How to Buy Your First Side Project

My personal photo.
Ilya Novohatskyi
November 1, 2022

Let me share a little personal story with you. 

I run a software development agency where I build websites and tools for small to mid-sized startups. Then less than 1 and a half years ago (at the time of writing), I decided to start a side project to build a marketplace where people can buy and sell small startups and side projects. Today, that side project has facilitated dozens of micro-acquisitions, gotten over 3,500 subscribers, and someone recently reached out to buy it for $100,000.

Paul Buchheit started a side project while working at Google. That side project is the Gmail most of us use today. Many success stories like mine and Paul’s exist. However, starting a side project doesn’t always end this way. Regardless, starting or buying one's a great way to test a new idea, embark on a creative adventure, and watch it grow. And if well-nurtured, could replace your full-time job.

Two of the top advantages of buying a small side project is that you can gain experience building a startup or business without too much financial or time investment. And while it may not take up much of your time like a real business, it’ll require some pretty decent time investment.

But you can’t wake up tomorrow and decide you want to buy a small project. It all starts with your why – that strong reason why you want to embark on this journey.

Why do you want to build or buy a side project?

Before buying or building your side project, you need to first be clear on your reasons for wanting to buy a side project.

It’s okay not to have a good reason why you want to start or buy a side project. In that case, here are a couple of good reasons I see people buying a micro-startup or any other side project on our platform.

To learn something new

Maybe you’re a software engineer who’s been building web apps, tools, and frameworks from the ground up, and you’ve heard about a new no- or low-code software that can make your work easier. Or maybe you’re a marketer, salesman, or any other employee who wants to have a feel of the thrill of being a tech guy.

These are good reasons to want to buy a micro-startup. The opportunities are endless when you commit to learning something new. You could end up with a project that’ll make your process faster and more streamlined. Or you walk away with an experience that will serve you in future roles.

To become an entrepreneur

For many people, their desire for buying a side project goes beyond wanting to learn something new. They actually want to be on the hot seat and flex their entrepreneurial muscle. This is a good reason to buy a side project, and it’ll keep you motivated to see the project grow if the tides turn out to be fierce.

One of the good things about buying a startup to build it is that it makes you more focused on the project. Plus you’ll give careful consideration to the kind of project you’ll buy and invest the time and energy it deserves to grow. And if you’re not aware, micro-acquisition is a big trend these days that even multinationals are following.

Growth potential

Software developers are notorious for not being great at marketing – sorry guys!

So if you’ve run a business in the past or you’re skilled at marketing SaaS or physical products and you see the potential for success in a micro-startup, why not buy it? The founder may have run out of ideas or lacks the time or skills you have.

Sometimes, all it takes to make a business profitable is changing the pricing strategy or more in-depth research on the needs of its target audience. Want the exact steps to buy a startup? You can check out our in-depth guide on the steps to buying a micro-startup as non tech founder.

Limited time or lack of technical skills

These are some of the top reasons why people come to Microns to buy side projects.

If you’ve got the experience to grow a startup but lack the technical skills to build one from the scratch, you can buy a micro-startup on our marketplace. It’ll save you the time learning the skill and the money hiring a developer to build an MVP for your side project that you aren’t sure will be a hit.

Also, one rule in the startup world is to test fast so you can fail fast or know if you’ve got a winner. Despite having programming skills, building an MVP takes time. Investing all that time on a side project you may not be able to turn into a profitable venture may not be worth it. Hence, we see many developers and product managers come to our platform to buy micro-startups.

Extra source of income

In this modern day and age, everyone’s looking for other means of earning passive income. So buying an ecommerce store, a newsletter, or even a micro-SaaS startup to make more money on the side is a viable reason. Your side project may grow one day to become your primary source of income.

To power up your existing business

One of the most common reasons people come to Microns is to get products or software to build synergy for their business or expand their offerings.

If you run a service-based business and would love to explore new technologies, you can buy a side project that will help you serve your clients better. This way, you may be able to build your side project into something of great value to your clients. And with your expertise, you can build a solution that offers what other products fail to deliver.

Boost your resume

This isn’t a popular reason to buy a micro-startup, but it still makes sense. If you’re an MBA student or you’re thinking of taking up a marketing or sales role but lack the experience to get jobs at big companies, running your own company may be all the experience you need.

You may not be able to grow the company, but the experience you’ll gain in marketing your side project and getting your first set of customers will serve you in getting bigger opportunities. Plus you’ll have an idea of what works and doesn’t work. But before embarking on this adventure, it’s good you understand the recipe for micro-startup success.

Now we have an idea of some good reasons to buy a startup, let’s dive into the steps you can take to buy your first side project.

Steps to buying a side project

Discovery phase

The first step is to research what’s available on the market. There are lots of interesting listings on our marketplace: so we organized them into categories. Scour the different categories, compare prices, and check for the number of users, and their revenue. You can also check out pre-revenue projects (projects that aren’t making money, yet, but with free users that you could potentially monetize).

When you’ve seen a couple of projects that interest you and align with your goal, you can bookmark them. Then analyze their pros and cons to determine if they fit what you want and can deal with.

Get in touch with the seller

After determining the projects that fit your goals, you can then contact the founders/sellers. Do so by sending them a short, simple, and polite message. Feel free to ask as many questions as you’d like about the project.

Here’s a sample introductory message to give you an idea;

Hey {{Seller name}},

I found your {{Project name}} interesting, and I’m interested in buying it. I’d love to get more details before making a formal offer. Could you please send me more details like churn, retention and lifetime value of your customers?

I look forward to hearing from you.

Best regards,

{{Your name}}

Carry out due diligence

Once the seller responds, now’s the time to do the groundwork. Due diligence helps ascertain the health of a business. The level of due diligence you do will determine if your desired side project will be profitable or not. Due diligence, when done properly, can help you make a well-informed decision as you’ll be aware of the risks involved with buying someone’s project.

To do this, you’ll have to verify the metrics in the seller’s report. One of the best ways to do this is by asking for read-only access to the website’s Google Analytics to analyze the traffic metrics. You can also ask the seller for access to their Stripe account to check claimed revenue numbers.

Make sure to check all assets from the seller. For this reason, we prepared a small checklist of things that you need to inspect:

1. Domain
2. Analytics (GA, Search Console)
3. Revenue (Stripe, Gumroad)
4. Email and Phone lists
5. Social accounts
6. Ad accounts
7. Marketing materials, logo, design
8. Ticket system
9. Technical and Support documentations
10. Code and APIs
11. Database
12. Other internal and external services

When you’re done verifying the accuracy of the metrics, you can request a call with the seller to gather more details in a screen-sharing session. This can also be an alternative if the seller isn’t comfortable granting you access to his website’s metrics.

Sign the contracts and make payment

Once you and the seller of your most preferred project have reached an agreement, you both will need to sign a contract. This contract is referred to as an asset purchase agreement (APA). It outlines the terms and conditions of the transaction.

You can proceed to make payment using an escrow service after signing the contracts. Two of the most popular ones are Tazapay and Escrow.com. However, we received several complaints about these platforms. So we developed our service called Transfer by Microns. The service will securely and easily handle your transactions with ongoing support from our team.

When transferring assets, I recommend the seller create a password manager account and save all logins/passwords. This way, the buyer can quickly receive all access to the project. Check out Bitwarden or 1Password for this.

Post sale period

Usually, our sellers offer a month of free support after the sale. During this period, they can help you run the business and apply/execute all your ideas and growth strategies. But after that, the contract is over. Nonetheless, if you feel like you need extended support, you can discuss it with the seller, but it most likely won’t be free.

Wrapping up

Buying a side project is a cost- and time-efficient way to build a side hustle that may become your full-time business. Even if it doesn't turn out that way, it'll be a learning experience. And you could develop habits that'll impact your personal life, career, and relationships. You can start investing in micro-startups by signing up for Microns Premium and exploring the micro-startups listed on our marketplace.

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