When it comes to the three different types of properties we sell at Broker.xxx — businesses, websites, and domains, it is domains that are the hardest to sell because they are almost entirely all unrealized “potential.” However, you cannot sell a business on “potential” alone, and I’ve run into this many times since I started buying and selling properties back in 2001 and during my investing and venture capital experiences.

Most people think there are such things as a “million-dollar idea,” so they try to protect them with non-disclosures and the like, building a secret project without anyone knowing about it. They safeguard their idea while they try to find someone who wants to invest or buy it. The thing about ideas is everyone has them, and acquirers don’t want to buy ideas or even the project you’ve built (nor do they want to steal them). You’ve heard of investors investing in people — what they are investing in is execution. That’s why a functioning business priced appropriately (based on that brilliant idea of yours) is worth something, whereas the idea alone, or that big ball of software you just paid to have developed — is not.

I’ve seen it happen many times before (and again last week) – someone has a dream and starts building. They have their budget (let’s say it’s $200,000), and they expect to develop it for $100k and spend $100k on marketing. But, much like building a skyscraper, bridge, or a house – nobody writes a complete spec, there’s always unexpected work to be done or dreaded “feature creep” and change orders that come in. Before they know it, they’ve spent $200,000, and they have nothing left except a wicked platform, and it is ready for prime time. [Continue Reading in XBIZ Magazine]