Built a 5-star App valuing SaaS businesses by a complete accident! Made on Bubble. Fully Bootstrapped. AMA!

Hey All!

Alex here, it seems there isn’t a huge amount of content on Indiehackers about Shopify App ecosystem and building on Bubble. Two being my favourite subjects - I thought why not to do an AMA for indie hackers here. Let’s dive in!

A few months ago my friend asked to help figure out how much his Shopify App is worth. He wasn’t thinking of selling it then but thought it’s good to know the 💸💸 value of what he was building. At that point I realised it’s not the first time we get this request so why wouldn't we build a simple App to help devs. We launched our very first version of a Valuation Tool for Shopify App developers. We knew it could be a useful thing but we didn’t expect it to be so powerful. 50+ Apps went through our tool to derive valuation in the first month and a half.

How it started 💡

We’ve been investing in developers and their Apps for a while and started getting involved in sale & purchase of Shopify Apps. At first, we wanted to get a better idea of how much $$ should actually be paid for a particular App. We knew how to build financial model forecasting future cash flow and noticed the following key drivers that can help App make it or break it:

• Customer churn / retention;
• Number of paid customers (merchants);
• Growth rate (rate of App installs).

Initially, we did a lot of research on various platforms where one can buy and sell an App (microacquire, flippa, empire flippers etc.) but quickly realised that advertised ARR multiples (most commonly used approach to define valuation) are somewhat misleading. There’s a lot of nuance around each deal and what people actually end up paying in cash might be materially different from the initially advertised level. It made us think of something more sophisticated and precise.

Better model - greater results 💪

Once we fine-tuned our approach we decided to have a two-step process where we will quickly generate an automatic valuation but can then double check key parameters and refine our model on the basis of monthly cohort analysis that is a much more precise tool to measure and forecast cash flow of a SaaS business. We now started getting much more favourable feedback as our estimates happened to be close to the levels of where deals were actually done between sellers and buyers.

Platform to build an App on🤖

We’ve had some prior experience of building on few different platforms but since most recently we’ve used Bubble, we thought it would be fast and easy to build there. Bubble has made a great progress and launched a responsive design constructor which is great if you’re building a truly responsive Application and want your customers to have a seamless experience across different devices. They also launched components library recently which makes it easy to quickly assemble a simple layout of a landing page or an App interface. There’s also a great community of like-minded bubble developers who help each other. One thing though is that if your App requires a lot of external integrations, brace yourself as this part may require you to sweat a bit.

First trials and happy developers 🤩

After our initial success we’ve noticed that some developers started suggesting our tool to each other and without any marketing we’ve had a stable flow of users coming and trying our App. We didn’t actually collect reviews initially but once we started asking for feedback we were positively surprised to learn that a) our approach was giving a fairly accurate results and b) people found it easy to use, yet powerful enough to give them what they needed. We’ve further improved our Valuation Tool but definitely want to make it even better - we will be launching on Product Hunt this Friday 23rd December, hoping to gather more useful feedback and take our product to the next level!

You can follow our team on @epsifund - and try our Valuation Tool on: https://app.epsifund.com/valuation_tool/

Always happy to help and Ask Me Anything!