Apptopia Hopes to Bring Broker Flair To Mobile App Marketplace

1/24/12Follow @xconomy

The vast majority of mobile applications in the marketplace aren’t coming from well-established businesses, but experimental developers. The apps can even accrue a good user following, but those developers don’t exactly have the skills or desire to build a business around their creations.

“It’s laughable how many times I’ve heard, ‘I didn’t get into this to answer support requests,’” says entrepreneur Jonathan Kay.

Kay is the chief operating officer and co-founder of Apptopia, a Cambridge, MA-based startup developing a marketplace that condenses the droves of similar, one-off app projects and puts them in the hands of people looking to turn them into real moneymakers. It looks like the lovechild of eBay and a Web domain brokerage, with hints of a mobile strategy consultancy.

As you can imagine, buying and selling source code for mobile applications is just a bit more complex than auctioning off your used electronics. “I’m spending more time than I’ve ever wanted to with lawyers,” says Kay, who I caught up with this week.

The company is the brainchild of co-founder Eliran Sapir, who jumped on early iPhone trends to create the mobile app GPush, which created push notifications for Gmail on the iPhone. Despite the paid app’s popularity in the iTunes app store, Sapir couldn’t quite figure what business to sell it to for an exit, Kay says. But he kept thinking about the problem, and later toyed with the idea of creating a mobile app brokerage while entrepreneur in residence at Cambridge-based Greatpoint Ventures. Last fall, Sapir connected with the boisterous Kay—a former brand evangelist for local startup the Grasshopper Group—and left the venture firm to work on Apptopia full time.

Apptopia’s first step is to formulate a target price range for app developers to sell at, using market knowledge and algorithms. Developers then must give Apptopia access to their apps that enables the startup to gather accurate, objective data on performance, user base, and other information that will inform prospective buyers.

“Much like in eBay, we provide a professional middle ground where a buyer and a seller can actually negotiate,” Kay says.

Sellers can list their apps to be purchased for a fixed price within that suggested range or set up an auction with a minimum starting point.

Connecting buyer and seller is just part of the challenge, though, says Kay. Apptopia continues to oversee that payment and transition process, and has developed contracts with lawyers outlining the details of the agreement.

“If you put the app up, you legally are bound to send us the source code,” says Kay of the developer responsibilities. Sellers also have to agree not to … Next Page »

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