Chapter 1. You Have an App Idea...Now What?

If you somehow escaped the runaway success of the iPhone, iPad, apps, and Apple’s App Store, you probably wouldn’t be reading this book. It’s likely that a family member, friend, colleague, some random person on the street, or Apple itself got to you. As a result, you’ve learned about people leaving their day jobs to pursue their dreams in Steve Jobs’ App Store. You’ve seen—or rather heard—sophisticated apps such as the infamous iFart. You may even be talking about mobile and apps at work just as people did 10 years or so ago with the Web.

On that point, it’s been suggested that mobile is the new Web. What is meant by such a statement in the context of the current mobile market is that mobile apps are the new Web. That is, apps—these small pieces of software that run on mobile devices—represent the next opportunity to fundamentally shift the way business and society use technology. This is perhaps a brash perspective for an upstart like the App Store, which is less than three years old. And yet, research shows that the iPhone has grown faster than other market-disrupting launches. For example, the iPhone and iPod touch subscriber base is already eight times larger than AOL’s was two years after its launch.[2]

If that seems absurd, that’s because it is. Since July 2008, when Apple opened its App Store—the marketplace where consumers can browse and install free or paid iPhone and iPad apps—the number of apps has grown so drastically that it’s not even worth trying to keep track anymore. In about a year, the App Store went from fewer than 1,000 apps to about 50,000. In July 2010, the App Store’s two-year anniversary, there were more than 200,000 apps that were downloaded more than 5 billion times in total.

Apple’s “There’s an app for that” marketing campaign has arguably been as successful as the company’s idea for an App Store. Unlike with most marketing campaigns, however, Apple’s campaign statement is somewhat true. There really does seem to be an app for almost everything, and that’s where the trouble begins.

The “New” App Store

Not only is there a metric ton of apps in the App Store today, but everyone seems to have an idea for a new one. As in the dot-com era, the success stories and accessibility of the medium have enticed would-be entrepreneurs to think, “Why not me?”

In fact, it didn’t take much effort to put some nice cash in your pocket when the App Store first opened. Earning a royalty check from Apple wasn’t as simple as sneezing, but most of the apps that people bought then aren’t even being downloaded for free now. At the launch, it was a simple case of supply and demand, with a relatively small number of diverse enough apps available compared to the large number of people who were intrigued by the newness of iPhone apps.

Circumstances are different today. The App Store is a highly competitive marketplace consisting of a delicately balanced interplay among Apple, developers (those who build the apps), and consumers (those who download the apps). Whereas Apple absolutely relied on a small, select group of developers to help populate the App Store when it launched, that’s no longer the case. Estimates put the developer count at over 50,000, with Apple reviewing more than 15,000 new apps per week.

Looking at the Numbers

Within the context of the new App Store ecosystem, anecdotal evidence as well as actual analysis confirms that a get-rich-quick mentality to developing apps can be emotionally devastating and financially costly. It’s true that the top developers do extremely well, with the most popular apps with the broadest appeal—typically games—such as Angry Birds and Doodle Jump yielding 4 million and 5 million downloads, respectively. Given the $0.99-per-download cost and the focus on these colossal hits, it is easy to look at the App Store and see nothing but dollar signs.

These tremendously popular hits, however, skew the realities of the more typical App Store application. The analysis that is available is fairly striking, and reveals that half of all paid applications receive fewer than 1,000 downloads and, after Apple’s cut, earn just less than $700 per application per year. Those numbers may even be optimistic, because the downloads for the very top applications—such as Angry Birds and Doodle Jump—are so much larger when compared to most apps.[3]

Does that mean that if you are new to apps or building software in general, you should give up now? Not necessarily, but I do want to give you a reality check: recognize that with the current environment of the App Store, there are few who venture into it and launch an extremely popular app the first time around. That does not mean it’s impossible for that to happen, but many successful iPhone developers create at least one app before building one that achieves their goals. Part of the value in pursuing your first app, in particular, will be the experience and process of building the app itself. Even with the head start you are getting from this book, the knowledge and experience of others cannot substitute for your own.

This reality check may be troubling to you, but my advice is to think broader than an app. Build something that has value to you beyond just the app. Successful developers usually decide from the outset of entering the App Store that they will be committed to it over a period of time, viewing app development as an investment opportunity and not a lottery ticket.

The more experience you gain and the more time you spend in the App Store, the smarter you will be at identifying the right opportunities. By approaching the App Store as an investment, you’ll cultivate important relationships with peers, customers, and the media, as well as create development and design assets that can be reused for other applications. In conjunction with the reality of the App Store’s economics and the collective wisdom in this book, these relationships and assets are going to provide you a considerable advantage over those wandering into the App Store. Unlike others, you will not approach the App Store emotionally charged and with visions of grandeur about the viability of your idea. Instead, you will, as objectively as possible, assess the opportunity for your app and figure out if you should invest your time, money, and effort into it.

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