Why "Last Month's Revenue" is the most dangerous metric when buying mobile apps
If you are looking at marketplaces like Flippa or even private deals, the first thing you see is the MRR. Most sellers want a 2x or 3x annual multiple based on that number. But in the subscription business, that number is almost meaningless without knowing the traffic source and the "age" of the subscribers.
We’ve seen apps doing 5k a month that are worth more than apps doing 15k. Why? Because the 15k app is usually riding a wave of incentivized installs or heavy Meta spend. The moment the buyer takes over and stops the ads, the revenue falls off a cliff.
When we analyze deals at AppRock, we ignore the peaks. We look for the "tail." If an app has had zero marketing for a year and the revenue is flat or slowly declining, it’s a predictable asset. You can model that. You can't model a spike. We look for "boring" apps in categories like utilities or niche games where users stay subscribed because they simply forgot they have the app or actually use it once a month.
The goal isn't to buy a rocket ship; it's to buy a bridge that collects a toll every single day. If you are looking to get into this space, stop asking "how much did it make last month?" and start asking "when was the last time you spent a dollar on ads?"
We’ve seen apps doing 5k a month that are worth more than apps doing 15k. Why? Because the 15k app is usually riding a wave of incentivized installs or heavy Meta spend. The moment the buyer takes over and stops the ads, the revenue falls off a cliff.
When we analyze deals at AppRock, we ignore the peaks. We look for the "tail." If an app has had zero marketing for a year and the revenue is flat or slowly declining, it’s a predictable asset. You can model that. You can't model a spike. We look for "boring" apps in categories like utilities or niche games where users stay subscribed because they simply forgot they have the app or actually use it once a month.
The goal isn't to buy a rocket ship; it's to buy a bridge that collects a toll every single day. If you are looking to get into this space, stop asking "how much did it make last month?" and start asking "when was the last time you spent a dollar on ads?"