What’s going on?
Update
Three buyers are very interested at this time. I’ve spent a lot of time emailing back and forth, making phone calls and preparing documents. It’s all pretty time consuming, but very interesting. I think we’re getting close to receiving formal bids. Everyone is aware and comfortable with the current minimum bid of $900K USD.
My biggest fear was that by live-blogging the sale, I would scare away buyers. The opposite has been true. Everyone who has gotten in touch said they find it fascinating and they appreciate the openness.
Meanwhile …
Gill came across something that made me laugh. She found an old photo of me in Carson Systems’ first office (our top bedroom!).
Gotta love that! An old crappy PC, a cactus plant, and two wooden desks!
Here’s a look at Carson Systems now. Wow, things sure change quickly. We’ve now got our own office, a four-day working week, five employees, gorgeous Mac gear, daily fresh fruit shakes and fresh ground coffee. Can’t complain!
On another note …
Someone called me out about my claim that we spend zero money on advertising.
I know you are never going to believe me, but I had forgotten about that ad. We spent £1800 on it (we got reduced rates because it was a slow month for the magazine), and we got one sign up (a Business Plan user) off it. The ad ran for 30 days in July (I think).
What does that prove? It’s hard to say. Possibilities:
- DropSend is not right for the audience.
- The reason we got the ad so cheap is because the readership is down.
- The design of the ad wasn’t compelling enough.
Anyway, thanks for calling me out. I had honestly forgotten we did this ad (probably because it was such a dismal failure).
what about ads on The Deck? I thought a saw some, but I could be wrong…
Comment by ns — November 16, 2006 @ 1:16 am
Foof — 900k minimum bid!! You’ve got to say that is a pretty good return on your investment!
Comment by Matt Carey — November 16, 2006 @ 1:55 am
Was checking in tonight because I was wondering what was happening. No need to ask, you’ve posted an update. It’s great to hear that it is going well. Now about that 4 day work week, Blake’s going to see that and we’re going to have to discuss. Maybe after we launch SiteMighty and it’s rolling along. Something to aspire too. Thanks for keeping us up to date.
Comment by Chris Schultz — November 16, 2006 @ 2:28 am
You have 5 employees and the company this year has only made $20,000 in profit.
I wish we had cheap labor like that in the states.
Thomas
Comment by Thomas — November 16, 2006 @ 5:21 am
Ryan, let me add my thanks for sharing your experience so openly, and my hearty congratulations at how things are evolving. Might I request you also share the process you went through in coming up with the valuation for DropSend?
Comment by Carson McComas — November 16, 2006 @ 6:07 am
Thomas- We don’t just do DropSend. We do lots of other things besides, mainly conferences, workshops and our other web app Amigo. Hence the five employees.
Comment by Gillian — November 16, 2006 @ 9:38 am
This sounds really exciting for you! Can you give more details about the “emailing back and forth, making phone calls and preparing documents”? What are the processes you’re going through before the formal bids?
Comment by John — November 16, 2006 @ 9:44 am
Now about those Deck ads. Yes we did put a DropSend ad on the Deck but the ad was just one in a rotation of four that we put up there. The other three being for the Future of Web Apps San Francisco. So technically, the ads were paid for out of the FoWA’s marketing budget and DropSend just piggie-backed on that.
So…(in a Life of Brian-esque voice)… apart from the Creative Review ad, and apart from the Deck ad, we don’t spend any money on advertising (at least not any more).
Comment by Gillian — November 16, 2006 @ 9:47 am
I think the thing with the advertising is not just what you have or haven’t paid for it, but that it HAS been advertised. You are able to exploit your various parts of your business, such as advertising on Vitamin, “sponsoring” workshops, or speaking about it at your summit, which is something you wouldn’t have been able to do without money if Drop Send was independent.
Comment by John — November 16, 2006 @ 10:16 am
Hey Ryan,
Great read, but whats with working in the dark!!
Marc
Comment by Marc McHale — November 16, 2006 @ 11:17 am
It seems to me that you’re saying: “Well that’s okay for you guys to say because you have Vitamin and FoWA and Carson Workshops and all these other sites that get lots of visitors, of course you don’t need to pay for advertising. But in the real world people do”.
I would disagree. Every company has some kind of leverage somewhere that they would be crazy not to use. For instance, you might know someone who has a big blog and ask them to post a link to your site, any of you could start a site that could gain as many readers as Vitamin, there’s nothing to stop you speaking at a conference about your product if you really wanted to.
We’re not going to apologise for using one part of our business to advance another. It’s what all of you absolutely must do if you’re serious about making your company work.
Yes DropSend has been advertised but (with two exceptions) always for free. We don’t have a marketing budget and yet our product is still successful. There’s no reason why you can’t do it too.
Comment by Gillian — November 16, 2006 @ 11:20 am
Well guys, thanks for the interesting reading, im almost as excitecd as you are about the dropsend sale, i can remember when i first started reading the blog, you inspired me then so i got all my ideas etc together, ive been planning my first webapp for at least 6months now, although ive just started university so its going to take me a while to get it ready and shipped. Please keep the blog updated regulary its really good to know whats happening around the carson office, keeps me inspired and gives me something to work towards.
Comment by James Deer — November 16, 2006 @ 12:50 pm
[…] Ryan Carson’s response to my last post on zero advertising got me thinking. He wonders why the advert was so unsuccessful. To me it has to be point one - “DropSend is not right for the audience.” That audience being ad agencies and the like who have subscriptions to Creative Review - I know you can buy it off the shelf but I think its mostly an industry mag, though i could well be wrong here. […]
Pingback by dk » Know your audience — November 16, 2006 @ 1:53 pm
Gillian - don’t get me wrong - I think it’s a perfectly legitimate and good thing to do. My point was mainly that not every potential buyer would have the same marketing power that you enjoy.
Comment by John — November 16, 2006 @ 2:49 pm
What advantages does having an office give you? Over at 37 Signals, they seem to prefer to work from home mostly and use Campfire for communication.
Comment by Joel Python — November 16, 2006 @ 3:49 pm
Thanks for publishing and sharing all this information. I think Carson Workshops is really really good at guerrilla marketing. This blog is a great example of that. DropSend buyers are already getting tons of free publicity even before they buy this product. Brilliant!
Carson Workshops is very successful at this level of marketing because of their ability to build successful brands. They also seem to have uncanny knack of making the right pitch at the right time, for ex: they are heavily involved in the Web2.0 world and get the best speakers etc. You guys should write a book similar to the Getting Real book from 37signals.
Comment by Sunder Iyer — November 16, 2006 @ 6:59 pm
All the fuss about the advertising, and in the end, does the advertising really matter? Advertising really exists to brand your product, it’s not really something that helps with sales. I’m willing to bet that Ryan would have done just as well without any advertising. From personal experience, the $10k I’ve wasted on advertising with Google, OSTG, and Tribe was $10k I should have been putting into more servers or more contract programmers.
Comment by Michael T. Halligan — November 17, 2006 @ 1:53 am
Ha! Got the same desk in my home office :)
Comment by Aaron — November 22, 2006 @ 2:01 pm
Hey Ryan– congrats on the 900k bid price, that’s terrific. Good luck with the other ventures; love the idea of start it up and sell it off. best, Eric
Comment by Eric M. — November 23, 2006 @ 1:59 am
Ryan
I’ve been following your work for quite some time now and I must say I’ve been very impressed by your whole approach. I think your definitely picking the right time to sell DropSend but I’m interested to know why anyone would want to pay in excess of 900k USD for a product that probably has a very short self-life. There is no doubting that DropSend solved the problem of emailing large files very well, but free services of an equivalent nature are springing out of the wood work all the time (and I don’t believe their is much customer loyalty when it comes to money) and surely the life of this type of service is limited to no more than 18 months, after which you can be sure this problem will be solved directly by the email service providers. I guess what I’m asking is that in the continued nature of barenakedapp and your general openness that maybe one of the interested buyers would explain how they believe as a business investment they can justify such a purchase?
I look forward to seeing how things unfold and good luck with acquiring the best price possible!
Comment by Nick — November 23, 2006 @ 8:32 am