Business Built To Flip on eBay

Originally posted on blogalicio.us 8–21–06

Ebay is a fantastic worldwide marketplace where almost anything you can imagine is being bought and sold at any given moment. And for the entrepreneur, this now includes businesses.

Now this may not be the initial game plan in a entrepreneur or angel investors strategy, but it actually could make a lot of sense in terms of rapid development and deployment of a online business, and the fastest route to liquidity you’re going to get.

Kiko, a Web 2.0 calendar service just posted their business for sale by auction on eBay. Now in this case, it clearly was not their intention or hope to put the business up for sale on eBay so quickly, but based on competition from Google that sounds remarkably Microsoftian, Kiko’s founder decided to throw in the towel.

But let’s examine this even further. Is this really a failed business “diving into the deadpool” as Richard White a member of the Kiko team states? Or was it simply a nimble team that was reevaluating their opportunities and seeing the prospects for growth with Kiko as well as the competition it faced making a decision to pursue other opportunites and save some of their investors cash.

Now, back to the eBay auction, lets see what this goes for. There have been businesses like the Jux2 Search Engine that sold on eBay last year for over $100,000. This type of sale creates a liquidity event for everyone involved at a very early stage.

What if building a business to flip on eBay were the gameplan from the get go. A couple of web developers could put together a web application that might have a lot of promise, but they don’t have the marketing budget or wherewithall to get traction with users. Hack it together over a couple of months, put it for sale on eBay, flip it to someone who has the resources to grow it and invest in it, and move on. Selling a 2–3 month investment for mid 5 to 6 figures would make a lot of sense in some people’s mind.

It will be interesting to see if this trend continues. Who knows, selling a business on eBay may not be the sign of a failed Web 2.0 startup for long, soon it might be the endgame in the mind of young entrepreneurs eager to hit their first liquidity event.