Black Magic: a $14K MRR Twitter tool sold for $128K after an API price change

Q: Why did Black Magic work?

High margins. "With $14K MRR at ~90% profit, I was confident that the business would live on" (Tony Dinh). A product he called his best. "Black Magic was the most successful product I have ever built" (Tony Dinh). Selling kept it alive. He chose a sale over a shutdown because "most customers don't care who owns the product. They just want to use it" (Tony Dinh).

Q: What didn't work for Black Magic, and what are the risks?

No negotiating leverage. With about two weeks and three potential buyers, he got two offers (Tony Dinh). Forced migration. Twitter required every customer to re-authorise under Hypefury's OAuth app, which he expected would lose some revenue (Tony Dinh; Black Magic). Bad timing on information. "I would have totally paid $5K/month if this had been announced one month earlier" (Tony Dinh). Revenue and profit figures are the founder's own.

Key takeaways

Solo-built over two years from $0 to about $14K MRR at around 90% profit, by the founder's account.
Twitter's new API pricing started at $42K per month, three times the product's revenue; the founder sold for $128K, under one year of revenue.
Three months earlier he had rejected a $500K offer. A $5K/month API tier appeared just after the sale closed.

What it is

Black Magic (BlackMagic.so) was "a Twitter SaaS" that Tony Dinh built and ran as a solo founder (Tony Dinh, Jun 2023).

Timeline

2021–2023: grew from $0 to $14K monthly recurring revenue in about two years; it let him quit his job (Tony Dinh).
About Feb 2023: Twitter announced it would stop the free API (Tony Dinh).
About three months before the sale post: he received a $500K acquisition offer and rejected it (Tony Dinh).
Mar 2023: another Twitter app company told him privately the new pricing would be "at a minimum $42K per month", with no smaller plans (Tony Dinh).
Around 30 Mar 2023: Twitter began cutting off free API access; Black Magic was cut too, then restored after Twitter was told about the acquisition (Tony Dinh).
17 May 2023: Black Magic announces it has joined Hypefury (Black Magic). Total deal value: $128,000, against about $168K ARR (Tony Dinh).

Why it worked (before the API change)

High margins. "With $14K MRR at ~90% profit, I was confident that the business would live on" (Tony Dinh).
A product he called his best. "Black Magic was the most successful product I have ever built" (Tony Dinh).
Selling kept it alive. He chose a sale over a shutdown because "most customers don't care who owns the product. They just want to use it" (Tony Dinh).

What to learn

If one API is your product, the API owner sets your valuation. He wrote: "I signed up for that when I created the product around Twitter API: platform risk" (Tony Dinh).
Take platform-risk discounts into account when you get an offer. With hindsight he lists "Sell the business earlier at $500K!" as a better decision (Tony Dinh).
Don't fix platform risk by breaking the rules. He rejected ideas like private APIs or shared keys as against Twitter's terms and "extremely risky" (Tony Dinh).
Run more than one product. He still had income from his other products and moved on to TypingMind (Tony Dinh).

Risks and what didn't work

No negotiating leverage. With about two weeks and three potential buyers, he got two offers (Tony Dinh).
Forced migration. Twitter required every customer to re-authorise under Hypefury's OAuth app, which he expected would lose some revenue (Tony Dinh; Black Magic).
Bad timing on information. "I would have totally paid $5K/month if this had been announced one month earlier" (Tony Dinh).
Revenue and profit figures are the founder's own.

FAQ

Short answers drawn from the sections above.

What is Black Magic?

Black Magic (BlackMagic.so) was "a Twitter SaaS" that Tony Dinh built and ran as a solo founder (Tony Dinh, Jun 2023).

Why did Black Magic work?

High margins. "With $14K MRR at ~90% profit, I was confident that the business would live on" (Tony Dinh).
A product he called his best. "Black Magic was the most successful product I have ever built" (Tony Dinh).
Selling kept it alive. He chose a sale over a shutdown because "most customers don't care who owns the product. They just want to use it" (Tony Dinh).

What can indie builders learn from Black Magic?

If one API is your product, the API owner sets your valuation. He wrote: "I signed up for that when I created the product around Twitter API: platform risk" (Tony Dinh).
Take platform-risk discounts into account when you get an offer. With hindsight he lists "Sell the business earlier at $500K!" as a better decision (Tony Dinh).
Don't fix platform risk by breaking the rules. He rejected ideas like private APIs or shared keys as against Twitter's terms and "extremely risky" (Tony Dinh).
Run more than one product. He still had income from his other products and moved on to TypingMind (Tony Dinh).

What didn't work for Black Magic, and what are the risks?

No negotiating leverage. With about two weeks and three potential buyers, he got two offers (Tony Dinh).
Forced migration. Twitter required every customer to re-authorise under Hypefury's OAuth app, which he expected would lose some revenue (Tony Dinh; Black Magic).
Bad timing on information. "I would have totally paid $5K/month if this had been announced one month earlier" (Tony Dinh).
Revenue and profit figures are the founder's own.

Sources

Every link cited above, in order of first use.

1.Tony Dinh, Jun 2023 (news.tonydinh.com)
2.Black Magic (blackmagicso.substack.com)