Monetize This

Apptopia, Set for a Post-SXSW Launch, Is an Exit Strategy for Unprepared Developers

Ever wonder how much $ that app has made?
apptopia office Apptopia, Set for a Post SXSW Launch, Is an Exit Strategy for Unprepared Developers

The Apptopia office. (Apptopia.com)

This is a guest post by Brady Donnelly, an editor at Fueled, a New York-based mobile design and development agency. Follow him on Twitter at @bradydonnelly and email him at brady@fueled.com.

Jonathan Kay and Eli Sapir, cofounders of the soon-to-be-launched app market Apptopia, have a problem with App Store over-saturation. “It’s quite inefficient for us to see 216 flashlight apps when it’s one of the single most simple functions on the entire App Store,” Mr. Kay said. “You also have big Fortune 500 companies spending upwards of $100,000 to build apps that mostly already exist. Why not acquire an app for $20,000, build off of that technology, and save yourself nearly 30 to 40 percent of the cost?”

The solution they’ve created is a marketplace, set to open shortly after SXSW, that allows developers to sell what Mr. Kay described as “exclusive rights” – not just code, but App Store-listed apps in their entirety, including existing revenue, users, and App Store statistics.

Mr. Kay was previously at Grasshopper, a phone service for startups, where he held the lofty title Ambassador of Buzz. His strategy for Apptopia is to spread the word as directly as possible about the brand. “We hustled as hard as we could for the four to six weeks pre-launch. We got involved in forum conversations, threw events, got press articles, had more than 500 conversations, and talked to every mobile app developer we could,” he explained. “We didn’t make the common mistake of waiting and expecting something ‘magical’ or, even worse, ‘viral’ to happen when we pushed the on button on launch day.”

With Mr. Sapir, who is the former Entrepreneur in Residence at GreatPoint Ventures and the founder of GPush, a once-popular Gmail-notification iPhone app that he struggled to sell (hence the need to create a market like Apptopia). Mr. Kay set up a password-protected version of the marketplace, gave each app a price tag, and walked buyers through. The numbers so far are promising, albeit a far cry from the founders’ long-term intentions: with more than 175 apps in the store and 65 interested buyers browsing, two apps sold for a total of $17,000. Apptopia is also adding two to three apps to the market per day.

Their pricing formula is really a “secret sauce,” Mr. Kay said, but it includes a number of broad considerations: App Store SEO rank for specific keywords, financial considerations per App Store category, and estimated future revenue per user based on a number of monetization strategies. Apps, with that in mind, must already be available for download. “It allows us to screen-scrape relevant sales data and assure that the financial data we are showing buyers is 100 percent accurate,” Mr. Kay explained. “This is really important, as buyers spending $10-, $15-, or $30,000 will need to know for certain the numbers they are using to make an educated decision are real.”

Apptopia is based in Massachussetts but raised more than $100,000 in seed funding from New York City-based ExpansionVC. Apptopia will guide sales from beginning to end and taking 10 percent in the process. And they’re committed to avoiding the saturation that justifies their existence in the first place, charging a listing fee after the first month and focusing on apps in the $1,000 to $100,000 range.

Mr. Kay said they want to focus on “real revenue generating opportunities” not common among Apptopia’s competitors like source code-salesmen Appsplit and SmartAppsters. Instead, Apptopia will take full-fledged, existing products from developers, who often lack exit strategies, and into the hands of those who can monetize them – enlightening the public in the process. “The general public will finally be able to see the financials and general sentiment behind certain apps,” Mr. Kay said. “This should be good for the mobile industry on a whole.”

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