You have developed a mobile app on your own, but you’ve come to the point where it’s time to move on.
Selling and marketing your app can be a difficult process if your app is not a top-charting app. The ideal situation is a thriving app with solid revenue with an ARPDAU of at least $0.05 and D1 user retention of at least 50% and a growing user base.
Not every app has this luxury, but your app can still be an attractive buy for investors.
The first step is gathering data about your app and crafting a pitch that will make the app look attractive to companies and investors.
Before pitching your app, make sure you have data ready to show. Here is some information to keep track of:
- Revenue, sales, and user traffic metrics
- Upkeep expenses. How much are you currently paying for API servers, domains, and other upkeep expenses? Prospective buyers want to make a profit, so it is important to let them know how much they will need to keep paying after buying.
The Elevator Pitch
Getting funding will be easier if you can get someone interested in your app in a pinch. The goal is to hook a listener on the app in 20-30 seconds. Powerful people say less. If you have the self-worth to believe in your app, investors will too.
The Pitch Deck
Investors like simple pitches that tell a story, and the pitch should take no longer than 5 minutes. An experienced venture capitalist once stood before a group of app developers at a hackathon and gave them a simple formula for crafting a pitch deck in 3 pages. Here is that formula.
Page 1 - The World Before: Describe the world before the app and the problem. For example, if you have an Android app that renews an eyeglass prescription, paint a tedious day renewing a prescription: booking a day off work, driving to the eye doctor, and spending hours taking an eye test. They won’t have time for afternoon karaoke with their children.
Page 2 - The World After: Describe how the world looks after your app fixes the problem. Using the previous example: Now, people can renew eyeglass prescriptions online in half an hour without a trip to the doctor. They’ll save money on gas and have time for their children.
Page 3 - The Money Pipe: Describe how your app will make money for you and the investors. Keep this brief. This section is where you can describe everyone on your team and their roles.
Whether you are pitching to someone at a party, or a group of investors, keep the pitch short. Powerful people use fewer words. If you have the self-worth to believe in your app, investors will too.
- Introduction: Begin by introducing yourself and the app you are selling. Explain what the app does and how it can benefit the company.
- Problem-Solving: Describe the problem that the app solves for the company. Explain how the app addresses this problem uniquely and effectively.
- Target Audience: Identify the target audience for the app and how it aligns with the company's target audience.
- Features and Benefits: List the key features of the app and the benefits they provide to the company. Be specific and provide examples of how the app can improve efficiency, increase productivity, or provide some other tangible benefit.
- Pricing: Provide pricing information for the app. Be transparent and upfront about the cost of the app and any ongoing maintenance or support fees that may be required.
- Demo: Offer to provide a demo of the app to the company so they can see it in action and understand how it works.
- Next Steps: End the pitch by outlining the next steps the company can take to purchase the app. Make it clear and easy for them to move forward with the purchase.
- Contact Information: Include your contact information so the company can reach out to you with any questions or to move forward with the purchase.
Once you have a pitch prepared, you’re ready to look for places to sell your app.
Similar to eBay and other online stores, app marketplaces are platforms where you can list your app, and interested buyers can contact you to request more information and submit offers. These platforms are a great option for smaller apps, that have less than $5k per month in revenue, or less than 5k downloads. The two biggest app marketplaces are Flippa ($375 million in sales), and Empire Flippers ($280 million in sales).
Selling on these websites is similar to selling on an online store.
- Gather information about your app.
- Decide on an app valuation.
- List your app for sale.
- Wait for an interested buyer! Negotiate the price, reach an agreement, and receive payment.
Flippa - This popular website flipping platform is the most popular option for apps as well. The commission is cheap, and submitting a listing involves fewer steps. Buyers are left to do their to dueto diligence and sellers can be more prone to copycats due to the platform’s hands-off approach.
Empire Flippers - This platform offers more protection in exchange for higher commission rates for smaller apps. The vetting requirements are more stringent, but once your app is accepted, the platform claims that 84% of listings have successfully sold.
Flippa vs. Empire Flippers Comparison
|Confidential Listings||For $100, a listing can be upgraded to hide information about the app until buyers sign an NDA.||Requires proof of funds to view specific information about a listing, in order to prevent copycats.|
|Listing requirements||No requirements. $29 to list.||At least $2,000 in monthly earnings. Google Analytics traffic data for at least 3 months.|
|Due Diligence||For $1.5k, buyers can buy a due diligence service to verify traffic and revenue, check for bot traffic, and identify asset transfer risk.||A dedicated team handles the transfer. They verify domain ownership, google analytics traffic, earnings, expenses, and seller information. Sellers with businesses worth over $100k can provide seller interviews to create legitimacy.|
|Commission||10% commission for sales under $50k. 7.5% commission for sales between $50,001-$100,000. 5% commission for sales above $100k.||15% commission for sales under $700k. 8% commission for sales between $700,001-$4,999,999. 2.5% commission for sales above $5 million.|
App aggregators such as Bluethrone are a new option for sellers. Instead of acting as an intermediary between sellers and buyers, Bluethrone directly buys apps.
Bluethrone requires all prospective apps to pass the 5K rule. Potential apps must be making at least $5k in monthly revenue, and have at least 5,000 downloads.
To sell your app on Bluethrone:
- Estimate your app’s value with Bluethrone’s free valuation tool.
- Contact Bluethrone, and apply for an App Exit.
- Connect your app’s analytics platform so that Bluethrone can look up marketing data such as downloads, revenues, and sales.
- Bluethrone has developed data-driven technology that projects your app’s growth. After applying for an Exit, Bluethrone’s team of experts will provide you with a full SWOT analysis of your app.
- Once Bluethrone sends you a proposal, negotiate a price for the app. This doesn’t lock you into selling! You can get a quote and sell in the future.
- Sign a contract with Bluethrone. Celebrate your finished sale!
Selling directly to companies
Big companies have many submissions every day. Many companies such as Apple and Google have policies that discourage unsolicited ideas. Everyone wants to be acquired by a larger company, making it much harder to be seen. It will be easier to get companies to listen if you know someone at the company.
Being in the community is an excellent way of getting to know people in the industry. Hackathons and business development events such as TechCrunch, HackZurich, and hackNY are great ways to connect.
Here are some other events for app promotion events:
App Promotion Summit. Attendees here can expect to network and trade secrets in app growth.
MAU Vegas. Focused on marketing and inclusivity, this event is a great place to find creative and modern ways to sell your app.
MWC Barcelona. A networking event focused on the future of the mobile industry. Themes include Augmented Reality, Fintech, and 5G.
Big businesses can afford to invest in apps that may not fulfill an immediate monetary need. Some smaller businesses, however, can only afford to invest in things that will immediately grow their business. Bluethrone is a simple and straightforward option. As the first online app aggregator, Bluethrone purchases apps directly. If your app has at least 5k in monthly revenue and over 5k downloads, consider selling your app via Bluethrone.
If you are having trouble selling your app, consider a different tactic.
Repurposing your app
Consider repurposing your app for an adjacent company’s niche. Small businesses are often looking for apps built specifically for them.
For example, if you have built an app like Yelp, it is unlikely to beat Yelp. However, perhaps there is a local restaurant with a few locations in their chain looking to expand.
A mobile application could help their brand grow. With a few modifications, it could be 10x or even 100x their revenues. A button to share dishes on Twitter, Facebook, and Instagram might double or triple their social media presence. The app could notify customers about new deals and promotions.
A digital stamp card feature could offer to repeat customers a free dish for every 10th purchase. Here customers can write a Yelp review and get a discount on purchases. The app becomes a home where people who love the business can show their loyalty to the brand in exchange for perks and benefits.
Your app could help them grow their business and create a loyal customer base that could multiply their revenue.
Partnering with Bluethrone
If you are attached to your application, there is the option of partnering with Bluethrone instead. Bluethrone has added a route for developers to form a partnership and streamline the process of selling their apps. You will gain access to Bluethrone’s unlimited resources and team of experts while maintaining ownership of your app.
For more information, visit Bluethrone’s website.
Draw Something: This popular mobile game was developed by OMGPop, a small startup based in New York City. In 2012, Draw Something became a sensation, with millions of daily users and strong revenue from in-app purchases. According to reports, OMGPop's CEO Dan Porter prepared a detailed pitch deck that demonstrated the game's potential for growth and monetization. Porter also made sure to highlight the app's strong user engagement and retention metrics, which were key selling points for potential buyers. In March 2012, the game was acquired by Zynga for $180 million, a huge payday for the small team behind the app.
What can we learn from this example?
- A strong pitch deck and focus on key metrics, such as user engagement and retention, can help to persuade potential buyers.
- Timing can be crucial in in-app sales – Draw Something was acquired just as it was gaining significant traction, which likely increased its value.
- It's important to be prepared for potential buyers and have a clear idea of what you want to achieve from the sale.
Waze: This popular navigation app was developed by a small team in Israel and launched in 2009. Waze quickly gained a loyal user base thanks to its unique features, such as real-time traffic updates and the ability to report incidents on the road. In 2013, Google acquired Waze for $1.1 billion, recognizing the app's potential to disrupt the traditional mapping and navigation industry. According to reports, the Waze team prepared a detailed pitch deck that demonstrated the app's growth potential and unique value proposition. They also emphasized the app's strong user engagement and the potential for monetization through advertising.
What can we learn from this example?
- A unique value proposition and strong user engagement can make an app more attractive to potential buyers.
- It's important to have a clear growth strategy and be able to demonstrate the potential for monetization.
- Being able to negotiate favorable terms, such as allowing the team to continue operating independently, can be key to a successful sale.
Supercell: This Finnish mobile game developer has had several successful app sales, including the popular games Clash of Clans and Clash Royale. In 2016, Supercell was acquired by Tencent, a Chinese tech giant, for $8.6 billion, making it one of the most successful app sales in history. Supercell's success can be attributed to its focus on creating high-quality games with strong replay value and monetization potential. The company also invested heavily in marketing and user acquisition to build a large and loyal user base.
What can we learn from this example?
- A focus on creating high-quality, replayable games with strong monetization potential can be key to success in the mobile game industry.
- Investing in marketing and user acquisition can help to build a large and loyal user base.
- Being able to negotiate favorable terms, such as a large upfront payment and a share of future revenues, can be crucial in in-app sales.
WhatsApp: This messaging app was developed by a small team in 2009 and quickly gained a large and loyal user base thanks to its simple interface and focus on privacy. In 2014, Facebook acquired WhatsApp for $19 billion, recognizing the app's potential to disrupt the traditional messaging industry. According to reports, the WhatsApp team prepared a detailed pitch deck that demonstrated the app's strong user growth, engagement, and retention. They also emphasized the potential for monetization through advertising and business messaging.
What can we learn from this example?
- A focus on user growth, engagement, and retention can make an app more attractive to potential buyers.
- The potential for monetization through advertising or business messaging can be a strong selling point.
- Being able to negotiate favorable terms, such as allowing the team to continue operating independently and retaining a share of future revenues, can be crucial to in-app sales.
Overall, these examples demonstrate that it is possible to sell a successful app to a larger company, even if you are a small team or an independent developer. With the right pitch, value proposition, and marketing efforts, you can attract the attention of potential buyers and negotiate a successful sale. It's important to be prepared and have a clear idea of what you want to achieve from the sale, as well as to be flexible and adaptable.
Before attempting to sell your app to a company, it is important to thoroughly research the market for your app. This includes understanding the competitive landscape, identifying potential customers or target markets, and determining the price point and revenue potential for your app.
Some key factors to consider when conducting market research include:
Competitive landscape: Who are the main competitors in your space, and what features and functionality do they offer? How does your app compare in terms of value proposition, pricing, and user experience?
Target market: Who is the target audience for your app, and how does this align with the company you are hoping to sell to? It is important to have a clear understanding of the needs and preferences of your target market to tailor your pitch and customize your app as needed.
Price point and revenue potential: What is the price point for your app, and how does this compare to similar apps in the market? How much revenue do you expect to generate from your app, and what are the key drivers of this revenue (e.g. in-app purchases, advertising, subscriptions)?
Depending on the needs of the company, you may need to customize your app to better fit their needs. This could involve adding specific features or functionality or tailoring the design and branding to fit the company's style.
Some potential areas for customization could include:
Features and functionality: Is the company looking for specific features or functionality that your app does not currently offer? Consider adding these features to better meet the needs of the company.
Design and branding: Does the company have specific design guidelines or branding elements that you need to incorporate into your app? Make sure to align the design and branding of your app with the company's style to create a cohesive brand experience.
Partnering with other companies or organizations can be a great way to promote and distribute your app. These partnerships could include co-marketing efforts, cross-promotion, or even joint ventures to jointly develop and sell the app.
Some potential benefits of partnerships include:
Increased reach and visibility: Partnering with a well-known company can help to increase the visibility and reach of your app, potentially leading to more downloads and revenue.
Joint development and innovation: Partnering with another company can provide opportunities for joint development and innovation, potentially resulting in a more differentiated and valuable app.
Increased credibility: Partnering with a reputable company can help to increase the credibility of your app, potentially making it more attractive to potential buyers.
Marketing and Promotion
Even with a great pitch and a well-designed app, you still need to promote your app to potential buyers. This could include creating marketing materials such as website landing pages, social media posts, or email campaigns, or using paid advertising to reach a wider audience.
Some strategies for marketing and promoting your app include:
Content marketing: Create blog posts, articles, infographics, or other types of content that showcase the value and benefits of your app.
There are several legal considerations to keep in mind when selling an app to a company, including intellectual property issues, contracts and agreements, and data privacy concerns. It may be helpful to seek legal advice or engage a lawyer to help navigate these issues.
Some key legal considerations to keep in mind include:
Intellectual property: If you are selling an app that you developed, it is important to ensure that you own all the necessary intellectual property rights (e.g. copyrights, trademarks, patents) and that you have the right to transfer these rights to the company. If you are using any third-party content or code in your app, make sure to properly license this content and ensure that you have the right to use it.
Contracts and agreements: It is important to have a clear and legally enforceable agreement in place when selling your app to a company. This could include a purchase agreement, a license agreement, or some other type of contract that outlines the terms of the sale, including the price, any customization or development work, and any ongoing support or maintenance obligations.
When selling an app to a company, you may need to negotiate the terms of the sale. This could include the price, any customization or development work, ongoing support and maintenance, and any other considerations. It can be helpful to have a clear understanding of your goals and what you are willing to compromise on before entering into negotiations.
Some tips for negotiating the sale of your app include:
Do your homework: Research the company and the market to determine the value of your app and what you can reasonably expect to receive in terms of price and other terms.
Be prepared to compromise: While it is important to stand firm on key issues, be prepared to make some concessions to reach a mutually beneficial agreement.
Consider non-monetary terms: In addition to the price, there may be other terms that are important to you, such as ongoing support and maintenance, or the ability to retain certain rights or control over the app. Consider these non-monetary terms as part of the negotiation process.
Get everything in writing: Once you have reached an agreement, make sure to get everything in writing in the form of a legally enforceable contract or agreement. This will help to protect your interests and ensure that both parties are held accountable to the terms of the deal.
There are many platforms for selling your app to a company. It can be confusing to decide what avenue to choose when exiting with your app. Bluethrone simplifies the process by offering consultation that is catered to you and your app’s business development needs.