There are a few moments in life that feel like a lightbulb going off. Suddenly, you can see a new idea in stunning clarity – and if you’ve recently had a lightbulb moment with an app idea, you’re probably excited.
You have good reason to be excited: mobile apps bring in more than $60 billion in global revenue every year, with profit margins 3–10 times those of traditional brick-and-mortar business models.
With hard work and applied experience, an app idea can transform into a multimillion-dollar business in a matter of years, or even months. We’ve seen it happen, many times.
But after the excitement of the lightbulb moment wears off, you might find yourself thinking… what now? How do you turn an app idea into a real business? How do you make an app?
You’re not the only one with this question. The process of creating an app can seem mystifying, and it’s often difficult to know how to get from A to B. Especially if this is your first time trying to make an app, it can be hard to know where to start.
At Rootstrap, we specialize in answering this question and helping first-time entrepreneurs take their mobile app idea from concept to reality.
In this post, we address the most common questions we hear from first-time founders with a great app idea and a desire to build it.
Can You Sell an App Idea?
Often, first-time app entrepreneurs are eager with one question: can I sell my new app idea?
Asking this makes sense. After all, if you’ve just had the lightbulb go off in your head, you could be sitting on the next Snapchat. Who doesn’t want to get in on that? Selling your idea probably seems like an easy way to make money, fast.
So can you sell an app idea?
Well… sort of. This is America – you can sell just about anything someone is willing to buy. It’s certainly possible for you to sell an app idea you just had in the shower for millions of dollars.
Probable? Not so much.
The mobile app industry – just like entrepreneurship more broadly – is crowded. There are 2.2 million apps available on the app store and 2.8 million on the Google Play store. In the vast expanse of available apps, you could probably find an app for just about any idea you can think of: Instagram for dogs. Uber for physical therapists. Turbotax for credit card disputes. You name it, there’s an app for it.
This doesn’t mean your app idea has no chance at competing on the App Store, even if there’s already a similar one out there. What it does mean is – and this can be hard for first-time entrepreneurs to swallow – is that app ideas are cheap. The likelihood of coming up with an idea so revolutionary, so innovative, so unprecedented that the idea alone is worth a significant amount is fairly low. It’s not impossible, but it is unlikely.
That said, there are still some options to either sell your app idea outright or to make money on the idea alone.
Chief among those is an app patent.
Can I patent an app idea?
App ideas can be patented. However, due to the time and cost associated with acquiring a patent, it’s rarely profitable as the idea may be obsolete by the time of sale. It is common to submit a rough description of an app idea to claim “patent pending” when seeking funding, to reassure investors that your team has legal protection against competition.
Here’s the thing, though: patents have a very specific definition. Patents are a form of intellectual property law designed to protect ideas: inventions, processes, methods, tools, and machines. You can only get a patent if you “[invent] or [discover] any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof,” according to the US Patent and Trademark Office. This definition applies in a specific way to mobile apps.
Because of this, overall, the sale or licensing of patented ideas is more common with physical products than apps and digital products.
If you want to patent your app idea – as you’ll need to, if you’re looking to sell it – you can’t patent the idea itself, generally speaking. The patent applies only to some novel technological process, algorithm, or method contained within the app.
That is, patents don’t apply to written code, as computer software is protected by copyright. Patents apply to the novel invention embodied by the software: they protect the idea on which the software is built.
If you have an app idea, this may be your best bet for selling it for cash – but even then, patents are tricky. Patents for mobile apps can cost anywhere from $5,000 to $20,000, and the process is long and arduous one.
Selling your app idea isn’t impossible, but we wouldn’t recommend you count on it. Instead, our recommendation is that if you really think you’re onto something, you try to build a business out of it. So how do you do that?
How Do You Turn an Idea Into an App?
In our experience, the best way to make an app idea valuable is to actually build it and launch in the app store. But how do you do this?
On one level, the answer is simple: hire an app developer and have them build it for you. But this is expensive (upwards of $150,000), and there’s no guarantee you’ll make a return.
If we had one single piece of advice to you on how you turn your idea into a mobile app, it’s this: building an app is the same thing as starting a business. All the same rules and strategies apply.
To that end, the best place to start making your app idea real is with your customers. Think hard about the concept behind your new app, the benefit it creates for its users, and who would actually want to use this thing. Whom does your app serve? Try to create a caricature of this person – who they are, what they do, where they spend time in the real world and online. Bring this person into sharp focus. This is your target user.
Draw a detailed picture of your target user and identify some places they frequent online. Are they a Redditor? Are they an active member in any Facebook groups? Are they a gamer? What kinds of things do they search Google for?
Use these insights to find people in your target user demographic and ask them about your app idea. See if it’s something they want and need. And – importantly – ask them how much they’d be willing to pay for it. Then, ask them what else they’d want from an app like yours. The answers to these questions will help you refine your app idea and move towards building a Minimum Viable Product (MVP): the first iteration of your app you can put in front of users to start testing and refining it.
All of these steps are part of the lean startup and Agile development methodologies, two schools of thought that we at Rootstrap strongly support. There are plenty of books on this subject – The Lean Startup, Zero to One, and plenty more – that can teach you the fundamentals of running an app startup.
However, if you want a little help, we’ve created a workshop designed specifically to take app ideas and turn them into real apps with growing businesses behind them: Roadmapping.
During Roadmapping, we take your app idea and drill down deep into it. We look to understand the exact core concept of the app, the key benefit it provides to users, and who those target users are. We test this concept against the existing market, and if the app seems like a good idea, we prepare you for development by creating a clickable prototype (an MVP) and a development backlog (kind of like a roadmap to full development).
Roadmapping is kind of like boot camp for your app idea. We’ll help you understand if there’s a market for your idea, what that market looks like, and how you can bring your idea to fruition. We’ll also prepare you to raise capital for developing your app in full – and we’ve got a pretty good track record there. About 18% of Roadmapping alumni raise at least $250,000 in seed capital, which is more than enough to get your idea off the ground.
But Roadmapping is by no means your only option. Let’s look at some other possibilities.
Should You Hire an App Developer?
Often, first-time app entrepreneurs want to head straight into development after they get their app idea. We can appreciate the enthusiasm, and sometimes it makes sense to start development right away. If you do choose to do this, you have a few options – the first of which is hiring an app development company.
Hiring a reputable US app developer is the safest, most reliable way to create a quality app. Professional app development companies will adhere to a standard of quality you can count on, as you’ll be enlisting the pros to build your app. If you work with a good app developer, you can feel safe building a business on your app. You can trust that the code is solid and the app will grow with you as your business scales.
However, quality comes at a price. All told, building an app with an onshore app developer can run anywhere between $80,000 and $1,000,000 or more, depending on the specifics of your app and the feature set. If you have that kind of cash to burn, more power to you. But for more people, this is cost prohibitive.
Another option would be to engage an offshore developer. With a little digging on Upwork or Elance, you can find app developers willing to build an app for as little as $5 per hour worked, which can bring the cost of development down below $5,000.
This sounds attractive, but keep in mind: in this life, you get what you pay for. Working with an offshore, low-budget developer is risky. There’s no guarantee of code quality, and there’s little recourse if the code does turn out to be shoddy. And again, building an app means starting a business. This is your core product – if it’s faulty, that can cause huge problems and sink your business a little bit down the line.
A third option is to bring on a technical cofounder to build the app, and engage contractors, staff augmentation services, or future hires as your product scales. Assuming you don’t know how to code, this would be someone with the technical and engineering chops to build the product outright while you run the company. This kind of partnership has worked many times, but it comes with its own problems.
First, good engineers are worth a lot. A good software engineer could easily go find a cushy, $120K salary job at a software company. To give that up and work double hours for little pay on a startup isn’t attractive to most people. You’ll have to convince someone that your idea is so valuable that it’s worth risking thousands of hours of work and years of life on. That’s a difficult prospect.
If you have a friend who’s capable of coding the project and willing to invest the time, that can be a solution that works well. You’ll both be making a major commitment, so it’s important to realize that from the outset. It’s also important to trust your friend’s work – you can run into the same quality issues you would with outsourcing the development. However, if you’re both hungry and willing to work hard, you can build something together.
With time, what you build could turn into something hugely profitable. Let’s look at how to make that happen.
How to Create Your App and Make Money
Here’s where we get to the real problem: money.
See, anyone can make an app. That’s not the hard part. The hard part is making sure your app makes money. WIthout this, you’re sinking hundreds of thousands of dollars and years of life into something that’ll never stand on its own two legs.
So how do you create a profitable mobile app?
The first step is asking the question. Too often, entrepreneurs leave profitability to be taken care of at the end of the project. The thinking is to build the app, get a bunch of users, and figure out how to make money later.
This has worked for some apps. It’s not impossible that it will work for you. But we have one piece of advice:
DON’T DO THIS.
This is a strategy that worked well in the mid to late 2000s, when the mobile app world was just beginning to blossom. App development was the wild west, venture money flowed freely, and you didn’t have to think about profitability until you had millions of users.
This is no longer the world we live in.
Since then, the mobile app market has matured. You can not afford to make profitability an afterthought anymore: you will run out of runway, run out of money, and fail.
Perhaps the most important step to making your mobile app profitable is to think about profitability from the very beginning. This doesn’t mean you have to charge your first users an arm and a leg, but have a clear plan for monetization in mind. That plan can, will, and should change over time. But from the early stages of building your app, you need to consider how the thing will make money.
Every app is different, but monetization has been pretty much been boiled down to a science at this point. Most mobile apps will use one of a few well-established monetization models. The most common are:
- Paid Installs: Simple. User pays a fee to install your app.
- Freemium: Your app has a limited version that’s free to download as well as a full version, which is paid.
- In-App Purchases: The app is free to download and use, but there are special perks users can access by paying for them.
- Subscription: Users pay a monthly or annual fee to use the app.
- Ad Revenue: You don’t charge users for the app, but you show ads in the app and make revenue from the impressions.
How you monetize your app isn’t as important as the act of monetizing it. You may choose one of these well-established models, or you may opt to think of something new entirely. That doesn’t matter, and ultimately, the method you use to monetize your app depends entirely on the nature of your app idea. What’s important is that you make profitability a central concern and create a clear plan from the early stages of your mobile app.
Profitability is one of the things we focus on in our Roadmapping workshop – and if you’re really serious about turning your app idea into a reality. Roadmapping is one of the best options to do it.