
$80,000 a Month in App Sales by Outsourcing Everything - gatsby
http://mixergy.com/free-apps-interview/
======
klochner
I'm not a marketing expert, so correct me if I'm wrong here ...

Let's assume an iphone app gets CPM of about $1 [1,2]

So if their first app grossed $100k, that means about 100M impressions. That
sounds insanely high to me - 100 impressions each for 1M users? 10 impressions
for 10M users?

When I then see that they're trying to sell books for $99 a pop so you can
cash in on their winning techniques [3], it rings of late-night infomercials
telling me how to get rich buying foreclosed homes.

I don't have hard numbers, but my impression is that @tferriss took the same
approach - making the bulk of his money off of book sales (and his prior
supplements business), pitching virtual assistant techniques that never would
have made that kind of money for him.

So the real 4-hour work week strategy they're copying is to give the
impression of success with little effort, and then sell people books detailing
your special technique.

    
    
      [1] http://techcrunch.com/2009/06/24/greystripe-ups-the-ante-in-the-iphone-ad-network-wars-launches-guaranteed-cpm-program/
      [2] http://blog.jwegener.com/2009/07/26/debunking-average-iphone-cpm-ad-rates/
      [3] http://www.freetheapps.com/create-iphone-apps/?hop=tdrone

~~~
spitfire
If you go to the freetheapps site it is _so_ used-car salesman. When you go to
leave the page it has a Javascript popup that begs you to stay with yes/no
dialog.

My already very low view of Andrew Warner just got even lower. slimy get-rich-
quick guys give me the shivers.

~~~
kranner
Freetheapps is not Andrew Warner's site. Mind explaining your low view of the
guy?

It seems to me he provides a great resource to the tech entrepreneurship
community in Mixergy and hardly deserves to be called a 'slimy get-rich-quick'
guy.

~~~
epo
I think slimy get rich quick was referring to the snake oil peddled by the
interviewees.

If Andrew can be accused of anything, it is for writing a sloppy puff-piece
and not submitting these fantasy claims to any scrutiny.

~~~
kranner
If I recall correctly, in previous interviews Andrew has talked about running
background checks and verifications on reported incomes.

Overall I think he's a great interviewer.

~~~
AndrewWarner
Thanks Kranner.

When I interview someone who wasn't referred by someone I know or when I'm
unsure of the numbers before an interview, I often ask them to log into their
affiliate or paypal or bank account to show me activity using Skype's desktop
share. Or I ask for their accountant to confirm their numbers. Or I ask to see
their tax returns. I always keep what I see private.

In this case, I didn't need to do that because: a) $80k per month for iPhone
makers isn't shocking -- as other have said in the comments -- b) anyone who
checks out the app store on a regular basis will recognize the apps these guys
made because they're often the most popular in their categories. You can check
on this right now, and c) the big part of this story was that they outsourced
everything and elance confirmed that.

Finally, I can't be 100% accurate with every interview I do -- not even close.
I count on readers to point out when I get my data wrong and when I let my
interviewee get away with lying.

I don't think that's the case here. But when it comes up, say something.

I respect readers' opinions and feedback. Anyone is welcome to call me
"slimy," but there's no need to do that to get my attention.

~~~
spitfire
Just to correct the impression. I was calling the interviewee's slimy for
their sales page tactics.

My opinion of you (already low) dropped through association. I understand
you're trying to keep up the pace, but sometimes the right thing to do is give
up quantity for quality.

------
ajg1977
I don't know what to think about stories such as these to be honest.

My inner entrepreneur says "Wow, great job guys! I wish you every success".

My inner software developer winces, and fears, both professionally and
personally, that the ever-growing number of such low-quality apps will
eventually make it pointless for developers to invest in creating a ConvertBot
or Instagram.

(FWIW I currently make $15k a month from sales of apps $1.99 or higher)

~~~
callmeed
It definitely creates a lot of noise and worries me as someone who is just
about to enter the mobile app market.

I just finished some iOS training and am working on my first paid app. What
would you say is the key to getting where you are? Apps with true utility–or
something else?

~~~
ajg1977
I would recommend you do two things:

1) Create one app to throw-away - something that's simple, useful to you, and
which you are confident you can create. Don't worry about there being hundreds
of similar apps. This is your Learner app. Get it together in a few weeks and
put it on the app store for $1-$2. Make sure you have some "please leave a
review / send email" link that makes it a no-brainer for people to give you
feedback. Read them all, but learn to distinguish between genuinely useful
suggestions, and comments from people who feel your app really needs their pet
feature.

2) Find a need that you think people would pay $3-$5 for, preferably a need
that you yourself have, and work on that app using everything you learnt in
#1. Get something basic but polished out, then iterate.

General tips:

\- Polish is more important than features. \- Ensure you get 6 friends to buy
& rate your app (5-6 is the minimum you need for a visible rating). \- Launch
at $1 for a week, and cut the price to $1 for a week for every update. It does
make a difference IME. \- Read the descriptions of top apps and see how they
sell themselves. \- Read the reviews of apps similar to yours and see what
people are missing. \- Make it easy for people to send in-app email for
support questions. Be the best support person they've encountered. Happy users
recommend your app and leave very nice reviews (particularly if you ask for
the latter after helping them).

~~~
rkwz
_> Launch at $1 for a week, and cut the price to $1 for a week for every
update. It does make a difference IME._

I see a lot of apps cutting their price to $0 for a few days. Does this
technique work? What are the advantages of doing this?

~~~
ajg1977
In the early days of the AppStore you could drop your price to $0, then switch
to paid, and retain your ranking. Apple quickly quashed this, so perhaps these
apps are looking to benefit from word of mouth, or to gain a number of
reviews. As I mentioned earlier you need 5-6 reviews before you even get a
rating and having more certainly doesn't hurt.

On a similar note, I believe Apple's charts may now be weighted to take price
into account, at least in some form. I occasionally play around with app
prices to see how sales/revenue/in-app purchases change, and last week I upped
the price of one app from $1.99 to $2.99. Sales dropped from ~400 to ~250, but
my chart placing was virtually unchanged (I think I dropped once place). I
don't believe the ranking is based on sales over a period of days, though it
may be a factor, since my ranking does increase/decrease with normal sales
fluctuations.

------
stevenwei
$80k a month in ad revenue by making the following apps for $2k a pop on
Elance?

    
    
      Record Video for Free
      911 Police Radio Free!
      Battery Box 3-in-1
      Find Sex Offenders Free!
      Dash of Color FREE
      MovieFX for Free
      Convert Units for Free
      FilterFX HDR Fisheye in 1
      Fisheye for Free
      FilterFX for Free
      Flash for Free
      HDR for Free
      Convert Units Free HD
    

I know people are saying the gold rush is over, but that is _ridiculous_.

~~~
AndrewWarner
For me, this interview wasn't about creating another "iPhone gold rush" story.
It was about understanding how they could build an app business without coding
or designing. They even hire someone to write their descriptions for a few
hundred bucks.

~~~
colinplamondon
And they weren't afraid to make a slutty business. For every startupy person
trying to 'change the world' and 'make a dent in the universe' with a me-too
social network, there's five with a slutty free app business banking it each
month.

~~~
AndrewWarner
Colin, they didn't say much about their marketing. Do you think they're doing
any app store SEO?

~~~
eob
How does app-store SEO work? I sell some apps on the app store, but I've never
tried to market them (and have pretty anemic sales as a result).

Does SEO tend to be black hat (hire people to rate it?) or ad-driven?

~~~
vaksel
i think it has more to do with having possible search terms as your app title

------
run4yourlives
Did anyone actually ask them to verify these numbers? Did a third party do so?

Extraordinary claims ($80K a month) require extra-ordinary evidence.

They don't even really seem to _know_ what their revenue is like, but their
fairly certain about the large size of the numbers... normally, that's the
smell of bullshit.

Tom Vu's girlfriend wants to see the proof of these claims.

~~~
gregpilling
Ahh, Tom Vu. Whatever happened to him and his late night infomercials? I
remember his great quote - "Do you think these girls like me? NO, they like my
money!"

~~~
shard
Curious me googling... Surprised me: he is winning oodles at poker
tournaments,
[https://secure.wikimedia.org/wikipedia/en/wiki/Tom_Vu#Profes...](https://secure.wikimedia.org/wikipedia/en/wiki/Tom_Vu#Professional_poker_career)

------
AndrewWarner
After posting the interview I realized that the guy I was emailing about an
interview was probably a virtual assistant. I assumed he was working in their
office because he responded to my interview request so quickly.

I wish I asked them about it.

~~~
nikcub
they probably outsourced the entire interview

~~~
qbui
LOL! we used indian virtual assistants in costume for the interview =)

------
epo
This sounds a bit too good to be true. How many ad impressions add up to
$80,000 in a month? What is that in user hours per month for 12 or so apps?

I'd be fascinated to see the financial statements, I bet we never will

~~~
qbui
It's not as outrageous as you think. Although the first month we hit big
numbers we were VERY VERY surprised. Check out the paper toss guys that make
500K a month with just 5 free apps!!! [http://www.develop-
online.net/news/36155/Paper-Toss-dev-make...](http://www.develop-
online.net/news/36155/Paper-Toss-dev-makes-500k-per-month-with-ads)

Now THAT'S something. We're not even close to that!

~~~
nhangen
Why do you keep showing their numbers? Why not some of your own?

------
danieldon
Regarding the outsourcing thing, it's clear that even they aren't getting high
quality. I'm checking out their Convert Units app, for instance, and the drum
scrolling and selection is totally broken, although it works just enough to
still function.

It's interesting, however, that the poor quality apparently isn't stopping
people from using it. Part of it might be that people don't expect much out of
a free app, so if it's broken they just deal with it.

~~~
chc
Even the functionality of the drum is iffy. It seems like maybe a quarter of
the time it will somehow mysteriously wind up on something other than what you
selected.

------
jbail
That guy who was wondering how to spend $3,000 a month to generate income
should talk to these guys.

~~~
AndrewWarner
I'm actually getting a lot of requests for intros to these guys and I posted
the interview less than an hour ago.

------
robryan
Anyone know any articles from people that run ads in these kind of apps
talking about returns? They don't seem like the kind of apps that would drive
any high quality traffic. Interesting to see if it's just an advertising
bubble where because it's new there is many companies trying it out pushing up
prices or there is actually a sustainable business here for advertisers.

------
percept
This sounds like some good advice to help prevent ideas from being taken:

"We get that question a lot. It was kind of concern. So what we usually do in
our first bid, in our first description we’re kind of vague. We say, ‘We’re
looking for a developer for a simple photography app.’ And from all those
people we’ll choose three to five that look kind of trustworthy, seem like
they could do the job and then we’ll give them the wireframe bid. So we start
off really vague so not everybody sees it. We’ll pick three to five people,
we’ll give them the full details and then they’ll give us a more detailed
proposal."

------
fapi1974
Scam, scam, scam. The e-book website could be selling anything from stock
newsletters to - well - internet get rich quick schemes!

------
mdolon
Here's a link to the e-book they wrote and mentioned in the interview:
<http://www.freetheapps.com/create-iphone-apps/>

It makes sense that they seemed somewhat reserved at certain points of the
interview, they don't want to give away too much and make their e-book less
useful.

~~~
epo
Now I know its snake oil, this page has all the wording and techniques of a
classic get rich quick scam.

~~~
BonesLF
It's only a scam if you fail. Hell, most people give up even when the
blueprint is right in front of them.

It's time to stop making excuses and realize that there is so much money to be
made on this here internets that the best idea is to TRY HARDER.

caveat: Yes, this may be a bit slutty. But I don't know if you noticed this
Halloween - slutty is in.

~~~
sofal
_It's only a scam if you fail._

So it's not a scam if you make money off it?

~~~
chc
I think he means it's not a scam if it actually makes money for the reader.
The hallmark of a get-rich-quick scheme is that it doesn't work.

OTOH, this does sound like a get-rich-quick scheme.

------
faramarz
Is it me or does it sound like they are just _winging_ the whole business?
Andrew had to pretty much coach on what to do, and what to answer.

That said, they still get A+ in my books for just doing it. That's the biggest
differentiator between people who find success and people who don't. Kudos.

~~~
qbui
We are and have indeed been winging the whole business. We're no business
experts, we've learned a lot going through the process. It hasn't even been 2
years yet. This was our first "face to face" interview. We're not great public
speakers either haha. Just going with the flow and we've been very fortunate
so far.

------
Sindrome
Andrew I love you. I sent you an email a few months ago asking if you could
get more videos about the mobile space and you have totally come through. I've
seen a hearty amount of mobile interviews this month. Thanks.

~~~
AndrewWarner
Thanks.

If you come across anyone I should interview, email me.

------
switch
Let's break it down.

1) Release a bunch of free apps. 2) Take the holiday season - the single month
with the highest sales and traffic. 3) Round it up a little bit to get to $80K
a month. 4) Find as many people as you can who're willing to believe the
story. 5) Don't lie - just let people extrapolate - Say $80K in a month and
let people assume that means $80K per month.

Their website is the classic long form sales letter.

Make it long so people get invested. Offer $2600 worth of value for just $300.
Then knock another $200 off.

Appeal to the total idiots who think a 'free' ready to go app that is included
will start making them $5,000 a day.

Quote examples like iShoot + kitchen table without telling the whole story
i.e. the guy's programming experience and the actual number of months spent
and the strategy he used.

A fool and his money are soon parted. These two gentleman are taking upon
themselves this painful task.

If we set aside ethics it's just a strategy - One guy builds a super valuable
product and sell it at high price to smart people who value it.

Another person builds a house of cards and targets people's greed and
laziness.

Notice a few things -

1) Their insistence that they spend just 5 hours a week on this. 2) Their
focus on showing earnings from a single month - the month in the year that has
the most sales. 3) If you were to wish for a easy, no hassle way to make lots
of money - You'd dream up exactly what they are claiming. It's absolutely
perfect - you don't have to know coding, you need just 5 hours a week, and
you'll start making $5,000 a day within 60 days.

~~~
dzlobin
Right, but as it turns out they didn't just make $80,000 in a month. They made
~$800,000 over a year and a half, and clearly said they have had dud apps as
well

------
PhrosTT
FML

------
scottchin
I'm curious about the ad networks that are used in these apps. I read the
interview transcript and it says that AdMob was used at first and then they
switched to "AdWorld" (which I assume was a transcription error and it meant
AdWhirl). If Mike or Quoc are reading, or if anyone else has any insights, I'd
be interested in hearing more.

~~~
qbui
We use Adwhirl to run in this order - iAd, Adsense, Admob. iAd has been making
us the most money so we give it the highest priority.

We also use transpera and greystripe in some of our apps.

------
d_r
It would be interesting to see more people chime in here about using sites
like Elance. Have you had good/bad experiences with this approach?

Outsourcing seemed to work great for these guys (good for them!) Is it because
the apps were fairly simple, or did they get "lucky" with picking the right
developer(s)?

~~~
davidedicillo
When I started 39 (my company) I was outsourcing my iPhone development via
Elance to a firm in Ukraine. We got some good simple apps out and made some
money. But quickly they weren't reliable; they fit your job in a pipeline with
other jobs, so you can't just tell them "today just stop whatever you are
doing and work on this important stuff". Also you need to be very lucky with
the people you hire.

~~~
atleta
I hope it didn't come as a surprise. What you do when you outsource is not
only you hire cheaper workforce from the other end of the world but you also
spare on not having a permanent employee/consultant. It's cheaper because you
only pay for what they do and not their availability (i.e. you don't pay if
you don;t have anything to assign to them). Now on the other end of the
business there are people who can only make a living if they are highly
utilized. So they'll have a pipeline for sure. (I.e. they won't pay what you
don't pay, the availability.)

So if you want an employee or permanent contractor then hire one, even from
the other end of the world. Most freelancers will be more than happy to have a
longer term contract with a fixed income. But you have to pay the bill...

------
stevenp
Hey Andrew! Curious why your podcasts don't show up in the iTunes feed until a
few days later. I'm having to manually download this one because I'm so
excited about it. :)

~~~
AndrewWarner
I didn't know that was happening.

For some reason keeping my itunes up date has been a struggle. Thanks for
telling me.

~~~
kranner
The RSS feed as it shows up in Google Reader is also delayed, just so you
know.

------
bhoung
I'm a little surprised at the relatively negative responses on this. Is this
story not consistent with hacker culture and working smarter, not harder?
[Pointing out to a bunch of programmers they can be outsourced is unlikely to
be well received though]. The execution and success of their apps was
brilliant. Sure they lose marks for immaturity, which is even more of an
achievement, and their contribution low-quality apps which now plague the
internet.

------
pix30
I call BS - I don't believe they are making 80k a month. The numbers don't add
up and their responses seem very ill informed and shaky on specifics.

------
maxklein
Why is the screenshot on the ebook page Adsense? Are they advertising in their
mobile apps using adsense? Is that possible? I thought Apple disallows this.

------
tyng
Who is this Ed Turner guy? Sounds pretty awesome

~~~
maxklein
He's some type of guy who sends emails to all app developers advertising his
services. I've got at least 10 emails from him.

------
known
Damn outsourcing viz Chindia is destroying American Dream and Confidence.
<http://goo.gl/2PGOE>

