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How to Avoid the Bad "Deals" - [Apple Turnover #3]

How to Avoid the Bad "Deals" - [Apple Turnover #3]
By Alexander Greene • Issue #3 • View online
Welcome to the third issue of Apple Turnover! In the second issue, I highlighted Noted for Mac, a low maintenance menu bar app. In this issue, I will:
  • Discuss why I think the public iOS/Mac acquisitions market is quite small.
  • Share what “deals” I avoid, and the red flags that give them away.
  • Analyze another acquisition opportunity.

First, a few notes:
  1. Please, read whatever topics interest you, and skip over the rest. I want this content to be helpful and encouraging, not burdensome and overwhelming.
  2. I’d love to learn more about you! Are you interested in buying apps, or selling? Do you have any thoughts/feedback about what I’ve written? You can email me or find me on Twitter. Several readers have reached out with great questions/suggestions. Thank you!
Alright, now for the good stuff…
There Are Very Few Apps Listed For Sale.
In the last issue, I shared a few of the sources I scan through every day. I think it’s important to make clear that the number of quality iOS/Mac apps listed for sale on these sources, at any given time, is very low. Micro-acquisitions are a hot space right now, but most of that fervor is centered around SaaS websites and affiliate/content websites. If you want my two cents, the iOS/Mac space is going to grow, but it’s going to take some more digging to find deals beyond what’s listed publicly. I have a few reasons I think that’s the case:
1) Developing apps is more difficult than developing websites, on average. Don’t get me wrong, it’s not trivial to build a website, but with a burgeoning list of no-code tools, easier ways to collect payments (Stripe), and a huge international pool of web developers/designers that can do contract work quite inexpensively, it’s easier than ever. The iOS/Mac development process is not so rapid. Things are getting faster, but there are design requirements, payment limitations, and review processes to adhere to when building/updating apps that lengthen the process and make it more resource intensive. This is another generalization, but resource intensive projects are (a) less likely to be abandoned/sidelined, and (b) when they are ready to be shut down, the asking prices are more likely to be representative of investment, not returns. That’s why you see apps listed for $1mm on Flippa that have 0 customers.
If there's zero revenue, you're paying to start from scratch. Why?
If there's zero revenue, you're paying to start from scratch. Why?
3) The buyer pool is smaller. The talent pool of iOS engineers is smaller and more specialized. If you’re not an iOS engineer, you have to have connections to people who are.
4) There’s personal attachment. This is anecdotal, but developers who have an app published on the App Store are proud of it, understandly so!
5) The transfer process is… complicated. One reader asked about this, so I’ll paste in my response. I will cover this in more detail in a future issue.
The process for taking over an iOS/Mac app is both easier and more complicated than a web app/ android app/ etc. Apple has made it really easy to transfer apps to another developer. It’s just hitting a few buttons in your Developer account. However, there are certain stipulations and requirements that an app must meet to be transferable. Many things, such as iCloud-support, make an app non-transferable. There is a workaround for this, but it complicates the process. The new Apple Small Business Program has also complicated the transfer process, a great example of this is the app I’ve discussed in the first issue of the newsletter.
6) There can be less maintenance. For apps that don’t connect to a backend, the only gauranteed expense is the Apple Developer Program renewal fee. A developer that has an app without ongoing expenses, especially one that’s generating revenue and ranking for App Store search keywords, might not think too often about selling it. In comparison, most websites have ongoing costs spread across multiple services. Each thing a developer has to manage might make them consider letting go of a project.
So what does this mean? Is it more trouble than it’s worth? Absolutely not. I’m not sure that the number of publicly listed opportunities is that representative of the amount of total opportunity. I’m starting to see the lack of listings as a positive, actually. We know the opportunities exist, there’s maybe just a bit more work involved in identifying them. There are 200 paid apps in every app store category. We know those are making money. I can go through each one and list 10 things that would make that app better and provide more value. You can too.
I think the iOS/Mac App Stores are full of opportunities where developers have a competitive advantage as owner-operators. No VC firm is going to care about an app making $800 a month, and a non-technical person is less likely to want to pay someone to maintain that app and eat from their profits. A lean product-minded engineer has a huge advantage here.
There Are a Lot of Bad "Deals"
The best way to learn how to identify good deals from bad ones is to look at a lot of them. If you’ve ever searched for an apartment on Craigslist, you’re probably going to be great at this exercise! There are things you pick up on that hint at when something is too good to be true.
Start looking at apps for sale every day, and you’ll pick up on certain patterns. Here are a few:
Look at what the in-app purchases are. There’s nothing wrong with an app being trivial/fun, but when it has a $7/week subscription, it’s possibly using dark patterns to trap unsuspecting users into an extremely expensive commitment. This is a big problem that Apple needs to address, and a handful of the “profitable” apps you’ll see for sale are actually doing this.
Listed for sale on Flippa, "Astro Secrets" has $774 MRR, and up to this screen, it's beautifully designed. But at $10 / week, your customers are either just testing it out for a week, or don't know what they're getting themselves into. The biggest improvement you can make is to fix the pricing model, but the current valuation is based on bad-practices.
Listed for sale on Flippa, "Astro Secrets" has $774 MRR, and up to this screen, it's beautifully designed. But at $10 / week, your customers are either just testing it out for a week, or don't know what they're getting themselves into. The biggest improvement you can make is to fix the pricing model, but the current valuation is based on bad-practices.
Fake reviews. Scroll through some of the written reviews. This is just my personal take, but I don’t think people often write 5 star reviews with comments like “This app is so good!” and nothing else. A user writing a review has gone through a few steps to get to the point that they’re writing a review, and they’ve gone through that trouble because (A) They have some feedback/complaint or (B) They are super impressed and want to describe why the app is awesome.
Really bad reviews. This is an app that has problems. It’s been abandoned for a long time, was never really finished, or has terrible customer support. This is a forgiveable issue depending on your skillset, but unless it has recurring revenue or a large audience, it’s probably better to start from scratch than to fix problems for customers who already paid the previous owner.
Requires too much work. Some time ago, I came across a “Prompts/Quotes” app for sale. It’s not really something I’m looking to add to my portfolio, but for someone, the ~ $150 / month could be worth it. However, the app was not particcularly well designed, and was using a backend to serve quotes. Why? I have some ideas why, but not great ones. You could rip it out, redesign it, reduce expenses, and relaunch it, but unless you’re really interested in growing a portoflio of quotes apps, you’re likely better off starting from scratch.
How is the seller pitching their app? The best deals are straightforward how they describe their apps. They lost interest, they’ve accepted a job that leaves no time for side projects, or they’re not interested in trying to grow it and want to cash out. When a listing is for a poorly executed clone of a popular game, states the app is making $1800/month and has unlimited growth potential, but the app only has 1 review, it’s too good to be true.
Acquisition Opportunity: Reji for iOS
This issue, we’re going to be taking a look at an app for sale, called Reji.
What is it?
Reji is an iOS app that lets you translate words into other languages and then save them in “Decks” as a way to practice learning that language.
Why is it being turned over?
The seller, Gikken, has another translation app that is their main focus, and they are letting go of other projects that require their attention to maintain.
Gikken
A new chapter in the story of Gikken—we are shutting down @UseReji and Breaks for Eyes. They did not pull enough profit to warrant keeping around.

From here on, we’re hurling all our brainpower into @MateTranslate. Mate is our biggest success by far and will only get better! ⚡️ https://t.co/iVhbRiL4AQ
I should add the disclaimer that I acquired one of Gikken’s other apps, so I’m friendly with one of the founders, Alex, and have only great things to say. I’ll be sharing more details about that acquisition in a future issue, but don’t hesitate to reach out if you’re interested in this opportunity and have specific questions about how things went.
Overview
Asking Price: $20,000
Annual Profit: $7,560 over the trailing twelve months (TTM)
Recurring Expenses: Digital Ocean server (lowest tier) for powering Image / Sharing features
What I like about this app:
It’s got existing users & they love it. 1500 active monthly users. Even if only a fraction of those convert/stick around for a subscription offering, it’s a fantastic starting point.
Good Ratings/Reviews. More recent reviews are negative, but the overall picture is great. In the US App Store, Reji has a 4.3 star rating over 126 ratings. You’ll want to take a look at what the ratings are like in different markets.
Clean Design The colors, icons, screens are all attractive, but I love that I still see room for small improvements. You’re starting with a great base, but as I go through the app, there are certain elements I’m expecting to be a little more interactive.
Revenue Potential This app is going to be a much larger time commitment than the one we looked at in Issue 2. It’s also got much higher revenue potential. The owners currently have a full-time business focused around Mac/iOS translation apps, so there’s potential here to build a differentiated competitor that could become a full-time gig. Don’t misread that as me suggesting it will be easy to get there!
Website Included There’s a beautiful landing page for Reji, and as I discuss below, shareable web pages for user generated content.
What I don’t like about this app:
Competition. There is a lot of competition for translation apps. Differentiation/execution is key.
Search Rankings. I had a hard time finding what keywords this app would rank for in the App Store.
Users have been notified of a shutdown. If you buy this app, you’re going to have to deal with users who have (A) abandoned Reji for a competitor or (B) won’t trust the longevity of the app going forward. I think you’re best off by addressing their concerns but moving forward and not those users drag you down.
Time Commitment This is a flipside to revenue potential. If you’re interested in the space and want to grow a business, this is a given. If you’re looking for a buy and hold opportunity, this would be a hard pass.
Dependencies Reji relies on third party APIs and a hosted backend to power certain features. This means you’ll need some expertise in those areas, or a partner who does. It also means if things don’t pan out, you’ll have ongoing expenses that will force you to (A) shutdown, or (B) dumb down the app to remove dependencies.
Cross Promotion The owners currently cross promote Reji with their other app, Mate Translate and offer an integration that makes them sync. I don’t believe the integration was particularly popular, but any time you consider buying an app from a company with other apps, you should be aware that you’re buying an asset, not their entire audience.
User Generated Content This is mostly a blessing, but also a curse. Any time you enable user generated content, you will run into issues eventually. My prior job was building content moderation tech, so this is what I’m thinking about. What happens when a user creates a deck with something very inappropriate, and then shares it on your platform. You’re going to want to create a plan of action for dealing with these issues if you plan on growing this into a business.
Who should acquire this?
  • Someone interested in the Translation / Education / Language Learning space. This is not a “passive income” app, so you’ll want to be personally, not just financially, invested.
  • Someone looking to focus heavily on one app and treat it like a business rather than a buy portfolio addition.
  • Someone interested in Content / SEO. Not necessarily an expert, but maybe you want to try your hand at it.
My Recommendations
I’m not a potential buyer for this app, but I do have a lot of ideas of what I would do if I acquired it:
1. Change the Monetization
Reji was made free after the shutdown announcement, but before then, it could be purchased for a one-time payment of $7.99. That’s a healthy price for many apps, and the fact that customers didn’t balk at the price being over 99 cents is a good sign it was providing a lot of value. However, there are ongoing costs with Reji, and in order to beat out the competition and move up in the search rankings, you’ll need continued revenue to fund the time you’d spend.
This is a tricky scenario, because customers have already paid what they thought was a lifetime deal. On one hand, you could strip down the app to reduce maintenance. but you’d probably kill features that differentiate Reji from competitors. If that’s your inclination, Reji is probably not the best app for you to acquire.
I’d keep the app free as it currently is, and then wrap a subset of features in a paid subscription plan
2. Build a Feature Matrix
This was mentioned in the last issue, and I’m putting it here too. It’s always good to do this, especially when it’s an app with a lot of competitors with overlapping & differentiating feature sets.
There are a lot of competitors. I want to build a feature matrix that shows what competitors offer which features/advantages. It will help me notice who my true competitors are. The apps that my current customers almost decided to go with, because we compete on features & design. I want to outshine those apps, not every app.
3. Improve the Onboarding Experience.
Reji has a lot of guiding instructions/hints in the app that nudge a user along, which is fantastic. Still, I see room for improvement. When a user first launches the app, I would expand the onboarding presentation that gives an overview of features, as well as add what I’ll call a Lexicon - something that defines words/concepts specific to this app. For example, introduce the concept of “Decks” to the user from the start, rather than waiting until they view a deck for the first time. There’s currently a link to an external page describing how to use Reji. I’d get rid of this and make sure it’s all within the app.
4. Improve the Localized Copy.
Some of the copy on the App Store and in the app itself could be better localized for the United States. Small grammatical changes, etc.
4. Double Down on Sharing
This is probably the biggest impact change. I’m going to drop in the current owner’s thoughts here because I think they’re great:
“Reji’s power users are in love with Shared Decks. You can basically make any of your decks available by a link—share with your students, classmate, etc. We wanted to launch a "Deck Market"—i.e. a public catalog of users’ decks right in the app. Quizlet has a similar thing. It’s also an SEO goldmine. Making public landing pages for those public decks is kid’s stuff (programmatically). They should pull in a lot of organic traffic. We did a similar thing with Mate and it worked nicely.”
This is a key differentiating feature of Reji, and if it’s what power users love most, it’s probably what they’ll pay more money for too. And I had no idea sharing was a feature until I read this ^. Make it a core offering by highlighting it within the app, and within the App Store screenshots/description/title/subtitle. This is a feature I would at least partially wrap in the paid subscription. You should at least have to be a subscriber to share a deck with others.
5. Content Content Content
Each time you share a deck, a shareable web page is created. Optimize the heck out of this, and figure out the best way to share. Demo this feature with teachers, with language learning groups, with college students, etc.
Create curated Decks that are interesting on their own. For example: “Longest German Words”, “Funny Spanish Words”, Decks for translations of songs, etc. Share those on social media every day. I don’t use TikTok, but there’s some creative way to share it on there, and it’s worth some time trying to figure that out.
Was this helpful? Was it interesting? Please reach out and let me know, and thank you for reading!
Alex
Did you enjoy this issue?
Alexander Greene

Hello Readers, thanks for tuning into Apple Turnover. Are you an iOS/Mac app developer or entrepreneur interested in acquiring apps?
Each issue, I'll be reviewing a selection of app investment opportunities sourced from public marketplaces, and private conversations. I won't just be analyzing financials. As a developer & designer myself, I'll review strengths and weaknesses of each opportunity from technical and design perspectives.

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