I've created a simple SaaS (Software as a Service) project that helps small towns improve their tourism websites and apps easily, fast and paying a small fee each month.

Why I want to sell it?

I'm moving to the Netherlands and I will not have enough time to develop it. It is for small towns, so there will be many problems with meetings, and so on.

Why to my "competitor"?

  • They are bigger and can offer this service.
  • They trust me, tried to hire me a couple of weeks ago.
  • This project can generate synergies with their business model.
  • Got access to the CEO.

What are my concerns?

I want to propose it, but I don't know how to start. I have the design, the development and examples. The system is straightforward and I'm creating documentation to simplify/explain it even more.

I don't want to get copied, although that would require a good investment on their side, so I think that it isn't very smart.

  • What should I give them?
  • How can I see if there's real interest?
  • 1
    Don't make it more difficult than it has to be. If you have access to the CEO, ask him about it. If there is interest, make sure you have an NDA signed before getting into specifics. Be clear about your intentions and expectations from the start. If something isn't clear, make sure it is regardless of the topic. – user3244085 Dec 25 '16 at 21:07
  • Thank you @user3244085, but the NDA does not help me in this case. Even if he signs it they can "copy" the project. – Kevin Mamaqi Dec 26 '16 at 9:19
  • 2
    If you say so, but the whole idea of an NDA is to put it into writing that they can't :) – user3244085 Dec 26 '16 at 19:50
  • 1
    An NDA, depending on the text of course, usually also covers technology or any other form of commercial information. You are right that an NDA does not physically prevent anything (as is the case with any written agreement), but if you can't trust them to respect a written agreement maybe you don't want to do business to begin with. – user3244085 Dec 27 '16 at 12:36
  • 1
    If you don't intend to keep developing the baby, then don't see this company as a competitor but as a customer. – Harry Cover Nov 27 at 14:20

From a business college student's point of view, you will need to do a few things to sell your idea to your competitor.

Protect your idea.

Good job on thinking about this. As a market researcher, you have no idea how many times I see ideas stolen.

How should you protect your idea? You will need to have your app patented. This may take a long time so I would recommend getting started on it. Here is the link for more info:

https://www.legalzoom.com/articles/can-you-patent-your-mobile-app

Write a proposal

Now for telling your competitor (or the person you want to sell your app to) you will need to write up a proposal. Here is a website that has templates.

https://www.sampletemplates.com/letter-templates/business-proposal-letter.html

How to get your competitor's attention

Mention your project as an investment. You are actually selling them an investment so I'm sure you'll get their attention.

Write up the proposal once they show interest. The questions they ask you are things you should add to your proposal.

To make sure that they think about it, give them a deadline. Lastly, tell them that you are also looking for other investors (even if you're not). This is a copywriting technique.

This may not seem easy but it is doable.

Goodluck.

  • "In order to get your competitor's attention": did you read the OP ?? – Harry Cover Jan 2 '17 at 17:36
  • Patenting the software seems disproportionate, if possible at all (in principle, sofware can't be patented in the EU.) Copyright is more accessible, file a copy with a notary or similar. In any case, a protection is only useful as long as you can prove that you were copied, and are in position to sue. – Harry Cover Jan 2 '17 at 17:37
  • Patenting is the last thing I would do. 1) You'll have to invest time and money to obtain the patent; 2) getting the patent requires you to publish and explain what you have done, in fact easing the copying; 3) you'll never know who is infringing the patent nor will be able to collect evidence; 4) and even so, you won't be able to afford a trial against the offenders; 5) last but not least, you will lose. – Harry Cover Nov 27 at 14:17

Here are some tips and thoughts around this. Personally I don't think that selling a company is very much different from selling a product or solution. So think about how you sell your product or service today to your customers. Key considerations include:

  • What's the value of your business to that competitor- how much would they value your company or your customers? What does it bring that they don't have? How can they make more money by having it? If they built it themselves how much would it cost them? If you are not part of the sale, then is there still value in buying what you have built? Who would manage it? How much does it cost to maintain the platform ongoing? Is there someone who understands how your software works who can help to integrate it with this competitor company? Understanding the value that you bring to the table is critical in determining if there is an actual pain point or need you are solving for the competitor. It will also likely help you determine how big that need is and that leads to helping you understand how much your company may be worth to that competitor.

  • As many are aware, word of mouth marketing is very powerful. Similarly when you are trying to sell a company, if the CEO of this competitive company not only hears about the value of your company from you but also from some of his or her trusted advisors, it is even more valuable. Are there people in your network and the CEO's network who really love your service who could plant a seed with the CEO about how it could really help out his or her business? It goes a long way when the suggestion is coming from others in addition to you.

  • Your value always goes up when you have a strong customer base. Think about ratings and reviews - the more ratings and higher reviews your product has, the more confidence someone has in buying it. Similarly in this situation - if you have actual customers that not only use your product but are paying for it and love it and are willing to talk about it at length - this helps to show the buyer that there is real value here that you are offering.

  • Lastly it always helps when you can create a bit of competition yourself. Do you only have one prospective buyer? By talking to 2 or three prospective buyers and getting them interested, it helps by creating more urgency as well as with regard to the value of the company. If no one else is interested, there is no urgency to buy it and the buyer has a significant competitive advantage. If there are others who want to buy the same company, you are in a better position for offering a price that makes sense for you.

Create an overview, not detailed, give a projection of revenues and how you calculate that. Determine your selling price. Have an NDA signed then show him the overview and sales projections. If he is truly interested and the price is semi-agreeable, create a LOI, Letter of Intent to purchase based on his examination and viability of the product. Include in the LOI that he will not create a similar product for the next "x" amount of time if he chooses not to make the purchase. There is really no way around someone copying you but you have a paper trail if you can afford to go after them.

Your Answer

By clicking "Post Your Answer", you acknowledge that you have read our updated terms of service, privacy policy and cookie policy, and that your continued use of the website is subject to these policies.

Not the answer you're looking for? Browse other questions tagged or ask your own question.