I still think reason stories like this make the papers is because they are so rare. Yes, it sounds easy, and get rich quick, but the graveyard is full others not so fortunate.
Turning any business around effectively still requires skill and knowledge of the market and methods.
In a way, this article reminds me of other I read of people that buy poorly advertised items on eBay (poor description, no pictures) and turn them around for profit simply by putting up more detailed information and high quality images.
Essentially anyone can do it (low barrier to entry etc.), but the difference between those that do it well and make good money and those that can't/don’t really is often down to persistence, practice, more practice, and yet more practice, and in many cases fortunate timing. The fundamental lessons of flipping houses, flipping websites, or flipping any commodity seem to be the same.
I wonder how this can apply to flipping start-ups.
In the Internet landscape, sometimes there were opportunities literally lying on the floor. Remember domain names? Anyone could buy a good .com name and make a fortune few years later, without any business model. Later, there were expired domains with high traffic...people just discovered them, picked them up and made a fortune again.
The point is, that there were finite number of such opportunities, and this I think applies to this article as well.
I'm really cynical about the numbers SEO people and internet entrepreneurs give to reporters.
There are a few missing pieces as well. Sure the dude bought a website, but how's the rest of the business being run? It's not just a "website", it's a whole store. They're going to have inventory to manage, suppliers to deal with, etc, etc.
It's possible they solved the inventory problem by letting their suppliers drop ship things, but there's still quite a bit of effort required for something like that.
I went there after reading NY Times article a couple days ago.. its the largest such marketplace. "$729k in websites sold in 18 months". All and all, kind of cool, but still an emerging industry. Reminds me of domain names a few years back. If you can code well, you can probably make a lot more money selling sites to clients who have money.
The opportunities I saw:
1) Buy a site that has traffic existing customers/visitors (will cost 1-3X profits). This could be a way to validate a product/service idea, and then make it better.
2) Build scripts for websites that you can license repeatedly for $200-$1k.
I've shopped for and sold a web business on the SitePoint marketplace (went for around $3K), and it's a fairly decent way to make money.
Many people operate by building quick affiliate based sites, growing traffic and then selling it with "proven income" to someone for 1-3K 6 months (or less time depending on how good you are at driving traffic).
SitePoint's marketplace is great (I built a site and sold it there half a year later for $12,000); I'd avoid the buy/sell/trade forum on DigitalPoint, however -- there's a lot of scammers there and half of them can't speak English correctly.
I like the article, and it certainly got me thinking, but it understates the level of skill required to revamp a poorly done website.
To make that type of money flipping sites, you need to spot the right opportunities and make all the right improvements: programming, design, copywriting, marketing, SEO, and optimizing the conversion process.
Anyone with the ability to do all these things well deserves to make money. I'm also skeptical that finding a buyer who can pay 6 figures is as easy as posting to SitePoint.
>> the latest wave of entrepreneurs who, like the day traders and real estate investors before them, are looking to make a lot of money without much effort.
The article pertains to a different breed of online 'entrepreneurs', called salvagers.
In the 'ground-up' startup world, the reality is not the same. It's not as simple as it sounds. Building a startup and running it profitably is equally difficult (and self-satisfactory) as running a brick-and-mortar business.
I am surprised there aren't more hackers here openly flipping sites in this manner, especially the most entrepreneurial ones. Maybe it's a hacker's best kept secret. Forget coding from scratch, angels, VCs and team members, just do the flip.
So this is "Hacker News"? i.e. site for HACKERS to hang out?
Where stories about weight loss, Hollywood-grade entertainment industry rumors and get-rich-quick speculators routinely get voted up to the top, while kick-ass Rails API documentation site I submitted yesterday was not even noticed.
If you think the article is about a Get Rick Quick scheme you are entirely missing the point. It takes years of learning and a high level intelligence to make a bad website into a good one.
The real insight here is that profitable sites can the built and sold much more quickly by buying old sites and renovating them. This is because of Search, where old sites that already have some authority and rankings have a great advantage over recently registered domains.
So out of interest, what do you think is the proportion of people who really know what they are doing vs the wannabes?
I think that those of us with our collection of domain names are going to see an exponential increase in value over the next two quarters.
The question is, how bothered are all of you about the impending Get Rich quick rush.
So far the Get Rich Quick crowd seems to have focused their attention on the website marketplace sites like SitePoint, which drives up sale prices for those who are willing to find sites to sell in other (smarter but harder) ways.
[+] [-] babul|17 years ago|reply
Turning any business around effectively still requires skill and knowledge of the market and methods.
In a way, this article reminds me of other I read of people that buy poorly advertised items on eBay (poor description, no pictures) and turn them around for profit simply by putting up more detailed information and high quality images.
Essentially anyone can do it (low barrier to entry etc.), but the difference between those that do it well and make good money and those that can't/don’t really is often down to persistence, practice, more practice, and yet more practice, and in many cases fortunate timing. The fundamental lessons of flipping houses, flipping websites, or flipping any commodity seem to be the same.
I wonder how this can apply to flipping start-ups.
[+] [-] greyman|17 years ago|reply
The point is, that there were finite number of such opportunities, and this I think applies to this article as well.
[+] [-] mrkurt|17 years ago|reply
There are a few missing pieces as well. Sure the dude bought a website, but how's the rest of the business being run? It's not just a "website", it's a whole store. They're going to have inventory to manage, suppliers to deal with, etc, etc.
It's possible they solved the inventory problem by letting their suppliers drop ship things, but there's still quite a bit of effort required for something like that.
[+] [-] steveplace|17 years ago|reply
I guess they're doing their own inventory.
Edit: This article was linkjacked (i.e. stolen) from the nytimes. Here's the link: http://www.nytimes.com/2008/07/29/technology/29flip.html
The picture and the birdcage are there.
[+] [-] jonmc12|17 years ago|reply
I went there after reading NY Times article a couple days ago.. its the largest such marketplace. "$729k in websites sold in 18 months". All and all, kind of cool, but still an emerging industry. Reminds me of domain names a few years back. If you can code well, you can probably make a lot more money selling sites to clients who have money.
The opportunities I saw: 1) Buy a site that has traffic existing customers/visitors (will cost 1-3X profits). This could be a way to validate a product/service idea, and then make it better. 2) Build scripts for websites that you can license repeatedly for $200-$1k.
[+] [-] josefresco|17 years ago|reply
Many people operate by building quick affiliate based sites, growing traffic and then selling it with "proven income" to someone for 1-3K 6 months (or less time depending on how good you are at driving traffic).
[+] [-] rob|17 years ago|reply
[+] [-] jwesley|17 years ago|reply
To make that type of money flipping sites, you need to spot the right opportunities and make all the right improvements: programming, design, copywriting, marketing, SEO, and optimizing the conversion process.
Anyone with the ability to do all these things well deserves to make money. I'm also skeptical that finding a buyer who can pay 6 figures is as easy as posting to SitePoint.
[+] [-] hgielrehtaeh|17 years ago|reply
Better luck next time.
[+] [-] nreece|17 years ago|reply
The article pertains to a different breed of online 'entrepreneurs', called salvagers.
In the 'ground-up' startup world, the reality is not the same. It's not as simple as it sounds. Building a startup and running it profitably is equally difficult (and self-satisfactory) as running a brick-and-mortar business.
Btw, here's the original NYT article: http://www.nytimes.com/2008/07/29/technology/29flip.html
[+] [-] adrianwaj|17 years ago|reply
[+] [-] dpapathanasiou|17 years ago|reply
I think it's because of two factors, as the article mentions:
"Creating the value, though, is the tricky part."
and
"The average selling price of Web sites on eBay was $78 last month."
[+] [-] tx|17 years ago|reply
Where stories about weight loss, Hollywood-grade entertainment industry rumors and get-rich-quick speculators routinely get voted up to the top, while kick-ass Rails API documentation site I submitted yesterday was not even noticed.
What's next? Britney's next pregnancy prediction?
[+] [-] ConradHex|17 years ago|reply
Maybe Rails isn't that popular here. (Personally I'm not crazy about it.) And Rails docs aren't really "news", are they?
[+] [-] jwesley|17 years ago|reply
The real insight here is that profitable sites can the built and sold much more quickly by buying old sites and renovating them. This is because of Search, where old sites that already have some authority and rankings have a great advantage over recently registered domains.
[+] [-] icey|17 years ago|reply
[+] [-] jobeyonekenobi|17 years ago|reply
I think that those of us with our collection of domain names are going to see an exponential increase in value over the next two quarters. The question is, how bothered are all of you about the impending Get Rich quick rush.
[+] [-] rationalbeaver|17 years ago|reply