Appbackr is a marketplace where everyone can crowdinvest in IPhone apps and Android apps. The way it works is that investors prefund future sales of apps. The investor buys the copies at a lower wholesale prices and makes a profit later, when the copies actually sell in the app store. I described the concept in more detail in my article ‘Experimenting with Appbackr – Promising and Trecherous‘. In the 6 month that have passed since that review, my experience turned worse.
There are two major problems with Appbackr
- Even when Apps achieved the sales of the copies the investors have pre- purchased, then it still frequently happens that the investors do not get payed on time. The information given in the dashboard (see screenshot) is useless, because the given dates lapse without payment or notice. On March 24th, the payout schedule said I would be paid 53 US$ for sales of the SOS Friends Alert App – the date passed, no payment arrived, no information was given.
Even worse the interface is no help at all in keeping track – it just pretends the payment arrived (for the SOS Friends Alert app the status is ‘Completed’ saying 57 US$ earned 12 US$ profit, while in reality I did not receive any payments for this app so far. The backrs are left to manually keep track on their own. - Appbackr has no means to enforce agreements with developers. Two concept apps I funded (Boogie Monster and Glass Ceiling) are 6 and 4 months past announced launch date – again no notice, nothing happening. Vy Nguyen, Manager Finance at Appbackr answered my complaints in January saying: ‘appbackr will try its best to enforce the contracts facilitated on its marketplace, but as the actual contract is between the Developer and Buyer, we can only negotiate on your behalf. Similar to other marketplaces, the main communications should be between the Developers and Buyers, with appbackr’s role being to facilitate that communication. Our goal in making payment details available in the myappbackr dashboard was to help backrs of multiple apps reconcile their monthly payments from appbackr, track down exactly which payments, if any, have been delayed, and contact the developer directly as necessary. We do have a late payment notification in place, but it is only set to go out to backrs when the payment is delayed for longer than 1 month.’. That sounds pretty weak to me.
Furthermore Appbackr is taking steps in the wrong direction. They removed (without explanation) the statistics tab which I predominately used to screen and select IPhone apps on the marketplace to invest in.
Members of the management did not reply to my last emails in which I asked for status information and what measures Appbackr have undertaken to address the problems.
Needless to say I won’t invest any more on Appbackr. It is a pity, because the flaws in Appbackr will let those app developers down, that performed well and paid on time (in my case Appzilla 2, 7zipper, iCurrency Plus and Multiplying Acorns -thx).
If you have similiar/different Appbackr experiences please do share them by commenting to this post.
I am the founder and CEO of appbackr and wanted to address at least some of the points that you made here. appbackr is a peer-to-peer wholesale marketplace for apps. This means that the agreement is between buyer and seller. The nature of purchasing apps is that the buyer is reliant on the performance of the developer. We track sales and distribute payments as received. In your past post, you noted that you felt we are soft on developers. Our intent is not to be hard or soft, but to do our best to be fair and consistent and effective. Our experience is that in the small percentage of cases where a developer is late in delivering the app to the store or in making a payment, we are most likely to reach a successful outcome by contacting the developer and reaching an accommodation. In the situation that you described, in addition to the direct communication available to you, we also contacted and then resolved the matter.
Our dashboard tracks sales in the Apple and Android markets. If a developer is late in making a payment, like in any commercial arrangement, that effects the buyer. In the case of the SOS Friends Alert app, the payment has been sent to your PayPal account. As a final check in reconciling the sales report, we manually make those payments and it was our error that you received that payment after the expected payment date.
The statistics tab that you referred to was third party data (AppAnnie) and the supplier changed their terms of service and so we are unable to continue to provide that data. We are soon going to be rolling out appscore which scores apps based on qualitative and quantitative factors. You can see a preview of the service at http://www.appbackr.com/score. Many buyers contact developers ahead of time; use their own third party research tools; or only make purchases from developers in their own network. We will continue to look for services that can enhance the buying decision for buyers.
With regard to your email, our finance team received an email on Wednesday of this week and wanted to thoroughly look at your questions. You received a reply within 48 hours. We do our best to respond within 24 hours but processing some 250,000 transactions with a small team and wanting to be thorough, it can indeed take longer.
We take your points to heart and will try our best to continue to improve our model. We are working with a new concept in a new market. You are good to point out our deficiencies. We will work hard to improve on the issues you raise.
Thank you.
Hi Trevor, thank you for taking the time to comment. I did in fact receive the following answer after the article was written (one earlier email in March went unanswered):
a) SOS Alert: We received the money from the developer on the 29th but because of an error with a new system to automate our invoices, the money didn’t go out until today.
b) Boogie Monster concept app
We sent Boogie Monster a formal letter in Feb . The developer responded that the app should be complete this Spring. We are waiting to hear from him again.
c) Glass ceiling concept app
We’ve contacted the developer on behalf of backrs and waiting for a response. They’ll receive a formal letter from us next week. We spoke with them this week and they want to find a way to compensate backrs for the delay. They want to offer a higher profit to backrs. We’ll send out an email next week with that information.
d) naked gun app
The app has been submitted to Paramount for approval. After that, it will be submitted immediately to Apple.
e) Medieval Android app
There’s a bug that’s not displaying Medieval’s data, it will be fixed by Tues. The Feb. data is in our system and repaying backrs. The March sales data will be posted in late April, when we receive it from Google.
We’re sorry for the delay, we were trying to get lots of answers back on several issues.
Please send me the email in March for which you did not receive a reply. We looked and could not find an email that did not receive a reply. I will research it to see what happened. Replies sometimes do end up in a spam folder–and it is possible there was an error on our part. In any case, we want to make sure to work to perfect our operations and your feedback is helpful to us.
Through our platform, we enable direct communication to the developer–and give tools for developers to communicate directly with backers. However, sometimes backers contact us, as you have done and then we will contact the developer (our efforts on your behalf are described above as you have published our response). In this case, we are facilitating the peer-to-peer relationship that you have entered into.
By its very nature, a peer to peer market requires individuals to interact with individuals. You had indicated that you were surprised more enforcement options weren’t available at a company to peer level. I would be curious to hear your thoughts. The nature of creative works is such that there are delays. The Paramount title, Naked Gun, is an example. I have seen the game–and it looks great. As part of the contract to license the title, Paramount must approve the title before it is submitted to Apple for approval. The developer gave his good faith belief that the title would be live on X date, but the approval has taken longer.
Some apps will be successful and some developers will be better communicators than others. That is the essence of a peer to peer market. We are working to create more tools to provide more transparency, but when a developer is late in submission or suffers a setback (loses a coder, etc) there is a consequence to backers. That is why some backers choose a portfolio strategy; other backers only choose to buy from developers they know and other backers only choose to back apps that have already been approved. Concept apps carry a 50%+ profit and they do, indeed, pose delivery delays and risks not attendant in lower profit apps that are already in market.
As someone who is very interested in peer to peer financing, I would be interested to hear your thoughts directly. You have my email and I would be very happy to speak with you.
Thanks again for taking the time to share your thoughts and I hope to have the chance to speak with you.
Trevor, Claus,
interesting discussion.
Being an App developer myself although coming here mainly as someone interested in P2P financing concepts I would have a few questions:
1. A technical one: Trevor, you mention you will add statistics data from app-score.com (that’s where your link points to). What kind of data will that be and how is it being produced. Right now, it’s obviously only a UI dummy (it always returns a score of 7.9) and what you see in terms of scores is just a rating of kind. My experience with the field is that there are currently two kind of statistics services: a) those who, using the developer’s credentials and approval – draw their data directly from the App Store/Marketplace and b) those who are extremely unreliable, at best. Android is
2. As I understand the comments above, Appbackr doesn’t get involved in resolving issues, enforcing contracts, contract standardization and such so doesn’t really add value for the investor in terms of offering some level of security in dealing with companies or individuals they have no chance to screen themselves. What’s the value add Appbackr is providing compared to e.g. kickstarter where I – as an App developer – will certainly find a lot more liquidity?
Thanks for this discussion and the open answers!
As a developer working on one of the projects mentioned, I wanted to let you know we are working on getting Naked Gun out asap. It is in Paramount’s hands for approvals and we are hoping to have it in the marketplace early next month.
Game development is a unique art from, you are constantly fighting between getting the product out on time, and getting the product made well. It’s a hard balancing act that makes it difficult to hit deadlines and quality expectations at the same time.
Appbackr is helping small developers like ourselves try and make fun games that big publishers may not see the value in, and in my opinion that’s a great ally to have.
The best way to pay back the backr’s, is to make something that is worth their investment. I hope that is what we have done.
Jorg,
To your two questions,
1. Yes, appscore is being developed which is based on reviews, sales, semantic analysis of reviews, etc. It will be live in a couple of weeks. We are planning to allow developers include their data from Google Checkout, ad networks and analytics companies. There are many other sources, appdata.com, appannie.com which backers also avail themselves of.
2. In terms of appbackr’s role, we provide contract standardization; we obtain sales reports to track sales and handle payments between parties. Actually, in this thread I provided an example of where appbackr has intervened. appbackr preserves the right to intervene and we do where we are asked to do so and it is appropriate, like, for instance when terms of service are violated. The question of communication between developers and buyers prompted the discussion on the nature of the contract and that is indeed between buyer and seller, like it is between developer and backer on Kickstarter, etc.
I am not quite sure what you mean by liquidity in these circumstances. As a developer, some prefer Kickstarter because it does not require repaying backers and that of course has its advantages.
Please feel free to contact me directly if you have any questions as I do not normally monitor this blog.
I just yesterday listed my app on appbackr. It’s called Gadzookery, which is an anagram based word game where players create a sentence off of a target word.
I’ve read two of your articles concerning appbackr with interest. Most of the ground work in our app has been completed already and we’re scheduled to submit to the App Store early September. That we’re close to already having the app finished I believe is a key point in choosing an investment opportunity. Choosing one too far out leaves too many variables in between.
As an honest, and decent human being, I encourage you to give appbackr developers another try. Us developers need investors like you. Perhaps making a small investment on my app will be the investment that earns your trust on appbackr again.
Simon, I wish you the best. In my view the situation has not approved. Payments are unpredictable (“estimated payout” is a joke), the Glass ceiling app is now 8 month past scheduled launch with no information …
Thanks for the response. Obviously I can’t say too much on the glass ceiling app as I know nothing about it. However it does sound they weren’t far enough into the project to give investors a real confidence. I’m sure they hit unforeseen problems along the way. Investing before any builds of the app have been completed sounds risky to me. I held back looking for funding until I knew our launch date was in close reach. If I were looking for investment opportunities myself I think I’d have more confidence in a project either close to completion, or already completed. I’m not a high risk taker by nature. I prefer the safer bets.
Best Regards
Simon, as said: all the best for you app!