that inevitable bump in the road

Etc etc....

Its pretty exhausting, but execution is where the actual business is.

answered May 21 '11 at 19:42
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Tinny
404 points

3

"At what point is a startup “sellable”?"

  • a Product is sellable at each point, from idea to market established product.
  • a Startup is sellable when you have startup.

So, the question is "When we have a startup". My guess is that you have a startup when you have product working, or at least some half cooked product or prototype.

answered May 21 '11 at 21:32
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Ross
2,288 points

2

As Anthony mentions, it's probably not sellable. Value is often defined by substitutes. If you don't tell someone the idea, what would it cost them to do something similar? Would they even want to do this based on what they're doing already? Would they be willing and able to do it well? If you do tell them, what would it cost them to do it without you? If the difference in value from knowing the idea is big enough it might be an idea you have to protect, but then how do you convince people they want to buy it? Do you have a proven history of valuable ideas?

If you have an actual running business, the easiest way to answer the question is to think of what would happen if you were cut off from the world for 3 months. If that's bad for the business, then it's really your job and it's not easy to sell. If the business keeps running fine then it has an investment value which is defined by past earnings, future potential, and risk.

Coming back to your idea - if you have a special ability to execute this idea it sounds like you might want someone to pay you to do it and then take ownership of the results and responsibility for future investment, marketing, etc. This is more of a strategic partnership than selling a business, and it depends a lot on how it complements the buyer's existing business. Can you double sales of Windows using your idea? Then you may be very rich soon :)

answered May 22 '11 at 00:54
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Richardg
474 points

1

U-S-E-R T-R-A-C-T-I-O-N

if you can retain users/clients/traffic - you're on to something.

answered May 22 '11 at 02:09
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Ron M.
4,224 points

0

Anything is "sellable", as long as there is someone willing to buy :-)
It's not unheard of that ideas have been sold as just ideas. You need to figure out if there would be someone even interested in buying the idea (maybe an established company in the same field). Then you need to see how you can protect your idea from being developed without paying you. There is a very small chance that just an idea can be sold.

In essence, the more you are able to turn your idea into reality, the easier it will be to sell, and the more valuable it will be. If you can prove that:

a. It can be done
b. There are people who are willing to pay to use it
You have a chance in selling it.
In absolute most cases, this involves at the minimum having a prototype, and getting significant user feedback that it's something they will like to use. If it's a web based business - then you should build the actual website, and get some real-life users.
Even then, it will probably be hard to sell. Most investors will want the founder to stay on-board for a significant period (at least a year), and make sure that it works and sells. At least part of the price will be associated with this requirement.

answered May 22 '11 at 06:40
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Zottek
111 points

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