Tag: Case Study

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Business

Flappy Bird vs Angry Birds – a tale of Hobbyists and Hunters

Here are the stories of two successful birds on the app store. See if you can spot the difference.

Angry Birds vs. Flappy Bird_639px

Flappy Bird was a mobile game developed by Dong Nguyen, a Vietnamese indie game developer, in a few evenings after work. He launched the game in May 2013, but only 7 months later (in January) did it unexpectedly gain immense traction. It reached the top of the US charts, and Nguyen was reportedly earning about $50,000 per day from ads. He couldn’t cope with the pressure and abusive comments however, saying it “ruined his simple life”, and removed the game from the app store on February 10th.

Angry Birds was developed by Finnish game maker Rovio Entertainment. It was a runaway success… on the 52nd try! (That’s how many games the good people at Rovio had developed before Angry Birds). Rovio has expanded to be a successful franchise and merchandising business, counting its revenues in the hundreds of millions of Euros. Today, Rovio employs over 700 people according to its website.

Why did Flappy Bird become a flappy Icarus, crashing after flying too close to the sun, and not a new Rovio? In truth, Nguyen and Rovio represent very different groups of developers. Their motivations are not at all alike, and so neither is their behavior.

Developer motivations wildly differ

Dong Nguyen and his indie game studio .Gears sits on the border of a Hobbyist and an Explorer profile in VisionMobile’s developer segmentation model. Hobbyists are motivated by the fun of making an app, and like Nguyen often do it in their spare time after work. They don’t care about success – killing off a successful project that interferes with their sense of fun and peaceful life wouldn’t seem strange to them. Arcade games like Flappy Bird and the other .Gears projects are a typical project for Hobbyists (professional game developers rarely touch the arcade category).

Our Flappy Bird protagonist also shows traits of an Explorer, however. He presents a formal face with the .Gears studio, complete with email address and copyright notice. Put simply, Explorers are “practicing” to become successful app developers (either as contractors or with own apps): their main motivation is learning how to become professionals and they define success by knowledge gained as well as having a lot of fun developing. Some speculate that Nguyen might have tried to artificially boost the app using review bots, which would be more Explorer than Hobbyist behavior. (Nguyen himself denies having done any kind of promotion.)

Whether Hobbyist or Explorer, Nguyen clearly wasn’t in it for the big money. Contrast that with Rovio, a clear Hunter company. Hunters are revenue driven: their goal is to build a successful business and make money from apps. The 50+ games that Rovio built before Angry Birds are a testament to their persistence in achieving that objective. Success is measured strictly in business terms: app revenues (in the case of Rovio enhanced with merchandising) and user reach. Hunters are professionals, out to build real, lasting companies, exactly what Rovio has achieved. The difference couldn’t be clearer.

Understanding the motivations of developers is key to understanding the choices they make. This includes fundamental choices, like the one between lifestyle and business success that Dong Nguyen faced when his project became a huge success overnight. It also includes all the minor and major decisions that app development involves: business models, tools, platform selection, and much more. [tweetable]If you’re working with developers, gaining insights in their motivations is crucial[/tweetable].

— Christina & Stijn

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Platforms

Kids’ Educational Apps – An Indie Dev’s Final Frontier

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I am wondering if you know that there is an SXSWedu event. Well I can’t blame you if you don’t, it is the third year it is running and it sounds a bit off when you think of SXSW and “Keep Austin weird”. If you don’t then it will even come more as a surprise to learn that Bill Gates delivered the closing keynote to a standing-only room of 2,500 people.  On top of that, Apple revealed to TechCrunch a couple of weeks ago that they have sold more than 8 million iPads to educational institutions worldwide (4.5 million to U.S. schools).

You might have started thinking that putting together an educational app may not be such a bad idea, I mean how hard can it be? How about checking out the App Store’s top 200 paid list of iPad educational apps? Just by going through it, even if you don’t know who is who, you will see a lot of indie developers. Let me save you the trouble and give you the rundown. Of the top 200, 70% are kids’ educational apps. Out of these, roughly 80% are by independent developers, and only 20% from well-known publishers like Disney, Nickelodeon, Sesame Street, etc. This is really impressive to say the least.

But before you team up with a teacher and start coding that idea, hold on. For every developer who is succeeding, there are 20 who are struggling to see noticeable sales. To make matters worse, only 20% of the developers present in 2009 were still active in 2012 (iLearn II – “An Analysis of the Education Category of Apple’s App Store”).

All of this translates to the indication that there are still great opportunities in kids’ educational apps right now, but there is also a lot of risk. That is why the kids’ educational apps market is an indie dev’s “final frontier”. So before you set off to “boldly go where no man has gone before”, here is a survivor kit to keep in mind when navigating those treacherous waters:

1)    App stores lack specific categorizations

No single app store has a separate category of kids’ educational apps. So kids’ educational apps are all scattered in a number of categories. In the Apple App Store they are scattered across Education, Games/Educational, Games/Kids, Books, etc., and in the Windows Phone Marketplace between Education and Kids + Family. Keep that in mind as you pick your category and since there is no right or wrong,  don’t be afraid to experiment.

2)    Never ever forget market segmentation

It is an easy assumption to make but it is one that you must always keep in mind. Education differs across countries considerably, it is not only the language and cultural barriers, but also that educational topics are approached in different angles. In the US the past three years the Common Core Standards initiative has been put together that provides a clear understanding of what students are expected to learn so teachers and parents now what to do to help them. CCS can be a very useful roadmap when you are thinking of your app. Lastly always factor in that localization will not be easy and it will cost more than it would normally do.

3)    You have limitations on your monetization strategy

With stories of a 5 year old spending $2.500 on iPad apps in 10 minutes hitting the news frequently be very careful of your monetization strategy. I am not arguing to exclude In App Purchases but be very cautious about your implementation and disclose this information to parents.

4)    Be wary of COPPA

Talking about disclosures you need to get up to speed with the Children’s Online Privacy Protection Act. You need to have a privacy policy, provide disclosure about data practices and take responsibility for data practices of 3rd party code. Lorraine of Moms With Apps has put together a great reading list on the subject here, which is always updated.

If then you are up to being one of the risk-takers that Bill Gates mentioned in his speech, help change the face of education and make money on the way keep in mind his closing words “In this space, we either improve the quality of education or we stay flat, like we have for the last few decades”, put your soul into it and make great educational apps.

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Business Community Tips

Developer Story: Lyft

developer story: Lyft

Sebastian Brannstrom, Lead Engineer for Lyft at Zimride, talked to us about their app and the business that the technology enables. Sebastian has been working in mobile software since 2006, initially on Symbian and then transitioning to iOS, Android & Web by way of a side project, created in collaboration with designer and product manager Anna Alfut. In 2011 he joined VC-funded startup Zimride, who at the time only had a handful engineers, to create social ride-sharing services. Zimride’s initial service was an online marketplace for people to sell seats in their car on longer journeys. It was (and still is) growing but relatively slowly by Silicon Valley startup standards.

App Background

The company decided to create a new real-time marketplace for shorter trips and hence Lyft was born in 2012. Lyft has iOS & Android apps with two modes, driver and passenger. Lyft drivers are thoroughly screened, background checked, trained and insured with a $1M excess liability policy. Passengers can use the app to request rides that are tracked by the service, which suggests a minimum donation to the driver at the end. The driver mode notifies drivers of a nearby pickup request and gives them a short time window to accept it before it’s passed to another driver. The whole system enforces use of Facebook for identification to provide some additional security.

 

Track Record

The concept caught on and quickly became the main focus of the company. The engineering team has roughly tripled in size and the growth of the service is only being limited by how quickly they can recruit, screen and train drivers. Whilst they advertise for drivers on services like Pandora, Spotify and Craigslist, they have never marketed to passengers at all, apart from their signature giant pink mustaches on participating cars. Word-of-mouth marketing at its best, straight out of Seth Godin’s Purple Cow playbook. They have hundreds of registered drivers and tens of thousands of passengers in their first city, San Francisco. The company was nominated for three Crunchie awards and named runner-up in the “Best New Startup of 2012” category. According to TechCrunch, they very recently closed a $15M series B round of venture capital funding and have also just launched their service in a second city – Los Angeles. Open job vacancies make it clear they’re planning significant further expansion.

Competition

The disruption of transportation enabled by near ubiquitous smartphone adoption is an opportunity several startups are attempting to exploit. Lyft faces direct competition locally in San Francisco from SideCar, whilst Uber provide a high end alternative and have stated an intention to create a direct competitor in the lower cost segment. Fairly high-profile competitors with similar technology but not yet competing in the same geographical markets are Heyride, HAILO and Taxibeat, although the latter are enabling existing taxis with similar technology rather than encouraging peer-to-peer ride sharing. There is also indirect competition from existing taxi services.

Business Model

Lyft do not monetize their apps directly, it’s free to download and there are no in-app purchases for new features. Like almost all online marketplaces, Lyft make money by taking a cut of the transactions on the market. In this case the transactions are donations from the passenger to the driver. These are entirely voluntary (which gets around legal issues with drivers using their vehicles for commercial purposes) but the app provides a suggested donation and drivers can set a minimum average donation – passengers that don’t pay much/anything are likely to find no-one will accept their requests very quickly.

Lessons Learned

A successful service is much more than an app. The technology only enables the business at Lyft. Sebastian was quick to point out that the key to the success of the company is the operations team, building a community of drivers and passengers. If they’d simply built the technology and put it out there to see who wanted to use it, it’s very unlikely they’d be enjoying the growth they see now.

Projects will expand or contract to fill the time available to them. The initial concept for Lyft was originally scoped out as an 8-week development for a team of 5 (3 engineers, a designer and a product manager). One of the founders, playing devil’s advocate, said “what if you’ve only got 2 weeks to do it”. This forced them to really cut the concept down to a true Minimum Viable Product. They eventually got the first version built in 3 weeks (server and iOS app) – even today there are still several of their original requirements sitting at the bottom of their backlog unimplemented. The things you think will be essential parts of a service can often turn out to be unimportant for real users.

Team chemistry is essential. It would have been impossible to build such a complex service so quickly without fantastic collaboration. The relationships and collaborative working mode are more important than physical location – Lyft has been hiring top talent from around the world and sorting out visas and relocation to San Francisco afterwards. Sebastian was based in London when he was hired, their iOS lead was in Uruguay and the Android lead in Russia (the extreme time difference was sometimes an issue in the latter case).

What’s in the Lyft toolbox?

Like many successful development teams, Lyft use a lot of third party tools to help build their product:

Also, although they have built their own backend service, creating a highly responsive notification system was a challenge they solved with a combination of polling for updates when sending driver location, the Apple Push Notification Service, Google Cloud Messaging and a paid service from Pusher. However, the latter was initially a source of many crashes due to immature client libraries (Pusher only provide official support for a JavaScript client library, other platforms are community supported).

Sebastian’s desire for the tools space was very much in-line with our outlook in the latest developer economics report – consolidation. Fewer SDKs to integrate and fewer monitoring consoles to log into.

King for a day

Finally, if Sebastian could change just one thing about the platforms he works with, what would it be?

Better support for web/native hybrid app development (Lyft explored and abandoned that approach), with the Android WebView particularly in need of improvement, was a close contender but the top of the list for fixing was the Apple App Store review process.  5-10 days of waiting and they can see from their server logs that the reviewer doesn’t even login to the app with Facebook Connect before approving it. There must be a better way.

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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.

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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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Business

Different Ways of Winning on the App Stores

winning on the app stores

A recent report from Canalys highlighted the extreme concentration of income distribution across the iOS and Android stores in the US. The top 25 publishers make 50% of the revenues. 24 out of 25 of those are games publishers (the 1 exception is the Pandora music streaming service). During the first 20 days of November these 25 publishers made $60m from paid downloads and in-app purchases in the US alone. Is there still room left for smaller publishers? How can smaller companies succeed and start winning on the app stores?

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