The $12 Startup
The beginning of the story of how I built a profitable web business for $12 and sold it for $100,000.
Despite always being very technical, some 10 years ago I found myself working as a janitor cleaning office buildings. One of those offices happened to belong to Vegas.com, one of the larger vacation sites of the first bubble. Each night I’d arrive there after midnight, only the find the office packed and full of energy. Employees were playing pinball, drinking Mountain Dew and occasionally doing some code. The boss would put his feet on his desk, smoke cigars and build his various digital empires. The vibe was intoxicating, I knew it was for me.
So after a string of IT and small web jobs, some 10 years later I was finally there. Although Red Bull has replaced Mountain Dew, and bosses do more tweeting than smoking these days, the experience is still equally unique. In 2 short years I edged my way into a few startups here in Los Angeles, starting with Mahalo, then Docstoc and finally Tsavo. I picked these companies for two reasons mostly, to gain experience from some of the best entrepreneurs in the area, but also to be part of quick (and hopefully profitable) exit. I felt those startups were “built to flip” and could sell quickly, but due to the economy and other influences, well, I swung and missed three times.
However all this time I was also pushing my own silly web dreams on the side. I tried about a dozen different ideas, some made money, some never even got off the ground. I affectionately called these $12 startups because I essentially launched them for just the cost of the domain name itself. Once the site started to generate revenue I’d roll some profits back into it, growing the property further.
One of those ideas was an e-commerce site selling what can best be described as a niche automotive part. I had no experience in the space, but figured I’d learn what I needed along the way. I had no idea that would cover everything from programming to SEO, and of course social media marketing. Developing these skills not only helped the business (it became profitable within two days) but the exercise gave me great skill set. And guess what, I finally got my exit. I just sold that silly idea for $100,000.
Sure $100,000 is not much compared to what some startups go for, but when your investment is so low, and you’re the sole shareholder, that represents a great return on my initial investment of $12 and one weekend to build the site.
So as you try to push your own digital dreams, remember sometimes the simplest ideas can be the best. While it may be exciting to build the next real-time-location based-micro blogging-mashup, perhaps it would be better to create something more tangible, both in terms of product and profitability.
In fact I hope to show you how it’s done.
Stay tuned.
On FriendFeed, this post was liked by 8 people and commented on 6 times 
July 29th, 2009 at 3:54 pm
congrats!
July 29th, 2009 at 3:57 pm
Hot. But, that model’s not very scalable
July 29th, 2009 at 4:04 pm
Well done.
This is another example where consistent work pays off.
July 29th, 2009 at 4:19 pm
Nice. Congrats. Its funny how everyone has this “swing for the fences” mentality. I’ll take a quick single anyday instead of striking out trying to look like a big shot. Cheers! ; )
July 29th, 2009 at 4:30 pm
Great story Sean, thanks for sharing it with us. I posted these questions over on FB, but I’m guessing you would rather interact here. Here’s my two questions for you:
1. You registered the domain in April ‘05 – how long did it take you to develop a decent revenue stream (not just a profit, after all $13 would have been a profit)?
2. Why did you wait four years to flip the site? Did it just become enough of a hassle with your other growing internet empires or did you finally make the right connections for the sale?
July 29th, 2009 at 4:30 pm
I am looking forward to the next post.
July 29th, 2009 at 4:39 pm
Congrats! Thrilled to see it in print and nothing to sneeze at at all. Laurie, what are you going to do with all of the time now???
July 29th, 2009 at 4:43 pm
Nice. I’m on a similar path and this post truly spoke to me. Thanks for sharing it. Congrats!
July 29th, 2009 at 4:59 pm
Congratulations! That’s so inspiring. Thanks for sharing because it encourages people to go after their dreams no matter what happens.
July 29th, 2009 at 5:09 pm
Hey, man, big congrats on the sale! $100K isn’t anything to sneeze at. Now take that money and *really* launch your own thing.
July 29th, 2009 at 5:09 pm
Congratulations! I still have one of your fine license plates sitting on my wall. They’re great!
July 29th, 2009 at 5:17 pm
Congrats Sean,
couldn’t happen to a nicer guy!
Look forward to more great things from you!
best,
M.
July 29th, 2009 at 6:18 pm
Heh, $100,000 not being much?! Its pretty fair. Congrats!!
In the long run, today there are A LOT of startups, so I see it hard to actually get chances like yours. Seriously, Congrats again!!
Wish the best for you even for the future.
July 29th, 2009 at 6:28 pm
Congrats, however, lets be fair, how many hours did it take to SEO the site? How much did you earn pear hour? I’m sure its quite a bit but I think thats the true measure.
BTW sweet blog.
July 29th, 2009 at 7:25 pm
Proof that the little fish can actually turn into a big fish… all it takes is tenacity and a good idea. I’m so glad it worked out for you. This is inspirational and gives little entrepreneurs like myself hope.
I’d buy you a drink and all but I haven’t invested my $12 just yet on my startup. Raincheck?
*cheers*
July 29th, 2009 at 8:25 pm
I bet I had some VW car club buddies order some euro plates starting with “WOB” from your site! Congratulations.
July 29th, 2009 at 8:46 pm
I really like the idea to focus on the ROI that you get for the 12$ business plus the time spent on it. great story, the digital revolution is there.
Keep it simple stupid. thanks
July 29th, 2009 at 9:42 pm
And it also proves that it doesn’t have to be a million-dollar idea. Hundred-thousand dollar ideas pay the bills, too. Congrats! (Especially ’cause instead of just talking about it…you actually went and DID it.)
July 30th, 2009 at 12:40 am
That’s wonderful! Truly success lies in the hardworking and ever creating. This is very inspirational. And it’s just the first step for you. Keep at it and I’m sure some more success is sure to follow!
July 30th, 2009 at 12:54 am
(Hope you know I was just teasing with my previous comment.)
Well Done, Sean.
July 30th, 2009 at 12:56 am
If you had no experience in the area, what gave you the idea to sell these things the first place? Seriously, how did you go from working at startups to saying ‘Hey, I’ll sell license plates. No, even better, European ones.” And how can I find niche products like this to sell?
July 30th, 2009 at 1:45 am
Hey wait, you’re that guy who comments instantly on every single TechCrunch article that is posted. Where do you find the time to work at a startup?
July 30th, 2009 at 2:56 am
Don’t forget to count your own time investment. For a website which creates sufficient monetizable value to sell for $100,000, there must be more to it than a bare landing page.
Even if you don’t put a value on your time, there’s still opportunity cost to consider.
July 30th, 2009 at 4:51 am
Nice!
July 30th, 2009 at 8:19 am
Thanks everyone for the notes and questions. I’ll start to address some of those questions in future posts.
July 30th, 2009 at 5:31 pm
Show me the annual reports and the quickbooks. The proof is in the pudding.
July 31st, 2009 at 3:12 am
[...] The $12 Startup — 8:45am via Google [...]
August 2nd, 2009 at 8:11 pm
Let’s not overlook the fact that besides starting and profiting from a business, you have gained incredible experience and skills in the process.
Good luck with your next venture.
August 5th, 2009 at 3:09 am
And here I thought you were just another pretty face…
You rock, smart guy!
Congratulations Mr. Percival, that is a great success story.
Do I smell a book?
August 16th, 2009 at 11:31 pm
[...] $12 Startup: I received a great response to my story of the $12 startup. As I mentioned in the post, I want to share the details of how I did it. So I’m hoping to [...]