As Boom Lures App Creators, Tough Part Is Making a Living | Hacker News Reader

As Boom Lures App Creators, Tough Part Is Making a Living

nytimes.com

111 pointsuladzislau67 comments

Be the guy who sells the pick axes during the gold rush, not one of the guys panning and mining for gold.

To be more specific, I've had exactly one 'hit' iOS app. It sold 60,000 copies in late 2008. But I've made my living since early 2010 on iOS (and rails) software consulting and development for other people and through http://www.cocoacontrols.com.

What does that simile mean here? Build other people's apps?

I assume he is referring to Apple making tons of money selling app developers the tools they need to make apps. Iphones, macs, developer licenses, etc.

Indirectly. He's referring to developers, like you and me. But, Apple, being one of the smartest businesses on the planet, is playing the exact same game. If you actually strike gold with your app/unicorn, they win. If you don't, they're still getting paid. This is just smart business.

When you build other people's apps you are still digging for gold, you just get paid to do it, hence eliminating the risks (and the gains too, if the App becomes popular). But what I think meant with this simile is that instead of being an app developer you can be a service provider to app developers. In his case, he became a consultant, in my case, I develop APIs and other server-side code for App developer, and sometimes also manage the whole setting up of servers for them. My guess is that after the first wave of success, many people without software development background joined the gold rush and only focused on learning how to write apps and later they found out there is more to it than that.

There is an exception though, which is building apps for some established brand who's business is not selling apps.

Even some fairly small companies now want their own 'app' in order to seem hip and modern. This could be anything from a spammy push notification thing to a crappy game that has been rebranded.

The purpose of these apps is not to have millions of downloads, but to have enough customers put it on their phones so that it helps them sell X more of Y where X is some number higher than what it cost to produce the app.

Contracting is more akin to mining for (high) pay. A better simile would be something like RubyMotion (http://rubymotion.com) by my friend Laurent Sansonetti. That's selling pickaxes (and excellent ones at that). Training for iOS developers would qualify as well.

As a fellow tool builder (albeit in a different domain than mobile), i'm repeatedly impressed and awed by how well RubyMotion is done + how they've grown a nice community around it.

(I can only hope I encounter remotely as much success as they once I launch! :) )

I actually took a course on iOS programming from the guy discussed in the article, 1 day, $350, though there was another instructor. So he was doing that to some extent.

I thought you were describing me, right down to the sales numbers.

Agreed that the real cash here is in contracting. Use appstore apps as exemplars of your work, make your actual $ consulting.

I agree, but I can never get over the fact that selling picks and axes to gold-rush miners is selling services and products to people who are chasing unrealistic dreams and are statistically pre-dispositioned to fail. And is just a way to take advantage of the situation to your own gain.

Fully knowing that, at the end of the day, I can't feel proud of that ... unless I also increase the success rate of those miners.

So the moral of this is - don't just sell those picks and axes, but improve and progress the process of finding gold.

All business people chase unrealistic dreams since most will fail. Providing the best services and products you can only improves their odds. The mining supply company that gets a great bulk deal on high quality pickaxes and sells them for a modest profit is doing a good thing.

Not necessarily, unless you are misrepresenting something to your own advantage I don't think you would have acted immorally.

You can sell your services to somebody who has better odds of success than you would alone because of finance or other skills experience they have etc.

As I have mentioned elsewhere in the thread, there are a lot of perfectly valid reasons to hire a mobile developer other than "I want to be an appstore millionaire".

Thinking about it only in this way might suggest an over-exposure to HN-think.

I wonder how long is this going to last. Lately I been hearing more about startups that provide tools and services to make apps than about startups that make actual apps.

I think that might be a sign that this gold rush it's on its last legs. Too many devs got tired of trying, so the question now is how long until the vast infrastructure of app-dev startups starts to crumble due to the old offer>demand imbalance.

Pickaxes sure got a lot cheaper when nobody was looking for gold anymore...

I suppose its a lesson for them in how real risk works. They traded in an opportunity with a high chance of making 200k for an opportunity with a very low chance of making 1mm+ and a very high chance of making much less than 200k. They ended up probably statistically somewhere in the realm of average which in reality should be of no surprise - its just unfortunate that it seems they didn't take many safeguards for when the most likely scenario occurred.

I think there is an unfortunate side to the way the tech media has turned into a machine at pumping out stories about all the big hits in that it gives a very skewed perspective of how rare true sustainable startup success is. That doesn't mean that it isn't worth pursuing but I think doing things like cashing in your 401k is incredibly foolish to be totally honest. I dont blame people for taking big risks being that most big success comes with big risks but make sure you are completely ok with what big risk truly means.

Very true, when I tell people I am a software developer they either assume I live in a mansion with 5 ferraris or that I eat nothing but ramen and sleep in my parents basement and not much in between. Sadly the second is probably closer to the truth.

This is the lesson of the professions in general. Med school has a better ROI than both law and business school, but the doctors and lawyers fall out of the income distribution around the top 1% to 0.5%. Above that, it's all bankers, most with MBAs.

Two things I noticed:

1. Overspending - No need to buy hardware to 'test' if you can't afford to live. 2. Lack of Focus - An app a month sounds nice, but to quote the article, 'decent is not good enough.' Hard to make 12 good apps/year, let alone great apps. Not to mention support said apps.

That said, I'm finding that I have to work harder and harder to keep my apps selling. Used to be that sales were the primary income, now it's ads for all but one app.

Sadly, I don't see it getting anything but worse.

I'm sorry, but this really, really does not compute:

    In March, with the apps bringing in only about $20 a day, they
    cashed in Mr. Grimes’s 401(k), which yielded $30,000 after taxes
    and penalties. They had already spent the severance from his job at Legg Mason.

    ...

    One thing they never scrimped on was technology, especially Apple
    technology. At one point they owned a 24-inch iMac, a Mac Mini, a 24-inch
    cinema display screen, two 13-inch MacBook Airs, a 15-inch MacBook Pro, two
    iPad 2s, two Apple TVs, two iPhone 4s and an iPhone 3GS. “We justify buying
    new models by saying we need them to test out the apps,” Mr. Grimes said.

WTF? I've been doing this full time for 2 years now and even I don't have half as much gear.

To me, it sounds like a description of an addiction, completely irrational and willing to sacrifice life necessities just to have another fix.

Hardly, there would be plenty of couples out there who don't directly need iOS devices for their job that have just as much if not more.

After you take out 2 phones you would have anyway, 2 laptops and maybe an iPad and an Apple TV there isn't that much more.

To me, it's not about how many devices they have and whether that makes sense, it's about the fact that they had spent $200,000, which then generated $5,000 (this year only, don't know how long they've been at it), they had to move to a smaller flat, the guy had to get another job, and then they just had to buy two new iPhone 5s (which are mentioned later on in the article). Why? Can you justify spending that if your income from iOS development is $5,000 a year? That what gives me the feeling it's an addiction.

Now, I assume the new iPhone 5 is so different to the ones before it (screen size) that you have to test for it separately. If I was down $195,000 in a year (or two) and I felt this, I'd buy a new generation iPod touch instead. Or two, if they really can't share the device.

I also look at the picture and I question if they really need 5 computers between them if they only work on the two laptops.

Anyway, my point is not that having X amount of devices (Apple or others) per person is an addiction, if you can afford it, go for it and enjoy yourself. My point is that this couple seem to be struggling financially and cannot stop themselves from buying more devices. I'm trying not to be judgemental, but to me it sounds like an addiction.

The article says it cost $200,000 "in lost income". That's not quite the same as spending $200K, they're factoring in opportunity cost to make it sound more dramatic. It's also possible that some of the equipment (eg laptops & displays) was purchased before they started iPhone work.

Definitely agree about iPod touches & cutting costs, though.

The 5th gen iPod Touch is not the same as the iPhone 5 - it is more like the iPhone 4S, as far as I can tell, but obviously with the larger screen.

Buying two certainly sounds like an extravagance. A better distribution of devices would be 1 x iPhone 5, 1 x 5th gen iPod Touch, 1 x 4th gen iPod Touch, which would cost about the same as 2 iPhone 5s and also give you a reasonable idea of performance on iPhone 4S (roughly equivalent to 5th gen iPod Touch) and iPhone 4 (equivalent to 4th gen iPod Touch).

That assumes your program is OpenGL- or CPU-heavy. If not, you can probably do fine with whatever you've got, plus the simulator :)

Opportunity cost is real! $200,000 in lost income is $200,000 in lost income - there are no two ways about it...

I feel their pain. I just paid $750 for an iphone 5. Right now to submit an app for iPhone 5 you have to have a retina display with correct dimensions for screenshots.

You can just use iPhone simulator to make retina screenshot and/or do bigger screen testing.

Exactly Command+S has started to work again, so you easily save screenshots. Just as you can develop iPad apps as well, without owning an iPad. All you really need is a mac, although having a device really helps testing.

Yeh, you guys are right. As a practical matter, I feel like you need either an iPhone 5 or a retina display on your mac. When I use the iPhone (Retina 4-inch) simulator on my (non-retina) MBP, I can't see the whole thing on the screen.

You can scroll the display same way like you scroll any other window.

An iPod touch 5th gen has the same 1136 x 640 screen resolution as an iPhone 5. It's $299 + tax.

The gear is completely irrelevant. They blew two hundred thousand dollars. How much of that went on gear, a tenth? That's down in the noise. Forget about it. The real expense was the other nine tenths, which presumably went on living expenses, representing the value of time. (Underrepresenting at that. You can always replace money. You can't replace time.)

The real lesson here is: time is precious. Don't blow it in large quantities unless there's going to be something a lot more worthwhile than "apps" to show for it.

I'm going to assume that the $200k number mentioned in the article refers to lost opportunity cost (compared to having a normal software job), and not that they actually spent $200k in a two year timespan when they had no other income.

You are correct. From the article:

"Shawn and Stephanie Grimes’s efforts have cost $200,000 in lost income and savings"

This is what happens when people with bad business sense jump into the arena. First and foremost, you need good business sense, no matter what you're doing.

This article highlights how most app developers try to enter the App Store without any kind of business plan. To buy that many Apple devices when you are only making $20/day is plain stupid.

When we started FIPLAB, we didn't even buy a single Apple device (other than the iMac I already had for personal use). We used my friend's 1st Gen iPod Touch to test our app on and did everything possible to not waste money without first seeing whether we could make it in this business. 3 years on, and everyone in our team is making a good living doing what they love.

The App Store today is a totally different beast and unless you are very lucky, you won't make it big without a proper strategy that involves at least a few of the following (1. securing press coverage on popular websites/blogs, 2. Having a budget to spend tens of thousands EACH DAY on generating downloads (or a cross promo network to leverage your current userbase), 3. Developing a viral app that quickly propels itself up the starts.

"Having a budget to spend tens of thousands EACH DAY on generating downloads" implies that you are probably generating more than that from your apps.

Do you have tips on each of the mentioned points? Details would be very interesting. Also how do you evaluate app ideas for example to come to apps like "Ghost for G+", the "Menu Tab" series and "Ask A Girl"?

Found a good interview with the founders: http://outsourcedvideomarketing.com/fiplab/

I feel bad for the couple featured in the article, but it looks like they didn't bootstrap their business very wisely. They sold their car, cashed in their 401K, and bought unnecessary hardware:

  When the newest iPhone came out at the end of September,
  the couple immediately bought two.

I've worked on iOS apps for 2 years, and still don't own an iPhone (an iPod touch suffices). Why did they have three Macbooks, an iMac, and a Mac mini for only two employees?

Selling the car and cashing in 401K is generating cash flow. The hardware they bought would be around 8k-10k$ expenses (4k-5k$ per person). I don't consider this as a lot. Or is your point that they should have put that money into marketing instead?

Car & 401K is a terrible idea for generating cash. Keep your day job (or find a day job) and build apps on the side until you think you've found a winner.

Putting money into marketing is a difficult question. I feel like it works if you have apps that are already generating money, so that you can use that revenue stream to fund the marketing for your other apps.

But if you are just starting out, you should try the $0 marketing approach of contacting bloggers in your space (in their case, educational app blogs) to see if they'll review your app.

Selling the car and cashing in 401K is generating cash flow.

So is selling a kidney, but that doesn't make it a good idea. The wife had a job and quit. The husband appears to have some IT skills that he could have used to bring cash in on the side while looking for that hit game.

Heck, if they both kept working they could have had someone make these games for them for way less than they loss in money and opportunity costs.

The only issue I have with using an iPod touch is that the camera isn't as nice so if you want to do anything with like barcodes or such you are SOL

It'll be interesting to see how the "app boom" turns out. The demand for apps right now reminds me of the demand for all of the shareware, etc programs of the late 90s, when personal computing was growing at a rate analogous to smart phone usage today. Utilities to speed up your internet and computer and the cute little animated tray programs, etc. (I had a soft spot for Tiny Elvis, who at random times would be awed at the size of a an icon on my desktop and then do a little jig). It was normal to pay for a web browser or video player.

I find myself only using apps that satisfy a core set of use-cases: favorite website consumption (HN reader, Reddit is Fun), media consumption, and social media. I play games much less than I thought I would have but I think it is the one subset of apps that will continue to see demand. The apps that list different types of knots...not so much.

>>The apps that list different types of knots...not so much.

If you look at AppStores there are apps with Types of Knots that has in access of Millions of downloads (Which I am sure had pretty good return).

Your analogy is wrong IMO. App boom is similar to Web Boom of Late 90's. Almost everyone says they only visit 1-50 websites a day but there are several 10K's of sites that are profitable.

> there are apps with Types of Knots that has in access of Millions of downloads (Which I am sure had pretty good return).

And there is even a niche inside the Knots niche. The sad truth is people are searching for specific things 'how to tie my tie' not mediocre social media/game/productivity apps.

https://play.google.com/store/apps/details?id=com.artelplus....

"INSTALLS: 5,000,000 - 10,000,000

Ratings: 1/2

(114,872)"

I think you will see more variety in successful smartphone apps simply because a phone can be used in so many more situations.

A PC app with a list of knot types is not especially useful if you can't take it on your boat with you.

I see phones and tablets as just another platform to put your service on. To rely on app sales at this point seems foolish. Correct that, relying on app store visibility is very risky, unless you're a big dog. In the end, a better bet seems to be building a good service with a targeted audience that needs your specific product, otherwise you'll be in the business of making blockbusters, and you won't last for long.

An exception to that is games or proof of concept app whose novel aspect will be the main draw.

Yes, selling games will always be tricky, unless the platform is very new.

To put another data point out there: I recently released a little kids puzzle game[1]. I payed a friend to help out with the coding, contracted out illustrations and purchased the sounds from stock sound services. I've put in around 10k$ to develop the app and it's generating around 2$/day. It will take me roughly 13-14years to break even :)

However I also see the app as a advertising for my consultation business and plan to use it to cross promote my next kids app[2], so it's hard to figure out the real cost/benefit structure.

[1] Animal Puzzle - http://itunes.apple.com/us/app/kids-animal-puzzle/id54051213...

[2] ToddlerTube - http://news.ycombinator.com/item?id=4504690

I released a free game [1] recently which had been performing rather poorly with IAP. But in a recent release, I reduced the amount of free gameplay and allowed users to use (and spend) more than one hint per level (and of course I sell hint packs). Since then it's been doing much better.

If you don't mind unsolicited advice (and I've only seen your screenshots):

a. How about releasing a paid version of your app with everything enabled but no IAP? If nothing else, you'll come up in the new releases chart again.

b. I'm not sure what your in-app store looks like, but in my game I sell a 'combo' pack which includes two regular packs and 10 hints, all available separately, for a discounted price. I call it a 'combo super-saver' and even put a yellow star in front of it to draw the eye. It is the biggest selling SKU by far. Can you try something like that?

[1] https://itunes.apple.com/app/alphabet-connection-logic/id560...

I really enjoyed Matt Rix's write up about his success with Trainyard, a hot game from two years ago.

"It’s like winning a lottery, but a lottery where you work really really hard to buy your ticket."

For reference: http://struct.ca/2010/the-story-so-far/

This story is more about personal stupidity. They buy a ton of new Apple products then lie to themselves saying it's for "business". It shouldn't be news that most devs dont make much on AppStore apps. $5,000 isn't bad from indie apps. Honestly, I doubt even large corporations spend $200,000 to create an iPhone app.

Is this not perhaps a function of the Apple culture's obsession with "feel" and also the app store review system.

There might be a fear (rational or not) that not testing a particular device could lead to 1 star reviews due to it not "feeling right".

> Honestly, I doubt even large corporations spend $200,000 to create an iPhone app.

I just don't understand how you manage it. I develop apps for large corporations, and you're right: most of them aren't spending $200k - and the ones that are spending $200k are getting serious software and a full team (designers, PMs, developers, testers, etc).

Although the story is a little unclear: it talks about $200k in "lost income and savings", which is a little different to putting money up front.

Their apps just don't look that good. Spooky headlamp?

http://www.campfireapps.com/

https://itunes.apple.com/us/app/henrys-spooky-headlamp/id469...

That's what I was thinking. Clicking around a few more of their apps, I noticed a self review on Patriot Dash from the husband in the article:

"I'm very proud of these high school students and their hard work. I can't wait to see what else they do."

Did the wife need to quit her job in order to help develop these games? They look fairly simple. Why didn't the husband keep doing contract work on the side the whole time? Was their any real thought into a business plan? Games are a tough, hit driven market. Kids games can be even harder because of competition with well known names and characters from the likes of Disney, Lego, etc...

I noticed a mini-golf game on the web site. I'm typically a sucker for those types of games, but when I opened it realized it's only a score keeper! Sigh.

The app store gold rush is over, but the article confused the gold rush ending with too many poor business decisions.

I see this as a great opportunity for developers from countries like India (where I'm from) . Though the barriers to entry are a bit high , they can easily sustain themselves compared to their western counterparts if they're good enough.

I don't think you are going to have a good quality of life on $200/year even in India.

The article doesn't detail their planning, goals, etc...but it seems to me like they went all in without a solid plan. Just hoping to get rich. And it didn't happen.

This is why like in most lines of business, the best technique is to reach a "sale" (or at least a lead) as soon as possible and then fill in the blanks. Spending ages perfecting something you "want" to build and then trying to find a market for it is incredibly risky whether it's an app or a startup. Perhaps build a quick prototype, build up demand, find buyers, then build the app.

Is free-to-play with in-app upgrades now the favored model for games?

Yes. See League of Legends and Team fortress 2 on PC and all the top grossing games on iOS and android. Developers follow the money.

For the alternative viewpoint, see "Amid Slumping Revenue, Punch Quest Switches To A Paid Game" over at Touch Arcade: http://toucharcade.com/2012/11/14/amid-slumping-revenue-punc...

Yes, I wonder if the differentiation between Punch Quest's tepid profit and between TF2 and other successful in-app-purchase games is that Punch Quest is a single-player game with very little social action. It's certainly a high quality game, one of the most polished endless-runner type games I've ever played. But since the game is enjoyable without all the purchasable perks...and because I have no one to brag to/compete with...I don't have much incentive to buy anything. In a sad way, PQ's competence and good faith is the cause of their troubles.

TF2 is surprisingly making a lot of money for its age and niche community (I call it niche because it's tight-dependence towards teamwork makes it unforgiving to newbies who'll get booted)...I don't understand why people buy the hats, but I do think there's an advantage to picking up the special weapons.

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