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How We Built iTeleport into a Profitable Business on the App Store (iteleportmobile.com)
63 points by jsherwani on May 20, 2010 | hide | past | web | favorite | 22 comments

What they don't mention: They got in during the "gold rush" period on both platforms. That is a huge competitive advantage that can't be replicated. I'd be surprised to see someone who released an iPhone app a year ago who could show similar numbers.

Though I do think it's very cool that they're posting these stats. This kind of openness is uncommon.

But someone who made it in during the gold rush period should only have an advantage if they made it into the top 100 category or store-wide chart.

What kind of advantage would they have otherwise?

There are some App Store sales advantages which stem from simply having sold a large number of copies. For example:

1. More ratings (shown as numbers next to 1-5 star ratings) - Help convince potential buyers that your app is significant

2. More reviews - advantage as with #1, but also higher chance of having at least 1 review in a larger number of countries.

3. Recommendations in iTunes - On the iTunes interface to the App Store, users are shown 'People who bought X also bought Y'-type recommendations. High sales increase the chance of your app featuring in these.

So by getting in early, you sell copies through being the main/only product choice in your area. Then, when competitor apps arrive there are some residual advantages like these which place you ahead of the pack.

They credit their success to word-of-mouth. Getting in during the gold rush means they have users to spread that word of mouth. Getting in after the gold rush means your app is more likely to languish in obscurity.

What strikes me is this though: Ok, they are making good money and that's fine with me. But if this would be an open platform they would not have been able to compete with some open source port of the VNC client for that machine.

The only reason this works is because the platform is somewhat closed.

Closed platforms => closed source => profits

Open platforms => open source => no profits

(or at least not for 'utility' level stuff like this).

Once you've shelled out the money for that ipad you're good to go and spend some more on applications, but an open source developer is not expecting a return on his investment so will not be shelling out money for development tools.

If it works like that, we'll see what happens when android powered pads are going to be available, I expect that 'apps' like this will not be making any money at all.

they would not have been able to compete with some open source port of the VNC client

That depends on the culture of your open platform. The Mac OS is an open platform -- in the sense that you can compile and run any open source software you want on a Mac -- but there are quite a few Mac apps that successfully compete against open source "equivalents". Consider Transmit: An FTP/SSH/EC2 app. Or Textmate: A text editor for programmers.

It's not the platform that matters. It's the customer base. It doesn't matter how many users the platform has; what matters is whether they have money and are willing to spend it for higher quality, less wasted time, greater ease of use, or some other value that your software provides.

I'm not sure there's any first-order reason why people couldn't develop a really polished VNC client for, say, Linux and make money on it. There are just second-order reasons: Linux is a fragmented software platform (many distros, many moving parts), running on incredibly diverse hardware, with a culture that actively discourages charging money for software and has therefore built little or no infrastructure or culture to support such business. Most difficult of all, Linux must compete with the Mac, which has built a culture of paying for quality and has used it to vacuum up many of the most valuable desktop-software customers.

Transmit I would consider 'at risk', of having their lunch eaten one of these days, textmate (like ultraedit) has a loyal following and will be here for the time being.

If it was as easy to apt-get some package on to the mac as it is to install stuff on most linuxes (or 'yum' if that's your flavour) I think that would change matters considerably.

The initial hurdle to deployment is the hard one, if there would be a package manager with a sizeable repository installed by default on OS/X I think it would make life much harder for those earning a living writing software.

Just like 'tucows' changed the world of closed source utilities for sale on the PC platform, only then a bit more dramatic because the vanguard would already be pre-installed.

Openness includes removing barriers to getting at stuff, not just that it is 'open' to modification, I suspect the majority of the 'hackers' on this forum have never modified a line of code in most of the stuff they download and install.

"If it was as easy to apt-get some package on to the mac" / "The initial hurdle to deployment is the hard one"

Far easier for the vast majority of users already. Download, move to Applications, done. Automatic updating via Sparkle. It ain't exactly rocket surgery.

As far as typical unixy tools, homebrew (http://github.com/mxcl/homebrew) does a pretty fantastic job.

I've installed some non-standard packages on the Mac and it was pretty tricky.

Not exactly 'move to applications'. And if some package is only available in source you're really in for a rough ride.

It's been a while though (about 2 years), possibly it's much easier now than it was then.

I use my mac so little now I've borrowed it to a friend here that does design. Too bad in a way because I really like the machine, it's so quiet compared to the pcs I use.

Well, that's exactly the thing... There's a vast difference between installing some library for a programming language versus an application that John Q. Enduser wants to use.

As far as installing things from source that also has improved greatly in the last two years as well, so there's that.

But in general I'd say the user experience when installing applications on the mac is certainly miles ahead of the way Windows typically works, and arguably better then even Linux (Ubuntu or similar) with the gui frontend to apt-get.

How do people find stuff ? Is there a repository of sorts ?

Versiontracker.com and Macupdate.com are the two big ones for the Mac.

I certainly hope you're wrong. Writing software is one of the few things left that a normal working person can get into and become financially independant.

Personally I expect to just see the prices of software to come down on Mac and Windows but start charging on Linux if more people start using it. A couple of bucks is no big deal if the software is easy to buy.

One of the bigger drawbacks to the whole open source movement was the inroads that it made on -surprise- people like me that made a good living selling software they wrote.

For every package on the windows platform there were suddenly 3 or more competitors available, 90% feature complete in a race to the bottom for marketshare, which they all got and then suddenly figured out they had to make money somehow.

And then they imploded, but the damage to the market was done, everybody expected 'free'.

Apple has bucked that trend to some extent, but I don't think this was a reversible process, all software, including operating systems and so on, with the exception of niche code and in-house software for deployment in a company, some firmware or as a back-end for a service will be free. And even some of the latter will be free (see 'reddit').

So, I changed tack, way ahead of the pack I aimed at a service driven income stream rather than selling bits of software.

My then partner Michael saw it coming with great clarity and together with another guy called Paul (who was founder of one of the first ISPs in NL) they changed my future in a fairly dramatic way.

So if you haven't seen the elephant yet, maybe you need a higher ladder, but he's coming for sure. None of the 'old' ways of making money can be taken for granted. Read 'being digital' by Nicholas Negroponte if this hasn't convinced you.

It's old (by internet standards) but it is in many ways a visionary book. Far more so than Gates' 'the road ahead'.

I understand what you're saying, but I'm not sure it will play out exactly that way. So many movies/songs were being copied that some people were speculating that no one would be willing to pay for movies/songs at some point.

Then iTunes came along and showed that actually people just wanted (a) to not pay such a rediculous amount and (b) to be able to conveniently get the product. $15 for a CD that has just one song I want? Nah, I'll just download it. $1 for exactly the song I want and I don't have to mess around with torrents and shady software and sites? Done deal.

What used to be around that a normal working person could become financially independent from but can't anymore?

Fair point. "financially independant" wasn't the proper phrase. I meant being able to have a good middle class, or better life without punching a clock for someone else. I resist anything that would mean our only asperations can be (a) be the next google or (b) sit at a desk in a sykscraper hammering a keyboard.

I find apt-get harder to use than macports though the packages are usually more uptodate.

No, because people on iP* will keep buying this. Also they might start offering more feature, better support and all the other stuff.

People still buy Photoshop even if Gimp is free...

This is excellent data to see. I'm tired of paying for crappy $1 apps and will gladly pay extra for something that works well and looks great.

Good to see that niche markets exist in the app ecosystem that support pricier apps.

If there's a killer app for the iPad, this is it. I'm not surprised to see them doing well at a $25 price point. It's worked well for me for a long time, on both the iPhone and iPad.

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