The Million Dollar Flashlight

mediaspree · August 2012

Check out this auction over at apptopia! I thought the sales stats on this were interesting, as well as the asking price
https://www.apptopia.com/listings/flashlight-by-i4software

Perhaps there is some credence to "simpler is better".

StayFoolish · August 2012

How do you even go about selling an app anyway? You'd have to transfer the whole company to someone else right?

ChelseaT · August 2012

Hey - just a heads up I'm from Apptopia :) but to answer your question about transfers, it all depends whether the app is iOS or Android... Transfers with Apple are a little bit harder, which our Founder Jonathan Kay explains really well in this blog post - http://blog.apptopia.com/iosappstransfer/... for now the app must be unpublished from one dev account & the source code is re-published to the new one

StayFoolish · August 2012

So in this case, yes, they have to be selling the whole company, especially since Flashlight apps are no longer allowed....

ChelseaT · August 2012

No, there's no need to sell the whole company. Apptopia allows devs to sell just one app from his or her portfolio, but on the iOS platform this does not normally allow users, ratings, & reviews to transfer over. With our SDK users can now easily be directed to the new app. I'm sure you can understand that at a certain extreme price point with very big players, the transfer process will run much more smoothly.

panzeriti · August 2012

Interesting how much most people are trying to get for apps that don't already make much money/downloads. Also, I didn't see any bids on any of the apps I looked at. Wonder if people are actually buying.

rocotilos · August 2012

This tactic is old school tactic. He is not looking to sell it, hence the extreme price.
He's just making a viral marketing of the app. He is successful so far because TS
posted about it in this forum, and soon, many people will be curious as how good
this app is, and start to download it... rank improves. lol

mer10 · August 2012

Agreed. Anyone would have to be crazy to buy it for that much, especially considering how the ranking and reviews would disappear.

ChelseaT · August 2012

Good point Panzeriti about some of the valuations being off - unfortunately we cannot control what some people choose to price their apps at, but we love to help anyone interested in getting advice on where to start. We encourage to everyone to email valuation@apptopia.com for this.

As for whether people are actually buying or not, you should take a look at the Recently Sold section of the site (https://www.apptopia.com/listings/browse?by_finish_at=desc&with_completed_state=1).. Apptopia launched in April & we've brokered the sale of 65 apps, which has resulted in $178,400 to developers so far! So yes, people are actually buying :)

Touchmint · August 2012

ChelseaT said:
No, there's no need to sell the whole company. Apptopia allows devs to sell just one app from his or her portfolio, but on the iOS platform this does not normally allow users, ratings, & reviews to transfer over. With our SDK users can now easily be directed to the new app. I'm sure you can understand that at a certain extreme price point with very big players, the transfer process will run much more smoothly.

I think what was meant by that is that they would have to sell the whole company because if Apple makes you repost the app this means it would not be accepted since they no longer take flashligh apps. I guess it really doesnt matter because its most likely just marketing.

Honestly it did look like the ones that did sell sold for way more than they are worth so maybe a sellers market

BTW not sure how I didnt notice this before (smaller pic on my phone) but ChelseaT is extremely smoking hot!

ChelseaT · August 2012

I realize that in any other case of selling a Flashlight app, acquiring the company would be the only option. I'm just saying that in this specific case since so much money is involved, there would be a few exceptions to the transfer process. The app has had over 22,000 5 star ratings, 1.4 million downloads, and has spent 80 weeks as a top 10 paid utility app... so it seems extremely unlikely that if this acquisition were to occur, Apple would just tell a big brand like Energizer that the app cannot be added individually since there are already so many flashlight apps.

Furthermore, it's not just a marketing scheme! Even though it seems a little crazy initially, the idea of selling this app for $1 million is not as far-fetched as you guys are making it out to be. To put it in perspective, at the $1 million price point you would be acquiring users at LESS THAN A DOLLAR a user…which is truly unheard of. Most companies are buying users at $3-$5 a pop. Not to mention, the price point means very little to a big brand who would consider acquiring the app. With all the hype they can produce around the app itself & the acquisition, by the time they choose to re-launch the branded app they will have already made back their initial investment.

mediaspree · August 2012

Id just like to chime back in and say apptopia is a great place to sell your app. I recently sold an app there for about 1 years worth of revenue which seems like a fair price for both buyer and seller. I know I was happy :) The support they give developers is great too.

To touch on touchmints thought of it being a sellers market, it certainly is! People want to get into apps but most don't have the technical skill,design skill, or time. If you have a moderately successful app that you want to exit for any reason, the buyers are waiting.

taylor202 · August 2012

I can almost guarantee that Apple would not allow this app if it was re uploaded. They have really buckled down on the emoji, flashlight, and other super simple apps being added.

ChelseaT · August 2012

mediaspree said:
Id just like to chime back in and say apptopia is a great place to sell your app. I recently sold an app there for about 1 years worth of revenue which seems like a fair price for both buyer and seller. I know I was happy :) The support they give developers is great too.

To touch on touchmints thought of it being a sellers market, it certainly is! People want to get into apps but most don't have the technical skill,design skill, or time. If you have a moderately successful app that you want to exit for any reason, the buyers are waiting.

Thanks for the kind words - we really appreciate it :)

Also, Taylor I respectfully disagree.. the Flashlight app developer from i4software just won Macworld's Best of Show in January for his other app and has been very well received by the community... it's not as if an additional Flashlight app is being added to the store, it would essentially be a transfer of ownership since the app will be removed from the previous account.

taylor202 · August 2012

Right, in that case it would be ok. If a person was to try and re upload said app I feel there would be issues with the review process.

HappyByte · September 2012

ChelseaT said:
No, there's no need to sell the whole company. Apptopia allows devs to sell just one app from his or her portfolio, but on the iOS platform this does not normally allow users, ratings, & reviews to transfer over. With our SDK users can now easily be directed to the new app. I'm sure you can understand that at a certain extreme price point with very big players, the transfer process will run much more smoothly.

Chelsea, with all the respect, I really do believe you are smart enough to understand what people write, do you? Did you read what people say above or you are just making a PR of you site here?

Nobody needs neither a source code of a flashlight nor a flashlight app binary without the linked dev. account.

Because of a few quite simple reasons:
1) app will lose all existing user base
2) flashlight won't be allowed into the store with a new account
3) app store apps are not transferrable between dev. accounts

Your SDK, whatever that is, is a nothing but useless to help with the above.

Neither the "Best of Show" award can help.

***

Now about the i4software Flashlisht.

Only a person that can't use a calc may throw 1M on it - or the one that knows nothing about the App Store and has 1M to spend on an over 10-15 year ROI, that's really weird.

I. A NEGATIVE TREND

The app had its good days in the past. The trend for the last year is quite negative. They used a promotion scheme that just doesn't work anymore for them. The app has disappeared from the top overall rating. It was over 5k downloads a day at over top 20 overall position. Now it's stuck around 500 downloads a day at top 20 utilities position.

It was #1 in the search results for "flashlight" - now, it's #8 - and all above apps are FREE.

Reasons for such a significant (a factor of ten) drop may be in Apple policy tightening and the search engine algorithms changes. These drops (on the appannie.com all-time chart) are exactly matching dates of search updates of the App Store.

Second reason may be related with banner networks. Banners advertising the same things for years are losing their CTR and it may have become a way too costly to continue to buy as much clicks as earlier for banners that doesn't rotate as well as in the past due to the lowered CTR.

II. UNCLEAR PROMO EXPENSES AND SCHEMES

Nobody knows (except the owner) how much does it cost and what effort is it to maintain the current position in the store.

Clearly it's not just banners, but also a cross promo network between their all apps. Yet anyway to maintain current position in the category should cost the author at least several K$ a month.

You got the idea, the $8k revenue, minus expenses, minus taxes or other expenses... Somewhat about $4-5k of pure income of this app. And it's only in case you will buy it with the company, or Apple will eventually agree to really transfer the app with all the user base to spam with push notification ads. And honestly 1.5M users isn't that big user base to spam to, hence paid users.

III. So...

Is it worth to pay $1M for $5K monthly revenue in return with a negative trend that looses it's popularity?

Will you wait 20 years for your invertment to return with no profit?

I guess, NO, you don't want it - there are much more ways to spend $1M more effectively in terms of much faster ROI.

The real price for the app along with the dev. account and the user base is around $60-120k (not taking into account all other apps on this account).

The real price just for the source code and the app without their dev. account is $0.

Jonathan.kay · September 2012

HappyByte - thanks for sharing your opinion. Completely makes sense. My instinct is that you would possibly disagree with AutoDesk's $60m acquisition of social cam as well? As, it would probably take a lifetime to make back that money as well. But yet it happened. And it will continue to happen.

Big brands do not always look at things in terms of revenue, but in terms of branding and PR, and potential return. For an Energizer this is a no brainer. And can you imagine if Energizer turned this free? Would you download the Free Energizer flashlight (that never stops going) or the random app by John Haney Software....which asks you for push notifications before the light even comes on?

In regards to the transfer process...on the surface you are 100% right. However, one of the luxuries in being the market leader and in doing deals over $1m, is that there are situational loopholes, and this will be one of them.

Again - really appreciate you getting involved in the chatter.

Jonathan

HappyByte said:

ChelseaT said:
No, there's no need to sell the whole company. Apptopia allows devs to sell just one app from his or her portfolio, but on the iOS platform this does not normally allow users, ratings, & reviews to transfer over. With our SDK users can now easily be directed to the new app. I'm sure you can understand that at a certain extreme price point with very big players, the transfer process will run much more smoothly.
Chelsea, with all the respect, I really do believe you are smart enough to understand what people write, do you? Did you read what people say above or you are just making a PR of you site here?

Nobody needs neither a source code of a flashlight nor a flashlight app binary without the linked dev. account.

Because of a few quite simple reasons:
1) app will lose all existing user base
2) flashlight won't be allowed into the store with a new account
3) app store apps are not transferrable between dev. accounts

Your SDK, whatever that is, is a nothing but useless to help with the above.

Neither the "Best of Show" award can help.

***

Now about the i4software Flashlisht.

Only a person that can't use a calc may throw 1M on it - or the one that knows nothing about the App Store and has 1M to spend on an over 10-15 year ROI, that's really weird.

I. A NEGATIVE TREND

The app had its good days in the past. The trend for the last year is quite negative. They used a promotion scheme that just doesn't work anymore for them. The app has disappeared from the top overall rating. It was over 5k downloads a day at over top 20 overall position. Now it's stuck around 500 downloads a day at top 20 utilities position.

It was #1 in the search results for "flashlight" - now, it's #8 - and all above apps are FREE.

Reasons for such a significant (a factor of ten) drop may be in Apple policy tightening and the search engine algorithms changes. These drops (on the appannie.com all-time chart) are exactly matching dates of search updates of the App Store.

Second reason may be related with banner networks. Banners advertising the same things for years are losing their CTR and it may have become a way too costly to continue to buy as much clicks as earlier for banners that doesn't rotate as well as in the past due to the lowered CTR.

II. UNCLEAR PROMO EXPENSES AND SCHEMES

Nobody knows (except the owner) how much does it cost and what effort is it to maintain the current position in the store.

Clearly it's not just banners, but also a cross promo network between their all apps. Yet anyway to maintain current position in the category should cost the author at least several K$ a month.

You got the idea, the $8k revenue, minus expenses, minus taxes or other expenses... Somewhat about $4-5k of pure income of this app. And it's only in case you will buy it with the company, or Apple will eventually agree to really transfer the app with all the user base to spam with push notification ads. And honestly 1.5M users isn't that big user base to spam to, hence paid users.

III. So...

Is it worth to pay $1M for $5K monthly revenue in return with a negative trend that looses it's popularity?

Will you wait 20 years for your invertment to return with no profit?

I guess, NO, you don't want it - there are much more ways to spend $1M more effectively in terms of much faster ROI.

The real price for the app along with the dev. account and the user base is around $60-120k (not taking into account all other apps on this account).

The real price just for the source code and the app without their dev. account is $0.

J · September 2012

I just never understood... what's wrong with the native flashlight from ios ?
It's doing what it's supposed to do... why people download those apps ?

esoteric · September 2012

J said:
I just never understood... what's wrong with the native flashlight from ios ?
It's doing what it's supposed to do... why people download those apps ?

...there's a native flashlight built into iOS? Where am I missing this?

J · September 2012

My mistake... I guess my wife made an utility app folder and I thought it was native ^^ how stupid...

HappyByte · September 2012

Jonathan.kay said:
My instinct is that you would possibly disagree with AutoDesk's $60m acquisition of social cam as well? As, it would probably take a lifetime to make back that money as well. But yet it happened.

I spent many years working in huge corporation with over 100K employees worldwide - the kitchen inside big companies is completely different. Such companies belong to lots of shareholders, what in most cases means "no one". On very top levels it's is all about cutting money from funds of a company into pockets of involved top managers and their affiliated companies - they can spend money just like that. Our small research lab (one of many) was spending many $M a quarter for 100% in-house projects, for example, hiring over 200 "aside" contractors from affiliated companies for $20K-$70K a month for each of them in addition to over 50 staff lab employees. Once the division was sold to a real investor, that mainly bought it for patents and the market share, the project was closed right away. Those contractors had quite low salary in comparison to what the company got paid for them, somewhat $3-5k a month. Guess where did the margin go :)

Yet, anyway, Social Cam is not just a simple iPhone app.

It's mainly a venture project of another venture project, that both already had completed several rounds of investments. Social Cam has also a Facebook spam app that many users are quite tired of. It also has a back-end, hardware and so on. iPhone app is just a tip of the iceberg. It's all about the old mans network in corporations, close affiliates, investors, investment rounds, making money on it - and it's all different kitchen once again. In either case there is always someone who "wins a lottery" putting some good money in his very pocket aside, during the process of acquisitions, spending project budgets and so on.

But above we were talking about an investment into a Flashlight app that, according to publicly available statistical data, is now just a sinking vessel, despite it's over ~1.5M user base. Would you invest in Titanic after the clash? And, well, we aren't talking a big corporation - we are talking from a position of a small investor that uses to count money and wants the money returned, as there are too many ways on how to spend this $1M getting much more in return.

The only reason in buying this app (of course, with the company and the user base) for any amount of money would appear, if Apple would return the old search algorithm that won't give such a huge preference to free apps - however, in such a case there would be no reason to sell the app at all ;-)

Otherwise, as soon as free apps will get more and more downloads the paid app will completely disappear from the 1st page of the search results - and it will be cheaper to just let it go then to spend money on trying to maintain its position in the store top rankings.

The most wise decision on the Flashlight app would be to sell it much earlier when it was on top and when it was showing a perfect positive trend over a year. Now, the OK price for it is $60-120K depending on what it costs to maintain its current position in the category.

KimioApps · September 2012

I would have to agree with HappyByte and am actually quite interested in the topic of valuation of apps...I wanted to buy an app for the userbase and soon found that you need to figure out the DAU to make an appropriate valuation:

- SocialCam (25,000,000 users) VS. Flashlight (1,500,000 users)
- SocialCam ($30mil+ in venture capital) VS. Flashlight ($0)
- SocialCam (~5,000,000 DAU and rising) VS. Flashlight (~15,000 DAU??)
- SocialCam (is Social! And has celebs to follow) VS. Flashlight (you are alone in the dark searching for lost keys)
- etc...

The key here is that the flashlight could be purchased for $120,000 ($5k/m x 24 months) max
Their userbase is not a base at all. Most of their sales probably came in 2010 when people were still buying fart apps.

How many people have never opened it?
How many people open it for one specific reason (to use the light in a dark place)?

BUT!!! And a BIG BUT.....
Flashlight is probably more profitable and in the black where as SocialCam probably isnt yet and may not be for a long while.

Howdy, Stranger!

Forums

The Million Dollar Flashlight

Replies