I remember hearing a story way back in the early 90’s. A college kid from California had started a BBS (a primitive version of today’s forums on the Web where users could form communities, chat and download software). He bought it off his uncle for next to nothing, attracted masses of users (as much as it’s dial in telephone lines could handle) and eventually sold it for the princely sum of…are you ready…
"an undisclosed amount known to be in excess of $5,000"!
Pre dot com boom or bust, was this an example of an early day web flip?
The process of Flipping, is usually made in reference to stocks or property and is primarily to describe the practice of “buying an asset and quickly reselling (or “flipping”) it for profit”. The aim of a flip is to make profit, usually in a relatively short period of time, relative being so to the market the asset is in – for houses typically one month to one year and in stocks typically the time from IPO to trading. Being realistic, there are only two (legal) ways to do this
- Buy an asset below market price that has been undervalued and sell it at its market price.
- Buy an asset that has shortcomings that affect its value and resolve them. Once fixed, sell at or above market price.
Going back to the Web, the process works the same with buying and selling websites.
The first option is arguably the simplest to execute, however without the tools available to property investors (such as surveys, readily available comparisons of similar properties, archived sale data) we rely on our instinct to work out the ‘value’ of a site. We run the risk of being just one incorrect assumption away from buying an eTurkey; in this market, just as in any other free market, an asset is only truly worth what someone will (eventually) pay for it.
The second option relies on the ability to identify shortcomings and our assumption that we can fix it. In the flipping of stocks the shortcomings are simple – the company is new to the ‘market’ with no previous data or track record to rely on. As an investor, your assumptions that company will make money are based on the knowledge of that company’s people, product or market it operates in. This is similar on the web but shortcomings are usually about problems with the site itself or poor promotion.
So, we don’t really have a manifesto (we’re British and as everyone knows we hate all forms of public declaration … except marriage and swearing). If we did have a manifesto it would probably be along the lines of
1) Create a simple, easy to use application that gives us the data we need to buy and sell in the knowledge we’ve made the right decision at the right price.
2) Take all the good bits that people have learnt works in property and finance, such as standard ratios and indices, best practices and solid research and put these to use in the web market.
3) Contribute as much as we can to the industry, with transparency, integrity and goodwill in the hope that it will reciprocate and one day someone will name a city, their children or even a small pet after us.
We believe we’re at the start of something exciting, and merely being at the start of something on the internet makes it pretty special. With a little more promotion, and the skills of some of the remarkable marketing people in the industry, we can all look back and claim we pioneered something great.
This is my first post here, and I look forward to making more as well as being a part of the community.
p.s. in case you’re wondering, we’re working hard and our app’s coming soon!