Show HN: I made $8000 in one day on the Mac App Store | Hacker News Reader

Show HN: I made $8000 in one day on the Mac App Store

aptonic.com

190 pointsjohnw83 comments

Extrapolating your day on day sales figures, you should see about 600k copies get sold tomorrow and 54M the next day.[1]

Morgan Stanley probably isn't too busy now, you should get their Facebook team to run an IPO based on that, before tomorrow's number come in.

EOM

[1] by July every particle in the universe will own a copy, that might cause sales to taper off.

You're just jealous ;)

Valid point though, if you have a small part of a large graph for a new product it somehow always looks like a hockeystick.

But if he can maintain this for even three weeks or more then he's on to something. Stranger things have happened.

A word of advice for the OP: keep it quiet. Bragging like this is going to bring copycats and unwelcome attention in large quantities. If you're making 'easy money' keep it to yourself.

I agree in principle. However, it's not "easy" money, he produced a quality, well thought out app and then got lucky (or executed a well thought out strategy) with marketing.

Something that has already been made can be copied much quicker than it was originally developed.

Touché.

"Good Artists Borrow, Great Artists Steal"

  > "Good Artists Borrow, Great Artists Steal"

Forgive my pedantry, but I hate to see a favorite quote of mine used with the wrong context for the word "steal":

  "One of the surest tests [of the superiority or 
  inferiority of a poet] is the way in which a poet borrows.
  Immature poets imitate; mature poets steal..." [1]

[1] http://nancyprager.wordpress.com/2007/05/08/good-poets-borro...

One thing I've learned about the app ecosystem is that when your app gets attention and becomes popular, the copycats come out in full force - relentlessly, shamelessly, and often fraudulently.

My organization doesn't develop mobile apps, but we provide APIs that power many of the top apps in the "News" categories on the various app stores. We've seen apps that are solely designed to just consume our API reach #1 in categories a few times. And we love to see that.

But, when an app gets popular as described above...? Copycats come out in full force, stealing API keys, decompiling apps for data and info, and other completely nefarious techniques with zero innovation. And they release exact copies of competing applications.

No doubt about it, while "controlled", the app stores are still a wild-wild-west.

Wow how awful. I guess I always wanted to believe that people bright enough to be programmers would create things instead of shamelessly ripping off other stuff. But I guess that was horribly naive of me.

Most software is built by people being employed by someone who has enough money to pay for them to build whatever they want. If that person with the money wants to build a shitty ripoff then a shitty ripoff is being built.

The only thing Apple's control of the app store achieves at this point is keeping out blatant malware. Maybe that alone is worth it but scams and cheap clones abound.

To be fair, everything is a repost of a repost. The App stores are a copy of previous app stores, running on a gui, the concept of which was 'borrowed' from Xerox.

Copycats are the best (and worst) form of flattery, but it's a service problem. On the front page of the Mac App Store (here in the UK) there's a tool called Yoink which seems to be a similar product. If the author can compete with the attention the product will only get better for users.

Interesting, so 6000 x 2 ($12,000) vs 300 x 14 ($4,200) a price elasticity factor of 3.

If you are reading John, how did you pick $14 as the price? Pricing software is always difficult because you marginal costs are 0.

One school of thought is to take the time needed to write something, pick an hourly rate of what you would have had to pay a person to write it (or use what it cost you to produce it [1]) and then divide by the 'nominal' market to get a price.

Working a contrived example, lets say you write an App all by yourself, it takes you 3 weeks and you put in 300 hrs of work over those three weeks. Now you say "My time is worth $100/hr" so you've invest $30,000 into building that App. Now if the 'nominal market' which is people that you think need this capability at any cost is 1,000 people, you might charge $30/.3 or $100 ($99.95 if you're clever) for the app. After capturing your 1000 sales you've covered your development cost and are 'profiting' on the long tail with additional sales.

The danger of course is that you can over value your time and over estimate the number of people who might want your product.

[1] Cost to produce can be tricky if you are building several things, how much of your UI design developer do you charge to one project or another? Even fractions is a common technique but the designer will tell you that some projects took more of their time than others so its not a perfect strategy.

The marginal cost is also time and energy spent on support as well.

Excellent point, really its only zero to distribute. Definitely need that cost included as well.

Honestly, I don't think this is the right approach. Development time is a sunk cost at this point, and doesn't have any impact of the profitability of the app in the future. John's only concern now should be maximizing profit, and profit's going to be a function solely of the market for his app.

The type of analysis you've described is more applicable to consulting work, where there's a hard limit to how much output you can produce.

Fair enough. I am interested in the general question "pricing software" and explained my reasoning for how I might go about pricing an App. If John is reading I would really like to know what his reasoning is. The data points we have from the article are "originally priced at $14" "Priced one day at $2" "Made $8000 which is more than they expected to make" these are all pieces of data regarding his reasoning but I'm truly interested in how he thinks about it. Why was $8,000 more than he expected, how much did he expect? If he had no idea how much did he guess? What reasoning did he use to inform that guess?

"App stores" are an amazingly disruptive power on software development costs. I find them fascinating both from a business perspective and from a more general economics perspective. Perhaps someone else reading this will some day post their experiences to HN as well and we'll another data point.

If you're able to randomly divvy up your customer-base, then split-testing is a better approach.

("Better" in that it's easier and more profitable, but not necessarily as fair.)

Congratulations on your well-earned success and thanks very much for your forthrightness about your numbers.

But I think this really shows just how hard it is to make real money in the app store. You have been as successful as any of us could hope to be there, yet your peak bounce is $8k/day. This is nothing to sneeze at, of course, but chances are very high it will quickly taper off the way these bumps usually do. In comparison, a decent engineer can pull in $8k/month easily, month after month. So my guess is that over a year you will be lucky to make anywhere near what you could have made at a salaried job with the same effort, and you're probably in the top 1% of earners.

The independence and freedom the solo dev enjoys is certainly worth something, but if you're considering abandoning a salaried job for a crack at the app store market be advised that you're likely to pay a tremendous premium for that freedom.

Thank you! And I agree with what you're saying (although it pains me greatly to admit it). It really is difficult to make a sustainable living from the App Store. Even the top apps don't pull in all that much and sales always drop off very rapidly after the initial hype wears off.

I think you'd be crazy to abandon a salaried job in the hope of making it big on the app store. I've been working on Dropzone pretty much full-time for almost 5 years now and only now am I starting to see some payoff. I'm wondering whether having multiple apps might be the key to a more sustainable income. Then you can cross sell and hopefully make more money overall.

Relying on Apple to distribute your apps is also very frightening. I feel that policy changes with regards to things like sandboxing could easily put me out of business, and there's no money to speak of to be found from selling outside App Store.

I love writing apps though so I really hope I can continue to do so.

I like writing apps too (iOS), although I'm slowly letting go of the idea that I can sell enough on my own to support myself. The job market for iOS/Mac developers seems strong enough, so you probably can pay the bills with those skills and consider your own apps as a portfolio.

May your tail be long!

A little off-topic, but I'm curious: which apps are yours?

Main ones are listed here:

http://www.plastaq.com

Man, Wednesday is the worst day to learn about Two Dollar Tuesday.

We're doing one next week, and it should be great too. :)

Yes, I missed it too. I should probably read the verge more often, but their site design is just too beautiful to miss by putting it in my RSS reader. Ironically, the result is that I hardly ever remember to go there.

Try http://www.newsblur.com/, it lets you look at orginal sites from your RSS reader. This was a big pain point for me until I found it.

It's an HN user's side project and it's the best RSS reader I've found, hands down.

At $1-$2 prices, purchases are made mostly on impulse. This is why I think e-books should come down to that price, too. For many authors the sales would just skyrocket, because people will just start buying 10 books at a time, without even thinking that it may take them a full year to read them all. But they will just "want them there" for a later read.

But once they do realize that they have a year's worth (or more) on their reading list, why would they keep coming back to the store to buy 10 more books?

And that will lead to authors only publishing short books, or even sell individual chapters for $1. Not a good thing.

Why would this not be a good thing?

That's similar to how Dickens wrote A Tale of Two Cities[1].

"The 45-chapter novel was published in 31 weekly installments in Dickens' new literary periodical titled All the Year Round. From April 1859 to November 1859"

Likely more people will read a book in short chunks because it looks less imposing. And it gives you an opportunity to "pivot" your story if it's not going well.

[1] http://en.wikipedia.org/wiki/A_Tale_of_Two_Cities

Dickens' method had more do with economics. Most of his audience was not especially well off, and books were VERY expensive back then, as in over $100 in today's money.

personally? yes. Many times I'll buy a bunch of cheap (physical and digital) books, read them for a bit, get bored and then eventually sell the physical books.

Most times if a book is expensive I'll put off buying it, but if its a dollar or two, no love lost if I only read a few chapters and don't like it.

Because this is how a lot (most?) people work. They read about something interesting today, buy the book, send it to their Kindle and then forget about it. When they get to actually read a book they enjoy they might start looking for more titles from the same author/genre and at $2 you won't think too much about buying 2-3 at once.

A) I once read that only about 17% of the books people buy actually get read. People seem to get some satisfaction out of "owning" the info even without consuming it.

B) When I was homeschooling my sons I frequently bought actual (dead tree) books for a dollar or so off the clearance tables. It was cheap enough that I was willing to gamble on their usefulness. Some panned out. Some didn't. Enough panned out for me to feel it was still well worth it.

I'll go on Amazon and buy several cheap Kindle books before I travel. Invariably I don't finish them all, and set the Kindle aside for a few weeks. Then I pick it up, see the unread books and read them before buying more

I've always wondered how much more money Amazon would make if they didn't highlight unread books, and how much people would care about the lack of that feature.

If it was that easy to get additional income, they would have done it. They probably have a bunch of MBA types with fancy spreadsheets that came up with the pricing strategy not mention Amazon's pricing 5x to 10x additional sales over the long term is probably not realistic.

My current understanding of psychological price barriers, at least for mobile apps, is that once you're over the 99 cent barrier, there isn't much of a difference (at least to Americans with our $5 bill) between $1.99, $2.99 and $3.99. It's only when you hit the $4.99 that they think of that as a different price class. There will still be people that balk at paying $3.99 instead of $1.99, but supposedly not 50% of them.

Do you have any references for this theory? If true it would influence my pricing strategy for my own apps. I have seen more sales at $2.99 than $4.99 but I haven't tried anything in between.

I wish I did but it's from a bunch of different posts. I wish it was easier to A / B test in the store but the daily traffic is so unpredictable and unmeasurable. I guess it could be tested on a landing page before hitting the iTunes store, even if you have to lie about the price.

That might happen initially, but I think the effect will go away as people get used to dealing with e-books.

When I'm shopping in an actual physical bookstore it often makes sense to buy a book that I won't be ready to read for a while.

First, if I become ready for it at a time when it is inconvenient to get to the bookstore to buy it I have to wait to start reading it, and that could be annoying.

Second, it might no longer be stocked when I get around to going back for it. I then have to order it, wait for delivery, possibly go pick it up if I order for delivery at the bookstore.

Third, I might forget about it.

With an e-book, none of these apply.

First, the e-bookstore is for all practical purposes open 24/7/365, and the book is only a couple of minutes away.

Second, it is unlikely to go out of stock.

Third, when browsing at an e-bookstore there is usually an easy way to mark books you want to get back to later.

Putting these all together, there is very little point in buying an e-book when I'm not ready to start reading it soon, unless it is on sale.

The biggest point made here is the following: whatever perception you have about money, you are right. If you think you can't make more than $1k a month, you are right. Same with $10k, $100k, etc.

The author stunbled with this by accident. I bet you he will now focus on finding another product that will allow him to repeat that.

Another minor point is that marketing works. Its up to you to find what. So don't stop when your ad words campaign fails. Keep iterating.

From the article:

> This is beyond my wildest dreams of what I expected to make.

Therefore the app creator did not have an accurate perception of what money he would make. Therefore he is a counter-example to your claim, and your claim is false.

The German stat is probably due to being mentioned on Heise, which is pretty much the go-to site for tech news in German:

http://www.heise.de/mac-and-i/meldung/Reduzierte-Programme-i...

It actually surprises me that so much promotion, and such a large price drop, didn't result in even more purchases. It'd be interesting to see the sales curve after you raise the price again.

Well he was in the #2 and #3 spot in the U.S. App Store, he was selling more than almost anything else there. :)

Sounds like the implication is that Mac App Store sales are lackluster in general then.

Yeah, that's what I was getting at

This is hardly anything to do with price elasticity. It's to do with the fact that 3 major websites picked up the story and linked to the app.

It's true that the websites would have driven most of the sales, but still interesting that the response was better than when Apple featured the app (which is also a big deal). I suspect the one-day-only nature of the sale might have helped quite a bit.

I agree, one-day-only is a big motivator for me. Even though Panic's Diet Coda was priced a little more than I would normally have paid for an app I know I probably won't use very often, knowing the price was going to double tomorrow rather forced my hand.

How do you separate how much of the sales increase was due to the sharp price drop, and how much was due to promotion by Two Dollar Tuesday?

This is a good point. It'd be hard to measure credit assignment for the success. My guess:

1. Increased exposure: 50%. Buyers got to be reached in the first place.

2. Expiring deal: 40%. This is a close second. Besides establishing urgency to act, it reduces buyer risk without raising value doubt associated with a permanently low price.

3. Lower price: 10%. Lowering the price, IMO, wouldn't have helped much without the increased exposure or the certainty of the price restoration the next day.

It's tempting to attribute too much of this to the price itself. Promotion on the App Store(s) can be really tough so a special one-day event like this with coverage from major blogs is extremely valuable. If this were a $5 app that dropped to $2 the developer may have received less lifetime app revenue than he did with this $14->$2 one day promotion—there's a lot of psychological value in being able to get a $14 app for only $2, and only today.

As another data point, so far the only way I've managed to get anyone to notice my app was by making it free (and then it was picked up by all the "free app of the day" feeds and websites, as well as a podcast). I also had a similar "sales" graph:

http://www.syncingdreams.com/2012/03/over-9000.html

Unfortunately my giant spike didn't come with any money since the app was free. I ended up making an extra $40 or so as a result of the "free" day sale (and subsequent 99 cent sale), which is (sadly) a huge spike in terms of percentage though obviously not something to write home about in terms of actual return. I did get a ton of reviews, including some really helpful and thoughtful reviews. Interestingly, even with all the free downloads (which I've read can result in a lot of negative reviews) I'm around 4-5 stars in every region except in Italy where I've been mercilessly panned as a "poor rip-off" of what I can only assume is The Impossible Game (the reviewers there only refer to it as "that famous game").

Did you actually have any angry customers contacting you who paid full price for the app?

The old customers should be happier, the developer might be able to spend more time on future updates.

Or the developer might have to spend more time on support now.

What percentage of people actually get angry at this sort of thing? It's insane for luxury items -- either you value an item at the price it's listed for or you don't. If you don't, why are you buying it in the first place?

I have no customers who were angry about this. Not one. So this fear I had of upsetting customers who missed the discount appears to be unfounded.

I'm guessing your $14 price is not the sweet spot for you. Bear in mind you can't even try to price mobile apps as if there was a free market because there isn't. It's manipulated by Apple and Google, and low prices get tremendous benefits, because they want apps to be cheap so their mobile OS will have more value for the user (yes, it's a scam). Tell this to the people who blame developers for low app quality and whine about it all day: Apple and Google can have the apps they want, they just happen to want cheap and crappy because it makes their OS the best value for the consumer.

Wow! What a great result! So how does one get featured in the two dollar deal? What have sales done now, back at the normal price? Would you consider dropping the price permanently?

I'm actually the maker of Two Dollar Tuesday. You can click go to developers area on the site if you're interested in featuring an app and we can talk. :)

Thanks for the offer! I don't have any published apps but sure someone will take you up on your offer.

That was apparently a great idea. Email is on the way.

That's impressive. Are you considering adjusting the price slighly downwards to maximize your potential due to the better exposure?

Yes, I dropped the price to $9.99. So we'll see how that goes. I don't know what I'm doing at all with regard to pricing but the result from this sale does make me think that $14 may be too high.

You mention a few things that you were concerned about:

"That it would reduce the perceived value of my app, that it would upset other customers who missed the discount and that the support burden would be too high."

But you don't talk about how these concerns played out after the sale. Would love to hear your thoughts on how valid these concerns were.

We participate in a weekly promotion like that for kid-friendly mobile apps, Moms With Apps "App Friday". Every Friday there's a joint promotion of quite a few discounted and free educational apps. http://momswithapps.com/app-friday/

This is a great result for a single day, but isn't this a sign of a wrong initial pricing?

I would try to lower the price for a month or two, to see how the market reacts. I believe that you still have to find the sweet spot in the price/demand curve.

Not necessarily -- it could be different market segments. There might well be one group who will gladly pay full price, and a different group who'll gamble two bucks just to check something out.

Personally, $0.99-1.99 falls into impulse buy territory, while $14.99 means that I won't buy it unless I'm positive it's exactly what I need.

The impulse buy thing is a really important reason this works.

For example, I adore Transmit and have no need for any other FTP app. I bought Forklift anyway when they discounted it to $1. Haven't even launched it yet.

Same here. I'll buy two or three <$3 apps and not think about it. >$6 and I start thinking about my budget, and slow down. Same issue with Steam sales. The advantage of the AppStore is the payment integration and instant install, it works really well for the impulse, "I need a nifty new tool" type of personality.

But will the developers be able to support Forklift in the future if that's what they're going to sell it for.

well, I just added $6.96 ($9.95 - 30%) to your revenue numbers for today. I had no idea about this application but it looks great and solves a pain point for me.

Some successful Hackernews marketing in action I suppose.

Good luck on future success in the App Store!

Good job!

btw: I love how their Revenue counter is poised to go up to a trillion dollars.

I was just about to say... I guess that's to keep people's hopes up.

Conversion to Zimbabwean dollars, naturally.

Since I am the proud owner of 150 trillion Zimbabwean dollars, I'm not sure that counter goes high enough, really.

Similar App Store discount is happening today: http://zeroninetynine.com

Disclaimer: one of my apps participates as well.

You should lower the price point to somewhere between $2-$5 and keep it there. It would be a shame to lose the top app store ranking when it goes back to $15.

Or let it hike back up to $15 to show people what they missed out on, then do a sale next month for $5/copy.

You may be right, but another thing to keep in mind is the volume needed to maintain the same amount of income at a lower price point.

Staying higher in the rankings isn't worth it just for the sake of the rankings if you're only making the same amount of money.

Plus, there's the additional support cost.

it would be nice if you told us what your app does.

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