How many App users do you need to Be successful?

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I get this question all the time:

“Hey Armando… We’re coming to the point in development of our new app startup and we have no idea how many users we need to be successful. Can you help?”

Building a web or mobile application can be time and cost expensive and it is not developed from the ground up with the user’s experience, engagement and retention in mind, your app can be among the 78 percent of apps users never return to after registering.

Before you can know how many users you need to be successful, you need to figure out other things as well.

 

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The amount of users you need to be successful depends on many things, such as pricing model used, niche targeted and market competition.

Many companies come to us and want to provide it for free, they hear of success stories such as Angry Birds, SnapChat and Candy Crush and think that they can succeed with the same model.

Providing your application for free can be risky, as free apps have little value in the eyes of the user, but you can increase usage by providing a free trial period.

People are cautious about cheap or free products. The free model rarely works for those without huge marketing and development budgets, and have money to burn initially. For example, when YouTube was started, they offered the service at no cost and free of advertising all the while running up a 15 million dollar a month hosting and development debt. YouTube was able to be successful due to high user engagement and high user return rate, which they parlayed into a sale to Google.

Even Snapchat, a 100% free app was purchased for an unbelievable $3 billion-dollars by Facebook because of its incredible user engagement numbers (currently over 400 million photos shared per day).

A user simply wants to improve his or her situation, whatever that may be. Your app should improve it. YouTube allowed users to improve their current situation by making video searches for efficient, Snapchat allowed users to transfer pictures securely and privately. This is how you draw and retain users.

There are 3 major modern app pricing strategy models and each one determines the engagement and amount of users you need to be successful.

Freemium – Freemium is a pricing strategy by an app is provided free of charge, but money (premium) is charged for proprietary features, functionality, or virtual goods. This app works well with games and business applications that house historical or important information. Using this model, downloads must be high because under several studies, 97% of users will NEVER pay you a dime, so in order to make a profit you have to get many users signed up and engagement has to be very high.

For example:

If you have 1000 users and you get a 2-3% conversation and your pricing is $19.99, you will be making roughly $600 per month, which would not be enough to cover hosting, data fees and support. Even at 25,000 highly engaged users you would struggle. The burden to get new users is high in this model and requires a substantial advertising budget.

Remember, when you hook someone with “free” it becomes almost impossible to charge them for access later on, this is why the conversion rate is so low.

Candy Crush Saga, a Freemium game, generates almost $1,000,000 per day because of its high engagement and user bade.

Free (Advertising supported) – Again, this pricing strategy requires high amounts of users, even more than the Freemium model. According to a major company that provides in app advertising analytics, Android developers received an average $101.76 per 1,000 users. There is a myth that ads bring millions for developers, but the truth is that they don’t bring in as much money as is generally thought.
This has led to developers using tricks such as the very annoying popup ads or placing fundamental UI buttons near ads, so that users accidentally click the ad.

SaaS (Software as a Service) – SaaS is a way of delivering applications as a service instead of a product. Instead of installing and maintaining software, you simply access it via an app and it is paid monthly, quarterly or yearly.
SaaS requires the least amount of users, even less if you service a niche industry or group such as “Air conditioner repairmen”. Engagement is irrelevant to your pricing, as your user base will likely pay for your app for one main feature such as inventory tracking or GPS tracking.
If you can, SaaS is the best pricing model because it provides reoccurring revenue and the burden for user signups and engagement is much lower.

 

With the proper app implementation and marketing strategy, an app can succeed with any of these models.
Before begging any app project, be sure to know how many users you need to signup, pay and engage to be successful, this affects app development such as UI and infrastructure from the ground up.

Download my eBook, like this page on Facebook, re-tweet this article, or link to me from your site. Please note that I get about 20 emails a day from people asking for advice on apps, so if I don’t get back to you immediately, please accept my apologies.

Does App Design Matter?

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The user experience is something that you need to have at the top of your list in all aspects of your app development.

You are competing in an increasingly active market place and you have just a few seconds to grab people’s attention and just a few more seconds to keep it.

Design can make or break an app, plain and simple, so don’t skimp on this. You need a great icon, splash screens, tab icons, and dozens of other assets that need to be tied together.

Without a good user interface and functionality, your app will fail. These elements need to work together seamlessly. If there is a cumbersome aspect in any area, the overall app will be affected.

Begin at the beginning and sketch out the design. You can also use the design wireframe for iphone. This guides you through the potential and different views from the root view to the navigation view. Think about the end user and what he or she will see or want to see.

Whether you sketch it out on paper or with the wireframe design tool, think about the natural flow of the app and draw the map of this navigation. If you are having someone else create the app, this process is extremely valuable because it allows you to guide the process.

If you are doing your own programming, don’t skip steps thinking that because you are doing it yourself you will remember all these steps and features in the process of creating the app.

Speaking of the user experience, do not cut corners on the appearance of the app. Studies have shown the power of color in attracting buyers. Just because deep purple might be your favorite color, that does not mean that it is a good choice for attracting app users who are browsing the app store.

Marketplace and SEO for App Sales

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You can have the perfect app created and developed with ultimate precision but if no one knows about it, no one will buy it. You need to get your word out there in front of people. There are two routes to take and you need to take both of them. One is the search engines and the other is the marketplaces.

Search Engines

The old methods of search engine optimization (SEO) have been criticized as being part of a marketing method that can be construed as too artificial. The big quest for the past few years has been to find a way to get the word out in a consistent and authentic manner.

The new approach involves a steady stream of your personality and brand in a realistic and down to earth manner. Your web site for instance should be thorough and informative and easy to navigate. And yet, it should not be too slick.

And it has to be search engine friendly. Even if the focus on SEO has changed, you need to have some familiarity with it. The fact is that the more your app’s name appears online, the easier it will be to find.

You need to have a functioning website that you keep up to date. If your app is floating around a marketplace and someone stumbles on it and wants to know more about it, and they go to your website and see that it is not working well or has lapsed, they will quickly lose interest in knowing anything about your app or you.

As well as your own website, get out there and spread the word. Get to know the top tech blogs and if they are willing to feature you or a guest post from you, then grab that opportunity.

If they won’t interview you or don’t accept guest posts, see if you can advertise on that site.

Use social media to get your web site and brand out there. It is best to take a couple of social media outlets and really work at keeping the information moving rather than sign up for dozens of the hundreds of social media sites and become overwhelmed.

I mentioned that my app was slow to start selling but the momentum picked up and then I was offered a satisfactory buy out for the whole idea.

Outsourcing works here too. If you are not into marketing yourself, you might want to hire someone to write posts and articles for you. You need to build a buzz about your app.

Have a plan in place and begin the buzz even before you publish your app. Find the sites where your target audience hang out and get your app in front of them with articles, posts, and interviews.

It takes seven sighting of a product before people remember it. Think of your ideal consumer and think of how to get your app in front of this person at least seven times.

Marketplaces

The big app marketplaces are iTunes and Google Play. These are the big names but not the only names. However, the same rules apply. If you want your app to stand out in the marketplace, you need to apply some thought to it.

Here are some startling bits of information for you. Even in the big app stores such as those mentioned in the last paragraph, sixty percent of them never get downloaded. Yes, that is correct. More than half the apps in these gigantic marketplaces never get downloaded.

Two out of three apps get less than a thousand downloads a year. This brings me to something that you need to consider. The old saying is that Rome was not built in a day. So don’t think about your app as a get rich quick scheme.

You can easily publish your apps to such marketplaces. Start doing the research now so you get the feel for what these marketplaces consider applicable apps. For instance, Google Play limits the size of an app to 50 mb. You also need to know if your app will be free or priced. If it is priced, you can change it to free but then you cannot change it back to priced.

If your app starts out as free, you cannot change it to priced. However, you can create priced in-app products or subscriptions. It is best to know this before you create an app that is not suitable. In other words, do your homework on all levels.

App Branding – Brand your iPhone/Android App

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Microsoft Windows 8.1 is a product because it meets a need. Because it is offers tangible goods as well as services, Microsoft Windows 8.1 has several components – it has a core product, an actual product, and an augmented product.

The core product is the operating system that is essential for running a computer. The actual product is the brand name (Microsoft) and the features that are particular to Windows 8.1 (for instance, its stability and ability to host a variety of popular and necessary software products.

The augmented aspect involves the type of support offered by Microsoft such as the frequent updates and the way that Windows 8.1 automatically updates itself so that it is not a burden to the owner who has to keep track of necessary updates.

A brand is a symbol, name, term, or design or some combination thereof that identifies that product uniquely and its value for both marketer and buyer is that it acts like kind of a shorthand of recognition.

An example is the Nike symbol. For the marketer, if a new product is introduced, branding makes introducing it to the public so much easier. Consider what it would mean for Nike to come out with a radically different type of footwear – the Nike symbol on it would give it instant recognition and credibility. This makes it much easier for the marketer to bring new products to market.

From the consumer perspective, it allows for faster decision making because they will already be familiar with the quality and service that the branding promises.

Brand equity is important for the seller because it is the measure of the impact that the brand actually has on the consumer. Brand equity is that quality that makes the consumer willing to pay more for the product just because of the perceived worth of the brand.

It differs from brand value in that brand value is actually the measurable aspect of the brand’s equity. If slapping a famous and well recognized brand on an item raises the price that a consumer is willing to pay for it, then that extra price they are willing to pay is brand value.

The Martha Stewart line of household goods are worth more than the same sheets, for example, would be worth if they were no name sheets but otherwise identical. This is brand value created by the brand equity of Stewart’s name.

The three levels of brand positioning are product attributes, benefits, and beliefs and values. For instance, in looking at “The few. The proud. The Marines” you can see a top level of brand positioning where this slogan that identifies the Marines appeal to a set of beliefs and values where the slogan triggers the notion that the Marines are special.

Think of the phrase, “many are called but few are chosen” and “the few” resonates of that specialness in being a Marine. It appeals with “The proud” which offers a nationalistic sense of American values and beliefs.

Branding is how you stand out from the crowd.

Why you need to brand

  • You want to be the leader in your field

How to brand

  • Simple but ongoing steps to market yourself

Branding and Social Media

  • What social media to join and how to act in those groups

Building branding momentum

  • Spreading the word about your app

Protect Your App – Legality and Code Protection

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Think about Open Source applications and software. This is software that is, well, open source. The developers share it with everyone. This helps promote the notion that all software is free for anyone to use.

It isn’t.You put your brain power and your expertise into creating your app. Perhaps you paid someone to create it for you. In that case, you put your money into creating your app.

It is your creation and your property. You need to make sure that people know this. One of the simplest ways is to copyright your software and include a copyright announcement on your app.

Protecting Your Investment: Code Protection

There is that fantasy that you can protect your code in clever ways such as using API calls in creative ways. The reality is that once you release your app, the idea is out there. Another software genius can reverse engineer it and discover what makes it tick.

It can even call for less of an effort. Your app can kick off an idea for a very similar app that someone can create simply by thinking of ways to make something just like it.

This brings you right back to the importance of registering your ownership of this idea. If you have registered your ownership, that is, copyrighted your work, you have the full force of the legal system behind you.

Sure someone can still steal your idea and your code but you can take them to court. The threat of being punished monetarily for stealing someone’s app creation is usually enough to scare off potential app thieves.

I’m talking about the big thieves who will steal your idea and try to make it their own. Be prepared with copyrighted apps so you can stop them legally. There are the other thieves of the smaller variety.

Protecting My Code

These are the people who provide cracked versions of your very own app. After a couple of years, I noticed that Keyprowler was showing up on Torrent and Warez sites - for free along with the key.

At first, I was scared I would lose sales. I worked hours and hours trying to stop this thievery but no matter how much I tried the software kept getting cracked.

Then I had an epiphany, which every app developer needs to keep in mind….anyone willing to spend hours cracking your software is not a customer. This means that the best solution is that if you have limited resources just disregard these Warez and Torrent crooks.

Sure put it basic safeguards but do not put in ridiculous schemes and registration procedures that could scare off real customers. Basic user keys is enough. Anyone that will buy your software is going to do it the right way, anyone that would steal it would never purchase it anyway.

The Elements of Designing Your Application

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As well as time in choosing the app, you will need time to program the app, develop a good user interface and develop the functionality. These elements need to work together. If there is a cumbersome aspect in any area, the overall app will be affected.

Begin at the beginning and sketch out the design. You can also use the design wireframe for iphone. This guides you through the potential and different views from the root view to the navigation view. Think about the end user and what he or she will see or want to see.

Whether you sketch it out on paper or with the wireframe design tool, think about the natural flow of the app and draw the map of this navigation. If you are having someone else create the app, this process is extremely valuable because it allows you to guide the process.

If you are doing your own programming, don’t skip steps thinking that because you are doing it yourself you will remember all these steps and features in the process of creating the app.

Examine templates and even other apps to get ideas and see how the flow works. End users are used to a good functionality and if you try to be too creative and go too far from the navigation that they expect, your app might suffer because it does not respond to the expectations of the end user.

How to Market an App (iPhone and Android)

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In the summer of 2007, I was working on Keyprowler and people kept telling me I was wasting my time. I was told constantly by my friend’s and relatives I was off base with this idea.

Also listen to what they say when you reveal your idea to them. Their criticisms might be valid and your second hurdle, after coming up with the idea, is measuring your idea against what the naysayers tell you.

Every time I mentioned what I was doing, they said, “oh, they already have that.” Or “you are too late, no one will buy it.” But what they forget is that the marketplace for any given application always has unserved or underserved positions.

For example, when Starbucks was created, people probably said, “oh, there is coffee in every gas station. In fact people give it away.” But what they forgot is that there are many positions in the marketplace. (Remember this - there are many positions in the marketplace.) At that point in time there was no branded premium coffee. This mean that the coffee market was underserved.

The entire reason Facebook is successful is that they took the MySpace business model and figured out what caused problems with the userbase. They discovered that slow loading pages, no privacy whatsoever, and too much page customization were the big problems.

Facebook created an application that addressed these issues and before MySpace could respond, Facebook had taken over the marketplace .

In a given app marketplace there are several openings that an app developer could take advantage of. These are the leading ones.

Price. The price is too low or too high. Software is one of the few industries where people EXPECT to pay more for good software. Think Premium vs. Discount. Think Starbucks vs. McDonalds coffee

Ease of use. Some apps are bloated from years of adding features on top of features. Many users want a simpler, straight forward approach. This is one tactic that Apple has used for users, starting with the first iPod. Think Tinder as opposed to Match.com.

Niche marketplaces. Some users want an already existing app geared toward their lifestyle, and industry. Think Grindr, a dating app for homosexual and bisexuals.

After months and months of research, I began to develop Keyprower to serve the mid range ($29.99) ease of use market which I felt was underserved. There were dozens of similar applications from $9.99 to $199.99, what they all had in common was the difficulty of use and too many features.

Technology Research

When you are researching ideas, do not overlook the cutting edge in technology. Check out the news reports, technology blogs, and even the academic journals on the latest in technology research.

In the rapid-paced world of emerging technologies, there is always something new and it can be in any field from nanotechnology on up. The range of possibilities is unlimited. Even new technology in diet and exercise can be useful in feeding your app research.

I mention this so that you don’t get caught up in thinking about the technology available for creating your app and extend your thinking to the possibilities in the types of apps that will be needed as new technology emerges.

 

Judging the Market

Ideally when you began thinking about your app, you had the typical buyer in mind. You could see that person and how he or she would use the app. You should think about this person and the segment of society to which this person belongs.

If you are thinking of a man in his early twenties, you need to start breaking down that segment into a smaller segment. Market segmentation is useful because it breaks the large groups into smaller groups which allows you to focus more specifically the distinct needs, characteristics, and behavior.

The better you understand their needs, the easier it is to reach the people in this group. People respond according to their buying habits and how they plan to use the product or a service.

Why do they want the app? To make their lives more efficient? To make their lives more fun? To help them break a habit?

The four primary segmentation variables are:

u  Geographic

u  Demographic

u  Psychographic

u  Behavioral

Where are you selling your app? Who in that geographical area will want to buy it? What kind of people are they? What do they do for fun and work?

Here are some ways to look at these potential segments. These five questions help you narrow your target market.

Measurability

Can you measure the number of people in this area with purchasing power and interest in your app?

Accessibility

Can you reach the people who would be interested in your app with your advertising campaign? Suppose they are students who do not listen to radio, watch television, or read newspapers? How will you reach them?

Substantial

Are there enough people in this area who would want to use your app?

Differentiable

In this market segment, can you separate out the people who would be interested in your app?

Actionable

Is it possible to deliver the app to meet the demand? Actually with an app, the strictures that are on a tangible product are not a problem. If you have a good delivery system with no downtown, you’re good to go.

Outsourcing App Development

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Whether you hire a company or outsource your work overseas, you need to be aware that there are pitfalls. Of course, the cost of hiring someone do to your work is often an obstacle.

People think that the solution to this is to hire someone from a country where people work for very little money. Well, sometimes this works and sometimes it doesn’t. You are working with people from a different culture and it is possible that your communication may not be the best.

Sometimes their skill levels are not up to par. If you are working with someone you cannot deal with face-to-face, you run the risk of hiring someone who really does not have the expertise you need.

If you ask around for references you can mitigate this somewhat. Then you run into the next potential problem. The person might be overwhelmed with work and take too long to finish your job.

You have to be cautious in finding the sweet spot between the cost and the expertise and the time involved.