Nathan Mellor - Android Apps For Profit: Making Money with Apps on the Android Market

Table of Contents

Apps for Profit

How to Make Money with Apps on the Android Market

Nathan Mellor

1st Edition

1. Should You Have an App Business?

From a young age, I've liked story problems. That's largely why I went into software development. Meanwhile, my wife and other English majors would be the first to tell me that the story problems never seemed to have enough story to them. No significant plot, and not enough character development for the audience to be fully vested in the outcome. Nonetheless, if we can look at building an app business in terms of story problems, many of you will be able to solve them in a way that creates a good business for yourself.

Sometimes decisions that change your life are made based on a combination of necessity and reckless determination. Hopefully, most of you reading this book will have an easier time deciding whether to start an app business than I did.

A G ETTING S TARTED S TORY

After graduating from college, I worked for twelve years as a software engineer for a major printer manufacturer. I was not heavily involved in business, marketing, or even management. At the time I started, I thought that I might be with this company all the way through retirement, though that idea faded slowly with the changes in corporate culture.

Paperwork was in store for me that day at work

At a routine meeting with my manager in the Spring of 2009, I was informed that I had been chosen as a part of a company wide downsizing. At the time, I had recently moved into a new house with a mortgage that was already proving difficult to afford. My last working day at the company was a Friday. The next day, a Saturday, my third child was born.

Stork brings a new baby and some CORBA insurance bills

Under such circumstances, a more logical and reasonable human being would have simply looked for another job. During the course of my outplacement counseling services, though, I discussed what was my true passion: to run a successful online software business.

In 2010, I was developing an app for the outdoor recreation market called BackCountry Navigator. It was named after an app I had developed for the archaic Windows Mobile operating system, back when I still had a day job. I have a corner office, in the corner of my house that is, with a pastoral view.

Home Office in 2011. Earlier versions had a folding table with a laptop on it.

Pastoral View from Home Office

At the same time, I was going back to school. Because my job was eliminated due to hiring overseas, and because the downsizing had put the local market for my latest job title in decline, I qualified for a grant under the US Trade Adjustment Act. After making a convincing case for my reeducation, I was enrolled in the University of San Francisco Master Certificate of Internet Marketing program. I figured, and rightly so, that my programming skills were less important than understanding at least a little bit of the principles of marketing.

Certificates from the USF Internet Marketing Program still adorn my walls

When the app was first released in June 2010, I figured I needed about 56 sales a day to make this into a sustainable business venture. The first month, I was lucky to get seven a day. Over the course of that year, the app inspired both love and hatred among users, and both stress and triumph in myself. By January 2011, the app was at the top of its category, "Travel and Local", and remains in the top three grossing apps until the time of this writing. In August 2013, I took a screenshot from Google Wallet to celebrate the first million in sales from that app. Sales are not the same as profit, though one can hope. You can see from that screenshot that success has been far from instantaneous or steady.

Squiggly lines showing the history of an Android Apps revenue.

Should you you model your own endeavor after my adventure? Probably not. For one thing, not all of you could or should develop your own apps from scratch. For those that might want to, I will attempt to talk you out of it in Chapter 5. For another, few of you are going to weather a year of extreme poverty and focus in seeking to build your app business. Nor should you. Many of you are, like me, working out of your home, and not hoping for victory by size and scale alone, but by working smart and doing things right.

There are a number of ways you can get into the apps business much more smoothly than I did. By studying this out in advance as you are with this book, you are taking steps toward that end. For a number of reasons, my success over the next few years will depend on my ability to be more effective, efficient, and scaleable. As a result, I've put together this book based on what I have learned, and I am sure to mention the things that I wish I had done from the beginning.

S HOULD YOU FOCUS ON A NDROID?

Another question you will face is whether you should spend time on the Android platform. While some of you are just getting started with apps, other may have already had success with the iOS platform, and are wondering if Android merits your attention. Probably the better question is how much attention. The big developers are already paying attention to Android. Should the smaller ones pay attention too?

It is no longer the case that having an app for both iOS and Android will always require twice as much investment as making only one app for iOS.

I will decline to take part in an OS war of words, arguing whether Android or Apple is inherently better. Even if we could design a scientific instrument that would answer the question to the satisfaction of all parties, it would not make a bit of difference to this question. What you need is users, and you should understand what is happening with the users.

When I started working on Android in Fall of 2009, it was in many ways too early to focus on Android, and certainly too early to focus on it exclusively. Android had only one phone, the G1, and less than 2% market share. However, Verizon that year came out with the first Droid, and from there, things took off dramatically. Gartner was predicting that Android would surpass iPhone in a few years with 18% market share compared to 13% or so for iPhone. Both predictions turned out to be low. Android grew, through not at the expense of Apple, which has had tremendous growth as well. Some other popular operating systems, such as RIM, Symbian, and Windows Mobile, have simply imploded faster than predicted.

All throughout the growth of Android, journalists showed that they could be as loyal to the operating system on their favorite phone as they could to their favorite political party. The demise of Android has been predicted several times. All Android users, they've said, really wanted an iPhone in their heart of hearts and were only kept from it because they couldn't get or tolerate AT&T. Once the iPhone is on Verizon, they said, that will be the death knoll, the nail in the coffin, and Android will fade into irrelevance once again.