The long term sustainability of your Mobile App

A new app was making the rounds on Product Hunt the other day. LetterSpace.

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It’s basically a take on Simple Note, with Markdown mixed in…. nothing special… few extra features here or there, nice animations, nice sounds (taking a page out of “clear’s” playbook)… but that’s the point… For a category like “quick and easy text input/export” where app’s MOSTLY end up using iCloud’s (or dropbox’s) sync architecture, and essentially all have similar to exact copies of the same front end UI/UX…

… Essentially what you come to is what we have here with LetterSpace… the essential logical conclusion of a category, with an app that is a summation of (many) similar apps before it.

And boy, are there similar apps before it… You have things like SimpleNote, the original:

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Then you have NEW apps which have essentially the exact same core feature set… but with a “slightly” different UI/UX

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And then you have some of the “core”, simple “text editors”, less about note taking, and more about editing plain text files, like iA Writer, Byword… there are probably another half a dozen I’m not mentioning… These are not exact copies, as these are meant for more long form, article length writing…. but at the end of the day, it’s all just Markdown…

Screen Shot 2015-02-01 at 12.15.51 PM Screen Shot 2015-02-01 at 12.15.57 PMFor comparison, this is what LetterSpace looks like full screen… let’s play “spot the difference”…

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And with a Mac App, iPad app and iPhone app already, and by using iCloud architecture from the get-go, LetterSpace even is on more devices than the infamous “Vesper” from John Gruber and Daring Fireball… Although granted, Vesper DOES allow photo capture, while LetterSpace does not… But at the same time, LetterSpace has a much simpler way to add #hashtags, and features to add @people mentions…

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But lets get to the point… The point is, this app is different than all of the others (except SimpleNote) in that it’s FREE… It’s FREE, FREE, FREE, FREE…. You get the idea…

This is complete commoditization of the core functionality of your application… The thing which you, as a developer, have spent months and months building and hours upon hours coding, is not what a customer is going to pay for…

Instead, how LetterSpace makes it’s money, is by allowing you to change the color of the theme… Like… literally, a trivial thing to code…

And this is now a perfect illustration of App store economics and game theory. It also is why the App store is really about business models and marketing strategy… Yes, let’s assume that there are MULTIPLE really good products… perhaps even equal in their usability or with significant overlap in terms of quality on comparison…

… But if one is free, and the others are not, massive, massive, outsized sales goes to the app which is free, which is then monetized by essentially – to a developer – would be a complete mis-match between what people are actually paying for, versus the actual effort put into the application itself.

We already have developers complaining that they can’t make money with a well crafted product/application… To which the reply really ought to be, seriously?? The app store is a “dog eat dog” world… You can just watch the Darwinian evolution occurring, and what comes out on top has absolutely little regard for how much EFFORT you put into your app, but what MATTERS to the people USING your app. At this point, business concepts, business models and monetization strategy matter just as much as building something…

So if there should be a take away, it really needs to be that:

#1 – Building a good product is not enough. If you are charging money for your product upfront (and depending on the category of course) you are leaving room for someone else to come in under you and cut you out… the easier the category, the more likely it will happen.

#2 – Prices MUST tend towards free… Monetization on the core functionality on your app as the method of value capture is a luxury… still available in some categories, but NOT available in categories with (close to) perfect competition and no sustainable advantage

#3 – Counter-Intuitive to many developers, monetization itself, may be on something which has absolutely nothing to do with effort or difficulty… In perfect (or close to) market competition, prices are set by what the USER values and by the available COMPETITION… whether something took you 1 week or 1 month or 1 year to build, it doesn’t matter, unless it’s creating real, unique and differentiated value.

#4 – Fourth, if you can actually create real, unique, differentiated value (Eg. Marco and Overcast) along some dimension which at least one group of (hopefully large) customers/users will value, you can work towards building a business with at least SOME semblance of defensibility… But if you have none of those things, don’t cry about why you can’t make money with the “nice” looking app which costs money, when there are free alternatives out there.

Market fundamentals are a completely different ball game with iOS apps, that tend to follow very tried and true business principles. If you can’t beat them, join them.

 

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