About a year ago I was contacted by several schools to design and build a complete classroom management application for android. I found a developer who agreed to work on it with no down payment but payment on final sale.(later they received good faith money to keep the project going.) When the government shutdown took place the grants the schools were using to pay for the project disappeared and I never even saw one cent. But the programmers misunderstood and instead of building a demo for me to shop around and find new buyers for they built the full version and sent me demos to show to buyers. Since the government shutdown I have not been able to get any schools to try it out and with my extremely limited resources I am not able to market it beyond schools in my area. The design took a little over a year of work and discovery to create and it could be a huge player in schools if deployed properly. The problem I have is that everyone is backing out on me including my investors. Now the programmers want their money as they are seeing everyone else backing out and are demanding payment within the next 4 weeks. I have tried using brokers and websites to sell it but am now at the end of the line. The project has racked up a bill of nearly $100000. I am currently short $70000 to pay off the programmers and am more than willing to take the loss of the 30000 so that this does not leak over into my personal life and threaten my home with the debt. My thing is that I need real advice to get it sold and paid within the next 3 weeks so that it can be over and I can devote my time back to other projects that have healthier ROI with my limited resources.
Please clarify ;) the situation :
- do you have a contract with developers ?
- do you own the app ? or does it belong to the developers until you pay them ?
- why are the developers asking payment ?
- do you have a running app ? which needs does it covers ?
- did you set a company ?
- who are your investors ? why they don't help you ? what do they expect ?
- do you have schools using your app (even for free) ?
- can we see the app features ?
- how many competitors do you have ? what is your unfair advantage ?
- why did you spend one year on this without a real customer ?
- why are you looking for a company rather than paying customers ?
- who are your customers ?
- what are the 3 main problems you solve for your customers ?
- do you know schools that uses classroom management apps ? which apps ? how much does it cost them annually ?
- do you want to stop or continue this project ?
- have you ever heard of "Lean Startup" ?
I'm sorry to hear about your current predicament. No matter what happens in the next three weeks, I would devote a good portion of your current thinking and planning to what will happen in 3 weeks, assuming that you can NOT pay the $100,000 bill. By knowing what is most likely to happen if you don't get what you need to get done done, you can be more prepared for the worst case scenario than by ignoring those details until 3 weeks from now.
Unfortunately, you have many things working against you, not the least of which is that any time a seller has extreme time pressures, they are at a disadvantage. Any buyer or investor will discover your time pressure and the reasons why you are at where you're at, which will put you in a considerably weaker position to negotiate. $70,000 for any asset sale of a product that failed to achieve traction is considerably high, higher than many apps currently listed for sale, so unfortunately, I would say that it's highly improbable that you will achieve your minimum sale price in your 3 week deadline.
The last thing working against you is that it seems that you have run out of energy and the will to survive. When an entrepreneur runs out of their will for their company to survive when it's struggling to do so, the Company inevitably dies.
If you have energy left, then I would do everything you can to buy more time with your contract engineering team. Many professionals aren't even really reactive to email from now through January 6th, and then that first week back, are digging-out of an avalanche of more urgent emails and requests. So 3 weeks will likely go back before you can even get an email back to schedule a meeting which might be between 1 to 3 weeks after that email exchange.
I would say that if you want to get back on the right path, then you'll need at least 3 months to resolve the issues with your contract team, and put yourself in a position to even potentially raise money.
But based on you indicating your belief that other projects have a better return on investment, it doesn't sound like you lack the motivation to keep this going.
Therefore, I think the only potential avenue out would be to offer your resignation to the investors and creditors and find a way to get the developers to take over the Company by converting their debt to equity thus leaving the investors with still some potential to see their investment returned in the future, should the developers find some way to monetize this.
That's all the help I can offer not knowing the granular details of your scenario. Normally I would offer a call, but in this case, I think you're better advised by a lawyer who can review the actual state of corporate affairs including the contractual relationship with the developers. If you have documentation that makes it clear that they have far exceeded their authorized scope, then you might have grounds to dispute a significant portion of their bill. But either way, it sounds like at this stage, you should be consulting counsel as to your next step.
I'm hopeful this is at least somewhat helpful despite it not being the answer you seek.
Tom gave you great advice. I would like to add this...Things are seldom as bad as they appear. If I could change one thing about my past 30 years in marketing and business (and life) it would be that I would worry less.
It appears that you need to figure out how to clear the debt through sharing the equity and/or sharing the responsibility.
Good Luck and Keep Your Head Up!
Michael T. Irvin
"Get To The Top Without The Slop"
A lot of Android developers and users alike assume that Google's Android Market is the only place to download free and paid apps for the platform. Most of these app superstores have no developer fees, but the revenue models vary greatly. For a comprehensive list of mobile app stores that serve the Android user community, along with app catalogue and download data.
You can read more here: https://www.developer.com/ws/android/app-market/where-to-sell-your-android-killer-app.html
Besides if you do have any questions give me a call: https://clarity.fm/joy-brotonath