On The App Store Hype

My name is Kenneth and I write cool Mac and iPhone software. This is my personal weblog where I post about stuff I find interesting. I usually write about Mac development, the business of shareware and the Mac community in general.

[NSBlog date:@"30 May 2009"].comments = 3;

A while back, TechCrunch covered yet another article complaining about the App Store being more of a Lotto than a marketplace. Setting aside the App Store’s numerous other issues, coverage of iPhone app developers has been divided into two extremes: reassuring yet unlikely success stories, or depressing yet much more likely failure stories.

The general question in all of these articles is: “Can an average guy become a successful iPhone developer?”. The answer depends on how you define success, and on that topic I can speak from my own experience.

If, to you, success means making a million bucks overnight you will most likely be unsuccessful. To me, success is defined as the return on my investment (both in time and money) on the project. In my previous article, I mentioned making somewhere around a hundred dollars a day on iLaugh. However, I didn’t mention how much I invested in the project.

The first version of iLaugh and its subsequent revisions took me very little time to create. I estimate that I invested between ten to twenty hours of my time to create iLaugh 1.0. At my asking rate of $100 per hour, that represents a $1,000 to $2,000 investment. The server running the first iteration of the iLaugh API cost me about $100 per month to maintain.

If you look at the numbers for iLaugh from previous months, I make over $3,000 monthly (for a total of over $8,000 so far). Thus, I consider it a success.

Many people, in response to my previous article, said that I too, was one of the lucky ones, albeit on a smaller scale. And while that may be true, considering the low quality of that first iteration of iLaugh, a more carefully crafted app would likely have done better.

I believe the potential for success is relative to the investment put into anything.

If you look at the familiar success stories, many of them involve reinvestment and good marketing. For instance, Tapulous hit the jackpot with their Tap Tap games. Being good friends with one of their employees, I know exactly how much work goes into their production.

Perhaps one of the most talked-about success stories is Trism. Its developer, Steve Demeter, made an insane $250,000 in just two months. What I believe is the key to Steve’s long-term success, is that instead of buying a fancy sports car, he reinvested his money into founding a sustainable business.

Part of reinvesting, and a facet of development often ignored, are things that a typical developer can’t do. Most importantly: design, copywriting and marketing. These are things that will most likely have to be outsourced. Developers are reluctant to do that, because it’s very costly, but in the end, ignoring it is going to cost them the popularity of their application.

I view iLaugh 1.x as a catalyst towards bigger and, hopefully, even more successful endeavors.

In fact, I have already put a big part of my (in comparison to the numbers above, quite mediocre) earnings into the second iteration of iLaugh. I’ve hired a bunch of people much more talented than I am in their respective fields, and iLaugh 2.0 is coming along really nicely. It will be entirely different and nearly incomparable to the first iteration. There are some very cool things coming.

So, responding to my initial question: “Can an average guy become a successful iPhone developer?”. Yes! An average developer can be successful in the App Store. But it takes hard work, a lot of time, money, and perseverance.

This entry was posted on Saturday, May 30th, 2009 at 7:05 pm and is filed under Apple, Articles, Business, Internet, Rants. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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3 Comments

Santiago Lema screams

May 30th, 2009 at 9:53 pm

I mostly agree with you. Working on the appstore is like working in real life. Heck, some people can even make money selling coffee cups but it doesn’t happen overnight. Like any business it requires hard work.

From my own experience, the success of an app isn’t always tied directly to the work you put in it. Some of my apps required more work than others but brought little benefit. For example my Fearless Brain game, which is pretty simple but still took some days to build and has its own website, is definitely a total flop (as in 0-2 sales a day now and max 10-15 a day upon launch). One could argue that if the game was more elaborate it could sell more, but it could also be additional wasted time. It’s always hard to know if you should be betting more or stop the losses. I ended up making it available for free (with only one additional ad but keeping full functionality). The ads on the free version also get me a buck or two a day (for a rather low total of 6k free downloads).

The most valuable thing I got from this app is the enjoyment to see how some players from Asia have an suprisingly good memory and a will to beat their own score which never ceases to amaze me.

But at that rate that app will basically never get me back the virtual money I have put in it (a few evenings of hard work coding and designing the app and the website).

I have been writing several apps during my free time (as seen on smallte.ch), all intentionnally rather simple because I didn’t want to waste 20k worth of developement on any project while I didn’t have any experience with the possible returns, not to mention it’s better while learning an API not to start with a huge project since once is bound to make mistakes.

So far my experience has been similar to yours, sadly with lower numbers however. I have found also that advertising is much more sustainable than sales in the long run. That said avertising of course is only viable for apps that get used on a daily/weekly basis. With all my apps I now get about 20-25$ a day from advertising, most coming from apps that require daily usage or at least regular usage. Anyway 20$ is about twice what I now get from constantly declining sales (most coming from my Convert Any app). This top selling app has now brought 1784$ total since its launch in December. It’s still less than the virtual amount it cost to develop originally and sales are just getting lower and lower everyday. Ad revenue on admob on the other hand has been steadily increasing.

iLaugh lite is great in terms of advertising because it has a recurring usage, much like a weather application. If you want to go for advertising try to pick a subject with changing information to which people will come back every day.

Another thing about advertising is that you never know which one will have a high click rate. For some reasons one of my apps gets a click rate of around 4% while another gets about 0.5%. As a result one of them is viable even though it has less traffic than the other.