Apps for Profit

Nathan Mellor
CritterMap Software LLC

Followup at http://eepurl.com/d9tZj
Low
Objectives
• Think about app idea
• Find your top ten
• Evaluate their profit potential.
To get started

• Make a copy of this

spreadsheet (Google Drive)

• http://bit.ly/1cwrX7E
Register at AppAnnie.com
•
Book Signing

•

http://www.amazon.com/
dp/B00GJHIGY0
About me - 2009
•

Worked for a major printer
manufacturer for 12 years

•

Feb 2009: “routine” meeting with
boss

•
•
•
•...
Nathan in 2010
•
•

•

Reeducation through the Trade ACT

•

Enrolled in University of San Francisco’s Internet
Marketing ...
Since 2011
• Top grossing App in
“Travel and Local”
I have a corner office
with a view
Is this you?
(Dilbert.com)
Marketing Funnel
How it applies to mobile apps
The Internet Marketing Funnel
Target Audience
Target Audience
(potentially interested)
(potentially interested)
Prospect
P...
App Market Funnel + Numbers
Target Audience = Outdoor Navigation users
Target Audience = Outdoor Navigation users
1% of 1....
Target Audience
Focusing your App Idea
Target Audience
Target Audience
(potentially interested)
(potentially interested)
P...
The Secret Idea
• Email from stranger:
• Hey, I have a great an idea for an app that will
make lots of money. I will let y...
“Good ideas are common - what's
uncommon are people who'll work
hard enough to bring them about”

Ashleigh Brilliant
But not all good ideas
are equally valuable . . .
•
•

Top Grossing Apps: 500

•

>1 million apps

Ranked in a category:
a...
Should your idea be
your passion ...
your passion ...

• Yes.
• Doesn’t change the market.
• But it does change you
• Find...
Should your idea be a
hobby or interest?
• Not if you are the only one with the hobby.
• Yes if it has mass market appeal
...
What do they buy
now?

Ex: Garmin’s outdoor/fitness division
had sales of $400 million last year
How unique should
your idea be?
Book
All New Square Foot
Gardening, 2nd Edition
Greenhouse Gardeners
Companion

Amazon Sal...
Should your idea be
innovative?
• Innovation is great!
• Innovation involves both risk and reward.
• Innovation is not alw...
Success=Profit

• Profit(app) = Revenue(app)-Cost(app)
Profit Potential
• Try to find exact dollar value of future app.
• Come up with your ten best ideas.
• Find out their reve...
Calculating Revenue
Potential
Market Research:
Crushing your Dreams.

What if there are seven apps like yours?
Good thing or bad?
an existing app?
• Themes
• UI Standards
• Features
• Best or worst practices
• Revenue potential
How much money are
those other apps
making?
spreadsheet on Google
Drive

http://bit.ly/1cwrX7E
Spreadsheet
Comparable apps for
each idea
Free or Paid
Total Installs
Total Installs
Rankings
Top Paid/Free
• Based on downloads
• From the last several days - not a lifetime
achievement award

• A LOT less downloads...
Rankings Hierarchy
App Annie Rank
History
Top Grossing
• Also hierarchical
• Also from the last few days
• Based on revenue including iap
• Best way to gauge succes...
App Annie Chart
But what about
advertising revenue?
Adwords Display
Planner
possible CPM?
Spreadsheet
Cost to provide?
Can you have a million in
revenue and still worry?
What is cost effective?
Two Ways to Increase
Cost
1. Complexity
Faucet App

Everything but the
kitchen sink app

Engineering effort

You wrote it in a
weekend

Several engi...
2. Labor
• Won’t be a problem, because you are doing
everything yourself, right?

• Wrong!
• Doing everything yourself is ...
Four Ways to Decrease
Cost
1. Leverage and Reuse
• Can you take advantage of existing code?
• Yours or some you can license.
• Leverage - needs more ...
1. Leverage and Reuse
• Library
• presumably closed source
• Framework
• Cross platform
• Open Source
• Apache 2.0 vs LGPL...
ReSkinning
• License complete source code
• Change all graphics, themes, names
• Release as new game/app
• Rinse and repea...
But reskinning is never
done by big companies?
Or is it?
2. Process and Planning
• As opposed to making it up as you go
along.
3. Tools
•

Are great to have in the cloud for a dispersed
team

•
•
•
•
•

Not just software development
Communication: S...
4. Effective Hiring
• You can hire someone to do:
• Programming
• Design/graphics
• Writing/Content creation
• Internet ma...
4. Effective Hiring
• You can hire someone:
• For a fixed price job according to a quote
• As a part time, hourly freelanc...
So... do you need an
office building and
some venture capital?
Where to hire

•
• ODesk
• Hourly, fixed price
• eLance
• Hourly, fixed price
• onlinejobs.ph
• full or part time, philipp...
What is cost effective?
Conclusions:
• Find your top ten ideas
• Research the revenue potential
• Research the potential cost
• Go out and make so...
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Apps for Profit

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Apps for Profit

  1. 1. Apps for Profit Nathan Mellor CritterMap Software LLC Followup at http://eepurl.com/d9tZj Low
  2. 2. Objectives • Think about app idea • Find your top ten • Evaluate their profit potential.
  3. 3. To get started • Make a copy of this spreadsheet (Google Drive) • http://bit.ly/1cwrX7E Register at AppAnnie.com •
  4. 4. Book Signing • http://www.amazon.com/ dp/B00GJHIGY0
  5. 5. About me - 2009 • Worked for a major printer manufacturer for 12 years • Feb 2009: “routine” meeting with boss • • • • • Downsizing announced New house, new mortgage. March 27: Last day at work March 28th: Third child born April 2009: “Outplacement” counseling
  6. 6. Nathan in 2010 • • • Reeducation through the Trade ACT • Enrolled in University of San Francisco’s Internet Marketing program Developing an app on a new operating system called Android • • First launched to the market June 2010. Started at about 5 sales a day; I was aiming for ~56. Paid zero taxes AND got a refund.
  7. 7. Since 2011 • Top grossing App in “Travel and Local”
  8. 8. I have a corner office with a view
  9. 9. Is this you? (Dilbert.com)
  10. 10. Marketing Funnel How it applies to mobile apps
  11. 11. The Internet Marketing Funnel Target Audience Target Audience (potentially interested) (potentially interested) Prospect Prospect (aware product exists) (aware product exists) Lead Lead (has tried product) (has tried product) Customer Customer (paid for something) (paid for something) Loyal Customer Loyal Customer (repeat sales) (repeat sales) Advocate Advocate (recommends product) (recommends product)
  12. 12. App Market Funnel + Numbers Target Audience = Outdoor Navigation users Target Audience = Outdoor Navigation users 1% of 1.3 million activations per day = 13,000 per day 1% of 1.3 million activations per day = 13,000 per day Prospect = see my app listing Prospect = see my app listing ????? -- figures not available ????? figures not available Lead = installs demo product Lead = installs demo product 500 per day 500 per day Customer- bought paid app Customer- bought paid app 20% =>100 per day 20% =>100 per day Loyal Customer= bought an addon Loyal Customer= bought an addon 22 per day 22 per day Advocate= 5 star Advocate= 5 star 2 per day 2 per day
  13. 13. Target Audience Focusing your App Idea Target Audience Target Audience (potentially interested) (potentially interested) Prospect Prospect (aware product exists) (aware product exists) Lead Lead (has tried product) (has tried product)
  14. 14. The Secret Idea • Email from stranger: • Hey, I have a great an idea for an app that will make lots of money. I will let you develop it for a split of the profits. 
  15. 15. “Good ideas are common - what's uncommon are people who'll work hard enough to bring them about” Ashleigh Brilliant
  16. 16. But not all good ideas are equally valuable . . . • • Top Grossing Apps: 500 • >1 million apps Ranked in a category: about 34,000 • • 64% have <10 ratings 89% have <100 ratings
  17. 17. Should your idea be your passion ... your passion ... • Yes. • Doesn’t change the market. • But it does change you • Find passion or choose to be passionate. • Avoid something you don’t care about
  18. 18. Should your idea be a hobby or interest? • Not if you are the only one with the hobby. • Yes if it has mass market appeal • Long tail products may not pay off in apps yet.
  19. 19. What do they buy now? Ex: Garmin’s outdoor/fitness division had sales of $400 million last year
  20. 20. How unique should your idea be? Book All New Square Foot Gardening, 2nd Edition Greenhouse Gardeners Companion Amazon Sales Rank #4,629 in Books #23,593 in Books The Pack Goat #678,394 in Books Practical GoatPacking #3,054,219 in Books
  21. 21. Should your idea be innovative? • Innovation is great! • Innovation involves both risk and reward. • Innovation is not always rewarded in the marketplace. • Can you build on something that is already popular?
  22. 22. Success=Profit • Profit(app) = Revenue(app)-Cost(app)
  23. 23. Profit Potential • Try to find exact dollar value of future app. • Come up with your ten best ideas. • Find out their revenue potential • Look at the cost to produce them • Pick the best of them in terms of profit potential.
  24. 24. Calculating Revenue Potential
  25. 25. Market Research: Crushing your Dreams. What if there are seven apps like yours? Good thing or bad?
  26. 26. an existing app? • Themes • UI Standards • Features • Best or worst practices • Revenue potential
  27. 27. How much money are those other apps making?
  28. 28. spreadsheet on Google Drive http://bit.ly/1cwrX7E
  29. 29. Spreadsheet
  30. 30. Comparable apps for each idea
  31. 31. Free or Paid Total Installs Total Installs
  32. 32. Rankings
  33. 33. Top Paid/Free • Based on downloads • From the last several days - not a lifetime achievement award • A LOT less downloads are needed to get in top paid than top free.
  34. 34. Rankings Hierarchy
  35. 35. App Annie Rank History
  36. 36. Top Grossing • Also hierarchical • Also from the last few days • Based on revenue including iap • Best way to gauge successful freemium products
  37. 37. App Annie Chart
  38. 38. But what about advertising revenue?
  39. 39. Adwords Display Planner
  40. 40. possible CPM?
  41. 41. Spreadsheet
  42. 42. Cost to provide?
  43. 43. Can you have a million in revenue and still worry?
  44. 44. What is cost effective?
  45. 45. Two Ways to Increase Cost
  46. 46. 1. Complexity Faucet App Everything but the kitchen sink app Engineering effort You wrote it in a weekend Several engineering years Lines of code 300 70,000 Number of features 1 100 Number of features requested by users 0 300+ What to do when done Work on another app Bragging rights “My 400th big hit” Never done “Still working on the same app I told you about last year”
  47. 47. 2. Labor • Won’t be a problem, because you are doing everything yourself, right? • Wrong! • Doing everything yourself is the most expensive thing you can do.
  48. 48. Four Ways to Decrease Cost
  49. 49. 1. Leverage and Reuse • Can you take advantage of existing code? • Yours or some you can license. • Leverage - needs more work • Reuse - intact • Reuse is cheaper than leverage
  50. 50. 1. Leverage and Reuse • Library • presumably closed source • Framework • Cross platform • Open Source • Apache 2.0 vs LGPL vs GPL • Complete Source Code
  51. 51. ReSkinning • License complete source code • Change all graphics, themes, names • Release as new game/app • Rinse and repeat if desired. . .
  52. 52. But reskinning is never done by big companies? Or is it?
  53. 53. 2. Process and Planning • As opposed to making it up as you go along.
  54. 54. 3. Tools • Are great to have in the cloud for a dispersed team • • • • • Not just software development Communication: Skype Project Management: basecamphq.com Tech support: Zendesk Design and mockups: LucidChart.com
  55. 55. 4. Effective Hiring • You can hire someone to do: • Programming • Design/graphics • Writing/Content creation • Internet marketing tasks • Tech Support
  56. 56. 4. Effective Hiring • You can hire someone: • For a fixed price job according to a quote • As a part time, hourly freelance • As a full time worker. • Which is best?
  57. 57. So... do you need an office building and some venture capital?
  58. 58. Where to hire • • ODesk • Hourly, fixed price • eLance • Hourly, fixed price • onlinejobs.ph • full or part time, philippines A number of online site
  59. 59. What is cost effective?
  60. 60. Conclusions: • Find your top ten ideas • Research the revenue potential • Research the potential cost • Go out and make some money!

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