Wow! My wife Khwan and I are already 8 months full-time into the app business. We went from 1 Android app to 12 apps, with 3 more soon to be released, plus the iOS version in beta. Today I wanna share 5 lessons I learned in the journey.
This post is based on a talk we gave in Chiang Mai, Thailand. If you prefer to watch the video, scroll down!
1. Don’t build an app nobody wants
Before we started to create our first app a few years ago, I had big ideas about the app of my dreams. The more people it would reach the better. One idea was to build an app that would let you track the whole bus system in Southeast Asia.
Khwan, on the other hand, had the idea to build an app to learn Thai. My first thought was “What? Is that any innovative or new? There are more than enough apps in the Play store.”
In fact, there were probably 50 different apps to learn Thai already in the store. But Khwan had done quite some research and realized that all these apps were crap and we could beat them.
How did she do the research? She downloaded as many Thai learn apps she could and tested them thoroughly. Plus, one of the cool things about the app store is, you can read every single good and (even more importantly) bad review of your competitors.
Quickly, it became clear that our competitors had a lot of shortcomings:
- Bad quality recording
- No interaction, e.g. no quiz or mini games
- Phrases obsolete or not practical
- Interface ugly
And that was information right from our target customers!
Plus, we already could estimate how big the market was, by just looking at their download numbers on the Play store and using tools like AppAnnie and Sensortower for revenue estimations.
So in short, what we did was focusing on existing apps in the market that had an audience and made them considerably (!) better.
So should you give up on your innovative unique idea for the next million dollar app? Yes, at least when you don’t have other passive income sources yet. Even if your idea is great the risk is extremely high that there is no market (yet) for your app.
Go the safe route first (improving existing apps) and realize your dreams later when you have a stable income and much more experience in the app business.
2. Better launch too early than too late
When we finished with the first version of our learn Thai app, I hated it. Not only had it bugs and not a lot content at all. It also looked frankly, quite ugly. Plus, the app was totally free, without in app purchases or advertising.
This day, Khwan came to me and said: “So we are done, lets put it into the Play store”. I said, “NO way! Users will hate it so much, they will give us bad reviews, and then our rankings will drop and we will never be found again and our app will die.”
Luckily, Khwan convinced me and she was right again (as 99% of the time 😉 ).
So we launched the app and I was so ashamed for the app, I think I didn’t check the Play store stats for a week. But I was lucky – no one downloaded the app anyway. We had maybe 50 downlaods during the first week.
So we decided we should do some Facebook marketing (see next point) and our downloads grew. And so two things happened:
- Even though many users didn’t like the first version, they gave us valuable feedback on how to improve it rapidly. For example, we had forgotten a lot of essential phrases. Also, it turned out that a lot or our initial users were Germans, so we quickly localized the app into German.
- Once we realized we had real people using our app (even if they couldn’t pay yet), we were extremely motivated to push forward and make the app better. Even though we both had a full time job at this time and could only work on the app at night and weekends, we worked harder then ever. A few months later, we released an update that enabled users to unlock paid premium content, and we had our first income. That was the time when we decided to go all in and quit our jobs.
What would have happened if we went on to make the app perfect and then prepare everything to make the ultimate launch event?
Chances are we would have spent months to add features users wouldn’t even like or use. Chances are we wouldn’t have released the app at all as our lives were busy at the time.
3.Do marketing, but don’t pay for it
When you release an app in the App Store or Play Store, assume that no one will find it in the fist place. So if you have no downloads, your app will stay forever at the bottom of the rankings and no one will find your app.
Luckily, there is an abundance of possibilities to get traction for your app. I would say it is reasonable to spend at least 30% of your time and resources into marketing (some say even 50%).
Now the easiest way to get the early downloads is to simply pay for traffic. For example, create Facebook or Google Ads and wait for the downloads to come in. The drawback of this approach is that has become extremely expensive to do so in 2016. You will pay at least 2-4$ for each download and this number is only likely to increase.
It is very unlikely that you will make the 2$ back for this single user. So you will lose a lot of money and are not even guaranteed that the downloads will push you up the rankings in the App stores. Paid downloads are also usually less valuable than organic downloads (organic = users who found you app by searching in the store).
So, what works if not paid marketing?
- Marketing by Hustling: Get traction for free
- App Store Optimization (ASO)
Marketing by hustling is posting your app in 100s of relevant Facebook groups, for example. It is posting content on Twitter and link to your landing page. It is launching each app on Producthunt and other product pages. I could go on and on with this. Every single tactic has proven more effective than paid downloads in our business. More free marketing tactics here.
Another great way to drive downloads is to translate your app into different languages. The downloads of our Thai app are only to 35% English, followed by Korean (16%) and Chinese (12%).
ASO is a great technique to drive free downloads. It involves making beautiful icons, screenshots, a good app title and description with your relevant keywords.
One example how we increased traffic is we tried out app icons in different colors, say one green, one red. Google has a cool feature (A/B testing) that allows you to show one icon 50% of your users, and the other one the other 50%. You can then measure the performance of each of the icons. We increased our downlaods by 10% just by changing the color of our app icon. Great bang for the buck!
4. Invest time in monetizing your apps
One of the most important things to consider is how you actually make money from your apps. There are a couple of ways, the most important being:
- Sell the app itself (users have to pay for the downlaod)
- In-App purchases
- Subscription model
The first one, I would avoid at all costs. Due to intense competition of free-to-downlaod apps, users are just not used anymore to pay for apps.
As for the other three models, what to choose depends a lot of what kind of app you have. For simple games, ads may be a good choice. For more sophisticated games or casino games, think about a in app currency or payments to unlock new features.
For our language learn app, in-app-purchases were definitely the way to go, because naturally users are often willing to pay for content useful to them. Later, if you have a lot of satisfied users, you can think about introducing a subscription model.
When it comes to in-app-purchases, it makes sense to experiment a lot with the prices. E.g. we increased the price of our Learn Thai app by 30% and observed 6 weeks the user reactions. The result was clear: Profits in English speaking countries decreased sharply, whereas profits in German speaking countries and Korea went up.
So we reduced the price in English speaking countries and increased the price further in German speaking countries and Korea. After 6 weeks, we repeat the process until we find the sweet spot for the price for any particular app.
To summarize, think hard about how you will make money out of your app, but stay flexible and constantly experiment and optimize prices.
5. Build an app business instead of a single app
You should not go into the the app business with a single app in mind. Your first app will likely cost more time and money than any app you build later in the future. Your first app is first of all an opportunity to learn and make lots of mistake.
So if you decide to build an app, check whether you idea is scalable or not. Ask yourself, can I use the app code to build other apps that provides more value to the same customers, or the same value for another audience? A good example for this is our language apps. Once we had the Learn Thai app in place, we could easily exchange the content and make the exact same app to learn German, Chinese, etc.
Also, realize that you will not be able to do everything yourself once your business grows. And hiring staff will be a lot easier if you have documented all your processes so that they can take over easily.
I hope you learned something from our journey and would be happy to hear about your stories.
Here is the video of the event that accompanied this article: