Under the Radar

Under the Radar 18: Choosing a Pricing Model


00:00:00   welcome to under the radar a show about

00:00:01   independent iOS app development I'm

00:00:03   Marco Arment and I'm David Smith under

00:00:06   the radar is never longer than 30

00:00:07   minutes so let's get started so I am in

00:00:11   the process of wrapping up development

00:00:13   on my next app you I'm yes yes another

00:00:17   one it's it's truly shocking and you

00:00:19   know a revelation that I'd be working on

00:00:21   a new app but I am and I'm at the point

00:00:24   now where the app is mostly finished

00:00:29   it's like functionally complete I'm

00:00:31   getting ready to start sort of more

00:00:32   broad testing and that kind of thing and

00:00:34   it's an app that's geared in sort of in

00:00:36   the health and fitness area that I've

00:00:38   been doing recently to sort of join the

00:00:40   ranks of pedometer plus plus and C++

00:00:42   this one's about displaying the activity

00:00:46   and fitness data collected by Apple

00:00:47   watches you know hopefully a more useful

00:00:50   way so I've come through like the part

00:00:53   that I have a lot of comfort with in

00:00:55   terms of sitting down and just building

00:00:57   an app like the actual opening Xcode and

00:00:59   coding that part I always feel good

00:01:01   about but now I'm hitting an interesting

00:01:03   a more challenging part of it at least

00:01:05   for me that I thought it would be

00:01:07   interesting to talk about and that's the

00:01:08   process of working out the business

00:01:11   model that I'm going to ultimately

00:01:13   launch the app with and maybe some

00:01:15   people would think that it would be a

00:01:17   better idea to have the business model

00:01:19   in mind before I make the app but that's

00:01:22   just not the way I work I have an idea I

00:01:24   start building it a few weeks later I

00:01:26   have the app that's just how my process

00:01:29   works so now I hit the point that I have

00:01:31   to decide what am I going to do with

00:01:33   this and you'd think at this point like

00:01:37   I've been doing this for long enough and

00:01:38   I've launched enough apps that I would

00:01:40   just like immediately know what it isn't

00:01:42   going to do but I kind of awkward

00:01:45   reality as I looked at it and I'm like I

00:01:46   don't really know what I want to do for

00:01:48   this app like I could make it do do so

00:01:51   many different things like the number of

00:01:53   options available to app developers

00:01:55   these days is kind of wild in terms of

00:01:58   it's not just like an older sort of like

00:01:59   the old days where it's like you could

00:02:01   have a paid app or a free app or like

00:02:03   push it free with ads and then like the

00:02:05   introduced you know purchase and

00:02:06   originally in a purchases were only in

00:02:07   paid apps and so you could have like

00:02:09   extra what they call like pay mia maps

00:02:11   and

00:02:11   then they added in a purchase for free

00:02:14   apps we can do that now and this

00:02:16   recently been a whole big wave of

00:02:18   fitness apps being purchased by big

00:02:20   companies and so that's even like this

00:02:22   other kind of vague not like a business

00:02:23   plan but they sort of like a concept of

00:02:26   people are making fitness apps and

00:02:27   eventually being purchased by bigger

00:02:29   companies and making their money that

00:02:30   way and so that leaves me in kind of a

00:02:33   crazy thing and so I what I wanted to do

00:02:34   this week is to sort of think out loud

00:02:38   and get your your your thoughts Marco

00:02:41   about how to proceed and kind of the

00:02:43   considerations and the thoughts that go

00:02:45   into this because I imagine anybody who

00:02:48   is making an app a product something

00:02:50   like that you have to go through this

00:02:51   kind of mentality

00:02:53   to think you know what's ultimately

00:02:55   going to be best for you and the answer

00:02:58   is probably different for everybody

00:02:59   so thinking you know rather than just

00:03:01   giving an answer explaining how I'm

00:03:04   going to hopefully end up with an answer

00:03:06   is probably more helpful so for me I

00:03:09   think that one of the ways to look at

00:03:11   this first off is if you have any any

00:03:14   previous apps that you've made

00:03:16   especially anything you've made in

00:03:17   recent years you know since the economy

00:03:19   always changes in the App Store any

00:03:21   parallels you could draw from other apps

00:03:23   of like what might be the best pricing

00:03:25   model for like you know a similar app

00:03:27   that you've made and how that's done

00:03:29   sure and probably the closest have to

00:03:32   this is it's really it's out of all my

00:03:35   apps it's certainly going to be

00:03:35   pedometer plus plus or sleep plus plus

00:03:37   which are fitness apps and probably in

00:03:40   many ways sleep plus plus is the actual

00:03:43   a pedometer plus plus or in the early

00:03:44   days have the same thing where like

00:03:46   because it's an app that's tied to a

00:03:48   particular platform like in when

00:03:51   pedometer plus plus launched it was tied

00:03:53   to the iPhone 5s and if you didn't have

00:03:55   a 5s it was worthless to you and in you

00:03:58   asleep plus plus if you don't give an

00:03:59   Apple watch it's useless to you and we

00:04:01   had this new app if you don't have an

00:04:02   Apple watch it's not really gonna be

00:04:04   able to show you anything useful so

00:04:05   those are probably like the closest to

00:04:08   the way I do now and those are both free

00:04:10   with ads and an in-app purchase to

00:04:14   remove the ads and in the case of

00:04:16   pedometer plus plus the in-app purchase

00:04:17   is structured as a consumable tip jar

00:04:20   type of thing and in sleep us+ it's just

00:04:23   like a one-time rake

00:04:24   like any net purchase to remove ads with

00:04:27   a nice little message saying thank you

00:04:28   so much and pedometer plus plus does not

00:04:31   have ads at all right it does okay I

00:04:34   didn't it didn't initially launch with

00:04:36   them initially it just launched with the

00:04:38   tip jar but that I introduced ads a

00:04:42   while after a while because the tip jar

00:04:45   while conceptually I liked from a

00:04:48   performance perspective didn't do that

00:04:50   as well at least until I added advert

00:04:53   ads to it and once I added ads like once

00:04:56   there was both the carrot like hey

00:04:58   support me this is great and the stick

00:05:00   of I'm going to show ads in the app

00:05:01   unless you pay like the combination of

00:05:04   those two it led to a much more robust

00:05:07   adoption of the tip jar and so I had it

00:05:10   ads and it's been working much better

00:05:11   since then because otherwise I'd find

00:05:13   sort of the I launched it or I launched

00:05:15   a big update and I'll get this kind of

00:05:16   like this little wave of goodwill and

00:05:18   then it drops to almost nothing and so

00:05:22   that didn't really work in the long run

00:05:23   that makes sense so now it seems like

00:05:27   the the most logical conclusion then if

00:05:30   you say that the new app is most similar

00:05:32   to pedometer plus plus and apps like

00:05:34   this and the pedometer plus plus and

00:05:36   sleep plus plus both have this kind of

00:05:39   you know ads with paid options to remove

00:05:41   them models and they both work pretty

00:05:43   well it seems on the surface that would

00:05:45   be the best choice but with I ad

00:05:48   shutting down this summer then obviously

00:05:50   that there's a wrench into everything

00:05:51   right exactly yeah and like I look at

00:05:53   this and it's it's more complicated both

00:05:56   because of that and also because in a

00:05:59   weird way I also want like I kind of

00:06:01   want diversity in my in my income stream

00:06:04   and so like having everything be the

00:06:06   same model sometimes it makes me wonder

00:06:08   if that's problematic like if all of my

00:06:10   money is coming from ads I mean it's

00:06:12   sort of in the same way that like fair

00:06:13   enough I can move to another advertising

00:06:15   platform but you know if a there was

00:06:18   some App Store policy change for example

00:06:20   that changed the types of advertising

00:06:22   that was that were allowed and it led to

00:06:25   you know essentially meant that

00:06:27   advertising rates collapsed like if all

00:06:29   my income is coming from advertising

00:06:30   then it's probably problematic or if the

00:06:35   types of ads that are available you know

00:06:38   become more and more skeezy and crumby

00:06:40   then I can like and if my entire like

00:06:44   business is based on that like that's

00:06:46   not a great position either and so I end

00:06:48   up with this weird thing if it's like

00:06:50   there's a lot of things that I could do

00:06:51   and when I was taking a step back and

00:06:54   thinking in preparing for this episode I

00:06:56   kept finally coming back to is it's like

00:06:58   ultimately I have to decide and this is

00:06:59   like really I think that like you can

00:07:01   build and a business models to do what

00:07:03   like one of four things you can either

00:07:05   like maximize the money that you get now

00:07:08   you can maximize the reliability of

00:07:12   income you'll get later you can maximize

00:07:15   the overall money the app will ever

00:07:18   receive in its lifetime or you can try

00:07:21   and maximize your user base which one of

00:07:24   those things will vary dramatically

00:07:26   dependent like will then decide which

00:07:28   business model makes most sense for you

00:07:30   because okay if I want the most money

00:07:32   now well I should probably do like a

00:07:34   paid app just like charge money up front

00:07:36   hope for a little bit of press when the

00:07:38   app launches you know kind of get a big

00:07:40   big push have a couple of days with nice

00:07:43   big sales and then it'll likely fall off

00:07:46   pretty dramatically least that's my

00:07:49   experience is that you end up with this

00:07:50   very steep drop-off afterwards but you

00:07:53   know in that first couple in that first

00:07:54   cut in the first week or so you can

00:07:56   actually make quite a lot more than you

00:07:59   would probably be able to make from any

00:08:00   of the other models and so you can make

00:08:02   it now and like if I want reliable

00:08:04   income something like advertising is

00:08:06   great because it's there's no not there

00:08:09   isn't kind of like this one time

00:08:11   purchase nature to it where people just

00:08:13   keep every time they open the app I make

00:08:16   you know a fraction of a penny and so

00:08:18   the more if people keep using the app

00:08:20   there continues to be money coming in

00:08:23   like overall revenue is probably going

00:08:25   to be some combination of them like

00:08:28   where it's like I'm gonna do everything

00:08:29   I'm gonna have ads I'm gonna have in-app

00:08:32   purchases to remove ads I may have NF

00:08:34   purchases to do features like do

00:08:37   everything you could possibly do to try

00:08:38   and maximize things and then if I wanted

00:08:40   to like Matt just maximize the user base

00:08:42   well then kind of take the VC model and

00:08:44   say you know

00:08:45   just make it free like in hope that

00:08:48   you'll work something out down the road

00:08:49   like if once you have you know hundreds

00:08:52   of thousands of customers using the app

00:08:53   all the time then hey that's got to be

00:08:56   worth something to someone right yeah I

00:08:58   mean so I think so you know with

00:08:59   overcast I obviously chose the pretty

00:09:02   much the latter option but you know

00:09:04   pretty much make it free at first I had

00:09:07   like you know free with unlock to get

00:09:09   all features now it's pretty much

00:09:11   everything's free and and you you know

00:09:13   you you pay if you feel like it which is

00:09:16   almost like everything's free and the

00:09:20   reason I did that was because I've

00:09:21   wanted to maximize the user base really

00:09:23   you know I have I have like political

00:09:24   goals with with how I feel about how

00:09:27   podcasting apps should and shouldn't be

00:09:28   designed and I you know I want to like

00:09:31   keep podcasting open and and you know

00:09:33   reduce the influence of proprietary

00:09:35   gatekeepers and everything and so for me

00:09:37   it was important to maximize the user

00:09:39   base first and then figure out money

00:09:41   with that in mind like you know not

00:09:43   necessarily later because I didn't delay

00:09:45   making money but just like figure out a

00:09:48   way to make money while also giving away

00:09:50   as much as possible for free and so you

00:09:53   know that that's the model I chose that

00:09:55   though you know that was in the context

00:09:57   of this entire ecosystem that had these

00:09:59   other factors that I was playing to in

00:10:02   in your situation here with this app you

00:10:04   know with every app certain models will

00:10:07   work better than others you know and and

00:10:09   it depends so much on what the app is

00:10:10   what the competition is how your market

00:10:13   timing is you know what you know what

00:10:15   the market is itself so something like

00:10:18   pedometer plus plus that was that

00:10:20   initially a paid app or was it always

00:10:22   free upfront it's always free cuz it's

00:10:23   because of in especially it was free

00:10:26   because it required an iPhone 5s and

00:10:28   there was no way that I could require

00:10:30   you to have one before you purchased it

00:10:32   and so I made it free because I was

00:10:35   afraid that there would be lots of

00:10:36   people who would pay for it and then

00:10:39   immediately discover that it's worthless

00:10:41   and go and get a refund or leave a

00:10:43   one-star review and so it just never

00:10:45   seemed like paid would be a viable

00:10:47   option right and so therefore the same

00:10:50   thing applies to this then because this

00:10:51   requires an Apple watch so you know it's

00:10:53   or what does it officially require it

00:10:55   isn't you know basically it basically

00:10:56   requires it right it basically record

00:10:58   everybody it would be fairly useless

00:10:59   that one right exactly so it seems like

00:11:02   paid is right out the window which is

00:11:04   unfortunate because actually something

00:11:06   like this where you're saying like you

00:11:08   know it's taking advantage of something

00:11:10   new it's something that is a that is a

00:11:12   small market there's probably going to

00:11:14   be very little competition out there at

00:11:16   least at first so that kind of condition

00:11:18   usually is a really good fit for paid

00:11:21   where you have people who are going to

00:11:23   be motivated to get it and very little

00:11:25   competition really and and especially it

00:11:28   being new well that combination usually

00:11:30   means go paid upfront because you kind

00:11:34   of have to be free up front because we

00:11:35   don't have real trials this would be a

00:11:38   man this would be a great case for a

00:11:39   trial but but those don't exist so

00:11:41   instead you have to be free somewhat so

00:11:44   the only question now is whether you

00:11:46   lock some features whether you use ads

00:11:49   or whether you just don't think about

00:11:50   money with this app and use it for other

00:11:51   purposes like promoting your other stuff

00:11:53   or giving back to the world or whatever

00:11:56   so going through those one by one I

00:11:58   guess free with unlock is tricky certain

00:12:03   apps there just really isn't a good

00:12:04   place to put that locking barrier so

00:12:07   like one of the examples I know I think

00:12:09   James Thompson talked about this a while

00:12:11   ago with P calc is you know where do you

00:12:13   if you have a calculator that you want

00:12:16   to be free upfront with a paid app

00:12:18   purchase to unlock something what do you

00:12:20   unlock like the nine button like it's

00:12:22   it's hard it's like certain apps are

00:12:24   just hard to figure out where to place

00:12:26   that barrier in a way that the app isn't

00:12:29   totally useless without it but that

00:12:31   enough people will hit that barrier and

00:12:33   be motivated to pay and certain apps the

00:12:36   answer is just this doesn't fit well and

00:12:38   there isn't a good place for it and

00:12:40   certain apps you know there are plenty

00:12:41   of places for it and the question is

00:12:43   where do you put it and so in this case

00:12:45   do you think there's a good spot to have

00:12:48   a paid unlock like there's a good

00:12:50   feature or set of features or limit that

00:12:52   can be removed where enough people will

00:12:56   hit that and want to pay but they won't

00:12:58   hate you because it's so annoying every

00:13:00   time they hit it the only one that comes

00:13:03   to mind for an app like this is to do

00:13:05   with some type of kind of artificial

00:13:07   limit

00:13:08   the amount of data that it will display

00:13:12   so you'd have something you know it's

00:13:14   sort of like being the same with like

00:13:15   pedometer plus balls like it shows you

00:13:16   historical data it would be like you can

00:13:19   only see the current week unlock to see

00:13:21   all kind of a thing

00:13:24   is the only thing that I could sort of

00:13:26   see because partitioning the feature set

00:13:29   or the functionality in other ways like

00:13:30   it feels so contrived like feels much

00:13:33   more like the yeah like you don't use

00:13:35   like you can do multiplication but you

00:13:37   can't do division like that right

00:13:39   exactly

00:13:40   it completely kind of removes the point

00:13:43   of the app if you start partitioning the

00:13:45   features and so the only way I could

00:13:46   ever really I could have a kind of

00:13:48   imagine is to say like hey I'm only

00:13:50   going to show you this amount of data

00:13:51   you know if you scroll beyond that

00:13:52   there'll be a little box that says hey

00:13:54   would you like to see the rest of your

00:13:55   data you know I'm holding it hostage for

00:13:57   $2 at the bottom

00:14:00   yeah and that's that's so tricky to do

00:14:02   while also balancing like the users will

00:14:05   to pay you because it's so easy to just

00:14:07   appear really stingy or annoying or

00:14:10   cheap with what you give them for free

00:14:11   and what you don't and if they don't

00:14:13   feel good about your app they usually

00:14:16   won't pay to get past that barrier some

00:14:18   people still will and they will hate you

00:14:19   for it I've done that before with some

00:14:22   apps like sometimes for like I really

00:14:24   needed it to get my job done and they

00:14:26   offered a free trial and I kept hitting

00:14:29   walls and I just eventually I did pay in

00:14:32   a lot of these cases and I but I just

00:14:34   felt terrible I felt like I hated them

00:14:36   for it and that kind of soured me on the

00:14:38   whole company and on you know like their

00:14:40   future products or my experience with

00:14:42   the app or my willingness to recommend

00:14:43   it to others so it's always a hard

00:14:45   balance when you whenever you have these

00:14:46   barriers but that being said if you have

00:14:49   an app where a barrier like this makes

00:14:53   sense and where you where you can find a

00:14:54   good place for it and you implement that

00:14:56   well it usually is a really good way to

00:14:59   make a reasonable living like it you can

00:15:01   usually get decent income that way

00:15:03   without a lot of the problems of things

00:15:06   like ads or paid upfront so usually that

00:15:09   that is great when it works but it is

00:15:12   really hard to make it work yeah and I

00:15:14   think one thing that I always struggle

00:15:15   with and I'm trying to think of this

00:15:16   it's like

00:15:18   it's what am i communicating to my

00:15:20   customer because like the hardest part I

00:15:22   think like that you have to get over and

00:15:24   a little bit I think you're alluding to

00:15:25   it for like it makes you feel bad is

00:15:27   when you say like this part of the app

00:15:31   is free like the the initial part like

00:15:34   in typically it's like the core part

00:15:36   like the main purpose of the app is free

00:15:38   and then there's these extra things that

00:15:40   are are like cost more like the weird

00:15:45   thing that you have to keep in mind is

00:15:47   in some ways what you're communicating

00:15:48   to your customer is like the core part

00:15:50   of the app is free or in some ways you

00:15:52   could like it's not a great word but

00:15:54   it's more helpful for this analogy it's

00:15:57   like this part of the app is worthless

00:15:58   and this other part somehow I'm saying

00:16:03   is worth full but if you look at those

00:16:06   as a customer

00:16:08   they may look functionally identical

00:16:09   right it's you're saying like if you

00:16:13   know the ability to do this XY and Z

00:16:15   shouldn't cost you anything and I'm

00:16:18   telling you that it shouldn't cost you

00:16:19   anything to do these things because I

00:16:21   just gave you an app that you downloaded

00:16:23   for free that does those things so I've

00:16:25   communicated to you this is worthless

00:16:27   but you know but this other thing

00:16:30   that is essentially probably very

00:16:31   similar to the other thing and is in

00:16:34   many ways a contrived barrier like

00:16:37   somehow it should be valuable and like

00:16:39   there's a dissonance there that I feel

00:16:41   like is is where it gets really hard

00:16:42   like you can only really make the case

00:16:44   for unlocking something when the thing

00:16:47   that you're paying is like paying for

00:16:49   feels different and like completely

00:16:54   orthogonal to the thing that you the

00:16:57   core part of the thing that you gave

00:16:58   away for free you know so often you'll

00:17:00   have something where there's a physical

00:17:02   cost associated with it like you're

00:17:04   paying for storage or for a sink you

00:17:07   know to access sink or something where

00:17:10   it's not the thing that I gave you for

00:17:12   free just you know like I it's something

00:17:16   totally different in a team's of a

00:17:17   tangible way because when you do that I

00:17:20   think maybe that's where you can get

00:17:21   around that feeling of like I feel bad

00:17:23   about this because I feel like they're

00:17:25   just kind of you know like being cheap

00:17:27   by you know creating this artificial

00:17:30   limit

00:17:31   it's tough too because when you put up a

00:17:33   limit like that people who will hit it

00:17:36   and they will they will try to

00:17:37   rationalize not going past it so though

00:17:39   if you put up a limit and you say well

00:17:41   you can only see the last week of data

00:17:43   or whatever you know whatever limit you

00:17:45   put up yeah people are gonna hit that

00:17:46   and they're first going to think well I

00:17:48   guess I don't need that right like

00:17:50   they're gonna try to convince themselves

00:17:51   they don't need that because they don't

00:17:53   really want to pay so we're gonna try to

00:17:55   say well you know what I can get along

00:17:57   fine without that and even if they would

00:17:59   enjoy the app more with that even if

00:18:01   they would get their $2.00 or whatever

00:18:03   worth of enjoyment or value out of

00:18:06   having gone past that barrier they will

00:18:08   try very hard to convince themselves

00:18:10   even if it's subconscious not to go past

00:18:12   that barrier and so you'll have so many

00:18:14   people who really could use the app who

00:18:16   really could enjoy it a lot more if they

00:18:19   would pay the two bucks but who have

00:18:20   convinced themselves they don't need to

00:18:22   because they would rather not and and

00:18:24   like that's the issue I favor the

00:18:25   overcast that's one of the reasons I

00:18:26   want patron eggs eventually it's just

00:18:28   very hard but I don't know and then we

00:18:30   have we have a lot more better options

00:18:32   or different options at least including

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00:20:16   so there's also ad supported apps to me

00:20:20   like it sounds like it'd be a decent

00:20:22   idea because it sounds like you get

00:20:24   money for when the app is being used and

00:20:27   no one has to decide whether to pay you

00:20:29   or not because the ad is paying you

00:20:31   automatically effectively if they use

00:20:33   the app and they can maybe pay to remove

00:20:35   it or something that's you know that's a

00:20:36   separate discussion which I'm sure we'll

00:20:37   have but at the heart of it you kind of

00:20:40   automatically just get money slowly with

00:20:42   usage of course there's downsides in

00:20:45   practice things like you know privacy

00:20:48   concerns annoyance concerns image

00:20:50   concerns what do you think about after

00:20:51   that yeah it's a it's an uncomfortable

00:20:57   it's like it's like if you may have

00:20:59   noticed that was an uncomfortable intake

00:21:01   of breath yeah because I don't read I

00:21:04   don't like using apps that have ads in

00:21:06   them but I make a substantial amount of

00:21:10   my revenue from ads and like there's a

00:21:14   little bit of cognitive dissidence about

00:21:16   that like it's like the ultimately the

00:21:17   pragmatic part of like this is the

00:21:19   practical way to make revenue but the

00:21:22   reality is I never really like I don't

00:21:24   my app is never made better by having an

00:21:27   ad in it like it's not like oh wow well

00:21:30   it's like people will love it when they

00:21:31   can see ads for other you know for for a

00:21:35   game of war or clash of clans or

00:21:38   whatever like the like the latest

00:21:40   creative play game is like which is

00:21:42   essentially what most online ads seem or

00:21:44   mobile ads seems to be these days

00:21:46   therefore like I don't know those games

00:21:47   or they're for a big brand like audible

00:21:49   or Google or something like that

00:21:51   and so putting those into my apps like

00:21:55   always feels a little bit's not great

00:21:59   but the reality is like like you said

00:22:02   like it works well and I like

00:22:05   conceptually the fact that I'm getting

00:22:08   paid for use in a way that like it's a

00:22:12   really nice virtuous cycle like I want

00:22:14   to make an app that's really engaging

00:22:15   and you wanna you know you want to keep

00:22:18   opening up and looking at you know from

00:22:21   showing you you know health and fitness

00:22:22   data like hopefully it's motivating

00:22:24   hopefully it's something that you want

00:22:25   to go and check on a regular basis and

00:22:27   so aligning a business model with that

00:22:29   where it is something that the more you

00:22:31   use it the more money I make like is

00:22:34   great and in some ways it reminds me

00:22:35   think of the way that like I almost kind

00:22:38   of wish that there were was a mechanism

00:22:41   kind of like quote musicians have with

00:22:45   streaming services oh you don't want

00:22:47   that conceptually I do I don't

00:22:50   necessarily like it breaks down in

00:22:52   certain ways obviously like all these

00:22:54   things do but like conceptually you just

00:22:55   add a bunch of zeros to the number

00:22:57   basically then we want that version of

00:22:58   it that version that version B so is so

00:23:00   great right for the conceptually like

00:23:02   every time someone listens to the song

00:23:03   they get a bit of money and like if

00:23:05   every time someone opens my app I got a

00:23:07   bit of money that would be great

00:23:10   like if the if such a thing sort of

00:23:11   existed like if there was like a breath

00:23:13   and Apple music there was like Apple app

00:23:15   and people paid a certain amount of

00:23:17   money and it was distributed around

00:23:18   people based on what they used or

00:23:20   something right like you could imagine a

00:23:21   system that would sort of work in that

00:23:22   way like it's hugely problematic and I'm

00:23:25   not really advocating for that but like

00:23:27   conceptually a version it would be like

00:23:30   the business model that adds create but

00:23:33   without the potential for kind of like

00:23:36   not desirable aesthetics in my apps so

00:23:40   like that would be great that doesn't

00:23:42   exist and so you end up with ads and you

00:23:46   ultimately I like I end up like most

00:23:48   likely than not that's ultimately what

00:23:49   I'll probably have to do is I look at

00:23:51   and it's like you know if I have ads in

00:23:54   this app I will if it's successful if

00:23:57   it's just downloaded wildly then I will

00:23:59   likely you know make a reasonable amount

00:24:01   of semi reliable income from it

00:24:03   and if P if it's sticky and people

00:24:05   really like it and keep coming back to

00:24:07   it like my revenue will continue to if

00:24:09   not grow at least to stay stable in long

00:24:11   term which is great like see our episode

00:24:13   about work-life balance that we just did

00:24:16   where I talked about like the more you

00:24:18   can make your income kind of like

00:24:21   passive and not related to what you're

00:24:22   doing like the better and so ads are

00:24:25   great for that because it's all based on

00:24:27   work you've done in the past like

00:24:29   continuing to pay you in the future I

00:24:30   just wish it didn't make me feel so kind

00:24:33   of like mmm whenever I do it yeah and it

00:24:37   seemed like with ads like you could do

00:24:39   something crazy like direct sales of ads

00:24:41   but that's a lot of work it's the best

00:24:44   for like privacy maximization really and

00:24:46   it might be the classiest but that's a

00:24:48   ton of work and as you go like kind of

00:24:50   down the rabbit hole I'm like well I

00:24:51   could join a network and then you know a

00:24:54   small app network if that existed which

00:24:57   I don't even know if it does but you

00:24:58   know assuming that existed up then then

00:25:00   we pool resources selling ads is a

00:25:02   little bit easier I've maybe I don't

00:25:03   have to do it anymore or I can I can you

00:25:05   know share a salesperson with somebody

00:25:06   else and as you get further down it's

00:25:08   like well all these things are a lot of

00:25:09   work until you get down to the well I

00:25:12   can just plug in a module from a big ad

00:25:15   provider where I might not have even

00:25:18   beat I might not have even dealt with a

00:25:19   human at all to be part of this thing

00:25:21   you're getting who knows what ads from

00:25:23   who knows where and they're doing who

00:25:25   knows what with your customers private

00:25:26   privacy and data but that's also the

00:25:28   easiest for you I like that and so like

00:25:31   with ads you like the the incentives are

00:25:34   all towards getting creepier and

00:25:36   creepier because the the easiest ways to

00:25:38   get into ads and the most accessible

00:25:40   ways against ads happen to also be the

00:25:43   worst about privacy and customer data in

00:25:45   most cases whereas you know anything

00:25:47   better than that tends to take more work

00:25:49   than most people can really devote to it

00:25:51   exactly and that guy in my first ever

00:25:54   foray into ads I did actually sell them

00:25:57   direct like this was like way back early

00:25:59   days of the app store because like ad

00:26:01   networks didn't exist and like I would

00:26:04   sell ads to you typically was to other

00:26:06   app developers at very small very small

00:26:09   amounts of money but it's like that was

00:26:12   the best you could do back then but now

00:26:14   yeah like you would just you install

00:26:16   I add for the next couple of months or

00:26:19   you know AdMob from Google or any of the

00:26:21   million things like see our previous

00:26:23   episode about ads where there's like so

00:26:24   many networks and all kinds of things

00:26:26   and you just kind of put it in and like

00:26:29   in theory like and then money will start

00:26:31   flowing and like that's great it's like

00:26:33   in some ways this is an area though with

00:26:35   like some you know the last version of

00:26:37   like business model that I probably

00:26:39   doesn't really fit from what I do but is

00:26:41   interesting nevertheless is I am kind of

00:26:42   envious of venture funded companies in

00:26:45   this regard because they don't have a

00:26:47   business model like they don't need well

00:26:50   they have a different business model

00:26:50   therapist this model is get really huge

00:26:53   and worry about it later even though

00:26:55   that usually means probably get bought

00:26:57   before we have to worry about it exactly

00:26:59   which is a business model it's just

00:27:00   different for what we do yeah and like I

00:27:02   look at that and I'm like in some ways

00:27:03   that's actually kind of cool like to be

00:27:04   able to just say like you know what I'm

00:27:05   just gonna focus on making something

00:27:07   cool and getting as many people as I can

00:27:10   to use it and I don't need to worry

00:27:12   about the financial part of that and in

00:27:15   some ways like that's kind of

00:27:16   interesting like I've definitely had the

00:27:19   thought for some something like this of

00:27:20   saying like you know what if I just went

00:27:21   to like took that tack and like hope you

00:27:25   know it's like MyFitnessPal got bought

00:27:27   by Under Armour RunKeeper got bought by

00:27:30   a6 like at some point is good COO you

00:27:33   know if I was able to make some make a

00:27:35   like a wildly successful health and

00:27:38   fitness app that could it be picked up

00:27:39   by some other company for you know it's

00:27:41   probably in some ways more money than I

00:27:43   could ever make from you know running

00:27:44   AdMob ads in an application like that

00:27:48   sounds kind of interesting it's like the

00:27:51   risk dynamic on that just like goes

00:27:53   through the roof where it's like or I

00:27:54   could end up with having made this cool

00:27:56   thing that ends up making me no money

00:27:58   ever and that's kind of terrifying as

00:28:01   well yeah all right well what do you

00:28:05   think you're gonna do I have um have you

00:28:06   come to any conclusions or you still

00:28:07   gotta think about it I'm still gonna

00:28:09   think about it I'm probably gonna do at

00:28:12   like I think my default is gonna be ads

00:28:14   like I don't think paid works

00:28:16   I don't think unlocking features really

00:28:18   works like I don't like the thought of

00:28:20   right and to clarify it really works for

00:28:22   this app on both exactly the whole point

00:28:25   of this discussion is like whether it

00:28:26   works in this particular case and like

00:28:28   the reason we're going through it step

00:28:29   by step

00:28:30   that every app is different this is why

00:28:32   this may or may not make sense for this

00:28:34   app ads are like the easy thing I don't

00:28:38   feel great about them but I think they

00:28:40   are sort of like the obvious and

00:28:41   straightforward choice I'll most

00:28:43   certainly have an option to remove the

00:28:46   ads I'm just in terms of that's often

00:28:48   just it makes me feel better maybe it's

00:28:50   like it's just like cleansing my

00:28:51   conscience a little bit about not having

00:28:53   ads to say like so you know like if you

00:28:55   don't like them that's fine then it's

00:28:56   just a paid app and you can give me

00:28:58   money and we'll go away and if I'm

00:29:01   feeling particularly daring or a little

00:29:03   bit reckless in wild then maybe I just

00:29:04   make it free but being a one-person shop

00:29:07   who pays my mortgage with the revenue

00:29:10   from my apps not having any revenue does

00:29:13   not seem particularly wise yeah all

00:29:16   right well that's all the time we have

00:29:18   for today thanks a lot to our sponsor

00:29:19   hover and we will talk to everybody next

00:29:21   week bye