Apps for Profit Nathan Mellor CritterMap Software LLC Followup at http://eepurl.com/d9tZj Low
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!