00:00:00 ◼ ► Hello and welcome to Developing Perspective. Developing Perspective is a podcast discussing
00:00:08 ◼ ► an independent iOS developer based in Herndon, Virginia. This is show number 190 and today
00:00:13 ◼ ► is Thursday, July 3rd. Developing Perspective is never longer than 15 minutes, so let's
00:00:22 ◼ ► note. I'm going to be going on vacation for the next two weeks. And so unless something
00:00:27 ◼ ► monumental happens between now and then, I don't expect to do any episodes. So just as a warning,
00:00:35 ◼ ► because I'm enjoying myself traveling with my family. All right, so what I'm going to thought
00:00:41 ◼ ► would be interesting to dive into today is a bit maybe it's a bit more factual rather than opinion
00:00:47 ◼ ► oriented, which, you know, depending on yourself and how you view things could be good or better
00:00:52 ◼ ► or worse. But what I remember when I was back at WWDC, and I was basking in kind of that
00:00:58 ◼ ► back the glow of all the new announcements and everything was coming in, I remember quipping
00:01:08 ◼ ► that comment itself is kind of absurd and silly. But it was heading in a direction that
00:01:13 ◼ ► I think is something that I noticed a lot more for myself and just among my colleagues,
00:01:18 ◼ ► into this autumn of 2014, you know, looking for Yosemite and iOS 8 and the implications
00:01:24 ◼ ► of that. A lot of the challenges that I see us facing as a community and as developers,
00:01:34 ◼ ► You know, almost everything we've asked for or need in order to make awesome, great software
00:01:39 ◼ ► is now available to us, or at least will be shortly. The challenges I see us facing are
00:01:45 ◼ ► much more on the business side, are much more on can we continue to make a sustainable living
00:01:56 ◼ ► of some of the older inefficiencies that may have propped up less sustainable models having
00:02:01 ◼ ► kind of fallen away now. The App Store itself and the related ecosystems to it are incredibly
00:02:07 ◼ ► efficient, sometimes kind of scarily so. You know, if there's an opportunity to be exploited,
00:02:20 ◼ ► idea, you come up with something completely new and you put it out there, it will be immediately
00:02:25 ◼ ► analyzed, dissected, and all the interesting and useful parts copied, and often at a pace
00:02:31 ◼ ► which is kind of crazy. It can often be you see something new come out and within a few
00:02:42 ◼ ► out, we'll be out there in just a few days. And that's including app review time. You know,
00:02:45 ◼ ► it's kind of crazy. This is the world in which we live. And so, while you may have been able to get
00:02:51 ◼ ► away with, you know, you just create something awesome and throw it over the wall. And hopefully
00:02:56 ◼ ► it all works out in days gone by. I'm not saying that was easy, but that was something that was
00:03:00 ◼ ► perhaps more possible. In the modern marketplace, I find you really have to be more thoughtful about
00:03:06 ◼ ► it. Because if you're doing something, someone else will want to do it too. And as it becomes
00:03:12 ◼ ► more and more successful, more and more people will want to do that. Whatever it is, you make an
00:03:17 ◼ ► app with a bird that flaps up and down going through pipes, there are now hundreds or thousands
00:03:21 ◼ ► of people doing exactly that same thing. And so in order for your business to be sustainable,
00:03:26 ◼ ► it can't just be based on novelty. It can't just be based on scarcity, that you have something that
00:03:31 ◼ ► no one else has. If you can do that, great. If you're Dark Sky, for example, who, you know,
00:03:36 ◼ ► they have this kind of, they've built this whole kind of unique and novel interface or way of
00:03:40 ◼ ► thinking about weather, like, okay, maybe you can package that up and be successful. Or you have
00:03:45 ◼ ► kind of a unique position in the eco, in the market where you say like, you're a Twitter
00:03:49 ◼ ► client right now, where you are essentially, you're given a monopoly by Twitter to make
00:03:55 ◼ ► applications because no one else really wants to make them because of all the strange limits
00:03:59 ◼ ► placed on them. Like maybe you can make that. But by and large, the industry as a whole
00:04:04 ◼ ► has tremendous veracity in attacking any other inefficiencies that it can find. So you have
00:04:10 ◼ ► to be really thoughtful about how you're going to market your software, how you're going
00:04:16 ◼ ► to sell it? Because ultimately, you need to have a model that was sustainable inside of
00:04:45 ◼ ► answering the question of how you should market or sell your software until you know which
00:04:49 ◼ ► model you want or which combinations of models you want. And in order for you to really do
00:04:56 ◼ ► maybe if you're an experienced developer, this is kind of redundant for you. But hopefully,
00:05:01 ◼ ► at least for somebody, it'll be useful. So I'm going to kind of run through them in roughly
00:05:04 ◼ ► the order in which I think they're increasingly, they're starting with the most desirable and
00:05:11 ◼ ► working to the least desirable, at least from a sustainable development perspective. And
00:05:18 ◼ ► you can't do this, if you can't do that. But by and large, this is what I've found from
00:05:22 ◼ ► my own experience to be the most sustainable to the least sustainable. And so the first
00:05:26 ◼ ► is subscriptions, which is, you know, someone pays you on an ongoing basis to provide software
00:05:32 ◼ ► or software related services. Pretty straightforward. They say, I'm going to give you X dollars
00:05:41 ◼ ► services, which is pretty cool. And the biggest pro of obviously a subscription based thing
00:05:47 ◼ ► is as long as your subscription base is enough to cover your expenses and your renewal rate,
00:05:54 ◼ ► renewal slash signup rate exceeds your cancellations, you're running a profitable business. Hooray!
00:06:06 ◼ ► signed up to give you money, you can see how many of those people typically cancel, how
00:06:10 ◼ ► many people typically show up every day, and you can just look at that and you can build
00:06:33 ◼ ► thinking about signing up for a service that's $9 a month, I'm kind of committing to quite
00:06:40 ◼ ► a lot of money in the long term. And so I'm going to be much more apprehensive about diving
00:07:12 ◼ ► But often that user base will often feel that they are owed a lot more from you, just by
00:07:20 ◼ ► I'm putting it more in the con part just because it's something that you have to keep in mind
00:07:24 ◼ ► and manage, that people are, in order for you to stay in control of your software, will
00:07:40 ◼ ► Next, let's dive into advertising. So this is people use your software, and while using
00:07:46 ◼ ► it, they are presented a message from someone else, and that third party is the one who
00:07:50 ◼ ► is paying you money. This is, you know, as old as business probably, there's been advertising.
00:07:58 ◼ ► And the strongest pro I see with advertising is, of course, that it has a tremendous possibility
00:08:03 ◼ ► for ongoing revenue. It is, in my experience, it is the best at ongoing revenue in a lot
00:08:09 ◼ ► of ways because the revenue that you get is directly correlated to the usage of your application.
00:08:17 ◼ ► If a lot of people are still using your application, then you will continue to get money. And if
00:08:21 ◼ ► they stop using your application, you'll stop to get money, but those two are sort of directly
00:08:26 ◼ ► tied to each other, which is really, really convenient in terms of as you need to think
00:08:30 ◼ ► about a product going forward, if it's still making money, that means it's still getting
00:08:35 ◼ ► It also means you can make your software free, which makes it a tremendously powerful marketing
00:08:49 ◼ ► your hand. The con is obviously that you have to show third parties messages inside your
00:08:54 ◼ ► applications, which may or may not be desirable, and also requires a pretty large customer
00:09:01 ◼ ► base to get reasonable revenue. You're talking about customer bases in probably the hundreds
00:09:05 ◼ ► of thousands, if not millions, before you're able to make a reasonable living from advertising.
00:09:11 ◼ ► So something to keep in mind. Next are consumable in-app purchases. And so a consumable in-app
00:09:23 ◼ ► make a small, repeated payment inside of your software in order to gain access to some aspect
00:09:29 ◼ ► of it. And I want to also mention that this is a similar kind of model to what I've been
00:09:33 ◼ ► doing in Perometer where I have a tip jar, which is a consumable in-app purchase, somewhere
00:09:40 ◼ ► Obviously, the big plus side of consumable in-app purchase is that it has a very strong
00:09:51 ◼ ► they consume whatever it is that that result that that resulted in, and then if they're
00:09:57 ◼ ► if they like that, they can do it again, and they can do it again, and they can do it again.
00:10:09 ◼ ► Because obviously, you know, people who want to spend lots of money in your application,
00:10:19 ◼ ► Versus somebody who just wants to, for example, make the purchase once, they can just do that.
00:10:24 ◼ ► And so you have a really nice sort of capturing of the entire demand curve for your application.
00:10:29 ◼ ► The biggest downside, obviously, to consumer line-up purchases is, depending on how they're
00:10:34 ◼ ► implemented, they can very quickly get very dodgy. So you start to think of, obviously,
00:10:38 ◼ ► the free-to-play game type of thing, where you're creating these loss aversion scenarios
00:10:44 ◼ ► or sort of psychological manipulation on people to make them feel like they need to keep putting
00:10:54 ◼ ► that are very dodgy, and you can head in that direction. That's not to say all of them are,
00:11:31 ◼ ► And so typically you will have some part of your feature set, some part of your application
00:11:35 ◼ ► that is only available if you make the purchase, but hopefully you've proven the app's worth
00:11:48 ◼ ► applications, is that you are often dependent on having a very good segmentation of your
00:12:16 ◼ ► going to buy. But also, if you're too stingy in terms of feature set, then nobody's going
00:12:20 ◼ ► to buy either, because they won't feel like they're getting--they won't have a rich enough
00:12:25 ◼ ► experience with your application in the first place to then want to be by. And so finding
00:12:36 ◼ ► to do in my own experience. It's easier with things like content, where it's they're buying
00:12:40 ◼ ► a book or they're buying a magazine or whatever it is inside of your app, because obviously
00:12:45 ◼ ► there's a clear indication of what it is they're getting. But in terms of feature set, I find,
00:12:55 ◼ ► Next is obviously the upfront in at one upfront one time purchase. So this is someone pays
00:12:59 ◼ ► you money, you give them software. It's pro is obviously it's very simple and straightforward.
00:13:03 ◼ ► You know, they give you money, you give them software, great. It's trickier to make sustainable
00:13:08 ◼ ► though, because you are effectively capping your income per user at one time, they give
00:13:13 ◼ ► you money, they give you give them software. And then the question then becomes, what do
00:13:17 ◼ ► you do? And what's your relationship going forward? How do you provide long term support
00:13:30 ◼ ► not something similar to a single price. And so you're not really segmenting your population
00:13:39 ◼ ► give your software away for free, you make something, you give it away. You lots of people
00:13:42 ◼ ► may use it, but obviously you're not making any money. So this only works if you are have
00:14:04 ◼ ► lot based on your business. And what I found most in, you know, in the last six years is
00:14:13 ◼ ► at the beginning. So things like subscriptions, advertising, consumable in-app purchases are
00:14:18 ◼ ► the best in my experience for creating long-term sustainability. And often the better, the
00:14:23 ◼ ► more that you can mix them together, the better the overall result will be. But ultimately,
00:14:28 ◼ ► the last thing, this is what I want to close on, is that before you can decide your business