Category: Business

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Business Tips

The Costs of App Security

app security costs

The security features of an app are often ignored in the rush to get a new product to market. We naturally tend to focus more on what an app should do, rather than what it shouldn’t. Making sure that an app doesn’t have security issues is a difficult and potentially expensive process. Lately there is evidence that developers are trying at least to face app security costs issues. A recent post from our partners in DZone shows exactly this.

There are no automated tests to ensure user data hasn’t been left vulnerable. This goes for unencrypted passwords as well. Typically this requires a manual audit of the code and some form of penetration testing, with a skilled developer attempting to compromise the app. However, the costs of implementing security features and adding security testing to your development process are much smaller than the potential costs of a major security breach.

Problems with payments

For some types of app the consequences of this are more obvious. There are even standards in place to try to ensure a minimum level of security. For instance, any application which handles payment card details needs to process that data securely as specified by the Payment Cards Industry. However, PCI standards compliance is only audited for large merchants. Smaller merchants self-certify compliance.

If an app or service for a small merchant was compromised, resulting in abuse of payment card data, then any non-compliance discovered could result in significant fines or even liability for any fraudulent payments. Merchants who add interfaces to their existing payments infrastructure to support mobile apps need to be particularly careful. New attacks can be made possible when the payment authorisation occurs on a native mobile client, rather than a website.

Even for apps selling digital goods via in-app purchase there are still payment security issues to consider. Of course stakes are nowhere near as large. However, attackers can still impersonate the official store provider servers and simulate in-app purchases without any genuine payment.

Apple’s system was compromised in this way last summer. Another hack was reported for payments on Google Play just before Christmas. There is no link to this because, although it was only for rooted devices, we’re not aware of a fix in place yet. (Indeed it may even be a scam to get users to install malware).

Losing data can cost you even more

For enterprise app developers, being associated with a major security breach could mean the end of your business.

A harmful loss of data for a client could send valuable market data go to the competition, or even key employees. You would lose trust (and business)! If the breach is sufficiently public, you could lose the trust of all potential future clients as well.

The larger a company the more vital it is that they implement good security practices.

For consumer apps, leaking user data to attackers has direct costs. Firstly, in terms of service downtime whilst fixing security holes (usually in a hurry with the aid of expensive experts), notifying those affected and possible compensation. Secondly, there are serious indirect costs in terms of lost trust and users. Again here, the larger the user base, the more attractive the app is to attackers and the more serious any breach.

Invest in app security appropriately

Investments in security need to be proportional to the risks. How many users are involved and the value of data stored should determine the level of effort required to ensure that data is safe.

Not knowing about the security implications of your application is somewhat like driving without insurance.

Everything is fine until the unthinkable happens. Then it’s likely that lots of innocent people suffer and you get into a lot of trouble.

The technical details of app security are beyond the scope of this post. However, we have prepared a list of top 10 vulnerabilities and how to avoid them. Read on if your app deals with any user data or payments.

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Business

How to Get App Ideas

How do you decide what app to build next? Paul Graham wrote an excellent post about the related problem of finding an idea for a startup. Paul says:

The way to get startup ideas is not to try to think of startup ideas. It’s to look for problems, preferably problems you have yourself.

The very best startup ideas tend to have three things in common: they’re something the founders themselves want, that they themselves can build, and that few others realize are worth doing. Microsoft, Apple, Yahoo, Google, and Facebook all began this way.

However, it should be noted that when Paul Graham says “startup” he does not mean any new company, only the hyper-growth variety that are often funded by venture capital. It should be noted that the vast majority of these companies fail. So, if you’re building a business around apps and are aiming your sights a little lower than “the next big thing” then our survey suggests that solving your own problems might not be the best option. 49% of developers build apps they want to use themselves, but end up generating the least revenue.

Beware survivorship bias

The following data should be interpreted carefully, some of the most successful strategies are only viable for larger publishers, or only available for those who already have a successful app – this creates survivorship bias. However, there appears to be a strong correlation between more carefully researched methods of deciding what app to develop and financial success.

Developer Economics 2013 - Successful developers grow by extending apps into countries and verticals

Business side of apps is harder than the technology

Almost half of developers (49%) in our survey decide which apps to develop based on their own needs. Those same developers end up generating the least amount of revenue per app per month, indicating that they have a lot to learn in how they plan their app business. Naturally, planning a business based on own needs may yield a good customer understanding, but lacks the rigor of market research or of extending proven app recipes into new countries or verticals.

User feedback is effective but hard to get

We find it remarkable that only 24% of developers in our sample plan their apps based on discussions with users, a figure which does not change with development experience or proficiency. This indicates that the bottleneck of the build-measure-learn cycle of lean development is the “measuring”, or listening in to user needs. This highlights the need for a frictionless 2-way feedback channel between developers and users, much like what GetSatisfaction pioneered for web apps, and which now HelpShift is pioneering for mobile apps.

Market research pays off

To decide which apps to build, a sizeable share of developers uses market research and competitive intelligence. Market research and competitive intelligence are well-established practices in business development and we expect that the increasingly business-savvy developer population will, in the near future, invest more effort in these elements when designing a product strategy.

Bigger publishers have more options

Developers that publish more apps per year tend to make decisions based on different criteria than those publishing only a few apps per year. For developers publishing 16+ apps, the decision mainly lies with clients or management – these are mostly professional developers that work on commissioned apps or as employees of larger publishers where the decision on which app to work on is mainly based on a defendable business case. Developers publishing more apps also tend to rely on market research more, whether that is purchased research or own research through app store monitoring and analytics services.

Build on success

The most successful strategies are those that extend an app into markets, either into verticals or different geographies. To some extent these strategies rely on an already established and successful business: these are apps that have been tried and proven in at least one market and are generally less risky options or “low hanging fruit” for developers.
[doritos_report location=’DE13 Article – App Ideas’]

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Business

How Price Changes Can Improve Revenues

Cash for apps

Distimo recently published an interesting report (free, registration required) on how app price changes affect revenue for iPhone & iPad apps. They give a breakdown on the scale of price changes but only give the really interesting results – the download and revenue impacts – averaged across all price changes. The key result is that download volumes and revenues are significantly positively impacted by price drops and negatively impacted to a lesser degree when the price rises again.

Although not specified by Distimo it’s likely that the vast majority of price rises are simply prices returning to normal after an offer ends. In this context it’s worth bearing in mind that e.g. an app with 1000 downloads/day increases on average to 9710 downloads/day after 5 days following a price drop. When the price goes back up again, the downloads fall by 57% of the increased total, e.g. back to 4175.

Demand at zero price

A factor that is not accounted for in the Distimo analysis is the discontinuity in demand at zero price. Ideally the effects of price changes that make an app free should be analysed separately from those which do not. In the former case, demand at zero price is typically multiples of demand at any non-zero price; a free promotion also relies on generating revenue from in-app purchases, advertising or subsequent increased demand after the promotion ends. On the other hand, price changes which do not make an app free are trading off price against volume. Developers can experiment with these changes to find the price point which generates maximum revenue. For most apps the marginal cost of serving additional users is close to zero and certainly dwarfed by the cost of creating the app. In this scenario, maximum revenue equals maximum profit. The zero price effect also suggests that any price drop intended to increase downloads for the purposes of increased visibility in the store should be a free promotion for maximum impact.

Longer term impact

The Distimo report shows revenue growth (purely from downloads and in-app purchases) continues for at least seven days from a price drop, reaching an average of 71% increase for the iPad and 159% for the iPhone. Beyond seven days we have a much smaller dataset from the App Rewards Club (and their analysis of Free App A Day) which suggests an initial revenue spike follows the end of a free promotion but the longer term increase in revenues is only minor, questioning the fees charged by some free promotion services.

Beware frequent sales

If a key component of your revenue model is paid downloads and temporary price drops create spikes in revenue, along with slightly increased revenue in the long run, it’s tempting to think that frequent sales will ratchet up your earnings bit by bit. The truth is likely the opposite since there are multiple services that allow consumers to check the price history of a premium app; if there are regular sales many users will simply wait for the next one. There was a good review of the issues with sales on the app store last year, however, ignore any claims that it’s impossible to succeed with premium pricing – even in the most competitive category, games, one of the most successful apps is MineCraft, priced consistently at $6.99. Most of the other top ranked premium apps either don’t have sales at all, or only do so around significant events (new major versions, holidays, new device launches).

All of this data was for iOS. According to Distimo, Google Play also shows similar effects on price changes but of a smaller magnitude due to the greater difficulty of reaching top rankings. However, the subject of price promotion on Android is much less relevant, since paid downloads make up such a tiny fraction of overall revenues.

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Business Platforms

The Darker Side of App Store Optimization

Shady Characters

As long as there are algorithms impacting revenues there will be people trying to game them. In the world of mobile apps there are two sorts of algorithm that can be routes to success, chart rankings and search rankings. Chart rankings are very simple and typically just use some time-weighted download volume. Search rankings are much more complex, involving keywords, reviews and other social or similarity-based data as well as downloads. Developers can use a range of tactics to improve their ranking in these algorithms, some of them much more legitimate than others.

There’s no such thing as a bad download

Whilst there are very good practices for optimising search ranking, such as using tools that monitor competitors and analyse their keyword usage to suggest improvements to your own, the single most effective way to improve all rankings is to increase downloads. For paid apps, all downloads generate revenue, whether the app gets used or not – temporarily reducing the price or making the app free is an effective technique for boosting downloads, which boosts rankings and subsequent revenue when the price is returned to normal. For apps that are free anyway, it can similarly be worth spending some of the revenue earned through advertising or in-app purchases to increase downloads. On one level this is obvious, it’s worth spending money to market the app and try to reach new users. However, the winner takes all nature of app store discovery at present makes it worthwhile for some developers to chase downloads purely to enhance their rankings. Even users who will never open the app are worth attracting if they can be acquired for a low enough cost.

Paid placement

There are lots of advertising options available that drive users to your app in the store. The vast majority of them are pay-per-click and thus cannot be used cost effectively to inflate downloads of an app that doesn’t generate significant revenue per user anyway. Most of these are clearly advertising products, others look like app discovery tools to end users. Hooked is a good example of an app that blurs the line between discovery and advertising. They have a popular social discovery app for Android games where developers can pay to generate installs. For developers this is a very logical option because they have a fixed cost for installs which they can compare against average revenue per user. On the other hand, users may believe they’re getting a recommendation when in reality they are seeing an advert. It’s the same argument that surrounded paid placement for search results in the days before Google launched AdWords.

Cross Promotion

Another way to reach users is through similar apps. Apps promoting one another is a great way to reach a common user base. There are several cross-promotion networks with a variety of business models. Ironically the one with the name most suggestive of ranking manipulation, Chartboost, is at the most ethical end; they provide completely free technology for developers to organize their own cross-promotions and also a marketplace to connect developers where they take a cut of the transactions. At the same time, the most popular cross-promotion network (according to our latest survey), Tapjoy, plays much closer to the lines of acceptable conduct. One (and in fairness it should be emphasised only one of several) of Tapjoy’s services is incentivised downloads, a practice that Apple have repeatedly cracked down on – they pay users (in virtual rewards such as in-game currency) to download apps which have paid for that service (in cash). Clearly a large fraction of people who will download other apps to earn a bit of virtual currency are those unable or unwilling to pay for the same. These users almost by definition are unlikely to monetize, so the only obvious reason to seek them out is to increase rankings in order to be discovered by other paying users that would be more expensive to reach directly.

Shuabang!

At the extreme end of ranking manipulation, with no pretence of being anything else, is Shaubang. This manipulation is primarily practiced on Apple’s App Store, made possible by the fact that a credit card is not required for an iTunes account in China. Companies with millions of accounts make use of extremely cheap local labour to pay people to download and review apps. These services often guarantee to boost an app to a desired category ranking for a fixed fee. This practice is heavily frowned upon by store owners but also extremely hard to police, since it involves real users (sometimes bot-assisted for efficiency) with real accounts.

Where’s the harm?

Users are mostly getting what they want out of these deals and so are the developers involved. Store owners have higher download stats to boast about. Even at the extreme end we have job creation in China. The main people losing out are the developers not taking advantage of these strategies. However, if ranking manipulation becomes the norm rather than a fringe behaviour then two problems become very serious. First, the top ranked apps are simply the ones that paid the most to be there, rather than the best ones – this makes discovery of genuinely great apps harder and reduces the overall perception of app quality. Second, a feedback cycle further concentrates revenue at the top of rankings – only those who pay to be at the top can afford sufficient manipulation to stay there and the rankings will begin to stagnate. App store owners need to ensure their markets are as honest and fair as possible, or users and honest developers will suffer in the long run.

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Business News and Resources

Two Important App Market Trends to Watch in 2013

App market trends

2012 was another big growth year for the app market. Apple continued to launch new products, sell them in ever greater volumes and distribute more revenue to developers. Meanwhile Google overhauled their market and developer revenues climbed sharply. Android developers also saw the Amazon Appstore expand and become a serious second revenue source. Developers who created quality apps and marketed them well were richly rewarded. However, for many developers the major challenge of getting their apps discovered by users only got worse. How is 2013 likely to compare and what are the most recent app market trends? Will app revenues continue to grow at similar rates and will those revenues keep concentrating in the hands of fewer publishers?

App market trends: Continued Growth

According to Distimo’s 2012 report, Apple’s daily App Store revenue grew 21% in the four months to the end of November. Google Play revenue grew 43% in the same period. During November the average daily revenue from the App Store was $15m while for Google Play it was $3.5m. So Google has more than double the growth rate, although from a much lower base.

The graph below extrapolates those four month growth rates exponentially through 2013. This illustrates the effects if those growth rates continued – this is not a prediction.

The Apple daily revenues and growth rate figures were taken during a double new product introduction spike, so the actual 2013 growth is likely to be significantly lower. According to App Annie, iOS revenue growth for the first 10 months of 2012 was only 12.9% total.

Similarly Android’s revenue growth in 2012 was from a very low base, it will be important to watch how it changes as the absolute revenue levels increase. The likelihood is that Android revenues will be significantly closer to iOS revenues by the end of 2013 but iOS revenues much closer to where they are now than the graph above suggests.

In the biggest spending app markets around the world, smartphone penetration is above 50%. A large proportion of smartphone purchases in those markets in 2013 will therefore be replacement devices running the same platform. With iOS a new device can download purchased content and restore in-app purchases at no extra cost. On Android it’s entirely up to the developer whether existing purchases can be used on a new device but by default, paid apps can be downloaded to new devices and in-app purchases will not be restored automatically without charge.

App revenue expectations

Will users continue to spend on apps at the same rate on replacement devices, or will the app revenues in the most developed markets start to fall? There’s likely to be some variation here across platforms and app categories but this may be the first year that the total market growth doesn’t obscure this important user behaviour trend.

App market trends: Revenue Distribution

Although the app stores are generating millions of dollars in revenues every day, those are not distributed at all evenly amongst developers. Canalys recently highlighted that 50% of revenues are earned by just 25 publishers in the US. Although we already pointed out that this is not as bad as it sounds, since those publishers have well over 1000 apps between them, at the very top, the concentration really is that extreme and getting worse.

According to the 2012 report from Distimo linked above, 7 apps were responsible for 10% of revenues on the iPhone in November, for the iPad it was only 6 apps and on Google Play just 4. At the very top on iOS we know that Supercell were grossing $500k per day from two games in early October. At the time Hay Day, the lower ranked of the two, was below position 20 in the top grossing chart, while it is now rarely outside the top 10. Clash of Clans has consistently been in the top 2 since that report. We can guess their revenue is even higher now and that the number 1 grossing spot is worth somewhere around $300-450k per day (about 2-3% of total iOS revenues) before Apple’s 30% cut.

In January 2012 the top 11 apps for the iPhone were responsible for 10% of revenues while on the iPad it was 8 apps. It’s tempting to speculate that the greater increase in revenue concentration on the iPhone is due to the changes to the App Store in iOS 6. However there is very little overlap between the top 10 grossing apps and the top 10 paid or free downloads. Whatever the reasons for this increased concentration of revenue at the top, this is an important trend to watch in 2013.

If revenues aren’t more evenly distributed amongst a larger number of developers then investment in new app projects must eventually start to decline. Otherwise, developers will need to find more business models that aren’t dependent on direct monetisation of their apps through stores.

If you are interested in more recent trends, have a look into our App Developer Trends from Q1 2015.

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Business Platforms

Multi-Platform Developers Are Better Off

Multi-platform developers generate higher revenues

Our latest survey shows a concentration of developer attention around the iOS/Android duopoly. Given the reach and revenues available on the two leading platforms compared to the competition, it’s unlikely that developers will find significant success without targeting one or both of them. However, our survey data also shows that developers should not limit themselves to those two platforms. There is a strong correlation between average revenue and the number of platforms targeted.

Developer Economics 2013 - Multi-platform developers generate higher revenues

74% of developers use two or more platforms concurrently. At the same time, developer platform choices are now narrowing. On average mobile developers use 2.6 mobile platforms in our latest research, compared to 2.7 in 2012 and 3.2 in our 2011 research. The Android-iOS duopoly in smartphone sales is gradually creating a concentration of developers around these two platforms: 80% of respondents in our sample develop for Android, iOS or both, making them the baseline in any platform mix. Developers that do not develop for one of these two platforms generate, on average, half the revenue of those developers that do, leaving little doubt as to the concentration of power within these two major ecosystems.

In our Developer Economics 2013 survey of over 3,400 developers we found that 49% of developers use just one or two mobile platforms concurrently and 75% use up to three mobile platforms. The number of platforms developers use depends to some extent on which is their lead platform. In mobile development, loyalty to one platform is not something that pays off. Our research shows that the revenues are higher when using more platforms. For example, an iOS developer porting an app on Android is likely to experience some growth in revenue. At the same time, for developers working on four or more platforms, higher revenues are probably the result of extending an already successful app to more platforms. Obviously, this is not something that all developers can afford to do; it is a strategy more suited to large publishers or commissioned developer teams that are large enough to support a number of platforms.
[doritos_report location=’DE13 Article – Mulit-Platform’]

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Business

PhoneGap and Appcelerator lead developer mindshare across tens of CPTs

Cross-platform tools (CPTs) address real challenges for developers. Cross-platform tools allow developers to create applications for multiple platforms – usually mobile, but increasingly tablets or TV screens – from almost the same codebase or from within the same design tool. CPTs reduce the cost of platform fragmentation and allow developers to target new platforms at a small incremental cost. More importantly, cross-platform tools allow software companies targeting multiple platforms to reuse developer skills, share codebases, synchronise releases and reduce support costs.

CPTs can be used to develop native, hybrid and web apps and come in several technology flavours: JavaScript frameworks, App factories, Web-to-native wrappers, Runtimes and Source code translators. There are over 100 CPTs that we identified in our Cross Platform Tools 2012 report.

Developers most often use several CPTs; on average CPT users will use 1.91 CPTs, confirming the lack of maturity and niche nature of cross platform tools much like we observed in our CPT survey a year ago. Moreover, we found that one in four developers will use more than three cross platform tools. The lack of a one-size-fits-all and immaturity in the CPT landscape is what is stalling cross platform tools from shifting the balance of power in the iOS / Android duopoly towards alternative platforms.

Cross platform tools are most popular for developers focusing on HTML development, with 38% of of them using CPTs for development. CPTs and particularly JavaScript frameworks and Web-to-native wrappers, provide a relatively smooth transition to mobile apps for web developers: in our Cross-Platform Developer Tools 2012 report we found that 60% of developers using CPTs have over 5 years experience in web development. Usage of CPTs is popular among iOS developers, while usage among Windows Phone developers is much lower, presumably due to historical lack of support for the iOS platform from CPT vendors and Microsoft’s financial incentives for the creation of native apps.

DE13-18-01

PhoneGap tops CPT rankings, used by 34% of developers, followed by Appcelerator and AdobeAir with 21% and 19% developer mindshare respectively. With over 100+ cross platform tools available, the choice for developers can be a challenge. Choosing between CPT technologies is not always straightforward (i.e. whether to go for a web-to-native wrapper or a JavaScript framework). Moreover, developers need to try out a cross-platform tool to see if it aligns with their needs in terms of performance, learning curve, access to native APIs or look & feel. It’s never a black or white decision.

The most important selection criterion for CPTs is their availability across platforms. Due to their deep platform integration, CPT tools support iOS/Android platforms first, and others secondly. Beyond cross-platform availability, 38% of developers using CPTs select their tools based on development speed and 33% based on the learning curve. Since CPTs aim to expedite and facilitate development across platforms, they should provide a clear advantage over native platforms when it comes to speed and ease of development to justify their use. Amidst differentiating features for CPTs are access to native APIs, performance optimisation and the ability to reproduce native UI elements on each platform.

[doritos_report location=’DE13 Article – CPT’]

Which CPTs are other developers using?


[toggle title=”Important things to know about this interactive graph”]

  • All the filters in the graph refer to survey questions in which respondents could select multiple answers. This means that there is no direct link between the filter and the use of the tool. For example, filtering on “Android” means that the respondents develop Android apps. It doesn’t imply that they use the tools for their Android apps specifically, or even that the tool supports the Android platform. Use filters as a guideline only.
  • Keep an eye on the sample size. If the sample size is low, the graph doesn’t offer strong conclusions about the popularity of different tools. Use your good judgment when making decisions.[/toggle]

Find the best CPT for you!

[sectors slugs=’cross-platform-tools,app-factories,hybrid’]

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Business

The Six Biggest Challenges for App Businesses (and what to do about them)

In our Developer Economics 2012 survey, we asked developers about their biggest challenges. Here we discuss six of them, with some basic tips on what to do about them. The challenges are split between marketing and post-launch app and user management. The three biggest marketing challenges were: keeping users engaged, targeting the right users and identifying the right revenue model. The three biggest post-launch challenges were: Tracking bugs and errors, getting users to review your app and updating applications in the field.

Keeping users engaged

Keeping users engaged was the challenge cited most often overall, by 39% of developers, irrespective of primary platform. This is consistent with data from analytics firm Flurry, who report that user engagement falls sharply over time, with only 24% of consumers continuing to use an app after three months from download. “Developers must focus on tracking user engagement & usage patterns rather than just on downloads” notes Jai Jaisimha, founder of Open Mobile Solutions, a brand-to-developer matchmaking service.

There are many techniques for improving user engagement and retention. Social buttons like Follow or Like, especially when integrated with social networks are known to increase engagement. “‘Follow is the most common social feature used by our users” notes Yiannis Varelas, co-founder of Weendy, a weather app for surfers, with 6,500 monthly active users and 80% retention rate (in May last year). Where direct social integration doesn’t make sense, push notifications are another tool to help keep users engaged.

Gamification is another retention technique that rewards users for achievements (e.g. FourSquare-style badges) or for inviting other users (e.g. for each user you invite to Dropbox, you get another 250MB free storage space). Moreover, Tom Hume, founder of Future Platforms, argues that developers need to fundamentally rethink user retention. “To improve retention, developers need to build up value for the user that increases with usage. A natural way to do this is to build in a history of usage data – for example in the Nike Plus the value and stickiness of the application increases as more data is recorded in the application”.

Targeting the right users

The second most oft-cited challenge is targeting and getting through to the right users – mostly because existing app stores offer little in the way of user targeting. App stores, for example, provide no means for developers to reach existing customers or gain information about them. The only way developers can target users via app stores is via coarse-grained methods based on app categorisation or keyword selection.

Consequently, we found that developers using app stores are more concerned about targeting (39%) and engagement (46%) than developers using most other distribution channels. The situation in carrier portals is even worse: around 55% of developers using them are challenged by targeting and engagement.
Customer information, as with any business, is a key source of competitive advantage. As such, app stores have little incentive to share customer data with app developers. Apple has done so in part, after considerable pressure, but only to Newsstand publishers, and only where customers opt in. There’s more to it than just control: app store owners are loath to jeopardise user privacy contracts, lest their platforms become marketing “wild wests.”

The inaccessibility of customer information will likely remain a thorny issue, and one that hampers developers’ marketing potential. For the moment, it generates a flurry of innovation, as evidenced by the proliferation of in-app and external app marketing channels. However, seeing as this will remain a pain point, there may be opportunities for app stores to differentiate, if they manage to balance their priorities against those of developers – as Apple arguably has with Newsstand publishers. In the meantime, app developers would be wise not to wait for the app stores to fix this. Try to reach the right users for your app wherever they are currently, via blogs, forums and more traditional media. Arrange cross-promotions with similar but complementary apps. Experiment with alternate discovery solutions and find out what works for your app.

Identifying the right revenue model

Developers were becoming increasingly confused (36%) about which revenue model to use. There are over 10 revenue models to choose from and no guarantees as to which revenue model will work best in the long run in terms of reach vs. monetisation. Moreover, the revenue model needs to be optimised to the platform and app category. The decision should also take into account factors such as customer paying propensity (which varies across platforms), competitor pricing and positioning (which varies by app category). For example, paid downloads are extremely unpopular on Android, whilst apps aimed at children often need to use that model, since parents are very uncomfortable with in-app purchase or advertising based models for apps their children are using. User needs should also come into perspective when considering
your pricing strategy. “You may only need one Facebook, sports or weather app, but you will want to play many games. Mobile games are like movies – users are always looking for the latest one,” notes Markus Kassulke, CEO at Germany-based HandyGames.

Overall, we found that pay-per download was the revenue model used most frequently, by 34% of developers irrespective of platform, followed closely by advertising, which was used by 33% of developers. Wherever possible, the best advice we can give for now is to try some sort of freemium or virtual goods model using in-app purchases. The growth of in-app purchase revenues across iOS and Android is significantly outpacing paid downloads.

Tracking bugs and errors

Tracking bugs and errors was, by far, the most frequent post-launch headache, as reported by 38% of developers in our survey – and particularly so for WP7 developers. There is no direct feedback channel between users and developers, and no out-of-box
means to monitor the performance of an app. App reviews work and feel more like post-mortems, rather than a live feedback tool. As a result, developers will often find out what’s wrong with their app too late, through users’ negative feedback. “Our biggest headache after launch is the lack of a two-way communication channel with our users” notes Hong Wu, Director of Android Engineering at Peel, makers of a personalised TV guide app.

The first line of defence here is to remove as many errors as possible before launch, both through good engineering practices during development and extensive beta testing. The second line of defense comes in the form of crash analytics and bug tracking services. These services track app errors by monitoring crashes and reporting the type of error, platform, device and environmental variables like location, time and transaction flow. As such, they can provide useful insights, helping find and fix errors before they drive users away.

Updating applications in the field

Updating apps was highlighted as a challenge by 25% of developers irrespective of platform. Interestingly, the difference in the update process between iOS and Android has no impact on developers’ attitudes – as both iOS and Android have their own update challenges. On iOS the process requires full certification and approval by Apple, plus explicit opt-in by the user. On Android, the update process can be automatic and near-instantaneous. This however requires that users opt-in for automatic updates for specific applications. In effect, these challenges with the update process on both iOS and Android increase the average application “age” and escalate both code maintenance and customer support costs for developers.

One solution to this is to have the app check for the availability of a newer version at launch. Although it may not be possible to have the application download the update, it could prompt the user to do so. Another option here is to track application versions via analytics and send push notifications to users with sufficiently old versions, highlighting the benefits of updating to the latest version.

Getting users to review apps

Last but not least, another frequent post-launch challenge was getting users to review apps, reported by 30% of developers irrespective of platform. At the same time, there have been some success stories of apps boosting their review numbers, usually by nagging users after they have used the app for some time. For example, to solicit reviews, DrawSomething shows a motivating alert where “Rate 5 stars!” and “Remind me later” are the only two options, wrapped in a friendly pop-up box. The example shows that the runaway success of DrawSomething was more science than luck. However, DrawSomething’s grossing ranking was declining in the run-up to the all-important Christmas sales season, showing that even successful and well funded apps with highly social components can struggle with our first challenge – keeping users engaged in the face of all the other shiny new offerings in the app stores.

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Business

Growth Lessons from LinkedIn

Elliot Schmukler from LinkedIn spoke at a recent Growth Hacker conference about the strategies they’d used to grow the site since he joined in 2008. His advice was very helpfully summarised by Sandi MacPherson, Founder at Quibb and is general enough to be applied to mobile apps. Here’s our take on his main points.

Before you get started: Understand your channels

It’s important to understand how new users come to your product. Although it may be distributed exclusively through an app store, if that’s the only way users discover your product then you’re unlikely to succeed. This aspect of app marketing is still evolving rapidly, so keep testing different channels but focus your resources on the ones that generate the best results for you.

Continue reading “Growth Lessons from LinkedIn”
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Business

The “Onboarding” Problem

With some types of mobile app, getting a user to download it is just the beginning of the problem. If the application is going to be personalised to a user’s preferences, or allow them to interact with others via some online service, then they’ll need to provide some data before they can start using it. Typically the more information a user provides about themselves, the better job an app or service can do of tailoring the experience to them. Unfortunately, the more steps a user has to go through before they can start using an app, the less likely they are to complete the signup process. Getting this wrong can catastrophically alter the economics of user acquisition.

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