Serial entrepreneur and SEO expert Stav Zilbershtein bought the SellMyApp domain in 2013 for a five-figure sum and bootstrapped the most prominent mobile app marketplace for buying and selling mobile source codes. In a process of 6 years, he evolved the company from an ad site to a full-fledged marketplace and was able to exit for more than 47x his initial investment.
The Initial Idea Behind the Marketplace: SellMyApp
Stav owned a digital marketing agency and decided he wanted a change.
He saw changes to the sector on the horizon and he became disillusioned with the way the industry was going.
“The environment in the digital marketing space became extremely competitive. Even if some of these people only read three articles on SEO, they would begin to claim expert status,” Stav says.
As an experienced digital marketer, he believed he could build a successful productized service business instead.
“The prices were getting knocked down as well—so I left the niche, and I wanted to focus on buying online businesses instead.”
Stav took out loans from the bank—a risky endeavor, he noted—and bought several websites on Flippa. For one reason or another, all failed, except SellMyApp.
At its inception, SellMyApp was simply a marketplace where you pay a low fee to list an ad of your app for sale for 30 days. You could then bump your ad to the top for a few dollars, and in total, the business earned Stav around $1,000 a month.
He decided to look for opportunities to enhance the product and to take his background in SEO and apply it to grow SellMyApp.
Enhancing the Product
Stav transformed SellMyApp and, over time, built what it is today—not just a website but a full-fledged marketplace and one of the most active mobile developers communities on the web.
“At the time, SellMyApp didn’t have the actual marketplace feature like it does today. It was merely a website that had dozens of ads, and people would pay for ads. It was essentially an ad website.”
His next step was to turn it into a revenue share with a full-scale marketplace. He began to look on Google Search Console to see what the traffic was like. The website would appear in specific keyword searches, but the monthly traffic was low, with about 1,000 unique views a month.
“I did have traffic appearing from relevant keywords, but only a few in a month, and I knew there was potential with this website,” says Stav, “I knew that if I could turn it into a marketplace, it would succeed.”
Success Through Failure: Niches That Didn’t Stick
In 2013, the online marketplace didn’t exist like it does today. Stav had purchased several websites, but in the end, only SellMyApp remained.
“I bought a horse betting website where people would pay to receive tips. It was not scalable, and I did not know enough about the niche. I had an idea to scale but never got that far. Revenues died, and it was dwindling fast when I bought it.” Stav explains that the most challenging part of this purchase was constantly inventing new tips.
This was a big scalability issue because he had to pay a verified freelance tipster which ate up most of the income from the subscriptions. “I ended up with low margins and no ability to scale. So, this one died, and I just tried to get it out of my mind so I can move forward.”
Stav also purchased a microloan lead generation website that crumbled quickly. “A new regulation in the UK wiped out affiliate websites for microloans. You needed a license from the government to be an affiliate.”
He bought it from someone who was making around $10,000 a month from the website. The owner claimed that the website had good rankings, but when Stav asked the seller if there were any regulatory changes that were going to happen, he said no. Two weeks after he purchased the website Stav had to close it.
He called it a ‘low blow’ to his bank account, as he felt he threw his money to the wind.
Next was a Forex programming website. Stav had to generate forex coding strategies, but their revenue share on the leads wasn’t enough to make significant money.
Stav explains in detail, “Many people were interested in algorithmic trading, and they had an idea for a strategy and wanted someone to code it, so this website would generate leads for people who wanted to code strategies. It ended up that it was not scalable enough to make significant numbers, so I left that business behind as well.”
Stav was able to identify four different business niches that he didn’t want to focus on at a low expense of time and capital. Then, he was able to hone in on the value proposition that SellMyApp had, and he knew how to provide the value that the market needed.
A Bootstrapped Venture: From the Bottom to the Mountain Tops
Stav was at a crossroads with his then business partner, with whom he decided to mutually part ways, each taking some assets and some debts from their past ventures.
The one business that remained in his portfolio (at the time) with real potential was SellMyApp.
In 2015, Stav was a one-person band with a plan he felt was going to succeed. He did, however, realize he was up against some intense competition.
“I learned about a phenomenon that is less spoken about in the investment world, which is when you don’t bootstrap yourself, you don’t feel the pain when money is dripping out of your bank account.” Stav adds, “Many founders have never hit rock bottom: I have, and I attribute it to my successes now.”
Today, Stav’s story is one of immense success. He is now an investor in multiple businesses but has never forgotten the place of desperation that comes from bootstrapping a venture on your own.
“If you sit on a cushion of $1 million in funding, you only need to take your company a few milestones to prove you’ve met a development goal, and you only have to show that you have increased your sales by a certain percentage.” Stav says, “When it is not your money, you do not value money the way you should.”
Gaining Traction in the Early Days
The countless lessons he’s learned along the way have contributed to his ultimate success today.
Observing other people and gleaning from their mistakes is a common thread throughout his entrepreneurial journey. In the early days of SellMyApp, Stav learned that the pricing of your company is vital and you should always adapt your processes as circumstances change.
Over time, founders should be charging more for what they are offering, especially in terms of scaling with exit planning in mind.
Stav had seen the rise and fall of several competitors as marketplaces like SellMyApp were emerging.
He explains that those competitors were just offering a few components or basic templates that weren’t customizable. On the other hand, SellMyApp sold complete games, and Stav realized that people wanted and preferred this type of offering.
“Many people looking to make money off apps don’t want to do a lot of development. Most of them are searching for ready-made games which they can reskin and launch fast” Stav says.
The key, he shares, was how the monetization was in place so the buyer could change the graphics. He realized there was still a place in the market for what he was offering; high-cost complete templates – an all-inclusive game ready for launch.
“If you don’t have much traffic, you need a better pricing strategy,” Stav says, “I believe people tend to get burnt out in the big marketplaces because of failed pricing strategies. It’s something many businesses struggle with, and if you get it wrong, it could be the end.”
Stav consistently evaluated his pricing. He chose to keep prices the same and not lower them. The biggest fight he found was convincing people to join the platform when their competitor was so strong in the market. He chose not to budge because he knew that pricing was vital to his operation.
Marketing, Scaling and Innovating New Strategies
Pricing wasn’t the only area that required innovation. SellMyApp needed people with the right skill set and vision to help the company not die out like many other marketplace competitors.
As the marketplace improved over time, there was more value-added to his business. In terms of pricing, at the time, SellMyApp was the only marketplace with high prices but also offering complete games.
Over the first 18 months since inception, Stav was working 18-hour days. He had so much that he needed to discover about the niche and about running the business. He knew he had to work tirelessly to grow the business and convince people to join the marketplace.
“I had an idea to offer a prepaid commission to those developers who would upload 100 of their apps. It was a gamble, but I ended up being right,” Stav says, “It took time, but I always saw a return on investment with this arrangement. People would know about SellMyApp, and it would generate sales.”
Stav spread the word, and people started to join the platform. He knew he solved one of the product pain points because someone else was inventing the products.
“If the product creation is in my hands, it is better not to buy such a business from someone else. In a marketplace, the huge advantage is I was not creating the products,” Stav continues, “The products are endlessly being uploaded. My main job was to make sure support was streamlined and that transactions were streamlined. I needed to pay developers, and I focused on SEO.”
Stav continued to solve pain points that a lot of his competitors were not solving. As with any business, in the age of the internet, SEO was a large piece of the overall puzzle.
He noticed ChupaMobile (funded) and saw how they were publishing content. They didn’t just have products; they also had a blog. His competitive research paid off and gave him the ideas he needed to start his SEO strategy.
“They had a nice lexicon for app development and cool SEO ideas. It gave me enough ideas from the onset,” Stav says.
With newfound inspiration to create valuable content, he spent his whole marketing budget on one single app guide.
“I had a marketing budget of $15,000 and spent it all on this app guide that we wrote with an agency. It was a nice app guide with 10 chapters and 50- or 60,000 words full of case studies and links and ideas.” Stav adds, “We believed this would be highly reputable and linked to. The magic didn’t happen after that.”
Stav had imagined a leap in traffic; instead, he found himself with no marketing budget. As with so many mistakes in life, it can lead to the most inspired ideas.
“I put everything on one bullet and shot it out, and not much happened. After that, it was just organic growth,” Stav says. “If I woke up on the 15th of the month, payout day, with zero income, I would calm myself down and ask myself, ‘What is there to do today?’ Then, I would do the right thing and make sure everyone got what they needed. – to get paid!” he adds “To keep myself focused and keep my mind away from the stressful uncertainty about future growth I kept focusing every day on things I could do to make the platform better and eventually that paid off”.
After Stav decided to add extra services, the business took off. He added mainly two parts: sell the code (which could happen again and again), and then the “let us reskin and publish your code” bit.
“People wanted to buy from us, because it made it different from platforms that only offered codes and said good luck,” says Stav.
“In our check-out options, similar to ChupaMobile back then, we brought on freelancers who did the job, and we established a workflow and a team that was ours. We ended up selling extra services on top.”
SellMyApp launched the extra service and started upselling by having it appear in the check-out option. This way, customers had the opportunity to figure it out themselves or buy it from SellMyApp.
“They trusted the marketplace to change graphics and then launch the game. It made a psychological difference when we were able to show that we could launch it for our customer,” says Stav “We don’t only sell the codes but we also stand behind the ability to publish the game by offering that extra service and that builds confidence in our buyer audience”.
One Person Operation to Fully Hands-Free Operation
There came a point in time where Stav considered exiting SellMyApp early on, but he realized that even a growing, strong business doesn’t always translate to one that will be competitive when the time comes to exit. He also quickly learned that in order to successfully grow his business he would have to delegate tasks to a team with a broader skillset.
“The first time I wanted to sell, I contacted FE International and we had a short consultation with someone on their Valuation team. I was told that even though I was doing everything right in the business, I needed a team or else a buyer wouldn’t take the business seriously,” says Stav.
Often when a buyer sees that a business does not have a team, it seems like too much work and too much risk for them. That is basically a one-person show for them to operate and when the person is gone, the business often crumbles.
”I knew I was heading for burnout if I were to continue doing everything for SellMyApp on my own, so I knew it was going to be a good idea to start considering and adding roles to get work out of my hands. It took another two years before I was able to completely automate the entire marketplace to operate solely by my team.”
But it wasn’t just FE International’s guidance that convinced him to hire help. He knew that the business had gotten to that point when he was unable to enjoy his personal life and relationships given the volume and consistency of the work.
“My life partner told me to find a solution, or it was going to turn out bad for our relationship, so I took that as a sign, hired people and went through the journey of structuring what I needed to do to get processes in place. It forced me to think this way because my initial standpoint was that no one could do what I did or understand how I ran the business.”
It was a challenge at first for Stav to relinquish control, but the more he looked at it like a scientific process that could be executed by someone else, he realized nothing was truly unique to him.
At that point in time, Stav built SellMyApp up to a place where it could fully function without him. It was the first time he could go away on holiday for several weeks and not be bombarded by the business.
Acquiring the Competition
While SellMyApp had newfound success, their competition started to crumble.
“ChupaMobile was our competition at the time. They were crowdfunded by $1.3 million, and they had a team of six or seven people. They knew how to make a show in the startup scene and raise funds, but they had inflated salaries and inflated roadmaps.” Stav continues, “They were more aggressive about growth and put thinking about profits on the back burner. I could somehow see right through them from the start.”
Stav knew that he was becoming the lean competitor in the marketplace and that he would eventually win out because his competitor was burning all their money on paying salaries alone.
Stav decided not to take dividends at that point and paid developers with the money to launch new features on the marketplace. He did this for an entire year—which ended up being their best year yet—and their competition, ChupaMobile started to crumble. ChupaMobile was not adapting to the times and was continuing to lose customer support.
“From the start, ChupaMobile and I were not on good terms. They always acted like fierce competitors. When SellMyApp started to compete with them, I decided to back off and let them be number one.” Stav continues, “However, the competition got so bad between us that one night I told my life partner that I didn’t want to be number two anymore and one day the owners of ChupaMobile were going to beg me to acquire their business.”
Ironically, that is exactly what happened. Stav and his company acquired ChupaMobile and all their links went to them.
Selling at the Optimal Time
After Stav acquired the ChupaMobile domain, SellMyApp had the best streak of two years of their entire business, and he knew in his heart it was time to sell the business to a buyer who could care for it the way it deserved.
“I knew I needed to close that chapter in my mind because the business was mentally and emotionally consuming for me since the start. I needed my mind clear to focus on my other businesses,” says Stav.
“Everything ended up aligning perfectly. I felt so fortunate, and in the end, I sold at the right time. Since initially coming to FE International to list, and ending up opting to go through some exit planning instead, the time I spent focusing on growing the business was not a waste. I am grateful for the work we put in because I know that continued growth will happen in the future.”
During the sale process, SellMyApp had solid buyer interest, going under offer in just a matter of weeks. There was not a long waiting period between the initial Letter of Intent (LOI) to close either – a reflection of how well the business was set up and the ease of due diligence and transfer. Stav had his documentation in place, all his operation procedures covered and a team.
“Everything went very smoothly, and the selling process was swift. The training was easy because I had set up SellMyApp to run on its own. My only involvement was emotional at the point of sale. It was mentally and emotionally filling up my time, so I was ready to focus on my other businesses.” Stav continues, “Training was easy and fast, and although I committed to a 30-day training period post-sale, I decided to give the new owner more training hours to continue the smooth process.”
Stav believes there is still much potential to grow SellMyApp. “I want the new owner to succeed moving forward, and there is still so much potential to grow SellMyApp from where it is today. I look forward to seeing the heights the new owner takes it to.”
Advice to Owners Looking to Exit Their Online Business
- Not every niche will play out successfully, it’s okay to try out different niches but ultimately it is best that you narrow it down to the one you are confident will play out successfully – Focus is of the essence.
- Bootstrapping a venture, although quite taxing on your mind, body and wallet, often gives you a more grounded perspective when it comes to how you spend money and make decisions for your business.
- Don’t grow weary when you are working hard and know that it takes a while to see results. One day, you might end up wearing down your competition and buying out their domain.
- Listen to advice when it is given by experts. It can be easy to be hardheaded when advice is offered towards something that you have built from the ground up, but odds are the person giving advice, especially if it is an M&A advisor, has your best interest in mind.
- It is important that you take the time to grow, scale and build out your business to a point that it is ready for an exit. When and how you exit your business is entirely up to you, but there are optimal times for an exit, and times where you should hit the pause button.
- Working with an M&A advisor not only walks you through every step of the selling process, but they will also be upfront with you from the start. In Stav’s case, the team knew he would be more likely to reach his exit goals if he took the necessary time to grow the business to a place where multiple buyers would be attracted. Whether you plan to exit in 3 months, or 2 years down the line, it is always a good idea to get a grip on where your business is currently and what can be done to optimize it ahead of a sale to get maximum value when you do exit. FE International offers complimentary valuations consultations, so get in touch today to set up a time to talk through an exit strategy for your business.