After I had laid out my analysis about Brice Milliorn offering his iPhone Apps Portfolio for sale on eBay, I got contacted by the owner/seller himself. He offered to respond to any deeply probing questions I might have. Journalistic curiosity got the better of me and so I constructed the hardest questions that I could think of.
Here are his answers, verbatim and unedited.
1. You claim to produce 86% of your income from the USA, yet none of your apps appear in the top 100 in any category there. What is your explanation for this?
There are 100,000 apps on the app store and my apps pop in & out of the top 100 from time to time. Also obviously a Top 100 is only a 0.001 percent of the total app store product mix, considering there are 100k apps out there now. So just because you don’t show up in the Top 100, doesn’t mean you don’t sell a lot of apps. And furthermore, it is good that my apps are being recognized internationally as well.
2. If your business is still growing (and would grow more with “proper marketing”) how do you explain the steep decline in average royalties for the past 30 days compared to the 60 or 90 days range?
Lack of marketing, lack of updates, lack of attention, and o’yes 100,000 apps on the app store!
3. You say “a person who can market them will have much better results”. How can you predict that if everybody knows that after an initial sales spike there is only a long tail to farm on?
Marketing 101, see below.
4. What’s your factual foundation to claim that “the numbers may be better” as a sales argument?
Marketing 101, and I know this because the spike in sales that you saw (see charts on link list at bottom) was because of the little marketing that I did have time to do. Also a lot of these apps can have focus marketing, meaning they deal with certain areas of the US, so marketing can be focused on that area or that segment of people (i.e. College Students).
5. How did you yourself arrive at the number $100,000?
- Well I like what I am doing, don’t have much time but still like it, for me to give it up, a big number would need to be paid, 100k is that big number.
- However when valuing the business, I think it is a small price to pay. When you value real estate you look out 5-6 years. If you take my sales and look out only 2-3 years, this business will pay for it self easily.
- I also arrived at this number by looking at the two previous cases that I know of (see below for 2 example cases in question #10) of iPhone developers selling their business and after talking to them about their situation. These apps were sold between 5k and 10k each, I am selling 87 apps for 100k, that is $1,149 each.
6. Currently it is unlikely that you will find a buyer. Small guys don’t have the money. Big guys don’t see an audience. What’s your plan B? Would you also be willing to only sell shares of your company to interested investors? Like $10,000 to get 10% of your monthly royalties would be around 36% annual interest.
I wouldn’t say I won’t find a buyer? I have had over 100+ emails inquiring about it further and there are 70+ watchers on ebay right now. My website has had over 3000 hits in just 3 days, the ebay auction has over 3000 page views as well. I have no plan B. Like I said above, I like what I do and to get me to sell it would have to be a BIG number. Not willing to sell shares of company. 100k, take it or leave it.
7. Or how about only asking for a certain percentage in cash and getting paid a percentage from royalties over a certain period?
Again, not willing to do this, 100k take it or leave it, I enjoy what I do.
8. There is a guy named Joe Madox who is seemingly interested. When defending your offer it sounds like he has already made up his mind to try to come up with the sum. Or is a friend of yours?
This guy has asked a lot of questions, more than anyone. He owns a publicly traded company. He was thinking about paying me in shares of his company. I declined, cash only.
9. You are saying you’re selling “your business”. Does this include the legal entity plus bank accounts belonging to it? What’s this “collateral” you speak of?
Selling the assets of the company, meaning the 87 apps, not the name of the LLC or the LLC itself, little confusing I realize. The collateral is all the source files, the website files, images, everything the user needs to run these apps and update these apps and completely relinquish these apps from me! No bank account b/c not getting the LLC, just getting the apps themselves.
10. Based on what legal foundation do you think you can sell your business at all? Sure you can sell a corporation, but how does Apple deal with such a sale?
I am selling my programs, not Apple, not my LLC. There have been previous developers who have sold their business fine, I contacted them to ask questions, got a response from them, said everything went smoothly. Here are those two examples…
11. How big is the business risk of your news providers cutting your sports-related apps off?
Well I have fended them off so far but there are a lot of hoops to get around with these apps, a new person starting these types will take weeks and weeks of trial and error with Apple before it ever gets approved. There are also other news providers I could always use I am sure.
12. In Summary I must say that you are doing a very bad job at presenting your business as something worth purchasing. Anybody who has the money to spend on your company also has the financial sense to want to see a good business case. You fail to present it. We all don’t know what will be in 3 years. Apple may still dominate the Smartphone market. Or it may not. And also coming out of the crisis it has become extremely hard for anybody to get a loan for 100k for a business.
I think we all know, the only company to better the iPhone, is Apple. And the economy is/was bad but there is always someone with more money than they need looking for a golden opportunity.
13. Therefore I suggest that you need help in 1) compiling the numbers in a more transparent fashion, 2) maybe even going so far as to providing the apps.db from MyAppSales for download (It does not contain login data, which is on your keychain), or a ZIP of your past financial reports. 3) formulating a plan B as outlined above.
I am NOT going to give out the individual numbers but I will break them down more. The reason I will not give out the individual numbers is because my best selling ones will then be duplicated.
These numbers are again from AppViz as of 11/07/09.
- Rule book Apps 8,712
- Sports Related Apps 12,479
- Friday Night Lights, ANTZ, & iSpy 4,533
Any further questions can be direct to me at firstname.lastname@example.org.
Also further info can be found at the following redirected sites:
JBMJBM, LLC iPhone App Website
JBMJBM, LLC Sell Page (with CHARTS)
JBMJBM, LLC Ebay Sell Page
JBMJBM, LLC Press Release