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.