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I acquired a mobile app!

This is a first post in the series. I’ll be documenting my experience of buying a “starter” mobile app with a goal of either building a passive income source or selling it in a year with profit.

Why I wanted to buy a mobile app?

Backstory first: I’ve created my very first website back in 2004. It was a simple HTML page, coded on Notepad and hosted somewhere for free. Since then I created several online businesses – usually, in the form of content-heavy websites and communities. In short, web is my primary digital medium. I know how it works technically, I know how business model works, who to hire and when.

In the past, I successfully worked with mobile apps, however they always were ‘complementary’ to the main web businesses. For example, mobile audio guides Touringbee were a spin-off from web content. Little by little, I became more curious about stand-alone mobile app development and mobile apps business. I was considering to create a mobile app from scratch – as a v2 for PropertyTool – but then learnt about online business acquisitions marketplaces. In short, one could buy digital business such as blog, shop, mobile aps etc; at a different stages: from million-dollar deals for well established businesses to cheap “starter” websites and apps and everything in between. Two months after I acquired my first mobile app!

What mobile app I bought?

I bought “Chakras meditation: healing body” Android app. I used as acquisition marketplace, because they list ‘starter’ businesses. It took me roughly a month before spotting the listing, doing my due diligence, bidding and finalising the deal.

My “Chakras meditation: healing body” is a classic “starter” app. It’s been build in a popular niche (meditation and well-being) meaning there is a stable level of free organic installs. App was ready to use and crash-free at the time of the purchase. It’s current feature-set is extremely limited, so it’s up to me to develop product strategy, define a roadmap and drive the development. Seller didn’t started app promotion either, so it’s up to me to figure out the go-to-market plan. In short, I bought the assets (code, images etc), and it’s up to me to make it a business.

Why I bought this app?

I had a simple due diligence process. My acquisition budget was below 500E, and I was ready to take some reasonable risks. With that in mind, I compared different listings to find a match. I chose Chakra Meditation app because:

  • Familiarity with topic: As a certified yoga teacher, I’ve learnt a lot about chakras. So when I downloaded the app, I knew how I could improve it’s content and it’s features.
  • Addressable audience and potential for growth: Meditation (and Wellness as a whole industry) is a growing trend. People want to improve their mental health. Some people do it by meditating on a regular basis. One of the ways to meditate regularly is to use a specialised mobile app.
    • “Chakra healing” is a popular trend. I quickly checked Instagram and found 1M images associated with #chakra hashtag, this mean there are lot of potential users for the app.
    • I checked Google Play for other apps in the same niche – there are at least dozen on them. Seller also informed me that the app has a steady organic install rate. Currently, about 15 users would install the app per day (and 10 of them would deinstall it soon after). I liked that there is a competition, this means that there is an addressable audience as well! I also liked that there is a steady organic acquisition. It indicate a healthy user interest, while the performance of this acquisition channel could always be further improved.
  • Technical support. I checked with Seller if they’d be willing to provide post-sales technical support as a freelancer. They agreed to it and shared their rates. As a part of a deal, Seller made some small changes in the app before passing me the asset’s code. In short, I could now plan in-product development, without spending time for hiring a developer. This is a huge time-saver!
  • Type of business and availability. I actually wanted to acquire either a mobile app or a drop-shipping business as I am also curious about running e-commerce. But there weren’t good e-commerce listing to bid on, meanwhile my bid on Chakra Meditation won the the auction. So for now, I am focusing on mobile app development only.

What’s next: business, product, marketing strategy

The acquisition process was smooth. Once I won the auction, I paid to a Seller directly by Paypal. They initiated an app transfer on Google Play, it took a week or so to complete. Since then I am a full owner of the app! As a separate update, Seller added AdMob and Firebase identifiers, and send me a new release .apk. I am now waiting for this update to be approved in Google Play console.

So far, this venture feels as a nice stretch outside of my comfort zone.

  • I want to offer guided meditations as a product update; and this would include sourcing voice-over artists, writing the content, and even licensing and mixing the music!
  • I am excited to work on product strategy & product roadmap process. Some things are the same, while others are different for native apps vs web. For example, any app update requires a weeks to complete because of Google Play team is currently verifying them with delays.
  • I discovered a problem with music licensing within the app. It should be fixed through product updates, but it brought my attention towards legal licensing and music stocks.

My overall business strategy is to complement the existing monetisation model (i.e. mobile native ads) with a monthly subscription model. On a product marketing side of things, at the moment I simply focus on install rates as a primary metric, with a retention rates as a secondary one.

Want to accompany me on this journey? Sign-up to my newsletter / follow me on LinkedIn!

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