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The Majority of Today’s App Businesses Are Not Sustainable

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Re: The Majority of Today’s App Businesses Are Not Sustainable

#31

Post by abk »

I feel like to a large extent this is just techcrunch being techcrunch and writing link-bait articles.

My thoughts on this:

1) Just about everyone is "interested in making money" from their apps. I'm not sure how they're filtering the developers in the survey, but I'm willing to bet the amount of effort put in, and the actual methods used to "make money" differ wildly among those developers. Apples to oranges.

2) 5-10k per app per month for a single developer with a full-time job doing this in his spare time is pretty good. For a 300 employees company, not so much. Similarly, millions a month will sustain a large company and make an individual developer extremely wealthy. What are we comparing?

3) I'll go out on a limb here and say that games make more than any other category on the app store. They also tend to require a higher budget and production value: better graphics, sounds, a storyline, etc... Maybe the 100 flashlight / todolist apps competing for the same spots don't make much money but they also cost nothing besides a weekend of work and the $99 / year ADC membership. I also wouldn't be surprised if most of that "1.6%" were game developers. Lumping every app together and trying to get stats out of it doesn't tell us anything about how much the developers are spending to get those apps out.

4) Obligatory plug: Storm8, the company I work for, is recruiting. We're a mobile games developer (on the App Store we tend to be better known as TeamLava) and have been profitable and fully bootstrapped for over 5 years now through rapid growth. We're all very passionate about creating new games and refining our existing ones and have a lot of interesting projects to work on. We're looking for developers interested in learning more about the mobile games industry, no experience required. Email is in my profile if interested :)

Re: The Majority of Today’s App Businesses Are Not Sustainable

#32

Post by visakanv »

opendais wrote: post #19

This seems to go a long way to basically say "90% of new businesses/apps/[insert here]" fail. Why yes, we've known this forever. It is why it is risky. :/

I know right? Life on Earth isn't sustainable. The Sun will eventually blow up and destroy it. The universe isn't sustainable, either. Eventually all the stars will go out and there'll be a lukewarm nothingness...

Sustainability is such a fairy tale.

Re: The Majority of Today’s App Businesses Are Not Sustainable

#33

Post by Houshalter »

gfd54ydfgf wrote: post #11

Looks like income inequality is FAR worse in the app store compared to the rest of our economy. Will the Apple loving leftists speak up about this?

Well many people find the level of inequality in the economy surprising, but it really isn't that surprising it occurs in app stores. Even if we discount all the apps that are objectively terrible, the system very much favors apps which are already successful.

And I'm not saying that it's a bad thing. Why would you want to download some obscure game with 2 reviews over the game your friends are playing and you know is good and successful?

Re: The Majority of Today’s App Businesses Are Not Sustainable

#34

Post by Donzo »

Donzo wrote: post #18

Releasing apps seems increasingly pointless. Unless you get featured, there is pretty much no visibility and almost 0% chance of discovery. At least with web based apps your ranking can improve overtime for a variety of keywords and traffic can begin to find you. I have not had a similar experience with development for the app store.

I see that I am getting down voted for my sentiments, so perhaps I should better explain my experience.

I programmed an app that was featured in several publications including the Washington Post and coverage by one of the writers for the Guardian. These favorable reviews led to a handful of sales. If this were a web app, these valuable links would have given my product a real boost.

With the app store, there's almost no way for a third party to influence the discovery of your app. Everything is sold through the app store and Apple holds all the keys to the kingdom. Who knows what mysterious process they use to select their favorites, but if they don't select yours, that's pretty much it. No recourse. The web, on the other hand is much more open and many different people can influence and contribute to a developers success.

Re: The Majority of Today’s App Businesses Are Not Sustainable

#35

Post by onmydesk »

The app store that came with iOS6 totally destroyed the income of developers on iOS. Many developers pointed out the problems, many left the platform. With iOS7 apple plainly ignored the problem. With iOS8 some changes are coming which might help.

Apple did it. They had better undo it if they don't want their iOS devices to be nothing but ad display machines or in app purchase tricks.

Re: The Majority of Today’s App Businesses Are Not Sustainable

#36

Post by habosa »

Like others have said, it's hard to separate the 'App Businesses' from the 'App Hobbies'. For example, I have published 4 Android apps with about 250k combined downloads. On two of them I did not monetize at all, I just did them for the exercise and because I like to code. The other two I did monetize, but only in ways that kept non-time costs to $0 so it was all profit (aka no marketing, no employees, no paid services).

I've made some decent money off one of the apps, but definitely not enough to live on for any amount of time. Still i consider my efforts a success, because I did it as a supplemental activity to my full-time work. If I was trying to make a living, I'd probably invest in marketing, hire a designer and/or co-developer, and monetize more heavily.

Re: The Majority of Today’s App Businesses Are Not Sustainable

#37

Post by danbucholtz »

These numbers are actually quite rosy in my opinion. When I built PaperBox (www.gopaperbox.com), our chief competitor was getting about 50K downloads per day - this compared to maybe 50 a day for us back then. We knew we had a better offering - but we also knew that charging right off the bat would shoot us in the foot. Instead, we've opted to go the free route to build our user base & brand, and figure out the business model later on.

I cannot imagine an app charging and being successful right off the bat unless they have a platform for advertisement (something like Vesper and Daringfireball.com) or it's made by a very prominent figure/company. The reality is there are 10 apps for every idea in the app store (in 2014) and the best app likely won't win market share if they charge from the start.

Re: The Majority of Today’s App Businesses Are Not Sustainable

#38

Post by danbucholtz »

zxcvvcxz wrote: post #26
tomjen3 wrote: post #14

Earlier quoted context omitted.

I think you are underestimating what the really big guys are pulling in. I doubt twice is high enough for the tail end, three or four times is likely better.

I also think we underestimate just how many apps are being created with the intention or desire of generating revenue that fail to do so. It's a fairly arbitrary calculation anyways, the point is the expected value is on the same order of magnitude as that of a stable company man. The big question is what implications this new "career salary distribution" will have as it becomes more popular.

This 10000x. It is incredibly hard to compete today when there are 10 apps for every idea. Most of them suck - but it is damn near impossible to charge from day one and be successful unless you have a very large platform to advertise or are a prominent figure (something like Vesper from John Gruber). We're in it for the long haul with PaperBox (gopaperbox.com) - we intend to be the best app and continue to iterate for 3 years or so, and then figure out how to make money when we hopefully have a million or so users. Having said that, it is very hard to project out and keep growth going without a significant advertising budget.

Re: The Majority of Today’s App Businesses Are Not Sustainable

#39

Post by thrownaway2424 »

danbucholtz wrote: post #37

These numbers are actually quite rosy in my opinion. When I built PaperBox (www.gopaperbox.com), our chief competitor was getting about 50K downloads per day - this compared to maybe 50 a day for us back then. We knew we had a better offering - but we also knew that charging right off the bat would shoot us in the foot. Instead, we've opted to go the free route to build our user base & brand, and figure out the busin…

What about Paper? Not only did they charge from the start, they charged a rather high price, and entered a market full of existing competitors, some free.
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