9 ms·

Building a business, not just an app

170 points by exolymph 11y ago

exelius 11y ago
In other words, don't start with a solution; start with a problem.
FreedomToCreate 11y ago
The author is on point in describing how to create a business not just an app but he glosses over that many people develop apps with monetization as an afterthought and that monetizing an app is as complex as rocket science. Pleco had a lot already going for it before it even before it launched on iOS. Its founders had years of business experience and a strong market differentiator. So even though they had to retread their business models, they knew that Pleco had enough value that people would pay for it. A lot of other developers however, like Sinclair, develop apps for themselves, find a small user base and decide its enough to establish there own business, but usually these apps are cool but not unique. Pleco was built on licensed and unique tech, which gave its value. The author should mention that not every app can be turned into a business and that you need to create enough unique IP for yourself, so that you can grow and create value others can't. Sinclair has the entrepreneurial drive, he just didn't have the right idea to be a business.
- Eridrus 11y ago
  I really wonder what Sinclair's rationale for quitting his day job to work on his app was. I wonder if he had some sort of analysis that made him think it would be more of a success which turned out to be wrong (e.g. projecting early sales numbers into infinity, whereas in reality they dropped off), or if he just jumped into it thinking that if he built it they would come.
  - FreedomToCreate 11y ago
    Probably the "If i build it, they will come" mentality.
seibelj 11y ago
If you want organic growth, don't charge money for your app. Period. No one wants to pay money for something they can't even try, unless they are positive they know it will work for them. For example, I paid money for the Pure ad blocker because it had tons of positive reviews and coverage in the NYT. But this will not be you. Make money on ads, paid upgrades (remove ads, get premium features), and subscriptions. Show that you have value first, then it becomes very clear how much more value someone can get by paying a little extra. Especially for mobile apps, ad revenue is very high right now as freemium games and VC money has flooded the market. I get as high as $5 per click, usually around $1-2, which is much higher than it used to be.
- hellosir 11y ago
  Hi, would you mind explaining more about what type of ads you serve and which network? Thank you!
  - seibelj 11y ago
    Admob, finance category apps
    - hellosir 11y ago
      Do you do both banner and interstitial? What about native? I didn't know AdMob pays that well, usually they're mentioned on the low end.
      - seibelj 11y ago
        Banner and interstitial, interstitial happens every 5 minutes. Often people open my app several times a day just to check their financial status, triggering an interstitial every time. I'm sure finance ads pay very well. What mobile ad networks do you recommend for higher payouts? I would love to experiment.
        hellosir 11y ago
josho 11y ago
The key takeaway is the ever common mantra 'what is your sustainable competitive advantage?'. As many App Store developers have found out, design is not one. Rather, paying for exclusive license to a dictionary, and ensuring his apps are on the school syllabus was the path to success for this app. (Remind you of those TI calculators?)
- deleted 11y ago
  [deleted]
deleted 11y ago
[deleted]
charlesdm 11y ago
He's clearly not delivering enough value then, or he's not focusing on a large enough target audience. He's probably also not charging enough. Every single app that I've built has easily grossed >$30-50k each in less than 6 months after launch without having to do significant marketing. And we're talking apps built in <30 days. The app store has a massive audience; you need to focus on large enough target groups. How many people use RSS apps these days? Now that I think about it.. I should probably write an ebook on building profitable apps from a developer point of view.
- pc86 11y ago
  You're probably better off writing an ebook on how to write an ebook building these apps.
- billconan 11y ago
  I'm curious about your apps. Could you provide some links. Thanks
  - charlesdm 11y ago
    See comment above
    - billconan 11y ago
      How do you detect a profitable market before writing those apps?
      - charlesdm 11y ago
        You don't look for profitable markets, you look for groups of users. Groups of people within a certain segment will generate revenue; then it just depends on how you differentiate and how much of the searches on the App Store you can capture. A random example: there are 1.6 billion muslims on the planet. Some of those will own smartphones. Most of those read the Quran. Meaning, some of those will look on the App Store for a Quran app. If you build a good Quran app, you'll be making money. It could be $50k a year, $100k or $500k; that I don't know. But you'll be making money. Also, don't forget, even though my apps have never been featured, Apple does actively look for good apps. That can help significantly if you build something nice. But you still need to target a large enough group of people.
esusatyo 11y ago
I'd like to add that this is a great example of how a great In App Purchase can be utilised in place of free trials. People are so against IAP because of companies like Zynga, but there are good examples of IAP like this one.

170 points by exolymph 11y ago

In other words, don't start with a solution; start with a problem.

The author is on point in describing how to create a business not just an app but he glosses over that many people develop apps with monetization as an afterthought and that monetizing an app is as complex as rocket science. Pleco had a lot already going for it before it even before it launched on iOS. Its founders had years of business experience and a strong market differentiator. So even though they had to retread their business models, they knew that Pleco had enough value that people would pay for it. A lot of other developers however, like Sinclair, develop apps for themselves, find a small user base and decide its enough to establish there own business, but usually these apps are cool but not unique. Pleco was built on licensed and unique tech, which gave its value. The author should mention that not every app can be turned into a business and that you need to create enough unique IP for yourself, so that you can grow and create value others can't. Sinclair has the entrepreneurial drive, he just didn't have the right idea to be a business.

Eridrus 11y ago
I really wonder what Sinclair's rationale for quitting his day job to work on his app was. I wonder if he had some sort of analysis that made him think it would be more of a success which turned out to be wrong (e.g. projecting early sales numbers into infinity, whereas in reality they dropped off), or if he just jumped into it thinking that if he built it they would come.
- FreedomToCreate 11y ago
  Probably the "If i build it, they will come" mentality.

seibelj 11y ago

If you want organic growth, don't charge money for your app. Period. No one wants to pay money for something they can't even try, unless they are positive they know it will work for them. For example, I paid money for the Pure ad blocker because it had tons of positive reviews and coverage in the NYT. But this will not be you. Make money on ads, paid upgrades (remove ads, get premium features), and subscriptions. Show that you have value first, then it becomes very clear how much more value someone can get by paying a little extra. Especially for mobile apps, ad revenue is very high right now as freemium games and VC money has flooded the market. I get as high as $5 per click, usually around $1-2, which is much higher than it used to be.

hellosir 11y ago
Hi, would you mind explaining more about what type of ads you serve and which network? Thank you!
- seibelj 11y ago
  Admob, finance category apps
  - hellosir 11y ago
    Do you do both banner and interstitial? What about native? I didn't know AdMob pays that well, usually they're mentioned on the low end.
    - seibelj 11y ago
      Banner and interstitial, interstitial happens every 5 minutes. Often people open my app several times a day just to check their financial status, triggering an interstitial every time. I'm sure finance ads pay very well. What mobile ad networks do you recommend for higher payouts? I would love to experiment.
      - hellosir 11y ago

josho 11y ago

The key takeaway is the ever common mantra 'what is your sustainable competitive advantage?'. As many App Store developers have found out, design is not one. Rather, paying for exclusive license to a dictionary, and ensuring his apps are on the school syllabus was the path to success for this app. (Remind you of those TI calculators?)

deleted 11y ago
[deleted]

deleted 11y ago

[deleted]

charlesdm 11y ago

He's clearly not delivering enough value then, or he's not focusing on a large enough target audience. He's probably also not charging enough. Every single app that I've built has easily grossed >$30-50k each in less than 6 months after launch without having to do significant marketing. And we're talking apps built in <30 days. The app store has a massive audience; you need to focus on large enough target groups. How many people use RSS apps these days? Now that I think about it.. I should probably write an ebook on building profitable apps from a developer point of view.

pc86 11y ago
You're probably better off writing an ebook on how to write an ebook building these apps.
billconan 11y ago
I'm curious about your apps. Could you provide some links. Thanks
- charlesdm 11y ago
  See comment above
  - billconan 11y ago
    How do you detect a profitable market before writing those apps?
    - charlesdm 11y ago
      You don't look for profitable markets, you look for groups of users. Groups of people within a certain segment will generate revenue; then it just depends on how you differentiate and how much of the searches on the App Store you can capture. A random example: there are 1.6 billion muslims on the planet. Some of those will own smartphones. Most of those read the Quran. Meaning, some of those will look on the App Store for a Quran app. If you build a good Quran app, you'll be making money. It could be $50k a year, $100k or $500k; that I don't know. But you'll be making money. Also, don't forget, even though my apps have never been featured, Apple does actively look for good apps. That can help significantly if you build something nice. But you still need to target a large enough group of people.

esusatyo 11y ago

I'd like to add that this is a great example of how a great In App Purchase can be utilised in place of free trials. People are so against IAP because of companies like Zynga, but there are good examples of IAP like this one.