apps for profit

Apps for Profit

Nathan MellorCritterMap Software LLC

Followup at http://eepurl.com/d9tZjLow

Objectives

•Think about app idea

•Find your top ten

•Evaluate their profit potential.

To get started

•Make a copy of this spreadsheet (Google Drive)

•http://bit.ly/1cwrX7E

•Register at AppAnnie.com

Book Signing

• http://www.amazon.com/dp/B00GJHIGY0

• Worked for a major printer manufacturer for 12 years

• Feb 2009: “routine” meeting with boss

• Downsizing announced

• New house, new mortgage.

• March 27: Last day at work

• March 28th: Third child born

• April 2009: “Outplacement” counseling

About me - 2009

• Reeducation through the Trade ACT

• Enrolled in University of San Francisco’s Internet Marketing program

• Developing an app on a new operating system called Android

• First launched to the market June 2010.

• Started at about 5 sales a day; I was aiming for ~56.

• Paid zero taxes AND got a refund.

Nathan in 2010

•Top grossing App in “Travel and Local”

Since 2011

I have a corner office with a view

Is this you?(Dilbert.com)

Marketing FunnelHow it applies to mobile apps

Target AudienceTarget Audience(potentially interested)(potentially interested)

Target AudienceTarget Audience(potentially interested)(potentially interested)

ProspectProspect(aware product exists)(aware product exists)

ProspectProspect(aware product exists)(aware product exists)

The Internet Marketing Funnel

LeadLead(has tried product)(has tried product)

LeadLead(has tried product)(has tried product)

CustomerCustomer(paid for something)(paid for something)

CustomerCustomer(paid for something)(paid for something)

Loyal CustomerLoyal Customer(repeat sales)(repeat sales)

Loyal CustomerLoyal Customer(repeat sales)(repeat sales)

AdvocateAdvocate(recommends (recommends

product)product)

AdvocateAdvocate(recommends (recommends

product)product)

Target Audience = Outdoor Navigation usersTarget Audience = Outdoor Navigation users1% of 1.3 million activations per day = 13,000 per day1% of 1.3 million activations per day = 13,000 per day

Target Audience = Outdoor Navigation usersTarget Audience = Outdoor Navigation users1% of 1.3 million activations per day = 13,000 per day1% of 1.3 million activations per day = 13,000 per day

Prospect = see my app listingProspect = see my app listing????? - figures not available????? - figures not available

Prospect = see my app listingProspect = see my app listing????? - figures not available????? - figures not available

App Market Funnel + Numbers

Lead = installs demo productLead = installs demo product500 per day500 per day

Lead = installs demo productLead = installs demo product500 per day500 per day

Customer- bought paid appCustomer- bought paid app20% =>100 per day20% =>100 per day

Customer- bought paid appCustomer- bought paid app20% =>100 per day20% =>100 per day

Loyal Customer= bought an Loyal Customer= bought an addonaddon

22 per day22 per day

Loyal Customer= bought an Loyal Customer= bought an addonaddon

22 per day22 per day

Advocate= 5 starAdvocate= 5 star2 per day2 per day

Advocate= 5 starAdvocate= 5 star2 per day2 per day

Target AudienceTarget Audience(potentially interested)(potentially interested)

Target AudienceTarget Audience(potentially interested)(potentially interested)

ProspectProspect(aware product exists)(aware product exists)

ProspectProspect(aware product exists)(aware product exists)

Target Audience

LeadLead(has tried product)(has tried product)

LeadLead(has tried product)(has tried product)

Focusing your App Idea

The Secret Idea

•Email from stranger:

•Hey, I have a great an idea for an app that will make lots of money. I will let you develop it for a split of the profits. 

“Good ideas are common - what's uncommon are people who'll work hard enough to

bring them about”

Ashleigh Brilliant

But not all good ideas are equally

valuable . . .• Top Grossing Apps: 500

•Ranked in a category: about 34,000

•>1 million apps

• 64% have <10 ratings

• 89% have <100 ratings

Should your idea be

your passion ...•Yes.

•Doesn’t change the market.

•But it does change you

•Find passion or choose to be passionate.

•Avoid something you don’t care about

Should your idea be a hobby or

interest?•Not if you are the only one with the

hobby.

•Yes if it has mass market appeal

•Long tail products may not pay off in apps - yet.

Ex: Garmin’s outdoor/fitness division had sales of $400

million last year

What do they buy now?

How unique should your idea be?

Book Amazon Sales RankAll New Square Foot

Gardening, 2nd Edition

#4,629 in Books

Greenhouse Gardeners Companion

#23,593 in Books

The Pack Goat #678,394 in BooksPractical GoatPacking #3,054,219 in Books

Should your idea be innovative?

•Innovation is great!

•Innovation involves both risk and reward.

•Innovation is not always rewarded in the marketplace.

•Can you build on something that is already popular?

Success=Profit

•Profit(app) = Revenue(app)-Cost(app)

Profit Potential•Try to find exact dollar value of future

app.

•Come up with your ten best ideas.

•Find out their revenue potential

•Look at the cost to produce them

•Pick the best of them in terms of profit potential.

Calculating Revenue Potential

Market Research: Crushing your

Dreams.

What if there are seven apps like yours?Good thing or bad?

•Themes

•UI Standards

•Features

•Best or worst practices

•Revenue potential

What can you learn from an existing

app?

How much money are those other apps making?

Make a copy of this spreadsheet on Google Drive

http://bit.ly/1cwrX7E

Spreadsheet

Comparable apps for each idea

Free or PaidTotal Installs

Rankings

Top Paid/Free

•Based on downloads

•From the last several days - not a lifetime achievement award

•A LOT less downloads are needed to get in top paid than top free.

Rankings Hierarchy

App Annie Rank History

Top Grossing

•Also hierarchical

•Also from the last few days

•Based on revenue including iap

•Best way to gauge successful freemium products

App Annie Chart

But what about advertising revenue?

Adwords Display Planner

possible CPM?

Spreadsheet

Cost to provide?

Can you have a million in revenue

and still worry?

What is cost effective?

Two Ways to Increase Cost

1. Complexity

Faucet AppEverything but the kitchen sink app

Engineering effortYou wrote it in a

weekendSeveral

engineering years

Lines of code 300 70,000

Number of features

1 100

Number of features requested

by users0 300+

What to do when done

Work on another app

Never done

Bragging rights “My 400th big hit”

“Still working on the same app I told

you about last year”

2. Labor

•Won’t be a problem, because you are doing everything yourself, right?

•Wrong!

•Doing everything yourself is the most expensive thing you can do.

Four Ways to Decrease Cost

1. Leverage and Reuse

•Can you take advantage of existing code?

•Yours or some you can license.

•Leverage - needs more work

•Reuse - intact

•Reuse is cheaper than leverage

1. Leverage and Reuse

•Library

•presumably closed source

•Framework

•Cross platform

•Open Source

•Apache 2.0 vs LGPL vs GPL

•Complete Source Code

ReSkinning

•License complete source code

•Change all graphics, themes, names

•Release as new game/app

•Rinse and repeat if desired. . .

But reskinning is never done by big

companies?Or is it?

2. Process and Planning

•As opposed to making it up as you go along.

3. Tools

• Are great to have in the cloud for a dispersed team

• Not just software development

• Communication: Skype

• Project Management: basecamphq.com

• Tech support: Zendesk

• Design and mockups: LucidChart.com

4. Effective Hiring

•You can hire someone to do:

•Programming

•Design/graphics

•Writing/Content creation

•Internet marketing tasks

•Tech Support

4. Effective Hiring

•You can hire someone:

•For a fixed price job according to a quote

•As a part time, hourly freelance

•As a full time worker.

•Which is best?

So... do you need an office building and some venture

capital?

Where to hire

•A number of online site

•ODesk

•Hourly, fixed price

•eLance

•Hourly, fixed price

•onlinejobs.ph

•full or part time, philippines

What is cost effective?

Conclusions:

•Find your top ten ideas

•Research the revenue potential

•Research the potential cost

•Go out and make some money!