I had the opportunity to interview Jonathan Kay, who is the the founder of Apptopia, a marketplace for apps. The average price of an app on Apptopia is $7,500 and gives the buyers full access to code, revenue and users. For developers it offers a viable exit strategy. This is what Jonathan had to say:
Me: What is Apptopia all about? Who is your target audience? How can they benefit from using your site?
Jonathan: Apptopia is a marketplace for brokering mobile app acquisitions. In a simple, ebay style format, we help app developers list their apps for sale (think “sale” in terms of ownership, users, code, revenues, IP, etc.).
Our target audience are mobile app developers, as well as business owners and entrepreneurs who are trying to find a way to get involved in mobile. For app developers we provide the first real exit strategy, a way to make money outside of getting millions of downloads. For buyers, we provide a really easy, really safe way to both evaluate and acquire a mobile app. Buying apps can be much cheaper and more effective than building from scratch (as you already have an idea of how the market has reacted).
Me: How does Apptopia work? How do users navigate around your site?
Jonathan: For sellers – you authenticate into your site with your developer credentials. This allows us to pull real, up-to-date download and sales data about your app and create a powerful listing page that helps buyers evaluate your app. This also provides a level of credibility to the site that makes buyers feel really comfortable working with us. After we have done this, you add some basic details such as: Auction Type, Asking Price, & Developer Notes.
You list your app, promote it, and then hope a buyer is interested. After your app sells, we have a team of transfer specialists who work 24/7 – 365. We will assign someone to work with you and the buyer specifically to make sure the entire transfer goes smoothly. During this time Apptopia will function as an escrow agent (holding on to both the code and the money until the transfer is 100% complete).
The only difference from a buying perspective is that you will spend most of your time on our Search & Browse page. Here you can search by any and every criteria imaginable, until you find something that catches your eye. At which point you should either bid on an app or “buy it now”.
Me: What kind of information do you provide to those interested in buying apps so they can make an informed decision? What is the most important factor buyers should consider when choosing an app that will be profitable for them?
Jonathan: Right now we are providing all public information (ratings, reviews, description, screen shots, etc), as well as an in-depth analysis of both sales and download data. We break both sales and download data into 3 basic areas: 1. Total numbers, 2. Recent numbers (last 3 months) and 3. Volatility (best and worst months). We will soon be adding data around both app rank and usage, these integrations are just still under development.
When evaluating an app you should really research a lot of things but I will personally make two straight forward recommendations. 1. Put the most emphasis on recent stats. The last 3-6 months are crucial as that will be the best gauge of what you can expect in the future and where the potential lies.
Potential does NOT lie in TOTAL DOWNLOADS – as this is often a misleading stat….most of those people probably do not even still have the app installed on their phone. 2. Test the app out! One of the best parts of Apptopia is that every app on our market is currently live on either Android or iOS…test out the app, what do you think? Is it fun? Engaging? What could you do better? Put yourself in the consumers shoes. This is a really effective strategy believe it or not.
Me: How does your site make money?
Jonathan: We take a 15% success fee, if we sell an app. This money comes from the seller, not the buyer.
Me: What has been the biggest challenges launching Apptopia? What are you the most proud of?
Jonathan: The biggest challenge in launching Apptopia is that it’s a completely new type of market. This did not exist before we built it, and only happened offline in rare one-off situations. So it requires a lot of time and education to get people to both understand and feel comfortable with something new, something there is no precedent for. This can require time and patience, which are both difficult when you have investors who are constantly looking to you for major growth.
It’s funny. What I am proud of, is quite similar to our challenge. The thing I am most proud of with Apptopia, is that we built up a following, a very passionate group of beta users before we even launched the site. This helped our business and our website have activity and excitement around it from day one versus pushing the “on” button and having nothing happen.