Mobile apps are expected to generate over $490 billion in global revenue in 2023. If you’re creative and have what you believe is a great app idea, now is the time to sell it (and hopefully, make a lot of money doing it).
With nearly 2 million apps on the Apple App Store alone, you face a lot of competition.
In this guide, we’ll discuss how to sell app ideas and find the right investors.
Is it worth it to develop and sell your app idea?
If you’re wondering if it’s worth selling an app idea, take a look around you — or just pick up your phone.
People love their phones, and they love the apps on their phones.
The average smartphone user has 40 mobile apps installed on their phone.
As for how much people use apps?
We ran a quick Open-Ended poll asking 100 U.S.-based respondents to estimate the number of hours a day they spend using apps on their phone. This includes social media and gaming apps.
After sorting through their comments and tallying their responses, we found:
- 51% spend between 2-4 hours
- 32% spent 1 hour or less
- 17% spend 5 or more hours
Here are a few of their comments:
The point is, most people spend several hours a day using mobile apps. (They might even be underestimating that number.)
If you have an app idea you think will sell, and you do the work it takes to sell it to the right financial backers, we would say it’s probably going to be worth it.
The step-by-step process for selling an app idea
Here are 6 steps you can take to get your app idea ready to sell.
Step #1: Write it down
Put all your app ideas on paper.
Write out what your app does, its features, and the value it brings to users.
A brain dump is a good way to find out whether your app has potential, and to uncover problems or opportunities you might have missed.
It might take some work to organize your thoughts and find the right words to use. Copy testing can help ensure your messaging is clear.
Once you’re done, you’ll have something to present to potential investors and refer back to yourself.
Step #2: Conduct market research
You probably think you have a unique app idea. But chances are, there’s at least one app similar or even superior to yours.
That’s why you need to do market research before trying to sell your app idea.
Competitive analysis is a key market research technique. Search the App Store and Google Play for apps that are similar to your app idea. Look at the target audiences for competing apps and see if there’s overlap.
As you research, keep these 4 questions in mind:
- Does your app idea address a specific problem?
- Does it provide a feasible and efficient solution to the problem?
- Is there a competitor with a solution to this problem?
- Does your app offer a better alternative than your competitor?
This approach to DIY market research uncovers who your target audience is not and whether you need to revise your app idea.
This can also help you develop your branding or find trends that can inspire new app ideas.
Step #3: Validate your app idea
Being able to show that users are interested in your app will work in your favor when selling your app idea. With PickFu, you can ask potential users directly.
The online platform enables you to poll hundreds of people who fit the demographics of your target audience. You can target respondents by age range, gender identity, average app store spend, gaming habits, and other traits.
Using PickFu for idea validation can be as simple as asking an open-ended question about your app idea.
Here’s a good example of an Open-Ended poll for a hiking-themed mobile app.
The user uploaded a video trailer for the app and asked 50 respondents who are hikers this question:
“Assuming a reasonable price, how interested would you be in using the app described in the video where 1 star is the least interested and 5 stars is the most?”
With an average rating of 4 out of 5 stars, respondents explained their interest level in detail and offered pros, cons, and suggestions as well.
When you validate your idea with insights from your target audience, you know for sure whether to proceed with selling your app idea.
Step #4: Create a mobile app business plan
You’ve already taken the first step by putting your app idea into writing. It’s time to turn that into a convincing mobile app business plan.
Your plan should give a real projection of what you hope to achieve with your app.
Here are the key pillars of a mobile app business plan:
📒 Executive summary. Concise description of your app that includes the market situation, target audience, and product information.
🏢 Company description. Information on you and your team, your experience, responsibilities, accomplishments, and your mission statement.
⛰️ Risk and opportunities assessment. Analysis of the strengths, weaknesses, opportunities, and threats of your business and app.
It’s a bonus if you have industry knowledge, which will prepare you for the inevitable challenges your app will face. Make sure your business plan reflects that.
Step #5: Outline your marketing strategy
Your mobile app marketing strategy will show investors how you plan to grow and monetize your app.
Here are a few things every marketing strategy should have:
🕵️ Ideal buyer persona
Personalization leads to profitability. In order to tailor your app to your audience, you need to create your ideal customer profile. An easy way to do this is with a free online tool such as HubSpot’s Make My Persona.
📊 Key performance indicators (KPIs)
KPIs are a way to measure the success of your app idea. How else will you know whether you are going in the right direction?
Set a few metrics to track, such as the number of downloads, subscriptions, or in-app purchases.
🎯 Customer acquisition strategy
How are you going to acquire customers — and how much will it cost?
Identify the channel or channels you’ll use to generate leads. Will it be via social media, PPC ads, or something else? Then calculate your customer acquisition cost. Check out our mobile app business plan guide for more on how to calculate CAC.
Step #6: Have a detailed financial plan
The main objective of a financial plan is to answer questions that potential investors are likely to ask you about your app idea.
Here are 3 questions you should be ready to answer.
- How will your app make money?
- How much will it cost to build and run your app?
- How much funding do you need, and how will you allocate it?
Also, have an answer ready for how much of your own money you are willing to put into your app idea if you plan on developing it yourself.
Where to find investors for your app idea
Now that you have a plan to sell your app idea, it’s time to execute it. Let’s look at the types of investors to whom you can sell your idea and get funding.
Friends and family
The financial support of your family and friends can be just enough to get you started and supplement other sources of funding.
It can definitely help you in the research stage before you begin serious production on your app.
Crowdfunding is a fundraising method for a cause or project in which people donate money in small amounts, usually within a few months.
On a rewards-based crowdfunding platform like Kickstarter, you could offer your supporters rewards based on their level of contribution.
Rewards could range from a free download once your app is live to discounts on in-app purchases.
Learn more about crowdfunding in our guide to how to launch a successful crowdfunding campaign.
Business angel networks
Wealthy angel investors and angel groups invest their own money or equity into small businesses and startups, usually in the very early stages.
They expect a high return on their investment, as much as 40%.
Like angel investors, venture capitalists invest and expect hefty returns.
Here’s the difference: venture capitalists are part of firms that invest on behalf of other people, and they generally target businesses that are already established.
Look for venture capitalists that have experience investing in mobile apps. Some of the most prominent VC firms include Sequoia Capital, Kleiner Perkins, and Andreessen Horowitz.
Do an online search to find tech companies’ recent app acquisitions and investments.
Chances are, they’re always interested in looking for new app ideas that have the potential to make money.
💡 Bonus tip: Protect your app idea
You might think investors are kind-hearted entrepreneurs who want to help you with the app development process.
But that’s not always the case. Unfortunately, there are a lot of scammers out there.
And that’s why you must protect yourself and your app ideas.
A non-disclosure agreement (NDA) establishes a confidential relationship between you and your investors. By signing it, your investors agree not to share sensitive information about your app.
That’s one way to protect your app idea from being stolen.
You could also pursue a patent, copyright, and trademark for your app.
In a nutshell, don’t let all the work you put into validating your app idea, naming your mobile app, and creating a plan to sell it go to waste.
Make a plan for your app idea to succeed
The mobile app market is growing. If you want to sell your app idea, you need to create a plan, do competitive research, and find the right investors.
Ready to validate your app idea? Find your audience of potential users on PickFu and start a poll.