Mike Lee is a product engineer in the Netherlands.
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This afternoon we saw the second Weekly Wednesday Lunchtime Lecture, hosted by SourceTag. The speaker, Raul Portales, talked about his experiences in marketing his games on the Android Marketplace. Although I’m an iOS guy, the challenges we face on the App Store are even greater on the other side.
Raul presented several graphs showing his total installed base over time as irrefutable evidence to back his assertions, and I took away several lessons that I think are relevant to all platforms, and to product engineering and marketing in general.
When we talk about the business model of your app, we’re talking about whether you’re selling it outright, or giving it away for free and trying to monetize with advertising.
Also common are the hybrid “freemium” models. You can have two versions: a lite version and a paid version. Or you can use the old shareware model, letting people download and try the app for free, then purchase it in-app to remove adds, unlock features, and remove limitations.
Raul proposed a new model, which can be used alone, or in conjunction to other models, which I call the “freebie” model. You have the main, full-featured app available to purchase. You then have a number of simplified spin-off apps you give away for free, which contain ads for the main app.
There are several advantages to this model, and Raul’s numbers prove that it works. His freebie app was featured by Google, which brought in some 80,000 new users. Although the absolute numbers are an order of magnitude lower, the growth curve for the paid app was an exact match to that of the freebie app.
It was no accident the freebie got featured. Raul shrewdly made a stripped down seasonal variant, in this case for the Easter holidays. Not only are customers looking for seasonal things to try, stores are looking for seasonal things to feature.
This is genius. Seasonal apps are a niche market. The number of entries is smaller, meaning the chances of getting picked are much higher. Getting featured is the fastest way to pick up new users, and making the app free makes downloading it a no-brainer.
Not only do a number of users follow the cross promotion to the main app, the quality of the users is particularly high. Every app has a certain “bozo penalty” of users who give it undeservedly low ratings for asinine reasons. The less your app costs, the more bozos end up trying it, with free apps suffering the worst by far.
The freebie model uses the free app to absorb the bozo penalty, and only sends over the users who actually liked the app. This means that not only are your sales higher, your reviews are higher than they would have been with similar growth from other sources, like being featured directly.
I’ve always preferred the shareware model, but this bozo shield effect is a compelling counterargument in favor of the lite model. If my app skinned easily, I think I would eschew them both and just use a pure freebie model.
Raul’s other observations included the superior performance of niche apps over apps for a general audience. Even though the market is smaller, penetration rates are much higher, meaning you capture a larger percentage of possible users. Ratings are also higher.
Why is that? There are a number of possible explanations, but the one I prefer is based on the fact that real users differ from the models of them we use in creating our products. Assuming you know what you’re doing, the closer the actual user is to the model, the more they will like the app.
By extension, the farther the user is from the model, the more they will dislike the app. Users tend to like products more as they get used to them, because mastering the product moves them closer to the model user.
When you make an app for a general audience, you are casting a wide net, and are going to get a lot more people who are so far from the model as to fall into this bozo category. Because they are focused, niche products tend to attract people already closer to the model, leading to better overall satisfaction.
Another problem Raul mentioned is that people who dislike an app are more motivated to rate it than people who actually like it. This causes all reviews to trend downward. This effect is exaggerated by the fact people overuse the lowest rating. Anyone who ever got an F knows what one low score can do to an average.
Andy Ihnatko once made this point about people leaving one-star reviews of his book on Amazon for relatively minor complaints. I am paraphrasing here, but the idea is that if the book contained nothing but insults for the reader, racist jokes, and fond remembrances of Hitler, you would also give it one star.
I think the solution to both these problems is for the store or OS to prompt users after one month, or upon deleting the app, to simply give the app a thumbs up or thumbs down.
This is how we do our speaker ratings after each Weekly Wednesday Lunchtime Lecture. No star ratings. No surveys. We simply ask people to answer a yes-or-no question: would you like to see this speaker again? We get around 75% voter participation, which is pretty damned good.
Any speaker who receives at least an 80% approval rating will be put on the Appsterdam speaker list, which will be online so journalists looking for interviewees, conferences looking for presenters, and schools looking for lecturers know who to talk to.
I spent the weekend as a keynote speaker, mentor, and jurist at Startup Weekend Amsterdam. This was an amazing event with 175 participants giving 75 pitches and forming 24 startups. After a 54 hour hackathon, we awarded prizes in 5 categories.
Expect to see more than 5 companies come out of this, as the whole field was full of great teams building interesting products. Picking winners was an agonizing process, easily as agonizing as being an Apple Design Award judge.
If you did the weekend right, you should have taken home lots of experience, even if you failed to walk away with a trophy, or even launch. Prizes are nice, and winning is nice, but they are fleeting pleasures. Knowledge is priceless.
The panel at Startup Weekend is looking for the same things any set of investors is looking for. Pitching to the jury after days without sleep is as close to the Valley experience as you’re going to get, minus the penalty for failure.
I’d like to share some of the insights I myself brought home.
The number one rule of venture capital is invest in the team. Product ideas and business plans are great, but pretty easy to come by. A great team that enjoys working together is a genuine treasure.
When you start a company, you need to be aware of every other company that has ever tried to solve the same problem. You need to study them, and you need to figure out how to differentiate yourself. You need something other than braggadocio to show that you’re better.
You might think companies that have gone out of business are no threat to you, but if you’re trying to get funding, they are your biggest threat. The only thing worse than an unproven model is a disproven model. You need to know exactly why they failed, and prove that you are different.
You know that hot space you keep hearing about? Forget about it. Investors are looking for tomorrow’s big thing, not yesterday’s. You see an open niche, but investors see a crowded space. Besides, it’s way more fun to invent the future.
When you’re pitching on stage, don’t bother giving a bio. You need that time to show off your products. Plan for failure. That means being ready to present without slides or notes. No live demos. especially ones that rely on WiFi. If this can trip up Steve Jobs, what chance do you have? Make a movie.
If you can do this in a weekend, so can anyone else. Disabuse yourself of the notion that you are particularly talented. Don’t think you’re shipping this thing on Monday. You’re only just beginning the long, hard road to creating and launching a viable product.
One thing I kept trying to drive home to the people who asked me for advice was that there’s a world of difference between Sunday night and Monday morning. Sunday night is all about giving a good demo. Monday morning is about getting down to business.
In my keynote, I talked about taking lessons from negative experiences. Here’s one such lesson: don’t be a dick. Don’t stand around after the show badmouthing the team that beat you. It doesn’t reflect well on you.
Our community is small, and word of bad behavior travels far and wide. Getting caught up in the moment and losing sight of the bigger picture can damage your most precious asset—your reputation. If you don’t have that, you don’t have anything.
Talk is cheap—smacktalk doubly so. Instead, take the loss as that rarest of opportunities to return to your lair and meaningfully say, “Fools! I’ll show them all!” If you think you should have won, prove it. The best revenge is a successful launch.
For those of you working on apps—and what startup these days doesn’t have an app—you’re in the best possible place. As the capital of the Appsterdam movement, Amsterdam has the world’s most advanced infrastructure for developing your technology.
Come work with mentors and colleagues at an Appsterdam Approved Hangout. Take in a Weekly Wednesday Lunchtime Lecture. Stop by after work for Meeten en Drinken. Join an Appsterdam Family Weekend. We’re here to help you succeed.
With all the great initiatives we’ve launched, there are so many chances for you to participate in the Summer of Appsterdam, it can be hard to keep track of them all. Here’s a quick summary of where the action is in Appsterdam:
Appsterdam Approved Hangouts are a place for you to bring your laptop and get some work done alongside other App Makers. Our first facility, Appsterdam Noord, is currently in beta testing at NDSM Wharf. It’s open Tuesdays and Thursdays. There’s no charge, but let us know you’re coming.
Weekly Wednesday Lunchtime Lectures, hosted by SourceTag, are educational business lunches presented by your fellow Appsterdammers. These happen every Wednesday at 12:30 at Vijzelstraat 20. Presentations are recorded and put online, so even if you can’t make it, you can still benefit. There’s no charge to attend, but bring your favorite sandwich filling to share.
Appsterdam Meeten en Drinken are informal get-togethers at cafes and bars around the city. This is a chance for you and your partner to have a night out surrounded by colleagues. We get together like this about once a week, and while you’re free to just show up, you can RSVP and see who’s coming on our Meetup site.
Appsterdam Family Weekends are fun outings for App Makers and their families, and your best chance to really get to know your fellow Appsterdammers. Our first one will be on Saturday, July 23, at the Artis Zoo here in Amsterdam. Please let us know you’re coming, and bring cash for admission.
In addition to these recurring events, Appsterdam also participates in other events, such as next weekend’s iOSDevCamp, and this September’s PICNIC festival. News of the former is coming soon, and planning for the latter is happening next Friday in Bloemendaal.
You’re also likely to run into Appsterdammers at any one of the many technical and cultural events constantly happening in the city. We maintain a “concert calendar” of all our events at the Appsterdammers site, and will soon include other events of interest to Appsterdammers.
When we talk about Appsterdam, we talk about App Makers, and when we talk about App Makers, we talk about nerds. Maybe they’re programmers, or designers, or lawyers, but they’re all nerds in their own way. But Appsterdam is about more than nerds getting together.
Even in the Netherlands, App Makers on a project leave their families. We might be sleeping at home, but we’re not there. We’re at the office for ungodly hours, distracted behind the eyes, and generally unavailable to tend to our families’ needs.
Having our families involved increases our diversity and makes our community more welcoming to a wider range of people. They also keep us in line. I firmly believe if people had brought their partners to WWDC, none of the hullabaloo from the after parties would have happened. We don’t call them our better halves for nothing.
That’s why it’s important not just to get the nerds together, but also to get our families together. When our families get to know each other, they will be able to build their own community, and their own support network. This will be especially important for families that move to Appsterdam.
Getting to know each other’s families will also help us to get to know each other better. It is one step past the Meeten en Drinken on the path to forming true friendships within our community. Those friendships are vital in building an ecosystem that allows us all to mind our businesses.
This is why I am particularly pleased to announce that our first Appsterdam Family Weekend event will be happening on Saturday, July 23, at the Artis Zoo in Amsterdam. All members are welcome, and encouraged to bring their families. We’ll meet at the zoo at a time to be determined and take this fantastic urban safari together.
Please bring cash to pay for your admission to the event. The prices are as follows:
Adults (10 years +) € 28,50
Children (3 to 9 years) € 25,00
Artis members (3 years +) € 11,50
Details will be added as we know them. You can RSVP now.
With the Summer of Appsterdam well under way, our community is growing in leaps and bounds. In order to keep up that growth, we’re restructuring things a bit, getting volunteers and sponsors to take over large swaths of the Appsterdam landscape.
To that end, we’re turning over structural work on the Appsterdam.rs website to Fingertips. They’re making much needed upgrades, especially to the members section, so you’ll be able to manage your own membership listings. We’ll also have searching and filtering to help people find you.
We’re implementing some of the most common requests, such as removing pagination from the lists. We’re also adding a “classifieds” section where you can post or find jobs, bikes, housing, or anything else you need.
In the spirit of openness and community, we’re open sourcing the website. For now that means you can watch our progress in realtime. In the future, this will make it easy for people to add functionality, since our standard response to “you should do this” is “you should do that.”