Under the Radar

18: Choosing a Pricing Model


00:00:00   Welcome to Under the Radar, a show about independent iOS app development.

00:00:03   I'm Mark O'Arment.

00:00:05   And I'm David Smith.

00:00:06   Under the Radar is never longer than 30 minutes, so let's get started.

00:00:10   So I am in the process of wrapping up development on my next app.

00:00:15   You?

00:00:16   Yes.

00:00:16   Yes, another one.

00:00:17   It's truly shocking and a revelation that I'd be working on a new app.

00:00:22   But I am.

00:00:23   And I'm at the point now where the app is mostly finished.

00:00:28   It's like functionally complete.

00:00:31   I'm getting ready to start sort of more broad testing

00:00:33   and that kind of thing.

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

00:00:36   in the health and fitness area

00:00:37   that I've been doing recently

00:00:39   to sort of join the ranks of pedometer plus plus

00:00:41   and C plus plus.

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

00:00:46   and fitness data collected by Apple watches

00:00:49   in hopefully a more useful way.

00:00:51   So I'm through with the part that I have a lot of comfort with in terms of sitting down

00:00:56   and just building an app, like the actual opening Xcode and coding.

00:01:00   That part I always feel good about.

00:01:02   But now I'm hitting a more challenging part of it, at least for me, that I thought would

00:01:07   be interesting to talk about, and that's the process of working out the business model

00:01:11   that I'm going to ultimately launch the app with.

00:01:15   And maybe some people would think that it would be a better idea to have the business

00:01:18   model in mind before I make the app, but that's just not the way I work. I have an idea, I

00:01:24   start building it, a few weeks later I have the app, that's just how my process works.

00:01:29   So now I hit the point that I have to decide what am I going to do with this. And you'd

00:01:36   think at this point, like, I've been doing this for long enough and I've launched enough

00:01:39   apps that I would just immediately know what it is I'm going to do. But the awkward reality

00:01:45   is I looked at it and I'm like, "I don't really know what I want to do for this app."

00:01:49   I could make it do so many different things. The number of options available to app developers

00:01:55   these days is kind of wild in terms of it's not just like the old days where you could

00:02:01   have a paid app or a free app, or push it free with ads, and then they introduced in-app

00:02:05   purchase. And originally, in-app purchases were only in paid apps, and so you could have

00:02:08   extra, what they call "pay-me-em" apps, and then they added in-app purchase for free apps.

00:02:14   We can do that now."

00:02:16   And there's recently been a whole big wave of fitness apps being purchased by big companies.

00:02:21   And so that's even like this other kind of vague, not like a business plan, but this

00:02:24   sort of like a concept of people are making fitness apps and eventually being purchased

00:02:28   by bigger companies and making their money that way.

00:02:31   And so that leaves me in kind of a crazy thing.

00:02:33   And so what I wanted to do this week is to sort of think out loud and get your thoughts,

00:02:40   about how to proceed and kind of the considerations and the thoughts that go into this. Because

00:02:47   I imagine anybody who is making an app, a product, something like that, you have to

00:02:51   go through this kind of mentality, this thought process, to think, you know, what's ultimately

00:02:56   going to be best for you. And the answer is probably different for everybody. So thinking,

00:03:00   you know, rather than just giving an answer, explaining how I'm going to hopefully end

00:03:05   up with an answer is probably more helpful.

00:03:08   - So for me, I think that one of the ways to look at this,

00:03:11   first off, is if you have any previous apps

00:03:15   that you've made, especially anything you've made

00:03:17   in recent years, since the economy always changes

00:03:19   in the app store, any parallels you could draw

00:03:22   from other apps of what might be the best pricing model

00:03:26   for a similar app that you've made and how that's done.

00:03:30   - Sure, and probably the closest app to this is,

00:03:33   of all my apps, it's certainly gonna be Podometer++

00:03:37   Sleep++, which are fitness apps.

00:03:39   And probably in many ways, Sleep++ is the,

00:03:43   actually, I guess, Pedometer++ in the early days

00:03:45   had the same thing where, because it's an app

00:03:47   that's tied to a particular platform,

00:03:50   like when Pedometer++ launched,

00:03:53   it was tied to the iPhone 5S.

00:03:54   And if you didn't have a 5S, it was worthless to you.

00:03:57   And then, you know, with Sleep++,

00:03:59   if you don't have an Apple Watch, it's useless to you.

00:04:01   And this new app, if you don't have an Apple Watch,

00:04:03   it's not really gonna be able to show you anything useful.

00:04:05   So those are probably like the closest to the way I do it now.

00:04:09   And those are both free with ads and an in-app purchase

00:04:14   to remove the ads.

00:04:15   And in the case of Pedometer++, the in-app purchase

00:04:17   is structured as a consumable tip jar type of thing.

00:04:21   And in Sleep++, it's just like a one-time regular,

00:04:24   like an in-app purchase to remove ads

00:04:27   with a nice little message saying, thank you so much.

00:04:29   - And Pedometer++ does not have ads at all, right?

00:04:32   - It does.

00:04:33   - Oh, okay.

00:04:34   And it didn't initially launch with them. Initially, it just launched with the tip jar.

00:04:39   But that, I introduced ads after a while because the tip jar, while conceptually I liked, from

00:04:48   a performance perspective, didn't do that as well. At least until I added ads to it.

00:04:54   And once I added ads, like once there was both the carrot, like "hey, support me, this

00:04:59   is great," and the stick of "I'm going to show ads in the app unless you pay," like

00:05:03   the combination of those two led to a much more robust adoption of the tip jar. And so

00:05:09   I added ads and it's been working much better since then. Because otherwise I'd find sort

00:05:13   of the, I launch it, or I launch a big update and I'll get this kind of like this little

00:05:17   wave of goodwill and then it drops to almost nothing. And so that didn't really work in

00:05:23   the long run.

00:05:24   That makes sense. So now it seems like the most logical conclusion then, if you say that

00:05:30   the new app is most similar to Penometer++ and apps like this, and the Penometer++ and

00:05:36   Sleep++ both have this kind of ads with paid options to remove them models, and they both

00:05:42   work pretty well. It seems on the surface that would be the best choice. But with iAd

00:05:48   shutting down this summer, then obviously that throws a wrench into everything, right?

00:05:52   Exactly, yeah. Like, I look at this and it's more complicated, both because of that and

00:05:57   And also because in a weird way I also want diversity in my income stream, and so having

00:06:05   everything be the same model sometimes makes me wonder if that's problematic.

00:06:10   If all of my money is coming from ads, it's sort of in the same way that, fair enough,

00:06:13   I can move to another advertising platform.

00:06:16   But if there was some App Store policy change, for example, that changed the types of advertising

00:06:22   that were allowed, and it essentially meant that advertising rates collapsed. If all my

00:06:29   income is coming from advertising, then it's probably problematic. Or if the types of ads

00:06:36   that are available become more and more skeezy and crummy, then I can—and my entire business

00:06:44   is based on that, that's not a great position either. And so I end up with this weird thing

00:06:49   of it's like, there's a lot of things that I could do. And when I was taking a step back

00:06:54   and thinking about preparing for this episode, I kept kind of coming back to it, it's like,

00:06:58   ultimately I have to decide. And this is like, really, I think that you can build a business

00:07:02   model to do one of four things. You can either maximize the money that you get now, you can

00:07:09   maximize the reliability of income you'll get later, you can maximize the overall money

00:07:17   the app will ever receive in its lifetime, or you can try and maximize your user base.

00:07:24   Which one of those things will vary dramatically will then decide which business model makes

00:07:29   the most sense for you.

00:07:31   Because if I want the most money now, well I should probably do like a paid app.

00:07:35   Just like charge money up front, hope for a little bit of press when the app launches,

00:07:39   you know, kind of get a big push, have a couple of days with nice big sales, and then it'll

00:07:46   likely fall off pretty dramatically. At least that's my experience, is that you end up with

00:07:50   this very steep drop-off afterwards. But in that first couple—in that first week or

00:07:56   so, you can actually make quite a lot more than you would probably be able to make from

00:08:00   any of the other models. And so you can make it now. And if I want reliable income, something

00:08:05   like advertising is great, because there's no—there isn't kind of like this one-time

00:08:11   purchase nature to it, where people just keep—every time they open the app, I make a fraction

00:08:17   of a penny, and so if people keep using the app, there continues to be money coming in.

00:08:24   Overall revenue is probably going to be some combination of them, where it's like, "I'm

00:08:28   going to do everything.

00:08:29   I'm going to have ads, I'm going to have in-app purchases to remove ads, I may have

00:08:33   in-app purchases to do features."

00:08:36   Do everything you could possibly do to try and maximize things, and then if I wanted

00:08:40   to just maximize the user base, well, then you kind of take the VC model and say, you

00:08:45   know, just make it free, and hope that you'll work something out down the road. Like, if

00:08:50   once you have hundreds of thousands of customers using the app all the time, then hey, that's

00:08:55   got to be worth something to someone, right?

00:08:57   Yeah, I mean, so I think, so with Overcat, I obviously chose the, pretty much the latter

00:09:03   option, which, pretty much, make it free. At first I had like, you know, free with unlock

00:09:08   to get all features. Now it's pretty much everything's free and you pay if you feel

00:09:15   like it, which is almost like everything's free. And the reason I did that was because

00:09:21   I wanted to maximize the user base, really. I have political goals with how I feel about

00:09:26   how podcasting apps should and shouldn't be designed. And I want to keep podcasting

00:09:31   open and reduce the influence of proprietary gatekeepers and everything. And so for me,

00:09:38   it was important to maximize the user base first

00:09:40   and then figure out money with that in mind.

00:09:43   Not necessarily later, because I didn't delay making money,

00:09:46   but just figure out a way to make money

00:09:49   while also giving away as much as possible for free.

00:09:51   And so that's the model I chose.

00:09:55   That though, that was in the context

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

00:10:00   that I was playing to.

00:10:02   In your situation here with this app,

00:10:05   With every app, certain models will work better than others.

00:10:08   And it depends so much on what the app is,

00:10:11   what the competition is, how your market timing is,

00:10:14   what the market is itself.

00:10:17   So something like Pedometer++,

00:10:19   was that initially a paid app

00:10:21   or was it always free up front?

00:10:22   - It's always free.

00:10:23   And especially, it was free because it required an iPhone 5S

00:10:28   and there was no way that I could require you to have one

00:10:31   before you purchased it.

00:10:32   And so I made it free because I was afraid

00:10:35   that there would be lots of people who would pay for it

00:10:38   and then immediately discover that it's worthless

00:10:42   and go and get a refund or leave a one star review.

00:10:44   And so it just never seemed like

00:10:46   paid would be a viable option.

00:10:48   - Right, and so therefore, the same thing applies to this,

00:10:51   then, 'cause this requires an Apple Watch.

00:10:52   So, you know, it's, or does it officially require it

00:10:55   or does it, you know, basically, it basically requires it,

00:10:57   right? - It basically requires,

00:10:58   it would be fairly useless without one.

00:11:00   - Right, exactly.

00:11:01   So it seems like paid is right out the window,

00:11:04   which is unfortunate because actually,

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

00:11:07   it's taking advantage of something new,

00:11:11   it's something that is a small market,

00:11:13   there's probably gonna be very little competition out there,

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

00:11:19   usually is a really good fit for paid,

00:11:21   where you have people who are gonna be motivated to get it

00:11:25   and very little competition really,

00:11:26   and especially it being new.

00:11:29   That combination usually means go paid up front.

00:11:33   Because you kinda have to be free up front

00:11:35   because we don't have real trials,

00:11:37   and this would be a great case for a trial,

00:11:40   but those don't exist, so instead,

00:11:43   you have to be free somewhat.

00:11:44   So the only question now is whether you lock some features,

00:11:48   whether you use ads or whether you just don't think

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

00:11:52   like promoting your other stuff

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

00:11:57   So going through those one by one, I guess,

00:12:00   free with unlock is tricky.

00:12:02   Certain apps, there just really isn't a good place

00:12:05   to put that locking barrier.

00:12:07   So like one of the examples, I know,

00:12:09   I think James Thompson talked about this a while ago

00:12:11   with Peacalc, is, you know, where do you,

00:12:14   if you have a calculator that you wanna be free up front

00:12:17   with a paid purchase to unlock something,

00:12:19   what do you unlock?

00:12:20   Like the nine button?

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

00:12:25   figure out where to place that barrier in a way that the app isn't totally useless

00:12:30   without it, but that enough people will hit that barrier and be motivated to pay. And

00:12:35   certain apps, the answer is just this doesn't fit well and there isn't a good place for

00:12:39   it. And certain apps, you know, there are plenty of places for it and the question is

00:12:43   where do you put it? And so in this case, do you think there's a good spot to have

00:12:48   a paid unlock? Like there's a good feature or set of features or limit that can be removed

00:12:53   where enough people will hit that and want to pay, but they won't hit you because it's

00:12:59   so annoying every time they hit it.

00:13:01   The only one that comes to mind for an app like this is to do some kind of artificial

00:13:07   limit on the amount of data that it will display. So you'd have something, you know, it's sort

00:13:14   of like, in the same way like pedometer++, like it shows you historical data, it would

00:13:18   be like, "You can only see the current week." "Unlock to see all" kind of a thing is the

00:13:25   only thing that I could sort of see, because partitioning the feature set or the functionality

00:13:29   in other ways, it feels so contrived. It feels much more like the, yeah, you can do multiplication,

00:13:37   but you can't do division. It completely kind of removes the point of the app if you start

00:13:45   partitioning the features. And so the only thing I could ever really, I could ever kind

00:13:48   of imagine is to say like, "Hey, I'm only going to show you this amount of data. You

00:13:51   know, if you scroll beyond that, there'll be a little box that says, 'Hey, would you

00:13:54   like to see the rest of your data? You know, I'm holding it hostage for two dollars at

00:13:59   the bottom.'"

00:14:00   Yeah, and that's so tricky to do while also balancing like the user's will to pay you,

00:14:05   because it's so easy to just appear really stingy or annoying or cheap with what you

00:14:10   give them for free and what you don't. And if they don't feel good about your app,

00:14:15   they usually won't pay to get past that barrier. Some people still will and they will

00:14:19   hate you for it. I've done that before with some apps like, some apps were like,

00:14:23   "I really needed it to get my job done and they offered a free trial and I kept hitting

00:14:29   walls and I just, eventually I did pay in a lot of these cases and I, but I just felt

00:14:34   terrible. I felt like I hated them for it." And that kind of soured me on the whole company

00:14:38   on their future products or my experience with the app

00:14:42   or my willingness to recommend it to others.

00:14:44   So it's always a hard balance

00:14:45   whenever you have these barriers.

00:14:47   But that being said, if you have an app

00:14:50   where a barrier like this makes sense

00:14:53   and where you can find a good place for it

00:14:55   and you implement that well,

00:14:57   it usually is a really good way to make a reasonable living.

00:15:00   Like you can usually get decent income that way

00:15:04   without a lot of the problems of things like ads

00:15:07   or paid up front.

00:15:08   So usually that is great when it works,

00:15:11   but it is really hard to make it work.

00:15:13   - Yeah, and I think one thing that I always struggle with,

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

00:15:17   it's like, what am I communicating to my customer?

00:15:20   Because the hardest part, I think,

00:15:23   that you have to get over,

00:15:24   and a little bit I think you were alluding to it

00:15:25   for it makes you feel bad,

00:15:27   is when you say this part of the app is free,

00:15:32   like the initial part,

00:15:34   and 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 are like cost more.

00:15:43   Like the weird thing that you have to keep in mind

00:15:47   is in some ways what you're communicating to your customer

00:15:49   is like the core part of the app is free

00:15:51   or in some ways you could like, it's not a great word

00:15:53   but it's more helpful for this analogy,

00:15:56   is like this part of the app is worthless.

00:15:59   And this other part somehow I'm saying is worthful

00:16:04   but if you look at those as a customer

00:16:08   they may look functionally identical, right?

00:16:11   You're saying like, the ability to do this X, Y, and Z

00:16:16   shouldn't cost you anything.

00:16:17   And I'm telling you that it shouldn't cost you anything

00:16:19   to do these things because I just gave you an app

00:16:22   that you downloaded for free that does those things.

00:16:24   So I've communicated to you, this is worthless.

00:16:28   But this other thing that is essentially probably

00:16:31   very similar to the other thing,

00:16:33   and is in many ways a contrived barrier,

00:16:37   like somehow should be valuable.

00:16:39   And like there's a dissidence there

00:16:40   that I feel like 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 that you're paying

00:16:48   is like paying for feels different

00:16:52   and like completely orthogonal to the thing that you,

00:16:57   the core part of the thing that you gave away for free.

00:16:59   You know, so often you'll have something

00:17:01   where there's a physical cost associated with it.

00:17:04   like you're paying for storage or for a sink,

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

00:17:11   it's not the thing that I gave you for free,

00:17:13   just, you know, like, it's something totally different

00:17:17   in a tangible way.

00:17:19   Because when you do that, I think maybe that's where

00:17:20   you can get around that feeling of like,

00:17:22   I feel bad about this, because I feel like

00:17:24   they're just kind of, you know, like being cheap

00:17:28   by, you know, creating this artificial limit.

00:17:31   It's tough too because when you put up a limit like that,

00:17:34   people will hit it and they will try to rationalize

00:17:38   not going past it.

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

00:17:41   well, you can only see the last week of data or whatever,

00:17:44   you know, whatever limit you put up,

00:17:45   people are gonna hit that and they're first going to think,

00:17:48   well, I guess I don't need that, right?

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

00:17:52   they don't need that because they don't really wanna pay.

00:17:55   So they're gonna try to say, well, you know what,

00:17:56   I can get along fine without that.

00:17:58   And even if they would enjoy the app more with that,

00:18:01   even if they would get their $2 or whatever

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

00:18:07   past that barrier, they will try very hard

00:18:09   to convince themselves, even if it's subconscious,

00:18:11   not to go past that barrier.

00:18:13   And so you'll have so many people who really could

00:18:16   use the app, who really could enjoy it a lot more

00:18:18   if they would pay the two bucks,

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

00:18:22   because they would rather not.

00:18:24   And that's the issue I faced with Overcast.

00:18:26   That's one of the reasons I went patronage eventually.

00:18:28   It's just very hard, but I don't know.

00:18:29   And then we have a lot more better options,

00:18:32   or different options at least, including ads.

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00:20:17   So there's also ad supported apps.

00:20:19   To me, it sounds like it'd be a decent idea

00:20:22   'cause it sounds like you get money

00:20:25   when the app is being used.

00:20:27   And no one has to decide whether to pay you or not,

00:20:30   because the ad is paying you automatically, effectively,

00:20:32   if they use the app.

00:20:34   And they can maybe pay to remove it or something,

00:20:35   and that's a separate discussion, which I'm sure we'll have,

00:20:38   but at the heart of it, you kind of automatically

00:20:40   just get money slowly with usage.

00:20:44   Of course, there's downsides in practice,

00:20:46   things like privacy concerns, annoyance concerns,

00:20:50   image concerns, what do you think about apps with ads?

00:20:53   Yeah, it's an uncomfortable-- if you may have noticed,

00:20:59   that was an uncomfortable intake of breath.

00:21:02   Because I don't like using apps that have ads in them,

00:21:07   but I make a substantial amount of my revenue from ads.

00:21:13   And there's a little bit of cognitive dissidence about that.

00:21:16   It's ultimately the pragmatic part

00:21:18   of this is the practical way to make revenue.

00:21:21   But the reality is, my app is never made better by having an ad in it.

00:21:28   It's not like, "Oh, wow, people will love it when they can see ads for Game of War or

00:21:37   Clash of Clans or whatever the latest free-to-play game is," which is essentially what most mobile

00:21:45   ads seem to be these days.

00:21:46   They're for one of those games, or they're for a big brand like Audible or Google or

00:21:50   or something like that.

00:21:52   And so putting those into my apps

00:21:55   always feels a little bit not great.

00:21:58   But the reality is, like you said, it works well,

00:22:04   and I like conceptually the fact that

00:22:08   I'm getting paid for use in a way that,

00:22:12   it's a really nice virtuous cycle.

00:22:14   I wanna make an app that's really engaging,

00:22:16   and you want to keep opening up and looking at, you know, if I'm showing you, you know,

00:22:21   help and fitness data, like, hopefully it's motivating. Hopefully it's something that

00:22:24   you want to go and check on a regular basis. And so aligning a business model with that,

00:22:29   where it is something that the more you use it, the more money I make, like, is great.

00:22:34   And in some ways, it makes me think of the way that, like, I almost kind of wish that

00:22:39   that there was a mechanism kind of like what musicians

00:22:44   have with streaming services.

00:22:47   Oh, you don't want that.

00:22:48   Not necessarily.

00:22:49   Well, conceptually I do.

00:22:50   I don't necessarily-- it breaks down in certain ways,

00:22:53   obviously, like all these things do.

00:22:54   But conceptually--

00:22:55   Just add a bunch of zeros to the number, basically.

00:22:57   Then we want that version of it.

00:22:59   That version.

00:22:59   That version would be so great, right?

00:23:01   But conceptually, every time someone listens to the song,

00:23:04   they get a bit of money.

00:23:05   And if every time someone opens my app, I got a bit of money,

00:23:08   that would be great.

00:23:10   Like if such a thing sort of existed,

00:23:12   like if there was like, rather than Apple Music,

00:23:14   there was like Apple App,

00:23:16   and people paid a certain amount of money

00:23:18   and it was distributed around people

00:23:19   based on what they used or something, right?

00:23:21   Like you could imagine a system

00:23:22   that would sort of work in that way.

00:23:23   Like it's hugely problematic,

00:23:25   and I'm not really advocating for that,

00:23:27   but like conceptually, a version,

00:23:30   it would be like the business model that ads create,

00:23:33   but without the potential for kind of like not desirable

00:23:37   Yeah aesthetics in my apps. So like that would be great that doesn't exist. And so you end up with ads and

00:23:45   You ultimately I like I end up like most likely than not that's ultimately what I'll probably have to do is

00:23:50   I look at it and it's like, you know

00:23:52   If I have ads in this app

00:23:54   I will if it's successful if it's just downloaded wildly then I will likely you know

00:24:00   make a reasonable amount of semi reliable income from it and

00:24:03   And if it's sticky and people really like it

00:24:06   and keep coming back to it,

00:24:07   my revenue will continue to, if not grow,

00:24:10   at least stay stable in the long term, which is great.

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

00:24:16   where I talked about the more you can make your income

00:24:20   kind of passive and not related to what you're doing,

00:24:23   the better.

00:24:24   And so ads are great for that

00:24:26   'cause it's all based on work you've done in the past

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

00:24:31   I just wish it didn't make me feel so kind of like,

00:24:34   hmm, whenever I do it.

00:24:36   - Yeah, and it seems like with ads,

00:24:39   you could do something crazy like direct sales of ads,

00:24:42   but that's a lot of work.

00:24:44   It's the best for privacy maximization, really,

00:24:46   and it might be the classiest, but that's a ton of work.

00:24:49   And as you go down the rabbit hole,

00:24:51   I'm like, well, I could join a network,

00:24:53   and a small app network if that existed,

00:24:56   which I don't even know if it does.

00:24:58   But assuming that existed,

00:24:59   then we pool resources, selling ads is a little bit easier,

00:25:03   maybe I don't have to do it anymore,

00:25:04   or I can share a salesperson with somebody else.

00:25:07   And as you get further down, it's like,

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

00:25:10   until you get down to the, well, I can just plug in

00:25:13   a module from a big ad provider,

00:25:16   where I might not have even dealt with a human at all

00:25:20   to be part of this thing, you're getting who knows what ads

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

00:25:25   with your customer's privacy and data.

00:25:28   But that's also the easiest for you.

00:25:30   And so with ads, the incentives are all towards

00:25:35   getting creepier and creepier because the easiest ways

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

00:25:40   to get into ads happen to also be the worst

00:25:43   about privacy and customer data in most cases.

00:25:45   Whereas anything better than that tends to take more work

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

00:25:51   - Exactly, and in my first ever foray into ads,

00:25:56   I did actually sell them direct.

00:25:57   This was way back early days at the App Store because ad networks didn't exist, and I would

00:26:04   sell ads to other app developers for very small amounts of money.

00:26:11   But that was the best you could do back then.

00:26:13   But now, yeah, you install iAd for the next couple of months, or AdMob from Google, or

00:26:21   any of the million things.

00:26:22   Like see our previous episode about ads, where there's so many networks and all kinds of

00:26:25   of things, and you just kind of put it in and, in theory,

00:26:30   and then money will start flowing, and that's great.

00:26:34   In some ways, this is an area, though,

00:26:35   like speaking of the last version of business model,

00:26:38   that probably doesn't really fit from what I do,

00:26:40   but is interesting nevertheless, is I am kind of envious

00:26:43   of venture-funded companies in this regard,

00:26:47   because they don't have a business model.

00:26:49   They don't need--

00:26:49   - Well, they have a different business model.

00:26:51   Their business model is get really huge

00:26:53   and worry about it later,

00:26:55   even though that usually means probably get bought

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

00:26:58   - Exactly.

00:26:59   - Which is a business model, just different from what we do.

00:27:01   - Yeah, and I look at that and I'm like,

00:27:02   in some ways that's actually kind of cool,

00:27:04   to be able to just say, you know what,

00:27:05   I'm just gonna focus on making something cool

00:27:08   and getting as many people as I can to use it.

00:27:11   And I don't need to worry about the financial part of that.

00:27:15   And in some ways, that's kind of interesting.

00:27:18   I definitely had the thought for something like this,

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

00:27:23   took that tack and hope, you know, it's like,

00:27:26   MyFitnessPal got bought by Under Armour,

00:27:29   RunKeeper got bought by Asics.

00:27:31   At some point, if I was able to make a wildly successful

00:27:36   health and fitness app that could be picked up

00:27:39   by some other company for, you know,

00:27:41   and it's probably in some ways more money

00:27:43   than I could ever make from running AdMob ads

00:27:47   in an application.

00:27:48   Like, that sounds kind of interesting.

00:27:50   It's like the risk dynamic on that,

00:27:52   just like goes through the roof where it's like,

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

00:27:57   that ends up making me no money ever.

00:28:00   And that's kind of terrifying as well.

00:28:02   - Yeah, right.

00:28:03   All right, well, what do you think you're gonna do?

00:28:05   Have you come to any conclusions

00:28:07   or are you still gonna think about it?

00:28:09   - I'm still gonna think about it.

00:28:11   I'm probably gonna do,

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

00:28:15   Like I don't think paid works.

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

00:28:19   Like I don't like the thought of.

00:28:20   - Right, and to clarify,

00:28:21   really works for this app on both of those.

00:28:23   - For this app, yeah, exactly.

00:28:24   The whole point of this discussion is like,

00:28:26   whether it works in this particular case,

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

00:28:30   is that every app is different.

00:28:32   This is why this may or may not make sense for this app.

00:28:35   Ads are the easy thing.

00:28:38   I don't feel great about them,

00:28:39   but I think they are sort of the obvious

00:28:41   and straightforward choice.

00:28:42   I'll almost certainly have an option to remove the ads,

00:28:47   just in terms of that's often just, it makes me feel better.

00:28:50   Maybe it's like it's just like cleansing my conscience a little bit about not having

00:28:53   ads to say like, "If you don't like them, that's fine.

00:28:56   Then it's just a paid app and you can give me money and they'll go away."

00:29:00   And if I'm feeling particularly daring or a little bit reckless and wild, then maybe

00:29:04   I'd just make it free.

00:29:06   But being a one-person shop who pays my mortgage with the revenue from my apps, not having

00:29:12   any revenue does not seem particularly wise.

00:29:14   Yeah.

00:29:15   All right.

00:29:16   Well, that's all the time we have for today.

00:29:18   Thanks a lot to our sponsor, Hover, and we will talk to everybody next week.

00:29:22   Bye.

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