Tag Archives: analyzing your competitors

Work a Little and Play a lot: Lifestyle Freedom through App Development

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Many people are equating today’s popularity of mobile apps to the US gold rush of 1849. This hype suggests that you can create a mobile app, publish it to the various app stores and quickly become a millionaire.

Lifestyle Freedom

Is it true? Think about it, there are 1.2 million apps in the Apple App Store in mid 2014. Do you think all of the people publishing apps are millionaires? Nope.  According to Laura Tallardy (statistics provided by Owen Goss), here are the statistics:

  • The bottom 25 percent have made less than $200
  • The next 25 percent have made between $200 and $3,000
  • The 50-75 quarter are between $3,000 and $30,000
  • The top 10 percent have made $400,000
  • The top 4 percent are MILLIONAIRES!

So the real question is “Can I build an app company that does well enough that I can design my own lifestyle, work when I am inspired and play a lot?“.  To do that, you need to get yourself into the top 25%. Is that easy? I’m not sure but I do know that many app developers simply develop an app, put it in the app store, do no marketing and expect it to reach the top 10%. And as you might predict, they land in the bottom 25%.

2HourAppreneur Experiment

All of this brings us to an experiment called the “2HourAppreneur experiment“. I am developing an app (and possibly multiple apps if it looks promising) to determine if a person can build an app business that allows them to live a cool and fulfilling lifestyle. A lifestyle that affords you the opportunity to work on your own timetable, play a lot and revel in your entrepreneurial spirit.

Why am I qualified to try it? I’m an entrepreneur that started a software business in 1998 and sold it in 2009. Selling the business made me financially independent and allowed me to retire at 50 years old. I have enjoyed the retired lifestyle freedom. I’ve traveled a lot, adopted new hobbies, and pushed myself with new challenges. With my free time, I can try this experiment without financial pressures because building an app business is fairly inexpensive. If you want to learn more about me, you can take a look at my personal website and travel blogs.

Will it work? I am not sure but it will be fun to try. I will document my journey and tell you exactly what works and what doesn’t. This posting will be a living document that includes a list of helpful blogs explaining exactly what I am doing and why.  And if it doesn’t work, at least we will all know!

Here are some blogs I’ve created to document the process thus far:

How Can You Track the 2HourAppreneur Experiment?

If you find this experiment interesting, you have a couple of ways of keeping updated on the progress:

Email
If you don’t mind getting an email every few weeks subscribe to my 2HourAppreneur blog. You can do that by entering your email address below (you can unsubscribe at any time):

Subscribe to Blog via Email

Facebook
If you prefer not to get an email this often but would like to check in, LIKE my facebook page at http://www.facebook.com/2hourappreneur.

Twitter
Or you can subscribe to my Twitter feed at https://twitter.com/2hourappreneur, my Twitter handle is @2HourAppreneur.

aMemoryJog
While you’re at it, take a look at the first app I am developing called aMemoryJog. It is an app for keeping track of all your passwords, loyalty reward numbers, and anything else that is easy to forget. Learn more at http://www.aMemoryJog.com.

Latest Updates

As mentioned above, I plan to continually update this blog posting as I publish new blogs related to app development, so you will see the list of blogs listed above grow over time. I will also let you know where I am in the process.

Update on 18-June-15
I am now working on my second app called Count Us Down. It lets you count down the days until a big life event (vacation, baby on the way, wedding, concert, sporting event, retirement, etc.).  It also allows you to share that event with your friends and family. Want to be part of the beta team? If you do, you will get early access to the app and you can provide feedback before it gets to the app store. Sign up here: http://www.CountUsDown.com

Update on 13-May-15
The aMemoryJog app has been in the app store for a few  months now and I’ve learned a great deal from this experiment. Click here to see what I’ve learned

Update on 17-Nov-14
I outsourced the development of the aMemoryJog app in early April 2014. It was expected to take about 4 months to complete but it has taken a lot longer than expected. The extra development time has been OK because it has given me more time to build my social media followers and prepare a marketing strategy. aMemoryJog should be in the Apple app store sometime in December 2014.

This Article Was Brought to You by 2HourAppreneur

This article was brought to you by 2HourAppreneur makers of the aMemoryJog Password Manager app. The app is free, why not try it now?

aMemoryJog: Best Password Manager

Putting the final touches on the Business Plan

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In prior posts, I discussed many of the things to consider when developing a business plan for starting an #appreneur business.  It is now time to put the finishing touches on the business plan.

A man who does not plan long ahead will find trouble at his door. – Confucius

If you missed any of my prior posts, quickly access them from here:

Do Not Wear Rose Colored Glasses

Before committing money to any business, it is important to create a business plan. When doing this, don’t wear rose colored glasses. Too many people come up with an idea and convince themselves that it is a good idea without any objective analysis. If they do commit to doing a business plan, they skew their analysis to support their idea that the business is viable instead of objectively analyzing competitors, attainable market share, and overhead costs.  This is a great way to lose money.

How Can We Reduce Risks of Losing Money?

The best way to reduce the risks of losing money on a business venture is to go into the business planning with skepticism as to whether your business idea is worthy of investing in. Only after careful analysis of the market space, competitors and costs do you decide if the idea is worth investing in. If your analysis tells you that it is not financially viable — don’t waste your time and money! Go back to the drawing board and look for another idea that has reduced risks.

If your idea does look like it has legs (is viable), commit a certain amount of funds towards it, based on your startup analysis. Then when you commit those funds, keep an eye on your expenses. If your revenue is not what you expected or if your costs greatly exceed your projections, define a monetary threshold you will not exceed and if you do — shut it down! Pouring tons of money on a bad idea is a great way to go broke!

Anatomy of a Business Plan

OK, now that I’ve scared the hell out of you, you probably figured out that I am really just describing how important the business planning process is. Skip it and you will most likely fail. Go into with a biased optimism can also cause you to fail.

Go into it with open eyes and analyze everything you can so that you can make the best decision possible regarding the viability of your idea. In the past months, I’ve been feeding you blogs that described different parts of business planning.

Now it’s time to put all of this information into a document.  Here are the sections I normally include in a business plan:

  • General Company Description – This contains your mission statement, goals and objective, business philosophy, user demographic, industry information, company strength/weaknesses, and legal form of ownership.
  • Products and Services – Describes your product /services offered.
  • Marketing Plan – Describes your product features / benefits, customer profile, competitor revenue analysis, branding elements, the niche you are pursuing, marketing strategy, a description of the sales process and follow up, marketing budget, how you will price the product, a sales forecast for the first 2 years, and timelines.
  • Operational Plan – Describes your production and maintenance plan, business location, legal environment, personnel plans, inventory process, accounting procedures, general marketing approach, competitive matrix, startup and expenses and capitalization.

Rather than go into each of the above items in ad nauseum, I find it easier to simply give you an example of the business plan I built for aMemoryJog.  Of course, I hide our competitor list, as this proprietary, but you will understand the thinking that went into the analysis.  Below are 2 versions you can use, an MS Word and a PDF edition:

MS Word Version

MS Word Version

PDF Version

PDF Version

Related article: How to Build a Product Website for your App

Conclusion

Now we have a very good understanding of how to analyze our business idea and to create a business plan to determine if it is viable. My next blog will be out in a couple of weeks — I will discuss how develop a specifications document that you can hand off to a consultant to get the best price for developing your app.

Shameless Plug

The app I am creating is slated for production in the App Store around July or August 2014. However, the web edition is already available at http://www.aMemoryJog.com. Once the app is done, it will seamlessly sync with the web version.

Download a free trial and check it out!

aMemoryJog – Web and iPhone editions

Also, if you like this blog, please share it with others to increase our following. Our twitter account is @2HourAppreneur and be sure to like my Facebook page at http://www.Facebook.com/2HourAppreneur.

Thanks for following the blog!

Is your App Idea Financially Viable?

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In our last post, we discussed how to define your competitive advantages as you begin your #appreneur journey. Once you have sized up your competition, it is now time to determine if your app idea is financially viable.

If you want to rear financial blessings, you have to sow financially. – Joel Osteen

How Much will it Cost to Develop My App?

The cost to develop an app will depend on the number of screens and complexity of the app, who you choose to develop the app, and how detailed your specification is before getting an estimate.  If you develop the app yourself, the costs will be smaller because there will be no subcontractor costs. However, I recommend you outsource the development so that you can spend your valuable time on pre-launch marketing and planning.

The first step in this process is to create a prototype of what your app might look like. There are some great prototyping tools available, I use Balsamiq Mockups. The cost of this software is minimal (one time fee of $79) and you can use it for all your upcoming apps if you are successful. Using Balsamiq, you can create each screen of your application, here is an example of the ones I put together:

Balsamiq Mockup

Balsamiq Mockup

By crafting your app ideas into a design, it forces you to flesh out the look and feel of each screen needed for a subcontractor to perform work.  Once you have the prototype done, create a specifications document that a subcontractor can create an estimate from.  In my specifications document, I like to include descriptive text that identifies what to do when any button is touched on the screen, what messages to display, etc.  By defining this level of detail, the subcontractor can provide a much better estimate because there are less unknowns.

In future blogs, I will discuss the specifications document in more detail (what to include and exclude), where to find subcontractors, what legal documents you should have in place when working with subcontractors, and how to pick a good subcontractor.

Assuming you have created a good prototype and specifications document, the cost of the development of your app will depend on the number of screens and complexity of your app. Based on my own experience, here are some very general guidelines, the prices are for a single platform (Apple iPhone, Apple iPad, Android device, etc.):

  • Small app (Less than 5 screens and little complexity) – $1,500 to $3,000
  • Medium app (Less than 10 screens and medium complexity) – $3,000 to $6,000.
  • Larger app (10+ screens and medium to harder complexity) – $6,000 to $15,000.

I also suggest that you ask the subcontractor to write the software in a way that allows them to re-use the code when targeting a different platform (Apple iPhone, Apple iPad, Android device, etc.). Also, ask the subcontractor for a ballpark estimate for creating a version in the other platforms once the first platform is done. By investing in a single platform first, it allows you to test the waters to determine if you want to sink additional money into the next platform. Once you recoup your costs on a specific platform, move on to another platform.

Other Costs to Consider

In addition to app development, here are some other costs to consider:

  • Registering your Business – You will need a business name and want to register it your state or province. The cost of setting up a LLC (Limited Liability Company) is about $125.
  • D-U-N-S number – It is also smart to get a Dunn and Bradstreet number for your business. This prevents you from having to use your social security number when working with vendors, you can use your D-U-N-S number instead. If you do this, allow 30 days to get it for free. If you want it expedited, it can cost as much as $299.
  • Website – You will want to create a website for your app that allows you to talk about the features of the app and allow them to purchase. By having a website, you will also get indexed by Google, driving more sales of your product. If you know HTML, I suggest writing your own website. Start off by purchasing a website template from somewhere like Template Monster, they are generally less than $50. You can then simply change the template with your site details. If you are not comfortable creating your own website, you can outsource this just as you do the app development. The cost of this will probably run you about $1,000 or less, especially if you ask them to use the template you purchased.
  • Website  Hosting – You will also want to purchase a domain for your app (for example, I purchased www.aMemoryJog.com) and you will need a company to host the site.  I purchased mine from Go Daddy, you should be able to purchase the domain and hosting for about $65 per year.
  • Google Ads – Once your website is up and running, you can purchase Google Ads to drive business to your site. This is totally optional but can increase your sales. You have to analyze the sales it brings to determine if it is worth it. In my past experience, it is, but every scenario is different. I normally budget $100 per month for Google Ads. Of course, do not do this until your app is in available for sale.
  • Apple App Developer (iTunes Connect) – To sell your app in the Apple App Store, you must sign up for iTunes Connect. This allows you to submit your app to Apple for review and once approved, they will post it in the app store. The cost for this is $99 per year. Apple will keep 30% of the sales from your app, and you will get 70%.
  • Google Play Developer – Similar to iTunes Connect, if you plan to create your app for Android devices, you will need a developer account for Google Play. The cost is $25 per year and like Apple, they keep 30% of your sales.
  • Email Marketing – If you plan to do any email marketing, you will need a product to send emails out automatically on your behalf. For example, when someone signs up for a trial of our web edition of aMemoryJog, it sends an email to the new subscriber welcoming them to the trial. Then every few days, it sends other emails explaining how the product works and how to purchase once their trial expires. This automated engine eliminates a lot of busy work of having to send these emails manually. Since I am a programmer by trade, I wrote the software to do this for my product. But you can purchase a tool to do this for your product. Tools like MailChimp are free to start with, allowing you to send up to 12,000 emails to 2,000 subscribers at no cost. After you exceed that, it could cost you from $40 to $100 a month, depending on the number of contacts you have and the number of emails you send.
  • Contact Management Tools – Once you begin marketing to app reviewers, you will want software to keep track of who you have communicated with and who needs to be sent an email about your app. You can get a contact manager for free until you collect a certain number of contacts. I use Zoho CRM, it is free for 5,000 contacts or less and only $20 per month once you exceed that.

Related article: How to Build a Product Website for your App

Estimating Your Revenue

This is the tricky part. About the best you can do is to try to determine the revenue of your competitors and then estimate yours based on a percentage of that. I discussed this in a prior blog. But I have to tell you from experience, it is a crap shoot.  You really won’t know your revenue until the product is in production. I always try to estimate very conservatively and hope to outpace my estimates. For example, you might look at the competitor with the least number of downloads and estimate that you can capture half that number of downloads.

The best way to estimate your revenue is to estimate your monthly downloads multiplied by the cost of your app, minus the App Store commission of 30%.

Putting it all Together

Once you estimate your revenue for the year, subtract the costs, then you have your expected net profit. If you can live on that net profit, great!  If you can’t but it is at least half what you can live on, you can always create multiple apps to create a profit multiplier and still make the #appreneur life work.

Is your App Financially Viable?

Conclusion

We now have analyzed whether our app seems financially viable. If it looks promising, we should proceed. If not, we should go back to the drawing board – either think of another app idea or bail on app development in general. My next blog will be out in a couple of weeks — I will discuss how to monetize your app.

Shameless Plug

The app I am creating is slated for production in the App Store around July or August 2014. However, the web edition is already available at http://www.aMemoryJog.com. Once the app is done, it will seamlessly sync with the web version.

Download a free trial and check it out!

aMemoryJog – Web and iPhone editions

Also, if you like this blog, please share it with others to increase our following. Our twitter account is @2HourAppreneur and be sure to like my Facebook page at http://www.Facebook.com/2HourAppreneur.

Thanks for following the blog!

Defining your Apps Competitive Advantages

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In our last post, we discussed how to choose what type of app to develop as you begin your #appreneur journey. Once you have picked an app to develop, how do you research your competitors and separate your app by providing competitive features?

I have been up against tough competition all my life. I wouldn’t know how to get along without it. – Walt Disney

Do a Little Competitive Snooping

To build a better app, you need to objectively analyze the competition and understand their strengths and weaknesses. You can do that by visiting their website, downloading a free trial of the product, and in some cases, purchasing their product to see how well their paid products work.

By downloading a trial, you get to see several things. You get an inside view as to how they manage their prospects. They will send you emails during your trial, they may even call you to nudge you to buy. You can also determine how much help they provide as you are learning their product, determine how easy their product is to use, and you can see things you like and dislike about  their product.

Create a Competitive Matrix

Once you fully understand your competition’s features, create a matrix so that you can more easily see who has competitive features.  It might look similar to this for each competitor:

steve

Define your Features

Once you understand your competitors, you can define your features. Here is how we defined this for our product:

aMemoryJog allows tech savvy consumers that own a computer, phone or tablet to keep their easily forgotten information accessible at their fingertips. This includes passwords, account information, frequent flyer details, and an endless list of other critical info. The benefit is that this hard-to-remember information no longer has to be remembered – they can find it in seconds.

Features of aMemoryJog will include:

  • The ability to enter personal information separated by easy-to-set up categories and personal data attributes, and a large notes section to enter more detailed information
  • Automatic cloud backups and encryption of all stored information
  • The ability to access websites with a single click and single click copy userid / passwords
  • The ability to restore a deleted entry from the recycle bin
  • The ability to quickly find information by searching by keyword and by automatically showing recent items.
  • Localized language support for English, Spanish, French, German, Italian, Russian, Chinese and Japanese.
  • Friendly password generator that uses real words instead of hard to remember letters.

Our competitive advantages are:

  • More stylish and user friendly interface than competitors
  • Lean, value added features without feature bloat
  • Recycle bin that allows restoring of deleted items
  • Simpler import feature than our competitors (web edition)
  • Simple to use, easier data entry than our competitors, less options to configure
  • Multiple language support (English, Spanish, French, German, Italian)
  • Friendly password generator that uses real words instead of hard to remember letters.

Related article: How to Build a Product Website for your App

Conclusion

We now understand our competitor’s strengths and weaknesses and have defined our feature set to provide our own set of competitive advantages.  We are now progressing in the development of our business plan. In our next blog, we will begin to discuss the  financial viability of your app and how to forecast costs and revenue.

Shameless Plug

The app I am creating is slated for production in the App Store around July or August 2014. However, the web edition is already available at http://www.aMemoryJog.com. Once the app is done, it will seamlessly sync with the web version. Download a free trial and check it out!

Also, if you like this blog, please share it with others to increase our following. Our twitter account is @2HourAppreneur.  Thanks for following the blog!

 

What App Should I Build?

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Probably the biggest up-front decision for starting an appreneur business is deciding on what type of app to build first. When I built my last software company, I found that I needed software to track requirements, bugs, test cases, and project deliverables. At the time, very few software products did this in one tool. Sure, you could buy several tools to accomplish this but they were not tightly integrated and were pretty disparate. That triggered the idea for the product — I would create a web-based product that did all of those things and could be rented (SaaS) instead of purchased. Since I was a major client of my own software, it made all the difference as to how we continued to improve it.

Trust your instincts, and make judgements on what your heart tells you. The heart will not betray you. ― David Gemmell, Fall of Kings

Be the Customer of Your App

Keeping with my past successes, I decided I should create an app that I desperately needed and would use on a daily basis. In other words, I should build an app that I would actually be a customer of. I came up with the idea of becoming an appreneur in January 2013 and at the time, my wife and I were traveling a lot and needed a way of tracking hotel loyalty cards on my phone. That way when we went to a Holiday Inn or some other hotel, I could quickly give them my loyalty card account number and they would give us credit for the stay.

At the time, I was using a Windows program for keeping track of passwords for the different websites I use, my loyalty card account numbers, and just about anything else I needed quick access to. The Windows version worked great when I was sitting at my PC but it was not accessible when I only had my phone in my pocket.

This spurred the idea for my app. I will create an app that allows me to track passwords, loyalty card accounts, credit card accounts, and the other hundreds of things that are hard to remember yet important to track.

Does this App Exist Today?

The next thing to do was to determine if there is already an app that does what I need. After doing a few Google searches, I found that this app does exist and in fact, there are a number of competitors already doing it. Many people would stop there — it has already been done, someone beat me to the punch. But this tells me that there is already an established market, so there must be lots of people like me that need an app like this. I will not be deterred by the fact that competition already exists, I just need to find some competitive advantages that will allow me to compete well.

I personally believe that trying to create a totally unique app is much harder because you don’t have an established category or market to pull data from. It is a crapshoot as to whether the idea will be marketable. So creating a competitive app is not a bad thing.

Sizing Up the Competition

After doing multiple Google searches, it was clear that about 6 companies were capturing most of the market. Looking at iTunes, I found that there were another 15 or so companies with competitive apps but very few seemed to be selling much. How did I know that? I used http://xyo.net to determine how many mobile downloads each of the big 6 competitors were getting per month.

Note: http://xyo.net provided free analysis of app downloads when I first did this research. They have recently sold that business to https://prioridata.com and it appears that they charge for researching this data now.

It was easy to estimate the amount of revenue each of the 6 companies were making because I knew how much each app was selling for and XYO told me how many monthly downloads they were getting.  Here were the results (I won’t use the competitor names since that is confidential to my analysis):

  • Competitor 1 – They had a really good website, they had apps sold for Apple, Android, Windows, and Web. According to XYO, they were generating 236,000 downloads a month. However, since they have both a paid ($9.99) and free app, it was hard to determine how much revenue they were generating. But if we assume 20% of the downloads were paid downloads, that put their yearly revenue at $5.6 million per year.  Wow!
  • Competitor 2 – They were getting about 31,100 downloads a month and the cost of their app was $9.99, equating to a yearly revenue of $3.7 million.
  • Competitor 3 and 4 – One of these were getting about 14,050 and the other about 13,300 downloads a month at $9.99 each, equating to about $1.6 million in yearly revenue.
  • Competitor 5 – They were getting about 11,450 downloads a month at $9.99 each, equating to $1.3 million per year.
  • Competitor 6 – They priced their app less than the others ($4.99) and were driving about 2,050 downloads a month, equating to $122,754 per year.

Related article: How to Build a Product Website for your App

Conclusion

Based on this initial research, this app idea seems promising. Even if I could generate half of the revenue that the 6th competitor generates, it still meets my goal of creating an app that can produce revenue of $50,000+ per year. And if it is able to do even better, I may have a lucrative app on my hands. But to be competitive, I know I will need some competitive features that allow my app to shine over some of the others. That will be the next analysis — understanding the things each of the competitors do well and not so well so that I can capitalize on it.

This is the early stage of business plan development, I will continue upon this theme in upcoming blogs so you can see how I developed the business plan.

Shameless Plug

The app I am creating is slated for production in the App Store around July or August 2014. However, the web edition is already available at http://www.aMemoryJog.com. Once the app is done, it will seamlessly sync with the web version. Download a free trial and check it out!

ScreenShot_aMemoryJog

Also, if you like this blog, please share it with others to increase our following. Our twitter account is @2HourAppreneur.  Thanks for following the blog!