I'm an iPhone developer, and I'm smack-dab in the center of your target market - just like drewcrawford.I actually had the same business idea that you're worki

I'm an iPhone developer, and I'm smack-dab in the center of your target market - just like drewcrawford.I actually had the same business idea that you're working on about 5 months ago, and decided not to pursue it. I love HN, so I'll share the design of my system/the thinking behind it. The problem to me is that you're asking developers to partake in (at least on the face value) ROI negative advertising. There's actually nothing wrong with ROI negative ads, iff they deliver network effects that make the ads ROI positive over time or the lifetime value of a user is more than the price of the app. We (developers) d*mn well know that natural network effects are not strong enough to make ROI positive when Apple is taking 30% of the pie each time. And for most iPhone Apps, the lifetime value of a user is that $.99 cents that the user pays when they buy the app. So there are very few iPhone apps who your current system can benefit. Because there's very few apps you can help, you're unlikely to get any traffic at all unless you're already famous/ willing to spend a ton on ads. The solution is to embrace social networks and understand that sometimes, people need to pay for the stuff they're getting.Less cryptically: 1)Integrate with facebook connect and twitter. 2)Require users to send a status message to both, effectively endorsing the app you're giving away to their friends. This solves your network issue as best you can (and it's how they'll be paying you). 3)Instead of holding regular sales of apps, go the groupon route, where the sale is almost a game, and the paid app that people can get for free changes regularly. This way you can get people to tweet/update about your app, and if you don't get the developer say 1000 downloads, you can say that the sale failed, and give out no refunds for the app purchases. This would entice users to seriously get their friends to download the app through your link (or however you track CPM). Be sure to keep track of your users (and their referrals) email addresses, so you can update them every 4 or so days with your new app that you're giving away. 4)Stop trying to sell your site as "earning money", and instead sell it as "get paid apps free". The difference in the psychology of the users that you'll attract will be HUGE.Plus nobody wants to earn 20cents per hour, but people would spend the same time to save $1. 5)I would start this business with the top 10 apps in the appstore, and without their permission. For this to work, you'll need about $3000, but it'll almost guarantee your success. People already know these apps, so you're lending their legitimacy to yourself by giving them away. I would also send a post to techcrunch (& etc) in advance about how you're "giving the appstore away for free" - they love apple and would love to write about you, especially if you send them something with a sensationalist headline like I just wrote. You could give away doodleJump, then angry birds, then .... And go down the list. If you want more of my research/ more tips for success in this business, email me: stephen at brownianm.com