How to Build an App Studio by Buying Apps [The Wall Street Playbook]

Portfolio had 50+ shallow apps (QR code scanners, PDF scanners) where there were few levers to double revenue in 30 days. Sold them all and restarted with 3-5 'deep' apps that have multiple use cases and levers (e.g. dating apps: matching algorithm, UI/UX, soft currencies, pricing, packages).

When buying an app, pay 50% at closing and guarantee the remaining 50% after 12 months regardless of KPIs or app performance. Unlike an earnout (payment tied to e.g. keeping downloads at current levels), payout isn't tied to performance, which sellers see as fair, and the lower upfront risk lets the buyer offer a higher valuation. Alternatives discussed: all-cash, earnout, equity plus cash (e.g. 70/30), revenue share.

After buying an app with 200K organic MAU, redesigned the subscription and ran aggressive A/B testing on it to lift free-to-paying conversion.

Rebuilt the app's ASO and launched it in additional markets, while also working on virality (K-factor) through product-led growth.

Added gamification and streaks to the core product, plus daily login rewards and subscription retention mechanics.

Direct outreach to app developers about buying got 'crickets'. Bought instead through broker Evelyn (Josh also names Charlie Ryan of App-IQ); brokers pre-talk sellers down from unrealistic prices and confirm they are motivated to sell. Josh: use a broker for early deals, avoid them on bigger deals because the broker's cut affects price.

Bought an app earning about $10K/month (closer to profit than revenue) for roughly 3x annual earnings (~$350K). Financed with a 10-year loan at about $5K/month, so the app's current income covers payments. Structure: some cash, an earnout on revenue (not profit) milestones, and a deferred payment / seller's note. Risks found in diligence were used to negotiate the multiple. Josh's caveats: 10-year app life is optimistic; rule of thumb is that current revenue must cover loan payments; any growth pays the loan faster.

Previous owners (who followed App Masters' ASO advice) got all traffic from ASO and Apple Ads: one primary keyword plus a few long-tail variants, with Apple Ads defending its own keywords. This avoided competing on paid UA against well-funded health and fitness apps with high CPIs.

Flow was onboarding -> forced sign-up -> paywall. Swapped the last two so the flow became onboarding -> paywall -> registration (sign-up still required).

Launched on Android first. Used Google Play custom store listings, each targeting a different keyword with its own title, short description and screenshots. Steve found Google Play ASO easier to get going than iOS.

In a share deal the buyer acquires the seller's company with the app inside it, so the app stays in its developer account. In an asset deal the app must move from one developer account to another, which can disrupt keyword rankings and ASO. Works best for one-app companies; seller pays far less tax than in an asset deal. Buyers can still make deals work without a C-corp.