Apps

Lesson Details:

Video Transcription – Now let's examine another easy business for you to get into because of your engineering background and that's the mobile app business and just like the services business where I have personal experience because I provide a lot of services for my clients I also have a lot of experience in the mobile app industry I've created my own successful mobile apps that have millions of downloads and I teach and coach now mobile app business mobile app marketing and I've got a lot of clients in this and I see their current struggles so I am kind of neck deep in this business as well now let's let me explain to you the ins and outs and pros and cons of this business the cool thing about this business unlike the services industry the services businesses is boring apps are different they're cool they're sexy they're startup P which kind of also means that not only is as being startup P which maybe should be in air quotes but like it sounds cool but also there are some big exits there are not many big exits and like a services business it's like once you get tired of that business you know it's really hard it's much harder to sell it off some people would say of course this is a great area some people would argue that it's actually harder to sell apps and partially that would be right but generally speaking in the mobile app industry you see some gigantic exits every once in a while snapchat whatsapp Instagram and if they if there aren't big exits then there are just big big big valuations okay so these guys when they really fine scale they find tremendous next-level scale and that gives them this tremendous valuation so there's that whole upside to it of course take that with a grain of salt because out of the millions of apps out there there's you know a handful of exits like that so what you actually see is the exception not the rule and the problem is that you really do have millions of competitors I mean there may be not millions of health apps or business apps but they're certainly like I don't know the exact number but it's close to that in puzzle games other kind of games because some types of apps are just so so easy to start so every beginner when they start learning programming they make a certain kind of app they launch it in the App Store they try to grow it and so you you're in this space that is just too competitive and that competition makes it really hard to promote remember the three centers business plan promotion and marketing is always a big part of it and so the main marketing strategy for most apps it's something called ASO app store search optimization it's similar to or analogous to SEO search engine optimization for Google but this is for the app stores the app stores being essentially the Google Play Store and Apple App Store on both of those the search is for most apps apps the biggest driver of downloads but the problem is that there's a glut of apps most users only download you know the first few apps that really come up for any given search and so there's this 8020 rule of like a 20% of the apps are getting 80% of the downloads just the ones that are like the million and billion dollar apps that have been able to remain on top of the search engines and it's not even an 8020 rule it's like a hyper 8020 rule it's almost like a 98 to where like 2% of the apps are getting essentially all the downloads and 98% of the apps are really really struggling and that glut really makes this a tough business because many apps struggle to get downloads and you can get users can get downloads these businesses that so another problem if you you know we just talked about the marketing problem of the app stores another problem and that's the second sentence of the three sentence business plan remember it's product marketing finance so marketing we just talked about that third sentence the finance is another problematic area of the mobile app space because guess what for some reason mobile app users hate spending money like $0.99 is literally nothing it will make no difference in your life but you probably give it a disproportionate amount of thought when and presented with a 99-cent purchase in the app stores you'd you know elsewhere $0.99 is a steal in the app stores 99 cents is you have to think about it oh my god and it you don't even keep the whole 99 cents you really just keeps having a sense and it's just a way to become poor right collecting 70 cents at a time it's just a way to become poor unless you reach tremendous volume and tremendous scale so there's very little middle ground you're either poor or very rich so there's very few ways to make this kind of like a middle-class business for yourself there's it's either win big or just lose that that's really the essentially the reality of the app stores and when you're thinking of like should I make an app what you really need is very very very compelling differentiation for your app and perhaps even compelling niching down so instead of maybe you're thinking and making a fitness app well there's already a thousand or thousands of those so or tens of thousands of those so what happens is think of like is there something that's not covered with in the fitness industry maybe you've got like the best kettlebell app okay idea and so maybe there's not an app for kettlebell exercises of course it's gonna be a much smaller market but at least it's some sort of a win in a place where most apps die from anonymity nobody can find them because there's a glut in terms of discovery and marketing them is really hard and ads are hardly a solution because it's very hard to make money in more money per download than it cost to advertise to get that download so that's the challenge of the mobile app stores and the mobile app business it's it's fun and natural for you to maybe get into but there are some very real challenges about this space it's a now mature space and I feel like I'm getting repetitive but it is competitive and that's a huge problem in here.