Lightricks is an app development company based in Jerusalem that has found success with paid apps like Facetune and Enlight. While the paid app model has limitations like competitors releasing free versions and difficulty gaining recognition, it allows developers to earn money from day one and optimize more easily based on direct metrics. Lightricks recommends focusing on great products, influencers, PR and Facebook ads to drive sales, while also experimenting with untested strategies and documenting results. Burst advertising can help new paid apps reach top charts and gain organic users in a cost-effective way.

1. 21/11/2016
Paid Apps Economy

2. Today’s Talk
• About Lightricks
• Paid models: Pros & Cons
• How to succeed with a paid model

3. Lightricks - History
• Bootstrapped in 2013
• Jerusalem-based
• Five founders
• Raised $10M in August 2015

4. Facetune
• Launched in March 2013 for iPhone
• iPad - September 2013
• Android - July 2014
• Over 8 million units sold
• #1 top Paid App in 128 countries (App Store)
• Google Best of 2014

5. Enlight
• Launched in March 2015
• Apple’s Editors’ Choice
• Apple’s Best of 2015 Worldwide
• Universal (both iPhone & iPad)
• Over 2 million units sold

6. Paid Model Doesn’t Work Well on Android
• Lots of lower-end devices
• Lower rates of users who entered their credit cards
• Higher piracy rate - much easier to download pirated
versions
• Users are used to free software

7. Paid Model - Pros
• Small market - easy to get to the top
• Money from Day 1
• Easy to optimize
• Relatively easy to measure

8. Paid Model - Cons
• Competitors are likely to release a free version
• Limit on how much you can earn
• Harder to achieve brand recognition
• Ongoing cost can be problematic (support, backend,
etc.)
• Amount of money you can extract per user is
(usually) limited

9. What Does Work With The Paid Model?
• Great products
• Ads - mostly Facebook
• PR
• Influencers
• Social Media

10. What Doesn’t Work With The Paid Model?
• ASO
• Most ad networks
• Limited effect of word of mouth
• Android

11. Exploration Vs. Exploitation
• There will always be a trade-off between trying new
things vs. doing what has worked before
• Leave some budget for exploration!
• Document what you’ve tried
• Try things you don’t expect to work

12. Bursts
• Maximizing profits by getting to the top of the charts, which
will bring organic installs
• Measurement of success is not by CPI but by blended CPI,
which takes into account the organic installs as well as the
paid installs
• Easier on paid apps since less installs are needed to get to
the top, and no need to extract value from users later.
• Can start with a very low budget - we started with a $500
marketing budget

13. More Insights
• Videos vs Photos (and other formats)
• Facebook & Instagram work best for paid apps
• Overall volume in paid category is declining
• Seasonality has a strong effect
• New devices are a strong signal for potential paying
users

14. Advertising Tips
• Easy to measure and distinguish between channels -
CPI (no need to calculate LTV)
• Test as much as possible
• Explore every possibility and exploit what works
• Basic statistics knowledge can help

15. The Future
• Recurring revenues - subscription model