I just started making apps few months ago. 1 app is sold in the app store now. Money is not that great, but I am happy with it.
Now yesterday a friend came to me and told me he has the greatest idea of all time for an app, and the idea is unique and not one app is same like his idea.
He also says he has a lot of more ideas that he is willing to share. The only catch is he just gives ideas and I will be doing all the work and we share 50/50 profits.
What do you think of this situation? How would you reply to my friend if you were me?
I'd offer either a lot less (like 10/90) or a set amount for an idea (like 100 bucks).
Tell him ideas are cheap. Even if his idea is good, you need to do the research to see if there is other competition out there for the same idea. Then you need to figure out how to make the application stand out. Then you have to code it and generally do all the work.
Or, tell him yes 50/50 on the profits. But after you get your ad money deduct your programming fee (80%) and then split the rest with him.
I tell my friends/family to not share app ideas with me, because I don't like to work on other peoples ideas/apps. So that if I happen across the same idea they don't think I stole it.
Rights to a really good idea with mockups and a program flow are worth more like 5%. Now if your friend is willing to generate content, provide testing and feedback, and do the marketing, then it could be worth up to a 50% split. But you better trust your friend that he/she will do the work. (I'm lucky enough to be in such a situation.)
Perhaps you could try to find some creative friends who give their ideas away for free.
As for replying to your friend, I wouldn't give him money at all. Even if the idea is 'the best ever', ideas aren't worth money.
So if he doesn't want to give his ideas away without asking for money, then it's his lost. Also, if he does share his ideas for free and it turns out the ideas are great indeed and you do make a lot of money with it, you could still give him any amount of money at any time.
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50/50 is not reasonable if he's just providing the idea :/
I guess it depends upon the idea. If it is truly unique and self-marketing then I would say it might be worth it. Some simple ideas can be turned into an app that generates reliable revenue in only a couple of days. Others take months.
If someone wants to give me a new idea that I can turn into an app in only one week of work and the app will sell without any marketing then I will gladly give them 50%.
You are the one taking all the risk. Inveting your time into the app and it could sell 1 day....or less. 50/50 is very unreasonable.
True - but if you are an experienced app developer/marketer then you have some idea if this will happen so you can limit your risk. You can always turn down the idea after you hear it - just sign a non-disclosure so you friend will tell you.
50% of something is something.
90% of nothing is nothing.
How about you work on something not so fixed? For example, the first $500 in a month is yours. You keep 75% of the next $1000. Everything above that 50/50.
The best should be like this:
you calculate your development costs:
Only when incomes are greater than them you can share 50/50 with your friends or another percentage before you take all money. It is what i did with my friends.
So in this way is a win-win for both.
Somebody needs to do marketing, webpage, support, research, forum-posts etc. What could he/she offer? An idea is maximum 10%, a fully developed spec with research, design, etc, could easily be worth 50%.
If you do all the programming, you're risking a lot. You could potentially waste hundreds of hours for no gain.
What does your friend risk? Nothing. If the idea is a flop they may have their dream squashed, but they really haven't lost much of anything.
Given that your compensation should be structured accordingly. Whether that means 90/10, 80/20, 75/25 -- that's for the two of you to agree upon.
I will offer up one other important caveat, however: You should also agree that you are rewarded first.
Suppose you spend 100 hours building the app, and the hourly rate you would charge someone else for your services is $50 per hour. Theoretically, you're going to invest $5,000 worth of effort into the project. If that's the case, you should receive the first $5,000 of profit the app makes. Once your costs are covered, then the profit sharing would begin.
Working with friends is always a challenge, but don't let it cloud what is fair. If you do the work, you get paid for it. If it's a smash success, you both win, but if it's only a modest success, or (hopefully not) a flop, you should at least get some return on your time investment.
Unless you agree upon something you know you're comfortable with, I'd avoid this situation completely. I've worked with someone who was content with coming up with ideas while I did literally all of the work. We never finished the project, but I'm sure his intentions were to take more than 50% of the profits were we to finish. It was an annoying couple of months, but a great learning experience.
One other thing to keep in mind. You will be dealing with this person a lot. Is this a friend you enjoy talking to all the time? Someone you feel comfortable resolving conflicts with? If not, I'd be very hesitant to go through any of this.
If you do decide to do it, make absolutely sure that you have a clear, written agreement of what the rev sharing will be before any work is done.
If you're working with a friend or a family member, it may seem like this is unnecessary, but not having had things clear up front when money starts showing up later is a classic way to lose a friendship.
How about you work on something not so fixed? For example, the first $500 in a month is yours. You keep 75% of the next $1000. Everything above that 50/50.
Ideas are cheap. If he thinks it's such a great idea and you are willing to take the risk, let him put this money where his mouth is. I would go further than pofak: pay you x dollars up front for your time and effort and then do some sort of profit sharing.
__________________
Michael Emmons
Founder, App Apps, LLC http://app-apps.com
I guess I disagree with most people here. Good app ideas are worth a lot and I would be willing to split the money 50/50 with anyone who gives me one.
Here is what I consider a "good" idea for an app:
1. It can be written in a week
2. There is no chance that Apple will reject the app.
3. It markets itself through either immediate popularity or App Store searches.
4. It will generate at least $5000.00 in revenue over its life either through sales or ads.
5. It does not rely upon our own server or website.
6. It will not need to be updated once all bugs are eliminated.
7. No one will have a copyright claim against the app, whether valid or not, which may cause Apple to pull it from the app store.
If anyone has any such ideas, I will gladly sign a NDA and schedule a week to work with you for 50% of the revenue.
There if no way to tell if an app will be successful, even if it is an amazing idea. So, would you consider doing the app if someone could guarantee with 49.2% certainty that it would bring in at least $5000?
Quote:
Originally Posted by Joseph Nardone
I guess I disagree with most people here. Good app ideas are worth a lot and I would be willing to split the money 50/50 with anyone who gives me one.
Here is what I consider a "good" idea for an app:
1. It can be written in a week
2. There is no chance that Apple will reject the app.
3. It markets itself through either immediate popularity or App Store searches.
4. It will generate at least $5000.00 in revenue over its life either through sales or ads.
5. It does not rely upon our own server or website.
6. It will not need to be updated once all bugs are eliminated.
7. No one will have a copyright claim against the app, whether valid or not, which may cause Apple to pull it from the app store.
If anyone has any such ideas, I will gladly sign a NDA and schedule a week to work with you for 50% of the revenue.
__________________
Michael Emmons
Founder, App Apps, LLC http://app-apps.com
If you are an experienced app developer/marketer and not just an app programmer then you should be able to have a pretty good idea whether an app should generate the required revenue.
You need to have confidence in your ability to do that.
If you have any doubt then don't do the project.
In your case above, the person is only guaranteeing revenue of $1250 for me so I might not do it. By guaranteeing, I assume you mean putting $1250 in escrow and releasing portions back to my partner as revenue from the app comes in with the balance released to me at the end of the year if it has not been earned by app.
Last edited by Joseph Nardone; 01-09-2011 at 09:45 AM.
What to reply to my friend?
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