The Business of Mobile Apps
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Transcript of The Business of Mobile Apps
The Business of Mobile Apps
February 2012 Brian Hurley
President and CEO, Purple Forge Corp
© 2012 Purple Forge Corporation
© 2012 Purple Forge Corpora1on
Spread the Love
• I am happy to freely share my knowledge and experiences to help you in achieving your goals
• Only expectation is you do the same in the future for others
• Strengthens our community • You will never regret the time
invested in sharing. You will learn as you share your learning. Added bonus of generally “doing good” as Tony says!
© 2012 Purple Forge Corpora1on
Agenda
• Pre-amble • Part 1 - Building a Mobile App Business • Discussion • Break • Part 2 - Selling, Challenges, Operationalizing • Discussion
© 2012 Purple Forge Corpora1on
Caveat Emptor
• Based on my experiences with Purple Forge and Liquid Computing
• My opinions • There is more I don’t know then
I know • I am not a lawyer • Mobile is a rapidly developing
and dynamic environment
© 2012 Purple Forge Corpora1on
Purple Forge -‐ Overview • Founded 2008 • Headquartered in Ottawa • Federally incorporated • Leadership:
– Brian Hurley, President and CEO – John Craig, VP Sales and Marketing
• Private company – no investors • Hosted mobile app solutions • iOS, iOS Tablet, Android, Mobile Web, Blackberry • Over 100 apps published • Reseller partners in US, Canada • Sales in US, Canada, South America, Europe, Australia • Revenue growth doubling every year • International awards and recognition
© 2012 Purple Forge Corpora1on
Purple Forge -‐ SoluAons
• Political Campaigns • Government • Market Research • Conferences & Events • Print Replacement • Tourism • Public Consultation • Advocacy and Associations • Celebrities
© 2012 Purple Forge Corpora1on
Purple Forge OpportuniAes • Virtual Concierge Licensing • Postcard App Licensing (10+ themes que’d up) • Customer Portal Licensing • Reseller / Referral Partnerships • Jobs
© 2012 Purple Forge Corpora1on
The Mobile Apps Gold Rush
Ref: Telus Mobile SoluAons, Jan 2012
© 2012 Purple Forge Corpora1on
Gold Rush Stories
© 2012 Purple Forge Corpora1on
Case Study 1
© 2012 Purple Forge Corpora1on
Case Study 1
The idea is hard
© 2012 Purple Forge Corpora1on
Case Study 2
© 2012 Purple Forge Corpora1on
Case Study 2
An idea needs to have a path to make money
© 2012 Purple Forge Corpora1on
Case Study 3
© 2012 Purple Forge Corpora1on
Case Study 3
Validate path to money with prospective customers
© 2012 Purple Forge Corpora1on
Building a Mobile App Business
Developing an Idea
Determining how idea can make money
Turning idea into an App
Selling
Part 2 Part 1
© 2012 Purple Forge Corpora1on
Making Money with Apps Making Mon
ey
Product Focused • Pay for Downloads • AdverAsing (e.g. Apple iAds, Google Ads) • Sponsorship (e.g. splash page, branded app) • Digital “Goods” (e.g. game levels, extra health/points, new features) • SubscripAon/Memberships (e.g. content, feature use, membership access) • TransacAon fee(s) (e.g. per transacAon fee, % of transacAon) • Sell physical products (e.g. Ackets, printed photos) • DonaAons Service Focused • Build Apps on Contract to Customers , e.g. Macadamian Technologies • Sell Hosted Apps to Customers, e.g. Purple Forge Complementary Product Focused • License Source Code to App Developers • Sell Cloud Services to App Developers • Marke:ng/Business Development Services to App Developers • Sell complimentary hardware (e.g. auto diagnos:cs, medical, card readers)
* -‐ not in scope for today
© 2012 Purple Forge Corpora1on
Downloads -‐ Opportunity
h[p://gigaom.com/apple/the-‐average-‐ios-‐app-‐publisher-‐isnt-‐making-‐much-‐money/
© 2012 Purple Forge Corpora1on
Downloads -‐ What Does it Take?
United States (Daily Downloads) • Top 50: 25 thousand • Top 25: 45 thousand • Top 10: 80 thousand
Canada is approx 1/10th US
Ref: h[p://www.disAmo.com/blog/2011_12_quora-‐answering-‐series-‐download-‐volume-‐needed-‐to-‐hit-‐the-‐top-‐charts/ h[p://www.apple.com/itunes/charts/paid-‐apps/
© 2012 Purple Forge Corpora1on
Digital Goods
h[p://blog.flurry.com/bid/67748/Consumers-‐Spend-‐Average-‐of-‐14-‐per-‐TransacAon-‐in-‐iOS-‐and-‐Android-‐Freemium-‐Games
“In –App Purchase”
© 2012 Purple Forge Corpora1on
AdverAsing
h[p://webdesktoplife.com/post/6684344795/making-‐money-‐with-‐iads-‐not-‐so-‐easy
h[p://forum.unity3d.com/threads/55191-‐iAd-‐StaAsAcs
h[p://www.galarina.eu/blog/2011/9/24/photometa-‐iad-‐revenues.html
© 2012 Purple Forge Corpora1on
Sponsorship Can sell sponsorship of the app as a whole or sponsor elements separately For example, can sell sponsorships for elements of an app: • Splash screen logo • About page • Pop-up • Slide in/out banner ad • Individual functions/features of app Sponsorships can be time-based, e.g. sold year by year, or during specific days (if time-related event)
We’ve seen conference-app related sponsorships ranging from $5K – $25K+ Sponsors are typically looking for name/brand visibility to app audience or app owner
© 2012 Purple Forge Corpora1on
SubscripAons – Content
• Media content subscription, e.g. New York Times, Netflix, Zino
• Books (e.g. iBook), Publications • “In-App” and “Out-of-App” purchase
© 2012 Purple Forge Corpora1on
SubscripAons – Membership
© 2012 Purple Forge Corpora1on
TransacAon Fees
© 2012 Purple Forge Corpora1on
Physical Goods
© 2012 Purple Forge Corpora1on
Build Apps on Contract • Contract Types
– Fixed cost – Time and materials
• Contract Scope – Server + Mobile Client – Mobile Client Only
• Typical Rates – Hourly Rates: $20 - $150/hour – Fixed Fee Contracts: $10K - $100K+
• Typical Terms – 50% on signing, 50% on sign-off – Usually have to assign IP and source code to the client
with indemnification • Competition
– Thousands of companies offering “hired gun” services – Lots of Offshore services and proxy companies pushing
price down – Large companies starting to do work in-house for large/
strategic – but will always be demand for custom dev
© 2012 Purple Forge Corpora1on
Hosted Apps
• Setup fee • Monthly hosting fee • Base offer - modules • Customizations extra • One-stop solution • Fast delivery • Economical cost • Worry free support
© 2012 Purple Forge Corpora1on
Cloud Services
© 2012 Purple Forge Corpora1on
Smartphones Key A[ributes Demographics • Over 1/3 of population owns a
Smartphone and growing • Replacing desktop as primary
method of accessing online information
Technology • Location aware • Push notifications • Compass • SMS • MMS • Camera(s) – Front and Back • Video(s) – Front and Back • Audio recording • Voice recognition • Accelerometer • Touch interface • WiFi • Bluetooth • NFC • Cloud services (e.g. Siri, Google)
© 2012 Purple Forge Corpora1on
Why Do People Use Apps? • Access to internet is continuous during day for smartphone users - apps
are downloaded anywhere and at anytime – considered rewarding in itself… • Apps preferred over mobile web because:
– Quick access – Direct access – Ease of use – “Offline” functionality
• Main reasons for using apps: – staying part of the social loop – building image and appearance – managing everyday chores – instant access to know-how – structure and self-discipline (becomes part of routine for day) – receiving inspiration/ideas – immediate updates on areas of interest – infinite entertainment/distraction
Ref: Device Study 2010 The US Results, Ericsson
© 2012 Purple Forge Corpora1on
Finding the Idea -‐ Where to Start?
Technology
• Mobile feature centric
Category
• Game • Social • Etc
Content
• Media
Add-‐on
• Enhance exisAng business processes
Solve Problem
• Previously not possible without mobile
Hired Gun
• Build what a customer will pay you for
Sell Talk with
prospecAve customers
Talk with prospecAve customers
© 2012 Purple Forge Corpora1on
Gejng to “the” Idea
Establish the evaluaAon parameters
Evaluate Ideas against parameters
Narrow down Invest Ame incrementally
Fastest Ame to $$$
Make your decision
© 2012 Purple Forge Corpora1on
Filtering Ideas (Example)
Column Headings • Ranking • App Name • App DescripAon • Comments • Expected Ease of Development (Quick (based on app example template, mainly text-‐based)/Easy
(client only, minimal graphics)/Medium (GPS, Music/Sound Effects, staAc graphics with simple manipulaAons)/Hard (heavy animaAon, AI player, client and server sides, lots of content creaAon, ongoing maintenance of server content))
• App Category • Addressable Size (H/M/L) • "Cool" Factor (H/M/L) • A "Candy Bar" Purchase Decision? (Y/N) • Uses Graphics (staAc/dynamic) • Uses AI Players/Game Control Logic (Y/N) • Uses 3G Network (Y/N) • Uses GPS (Y/N) • Uses Accelerometer (Y/N) • Uses Audio Input (Y/N) • Uses Audio Output/Sound Effects/Music (Y/N) • Uses MulA-‐touch (vs single-‐touch, single-‐touch swipe) Interface (Y/N) • Uses Client-‐Server (Y/N) • Uses Manual Tasks to Maintain Server/Network Content (Y/N) • CompeAAve Apps Exist (Y/N) • Price per Client • Price per annual service sub • EsAmated Selling Period (weeks) • PenetraAon % EsAmate • Extra Development Costs (e.g. any special hardware/configuraAons, libraries) • Est Copies Sold • Est Annual Revenue
Talk with prospecAve customers
© 2012 Purple Forge Corpora1on
Filtering Ideas (Example)
Define how it will make money
Define revenue opportunity (e.g. how much, who, how many, when) (talk to prospecAve customers)
Understand potenAal compeAAon and posiAoning/advantage
Determine Ame and cost to implement and sell
Confirm it will be profitable
© 2012 Purple Forge Corpora1on
Where Are These Customers?
One way to meet prospective customers is to join the Ottawa Chamber of Commerce and participate in their
networking events.
h?p://o?awachamber.ca
© 2012 Purple Forge Corpora1on
Where Are These Customers?
First municipal politician First bilingual municipal app (French/English)
© 2012 Purple Forge Corpora1on
Where Are These Customers?
• Pick up the phone and do a cold call – the worst that can happen is they say “no”
• Ask your friends and family who they know – get an intro
• Network, network, network
© 2012 Purple Forge Corpora1on
Aser the “Idea” • Target market • Team formalization • Business plan
– Sales plan – Implementation plan
• Build vs Buy/License vs Partner – Financial plan
• Costs: labour, 3rd party contracts, servers, operations infrastructure, marketing, legal
• Revenue: sales
Only do the minimum to get to the next stage of the business
© 2012 Purple Forge Corpora1on
Target Market
App Store
Device
OS Version
Plauorm
Carrier
Language
Country
Interests
Age
Gender
TECH REGION
PEOPLE
© 2012 Purple Forge Corpora1on
Necessary Team Skills Mix
• Business Leadership • Sales and MarkeAng • Technical • CreaAve • OperaAons
Advisors
Contract
Part-‐Time
Core Team
© 2012 Purple Forge Corpora1on
Components of an App
User Experience Editorial Content Digital Media Content Mobile Plauorm(s) Coding Mobile Plauorm(s) TesAng Cloud Services Coding Cloud Services TesAng Cloud Services IntegraAon
APP
© 2012 Purple Forge Corpora1on
Plauorm Technology Choices
Op1ons Examples
Plauorm iOS, Android, Blackberry OS, Bada, Web
OS Versions Android V2.3, Blackberry OS5, iOS4.2
Form Factors Smartphone, Tablet, Phablet
Devices Blackberry 9000, Nexus S, iPhone 3GS, Fire
Development Tools -‐ NaAve ObjecAve C, C++, Java
Development Tools -‐ Web HTML5, CSS3, Javascript, JQueryMobile
Cross-‐Plauorm Frameworks Appcelerator, PhoneGap, Sencha
Game-‐Oriented Development Torque, Unity, Game Salad
Apps as a Service Purple Forge
© 2012 Purple Forge Corpora1on
Game Environments
© 2012 Purple Forge Corpora1on
Cloud Services Op1ons Example
Role your own • Servers: Amazon, Rackspace, GoDaddy, .. • Sosware: e.g. Open Source Sosware • Services: e.g. Apigee
Commercial APIs
• YouTube, Flickr, Facebook, Twi[er, Picasa, LinkedIn, Flurry, Google AnalyAcs, Urban Airship, Parse, Apple Game Center, Apple Push NoAficaAon, Google Search, Google Maps, YellowPages, OpenFeint
• See h[p://programmableweb.com for more examples
Usage ConsideraAons
CondiAons of Use SLA Cost (parAcularly wrt usage) Capacity/Scaling, Usage quotas, Usage thro[ling rates Data Privacy Data Ownership Security FaciliAes LocaAon
© 2012 Purple Forge Corpora1on
Technical Resourcing • Project management • Technical leadership • ImplementaAon skill sets will be dependent upon the
technology choices made (or vice versa) • Different implementaAon skill sets required and exist
in individuals • Skills vary by plauorm, e.g. Android, iOS, Blackberry • Some example skill types:
• Server Apps and OperaAons • Mobile APIs • 2D/3D Gaming • Graphic Designer • Unity Developer • Torque Developer • 3D Graphics Model Designer • User Experience Designer • Database Developer • Website Developer • Tester • OperaAons
© 2012 Purple Forge Corpora1on
Outsourcing Labour
© 2012 Purple Forge Corpora1on
Outsourcing Infrastructure
© 2012 Purple Forge Corpora1on
Simplified ProducAon Cycle
Project Established
API Spec
Wireframes Prototype/Mockups
Incremental Development
Placeholder Media Test
Add Final Media
Test Sign-‐offs
Submit to Distribu1on
Available for Download
© 2012 Purple Forge Corpora1on
Wireframe Example
h[p://sixrevisions.com/user-‐interface/website-‐wireframing/ h[p://inspiraAonfeed.com/inspiraAon/25-‐examples-‐of-‐wireframes-‐and-‐mockups-‐sketches/
h[p://www.balsamiq.com/
© 2012 Purple Forge Corpora1on
Agenda
• Pre-amble • Part 1 - Building a Mobile App Business • Discussion • Break • Part 2 - Selling, Challenges, Operationalizing • Discussion
© 2012 Purple Forge Corpora1on
Selling
• Resellers • Partners • Direct • App Stores
“TECHIES” marginalize the effort associated with selling the way “SALES” marginalize the complexity of implementaAon.
© 2012 Purple Forge Corpora1on
Selling – Heavy Lising Resellers They resell your product/service in return for a % of the sale 30%-‐60%. They
may white-‐label. You need to cold call to find Resellers. (Once established they may call you!)
Partners They sell your product as a complementary products or services to their sales. They bring you deals. You may need to work on proposals with them. You need to cold call to find Partners. (Once established they may call you!)
Direct You do all the heavy lising – direct calling to end purchaser. Cold calling. MarkeAng – Website, Google Ads, TradiAonal Media. Closing “reference customers” may be required in order to land Resellers and Partners.
App Stores Publish thru App Stores. Sales via pay per download, pay per in-‐app digital content or subscripAons. App Store collects the revenue and handles returns. They take 30% of sale. They keep their cut on returns. MarkeAng – Website, Google Ads, TradiAonal Media
© 2012 Purple Forge Corpora1on
App Stores Popularity Store User
Exp Submission to Approval
Transac1on Fee
Market leader Best 5-‐ 10 days 30%
Increasing Good Immediate 30%
Rapidly declining Poor 5 to 10++
days 30%
Increasing Good 5 to 10+ days 30%
Mobile Web Steady
Very Poor -‐ Google Search
N/A N/A
© 2012 Purple Forge Corpora1on
MarkeAng Strategy
Publishing in an app store is NOT a marketing strategy
© 2012 Purple Forge Corpora1on
Gejng Your App NoAced • TweeAng • Dedicated Facebook Page for App • MenAoned on related Facebook Page • PosAngs on related Facebook Pages • Dedicated domain and website • Dedicated landing page that supporAng organizaAons all point
to (e.g. h[p://getmyapp.me/appname) • Dedicated webpage on exisAng organizaAon's website • MenAoned on shared page on exisAng organizaAon's website • MenAoned on front-‐page rotaAon of organizaAon's main
website in prominent manner, e.g. large graphic banner • MenAoned on front-‐page rotaAon of organizaAon's main page
by a link to another page • Cross-‐linked from related app partner sites to a dedicated
webpage for the app • In app cross-‐selling catalog (where organizaAon has mulAple
apps) • App.net Webpage • “Rate the app” nag • Blog coverage • Review sites coverage • Paid web adverAsing • Sponsored Blog RSS feed • Sponsored eNewsleKer • Sponsored website • AdverAsing on public transit buses • AdverAsing on airport screen Ackers • AdverAsing on airport display screens • Google Ads Web • Google Ads Mobile • iAds Mobile • Radio On-‐air MenAon/Interview
• Podcast review • TV coverage -‐ Local • TV coverage -‐ NaAonal • Special Feature by Apple • New and Notable by Apple • Mashable coverage • TechCrunch coverage • CNN website coverage • Press Release -‐ PR Web • Press Release -‐ Self-‐distributed • eNewsle[er Announcement (exisAng distribuAon related to
organizaAon) • Print Newspaper Coverage -‐ NaAonal • Print Newspaper Coverage -‐ Local • Topic of App -‐ Common Interest • Topic of App -‐ Local/Regional Interest • Topic of App -‐ Niche Common Interest • Topic of App -‐ Seasonal Interest • Topic of App -‐ Event A[endee Specific Interest • AdverAsed with/linked to a specific event which has people arriving /
interested on a specific date • Event collateral -‐ business card handouts with links to download page • Event collateral -‐ posters at event site registraAon and entrances • MenAon of app in all press release communicaAons of organizaAon • MenAon in .sig of email's for members of organizaAon • YouTube videos • QR-‐codes in organizaAons print materials • AdverAsing on print (e.g. magazines, news papers, brochures) • Push noAficaAon to ask people to "Tell their friends" about the app • Press event by Mayor • App wins an Award which is publicly announced by award giving
organizaAon
© 2012 Purple Forge Corpora1on
What Works
• App Store Featured App • App Store What’s Hot • App Store New & Noteworthy • App Store Top 50, 25, 10 in Category (accelerates downloads) • App Store Top 100, 50 Overall (accelerates downloads) • Major Online News coverage • National Traditional Media coverage – TV, Newspapers • Regional Traditional Media coverage – TV, Newspapers • Part of existing coordinated campaign / event marketing • eMail Newsletters to established list • App cross selling • Prominent placement on established org/business website • Press release • Awards
© 2012 Purple Forge Corpora1on
The Holy Grails
© 2012 Purple Forge Corpora1on
Press, TV, Papers, Blogs, Apple,…
Apple Featured
Online News Coverage
Big Launch
Digital signage, websites, print ads for specific events
© 2012 Purple Forge Corpora1on
Web, eMail, Media, Event Event Ends
Event Starts
Media Coverage Starts
eMail, Web Launch
Few weeks before Event Starts
MenAoned in associated campaign
© 2012 Purple Forge Corpora1on
Launch, Press, Event
Media Coverage Starts
Week Before Event Starts
Event Starts
Event Ends
eMail, Media, Web Launch
MenAoned in associated campaign
© 2012 Purple Forge Corpora1on
Press, Social, Featured, Event Event Ends
Featured
Strong Press, Social Launch
Event Starts
MenAoned in associated campaign
© 2012 Purple Forge Corpora1on
Do nothing… free… common interest
© 2012 Purple Forge Corpora1on
Do lots… get nothing… go free
© 2012 Purple Forge Corpora1on
Zombiegram
© 2012 Purple Forge Corpora1on
Challenges – Technology
• TesAng: n x n problem • MulA-‐language • MulA-‐version • MulA-‐plauorm • App upgrade management • Dev environment management • Dev skillsets management • FragmentaAon
© 2012 Purple Forge Corpora1on
FragmentaAon • Blackberry is off the scale – includes variants by carrier (BB10 may be
better?) • Android fragmentation is a rapidly growing challenge • Apple – constrained, minimal fragmentation • Form factors - Smartphone, Tablet, Phablet (phone-tablet hybrid) • Screen sizes / resolutions - graphics x “n” • OS versions • OS forks (e.g. Amazon Fire) • App Stores (e.g. Google, Amazon, Blackberry Android, others++) • No such thing as an “Android App”, only “Android Compatible”
FragmentaAon = cost to develop, cost of hardware to test on, poor user experience, lengthy Ame to deliver, support issues (and a stain on your reputaAon)
© 2012 Purple Forge Corpora1on
Challenges -‐ Business
• RestricAons by app store • Shising App Stores policies • Privacy • Security • PCI compliance • Open source risk management • Rapidly changing trends and
demographics • Provenance / Copyright • IP risks • IP ownership
© 2012 Purple Forge Corpora1on
Intellectual Property • Intellectual Property
– You assign all rights, e.g. hired gun – You retain all rights – You license
• exclusive, non-exclusive • source code and/or binary • Indemnification against infringement
• Splitting IP Ownership – Code versus content – Indemnification considerations
• Open Source – Exposure to IP claims – Risk of having to make proprietary code public
• Employment Contracts – If doing “on the side” you may be violating your
employment contract and compromising your product IP Mobile App
Graphics/Media
Content Code
Unknowable world – assigning away IP is giving away future business opportuniAes, e.g. derivaAve works
© 2012 Purple Forge Corpora1on
OperaAonalizing Your Business • If creaAng something of value with others involved -‐
good paper makes good friends/business • Legal enAty establishment -‐ form of company,
shareholder agreement, stock opAon plan, HST number • Bank account / paypal account / google market
account / itunes app store account / android market / RIM developer accounts / cloud service accounts – company controlled
• Infrastructure – file shares, SCM, bug tracking, project management – company controlled – virtual / SaaS products
• Employment contracts – IP assignment, NDA, terms for divorce
• Insurance • Taxes -‐ paying and collecAng and remijng • AccounAng • Payroll • HST collecAon/payment • Contracts • Intellectual Property (IP) – patents, trade secrets • Trademarks • Business plan • Roadmap
© 2012 Purple Forge Corpora1on
IniAal Money / Launching Base
• Gejng first customer to pay up-‐front
• Government programs • University / College collaboraAons • Personal Savings • Friends and family • Unpaid labour from founders • Equity / stock opAons • Good will • Spouse’s paycheck • Doing contract work in parallel
© 2012 Purple Forge Corpora1on
The Opportunity is Now
• Build your network of potenAal collaborators/partners
• Leverage your schools experts – informal discussions around their interest areas/areas of research
• Experiment with new technologies and how you and your friends might use them
• Government programs – summer jobs, research grants
• Resell another companies products
• Apply to Lead to Win
© 2012 Purple Forge Corpora1on
Lead to Win
• Apply to Lead to Win (it’s free!) • Will “fill in the details” • Will support your efforts to grow a sustainable business • Need to have a business idea and desire to make it a reality • Next sessions Feb 21-23 (Days 1 to 3) , Mar 20-22 (Days 4 to 6)
© 2012 Purple Forge Corpora1on
Next Steps • Lead to Win - Receiving Applications Now • Feedback on your ideas – Lead to Win can
help • Monthly Networking Sessions to connect
people who are looking to form teams – Lead to Win
• Join the Ottawa Chamber of Commerce – meet some prospective customers
• Lead to Win Mobile Stream – Interest? Send Tony a note with what you need to build your business!
© 2012 Purple Forge Corpora1on
Agenda
• Pre-amble • Part 1 - Building a Mobile App Business • Discussion • Break • Part 2 - Selling, Challenges, Operationalizing • Discussion
© 2012 Purple Forge Corpora1on
Case Study 4
© 2012 Purple Forge Corpora1on
About Me
[email protected] h[p://linkedin.com/in/brianrhurley h[p://twi[er.com/brianhurley h[p://slideshare.com/brianhurley h[p://purplejuncAon.com (lots of lists of useful stuff related to tools and stats) h[p://purpleforge.com
Thank You!
www.purpleforge.com [email protected]