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ENTREPRENEUR TIPS · HUGH KIMURA · MARCH 2015

How To Do App Due Diligence For A Potential Investment

If you are thinking about investing in an app or a company with an app, this post will show you what to look for.

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If you are interested in investing in a company, understanding its assets is a vital step in the due diligence process. But if one of a company's assets is an app, you may be wondering how to do some preliminary research to find out how well their app is doing.

This post will show you exactly how to get started and what to look for. The best part is that you can get a lot of information about an app before you even contact a company or sign any disclosure agreements.

As you read this post, keep in mind that our platform only provides data from public sources. As you get deeper into the investment process, you will have access to the proprietary information anyway. But the steps outlined below will give you an excellent idea of how well an app is doing and if it is worth investing in.

Add The App To Your Dashboard

The first thing that you have to do is add the app you want to examine to your dashboard. Click on the green Add New App button in the upper left corner of your dashboard.

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Now search for the app that you want to examine. You can add any iOS app or Android app on Google Play.

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Once you have added the app, it is time to find out how well it is doing. Here are eight ways to find out more information about the app.

Category Rankings

The easiest way to see how well an app is doing is to look at how well it ranks on the Top Charts. Our Category Rankings module makes this easy.

We provide two tabs, the Charts tab and the Country Summary tab. The Charts tab will allow you to examine the charts that an app is ranking for in one country. First, choose the country you want to examine at the top of the screen.

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After you have selected a country, you will be able to see a list of Top Charts that the app ranks on, at the bottom of the screen. When you click on any of those listings, you will see a historical ranking chart above the list (pictured above).

The second part of the Category Rankings module is the Country Summary tab. This is a great way of seeing how well an app is doing worldwide, without having to check each country individually.

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We provide a summary of rankings across all countries at the top. In the second table, we provide details on each individual country.

Since an app needs to have a significant number of downloads to get ranked on the Top Charts, examining how well an app is ranking is a good place to start your due diligence. But not all valuable apps will make it to the Top Charts.

Niche apps may not make it to the Top Charts, but they may still be doing very well for a company. Now let's look at how you can dig deeper and find out more about an app.

App Profile Page

The next place that you should look to learn more about an app is its App Profile page. This will give you a good overall view of how well an app is rated, ratings trends, where their users/revenue are coming from, and much more. You can also see related apps, blog mentions and in-app purchases.

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To get to the App Profile page for an app, simply select it from the menu at the top of your dashboard.

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Review Analysis

Now take a look at what users are saying about the app. Go to our Review Analysis module and search for phrases that would be related to good and bad things about the app.

For example, you could search for a phrase like "loved it" to find out what people like about it. On the flip side, you could also search for terms like "bug" to find out about the bugs that the app has. If the review is written in another language, you can translate it by clicking on the "Translate to" menu in the upper right corner of each review.

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Visibility Score

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An app's Visibility Score is a good indication of how easy it is to find an app on the App Store. We take several factors into account when calculating this proprietary score. If you would like to learn more about it, you can read this post.

The most important thing to remember is that Visibility Score is not an absolute score. There is no maximum to Visibility Score. Therefore, you have to compare the Scores of apps that are in a similar niche.

For example, you would have to compare banking apps to other banking apps in the same country. You could not compare a banking app to a game.

Keyword Rankings

If you want to find out how easy it is to find the app in search, you should take a look at how well the app ranks for its keywords. Our Keyword Spy module is an easy way to do this.

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To the right of each keyword that the app ranks for, you will the the exact rank. Keep in mind that even if the app is ranking poorly for an individual word, that word might be part of a keyword phrase. To learn more about the value of keyword phrases, read this post.

Understanding an app's keyword rankings can give you insights into how the app's App Store Optimization could be improved. Poor rankings could be an indication of an app that has potential to grow via organic downloads.

Update Timeline

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Not all apps need frequent updates. However, it is important to see how often an app is updated, to get an idea of how well an app is maintained. Our Update Timeline module will show you the version notes for each update, as well as the user reviews for that update, so you can see how well that update was received.

Review The Portfolio

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If you want to find out about the other apps in a publisher's portfolio, you can click on the publisher's name on any of our pages. This link will take you to the Publisher Profile page and you will be able to see a summary of all the apps in their portfolio.

Store Intelligence

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Finally, our Store Intelligence product allows you to find out more about the app stores in general, individual publishers and individual apps. Discover store trends, which sections of the store are making the most money, which apps are doing the best for a publisher and much more.

Again, we do not disclose private data about an app. But our extensive database allows us to estimate download and revenue numbers, based on publicly available data.

Conclusion

So that is a quick and easy method for examining any app that you are thinking about investing in. Following these steps can give you a very good idea of how well an app is doing and if you want to get involved or not.

To get a free trial of Sensor Tower, you can sign up here. If you want to schedule a demo of Enterprise features like Store Intelligence, you can get more information here.

If you have any questions about this process, let us know in the comments below...


Sensor Tower's platform is an enterprise-level offering. Interested in learning more?


Hugh Kimura

Written by: Hugh Kimura, Head of Content

Date: March 2015

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