The Windows Phone developer business experience

This morning a blog entry by Steve Behrendt got me thinking about what the business experience must be like for Windows Phone developers.  Actually it is more than Windows Phone developers, it is developers for any of the app stores.

Prior to Apple introducing the modern concept of an app store a developer would, for the most part, have to implement all the components of a modern business in order to succeed.  They’d need to put real money into marketing, sales, and service.  Since the late 90s they could use the web to explain their product, sell, and even download the application to customer systems.  But often they still needed traditional sales and promotional activities as well.  You did a lot of PR.  If you were lucky enough a major publication published a review of your app.  You got a booth at a trade show to push your product.  You worked on deals to distribute your product through third parties.  Etc.  Today a lot of developers submit their apps to an app store and sit back waiting for the money to flow in.  Guess what, it wouldn’t have generally worked in the pre-app store days and it doesn’t work any better with an app store.

After reading Steve’s blog post I set out on a modern style attempt to find an expense tracking app for Windows Phone.  Steve’s app, traXs, did not show up in the first 5 pages of results on a Bing search for +”windows phone” expense tracking app nor on the first page of results for an expense tracking search I did at windowsphone.com.  When I expanded the windowsphone.com results to include all expense tracking apps I had to scroll to almost the bottom of the list to find traXs.  And then I noted it had no ratings and no reviews.  I’ll get back to that.

I tried the same search with Google with the same results.  TraXs just doesn’t show up in search results for Windows Phone expense tracking applications.  An explicit search for traXs found a few results, including an apparent website (which is also listed in their Facebook entry).  However attempting to access the website returned an HTTP 500 error.  Someone searching for an expense tracking app for Windows Phone would likely never come across traXs, and if they did they wouldn’t trust it was for real.

The lack of a rating or review really confuses me.  Steve’s blog has a chart that shows they’ve had 29 downloads.  None of those, not even acquaintances of the developers, has bothered to rate or review the app.  I have no way to judge traXs versus the other expense tracking apps, but with the others having ratings and reviews, and their even being free competitors, it is hard to see why someone would even download the trial of traXs.  A user is likely to try a small number of the better reviewed apps and either find one they like or give up completely.  They aren’t likely to get around to trying traXs, even if it turns out it would have been the perfect answer for them.

Steve’s blog post includes the observation that “there is absolute no correlation between downloads and price”.  This is a good point and one that developers need to keep in mind.  There is Free and Not Free.  (Actually, I think it is Free, Not Free, and Expensive.)  It doesn’t matter if Not Free is $.99, or $1.99, or in fact $.25 (if that were allowed) the moment you charge for an app the dynamics change entirely.  Many (maybe most) people won’t pay for an app, especially if there is a free alternative.  Once they decide to pay there is quite a bit of insensitivity to price.  That’s why Microsoft is comfortable charging more for Office 365 than Google is charging for Google Apps.  And why the Windows 8 store set a minimum price of $1.49 rather than the industry standard $.99.  Analysis of Price Elasticity (most likely) showed that setting the price of the small business edition of Office 365 at $72/year would make little difference in sales volumes vs. Google’s $50/year.  The same for the $1.49 vs $.99 situation.  Most likely unit volumes drop slightly but total revenue goes up significantly.  But the real lesson here is the Free vs Not Free dynamic.

Angry Birds has about the best name recognition in the App world.  If Rovio put out a version tomorrow called “Angry Birds Take-Your-Wallet” thousands, hundreds of thousands, perhaps millions of people would buy it sight unseen.  Yet most of the world got hooked on Angry Birds through free versions.  You make an app Free either because you have an alternate means of monetization (e.g., the Wall Street Journal app is free but useless without a subscription) or you do it as part of your marketing effort.  Unless you have significant brand name recognition and/or an ability to heavily promote your app and/or an actual sales organization, you need to use Free as a means of building a customer base.  Yes the freemium model is a difficult one, yet represents the best option for cracking the consumer (and very small business) market.

Trials are not the same thing as Free.  I believe most users don’t even look at Not Free apps to see if they have a trial unless they are looking to buy eventually.  Sometimes trials are limited versions of the app, sometimes they are ad-supported versions of the app, and sometimes they are full versions that expire after a few days.  Whichever the case, the user makes the assumption that a trial is just that.  It is a way to try the Not Free app before buying it and not something they are expecting to be able to use indefinitely.  Use a trial for what it is intended, not as a substitute for having a Free version of your app.

I’m not claiming to be an expert on business of app store apps, I’m just applying some common sense (and overall business experience) here.  In the first couple of years of the iPhone “build it and they will come” actually somewhat worked.  But today, unless you are in it as a hobby, success requires the same level of business acumen as in the pre-app store era.

I didn’t mean to pick on Steve, he just provided an example to comment on.  Hopefully he and his associates are looking at what a real business plan would be for traXs.  They need to put at least as much effort into marketing as they did into development.  And, assuming they are all developers rather than business people, they may need to bring a marketing-oriented business person in to help.

And if you are a developer looking at building an app for Windows Phone, Windows 8, Android, IOS, or any other platform then get prepared to party like its 1999.  Because while specific tactics may be hugely different in 2013 the basic business requirements necessary to succeed haven’t changed all that much.

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17 Responses to The Windows Phone developer business experience

  1. Your lack of experience with app stores shows quite a bit in this post and this article doesn’t meet the quality one has come to expect from your blog.

    29 downloads without a single review is not surprising. Users tend to write reviews only when they feel strongly about a product (i.e. by default most reviews are negative) unless the app goes out of its way to nag them to leave reviews. That said, there is a balance that has to be done with these nags/prompts so as not to have a user write a heated review because you interrupted their task with a nag prompt.

    Secondly, FREE is a fine way to make a living from apps if you have the right kind of app. Advertising supported and free with in-app purchases are now the dominant ways developers make money in the app store not paid apps. This mirrors the real world where Google’s market cap is now higher than Microsoft’s with advertising supported apps instead of paid software. I know at least two different groups of people who quit their day jobs as technical leads at Microsoft off of the back of advertising supported apps.

    Finally, I agree that developers need to give some thought to a marketing plan when delivering an app. Even with just 100,000 apps in the Windows Phone marketplace, it is hard to get your app to stand out without having a strategy to build an audience (PS: buying search ads isn’t it).

    • halberenson says:

      Thanks. I wasn’t equating Free with no revenue stream. Advertising and in-app purchases are fine as a business model. If anything I was calling for a situation where you offer a Free w/ads product as an option to your paid with no ads offering.

      I’m sorry, but if I put an app into an app store I’d go find a few people (neighbors, business associates, relatives, etc.) to try the app and get the ball rolling on reviews. That’s harder with a Windows Phone than with an iPhone or Android phone, but still….

  2. MarcSilverTriple says:

    Hi, not really sure how people act towards buying an application, but when I have personnally to pay for, I first try the different existing possible options. I might download more than a few before finding the right one. But it also means that generally, I’m not able to feedback the application with a rating until I’m really sure which one I’m going to pick. And I might have uninstalled the application at the time I actually decide to buy it… The dynamic is quite complex somehow. And when for the same topic there is free application, I can tell you that you are looking as well twice before to put a penny in a paid app, especially with none of them being completely responding to the requirements.
    Also interestingly, among the first things I check when downloading an application is existence of a change log (not sure I’m the normal consumer, here) and the possibility to identify quickly how to raise a change request or to submit a bug. Not all of the paid applications I tried are providing such basics fucntionality which definitely might help as well to establish the presence of a real support of the application… And when you put a penny in, generally, you are a bit more expecting that for for a free application. But again, here, I’m not sure I’m the average Joe when buying a application…

  3. sriramk83 says:

    @Dare – wow, you don’t hold back do you? :)

    I disagree that search ads isn’t it. If you look at the iOS/Android world, a lot of apps have done very well buying ads. The key is to understand the LTV of every user you acquire, churn and be able to tweak those variables to make your CPA work.

    • It seems you are confusing search ads (CPC ads) with pay per download (CPA) ads. Buying ads from services like Tapjoy, Flurry, Fiksu, or even Facebook’s mobile install ads is a different ball game from buying a Google or Bing ad for whenever someone searches for a term related to your app or the mobile platform you are targeting.

      Using such CPA services is a much more effective way to build an audience than search ads for a mobile app from what I’ve seen in the mobile developer ecosystem. Unfortunately, the maturity of such services on Android & iOS far that on Windows Phone (e.g. Facebook app install ads & Flurry App Spot aren’t supported for Windows Phone apps).

  4. jcallahan says:

    I’ve written a bunch of freeware and shareware over the past 20-25 years and I think your assessment is spot on. Again, that’s mainly a hobbyist perspective. I think it still applies from a business perspective, but you would hope that a business would realize that it’s not worth building if you can’t make money on it. And if you want to make money off of it, you need to have a marketing plan.

    At any rate, just wanted to let you know that I enjoyed the post.

  5. Guest says:

    Cisco IOS has a appstore ??? :-P

  6. Tim says:

    I’m three weeks past releasing my first app in the Windows 8 Store. I debated quite a bit about free vs paid. I saw recent stats saying something like of all the apps in Apple’s store that have an initial price, very few sell more than 100 copies. Still, I chose to include a 1.99 price tag. The choice wasn’t easy, and if I had to do it over again I might have gone the free route. (Somehow, though, I have to pay for Azure storage costs.) I do have one in-app purchase option at this point, but I’m not sure whether people will clearly see its value. The niche I’m going after is smaller, but large enough that if/when more of them get Windows 8 I think they’d pay for it.

    One thing is certain – I now have more appreciation for those that write (quality) apps and can understand their need to charge for them. But the strange thing is I *still* find it difficult myself to purchase anything…I pay $599 for a Surface tablet and yet somehow I hesitate to pay $2 for a good app. That just doesn’t make sense.

    • halberenson says:

      I know, the app buying behavior is odd considering how much people spend on the device. It’s a spillover from the smartphone market where people started from wanting a phone and not thinking they’d use apps at all. Free apps tempted them to the dark side and were so cool that they couldn’t see a reason to pay. Now they’ve been trained that, just as on the web, you can generally get what you want for free.

      The question for your app is what else can you do to promote it? Actively work to get members of your own church to try and review it? Send out a press release to large numbers of churches trying to get them to put a blurb in their newsletter? See if you can get an influential minister to try out the app and recommend it?

      If all you care about is cost recovery then you could always seek out a larger group that might agree to cover the Azure Storage costs and promote a free app to their members in exchange for an acknowledgement.

      • Tim says:

        Thanks for the tips, Hal. Some of those I had considered (current pursuing), some I had not. My wife has been working the blogs she follows (with thousands of followers themselves) to see if they can mention or recommend it. So far, the best thing to happen has been that the website from where the rotational methodology originated has mentioned my app, so in the past few weeks I’ve received a few hundred visits, with ~80% coming from that referral source.

        Interestingly, per Google Analytics, close to 70% of those visits came from Windows devices, 8% from Mac users, the rest from mobile devices (mainly iPhone/Droid devices). Of the Windows users, only about 10% were Windows 8. The rest were from Win 7, Vista, and XP (in that order). I even saw a few from NT and 2000.

  7. derSteve says:

    Thanks for your thoughtful response!
    You made some good points in your blog post that we identified as well over the course of the last couple of months and I was trying to make that clear my blog post:

    #1 App Stores promise you kind of a marketing support by creating you an app store page. It doesn’t help much though.
    #2 Discoverability in all of the app stores just doesn’t work. The search engines don’t help you much either.
    #3 Traditional marketing is still needed. It’s not enough to just create an App Store Page, a Facebook Page and a normal web site.

    I’ll dig deeper into those problems in my next post and will explain how we are going to change our business model for the future.

    BTW, our app has reviews, but they only show you the reviews from your region – the US. There are reviews from Europe, which you can not see – for some reason.

  8. Pingback: The Windows Phone developer business experience

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