Wednesday, May 6, 2015

4 Years of Success and Failure on the App Store

I quit my job 4 years ago this week. At the time I was making about $15 a day on apps I had done in my spare time. I'm crazy right? Biggest regret? Not quitting sooner. The first mover advantage for iPhone apps was huge. Keys? I saved up a decent sized emergency fund, paid off all my debts, and my wife works. Her salary as a teacher isn't enough for us to be excited about surviving on alone, but that and our savings meant I didn't have to stress too much about money (though I still did). I had a long runway.

I'll lead with the chart everyone wants to see - Last 4 years app sales, trailing 30 days to smooth it a bit. Total of ~222k including ads, not including freelance I've done from time to time as a supplement.

T30D - Trailing 30 days

The big spike in April 2012? That's the release of Debt Snowball+. It got several good reviews from popular blogs on release day which helped it peak at #2 in Finance and about #130 overall (I can't remember exactly, somehow). The decline soon after? That's the Chomp search update followed by iOS 6 and the card app store layout. So sad.

The seasonal ups and downs are due to most of my revenue coming from fitness apps, and more people go running in June than in December. Shocking, I know. Jan-May is meh, June-September is pretty good, Oct-Dec is awful.

TTM - Trailing Twelve Month

The trailing year graph is really the most interesting. Though, perhaps this exaggerates how well the beginning went, as obviously full year sales are going to be more when they actually include sales every day.

TTM, starting with year 2

Frankly, my decline in sales doesn't look as bad in those charts as it has felt to me. It's a 19% drop from the peak to today. Less than 5% drop from the trough in 2013. 

Success and Failure

My biggest success, as a whole, is simply that I'm still here. While if the numbers don't start growing again I might not be able to say that a year from now, I've very much enjoyed working for myself and having that freedom over the last few years. My wife is about to have our first child, and while she plans to keep working for now, we'd love it if she could stay home. My current income is such that we are incredibly comfortable with both of us working, but not super excited about dropping it by 35% overnight. For her to quit, I either need to make that chart turn back up, or go find a real job :-)

My biggest failure, is simply using a shotgun strategy when I started. It's actually pretty interesting really, and sad that it took me so long to realize where the pitfalls were. The idea is pretty simple. It's not that hard (at least it wasn't back then) to make an app that would make 5-15-30 dollars or so a day. It wasn't hard to go from that, to say I'll make an app every month or 2 and each one will add to the total. Sales will grow and life will be good.

Frankly, that's pretty much how it worked for the first year. Then the Chomp search update hit and I was thrown for a loop. I actually managed to recover pretty nicely from that, but the problem is that it hid the real problem I see now.

The real problem, is that you hit a point where you can't keep up with updating all of the apps, and they don't each make enough individually to justify updating them really. As time progresses, new iPhones and new versions of iOS are released. New screen sizes, deprecated API's, flat design, etc. All kinds of things change that mean if you aren't updating your apps, their sales will decline. Not even touching on the fact that there are a lot more apps competing with you. It does help that there are a lot more people with iPhones buying apps, but it doesn't outweigh the negative forces.

That means that any new apps are just trying to replace sales being lost from the old apps, as opposed to increasing the total. Given that it is much harder for a new app in 2015 than a new app in 2011, you get the situation I'm in today, with (slightly) declining sales.

In hindsight, I definitely should have focused on a much smaller handful of apps, perhaps 2-3 at most. The problem at the time was, I didn't feel like any of the things I'd done were successful enough to justify putting all my focus into. I'm pretty sure now that at least 2 of the apps were worth putting more effort into. Alas.

Where to from here

I'm going to stop the shotgun approach, as of today. That doesn't mean I won't ever release a new app. I plan to focus my attention for the next year on 2 total apps. One of my current apps, and 1 that I've been planning to build for awhile now, which is actually an update to another of my current apps. It will however be a complete overhaul and likely a different business model, so we are going to release it as a new version 2 app. 

Vima - GPS Run Tracker and it's Biking and Walking variants will be the first major focus. It has been featured in the Health and Fitness "Apps for Runners" and "Get in Shape" sections since it was released about a year ago. We recently added a few major features including several charts showing things like weekly and monthly distance, and an Apple Watch app to let you start and stop runs without taking your phone out of your pocket. We have more planned on the way over the next few months as well. If you are a runner or biker etc, I'd really love to hear what you think of them and what features we should focus on next. Feel free to get in touch clarky07[AT]gmail[DOT]com.


It's been a bit of a roller coaster 4 years, but it's been a fun ride. I'm excited for my next adventure narrowing my focus. It's going to be a bigger challenge to have 1 or 2 significantly more successful apps than it was to have a bunch of moderately successful apps, but I'm confident that it's the only reasonable way forward. It's simply too much work for too little reward to keep up with as many apps as I have. 

As a side note to all this, I may end up selling some of my other apps. It's possible I'll just keep them and the moderate income they give each month, but I haven't completely decided yet. If anyone is interested in any of my apps, feel free to contact me at clarky07[AT]gmail[DOT]com. I'm happy to share details. I will definitely keep a few of them, but I could part with many of them for the right price. 

Monday, January 19, 2015

2014 Year in Review for My App Business

2014 was a crazy year for me. Note that I'm almost 3 weeks late writing my year in review, that's pretty much how my year went. 

In June we finally sold our townhouse. We have plans of building on some land that we purchased a few years ago. While we wait on that, we are renting. This occupied much of June. 

My Dad was diagnosed with cancer for the third time in 5 years in July. He had a large tumor on his spine that was causing him tremendous amounts of pain. In August, he had surgery to remove most of the tumor, which included removing parts of several ribs and fusing his spine. Following surgery, he went through chemotherapy for the next few months, and then in December he had a special extended chemo (6 straight days) to wipe out his immune system and then a stem cell transplant. He is now slightly past 30 days from the transplant and he is doing well so far.

I told you all that to tell you this. This has had quite an impact on my business, because I spent a lot of time taking care of my parents and driving them back and forth to hospitals over the last 6 months. The great thing about my business is that I can take the time to do that. The other side of that coin is that I haven't spent nearly as much time on the business as I would have liked to, and it suffered as a result. It happens.

That being said things weren't all bad, and I still made more than I did at my previous employer. This year was however below market rates by a decent amount. Given the amount of time I actually worked though, it's not too bad.

Paid Apps

iOS - $41,319.32
Android - $1,740.01
Mac - $1,256.92
Windows - $672.15
Amazon - $181.58

Paid Total - $45,169.98


Xplode - $1,043.67
Admob - $8,739.62
iAd - $893.23
Amazon - $40.76

Ads Total - $10,717.28

Apps total -    > 500,000 total downloads

Freelance - $12,400

Total Revenue in 2014 - $68,287.26

As for 2015, to add to the craziness of dad's health and building a house, my wife and I are expecting our first child. That being said hopefully my dad has turned the corner and this year can just be crazy and stressful for good things (house and child).

As for the business, I still have hope for the app stores. I did some interesting experiments this year, and while they weren't completely successful they weren't failures either. I tried out a subscription monetization model for an app, and it had pretty reasonable conversion rates. I'm hoping to drive more downloads in 2015, but I'm interested to see how many people will actually still be using the app after the 1 year mark (it has a monthly and yearly subscription options). I expect the revenue to be higher this coming year than it was last year based on how things have gone so far, and that will be something that hasn't been true for most of my apps.

In addition to my being off work quite a bit recently, one of the other things effecting my revenue is that most of the work time I have done since September is on an app that hasn't yet launched. This will be my first serious attempt at making a game, and it is almost done. I'm just putting some finishing touches on it, and I hope to submit it in the next week or two.

While I know the game market is exceedingly difficult, I have wanted to give it a shot for quite awhile now and I finally decided to do it. It started out as a nights and weekends project with a friend to learn Swift. I have really enjoyed making it, and (surprisingly to me) I actually think it's pretty good. I enjoy playing it, and it has become far more polished than I expected it to be.

All that being said, my expected ROI is approximately 0, but it is a nicely polished lottery ticket, and it does account for part of my lower revenue last year. Perhaps it pays off at least a little bit and affects this year's revenue numbers a bit.

Aside from launching my first game, I do plan on doing more freelancing again this year. With the baby and house on the way, it helps give a nice supplement to the app sales, and it is more guaranteed money. I may or may not make any money at all on the this game, but I will make money on the freelance project I'm getting ready to start.

Perhaps this will be the year I finally start a SaaS business. Don't get your hopes up though, I still don't have any ideas I'm excited about. Maybe someday.

If you have any interest in my new game, sign up to the newsletter and I'll shoot you a link when it gets approved. If you want to beta test it, send me an email and I'll get you on the list. The game is a number puzzle game with almost no similarities to Threes or 2048 :-) (There is a grid of numbers, but that's the extent of it).

P.S. If you are in the market for an app developer, shoot me an email at clarky07[AT]gmail[DOT]com. I'm not looking for anything full time, but if you have a smaller (1 - 6 weeks) project let me know and I'll get you a quote. I prefer iOS but have also done many Android apps.

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.

Tuesday, August 19, 2014

App Devs Stand Up To Cancer September 4th

Every year I try to find worthwhile causes to donate a bit of money to. Recently, my dad has been diagnosed with cancer again after having beat it twice already. He's just had part of a tumor along with parts of ribs removed from his spine and he'll be starting chemotherapy and radiation once he heals from the surgery. Obviously this sucks, but he's doing well from the surgery and we're going to fight it again.

Given this, I've decided I'm going to direct some of this year's charitable giving to Stand Up 2 Cancer. Unfortunately, on my own I can only do so much. As this is something close to my heart, I was trying to think of a way to do more. Here goes:

On September 4th, 2014 I'm going to donate all of my app sales to Stand Up 2 Cancer, whatever that number ends up being. I'm also working on getting as many devs as possible to join me. It can be just 1 of your apps, all of your apps, or any combination. Every little bit helps.

I've got a website under way to promote everyone's apps that join the cause. If you'd like to join me in a great cause I just need:

1. App Name
2. 256x256 Icon
3. Link to app store
4. 1-2 sentence description
5. (Optional) Link to all apps if doing all apps

If you just want to commit 1 app that's great, if you want to do more send me up to 3 apps and then I'll also include a link to your account. I plan on adding apps to the website as they come in.

If you have any questions at all don't hesitate to contact me.

Contact email:

App Devs Stand Up

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Friday, August 1, 2014

Unread wasn't an indie failure, the business model was

There has been a lot of talk about indie success and failure this week, much of from Jared Sinclair's great post looking at his stats for Unread. I'd like to give my take on it.

I don't think Unread is a failure. The conclusion might be right, in that it is really hard to be an indie developer right now, but the reasoning is faulty in my opinion. It seems like mismatched expectations to me. He made $42,000 on a RSS reader app. What was the expectation? The app was featured by Apple, blogged about extensively, and did I mention it made $42,000? It's an RSS reader. They've been provided for free since the beginning of time. Why is this something that should make a million dollars?

I've made a little less than $200,000 on iPhone (and android) apps since I started my business 3 years ago. I've had over 1 million downloads, and I didn't have any free apps until last year. It hasn't been all roses, I've paid out a decent amount of money to designers, and I could easily make more than the ~60k I've been pulling in doing consulting, or getting a 9-to-5. That being said, I'd still consider my time as an indie dev a success.

I tend to work between 20-25 hours a week. I don't work for anyone but myself, I can take off for vacation or if I need to take care of sick family members whenever I want. Unfortunately my family seems to have more than our fair share of health problems so I take a lot of days off taking parents to doctors. There might be some 9-to-5's out there that are pretty understanding, but it would be hard for me to take nearly the amount of time off that I do now. All in all I'm pretty happy how things have gone.

Unread would rank as #1 in my top grossing list. My best selling app, with 3 years of sales, is at 30k. Fortunately for me, I didn't spend a year making it. It took about 2 weeks, along with updates of a week or two each year since. I've had other apps that I spent significantly longer on with less reward. The key though, is to have realistic expectations going in, and matching the effort required to the expectations. What are the expectations for a paid rss reader app? I certainly wouldn't expect it to do much better than Unread has done. You have to match effort to expectations.

The other thing to realize here is that apps continue to sell over time. If your plan is to make your entire development effort back on launch day I think you are doing it wrong. If that is your goal you should switch to consulting. The reason to make products is to continue making money on it each month after development is done (or at least reduced for maintenance and feature updates).

Personally, I would prefer that one app (or suite of apps) could support my development full time. I'd like to work towards that goal of really building a sustainable business instead of just building apps. I'm working towards that with my latest experiment of subscription IAP. That being said, I don't think rss reader is the thing I'd choose as 1 app to support a business. I just don't see it. Are there any other rss readers supporting entire business?

If Unread was one of several apps, and it was limited a bit more to take a bit less dev time, I think it could be considered a nice success. I suspect it will continue selling as Jared works on his next app, and over time it can be a part of a successful portfolio. I don't think it could ever be the only app supporting him though.

I hope if Jared reads this he doesn't take it the wrong way. I think Unread is a great app and he's done a fantastic job with it getting it featured everywhere he did. I just think all the talk about indies this week has been overblown. If want to start big sustainable businesses we need to think bigger. We need to have a plan for that ahead of time. A 1 time payment rss reader doesn't scream big business to me. If we want a nice lifestyle business, a portfolio of smaller apps can still work just fine.

So far I've gone for the portfolio of apps lifestyle business, but now I'm trying to think bigger and more long term. Patrick McKenzie (@patio11) said today many of his bootstrapping friends, including himself, derisk by making each successive business more ambitious. I think that's a good way to think about it. Try something small, get some money coming in, and then try something bigger. Here's to indies having bigger success in the future.

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%


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. 


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.