
What next for Agant – iOS house downsizes - grayprog
http://www.agant.com/index.php
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tsunamifury
I've said it and been laughed at but the App Store is a shovelware market. A
tiny fraction of apps gain enough volume to offset their low prices, and of
those many are the result of paid downloads (tap joy).

There is a pervasive delusion that launching an app means immediate access to
a lucrative market, but the reality is that it's highly competitive with
extremely low returns.

If you are looking to make money off a mobile app (not establish saas mobile
extension) rapidly launch MVPs of your apps to see if there is any demand.
Don't invest in perfect designs and ux until you've validated that there is a
user base worth investing in.

~~~
monkey_slap
Could not agree more with you.

I'd further suggest that creating apps for clients is incredibly profitable.
You don't necessarily need sales on apps to make money. Businesses,
organizations, and people have problems that they are willing to pay to get
solved with an app. Take your time selecting the right problem and you can
make a good living and enjoy what you're creating at the same time.

~~~
hopfog
What niches would you recommend?

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monkey_slap
Niches for creating your own apps? Or making niche apps for a client?

Since I was advocating client work in my previous post, I'll go with the
latter. Start with what you love. As an example I love aviation. There's a lot
of money in aviation (as well as a lot of debt). Companies and FBOs sometimes
have very specific needs that could be solved with an app: scheduling,
customer loyalty, logging, etc. Reach out, talk to them, tell that you love
what they love, just see what happens.

Also I have absolutely no marketing training and create apps in an
organization that I have no control over the clientele, which actually works
out great for me.

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objclxt
I agree that it _is_ tough being a small agency building apps, but I don't
think high value apps are in themselves unprofitable. I think whoever
submitted this has perhaps misjudged the title a little.

The problem is that as time has gone on, more traditional agency suppliers
have entered into the marketplace. This makes it _really difficult_ for small
players to compete. All the big digital agencies are doing app dev in house,
and even the big consultancies are getting in on the action (Accenture,
Deloitte, etc). I don't think Agant were helped by the fact they weren't based
in London either.

Hypothetically, let's say you're a large retailer looking to get an app built.
Who do you go with: the small player with great creds, or the well established
agency that you already used to build your eCom site? I can tell you which one
your _procurement_ department will recommend you go with.

This isn't really an app specific issue, but one that occurs generally in the
agency space (be it traditional print, digital, etc): mid-tier agencies find
it very hard to compete. On the one hand they're getting their toes snapped at
by one and two man shops who can undercut them, on the other they're not big
enough to command attention at RFP stages against vast agency conglomerates.

~~~
tsunamifury
A big counterpoint to this is that app profits likely won't justify big
consulting firm rates. When clients realize how fast and cheaply they need to
build and update their apps to keep up, paying Deloitte to maintain it will
quickly become unrealistic.

~~~
objclxt
A lot of RFPs are going out now that require a clear plan to update and keep
apps current in a cost effective manner. This could range from strategic use
of HTML/cross-platform tech, or some form of retainer agreement.

That being said, many app builds that I see being put to tender (at least in
the UK) are often 'one shot' in combination with an advertising campaign or
marketing effort. For better or for worse, many builds aren't designed to be
sustainable or have a long-term presence.

~~~
tsunamifury
True. In reality it's about getting support and versioning under 5k (or even
under 1k) per app per year.

I do low $xx million in revenue on apps across many storefronts so I do get to
see a fair sized chunk of the market and what works and doesn't work.

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toddmorey
I take a bit of issue with the editorial title on this post. Can someone
please define "high-value app"?

I know on smartphones everything is an app, but these from Agant are mostly
auxiliary content plays, interactive titles to accompany other printed work. I
was reminded of the glory days of the CD-ROM browsing their portfolio. Content
like this has often been beautiful and compelling, but rarely profitable.

The problem on the content front is that you are competing with (1) print /
Kindle, (2) the huge library of existing movie and TV content already
available for tablets and phones, and (3) the entire internet, where most of
the content is free to the reader.

Most of the paid apps that do well add specific functionality to your phone:
managing files in the cloud, controlling physical devices, exercise
companions, etc. Often they are tied with hosted services: Evernote and
Dropbox, for example.

For this reason, I'd imagine Agan saw bigger success with UK Train Times
rather than Explore Shakespeare.

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badman_ting
Sometimes I feel like I passed up a big opportunity not getting in on the
iPhone market. Other times, I feel like the app market is like very packed
concert where people get crushed and trampled, and avoiding it was a good
move.

~~~
potatolicious
It was _very_ lucrative and easy to enter for a while. Now all the easy gold
has been dug up yet there are more prospectors than ever before.

Getting into the paid mobile app market was never a viable long-term strategy,
but it was certainly capable of making someone extremely wealthy for a while.

~~~
VLM
There's an interesting gold rush analogy that in real world gold rushes only a
small number of early adopters make any real money, but the support staff
dragged along by the me-toos has a much longer and more profitable run. You
wanna be the gold rush equivalent of the old prospector now running a general
store, land agent, and saloon. Teach training classes, .edu market, tools ...

Repeated past observations imply that years after the bubble pops they'll
still be .edu's offering classes to prepare noobs into the bubble, which no
longer exists anymore.

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ambirex
After looking at their portfolio, I'd say that high-cost/low-audience apps are
hard to make profitable. Let alone building a business around such apps.

That being said, some of their apps look beautiful. Wish them all the best of
luck on their next venture.

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monkey_slap
This is really sad to me because I aspire to run my own shop just like this
one day, creating apps and software for ourselves and clients. I too see
myself as a maker, not a business developer, so maybe this is a red flag to
reevaluate.

Most of the apps that Agant has produced appear to be aggressively priced
(seems most are around £9.99, the most recent at £24.49). Though, they do
target a rather niche market. I'm very curious as to whether the apps did not
sell well or simply did not cover the cost of operation. Whatever the case,
now that Dave is the sole employee the revenue of the existing apps will not
hurt.

Finally, I'm also wondering if Dave ended this adventure simply because he was
not enjoying it, or if Agant was spiraling into debt. I can't really tell from
this post. He does mention that making it in the App Store is difficult, but
that some of the apps were created for clients (some being partners). I can't
imagine that there wasn't enough good work out there for a talented team of
proven developers+designers.

~~~
objclxt
What's not totally clear to me, and I'm not sure if Dave would be willing to
share (but worth a try!) is whether Agant was primarily financing itself
through up-front development fees or through revenue share.

Because I know for a fact there are a number of agencies in the UK that have
managed to build sustainable businesses off _up front_ costs. I don't know of
any (and I'd love to be proved wrong on this) that have done it through
revenue share. I've definitely lost pitches to companies that _proposed_
revenue shares though...

> _I can 't imagine that there wasn't enough good work out there for a
> talented team of proven developers+designers._

I alluded to this in another post, but the problem now is more that the
companies prepared to pay top dollar for apps tend to be those that aren't
going to pick a small agency, even one with good creds. They're looking for
big, established players that can service all of their digital needs in a
single go.

~~~
monkey_slap
The agency I work at would likely never take a revenue share. I wouldn't take
one either, personally, unless the product was something I would be satisfied
seeing no return on. Unless the client was someone with a proven track record,
I think revenue share would be suicidal.

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nicholassmith
As long as you're realistic with yourself and a client the app store is still
fertile ground, as much as any platform. Yes, there's a lot of apps and there
has been a race to the bottom in terms of pricing, but there's still a
reasonably strong market. XCOM was released at a reasonably high price, to a
niche set of gamers and is seemingly making sales as it was (possibly still
is) in the top grossing.

I don't know whether the title is fair. The article doesn't say 'we're not
profitable', it just says it's a risky market to make high value, premium
products, but making that kind of product in _any_ market is inherently risky.

It's a shame, their apps are nice, but I think it's more a developer wants to
develop, not chase down the next contract to keep the wages going so hopefully
we'll see more work appearing.

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Zigurd
I would not call a retail app "high value." Alternatively, I would not call
retail sales of the software itself a good way of supporting high-value apps.

I have two kinds of clients: Ones with hardware as part of the product, where
Android is an embedded component and the software is specialized to work with
the hardware; and ones with business models that do not depend on the end user
paying a one-time retail price.

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tomasien
If you're going to make high value apps, your marketing can NOT be app-store
dependent which is tough. I would employ highly targeted paid download
advertisements either through Facebook or other methods, as well as an
excellent web and PR presence.

I do not agree they're not profitable, but they're NOT going to be "set it and
forget it" style successes.

~~~
tsunamifury
It's difficult to get a marketing campaign cheap and effective enough to
offset 79c to 3$ profit margins per unit.

~~~
crgt
If you have a large enough user base built up, cross-promotion from your own
apps can work wonders.

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tomasien
YES! We JUST stumbled upon this but it's huge - if you can ship something cool
everything 3 months, and assume upkeep on a rolling scale (as in your upkeep
the things getting the most traction) you can cross promote your way to
serious income. 1 app often won't do it unless it's a homerun, but cross
promotion of 5 things starts to build a tribe.

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workbench
Most of these are not really applications, seems to be mostly just the
equivalent of small adverts that would normally be a relatively cheap Flash
page or Facebook app. Or they're just CDRom style multimedia experiences which
we already know are not that profitable.

