Tuesday, July 29, 2014

Trying Out a New iOS Monetization Strategy, First 2 Months Stats

With my latest app, Vima - GPS Run Tracker, I decided to try a new revenue model. To be fair, it's not really a new revenue model, it's just new to me. It's also not very common for mobile apps. It might be a big ask, but I made the app free with an IAP for premium features that is recurring either monthly or yearly instead of just a 1 time purchase. It is not automatically recurring, partly because that would feel dirty, and partly because it would be tough to get Apple to approve it. If a user wants the premium features, they have to click the button again each month (or year).

The reason for trying this is simple. I'm trying to build a sustainable business. Hopefully one where I can eventually hire employees etc. That is really hard to do as an indie app developer as noted by some popular recent posts here and here. I've been on my own for over 3 years now, which frankly feels like a pretty big success by itself, but it is definitely harder to succeed now that it was in the beginning. There are a lot of indie devs that are either eating ramen, or they are back at a 9-to-5. While I've been able to exceed my salary at my first job out of college, I haven't quite gotten to that next level of huge indie success. I've just made a nice lifestyle business out of it thus far.

Getting to the next level means taking some chances. I'm going to try new ideas and new monetization strategies. The first of which is the subscription model. I've spent a lot of time on this latest app, and so has my designer (freelance, but I really wish I could hire him full time). That being said, we can't continue to spend all of our time improving it and updating it unless we can convince people to pay us for that time. People have been paying subscriptions for software for a long time. I don't see why it would be unreasonable to do the same for mobile apps. Just a tiny fee each month ($0.99 in our case, or $0.50 if you pay $5.99 yearly). Users give us a little bit of money each month so we can eat and stuff, and in exchange we give them a great piece of software that solves a problem in their life.

Of course, that sounds great in theory, but how does it work in the real world where you have to convince people to part with their hard earned cash? The moment you've been waiting for, numbers and graphs! It actually has worked better than I expected. Of course, I set the expectations bar pretty low for this. It's nowhere near something that can sustain me or other employees yet, but it's a decent start for an experiment.

Downloads : 22,305

Best Day: 458

Average Day: 323

1 Month Upgrades: 245

1 Month Upgrade Profit: $171.22

1 Year Upgrades: 243

1 Year Upgrade Profit: $1021.79

Combined Upgrades: 488

Total Profit: $1193.01

Conversion rate to any paid - 2.19%


Downloads



User Sessions

This user session graph is the one that actually gets me a little bit excited. We are having pretty good retention numbers. People like the app, and they are using it consistently. Our downloads aren't where I want them to be, but they are higher than many many apps on the store. 

Our conversion to paying users is better than I expected. Everything I've read says that good numbers are between 1-5%, and only the best of the best get anything on the top end. Considering there is only 1 thing to buy, and it isn't a 1 time purchase, I think > 2% conversion is pretty good. 

Obviously 500-600 dollars a month isn't going to allow me to retire anytime soon so where do we go from here? There are lots of questions that remain to be answered. 2 months is really too small of a sample size to find out how well the recurring part of this equation is working. The conversion rate is very promising in my opinion, and there have been people re-subbing after their first month, but I haven't done the math to see how many. At this point there just aren't enough people who have hit that point to give really meaningful data. 

Frankly it won't be that meaningful until we get out 6-12 months from now. As long as we keep some percentage of new users each month the number should go up. Of course, less people run in the winter so I fully expect some of the numbers to go down, but I'm really interested to see what happens next spring/summer. Will people still be using the app in a years time? Will we have 12 months worth of users subbing, including some people re-upping on the yearly subscription? I have no idea, but I'm interested in finding out. 

The biggest key to the overall success of the app is going to be getting the download number up. I'm pretty happy with the recurring experiment so far. The conversion rates are similar to what I've seen on cheaper 1 time purchase apps. Once you convince people to pay you anything, convincing them to pay a little bit more doesn't actually seem to be that hard. The problem is getting more and more people to find the app in the first place. 

So far, we haven't put much money into promotion, just a few tiny test campaigns on Admob to get a feel for click through rates on different ads and a small Twitter promotion to try out their new targeting options. This next month we are planning on wading a little bit deeper to try and find a way to increase the downloads further. I've got a few outside of the box ideas as well as few other ad networks to try including Facebook. 

It's really hard to advertise with an ARPU of 5 cents, but you have to keep in mind that you don't necessarily have to have a measurably positive ROI for the advertising to make sense. Increasing downloads helps on so many different levels. More downloads means you get higher rankings in the search results and in the top category and overall rankings. Higher rankings means more organic downloads. More downloads means more users to share your app on social media and other offline word of mouth methods. This also creates more organic downloads. Finally, more users means more reviews, which are key to converting people once they find you in the store.

I hope I can find ways to increase my ARPU in the future. There are several possibilities for this including adding ads (currently even the free version is ad free other than promotion of the premium upgrade). Another option we've considered is adding a store to sell branded items such as clothing or car magnets. While I wouldn't expect huge conversions, every little bit helps. This would also be a method of advertising any time someone wears a shirt or puts a magnet on their car. Getting people to pay you to spread the word about your app seems like a huge win, even if not that many people ultimately do it. Also, there is certainly the hope that the ARPU will naturally rise somewhat over time as people upgrade multiple times. 

All that being said, obviously I can't be too excited about several dollars for acquiring a user. That won't be profitable ever. I'll have to find ways to get conversions for less than $0.50 before I'll consider putting more money into a certain area, and probably less than $0.25 before I'm excited about putting more money there. We'll see how that goes in the coming months, but that's for another blog post. 

Conclusion

For those jumping to the bottom to get the cliff notes version:

1. We've been able to get a ~2.19% conversion from free users to paid for either monthly or yearly access to premium features of our app. Overall I'm happy with this rate, and it compares favorably with other apps. It seems once you convince someone to pay you, it's not that hard to get them to pay slightly more.

2. We don't have enough downloads to make this sufficient to sustain 1 or more employees. Thankfully it isn't the only app in my portfolio. A handful of apps making 500-1000 dollars a month can sustain 1 person easily. That being said, I'd prefer to have a smaller number of apps making significantly more consistently. To build something more than a lifestyle business an app or suite of apps needs to be significantly more profitable. To continue providing major updates an app needs to make more than a few hundred dollars a month.

3. The next step is finding ways to raise our ARPU, and more importantly finding more users.




If you've read this far and are interested in the mobile app market you may want to check out my book on how I make money on the mobile app stores called Building an App Business.
 


Monday, June 2, 2014

Big iOS App Store Changes for Devs Coming to iOS 8

I've talked at length about the iOS App Store in the past. After the huge Chomp App Store search changes in the summer of 2012, I was one of the first people to notice and write about it. I talked about the major changes in iOS 6 when the new App Store previewed. Both of those changes were pretty negative for my business, but I quickly adapted and 2013 was my best year yet. 2014 is just slightly behind 2013, but I'm hoping that my latest app release will help close that slight gap.

WWDC started today, and with it come more major changes to the App Store. This time, I'm actually really excited about them.

Spotlight Search

Not exactly the App Store per se, but the first major positive change is that now the Spotlight search will search the store for apps you don't have, and not just apps already on your device. I'm not sure if this will have a huge impact on download numbers, but added visibility and a new window into the store can't hurt.

Permission for Family Downloads

As an update to parental controls, instead of just not letting kids download stuff, they send a notification to the parent with the option to either allow the download or not. This probably won't effect me, but it's pretty cool. 

Killed "Near Me" and added "Explore"

I always found the "Near Me" tab to be useless, and I'm glad it's getting killed. It looks like it will be a small part of the new Explore tab instead of taking up so much valuable real estate. I'm not entirely sure what is going to be in the new tab, but it is for category browsing and that is a good thing. It can only mean more visibility for apps, and that is a good thing. I suspect I have exactly 0 downloads originating from the near me tab. 

Continuous Scrolling Search

In 2012, after the new App Store came out with iOS 6, I said that the easiest way to improve it for both users and more specifically for developers was to get rid of paging. Previously, with a list of icons, the top 25 of a search were really in the running for at least getting seen, and the top 5 were all visible at the same time. With the iOS 6 store search, that switched to a card view that showed 1 at a time, and scrolling through it was paged. That makes it slow, and it means that users likely don't get past the first few options. Being #1 for a search is a HUGE bonus over the rest of the list.

Well, thankfully Apple clearly reads my blog, though I must say 1.5 years is a long time for this small change I suggested. In iOS 8, we are going back to a continuous scrolling list, but keeping the new "card view" that includes screenshots and the ability to download the app directly from the list.

I'm not sure how much it changes things, but the new view also goes back to the vertical scrolling list from the current horizontal scrolling. 

App Bundles

I'm not sure how much this changes things for me, but they are also adding the ability for developers to bundle their apps. If you have several apps in the same genre, you can now bundle them together and offer likely offer a slight discount for people buying them all. This is a small but nice addition for those that can use this. I suspect this will be a great feature for indie game developers trying to cross promote their other work. 

Conclusion

Normally, Apple changing the App Store scares the crap out of me. WWDC and new versions of iOS are exciting for me, but they also make me very nervous. In 2012 my sales absolutely tanked after the new store was released, and I had to work very hard to adjust and come back stronger. Perhaps that's a good thing, but that doesn't make it any less scary when my livelihood depends on it. These changes don't scare me too much though.

There's always going to be a little bit of nervousness because of the black box that is the App Store. I'm not entirely sure where all my downloads come from, but that being said, all of these changes look great to me. I don't think any of them lower my visibility, and some of them definitely have the chance to raise my visibility. If you believe you are doing quality work, then the biggest key is to just get that work in front of people. On that note, I'd be remiss if I didn't at least link my new app, Vima - GPS Run Tracker. I think it's pretty solid, but now the key is just getting it out there. I think the new App Store will only help it.  If you like running, check it out. 




If you've read this far and are interested in the mobile app market you may want to check out my book on how I make money on the mobile app stores called Building an App Business.
 

Monday, January 13, 2014

Jelly isn't a Social Network, but it is Interesting

Jelly is a new "social network" that recently launched from one of the founders of Twitter. The founders call it a cross between a search engine and a social network. 
Using Jelly is kinda like using a conventional search engine in that you ask it stuff and it returns answers. But, that’s where the similarities end. Albert Einstein famously said, “Information is not knowledge.” Knowledge is the practical application of information from real human experience.
Jelly changes how we find answers because it uses pictures and people in our social networks. It turns out that getting answers from people is very different from retrieving information with algorithms. Also, it has the added benefit of being fun. Here are the three key features of Jelly.
Essentially, you snap a picture, add a question, and send out to everyone within 2 degrees of you on Twitter and/or Facebook. See something unusual and you don't know what it is? Snap a picture, circle it, and see if someone else knows. I saw a post from Mark Zuckerberg today asking what type of spider was in his shower. 

As far as I'm concerned, it's far more similar to Quora than it is Twitter or Facebook. As for my app business, I think it could be more useful too. I don't know if Jelly will take off, and I don't know how receptive it will be to this sort of thing, but I think it would be incredibly useful as a way to do market research. Can't decide on an icon? Put your choices out there and ask lots of people which they like better. As it is designed to be a question and answer network, this would work far better than posing the same question on Twitter or Facebook I suspect.

I've seen some people complain about the 2 degrees, or "friends of friends" approach. Personally, I don't think they realize this isn't a social network. It is a question and answer site. The more people you have looking at your question the better chance that someone knows the answer. Frankly, I think it would be fine for me if my "network" included every single person signed up for Jelly. I guess I could simulate this by following the top people on Twitter. Follow a handful of celebrities and you are probably 2 degrees from almost everybody there.

Perhaps there is also a use case where you would want a closed private version with only your close friends, but I suspect that would be better served by a different medium. If you want to ask a personal question, this isn't the correct forum. It is for general questions, and as such, it is almost certainly better served by larger networks than smaller ones.

My first 2 questions posed to the audience?

1. Do you prefer apps with a more flat iOS 7 design or the old skeuomorphic design better? Link to Jelly Q

2. Anyone have or plan to get a smartwatch this year? Echo, Pebble, Galaxy, only if Apple releases iWatch? Link to Jelly Q






If you've read this far and are interested in the mobile app market you may want to check out my book on how I make money on the mobile app stores called Building an App Business.
 

Friday, January 3, 2014

My App Business 2013 Year in Review

2013 was an interesting year for me in many ways. Overall, it went pretty well, but I was also disappointed by several things. Coming off of 2012 where Apple changed their search algorithm in the summer, and then the App Store in the fall, my goals for the year were mostly to diversify and try to stabilize my earnings. While I had some success with this, frankly I didn't work hard enough to meet all of my goals. I'll go ahead and list the figures first, and then talk about the successes, failures, and goals for next year.

Paid Apps

iOS - 52,120.76
Android - 3,263.71
Mac - 2,774.34
Windows - 620.81
Amazon - 246.84

Paid Total - 59,026.46

Ads

Revmob - 7,298.55
Admob - 5,119.04
iAd - 1,285.22
Amazon - 25.36

Ads Total - 13,728.17

Apps total - 72,797.11   ~500,000 total downloads

Book - 1,456.31

Freelance - 10,700

Total Revenue in 2013 - $84,953.42

27% increase over 2012

Going into the year, I wanted to do a bit more freelance, more Android, more free apps, a book, and potentially a SaaS app. I succeeded with the freelance. I took on a 2 clients that were much better than I've had in the past, made more than I did last year, and still didn't spend that much time freelancing. Overall that was a success.

I did make more money on Android, but not a ton. Aside from freelancing, I didn't work much on Android this year. I didn't make any new apps, and I didn't do any updates after March. I just never set aside the time for it. Overall I'd label my efforts in Android as a failure, but I am happy I did increase my earnings from basically 0 to something with my efforts towards the end of 2012 and early in 2013. I don't have any immediate plans to make a new Android app, but I would like to put some more effort towards Android this year.

Thanks to the changes Apple made in 2012, free apps have become a very important part of any iOS strategy, and they were already very important to Android. I made a big effort to add free versions to many of my apps, and it paid off very nicely this year. The free apps were very instrumental in keeping my paid apps going. I ended up making almost exactly the same from paid apps as I did last year (which is not something I expected to be able to do with the changes) and I added 13k in ad revenue. This was a success for me.

I set a goal to write and publish a book this year. Part of it was that I simply wanted to write a book. Part of it was that I wanted to expand on this blog and help other indie devs like myself. And part of it was that I hoped to diversify more and make a bit of money. I'll call this a partial success. I did write and publish a book. The feedback I've gotten has been almost universally positive.

The only negative feedback I've gotten was at launch from a few haters suggesting that I was another person who made all my money telling people how to make money and not doing it myself. No worries there, I made very little money on book, and quite a bit on my apps :-) If I really wanted to make money from the book I should have priced it much higher and added some other materials in different tiers. I may eventually do this, but for now I have other more important things to do with my time.

Unfortunately, I didn't get around to releasing a SaaS app in 2013. I did get started on one late in the year though, and this will again be one of my biggest goals for 2014. I consider this an almost complete failure, with the only positive being that I decided on an idea and got started on it.

Overall, I can't complain too much about the way 2013 went. I made significantly more than I used to working for someone else, and frankly I worked significantly less than I did then. My biggest complaint is that I didn't push myself to work harder. I had a great first 6-8 months of the year and then things slowed down. I had hoped to get the SaaS app released by the end of the year, but life got in the way. Between my mom having a major surgery and the holidays I basically didn't get too much done in the last 2 months. The good news is that I am able to take the time off and mom is doing better, the bad news is my business has been stuck in neutral for a bit.

Goals for 2014

I want to continue to diversify my revenue streams, and I'd really like to smooth out my income a bit. Due to the nature of my apps, I make significantly more money in the summer than I do during the winter. In addition to adding apps and improving on the ones that do well year round, my biggest goal is to release the SaaS app. Adding monthly recurring revenue is a major goal for me this year. Instead of starting every month at 0, it would be nice to having a little bit higher base, even if it isn't huge.
Thankfully I've known this for awhile, so I just give myself a set salary each month and the significant overflow during the summer easily covered any shortfalls I had in the winter. That is a key point for anyone in this business. Don't spend every dime you make, as you aren't going to make the same amount every month. Save some to help smooth things out in your budget. And like me, you probably want to invest in diversifying your business so that you avoid having too many low months.

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If you've read this far and are interested in the mobile app market you may want to check out my book on how I make money on the mobile app stores called Building an App Business.
 

Thursday, November 21, 2013

I Switched to Android for a Week and Almost Didn't Switch Back

A year ago, I did an experiment where I completely switched to Windows Phone for a week. Overall it was a good experience, but it was lacking in enough areas that it made switching back to my iPhone was a no brainer. Also, tellingly, there wasn't anything that I missed when I switched back. I recently got an invite to buy Google Glass, so I went ahead and got one to test out and hopefully make some apps for. (I'll talk more about Google Glass in a separate post). I also got an HTC One Developer edition to use alongside it.

For a little over a week now, my 4.3 Android HTC One has been my only phone. I haven't touched my iPhone 5s at all except to look up a few apps someone was telling me about (that were only on iPhone). Overall my experience with it has been great, and I could probably switch and not be too sad. Most tellingly, unlike the Windows Phone experiment, there will be things about Android that I will miss on my iPhone. 

Pros

1. Widgets. Widgets are great. I love having the weather and sports information just always on on the desktop. It's handy. This is one of the things I will miss.

2. Google Now. While they have it available in app form on iPhone (which I may start using) it is more integrated into Android. Also, going back to #1, I can have it in widget form on my desktop. (Is it weird that I call the home screen of my smartphone "desktop").

Google Now is pretty great though, as long as you can get past the creepy privacy implications. I'm mostly over it, and the service is pretty handy.

3. Apps - I mentioned that the only time I picked up my iPhone this week was to check out some new apps. That being said, all of the apps I use on a regular basis are available on Android except one. This is close enough for me to list it as a pro. 

4. Google integration - I use gmail, google calendar, and chrome so the integration with them is nice. I was amazed that Google chrome auto-completed a website I had recently visited on my Desktop that I had never been to on the phone. I suspect this is something Safari could do for me as well, but I don't like Safari on Desktop as much. Perhaps I should switch to using Chrome on iPhone, but the lack of ability for it to be the default action is problematic.

Cons

1. Battery - So frustrating. Perhaps it's the awesome new widgets that I love, but the battery life is not comparable to my iPhone at all. Normal days for me I don't go below 50% on my iPhone. Heavy use days I usually don't go under 20%, and I honestly can't ever remember it dying completely. With this phone, I finished almost everyday under 10%, and it died 2 of the days. This is a problem. Perhaps another Android phone would be better, but I suspect at least part of it is software related.

2. Bluetooth - The bluetooth on this is absolute crap. In general, bluetooth isn't great. I know that. But this was beyond "not great" into completely unusable territory. The internets tell me the HTC One has issues in this area. I don't think this is an Android thing, just an HTC One thing. 

3. Crashing - I'm certain this has happened on someone's iPhone, I don't need you to tell me about it. That being said, I had the phone completely crash and restart (not just drop call) while on a business call this week. I've had my iPhone drop calls, but never had the phone just crash. That was a bizarre experience, and really frustrating. 

4. Email - This one I couldn't believe. I like the default iPhone app for gmail far more than the gmail app in Android. WTF. I didn't expect this, but there are several things about it I find really annoying. The biggest is the swipe to archive. On iPhone, I swipe, it gives archive button, I click, it goes away. On Android, I swipe and it archives. It then leaves the blank area with an undo option. If it just went away completely I'd be fine with that, in fact would probably be better. Leaving the blank area just sucks though, especially when try to go through multiple emails quickly. Sometimes it stays, sometimes it goes. I don't know how many times I accidentally clicked on an email I didn't mean to click on. 

5. Keyboard - This is a minor nitpick, and could probably be solved with a third party, but I didn't like the keyboard. Perhaps this is just getting used to something different, but I had more typos consistently all week than I normally do. 

6. UI/Screen issues/screen responsiveness - This one is still frustrating for me. When I click something on my iPhone it almost always does what I expect it to, and it does it instantly. I had repeated issues of clicking things in apps (mostly chrome) where it wouldn't register, it would be delayed, etc. This has recently been benchmarked. I find it amazing that the iPhone 4 that is 3 generations old is more responsive than the newest Android phones. I don't know why this is the case, but I do know that it is a quality of life thing. It makes the phone more pleasant to use. 

7. Find my friends - perhaps it is silly, but I use find my friends on a regular basis, and most of my friends and family have iPhones. Sometimes you can't get ahold of someone for whatever reason (loud environment etc.), it's nice to see if my wife is on her way home or still out wherever she went.  This is another mostly minor thing that I could probably live without, but it is the 1 app I use regularly that doesn't have an Android equivalent (perhaps there is for Android, but not to find my iPhone using friends).

8. I assume this is not Android problem, but rather HTC One problem, but the dialer sucks. I can't seem to default to favorites instead of the dialer, and clicking on the person doesn't dial but instead goes to a contact page even after I set the default action to be call mobile. It appears this is a bug from my online reading. Hopefully it gets fixed at some point. For now it is frustrating. 

iPhone call - Click phone button, click person.
HTC One call - Click phone button, swipe to favorites, click person, click number. 

Why is the dialer hard? The dialer on Windows phone sucked in similar ways, and I don't know why. This seems easy. 

Conclusion

Unlike the Windows Phone, I could actually switch to this phone. I really could. That being said, I'm going back to my iPhone. The main reason? It's better at being a phone. The fit and finish is better. It's more responsive. The battery lasts longer. I didn't list the camera as being a pro or con, as it's fine, but the iPhone is better. 

I listed more cons than pros, but that's just because I'm comparing it to what I already know and like. I could list plenty of cons about the iPhone too, but that isn't what this post is about. The fact that there are things I will miss about the Android phone is pretty big IMO. The fact that I could actually switch is pretty big. When I started a week ago I didn't think that was even a remote possibility. If I could buy and Apple made Android phone, I might actually take that over iOS. Or perhaps I can just convince Apple to add widgets and intents into iOS. That would probably be enough.

If someone asked me what I would recommend, before my answer would simply be iPhone. Now, I'd have to at least get more information from them. My answer would still be iPhone most of the time, but there are definitely people I'd suggest Android to.

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If you've read this far and are interested in the mobile app market you may want to check out my book on how I make money on the mobile app stores called Building an App Business.