

The App Store is for Suckers - mcantelon
http://jonathanstark.com/blog/2010/03/09/the-app-store-is-for-suckers/

======
andrewljohnson
This is the opinion of people who don't try or fail at the App Store.

For a counterpoint, my start-up (me, my fiancée, and my good friend) started
an indie GPS app at the tail end of last summer. We worked hard, did many
iterations, built up our userbase, and now we have several top grossing
navigation apps, and we are piling up cash in the bank.

We don't have a marketing budget. All we do is engineer and Tweet, and we have
had steady growth. Now we are also licensing the mapping platform to a handful
of other companies, and I'm guessing our revenues will double or triple over
the next couple of months, again.

For all those deciding whether to do an iPhone app, it can be done. But pick a
niche and plan to work harder than any job you've ever had, or it probably
won't pay off. There may be a lot of disgustingly successful Fart apps,
outliers in the game section, and the like. But there are also indie devs that
make a job of it, and there is plenty of money in it for us too.

People like to say the "App Store" is a bad bet. The truth is, any start-up is
a longshot, and the App Store is a fine way to sell software. We pivoted away
from the web and Facebook because we found it too hard to monetize, even
though we had strong traffic growth and we had won an fbFund grant early on.
Different strategies work for different people - you just have to experiment,
instead of basing your decisions on bad assumptions and never reevaluating
them.

~~~
evansolomon
Have you considered doing more marketing? Seems like you are in a spot where
it would make sense.

~~~
andrewljohnson
Well, I guess I should say we do a bit more than just Tweet :)

* We also network with companies to get their content in our app (maps and data), which leads to links from their sites. This is a constant activity and we see this as the primary way to create a defensible market position in the category. Not only do we get something to sell, but our partners go out and sell their customers too.

* We have a popular hiking website (that's what we first build before switching to mobile dev) and this provides us with good PageRank for some searches, since we link our app site.

* We also have started to make all sorts of nice PR contacts - this seems to come organically the more you hang around a niche (hiking and backpacking for us). We will probably get our first real write-ups this summer.

* We have tried some Facebook and Google ads but we don't have a good handle on how well they convert, so we pretty much stopped that... just using a free credit to advertise our Android app on Google now.

* Our most effective strategy is we offer the 50 free promo codes we get from Apple for each release on our website, to anyone who asks. This leads to a lot of blog posts and App reviews.

* We also heavily cultivate our beta group, which leads to solid software and word-of-mouth.

------
andrewljohnson
What do I get for my 30%:

* Apple processes payments and wires me money

* Apple processes over 1GB of downloads per day for me (and growing)

* Apple makes my software discoverable to their hundreds of millions of already-entered-my-credit-card users

Also, for expensive apps, 30% might seem steep. But I challenge you to find a
payment provider who will let you sell something for .99 and wants much less
than 30%, as a fee or percentage. Plus, you can avoid the 30% if you want by
having a free app with in-app purchases that you process via some other
mechanism.

~~~
mattmaroon
While I don't agree with the original poster (and FWIW, my company is
currently working on an iPad app) but your arguments are sorta silly too. You
can process your own payments and get the money much faster and with less
hassle for less than 3%. If you're monetizing your app, 1GB of downloads is a
trivial cost as well. Ask any Facebook developer, Apple's raping you on those
two for 30%.

The distribution is good and bad. Good if you get high on the lists, bad
otherwise. Overall I'm not sure you can call it a win, half the reason the App
Store is the best distribution method is because Apple prevents all others.

I'd disagree with OP largely because of technology. You can't build a
compelling 3d game using web technology yet. You can't take advantage of the
GPS chip or gyros or camera, etc. Most apps worth having will be more than a
website can accomplish right now.

You're paying Apple 30% because they built the platform, which was an enormous
gamble for them that paid off handsomely.

~~~
robryan
There is also the buying mentality that an app store user has when browsing
for apps. It's hard to measure this but is probably bigger than anything else
you get for your 30%. You sell an app store app and people don't mind droping
99 cents or a couple of dollars for something that preforms a few functions.

In contrast I think web apps are a much harder sell at those price points, so
for a similar app your only real choice is advertising supported.

------
jeb
The main advantage of the app store is a quick and painless payment method for
the end users. Your web app does not offer that.

~~~
stcredzero
I don't see why this couldn't exist, though. Is this what Google is trying to
do with their WebApp Store?

~~~
mustpax
It's not a technical limitation, it's a matter of user expectations and
perceived value. In a way it's a marketing issue, that's why Apple was so good
at getting over it.

~~~
jasongullickson
There's also the convenience factor. If I had to whip out my credit card (or
deal with Paypal) every time I wanted to buy a $.99 app, I'd buy fewer.

(probably better for me, but definitely worse for developers :)

~~~
masklinn
Yes, but in that case it's just a technical limitation, you could have a
unified micropayment platform (wasn't DVD Jon trying to build one? Or
something?) which would make it as easy for web services as it is for the
appstore.

~~~
jasongullickson
You could have _another_ unified micropayments platform, but that's still
another system I need an account for, etc. (unless you can back-end to
iTunes...good luck! :)

~~~
robryan
The facebook one could takeoff, but then I think you will only be able to
offer an app for free and sell virtual goods. Still the same kind of profit
margin for facebook as apple though.

~~~
masklinn
Would be lower since they only handle payments, and don't have to manage
distribution, infrastructure and a bunch of services around the product
itself, not just its sale and billing.

------
jbail
I agree that if you build one web app tuned for mobile phones --- it should
work for both iPhones and Android phones...as well as for browsers on laptops
and desktops.

But, HTML5 is nowhere close to supporting the features you need, nor does it
have access to essential phone hardware. I've built a browser based paint app
and a browser based GPS using HTML5 and while fun, I think if you're honest,
you know it's not quite ready for that yet. There is too much browser
sniffing/adapter pattern going on and it can't be avoided.

That aside, my question to other mobile phone users is how Native vs. Web apps
are perceived by users on a phone. Since the Native App is --- well, native
--- it is given more prominence within the phone's UI. I suppose you could
bookmark the web app, but it just doesn't seem to have as much importance as
something natively installed with a shortcut icon, full access to all
hardware, native menus, buttons, etc.

So, I don't think you can blatantly say "web apps are better than mobile" ---
unless maybe you have a vested interest in that position --- like you're
writing a book or something (ahem, ahem).

I think the reality is that app stores are a pretty cheap distro opportunity
with millions of people with credit cards on file and are certainly not going
anywhere in the near future.

~~~
redrobot5050
You can "bookmark" web apps into your home screen with the iPhone. I'm sure
Android offers some version of support for this as well.

But you still have to deal with stuff like having to login every time. Losing
some screen space of your app to the Safari bar at the top, etc.

~~~
semanticist
You can have your web app not show the safari bar when saved to the home
screen. If you're using a framework like jQTouch it's automatic, and combined
with a custom icon and splash screen really does give the 'native app' feel.

It's just a pity that it's so awkward to get it onto the home screen.
Prompting the user to press the '+' and save it is clunky.

------
redrobot5050
Amazon.com takes a slice of my sales when I use their marketplace. I'm also
forced to agree to their policies with regards to shipping fees (I get a
credit, but my costs often are MORE than the credit) and their A-to-Z
guarantee.

I still end up making more money with the "global" marketplace of Amazon.com
than I would my local marketplace. I think the same applies to a well written
app over a well written web app.

------
evansolomon
This is a popular idea lately, that web apps can (and should!) do everything
that native apps do. Are there any examples of that people actually use
regularly? I know I have tried a few of these 'apps-in-a-browser' and even the
ones that worked reasonably well were still clunky enough that it always felt
like a worse version of something else, to the point that I stopped using them
quickly.

~~~
sprout
<http://touch.facebook.com> is a better app than the native client (on
Android.)

m.facebook.com is trash, and really so is the native client. Though I don't
think a native app could do better than the touch site, except for the obvious
ways it can't integrate and do notifications (which I have turned off anyway.)

<http://i.reddit.com> is a touch better than RedditIsFun, though RedditIsFun
is faster and has better caching, so I use that. This is on a Motorola Droid,
so on a current-gen device i.reddit might be better.

~~~
masklinn
> <http://i.reddit.com> is a touch better than RedditIsFun

It definitely isn't as good as (let alone better than) AlienBlue or even
iReddit as far as I'm concerned

------
treblig
"As you know, it has the iBookstore, which joins the App Store and iTunes
Store as the third store on the iPhone. We have over 150 million credit cards
on file ready to purchase your apps. We think we’re number one on the web."
-Steve, June 2010

150 million credit cards with one-touch purchasing.

~~~
mkramlich
in essence: Apple has become the Amazon of native mobile apps. brilliant move,
business-wise.

------
hexis
The app store doesn't charge 30% of profit, it charges 30% of revenue. It's a
big difference.

------
voidfiles
I think its clear that the store offers some benefits to developers, but
mostly economic. Which is to say that the biggest argument isn’t that the
development platform is awesome, but that the distribution platform is
awesome. Probably even not that it’s awesome, but that it’s the only game in
town.

What if there were a third party store out there, one that could provide the
trust, and authority need to get consumers over the small purchase hump. What
would it look like?

I think Google Chrome team is working on a HTML5 App store but its going to be
for Chrome, do you guys think it would be possible to do it outside a major
company.

This is something that I have been thinking about for a while, no one has
tried this, but it could be huge.

What would this store need to offer, what would it look like?

------
mkramlich
everything he said was true and compelling. however there remain some
arguments in favor of the App Store (unfortunately, in my mind) with the super
simple purchase ability for users being possibly the most compelling. The
large audience is still attractive but I think the benefit of this to
developers is decreasing as the massive number of apps and updates cause so
much noise it gets harder for any one app to stick out or be found at all.
I've written 4 of the apps in the store now and have reached a point where I
look hard for excuses to not make anymore, because I think in the long run it
goes against my best interest and that of my clients. The best reason for a
native mobile app is if it truly needs fast performance and/or offline access,
for example.

------
fjabre
It's true. Apple's App store will never produce a Google, a Facebook, or a
Twitter etc. The App store platform is designed so that its children will
never compete with its parent.

The App store reminds me of walking around a mall - it's mostly a 'retail'
experience.

I believe nothing truly innovative will come out of Apple's app store because
Apple locks up all the really cool shit for themselves.

The web is the only truly free frontier on which people can build _real_
innovation.

An app for a truly disruptive product will be a web app first and an iDevice
app second.

------
floozyspeak
The biggest reason to have an app is to be seen in the network, to be there
when users go to search and try and something new. The next best reason, plays
more to your ego, gives you internal drive to do more, learn something new and
feel like you've made progress, it may be serious fail material but it's still
more than a website. Third, transactional goodness is a mere click away vs
create an account and enter credit card here, if you nail the concept and yes
share the funds with the store you stand to reap the rewards.

------
aresant
"Give up 30% of your profits . . ."

Considering the huge # of apps priced @ $1.00 his math falls apart.

If you're charging $1.00 and have even REASONABLE merchant fees you're going
to wind up shelling out $0.40 - 0.50 of every dollar to the merchant
processor.

Even paypal is 1.9% - 2.9% + $0.30 USD for the bulk of transactions.

Not to mention access to millions of consumers, not to mention completely
eliminating customer service costs, etc, etc, etc.

~~~
portman
>> _Even paypal is 1.9% - 2.9% + $0.30 USD for the bulk of transactions._

Actually, we use PayPal's micropayments service, which is 5% + $0.05 USD. This
is only $.10 out of every dollar to the merchant processor.

<https://micropayments.paypal-labs.com/>

~~~
aresant
Did not know this - thanks for pointing it out - that's actually amazing.

------
T_S_
If you can get HTML5 to do what you need it makes a ton of sense. You can even
get a nice icon on the desktop. I have some "apps" on my phone that work this
way.

But apps and the App Store aren't going away and its developers aren't
suckers. You should perhaps be trying to create apps that are connected with a
revenue stream independent of Apple. No need to give them the same status as
the IRS.

------
alanstorm
For a profession that's all about analyzing the impact and trade-offs involved
for any particular solution, there's a massive amount of lazy and bullying
writing about the various methods of software distribution that exist in 2010.

------
jonathanstark
Hi all -

I'm the author of the original post being discussed here. I can see that most
everyone on this thread disagrees with me, which is fine.

I just wanted to let you know that because of being linked to on HN, there has
been some thoughtful discussion in the comments that addresses several of the
points raised here.

Cheers, j

------
napierzaza
These bait posts are annoying. Apple supplies the distribution, payment,
promotion and a centralized market that can get you thousands of sales just by
being good and on the store.

So how are you monetizing your web app? You taking payments? Paying bandwidth?
Advertising?

Web apps are fine, but they're something ELSE not something better. Apple is
doing some lifting on the App Store and they get a cut, that's it.

~~~
credo
_> >These bait posts are annoying._

I agree and the content was mostly meaningless and shallow.

So why did it become the #1 post on HN ? My theory is that a large number of
people have big ideological problems with the app store (and/or Apple)

~~~
thought_alarm
> So why did it become the #1 post on HN ?

My theory is that this place has become overrun with .NET enterprise
developers who immediately up-vote any title that paints Apple in a bad light.

~~~
troygoode
I'm a ".NET enterprise developer", have two macs and two iPhones in my house,
and am working on my first iOS app. Your bitter sweeping generalization is
flawed and in my opinion has no place on HN.

------
J3L2404
If not for Apple, I would not be selling software. I would still code, but for
myself. I like to solve problems and software is like a puzzle with any number
of solutions. Any time I spend dealing with merchant accounts is time not
spent coding. Not that Apple's submission process is smooth -- speaking of--
any opinions on iOS4 submission changes would be welcome. I am not going to
quit my day job, yet, I love to use and write for iPhone and the state of cell
data networks means an uneven experience without a front end.

