Comments on: How to Evaluate a (paid) iPhone App Idea

By: Michael Brown

Michael Brown — Fri, 09 Mar 2012 02:36:00 +0000

The majority of small developer income doesn’t necessarily come from the app’s themselves, but from the market share, affiliation, and adverts incorporated into the apps. It is my observation that larger, more credible developing companies, have their toes in the market, leaving small businesses unlikely to compete (marketability wise). Smaller developers should focus (outside the box of app sales), and focus on the app itself as the marketeer.

By: Anonymous

Anonymous — Fri, 02 Mar 2012 15:57:00 +0000

That’s definitely a conclusion I came to. To build a big business you either need a hit OR you need a portfolio of (hopefully cross-promote-able) apps. That said, remember that the whole market is growing like gangbusters.

This is less true in games. If you build a (FREE!) game that is well designed for revenue, you don’t need to be a natural hit… You can just buy users via marketing. By way of example: Zynga Poker is the #3 grossing game in the whole dang app store. However, it’s only #88 on the “Top Free” list (and better believe that it wouldn’t be there without a big marketing budget– they are “buying” users). If you can build a game with a decent ARPU (average revenue per user), you can “buy” users at the going rate. This will make you more money than it costs AND will help you float up the rankings. Floating up the rankings gets you organic/free downloads, which reduces your effective cost/user.

There are certainly games outside of the top 50 (or even top 100) that are supporting entire teams/companies. That said, I’d still aim for a portfolio strategy here – you’d want to keep churning out games.

By: Pattondog

Pattondog — Fri, 02 Mar 2012 07:41:00 +0000

Some weeks ago i did my numbers, and i end up with really disapointing results. To make just $90K/year (support for just 2 developers), you need to sell 90.000 real purchases for $1.30. Every year and consistenly. Am i the only one that is seeing it a little bit not doable achieve that amount of real purchases per year? I really don’t know how a team from TOP80 can make $120K/month. It would requiere more than 100K real purchases per moth, almost 1M per year. Something is not going on well with this studies from my point of view.

By: Anonymous

Anonymous — Wed, 22 Feb 2012 00:04:00 +0000

That’s the second time I’ve heard that. FWIW, I didn’t muck with it– I just cropped my wife out of this picture ( https://skitch.com/webwright/8dwib/webwright11-on-instagrid.me-the-best-way-to-view-instagram-photos). I guess I’m naturally crooked?

By: Anonymous

Anonymous — Wed, 22 Feb 2012 00:00:00 +0000

That’s a great point! If your ARPU is $1.70, you can’t afford gold plated customer service by any means… At our peak with TouchBase (when our run rate was enough to cover 2 solid paychecks) we were getting 10-15 emails per day (though many of those didn’t require troubleshooting– oftentimes they were compliments and suggestions). So I think a 1-2 person shop could handle that, assuming no other monstrous incremental costs. Of course, apps can vary in terms of support needs. And, at scale with a free hit like Flipboard, it’s got to be pretty crazy! Yet another reason that a good ARPU is critical– otherwise you can be paralyzed by support volume.

By: Mike D.

Mike D. — Tue, 21 Feb 2012 22:57:00 +0000

Is it me or is the photo of you on the right a little distorted/skewed?

By: Jason Preston

Jason Preston — Tue, 21 Feb 2012 21:43:00 +0000

Even numbers like this are misleading though, right? because a 1 or 2 dev shop is unrealistic given other hidden costs? I asked one of the founder of Flipboard what the biggest surprise was about their success, and he told me it was the massive amount of customer support.

By: Anonymous

Anonymous — Fri, 17 Feb 2012 14:36:00 +0000

Yeah, we didn’t go too far down. Apple only publishes the top 1000, so you’d need to math your way down from there. There’s a really long tail, I think, of apps that can happily support 1 or 2 devs. We do have data down to rank 900 or so, which would net you about $9k/month after Apple’s cut.

By: Anonymous

Anonymous — Fri, 17 Feb 2012 14:27:00 +0000

Yeah, I think we’re probably a bit off (on the low side)– though our own data points are indeed in there, so it’s not too off. Didn’t do anything with the older data to compensate for age, which probably makes sense to do if I was going to do a great job at it. I suppose I could multiply it by the app store growth rate.

I am/was REALLY tempted to make a good study of it, try to collect tons of (timestamped) data… But I just wanted to be in the neighborhood of understanding “is this market worth it”. It was, for our little effort, but certainly wasn’t fundworthy or even full-timeworthy. Few single-app strategies are fundworthy, IMO.

By: Jeff Dixon

Jeff Dixon — Fri, 17 Feb 2012 06:43:00 +0000

Hey Tony, nice post. I did a similar analysis scrapping data from public and semi-private sources to come up with a power curve. In my case I came up with slightly more favorable results. I’m curious if your own personal results corroborated with the predicted results? Also, did you do anything to normalize the secondary data sources based on the date they were published? The overall number of iOS apps downloaded has increased significantly over the last 24 months and looking at data even 18 months old is probably misleading. Thoughts?