Earlier this year I shared part 1 of this series (about blogging as a career), and today I'm back to share about the second life-changing young industry that we're involved with, developing apps.
First, a little timeline/perspective maker!
-Seven years ago when I stood in line for my first iPhone, I didn't know what an app was. Oh, and by the way, if you didn't have the original iPhone, the camera sucked. Bad.
-Four years ago when I signed up for Instagram, I had no idea that I would soon share photos there every single day. I slowly transitioned into taking a good majority of my photos/memories with my iPhone. This is mind-blowing to me as someone who didn't even own a digital camera until I was in my twenties.
-Three years ago I had the crazy idea to create our own app, and we talked about it for months as just that… a crazy idea.
-A year ago, in May, we released our first app, Spiegeling. It went to #1 paid app on the first day and stayed there for more than a week. Our business was changed forever by this one risky venture. We invested an amount of money that seemed insanely scary to us, and we made it back on the first day. It was nothing short of a miracle and one of the happiest/craziest moments of my life.
-Last month we released our second app, Party Party! It was also successful and went to #1 paid app on the iTunes charts. We celebrated, again, and by the end of the day I was looming over Trey's desk trying to talk to him about the next app because we're completely addicted to and in love with this process.
All of this in just seven years.
We feel so incredibly lucky to be in the challenging, unpredictable, often-times-frustrating and super rewarding world of apps. We've learned so much in these past two years. And we look forward to learning more because the app world is evolving at an insanely rapid pace!
Today we're excited to share what we've learned from our adventures in creating apps, where we think the app world is headed, and why we love it so much (spoiler: it's not about the money).
Much like blogging, apps are a baby industry. It's so young it's hard to tell what will happen. That's okay. It's really healthy, actually! The app world is constantly changing, which is fun and exciting. The energy is electric. I am constantly learning from what others try, what catches on, and what users are gravitating toward.
With that said, we've actually developed four apps in the last two years, so we've learned a lot of lessons. (I know above it says we released two apps, but we also released an Android and Windows version of Spiegeling, which are a development process all their own.) And we're still learning! Here are a few of the pros and cons of the current app business, from our perspective.
I'll start with the cons…
Cons: The financial risk is insane. Even for a less risky category, like photo apps, most people have to sell 70,000+ apps (sometimes double or triple that) before making any profit at all. This is terrifying, even for companies that have a large following like we do. There is enormous risk in developing apps, because the initial cost of development is very high, and the potential revenue per user is very small.
Developing apps is a long, hard process. Many apps take more than a year to develop. You would be surprised how many app concepts get shelved halfway through development. Either the company gets cold feet, or something else really similar comes out, or the market changes. Anything can happen. There is a lot of money invested in apps that never even come out.
Expectations are high (especially for those leaving a review). We always say app dollars are the most expensive dollars people ever spend. Even though an app might only be $0.99, and the developer may have paid say, $100,000 to develop it, the customers expectations may not be met and reviews may be bad. Even the most honest companies with great intentions can get terrible reviews. Customers expect a lot for that $0.99, and there is a lot that can go wrong with their experience from start to finish. Not to state the obvious here, but app making is still software development. And it's software development for very, very limited computers: phones/iPods and tablets. Don't get us wrong. They're incredible devices, but their computing power pales in comparison to a laptop or desktop. But we still expect the speed and quality of our laptops from our phones. So app developers have to find tricks and efficiencies that create that quick home-computer-like experience within the limited power of a mobile device. To put it simply, managing that experience can be challenging.
Change is rapid. It's tough to be in a business where every update takes months and months and costs tens of thousands of dollars, but seems so instant to our users. It's crazy because it's moving so quickly on the outside, but tends to move SO slowly on the development side. We have to keep up with trends and expectations while still planning six months to a year ahead at all times. This fast/slow balance can be kinda strange at times.
Pros: Well, obviously there is a lot of money to be made in apps. Although maybe not quite as much as people think because development is so expensive, and there is continual maintenance to provide at all times. Also, the app platform (iTunes App Store, Google Play, Windows Phone Store, etc.) takes about 30%. That's significant. Even still, our first app is a big part of how we had our first million-dollar year, as a company, and I'd be silly not to mention this as an obvious perk of the whole gig. With that, learning the business and the market has been so fascinating. Like I said earlier, app dollars are the most expensive dollars anyone ever spends, so that creates a fun business challenge!
The development process is so rewarding. It's hard to word how cool it is to see an idea that started as a conversation over drinks become a functioning piece of software you can use and play with. It so exciting every time I see the first beta available to download and test—even when it's just a skeleton of what the app will be. Before we got into the business, it all just seemed like magic. Apps just worked or didn't work. We had no clue why you could do some things and not others. But to work hand-and-hand with developers for each step along the way, learning what powers each individual element, is just amazing. It gives me a completely different perspective on apps I use.
Creating apps is exciting. Apps are a really, really exciting business to be in. We just passed the one million mark of SpG apps sold, and it was one of the strangest, happiest feelings, because I couldn't really wrap my mind around the thought of one million different people using my handwritten doodles and arrows and stuff. Sometimes on random nights, Didier and I will be texting each other screen shots of Instagram pics where a celebrity used our app and giggling all cheesy. It's fun. And even more than that, we scroll through both the #partypartyapp and #abeautifulmess hashtags all the time to see all the cool ideas you guys are coming up with.
Anything is possible. Not to get all cheesy on you, but it's so cool to be able to think about our phones like this. It used to be a little disappointing to think of a useful app, look through the App Store, and come up empty handed. And now, we get the opposite feeling: excitement! We get to think it through as an opportunity and think about whether it really is enough of a want that thousands of people would join in to use it. Any idea that's good enough could become real!
"I have an app idea; where do I begin?"
Since we launched our first app last year we've been told dozens of fun app ideas. Pretty much every business lunch, or tax meeting, or family gathering includes someone pulling one of us aside and telling us about his or her awesome app idea. And so we've learned people have app ideas… like CRAZY.
Since there are no shortage of ideas, how do you decide if your idea is worth the financial investment, possible fundraising, reasearch, and multitude of other sacrifices you'd have to make before making a penny? We can't answer that for you. I'm not even going to try.
If you're really, really serious about an app idea, there are two equally important challenges you need to address:
1. Development: I'm using the word "development" as a coverall for app creation, so this isn't just coding. It's also UX planning, wireframing, and designing. If you're dreaming up app ideas, you're probably vaguely familiar with the steps here but not sure how to track down resources to pull it off. There aren't really any effective templated Squarespaces of app development for more unique ideas. So at the very minimum, if you don't know coding, you're going to need a developer. And if you don't know design, you'll need a designer. You can work with an agency, who will manage the whole process for you and offer insights/expertise in the industry. But they're a larger investment. Or you can go freelance, which can be just as effective if you feel really confident thinking through user experience on your own and research all the little steps that need to happen to get an app ready to upload. And be sure whoever you work with has experience in the type of app you want to do. A good place to start is by just looking up who developed quality apps.
2. Marketing: As much as I wish that a good idea executed well markets itself, the majority of the time it's just not true. Even with built-in distribution like the App Store, a great product without marketing likely will not survive. You have to reach some sort of platform to at least kickstart the app's momentum. Only then can the app quality market itself. Spiegeling is very fortunate to have a loyal readership like you to help us get the word out and kickstart the momentum. We also reach out to our friends and fellow bloggers to see if it's the type of app they'd want to use and share. Part of what makes our apps work is that we create them with bloggers and social sharing in mind, so every time someone blogs about the app or shares a photo on Instagram, it's like its own little ad for the app. This is what makes photo apps so successful in the App Store: they're self-promoting.
Beyond that, try your best to think ahead a year (or more) from now and make sure you believe that your concept will still be relevant and potentially popular at that time. Ultimately, there is nothing you can do to erase the risk factor. If you sit down with ten app companies and ask them how they got started, you'll get ten different stories and sets of advice.
Our advice: Find an agency or developer you trust and connect with to partner with or hire. Take your time. Try a lot of different people. Don't settle for the first company or quote you get, because it most likely will not be the best. It is not easy to switch developers, so find someone you see a long-term future with and vice versa.
The best advice we can give, based on our own business experience, is to never invest money you can't afford to lose. Calculated risk is a part of business, but since apps are so incredibly unpredictable, it's important to make sure you're okay either way.
Each operating system has its own needs and requires a complete rebuild of the app, so you have to be strategic in choosing how you release an app. While Windows is definitely showing some growth, and Blackberry has a strong niche presence, really, the big guys to consider are Android and iOS. We get asked pretty often why we favor iOS. We've touched on it a little bit in some previous posts about the specific apps, but this seems like a good post to break down the numbers and our thoughts.
So first the market share numbers* (as of writing this post):
• Worldwide phone usage, Android: 85% / iOS: 12.7%
• U.S. phone usage, Android: 57.6% / iOS: 35.9%
• SpG readership phone usage (according to our reader survey), Android: 24% / iOS: 65%
*FYI, Windows Phones are about 1-3% market share across the board, and Blackberry is less than that.
Looking at market share alone, it makes doing Android a no-brainer, right? Even conservatively, if we went off the SpG survey results alone, the Android version could be half as successful as the iOS version. And that'd be great! That was our thinking when got rolling on the Android version of Spiegeling. But the Android launch of the SpG app just didn't quite take like iOS. By comparison, it fell flat on its face, selling 1/20 the number of apps iOS did.
But apparently, we weren't alone. Just in Q1 of this year, iOS' App Store generated 85% more revenue than Android's Google Play, which is an ongoing trend. There are all kinds of theories why that you can read, but the bottom line is that it's quite the deterrent for app developers looking to recoup an investment. And in our case, it was more like 95% more revenue on iOS, so it makes all the more challenging for us to figure out how to approach the market. Of course, our conclusion isn't just to ignore Android. The Google Play store is growing more by the day, and it's definitely gaining on the App Store. Plus, there are a lot of developers making a fantastic business on Android. We just haven't found the right strategy for our business yet, but know we're actively looking for it.
So our advice on choosing an OS is to start with what you know and build from there. We're all iOS users, so dreaming up an iOS idea was only natural. But if you're an Android user, you probably have a good handle on the types of apps that would enhance your experience. Once you have an idea, research, research, and research more. Look up any numbers you can find on the app category you're interested in. To put it obviously, find what works and do that.
While we're not comfortable speaking for all categories, we can speak for our own (photo & video) with some confidence and two years of experiences, including lessons learned the hard way.
More and more people are using their smartphones as their primary camera. Kids are growing up with photo albums full of Instagram memories. We love this, and we're amazed by it.
We want to continue to create apps that make it easy and fun to save and share special memories from your life in a beautiful way.
Our first app, Spiegeling, started out as an idea of one thing I wished I could do to my iPhone photos that I couldn't do with any app at the time. Party Party was the same way. Our next idea is the same. We're trying to create apps that we can't wait to use. Our strategy really is that simple.
We see smartphone photography growing and changing so rapidly. It's more than just trends and filters and styles too. People are often using their phones to take more beautiful photos than they could take with a camera. It's an amazing thing, and we love being a small part of it!
So that's a little bit of our story about how we got into the app business!
The takeaway that I want to send with you guys isn't so much about apps as it is taking risks. When we first had the idea to make an app, we were every bit as clueless about it as anyone else. It was a long road from point A (the idea) to point B (the release). Along the way we were discouraged by friends and family members for risking so much money on an untested market. We doubted our choice until the day it was released. We had no security that it would pay off. It did pay off, but some of our investments have flopped too. Risks are scary, but they're a big part of growing a business.
The moral of this story, for us, is to take that calculated risk. Don't spend money you don't have. But if you have can take the risk and you believe in the possibility of a great return, go for it!
Before we got into apps we didn't consider ourselves a techy company. We still don't really fit that mold, but that doesn't matter. What's important is that we found a way to use our talents in a new marketplace. We created products that our customers love to use on a new format. When you find a new venture that doesn't compete with or cannibalize your staple income, it's worth looking into.
Be smart. Listen to good advice. Do your homework. At the end of the day, if you have a risk in front of you, don't hold back just because you're afraid. Developing our first app was one of the best choices we ever made, and we hope we can inspire some of you to take a risk in your business, too, when the time comes!
If you have questions or opinions, leave us a comment. Trey and I will be responding, and we can't wait to chat with you! xx. Helen (+ Trey)
Credits // Author: Helen Larson and Trey George. Photos edited with Spiegeling actions.