This transcript was generated from the episode audio and may contain minor errors.
[Music]
All right, thanks for tuning in today, Side Hustle School. My name's Chris Guillebeau, your host. Today we have a listener question from Kayla. She has what she believes could be the next Blockbuster app idea. So she's got this idea to make an app.
Instead of making it and building up the user base herself, running her own company or Side Hustle, she wants to take this app idea and sell it to a startup or to a private equity group or to someone with a lot of money, let's say, someone who wants to give her money for this idea. Now I've talked a few different times about how you usually need more than an idea. You can't just sell ideas. Ideas on their own are not worth a whole lot, but what could you do to go from idea to increasing the value of maybe an early stage asset that could in fact be sold in this way? And she's gonna give an example of a recent sale, a sale of an app for $50 million.
And I followed this story a bit too. So I'll mention that as well in my answer. And let's look at what this ambitious app builder or app idea builder needs to do to turn her vision into that valuable asset. I love it. How can I sell my big app idea?
That's her question coming up after this quick message from our sponsor. [Music]
Hello, Chris. I'm Kayla from Portland, Oregon. Loved seeing you at Powell's recently. So I've come up with a fantastic app idea that I think could be the next big thing inspired by the sale of text to automatic for $50 million.
I don't have the resources to develop it myself. So I'm considering pitching it to startups or private equity groups. What should I keep in mind to ensure that I sell my idea effectively and at the right price? [Music]
All right, Kayla, it's great to hear you're inspired and you've got an idea you're passionate about. And as mentioned, no matter how groundbreaking an idea may be, ideas on their own are not usually enough to secure the kind of deal you're envisioning.
And listeners, Kayla is referring here to this deal. There's an app called Texts. I started using this app myself, Texts, like a text message, T-E-X-T-S. And it basically brings together messages from different platforms, from Instagram, from WhatsApp, from LinkedIn, a bunch of other places, all to one app. So the idea is you have one inbox instead of 17 or whatever.
I don't know if I'm gonna stick with it or not, but I tried it out for a while, it's interesting. And anyway, this app sold to a company called Automatic, which makes WordPress for $50 million. So Kayla's like, how do I get some of that? Or even just half of that would be okay, right? So if you wanna make an app that is highly valued, well, most likely you're gonna have to make the actual app and develop a company.
That's what Texts did, it wasn't just an idea. But even if you don't want to go all the way, you probably need some sort of minimum viable product. Startup people love that term, MVP. So you need to actually have some core functionality that demonstrates here's what this is. Here's why it's so interesting and different and potentially valuable.
And in the case of this other example, it is hugely valuable to people who are overwhelmed, especially in a business context of trying to manage lots of communication and such. So it wasn't just an idea, it was potential and also functionality. There was a lot that went into that being worth so much. So you need a minimum viable product, you need some sort of market validation data to prove its viability. And that's more than just a hunch, it's more than intuition.
Again, if you're trying to get a really good valuation, and then you probably also need some legal protections along with it. So consider applying for a patents or registering your product whenever you can, have a non-disclosure agreement, ready for these kinds of talks. Again, this is at a higher level. It is possible to just create the idea and maybe that MVP and try to sell that. But of course your evaluation is gonna be much, much lower in that case.
So you just have to kind of figure out what do you want to do? And I totally understand, Kayla may not want to develop the startup herself and do all that. But if you're looking for a high valuation, selling it for millions of dollars, then most likely you're gonna need to go further than just like here is an idea. I do think there's some middle ground, so hopefully Kayla can find that, let us know how it goes. And listeners, if you have a question, sidehustleschool.com/questions, new projects, new updates every day, we'll feature them throughout the year, along with updates from listeners as they launch and grow their projects.
That's all for now. Thanks for tuning in. My name's Chris Guillebeau. This is Side Hustle School. [Music]
From the Onward Project.
