I did too, a couple of years back, and then I found the perfect way. I’ll be sharing the best way to pitch an App Idea to investors. Why you ask? Because that’s how businesses grow and people get more work.
“I was sitting in a meeting with our lead designer, Jaakko Lisalo, who presented 10 new game app ideas with long written documents about each one. Nothing piqued my interest. Then, right at the end, Jaakko showed us an image – a single sketch of some coloured blocks, a flock of birds, some smoke and dust. For some reason, I felt that the single sketch conveyed a lot of energy. I fell in love with that image and its energy. I got a feeling that this was the game we should make.”
And that’s how Angry Birds came into existence, and the person I quoted above was Niklas Hed, co-founder of Rovio, the firm behind Angry Birds.
Today the valuation of Angry Birds brand and Rovio Entertainments is more than $2.5 billion. This wouldn’t have been the case if Niklas hadn’t shown interest in that single sketch, and this billion-dollar idea would have been in a trash can.
But luck isn’t always in your favor, which means you need to work hard and also learn how to sell an app idea at the best price. So, tell me who wants to be a millionaire (or billionaire)?
How to Make Money from an App Idea?
News Flash, You can’t.
Honestly, no one wants to buy app ideas.
Anyone willing and able to work months to make an app already has about 100 app ideas of their own. They aren’t looking for someone who’ll sell an app idea to them.
I can’t tell you how annoyed developers get from this conversation. What I mean to say here is that an app idea has no intrinsic value in itself. Even the billion-dollar app ideas only begin to have actual value when the proof of concept is developed.
To make an app idea worth millions, you need to put in a lot of work into market research, project management, capital raising, development work, and marketing. And it’s those things that give your amazing app idea, its value.
If you know how to do all of that then you can make money from an app. But, if you are just like, “Hey, I have an app idea,” but not ready to truly work for it; then no one is going to want to pay you for that.
SEE ALSO: How Much Does It Cost To Make An App?
Create a Unique App Business Concept
I know there have been hundreds if not thousands of blogs and videos on creating the “perfect business plan” for your app startup, but most of them say the same thing, learn from your competitors and make something better than them.
This strategy is true and evergreen, but that is not what you came to learn here.
You didn’t want a fortune cookie advice but a solid business plan and I’ve wrote a blog on Uber business model and how to earn money from such an app-based startup.
Now, coming back to this blog. You need a UNIQUE app business concept (more focus on the unique part of the phrase). For instance, if we take into account Uber, there are hundreds of Uber-like startups, but only a handful are succeeding.
The reason is that instead of just offering an app-based service like all the other app startups, these unique companies either found a niche audience to serve or a special kind of service that only they could provide.
A few app-based startup ideas from the top of my head.
Instead of creating a simple document scanner app, the better idea would be to build an app that can scan in any language and convert to any other language.
Instead of creating an interior app that let’s you choose from the standard color palette for the walls in the picture; you can go for AR/VR feature and provide real-time color and furniture change from any available home design catalog online.
A niche in the user category can also be achieved. For instance, when everyone is creating online chat rooms for gamers, you can make a platform with virtual chat rooms for students to discuss their studies.
Create a taxi app service for people who wish to travel with their pets.
Opportunities are endless, and you can go as large or small as you want with your app-based startup idea.
#Startup Tip: Make sure that the app idea you came up with doesn’t exist already. Thoroughly check Google Play Store, Apple App Store, and even other 3rd party app stores if you can. You don’t want to do all the hard work only to realize that someone already did that before.
Study Pros & Cons of Your Competitors’ Application
I know that I did tease all the blogs that gave the same information, but I repeat that the advice is 100% solid. After researching all the similar apps to your app idea, you’ll have a few apps who’ll be your perfect nemesis that you first need to understand and then crush.
Learn about these apps and what kind of services they offer. Further research about their customers, how they feel about the app and its offerings, what their app is missing, and how your app can provide what theirs lack.
You must have already read in some blog to pay attention to your competitors’ customer user ratings and reviews. Well, I’d like to add a point to it. Pay attention to the release date of the latest version updates of their app – they could be out of date in a technical, visual, or some other aspect.
If you fill that gap, where your competitor app is lacking, people will most probably choose your app over theirs.
By offering something newer and in line with current technological trends, you are raising the bar for others, and if you continuously do so, you’ll stay on top of the app marketplace.
What’s Your App’s Advantages Over Competitors?
I’ll help you make the best app in your industry, but first, you have to answer my question. Why would I download your application instead of your competitors’?
This isn’t some kind of trick question or reverse psychology tactic. But this question is the key to making the best app of your chosen industry.
Simply providing what your competitors lack in their app is only a temporary solution until they find out and do the same within a month or so. To create a monopoly, you need to do something that no other company has done or will be able to do in the near future.
Some of the best examples in businesses:
Coke has never revealed its recipe. Now, it’s not as much the recipe but the curiosity behind it that sells coke.
Another example, in India, Reliance Jio broke the entire telecom market by providing free sim cards, with free calling, free messaging, and free internet for almost two years.
Only the companies and startups that have the best app idea and the guts to try something unique and interesting can survive and thrive in this time and age.
If you mix the same two chemicals every time, you’ll get the same result each time. So, find a unique formula to run your app-based business idea and offer what your competitors can’t.
Is Your App Idea Worth It?
You don’t have to shell out thousands of dollars on an app just to check whether your app idea will work or not. Test your app idea in just a few hundred dollars with a dummy website.
This is one of the most unique and creative ways to check whether people will like your app idea or not. Design and build a website for your app idea, as if the app already exists. Mention the features, dummy app screen designs, etc. On the page and place the app download button on the site.
Next, market the app with this website link to your targeted spaces on social media and other digital platforms. I will also recommend starting a small ad campaign to calculate your Return on Investment (RoI). By running a small campaign as low as $50 can give you a rough idea of how much it will cost you per download. That’s it.
Now you observe the statistics of the site visitors and how many clicked the button to download the app. The button won’t do anything, but the stats will give you an idea about the percentage of people interested in your app idea.
If you get a positive response overall, you can be sure that pitching your app idea to investors is a thought worth pursuing.
#Startup Tip: Remember that although this website is a dummy experiment platform, you need to give a complete feel of a real product. So, it is better to hire dedicated developers team, designers, and content creators to build the website. It’s better to create your website with the same company that will develop your application.
How Will Your App Idea Generate Money?
Any investment in the whole wide world is to make a profit. So, if you are thinking “how to make money from an app?”, you are in the right direction.
So, how will you sell your app idea and generate profit from it?
Before deciding on the source of the revenue stream on your app idea, there are several questions that you need to find answers to.
The answers to these questions will guide you through creating the perfect revenue plan for your app idea.
- What kind of demographic are you aiming as your target audience?
- Is your app’s target audience financially reliable?
- How are you planning to introduce your app solution to them?
- What ways of target audience interaction are you considering?
Once you understand the mindset and financial conditions of your target audience, you can create the perfect revenue generation model for your app idea. The most popular options to choose from are:
Go for Paid App Model
Pro App Paid Model
Include In-App Advertisements
Implement In-App Purchases
The in-app purchasing model is essentially a micro version of the paid pro app model. Instead of paying a hefty fee for the entire app, the users pay a small amount only for the particular feature or add-ons that they need.
The latest term for this model is “Freemium apps” as in Free+Premium.
Selling User Data (Legally)
You need to give a disclaimer when the app user downloads the app about the data that you will be storing and using. If you stay in the legal boundaries, then you have nothing to worry about.
Selling Virtual Goods
How to Advertise Your Future App?
There have been several visionaries amongst our midst that have proved that it is the idea that sells first and then the product. Steve Jobs was the reason that Apple sold its products, and Elon Musk is the reason why Tesla is becoming the future of electric automobiles.
It doesn’t mean that you need to become a celebrity business rockstar like them, but you definitely need to find unique ways to sell your million dollar app idea. Hire the best marketing team to create a perfect marketing plan for your app.
Although, remember that no one will ever understand the app as well as you and the team that develops it. So, make sure to discuss the right marketing approach with your technical team. A few mobile app development companies provide a marketing team to their clients. So, you can even go for that option as well.
Where to Find Investors for Your App Concept?
We are nearing the end of the blog as well as realizing your app idea. So, where do these magical creatures live that give you money to start your dream company with your brilliant app idea?
To find investors is not that difficult; what’s difficult is to make them interested in you app idea. But that is the topic for the next section so we’ll talk about that later.
For now, let’s see where you can meet your potential investors:
- Startup Platforms: Startups.co and Gust.com.
- Business Angels Networks: Funded.com, Angel Capital Association, and Angel Investment Network.
- Crowdfunding Platforms: Kickstarter, Pererbackers, Indiegogo, RocketHub, and OurCrowd.
- Business Incubators & Accelerators: 500Startups, TechStars, and Ycombinator.
- Professional Social Networks: LinkedIn, Xing, Plaxo.
- Private Equity Markets: Contact a company that specializes in business project investments. They will usually purchase the entire business idea as a whole with copyright transfer.
- Bank Loan or Venture Capital: You can go old school and ask a bank or other conventional financial institute for a loan on interest. They will, however, need collateral in case you fail to pay back the funds.
#Startup Tip: Before meeting and discussing your app idea with any of your investors, partners, or even friends, always make them sign an NDA (Non-Disclosure Agreement) so that they are legally bound to keep this under wraps unless you say so.
How to Pitch Your App Idea to Interested Investors?
Did you successfully follow all the steps mentioned above? Excellent! Now, you are prepared to face the harsh world of investors and cold-hearted VCs. Just kidding! Although the competition will be quite tough as there are almost hundreds of app ideas pitched to every big VC in town.
So, how will you make your app business proposal look different and interesting compared to the rest of the lot? Your top priority is to present your app-based business idea properly, so it gets bought or invested in as soon as possible.
Here are a few tips on how to present and how to sell an app idea. Always remember, the investors are looking for the best deal for themselves, so they’ll offer you the least amount, share, or royalty percent and make the most for themselves. However good they sound, always remember they are here to make money first, and help you second.
Young and inexperienced businesspersons almost always make a mistake while estimating the worth of their app idea. Frankly, this strategy is wrong because the valuation is never fixed and ever-changing.
Having said that, you have to keep a hypothetical price in mind while negotiating. My advice is to concentrate on other important things besides valuation, like a partnership, percentage in the company, royalty rate, etc.
But all this comes only after you have made them want your app very badly. For that, you need to give the best presentation of your life.
While presenting your app idea in front of potential investors, always;
- Be natural
- Be short
- Do not include too many technical terms
- Explain even the most complicated processes clearly
- Be exhaustive
- Always have the proof for every statement you make
- It’ better to have a working prototype app to show
#Startup Tip: Even after doing all of this, you’ll still be among the top 50 app pitches that they see each day. So to get among the top 5, you need to have a working model. Build An MVP app and make your space among the top 5.
How Much for Your App Idea?
Now you know how to sell an app idea but, how much is your app idea worth? That still remains to be found out. So that’s it for today, and if you need more guidance about where to start with your app idea, we have a proficient sales team that can guide you with your venture.
The post How to Sell an App Idea to a Company? [2020] appeared first on Excellent WebWorld.
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