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2/02/2012

App Store Milestone #1: $10k

By Mark Rickert.

I’ve been writing software for almost 10 years now and decided that 2011 was the year I started writing iOS apps. I’ve been a fan of Apple products for a while and dabbled with iPhone development when the tools and the App Store first came out, but nothing so serious to the point of releasing an app. That all changed this year.

I decided in January 2011 to pony up the $99 developer fee to release a simple, free, ad supported iPhone app. I was interested in it and wanted to see if I could do it. It also had the added “cool-factor” benefit of being able to say, “I have an app in the App Store” to friends, prospective clients at work, etc. Never in my wildest dreams did I expect to write a “hit” business app and start making major coin from something I was just doing in my spare time, but that’s what happened. So far, I’ve grossed over $11,000 in the App Store… $10,000 of it in the last 6 months.

My First Free App

I learned a lot from releasing my first iPhone app: Six-Pack Equivalent Calculator… primarily that you shouldn’t release an ad-supported app that does not have high user engagement times. The app was a utilitarian “one use and quit until you want to use it again” type of app. I can see an RSS reader or a Facebook client being free with ads, since there’s a long user engagement period, but this revenue model simply didn’t work with my application type.

To date (Jan 17th, 2011 – Jan 9, 2012) the app has netted me a total of $11.50. Yep, that’s less than $1 a month. Most of that revenue was front-loaded when the app was brand new. So far 624 people have purchased that app and I’ve earned about 1.85¢ per user. Not great, but then again, I wasn’t expecting huge sums of money and a heavenly chorus from my first free app.

The Next Idea

With my first app published and the pennies rolling in, I decided to go after a more lucrative market that might actually make me some money for my precious time. I decided to write an app for people in direct sales (no, not pyramid or ponzi-schemes… legitimate network marketing businesses). I had a few reasons for picking this market:

  • My wife and I are in the network marketing business. We are independent distributors for Premier Designs High Fashion Jewelry, so I know the challenges the distributors face on a day to day basis.
  • I have family members in the direct sales industry, so that would give me a beta tester base that would be willing to help me test.
  • People who would purchase the app are business people, therefore my app would be a business expense. People are more willing to lay down a few bucks when they know they can write it off on their taxes.

Version 1

I wanted to create an app that my wife could use when she was out and about selling her wares. The app would quickly add up multiple items and then add tax and shipping to give her the total for the order .Everything would be displayed and she should then write down the complete order details onto the customer’s receipt and give them the hard copy. I called it Checkout Helper.

The first version of the app was ugly, with a capital U. I didn’t really know how to properly use, manipulate, and style the UI elements that Apple provides developers. I priced it at $1.99 and released it on February 24th, 2011. I had one purchase that first day. WOW! A whole $1.40 (after Apple’s 30% cut)! That was more than double what I had seen so far from my free app.

Warning: watch out, your eyes might hurt when you look at these screenshots:

Checkout Helper chugged along at 1-3 purchases a day. I was high on the hog one fateful day in July when it brought in a whopping $19.60. Version 1 of Checkout helper netted me $418.64 over the first 4.5 months. Not bad… I had more than made back my $99 developer fee.

Version 2

I wasn’t happy with so many things about the app. I really wanted it to look nicer and do some extra stuff (like more shipping options for direct sales companies that use percentage based shipping or some combination of flat+percentage).

So I went to work in June redesigning and recoding the application from the ground up. I completely updated the layout and the graphics. I also added a bunch of new features like item discounts and generally made the application better. After all, I had become a better iOS programmer since the first version was released.

Version 2 went live on July 13th, just in time for an industry convention I was attending (“Rally” as it’s called at Premier Designs). I had come prepared with business cards that had a QR code on them and handed them out all week to people I saw that had iPhones (they were everywhere). I think I gave out a little over 200 cards that week.

Here’s how version 2 was updated, with a better look and feel:

Well I must have done something right, because sales shot through the roof. My app started gaining popularity amongst a few different direct sales companies and I did very little marketing other than Facebook. Within a day, Checkout Helper was the #29 top ranking business iPhone app. The rankings topped out on September 17th at #13.

In September, I added in-app purchases to change the background of the application. Soon after, I made the application universal so people could enjoy high resolution graphics on their iPads.

From July to around the middle of December, I netted $10,000 from Checkout helper. Let’s not forget that <$1 a month from my free app too! I’m hoping that the trajectory stays going up. December is typically a slow month for direct sales, so I expected worse than average sales.

I started an LLC to be a legal hedge around all my apps in December called, Mohawk Apps, LLC.

Conclusion

So here’s some advice from a guy that has been relatively successful in the App Store (at least I think I have).

  1. Find a real world problem you think you can solve and solve it. People will pay for it.
  2. Know your target market and cater to them. Provide ways OTHER than iTunes reviews for them to tell you about what they like/dislike, and what features they want. I have a contact form on my website and a link in my apps to contact me.
  3. Release early and release often. My first version was OK. It worked and I put it out there for people to use. Then I made it better. Then I made it even better! I’m sure those people who bought v1.0 have been on a fun ride with the successive improvements (and sometimes annoying bugs). I released updates as often as I could.”Real artists ship
    - Steve Jobs
  4. Start developing the project as a universal application if you ever plan to make it universal. It’s easier to make it universal from the start instead of adding in iPad support after the fact.
  5. Play with your pricing a bit to try and find the “sweet spot.” Not all apps need to be $0.99, especially ones that don’t have mass market appeal.
  6. Utilize the in-app purchasing mechanism to keep monetizing current users. I know the StoreKit framework is a pain in the butt to work with (especially when Apple’s sandbox servers are down without notice), bit it’s worth it in the end.

I’ve found that I really enjoy writing iOS apps. I have a total of 4 apps through Mohawk Apps, and another 4 that I’ve created for clients at work (wrote by myself, primary developer, or contributing developer).

Last week, I released a new utility application, specifically for Premier Designs Independent Distributors, called The Show Closer. With the money I earned from Checkout Helper, I was able to get professionally designed icons and loading screen, and I think the app is my best one to date.

…but there are just a few things I think could be improved upon…

Graphs created using AppViz 2 and AppSales-Mobile.

Update – to answer some questions

Hackernews throttled me and won’t let me post anymore tonight (not sure why), so I’ll answer these here:

coryl asked:

Thank you for sharing, its appreciated by people like me who are new to mobile development.
Question: Can you disclose any information about your in-app sales? You mentioned you sold customizable background art, what was the price point? How many did you sell? Roughly what percentage of app owners end up doing an in-app purchase?

No problem. Those are some pretty complex stats, but I’ll try and simplify them for you.

Total In app purchase revenue to date: $460.73. That came from 545 total transactions averaging out to about $0.85 per transaction ($1.22 before Apple’s cut). I have some art that’s $0.99 and some is $1.99, but nothing over that. You can see the percentage of the whole by looking at the last graph. Anything at the bottom of Sept-Dec that isn’t that large maroon color was an in-app purchase.

During that same time frame, I had 3,007 purchases of the app, which means on average, 18% of my users made an in-app purchase (not taking into account users that purchased more than one item or users that upgraded from previous versions and then bought an item). If I take into account my total user-base of 4,748, then about 11.5% of users made an in-app purchase so far.

As I understand it, the in-app purchase for a game like Jetpack Joyride hovers around 1% or so (read that somewhere, can’t remember where). So 18% and 11.5% are pretty dang high in-app purchase numbers.


brc asked:

I’m curious – if the UI has changed – are people just picking this up from screenshots? With no trial mode, I’m interested in how you think improvments[sic] in the software improve sales. Note that I totally agree with this position, but I’m curious as to how this plays out on App Store purchases

We’ve all done it: We look at an app and immediately judge the quality of the application by the screenshots. I think that making the application a lot “slicker” looking as well as good screenshots in the app store could have contributed to its success. I don’t have any hard data on this and data would probably be impossible to capture about this metric.

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