Under the Radar

Under the Radar 42: Getting Next Year's Customers


  welcome to under the radar or show about

  independent iOS app development I'm

  Marco Arment and I'm David Smith under

  the radar is never longer than 30

  minutes so let's get started so today we

  wanted to talk a little bit about a

  couple of different topics but largely

  around that the the theme of shutting

  something down and specifically drawing

  on some of the experiences from this

  past week where the app vesper which was

  made by brent simmons dave wiskus and

  John Gruber announced that they are

  going to be closing down after you know

  several your run of being in the App

  Store and they handled that process both

  really well and I think that's something

  that I think we wanted to expand upon a

  little bit and talk about how to

  actually walk through closing something

  down when it's time you know the time

  has come for it to be shut down how to

  do it in a classy and you know good for

  your users kind of way and then also

  they've they've both written a lot of

  post mortems and kind of thoughts about

  the process and some of them are relates

  to the modern App Store and ways of

  pricing things and where things that may

  have worked out differently you know if

  they have it approached the app

  differently would it have been

  successful in a different way I think

  are all very relevant to you know to us

  in our discussion but I think first the

  best place to start is just to talk

  about the way they shut down vesper and

  so you know Brent posted and they didn't

  serve this last update I just think it's

  been quite a while since they had done a

  previous update and they didn't update

  and basically all it does is it adds the

  ability to export all of your data out

  of the app they made the app free so

  that you it just because like why not

  and they've turned off the ability to

  create new sync accounts which and then

  their sync service will be going away

  soon and overall I was when I saw that

  it was like that is just like the classy

  way to do it like they've put in the

  extra effort even though necessarily

  there's nothing not a specific return

  for this effort because the app has

  become now free they put in the effort

  to make it so that if you're an existing

  customer you're taken care of and

  whenever I see you I'm gonna see some

  like that I like I was not surprised

  given the people who are doing this but

  it was a good reminder that there will

  come a time with all of our products

  where we have to just you know probably

  gonna have to you know turn things off

  and it's something

  worth planning for and thinking through

  and then you know probably encourage

  also just the being thoughtful about

  what's best for your customers in that

  situation you know it's it's an

  unfortunate reality that in in this

  business basically nothing is permanent

  this is one of the reasons you know

  going back kind of to the to the big

  picture for a second like the the the

  possibility for the apps we we use and

  possibly depend on to ultimately shut

  down or be sold or whatever the case may

  be to change in a way that either shuts

  them down completely or that make it so

  that we can't or don't want to use them

  anymore really underscores the

  importance of keeping your data if

  possible in open formats or at least

  preserving the option like what vesper

  did to export into open formats and

  there's there some discussion too about

  like whether they are morally obligated

  to open-source it or not I I think in

  Brent's original post he made a pretty

  good case for why like they might

  open-source it but it's not necessarily

  a sure thing that they should or need to

  because like this is really old code

  because it was it was originally written

  for iOS 6 and a lot of it is not

  particularly useful in the modern era of

  like modern iOS capabilities that they

  like now here at the same thing today

  you'd use way less code and ultimately I

  don't believe that anybody is entitled

  to the source could have another

  application if they if they paid five

  bucks for it once two years ago like

  that's that to me is just not not a

  thing I think it's a it's a courtesy if

  you can open-source that it's kind of

  interesting a little bit but it's not

  you know the panacea that some people

  think they need and deserve and and if

  you if it's very important to you to

  have open source stuff if an app goes

  out of business I think the only way you

  can actually do that is to use an app

  that is open source from the beginning

  anyway so you know I've gone through a

  few product transitions myself the only

  thing that's actually shut down is the

  magazine but you know who knows what

  what the future will hold there it's

  tough but it's the reality I mean this

  was an you know vesper was an app that

  that all of its creators were very clear

  that they would have liked to have more

  time to spend working on it they would

  have liked for it to continue and to be

  worth working on but it didn't bring in


  money to be full timing comes to justify

  the work that it would have taken to

  make it really the next level and to

  make the mac app and to make everything

  else it needed that's just how it goes

  sometimes that you know that's just the

  reality of product development sometimes

  it doesn't work out and when you're when

  you're choosing to work on a side

  project like this was for all three of

  its developers it has to somehow justify

  the time you're putting into it and in

  this case also the the money that they

  were paying to host the sync service and

  to end a license the font and so you

  know they had ongoing costs they were

  faced with the problem of time

  investment that it needed and there

  simply wasn't enough revenue coming in

  to make it worth it and that's

  unfortunate on so many levels for so

  many reasons especially with with this

  group of people and with this app

  because it was a very good app and these

  were very high-profile developers who

  they got a lot of good publicity from

  themselves and others because of their

  position and because it was a good app

  and it still didn't work out so I think

  there's a lot we can unpack from this

  and a lot we can learn from this from

  the market today

  yeah and it's I think there's something

  to to be said that it's it's it is it's

  a very strange thing to say but in a

  small way I find it slightly encouraging

  that the vesper didn't work out and and

  I want to explain that but I mean is any

  project that any of us do even if it has

  everything going for it in terms of you

  you know there's not a lot of things

  that you could kind of imagine or draw

  up that would be like put the app put

  your app if you whatever you're working

  on and in a better place as a starting

  off point then I think what vesper had

  but it's a reminder of how even if you

  have everything going for you and you

  make something awesome that's not

  necessarily going to be enough that like

  and that's in some ways I find that

  encouraging because it's a reminder that

  you it's not but even having all those

  things you want you're not guarantee

  success so even if you don't have those

  things you're in suddenly in a weird way

  much the same in the same boat you know

  your there's going to be a certain a

  certain degree of look about whether

  it's you know whether it's going to hit

  the right group whether you approach

  things in the right way

  I mean in reading through their post

  mortems about the experience it's like

  there's things that they look back and

  they made choices that they would do

  differently now and there are people who

  really understand the AppStore who are

  very smart developers and designers and

  you know they made decisions that in

  some ways they wish they would have

  changed too and I don't have any weird

  way it's like it's nice to have that the

  humanity of that of like yeah it's

  difficult it's tough and it's a good

  reminder that if you know I when I

  launch things if they don't work out the

  way that I might want them to be it's

  like that's just that's just the table

  stakes that's just the reality of the

  game of making software and putting it

  into a market that sometimes it's not

  gonna work

  and it's also a good reminder to of you

  know it's so easy I think to discredit

  an initiative like that that's nice for

  kind of a problem where it's like when

  you see someone punch something and they

  have the big publicity it's like yeah

  that's nice I suppose but like that's

  not a guarantee of success either

  ultimately the work and effort that

  it'll take for something to be

  successful isn't just based on who you

  are that it there's more to it than that

  and that just seems like a good reminder

  that this is as sad as it is as a as an

  event that's exactly it I mean like you

  know I've said for years and nobody

  believes me because I have I'm the

  benefit I'm the beneficiary of publicity

  because I have an audience but I've said

  for years that you know having a built

  an audience or being like a quote famous

  developer or whatever else it does help

  you a lot at launch time it is something

  that can basically guarantee you a

  certain minimum level of success at

  launch but it is not a substitute for a

  good product market fit it is not going

  to save you from market realities and is

  not really going to help you that much

  in the law it'll help a little bit it's

  not gonna help you that much in the long

  term you know in this case Vesper was a

  note-taking app and it was it things a

  little bit differently than another

  note-taking app so it had like a couple

  of you of unique features and design

  choices and also of course it looked

  really nice but you know I was using

  designed more in the feature sense there

  and they did a whole bunch of custom UI

  text field jumbling basically like

  worked to work around UI tech field

  limitations to make it really

  to do what they wanted to right before

  all that stuff became a lot easier so

  they had they had like you know market

  timing problem number one of the hate

  they did a whole lot of work to to hack

  around UI text fields problems right

  before the api's made unnecessary they

  also did a huge amount of design and

  work making a clean simple design

  looking app running on iOS 6 and then

  iOS 7 came in and changed everything

  about design and made a whole bunch of

  that stuff easier later they had the

  issue of when they launched the the

  third-party notes category was a lot

  healthier than it is now because Apple

  Notes was terrible and then in the

  meantime Apple Notes got really good it

  got that big update was it iOS 8 I think

  so yeah with cloud kit I think so they

  came out and it was first using it and

  would dramatically improve the sink

  system and that you didn't have to use

  web dev and I think that was eight yeah

  eight or nine whenever it was you know

  Apple Notes got a ton better like

  massively so and to everyone's great

  surprise I think I mean I don't think

  anybody expected Apple to ever really

  care that much about their Notes app and

  to add the level of features that they

  did but anyway Apple Notes comes out is

  awesome and takes away much of vespers

  market gain or rather much of Esper's

  purpose in the market I think not all of

  it of course because you know there's a

  lot of things that vesper still did

  better for a lot of people but it

  certainly took a lot of the window that

  out of those sales so it was it was

  impacted a lot by the market in general

  but also I think in John Gruber's post

  earlier his big post-mortem about it I

  think he just pointed also that the

  pricing model was just also fairly

  outdated and that's something I think we

  have a lot to say about here so

  originally a five dollar upfront app no

  in-app purchase no recurring revenue

  stream just five dollars and once

  upfront same model I used back in the

  day for instapaper sort of what I used

  at the beginning of overcast but not

  really a very popular model lots of

  people use it especially in the early

  days and the advantages of that model

  are plenty I mean first of all it's very

  very simple

  as we discussed earlier in earlier

  episodes about pricing in planning paid

  upfront takes basically no work for the

  developer you don't do you don't do

  any in-app purchase code you don't do

  any receipt checking any restore

  purchases any anything really you just

  kind of set the price in iTunes Connect

  and that's it you're done so there's

  lots of advantage of the developer it

  also takes care of a lot of like

  ambiguities of whether somebody bought

  it at the right time or whatever you

  know it it's all a lot of problems there

  it also creates a few problems there is

  no clear way to upgrade pricing there

  you know it people have to pay before

  they can even see the app so you have a

  lot of unhappy people who buy the app

  you get their money and then they kind

  of don't like it so you it's kind of

  like kind of unfair it's not really good

  for customer satisfaction or your

  reputation if the app doesn't live up to

  it and people are unhappy with you and

  then of course the big problem is that

  these days it's really hard to get

  people to pay for apps upfront that

  that's a big one and I think we'll talk

  more about that but first we'll talk

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  supporting the show so one thing that I

  wanted to sort of talk a little bit

  through is related to this sort of this

  concept of you know charging five

  dollars upfront and the in my recent

  experience it's something that I've sort

  of started to wrap my my hands around is

  the concept that is whenever I'm

  building something it is so easy to

  focus on the say the first month that

  the app is going to be in market that

  I'm gonna build something I'm gonna put

  on the App Store and it's gonna go out

  and my focus and my thinking and you

  know both around the design the

  development and everything pricing

  marketing it's all about that first sort

  of wave and in many ways that makes

  sense that's logical like that's that is

  after you know see you spend months and

  months building something like that

  first month is really exciting and

  important to say at first day you know

  we're seeing yourself you know hopefully

  you know zoom up the add the charts in

  the app store like that's really cool

  but in the reality is that like

  sustainable long-term viable businesses

  are not made really at all in that first

  month that in my experience in order for

  you to have something that is viable

  long term you have to have a model that

  will work a year from now 18 months from

  now and have an ongoing component to it

  that works and does what you need it to

  do and that is I worry that I think

  we're as I've gone through this there's

  so many I feel like I've had the

  discussion in my mind and out loud

  dozens and dozens of times about oh

  what's the best model for pricing in the

  App Store but at the end of the day I

  think the simple like question that is

  probably helpful as we think through

  these types of things for our own

  applications is how will I make money a

  year from now doing what I'm doing and

  if you don't have a good answer

  then it's probably not a great you know

  set up and if you actually remember back

  one of the early episodes of


  we're talking about activity plus plus

  and you know we were going back and

  forth whether it should be free or paid

  and there's an activity trapper tracking

  app that I made and we ended up deciding

  to do the paid upfront model and there

  was a variety of reasons for that but

  nevertheless it was an interesting and

  recent data point for the same process

  and what happened is I think which I

  could have predicted would happen and I

  was fine with happening but you know the

  first couple weeks I didn't I was very

  happy with it and then it very quickly

  just fell down and is now continuing and

  in a stable level that that stable level

  is very close to zero it's not zero it's

  you know it's just sort of mumbling

  along on the bottom and if you look at

  the you know the actual curve of it it's

  very very minimal income at this point

  and that for that particular app was

  fine you know for what I was doing but

  there's an example of that problem of it

  if you can't have a good way of making

  money down the road then your business

  model is always gonna be stuck and I

  think that is I think the most

  fundamental problem with the paid

  upfront model that we have right now

  because every it's sort of like it's

  almost like the opposite of the the

  marginal cost advantage we know we're

  over time like once I've made a piece of

  software I can sell the next copy for

  free essentially I don't have to build

  it twice I made it once and I can keep

  selling it and so you know the marginal

  cost of that each subsequent purchase

  goes down for me but in a weird way

  acquiring your next customer after

  you've gotten the first one gets

  incrementally harder as you go and in

  some in some ways necessarily that you

  may have that initial burst of people

  who are interested in it who are you

  know sort of passionate about you're

  doing or love in this case they love

  notes apps or they take lots of notes

  like you're the easy low-hanging fruit

  type of customers that you may be able

  to acquire but then each day you go on

  from there if you want to be able to

  have a sustainable and reliable income


  you have to have a way of getting more

  and more people and you're starting to

  get farther and farther from your own

  you know through your own circles in

  terms of if you're you know D what we

  were just saying earlier about well it's

  easy if you have a built-in audience

  it's like well that's great

  that first week but that doesn't help

  you a month later or a year later when

  everybody in your circle is aware of it

  they know about it they've bought it or

  have not bought it or you know and

  that's where you find yourself and so

  that's the thing that the interesting

  thing that I've started to try and

  filter my thinking through around

  pricing and around business models is

  it's not really caring too much about

  that first you know that that first

  period and thinking almost exclusively

  about a year from now and if you don't

  if you having a good plan for what that

  looks like and if you do if you can

  focus on that I feel like you're in a

  much better place and maybe you're gonna

  discount and lose a bit of potential

  revenue that first week or so but

  overall you know you'll make them you'll

  make it back dramatically if you have a

  much better position years down the road

  especially if this is something that you

  want to do long-term exactly I mean you

  know you have to think about like your

  from now because like we've like anybody

  who has ever had a paid app in the store

  has seen the exact same curve that you

  that you've seen on activity plus plus

  and probably many of your other apps

  which is like that big long spike that

  first like couple days or week where

  it's great and then just a pretty quick

  drop and then kind of a plateau kind of

  like an asymptotic curve look into zero

  basically that work kind of stays

  indefinitely low or gets gradually lower

  if it isn't at zero yet and you know

  I've seen that I saw that with many of

  my apps I saw that with instapaper every

  every major version I saw it with bug

  shot the whole thing I I saw it with

  overcast when when like I longed even

  though it was free it still had that one

  time paid purchase so it was it kind of

  had the same shape it was just a little

  bit different dynamic but same shape of

  great first couple of months and then

  gradual decline you know and and just

  slowly declining over time and that's

  one of the reasons I switched to

  recurring subscription payments for it

  is because scription payments it's not

  easy it's it's actually harder to get

  people to pay that way but at least the

  curve is going in the other direction

  and it's not even going that far in the

  direction and I'm going to have to add

  more things behind that pay wall to make

  it more healthy than it is now because

  right now basically what happened with

  overcast as a quick aside here the

  patronage model I was trying to get five

  percent of users to pay before there

  were any features when it was just

  goodwill based I achieved about one and

  a half percent and it kind of plateaued

  of that and so when I added dark mode

  and file upload but is I think it's

  mostly about dark mode just having those

  two desirable features behind the

  paywall rather than nothing made it go

  from about 1.8 1.9 percent to about 3

  percent but it is now plateauing at

  about 3 percent that that that rate has

  stopped growing and really I needed to

  be more like 5 percent to really sustain

  this healthily and so I'm going to have

  to put more new features behind that and

  so just so everyone knows like nothing

  works perfectly like you know I no

  matter what we say like you know when we

  long something is here's how we think

  it's going to go it doesn't always go

  that way and you know when Vesper

  launched at 5 bucks up front they

  thought that was gonna work great

  because for many people and for a while

  it worked ok but then the market moved

  over time they they found that you know

  they ran into competition and other

  another issues and it didn't work out so

  well in the end so one thing that I

  would definitely say is to basically

  keep your mind and options open on

  pricing and and how you make money

  because even if you pick a certain model

  at the beginning you will probably have

  to change that and what and what you

  think is the way to go might not be the

  way to go 1 2 3 years from now you know

  I'm now in that point with overcast

  where I'm making enough that it's you

  know it's it's okay

  I'm not losing money on it but I would

  ideally like to be making more to really

  justify pouring even more time and

  resources into it and having a little

  bit more a little bit more Headroom on

  the budget and so I got to figure out

  something else like that's it like I'm

  not I'm not just gonna sit here and do

  nothing I got to figure something else

  now the paid upfront model I think works

  really well if your business model is I

  don't care about next year

  and there's lots of legitimate cases

  where that is where that is true like if

  you're making like a little special

  utility app that is gonna be probably

  not able to justify a whole bunch of

  your ongoing time and your ongoing

  maintenance ongoing updates and you're

  maybe gonna have a lot of those that

  probably makes more sense to be like all

  right paid upfront it's a simple thing

  people are gonna like buy it use it once

  or twice and then their need for it will

  go away or whatever else that's fine but

  if you if you're trying to make

  something that's gonna be like a

  Productivity app that people are going

  to ideally use every day for years

  you're going to need a different model

  because I think we've seen over and over

  again that paid upfront for that is

  really hard to make work yeah and I

  think it's also an interesting that

  there's there's some interesting

  realities I think about the app store

  too and I've noticed these in myself and

  this is like a tricky thing too

  in some ways I feel embarrassed about

  talking about it but I noticed my in my

  own when I'm in the App Store like now I

  go to you know on my iPhone I open up

  the App Store if I'm looking for an app

  and I see that it's paid I have

  tremendous reluctance to download it me


  I feel bad about saying that because I'm

  a software developer I'm an indie

  software developer like I make my living

  from people giving me money in the App

  Store but I don't want to give anyone

  else money and I think the reality about

  that that I'm like which is where it's

  like that's kind of in some ways a

  profound thing to observe about myself

  is if I don't want to do it why would

  anyone else want to do it and give me

  money like that's just the experience

  we've had in the App Store and then you

  could unpack like thousands of different

  reasons why that's the case why I don't

  want to pay money for apps in the App

  Store anymore you know maybe it had been

  burned in the past there's there's such

  incredible competition there's a lots of

  free alternatives you know it's like

  unless it is an app essentially unless

  the app was made by a friend of mine or

  I absolutely have to have it for some

  reason I would probably won't buy it I

  will find a free alternative and that's

  just like the reality and I could have

  some high-minded ideals that oh no it's

  you know a devalue software it makes our

  craft less special or valuable or

  whatever you could kind of imagine but

  like that's the reality that when I look

  at something I'm like mmm maybe not or

  maybe I don't need it that much and

  and having that honesty about myself I

  think helps me understand my customers

  better and understand the realities of

  the store that we're selling in and

  that's instructive I think that having

  that feeling of saying like you know if

  I'm not willing to provide for you know

  pay for software hmm maybe why should I

  expect that someone else would and that

  leads me to you know now increasingly

  like my focus is on you know free apps

  and finding ways to make money in those

  and I think overall that's better free

  is great because it makes it there were

  saying earlier where it gets

  incrementally harder to find that next

  customer in some ways a free app has the

  opposite been because it's as you go it

  starts you know you it has a much more

  frictionless spreading phenomenon where

  you know if someone if someone has your

  app they like it they can tell someone

  else and there's no cost for that

  exchange it's not this like well here's

  this app I really like it you know but

  it there's no but there's not like but

  it's a couple bucks like there's not the

  sort of this apology that you have to

  add to that if you're recommending it to

  somebody yeah this is a barrier that

  people have to have to decide whether

  they want to go over or not I mean

  ideally you don't want to put big

  barriers in front of people before they

  even have seen how good your app is

  exactly like I mean you you want and I

  think even there's this funny theater of

  I feel like I have to keep in mind that

  while I'm sitting in my office working

  in Xcode making something it's so easy

  to almost to like become precious about

  my software and to like it over

  emphasize what it is that something

  could feel like if you know I've poured

  my heart into this it's a you know it

  you can make you can give it these

  feelings that aren't really constructive

  where at the end of the day it's just

  it's an app that's going to be going

  into a store with 2 million other apps

  and is special and unique and as much of

  a special snowflake is you feel like it

  is it's probably not as specialists you

  think it actually is and so being

  realistic about that and understanding

  that you know people aren't going to

  want to just pay you money because they

  your app is special like they won't know

  it's special and even if they do know

  it's special they may not care

  I couldn't said it better myself I mean

  it this is a very competitive market

  it's so competitive there's so many

  other apps out there you have to

  convince people that they need yours and

  if there's any barriers in front of that

  they're going to cost you dearly and you

  have to make money somewhere and it used

  to be really easy to just put a paid up

  front price on it and that worked pretty

  well but that was back when the market

  was less competitive and people were

  more exploratory with how they spent

  their money on the app store people

  didn't people weren't already like kind

  of burnt out on spending money on apps

  to try them out that worked very well

  for maybe two years at the be in the App

  Store now it's different and how it's

  harder it's a mature market there's way

  more competition it's just harder and it

  can be done but it's also going to be

  very hard to do it in a way that can

  fund somebody's lifestyle to be a

  full-time job to work on a basic iOS app

  that charges a couple bucks like you had

  there has to be more to your strategy

  than that and it's not easy and it's

  getting a harder every year and there is

  still a market there but you have to be

  really savvy at trying to get it you

  have to try a lot of things you have to

  be willing to challenge lots of

  assumptions and you have to be willing

  to swallow your pride on a lot of the

  stuff and it's unfortunate but that's

  the reality of a very competitive low

  profit business yeah I think those are

  those two things that you just pointed

  out are the key to all of this it's have

  being creative and flexible about

  approaches and then being humble about

  your approach to things and not over

  emphasizing or over exaggerating what

  you're doing exactly I mean like I've

  thought about like putting ads and

  overcast like shed something I never

  would have thought of years ago but now

  I have a situation where I make no money

  from 97% of the user base so I could

  make some possibly even good money from

  them if I put ads in it it's something

  that I was all snobby about before but

  now I'm actively considering it because

  again like why should I leave that

  option on or off the table whatever they

  why should I not consider that option

  because you know I once found them kind

  of annoying like could is it possible to

  do it well I don't know but we could

  talk about that different episode when

  we have more time

  but that's you know you have to consider

  everything now because it's it's so

  competitive make no assumptions alright

  and with that we are out of time thanks

  a lot for listening everybody and we

  will talk to you next week bye