BlueThrone · B2C · app acquirer
Build an in-house team making cheap UGC TikTok videos for the apps
First viral video took 6 months and several people; gets faster with practice
What they did
What happened
- Effort
- six months, multiple people across disciplines
In their words
Buying vs. Building: Scaling Beyond a Single App — Josh Peleg, BlueThrone
David Barnard… somebody with this more kind of financial asset approach, the buyer is going to say, "Oh, well, wait, 40 hours a week of a great marketer's time creating these assets that go viral on TikTok," or whatever kind of organic motion that you have, if it's a high either cost because you're paying creators or a high time cost, acquirers are generally going to look at that as a cost basis and not look at that kind of an app as a financial asset, right?
Josh PelegCorrect. I think us in the industry labeling this TikTok strategy as organic is very misleading. And even though you could pay $5 for a single UGC video that shows off your app with a nice CTA at the end, and you may as well get a million, 2 million views, which may convert into a 10% conversion rate and you get some downloads from that. That being said, the time invested to get to that point is significant. And I'm talking from experience. We recently built this UGC machine at Blue Throne. It took us six months to get our first viral video. And that's not one person's time. That's multiple people across multiple disciplines doing the research, doing the execution. So, there is a cost associated to this organic. But like all great mechanisms within the app business, you get better over time and you optimize and you're able to hit those targets faster with less resources as you get better, for sure.
David BarnardSo, then, what would your advice be to somebody in that position? Either they're just getting started and they're thinking, "Hey, I'd love to build this app and exit it in 12 months." I mean, I see this on Twitter all the time. Like, "I'm going to build this app and I'm going to sell it for 100k in a year." What would your advice be to a founder like that today to optimize that for a meaningful acquisition?
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More from this episode
- Buy about 100 small utility apps valued mostly on profitMany had been pumped before sale and died; shallow products didn't last
- Buy only a few apps with strong organic traffic and invest in their teamsPortfolio cut to 5 apps, each a category leader or on its way; guest says it works
- After buying a music app, hire a GM from Spotify and triple the teamMAU grew from 200K to almost 6M; still near the top of its category
- Sell mugs, t-shirts and hoodies to a game's biggest spenders
- Sell power-ups on top of the subscription, like 2x more songs nearbyGuest says it captures what each user is willing to spend; no numbers
- Build solo without VC money, then sell the app within 18 monthsSold for over $4M; deal closed in 3 months with no investors involved
- Charge $120 a year and pitch it as paying for itself in work timeGuest says it unlocked very high LTV; no figures beyond price
- Launch a rough app, prove people pay, then build the real techHost says it's now a genuinely great app; no numbers
- Push the lifetime plan on the paywall right before selling the appKnocks down negotiations; the buyer can't monetize those users again
- Cut ad spend from $50K to $10K a month to look profitable before sellingDownloads eventually follow the drop; guest calls it riskier than pushing revenue
- Add in-app coins that people earn from ads or buy in packsApps that crack consumables reach deeper LTVs, per talks with hundreds of founders
- Before buying an app, compare its return per dollar with more ad spend
- Stack category downloads over time to see if new apps grow the marketScreen time market grew with each new entrant; buying a non-leader looked OK
- Keep a bought app separate and sell one subscription for both apps
Tags: tiktok, ugc, viral