5,000 applications vs 1. Which generates more revenue?

TedNashpost

 

Let’s start from the beginning.

When I first started creating applications there were only about 80,000 apps out there competing against each other.

There’s now over 1,000,000 apps and it’s become seriously difficult to generate awareness for applications; even truly brilliant ones.

It was this understanding which led us to an idea;

We believe it’s easier to make 5,000 apps which make $1 a day as opposed to 1 application that makes $5,000 per day.

We started with two applications when we as founders were a lot younger and at the time we enjoyed some modest success with a couple of entertainment based applications which were pushed out as a test.

The revenue that we generated was extraordinary and our applications continued to provide what seemed to us as an inflated level of income.

They were all relatively slow to pick up speed, but we soon found some marketing tactics which gave us a good return on investment.

The first weekend, we made £5,000…

Over a period of time, these applications made a modest amount of money and to be totally transparent our best month was December 2011.

December looked like this;

Graph

Over the years then, we have made healthy revenues from a few different applications.

Crucially now, with the influx of applications and with the majority of revenue going to just 25 developers – the revenues from these applications are slowing.

If we take the applications we mentioned above and consider that to be the quality route, now let’s focus on the quantity route.

Project5000

We called this project, Project5000.

We hired some developers and designers on Elance and gave them all very loose briefs. We used sites like apptopia.com and chupamobile to buy up source code in order to re-skin it.

Over the last 12 months we have pushed out close to 14 applications, and we have about 50 more waiting to go. (I have since learned that people with similar quantity over quality based business models would aim to push out 14 apps, per week)…

The big question is, can you easily sustain 50 + applications on the App Store and to continue to make ‘passive’ income.

So far, in our experience the answer is yes and to further back up that statement, we’ve come across others with very similar success – step forward Gabriel, Raki, Ob

The Numbers

We launched these applications and to date, they are doing all we ask of them; $1 per day.

You can quite clearly see the first 14 applications doing as we’d hoped (and exceeding expectations);

Screenshot 2014-05-07 10.57.51

Here’s another revenue chart that proves the numbers from our Project5000 applications.

Screenshot 2014-05-07 10.59.22

It’s very clear then that within the App Store there are two relatively straight forward models;

– High Risk, High Reward (Quality Route)

– Low Risk, Lower Rewards (Quantity Route)

I’d never personally continue to pursue the quantity route as a business because it’s not something we would take an immense amount of enjoyment from.

Part of me considered writing that it’s probably far riskier mass producing applications – with quite a high chance of being pulled from the store, however, there are many case studies which show that having a single point of failure can be even riskier…

I mean, look at this. $13.5mn raised and the next day, pulled from the App Store.

Analysing the detail

It’s certainly interesting looking at both models and analysing the in detail.

When you drill down to the detail of both models, we can attribute the following;

High Risk, High Reward (1 app, $5,000 a day);

  1. Substantial Investment needed in both time, energy and resource to begin with
  2. Clear strategy needed around how best to take it to market and sustain growth
  3. Hugely competitive landscape and the average CPI is rising

Low Risk, Low Reward (5000 apps, $1 each per day/iOS App Reskinning)

  1. Much smaller investment needed in both time, energy and resource to begin with
  2. Compounded growth -> more apps -> bigger network = more installs = more installs
  3. No real pay per install marketing is needed to get your product off the ground

My Thought

If you are just starting in the App Store and want to understand how the market dynamics work, the best routes to market and start to become a person of influence amongst what I believe to be a hugely talented community. I’d recommend starting small so you can test the waters and extrapolate as much knowledge as you can via your network of applications.

For us however, the reason we pursued Project5000 was to prove a hypothesis.

If you can unite a number of different applications and work hard to cross promote users between these apps, then a Project5000 model could work. As we’ve shown above, many of our friends are doing just that and enjoying themselves along the way.

Our findings from the process led us to uncover a few fundamental problems;

– Discovery is broken

– Acquisition is too expensive

– Communication between these developers is fragmented

We wrote about these problems in more detail here and here.

It’s these three which make the quantity based model attractive and I personally think that’s wrong. You get far more original and innovative applications with focused effort on an individual application/business.

Our Passion

Our passion as a team has now shifted to focus on solving these three problems.

The product we are building to help solve these problems is Tapdaq.com.

We want to help developers communicate to one another in order to collaborate as opposed to compete with one another. The app ecosystem is big enough for everyone.

We as a developer community need to fully understand the implications of that because if we can work together to leverage each others users then we’ll find that generating awareness for the applications we have worked so hard to create will become a whole lot easier.

What’s next?

It’s just the beginning for us, but you can follow our journey on our social channels here…on that note – we have some extremely exciting news around the corner.