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What next for Agant – iOS house downsizes (agant.com)
56 points by grayprog on July 1, 2013 | hide | past | web | favorite | 33 comments

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.

Agreed. Agreed. I invested a year working on an app that was going to be followed my many. Soon after launch I discovered that people, for the most part, want free shit. A few apps are "blessed" be Apple and they do very well. Everyone else works for nothing. Apple benefits just the same and couldn't care less about making app discovery and the entire ecosytem better and more fair for the average developer. I am sure there are outliers but my current gut feeling about the iOS app world is that it a foolish pursuit.

Let's put it this way: Had I invested the same number of hours begging for change at a freeway off-ramp, instead of coding, I would have made vastly more money. How is that for a cold hard reality? I wonder how many published app authors feel the same way.

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.

What niches would you recommend?

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.

The problem with the MVP approach is that you get a brief spotlight in the "New & Noteworthy" section when your app first launches. For the vast majority of apps this is the only boost they're going to get from Apple. So you really need to make a good impression right up front and a half-assed MVP blows this opportunity.

It's a pity that the app market is such a wasteland now because the platform has so much potential.

The only people actually making real money are the ones selling trainings, middleware, tolling and dubious mobile developer certifications.

I always tell people to note down the amount of money spent in hardware, digital certificates and development time. Then check how many times they would need to sell their app to recover the investment.

Most of the time the conclusion is that at the current prices, it would seldom pay off.

> 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.

That advice is how you create shovelware. You can't validate a market if you don't meet the demands of that market, and that means producing something that can compete in a space of well-made and well-designed applications.

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.

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.

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.

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.

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.

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.

Most of us missed the gold rush. That is long gone. The real money in creating apps is in agency work for clients. I don't think that Agant wasn't profitable, I think that they just didn't like the work they were doing.

edit: I'll add too that "real money" does not mean riches. I make an adequate salary making apps and am very happy.

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.

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.

Yeah, that is the conclusion I have reached as well. Interestingly, some people are saying that iOS 7 presents a sort of second coming of that gold rush, but we'll see.

I feel the same, especially when I compare it to the business of developing / running a website:

- much lower barriers to entry (Apps are much less complex than websites that need to work on many different browsers, especially with iOS)

- micropayments are built-in, users will pay for additional content/features much more often

- scales much better (most of the functionality is in the client)

On the other hand, it's relatively unlikely that an App released today will work or be useful in 10 years - so it's an even faster market than websites.

Apps are much less complex than websites that need to work on many different browsers, especially with iOS

I can't really agree with this. I did web dev for ten years before I got into iOS and iOS development is far more difficult. You have to deal with threading, pointers, tight resource limits, crufty persistence APIs, flaky network connections, etc etc. A typical web app is far easier to build and maintain.

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.

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.

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.

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.

Its not the end of your dreams, just different. Mobile apps stores are the exact same marketplace and business trajectory as cdrom multimedia in the early/mid 90s. I'm sure they'll be another, probably unpredictable tech driven bubble in the future. The endless wheel of IT keeps on turning and something else will rotate up soon enough.

"I can't imagine that there wasn't enough good work out there"

Toward the end of a bubble the work goes away no matter how good you are. As far as I know he was pretty good. Which has pretty dire implications for the rest of the marketplace. The worlds best finish carpenter got fired in 2007. The worlds best multimedia cdrom designer got fired around 1996ish. The world best atari 2600 programmer got fired in 1983ish. Its the bubble that caused the problem, not the man.

Excellent points. I guess we'll have to see how this rides and if it is sustainable in the future. I love what I do currently and don't wish for change, but I'm sure my feelings and interests will evolve as technology and the world around us does.

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.

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.

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.

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

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

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.

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.

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