Have you ever woke up in the middle of the night with an concept that you were absolutely certain the world needed? Perhaps you’ve even identified ways to improve a current process or product, but were just not sure where to start. For the panelists of our panel at Chief on March 25, they follow through on these dreams and ideas for improvement, or even help make them happen through investments.
Apponomics: How Free Consumer Apps Get Funded
This month we focused on how ideas become apps, and how the apps end up on each of our phones, tablets, and computers. There are plenty of roads to take, whether that be due to bootstrapping, investments, using in app purchases or ads, or all of the above. There certainly is no secret sauce to ensure an app becomes successful, but between Speek‘s Co-Founder and CTO , and SnapDash‘s founder and CEO , there was a great deal to be learned about the process.
In regards to the investor side of developing companies, apps, and ideas, Disruption Corporation’s Founder set our theme of the evening, fulfilling needs.
If you can get your users paid, made or laid, you are set.
— Kathryn Garrett ()
To be fair, there are plenty of apps out there that don’t fall into these specific categories (unless Flappy Bird pickup lines actually work); however, each successful app that we use fulfills a specific need. And yes, that does include sex, money, esteem and even self-actualization. This sounds awful familiar, perhaps Maslow’s Hierarchy of Needs? This all leads into two specific areas that should be developed early on into the process: getting seen and fulfilling needs.
Getting Seen and Fulfilling Needs
For every successful app, there are at least a dozen or so that have failed. Even though the failed apps may result in learning experiences, some also lose investments or personal finances , and other fun negative side effects. One of the major issues an app developer faces is the over saturated market. You must be seen.
Singh suggests starting the entire process with the mindset of a marketer. Why would someone download your app? Would someone pay for it? Can I monetize it? What potential growth areas are there for my app?
To get your app to stand out, you need to cut through white noise and generate a lot of buzz, without a lot of money. – Danny Boice
Next, you need to get in the mindset of the user and figure out how you are fulfilling their needs and wants. For Speek, they improve the dreadful teleconference by adding in visual elements, moderation controls, and ditching dial in or pin numbers. For Snapdash, they have gamified and banked on the ever popular selfie. Though Speek has outside investments, Snapdash is bootstrapped and continues to gain active users [] [].
Distribution is the hardest thing about releasing an app. — Rachael Stone ()
Right about the psychology of users. Have to fulfill a need or exploit an instinct. Paid, made, or laid. — Chris Robinson ()
What Investors Look For
Even if you have a great idea, you can only bootstrap a company for so long without generating revenue or seeking outside investments. Unfortunately for many, especially if developing a free consumer app, revenue won’t come until later on. This means it’s time to seek outside investments. By this point there should already be a functional product and a plan for growth. Ideas alone just won’t sell.
Venture funding is nothing more than market growth. Not a sign of success — Digital District ()
Singh mentioned several times that outside investors focus on growth. In most cases this means that a developer needs to show their current growth and potential for growth as a result of the proposed funds. With 99% of ideas getting turned down for investments, it’s important to note what really matters to them in regards to metrics.
For instance, there is a huge difference between active users and app downloads. According to the panelists, a majority of users will download an app and never use it again or just uninstall it. Though your download numbers may create a positive surface number, investors care about who is using it frequently. You can’t grow a sticky community without active users.
When you hear “app installs,” more often than not, 50% of the people open it only once or never.
— Sarah Jørgensen ()
How to make money with your free app
If you can build an active userbase, you have a great concept that needs to be built, and a plan for growth, your free app can make money. Whether your app is supported through outside investors or a monetized system, it’s up to you to fulfill those needs. Needs are the base your money making dilemma in that you must fulfill an investors needs, your own needs, and the markets needs. Once you have created that demand, market it, sell it, and keep on changing along with the marketplace. That and patents never hurt either.
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AppEcon was made possible by our friends at Chief. Their organization continues to be a great friend and supporter of Digital District. Chief is a creative agency, with a team of brave bad asses. If you are looking for an amazing team to work with, please reach out to .
We’d also like to thank Adrienne Sheares, Social PR Manager of Vocus, for wrangling our energetic crowd and panel as the evenings moderator.
