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, 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 up 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 design 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 a 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.

Sean Percival

Sean Percival is an American author, investor and entrepreneur.