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Comment by HeavenFox | Hacker News Reader

May I say the title should be taken with a grain of salt. From the article:

> A month before being removed from the App Store, the app raked in ~$45,000 in revenue. This means the product was operating at a $500,000 annual run rate.

It's an extrapolation, from the first month.

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That plus they are talking about extrapolated "revenue". They didn't mention what the server costs were for having to handle the traffic of that many users. Server costs for such would be pretty high. Also other operating costs, development costs etc. Revenue doesn't matter, profit does.

I guess you aren't native english speaker. As a french speaker, I got bitten by it in the past. Revenu is the total income, you have probably profit in mind.

Yes - the comment you are replying to is making the point that revenue may be $500,000 (extrapolated) but if server costs are $1,000,000 then the app is losing money, not making money.

I see this trend quite frequently, only mentioning revenue but leaving out costs.

Yep. One thing which I have learnt from watching Shark Tank is that many companies would come with crazy valuations because they make millions in revenue. Only once questioned by the sharks would they disclose the much bigger operating costs and were severely bleeding money instead of profits.

To put it succinctly, "Revenue is vanity, profit is sanity".

Yep! Not to take away from what you said (which is absolutely true) the author does mention hitting profitability (assuming it is in 2018).

There are so many false friends with French and English. I really don't have the heart to tell my colleagues in France that 'Unicity' - which they named a whole big project after - isn't a word...

Huh? Seems like a word, linked below. https://www.thefreedictionary.com/unicity

TIL! It's must be a fairly obscure one though. My English speaking colleagues and I had never heard of it, and it's not here https://www.dictionary.com/misspelling?term=unicity

For a b2c app usually it is neither server cost nor Dev time being the main cost drivers but cpi campaigns. So you should have a way lower profit margin here than someone just looking at tech expenses might intuitively expect.

Why would there be server costs for an app that tracks local app usage on the phone?

Apps on iOS are sandboxed so no app has access to usage of other apps. They got around it by using a pretty forceful workaround of using VPNs to tunnel the data. The way they were tracking the app usage data was by making the user install a VPN profile so all the device's network traffic would be tunnelled through the developer's VPN servers. On the server, they would be able to track each network traffic and measure the device's app usage. Therefore the server cost which I am sure have to be very huge. Also a HUGE privacy and security issue. Apple was right to take these down as they were also against the app store guidelines for usage of MDM profiles for the wrong reasons.

Actually, this is not against Apple guidelines, they announced update on WWDC’19 in June, and now VPN apps can exist on Apple App Store again following these rules https://developer.apple.com/app-store/review/guidelines/#vpn... and https://developer.apple.com/news/?id=06032019j

It didn't actually directly track app usage locally, it tunneled all traffic through a VPN and tracked usage by monitoring network connections.

It's mind boggling that there is any good way for an app that just tracks your social media usage to make money when they have to tunnel all their user's internet usage. (Assuming they actually made any money on that $500k revenue...)

I really really doubt they made any money on $500k. Unless they developed the app themselves, hiring developers for such a complex app with backend itself would cost a few hundred thousand dollars.

Based on the story there are just 2 of them - founders, so not a lot of costs for devs.

It's an extrapolation from the last month which was the highest revenue they achieved and roughly estimating from the chart total lifetime revenue was ~$200K.

It seems like a fair estimate to me, especially given the fact that were growing but didn't extrapolate any growth.

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