Hey everyone, today I'm going to do something that I have never done before.
This is the first time that I am releasing Bluecloud Select material to the public. I am only doing so because this is a small part of a three hour video series that I did for members.
There was a ton of value in these videos, so even though you will get a lot of information here, this is only a fraction of the value that members got.
I wanted to release this information because you wouldn't believe how many times people ask me this question. So I know that this information will help a ton of people.
If you prefer the text version, it is provided below the video. There is a lot going on here, so I would encourage you to watch the video or read the transcription more than once.
[tweet_box design=”default”]This video will give you a strategy to create an app worth $1 million, in 6 months: [/tweet_box]
Hey guys and welcome back. This is video two and we've got something a little bit different than what we've done on Bluecloud Select before and I think it's actually going to be a really good education for everyone of all levels of education, about the app business.
Yesterday we talked about this question, which is: “How do I sell my portfolio in eight months for $200,000 (my casino portfolio)?” We read through this and what I want to talk about quickly is the answer to what I was saying about this, both top level and detail oriented and then I want to walk through a specific example, something I've really thought about doing.
I actually might do this anyway, but I want to show you a little bit more about the business side of what you would do to actually create a big exit really quickly.
Ask the Right Questions
To start, first and foremost, when you frame a question that says, “I want to make blank, what do I need to get it?” Realize that you are not thinking about that the right way.
You are thinking about that in terms of, “How can I get money? What can I do? Hook or crook. What do I need to do to get there?”
Instead of saying, “I want to build something that's worth $200,000, I want to have something that's worth this much money.”
Because what I can tell you is the people that say,
“I really want to make this much money. I really want to get this. I really want this. What do I need to do to get there?”
…almost never get what they are looking for.
It's always people that say,
“I've got this, Here's what I think it's worth. Do you agree? What do you think about this? Here's what I've got. How much value do you think it has?”
…and that type of thing is a really good transactional thinking, especially when you're dealing with a buyer.
So the first thing you need to think about is not “how can you make $200,000,” but “how can you create something that's worth $200,000” and then you will start to really understand how that's possible in eight months.
Consider Historical Revenue
More on a practical level I guess is you need to be making anywhere between $15,000-$20,000 a month if you want to sell this. The reason I say this is because the trailing revenue, which means the revenue that it's making right now and in July and in October is probably going to be ramping up.
Assuming that you're not at this level right now, you're going to have to be above what a consistent revenue would be. So for example, if you were making $10,000 a month consistently, twelve months in, twelve months out, you wouldn't need to make $20,000 a month because it would be very clear that that portfolio is continuing to work.
But if you don't have that historical revenue, you're going to have to be at the higher level to show that it's on it's way up to really justify that $200,000. Right in that ballpark, that's a really good place to think about and depending on all the factors, that's just where I would say you need to be just so you know what that portfolio needs to be generating.
Don't Compare Yourself to Me
Third, I would just urge you not to compare your situation to mine because I was in a totally different marketplace. I had a totally different set of criteria.
I had a very different situation and what I will say is that realistically, if I could go back and redo that, knowing what I know now, I probably would have gotten like $500,000 for that portfolio.
But the whole thing would have been way more complicated and it would have been a lot more work and I did that deal to try to get more experience and to make things happen really quickly and not really about the cash and it happened really quickly because of that.
The only reason I'm saying that is because I built a portfolio in a completely different marketplace where things just didn't make sense. The money was very different from what it is now and the valuations were different.
It was a bit of a bubble. What I'm saying is that what I did is not necessarily applicable for 10 years, 20 years, 30 years, at those valuations.
Is That Really What You Want?
Lastly, I would ask, why $200,000? You might have some personal reasons that that's how much money you need or want or whatever, but is $100,000 enough?
If you built something and you sold it for $100,000 at the end of this year, would that be enough money? At the same time, why don't you want to build a million dollar business by the end of this year?
Why is it $200,000? What got you to that number? Is it because that's how much money you want or is it because that's what you can build? That's the size that you want to go to.
This leads me into what I'm going to call the Anatomy of a $1 Million Exit in Six months and this may become a blog post. I'm probably going to turn this into an epic blog post at some point, but I just wanted to be able to show this to you guys because I think you're going to get a lot of nuggets out of this and I want to do a couple of disclaimers.
One, is I did not do a budget on this, so some of the numbers and some of the time lines may not be exact match ups. I tried to do my best, but if you're a real numbers person, it might not add up exactly.
Second, this is not completely chronological. Like any business, things have to happen in course. So while a developer is working, you may be doing the marketing and vice versa and things like that.
I just want to be clear that this is more than just a, “here are six buckets that you need to think about” and they tend to be chronological, but this is mostly just to give you a lot of information. I will definitely recommend that you watch this a few times because I think there are a lot of information in here that you can really take from it.
The goal is going to be a $1 million dollar exit. Let's use your date, let's say it's December 15, 2015.
That's eight months from today. Let's say you want to get a cash deal. I say cash deal because you can get either cash or an earn out.
This means that they pay you a certain amount up front and then over the next 12, 24, 36 months you get paid out like $15,000-$20,000 so it gives them a bit of a risk mitigation. They don't have to shell out everything up front.
For a budget, I'm going to say $15,000 to start. That could be really high or that could be really low, depending on where you're at. I literally just picked that number out of thin air.
Anything that the app that you make does, you could reinvest into the company. There's a few ways to do that with new services that are popping up that take away 30-45 day layover time from Ad Networks and iTunes to help with that.
The hours of work required, I would ballpark is really going to be high. I'm assuming this is just, I'm just saying this is what I was doing when I sold that.
Yeah, it was in eight months, but I also worked 80-90 hours a week making this thing happen because that's how I kept my costs down. Just want to set expectations like if you want to make this kind of money this quickly, expect to work an ungodly number of hours.
My education is very high for both business and for apps so I just put that out there because that is a variable in how to make this happen.
If your education let's say is medium, the way you make up for that is with a budget. Usually you just hire people that know more than you do about something.
I'm also going to say that the risk level of this is high because I think what some people might say is, “Why don't you just go out and do this right now,” and the reason being is I have a handful of other companies that I'm working on and to stop and do this wouldn't necessarily be the best move because there is a fair amount of risk involved in trying to make something like this happen.
The reason the risk is so high is because this is a very tight time frame and there's a lot of money, which is why I put the risk level as high.
The Six Phases
We're going to go through about six phases (buckets), and we're just going to walk through these. I'm going to explain how I would go through this process and how I would try to make this whole thing happen.
Phase 1 – Identify Your Buyer
Before you do anything else is you need to identify your buyer. You need to find out who is going to buy this and how to present it to them and where the demand is.
I always say you should spend at least a week or two doing this. It may sound like a lot of time, but you need to know this like so cold that there's no question about anything.
Most people assume that there are a lot of people out there just sitting on the sidelines waiting with a million bucks to hand you. Give me something I can buy…come on, give me some more stuff.
That's just not how it is.
There are people out there with a ton of money who are looking to buy products and businesses and everything else, but they are very, very smart savvy business people and they are still looking for specific things. You can't just throw anything out there and they'll buy it.
There should be some common themes, but you need to know that even if there are people out there with money, they'll want to buy things. They're not going to buy anything.
Discover What People Will Buy
What you do is you go find brokers, lawyers, you find businesses and find people that have done tech or app deals and you start connecting and reaching out to them.
You start emailing them, you start calling them. You start going to meet ups, you start getting in touch with them. Just find people that have experience in this field.
Just go to your local lawyer, a lawyer in town or whatever. Go online and start calling people.
Find people that have experience brokering these types of deals and ask them “who are your buyers? What are they buying right now? What do people who have a lot of money looking to buy right now? In 2015, what's the really great niche business to be in in relationship to apps?” and they'll tell you exactly what you need to know.
Once you find these people, get on the phone for a week and learn everything you can about what people want. You need to understand where demand is at this level. What do people want to spend a million bucks on?
Where is the demand?
Listen to the Answers
Most importantly, is you need to swallow your pride. You need to put your ego aside and they're going to tell you a lot of things that you might not want to hear.
They might tell you “don't even bother building a portfolio. No one wants to buy that” and you might say “no, no, no. You're wrong. That's what I'm building.”
You need to realize that whatever it is that you have in your head may be different. They may tell you exactly what you're building. I don't know.
It's kind of up to them, but you just need to listen and really heed their advice and say “okay. I understand what you're saying. That's clearly where the market is.”
Chances are they're going to want a business that has the following. This is classic business school.
What Buyers Want
Cash flow, that means punch out a lot of cash. Really good operations and really good standing operating procedures so you can train more people.
You have a development resource or at least you can introduce them to people so that when you hand over the app to the business, they have someone who can manage it, who understands the code and everything.
They're going to want good bookkeeping. They're going to want to look at your profit, loss and balance sheet.
You'll probably want to have some intellectual property. You don't own a bunch of codes or at least have the licenses to the codes. Have a lot of deisgn work. Have a lot of websites. Have a Facebook page or whatever. Have a brand.
They're going to want to see how they can scale it and get their money back. This is one of the most important things. I'm going to give you a million bucks. How am I going to make this back? How am I going to make it back 10X what I paid for you?
All of these things are what the buyers are looking for when they're looking at any business. This is the criteria.
Good Examples for 2015
The good examples, these are real examples. 2015, this is exactly what a lot of digital buyers are looking for. Software as a service, SaaS businesses. That's probably number one because of the cash flow that comes through that.
App reskin portfolio that's easily managed and updated, meaning that let's say you sell 50 apps, 50 casino app for a portfolio. You want to be able to say you can update them very easily this way. You can control traffic this way. You can update the ad networks this way.
How do you have huge control over those portfolios? If you have a development firm with a lot of contracts, meaning you build other people's apps and you have 15 long term contracts with 15 people, that is a business you can sell very easily right now.
If you have an individual app where you just built something, let's say you built this awesome photo app that's making $3,000 a day. That is a really good business to sell.
Along the lines of a SaaS business, a marketing tool. Let's say you built something that everyone uses. It's a paid service or whatever it may be.
Maybe even a free service, something that helps people, like a review service is a good example. What can you create that people will use for marketing, whether it be apps or websites or anything else?
Bad examples of things that someone might think has value. App portfolios that are completely wildly complicated and outdated.
You threw a ton of stuff at the wall and now you want to sell it and you just hand them your App Annie account and say, “You figure it out, but here's how much money it makes.”
That's not what business people want to hear. They don't want to hear the idea. They don't want to hear “I'm going to sell you this awesome idea.”
People want to buy things that are built. The ability to sell an idea is really difficult unless it's in something like TV.
The third thing, and we've all seen this, is something that could blow up with the right marketing person. When you build something and you say, “This thing could totally blow up if you had the right attention, the right marketing people on it. You could really make a ton of money. That's why there's so much value.”
Most business people are going to be like, “Why didn't you do that?” Go prove it and then we'll talk about buying it. That's a bad example.
The biggest take away from phase one is you need to identify what your potential one million dollar exit is and who you can call when you're ready to sell.
Think about it this way. When I started doing reskinning, realize that reskinning was one of six ideas. Going back to the first Bluecloud Select video. There is a million different ways to build an app business exit strategy.
I could have done the find something, emulate it, iterate it and improve it. I could have built something from scratch. I could have done reskinning. I could have done sponsorship ads. I could have a development business.
There's a lot of different ways, but reskinning, when I saw it, I was like, “This has the best demand, this is the best opportunity to grow quickly. This is the biggest opportunity to possibly sell this more so than the other apps,” in my opinion.
That's why I started with reskinning. The demand was there. You need to think about this the same way. Where is the demand to sell?
Once you go through this exercise, you're going to start to see some very common themes and you are going to get into phase two.
Phase 2 – Crystallize and Build
When you crystallize your idea and you plan and start to build it. Let's say this happens throughout the month of May.
Let's say you decide on the demand and it's going to be the app marketing database. I truly believe this. I think this is a really, really awesome business model.
I think it's complicated and I think it can be difficult to prove. But I also think that it's unbelievably valuable, lucrative and I think the demand for this is actually still in its infancy because I've talked to some really high-end digital marketers and they still don't think about this stuff yet and that's a good sign.
It means that this type of thing has a couple of years left. I wrote a blog post about this. You should go read it, The Backend You're Not Building. This explains this kind of model, very top level.
Of all the niches you research you determine that Finance is the most under served. Let's say you're going to build this app marketing database and you go through and you found the niches you want to build and you decide on Finance because this is actually true.
If you haven't read that blog post, what I'm talking about is you build an app that people will download. They will use the app and then you create a marketing engine on top of this.
For example with Finance, people are going to download your app. They're going to log in with Facebook and then you create a database with all their Facebook information and then you build a whole email marketing database on the back end of this app.
That entire model is what we're talking about here.
It's like an app with a marketing database on the backside. Let's say you research and find Finance. The others that are really good right now in 2015, just look up 2015 affiliate marketing niches and I'll explain why.
But fitness, personal growth/self help, cooking, language, online education. These are all the hot categories, but whatever you pick those are the ones that are going to work.
Let's say you're going to build the one with Finance. I've thought about this many times. I think this is a hugely under served market. What's going to happen is you decide “I'm going to crystallize this idea.”
This app is going to provide the following value for users. Users are going to stick around because of these four things:
- They're going to get curated stock picks delivered weekly. You're going to have someone or yourself are going to deliver awesome stock picks to them every week.
- They have the ability to track their stocks in a way that's really clever that is better than all the stock ticker apps out there. It's better than all the free apps.
- You think that Forex is going to be a really great subsection of Finance and you want to capitalize on that so you have the ability to track Forex charts as well.
- You have the ability to give real time alerts. So if price changes, if an options call goes through, you'll be able to give them real time alerts.
These are the four functions. There's nothing new here. This has been done in many apps before, but we're going to package this and we're going to do it better than other people.
You go through and you determine this functionality because it's what your potential buyers want and you can easily hedge from a marketing standpoint because this is a customer base.
What I mean by that is when you find out what kind of businesses people want to buy, you're going to determine Finance is a really good market.
You're going to go back and you're going to find Finance people and you're going to say, “What about the Finance Industry is hot? What do people want? What are people buying? Is it spending apps like monitor your spending?”
I know some of those apps have sold for a lot of money. Is it stock ticker apps? What about the Finance industry do people in the bigger institutions want? Do they want the customers? Do they want the data? Do they want the platform? What is it?
Let's say you just determined these are the four functions that you think are not only what people want, but also the most realistic to build in your time frame. What can they roll into their own business?
What you do next is you go through and you download 50-100 Finance apps and you subscribe to 30-40 Finance websites and you spend 200 hours studying that.
I'm not kidding.
Take the Research Process Seriously
You need to go full board on the research on this. You need to create spreadsheets. You need to take notes and you need to go through everything and spend all day, every day analyzing and deconstructing and reverse engineering everything that you see.
What you do is you create a spreadsheet and you map out every function that it has and then you can see which ones overlap. You're going to read through all the reviews on all of these apps.
You take notes on what the reviews are saying so you can star different reviews and categorize them and look at what functions people want.
Then you start deciding how do people use the app? How are you going to retain them? How will you provide unbelievable value to them?
What you do is you cold call, you cold email every Finance app developer on the app store and see if you can get on the phone with them to learn how they built it.
These two things happen in tandem.
You download all these apps, you do all the research and you start to realize this is clearly what works. Here's the functionality people want.
Often I can tell you in Finance it's about speed for the real time alerts. It's about having up to date data and it's about having bug free Parse database because one of the biggest problems is publicly available API data from things like Yahoo Finance get caught up on the bandwidth and that causes people to get misinformation.
Get Information From Developers in That Niche
That's one of the big things with the finance types. When you reach out to these finance developers, you say, “How did you build it? What were your biggest obstacles? What do people like the most? What were your biggest moves that changed the game for you?”
Like I said, it's probably about parsing all the data. A lot of these guys are going to be engineers and you've got to say, “What have you learned from your experience here.”
You ask every single one of them if they would be willing to partner with you or if they would be willing to sell you their source code. Just ask them.
If they say no, they say no. But you just have to ask them because if you do this, this is one of those worm holes that I talk about. This is one of the ways to bypass a huge learning curve, a huge amount of work and effort if you could find someone who has already done all of this.
At the very least, be like, “Can I call you in a month and ask you more questions and share all my data with you.”
Anything. Can I get you on my team in some capacity?
Then you're going to start mapping out both what the app and Parse database, go to the blog post if you don't know what I'm talking about. That basically means how you're going to organize all the marketing information.
Email address, you use stats. The first name of the location and things like that.
Create an Incredible User Experience
You start to wire frame this all out in a way that allows you to create an incredible user experience and data mine. You take all this research, all these phone calls, you take everything you just did and you say, “How am I going to create an app that people are just going to love using?” and also, “How am I going to take all those users and how am I going to organize their data correctly in the Parse database and push it to the email marketing, all that?”
Map that all out. Spend a lot of time dong that. Get a huge white board and put this all down. Keep putting the ideas out.
Track Your Results
Decide on an analytic solution right now and make notes on how you will track users. If you want, get Google Analytics.
It's probably your easiest free option, but then sit down and say, “What parts of this app do I want to track.”
I want to install it first thing. What events do I want to code in while this app is being built? What do I want to know? We talked about that in the first video about what custom events you want to do.
Find Great Developers/Code
Then you're going to start leveraging every piece of open source code you can possible find and then you hire a top shelf developer to customize the rest.
Let me be clear on this. Do not skimp on your quality.
Don't go and try to find someone who is $9 an hour if you're trying to build a million dollar company in eight months.
It's just not going to happen.
Invest in really good developers, typically someone who has built some sort of utility and even better, a finance app before. But really invest in an awesome developer and make sure you can find someone who you're willing to spend the money on because that is the most important thing you spend money on, is the quality of this code.
Spend a month doing this.
The take away of phase two is by the end of May you want to have a working prototype that collects full analytics. You want to have the whole thing wire framed out and you want to have the whole back end wire framed out.
You want to have the developer and you want to have that developer be able to build you at least something that is so basic that it can be like log in and see really basic data coming into your app and you can see some analytics come through on the back end.
That should be anywhere about from a third to maybe half of your money. Five grand to $7,000.
You should easily have a really great prototype and if you have a really great developer like this, they should be able to do that in about two weeks. That's why I said you can have a basic prototype.
Now you have a prototype in a niche that you know is really under served and you are building it in a way that is going to be highly valuable from an exit stand point.
That's phase two.
Phase 3 – Push to App Store ASAP, Collect Data, Monetize
There are two parts to phase three. Like I said, this isn't exactly linear, but you'll see what I'm talking about.
You're going to want to push this to the app store as fast as you can. You want to collect the data and you're going to want to monetize.
However you and your developer want to build out this app and you get this thing up and running and you start to iterate things as fast as you can, you just push it to the app store and the reason I'm saying this is once you have the build, do not worry about the launch.
This is not a launch play.
You're not worried about how many downloads are you going to get right off the bat. All you want is just, I just want to get in the store and see data coming. I want to see users using it. Much more than just like the launch for your success.
Remember your monetization model is on the exit. You're not worried about making money right now.
You're worried about making a million bucks in December. So don't stress out if you're not making any money or you don't have any adds in there or whatever.
Stress Test Your App
Only push it in the iOS store and see what breaks. You've got this basic prototype up there whereas you've got some stock ticker coming out in an area where they can check out custom stock picks that you put up on a website that gets parsed down.
You are showing the Forex trading pretty well and then you've got the push identifications and everything else. You want to see what breaks. You want to see where the bugs are happening and what's causing the app to crash and everything else.
You want to do all the best practices with reviews and on boarding and everything else. You want to get people to on board your app and review it.
You want to make sure all the data is coming through and you want to be able to understand it. You want to say, “We built something. It's not even close to what we want it to be or look like, but at least the data is coming through and we can analyze this data correctly. We have full ability to understand what's coming through and we can start to learn about what we can do next.”
You hire ten people on Fiverr to do some UX testing and give you feedback. They come through and not only do they download the app, but they give you all this feedback.
Look this didn't work on my phone or on wireless it crashed. On LTE it didn't, whatever. You start to see all the data and how people use the app and the funnels the people are using in the app.
You potentially go out and you get a little bit of Facebook traffic. Let's say you spend $200-$300 and you get a couple of people to come through your app. You might do that and you might not.
It depends on how much you're getting. But you're only doing that to get data, to get answers, to find out what's going on with this app, what are people using, what are people not.
The goals of this part of this phase are:
- What are the conversion rates?
- How many people actually come and log into Facebook?
- How many people complete the on boarding experience that we built?
- How many people are actually buying the in-app purchases? We'll talk about that in a second…
- What are these rates?
- What are people using?
- How are people using the app?
Get Feedback From Users
Your second goal is you want to get feedback. You want to understand through users and UX testing what do people think about this app? What is their feedback?
Why are people leaving this app? You're going to start to see some preliminary things like, “We're getting 100 downloads, but only 10 people stick around for more than three days.”
Why is that? What's wrong with this app? Look at the data, find out why they're not sticking around.
What are people using? The goal of this entire piece of the puzzle is to learn as much as you can about Financial users and get any sort of insights. That's an opportunity or this isn't working at all.
During this phase, once you get this data, you start to curate it, you start to roll out the premium features as a subscription.
How to Implement Premium Features
You don't just do, “Pay $5 and you can unlock the premium version of this.” In the Finance world, actually pretty much any app like this where you're doing content marketing or you're providing value through education information and content, make it a subscription.
Do not just do a one time thing.
Instead of charging $9 for the premium, you charge $9.99 a month. You think that might be high, but look at all the other competition in the finance category.
People spend more money in this category than they do in things like games. Your average user is pretty well off and they're willing to spend good money for good information.
Make sure you charge a lot and start high. If you need to drop it down, you can drop it down.
Offer tons of options for people to buy and become members. So every time they go through the app, remind them that they can upgrade and make it really worth their while. Give them teasers of what it could look like, how they would upgrade their membership.
Do not bother with ads at this point. That's just going to hurt your data. It's not going to make you nearly enough money. It's way better to get better data to keep users around. Try to get subscriptions than to try to make money on your ads because it's also going to be a big thing later on for your exit too.
You do this for the next few months so for the end of May, June and July, you're constantly getting more and more and more data and you're rolling out features and you're continuously listening to people. You're looking at the data. You're analyzing it and you're making the product better and better and all of a sudden you're starting to get something.
It's like now we have something that actually makes sense. This is something that people will start using.
Phase 3b – Iterate, Identify KPIs, Light Outreach to Blogs/Forums/Review Sites, ASO, Emails
This is going to be a little bit more tactical on your part. I'm assuming that most people here are not engineers and can't do a lot of the coding, so this kind of stuff can be done pretty much time whole time in tandem.
This is why the hours will add up so much, because of things like this. You're going to iterate and identify all these KPIs or key performance indicators and then you're going to get like, “How do I create a marketing engine behind this? How do I really start to blow this out and get a lot of people downloading this?”
Understand the Code Fixes
What your priorities are going to be is to provide detailed fixes and updates to your developer. During this whole process whether or not you have a partner, you're going to have to say like every day or every two days, “Okay, here's what the feedback is.”
You're going to have to process that in your own head and say, “Here's what this means. Here's what you need to do. The stock ticker is having a lag on data. I need you to identify what that lag is and fix it whatever it may be.”
Track Your Progress
You need to create the benchmark KPIs for your app from your analytics. People are staying for like a minute, 29 seconds. They come back three days in a row and then they're done.
We have a 5% subscription conversion rate and the average person doesn't last for more than one month.
We have a 3% return rate. Whatever it may be.
You want to start getting active in the Finance community and drive downloads to the app. You want people signing up for these forums and Facebook groups for these communities and start to wrap your head around what it means to be in the Finance community.
Build yourself a reputation and start talking to people and telling people to go download your app and to give you some feedback on it. Let you know what's going on.
Setup Email Campaigns
This is when you're also going to want to start setting up the email autoresponder campaign that you're going to build onto that Parse marketing database.
Everyone who logged in via Facebook, you collected their email and now you're going to start to send them emails and you're going to start to get metrics on that as well.
You're going to say what are my open rates? What are my click through rates? What do I need to do to change the subject line? Things like that.
This is going to be part of your initial set up. This is when you start to roll it out and write the copy and things like that.
Setup Affiliate Deals
You're going to want to start to set up the affiliate deals because after a few emails, what you're going to do is you're going to start selling products in the emails on top of selling subscriptions in your app and that's the beauty of this model. You make money on both sides.
You might actually end up making more money on the emails believe it or not.
You want to set up the affiliate deals, you want to find products that you can promote. Financial products, it might be an eBook, a training system, it might be whatever.
Then you start pushing those in the autoresponder series.
Boost Re-Egagement with the App
You also set up a re-engagement series with this that means, “You haven't used your app in seven days.”
You should send them to their email and say, “We miss you. We'll give you 50% off your subscription if you log back in today”, but use email as a re-engagement to get them beyond just push notifications.
Get them to come back and use the app.
App Store Optimization
Then you start doing things like the in depth keyword research and work on ASO in increase organic downloads. That is just going to be an ongoing process.
With all this, this is all going to be in chorus to your developer work so while your developer is working, this is the kind of stuff you can do day in, day out.
- Get better educated
- Build it more
- Get better keywords
- Build out the emails
- Test everything
- Reach out to people who have done this before and find out what they do
This will also be done by the end of July, the same time as Phase 3. If you can get all this stuff done by the end of July, you start to have this marketing.
You'll get a little bit of buzz. You're getting 5, 10, 15 downloads a day. That's really all you need at this point. There's something here.
I have people coming through, I can look at the data. You're starting to see some life being breathed into this.
Observe the Sales Funnel
You'll start to be able to see this funnel unfold. When I say funnel, you'll be able to say:
“Of the 15 people that have become paying subscribers, what path did they come through to become paying subscribers? It looks like they finished the on boarding experience. It looks like they checked the stock ticker. It looks like they synced five of their top stock picks to be tracked and it looks like they used the app five times and then they became subscribers.”
That is the common funnel that drives people. How can I get more people to do that?
Let's figure out how to drive people to add their tickers into the app or whatever. This is when it really starts to come together and crystallize and you start to see some momentum.
Frequently Asked Question One
A question you might have is what if I don't get enough downloads? What if nobody is downloading these apps and I don't get any of this data? How do I know what to do?
My answer is honestly you're just not hustling nearly hard enough. There is no reason why you can't get 20 downloads a day.
You can go on forums and personally ask 20 people, “Here's my app, can you please download it and send me an email? What do you think? I'll do the same for you.”
It might take you five hours a day, but that's what it takes. If you're not getting the downloads, you need to go out and find a way to get this sort of data. Go post everywhere. Get on social media. Just get unbelievable at Finance.
Just be able to help people out a lot and you'll be able to draw a lot more attention to it and it's just what you need to do. This is very different from games.
You just need to go out and always be asking people to download your app all of the time.
Frequently Asked Question Two
Second question is what happens if I run out of money at this point? What if I've been doing updates?
What if I've been doing a few marketing campaigns? What if I hired someone to help out? What if I run out of the $15,000 and I'm not getting any subscribers?
What do I do?
My answer to that is honestly:
- You need to go get more. You need to go ask your friends and family for money. You need to start a Kickstarter. You need to go like work somewhere. Go sell products, sell door to door. I don't know. You need to go get more money.
- You need to replace the developer by coding yourself, which sounds extreme, but that's literally what, you have to do it, or you just have to give it up and give up this dream. You just have to say, “I'm screwed” and honestly, there really aren't any other options. There's nothing I can tell you any different. If you run out of money, you run out of money.
Those are your options. Again, let me go back.
This is a huge goal and a very short amount of time, which is why this might be hard to swallow. But this is the kind of mindset you need to be in if you want to make something like this happen without having some big market force pulling you up the whole time.
Phase 4 – Solidify Model and Go Nuts on Marketing
You're going to solidify the model and go nuts on marketing. Now you've got all the KPIs. You've got all the data. You have an idea of what's working and what's not working and how to really scale this and now you have to really, really push this thing out.
You understand what parts of the app make the money, how you're going to find subscribers, how you're getting more subscribers. What are people paying for and what are they not paying for? You can understand this and your app is going to continuously get better and better and improve and improve.
You'll see emails going out on the backside and you'll see which ones convert the best. You'll see which ones are working and which ones aren't.
You'll start to see the lifetime value of each download. You'll be able to start taking all the analytics and marry it with all the email marketing database analytics and saying, “I have an idea of what lifetime value is finally on this app.”
Money is Not the Goal at This Stage
Important note: You do not need to have a product that is making a lot of money right now. I mean at this point if you have 20 subscribers, it would be unbelievable. That would be an incredible accomplishment already so don't think like, “I need to be making all of this money already to reinvest or have a lifetime value that's hugely scalable.”
All you need to have is something in Finance that people are using and that some people convert in. That's all you need at this point to be on the right track to success.
What I mean by that is people just signing up for subscriptions, meaning that they're paying the $10 a month or it can be people clicking on the emails or it could be people re-engaging with your app day-in and day-out or whatever it may be.
You just need to have something that people are using and people become premium members or people are showing signs of life that this could be a viable model.
It has to be something that a Financial blogger, for example with like two million subscribers could pop in his or her content and then tell their followers to download and he makes a bunch of cash.
For example, you could go to Jim Kramer and say:
“Here's how it works. Here's all the data. Here's the conversion mechanisms. Here's how it's worked so far. Here's our plan, but if you talk about this on your show or if you email this to your two million email list, this is how much money you're going to make on this over the next 12 months based on these subscription numbers.”
That's all they need to hear. Just talk to them in those terms. They're instantly going to be like “this person is on my level and they have something valuable.”
If they can do it very easily and all they have to do is change a few graphics and then press send, that is when you have something that is really valuable to a buyer or someone at that level. That is what you want to be able to talk about and build.
Don't worry about the numbers being off the chart or astronomical at this point. You just need to be able to say that.
Someone like Jim Kramer might say, “Carter I like the product, I like what you're doing here, but show me how this makes us the money.” What you say to them is “we can replace all the stock picks with your stuff dynamically from your website. That's easy to control.
We can replace the emails with your products and track the entire process through Google Analytics.” That's how you should be able to frame your app at this point.
If it's a fitness app, you do the exact same thing. We can put your brand in. We can put your Instagram pictures in.
We can put everything in that you want to sell into this product. That is how you control this. That is how you do this very easily.
Then you really need to be able to push hard on the marketing. Once you have it crystallized in a way that all the Jim Kramers of the world can say, “I understand how this works, I understand how I can be a part of this and I understand that Carter is really trying to make these numbers get better and better so that it's a really big win for us.”
Once you can explain that and you have something that is in those terms, that's when you go and start to get the numbers bigger and bigger.
You just have to reach out to bloggers and news publications and you pitch them on your app and what you pitch them on is what is your Unique Selling Proposition. What your Unique Selling Proposition is, whatever it is that's different about your app or what is better than everybody else and be able to prove it and be able to say, “Here is why this app is the best Finance app for blah, blah, blah” and just write that down and prove it and it will be a no brainer.
That's what you lead with. That's what you always pitch. You always pitch the unique part of whatever it is that you're doing.
Engage People in the Industry
You start to go to Financial meetups and you start to pitch people there. You meet people that are interested in the hedge fund world, interested in the day trading world.
These meet ups are all over the place, whether it's in person or online, whether it's in social media or it's a webinar. You create it in a YouTube hangout or whatever. Google hangout.
It doesn't matter, but when you go to Financial meetups, you are meeting connectors. Like the Malcolm Gladwell connector, or the mavens, you are meeting people who have influence and if they like your app they will tell a hundred people.
That is the next level of marketing. That is when you can really multiply what you're already doing.
Then you just go to everyone you can possible think of and tell people about your app and ask them to download it. You've probably already been doing this in the previous phase, but this is one you go to everybody you possibly can and you say, “Just download it. Download it and tell your friends. Share it on Facebook, share it on Twitter, retweet it.” or whatever it may be.
You do this relentlessly.
I think the best person I've seen do this was actually Tim Ferris when he was launching before our work week. He was at every single live event with a backpack full of books, giving it to people.
He was saying, “Here's my book, read it, let me know what you think. It's free of charge. Let me know what you think. Go write a review about it. Go write a review on Amazon. Write about this on your blog.”
That's all he did for like four or five months. Every night he was doing that and that is why he is where he is.
Think about that too.
Phase 5 – Package and Pitch the Business
The second to last phase is when you package and pitch it. This is the last phase I should say.
Now you've got the product, you've understood the business model, you've really started to market it, you keep reiterating it and all of a sudden you're like:
“I've got something now. This is a really legit model.”
This is when you start to package it up and really pitch it. You start to full circle back to the people you had the first initial conversations with.
You've done a ton of updates, you've spent thousands of hours marketing it improving it, curating it and everything.
You've got awesome data.
You've got decent downloads and you've got light to decent monetization.
Let's say you're making $15,000 a month in subscriptions. You might think that's a lot of money, but you've also got to understand that at this point you've just spent five or six months, seven months I should say working 90 hours a week so $15,000 a month is actually turns out to be like minimum wage.
It probably won't feel like that much money to you at that point, but right now it might seem like a lot of money.
Package it Up for a Sale
That's when you start packaging this up and selling it to Financial bloggers and people in the large Financial communities. You don't start selling the apps.
You start saying download this app and say look at the business that I built. Look at the platform that I have and that's what you start talking about the platform.
You say this is a marketing platform for Financial people who want to really take their content and their distribution to the next level using mobile.
All of a sudden, people are like wholly shit, this is a whole new level.
That's when you start to say, “Do I sell this to on person, do I sell this to Jim Kramer or do I license this to 25 Jim Kramers.” If you're going to sell it, it can be to anybody.
You can sell it to the brokers who then go out and do whatever they want to it. You can sell it to a marketer who knows what you're doing and they can make ten times the money on it or you can sell it straight to the Financial person and say, “you understand this, let's just do business together,” and they'll know what to do with it.
Licensing means that you'll allow bloggers or Financial people, so if you find a blogger who has a 300,000 person email list about Forex trading.
You might want people to license it to have the same, or license it to Fidelity or you license it to anybody or the Shark Tank or whatever and you say, “for $50,000 a year I'll give you this platform and then for $5,000 a month, I'll maintain it. I'll make sure that it's running and it's bug free.
You get all the updates that we do. It's way less expensive than trying to buy and build this yourself,” and you do that for ten different people and all of a sudden, you get a massively lucrative business.
Pitch Like Crazy
Once you decide what you want to do, assuming you sell it to somebody, that's when you go pitching it like crazy. You go back to the people you met with the first week and you say, “I built a Financial platform, a marketing platform that leverages mobile and email marketing and you collect all the data. Look at the data I have and look at how easy it is to control this and to re-purpose this for your own business.”
That is how you pitch it. That's the number one way and that doesn't matter if you're doing it for Finance, or fitness, or all education, or language. For this particular model, that is how you pitch it.
The Package is a Complete Business
You explain how easily this can be upgraded and how well it's organized both from a development standpoint, you say look how clean the code is. Look how everything is very neatly organized and how the data comes in cleanly through Google Analytics.
But also saying, this is a complete LLC. All the bookkeeping is intact. You have a full data trail of how everything was set up. We can package and sell this thing so quickly and so easily. Both of those things are really important when you're talking about selling the business.
You explain how the model works and where the value is. You talk about here's how much cash flow it has based on the number of downloads we have.
- Here's the LTV that you can expect
- Here's the intellectual property
- Here's the email marketing database
- Here's the Parse database
- Here's the app we built
- Here's how it's all set up
- Here's what you can own and here's how you can go and leverage that intellectual property yourself, if you want to license it or whatever it may be
- Here's what the marketing database says
- Here's what Parse can do for you
Yeah we have it for email, but you can also leverage that into something completely different. You can roll that into your own company. You can set up podcasts.
You could do whatever you want with that marketing database and then here's the analytics that we have. Here's all the information you need.
Here's everything you need to know how to do and here's how easy it is for you to do this too and here's how you can do it ten times better than I could, but that's why instead of selling the value, what you're saying is I'm going to sell it to you for a million bucks, but obviously you have the infrastructure.
This is the easiest way to do this. You can go blow this thing up, but for now it's worth a million.
You will get people calling you and saying I am interested in what you're doing. This is very exciting for me.
This solves a problem in my business. I understand what you're saying. This is something that we could easily roll into our company and we have the money to do it.
Boom! Christmas comes. You buy everybody you know some really, really nice presents.
You send Carter a gift basket, which I'll thank you for on Bluecloud Select and that's what you do.
Thanks guys for tuning in. I know that that was a lot of information.
I definitely recommend re-watching this.
I'll put this on a blog post so I can really organize it even better so you can re-watch it.
My number one goal for telling you all of this is that it's so possible and that is the number one thing to remember, that it is absolutely possible to make something like this happen.
It's not easy, it's not always likely. But it's absolutely possible and the more you just kind of follow the idea that you have to create the value, it's not that you want to go get the money, you will build something that when put in the right situation will be sold for a ton of money.
Thanks for tuning in guys. I know we had a couple of hours of video this month, but hopefully you guys got a lot of value and I will see you next month.