Do you have an innovative app idea that could change the world but are unsure where to start or how to sell it?
You’re not alone. According to Statista, mobile app downloads worldwide reached 255 billion in 2022. With the increasing demand for mobile apps, it’s no surprise that many entrepreneurs are trying to capitalize on this trend.
However, creating an app is only half the battle. Selling it is a completely different challenge altogether. One of the biggest pain points for app developers is getting their ideas in front of the right people and negotiating a fair deal.
But don’t worry, we’ve got you covered. In this article, we’ll walk you through a step-by-step process on how to sell an app idea, complete with examples from top apps. By the end of this guide, you’ll better understand what it takes to successfully sell your app idea and turn it into a reality.
So let’s get started!
10 Steps to Successfully Sell Your App Idea — Turn Creativity into Profit
Step 1: Find a Problem and Innovate the Solution
The first step to selling your app idea is to identify a problem in the market and innovate a solution to solve it. Your app should address your target audience’s real pain point or need. Find a market gap and find ways to solve it innovatively. Ensure your solution is unique and has a competitive edge over existing solutions.
Example: Uber identified a problem with traditional taxi services and innovated a solution by creating a ride-hailing app that was more convenient and efficient for customers. Look for gaps in the market, listen to customer feedback, and think creatively about how you can offer a solution.
Step 2: Conduct Market Research
Once you have your app idea, conducting market research to validate your idea and gain a deeper understanding of your target audience is essential. It will help you determine whether your idea has a market and is viable. Market research will help you to identify your target audience, understand their needs, and determine how much they are willing to pay for your app.
Research your competition, customer preferences, and market trends. This will help you understand what features and functionalities your app should have and how to position it in the market. Use tools like App Annie or SurveyMonkey to gather data and insights on your target audience.
Example: Snapchat did market research and discovered that millennials preferred short-lived content that disappeared after a short time. Thus, they created Snapchat, which allows users to share photos and videos that disappear after 24 hours.
Step 3: Develop a Prototype
After conducting market research and developing an innovative app idea, the next step is to develop a prototype. A prototype is an early version of your app that demonstrates its basic functionality and features.
Creating a prototype allows you to test your app’s viability in the market and gather feedback from potential users. It also helps you to identify any potential problems or limitations of the app and make necessary adjustments before investing significant resources.
There are several prototyping tools available that can help you create a prototype quickly and easily. Some popular options include InVision, Figma, and Sketch. These tools allow you to create interactive and realistic app mockups, which can help you better communicate your app idea to potential investors or buyers.
Example: When developing the app idea for Snapchat, co-founder Evan Spiegel worked for 7 months and launched a prototype called — “Picaboo” that allowed users to send disappearing photos to each other. He tested the prototype with a small group of friends and received positive feedback, which led to the development of the full app.
Step 4: Protect Your Idea
Before pitching your app idea to potential buyers or investors, protecting your intellectual property is important. This includes filing for patents, trademarks, and copyrights to prevent others from stealing or using your idea without permission.
You can start by conducting a patent search to ensure that your idea hasn’t already been patented by someone else. Once you’re confident your idea is unique, you can file a provisional or non-provisional patent application with the U.S. Patent and Trademark Office (USPTO) or your country’s intellectual property offices.
In addition to patents, you should also consider trademarking your app name and logo to protect your brand identity. Copyrights can also be used to protect the written or artistic content of your app.
Example: In 2012, Instagram co-founders Kevin Systrom and Mike Krieger sold their app to Facebook for $1 billion partly because they had taken the time to protect their intellectual property. This included filing for patents and trademarks to prevent others from copying their app’s features and branding.
Step 5: Network with Industry Experts
Networking with industry experts can help you gain valuable insights into the app development and marketing process. Attend industry conferences, join online forums, and engage with other entrepreneurs to learn about best practices, trends, and challenges in the app industry.
Building relationships with other professionals also increases your chances of meeting potential investors or buyers interested in your app idea.
Example: Steve Jobs’ networking with industry experts like Steve Wozniak played a key role in co-founding Apple, which eventually became one of the most valuable companies in the world, with a market capitalization of over $2.505 Trillion as of March 2023
Step 6: Pitch Your Idea
Once you have developed a prototype, protected your idea, and built a network of industry contacts, it’s time to pitch your app idea to potential buyers or investors.
Prepare a compelling pitch that outlines the unique features and benefits of your app, as well as the market opportunity and potential revenue streams. Be prepared to answer questions and address potential buyers’ or investors’ concerns.
When pitching your app idea, it’s also important to be flexible and open to feedback. You may need to adjust your app based on feedback from potential buyers or investors, so be prepared to iterate and refine your idea as necessary.
Example: When pitching their fitness tracking app, Strava, to investors, co-founders Michael Horvath and Mark Gainey emphasized the app’s social aspects, allowing users to connect with other athletes and share their workout data. This unique feature helped to differentiate their app from other fitness-tracking apps on the market and ultimately led to its success.
Step 7: Negotiate with Potential Buyers
Once you have found a potential buyer interested in your app idea, it’s time to negotiate the terms of the deal. This is an important step as it will determine the final price you receive for your idea.
Before entering into negotiations, research the market value of app ideas like yours. This will give you an idea of what to expect and what kind of offer to accept.
During negotiations, be prepared to compromise and find a mutually beneficial agreement. Don’t be afraid to ask for what you think your idea is worth, but also be open to feedback and suggestions from the buyer.
For example, in 2014, Facebook acquired the messaging app WhatsApp for $19 billion. Before the acquisition, WhatsApp had negotiated with multiple potential buyers but ultimately decided on Facebook due to their shared vision and willingness to offer a fair deal. It’s important to remember that negotiations can take time and require patience, but it’s important to remain persistent in finding the right buyer and deal.
Step 8: Due Diligence and Closing the Deal
After successful negotiations with a potential buyer, thorough due diligence is important to ensure they fit your app and business goals. This step involves verifying their financial stability, industry reputation, and compatibility with your team and product.
Once satisfied with the buyer’s credentials, it’s time to finalize the deal and close the sale. Don’t skip this crucial step; it can help avoid pitfalls and ensure smooth transactions.
Example: In 2018, Uber acquired electric bike-sharing company JUMP for an estimated $200 million. Before closing the deal, Uber conducted a comprehensive due diligence process to ensure that JUMP’s financials, operations, and technology fit its long-term vision well. This included analyzing JUMP’s user data, interviewing key personnel, and reviewing the company’s legal and regulatory compliance. Once Uber was satisfied with the results, they finalized the deal and integrated JUMP’s bike-sharing technology into their platform.
So, take the time to conduct due diligence, ask the right questions, and ensure a successful sale by closing the deal with a buyer that aligns with your app’s goals and values.
Step 9: Finalize the Deal
Once you have agreed with a potential buyer for your app idea. Now, it’s time to finalize the deal by creating a contract outlining all the agreement terms. Ensure to include all crucial details, such as the purchase price, payment terms, and intellectual property rights.
To ensure the contract is legally binding and protects your interests, have a lawyer review it. Once both parties have signed the contract, keep a copy for your records.
Remember, this is the final step in the process, so take the time to review and double-check everything before sealing the deal. A well-crafted and comprehensive contract will help ensure a smooth and successful transaction.
Step 10: Deliver the App Idea
Congratulations! You’ve finalized the deal and it’s time to deliver your app idea to the buyer. This is the exciting part, where you showcase all your hard work and creativity.
Start by giving the buyer a detailed description of your app’s functionality, including wireframes and design mockups. This will help them understand how the app works and what it should look like.
Next, provide relevant information, such as user personas or target markets, to help the buyer successfully design and develop the app.
Don’t forget to offer ongoing support or consulting services to ensure the app is launched successfully. This will help the buyer and strengthen your relationship with them for future business opportunities.
So confidently deliver your app idea, knowing you’ve taken all the necessary steps to ensure its success!
Selling an app idea can be lucrative for entrepreneurs looking to monetize their creativity and innovation. Following the steps outlined in this guide can increase your chances of successfully selling your app idea to a potential buyer.
From identifying a problem and innovating a solution to networking with industry experts and finalizing the deal, each step plays a crucial role in achieving success.
Remember that selling an app idea is just the first step. You’ll need to continue working hard to ensure your app idea is successful in the market. You can achieve your goals and succeed as an app entrepreneur with dedication, hard work, and the right strategy.
Alain Glaeser, a seasoned software developer with 7 years of experience, has helped countless mobile app and SaaS startups build and scale their products. He has an excellent track record of developing software downloaded by millions, playing a vital role in helping founders secure multi-million dollar funding. Alain's expertise in building tech startups has proven invaluable to a non-technical entrepreneurs seeking to expand their knowledge base and gain a competitive edge in the industry.Read all of Alain Glaeser's articles