How To Launch a Lean Startup: The Apptopia Story

Jonathan Kay launched his startup while working on the product, thanks to early press coverage that excited interest.
Strategic Facilitation & Ideation, MatthewEMay.com
April 11, 2012

"Lean thinking" has taken root and grown tremendously in the startup efforts of entrepreneurs in the U.S. over the last eighteen months. Partly driven by the exigencies of the marketplace and economy, partly driven by the reality that most startups using the old model of "plan-fund-build-launch" simply fail, the lean startup model has often shown to be a more sensible approach.

But lean thinking applied to startups is still in its infancy, and would-be entrepreneurs wishing to employ the method on their launch journey are learning the way along the way. So it helps to have a current example or two to provide a few guide rails.

Enter the Apptopia story. What's interesting about Apptopia, a newly-launched online marketplace for mobile apps, is that the founders launched without a real product.

Apptopia was nowhere near ready to launch when TechCrunch wrote about them. In other words, TechCrunch told a story when there really wasn't one yet to tell. Or was there?

TechCrunch had published a piece about an app developer who, being frustrated over lackluster sales and exhausting effort of getting and maintaining an app in an app store, decided to sell his app on eBay–not the client version, the developer version, source code included. In other words, eBay was working as a marketplace for developers to sell their apps to businesses wanting to market them.

And that's the essence of Apptopia idea. How did TechCrunch get wind of Apptopia when it was still in the shadows? I discussed the goings-on with the startup's co-founder Jonathan Kay (formerly Ambassador of Buzz at Grasshopper) to get the inside scoop on what was happening behind the scenes, and how they managed to get top shelf publicity with nothing yet to show or tell about.

"It's true," he tells me. "when TechCrunch ran that eBay article, I did a few simple things, like engage in the comment string, send an e-mail to the TechCrunch tips line and send a tweet. The opportunity was too good to pass up. We knew our idea had merit, so why not? We got lucky–it worked. TechCrunch wrote about us, in a piece simply called "Apptopia". That was January, and we started getting customers right away even though we were completely offline and over three months from launch."

"The reality is that Apptopia launched in parallel with building the product," explains Jonathan. "This allowed us to do three really important things: First, prove out our  idea; second, learn a lot about our potential customers–app buyers and sellers–and ultimately build a smarter product; and third, create traffic. Most people think that on 'launch day', magic is supposed to happen when you push the 'on' button and go live, but that's hardly ever the case. If you really want that magical launch, you have to work to frontload things, and launch before launch. We were getting over a hundred hits a day and we didn’t even have a product!"

Jonathan revealed that not only did he and his partner Eli Sapir get much smarter as a result of this, but they had investors proactively pitching them, and their current investors began asking to put more money in.

"If you think about it," explains Jonathan, "Not only did we have a good 'big' idea, and strong backgrounds as entrepreneurs, but we actually reduced the risk of the investment by closing sales pre-launch."

Getting those first customers is a real challenge for any entrepreneur, and I asked Jonathan to break down his overall strategy for me.

1. Make it personal

"I was fortunate that I had a very large network of entrepreneurs and friends from my time at Grasshopper," Jonathan explains. "I reached out to every single one of them, but not with one of these mass emails. I sent every single person a unique, personal email. I explained how they affected my life, what I was up to with Apptopia, and that I would love to catch up and tell them more. I spent 20-30 minutes talking to every once of these people. Did all of them know mobile app developers? Few did. But nearly everyone knew someone who was connected to an app developer."

"I was able to talk to all of those developers–our target market–and get them to refer me to some of their friends, who were all mobile app developers. I did this for six weeks straight and was able to network myself into all sorts of different mobile pockets throughout North America and some parts of Europe. Not only did this result in great feedback and customer development, it resulted in me talking to a ton of people who wanted to sell their apps, and it got our name out there. When someone asked a question about selling apps in a forum, we would start to notice our name being mentioned. The effort got us on the relevant radar screen."

2. Tell The world

"Never ever be scared to tell people your idea," Jonathan tells me. "I took a tell-the-world approach, even though it was two months before we had a product. I did this because now whenever anyone thought of a marketplace for mobile apps they would think of Apptopia and Jonathan Kay, not whoever our competitors would soon be. You might ask, aren't you scared of someone stealing your idea? Nope. The reason is that I am absolutely certain someone is already building this, and I'm betting on at most a six-week head start. But I figured if I told the world when I did, the world would associate a mobile app marketplace with Apptopia, simply because we were the ones out there talking about it."

3. Join the conversation

"While we certainly did not plan to get tons of press pre-launch," notes Jonathan, "we made one unconventional decision. We decided to be reactive. That meant simply that we weren't going around to all of the big media outlets sending emails to their Tips folders. What we did was, read a lot, listen a lot, and strategically, organically seed Apptopia into conversations that it made sense. That's how the TechCrunch piece came about, as well as the Boston Globe, Boston.com, Xconomy and Phandroid."

4. Old school first

"We created an offline market, pre-launch," Jonathan begins. "We called it the 'dealroom,' and it really worked for us. Based on the first three strategies, we got over 150 apps for sale and about 60 buyers. I personally talked to all of the sellers and got information from them about their apps. I then connected with buyers, found out their preferences and got them a unique login to the deal room. I had them narrow down the apps they were interested in to shortlist. Then I walked them through all of the private sales data from those apps, and essentially just turned into an old school broker: talking to both parties trying to close sales. Through this process not only were we able to close a few deals, but by launch we had over 200 people already actively involved in our site."

"I guess I did the unscalable," Jonathan concludes. "Launching pre-product is all about the unscalable. What is the most you as one human can do? What is the most you can learn? Sell? If I had to break the Apptopia strategy down, it comes to really those four things."

Photo credit: Apptopia