A client wants to buy old SaaS app – smart move or risk?
We’re a small software house that’s been developing a niche SaaS platform for cultural events over the past 15 years. The product works well, but we were thinking to rebuild it for the next year.
Recently, a well-known national brand — not in tech, but operating in retail — approached us. As part of their PR strategy, they run a medium-sized cultural festival once a year in their home country.
They want to use our platform — but with a hard no to licensing. They’ve had bad past experiences where vendors either raised prices or disappeared, leaving them stranded.
We’re currently in a bidding process, alongside other companies. From what we understand, most competitors are creative agencies likely to: • build something from scratch, or • white-label past projects from similar events.
We estimate that building this kind of event app from scratch would cost around $60,000.
The options we’ve considered so far are:
1. Give them a snapshot of our current codebase, with no support, onboarding, or guarantees. This isn’t ideal — they would need to hire someone else to burn time understanding the architecture and logic before they could even begin implementing or customizing it. It’s slow and wasteful, considering we already know the product inside-out. 2. Give them a snapshot of the code and charge separately for the extra features they’ve asked for (that we don’t yet support). Based on our estimates, development would cost them between $13,500 (optimistic) and $38,000 (pessimistic) if done externally. 3. Same as above, but instead of giving them the code directly, we place it in escrow with a law firm of their choice. If we go out of business, or suddenly triple our rates to lock them in, they’d have the right to release the source and continue working with another vendor. This gives them peace of mind without requiring a full transfer up front.
*Ask HN: What would you do in our shoes?* Any strategic, technical, or legal insights are welcome. Has anyone navigated something similar?
I don't know about your circumstances but if I was small, I would completely disregard this.
> We’re currently in a bidding process, alongside other companies. From what we understand, most competitors are creative agencies likely to: • build something from scratch, or • white-label past projects from similar events.
They are not interested in you. They just reached out to platforms to do price/feature/whatever discovery. They might decide on one of them, go with a friend or do nothing.
Do you want to expand time on this? Again, I don't know about your circumstances and don't have much info beyond what you are giving us but I wouldn't.
What is the(ir) reputation? Do they delay payments? Do they try to find reasons not to pay?
I will oversimplify this (and I work like this when I have to pick a service (anything from SaaS to hiring one of them Big4+2 for a project): I want jeans. I look around. I buy jeans. I am willing to pay full price for jeans. I give proper project reqs/scope of work up front. If they fuck up, I fuck them usiny with the SLA/OLA. I also shit on them to anyone who ever brings them back (with real and damning info). If they do a good/great/their job, I "marry" them until the end of time.
If these guys "appreciate" you what you are, go for it. If they make you jump through 100 hoops then a) tht already picked option Z and they want the rest of you to voluntarily drop out of the race either through pricing (keep adding reqs and keeping the price fixed), or through features (keep adding reqs that they KNOW/sense you cannot deliver e.g. 'oh your app doesn't do liquids? too bad we wanted espresso to go with it).
Either way.. (and judging by the numbers you provided): - from scratch 60k - enhance 13k-38k
Even at the lower end (13k) it is still (almost) 25% of the whole thing..
Doesn't look like a good deal for you.
You're going to HAVE to give them support, if only to get them setup. Think long and hard if selling this sort of on-prem version of your product makes sense for YOU. If not, it's likely going to be an expensive distraction and just tell the customer no, you don't sell and support product X that way.
They very likely will be back and if not, no hard feelings.
It does have much sense what you say. So 1. is off the table.
What I am pondering on is how much is worth the IP or to take it from another angle - how much should I charge for it as it's ready now (so we can ship it tomorrow vs. they have to wait for development) + it has been tested in the field so most of QA phase is gone.
1. Just agree to not raise the prices above some inflation-linked index.
2. Giving commercial project AS-IS without support is a no-no, and might be illegal in some jurisdictions.
3. Sell them a bank of on-prem support hours.