Creating a Iphone Application

[sixslow]

Hi Everyone,
I'm going to be paying for a iPhone application to be created and marketed.... As some of you may know this can be very costly... Going to cost me all of my funds available at the moment but, a chance at the fastlane is worth it. Do any of you have any suggestions when it comes to iphone applications? Or if it's a good idea to use all my finances on this right now?

 

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[Inphinity]

What sort of suggestions are you after? And it's a good idea if you have a plan to follow, have done your research, are aware of the possible outcomes, and are committed to executing it well.

Is there a need/demand for the type of app you're going to make?
What will you do better or different than similar apps?
If you're paying someone else to make and market the app... are you sure your plan involves you being the driver?

 

[sixslow]

What sort of suggestions are you after? And it's a good idea if you have a plan to follow, have done your research, are aware of the possible outcomes, and are committed to executing it well.

Is there a need/demand for the type of app you're going to make?
What will you do better or different than similar apps?
If you're paying someone else to make and market the app... are you sure your plan involves you being the driver?

Exactly... I'm not exactly sure at all! I just know I want to do something and needed to get the wheels turning headed toward something. Where i'm at now is:

I have a application developer I just talked into creating a app for me in return for 50% of the revenue and I do all the marketing.

The application is going to be a dating app, there is a wide range of them but the market is worth over 500 million so i'm going to go for it (I'm doing market research right now).

How can I make sure my plan keeps me being the driver and him not taking over after we start this?

Thanks for any and all advice.

 

[sixslow]

Now I officially have a marketing guy helping me with this too.

 

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[Inphinity]

How can I make sure my plan keeps me being the driver and him not taking over after we start this?

Ensure all agreements and contracts are structured such that, regardless of revenue share, control and ownership stays with you. I would imagine you have or will be forming some sort of company entity to own and control, and you in turn would be the controlling (or only) shareholder in said company.

 

[Likwid24]

Ensure all agreements and contracts are structured such that, regardless of revenue share, control and ownership stays with you. I would imagine you have or will be forming some sort of company entity to own and control, and you in turn would be the controlling (or only) shareholder in said company.

I Agree. Do Not do anything without signed contracts and if you are making money off of it you will need to form a Corporation or LLC. Your going to need a Tax ID # and an accountant. And don't just think about splitting 50% of the revenues. You should be splitting 50% of the profit. There will probably be some sort of advertising fees or whatever else comes along with creating an APP and don't forget taxes. You don't want to be stuck giving him half then paying expenses on your own. Also make sure you do your homework and lots of it before you sink all your money into it. Don't just create an APP to create an APP. Make sure there's a need for it.

 

[sixslow]

...

Basically what it comes down to is :

Make sure he knows I ment PROFIT share not revenue
Form a corporation to get tax id #

all advertising fees are being paid by me since he is making the app for free basically.

 

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[Inphinity]

Make sure he knows I ment PROFIT share not revenue

Yup. I cannot stress how important this is. here's a quick round-figures example.

You sell the product for $5.
You sell 1000 of them.
It costs you $2000 in marketing and other costs to sell this many products.

Revenue = 1000 x $5 = $5000
So your partner gets $2500, leaving you with $2500
Costs = $2000
So you wind up with $500. He gets 5 times what you do, coz you got stuck paying all the costs associated with selling the product. Even though it's your baby. Sucks eh?

 

[sixslow]

Isin't that fair though inphinity because hes making the app for just 50% of the profit/revenue and in return my job was to pay... basically him not getting paid till im in the clear is what you are saying fair? is that true?

 

[healthstatus]

I have had success with this in 2 different ways, one giving a fixed cost to the developer/partner for every unit sold. OR split the revenue 3 ways instead of 2, the developer gets 1/3, you get 1/3 and then marketing and other efforts are paid from the other 1/3.

 

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[MCD]

split the revenue 3 ways instead of 2, the developer gets 1/3, you get 1/3 and then marketing and other efforts are paid from the other 1/3.

So you would recommend this over paying a one time up front fee? Also on a side note does anyone know how to keep developers from running off with your idea and doing it them selves?

 

[kurtyordy]

Isin't that fair though inphinity because hes making the app for just 50% of the profit/revenue and in return my job was to pay... basically him not getting paid till im in the clear is what you are saying fair? is that true?

so lets say this sells $10 million in profit, is it worth $5 million to you to save $20,000 or whatever the app programming cost is?

better structure if you do not want to lay out cash now- if app costs 20k for example, income is split 50/50 until he recoups his 20k, then he gets 5% for life or something like that.

 

[sixslow]

Kurty: That deal sounds great but it's very hard pitching that to someone! I called a lot of people to get this deal and im a salesman by nature and only got TWO people out of like 100 to do 50/50. If I put restraints on it, I don't think any of them will go for it.

MCD: The Non Disclosure Statement is how to keep them from running off with your idea. Also if you're paying them you can probably find someone local and you can find out where they are and meet with them in person and have them sign it which is much safer.

 

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[sixslow]

Anyways guys I am having him start on the application today( He was going to wait till we get our marketing strategy ready, because he feels like hes apart of the ownership now and wants a clear vision to go to instead of being a developer and just doing what hes told).Then we are going to meet up next week and go over the NDA, Profit/Revenue Share & also all the functions I'm going to need and timeframe I want everything done in.

 

[healthstatus]

So you would recommend this over paying a one time up front fee? Also on a side note does anyone know how to keep developers from running off with your idea and doing it them selves?

I would never recommend that. If you have the cash pay for it and own it. Then you have lots more options without having to get permission...

If you hire from Elance, Odesk or similar, developers will not do this as they will get a negative feedback score and comments from you and that will toast their ability to ever get another gig on that site. Programmers like to program, they don't like to market, or SEO or any of that, they code.

 

[sixslow]

I would never recommend that. If you have the cash pay for it and own it. Then you have lots more options without having to get permission...

If you hire from Elance, Odesk or similar, developers will not do this as they will get a negative feedback score and comments from you and that will toast their ability to ever get another gig on that site. Programmers like to program, they don't like to market, or SEO or any of that, they code.

Love it!! Also people are not entrepreneurs / leaders by nature... When it comes down to it a lot of people like working for other people. You might even be one of those people... You never know until you actually go ahead and work on something! I didn't know till I got into real estate and built a team.

 

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[tekcraze]

Having developed some iPhone apps myself, I have a bit of perspective for you and others that may be reading along.

Just because it's on the app store does not mean it will sell. sixslow, since you mention marketing I think you have this figured out but I worry about other people who might sink money into an app and not realize this beforehand.

The biggest thing that scares me about app development is CONTROL...
This is huge- Owning the rights to an app doesn't guarantee anything at all. Apple could at any time make changes to their licensing agreement, revenue model, or shut down the entire iOS platform any time they feel they want to move in a different direction.

Based on that, I personally am very hesitant in sinking any significant money into this business on the fact that the future is completely out of your control.

I hate to be the bearer of bad news, but this business is a huge gamble of your money... some people have done well, but being late in the game the market is quite saturated and it is hard to get in.

Lastly, a non disclosure agreement is good in theory, but the chances of actually enforcing it overseas or even locally is slim to none as you would need both large amounts of time and money... both are not in your favour as a startup independent developer. Healthstatus is right on about the feedback/ratings being more important.

 

[werbl]

I listened to a Mixergy interview a few months back with these two guys who run an iPhone app company. They're both in their late teens and have no programming experience. What they do is look at paid apps that are selling well, replicate the idea (with enough variation of course), then offer it for free in the app store with all of their revenue coming from ads. They find their programmers on Elance and I think they said they paid between $1,000 and $8,000 per app from start to finish. At the time of the interview, they had something like eight or nine apps available, bringing in about $80,000 total profit per month!

I just checked out the site, their names are Quoc Bui and Michael Moon. Check it out!