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GOLD! How I lean startup’d my way to $240k+ on the saturated App Store

Discussion in 'Business Models, Niches, Industries' started by Rcaraway1989, May 22, 2017.

  1. Rcaraway1989
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    This is a long needed followup to this post. Some of y'all have been pinging me about this, so HERE WE GO.

    I cofounded a social app startup at age 22. Because I was gonna change the world, DUH.

    If you could believe it, our private social networking app, our BABY, never found product market fit.

    [​IMG]

    Our strategy was basically “Let’s brainstorm ideas and ship massive features. If we believe hard enough, maybe people will want them”.

    Yeaaaahhh, NOPE. That failed. Should've believed harder.

    In attempt to salvage our trainwreck, I absorbed everything I could on Lean Startups. But everyone gave me heat for "shipping junk" and I hated my life.

    Two years, zero sales, no friends outside of work, and countless failed iterations and pivots later, we ran out of funding.

    Once I was free, I was happy-ish. "Wait, I no longer have any decision overhead. Let's try this lean startup thing FOR SERIOUS."

    ...

    You ever have moments where you try a new skill thinking you'll be good because you've read everything about that skill ever published but then you realize you still suck?

    Yeah. That happened.

    I wanted some authentic "validation" that the next app I made had customers! No made up problems or ideas.

    My friend told me she was looking for a way to manage her passwords. That's validation right?

    And so I rode those goodfeels of false validation for five months.

    Five months of building immaculate features, ambitious designs, a pretty website to convert web users, and a made up funnels all the way to my awesome subscription payment.

    And it flopped.

    [​IMG]

    We lived a poverty lifestyle so my over-engineered app and website could have negligible downloads. My (ex) girlfriend had 90% lost faith in me.

    We had to borrow money to afford a life-saving surgery for my poor cat. Another victim claimed by my shitty entrepreneurship.

    You know what this whole debacle taught me? My brain hates pain. And bad entrepreneurship is gargantuan pain.

    I adopted lean startup principles because my brain hurt.

    The next few months kicked off an App Store portfolio that I ended up selling two years later, netting 725,000 downloads, nearly $200k sales and a modest exit.

    How I found a legit idea

    “The best way to have a good idea is to have lots of ideas” - Linus Pauling

    My former process on approaching ideas summed up:

    • Get a tasty idea in your head
    • If Competition exists: I could make this so much better
    • If No competition exists: The market is all mine muaha!
    • Romanticize about all the awesome features you will build
    • Start building the product immediately.
    • Make it perfect. Then make it perfect some more.
    • Build it in complete isolation. No on can see it until its beautiful.
    • Start marketing it after you launch it
    This is actually the guide on how to almost kill your cat. Trust me on this.

    If I were going to commit to building any idea, it would have to prove itself over. And over. And over.

    I wanted the world to beg me to build the app.

    Because 99% of ideas don't have people begging for a solution, I knew needed lots of ideas. I needed a habit of ideas.

    Not just any idea. Ever had a business winning homerun idea that you made up on the spot? That pretty much never works.

    Ideas come from real problems. And real problems come from real people. So my ideas came from clues other people gave me.

    [​IMG]

    I learned to tell people I was an app developer and ask people for their app ideas.

    And I mean ANYONE -- from random people online to a cashier at Chipotle.

    You were going to tell me your app idea and you were going to LIKE it, damnit!

    After turning myself into the Sherlock Holmes of iPhone app ideas, this one dude online told me about his idea for "turning GIFs into videos so I can post them on Instagram."

    "Wait. That doesn't exist?" My cautious optimisism had peaked.

    How I validated before building
    “Post GIFs to Instagram” passed the research test (which all my other ideas failed):

    • People were actively searching for a solution.
    • Some people were even making some clunky workaround to solve it already.
    • Traffic, as indicated by Google Trends, Keyword Planner, were good enough for an app
    • There was none or very little competition
    [​IMG]

    Old Me would’ve immediately jumped in and built the best product ever.

    But New Me knew too much pain which I highly recommend not experiencing.

    How could I validate without building an app?

    A good question because the App Store SUCKS for fast moving entrepreneurship.

    I can't post a "Landing Page" to the App Store to see if it gets downloads. So I "settled" for a landing page on the web.

    Using QuickMVP, I threw together a promotion in like 30 minutes that said “GifShare: Post GIFs to Instagram” with a call to action that said “Download for $1.99”. I made an awful app Icon that took me like an hour.

    [​IMG]

    I embraced shittiness. If users took action on an ugly landing page, imagine what they would do when I optimized it later.

    I posted it to the Youtube videos, Yahoo Answers and forum questions I’d found where people were talking about the problem and seeking solutions (do you see a trend? Get people involved before you build!)

    Curious users were flooding to my site, but they wouldn’t click the download button. Was the price too much? I changed it from $2.99 to free and people started clicking like crazy.

    Since I didn't actually have an app yet, I asked them for an email after clicking through. Emails were coming in. More than I thought would.

    TIME TO BUILD, MATE.

    From a crappy app to $900 in first month revenue

    I cobbled the whole first version together in a week.

    As minimal and “just good enough” as an app can be. Same app icon as before. Stock interface design. Free to use icons. A single App Store screenshot with a sentence or two for the app description.

    And to make money, an In app purchase to remove the watermark from the app.

    Compare that to the 5+ months I did on the previous app. I spent hours grinding out every single detail to perfection. And for what? (Spoiler: overwhelming anxiety & shame)

    I wanted to see some beta testers to prove an extra level of validation, because beta testing an app at the time was a chore. I had to get them to click through an email, sign up for an extra service, give me their iPhone UDID which they'd have to look up how to do, then recieve a download link through email then HOPE the app works.

    I thought if I even got 10 people to endure that process, that’d be enough. I got 20. I even set up a fake In app purchase to see if people would remove the GIF's watermark to see if they would pay.

    Many of them paid so I finally had the confidence to launch.

    The first month of launch did $900ish. I wasn’t about to quit freelancing, but if I could figure out how to “growth hack” this bad boy, maybe I could soon.

    [​IMG]
    My first taste of passive income


    Growth hacking my way to $200k in sales


    1. Getting new customers

    App business = big # of downloads. At its peak, I believe my business did ~1.2k downloads/day

    After MUCH experimenting (failing), I found a few things mattered here:

    1. Improving the App Icon
    2. Improving the App Store screenshots
    3. Making the watermark that showed on the gif to be prettier and more noticeable (but only to an extent that felt ethical to me). This worked because people would see "Made with GifShare" on Instagram and download my app from there.
    4. Encouraging good, abundant reviews
    Keywords barely appeared to matter for me though it mattered for other businesses. Neither did the App Store description. I figured this out by test test testing.

    2. Making more per transaction

    This was simply adding more In app purchases (paying for filters, fonts, etc) and… charging more for the IAP that was working well (removing the watermark).

    The original version, I charged 1.99 USD. By the time I sold, the same IAP was 3.99USD. All extra IAP were .99 or 1.99.

    I tried ads, and they added decent revenue. ($600ish a month). However, I eventually took them down because I felt a bit scummy — so scummy that I actually lost motivation for working on the app until I removed them.

    3. Creating more loyal customers

    I struggled the most improving loyalty. Users often would use the app once or twice then never again.

    I found a few things worked pretty well though:

    1. Get people to follow the app’s Instagram account
    2. Build an email list and email them occasionally for feature updates
    3. Make the app a super usable, fast, and rewarding to use
    4. Encourage sharing multiple GIFs (after they finished one, I'd try to get them to create another one)
    The Process

    In order to discover these changes, I wanted to move as fast I could which is a challenge on the App Store when you've got release cycles that sometimes last a full week or longer.

    To get around this, I used a backend service like Firebase and I would turn on/off various changes (like what color a button should be, should I show certain things or not). This allowed me to test if something worked or not without having to wait for a new update to push.

    Apptemize seems like an even better solution (as you can make sweeping changes with it without pushing any updates) and I'll be testing that out thoroghly in my apps soon. I'll get back to you on how well that works.
    -----
    In 2010, I started telling people I wanted to be an entrepreneur. I wasn't acting on it yet, because I didn't know how, what, why, who, ANYTHING about where to start.

    A few months later I found a brand spanking new podcast through iTunes: Jaime Tarde's Eventual Millionaire. And who was one of the first people other that MJ Demarco.

    The way he talked about PROCESS vs EVENTS made so much sense to me -- no more bullshit about "JUST DO THIS SIMPLE THING AND YOU'LL BE RICH" -- I bought his book immediately. I read it in one night and signed up to the forum IMMEDIATELY. My hype levels had peaked.

    The Millionaire Fastlane drastically and immediately shattered my paradigm. Only like 4 books have ever done that for me.

    I've posted this in various places on the web, but as this community has meant a lot to me, this is the only place I'll seriously responding to any questions :)
     
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  2. GuestUser450
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    This is great, Rep+ for process.
    Interesting...was this because you thought it was a nuisance on mobile or because of the copy you were using, etc.?
     
  3. Rcaraway1989
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    The ads were full screen ads provided by a third party that showed when a user reached the "share to instagram" page of the app. I think the ads didn't feel like a good long term investment -- they hurt reviews (fell from 4.5 star avg to 3 stars) and it didn't sit well with me to have part of my business model being to annoy the shit out of my customers.

    That would hurt the brand, make them less likely to download any new apps I wanted, and if a competitor sprang up, they had every excuse in the world to jump ship.

    Edit: However later, I used my own in-app promotions instead of ads. This felt way better to me because the promotions were very relevant to what my users wanted and were a much cleaner experience
     
    Last edited: May 22, 2017
  4. Action Mike
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    Action Mike Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    That's awesome. Thanks for posting your experiences. As someone that is getting started in app development it is very useful to see how others have managed their business.

    What made you wan to sell vs continuing to make income from the app?

    Are your plans to continually make and release apps on the app store going forward as a regular business?

    Have you branched out to other markets like Android or windows phones?

    My hope is to get started and slowly build a solid list of apps that will produce income long term.
     
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  5. Rcaraway1989
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    I felt like I was spinning my wheels and needed a fresh start.

    My plans are to keep experimenting with shit and see what works. You'll notice I used the web to create traffic for my apps, and that's where I'm comfortable marketing. So I'll keep marketing online for different things. If I happen to market an app that people want, I'll build an app. Right now I'm playing around with a web app and growing my email list.

    I tried to find the validation I needed to build for Android by building hype around an Android version, collecting emails, posting hints about it on my Instagram, but the interest wasn't strong enough. Felt like too much of a risk to me.

    My advice will to always be build traffic before committing to building apps. Either by building traffic through the web, or build niche apps that you can make in like a week then focus solely on marketing them.
     
  6. Action Mike
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    Action Mike Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    What kind of numbers are you looking for when validating a idea weather its an app or some type of product? I love the idea of using something like Quick MVP to see what interest there is in an idea. When you use a service like this you have a landing page and then you use something like AdWods to drive traffic to the page right? How much would you suggest budgeting for Advertising to validate an idea?

    I'm guessing you need to do some good research before you get to the landing page part as it could get expensive for advertising costs.
     
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  7. Rcaraway1989
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    I did not use adwords -- I actually targeted some keywords through Google like "Instagram gif", "Share gifs to Instagram", then I posted the link to my landing page within the pages that were ALREADY RANKING HIGH for those keywords.

    An example: A Yahoo Answers! question was at the first result for one of the keywords I targeted, and I posted an answer to it with a link. Another keyword had a Youtube video showing how to post a gif to instagram, and I just commented on that video saying something like "This app makes it way easier: [link]".

    With free traffic, depending on your goals, 100 uniques a day, 50 emails a week is a great benchmark to start.

    But the cool thing about the web is there is SO MANY different ways to market. If you want to use adwords, find someone on here who's an expert on adwords. My domains are landing page marketing and content marketing.
     
  8. Waspy
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    Waspy Float like a butterfly Read Millionaire Fastlane Speedway Pass

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    I also rep'ed as hard as I could.

    The process is awesome. And a lot of takeaways.
     
  9. Scot
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    Scot Ductus Exemplo Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

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    I was wondering what happened to you. Great story, great process! Thank you so much for sharing all the crap you had to go through before your revelation.

    Rep++ for sure.
     
  10. Rcaraway1989
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    I don't know why, but knowing that you were thinking about me makes me feel all warm inside.

    When I first started out, there was too much content online about others who were circlejerking about how great they were and not enough people who shared honestly about all the hardships and failures they went through.

    For new entrepreneurs, I feel like seeing the failures is actually WAY more important -- in a weird way its very validating to know that that one guy who's doing millions now had to go through an awful divorce, go bankrupt and suffer through depression before finally getting there.
     
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  11. Scot
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    Now you're just making it weird...

    Just kidding though, glad you're back.

    I agree whole heartedly. Thats why I've made a point to post everything on my progress threads, even the bad shit. Because people don't really get what goes into this.

    And more importantly, people think that if they have speed bumps or problems, they're doing something wrong and they're alone.
     
  12. GlobalWealth
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    Epic story. Love the hustle.

    Sent from my VTR-L29 using Tapatalk
     
  13. Millenial_Kid5K1
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    Millenial_Kid5K1 Bronze Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    Awesome story!

    Hmmm, I'm trying to debut 2 (physical) products where people are doing this. I'm hoping your post is a good omen, and that this is a decent bellweather for market need.
     
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  14. Rcaraway1989
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    It's certainly ONE indicator of validation, though I bet it depends on how ugly and hard the workaround is.
     
  15. beatgoezon
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    beatgoezon Bronze Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    Glad to see a thread by you again, was wondering when you'd come back:) And good to hear the full side of the story of Instagif!

    Not sure if you're still following the App Store and Google Play climate but what are your thoughts on developing for VR, particularly for mobile devices like Cardboard, Samsung GearVR, or even iPhone(works with cardboard)? At the moment the most common type of app would be games(most of them are very crappy on the mobile app stores)


    Some people are even speculating this to be like the initial app gold rush(though I wouldn't call it that). It seems to validate a sort of demand from consumers(I've never really heard much demand for other types of apps for a few years now)

    What are your thoughts on the whole mobile VR industry, do you feel it's worth it for indies to start learning/developing some games for it?

    Either way, your older thread on creating Instagif has always been an inspiration. I'd love to give some sort of value in the app Stores like you did back then with something that people actually wanted, but I just felt my skills aren't as developed as they need to be to compete in today's level of quality of the App Stores(for 2D games that is), that's why I had this hunch to go into VR for mobile and pick up something a bit more advanced and with a higher barrier of entry possibly

    I'd love your thoughts on it, @Rcaraway1989
     
  16. Rcaraway1989
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    After selling the app portfolio, it's taken a bit for me to "reset" if that makes sense. I've focused a lot of effort on just improving myself in the last year or so.

    You're probably asking the wrong guy. VR IS coming very soon, and I'd imagine if you're familiar with the tech you're in a good spot to kill it.

    However, that's a big investment -- if you're gonna go for it, go for it long term, don't just dabble in it.

    Trust your gut. I agree that games are a VERY competitive and hard for a solopreneur now days. Like I said, if you're going for VR, better be prepared to ride that wave when it comes. I'd love to hear about that.
     
  17. MJ DeMarco
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    Admin Post
    Wow, thank you for sharing.

    Your story really delivered. Rep+ marked GOLD.

    And a big congrats for taking a HUGE step on an Unscripted path. :praise::thumbsup::clap:::fistbump:
     
  18. James Fend
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    Great process and story!
     
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    Just adding in my two cents, 3D games on a phone have some serious inconveniences for both developers and users (slower development time, take up more space, use more battery, etc.). Even non-mobile VR has yet to really prove itself as being worth while once the novelty wears off.

    We had a guy come into a local hackathon to present his startup which was basically teaching naive college students how to build VR apps. Not a good sign. When there's more money to be made in teaching how to do X, than actually doing it, usually means that X is not a very lucrative market.

    Unlike the early app days, VR had tons of support and hype behind it before it even launched. The fact that it's still off to a slow start should be a wake up call.

    Great thread btw, glad to hear from the OP again.
     
  20. beatgoezon
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    Thanks for the awesome insights, it clears up a lot of confusions and doubts! If I do go all into it, I'll be sure to share the results of the industry, I can't say either whether it's going to be as lucrative as the early days for indie app developers, I think at this time anything can happen! Again, appreciate the input!


    I've had similar thoughts about the high end HMDs like Rift and Vive. I can't say the same for mobileVR since it seems to be where most of the users are sitting as of 2017. Not entirely sure what the future holds or where the market is going to go, but I'll keep looking for what the best course of action should be at this time, thanks for your thoughts!
     
  21. Action Mike
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    Sweet, makes perfect sense to me. I know it can vary but did you get a good feel for how many posts on forums, youtube etc. that you needed to make to get 100 unique a day and 50 emails in a week?

    Did you use a personal account when doing this or start a new account with your app name or just a new account with a random name?
     
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  22. Rcaraway1989
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    It's important to look at this as if you're a venture capatalist -- you might invest your time in making 10-15 landing pages for different ideas and post them to different areas, and out of those 15, 14 of them will fail. But that 1 that does well will account a solid 99% of all the traffic you get.

    Which is why we make landing pages instead of apps. 15 apps might take you a year to make. 15 landing pages might take you a month.

    Edit: But don't just make up ideas either. Don't skip the "look for real problems" step.

    I used an alias.
     
    Last edited: May 23, 2017
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  23. NFT
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    Hey I have a quick question. Do you invest PPc in all of those landingpages? How do you get the traffic?
    Ok.. two question ;)
     
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  24. G_Alexander
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    Nice writeup, and nice work :cool:
     
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  25. Rcaraway1989
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    My earlier response:

     

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