How to sell your app to another developer

Daniel Kennett asked on Twitter about how to sell his app to another developer.

Me, I’ve sold three apps — every major thing I’ve created, except for my current project — so I have some thoughts about this.

Find a good home

Your major concern is to find a developer who will take care of the app and its users in the way you’d want them taken care of.

You have to live with the decision later, and so it can’t be a “we drove Daisy out into the woods and left her there” thing.

The first thing to do is talk to other developers who you know who you believe would do a great job. Don’t worry too much about whether or not they’d want it — let them tell you. They might also suggest other developers.

If that doesn’t work, for whatever reason, write a blog post. Explain what the app is and why you want to sell it. Be honest, but don’t be unnecessarily self-deprecating. (Developers trust honesty.)

Link to your blog post from Twitter. Get the word out.

Be patient

You might get more than one person interested. Or it might take a few weeks or even months to find somebody. People make decisions slowly and carefully, often — as they should, with something important.

It can be stressful, but hang on. Give the decisions the respect they deserve.

Source code

I have never shown source code in advance of a sale. I don’t know what the industry standard is — it could be that I’m an outlier on this.

My thinking is that the product as a whole is the important thing, and code can be dealt with. Either they like the software, or not.

That said, if I had gotten to the point where a developer I trusted, who I wanted to take over the product, asked to see the source code, there’s a good chance I’d do it. If they’re not a person I’d trust to see the source code in advance, then they’re not a person I’d trust to take over the product.

The deal

The obvious way to make a deal is this: pay money for the source code, artwork, domain names, and all related assets. Just a straight-up transaction.

Sometimes it works that way, and that’s cool when it does — but it doesn’t always work that way. There are a couple others ways to structure a deal. These can be combined with up-front payment of some portion, though they don’t have to be.

  • Revenue-sharing. This is usually over the span of at least two years, but can be quite a bit longer, with a declining percentage of revenue. You want to make sure the buyer has an incentive to make great software and sell a lot of copies. This may come with a guaranteed minimum paid to you, either per-year or at the end. It may also have a maximum, beyond which the purchaser keeps all the revenue.
  • Installment plan. This is like revenue-sharing but with a set amount (which may also decline over time). It has the advantage of letting everyone know what the value of the deal will be.

You’ll need a contract, of course. Sometimes the contract can be the longest part of this, and sometimes it’s the shortest. I’ve seen some contract talks go on for six months (though not for any of my software). The contract is the boring part, but it’s important.

(My strong advice is to find a professional money person and a lawyer. I’m not either of those.)

One thing the deal has to be utterly clear about: the moment the contract is signed, the app and all its assets have been bought. It doesn’t matter what the structure is. It’s now entirely owned by the purchaser.

The transition

Don’t imagine that you just turn over the source code and call it done. There are a whole bunch of things related to the product that need to get turned over too, and some of those will take time. You’ll need to communicate with the app’s users. You may need to answer the purchaser’s questions about code, the website, future plans, the bug tracker, support, and so on.

There is a lot of work in the transition, even for a simple app. Plan for it.

(Dropbox is great for this. There’s often too much stuff to put in email. When I did the NetNewsWire transition to Black Pixel, I even gave them ancient screen shots and artwork — I wanted them to own the history of the app as much as the current app.)

Buck up

I may have made this all sound time-consuming and difficult. It probably is, more than you think it is.

But it can be fun, too, and interesting — and if you know it’s time to sell, then it’s time to sell. That’s a hard decision to make, but, once made, should be acted on. It’s the right thing to do.

18 Dec 2011

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