Are You Ready to Master App Development?

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Why iPhone App Development?

Consulting

iPhone app developers are in high demand as more and more companies want to see their brand on this compelling platform (I turn consulting jobs down every week!). In today’s economy people are scared to death of losing their day job… Believe me, if you learn iPhone app development you will not have that problem.

Your Business

Have a fantastic idea for an app that you think will make real bank? Why not give it a try and put your app on the Apple App Store and start selling it to customers as soon as possible? Many people (including myself) support themselves full-time on iPhone software that we are selling in the store right now. You can add residual income, supplement your consulting practice or go into business full-time as a software publisher.

Bragging Rights

Sure, people with iPhones brag about their cool new gadget and maybe even a niffy app that they downloaded the night before. How cool will it be to show off your app that you created yourself on your phone and in the Apple App Store itself? I can tell you right now that it is a pretty cool feeling.

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Many of you may have seen that I have been using the “Mobile App Mastery” name often these names although I have not really talked about what Mobile App Mastery was going to be….

Well, today I fleshed out this new brand a bit more by launching a new podcast as part of the Mobile App Mastery brand. Keep your eyes on this website or on http://mobileappmastery.com over the next few weeks: I have many new surprises in store!

The first episode of the new podcast is about the Entrepreneurial Seizure – that moment where you realize that you can leave your 9-5 job and become your own boss.

Now you can subscribe to the podcast in iTunes! Click here to subscribe to Mobile App Mastery.

This is something that iPhone App designers will appreciate…

As I was recording a [REDACTED] about an hour ago UPS dropped off a package that I wasn’t excepting until next week. This product is something that I believe that is being released on Monday and I think that app designers will love this one.

So this product is from the guys who did the iPhone Sketchbook. It is a stencil that will make it even easier to write out your ideas on paper. It is very cool looking. Check out the pic:

You can find out more about the iPhone App Sketchbook here: http://www.mobilesketchbook.com/

PS: if you are reading this on Monday and see this stencil in the wild comment below and let us know!

Everyone loves to see how much money iPhone apps earn so I thought I would share how much money I made with Beer Pad.

A Typical App

I like using Beer Pad as yardstick to try to project how much an average iPhone app can expect to earn. Beer Pad is a simple app that appeals to a very niched-down audience and it simply follows the typical app revenue model; Beer Pad’s cost varied between $1.99 to $3.99 throughout the year.

Another reason I like Beer Pad is because it represents a sort of coup for me personally: the idea for the app came right from the market itself, the code was repurposed from Wine Pad and the app has been well received in reviews. To keep things in perspective, the initial time it took to develop Beer Pad was about two weeks most of which was spent on doing research into the niche itself.

No Dreamy-Eyed Earnings Report Here

Finally, as you will see in a bit the earnings from Beer Pad are modest. If you are expecting to see the dreamy eyed “I made $100,000 in only five seconds on the App Store” you will be disappointed. However, I do believe that Beer Pad probably fits the profile of a relatively successful app. This hunch has been backed up at a recent conference I went to were the developer suggested that most successful apps will bring in about $10,000 and mostly in the first month or two.

So – How Much Already?

So, without further ado to date Beer Pad has made $8680 in total revenue. Most of that was earned in the first three months. The average revenue over the past year is $18. These numbers are after Apple’s cut.

Here you can see the break-down of Beer Pad’s earnings in three month increments:

Finally, here is the graph from App Viz detailing the sales over the past year:

Some Thoughts-Analysis-Lessons

The Long Tail

The first thing that is striking from the graph above is the head of the tail seems to be were most of the money was made. In the long tail, sales dropped down to only $7 per day. Every app that I have worked with involved a similar pattern and as the App Store gets older the head of the tail gets shorter.

Update Effects

It is not all that clear from the chart here, but updating Beer Pad would result in a sales boast for a few days. This is usually a significant but minor increase.

Will This Keep Your Kid In Diapers?

The other striking part of these numbers is the overall revenue. You will need to ask yourself: will one app like this be worth your while in time. For me, the answer is yes because I simply leveraged code that I already had in place. However, if you are looking at two to three months of development time then the question is a bit more difficult especially if you have more than one partner involved in the project.

Can You Afford to Maintain, Upgrade and Support Your App

So this is the unpopular discussion about whether you can afford to keep adding features to your app to keep it fresh. At some point I will need to take a look at that $7 per day figure and decide whether I can really afford to spend a week or two adding new content to the app. Many developers simply believe that you should keep on loving your app regardless of its performance no matter what and at any cost.

But, when you look at numbers like this and realize that most of your money will be made in the first month then assuming you have bills to pay you made need to consider releasing a new app instead of sticking it out.

Take-Away Message

I consider Beer Pad to be a successful app for a few reasons, but financially Beer Pad would not work on its own. The reason that it is a viable product for me is that it is part of a suite of apps (I had 9 apps out at one time last year). Simply releasing an app on its own and doing nothing else probably will not cut it for most developers.

Something I would recommend that you consider is to think a little outside the box when planning your app business. Think of supplementing your app sales with consulting, a desktop app, speaking or even ad supported apps. The app store is competitive: 85,000 apps and prices are falling to 99 cents. This is the time to be a bit more proactive in our business models so we can find a way to make this work. The app business can work, but we can’t just expect to build something, use Apple’s business model and assume we will make millions.

Any Ideas to Make It Work?

Given these numbers I’m curious about your thoughts. Can you make the mobile app business work for you? What new and crazy ideas do you have to make it work? Comment below!!

Apple App Store Stats

Source: Apple Insider, Apple announces App Store downloads top 2 billion

Source: 148Apps.biz, App Marketing 101: Pricing your iPhone App – Art and Science

Numbers like two billion downloads, four and half million app downloads each day and 85,000 applications available for iPhone OS are staggering. The App Store is clearly a huge market where people are seemingly printing their own money. Apple has essentially created a new billion dollar industry almost overnight using iPhone OS as a platform to sell software.

Even more enticing to people like myself is the dream of being involved in this market as an independent developer. That is, a developer who works either alone or with a friend or two to compete on the same turf as the big guys like Google, Microsoft and Electronic Arts. Our feeling is that with such a huge market we only need a very small piece of the pie to turn our hobby into a sustainable business.

However, taking a closer second look at the numbers above paints a more sobering picture. If we assumed that each of the 85,000 apps had an equal number of the 4.5 million downloads each day then each app’s share of that pie would be about 53 downloads each day. Since the most common price point on the app store today is 99 cents then that works out to about $37 in revenue each day after Apple’s cut. This works out to a $13,500 a year job before taxes. And of course, each app does not have an equal piece of the pie…

Here Is What This All Means For You

What you need to know about all of this is that if you are planning on simply releasing an app at the 99 cent price point then the odds are stacked against you. You are going to have to break out of the mindset that you can just build it and hope to magically get rich. You need to find a way to stand out.

How Do I Stand Out?

I’ve been spending some time with developers recently learning about how to stand out. Three themes have been repeating themselves over and over in terms of standing out on the app store: polish, Apple and pricing

Polish

Essentially, you must have your house in order for anything to happen for you on the App Store. This is means having an app that works well and looks nice. Everything that faces the customer must have a nice coat of polish, including things developers do not always think about like the app icon, description, support website and screenshots.

Apple

Apple can be your best friend or worst enemy on the App Store. Part of your strategy must be to become friends with Apple. You can do this by intentionally adding features that you know Apple is promoting, meeting Apple engineers at conferences and making sure all your contacts with Apple are positive. Most of the successful app developers I have met have cultivated contacts at Apple and have jump-started their success by being featured on iTunes.

Pricing

99 cents has become the de-facto price on the App Store for one reason: to get to the top 100 lists. This is becoming more unrealistic and developers need to start dealing with the reality that pricing apps at 99 cents is not sustainable. If you have a niche app or an exceptional app (aren’t they all?) consider raising your price point to $2.99, $4.99 or even $9.99. At those prices you may be able to support your app in the long run.

For what it’s worth, my app that sells as $4.99 has always had more revenue that similar apps I sell at $1.99 and $2.99. Sometimes, a higher price has actually increased sales for me since and I believe that some people assume that higher priced apps represent a higher quality. NOTE: right now I am experimenting with all my app pricing so it is not $4.99 right now, stay tuned for the results of that…

Recap

There are two answers to the question of standing out: make friends with Apple and offer a truly polished product. The other thing we need to think about is not about standing out at all, but simply creating a sustainable business supported by an appropriate price point.

How Do YOU Stand Out?

What tactics/strategy do you use to stand out on the Apple App Store? Comment below!

Rana Sobhany’s Keynote from 360iDev

I thought that this keynote from last week’s 360iDev was great. Rana works for a company called Medialets which helps developers do analytics for their apps (like web guys get with Google Analytics). She is talking about moving away from gaming the Apple App Store and moving toward quality in apps. Rana also has a bit to share in marketing apps which I think will be a key to success moving forward.

What struck me about her talk is the realization that we know almost NOTHING about the app store and how it works as a market. This means to met that there is still a huge opportunity for serious business to thrive in this medium.

What Did You Think of Rana’s Talk?

Please comment below!

Yesterday I snuck out of my conference to see the rocky mountains close up – the views were spectacular and I wanted to share a little bit of them with you today.

This video was taken with my flip cam and we were only halfway up the mountain:

Right after this I had the (terrible) idea to see what it was like to run in the thin mountain air. The good news was that I couldn’t run fast enough to actually feel any burn in my legs. The bad news was that it took me like 15 minutes to catch my breath.

Check out this pic I took of a lake we came across: the big white mountain is Pike’s Peak and that is where we were headed.

It took an hour to actually get up to the peak of the mountain; not ashamed to say that at times my hands got a little sweaty because on either side of the car there were 1000 foot drops. Once we got to the top I went and made this random video of me wandering around and looking over the edge of the mountain:

The views here were amazing: 60-70 miles! You could see the plains and the American desert. It really was fantastic. The air was also very thin and I found myself out of breath a few times in the cold air (40 degrees with snow up there).

After this leg of the trip we stopped by “The Garden of the Gods” where they have some amazing red rocks. I had a chance to take some pics with my iPhone, but none of these will do either of these places any justice. Check em out:

So, I must highly recommend checking out the mountains if you are out West. It was a great experience with a great group. For something like this I always like to go with a tour group. It adds a little bit of fun getting to know random people that you otherwise would never had met. My group and our tour guide was fantastic – stay tuned: later on I will be uploading some video that shows what it is like to drive in a rickety tour bus with 1000 foot drops of either side of you…

I’m psyched to be going to Denver next week for the 360iDev conference.

I am toying with the idea of interviewing the developers I met there (anyone who will talk to me!). If you are a developer, marketer or innocent bystander and what to appear on this site in either audio or visual format let me know in the comments below, Twitter or email at mattcampbell [at] howtomakeiphoneapps.com

Of course, even if I have no takers I may corner the random app developer while they are drunk and helpless at the bar so fear not!

How Can We Make Our App Business Successful?

So this is the question I will be trying to answer and frankly the reason I am attending. My own apps have been relatively successful and support my modest lifestyle, but there will be people at the conference who have knocked the ball out of the park! And I want to talk to all of them or really anyone who was something to add to the conversation about being successful app developers at any level.

Stop me and let’s talk at the conference if you have something to say. If you are being interviewed and would like a plug to your app and/or website I would love to pass you on some link juice. But, make sure to email me the information first so I can be sure that my readers can find you.

Specific Questions I Have:

How are you personally involved in app development and/or business?

What does it mean to have a successful app?

What are the biggest challenges facing developers and app business today?

What advice can you give to people who are thinking about jumping in to iPhone development?

Outside of having a solid app, what is the most important thing you can do to promote your app?

If an independent developer had $1,000 to spend that could ONLY go towards promoting their app, how should they spend the thousand bucks?

What are you most excited right now in terms of the platform?

Do you think that a particular business model is going to win out in the app world?

What do you think the future holds for the mobile app space?

I want to know what your questions are!!!

Use the comments below to submit questions. I will try to get as many as I can answered next week. Also, if you have any insight or answers to the questions above write them in below as well!

When you depend 100% on a closed system run by a company that has all the power in a business relationship then you are effectively making a deal with the devil. Here is what you need to know and do to protect yourself and your business from ruin.

BREAKING UPDATE: to get an idea of the real-world problems with working in a closed system check out this article about the serious problems developers have having right now with Apple’s iTunes Connect.

What I mean by a closed system is something where one company controls the entire process, the process is not transparent and the company that owns the system makes all the rules. As a business “partner” you have two options: play by their rules or leave. They can change the rules at any time and your business could flourish or perish. The overriding feeling though is one of lack of control.

Why Would Anyone Build A Business in Someone Else’s Playground?

If you are an iPhone developer (like me) or a Facebook developer than you know that the reason is: massive audience. From day one my apps have sold a healthy number of copies per day without me doing anything to promote them. Millions of people own iPhones and look at the app store every day. So, the answer is that you deal with the problems of a closed system because you can leverage the system’s audience and build a business that would not have existed in the first place without the system.

The bottom line is that in an increasing attention-driven ecosystem you need to do whatever you can to get people to pay attention to you or your product. These massive audiences that Facebook and Apple have are so valuable that most developers will put up with almost anything to get access to them.

So What’s the Problem?

Hopefully there will be no problem. But, you will always have the risk that one company can just pull the plug or they can change the rules and your app will tank. This does happen. Also, when you are working in this closed system you need to make choices that you may not have made in any other situation and issues can crop up that are out of your control but yet your company still gets the blame.

What Can We Do To Protect Our Business

That is all fine and dandy and to be honest this question has vexed me lately. But, I heard an great tip on the This Week In Startups podcast last week that I feel I should share with you that will help.

The take away solution is that as soon as possible you must diversify your app and decouple your brand from being exclusively on one platform. You also need to find a way to capture your audience’s email. The most important asset that you have is your audience and since Facebook and Apple will not give up our customer’s email you must find a way to stay in touch with your superfans.

Some ways you can diversity your brand are too: get an web version of your app that anyone can use, sell a desktop version of your app, get on all the other mobile devices, get web apps on other major outlets. Get your brand, product, you out to ask many different venues as you can. Keep the product focused in terms of user experience, simply provide it on as many platforms as possbible. Most likely, you will want your brand and your business to outlive any particular technology like the iPhone, Android or Facebook.

So How Does That Help Again?

Two ways: you are not overly depending on one stream of income and you have access to your audience. If you do diversify you will be able to grow your business and stay close to your mission. Probably the best way to view working in a closed system is that you are creating a funnel that will bring over customers from the system into your own.

What Do You Think? What Else Can We Do?

Comment below!!

These 7 online business models are all used in various business that I have seen and even considered at one time or another. All of these have the potential to be operated exclusively over the Internet.

Publisher

[Advertising Based Blog]

This is something you are probably familiar with already. What you do is set up an account with Google or some other ad provider and then start writing blog posts and other content. Over time you hope to create an audience who are mainly interested in what you have to say. You earn income when users click on the ads on your blog. Generally you can expect 1% of people to click on your ads – you will be paid a few cents each time a reader clicks an ad.

This is like publishing your own magazine and the business model is essential the same as a magazine. You must be able to either drive a lot of traffic to your site to make a significant income or have many sites that overall have a significant audience. When you are doing this you are essentially a publisher and you must be willing to write blog posts every day. Some blogs publish articles every hour.

Salesman

[Affiliate Marketer]

Affiliate marketers sell other people’s products for a commission. Usually, an affiliate marketer will earn between 5%-35% when they can entice someone to buy a product. You will see people doing this with Amazon books and information products like ebooks and online courses. Some affiliate marketers have their own websites and audiences and will only sell items they believe that real value to their followers. Others simply buy Google ads to sell products directly based on keywords.

The nice thing about affiliate marketing is that you can get started fast without making your own product. It is easier to generate income with affiliate marketing if you can match the right audience to the right product.

Helper

[Information Products]

Information products are things like ebooks, courses, videoes, audio and tutorials of all types that help people achieve some goal. When you are selling information products you are essential in the business of helping people. Generally, you must identify a niche of people who would benefit especially from your knowledge. Then you must find out what they want and then sell it to them. This business model can earn a decent income because there are high profit margins. The biggest cost is that you must carefully cultivate your audience and this can take a significant time investment. You must be willing to make your best effort to help your audience members out, both with your products and simply by interacting with them.

Hired Gun

[Consulting]

If you have any skill that you can use remotely with a computer you can sell your time as a consultant. You should find out what you want to do and how much you can expect to earn based on the market. Something you can do is list yourself on sites like elance and odesk to find one-off projects. As you successfully complete projects you can demand higher revenue. In this business model you will want to thing outside the box and also pursue local contracts since many people will place a higher “perceived value” on people they can work with in person. You may also want to pursue things like speaking or teaching courses to both increase your status as an expert and to diversity your income.

Store Front

Ebay Fanatics

You can use websites like Ebay to sell physical products. I am not talking about the junk from your garage, but stuff that you have either had made or bought wholesale to redistribute. Third party companies can be contracted to design, produce and even mail items out directly to your customers. This is an interesting alternative to a typical web-based company that tends to sells more abstract products.

Software Pusher

[Indy Software Publisher]

Mac users have a long history of buying software that is made by one or two person companies. This software is distributed via websites and purchased with shopping cart systems. This model can be applied to Linux and Windows users as well – the trick is to design a well polished software product that has all the trappings you would expect from a retail product. IE: professional graphics and UI, well thought out documentation, support and so on. It also helps to targeted an unserved niche or to provide a unique solution a large software companies are unlikely or unwilling to provide.

Mobile Software Pusher

[App Store Junkie]

This one is like the software pusher above except that the products are meant to be used for mobile devices like the iPhone or Android. The dynamics of mobile software development are different enough to warrant their own discussion.

The biggest difference from a typical indy software publisher is that mobile software developers have to play by the rules of the company that owns the platform and so lose a bit of the control they would otherwise have. Another difference is that mobile apps are much simpler than their desktop counterparts; one person can produce more apps in less time and takes risks a desktop developer may not be able to take.

Are There Any Other Online Business Models That I Missed?

Brainstorm in the comments below!