One thing I think he overlooked was the benefit of cross-promotion through a proven track record. Had he held on to his old apps, he would have been able to leverage them to promote his new app. Now he has to start from scratch, using only his blog to promote it.
Underscore Price Dynamics
11–20 of 91 posts
Re: Underscore Price Dynamics
#12There's really nothing new here. There was only a brief window during which you could immediately charge for mobile apps. Desktop software has relied on try before you buy for a while now. Mobile has simply matured.
Re: Underscore Price Dynamics
#13I think one of the main reasons it's so hard for new developers to make money is that -- as has been said so often -- discovery is broken on the App Store. The "new" category basically doesn't exist anymore, and even if it did there are a ton of new apps being released _daily_. For everyone's complaints about Apple's stringent review process, there's a ton of crapware on there, which makes customers really hesitant t…
It's not just discovery. The land grab is over and established apps are well entrenched. There was a huge first-wave advantage for mobile apps. We just barely caught the end of it ourselves, so we're doing ok.
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Re: Underscore Price Dynamics
#14On Windows Phone, every app has the ability to offer a free "trial" version. So you can make a paid app, but still let the user try it (with less features, or ads). I think this mechanism is ideal.
Re: Underscore Price Dynamics
#15The only business models I want to work on any more have some mass-market component that is absolutely free, and a niche companion product that makes money off of the exhaust fumes of the mass-market component.
The last two businesses I started are Stack Overflow, which is free, where the careers business on the side makes money on the small fraction of Stack Overflow users who are looking to get better jobs, and Trello, which is free, but the business of providing administrative tools to large organizations using Trello can sustain the whole business.
This is more than just "freemium" or "advertising-supported." Freemium and Ad-supported business models are special cases of this general model. The real insight is that the free product has a chance to reach an enormous audience which provides distribution/advertising/marketing making it trivial to go to market with your paid product.
What Marco is reporting here is that the old-fashioned "make something and get people to pay for it" business is much harder to pull off and likely to always be left in the dust by someone making the same thing for free, getting 100x the user base, and getting 1% of them to pay for some value added feature.
Re: Underscore Price Dynamics
#16I never understood why in-app purchases have been branded as "evil" in the first place. As long as Apple doesn't offer developers a way to do trials, it's the closest way a customer can get a taste of an app's features, esthetics before deciding whether to pay or not for an app. EX : I wouldn't have paid 10$ for flighttrack pro without the in app purchase option. I would go as far as theorize that the main reason why…
It's not In-App purchases, per se that are evil - I've spent around a hundred dollars on new levels (great use of In-App purchase - you reward the developer for creating new content), new tools, new capabilities in the last few years (much less than the the close to a thousand dollars in "up-front" app purchases I've made) - and I think I've gotten real value each time.
What's truly evil, is the cognitive manipulation that "free" games engage in on those who are most vulnerable to those manipulative techniques. The "Candy Crushes" of the world.
You want there to be a virtuous circle, in which developers are rewarded for creating new, and improved apps; not for buying extra boosters so you can clear the jelly without developing the skill required to (or wait long enough for an easier level). How stupid do you feel purchasing "Diesel" for your "Tractor" in a game? Particularly when you consume it and just have to buy more diesel to continue at any reasonable pace.
That's the evil part of In-App purchases - I can show you a dozen places where In-App purchases and/or subscriptions have been very well executed to the benefit of everyone. (LetterPress, Flickr, Whatsapp, Path, evernote, Pioneer Lands, Paper by Fifty-three - just to name a few)
Re: Underscore Price Dynamics
#17The only business models I want to work on any more have some mass-market component that is absolutely free, and a niche companion product that makes money off of the exhaust fumes of the mass-market component. The last two businesses I started are Stack Overflow, which is free, where the careers business on the side makes money on the small fraction of Stack Overflow users who are looking to get better jobs, and Tre…
Unless the cost of maintaining a 100x userbase outweighs the combined $$ value of the value added feature for the 1%.
Re: Underscore Price Dynamics
#18I general Marco's points seem accurate, except for the first one. I've mentioned to many people that I build iOS apps and never have I had someone assume that I work for Apple. There are certainly various misconceptions about the app business (ie. it's an easy ticket to millions), but assuming I work for Apple is not one of them. These are "regular" people that have no knowledge of the Apple or tech sphere, other than owning a smartphone. Doctors, teachers, retail employees, elderly relatives (who have no idea where I work), all sorts of different people. There is definitely some interesting psychology going on with regard to the amount anyone is willing to pay for an app, but I really don't think believing the developer works for Apple has anything to do with it.
Re: Underscore Price Dynamics
#19The only business models I want to work on any more have some mass-market component that is absolutely free, and a niche companion product that makes money off of the exhaust fumes of the mass-market component. The last two businesses I started are Stack Overflow, which is free, where the careers business on the side makes money on the small fraction of Stack Overflow users who are looking to get better jobs, and Tre…
What are your thoughts on say something like a video course? i.e giving it away for free and doing an upsell on consulting or stick to charging for the course?
Re: Underscore Price Dynamics
#20I think one of the main reasons it's so hard for new developers to make money is that -- as has been said so often -- discovery is broken on the App Store. The "new" category basically doesn't exist anymore, and even if it did there are a ton of new apps being released _daily_. For everyone's complaints about Apple's stringent review process, there's a ton of crapware on there, which makes customers really hesitant t…
It's not just discovery. The land grab is over and established apps are well entrenched. There was a huge first-wave advantage for mobile apps. We just barely caught the end of it ourselves, so we're doing ok.
You're right, absolutely. For newcomers, it's an uphill battle to market even if there's no competition in the space.