The App and Play stores have turned out to be exceptionally poor places to run a software product business for most developers. They’re great distribution channels for service makers, like Facebook or Lyft or Basecamp, but they’re terrible places to try to make a living (or better) selling software products.
At a buck or few per app, how could it be otherwise? That type of pricing will work for Angry Birds and a handful of other games, but very poorly for most other types of software products. The scale you need, the sustained influx of new customers, well, it’s a place for mega stars, and people who think they can beat the odds at becoming just that.
That’s why I’ve been discouraging people from chasing dreams of a successful, sustainable software product business by pursuing paid apps. Far better be your odds at succeeding with a service where the app is simply a gateway, not the destination.
Watching users of Tweetbot heckle the team for daring to charge $5 for a 8-month upgrade only reaffirms that belief. It’s a sad sight of entitlement, but at this point also entirely predictable.
Apple and Google both benefit from having apps be as cheap as possible. For Apple, that means people will buy an iPhone more readily when the cost to fill it with software is near nil. For Google, it means app makers have to shove ads into products to make them pay. Win-win-lose.
What’s good for platform makers is often not good for those who build upon it. That’s where the whole picking up pennies in front of a steamroller comes from. Yes, a few may be quick enough to pickup enough pennies to fill a jar, but for most, it’s not a wise trade of risk vs reward.
Forget the paid app.
Michael
on 05 Oct 15I get what you’re saying, but I think paid apps released on a regular upgrade schedule (as opposed to SaaS) are still viable where they make sense. Dash, Sketch and Omni come to mind as examples. If you look at the app store less as access to a gigantic global market and more a way to distribute to your existing customer + marketing list, you can filter out the complainers and see the smaller core of people supporting a paid business.
Jeff
on 05 Oct 15Amen. What have we given up for the Walled Gardens, most people will never know or understand.
Anonymous Coward
on 05 Oct 15I believe that in this story with Tweetbot people actually complain not about app (upgrade) price, but about showing no formal respect from tabbots to their longtime customers.
David Pinsen
on 06 Oct 15My new approach with the Portfolio Armor iOS app is to not promote it directly, just offer it as a light version of the web app. The web app does a, b, and c (which is much more involved than a & b). The iOS app does a, offers an in-app purchase for b, and doesn’t offer c. So, on the join page for the web app, there’s a line that says, “Just want a & b? Consider our iOS app, which doesn’t offer c”.
Raphael Scartezini
on 06 Oct 15I think we’ll exhaust this model in about 10 years, then restart the cycle, when good software will be paid again.
At least for niche products.
Independent developers will disappear due to the reality of the market place. (that is the reasonable thing to do.)
One of my paid apps is iPront (still on the “i” hype, back in the days…)
It is a simple CRM for psychologists.
The paid version costs 10 dollars.
The free version is fully functional only limited to 3 patients.
Still, sometimes, I get comments from users not wanting to “invest” this amount in software.
I laugh every time!
Can you believe?
Invest 10 bucks, like, a lunch.
Why the hell they invested 5 years at the university, paying thousands of dollars?
Then they cannot buy a 10 dollars (one time only) software to manage their practice.
Maybe they do that because they think free is the right price, without ads, of course!
A software like this, 10 years ago, would easily cost 300 bucks, to run in a desktop, and my mom would happily pay!
Have we become “taxi drivers” already?
Complaining about the new model?
Not yet, right?
Try not paying Uber or running that on ads to see what happens.
I agree, at least for a decade, forget the paid app.
Yuanhao
on 07 Oct 15My thoughts about this two months ago: https://medium.com/@yuanhao.li/the-price-of-going-free-in-the-app-market-2e497cb90bb6
Anthony
on 07 Oct 15A few things.
1. If you follow a business strategy of targeting a niche, then there’s probably no way you can make enough money with $1 or $2 apps.
2. Going big (non-niche) isn’t usually a very good strategy, as very few (almost be definition) are able to get to the level of ‘Angry Birds’ or whatever.
3. The App Store and so on should primarily be conceived as distribution and marketing vehicles, which is exactly how SaaS uses them.
4. The strongest points of SaaS are breaking down the cost of the app (yes, that’s what you’re selling) into monthly installments ($5 per month is no problem, even though that equals $60 per year) and creating a revenue stream that doesn’t require continually launching new products.
I would happily pay $5 per month in perpetuity for an app that did what I wanted to, but was continually being upgraded and made better, but where I could cancel at any point.
Take the CRM software mentioned above. Reduce the price to $5 per month. You now can sell to 1/6 of the people per year, and still make about the same amount of money. Psychologically, it seems like less, and my guess is that the number of sales would go up if implemented well. This ignores the fact that a significant % of those people will probably keep subscribing (if it’s used for day to day stuff in a practice), so the profits will probably be much higher. There’s actually no big divide between an app and SaaS, and existing ‘apps’ can fairly straightforwardly be transitioned into what could be considered as SaaS.
George
on 08 Oct 15It’s all about value/price ratio. I think it’s utterly arrogant for Tweetbot developers to think that they deserve to get paid when they have failed to convince existing users that their new version offers no meaningful values and/or usefulness. Twitter users are not obligated to respect any developers, not to mention pay them. Nobody asked them to develop Tweetbot. Twitter isn’t that important, and it doesn’t need to be used in any fancy non-standard ways. Their official app or even Twitter accessed via browser works just fine. Twitter is not that complicated. Why another third-party app when the default works just fine? Make something insanely useful and people would be glad to pay $2~5 for it. It’s as simple as that.
Alok
on 08 Oct 15Coming technology and mobile user Increases day by day free app is mostly used and the person who want to be paid app they just use for higher purpose and most of app available free due to tech. My app launch for my site : my fashion jewellery app
Scott Torvald
on 09 Oct 15@George, your point is fair in some ways but honestly do you think a frying pan is useless piece of garbage for everyone and we shouldn’t pay for such thing because you always eat out and never cook?
Business isn’t always easy and we all make mistakes. Maybe you should try developing an app, try to make living at it and then your tone might become a little different.
Besides, according to your logic, why subscribe to Basecamp when email, to-do list on a piece of paper and phone would do? Seriously, why use tech at all? ;)
This discussion is closed.